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)