RECEIVABLES PURCHASE AGREEMENT among SOLECTRON FUNDING CORPORATION, as Seller, SOLECTRON CORPORATION, individually and as Servicer, RECEIVABLES CAPITAL CORPORATION, as Issuer and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Administrator Dated as of September 17, 1997 TABLE OF CONTENTS PAGE ARTICLE I AMOUNTS AND TERMS OF THE PURCHASES Section 1.1 Purchase Facility -1- Section 1.2 Making Purchases -2- Section 1.3 Purchased Interest Computation -3- Section 1.4 Settlement Procedures -3- Section 1.5 Fees -6- Section 1.6 Payments and Computations, Etc. -6- Section 1.7 Dividing or Combining Portions of the Capital of the Purchased Interest -7- Section 1.8 Increased Costs -7- Section 1.9 Additional Discount on Portions of Purchased Interest Bearing a Eurodollar Rate -7- Section 1.10 Requirements of Law -8- Section 1.11 Inability to Determine Eurodollar Rate -9- ARTICLE II REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS Section 2.1 Representations and Warranties; Covenants -9- Section 2.2 Termination Events -9- ARTICLE III INDEMNIFICATION Section 3.1 Indemnities by the Seller -10- Section 3.2 Indemnities by the Servicer -11- Section 3.3 Contribution -12- ARTICLE IV ADMINISTRATION AND COLLECTIONS Section 4.1 Appointment of Servicer -12- Section 4.2 Duties of Servicer -13- Section 4.3 Lock-Box Arrangements -14- Section 4.4 Enforcement Rights -15- Section 4.5 Responsibilities of the Seller and Servicer -15- Section 4.6 Servicing Fee -16- ARTICLE V MISCELLANEOUS Section 5.1 Amendments, Etc. -16- Section 5.2 Notices, Etc. -16- Section 5.3 Assignability -17- Section 5.4 Costs, Expenses and Taxes -17- Section 5.5 No Proceedings; Limitation on Payments -18- Section 5.6 Confidentiality -18- Section 5.7 GOVERNING LAW AND JURISDICTION -18- Section 5.8 Execution in Counterparts -19- Section 5.9 Survival of Termination -19- Section 5.10 WAIVER OF JURY TRIAL -19- Section 5.11 Entire Agreement -20- Section 5.12 Headings -20- Section 5.13 Issuer's Liabilities -20- Section 5.14 Purchase and Sale Agreement -20- EXHIBIT I DEFINITIONS EXHIBIT II CONDITIONS OF PURCHASES EXHIBIT III REPRESENTATIONS AND WARRANTIES EXHIBIT IV COVENANTS EXHIBIT V TERMINATION EVENTS SCHEDULE I CREDIT AND COLLECTION POLICY SCHEDULE II LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS SCHEDULE III TRADE NAMES ANNEX A FORM OF LOCK-BOX AGREEMENT RECEIVABLES PURCHASE AGREEMENT This RECEIVABLES PURCHASE AGREEMENT (this "AGREEMENT") is entered into as of September 17, 1997 among SOLECTRON FUNDING CORPORATION, a Delaware corporation, as seller (the "SELLER"), SOLECTRON CORPORATION, a Delaware corporation, in its individual capacity ("SOLECTRON") and as initial Servicer (in such capacity, together with its successors and permitted assigns in such capacity, the "SERVICER"), RECEIVABLES CAPITAL CORPORATION, a Delaware corporation (together with its successors and permitted assigns, the "ISSUER"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association, as administrator (in such capacity, together with its successors and assigns in such capacity, the "ADMINISTRATOR") for the Issuer pursuant to an agreement between the Issuer and the Administrator. PRELIMINARY STATEMENTS. Certain terms that are capitalized and used throughout this Agreement are defined in EXHIBIT I to this Agreement. References in the Exhibits hereto to "the Agreement" or "this Agreement" refer to this Agreement, as amended, amended and restated, modified or supplemented from time to time. The Seller desires to sell, transfer and assign an undivided variable percentage interest in a pool of receivables, and the Issuer desires to acquire such undivided variable percentage interest, as such percentage interest shall be adjusted from time to time based upon, in part, reinvestment payments which are made by the Issuer and additional incremental payments made to the Seller. 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. PURCHASE FACILITY (a) On the terms and conditions hereinafter set forth, the Issuer hereby agrees to purchase and make reinvestments in the Purchased Interest from the Seller from time to time during the period from the date hereof to the Facility Termination Date; PROVIDED, that nothing herein shall be deemed or construed as a commitment by the Issuer to fund the purchase or reinvestment with regard to the Purchased Interest through the issuance of Notes, and it is hereby expressly acknowledged and agreed that such funding is, and shall continue to be, wholly discretionary on the part of the Issuer. Under no circumstances shall the Issuer make any such purchase or reinvestment if after giving effect to such purchase or reinvestment the aggregate outstanding Capital of the Purchased Interest would exceed the Purchase Limit. (b) The Seller may, upon at least 5 days' notice to the Administrator, terminate the purchase facility provided in this SECTION 1 in whole or, from time to time, irrevocably reduce in part the unused portion of the Purchase Limit; PROVIDED that each partial reduction shall be in the amount of at least $5,000,000 or an integral multiple of $1,000,000 in excess thereof. Section 1.2. MAKING PURCHASES. (a) Each purchase (but not reinvestments) of undivided ownership interests with regard to the Purchased Interest hereunder shall be made upon the Seller's irrevocable written notice delivered to the Administrator in accordance with SECTION 5.2 (which notice must be received by the Administrator prior to 11:00 a.m., San Francisco time) (i) three Business Days prior to the requested purchase date, in the case of a purchase to be funded at the Alternate Rate and based on the Eurodollar Rate, (ii) one Business Day prior to the requested purchase date, in the case of a purchase to be funded at the Alternate Rate and based on the Base Rate and (iii) one Business Day prior to the requested purchase date, in the case of a purchase to be funded at the CP Rate, which notice shall specify (A) the amount requested to be paid to the Seller (such amount, which shall not be less than $5,000,000, being the "CAPITAL" relating to the undivided ownership interest then being purchased), (B) the date of such purchase (which shall be a Business Day) and (C) the desired funding basis for such purchase (which shall be either the Alternate Rate or the CP Rate) and (unless such purchase shall be funded at the CP Rate) the duration of the initial Fixed Period(s) for such purchase. If such terms relate to the CP Rate, the Administrator shall promptly thereafter notify the Seller whether such terms are acceptable to the Issuer. If the Administrator notifies the Seller that such terms relating to the CP Rate are unacceptable to the Issuer due to market conditions, then the Seller shall be deemed to have requested that the purchase be funded at the Alternate Rate and based on the Base Rate. (b) On the date of each purchase (but not reinvestment) of undivided ownership interests with regard to the Purchased Interest hereunder, the Issuer shall, upon satisfaction of the applicable conditions set forth in EXHIBIT II hereto, make available to the Seller in same day funds, at Bank of America National Trust and Savings Association, account # 1233056289, an amount equal to the Capital relating to the undivided ownership interest then being purchased. (c) Effective on the date of each purchase pursuant to this SECTION 1.2 and each reinvestment pursuant to SECTION 1.4, the Seller hereby sells and assigns to the Issuer an undivided percentage ownership interest in all its right, title and interest in (i) each Pool Receivable then existing, (ii) all Related Security with respect to such Pool Receivables, and (iii) Collections with respect to, and other proceeds of, such Pool Receivables and Related Security; provided that the foregoing shall not include any Excluded Property. (d) To secure all of the Seller'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, the Seller hereby grants to the Administrator, for its benefit and the benefit of the Issuer, a security interest in all of the Seller's right, title and interest (including without limitation any undivided interest of the Seller) in, to and under all of the following, whether now or hereafter owned, existing or arising (A) all Pool Receivables, (B) all Related Security with respect to each such Pool Receivable, (C) all Collections with respect to each such Receivable, (D) the Lock-Box Accounts and any related deposit accounts and post office boxes and all amounts on deposit therein and all certificates and instruments, if any, from time to time evidencing such Lock-Box Accounts, related deposit accounts and post office boxes and amounts held or on deposit therein, and (E) all proceeds of, and all amounts received or receivable under any or all of, the foregoing; provided that the foregoing shall not include any Excluded Property. The Administrator and the Issuer shall have, with respect to the property described in this SECTION 1.2(d), and in addition to all the other rights and remedies available to the Administrator and the Issuer, all the rights and remedies of a secured party under any applicable UCC. Section 1.3. PURCHASED INTEREST COMPUTATION. The Purchased Interest shall be initially computed on the date of the initial purchase hereunder. Thereafter until the Termination Date, the Purchased Interest shall be automatically recomputed (or deemed to be recomputed) on each Business Day other than a Termination Day. The Purchased Interest, as computed (or deemed recomputed) as of the day immediately preceding the Termination Date, shall thereafter remain constant. Notwithstanding the preceding sentence, the Purchased Interest shall become zero when the Capital thereof and Discount thereon shall have been paid in full, all the amounts owed by the Seller hereunder to the Issuer, the Administrator, and any other Indemnified Party or Affected Person, are paid in full and the Servicer shall have received the accrued Servicing Fee thereon. Section 1.4. SETTLEMENT PROCEDURES. (a) Collection of the Pool Receivables shall be administered by the Servicer in accordance with the terms of this Agreement. The Seller shall provide to the Servicer on a timely basis all information needed for such administration, including notice of the occurrence of any Termination Day and current computations of the Purchased Interest. (b) The Servicer shall, on each day on which Collections of Pool Receivables are received (or deemed received) by the Seller or Servicer or an Originator (including pursuant to Section 1.7 of the Purchase and Sale Agreement): (i) set aside and hold in trust (and, at the request of the Administrator, segregate) for the Issuer, out of the percentage of such Collections represented by the Purchased Interest, FIRST an amount equal to the Discount accrued through such day for each Portion of Capital and not previously set aside and SECOND, to the extent funds are available therefor, an amount equal to the Servicing Fee accrued through such day for the Purchased Interest and not previously set aside; and (ii) subject to SECTION 1.4(f), if such day is not a Termination Day, remit to the Seller, on behalf of the Issuer, the remainder of the percentage of such Collections, represented by the Purchased Interest, to the extent representing a return of Capital; such Collections shall be automatically deemed reinvested in Pool Receivables, and in the Related Security and Collections and other proceeds with respect thereto, and the Purchased Interest shall be automatically recomputed pursuant to SECTION 1.3; (iii) if such day is a Termination Day, set aside, segregate and hold in trust for the Issuer the entire remainder of the percentage of the Collections represented by the Purchased Interest; PROVIDED that if amounts are set aside and held in trust on any Termination Day and thereafter, the conditions set forth in SECTION 2 of EXHIBIT II are satisfied or are waived by the Administrator, such previously set aside amounts shall, to the extent representing a return of Capital, be reinvested in accordance with the preceding PARAGRAPH (ii) on the day of such subsequent satisfaction or waiver of conditions; and (iv) during such times as amounts are required to be reinvested in accordance with the foregoing PARAGRAPH (ii) or the proviso to PARAGRAPH (iii), release to the Seller (subject to SECTION 1.4(f)) for its own account any Collections in excess of (x) such amounts, (y) the amounts that are required to be set aside pursuant to PARAGRAPH (i) above and (z) any other obligations of the Seller hereunder which are then due and owing. (c) The Servicer shall deposit into the Administration Account, on the last day of each Settlement Period relating to a Portion of Capital (or at such other times as the Administrator shall require upon the occurrence and during the continuation of (i)any Unmatured Termination Event or Termination Event or (ii) at any time when the Rated Long Term Debt of Solectron is not rated at least Investment Grade, any event that materially and adversely affects the Servicer's ability to perform its obligations hereunder or the collectibility of the Receivables), Collections held for the Issuer pursuant to SECTION 1.4(b)(i) or SECTION 1.4(f) with respect to such Portion of Capital and the lesser of (x) the amount of Collections then held for the Issuer pursuant to SECTION 1.4(b)(iii) and (y) such Portion of Capital. (d)
Receivables Purchase Agreement - Solectron Funding Corp., Solectron Corp., Receivables Capital Corp., and Bank of America NT&SA
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