EXHIBIT 4.2
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SOLECTRON CORPORATION,
as Issuer
TO
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
FIRST SUPPLEMENTAL INDENTURE
Dated as of December 27, 2001
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FIRST SUPPLEMENTAL INDENTURE, dated as of December 27, 2001 (the "First
Supplemental Indenture"), between SOLECTRON CORPORATION, a corporation duly
organized and existing under the laws of the State of Delaware, (the "Company"),
and STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., a national banking
association duly authorized and existing under the laws of the United States of
America, as trustee (the "Trustee").
WHEREAS, the Company executed and delivered the Subordinated Debt
Securities Indenture, dated as of December 27, 2001 (the "Subordinated
Indenture"), to the Trustee to provide for the future issuance of the Company's
subordinated debt securities (the "Securities"), to be issued from time to time
in one or more series as might be determined by the Company under the
Subordinated Indenture;
WHEREAS, pursuant to the terms of the Subordinated Indenture, the
Company desires to provide for the establishment of a new series of its
Securities to be known as its 7.25% Subordinated Debentures due 2006 (the
"Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in the
Subordinated Indenture and this First Supplemental Indenture (together, the
"Indenture"); and
WHEREAS, the Company has requested that the Trustee execute and deliver
this First Supplemental Indenture and satisfy all requirements necessary to make
this First Supplemental Indenture a valid instrument in accordance with its
terms, and to make the Debentures, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations of the Company
and all acts and things necessary have been done and performed to make this
First Supplemental Indenture enforceable in accordance with its terms, and the
execution and delivery of this First Supplemental Indenture has been duly
authorized in all respects:
NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless otherwise provided herein or unless the context otherwise
requires:
(a) a term defined in the Subordinated Indenture has the same meaning
when used in this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental Indenture has the
same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect
interpretation;
(e) the following terms have the meanings given to them in the Purchase
Contract Agreement (as defined below): Failed Remarketing; Last Failed
Remarketing; Normal Units; Purchase Contract Agent; Remarketing Agreement;
Remarketing Date; Remarketing Value; Separate Debentures; Stock Purchase Date;
Subsequent Remarketing Date; and Underwriting Agreement.
(f) the following terms have the meanings given to them in the Interest
Pledge Agreement (as defined below): Agent; Collateral; and Pledged Account.
(g) Time of Delivery has the meaning given to it in the Underwriting
Agreement (as defined below).
(h) the following terms have the meanings given to them in this Section
1.1(h):
"Interest Pledge Agreement" shall mean the Pledge Agreement, dated as of
December 27, 2001 by and between the Company, as pledgor and State
Street Bank and Trust Company of California, N.A., as Trustee and as
pledge trustee.
"Interest Rate" shall have the meaning set forth in Section 2.5.
"Lien" means, with respect to any asset, any lien, mortgage, deed of
trust, pledge, security interest, charge or encumbrance of any kind
(including any conditional sale or other title retention agreement, any
lease in the nature thereof and any agreement to give any security
interest).
"Over-Allotment Option" shall mean the option granted to the
underwriters pursuant to the Underwriting Agreement to purchase up to an
additional 4,000,000 Normal Units.
"Purchase Contract Agreement" shall mean the Purchase Contract
Agreement, dated as of December 27, 2001, between the Company and State
Street Bank and Trust Company of California, N.A., as purchase contract
agent (the "Purchase Contract Agent").
"Quotation Agent" has the meaning provided in Section 2.6.
"Redemption Amount" means, for each Debenture, the product of (a) the
principal amount of such Debenture and (b) a fraction whose numerator is
the applicable Redemption Treasury Portfolio Purchase Price and whose
denominator is the applicable Redemption Principal Amount.
"Redemption Price" means the redemption price per Debenture equal to the
Redemption Amount plus any accrued and unpaid interest on such Debenture
to, but excluding the date of redemption.
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"Redemption Principal Amount" means either (i) if the Tax Event
Redemption Date occurs prior to a successful remarketing of the
Debentures pursuant to the terms of Section 5.2 of the Purchase Contract
Agreement, the aggregate principal amount of the Debentures which are
components of Normal Units on the Tax Event Redemption Date or (ii) if
the Tax Event Redemption Date occurs on or after a successful
remarketing of the Debentures pursuant to the terms of Section 5.2 of
the Purchase Contract Agreement, the aggregate principal amount of the
Debentures outstanding on such Tax Event Redemption Date.
"Redemption Treasury Portfolio" means (a) if the Tax Event Redemption
Date occurs prior to a successful remarketing of the Debentures pursuant
to the terms of Section 5.2 of the Purchase Contract Agreement, a
portfolio of zero-coupon U.S. Treasury securities consisting of (i)
principal or interest strips of U.S. Treasury securities which mature on
or prior to the Stock Purchase Date in an aggregate amount equal to the
applicable Redemption Principal Amount and (ii) with respect to each
scheduled interest payment date on the Debentures that occurs after the
Tax Event Redemption Date and on or before the Stock Purchase Date,
principal or interest strips of U.S. Treasury securities which mature on
or prior to such date in an aggregate amount equal to the aggregate
interest payment that would be due on the applicable Redemption
Principal Amount of the Debentures on such date, assuming that the
Interest Rate on the Debentures were not reset on the applicable Reset
Date, and (b) if the Tax Event Redemption Date occurs after successful
remarketing of the Debentures in accordance with Section 5.2 of the
Purchase Contract Agreement, a portfolio of zero-coupon U.S. Treasury
securities consisting of (i) principal or interest strips of U.S.
Treasury securities which mature on or prior to November 15, 2006 in an
aggregate amount equal to the applicable Redemption Principal Amount and
(ii) with respect to each scheduled interest payment date on the
Debentures that occurs after the Tax Event Redemption Date, principal or
interest strips of such U.S. Treasury securities which mature on or
prior to such date in an aggregate amount equal to the aggregate
interest payment that would be due on the applicable Redemption
Principal Amount of the Debentures on such date.
"Redemption Treasury Portfolio Purchase Price" has the meaning provided
in Section 2.6.
"Reset Agent" means a nationally recognized investment banking firm
chosen by the Company to determine the Reset Rate.
"Reset Date" means the date of the successful remarketing of the
Debentures pursuant to the provisions of Section 5.2 of the Purchase
Contract Agreement.
"Reset Rate" means the lowest interest rate per annum (rounded to the
nearest one-thousandth (0.001) of one percent per annum), as determined
by the Reset Agent, that the Debentures shall bear in order for the
Debentures to have a market value at the Remarketing Date or any
Subsequent Remarketing Date, as the case may be, of 100.5% of the
Remarketing Value, assuming, for this purpose, even if not true, that
all of the Debentures are held as components of Normal Units and will be
remarketed; provided, however, that if there has been a Failed
Remarketing, the Reset Rate will be equal to the Interest Rate until (i)
the
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Debentures are successfully remarketed pursuant to the Purchase Contract
Agreement and the Remarketing Agreement or (ii) if the Last Failed
Remarketing shall have occurred, the principal of the Debentures is paid
or made available for payment.
"Tax Event" means the receipt by the Company of an opinion of Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, or other
independent counsel having a nationally recognized tax practice to the
effect that, as a result of (i) any amendment to, change in, or
announced proposed change in, the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing authority
thereof or therein affecting taxation, (ii) any amendment to or change
in an official interpretation or application of any such laws or
regulations by any legislative body, court, governmental agency or
regulatory authority or (iii) any official interpretation or
pronouncement that provides for a position with respect to any such laws
or regulations that differs from the generally accepted position on
December 20, 2001, which amendment, change or proposed change is
effective or which interpretation or pronouncement is announced on or
after December 20, 2001, there is more than an insubstantial risk that
interest or original issue discount on the Debentures would not be
deductible, in whole or in part, by the Company for United States
federal income tax purposes.
"Tax Event Redemption" has the meaning provided in Section 2.6.
"Tax Event Redemption Date" has the meaning provided in Section 2.6.
"Underwriting Agreement" shall mean the Underwriting Agreement, dated as
of December 20, 2001, between the Company and Xxxxxxx, Sachs & Co., Banc
of America Securities LLC, X.X. Xxxxxx Securities Inc. and Xxxxxx
Xxxxxxx & Co. Incorporated.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation, Principal Amount and Authorized Denomination.
There is hereby authorized a series of Securities designated the
7.25% Subordinated Debentures due 2006, limited in aggregate principal
amount to $1,000,000,000 (or up to $1,100,000,000, if the Over-Allotment
Option is exercised in full), which amount to be issued shall be as set
forth in any Company Order for the authentication and delivery of
Debentures pursuant to the Subordinated Indenture. The Debentures shall
be issuable in denominations of $25 and integral multiples thereof.
SECTION 2.2. Maturity.
The Stated Maturity of the Debentures will be November 15, 2006.
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SECTION 2.3. Form and Payment.
(a) The Debentures, on original issuance, shall be issued in the form of
(i) one or more definitive, fully registered Debentures registered initially in
the name of State Street Bank and Trust Company of California, N.A., as Purchase
Contract Agent and (ii) one or more fully registered Global Securities (the
"Global Debentures") registered in the name of The Depository Trust Company
("DTC"), as Depositary, or its nominee, and deposited with the Security
Registrar, as custodian for DTC, for credit by DTC to the respective accounts of
beneficial owners of the Separate Debentures represented thereby (or such other
accounts as they may direct).
(b) The principal of and the interest on the Debentures shall be payable
at the office or agency of the Company maintained for that purpose in accordance
with Section 10.2 of the Subordinated Indenture; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
registered Holder at such address as shall appear in the Security Register or by
wire transfer to an account appropriately designated by the Holder entitled
thereto.
SECTION 2.4. Global Debentures.
(a) DTC shall serve as the initial Depository for the Global Debentures.
(b) Unless and until it is exchanged for definitive Debentures in
registered form in accordance with Section 3.5 of the Subordinated Indenture, a
Global Debenture may be transferred, in whole but not in part, only to another
nominee of the Depositary, or to a successor Depositary selected or approved by
the Company or to a nominee of such successor Depositary.
SECTION 2.5. Interest and Interest Rate Reset.
(a) Each Debenture will bear interest from its Issue Date (as defined
below) or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, as the case may be, initially at the rate of 7.25%
per annum (the "Interest Rate") through but not including August 15, 2004, and
thereafter at the Reset Rate determined in accordance with Section 2.5(b) and
notified to the Trustee by the Company, in each case payable quarterly in
arrears on February 15, May 15, August 15 and November 15 of each year (each, an
"Interest Payment Date"), commencing February 15, 2002, until the principal
thereof is paid or made available for payment; provided that any principal and
installment of interest which is overdue shall bear interest (to the extent that
payment of such interest is enforceable under applicable law) at the Interest
Rate through, but not including August 15, 2004 and at the Reset Rate
thereafter, from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand.
(b) The interest rate on the Debentures will be reset on the Remarketing
Date or any Subsequent Remarketing Date, as the case may be, to the Reset Rate
determined by the Reset Agent (which Reset Rate will become effective from and
after August 15, 2004); provided, however, that if there has been a Failed
Remarketing, the Reset Rate will be equal to the Interest Rate until (i) the
Debentures are successfully remarketed
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pursuant to the Purchase Contract Agreement and the Remarketing Agreement or
(ii) if the Last Failed Remarketing shall have occurred, the principal of the
Debentures is paid or made available for payment.
(c) The amount of interest payable for any period will be computed on
the basis of a 360-day year consisting of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a 90-day quarterly period for which interest is computed
will be computed on the basis of the actual number of days elapsed in such a
90-day period. In the event that any date on which interest is payable on the
Debentures is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(d) The Regular Record Date for interest payable on the Debentures on
each Interest Payment Date shall be the close of business on the Business Day
next preceding each such Interest Payment Date.
(e) The Debentures do not have the benefit of any sinking fund
obligation.
SECTION 2.6. Redemption of the Debentures.
(a) If a Tax Event has occurred and is continuing the Company shall have
the right upon not less than 30 but no more than 60 days' notice to the Holders
of the Debentures to redeem all, but not less than all, the Debentures then
Outstanding (a "Tax Event Redemption") at a price per Debenture equal to the
Redemption Price on the date set forth in such notice (the "Tax Event Redemption
Date"), which notice shall be irrevocable.
(b) The Company shall, in order to determine the price of the Redemption
Treasury Portfolio, retain the services of an agent (the "Quotation Agent"),
which shall be a primary U.S. government securities dealer located in New York
City. The Company shall retain Goldman, Sachs, & Co. or a successor as the
Quotation Agent; provided that if Goldman, Sachs, & Co. ceases to be a primary
government securities dealer or does not wish to perform the services of the
Quotation Agent hereunder, the Company shall retain another primary U.S.
government securities dealer as quotation agent. The Quotation Agent will
solicit the lowest aggregate price quoted by a primary U.S. government
securities dealer for the Redemption Treasury Portfolio on the third Business
Day before the Tax Event Redemption Date (the "Redemption Treasury Portfolio
Purchase Price") for settlement on the Tax Event Redemption Date, promptly
notify the Company of such lowest price and arrange for the purchase and
settlement of the Redemption Treasury Portfolio per the order of the Company.
The Company shall pay to the Quotation Agent the Quotation Agent's customary and
reasonable fees for such service.
SECTION 2.7. Subordination of the Debentures.
Notwithstanding any provision herein to the contrary,
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(a) if, at the time of a successful remarketing of the Debentures
pursuant to the terms of Section 5.2 of the Purchase Contract Agreement, the
Company receives or has received ratings by Standard & Poor's and Xxxxx'x
Investors Service on its senior unsecured debt of at least BBB- and Baa3,
respectively, each with an outlook of stable or better, which are in effect on
the date of such successful remarketing (an "Investment Grade Event"), then, on
and after such Investment Grade Event, the subordination provisions of the
Debentures, including, without limitation, Article 15 of the Subordinated
Indenture, will no longer be applicable and the Debentures will automatically
become general, unsecured obligations of the Company ranking equally in right of
payment with all the Company's existing and future unsubordinated indebtedness.
(b) At all times during which any Debenture is Outstanding, a pro rata
portion of the Holders' rights to payments under each Outstanding Debenture
shall not be subject to the provisions of Article 15 of the Subordinated
Indenture and the subordination provisions of the Subordinated Indenture
generally such that the aggregate amount of all such Outstanding Debentures not
so subject equals the value of the Collateral as such is constituted from time
to time.
SECTION 2.8. Security.
(a) On the date hereof, the Company shall (i) enter into the Interest
Pledge Agreement and comply with the terms and provisions thereof and (ii)
deposit the Collateral to be pledged to the Trustee for its benefit and the
ratable benefit of the Holders in such amount as will be, upon receipt of
scheduled interest and principal payments, if applicable, of such Collateral, in
the opinion of KPMG LLP, independent public accountants, or another nationally
recognized firm of independent public accountants selected by the Company, equal
to the first eight scheduled interest payments due on the Debentures. The
Collateral shall be held by the Agent in the Pledged Account pending disposition
pursuant to the Interest Pledge Agreement.
(b) On each relevant Time of Delivery (if such Time of Delivery is
different from the date hereof), the Company shall (i) comply with the Interest
Pledge Agreement and comply with the terms and provisions thereof and (ii) if
necessary, deposit additional Collateral into the Pledged Account pursuant to
the Interest Pledge Agreement in such amount as will be, upon receipt of
scheduled interest and principal payments, if applicable, of such additional
Collateral, in the opinion of KPMG LLP, independent public accountants, or
another nationally recognized firm of independent public accountants selected by
the Company, equal to the first eight scheduled interest payments due on the
Debentures issued in connection therewith.
(c) Each Holder, by its acceptance of a Debenture, consents and agrees
to the terms of the Interest Pledge Agreement (including, without limitation,
the provisions providing for foreclosure and release of the Collateral) as the
same may be in effect or may be amended from time to time in writing by the
parties thereto (provided that no amendment that would materially adversely
affect the rights of the Holders may be affected without the consent of each
Holder affected thereby), and authorizes and directs each of the Trustee and the
Agent to enter into the Interest Pledge Agreement and to perform its respective
obligations and exercise its respective rights thereunder in accordance
therewith.
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(d) The release of any Collateral pursuant to the Interest Pledge
Agreement will not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Collateral is
released pursuant to this Indenture and the Interest Pledge Agreement. To the
extent applicable, the Company shall cause Section 314(d) of the TIA relating to
the release of property or securities from the Lien and security interest of the
Interest Pledge Agreement and relating to the substitution therefor of any
property or securities to be subjected to the Lien and security interest of the
Interest Pledge Agreement to be complied with. Any certificate or opinion
required by Section 314(d) of the TIA may be made by an Officer of the Company,
except in cases where Section 314(d) of the TIA requires that such certificate
or opinion be made by an independent Person, which Person shall be an
independent engineer, appraiser or other expert selected by the Company.
(e) The Company shall cause Section 314(b) of the TIA, relating to
Opinions of Counsel regarding the Lien under the Interest Pledge Agreement, to
be complied with. The Trustee may, to the extent permitted by Section 6.3 of the
Subordinated Indenture, accept as conclusive evidence of compliance with the
foregoing provisions the appropriate statements contained in such Opinions of
Counsel.
ARTICLE III
FORM OF DEBENTURE
SECTION 3.1. Form of Debenture.
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms:
[IF THE DEBENTURE IS A GLOBAL DEBENTURE, INSERT - This Debenture is a
Global Debenture within the meaning of the Indenture hereinafter referred to and
is registered in the name of the Depositary or a nominee of the Depositary. This
Debenture is exchangeable for Debentures registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Debenture (other than a
transfer of this Debenture as a whole by the Depository to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in limited circumstances.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) to the issuer
or its agent for registration of transfer, exchange or payment, and any
Debenture issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
No. ___________________
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CUSIP No. 000000XX0 $_____________________
ISIN No. US834182AM97
SOLECTRON CORPORATION
7.25% SUBORDINATED DEBENTURE DUE 2006
SOLECTRON CORPORATION, a Delaware corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to __________________________, the
principal sum of ______ dollars ($______________) on November 15, 2006 (such
date is hereinafter referred to as the "Stated Maturity"), and to pay interest
on said principal sum from December 27, 2001, or from the most recent interest
payment date (each such date, an "Interest Payment Date") to which interest has
been paid or duly provided for, quarterly in arrears on February 15, May 15,
August 15 and November 15 of each year, commencing February 15, 2002, initially
at the rate of 7.25% per annum (the "Interest Rate") through and including
August 15, 2004, and at the Reset Rate thereafter, until the principal hereof is
paid or made available for payment; provided that any principal and installment
of interest which is overdue shall bear interest (to the extent that payment of
such interest is enforceable under applicable law) at the Interest Rate through
and including August 15, 2004, and at the Reset Rate thereafter, from the dates
such amounts are due until they are paid or made available for payment, and such
interest shall be payable on demand; and provided, further, that if there has
been a Failed Remarketing, the Reset Rate will be equal to the Interest Rate
until (i) the Debentures are successfully remarketed pursuant to the Purchase
Contract Agreement and the Remarketing Agreement or (ii) if the Last Failed
Remarketing shall have occurred, the principal of the Debentures is paid or made
available for payment. The amount of interest payable on any Interest Payment
Date shall be computed on the basis of a 360-day year consisting of twelve
30-day months. Except as provided in the following sentence, the amount of
interest payable for any period shorter than a 90-day quarterly period for which
interest is computed will be computed on the basis of the actual number of days
elapsed in such a 90-day period. In the event that any date on which interest is
payable on this Debenture is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. The interest installment
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the person in whose name
this Debenture is registered at the close of business on the Regular Record Date
for such interest installment, which as long as any Debentures are represented
by a Global Debenture shall be the close of business on the Business Day next
preceding such Interest Payment Date; provided, however, if pursuant to the
terms of the Indenture the Debentures are no longer represented by a Global
Debenture, the Company may select such Regular Record Date for such interest
installment which shall be more than one Business Day but less than 60 Business
Days prior to an Interest Payment Date. Any such interest installment not
punctually
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paid or duly provided for shall forthwith cease to be payable to the registered
Holders on such Regular Record Date and may be paid to the Person in whose name
this Debenture is registered at the close of business on a Special Record Date
to be fixed by the Trustee for the payment of such Defaulted Interest, notice
whereof shall be given to the registered Holders of this series of Debentures
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures may be listed, and upon such notice
as may be required by such exchange all as more fully provided in the Indenture.
The principal of and the interest on this Debenture shall be payable at the
Office or Agency of the Company maintained for that purpose in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
registered Holder at such address as shall appear in the Security Register or by
wire transfer to an account appropriately designated by the Holder entitled
thereto.
The indebtedness evidenced by this Debenture is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company,
and this Debenture is issued subject to such provisions of the Indenture with
respect thereto. Each Holder of this Debenture, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes.
Notwithstanding any provision in the Indenture to the contrary, if, at
the time of a successful remarketing of the Debentures pursuant to the terms of
Section 5.2 of the Purchase Contract Agreement, the Company receives or has
received ratings by Standard & Poor's and Xxxxx'x Investors Service on its
senior unsecured debt of at least BBB- and Baa3, respectively, each with an
outlook of stable or better, which are in effect on the date of such successful
remarketing (an "Investment Grade Event"), then, on and after such Investment
Grade Event, the subordination provisions of the Debentures, including, without
limitation, Article 15 of the Subordinated Indenture, will no longer be
applicable and the Debentures will automatically become general, unsecured
obligations of the Company ranking equally in right of payment with all the
Company's existing and future unsubordinated indebtedness.
At all times during which any Debenture is Outstanding, a pro rata
portion of the Holders' rights to payments under each Outstanding Debenture
shall not be subject to the provisions of Article 15 of the Subordinated
Indenture and the subordination provisions of the Subordinated Indenture
generally such that the aggregate amount of all such Outstanding Debentures not
so subject equals the value of the Collateral as such is constituted from time
to time. Each Holder, by its acceptance of a Debenture, consents and agrees to
the terms of the Interest Pledge Agreement (including, without limitation, the
provisions providing for foreclosure and release of the Collateral) as the same
may be in effect or may be amended from time to time in writing by the parties
thereto (provided that no amendment that would materially adversely affect the
rights of the Holders may be affected without the consent of each Holder
affected thereby), and authorizes and directs the Trustee and the Agent to enter
into the
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Interest Pledge Agreement and to perform its respective obligations and exercise
its respective rights thereunder in accordance therewith.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
SOLECTRON CORPORATION
By: _________________________
Name:
Title:
Attest:
______________________
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series designated herein and
referred to in the within-mentioned Indenture.
Dated:
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee
By: _________________________
Authorized Signatory
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(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of the subordinated
debentures of the Company (herein sometimes referred to as the "Securities"),
specified in the Indenture hereinafter referred to, all issued or to be issued
in one or more series under and pursuant to a Subordinated Debt Securities
Indenture dated as of December 27, 2001 (the "Subordinated Indenture"), duly
executed and delivered between the Company and State Street Bank and Trust
Company of California, N.A., as Trustee (the "Trustee"), as supplemented by the
First Supplemental Indenture, dated December 27, 2001, duly executed and
delivered between the Company and the Trustee (the "First Supplemental
Indenture" and together with the Subordinated Indenture, the "Indenture"), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Securities. By the terms of the Indenture, the Securities are issuable in series
that may vary as to amount, date of maturity, rate of interest and in other
respects as provided in the Indenture. This series of Securities is limited in
aggregate principal amount as specified in said First Supplemental Indenture.
The Debentures do not have the benefit of any sinking fund obligation.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debentures to be affected under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of more than 50% in principal amount of the Debentures at the time
Outstanding to be affected. The Indenture also contains provisions permitting
the Holders of specified percentages in principal amount of the Debentures at
the time Outstanding, on behalf of the Holders of all Debentures, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Debenture shall be conclusive and binding upon such
Holder and upon all future Holders of this Debenture and of any Debenture issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Debenture.
As provided in and subject to the provisions of the Indenture, the
Holder of this Debenture shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Debentures, the Holders of not less than 25% in principal amount of the
Debentures at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in principal amount of
13
Debentures at the time Outstanding a direction inconsistent with such request,
and shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Debenture for the enforcement
of any payment of principal hereof or any premium or interest hereon on or after
the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Debenture at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Debenture is registrable in the Security
Register, upon surrender of this Debenture for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Debenture are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or its
attorney duly authorized in writing, and thereupon one or more new Debentures
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Debentures are issuable only in registered form without coupons in
denominations of $25 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Debentures are
exchangeable for a like aggregate principal amount of Debentures and of like
tenor of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Debenture for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Debenture is registered as the owner hereof for
all purposes, whether or not this Debenture be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
[If Debenture is a Global Debenture, insert - This Debenture is a Global
Debenture and is subject to the provisions of the Indenture relating to Global
14
Debentures, including the limitations in Section 3.5 of the Subordinated
Indenture on transfers and exchanges of Global Debentures.]
All terms used in this Debenture that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
This Debenture shall be governed by and construed in accordance with the
laws of the State of New York.
15
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Debenture to:
--------------------------------------------------------------------------------
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(Insert assignee's social security or tax identification number)
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--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert address and zip code of assignee)
agent to transfer this Debenture on the Security Register. The agent may
substitute another to act for him or her.
Dated: Signature:
Signature Guarantee:
(Sign exactly as your name appears on the other side of this Debenture)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Security Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Security Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
16
[IF THE DEBENTURE IS A GLOBAL DEBENTURE, INSERT -
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL DEBENTURE
The following increases or decreases in this Global Debenture have been
made:
==============================================================================================================================
Principal amount of
Amount of Amount of this Global Debenture Signature of
decrease in principal increase in principal following such authorized signatory
amount of the Global amount of the Global decrease or of Trustee or
Date Debenture Debenture increase Custodial Agent
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]
17
ARTICLE IV
ORIGINAL ISSUE OF DEBENTURES
SECTION 4.1. Original Issue of Debentures.
Debentures in the aggregate principal amount of $1,000,000,000 (or up to
$1,100,000,000, if the Over-Allotment Option is exercised) may, upon execution
of this First Supplemental Indenture, be executed by the Company and delivered
to the Trustee for authentication, and the Trustee shall thereupon authenticate
and deliver said Debentures in accordance with a Company Order. The date of
issuance of the Debentures shall be December 27, 2001 (the "Issue Date").
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Ratification of Subordinated Indenture.
The Subordinated Indenture, as supplemented by this First Supplemental
Indenture, is in all respects ratified and confirmed, and this First
Supplemental Indenture shall be deemed part of the Subordinated Indenture in the
manner and to the extent herein and therein provided.
SECTION 5.2. Governing Law.
THIS FIRST SUPPLEMENTAL INDENTURE AND EACH DEBENTURE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 5.3. Not Responsible for Recitals.
The recitals contained in this First Supplemental Indenture, except the
Trustee's certificate of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness and
makes no representation as to the validity or sufficiency of this First
Supplemental Indenture.
SECTION 5.4. Counterparts.
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
18
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed by their respective officers thereunto duly
authorized, on the date or dates indicated in the acknowledgments and as of the
day and year first above written.
SOLECTRON CORPORATION
By: /s/ Xxxxx Xxxxx
----------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President,
Chief Financial Officer
(Principal Financial and
Accounting Officer)
Attest:
/s/ Xxxxx Xxxx
--------------------
STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: /s/ Xxxxx Xxxxxx
----------------------------------
Authorized Signatory
