Document:

Exhibit 10.18

                              EMPLOYMENT AGREEMENT

            THIS EMPLOYMENT AGREEMENT (the "Employment Agreement") is made this
20th day of July, 2001, between EP MedSystems, Inc., a New Jersey corporation
(the "Company"), and Reinhard Schmidt (the "Executive").

                                  WITNESS THAT

            WHEREAS, the Company wishes to retain the services of the Executive
as an employee; and

            WHEREAS, the Executive agrees to be retained by the Company under
the terms and subject to the conditions hereinafter set forth;

            NOW, THEREFORE, in consideration of the mutual covenants and
representations contained herein, the parties hereto agree as follows:

      1. Position and Duties.

            (a) Position and Duties. The Company hereby engages the Executive as
the President and Chief Operating Officer of the Company under the terms and
subject to the conditions set forth in this Employment Agreement. During the
Employment Period (as hereinafter defined), the Executive shall report to the
Chief Executive Officer of the Company and shall exercise such authority,
perform such executive duties and functions and discharge such responsibilities
as are reasonably associated with the Executive's position, commensurate with
the authority vested in the Executive pursuant to this Employment Agreement and
consistent with the By-Laws of the Company, including, without limitation, the
responsibility for the Company's day-to-day operations. During the Employment
Period, the Executive shall devote his full business time, skill and efforts to
the business of the Company.

            (b) Company Offices. The Executive acknowledges that the Company's
headquarters are located in Mount Arlington, New Jersey but that the Company has
a facility in West Berlin, New Jersey as well and that the Executive's duties
shall primarily be performed from the West Berlin offices, subject to reasonable
and necessary business travel from time to time. Executive acknowledges and
agrees that the location of performance of his duties shall be at the discretion
of the Board of Directors provided that such location is within the State of New
Jersey.

            (c) Election to Board of Directors. The Executive agrees that, if
elected, the Executive shall serve as a member of the Board of Directors of the
Company and of any committees of the Board to which he may be appointed during
the Employment Period at the discretion of the Board and the shareholders, as
applicable, without further compensation, provided however, that insofar as the
election of the Executive as a director, the Company's obligations shall be to
use its best efforts to cause the expansion of the current Board of Directors to
five members and to similarly use its best efforts to cause the Executive to be
elected as a director to fill the vacancy created by such expansion. To the
extent that the Executive is elected

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to the Board of Directors, subject to approval of the Company's Plan Committee,
Compensation Committee or the Board of Directors, as required by the Company's
1995 Director Option Plan, the Company shall grant to the Executive a stock
option for the purchase of 60,000 shares of the Company's common stock at an
exercise price of equal to the fair market value of stock on the date of the
option grant. The stock option shall in all respects be subject to the terms and
provisions of the Company's 1995 Director Option Plan and to the option grant
and shall vest at the rate of 1,000 shares per month while the Executive is
serving as a director.

      2. Employment Period.

            The Company shall employ the Executive, and the Executive shall
serve the Company, under the terms of this Employment Agreement for an initial
term of two (2) years commencing on a mutually agreed upon date as soon as
possible after the date first above written. Unless terminated in accordance
with the provisions hereof, this Employment Agreement shall be renewed
automatically after the initial two-year term for successive one-year terms on
August 1st of each year on the same terms and subject to the same conditions
contained herein. Either party may provide the other with written notice of its
intention not to renew this Employment Agreement at least thirty (30) days prior
to the expiration of the then current term. Notwithstanding the foregoing, the
Executive's employment hereunder may be earlier terminated, in accordance with
the provisions of Section 4 and subject to the provisions of Section 5 hereof.
Any non-renewal of this Employment Agreement by the Company shall not be deemed
to be a termination other than for "cause" for purposes of Sections 4 or 5
hereof. The period of time between the commencement and the expiration or
earlier termination of the Executive's employment hereunder shall be referred to
herein as the "Employment Period."

      3. Compensation and Benefits.

            (a) Salary. During the Employment Period, the Company shall pay to
the Executive, as compensation for the performance of his duties and obligations
under this Employment Agreement, a base salary of $200,000 per annum, payable in
arrears not less frequently than monthly in accordance with the normal payroll
practices of the Company. Such base salary shall be subject to review each year
by the Board of Directors with any change in salary being in the sole discretion
of the Board of Directors.

            (b) Bonuses. During the first year of the Employment Period, the
Executive shall be eligible to earn a bonus in an amount up to $50,000, the
amount of which shall be based upon and subject to the achievement of certain
milestones to be determined by the Board of Directors, in its sole discretion.
Any such bonus shall be payable in accordance with the Company's normal payroll
practices. In each subsequent year of the Employment Period, the Executive shall
be eligible to receive a bonus in such amount and upon achievement of such
milestones as the Board of Directors shall determine, in its sole discretion.

            (c) Other Benefits. During the Employment Period, the Executive
shall be entitled to participate in all of the employee benefit plans, programs
and arrangements of the Company in effect during the Employment Period which are
generally available to senior executives of the Company, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plans, programs and arrangements, which plans, programs and

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arrangements shall include, without limitation, full health, life and disability
insurance coverage. In addition, during the Employment Period, the Executive
shall be entitled to fringe benefits and perquisites comparable to those of
other senior executives of the Company, including, but not limited to, four (4)
weeks of vacation pay per year, to be used in accordance with the Company's
vacation pay policy for senior executives.

            (d) Business Expenses. During the Employment Period, the Company
shall reimburse the Executive for all appropriately documented, reasonable
business expenses incurred by the Executive in the performance of his duties
under this Employment Agreement, in accordance with the Company's policies.

            (e) Automobile Allowance. During the Employment Period, the Company
shall provide to the Executive a monthly allowance equal to $600 as an
automobile allowance.

            (f) Temporary Housing Allowance. During the first year of the
Employment Period, the Company shall provide to the Executive a monthly
allowance equal to up $2,000 for the rental of temporary housing in the Cherry
Hill, New Jersey area. After the first year of the Employment Period, the
Company and the Executive shall re-evaluate the need for such allowance and a
decision shall be made by the Board of Directors, in its sole discretion,
whether to continued this perquisite.

            (g) Stock Options. Subject to approval of the Company's Plan
Committee, Compensation Committee or the Board of Directors, as required by the
Company's 1995 Long Term Incentive Plan, the Company shall grant to the
Executive an Incentive Stock Option under such plan for the purchase of 100,000
shares of the Company's common stock at an exercise price equal to not less than
100% of the fair market value of the stock on the date of the option grant. The
option shall vest as to 20% of the shares subject to option immediately upon
grant and, thereafter, 20% of the remainder of the shares subject to option
shall vest each year on the anniversary date of the date of grant and the option
shall be exercisable for a period of ten years from the date of grant. In
addition, during each subsequent year of the Employment Period, the Executive
shall be eligible to receive other grants of stock options or equity-based
incentive compensation under plans or arrangements adopted by the Company for
which senior executives are eligible. The stock options so granted shall be
subject in all respects to the terms and provisions of the Company's 1995 Long
Term Incentive Plan.

            (h) Equity. In further consideration of the Executive's agreement to
enter into the Company's employ, the Company shall sell and issue to the
Executive 100,000 shares of the Company's common stock (the "Shares") at a price
per share equal to the closing sale price on the date hereof, together with a
five-year warrant to purchase an additional 100,000 shares of the Company's
common stock at an exercise price equal to $2.75 per share (the "Warrant"),
pursuant to a Restricted Stock Purchase Agreement in substantially the form of
Exhibit A, and shall provide the Executive with an interest-free, non-recourse
loan to effect the purchase of the Shares; the loan shall extend for a period of
two (2) years, shall be evidenced by a promissory note in substantially the form
of Exhibit B and shall be secured by the Shares in accordance with the terms of
a Stock Pledge Agreement in substantially the form of Exhibit C, both of which
shall be executed contemporaneously with the execution hereof. The Warrant shall
be evidenced by a warrant instrument in substantially the form of Exhibit D.

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      4. Termination of Employment.

            (a) Termination. The Company may terminate the Executive's
employment hereunder at any time and for any reason which termination shall be
effective immediately upon written notice from the Company to the Executive.

            (b) Termination for Cause. For purposes of this Employment Agreement
the Company shall have "cause" to terminate the Executive's employment hereunder
if such termination shall be the result of:

            (i) fraud, theft, misappropriation of funds or assets or dishonesty
      or similar behavior;

            (ii) the conviction for, or plea of nolo contendere to a charge of
      commission of a felony involving dishonesty as against the Company;

            (iii) the willful, or grossly negligent, misconduct, disobedience or
      failure to substantially perform his duties hereunder or carry out an
      order from the Chief Executive Officer or the Board of Directors;

            (iv) habitual absence from work, including, without limitation,
      habitual absence from the office for substantial portions of a workday on
      non-Company matters;

            (v) habitual drunkenness, habitual drug use or addition;

            (vi) malicious denigration in public of the Company or any of its
      officers, directors or affiliates;

            (vii) physical destruction of Company property or assets or physical
      violence or lewd or lascivious behavior;

            (viii) appropriation of business opportunities of the Company for
      direct or indirect personal gain;

            (ix) any conduct of the Executive which is materially detrimental or
      embarrassing to the Company;

            (x) any significant and meaningful default of the Executive's
      obligations under this Employment Agreement which is not cured within
      thirty (30) days of written notification thereof to the Executive by the
      Company;

            (xi) any failure or refusal by the Executive to comply with the
      reasonable policies, rules and regulations of the Company which is not
      cured within thirty (30) days of written notification thereof to the
      Executive by the Company; or

            (xii) breach of the confidentiality/non-disclosure agreement entered
      into by the Executive contemporaneously herewith.

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            Notwithstanding the foregoing, it shall be a condition precedent to
the Company's right to terminate the Executive's employment for "cause" that (1)
the Company shall first have given the Executive written notice stating with
specificity the grounds for the "cause" and (2) if such grounds are susceptible
of being eliminated, a period of thirty (30) days from and after the giving of
such notice shall have elapsed without the Executive having effectively
eliminated such grounds during such 30-day period, unless such grounds cannot be
eliminated within thirty (30) days, in which case the period for elimination
shall be extended for a reasonable time (not to exceed thirty (30) days),
provided the Executive has made and continues to make a diligent effort to
effect such elimination.

            (c) Termination for Good Reason. The Executive shall have the right
to terminate his employment with the Company at any time and for any reason. For
purposes of this Employment Agreement, the Executive shall have "good reason" to
terminate his employment hereunder if such termination shall be the result of:

            (i) a material reduction by the Company of the compensation and
      benefits provisions set forth in Section 3 hereof; or

            (ii) a breach by the Company of any of the material terms of this
      Employment Agreement;

            (iii) a material diminution in the Executive's duties and
      responsibilities or title or authority associated with such title as set
      forth in Section 1 hereof;

            (iv) the relocation of the Company outside of the State of New
      Jersey; or

            (v) either of (i) or (iii) above occurring within one (1) year
      following a Change in Control (as hereinafter defined) of the Company.

            Notwithstanding the foregoing, it shall be a condition precedent to
the Executive's right to terminate his employment for "good reason" that (1) the
Executive shall first have given the Company written notice stating with
specificity the reason for the resignation ("breach") and (2) if such breach is
susceptible of cure or remedy, a period of thirty (30) days from and after the
giving of such notice shall have elapsed without the Company having effectively
cured or remedied such breach during such 30-day period, unless such breach
cannot be cured or remedied within thirty (30) days, in which case the period
for remedy or cure shall be extended for a reasonable time (not to exceed thirty
(30) days), provided the Company has made and continues to make a diligent
effort to effect such remedy or cure.

For purposes hereof, the term "Change in Control" shall be deemed to have
occurred if:

(1) any person, firm or corporation acquires directly or indirectly the
Beneficial Ownership (as defined in Section 13(d) of the Securities Exchange Act
of 1934, as amended) of any voting security of the Company and immediately after
such acquisition, the acquirer has Beneficial Ownership of voting securities
representing 40% or more of the total voting power of all the then-outstanding
voting securities of the Company; or

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(2) the individuals (A) who, as of the date hereof constitute the Board of
Directors of the Company (the "Original Directors") or (B) who thereafter are
elected to the Board of Directors of the Company (the "Company Board") and whose
election, or nomination for election, to the Company Board was approved by a
vote of at least 2/3rds of the Original Directors then still in office (such
directors being called the "Additional Original Directors") or (C) who are
elected to the Company Board and whose election or nomination for election to
the Company Board was approved by a vote of at least 2/3rds of the Original
Directors and the Additional Original Directors then still in office, cease for
any reason to constitute a majority of the members of the Company Board; or

(3) the shareholders of the Company shall approve a merger, consolidation,
recapitalization or reorganization of the Company or consummation of any such
transaction if shareholder approval is not sought or obtained, other than any
such transaction which would result in at least 75% of the total voting power
represented by the voting securities of the surviving entity outstanding
immediately after such transaction being Beneficially Owned by holders of
outstanding voting securities of the Company immediately prior to the
transaction, with the voting power of each such continuing holder relative to
such other continuing holders being not altered substantially in the
transaction; or

(4) the shareholders of the company shall approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of all
or a substantial portion of the Company's assets (i.e. 50% or more in value of
the total assets of the Company.

            (d) Termination Upon Death or Permanent Disability. The Employment
Period shall be terminated by the death of the Executive. The Employment Period
may be terminated by the Board of Directors if the Executive shall be rendered
incapable of performing his duties to the Company by reason of any medically
determined physical or mental impairment that continues for a period of either
(i) three (3) or more consecutive months from the first date of the Executive's
absence due to the disability, or (ii) six (6) months during any twelve-month
period (in either case, a "Permanent Disability"). If the Employment Period is
terminated by reason of Permanent Disability of the Executive, the Company shall
give thirty (30) days' advance written notice to that effect to the Executive.

      5. Consequences of Termination.

            (a) Without Cause or for Good Reason. In the event of a termination
of the Executive's employment during the Employment Period by the Company other
than for "cause" (as provided for in Section 4(b) hereof) and other than for
death or Permanent Disability, or by the Executive for "good reason" (as
provided for in Section 4(c) hereof), the Company shall pay the Executive and
provide him with the following:

            (b) Payments. The Executive shall be entitled to the following cash
payments (net of any required tax withholding):

            (i)   Severance Payment: The Executive's then-current base salary
                  payable over a period of twelve months which shall be payable
                  in the same amounts and

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                  at the same intervals as in effect during the Employment
                  Period subject to any revisions in the Company's normal
                  payroll practices; and

            (ii)  Earned but Unpaid Amounts: Any previously earned but unpaid
                  base salary through the Executive's final date of employment
                  with the Company, and any previously earned but unpaid bonus
                  amounts for any completed fiscal year prior to the date of the
                  Executive's termination of employment, which shall be payable
                  on the same date(s) as such amounts would have been paid prior
                  to the termination.

            (c) Other Benefits. For a period of twelve (12) months from the date
of termination, the Company shall provide to the Executive continued coverage
for himself and his dependents under all health, life, disability and similar
employee benefit plans and programs of the Company on the same basis as the
Executive was entitled to participate immediately prior to such termination,
provided that the Executive's continued participation is possible under the
general terms and provisions of such plans and programs. In the event that the
Executive's participation in any such plan or program is barred, the Company
shall arrange to provide the Executive with benefits substantially similar
(including all tax effects) to those which the Executive would otherwise have
been entitled to receive under such plans and programs from which his continued
participation is barred. In the event that the Executive is covered under
substitute benefit plans of another company prior to the expiration of the
twelve (12) months period, the Company will no longer be obligated to continue
the respective coverages provided for in this Section 5(c).

            (d) For Cause or Without Good Reason. In the event that the
Executive's employment with the Company is terminated during the Employment
Period by the Company for "cause" (as provided for in Section 4(b) hereof) or by
the Executive other than for "good reason" (as provided for in Section 4(c)
hereof), the Company shall pay the Executive any earned but unpaid salary
through the Executive's final date of employment with the Company, and any
previously earned but unpaid bonus amounts for any completed fiscal year prior
to the date of the Executive's termination of employment, and the Company shall
have no further obligations to the Executive.

            (e) Death or Permanent Disability. In the event that the Executive's
employment with the Company is terminated during the Employment Period by the
Company as a result of the Executive's death or Permanent Disability (as
provided for in Section 4(d) hereof), the Company shall pay the Executive (or
his legal representative) any earned but unpaid salary through the Executive's
final date of employment with the Company and any previously earned but unpaid
bonus amounts for any completed fiscal year period to the date of the
Executive's termination of employment and a pro rata annual bonus for the
calendar year in which the death or Permanent Disability occurs. In case of the
Executive's death, the Company shall also pay to the Executive's legal
representative a sum equal to the Executive's base salary for a period of sixty
(60) days and provide continued coverage under all health, life, disability and
similar employee benefit plans and programs of the Company to the Executive's
dependents previously covered under such plans and programs on the same basis as
the Executive was entitled to participate immediately prior to such termination
for such period, provided that the Executive's continued participation is
possible under the general terms and provisions of such plans and programs. In
case of the Executive's Permanent Disability, the Company shall also pay to the
Executive his base salary for a period of six (6) months and provide, during
such six-month period, continued coverage under all health, life, disability and
similar employee benefit plans and programs of the Company on the same basis as
the Executive was entitled to participate immediately prior to such termination,
provided that the Executive's continued participation is possible under the
general terms and provisions of such plans and

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programs. In the event that the Executive's participation in any such plan or
program is barred, the Company shall arrange to provide the Executive with
benefits substantially similar (including all tax effects) to those which the
Executive would otherwise have been entitled to receive under such plans and
programs from which his continued participation is barred. In the event that the
Executive is covered under substitute benefit plans of another Company prior to
the expiration of the six-month period, the Company will no longer be obligated
to continue the respective coverages provided for in this Section 5(e).

            (f) Withholding of Taxes. All payments required to be made by the
Company to the Executive under this Employment Agreement shall be subject to the
withholding of such amounts, if any, relating to tax, excise tax and other
payroll deductions as the Company may reasonably determine it should withhold
pursuant to any applicable law or regulation.

            (g) No Other Obligations. The benefits payable to the Executive
under this Employment Agreement are not in lieu of any benefits payable under
any employee benefit plan, program or arrangement of the Company, except as
provided specifically herein, and upon termination the Executive will receive
such benefits or payments, if any, as he may be entitled to receive pursuant to
the terms of such plans, programs and arrangements. Except for the obligations
of the Company provided by the foregoing and this Section 5, the Company shall
have no further obligations to the Executive upon his termination of employment.

            (h) Resignations. The Executive specifically agrees that upon the
termination of his employment, whether voluntarily or involuntarily, his various
offices and position on the Board of Directors and committees thereof, if any,
shall cease without further action on the part of the Executive or the Company.

      6. Indemnity.

            The Company shall, to the fullest extent required by law and by its
Certificate of Incorporation and By-laws, indemnify Executive and hold him
harmless for any acts or decisions made by him in good faith while performing
his duties pursuant to this Employment Agreement.

      7. Restrictive Covenants.

            (a) Confidential Information. During the Employment Period and at
all times thereafter, the Executive agrees that he will not divulge to anyone
(other than the Company or any persons employed or designated by the Company)
any knowledge or information of any type whatsoever whether of a confidential
nature or otherwise relating to the business of the Company or any of its
subsidiaries or affiliates, including, without limitation, all types of trade
secrets (unless readily ascertainable from public or published information or
trade sources) and confidential commercial information, and the Executive
further agrees not to disclose, publish or

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make use of any such knowledge or information without the prior written consent
of the Company.

            (b) Non-Solicitation and Non-Competition Agreement. The Executive
shall execute and deliver the Company's standard form of Non-Solicitation and
Non-Competition Agreement in substantially the form of Exhibit E hereto on the
date of execution of this Employment Agreement.

            (c) Enforcement. The Executive agrees that the Company would be
irreparably injured in the event of a breach by the Executive of the provisions
of this Section 7, that monetary damages would not be an adequate remedy for
such breach, and that the Company shall be entitled to seek a restraining order
or injunction in any court of competent jurisdiction to prevent any continuation
of any violation of the provisions of this Section 7. The covenants contained in
this Section 7 shall be enforced to the fullest extent permissible under the
laws of each jurisdiction in which enforcement is sought. The Executive agrees
that if any of the provisions of this Section 7 shall be adjudicated to be
invalid or unenforceable for any reason whatsoever, said provision shall be
construed (only with respect to the operation thereof in the particular
jurisdiction in which such adjudication is made) by limiting and reducing it so
as to be enforceable to the fullest extent permissible, without invalidating the
remaining provisions of this Employment Agreement or affecting the validity or
enforceability of said provision in any other jurisdiction.

      8. Notice.

            All notices, requests and other communications pursuant to this
Employment Agreement shall be in writing and shall be deemed to have been duly
given, if delivered in person or by courier, telegraphed, telexed or by
facsimile transmission or sent by express, registered or certified mail, postage
prepaid, addressed as follows:

             If to the Executive:

             Reinhard Schmidt
             55 Troy Drive
             Short Hills, New Jersey 07078

             If to the Company:

             EP MedSystems, Inc.
             100 Stierli Court, Suite 107
             Mount Arlington, New Jersey 07856
             Attention: Chief Executive Officer

Either party may, by written notice to the other, change the address to which
notices to such party are to be delivered or mailed.

      9. Arbitration.

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            Except as specifically provided herein, any dispute or controversy
arising under or in connection with this Employment Agreement shall be settled
exclusively by arbitration, conducted before a single arbitrator in the State of
New Jersey, in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrator's award in any court
having jurisdiction. The Company shall bear the expense of any such arbitration
proceeding and shall reimburse the Executive, regardless of the outcome, for all
of his reasonable costs and expenses relating to such arbitration proceeding,
including, without limitation, reasonable attorneys' fees and expenses. In no
event shall the Executive be required to reimburse the Company for any of the
costs or expenses relating to such arbitration proceeding.

      10. Waiver of Breach.

            Any waiver of any breach of this Employment Agreement shall not be
construed to be a continuing waiver or consent to any subsequent breach on the
part either of the Executive or of the Company.

      11. Non-Assignment; Successors.

            Neither party hereto may assign his or its rights or delegate his or
its duties under this Employment Agreement without the prior written consent of
the other party; provided, however, that (i) this Employment Agreement shall
inure to the benefit of and be binding upon the successors and assigns of the
Company upon any sale of all or substantially all of the Company's assets, or
upon any merger, consolidation or reorganization of the Company with or into any
other corporation, all as though such successors and assigns of the Company and
their respective successors and assigns were the Company; and (ii) this
Employment Agreement shall inure to the benefit of and be binding upon the
heirs, assigns or designees of the Executive to the extent of any payments due
to them hereunder. The Company shall require any successor, by an agreement in
form and substance satisfactory to the Executive, expressly to assume and agree
to perform this Employment Agreement in the same manner and to the same extent
as the Company would be required to perform if no such succession had taken
place. As used in this Employment Agreement, the term "Company" shall be deemed
to refer to any such successor or assign of the Company referred to in the
preceding sentence.

      12. Severability.

            To the extent any provision of this Employment Agreement or portion
thereof shall be invalid or unenforceable, it shall be considered deleted
therefrom and the remainder of such provision and of this Employment Agreement
shall be unaffected and shall continue in full force and effect.

      13. Counterparts; Facsimile Execution.

            This Employment Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument. Facsimile execution and
delivery of this Employment Agreement is legal, valid and binding execution and
delivery for all purposes.

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      14. Governing Law.

            This Employment Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of New Jersey, without giving
effect to the choice of law principles thereof.

      15. Entire Agreement.

            This Employment Agreement constitutes the entire agreement by the
Company and the Executive with respect to the subject matter hereof and except
as specifically provided herein, supersedes any and all prior agreements or
understandings between the Executive and the Company with respect to the subject
matter hereof, whether written or oral. This Employment Agreement may be amended
or modified only by a written instrument executed by the Executive and the
Company.

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      IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the day and year first above written.

                                    s/ Reinhard Schmidt
                                    Reinhard Schmidt

                                    EP MedSystems, Inc.

                                    By: s/ David A. Jenkins
                                    Name: David A. Jenkins
                                    Title: President and Chief Executive Officer

                                      E-45EXHIBIT A

                                                                Exhibit 10(a)(1)

                           SECOND AMENDED AND RESTATED

                        RECEIVABLES PURCHASE AGREEMENT(1)

                            Dated as of June 14, 2000

                                      Among

                                SCI FUNDING, INC.

                                    as Seller

                              SCI TECHNOLOGY, INC.

                               as initial Servicer

                                SCI SYSTEMS, INC.

                                  as Guarantor

                        RECEIVABLES CAPITAL CORPORATION,

                              as Exiting Purchaser

                           QUINCY CAPITAL CORPORATION

                                       and

                          AMSTERDAM FUNDING CORPORATION

                              as Conduit Purchasers

                                       and

                      BANK OF AMERICA, NATIONAL ASSOCIATION

                                       and

                               ABN AMRO BANK N.V.

----------
(1)   Conformed as amended by the Second Amendment dated as of August 10, 2001.
<PAGE>

                               as Bank Purchasers

                      BANK OF AMERICA, NATIONAL ASSOCIATION

                             as Administrative Agent
<PAGE>

                               TABLE OF CONTENTS

Section                                                                     Page

ARTICLE I

      PURCHASES AND REINVESTMENTS..............................................2
      1.01.       Purchases and Reinvestments..................................2
      1.02.       Purchase and Reinvestment Limits.............................4
      1.03.       Making Purchases from Seller.................................4
      1.04.       Assignment...................................................5
      1.05.       Facility Termination Date....................................5
      1.06.       Purchase Termination Date....................................5
      1.07.       Voluntary Termination of Facility or
                  Reduction of Maximum Purchase Limit..........................5
      1.08.       Limitation of Ownership Interest.............................6
      1.09.       Assignments on Closing Date..................................6
      1.10.       Assignment by Quincy to its Bank Purchasers..................6
      1.11.       Downgrade of Bank Purchaser..................................7
      1.12.       Non-Renewing Bank Investors.................................10

ARTICLE II

      UNDIVIDED INTEREST AND PURCHASERS' SHARE................................11
      2.01.       Undivided Interest..........................................11
      2.02.       Required Allocation.........................................11
      2.03.       Purchaser's Investment......................................12
      2.04.       Net Pool Balance............................................13
      2.05.       Purchasers' Share...........................................14

ARTICLE III

      SETTLEMENTS.............................................................14
      3.01.       Non-Run Off Settlement Procedures for Collections...........14
      3.02.       Run Off Settlement Procedures for Collections...............16
      3.03.       Special Settlement Procedures; Reduction of
                  Purchaser's Investment, Etc.................................16
<PAGE>

      3.04.       Reporting...................................................19
      3.05.       Payments and Computations, Etc..............................19
      3.06.       Treatment of Collections and Deemed Collections.............20

ARTICLE IV

      FEES AND YIELD PROTECTION...............................................20
      4.01.       Fees........................................................20
      4.02.       Yield Protection............................................20

ARTICLE V

      CONDITIONS TO EFFECTIVENESS OF PURCHASES................................22
      5.01.       Conditions Precedent to Initial Purchase....................22
      5.02.       Conditions Precedent to All Purchases and Reinvestments.....24

ARTICLE VI

      REPRESENTATIONS AND WARRANTIES..........................................24
      6.01.       Representations and Warranties - Seller.....................24
      6.02.       Representations and Warranties - SCI........................27
      6.03.       Representations and Warranties - Guarantor..................29

ARTICLE VII

      GENERAL COVENANTS.......................................................31
      7.01.       Affirmative Covenants.......................................31
      7.02.       Reporting Requirements......................................34
      7.03.       Negative Covenants..........................................36
      7.04.       Separate Corporate Existence................................37
      7.05.       Financial Covenants.........................................39

ARTICLE VIII

      ADMINISTRATION AND COLLECTION...........................................39
      8.01.       Designation of Servicer.....................................39
      8.02.       Duties of Servicer..........................................40
      8.03.       Rights of the Administrative Agent..........................41
      8.04.       Responsibilities of Seller..................................43
      8.05.       Further Action Evidencing Purchases.........................43

                                       ii
<PAGE>

      8.06.       Application of Collections..................................44

ARTICLE IX

     SECURITY INTEREST........................................................45
     9.01.        Grant of Security Interest..................................45
     9.02.        Further Assurances..........................................45
     9.03.        Remedies....................................................45

ARTICLE X

     TERMINATION EVENTS.......................................................45
     10.01.       Termination Events..........................................45
     10.02.       Remedies....................................................48

ARTICLE XI

     THE ADMINISTRATIVE AGENT.................................................48
     11.01.       Authorization and Action....................................48
     11.02.       Administrative Agent's Reliance, Etc........................48
     11.03.       Administrative Agent and Affiliates.........................49
     11.04.       Seller's Failure to Perform.................................49

ARTICLE XII

     ASSIGNMENT OF PURCHASER'S INTEREST.......................................49
     12.01.       Restrictions on Assignments.................................49
     12.02.       Rights of Assignee..........................................50
     12.03.       Notice of Assignment........................................50
     12.04.       Evidence of Assignment......................................50

ARTICLE XIII

     INDEMNIFICATION..........................................................50
     13.01.       Indemnities.................................................50

ARTICLE XIV

      GUARANTEE...............................................................53
      14.01.      Guarantee...................................................53

                                       iii
<PAGE>

      14.02.      Maintenance of Ownership....................................55
      14.03.      Representation and Warranty.................................55
      14.04.      Subrogation.................................................55

ARTICLE XV

      MISCELLANEOUS...........................................................55
      15.01.      Amendments, Etc.............................................55
      15.02.      Notices, Etc................................................56
      15.03.      No Waiver; Remedies.........................................56
      15.04.      Binding Effect; Survival....................................56
      15.05.      Costs, Expenses and Taxes...................................57
      15.06.      No Proceedings..............................................57
      15.07.      Confidentiality of Information..............................57
      15.08.      Captions and Cross References...............................60
      15.09.      Integration.................................................60
      15.10.      Governing Law...............................................60
      15.11.      Waiver Of Jury Trial........................................60
      15.12.      Consent To Jurisdiction; Waiver Of Immunities...............60
      15.13.      Execution in Counterparts...................................61
      15.14.      Originators.................................................61
      15.15.      Confidentiality of SCI Information..........................61
      15.16.      Funding.....................................................62
      15.17.      Sharing of Payments, Etc....................................62
      15.18.      Excess Funds................................................62

                                  APPENDICES

APPENDIX A - DEFINITIONS.....................................................A-1

APPENDIX B - CALCULATION OF DISCOUNT AND RESERVE.............................B-1

SCHEDULE I - Commitments

                                       iv
<PAGE>

                                    SCHEDULES
                                    ---------

SCHEDULE 2.04(c)     Special Concentration Limits

SCHEDULE 6.01(d)     Litigation

SCHEDULE 6.01(k)     List of Offices of Seller where Records Are Kept

SCHEDULE 6.01(l)     List of Lock-Box Banks

SCHEDULE 6.01(m)-1   Forms of Contracts

SCHEDULE 6.01(m)-2   Description of Credit and Collection Procedure

SCHEDULE 15.02       Addresses

                                            EXHIBITS
                                            --------

EXHIBIT 1.03(a)            Form of Purchase Notice

EXHIBIT 3.04(a)            Form of Periodic Report

EXHIBIT 5.01(i)            Form of Lock-Box Agreement

EXHIBIT 12.04              Form of Assignment (for assignment to third
                           party)

EXHIBIT I-1                Form of Guaranty

                                        v
<PAGE>

                           SECOND AMENDED AND RESTATED
                         RECEIVABLES PURCHASE AGREEMENT

                            Dated as of June 14, 2000

      THIS IS A SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT,
among SCI FUNDING, INC., a Delaware corporation ("Seller"), SCI TECHNOLOGY,
INC., an Alabama corporation ("SCI"), SCI SYSTEMS, INC., a Delaware corporation
(together with its successors and permitted assigns, "Guarantor"), RECEIVABLES
CAPITAL CORPORATION, a Delaware corporation ("RCC" or "Exiting Purchaser"),
QUINCY CAPITAL CORPORATION, a Delaware corporation, ("Quincy"), AMSTERDAM
FUNDING CORPORATION, a Delaware corporation ("Amsterdam", and together with
Quincy , individually a "Conduit Purchaser" and collectively the "Conduit
Purchasers"), BANK OF AMERICA, NATIONAL ASSOCIATION, a national banking
association ("BofA"), ABN AMRO BANK N.V., a bank organized under the laws of The
Netherlands ("ABN", and together with BofA , individually a "Bank Purchaser" and
collectively the "Bank Purchasers", and together with the Conduit Purchasers,
individually a "Purchaser" and collectively the "Purchasers"), and BANK OF
AMERICA, NATIONAL ASSOCIATION, a national banking association, as administrative
agent for the Purchasers (together with its successors and assigns, in such
capacity, the "Administrative Agent"). Unless otherwise indicated, capitalized
terms used in this Agreement are defined in Appendix A.

                                   Background

      1. SCI, Guarantor, RCC and the Administrative Agent entered into a
Receivables Purchase Agreement, dated as of June 30, 1995, which was amended and
restated pursuant to the Amended and Restated Receivables Purchase Agreement,
dated as of September 27, 1996 (as heretofore amended, the "Original Receivables
Agreement"). RCC has assigned all of its right, title and interest hereunder to
Quincy.

      2. The parties hereto desire to amend and restate the Original Receivables
Agreement in its entirety as set forth herein .

      3. Seller has, and expects to have, Pool Receivables in which Seller
intends to sell an undivided interest. Seller has requested the Conduit
Purchasers, and the Conduit Purchasers may,

                                        1
<PAGE>

subject to the terms and conditions contained in this Agreement, fund the
purchase of such undivided interest, referred to herein as the Undivided
Interest, from Seller from time to time during the term of this Agreement. In
the event that any Conduit Purchaser decides not to fund a Purchase or
Reinvestment hereunder, subject to the terms and conditions contained in this
Agreement, such Conduit Purchaser's Related Bank Purchasers shall fund such
Purchase or Reinvestment.

      4. Seller and Purchasers also desire that, subject to the terms and
conditions of this Agreement, certain of the daily Collections be reinvested in
Pool Receivables through the sale by Seller to the Administrative Agent, for the
benefit of the Purchasers, of additional undivided interests in the Pool
Receivables, such daily reinvestment of Collections to be effected by an
automatic daily adjustment to the Undivided Interest, and to be intended to
permit each Purchaser then funding a portion of the Undivided Interest to
maintain its Purchaser's Investments fully invested in uncollected Pool
Receivables.

      5. The Conduit Purchasers expect generally to fund their respective
Purchases and Reinvestments through the issuance of Commercial Paper Notes. Each
Conduit Purchaser has entered into Program Support Agreements providing for the
purchase by a Program Support Provider of, or the making by a Program Support
Provider of loans secured by, such Conduit Purchaser's portion of the Undivided
Interest in the event such Conduit Purchaser is unable or unwilling to fund its
Purchases or Reinvestments pursuant to this Agreement by the issuance of
Commercial Paper Notes or otherwise prefers to fund such Purchases or
Reinvestments under its Program Support Agreements rather than by the issuance
of Commercial Paper Notes, or is unable to pay such Commercial Paper Notes at
maturity from the proceeds of Collections.

      6. BofA has been requested, and is willing, to act as the Administrative
Agent.

      7. It is a condition precedent for Purchasers and the Administrative Agent
to enter into this Agreement that Guarantor guaranty the performance of SCI and
the Originators under the Agreement Documents, and Guarantor is willing to
guaranty such performance, in each case upon the terms and conditions set forth
herein.

      NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby amend
and restate the Original Receivables Agreement in its entirety, and hereby
agree, as follows:

                                        2
<PAGE>

                                    ARTICLE I

                           PURCHASES AND REINVESTMENTS

      SECTION 1.01. Purchases and Reinvestments. On the terms and subject to the
conditions set forth in this Agreement (including Article V):

            (a) Purchases. Each Conduit Purchaser may, in its sole discretion,
      fund purchases from Seller of the Undivided Interest or increases therein
      from time to time during the period from the date hereof to the Purchase
      Termination Date. In the event that a Conduit Purchaser decides not to
      fund a Purchase or a Reinvestment, such Conduit Purchaser's Related Bank
      Purchasers, subject to the terms and conditions of this Agreement, shall
      fund such Purchase. Each such purchase and, as the context may require,
      the purchase price paid by the Purchasers funding such purchase to Seller
      in respect thereof (determined pursuant to Section 1.03(b)), is herein
      called a "Purchase".

            (b) Reinvestments. Pursuant to Section 3.01, during the period from
      the date hereof to the Facility Termination Date, each Conduit Purchaser
      may, in its sole discretion, permit Servicer to cause certain of the
      Collections in respect of its Funded Percentage of the Undivided Interest
      to be applied to the purchase of additional undivided interests in the
      Pool Receivables, thereby resulting in an appropriate readjustment of the
      Undivided Interest. Pursuant to Section 3.01, but subject to the terms and
      conditions set forth herein, during the period from the date hereof to the
      Facility Termination Date, each Bank Purchaser shall permit Servicer to
      cause certain of the Collections in respect of its Funded Percentage of
      the Undivided Interest to be applied to the purchase of additional
      undivided interests in the Pool Receivables, thereby resulting in an
      appropriate readjustment of the Undivided Interest. Each such purchase of
      an additional undivided interest pursuant to Section 3.01 is herein called
      a "Reinvestment".

            (c) Sale by Conduit Purchaser to Bank Purchaser. Quincy may at any
      time, at its discretion, sell all or any portion of its Funded Percentage
      of the Undivided Interest to its Related Bank Purchasers, and each Related
      Bank Purchaser shall purchase from Quincy its Conduit Related Percentage
      of the amount being so sold, (the related purchase price with respect to
      such sale not to exceed the purchase price Quincy would have received
      therefor under its Liquidity Agreement), provided that no Related Bank
      Purchaser shall be obligated to make any such purchase (i) after such
      Related Bank Purchaser's Support Termination Date; (ii) if Quincy is
      subject to an Event of Bankruptcy at the time of such purchase or (iii) to
      the extent that, after giving effect to such purchase, such Bank
      Purchaser's outstanding Purchaser's Investment would exceed its
      Commitment. Any such sale by Quincy shall be made upon notice

                                        3
<PAGE>

      given to its Related Bank Purchasers no later than 12:00 noon (New York
      time) on the date of such purchase.

Nothing set forth in this Agreement shall be deemed to be or shall be construed
as a commitment by any Conduit Purchaser to fund the purchase of, or increase
in, the Undivided Interest. However, so long as the conditions to Reinvestment
set forth in this Agreement are met, Servicer may presume that Collections may
be used to make Reinvestments on behalf of each Conduit Purchaser as provided
herein, absent notice from such Conduit Purchaser (through its Related
Administrator to the Administrative Agent) to the contrary (which notice may be
given at any time). Purchases and Reinvestments made hereunder shall be without
recourse with regard to Defaulted Receivables (except as otherwise specifically
provided in Article II of this Agreement in connection with the calculation of
the Undivided Interest).

      SECTION 1.02. Purchase and Reinvestment Limits. Under no circumstances
shall any Purchaser fund any Purchase or Reinvestment to the extent that, after
giving effect to such Purchase or Reinvestment, as the case may be:

            (a) Purchase Limit. The Total Purchasers' Investments would exceed
      an amount (the "Purchase Limit") equal to $210,000,000, as such amount may
      be reduced pursuant to Section 1.07;

            (b) Required Allocation Limit. The Required Allocation would exceed
      an amount (the "Required Allocation Limit") equal to 100% of the Net Pool
      Balance;

            (c) Percentage. Such Purchaser's Purchaser's Investment would exceed
      an amount equal to such Purchaser's Percentage of the Total Purchasers'
      Investments or the aggregate of the Purchaser's Investments for all
      members of such Purchaser's Related Group would exceed an amount equal to
      the Group Percentage of such Purchaser's Related Group of the Total
      Purchasers' Investments;

            (d) Commitment. Such Purchaser's Purchaser's Investment would exceed
      an amount equal to such Purchaser's Commitment or the Purchaser's
      Investments for all members of such Purchaser's Related Group would exceed
      an amount equal to the aggregate Commitments of the Bank Purchasers in
      such Purchaser's Related Group; or

            (e) Coverage Limit. The sum of the Total Purchasers' Investments
      plus the Earned Discount to accrue through the end of the applicable
      Settlement Periods would exceed $214,200,000.

                                        4
<PAGE>

Each Purchaser's Commitment is several and not joint.

      SECTION 1.03. Making Purchases from Seller. (a) Notice of Purchase. Each
Purchase from Seller shall be made on notice from Seller to the Administrative
Agent and each Related Administrator received not later than 11:00 a.m. (New
York time) on the Business Day next preceding the date of such proposed
Purchase. Each such notice of a proposed Purchase shall be in substantially the
form attached as Exhibit 1.03(a) and shall specify the desired amount and date
of such Purchase. In the event that a Conduit Purchaser elects not to fund such
Purchase hereunder, it shall notify Seller and the Administrative Agent thereof
by the close of business on the Business Day next preceding the date of proposed
Purchase.

      (b) Amount of Purchase. The amount of each Purchase shall be equal to the
lesser of (x) the amount proposed by Seller pursuant to Section 1.03(a) and (y)
the maximum amount permitted under Section 1.02. All Purchases hereunder other
than on the date hereof shall be made by each Related Group on a pro rata basis
(based on the aggregate Percentages of the Bank Purchasers in each Related
Group).

      (c) Funding of Purchase. On the date of each Purchase, each Conduit
Purchaser and/or each Bank Purchaser funding such Purchase shall, upon
satisfaction of the applicable conditions set forth in Article V, make available
to the Administrative Agent at the Administrative Agent's Account not later than
11:00 a.m. (New York time) the amount of its Purchase (determined pursuant to
Section 1.03(b)) in same day funds, and after receipt by the Administrative
Agent of such funds, the Administrative Agent will make such funds immediately
available to Seller at such office.

      SECTION 1.04. Assignment. Seller hereby sells, assigns and transfers to
the Administrative Agent, for the benefit of the applicable Purchasers, the
Undivided Interest in the Pool.

      SECTION 1.05. Facility Termination Date. (a) The "Facility Termination
Date" shall be the earlier to occur of (i) November 10, 2001 (herein, as the
same may be extended, called the "Scheduled Facility Termination Date"), and
(ii) the date of termination of the Facility pursuant to Section 1.07 or 10.02.

      (b) The then Scheduled Facility Termination Date may be extended from time
to time for successive periods of 364 days by written notice of request given by
Seller to the Administrative Agent and each Bank Purchaser at least 90 days
prior to the then Scheduled Facility Termination Date and written notice of
acceptance given by each Bank Purchaser to the Administrative Agent and Seller
not later than 5 Business Days prior to such Scheduled Facility Termination
Date. Failure of any Bank Purchaser to respond in such time frame shall be
deemed to be a rejection of such request.

                                        5
<PAGE>

      SECTION 1.06. Purchase Termination Date. (a) The "Purchase Termination
Date" shall be the earlier to occur of (i) the Facility Termination Date and
(ii) the date of termination of the purchase facility with respect to Purchases
pursuant to subsection (b).

      (b) The Facility shall terminate with respect to Purchases by a Conduit
Purchaser on the scheduled date of termination of any Program Support Agreement
for such Conduit Purchaser. Each Conduit Purchaser agrees to give Seller at
least 30 days' prior written notice of the termination of the Facility (if such
date is earlier than the Purchase Termination Date) with respect to Purchases by
it pursuant to this clause (b), but no failure to give or delay in giving such
notice shall prevent or delay such termination.

      SECTION 1.07. Voluntary Termination of Facility or Reduction of Maximum
Purchase Limit. Seller may, upon at least 30 days' prior written notice to the
Administrative Agent and each Bank Purchaser, terminate the Facility in whole or
reduce in part the unused portion of the Purchase Limit; provided, however, that
(a) each partial reduction shall be in an amount equal to $5,000,000 or an
integral multiple thereof and (b) after giving effect to such reduction, the
remaining Purchase Limit will not be less than $150,000,000. Any reduction of
the Purchase Limit shall be applied to reduce each Purchaser's Commitment on a
pro rata basis.

      SECTION 1.08. Limitation of Ownership Interest. Nothing in this Agreement
shall be interpreted as providing the Administrative Agent or any Purchaser with
an ownership interest in any Receivables that are not Pool Receivables.

      SECTION 1.09. Assignments on Closing Date. On the date that the conditions
precedent set forth in Sections 5.01 and 5.02 are satisfied (i) RCC shall assign
and transfer to Quincy all of its right, title and interest in the Undivided
Interest, and upon such assignment and transfer, RCC shall no longer be a
Purchaser hereunder and (ii) Quincy shall assign and transfer to the other
Conduit Purchasers, and the other Conduit Purchasers may purchase (and if any
Conduit Purchaser elects not to purchase, its Related Bank Purchaser shall
purchase) from Quincy, without recourse or warranty, a portion of Quincy's
right, title and interest in the Undivided Interest such that, after giving
effect thereto, the Funded Percentage of each Related Group equals its Group
Percentage.

      SECTION 1.10. Assignment by Quincy to its Bank Purchasers.

      (a) Assignment Amounts. At any time on or prior to the Support Termination
Date for the Bank Purchasers in the Quincy Related Group, if the Quincy's
Related Administrator on behalf of Quincy so elects, by written notice to the
Administrative Agent and the Bank Purchasers in the Quincy Related Group, Quincy
does hereby assign effective on the Assignment Date referred to below all or
such portions as may be elected by Quincy of its interest in its Purchaser's
Investment and the Undivided Interest at such time to its Bank Purchasers
pursuant

                                        6
<PAGE>

to this Section 1.10 and the Seller hereby agrees to pay the amounts described
in Section 1.10(b); provided, however, that unless such assignment is an
assignment of all of Quincy's interest in its Purchaser's Investment and the
Undivided Interest in whole on or after the date Quincy has provided written
notice to its Related Administrator that it elects, in its sole discretion, to
commence the amortization of its Purchaser's Investment (the "Conduit Investment
Termination Date"), no such assignment shall take place pursuant to this Section
1.10 if a Termination Event described in Section 10.1(h) shall then exist; and
provided, further, that no such assignment shall take place pursuant to this
Section 1.10 at a time when an Event of Bankruptcy with respect to Quincy
exists. No further documentation or action on the part of Quincy or the Seller
shall be required to exercise the rights set forth in the immediately preceding
sentence, other than the giving of the notice by the Related Administrator on
behalf of Quincy referred to in such sentence and the delivery by the Related
Administrator of a copy of such notice to each Related Bank Purchaser (the date
of the receipt by the Bank Purchasers of any such notice being the "Assignment
Date"). Each Related Bank Purchaser of Quincy hereby agrees, unconditionally and
irrevocably and under all circumstances, without setoff, counterclaim or defense
of any kind, to pay the full amount of its Assignment Amount on such Assignment
Date to Quincy in immediately available funds to an account designated by the
Administrative Agent. Upon payment of its Assignment Amount, each such Bank
Investor shall acquire an interest in Quincy's Purchaser's Investment equal to
its pro rata share (based on the outstanding portions funded by it) of such
Purchaser's Investment. Upon any assignment in whole by Quincy to its Related
Bank Purchasers on or after the Conduit Investment Termination Date as
contemplated hereunder, Quincy shall cease to make any additional Purchases or
Reinvestments hereunder. At all times prior to the Conduit Investment
Termination Date, nothing herein shall prevent Quincy from making a subsequent
Purchase or Reinvestment hereunder, in its sole discretion, following any
assignment pursuant to this Section 1.10 or from making more than one assignment
pursuant to this Section 1.10.

      (b) Seller's Obligation to Pay Certain Amounts; Additional Assignment
Amount. The Seller shall pay to the Administrative Agent, for the account of
Quincy, in connection with any assignment by Quincy to its Related Bank
Purchasers pursuant to this Section 1.10, an aggregate amount equal to all
Earned Discount to accrue through the end of each outstanding Settlement Period
to the extent attributable to the portion of the Purchaser's Investment so
assigned to the Bank Purchasers (which Earned Discount shall be determined for
such purpose using the Commercial Paper Rate most recently determined by the
Related Administrator) (as determined immediately prior to giving effect to such
assignment), plus all other amounts owed to Quincy at such time (other than the
Purchaser's Investment and other than any Earned Discount not described above).
If the Seller fails to make payment of such amounts at or prior to the time of
assignment by Quincy to the Bank Purchasers, such amount shall be paid by the
Bank Purchasers (in accordance with their respective pro rata shares) to Quincy
as additional consideration for the interests assigned to the Bank Purchasers
and the amount of the "Purchaser's Investment"

                                        7
<PAGE>

hereunder held by the Bank Purchasers shall be increased by an amount equal to
the additional amount so paid by the Bank Purchasers.

      (c) Administration of Agreement after Assignment from Quincy to Bank
Purchasers following the Conduit Investment Termination Date. After any
assignment in whole by Quincy to the Bank Purchasers pursuant to this Section
1.10 at any time on or after the Conduit Investment Termination Date (and the
payment of all amounts owing to Quincy in connection therewith), all rights of
the Related Administrator set forth herein shall be given to the Administrative
Agent on behalf of the Bank Purchasers instead of the Related Administrator.

      (d) Payments to Agent's Account. After any assignment in whole by Quincy
to the Bank Purchasers pursuant to this Section 1.10 at any time on or after the
Conduit Investment Termination Date, all payments to be made hereunder by the
Seller or the Servicer to Quincy shall be made to the Administrative Agent's
account as such account shall have been notified to the Seller and the Servicer.

      (e) Recovery of Purchaser's Investment. In the event that the aggregate of
the Assignment Amounts paid by the Bank Purchasers pursuant to this Section 1.10
on any Assignment Date occurring on or after the Conduit Investment Termination
Date is less than the Purchaser's Investment of Quincy on such Assignment Date,
then to the extent Collections thereafter received by the Administrative Agent
hereunder in respect of the Purchaser's Investment exceed the aggregate of the
unrecovered Assignment Amounts and Purchaser's Investment funded by the Bank
Investors, such excess shall be remitted by the Administrative Agent to Quincy.

      SECTION 1.11. Downgrade of Bank Purchaser. (a) Downgrades Generally. If at
any time on or prior to the Support Termination Date for the Bank Purchasers in
the Quincy Related Group, the short term debt rating of any Bank Purchaser shall
be "A-2", "P-2" or "F-2" from S&P, Moody's or Fitch, respectively, with negative
credit implications, such Bank Purchaser, upon request of the Related
Administrator, shall, within thirty (30) days of such request, assign its rights
and obligations hereunder to another financial institution (which institution's
short term debt shall be rated at least "A-2", "P-2" or "F-2" from S&P, Moody's
or Fitch, respectively, and which shall not be so rated with negative credit
implications and which is acceptable to Quincy and the Related Administrator).
If the short term debt rating of an Bank Purchaser shall be "A-3", "P-3" or
"F-3", or lower, from S&P, Moody's or Fitch, respectively (or such rating shall
have been withdrawn by S&P or Moody's), such Bank Purchaser, upon request of the
Related Administrator, shall, within five (5) Business Days of such request,
assign its rights and obligations hereunder to another financial institution
(which institution's short term debt shall be rated at least "A-2", "P-2" or
"F-2", from S&P, Moody's or Fitch, respectively, and which shall not be so rated
with negative credit implications and which is acceptable to Quincy and

                                        8
<PAGE>

the Related Administrator). In either such case, if any such Bank Purchaser
shall not have assigned its rights and obligations under this Agreement within
the applicable time period described above (in either such case, the "Required
Downgrade Assignment Period"), the Related Administrator on behalf of Quincy
shall have the right to require such Bank Purchaser to pay upon one (1) Business
Day's notice at any time after the Required Downgrade Assignment Period (and
each such Bank Purchaser hereby agrees in such event to pay within such time) to
the Related Administrator an amount equal to such Bank Purchaser's unused
Commitment (a "Downgrade Draw") for deposit by the Related Administrator into an
account, in the name of the Related Administrator (a "Downgrade Collateral
Account"), which shall be in satisfaction of such Bank Purchaser's obligations
to make Purchases and to pay its Assignment Amount upon an assignment from
Quincy in accordance with Section 1.10; provided, however, that if, during the
Required Downgrade Assignment Period, such Bank Purchaser delivers a written
notice to the Related Administrator of its intent to deliver a direct pay
irrevocable letter of credit pursuant to this proviso in lieu of the payment
required to fund the Downgrade Draw, then such Bank Purchaser will not be
required to fund such Downgrade Draw. If any Bank Purchaser gives the Related
Administrator such notice, then such Bank Purchaser shall, within one (1)
Business Day after the Required Downgrade Assignment Period, deliver to the
Related Administrator a direct pay irrevocable letter of credit in favor of the
Related Administrator in an amount equal to the unused portion of such Bank
Purchaser's Commitment, which letter of credit shall be issued through an United
States office of a bank or other financial institution (i) whose short-term debt
ratings by S&P and Moody's are at least equal to the ratings assigned by such
statistical rating organization to the Commercial Paper and (ii) that is
acceptable to Quincy and the Related Administrator. Such letter of credit shall
provide that the Related Administrator may draw thereon for payment of any
Purchase or Assignment Amount payable by such Bank Purchaser which is not paid
hereunder when required, shall expire no earlier than the Support Termination
Date and shall otherwise be in form and substance acceptable to the Related
Administrator.

      (b) Application of Funds in Downgrade Collateral Account. If any Bank
Purchaser shall be required pursuant to Section 1.11(a) to fund a Downgrade
Draw, then the Related Administrator shall apply the monies in the Downgrade
Collateral Account applicable to such Bank Purchaser's pro rata share of
Purchases required to be made by the Bank Purchasers in the Quincy Related
Group, to any Assignment Amount payable by such Bank Purchaser pursuant to
Section 1.10 and to any purchase price payable by such Bank Purchaser pursuant
to Section 1.12(b) at the times, in the manner and subject to the conditions
precedent set forth in this Agreement. The deposit of monies in such Downgrade
Collateral Account by any Bank Purchaser shall not constitute a Purchase or the
payment of any Assignment Amount (and such Bank Purchaser shall not be entitled
to interest on such monies except as provided below in this Section 1.11(b),
unless and until (and then only to the extent that) such monies are used to fund
Purchases or to pay any Assignment Amount or purchase price pursuant to Section
1.12(b) pursuant to the first sentence of this Section 1.11(b). The amount on
deposit in such Downgrade

                                        9
<PAGE>

Collateral Account shall be invested by the Related Administrator in eligible
investments and such eligible investments shall be selected by the Related
Administrator in its sole discretion. The Related Administrator shall remit to
such Bank Purchaser, on the last Business Day of each month, the income actually
received thereon. Unless required to be released as provided below in this
subsection, Collections received by the Related Administrator in respect of such
Bank Purchaser's Purchaser's Investment shall be deposited in the Downgrade
Collateral Account for such Bank Purchaser. Amounts on deposit in such Downgrade
Collateral Account shall be released to such Bank Purchaser (or the stated
amount of the letter of credit delivered by such Bank Purchaser pursuant to
subsection (a) above may be reduced) within one Business Day after each
Settlement Date following the Termination Date to the extent that, after giving
effect to the distributions made and received by the Purchasers on such
Settlement Date, the amount on deposit in such Downgrade Collateral Account
would exceed such Bank Purchaser's pro rata share (determined as of the day
prior to the Termination Date) of the sum of the Purchaser's Investment then
funded by Quincy, plus Earned Discount accrued and to accrue with respect
thereto. All amounts remaining in such Downgrade Collateral Account shall be
released to such Bank Purchaser no later than the Business Day immediately
following the earliest of (i) the effective date of any replacement of such Bank
Purchaser or removal of such Bank Purchaser as a party to this Agreement, (ii)
the date on which such Bank Purchaser shall furnish the Related Administrator
with confirmation that such Bank Purchaser shall have short-term debt ratings of
at least "A-2", "P-2" or "F-1" from S&P, Moody's and Fitch, respectively,
without negative credit implications, and (iii) the Support Termination Date (or
if earlier, the Support Termination Date in effect prior to any renewal pursuant
to Section 1.12 which such Bank Purchaser does not consent, but only after
giving effect to any required purchase pursuant to Section 1.12(b)). Nothing in
this Section 3.2 shall affect or diminish in any way any such downgraded Bank
Purchaser's Commitment to the Seller or Quincy or such downgraded Bank
Purchaser's other obligations and liabilities hereunder and under the other
transaction documents.

      (c) Program Support Agreement Downgrade Provisions. Notwithstanding the
other provisions of this Section 1.11, a Bank Purchaser shall not be required to
make a Downgrade Draw (or provide for the issuance of a letter of credit in lieu
thereof) pursuant to Section 1.11(a) at a time when such Bank Purchaser has a
downgrade collateral account (or letter of credit in lieu thereof) established
pursuant to its Program Support Agreement relating to the transactions
contemplated by this Agreement to which it is a party in an amount at least
equal to its unused Commitment, and the Related Administrator may apply monies
in such downgrade collateral account in the manner described in Section 1.12(b)
as if such downgrade collateral account were a Downgrade Collateral Account.

      SECTION 1.12. Non-Renewing Bank Investors. If at any time the Seller
requests that the Bank Purchasers in the Quincy Related Group renew their
Commitments hereunder and some but less than all the Bank Purchasers consent to
such renewal within 30 days of the Seller's

                                       10
<PAGE>

request, the Seller may arrange for an assignment to one or more financial
institutions of all the rights and obligations hereunder of each such
non-consenting Bank Purchaser. Any such assignment shall become effective on the
then-current Support Termination Date. Each Bank Purchaser which does not so
consent to any renewal shall cooperate fully with the Seller in effectuating any
such assignment.

      (b) If at any time the Seller requests that the Bank Purchasers in the
Quincy Related Group extend the Support Termination Date hereunder and some but
less than all the Bank Purchasers consent to such extension within 30 days after
the Seller's request, and if none or less than all the Commitments of the
non-renewing Bank Purchasers are assigned as provided in Section 1.12(a), then
(without limiting the obligations of all the Bank Purchasers to make Purchases
and pay any Assignment Amount prior to the Support Termination Date in
accordance with the terms hereof) Quincy may sell an interest in its Purchaser's
Investment and Undivided Interest hereunder for an aggregate purchase price
equal to the lesser of (i) the maximum aggregate Assignment Amounts which would
be payable if Quincy assigned its entire interest in its Purchaser's Investment
and the Undivided Interest at that time under Section 1.10, and (ii) the
aggregate available Commitments of the non-renewing Bank Purchasers, which
purchase price shall be paid solely by the non-renewing Bank Purchasers, pro
rata according to their respective Commitments. Following the payment of such
purchase price, the extended Support Termination Date shall be effective with
respect to the renewing Bank Purchasers, this Agreement and the Commitments of
the renewing Bank Purchasers shall remain in effect in accordance with their
terms notwithstanding the expiration of the Commitments of the non-renewing Bank
Purchasers. Prior to the Termination Date, all amounts which are to be applied
in reduction of the Purchaser's Investment sold to the non-renewing Bank
Purchasers as described above in this subsection, shall be distributed to the
non-renewing Bank Purchasers ratably according to the aggregate Purchaser's
Investments held by them, in reduction of such Purchaser's Investments. On and
after the Termination Date, each non-renewing Bank Purchaser shall be entitled
to receive distributions as otherwise provided in Article III, such that all
distributions of Collections pursuant to Article III thereafter shall be
allocated among the non-renewing Bank Purchasers and the other Bank Purchasers
(based on the Purchaser's Investments as of the Termination Date). When (after
the expiration of the Commitments of the non-renewing Bank Purchasers) the
aggregate of the Purchaser's Investments described above in this subsection
shall have been reduced to zero and all accrued Earned Discount allocable
thereto and all other Aggregate Unpaids owing to such Bank Purchasers shall have
been paid to such Bank Purchasers in full, then such Bank Purchasers shall cease
to be parties to this Agreement for any purpose.

                                       11
<PAGE>

                                   ARTICLE II

                    UNDIVIDED INTEREST AND PURCHASERS' SHARE

      SECTION 2.01. Undivided Interest. (a) Definition and Computation of
Undivided Interest. For purposes of this Agreement, "Undivided Interest" means,
as the context may require (i) an undivided ownership interest, in a percentage
determined from time to time as provided in clause (ii) below, in (A) all then
outstanding Pool Receivables, (B) all Related Security with respect to such Pool
Receivables, (C) all Collections with respect to, and other proceeds of, such
Pool Receivables and Related Security and (D) all books and records (including,
without limitation, computer disks) related to the foregoing (collectively, the
"Pool"), and (ii) at any time, the quotient, expressed as a percentage, obtained
by dividing the Required Allocation by the Net Pool Balance. The Undivided
Interest shall be computed as follows:

      UI  = RA  = PI + DF + CR + SFR
            ---   ------------------
            NPB          NPB

where:
-----

      UI  = the Undivided Interest at any time;

      RA  = the Required Allocation at such time, as determined pursuant to
            Section 2.02; and

      NPB = the Net Pool Balance at such time, as determined pursuant to Section
2.04.

      (b) Frequency of Computation of Purchasers' Interest. The Undivided
Interest shall initially be computed by Servicer as of the opening of business
of Servicer on the date of each Purchase, and the Undivided Interest shall be
recomputed upon receipt of each Periodic Report. In addition, until the
Undivided Interest shall be reduced to zero, the Undivided Interest shall be
deemed to be automatically recomputed as of the close of business of Servicer on
each day (other than a day on which an actual recomputation is done), and, as so
recomputed, shall constitute the percentage ownership interest in Pool
Receivables held by the Administrative Agent, for the benefit of the Purchasers,
on such day. The Undivided Interest shall become zero at such time as each of
the Purchasers shall have received its accrued Earned Discount, shall have
recovered its Purchaser's Investment and shall have received all other amounts
payable to such Purchaser pursuant to this Agreement and Servicer shall have
received the accrued Servicer's Fee. The Undivided Interest shall remain
constant from the time as of which any such computation or recomputation is made
until the time as of which the next such recomputation, if any, shall be made.

      SECTION 2.02. Required Allocation. The "Required Allocation" at any time
means an amount determined as follows:

                                       12
<PAGE>

      RA  = PI + DF + CR + SFR

where:

      RA  = the Required Allocation at any time;

      PI  = the Total Purchasers' Investment at such time, as determined
            pursuant to Section 2.03;

      DF  = the Discount Factor at such time, as determined pursuant to Part I
            of Appendix B;

      CR  = the Credit Reserve at such time, as determined pursuant to Part II
            of Appendix B;

      SFR = the Servicer's Fee Reserve at such time, as determined pursuant to
            Part IV of Appendix B; and

      SECTION 2.03. Purchaser's Investment. (a) Subject to subsections (b) and
(c), "Purchaser's Investment" with respect to any Purchaser or its assignees at
any time means an amount equal to

            (i) the aggregate of the amounts theretofore paid by such Purchaser
      to Seller for the funding of a portion of the Undivided Interest (A) by
      Purchases pursuant to Sections 1.01(a) and 1.03 and (B) by Reinvestments
      pursuant to Sections 1.01(b) and 3.01, less

            (ii) the aggregate amount of Collections (including Deemed
      Collections) theretofore received and distributed to such Purchaser on
      account of such Purchaser's Purchaser's Investment pursuant to Sections
      3.01 and 3.02.

      (b) Solely for purposes of calculating the Earned Discount (and each
component thereof) pursuant to the proviso to the definition of "Earned
Discount" in Appendix B:

            (i) "Purchaser's Investment" of any portion of the Undivided
      Interest owned by a Program Support Provider (or any permitted assignee
      thereof) or otherwise funded by a Funding shall be deemed to be the amount
      paid to the related Conduit Purchaser by such Program Support Provider as
      the purchase price of, or the original principal amount loaned with
      respect to, such portion, as reduced from time to time by Collections
      received and distributed to such Program Support Provider (or such
      assignee) on account of such Funding pursuant to Sections 3.01 and 3.02 or
      by payments by or for the account of the related Conduit Purchaser to the
      Program Support Provider in reimbursement of any Funding; and

                                       13
<PAGE>

            (ii) "Purchaser's Investment" of any other portion of the Undivided
      Interest with respect to any Conduit Purchaser shall mean such Conduit
      Purchaser's Purchaser's Investment less the sum of Purchaser's Investments
      of all portions of the Undivided Interest described in clause (i) above
      with respect to such Conduit Purchaser, calculated in accordance with such
      clause (i).

      (c) No Purchaser's Investment shall be considered reduced by any
distribution of any portion of Collections if at any time such distribution is
rescinded or must otherwise be returned for any reason.

      SECTION 2.04. Net Pool Balance. (a) The "Net Pool Balance" at any time
means an amount equal to

            (i) the aggregate Unpaid Balance of the Eligible Receivables in the
      Receivables Pool at such time, minus

            (ii) the aggregate (for all Obligors) of the amounts by which (x)
      the Unpaid Balance of all Pool Receivables of each Obligor exceeds (y) the
      Concentration Limit for such Obligor at such time, minus

            (iii) so long as Receivables from Compaq generated at "Plant 11" are
      subject to offset by Compaq, the aggregate Unpaid Balance of Receivables
      from Compaq generated at "Plant 11" (provided that the aggregate Unpaid
      Balance of such Receivables from Compaq shall only be subtracted following
      delivery by any Purchaser of a notice to the Seller and the Servicer
      requesting such subtraction), minus

            (iv) for all Obligors that are Governmental Authorities the amount
      by which (x) the aggregate Unpaid Balance of all Pool Receivables of such
      Obligors exceeds (y) 5% of the Eligible Receivables at such time, minus

            (v) from and after the occurrence of a Trigger Event, the Accounts
      Payable Amount at such time, plus

            (vi) so long as Receivables from IBM fail to qualify as Eligible
      Receivables solely because they fail to satisfy the requirements of
      paragraph (s) of the definition of Eligible Receivables, an amount equal
      to (x) the aggregate Unpaid Balance of Receivables from IBM, minus (y) the
      Accounts Payable Amount owed to IBM.

      (b) "Concentration Limit" for any Obligor at any time means, as applicable
(x) 7% of Eligible Receivables at such time or (y) the Special Concentration
Limit for such Obligor, whichever is greater.

                                       14
<PAGE>

      (c) "Special Concentration Limit" for (A) any Obligor identified on
Schedule 2.04(c), means the applicable percentage set forth on Schedule 2.04(c)
and (B) for any other Obligor consented to by all Purchasers in writing
following a request from the Seller for such Obligor to be designated as an
Obligor for which Special Concentration Limits are to apply, means at any time,
such percentage consented to by all Purchasers in written notice delivered to
Seller of the aggregate Unpaid Balance of all Eligible Receivables at such time;
provided that any Purchaser may, at its discretion, reduce any such Special
Concentration Limit upon ten (10) Business Days' prior written notice to Seller,
the Administrative Agent and the other Purchasers.

      (d) In the case of any Obligor which, to the actual knowledge of Seller,
is an Affiliate of any other Obligor, the Concentration Limit, the Special
Concentration Limit, if any, and the aggregate Unpaid Balance of Pool
Receivables of such Obligors shall be calculated as if such Obligors were one
Obligor.

      SECTION 2.05. Purchasers' Share. "Purchasers' Share" of Collections of
Pool Receivables received (or deemed received) by Seller or Servicer on any day
means an amount equal to the product of

            (a) the amount of all Collections of Pool Receivables received (or
      deemed received) by Seller or Servicer on such day, times:

            (b) (i) if such day is not a Run Off Day, the Undivided Interest on
      such day, expressed as a decimal, and

                (ii) if such day is a Run Off Day, either (A) the Undivided
      Interest on the day immediately preceding the first Run Off Day to have
      occurred during the then current Run Off Period or (B) if higher, upon the
      request of the Administrative Agent or any Purchaser, the most recently
      calculated Undivided Interest (it being understood that in the event that
      the Purchasers' Share shall exceed 100%, the Purchasers shall share
      Collections, pro rata, based on their respective Funded Percentages);

provided that (i) during the continuance of any Termination Event, the
Purchasers' Share shall be 100% and (ii) after such time as the Undivided
Interest shall equal zero, the Purchasers' Share of Collections shall also equal
zero.

                                       15
<PAGE>

                                   ARTICLE III

                                   SETTLEMENTS

      SECTION 3.01. Non-Run Off Settlement Procedures for Collections. (a) Daily
Procedure. On each day (other than a Run Off Day) in any Settlement Period,
Servicer shall:

            (i) out of Purchasers' Share of Collections of Pool Receivables
      received or deemed received on such day, hold in trust for the benefit of
      the Purchasers an amount equal to the Earned Discount for all Purchasers
      and Servicer's Fee accrued through such day and not previously so held for
      the benefit of the Purchasers,

            (ii) apply an amount equal to the remainder of Purchasers' Share of
      such Collections (the "Remaining Collections") to reduce the Total
      Purchasers' Investment (it being understood that such amount need not be
      physically paid to any Purchaser under this clause (ii)), and

            (iii) subject to Section 3.03, after such reduction, (A) apply such
      Remaining Collections to the Reinvestment, for the benefit of Purchasers
      then funding the Undivided Interest, of additional undivided interests in
      Pool Receivables by recomputation of the Undivided Interest pursuant to
      Section 2.01 as of the end of such day, thereby increasing the Total
      Purchasers' Investment, and (B) pay to Seller such Remaining Collections.

The recomputed Undivided Interest shall constitute the percentage ownership
interest in Pool Receivables on such day held by the Administrative Agent, for
the benefit of the Purchasers.

      (b) Settlement Date Procedure. On each Settlement Date, for each day in
the related Settlement Period that is not a Run Off Day, Servicer shall deposit
to the Administrative Agent's Account the amounts set aside as described in
Section 3.01(a)(i) and the amounts, if any, set aside pursuant to Section
3.03(b) or (c) for payment to the Administrative Agent on such Settlement Date;
provided, however, that until Servicer receives written notice from the
Administrative Agent or the Required Purchasers to the contrary, Servicer may
retain amounts which would otherwise be deposited in respect of Servicer's Fee,
in which case no distribution shall be made in respect of Servicer's Fee under
clause (c) below.

      (c) Order of Application. Upon receipt by the Administrative Agent of
funds distributed pursuant to subsection (b), the Administrative Agent shall
promptly distribute them in the type of funds received (i) to the account
specified by the applicable Related Administrator for each Conduit Purchaser or
by the applicable Bank Purchaser funding the Undivided Interest in payment of
the accrued and unpaid Earned Discount on each such Purchaser's Purchaser's
Investment, (ii) unless retained pursuant to

                                       16
<PAGE>

subsection (b), to Servicer in payment of the accrued and unpaid Servicer's Fee
payable on such Settlement Date and (iii) in the case of any amounts set aside
pursuant to Section 3.03(b) or (c), to the account specified by the applicable
Related Administrator for each Conduit Purchaser or by the applicable Bank
Purchaser funding the Undivided Interest in reduction of its related Purchaser's
Investment, such Purchaser's Funded Percentage of such amounts. If there shall
be insufficient funds on deposit for the Administrative Agent to distribute
funds in payment in full of the aforementioned amounts, the Administrative Agent
shall distribute funds, first, in payment of such Earned Discount, on a pro rata
basis (calculated on the basis of the Earned Discount owed to each Purchaser as
a percentage of the Earned Discount owed to all Purchasers), second, in payment
of such Servicer's Fee and third, to such reduction of the Total Purchasers'
Investment on a pro rata basis (calculated on the basis of the Purchasers'
Investment of each Purchaser as a percentage of the Total Purchaser's
Investment).

      SECTION 3.02. Run Off Settlement Procedures for Collections. (a) Daily
Procedure. On each Run Off Day occurring in any Settlement Period, Servicer
shall set aside and hold in trust for the Purchasers the Purchasers' Share of
the Collections of Pool Receivables for such Run Off Day and shall, if requested
by the Administrative Agent or the Required Purchasers or if a Termination Event
has occurred and is continuing, deposit such Collections within one Business Day
of Servicer's receipt thereof into the Administrative Agent's Account or to
another bank account acceptable to the Required Purchasers in which no other
funds shall be deposited.

      (b) Settlement Date Procedure. On each Settlement Date, if one or more Run
Off Days occurred during such Settlement Period ending on such Settlement Date,
Servicer shall deposit to the Administrative Agent's Account the amounts set
aside pursuant to Section 3.02(a) during such Settlement Period, but not to
exceed the sum of (i) the accrued and unpaid Earned Discount for each Purchaser,
(ii) the Total Purchasers' Investment, (iii) the aggregate of other amounts owed
hereunder by Seller to any Purchaser or the Administrative Agent, and (iv) the
accrued Servicer's Fee. If no Termination Event or Unmatured Termination Event
shall have occurred and be continuing, any amounts set aside pursuant to clause
(a) of this Section 3.02 and not required to be deposited to the Administrative
Agent's Account pursuant to the next preceding sentence shall be paid to Seller
by Servicer.

      (c) Order of Application. Upon receipt of funds deposited to the
Administrative Agent's Account pursuant to Section 3.02(b), the Administrative
Agent shall promptly distribute them in the type of funds received (i) to the
account specified by the applicable Related Administrator for each Conduit
Purchaser, by the applicable Bank Purchaser or the Administrative Agent (as the
case may be) (A) in payment of the accrued and unpaid Earned Discount for each
Purchaser, (B) in reduction of the Total Purchasers' Investment and (C) in
payment of any other amounts owed by Seller hereunder to any Purchaser or the
Administrative Agent, in each case until reduced to zero, and (ii) to Servicer
in payment of the accrued Servicer's Fee, also until reduced to zero. If there
shall be insufficient funds on deposit for the Administrative Agent to
distribute funds in payment in full of the aforementioned amounts, the
Administrative Agent shall distribute funds on deposit, first, to the Purchasers
in payment of the Earned

                                       17
<PAGE>

Discount, on a pro rata basis (calculated on the basis of the Earned Discount
owed to each Purchaser as a percentage of the aggregate Earned Discount owed to
all Purchasers), second, in payment of the Servicer's Fee payable on such
Settlement Date, if any (if Servicer is not SCI or an Affiliate of SCI), third,
to each Purchaser, its Funded Percentage of the remaining amounts, which shall
be applied in reduction of such Purchaser's Purchaser's Investment, fourth, in
payment of other amounts payable to any Purchaser or the Administrative Agent
hereunder, and fifth, in payment of the Servicer's Fee payable on such
Settlement Date (if Servicer is SCI or an Affiliate of SCI).

      SECTION 3.03. Special Settlement Procedures; Reduction of Purchaser's
Investment, Etc. (a) Deemed Collections. If on any day

            (i) the Unpaid Balance of any Pool Receivable is

                  (A) reduced as a result of any defective, rejected or returned
            merchandise or services, any cash discount, any credit, pricing
            adjustment or other adjustment by Seller or any Affiliate of Seller
            (other than any adjustment permitted by Section 8.02(c)(i)),

                  (B) reduced or cancelled as a result of a setoff in respect of
            any claim by the Obligor thereof against Seller or any other Person
            (whether such claim arises out of the same or a related or an
            unrelated transaction), or as a result of any dispute, or

                  (C) reduced on account of the obligation of Seller or any
            other Person to pay to the related Obligor any rebate or refund, or
            to rework any product or service related to such Receivable; or

            (ii) any of the representations or warranties of Seller set forth in
      Section 6.01(i) or (m) is no longer true with respect to a Pool
      Receivable; or

            (iii) Seller receives a payment of a Deemed Collection pursuant to
      any Second Tier Sale Agreement;

then, on such day, Seller shall be deemed to have received a Collection of such
Pool Receivable;

                  (I) in the case of clause (i) above, in the amount of such
            reduction or cancellation;

                  (II) in the case of clause (ii) above, in the amount of the
            Unpaid Balance of such Pool Receivable; and

                  (III) in the case of clause (iii) above, in the amount of such
            Deemed Collection.

                                       18
<PAGE>

      (b) Unreinvested Collections. Collections that may not be reinvested by
means of Reinvestments in the Undivided Interest on account of the application
of the Required Allocation Limit or the Purchase Limit pursuant to Section 2.01
shall be so reinvested as soon as it is possible to do so without violating such
Required Allocation Limit or Purchase Limit, as the case may be. To the extent
and so long as such Collections may not be so reinvested, subject to Section
1.01, Servicer shall hold such Collections in trust for the benefit of
Purchasers (and, if requested by the Administrative Agent or the Required
Purchasers or if a Termination Event has occurred and is continuing, shall
deposit such Collections in a separate interest-bearing deposit account
containing only such Collections and earnings thereon and no other funds; it
being understood that any interest earned on such funds shall be for the account
of Seller and shall be paid to Seller on the Settlement Date next succeeding the
date on which such interest is credited to such account, so long as no
Termination Event has occurred and is continuing), for payment to the
Administrative Agent on the next following Settlement Date, and the Total
Purchasers' Investment shall be deemed reduced in the amount to be paid to the
Administrative Agent only when in fact finally so paid in accordance with
Section 3.05(a).

      (c) Seller's Reduction of Purchaser's Investment. If at any time Seller
shall wish to cause the reduction of the Total Purchasers' Investment (but not
to commence the liquidation, or reduction to zero, of the Undivided Interest),
Seller may do so as follows:

            (i) Seller shall give all Purchasers at least five (5) Business
      Days' prior written notice thereof (including the amount of such proposed
      reduction and the proposed date on which such reduction will commence,
      which date shall be a Business Day),

            (ii) on the proposed date of commencement of such reduction and on
      each day thereafter, Servicer shall refrain from reinvesting Remaining
      Collections until the amount thereof not so reinvested shall equal the
      desired amount of reduction, and

            (iii) Servicer shall hold such Collections for the benefit of the
      Purchasers, for payment to the Administrative Agent on the next following
      Settlement Date, and the Total Purchasers' Investment shall be deemed
      reduced in the amount to be paid to the Administrative Agent only when in
      fact finally so paid in accordance with Section 3.05(a);

provided that,

            (A) the amount of any such reduction shall be not less than
      $1,000,000 and shall be an integral multiple of $100,000, and the Total
      Purchasers' Investment after giving effect to such reduction shall be not
      less than $5,000,000 (unless the Total Purchasers' Investment shall
      thereby be reduced to zero) and shall be in an integral multiple of
      $100,000,

                                       19
<PAGE>

            (B) if Seller shall commence any voluntary reduction in a Settlement
      Period containing all or a portion of any Run Off Period, Collections not
      so reinvested shall be treated as if collected on the next following Run
      Off Day,

            (C) Seller shall use reasonable efforts to attempt to choose a
      reduction amount, and the date of commencement thereof, so that such
      reduction shall commence and conclude in the same Settlement Period, and

            (D) any reduction of the Total Purchasers' Investment shall be
      applied pro rata to the Purchaser's Investment of each Purchaser on the
      basis of its Funded Percentage.

      (d) Allocations of Obligor's Payments. Except as otherwise required by law
or the underlying Contract, all Collections received from an Obligor of any Pool
Receivable shall be applied to Pool Receivables then outstanding of such Obligor
in the order of the age of such Pool Receivables, starting with the oldest such
Pool Receivable; provided, however, that, if payment is designated by such
Obligor for application to specific Pool Receivables, it shall be applied to
such specified Pool Receivables.

      SECTION 3.04. Reporting. (a) On June 19, 2000 and on or prior to the tenth
(10th) day of each month (or the next Business Day if such tenth (10th) day is
not a Business Day) thereafter, Servicer shall prepare and forward to the
Administrative Agent and each Bank Purchaser

            (i) a Periodic Report relating to the Undivided Interest as of the
      close of business of Servicer on the next preceding Month End Date,

            (ii) if requested by the Administrative Agent or any Bank Purchaser,
      an aggregate listing of aged Pool Receivables, and

            (iii) a listing of the Unpaid Balance of Eligible Receivables for
      each Obligor with Eligible Receivables equal to or greater than 7.0% of
      the aggregate Unpaid Balance of Eligible Receivables as of the next
      preceding Month End Date.

      If requested by the Administrative Agent or any Bank Purchaser, Servicer
shall prepare and forward Periodic Reports more frequently than once a month
(but in no event more frequently than once per week unless such calendar month
contains a Run Off Day), using the most current information available to
Servicer.

      (b) On or prior to the Settlement Date of any Settlement Period containing
a Run Off Day, Servicer shall prepare and forward to the Administrative Agent
and each Bank Purchaser a Periodic Report as of the close of business of
Servicer on the next preceding Month End Date.

                                       20
<PAGE>

      (c) Seller will advise the Administrative Agent, each Bank Purchaser and
Servicer of each Run Off Day immediately upon the occurrence thereof.

      SECTION 3.05. Payments and Computations, Etc. (a) All amounts to be paid
or deposited by Seller or Servicer hereunder shall be paid or deposited in
accordance with the terms hereof no later than 2:00 p.m. (New York time) on the
day when due in lawful money of the United States of America in same day funds
to the Administrative Agent at Bankers Trust Company, New York, NY, ABA
#021001033 Account of BTCO as Depository for Bank of America, Account
#00-384-710, reference: SCI Funding Inc.; Attention: Boris Treyger (the
"Administrative Agent's Account").

      (b) Seller or Servicer, as applicable, shall, to the extent permitted by
law, pay to the Administrative Agent interest on all amounts not paid or
deposited when due hereunder at 2% per annum above the Alternate Reference Rate,
payable on demand, provided, however, that such interest rate shall not at any
time exceed the maximum rate permitted by applicable law. Such interest shall be
retained by the Administrative Agent except to the extent that such failure to
make a timely payment or deposit has continued beyond the date for distribution
by the Administrative Agent of such overdue amount to a Purchaser or any other
Person having an interest in such overdue amount, in which case such interest
accruing after such date shall be for the account of, and distributed by the
Administrative Agent, to such Persons ratably in accordance with their
respective interests in such overdue amount.

      (c) All computations of interest, Earned Discount, Negative Spread Fee and
any other fees hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first day but excluding the last day)
elapsed.

      SECTION 3.06. Treatment of Collections and Deemed Collections. Seller
shall pay to Servicer all Collections deemed received by Seller pursuant to
Section 3.03(a), and Servicer shall hold or distribute such Collections to the
same extent as if such Collections had actually been received on the date of
such delivery to Servicer. If Collections are then being paid to the
Administrative Agent, or lock boxes or accounts directly or indirectly owned or
controlled by the Administrative Agent, Servicer shall forthwith cause such
deemed Collections to be paid to the Administrative Agent or to such lock boxes
or accounts, as applicable. So long as Seller shall hold any Collections or
deemed Collections required to be paid to Servicer or the Administrative Agent,
it shall hold such Collections in trust and separate and apart from its own
funds.

                                       21
<PAGE>

                                   ARTICLE IV

                            FEES AND YIELD PROTECTION

                                       22
<PAGE>

      SECTION 4.01. Fees. Seller shall pay to the Administrative Agent and
Purchasers certain fees on such dates and in such amounts as set forth in the
letter agreement dated as of June 14, 2000 among Seller, the Administrative
Agent and the Bank Purchasers (as amended from time to time, the "Fee Letter").

      SECTION 4.02. Yield Protection. (a) If (i) Regulation D or (ii) any
Regulatory Change occurring after the date hereof

            (A) shall subject an Affected Party to any tax, duty or other charge
      with respect to any Undivided Interest owned by or funded by it, or any
      obligations or right to make Purchases or Reinvestments or to provide
      funding therefor, or shall change the basis of taxation of payments to the
      Affected Party of any Purchaser's Investments or Earned Discount owned by,
      owed to or funded by it or any other amounts due under this Agreement in
      respect of any Undivided Interest owned by or funded by it or its
      obligations or rights, if any, to make Purchases or Reinvestments or to
      provide funding therefor (except for changes in the rate of tax on or
      based upon the overall net income of such Affected Party imposed by the
      United States of America and any state, local or foreign jurisdiction in
      which such Affected Party is subject to income taxation); or

            (B) shall impose, modify or deem applicable any reserve (including,
      without limitation, any reserve imposed by the Federal Reserve Board, but
      excluding any reserve included in the determination of Earned Discount),
      special deposit or similar requirement against assets of any Affected
      Party, deposits or obligations with or for the account of any Affected
      Party or with or for the account of any Affiliate (or entity deemed by the
      Federal Reserve Board to be an Affiliate) of any Affected Party, or credit
      extended by any Affected Party; or

            (C) shall change the amount of capital maintained or required or
      requested or directed to be maintained by any Affected Party; or

            (D) shall impose any other condition affecting any portion of the
      Undivided Interest owned or funded by any Affected Party, or its
      obligations or rights, if any, to make Purchases or Reinvestments or to
      provide funding therefor;

and the result of any of the foregoing is or would be

            (x) to increase the cost or to impose a cost on (I) an Affected
      Party funding or making or maintaining any Purchases or Reinvestments, any
      purchases, reinvestments, or loans or other extensions of credit under any
      Program Support Agreement, or any Funding, or any commitment of such
      Affected Party with respect to any of the foregoing, or (II) the
      Administrative Agent for continuing its, or Seller's, relationship with
      any Purchaser,

                                       23
<PAGE>

            (y) to reduce the amount of any sum received or receivable by an
      Affected Party under this Agreement, or under any Program Support
      Agreement with respect thereto, or

            (z) in the sole determination of such Affected Party, to materially
      reduce the rate of return on the capital of an Affected Party as a
      consequence of its obligations hereunder or arising in connection herewith
      to a level below that which such Affected Party could otherwise have
      achieved,

then within thirty (30) days after written demand by such Affected Party (which
demand shall be accompanied by a statement setting forth in reasonable detail
the basis of such demand), Seller shall pay (and if the Seller does not pay such
amounts when due, the Guarantor shall pay) directly to such Affected Party such
additional amount or amounts as will compensate such Affected Party for such
additional or increased cost or such reduction.

      (b) Each Affected Party will promptly notify Seller and the Administrative
Agent of any event of which it has actual knowledge which will entitle such
Affected Party to compensation pursuant to this Section 4.02; provided, however,
no failure to give or delay in giving such notification shall adversely affect
the rights of any Affected Party to such compensation.

      (c) In determining any amount provided for or referred to in this Section
4.02, an Affected Party will use reasonable averaging and attribution methods.
Any Affected Party when making a claim under this Section 4.02 shall submit to
Seller a certificate setting forth such increased cost or reduced return in
reasonable detail, which certificate shall, in the absence of manifest error, be
presumed correct as to the amount thereof.

      (d) Notwithstanding anything to the contrary contained in this Section
4.02, unless an Affected Party gives notice to Seller that Seller is obligated
to pay any amount under Section 4.02 within 180 days after the later of (x) the
date such Affected Party incurs the increased costs, reduction in the amounts
received or receivable hereunder or reduction in return on capital, or other
liability described in this Section 4.02, as applicable or (y) the date such
Affected Party has actual knowledge of its incurrence of any of the foregoing,
such Affected Party shall only be entitled to be compensated for any such amount
by the Seller to the extent any such amounts are incurred or suffered on or
after the date which occurs 180 days prior to such Affected Party giving notice
to Seller as set forth above; provided that if the circumstance giving rise to
such claim by its terms has a retroactive effect to an earlier date, such
180-day period shall be extended to include the period of such retroactive
effect.

                                       24
<PAGE>

                                    ARTICLE V

                    CONDITIONS TO EFFECTIVENESS OF PURCHASES

      SECTION 5.01. Conditions Precedent to Initial Purchase. The effectiveness
of this Second Amended and Restated Receivables Purchase Agreement and the
initial Purchase hereunder are subject to the condition precedent that the
Administrative Agent shall have received, on or before the date of such
Purchase, the following, each (unless otherwise indicated) dated such date and
in form and substance satisfactory to the Administrative Agent and each Bank
Purchaser:

            (a) A copy of the resolutions of the Board of Directors of each SCI
      Party approving the Agreement Documents to be delivered by such SCI Party
      and the transactions contemplated thereby, certified on behalf of such SCI
      Party by such SCI Party's Secretary or Assistant Secretary;

            (b) A good standing certificate for Seller issued by the Secretary
      of State of Delaware and a foreign qualification certificate issued by the
      Secretary of State of California; good standing or foreign qualification
      certificates for SCI issued by the Secretaries of State of Alabama,
      California, Colorado, New Hampshire, North Carolina, Maine and South
      Dakota; good standing or foreign qualification certificates for Guarantor
      issued by the Secretaries of State of Delaware and California; and good
      standing certificates for each Originator issued by the Secretary of State
      or other governmental authority of the states or jurisdictions of such
      Originator's incorporation and principal place of business;

            (c) A certificate of the Secretary or Assistant Secretary of each
      SCI Party certifying on behalf of such Person the names and true
      signatures of the officers authorized on its behalf to sign the Agreement
      Documents to be delivered by it in connection herewith (on which
      certificate the Administrative Agent and each Purchaser may conclusively
      rely until such time as the Administrative Agent shall receive a revised
      certificate meeting the requirements of this subsection (c));

            (d) The Articles or Certificate of Incorporation of each SCI Party,
      duly certified by the Secretary of State or similar office of the State
      under the laws of which such SCI Party was organized, as of a recent date,
      together with a copy of the By-laws of each SCI Party, duly certified on
      behalf of such Person by the Secretary or an Assistant Secretary of such
      SCI Party;

            (e) Acknowledgment copies (or other evidence of filing reasonably
      satisfactory to the Administrative Agent) of amendments to the Financing
      Statements, filed in connection with the Original Receivables Agreement,
      and acknowledgment copies of Financing Statements or other filings with
      respect to all of the Originators, or other, similar instruments or
      documents, as may be

                                       25
<PAGE>

      necessary or, in the reasonable opinion of the Administrative Agent,
      desirable under the UCC or any comparable law of all appropriate
      jurisdictions to perfect Seller's interests in the Pool Receivables and
      the Administrative Agent's interests in the Pool assigned to it or
      otherwise created or arising hereunder;

            (f) A search report provided in writing to the Administrative Agent
      listing all effective Financing Statements filed in the jurisdictions in
      which filings were made pursuant to subsection (e) above and in such other
      jurisdictions that Administrative Agent shall reasonably request, together
      with copies of such financing statements (none of which shall cover the
      Pool or any part thereof, except for those in favor of the Administrative
      Agent);

            (g) Opinions of Powell, Goldstein, Frazer & Murphy LLP, counsel for
      Seller, SCI and Guarantor, a favorable opinion of Michael M. Sullivan,
      Esq., in-house counsel for Seller, SCI and Guarantor, and a favorable
      opinion of counsel for each Originator, in each case, satisfactory in form
      and substance to the Administrative Agent and each Bank Purchaser;

            (h) Evidence of the payment by Seller to the Administrative Agent of
      the structuring fee set forth in the separate engagement letter between
      the Administrative Agent and the Seller; and

            (i) Such other documents, amendments or certificates as the
      Administrative Agent or any Purchaser shall reasonably request.

            SECTION 5.02. Conditions Precedent to All Purchases and
      Reinvestments. Each Purchase (including the initial Purchase) and each
      Reinvestment hereunder shall be subject to the further conditions
      precedent ("Conditions Precedent") that on the date of such Purchase or
      Reinvestment the following statements shall be true (and Seller by
      accepting the amount of such Purchase or by receiving the proceeds of such
      Reinvestment shall be deemed to have certified that):

            (a) The representations and warranties contained in Article VI are
      correct on and as of such day as though made on and as of such day and
      shall be deemed to have been made on such day unless they specifically
      relate solely to an earlier period,

            (b) No event has occurred and is continuing, or would result from
      such Purchase or Reinvestment, that constitutes a Termination Event or
      Unmatured Termination Event,

            (c) After giving effect to each proposed Purchase or Reinvestment,
      the Total Purchasers' Investments will not exceed the Purchase Limit and
      the Required Allocation will not exceed the Required Allocation Limit, and

                                       26
<PAGE>

            (d) The Purchase Termination Date shall not have occurred;

provided, however, the absence of the occurrence and continuance of an Unmatured
Termination Event shall not be a Condition Precedent to any Reinvestment on any
day which does not cause the Total Purchasers' Investments, after giving effect
to such Reinvestment to exceed the Total Purchasers' Investments as of the
opening of business on such day.

                                   ARTICLE VI

                         REPRESENTATIONS AND WARRANTIES

      SECTION 6.01. Representations and Warranties - Seller. Seller represents
and warrants as follows:

            (a) Organization, Good Standing and Qualification. It is a
      corporation duly incorporated, validly existing and in good standing under
      the laws of the jurisdiction of its incorporation and is duly qualified to
      do business, and is in good standing, and has obtained all necessary
      licenses and approvals, in every jurisdiction where the ownership of
      property or the nature of its business requires it to be so qualified or
      have such licenses and approvals except where the failure to so qualify or
      have such licenses and approvals would not have a Seller Material Adverse
      Effect.

            (b) Power and Authority; Due Authorization. The execution, delivery
      and performance by it of this Agreement and any other Agreement Documents
      to be delivered by it hereunder and thereunder, and the assignment of the
      Undivided Interest and the other transactions contemplated hereby and
      thereby, are within its corporate powers, have been duly authorized by all
      necessary corporate action, do not (i) contravene (1) its charter or
      by-laws, or (2) any law, rule or regulation or any contractual restriction
      to which Seller or its property is subject and, in the case of this clause
      (2), which contravention would have a Seller Material Adverse Effect; (ii)
      result in or require the creation of any Lien upon or with respect to any
      of its properties other than as specifically contemplated by this
      Agreement; or (iii) violate any law or any order, rule, or regulation
      applicable to Seller of any court or of any federal or state regulatory
      body, administrative agency, or other governmental instrumentality having
      jurisdiction over Seller or any of its properties, which violation would
      have a Seller Material Adverse Effect.

            (c) Valid Sale; Binding Obligations. This Agreement constitutes a
      valid sale, transfer, and assignment of the Undivided Interest to the
      Administrative Agent, for the benefit of the Purchasers, enforceable
      against creditors of, and purchasers from, Seller and each Originator.
      This Agreement and each other Agreement Document to which Seller is a
      party constitute Seller's legal,

                                       27
<PAGE>

      valid and binding obligations enforceable against it in accordance with
      their respective terms, except as enforceability may be limited by
      bankruptcy, insolvency, reorganization, moratorium and other similar laws
      relating to or affecting creditors' rights generally or by general
      principles of equity (regardless of whether such enforceability is
      considered in a proceeding in equity or at law).

            (d) No Proceedings. Except as listed on Schedule 6.01(d), there are
      no proceedings or investigations pending or, to the best of its knowledge,
      threatened, before any court, regulatory body, administrative agency, or
      other tribunal or governmental instrumentality (i) asserting the
      invalidity of this Agreement or any other Agreement Document to which
      Seller is a party, (ii) seeking to prevent the sale and assignment of any
      Receivable, the Undivided Interest or the consummation of any of the other
      transactions contemplated by this Agreement or any other Agreement
      Document to which Seller is a party, (iii) seeking any determination or
      ruling that could reasonably be expected to have a Seller Material Adverse
      Effect or (iv) seeking to adversely affect the federal income tax
      attributes of the Purchases hereunder.

            (e) Government Approvals. No authorization or approval or other
      action by, and no notice to or filing with, any governmental authority or
      regulatory body is required for the due execution, delivery and
      performance by it of this Agreement or any other document or instrument to
      be delivered hereunder except for the filing of the amendments to the
      Financing Statements referred to in Article V, all of which, at the time
      required in Article V, shall have been duly made and shall be in full
      force and effect.

            (f) Financial Condition. The balance sheet of Seller as at May 21,
      2000, certified on behalf of Seller by Seller's chief financial or
      accounting officer, copies of which have been furnished to the
      Administrative Agent and each Bank Purchaser, fairly present the financial
      condition of Seller as at such date, all in accordance with GAAP
      consistently applied and since the date of Seller's formation, there has
      been no material adverse change in Seller's financial condition, business,
      assets, prospects or operations.

            (g) Litigation. No injunction, decree or other decision has been
      issued or made by any court, governmental agency or instrumentality
      thereof in a proceeding to which Seller is a party that prevents, and, to
      its knowledge, no threat by any Person has been made in writing to attempt
      to obtain any such decision that would prevent, Seller from conducting a
      material part of its business operations.

            (h) Margin Regulations. No proceeds of any Purchase will be used to
      acquire any security in any transaction which is subject to Sections 13
      and 14 of the Securities Exchange Act of 1934, as amended; and the use of
      all funds obtained by Seller under this Agreement will not conflict with
      or contravene any of Regulations T, U and X promulgated by the Board of
      Governors of the Federal Reserve System from time to time.

                                       28
<PAGE>

            (i) Quality of Title. Each Pool Receivable, together with the
      related Contract and all purchase orders and other agreements related to
      such Pool Receivable, is owned by Seller free and clear of any Adverse
      Claim (other than any Adverse Claim arising solely as the result of any
      action taken by a Purchaser or by the Administrative Agent) except as
      provided herein; each Pool Receivable was purchased by Seller from an
      Originator pursuant to a Second Tier Sale Agreement in a "true sale"
      transaction, which sale is enforceable against all creditors of, and
      purchasers from, such Originator, and Seller took all steps necessary to
      perfect its ownership interest in such Pool Receivable against such
      Originator; when the Administrative Agent, on behalf of the Purchasers,
      makes a Purchase, it shall have acquired and shall continue to have
      maintained a valid and perfected undivided percentage ownership interest
      to the extent of the Undivided Interest in each Pool Receivable and in the
      Related Security and Collections with respect thereto, free and clear of
      any Adverse Claim (other than any Adverse Claim arising solely as the
      result of any action taken by a Purchaser or by the Administrative Agent);
      and no effective financing statement or other instrument similar in effect
      covering the Pool or any part thereof is on file in any recording office
      except such as may be filed (i) in favor of an Originator in accordance
      with the Contracts, or in accordance with this Agreement with respect to
      Pool Receivables purchased by SCI from any Originator, or (ii) in favor of
      a Purchaser or the Administrative Agent in accordance with this Agreement
      or in connection with any Adverse Claim arising solely as the result of
      any action taken by a Purchaser or by the Administrative Agent.

            (j) Accurate Reports. Each Periodic Report (if prepared by Seller,
      or to the extent that information contained therein is supplied by
      Seller), information, exhibit, financial statement, document, book, record
      or report furnished at any time by Seller to the Administrative Agent, any
      Purchaser or any Owner in connection with this Agreement is accurate in
      all material respects as of its date or as of the date so furnished, and
      no such document contains any material misstatement of fact or omits to
      state a material fact or any fact necessary to make the statements
      contained therein not materially misleading in light of the circumstances
      when made.

            (k) Offices. The chief place of business and chief executive office
      of Seller, SCI and each Originator are located at the address of Seller,
      SCI or the applicable Originator referred to in Section 15.02, and the
      offices where Seller keeps all its books, records and documents evidencing
      Pool Receivables, the related Contracts and all purchase orders and other
      agreements related to such Pool Receivables are located at the addresses
      specified in Schedule 6.01(k) (or, in each case, at such other locations,
      notified to the Administrative Agent and each Bank Purchaser in accordance
      with Section 7.01(f), in jurisdictions where all action required by
      Section 8.05 has been taken and completed).

            (l) Lock-Box Accounts. The names and addresses of all the Lock-Box
      Banks, together with the account numbers of the lock-box accounts of
      Seller at such Lock-Box Banks,

                                       29
<PAGE>

      are specified in Schedule 6.01(l) (or have been notified to the
      Administrative Agent and each Bank Purchaser in accordance with Section
      7.03(d)).

            (m) Eligible Receivables. Each Receivable included in the Net Pool
      Balance as an Eligible Receivable on the date of any Purchase or
      Reinvestment shall be an Eligible Receivable on such date.

            (n) Compliance With Certain Statutes. Each Purchase from Seller
      hereunder, and each Reinvestment of Collections in Pool Receivables made
      hereunder, will constitute (a) a "current transaction" within the meaning
      of Section 3(a)(3) of the Securities Act of 1933, as amended, and (b) a
      purchase or other acquisition of notes, drafts, acceptances, open accounts
      receivable or other obligations representing part or all of the sales
      price of merchandise, insurance or services within the meaning of Section
      3(c)(5) of the Investment Company Act of 1940, as amended.

            (o) No Defaults. Seller is not in default under or with respect to
      any contractual obligation or any law or court order in any respect which
      could reasonably be expected to have a Seller Material Adverse Effect.

      SECTION 6.02. Representations and Warranties - SCI. SCI represents and
warrants as follows:

            (a) Organization, Good Standing and Qualification. It is a
      corporation duly incorporated, validly existing and in good standing under
      the laws of the jurisdiction of its incorporation and is duly qualified to
      do business, and is in good standing, and has obtained all necessary
      licenses and approvals in every jurisdiction where the nature of its
      business requires it to be so qualified or have such licenses and
      approvals except where the failure to so qualify or have such licenses and
      approvals would not have a Material Adverse Effect.

            (b) Power and Authority; Due Authorization. The execution, delivery
      and performance by it of this Agreement and any other Agreement Documents
      to be delivered by it hereunder and thereunder, are within its corporate
      powers, have been duly authorized by all necessary corporate action, do
      not (i) contravene (1) its charter or by-laws, or (2) any law, rule or
      regulation or any contractual restriction to which SCI or its property is
      subject and, in the case of this clause (2), which contravention would
      have a Material Adverse Effect, (ii) do not result in or require the
      creation of any Lien upon or with respect to any of its properties other
      than as specifically contemplated by this Agreement; or (iii) violate any
      law or any order, rule, or regulation applicable to SCI of any court or of
      any federal or state regulatory body, administrative agency, or other
      governmental instrumentality having jurisdiction over SCI or any of its
      properties, which violation would have a Material Adverse Effect; and no
      transaction contemplated hereby requires compliance with any bulk sales
      act or similar law.

                                       30
<PAGE>

            (c) Binding Obligations. This Agreement and each other Agreement
      Document to which SCI is a party constitute its legal, valid and binding
      obligations enforceable against it in accordance with their respective
      terms, except as enforceability may be limited by bankruptcy, insolvency,
      reorganization, moratorium and other similar laws relating to or affecting
      creditors' rights generally or by general principles of equity (regardless
      of whether such enforceability is considered in a proceeding in equity or
      at law).

            (d) No Proceedings. Except as listed on Schedule 6.01(d), there are
      no proceedings or investigations pending or, to the best of its knowledge,
      threatened, before any court, regulatory body, administrative agency, or
      other tribunal or governmental instrumentality (i) asserting the
      invalidity of this Agreement or any other Agreement Document to which SCI
      is a party, (ii) seeking to prevent the consummation of any of the other
      transactions contemplated by this Agreement, or any other Agreement
      Document to which SCI is a party, or (iii) seeking any determination or
      ruling that could reasonably be expected to have a Material Adverse
      Effect.

            (e) Government Approvals. No authorization or approval or other
      action by, and no notice to or filing with, any governmental authority or
      regulatory body is required for the due execution, delivery and
      performance by it of this Agreement or any other document or instrument to
      be delivered hereunder.

            (f) Financial Condition. The balance sheet of SCI as at June 30,
      1999, and the related statements of earnings, stockholders' equity and
      statement of cash flows of SCI for the fiscal year then ended certified by
      SCI's chief financial or accounting officer or treasurer, and the balance
      sheet of SCI as at March 31, 2000, and the related statements of earnings,
      stockholders' equity and statement of cash flows of SCI for the nine
      fiscal months then ended, certified on behalf of SCI by SCI's chief
      financial or accounting officer, copies of which have been furnished to
      the Administrative Agent and each Bank Purchaser, fairly present the
      financial condition of SCI as at such dates and the results of the
      operations of SCI for the periods ended on such dates, all in accordance
      with GAAP consistently applied and since June 30, 1999, there has been no
      material adverse change in the financial condition, business, assets,
      prospects or operations of SCI.

            (g) Litigation. No injunction, decree or other decision has been
      issued or made by any court, governmental agency or instrumentality
      thereof in a proceeding to which SCI is a party that prevents, and, to its
      knowledge, no threat by any Person has been made in writing to attempt to
      obtain any such decision that would prevent, SCI from conducting a
      material part of its business operations.

            (h) Accurate Reports. All information, exhibits, financial
      statements, documents, books, records or reports furnished at any time by
      SCI to the Administrative Agent, any Purchaser or any Owner in connection
      with this Agreement is accurate in all material respects as of its date

                                       31
<PAGE>

      or as of the date so furnished, and no such document contains any material
      misstatement of fact or omits to state a material fact or any fact
      necessary to make the statements contained therein not materially
      misleading in light of the circumstances when made.

            (i) No Defaults. SCI is not in default under or with respect to any
      contractual obligation or any law or court order in any respect which
      could reasonably be expected to have a Material Adverse Effect.

      SECTION 6.03. Representations and Warranties - Guarantor. Guarantor
represents and warrants as follows:

            (a) Organization, Good Standing and Qualification. It is a
      corporation duly incorporated, validly existing and in good standing under
      the laws of the jurisdiction of its incorporation and is duly qualified to
      do business, and is in good standing, and has obtained all necessary
      licenses and approvals in every jurisdiction where the nature of its
      business requires it to be so qualified or have such licenses and
      approvals except where the failure to so qualify or have such licenses and
      approvals would not have a Material Adverse Effect.

            (b) Power and Authority; Due Authorization. The execution, delivery
      and performance by it of this Agreement and any other Agreement Documents
      to be delivered by it hereunder and thereunder, are within its corporate
      powers, have been duly authorized by all necessary corporate action, do
      not (i) contravene (1) its charter or by-laws, or (2) any law, rule or
      regulation or any contractual restriction to which Guarantor or its
      property is subject and, in the case of this clause (2), which
      contravention would have a Material Adverse Effect, (ii) do not result in
      or require the creation of any Lien upon or with respect to any of its
      properties other than as specifically contemplated by this Agreement; or
      (iii) violate any law or any order, rule, or regulation applicable to
      Guarantor of any court or of any federal or state regulatory body,
      administrative agency, or other governmental instrumentality having
      jurisdiction over Guarantor or any of its properties, which violation
      would have a Material Adverse Effect; and no transaction contemplated
      hereby requires compliance with any bulk sales act or similar law.

            (c) Binding Obligations. This Agreement and each other Agreement
      Document to which Guarantor is a party constitute its legal, valid and
      binding obligations enforceable against it in accordance with their
      respective terms, except as enforceability may be limited by bankruptcy,
      insolvency, reorganization, moratorium and other similar laws relating to
      or affecting creditors' rights generally or by general principles of
      equity (regardless of whether such enforceability is considered in a
      proceeding in equity or at law).

            (d) No Proceedings. Except as listed on Schedule 6.01(d), there are
      no proceedings or investigations pending or, to the best of its knowledge,
      threatened, before any court, regulatory

                                       32
<PAGE>

      body, administrative agency, or other tribunal or governmental
      instrumentality (i) asserting the invalidity of this Agreement or any
      other Agreement Document to which Guarantor is a party, (ii) seeking to
      prevent the consummation of any of the other transactions contemplated by
      this Agreement or any other Agreement Document to which Guarantor is a
      party, or (iii) seeking any determination or ruling that could reasonably
      be expected to have a Material Adverse Effect.

            (e) Government Approvals. No authorization or approval or other
      action by, and no notice to or filing with, any governmental authority or
      regulatory body is required for the due execution, delivery and
      performance by it of this Agreement or any other document or instrument to
      be delivered hereunder.

            (f) Financial Condition. The consolidated balance sheet of Guarantor
      and its consolidated Subsidiaries as at June 30, 1999, and the related
      statements of earnings, stockholders' equity and statement of cash flows
      of Guarantor and its consolidated Subsidiaries for the fiscal year then
      ended certified by Ernst & Young, independent public accountants, and the
      consolidated balance sheet of Guarantor and its consolidated Subsidiaries
      as at March 31, 2000, and the related statements of earnings,
      stockholders' equity and statement of cash flows of Guarantor and its
      consolidated Subsidiaries for the nine fiscal months then ended, certified
      on behalf of Guarantor by Guarantor's chief financial or accounting
      officer or treasurer, copies of which have been furnished to the
      Administrative Agent and each Bank Purchaser, fairly present the
      consolidated financial condition of Guarantor and its consolidated
      Subsidiaries as at such dates and the consolidated results of the
      operations of Guarantor and its consolidated Subsidiaries for the periods
      ended on such dates, all in accordance with GAAP consistently applied and
      since June 30, 1999, there has been no material adverse change in the
      financial condition, business, assets, prospects or operations of
      Guarantor and its consolidated Subsidiaries, taken as a whole.

            (g) Litigation. No injunction, decree or other decision has been
      issued or made by any court, governmental agency or instrumentality
      thereof in a proceeding to which Guarantor is a party that prevents, and,
      to its knowledge, no threat by any Person has been made in writing to
      attempt to obtain any such decision that would prevent, Guarantor from
      conducting a material part of its business operations.

            (h) Accurate Reports. All information, exhibits, financial
      statements, documents, books, records or reports furnished at any time by
      Guarantor to the Administrative Agent, any Purchaser or any Owner in
      connection with this Agreement is accurate in all material respects as of
      its date or as of the date so furnished, and no such document contains any
      material misstatement of fact or omits to state a material fact or any
      fact necessary to make the statements contained therein not materially
      misleading in light of the circumstances when made.

                                       33
<PAGE>

            (i) No Defaults. Guarantor is not in default under or with respect
      to any contractual obligation or any law or court order in any respect
      which could reasonably be expected to have a Material Adverse Effect.

                                   ARTICLE VII

                                GENERAL COVENANTS

      SECTION 7.01. Affirmative Covenants. From the date hereof until the End
Date, unless the Required Purchasers shall otherwise consent in writing:

            (a) Compliance with Laws, Etc. Each of SCI and Seller will, and
      Guarantor will, and will cause SCI to, comply in all respects with all
      applicable laws, rules, regulations, orders and contractual obligations
      with respect to it, its business and properties and all Pool Receivables
      and related Contracts, the noncompliance with which would, either singly
      or in the aggregate, have a Material Adverse Effect or a Seller Material
      Adverse Effect.

            (b) Conduct of Business and Preservation of Corporate Existence.
      Each of SCI and Seller will, and Guarantor will, and will cause SCI to,
      continue to engage in business of substantially the same general type as
      now conducted by it, and preserve, renew and keep in full force and effect
      its corporate existence and take all action to maintain all rights,
      privileges and franchises material to the conduct of its business, and
      comply with all its contractual obligations and all Requirements of Law,
      except with respect to each of the foregoing where such failure would not,
      singly or in the aggregate, have a Material Adverse Effect or a Seller
      Material Adverse Effect.

            (c) Audits. Subject to contractual, statutory, regulatory or other
      similar limitations regarding confidential or proprietary information,
      each of SCI and Seller will, and Guarantor will, and will cause SCI to, at
      any time and from time to time during regular business hours upon at least
      three (3) Business Days' prior written notice (unless a Termination Event
      has occurred and is continuing, in which case, no such notice shall be
      required), permit the Administrative Agent or any Bank Purchaser, 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 its possession or under its control relating
      to Pool Receivables, including, without limitation, the related Contracts,
      purchase orders and other agreements, and (ii) to visit the offices and
      properties of Seller, SCI and Guarantor for the purpose of examining such
      materials described in clause (i) next above, and to discuss matters
      relating to Pool Receivables or Seller's, SCI's or Guarantor's performance
      hereunder with any of the officers or employees of Seller, SCI or
      Guarantor having knowledge of such matters. Seller, SCI and Guarantor
      expressly reserve the right to restrict access to any of their facilities
      in accordance with reasonably adopted procedures relating to safety and

                                       34
<PAGE>

      security. Article XIII notwithstanding, the reasonable costs and expenses
      incurred by the Administrative Agent, any Bank Purchaser or its agents or
      representatives in connection with any such examinations, copies,
      abstracts, visits or discussions occurring or made (i) more than twice
      during any calendar year, (ii) prior to the occurrence of a Termination
      Event and (iii) other than in connection with a change by SCI of its
      information systems, shall be for the account of the Bank Purchasers. Each
      Owner of an interest in the Undivided Interest, by acceptance of the
      benefits of such ownership, and the Administrative Agent agree to use
      their reasonable efforts to ensure that any information concerning
      Guarantor and its Subsidiaries obtained by the Administrative Agent or any
      Bank Purchaser pursuant to this Section 7.01(c) which is not contained in
      a report or other document filed by Guarantor with the SEC or otherwise
      available to the public generally or to the Administrative Agent or any
      Bank Purchaser from a source other than Seller, SCI or Guarantor will, to
      the extent permitted by law and except as may be required by subpoena, by
      any agency or other governmental entity which regulates the Administrative
      Agent's or any such Owner's business under federal, state or local law
      (the "Regulators") or in the normal course of the business operations of
      the Administrative Agent or such Owner, be treated confidentially by the
      Administrative Agent and each such Owner and, so long as no Termination
      Event has occurred and is then continuing hereunder, will not be
      distributed or otherwise made available to any Person, other than the
      Regulators, any Program Support Provider or potential Program Support
      Provider, any rating agency then rating the Commercial Paper Notes and the
      employees, authorized agents, Affiliates or representatives of the
      Administrative Agent or such Owner, and except as may otherwise be
      required by law, unless the Administrative Agent or such Owner, as
      applicable, shall have given Guarantor, SCI and Seller ten (10) days'
      prior written notice of such distribution or other disclosure. In the
      event that the Administrative Agent or any such Owner is required by law
      to disclose any information concerning Guarantor and its Subsidiaries (or
      any of them), the Administrative Agent or such Owner shall provide prompt
      written notice thereof (to the extent practicable, prior to disclosure;
      otherwise promptly after such disclosure) to Guarantor, SCI and Seller so
      that Guarantor, SCI and Seller (or any of them) may seek a protective
      order or other appropriate remedy.

            (d) Keeping of Records and Books of Account. Each of SCI and Seller
      will, and Guarantor will cause SCI to, maintain and implement
      administrative and operating procedures (including, without limitation, an
      ability to recreate records evidencing Pool Receivables in the event of
      the destruction of the originals thereof), and keep and maintain, all
      documents, books, records and other information reasonably necessary or
      advisable for the collection of all Pool Receivables (including, without
      limitation, records adequate to permit the daily identification of each
      new Pool Receivable and all Collections of and adjustments to each
      existing Pool Receivable).

            (e) Performance and Compliance with Receivables and Contracts. Each
      of SCI and Seller will, and Guarantor will cause SCI to, at SCI's expense
      timely and fully perform and comply with all provisions, covenants and
      other promises required to be observed by it under the Contracts

                                       35
<PAGE>

      related to the Pool Receivables, all purchase orders and other agreements
      related to such Pool Receivables subject, however, to the right of SCI to
      dispute or contest its obligations so to perform or comply with any such
      provision, covenant or other promise where it reasonably believes that
      such performance or compliance is not required or is not in the best
      interest of SCI, and such failure to perform or comply would not have a
      material adverse effect on the collectibility or enforceability of the
      related Pool Receivable or Receivables.

            (f) Location of Records. Each of SCI and Seller will, and Guarantor
      will cause SCI to, keep its chief place of business and chief executive
      office, and the offices where it keeps its records concerning the Pool
      Receivables, all related Contracts and all purchase orders and other
      agreements related to such Pool Receivables (and all original documents
      relating thereto), at the address(es) of Seller referred to in Section
      15.02 or, upon thirty (30) days' prior written notice to the
      Administrative Agent and each Bank Purchaser, at such other locations in
      jurisdictions where all action required by Section 8.05 shall have been
      taken and completed.

            (g) Credit and Collection Policies. Each of SCI and Seller will, and
      Guarantor will cause SCI to, comply in all material respects with its
      Credit and Collection Procedure and all other policies and practices of
      SCI referred to in, or discussed in connection with, the due diligence
      report prepared by PriceWaterhouseCoopers (as successor to Coopers &
      Lybrand) on or prior to the date hereof in regard to each Pool Receivable
      and the related Contract and otherwise comply with past business practices
      in regard to Pool Receivables.

            (h) Collections. Each of SCI and Seller will, and Guarantor will
      cause SCI to, instruct all Obligors to cause all Collections of Pool
      Receivables to be deposited directly with a Lock-Box Bank. If a Trigger
      Event has occurred and is continuing, each of SCI and Seller will, and
      Guarantor will cause SCI to, segregate all payments that do not constitute
      Collections from the lock-box accounts into which any Collections are
      deposited.

            (i) Marking of Records. To the extent reasonably practicable, at its
      expense, each of SCI and Seller will, and Guarantor will cause SCI to,
      mark its master data processing records evidencing Pool Receivables and
      mark the related Contracts with a legend evidencing that an interest in
      such Pool Receivables and related Contracts have been sold to the
      Administrative Agent, for the benefit of the Purchasers, in accordance
      with this Agreement.

      SECTION 7.02. Reporting Requirements. From the date hereof until the End
Date, unless the Required Purchasers shall otherwise consent in writing:

            (a) Quarterly Financial Statements. Guarantor will, furnish to the
      Administrative Agent and each Bank Purchaser as soon as available and in
      any event within sixty (60) days after the end of each of the first three
      quarters of each fiscal year of Guarantor copies of such consolidated and

                                       36
<PAGE>

      consolidating (showing each of the Originators and Seller) financial
      statements as Guarantor may prepare for its own use for the fiscal quarter
      then ended, which consolidated financial statements shall be prepared in
      conformity with GAAP applied on a Consistent Basis and certified by the
      chief financial officer, chief executive officer, treasurer or chief
      accounting officer of Guarantor; together with a certificate from such
      officer containing a computation of, and showing compliance with, the
      financial restrictions contained in Section 7.04.

            (b) Annual Financial Statements. Guarantor will furnish to the
      Administrative Agent and each Bank Purchaser as soon as available and in
      any event within ninety (90) days after the end of each fiscal year of
      Guarantor, copies of both the consolidated and consolidating (showing each
      of the Originators and Seller) balance sheets as at the end of such fiscal
      year, and the related statements of income and retained earnings, and,
      with respect to the consolidated statements, related statements of cash
      flows and changes in financial position for the fiscal year then ended, or
      statements providing substantially similar information, in each case
      prepared in reasonable detail (except for consolidating statements) and in
      accordance with GAAP applied on a Consistent Basis and, with respect to
      the consolidated statements, certified by nationally recognized public
      accountants; together with a certificate from such accountants containing,
      as applicable, a computation of the financial restrictions contained in
      Section 7.04 and a statement that to the best knowledge of such
      accountants the restrictions in Section 7.04 have not been violated.

            (c) Reports to Holders and Exchanges. Each of SCI and Seller will,
      and Guarantor will, and will cause SCI to, furnish to the Administrative
      Agent and each Bank Purchaser, in addition to the reports required by
      subsections (a) and (b) next above, promptly upon the Administrative
      Agent's or any Bank Purchaser's request, copies of any reports specified
      in such request which it sends its public stockholders generally, and any
      reports or registration statements that it files with the SEC or any
      national securities exchange other than registration statements relating
      to employee benefit plans and to registrations of securities for selling
      security holders.

            (d) ERISA. Each of SCI and Seller will, and Guarantor will, and will
      cause SCI to, furnish to the Administrative Agent and each Bank Purchaser,
      promptly after the filing or receiving thereof, copies of all reports and
      notices with respect to any Reportable Event defined in Article IV of
      ERISA which it or any of its Affiliates files under ERISA with the
      Internal Revenue Service, the Pension Benefit Guaranty Corporation or the
      U.S. Department of Labor or which it or any of its Affiliates receives
      from the Pension Benefit Guaranty Corporation.

            (e) Termination Events. Each of SCI and Seller will, and Guarantor
      will, and will cause SCI to, furnish to the Administrative Agent and each
      Bank Purchaser, as soon as possible and in any event within three (3)
      Business Days after any Executive Officer of Guarantor, SCI or Seller has
      notice or actual knowledge of the occurrence of each Termination Event and
      each Unmatured Termination Event, a written statement of an Executive
      Officer of Seller, SCI or

                                       37
<PAGE>

      Guarantor, as the case may be, setting forth details of such event and the
      action that Seller, SCI or Guarantor, as the case may be, proposes to take
      with respect thereto.

            (f) Litigation. Each of SCI and Seller will, and Guarantor will, and
      will cause SCI to, furnish to the Administrative Agent and each Bank
      Purchaser as soon as possible and in any event within five Business Days
      of Seller's SCI's or Guarantor's knowledge thereof, notice of (i) the
      commencement of or any development in any litigation, investigation or
      proceeding which may exist at any time which could reasonably be expected
      to have a Material Adverse Effect or Seller Material Adverse Effect and
      (ii) any material adverse development in previously disclosed litigation.

            (g) Credit and Collection Procedure. SCI will, and Guarantor will
      cause SCI to, deliver to the Administrative Agent and each Bank Purchaser
      any proposed material changes in the Credit and Collection Procedure at
      least thirty (30) days prior to the implementation of such changes.

            (h) Bank Credit Agreement. Guarantor will use its reasonable efforts
      to deliver to the Administrative Agent and each Bank Purchaser which is
      not a party to the Bank Credit Agreement copies of all drafts of all
      consents, waivers and amendments to the Bank Credit Agreement that are
      distributed to the bank group, and all final executed copies thereof, in
      each case promptly after they are available (it being understood that
      neither the Administrative Agent, in such capacity, nor any Bank
      Purchaser, in such capacity, has any right to approve such consents,
      waivers and amendments).

            (i) Other. Each of SCI and Seller will, and Guarantor will, and will
      cause SCI to, promptly, from time to time, furnish to the Administrative
      Agent and each Bank Purchaser such other information, documents, records
      or reports respecting the Receivables or the condition or operations,
      financial or otherwise, of Seller, SCI or Guarantor as the Administrative
      Agent or any Bank Purchaser may from time to time reasonably request in
      order to protect the interests of the Administrative Agent or the
      Purchasers under or as contemplated by this Agreement.

      SECTION 7.03. Negative Covenants. From the date hereof until the End Date,
without the prior written consent of the Required Purchasers:

            (a) Sales, Liens, Etc. Seller will not, except as otherwise provided
      herein, sell, assign (by operation of law or otherwise) or otherwise
      dispose of, or create or suffer to exist any Lien upon or with respect to,
      any Pool Receivable or related Contract or Related Security, or any
      interest therein, or any lock-box account to which any Collections of any
      Pool Receivable are sent, or any right to receive income from or in
      respect of any of the foregoing.

                                       38
<PAGE>

            (b) Extension or Amendment of Receivables. Neither SCI nor Seller
      will, and Guarantor will not permit SCI to, except as otherwise permitted
      in Section 8.02(c), extend, amend or otherwise modify the terms of any
      Pool Receivable, or amend, modify or waive any material term or condition
      of any Contract related thereto, or any term or condition of any such
      Contract that relates to collectibility of the related Receivable.

            (c) Change in Business or Credit and Collection Procedure. SCI will
      not, and Guarantor will not permit SCI to, cease to engage in business of
      substantially the same general type now conducted by it, or make any
      material change in the Credit and Collection Procedure.

            (d) Change in Payment Instructions to Obligors. Neither SCI nor
      Seller will, and Guarantor will not permit SCI to, add or terminate any
      bank as a Lock-Box Bank from those listed in Schedule 6.01(l) or make any
      change in its instructions to Obligors regarding payments to be made to
      Seller or Servicer or payments to be made to any Lock-Box Bank, unless the
      Administrative Agent and each Bank Purchaser shall have received notice of
      (and the Administrative Agent, upon direction of the Required Purchasers,
      consented to) such addition, termination or change and duly executed
      copies of Lock-Box Agreements with each new Lock-Box Bank.

            (e) Deposits to Special Accounts. Neither SCI nor Seller will, and
      Guarantor will not permit SCI to, deposit or otherwise credit, or cause or
      permit to be so deposited or credited, to any Lock-Box Account cash or
      cash proceeds other than Collections of Pool Receivables.

            (f) Purchase and Sale Agreement. SCI will not, and Guarantor will
      not permit SCI to, amend, waive or terminate any Purchase and Sale
      Agreement or any material provision thereof.

            (g) Sale Agreements. Neither SCI nor Seller shall amend, waive,
      terminate or modify any Second Tier Sale Agreement or Initial Purchaser
      Note. Seller shall not amend Article III, IV(b), VI, VII or VIII of its
      articles of incorporation.

            (h) Incurrence of Indebtedness. Seller will not incur or suffer to
      exist any Indebtedness other than its obligations to Servicer, the
      Purchasers and the Administrative Agent hereunder and its obligations to
      SCI under the Initial Purchaser Note.

            (i) Restricted Payments. Seller shall not (i) declare or pay any
      dividends, (ii) lend or advance any funds or (iii) repay any loans or
      advances to, for or from any Originator or any other Affiliated Party
      (including making any payment pursuant to the Initial Purchaser Notes)
      (all of the foregoing, "Restricted Payments"), provided that Seller may
      make payments on any Initial Purchaser Note in accordance with its terms
      and pay dividends and make Originator Loans, in each case, from
      Collections paid or released to Seller pursuant to Section 3.01 or 3.02,
      so long

                                       39
<PAGE>

      as no Termination Event or Unmatured Termination Event has occurred and is
      continuing or would result therefrom, and after giving effect thereto,
      Seller's Tangible Net Worth is not less than $20,000,000.

      Section 7.04. Separate Corporate Existence. Guarantor, Seller and SCI
hereby acknowledge that each Purchaser and the Administrative Agent are entering
into the transactions contemplated by this Agreement in reliance upon the
Seller's identity as a legal entity separate from the other Affiliated Parties.
Therefore, Guarantor, Seller and SCI shall take the steps described in this
Section 7.04 and any other steps that the Administrative Agent or any Purchaser
reasonably requests to continue Seller's identity as such a separate legal
entity and to make it apparent to third Persons that Seller is an entity with
assets and liabilities distinct from those of the other Affiliated Parties and
those of any other Person, and not a division of the other Affiliated Parties or
any other Person:

            (a) Seller will be a limited purpose corporation whose primary
      activities are restricted in its articles of incorporation to purchasing
      Receivables from the Originators pursuant to the Second Tier Sale
      Agreements, entering into agreements for the servicing of such
      Receivables, selling undivided interests in the Receivables to the
      Administrative Agent for the benefit of the Purchasers, and conducting
      such other activities as it reasonably deems necessary or appropriate to
      carry out its primary activities;

            (b) At least two members of Seller's Board of Directors shall be
      individuals who are not direct, indirect or beneficial stockholders,
      officers, directors, employees, affiliates, associates, customers or
      suppliers of any other Affiliated Party;

            (c) No director or officer of Seller shall at any time serve as a
      trustee in bankruptcy for any other Affiliated Party;

            (d) Any employee, consultant or agent of Seller will be paid by the
      Manager for services provided to Seller, which payment shall be charged to
      Seller's account, except as provided in this Agreement in respect of the
      Servicing Fee. Seller will engage no agents other than a Servicer for the
      Receivables, which Servicer (if an Affiliated Party) will be fully
      compensated for its services to Seller by payment of the Servicing Fee,
      and the Manager pursuant to the Management Agreement, which Manager's fees
      shall not exceed $10,000 in any calendar year;

            (e) Seller will not incur any liabilities other than its liabilities
      hereunder and under the other Agreement Documents, liabilities to the
      independent directors not exceeding $10,000 at any time outstanding
      (although annual compensation may exceed $10,000 per year), plus $1,000
      for each meeting in excess of three per year, plus out-of-pocket expenses
      approved by the Manager and other liabilities incurred in the ordinary
      course of business that do not exceed $3,000 due and owing at any one
      time;

                                       40
<PAGE>

            (f) Seller's operating expenses will not be paid by any other
      Affiliated Party;

            (g) Seller will have its own separate mailing address, stationery
      and, if used, bank checks and, if it uses premises leased, owned or
      occupied by any other Affiliated Party, its portion of such premises will
      be defined and separately identified;

            (h) Seller's books and records will be maintained separately from
      those of every other Affiliated Party;

            (i) Any financial statements of any other Affiliated Party which are
      consolidated to include Seller will contain detailed notes clearly stating
      that (A) all of Seller's assets are owned by the Seller, and (B) Seller is
      a separate corporate entity with its own separate creditors which will be
      entitled to be satisfied out of Seller's assets prior to any value in the
      Seller becoming available to Seller's equity holders;

            (j) The assets of Seller will be maintained in a manner that
      facilitates their identification and segregation from those of any other
      Affiliated Party;

            (k) Seller will strictly observe corporate formalities in its
      dealings with each other Affiliated Party, and funds or other assets of
      Seller will not be commingled or pooled with those of any other Affiliated
      Party;

            (l) Seller shall not maintain joint bank accounts with any other
      Affiliated Party or other depository accounts to which any other
      Affiliated Party (other than SCI or any Originator in its capacity as
      Servicer or Subservicer) has independent access;

            (m) Seller 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
      Affiliated Party;

            (n) Seller will maintain arm's length relationships with each other
      Affiliated Party. Any other Affiliated Party which renders or otherwise
      furnishes services or merchandise to Seller will be compensated by Seller
      at market rates for such services or merchandise; and

            (o) Neither Seller, on the one hand, nor any other Affiliated Party,
      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 respecting the daily
      business and affairs of the other.

      SECTION 7.05. Financial Covenants. From the date hereof until the End
Date, the Guarantor will:

                                       41
<PAGE>

            (a) not permit its Total Debt to Capitalization Ratio (as defined in
      and calculated in accordance with the terms of the Credit Agreement) to
      exceed 0.60 to 1.00.

            (b) not permit its Interest Coverage Ratio (as defined and
      calculated in accordance with the Credit Agreement) to be less than 2.00
      to 1.00.

            (c) not permit at any time its Consolidated Net Worth (as defined
      and calculated in accordance with the Credit Agreement) to be less than
      the sum of (i) $958,278,000 and (ii) an amount equal to 50% of the net
      income (if positive) of the Guarantor and its Consolidated Subsidiaries
      (as defined in the Credit Agreement) (determined on a consolidated basis
      without duplication in accordance with GAAP) for each quarter of Guarantor
      commencing with and including the fiscal quarter ending March 26, 2000.

      The covenants contained in this Section 7.05 shall be calculated in the
same manner as the corresponding covenants contained in the Bank Credit
Agreement are calculated. If the financial covenants set forth in the Bank
Credit Agreement which correspond to the financial covenants set forth in this
Section 7.05 are amended or deleted, the Guarantor will promptly provide notice
of such event and a copy of such amendments or deletions to the Administrative
Agent and each Bank Purchaser. If requested by all Bank Purchasers, this
Agreement shall be amended to reflect such changes, and the Guarantor and the
Seller hereby agree to promptly execute and deliver such amendments hereto as
the Purchasers shall reasonably request to effect the foregoing.

                                  ARTICLE VIII

                          ADMINISTRATION AND COLLECTION

      SECTION 8.01. Designation of Servicer. (a) SCI as Initial Servicer. The
servicing, administering and collection of the Pool Receivables shall be
conducted by the Person designated as

                                       42
<PAGE>

Servicer hereunder ("Servicer") from time to time in accordance with this
Section 8.01. Until the Administrative Agent (acting at the direction of all
Bank Purchasers) gives to SCI a Successor Notice (as defined in Section
8.01(b)), SCI is hereby designated as, and hereby agrees to perform the duties
and obligations of, Servicer pursuant to the terms hereof.

      (b) Successor Notice; Servicer Transfer Events. Upon SCI's receipt of a
notice from the Administrative Agent (given at the direction of all Bank
Purchasers) of the designation of a new Servicer, which new Servicer shall have
been approved by all Bank Purchasers (a "Successor Notice"), SCI agrees that it
will terminate its activities as Servicer hereunder in a manner that the
Administrative Agent believes will facilitate the transition of the performance
of such activities to the new Servicer, and the Administrative Agent (or its
designee) shall assume each and all of SCI's said obligations to service and
administer such Receivables, on the terms and subject to the conditions herein
set forth, and SCI shall use its reasonable efforts to assist the Administrative
Agent (or its designee) in assuming such obligations. From and after the
acceptance by a new Servicer of its appointment as Servicer hereunder, the prior
Servicer shall be released from its obligations as Servicer under this
Agreement, other than its obligations set forth in the previous sentence. The
Administrative Agent agrees not to give SCI a Successor Notice until after the
occurrence and during the continuance of any Termination Event (any such
Termination Event or other event being herein called a "Servicer Transfer
Event"), in which case such Successor Notice may be given at any time at the
direction of all Bank Purchasers. If SCI disputes the occurrence of a Servicer
Transfer Event, SCI may take appropriate action to resolve such dispute;
provided that SCI must terminate its activities hereunder as Servicer and allow
the newly designated Servicer to perform such activities on the date provided by
the Administrative Agent as described above, notwithstanding the commencement or
continuation of any proceeding to resolve the aforementioned dispute.

      (c) Subcontracts. Servicer may, with the prior consent of the Required
Purchasers, subcontract with any other Person for servicing, administering or
collecting the Pool Receivables; provided that such Person agrees to conduct
such duties in accordance with the terms of this Agreement; and provided,
further, however, that Servicer shall remain liable for the performance of the
duties and obligations of Servicer pursuant to the terms hereof; and, provided,
further, that the Administrative Agent shall have the right to terminate or to
continue any such subcontract upon the designation of a new Servicer approved by
all Bank Purchasers.

      SECTION 8.02. Duties of Servicer. (a) Appointment; Duties in General. Each
of Seller, each Purchaser and the Administrative Agent hereby appoints as its
agent Servicer, as from time to time designated pursuant to Section 8.01, to
enforce its rights and interests in and under the Pool Receivables, the Related
Security and the Contracts. Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Pool Receivable from
time to time, all in accordance with applicable laws, rules and regulations,
with reasonable care and diligence, and in accordance with the Credit and
Collection Procedure.

                                       43
<PAGE>

      (b) Allocation of Collections; Segregation. Servicer shall set aside for
the account of Seller and the Purchasers their respective allocable shares of
the Collections of Pool Receivables in accordance with Sections 3.01 and 3.02
but shall not be required (unless otherwise requested by the Administrative
Agent or the Required Purchasers) to segregate the funds constituting such
portions of such Collections, or to segregate the respective allocable shares of
any Purchaser and any Program Support Party, if applicable, prior to the
remittance thereof in accordance with such Sections. If instructed by the
Administrative Agent or the Required Purchasers at any time, Servicer shall
segregate and deposit with a bank (which may be a Bank Purchaser) designated by
the Administrative Agent such allocable shares of Collections of Pool
Receivables, set aside for any Purchaser, any Program Support Party and any
other assignee from any Purchaser, on the first Business Day following receipt
by Servicer of such Collections in immediately available funds.

      (c) Modification of Receivables. So long as no Termination Event or
Unmatured Termination Event shall have occurred and be continuing, SCI, while it
is Servicer, may, in accordance with the Credit and Collection Procedure, (i)
extend the maturity or adjust the Unpaid Balance of any Defaulted Receivable as
Servicer may reasonably determine to be appropriate to maximize Collections
thereof; provided that, no such extension shall be for more than a total of
thirty (30) days or cause any Defaulted Receivable to be an Eligible Receivable
and, after giving effect to such extension of maturity, the Required Allocation
will not exceed the Required Allocation Limit, and (ii) adjust the Unpaid
Balance of any Receivable to reflect the reductions or cancellations described
in Section 3.03(a)(i).

      (d) Documents and Records. Seller shall deliver to Servicer, and Servicer
shall hold in trust for Seller and the Purchasers in accordance with their
respective interests, all documents, instruments and records (including, without
limitation, computer tapes or disks) that evidence or relate to Pool
Receivables, except for Excluded Data.

      (e) Certain Duties to Seller. Servicer shall, as soon as practicable
following receipt, turn over to Seller (i) that portion of Collections of Pool
Receivables representing its undivided interest therein, less, in the event SCI
or an Affiliate of SCI is not the Servicer, all reasonable and appropriate
out-of-pocket costs and expenses (excluding overhead and any subservicing costs)
of Servicer of servicing, collecting and administering the Pool Receivables to
the extent not covered by the Servicer's Fee received by it, and (ii) the
Collections of any Receivable that is not a Pool Receivable. Servicer, if other
than SCI or an Affiliate of the SCI, shall, as soon as practicable upon demand,
deliver to Seller all documents, instruments and records in its possession that
evidence or relate to Receivables of Seller other than Pool Receivables, and
copies of documents, instruments and records in its possession that evidence or
relate to Pool Receivables.

      (f) Termination. Servicer's authorization under this Agreement shall
terminate on the End Date.

                                       44
<PAGE>

      SECTION 8.03. Rights of the Administrative Agent. (a) Notice to Obligors.
At any time following the occurrence and during the continuance of a Termination
Event, the Administrative Agent may (and, upon direction of the Required
Purchasers, shall) notify the Obligors of Pool Receivables, or any of them, of
the ownership of the Undivided Interest by the Administrative Agent, on behalf
of the Purchasers.

      (b) Notice to Lock-Box Banks. At any time following the earliest to occur
of (i) the occurrence of a Termination Event, (ii) any of the Conditions
Precedent shall not be satisfied and the Administrative Agent or the Required
Purchasers, by written notice to Seller and Servicer, shall have requested
implementation of the settlement procedures set forth in Section 3.02, and (iii)
the warranty in Section 6.01(i) shall no longer be true with respect to a
material portion of the Pool Receivables, the Administrative Agent is hereby
authorized to give notice to the Lock-Box Banks (and shall give such notice if
directed by the Required Purchasers), as provided in the Lock-Box Agreements, of
the transfer to the Administrative Agent of dominion and control over the
lock-box accounts to which the Obligors of Pool Receivables make payments.
Seller hereby transfers to the Administrative Agent, effective when the
Administrative Agent shall give notice to the Lock-Box Banks as provided in the
Lock-Box Agreements, the exclusive dominion and control over such lock-box
accounts, and shall take any further action that the Administrative Agent may
reasonably request to effect such transfer. SCI shall promptly (but in any event
within two (2) Business Days) identify any amounts deposited into any lock-box
account that do not constitute Collections.

      (c) Rights on Servicer Transfer Event. At any time following the
designation of a Servicer other than SCI pursuant to Section 8.01:

            (i) the Administrative Agent may (and, upon the direction of the
      Required Purchasers, shall) direct the Obligors of Pool Receivables, or
      any of them, to pay all amounts payable under any Pool Receivable directly
      to the Administrative Agent or its designee.

            (ii) Seller shall, at the Administrative Agent's or the Required
      Purchasers' request and at Seller's expense, give notice of the
      Administrative Agent's ownership to each said Obligor and direct that
      payments be made directly to the Administrative Agent or its designee.

            (iii) Seller shall, at the Administrative Agent's or the Required
      Purchasers' request, (A) assemble all of the documents, instruments and
      other records (including, without limitation, computer programs, tapes and
      disks), other than the Excluded Data, which evidence the Pool Receivables,
      and the related Contracts and Related Security, or which are otherwise
      necessary or desirable to collect such Pool Receivables, and shall make
      the same available to the Administrative Agent at a place selected by the
      Administrative Agent or its designee, and (B) segregate all cash, checks
      and other instruments received by it from time to time constituting
      Collections of Pool Receivables in a manner acceptable to the
      Administrative Agent and shall, promptly upon receipt,

                                       45
<PAGE>

      remit all such cash, checks and instruments, duly endorsed or with duly
      executed instruments of transfer, to the Administrative Agent or its
      designee.

            (iv) Each of Seller and each Purchaser hereby authorizes the
      Administrative Agent to take any and all steps, at any time after the
      Administrative Agent or the Required Purchasers have given notice to any
      Lock-Box Bank pursuant to Section 8.03(b), in Seller's name and on behalf
      of Seller and each Purchaser which are necessary or desirable, in the
      reasonable determination of the Administrative Agent, to collect all
      amounts due under any and all Pool Receivables, including, without
      limitation, endorsing Seller's name on checks and other instruments
      representing Collections and enforcing such Pool Receivables and the
      related Contracts.

            (v) Actions taken by the Administrative Agent pursuant to this
      Article shall be subject to the confidentiality provisions of Section
      7.01(c).

      SECTION 8.04. Responsibilities of Seller. Anything herein to the contrary
notwithstanding:

            (a) Seller shall perform all of its obligations under the Contracts
      related to the Pool Receivables and under the related purchase orders and
      other agreements to the same extent as if the Undivided Interest had not
      been sold hereunder and the exercise by the Administrative Agent of its
      rights hereunder shall not relieve Seller from such obligations.

            (b) Neither the Administrative Agent nor any Purchaser shall have
      any obligation or liability with respect to any Pool Receivables,
      Contracts related thereto or any other related purchase orders or other
      agreements, nor shall any of them be obligated to perform any of the
      obligations of Seller thereunder.

            (c) Seller hereby grants to Servicer an irrevocable power of
      attorney, with full power of substitution, coupled with an interest, to
      take in the name of Seller all steps which are necessary or advisable to
      endorse, negotiate or otherwise realize on any writing or other right of
      any kind held or transmitted by Seller or transmitted or received by any
      Purchaser (whether or not from Seller) in connection with any Pool
      Receivable.

      SECTION 8.05. Further Action Evidencing Purchases. (a) Seller agrees that
from time to time, at Seller's expense, it will promptly execute and deliver all
further instruments and documents, and take all further action that the
Administrative Agent or any Bank Purchaser may reasonably request in order to
perfect, protect or more fully evidence the Purchases hereunder and the
resulting Undivided Interest, or to enable any Purchaser or the Administrative
Agent to exercise or enforce any of their respective rights hereunder. Without
limiting the generality of the foregoing, Seller will:

                                       46
<PAGE>

            (i) upon the request of the Administrative Agent or the Required
      Purchasers, execute and file such financing or continuation statements, or
      amendments thereto or assignments thereof, and such other instruments or
      notices, as may be necessary or appropriate, to evidence that the
      Undivided Interest has been sold in accordance with this Agreement;

            (ii) upon the request of the Administrative Agent or the Required
      Purchasers, to the extent reasonably practicable, mark conspicuously each
      Contract evidencing each Pool Receivable with a legend, acceptable to the
      Administrative Agent and the Required Purchasers, evidencing that the
      Undivided Interest has been sold in accordance with this Agreement; and

            (iii) on or before the date of the initial Purchase, to the extent
      reasonably practicable, mark its master data processing records evidencing
      such Pool Receivables and related Contracts with a legend, acceptable to
      the Administrative Agent and the Required Purchasers, evidencing that the
      Undivided Interest has been sold in accordance with this Agreement.

      (b) Seller hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Pool now existing or hereafter arising in
the name of Seller.

      (c) Without limiting the generality of subsection (a), Seller will, not
earlier than six (6) months and not later than two (2) months prior to the fifth
anniversary of the date of filing of each of the financing statement referred to
in Section 5.01(f) or any other financing statement filed pursuant to this
Agreement or in connection with any Purchase hereunder, unless the End Date
shall have occurred:

            (i) deliver to the Administrative Agent for execution and, upon
      receipt from the Administrative Agent of such executed statements, file or
      cause to be filed appropriate continuation statements with respect to such
      financing statements; and

            (ii) deliver or cause to be delivered to the Administrative Agent
      and each Bank Purchaser an opinion of the counsel for Seller referred to
      in Section 5.01(g) (or other counsel for Seller reasonably satisfactory to
      the Required Purchasers), in form and substance reasonably satisfactory to
      the Required Purchasers, confirming and updating the opinion delivered
      pursuant to Section 5.01 with respect to (and only with respect to)
      perfection issues, subject to customary qualifications, assumptions and
      exclusions typically included in such opinions.

      SECTION 8.06. Application of Collections. Any payment by an Obligor in
respect of any indebtedness owed by it to Seller shall, except as otherwise
specified by such Obligor or otherwise required by contract or law and unless
the Administrative Agent (with the consent of the Required Purchasers) instructs
otherwise, be applied as a Collection of any Pool Receivable or Receivables of
such

                                       47
<PAGE>

Obligor to the extent of any amounts then due and payable thereunder before such
payment is applied to any other indebtedness of such Obligor.

                                   ARTICLE IX

                                SECURITY INTEREST

      SECTION 9.01. Grant of Security Interest. To secure all obligations of
Seller arising in connection with this Agreement and each other Agreement
Document to which it is a party, whether now or hereafter existing, due or to
become due, direct or indirect, or absolute or contingent, including, without
limitation, all Indemnified Amounts, payments on account of Collections received
or deemed to be received, fees and Earned Discount, in each case pro rata
according to the respective amounts thereof, Seller hereby assigns and grants to
the Administrative Agent, for the benefit of the Purchasers, a security interest
in all of Seller's right, title and interest (including specifically any
undivided interest retained by Seller hereunder) now or hereafter existing in,
to and under all the Pool Receivables, the Related Security and all Collections
with regard thereto, and all proceeds of the foregoing.

      SECTION 9.02. Further Assurances. The provisions of Section 8.05 shall
apply to the security interest granted under Section 9.01 as well as to the
Purchases and the Undivided Interest hereunder.

      SECTION 9.03. Remedies. Upon the occurrence and during the continuance of
a Termination Event, the Administrative Agent, for the benefit of the
Purchasers, shall have, with respect to the collateral granted pursuant to
Section 9.01, and in addition to all other rights and remedies available to any
Purchaser or the Administrative Agent under this Agreement or other applicable
law, all the rights and remedies of a secured party upon default under the UCC.

                                    ARTICLE X

                               TERMINATION EVENTS

      SECTION 10.01. Termination Events. If any of the following events
("Termination Events") shall occur:

            (a) (i) Servicer (if SCI or an Affiliate of SCI) shall fail to
      perform or observe any term, covenant or agreement hereunder (other than
      as referred to in clause (ii) next following) and such failure shall
      remain unremedied for two (2) Business Days after notice (which may be by
      telephone) to Servicer if such failure is the failure to deliver a
      Periodic Report when due or ten (10) Business

                                       48
<PAGE>

      Days after notice (which may be by telephone) to SCI in all other cases or
      (ii) Servicer (if SCI or an Affiliate of Seller) or Seller shall fail to
      make any payment or deposit to be made by it hereunder when due; or

            (b) Seller, SCI or Guarantor shall fail to perform or observe any
      term, obligation, covenant or agreement contained in Section 7.03, 7.04 or
      7.05 or to furnish to the Administrative Agent and each Bank Purchaser,
      pursuant to Section 7.02(e), a certificate required as a result of
      knowledge by an Executive Officer of Seller, SCI or Guarantor (as
      applicable) of the occurrence of a Termination Event or an Unmatured
      Termination Event; or

            (c) (i) If Seller or SCI shall fail to perform or observe any other
      term, obligation, covenant or agreement contained herein or any other
      Agreement Document on its part to be performed or observed (other than as
      set forth in Section 10.01(a) above or in Section 7.03, 7.04 or 7.05) and
      any such failure remains unremedied, until the first to occur of the date
      forty-five (45) days after an Executive Officer of Seller, SCI or
      Guarantor first obtains knowledge, or should have, in the exercise of
      reasonable diligence, obtained knowledge, thereof or the date thirty (30)
      days after written notice thereof shall have been given to Seller or SCI,
      as applicable, by the Administrative Agent or any Bank Purchaser, (ii) if
      any representation or warranty made by Seller, SCI or Guarantor in this
      Agreement (other than in Section 6.01(b), 6.01(c), 6.01(e), 6.01(h),
      6.02(b), 6.02(c), 6.02(e), 6.03(b), 6.03(c) or 6.03(e)), or in any other
      Agreement Document to which it is a party, shall prove to have been
      incorrect, incomplete or misleading when made or deemed made in any
      material respect, and any such representation or warranty continues to be
      incorrect, incomplete or misleading in any material respect until the
      first to occur of the date forty-five (45) days after an Executive Officer
      of Seller, SCI or Guarantor first obtains knowledge, or should have, in
      the exercise of reasonable diligence, obtained knowledge, thereof or the
      date thirty (30) days after written notice thereof shall have been given
      to Seller by the Administrative Agent or any Bank Purchaser or (iii) any
      representation or warranty made by Seller, SCI or Guarantor in Section
      6.01(b), 6.01(c), 6.01(e), 6.01(h), 6.02(b), 6.02(c), 6.02(e), 6.03(b),
      6.03(c) or 6.03(e) shall prove to have been incorrect, incomplete or
      misleading when made or deemed made in any material respect; or

            (d) (i) An "Event of Default" shall have occurred and be continuing
      under the Bank Credit Agreement; or (ii) with respect to any Indebtedness
      for money borrowed (other than the notes issued under the Bank Credit
      Agreement) or for the deferred purchase price of property created, issued,
      guaranteed, incurred or assumed by Seller, SCI, Guarantor or any Affiliate
      thereof which Indebtedness is in an aggregate principal amount equal to or
      greater than $10,000,000, Seller, SCI, Guarantor or any Affiliate thereof
      shall (A) default in the payment of principal of or interest on any such
      Indebtedness beyond the period of grace, if any, provided in the
      instrument or agreement under which such Indebtedness was created, or (B)
      default in the observance or performance of any other agreement or
      condition relating to any such Indebtedness or contained

                                       49
<PAGE>

      in any instrument or agreement evidencing, securing or relating thereto,
      or any other event shall occur or condition exist, the effect of which
      default or other event or condition described in either clause (i) or (ii)
      of this paragraph is a failure to pay such Indebtedness at maturity or is
      to cause, or to permit the holder or holders of such Indebtedness (or a
      trustee or agent on behalf of such holder or holders) to cause, such
      Indebtedness to become due prior to its stated maturity; provided,
      however, that in the event any such default or other condition described
      in either clause (i) or (ii) of this paragraph shall have been cured or
      waived or any such acceleration rescinded in accordance with the terms
      thereof prior to the time that the Administrative Agent has declared the
      Facility Termination Date to have occurred, this Termination Event shall
      automatically cease to exist; or

            (e) A Change of Control shall occur; or

            (f) An Event of Bankruptcy shall have occurred and remained
      continuing with respect to any SCI Party; or

            (g) (i) Any litigation (including, without limitation, derivative
      actions), arbitration proceedings or governmental proceedings not
      disclosed in writing by Seller or SCI to the Administrative Agent and each
      Purchaser prior to the date of execution and delivery of this Agreement is
      pending against Seller, SCI or Guarantor, or (ii) any material development
      not so disclosed has occurred in any litigation (including, without
      limitation, derivative actions), arbitration proceedings or governmental
      proceedings so disclosed, which, in the case of clause (i) or (ii), in the
      reasonable opinion of the Required Purchasers is likely to have a Material
      Adverse Effect; or

            (h) At any time, the Required Allocation shall exceed the Required
      Allocation Limit; or

            (i) The Sales-Based Default Ratio exceeds 3% or the Delinquency
      Ratio exceeds 8%; or

            (j) The Losses to Liquidations Ratio exceeds 1.5%; or

            (k) The average of the Sales-Based Dilution Ratios for the preceding
      six consecutive months exceeds 3%; or

            (l) There shall have occurred any event which has a Material Adverse
      Effect or a Seller Material Adverse Effect; or

            (m) The Internal Revenue Service shall file notice of a lien
      pursuant to Section 6323 of the Internal Revenue Code with regard to any
      of the assets of Seller or Guarantor and such lien

                                       50
<PAGE>

      shall not have been released within five (5) days, or the Pension Benefit
      Guaranty Corporation shall file notice of a lien pursuant to Section 4068
      of the Employee Retirement Income Security Act of 1974 with regard to any
      of the assets of Seller or Guarantor and such lien shall not have been
      released within five (5) days; or

            (n) A Purchase and Sale Termination Event shall occur under any
      Second Tier Sale Agreement.

      SECTION 10.02. Remedies. (a) Optional Termination. Upon the occurrence of
a Termination Event (other than a Termination Event described in subsection (f)
of Section 10.01), the Administrative Agent shall, at the request, or may with
the consent, of the Required Purchasers, by written notice to Seller declare the
Facility Termination Date to have occurred, which Facility Termination Date
shall be the date of such notice.

      (b) Automatic Termination. Upon the occurrence of a Termination Event
described in subsection (f) of Section 10.01, the Facility Termination Date
shall be deemed to have occurred automatically upon the occurrence of such
event.

      (c) Additional Remedies. Upon any termination of the facility pursuant to
this Section 10.02, the Administrative Agent and each Purchaser shall have, in
addition to all other rights and remedies under this Agreement and any other
Agreement Document or otherwise, all other rights and remedies provided under
the UCC of each applicable jurisdiction and other applicable laws, which rights
shall be cumulative. Without limiting the foregoing or the general applicability
of Article XII hereof, (i) the occurrence of a Termination Event shall not deny
to any Purchaser any remedy in addition to termination of the Facility to which
such Purchaser may be otherwise appropriately entitled, whether at law or in
equity, and (ii) following the occurrence of any Termination Event each
Purchaser may elect to assign to any Person any portion of the Undivided
Interest owned by or on behalf of such Purchaser.

                                   ARTICLE XI

                            THE ADMINISTRATIVE AGENT

      SECTION 11.01. Authorization and Action. Each Purchaser hereby appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto.

      SECTION 11.02. Administrative Agent's Reliance, Etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be

                                       51
<PAGE>

taken by it or the Administrative Agent under or in connection with this
Agreement (including, without limitation, the servicing, administering or
collecting Pool Receivables as Servicer pursuant to Section 8.01), except for
its or their own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, the Administrative Agent: (a) may consult with
legal counsel (including counsel for Seller), independent certified public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (b) makes no warranty or
representation to any Purchaser or any other holder of any interest in Pool
Receivables and shall not be responsible to any Purchaser or any such other
holder for any statements, warranties or representations made in or in
connection with this Agreement or any other Agreement Document; (c) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement on the part of any
SCI Party or to inspect the property (including the books and records) of any
SCI Party; (d) shall not be responsible to any Purchaser or any other holder of
any interest in Pool Receivables for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Agreement Document; and (e) shall incur no liability under or in respect of this
Agreement or any other Agreement Document by acting upon any notice (including
notice by telephone), consent, certificate or other instrument or writing (which
may be by facsimile or telex) believed by it to be genuine and signed or sent by
the proper party or parties.

      SECTION 11.03. Administrative Agent and Affiliates. BofA and its
Affiliates may generally engage in any kind of business with Seller, Guarantor,
SCI, any Originator or any Obligor, any of their respective Affiliates and any
Person who may do business with or own securities of Seller, Guarantor, SCI, any
Originator or any Obligor or any of their respective Affiliates, all as if BofA
were not the Administrative Agent and without any duty to account therefor to
any Purchaser or any other holder of an interest in Pool Receivables.

      SECTION 11.04. Seller's Failure to Perform. If Seller or SCI fails to
perform any of its agreements or obligations under this Agreement within any
applicable time or grace period, the Administrative Agent may (but shall not be
required to) itself perform, or cause performance of, such agreement or
obligation, and the expenses of the Administrative Agent incurred in connection
therewith shall be payable by Seller or SCI, as the case may be, as provided in
Section 13.01, provided, however, that the Administrative Agent shall not
perform Seller's obligations under any Contract, other than those necessary to
service and collect the related Pool Receivables.

                                       52
<PAGE>

                                   ARTICLE XII

                       ASSIGNMENT OF PURCHASER'S INTEREST

                                       53
<PAGE>

      SECTION 12.01. Restrictions on Assignments. (a) None of SCI, Seller or
Guarantor may assign its rights hereunder or any interest herein without the
prior written consent of each Bank Purchaser, and no Purchaser may assign its
rights or obligations hereunder or its Purchaser's Interest (or portion thereof)
to any Person without the prior written consent of Seller, which consent shall
not be unreasonably withheld; provided, however, that without any such consent

            (i) Any Purchaser may assign, or grant a security interest in, its
      Purchaser's Interest (or portion thereof) to any of its Related Bank
      Purchasers (or any successor of any thereof by merger, consolidation or
      otherwise), any other commercial paper conduit administered by its Related
      Administrator or any Affiliate thereof, or any of its Program Support
      Providers (which may then assign the Purchaser's Interest (or portion
      thereof) so assigned or any interest therein to such party or parties as
      it may choose); and

            (ii) Any Conduit Purchaser may assign and grant a security interest
      in any interest in, to and under its Purchaser's Interest, this Agreement
      and the other Agreement Documents to any collateral trustee for its
      commercial paper program, and any successor in such capacity, to secure
      Purchaser's obligations under or in connection with its Commercial Paper
      Notes, any of its Program Support Agreement, and certain other obligations
      of such Purchaser incurred in connection with the funding of the Purchases
      and Reinvestments by it hereunder, which assignment and grant of a
      security interest shall not be considered an "assignment" for purposes of
      Section 12.01(b), Section 12.03 or 12.04 or, prior to the enforcement of
      such security interest, for purposes of any other provision of this
      Agreement.

      (b) Seller agrees to advise the requesting Purchaser within five (5)
Business Days after receipt by Seller of written notice of any proposed
assignment by such Purchaser of its Purchaser's Interest (or portion thereof),
not otherwise permitted under subsection (a), of Seller's consent or non-consent
to such assignment. If Seller does not consent to such assignment, such
Purchaser may immediately assign its Purchaser's Interest (or portion thereof)
to any of its Related Bank Purchasers or Program Support Providers or any
Affiliate thereof. All of the aforementioned assignments shall be upon such
terms and conditions as the related Purchaser and the assignee may mutually
agree.

      SECTION 12.02. Rights of Assignee. Upon an assignment by a Purchaser in
accordance with this Article XII, (a) the assignee receiving such assignment
shall have all of the rights, and shall be deemed to have assumed all of the
obligations, of such Purchaser hereunder with respect to the portion of such
Purchaser's rights and obligations so assigned and (b) all references to such
Purchaser in Section 4.02 shall be deemed to apply to such assignee to the
extent of its interest in the related Purchaser's Investment and the related
Collections.

      SECTION 12.03. Notice of Assignment. Each Purchaser shall provide written
notice to Seller and the Administrative Agent of any assignment of any interest
in the Undivided Interest (or portion

                                       54
<PAGE>

thereof) by such Purchaser to any assignee, other than an assignment to a
Program Support Provider pursuant to an applicable Program Support Agreement or
to a collateral trustee for such Purchaser's commercial paper program.

      SECTION 12.04. Evidence of Assignment. Any assignment of any interest in
the Undivided Interest (or portion thereof) to any Person may be evidenced by an
instrument of assignment in the form of Exhibit 12.04 or by such other
instrument(s) or document(s) as may be satisfactory to the assigning Purchaser,
the Administrative Agent and the assignee.

                                  ARTICLE XIII

                                 INDEMNIFICATION

      SECTION 13.01. Indemnities. (a) General Indemnity of Seller. Without
limiting any other rights which any such Person may have hereunder or under
applicable law, Seller hereby agrees to indemnify each of the Administrative
Agent, each Purchaser, each Program Support Provider, BofA, each of BofA's
Affiliates, their respective successors, transferees, participants and assigns
and all officers, directors, shareholders, controlling persons, employees and
agents of any of the foregoing (each an "Indemnified Party"), forthwith on
demand, from and against any and all damages, losses, claims, liabilities and
related costs and expenses, including reasonable attorneys' fees and
disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them arising out of
or relating to this Agreement, any other Agreement Document or the ownership or
funding of the Undivided Interest or in respect of any Receivable or any
Contract, excluding, however, (a) Indemnified Amounts with respect to an
Indemnified Party to the extent determined by a court of competent jurisdiction
to have resulted from gross negligence or willful misconduct on the part of such
Indemnified Party and (b) recourse (except as otherwise specifically provided in
Article II of this Agreement in connection with the calculation of the Undivided
Interest) for Defaulted Receivables. Without limiting the foregoing, Seller
hereby agrees to indemnify each Indemnified Party for Indemnified Amounts
arising out of or relating to:

            (i) the transfer by Seller of any interest in any Pool Receivable
      other than the transfer of the Undivided Interest to the Administrative
      Agent, for the benefit of the Purchasers, pursuant to this Agreement and
      the grant of a security interest to the Administrative Agent pursuant to
      Section 9.01;

            (ii) the breach of any representation or warranty made by Seller (or
      any of its officers) under or in connection with this Agreement, any other
      Agreement Document, any Periodic Report or any other information or report
      delivered by, or on behalf of, Seller pursuant hereto, which shall have
      been false or incorrect in any material respect when made or deemed made;

                                       55
<PAGE>

            (iii) the failure by Seller to comply with any applicable law, rule
      or regulation with respect to any Pool Receivable or the related Contract,
      or the nonconformity of any Pool Receivable or the related Contract with
      any such applicable law, rule or regulation;

            (iv) the failure to vest and maintain vested in the Administrative
      Agent, for the benefit of the Purchasers, an undivided percentage
      ownership interest, to the extent of the Undivided Interest, in the
      Receivables in, or purporting to be in, the Receivables Pool, free and
      clear of any Adverse Claim, other than an Adverse Claim arising solely as
      a result of an act of a Purchaser, any assignee from a Purchaser or the
      Administrative Agent, whether existing at the time of any Purchase or
      Reinvestment or at any time thereafter;

            (v) the failure to file, 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 in, or purporting to be in, the Receivables Pool, whether at
      the time of any Purchase or Reinvestment or at any time thereafter;

            (vi) any dispute, claim, offset or defense (other than discharge in
      bankruptcy) of the Obligor to the payment of any Receivable in, or
      purporting to be in, the Receivables Pool (including, without limitation,
      a defense based on such Receivable's or the related Contract's 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 merchandise or services related to such Receivable or the
      furnishing or failure to furnish such merchandise or services;

            (vii) any failure of Seller to perform its duties or obligations in
      accordance with the provisions of this Agreement;

            (viii) any breach of warranty or products liability claim arising
      out of or in connection with merchandise or services that are the subject
      of any Pool Receivable; or

            (ix) any tax or governmental fee or charge (but not including taxes
      upon or measured by net income), all interest and penalties thereon or
      with respect thereto, and all out-of-pocket costs and expenses, including
      the reasonable fees and expenses of counsel in defending against the same,
      which may arise by reason of the purchase or ownership of the Undivided
      Interest, or any other interest in the Pool Receivables or in any goods
      which secure any such Pool Receivables.

      (b) Indemnities by Servicer. Without limiting any other rights which any
such Person may have hereunder or under applicable law, Servicer hereby agrees
to indemnify each of the Indemnified Parties, forthwith on demand, from and
against any and all Indemnified Amounts awarded against or incurred by any of
them arising out or related to:

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<PAGE>

            (i) the fact that any representation or warranty made by such
      Servicer (or any of its officers) under or in connection with this
      Agreement, any Periodic Report or any other information or report
      delivered by such Servicer pursuant hereto shall have been false or
      incorrect in any material respect when made or deemed made;

            (ii) the failure by such Servicer to comply with any applicable law,
      rule or regulation with respect to the servicing or collection of any Pool
      Receivable or the related Contract;

            (iii) the failure of such Servicer or any subservicer to perform its
      duties or obligations in accordance with the provisions of this Agreement;
      or

            (iv) any dispute, claim, offset or defense of the Obligor to the
      payment of any Pool Receivable by reason of the action or inaction of such
      Servicer or any subservicer of such Servicer.

      (c) Contest of Tax Claim; After-Tax Basis. If any Indemnified Party shall
have notice of any attempt to impose or collect any tax or governmental fee or
charge for which indemnification will be sought from Seller under Section
13.01(a)(ix), such Indemnified Party shall give prompt notice of such attempt to
Seller and Seller shall have the right, at its expense, to participate in any
proceedings resisting or objecting to the imposition or collection of any such
tax, governmental fee or charge. Indemnification hereunder shall be in an amount
necessary to make the Indemnified Party whole after taking into account any tax
consequences to the Indemnified Party of the payment of any of the aforesaid
taxes and the receipt of the indemnity provided hereunder or of any refund of
any such tax previously indemnified hereunder, including the effect of such tax
or refund on the amount of tax measured by net income or profits which is or was
payable by the Indemnified Party.

      (d) Contribution. If for any reason the indemnification provided above in
this Section 13.01 is unavailable to an Indemnified Party or is insufficient to
hold an Indemnified Party harmless, then Seller or SCI, as the case may be,
agrees to contribute to the amount paid or payable by such Indemnified Party as
a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by such
Indemnified Party on the one hand and Seller or SCI, as the case may be, on the
other hand but also the relative fault of such Indemnified Party as well as any
other relevant equitable considerations.

                                   ARTICLE XIV

                                    GUARANTEE

      SECTION 14.01. Guarantee. (a) Guarantor hereby unconditionally and
irrevocably covenants and agrees that it will cause SCI and each Originator duly
and punctually to perform and observe all of the

                                       57
<PAGE>

terms, conditions, covenants, agreements (including, without limitation,
agreements to turn over Collections or deemed Collections) and indemnities of
SCI and each Originator, respectively, under this Agreement and the other
Agreement Documents to which they are respectively a party strictly in
accordance with the terms hereof and thereof and that if for any reason
whatsoever SCI or any Originator 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 14.01
shall be absolute and unconditional under all circumstances and shall be
performed by Guarantor regardless of (i) whether any Purchaser or the
Administrative Agent shall have taken any steps to collect from SCI or any
Originator any of the amounts payable by SCI or such Originator (as the case may
be) to any Purchaser or the Administrative Agent under this Agreement or the
other Agreement Documents or shall otherwise have exercised any of their rights
or remedies under this Agreement or the other Agreement Documents against SCI or
any Originator or against any Obligor under any of the Pool Receivables, (ii)
the validity, legality or enforceability of this Agreement or of any other
Agreement Documents against SCI or any Originator, or the disaffirmance of any
thereof in any Event of Bankruptcy relating to SCI or any Originator, (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 Agreement
Document or any of the rights of any Purchaser or the Administrative Agent as
against SCI or any Originator 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 SCI or any
Originator to any Purchaser or the Administrative Agent under this Agreement or
the other Agreement Documents, (iv) the merger or consolidation of SCI or any
Originator into or with any corporation or any sale or transfer by SCI or any
Originator or 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 14.01 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 14.01 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 14.01, any Purchaser or the
Administrative Agent 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 this Agreement or any other Agreement Document, (ii) settle or
compromise any of the amounts payable by SCI or any Originator to any Purchaser
under this Agreement or the other Agreement Documents 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 hereunder, (iv) retain or obtain
the primary or secondary obligation of any obligor or obligors,

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<PAGE>

in addition to Guarantor, with respect to any of the obligations due hereunder,
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 this Agreement,
it being understood that nothing contained in this Section 14.01(c) shall give
any Purchaser or the Administrative Agent the right to take any of the foregoing
actions if not permitted by the other provisions of this Agreement, by law, by
written consent or otherwise.

      (d) The provisions of this Section 14.01 shall continue to be effective or
be reinstated, as the case may be, if any time payment of any of the amounts
payable by SCI or any Originator to any Purchaser or the Administrative Agent
under this Agreement or the other Agreement Documents is rescinded or must
otherwise be restored or returned by any Purchaser or the Administrative Agent,
as the case may be, upon any Event of Bankruptcy involving SCI or any
Originator, or otherwise, all as though such payment had not been made.
Guarantor hereby waives (i) notices of the occurrence of any default hereunder
(other than notices expressly required under this Agreement), (ii) any
requirement of diligence or promptness on the part of any Purchaser or the
Administrative Agent in making demand, commencing suit or exercising any other
right or remedy under this Agreement or the other Agreement Documents, or
otherwise, and (iii) any right to require any Purchaser or the Administrative
Agent to exercise any right or remedy against SCI or any Originator or the Pool
Receivables prior to enforcing any of their rights against Guarantor under this
Section 14.01. Guarantor agrees that, in the event of an Event of Bankruptcy
with respect to SCI, any Originator or Guarantor, or any combination thereof,
and if such event shall occur at a time when all of the Indemnified Amounts and
other amounts due under this Agreement may not then be due and payable,
Guarantor will pay to the Administrative Agent, for the benefit of the
Purchasers, forthwith the full amount which would be payable hereunder by
Guarantor if all such Indemnified Amounts and other obligations were then due
and payable.

      SECTION 14.02. Maintenance of Ownership. Guarantor covenants and agrees
that until the End Date, Guarantor, or one of its Wholly Owned Subsidiaries,
will (a) maintain, directly or indirectly, ownership of 100% of all of the
issued and outstanding shares of each class of voting capital stock of each of
SCI, each Originator and Seller, free and clear of all liens and encumbrances
and (b) maintain control of the election of the Board of Directors of each of
SCI, each Originator and Seller.

      SECTION 14.03. Representation and Warranty. Guarantor represents and
warrants that it now has, and will continue to have, independent means of
obtaining information concerning each of SCI's and each Originator's affairs,
financial condition and business. Neither any Purchaser nor the Administrative
Agent shall have any duty or responsibility to provide Guarantor with any credit
or other information concerning SCI's or any Originator's affairs, financial
condition or business which may come into such Purchaser's or the Administrative
Agent's possession.

      SECTION 14.04. Subrogation. Guarantor hereby agrees that no payment made
by it or for its account pursuant to this Agreement shall entitle Guarantor by
subrogation, indemnification, contribution,

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<PAGE>

reimbursement or otherwise to any payment by SCI or from or out of any property
of SCI or any Originator, until after the End Date and Guarantor shall not
exercise any rights or remedies it has or may in the future have with respect to
any of the foregoing until after the End Date.

                                   ARTICLE XV

                                  MISCELLANEOUS

      SECTION 15.01. Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by Seller, SCI or Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by (a) Seller, SCI, Guarantor, the Administrative Agent and the
Required Purchasers (with respect to an amendment) or (b) the Administrative
Agent and the Required Purchasers (with respect to a waiver or consent by any of
them) or Seller, SCI or Guarantor (with respect to a waiver or consent by
Seller, SCI or Guarantor), as the case may be, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given, provided, however that no amendment shall (i) reduce the amount
of Earned Discount, Purchaser's Investment or other amount payable to any
Purchaser hereunder, or extend the time for the payment thereof, (ii) increase
the amount of any Purchaser's Commitment, (iii) extend the Purchase Termination
Date or the Scheduled Facility Termination Date with respect to any Purchaser,
(iv) change the calculation of Required Allocation or any of its components or
(v) change the definition of "Concentration Limit" or "Required Purchaser", in
each case without the prior written consent of all Purchasers affected thereby.

      SECTION 15.02. Notices, Etc. All notices and other communications provided
for hereunder shall, unless otherwise expressly stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
certified mail, postage prepaid, or by facsimile, to the intended party at the
address or facsimile number of such party set forth under its name on Schedule
15.02 or at such other address or facsimile number as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall be effective, (a) if personally delivered, when received,
(b) if sent by certified mail, three Business Days after having been deposited
in the mail, postage prepaid, (c) if sent by overnight courier, one Business Day
after having been given to such courier, and (d) if transmitted by facsimile,
when sent, receipt confirmed by telephone or electronic means, except that
notices and communications pursuant to Article I, Section 2.04(c), Section
8.01(b) and the definition of "Designated Obligor" shall not be effective until
received.

      SECTION 15.03. No Waiver; Remedies. No failure on the part of the
Administrative Agent, any Affected Party, any Indemnified Party, any Purchaser
or any other holder of any interest in the Undivided Interest 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

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<PAGE>

thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

      SECTION 15.04. Binding Effect; Survival. This Agreement shall be binding
upon and inure to the benefit of Seller, SCI and Guarantor, the Administrative
Agent, the Purchasers and their respective successors and assigns, and the
provisions of Section 4.02 and Article XIII shall inure to the benefit of the
Affected Parties and the Indemnified Parties, respectively, and their respective
successors and assigns; provided, however, nothing in the foregoing shall be
deemed to authorize any assignment not permitted by Section 12.01. This
Agreement shall create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until the End Date. The rights and remedies with respect to any breach of any
representation and warranty made by Seller, SCI and Guarantor pursuant to
Article VI, the indemnification and payment provisions of Article XIII and
Sections 4.02, 14.05, 14.06 and 14.07, and the provisions of Sections 15.06 and
15.18 shall be continuing and shall survive any termination of this Agreement.
After the End Date, the Administrative Agent shall, at the request and expense
of the Seller, execute and deliver to the Seller such documents as the Seller
shall reasonably request to evidence the termination of the Undivided Interest,
including, without limitation, UCC termination statements.

      SECTION 15.05. Costs, Expenses and Taxes. In addition to its obligations
under Article XIII, Seller, SCI and Guarantor, jointly and severally, agree to
pay on demand:

            (a) all reasonable costs and expenses incurred by the Administrative
      Agent, each Purchaser, BofA, each Program Support Provider and their
      respective Affiliates in connection with the negotiation, preparation,
      execution and delivery, the administration (including periodic auditing)
      or the enforcement of, or any actual or claimed breach of, this Agreement
      and the other Agreement Documents, including, without limitation (i) the
      reasonable fees and out-of-pocket expenses of counsel to any of such
      Persons incurred in connection with any of the foregoing or in advising
      such Persons as to their respective rights and remedies under any of the
      Agreement Documents, provided, that Seller, SCI and Guarantor shall only
      be responsible for the fees and expenses of one counsel for each Related
      Group, unless a conflict of interest or potential conflict of interest
      exists among such Persons, and (ii) all reasonable out-of-pocket expenses
      (including reasonable fees and expenses of independent accountants)
      incurred in connection with any review of Seller's, SCI's or Guarantor's
      books and records either prior to the execution and delivery hereof or
      pursuant to the terms hereof; and

            (b) all stamp and other taxes and fees payable or determined to be
      payable in connection with the execution, delivery, filing and recording
      of this Agreement or the other Agreement Documents, and agrees to
      indemnify each Indemnified Party against any liabilities with respect to
      or resulting from any delay in paying or omission to pay such taxes and
      fees.

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<PAGE>

      SECTION 15.06. No Proceedings. Seller, SCI, Guarantor, each Bank
Purchaser, each other Conduit Purchaser and BofA, individually and as
Administrative Agent, each hereby agrees that it will not institute against any
Conduit Purchaser, or join any other Person in instituting against any Conduit
Purchaser, any insolvency proceeding (namely, any proceeding of the type
referred to in the definition of Event of Bankruptcy) so long as any Commercial
Paper Notes issued by such Conduit Purchaser shall be outstanding or there shall
not have elapsed one year plus one day since the last day on which any such
Commercial Paper Notes shall have been outstanding. The foregoing shall not
limit Seller's right to file any claim in or otherwise take any action with
respect to any insolvency proceeding that was instituted by any Person other
than Seller, SCI or Guarantor.

      SECTION 15.07. Confidentiality of Information. (a) Each SCI Party
acknowledges that each Purchaser regards the structure of the transactions
contemplated by this Agreement, the other Agreement Documents, and by any
Program Support Agreement and the other Program Documents referred to therein,
to be proprietary, and each such SCI Party severally agrees that:

            (i) unless such Purchaser shall otherwise agree in writing, and
      except as provided in subsection (b), such party will not disclose to any
      other person or entity:

                  (A) any information furnished to such party by any Information
            Provider regarding the asset securitization transaction contemplated
            hereby,

                  (B) copies of this Agreement,

                  (C) any information furnished to such party by any Information
            Provider regarding, or copies of, any Program Support Agreement, any
            of the other Program Documents referred to therein, or any
            transaction contemplated thereby,

                  (D) any information furnished to such party by any Information
            Provider regarding the organization or business of such Purchaser
            generally, or

                  (E) any information which is furnished to such party by any
            Information Provider and is designated by such Information Provider
            to such party in writing or otherwise as confidential or not
            otherwise available to the general public

(the information referred to in clauses (A), (B), (C), (D) and (E) above,
whether furnished by a Purchaser, BofA (including any branch or agency thereof),
any Program Support Provider, any assignee of or participant in any rights or
obligations of any Purchaser or any Program Support Provider identified to
Seller and Guarantor by written notice from the assignor or seller of such
participation interest, as the case may be, or any attorney for any of the
foregoing (each an "Information Provider"), is collectively referred to as the
"Information"; provided, however, "Information" shall not include any
information which is or

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<PAGE>

becomes generally available to the general public or to such party on a
nonconfidential basis from a source other than any other Information Provider,
or which was known to such party on a nonconfidential basis prior to its
disclosure by any Information Provider);

            (ii) such party will make the Information available to only such of
      its officers, directors, employees and agents, and to officers, directors,
      employees and agents of any of its Affiliates, who (A) in the good faith
      belief of such party, have a need to know such Information, and (B) are
      informed by such party of the confidential nature of the Information and
      the terms of this Section 15.07; and

            (iii) such party will not use the Information as the basis of a
      similar financing with any other party.

      (b) Notwithstanding clause (i) of subsection (a), each SCI Party may
disclose any Information:

            (i) to its independent attorneys, consultants and auditors who (A)
      in the good faith belief of such party, have a need to know such
      Information and (B) are informed by such party of the confidential nature
      of the Information and the terms of this Section 15.07;

            (ii) to any other party to this Agreement;

            (iii) as may be required in such party's reasonable judgment, by any
      municipal, state, federal or other regulatory body, whether domestic or
      foreign, (including, without limitation, the SEC) having or claiming to
      have jurisdiction over such party, in order to comply with any law, order,
      regulation, regulatory request or ruling applicable to such party (it
      being understood that in no event will the Fee Letter be publicly filed
      (except as required pursuant to subsection (c)(iv) below) without each
      Bank Purchaser's prior written consent); or

            (iv) subject to subsection (c), in the event such party is legally
      compelled (by interrogatories, requests for information or copies,
      subpoena, civil investigative demand or similar process) to disclose such
      Information.

      (c) In the event that any SCI Party or anyone to whom such party or its
representatives transmits the Information is requested or becomes legally
compelled (by interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any of the
Information other than pursuant to subsections (b)(i) or (ii), such party will
(or will cause its representatives to)

            (i) provide with prompt written notice so that (A) an Information
      Provider, at its sole cost and expense, may seek a protective order or
      other appropriate remedy, or (B) such Purchaser

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<PAGE>

      may, if it so chooses, agree that such party (or its representatives) may
      disclose such Information pursuant to such request or legal compulsion;

            (ii) unless the related Purchaser agrees that such Information may
      be disclosed, make (at its sole cost and expense) a timely objection to
      the request or compulsion to provide such Information on the basis that
      such Information is confidential and subject to the agreements contained
      in this Section 15.07;

            (iii) take any action (at the related Purchaser's sole cost and
      expense) as any related Information Provider may reasonably request to
      seek a protective order or other appropriate remedy, provided that, in
      connection therewith, such party shall have first received such assurances
      as it may reasonably request that such Information Provider shall
      reimburse such party's or its representatives' reasonable costs and
      expenses or provide such other assistance as such party or its
      representatives may reasonably require; and

            (iv) in the event that such protective order or other remedy is not
      obtained, or the related Purchaser agrees that such Information may be
      disclosed, use its best efforts to furnish only that portion of the
      Information which such party reasonably believes is legally required to be
      furnished, and, provided such party (or its representative) is reimbursed
      or assisted as referred to in clause (iii) above, exercise best efforts to
      obtain reliable assurance that confidential treatment will be accorded the
      Information.

      (d) This Section 15.07 shall survive termination of this Agreement.

      SECTION 15.08. Captions and Cross References. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section, Appendix, Schedule or Exhibit are
to such Section of or Appendix, Schedule or Exhibit to this Agreement, as the
case may be, and references in any Section, subsection, or clause to any
subsection, clause or subclause are to such subsection, clause or subclause of
such Section, subsection or clause.

      SECTION 15.09. Integration. This Agreement and the other Agreement
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof, superseding all prior oral or written understandings.

      SECTION 15.10. Governing Law. THIS AGREEMENT, INCLUDING THE RIGHTS AND
DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW

                                       64
<PAGE>

YORK, EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE INTERESTS OF THE
ADMINISTRATIVE AGENT OR ANY PURCHASER IN THE RECEIVABLES IS GOVERNED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

      SECTION 15.11. Waiver Of Jury Trial. SELLER, SCI AND GUARANTOR HEREBY
EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER AGREEMENT DOCUMENT
OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY BE IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR OTHER
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, OR ANY OTHER AGREEMENT
DOCUMENT AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT A JURY TRIAL.

      SECTION 15.12. Consent To Jurisdiction; Waiver Of Immunities. EACH OF
SELLER, EACH PURCHASER, SCI AND GUARANTOR HEREBY ACKNOWLEDGES AND AGREES THAT:

            (a) IT IRREVOCABLY (i) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION,
      FIRST, OF ANY UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL
      JURISDICTION IS NOT AVAILABLE, OF ANY STATE COURT, IN EITHER CASE SITTING
      IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
      RELATING TO THIS AGREEMENT, AND (ii) WAIVES, TO THE FULLEST EXTENT IT MAY
      EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
      OF SUCH ACTION OR PROCEEDING.

            (b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
      FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
      THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID
      TO EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
      PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
      OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT.

      SECTION 15.13. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by the different parties hereto in separate
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.

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<PAGE>

      SECTION 15.14. Originators. Until such time, if ever, that a Second Tier
Sale Agreement or a Purchase and Sale Agreement with an Originator is executed,
delivered and approved by the Administrative Agent and all Bank Purchasers, all
references to such Originator other than SCI, or a purchase from such Originator
other than SCI, shall be inoperative.

      SECTION 15.15. Confidentiality of SCI Information. Pursuant to the
negotiation, preparation and implementation of this Agreement and the Agreement
Documents, the Guarantor and its Affiliates may from time to time furnish to the
Administrative Agent or a Purchaser written information which is identified to
such Person in writing when delivered as confidential (the "SCI Confidential
Information"). Each such Person shall use reasonable efforts to apply to any SCI
Confidential Information such procedures regarding confidentiality as it applies
generally to information of that nature; provided, however, that any such Person
may disclose any SCI Confidential Information or other documents delivered to
such Person, and disclose any other information disclosed to such Person, by or
on behalf of the Guarantor or its Affiliates in connection with or pursuant to
this Agreement to (i) such Person's directors, officers, employees, agents and
professional consultants, (ii) the Administrative Agent, (iii) the Purchasers,
(iv) any Person to which such Person offers to sell, assign or grant a security
interest in all or any portion of its Purchaser's Interests or other rights or
interests under this Agreement pursuant to Article XII hereof, which prospective
purchaser, assignee or grantee agrees in writing prior to the receipt of SCI
Confidential Information to comply with this Section 15.15, (v) any federal or
state regulatory authority having jurisdiction over such Person, (vi) any other
Person to which such delivery or disclosure may be necessary or appropriate (a)
in compliance with any law, rule, regulation or order applicable to such Person,
(b) in response to any subpoena or other legal process, (c) in connection with
any litigation to which such Person is a party or (d) in order to protect such
Person's rights under this Agreement, (vii) any rating agency rating, or
placement agent placing, a Conduit Purchaser's Commercial Paper Notes and (viii)
any Program Support Provider. In connection with disclosures by any Person
pursuant to clause (vi)(b) or (c) above, such Person shall use its reasonable
efforts to notify the Guarantor prior to any such disclosure unless such
notification to the Guarantor is prohibited by court order. Notwithstanding the
foregoing, any Person that discloses SCI Confidential Information pursuant to
this Section 15.15 shall not be liable to the Guarantor for failure to notify
the Guarantor of such disclosure.

      SECTION 15.16. Funding. Any Bank Purchaser may fund or maintain its
Purchaser's Interest hereunder through any branch or agency of such Bank
Purchaser.

      SECTION 15.17. Sharing of Payments, Etc. If any Purchaser (for purposes of
this Section, a "Recipient") shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of setoff, or otherwise) on
account of the portion of the Undivided Interest owned by it (other than as a
result of the different methods for calculating Earned Discount) in excess of
its ratable share of payments on account of the Undivided Interest obtained by
the Purchasers entitled thereto, such Recipient shall forthwith purchase from
the Purchasers entitled to a share of such amount participations in the portions
of the Undivided Interest owned by such Persons as shall be necessary to cause
such Recipient to share

                                       66
<PAGE>

the excess payment ratably with each such other Person entitled thereto;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such Recipient, such purchase from each such other
Person shall be rescinded and each such other Person shall repay to the
Recipient the purchase price paid by such Recipient for such participation to
the extent of such recovery, together with an amount equal to such other
Person's ratable share (according to the proportion of (a) the amount of such
other Person's required payment to (b) the total amount so recovered from the
Recipient) of any interest or other amount paid or payable by the Recipient in
respect of the total amount so recovered.

      SECTION 15.18. Excess Funds. No Conduit Purchaser shall be required to
make payment of any amounts required to be paid by it pursuant hereto unless
such Conduit Purchaser has Excess Funds (as defined below); provided that no
Conduit Purchaser shall be required at any time to make Purchases or permit
Reinvestments hereunder, each of which are and shall remain in its sole and
absolute discretion. If a Conduit Purchaser does not have Excess Funds, the
excess of the amount due hereunder over the amount paid shall not constitute a
"claim" (as defined in Section 101(5) of the Federal Bankruptcy Code) against
such Conduit Purchaser until such time as such Conduit Purchaser has Excess
Funds. If a Conduit Purchaser does not have sufficient Excess Funds to make any
payment due hereunder, then such Conduit Purchaser may pay a lesser amount and
make additional payments that in the aggregate equal the amount of deficiency as
soon as possible thereafter. The term "Excess Funds" means the excess of (a) the
aggregate projected value of a Conduit Purchaser's assets and other property
(including cash and cash equivalents), over (b) the sum of (i) the sum of all
scheduled payments of principal, interest and other amounts payable on publicly
or privately placed indebtedness of such Conduit Purchaser for borrowed money,
plus (ii) the sum of all other liabilities, indebtedness and other obligations
of such Conduit Purchaser for borrowed money or owed to any credit or liquidity
provider, together with all unpaid interest then accrued thereon, plus (iii) all
taxes payable by such Conduit Purchaser to the Internal Revenue Service, plus
(iv) all other indebtedness, liabilities and obligations of such Conduit
Purchaser then due and payable, but the amount of any liability, indebtedness or
obligation of such Conduit Purchaser shall not exceed the projected value of the
assets to which recourse for such liability, indebtedness or obligation is
limited. Excess Funds with respect to Amsterdam shall be calculated once each
Business Day.

                               [SIGNATURES FOLLOW]

                                       67
<PAGE>

      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.

                                       QUINCY CAPITAL CORPORATION,
                                       as a Conduit Purchaser

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                       AMSTERDAM FUNDING CORPORATION,
                                       as a Conduit Purchaser

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                       RECEIVABLES CAPITAL CORPORATION,
                                       as an Exiting Purchaser

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                                     SECOND AMENDED AND RESTATED
                                       S-1        RECEIVABLES PURCHASE AGREEMENT
<PAGE>

                                       BANK OF AMERICA, NATIONAL ASSOCIATION,
                                       as the Administrative Agent

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                       BANK OF AMERICA, NATIONAL ASSOCIATION,
                                       as a Bank Purchaser

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                       ABN AMRO BANK N.V.,
                                       as a Bank Purchaser

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                       By
                                          --------------------------------------

                                                     SECOND AMENDED AND RESTATED
                                       S-2        RECEIVABLES PURCHASE AGREEMENT
<PAGE>

                                        Title
                                              ----------------------------------

                                                     SECOND AMENDED AND RESTATED
                                       S-3        RECEIVABLES PURCHASE AGREEMENT
<PAGE>

                                       SCI FUNDING, INC.,
                                       as Seller

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                       SCI TECHNOLOGY, INC.,
                                       as initial Servicer

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                       SCI SYSTEMS, INC.

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                                     SECOND AMENDED AND RESTATED
                                       S-4        RECEIVABLES PURCHASE AGREEMENT
<PAGE>

                                   APPENDIX A

                                   DEFINITIONS

      This is Appendix A to the Second Amended and Restated Receivables Purchase
Agreement, dated as of June 14, 2000, among SCI Funding, Inc., as Seller, SCI
Technology, Inc., as initial Servicer, SCI Systems, Inc., as Guarantor,
Receivables Capital Corporation, as an Exiting Purchaser, Quincy Capital
Corporation and Amsterdam Funding Corporation as Conduit Purchasers, Bank of
America, National Association, and ABN AMRO Bank N.V., as Bank Purchasers, and
Bank of America, National Association, as Administrative Agent (as further
amended, supplemented or otherwise modified from time to time, and including the
Original Receivables Agreement for as long as it was in effect, this
"Agreement"). Each reference in this Appendix A to any Section, Appendix or
Exhibit refers to such Section of or Appendix or Exhibit to this Agreement.

                                      INDEX

                                                                        Page No.
                                                                        --------

A. Defined Terms  A-1

B.    Other Terms A-24

C.    Computations of Time Periods ...................................  A-24

      A. Defined Terms. As used in this Agreement, unless the context requires a
different meaning, the following terms have the meanings indicated hereinbelow:

      "ABN" has the meaning set forth in the preamble.

      "Accounts Payable Amount" means at any time the aggregate amount,
vouchered and unvouchered, owed by Seller or any Originator to any Obligor at
such time for materials used in the manufacture or production of goods by an
Originator.

                                       A-1
<PAGE>

      "Account Payable Obligor" means any Obligor with an Accounts Payable
Amount.

      "Accounts Receivable" means all rights of any Person to payment for goods
sold or leased or for services rendered, whether or not such rights to payment
have been earned by performance, including, without limitation, all accounts,
contract rights, chattel paper, instruments and documents of any Person arising
from the sale of goods or services by such Person, whether secured or unsecured,
and whether now existing or hereafter created or arising and including, further,
without limitation, federal and state tax refunds due and owing to such Person
relating to taxes previously paid by such Person less all doubtful accounts
receivable owing to such Person, as determined in accordance with GAAP.

      "Adjusted Average Maturity" has the meaning set forth in Appendix B.

      "Administrative Agent" has the meaning set forth in the preamble.

      "Administrative Agent's Account" has the meaning set forth in Section
3.05(a).

      "Adverse Claim" means a Lien or other right or claim of any Person other
than (a) a potential claim or right (that has not yet been asserted) of a
trustee appointed for an Obligor in connection with any Event of Bankruptcy or
(b) an unfiled lien for taxes accrued but not yet payable.

      "Affected Party" means each of each Purchaser, each Program Support
Provider, any permitted assignee of a Purchaser, or a Program Support Provider,
any assignee of any of a Purchaser's obligations to a Program Support Provider
in respect of any Funding, or any holder of a participation interest in the
rights and obligations of any Program Support Provider under any Program Support
Agreement and in respect of any Funding, the Administrative Agent and any
holding company of BofA or any Bank Purchaser.

      "Affiliate" when used with respect to a Person means any other Person
controlling, controlled by, or under common control with, such Person.

      "Affiliated Party" means each of Guarantor, SCI and their Affiliates.

      "Aggregate Purchasers' Investment" means the sum of the Purchaser's
Investments for all Purchasers.

                                       A-2
<PAGE>

      "Agreement Documents" means this Agreement, the Lock-Box Agreements, the
Fee Letters, each Second Tier Sale Agreement, each Purchase and Sale Agreement
and the other documents to be executed and delivered in connection herewith.

      "Alternate Reference Rate" has the meaning set forth in Appendix B.

      "Amsterdam" has the meaning set forth in the preamble.

      "Assignment Amount" means, with respect to any Bank Purchaser in the
Quincy Related Group at the time of an assignment pursuant to Section 1.10, an
amount equal to the least of (a) such Bank Purchaser's pro rata share of the
Purchaser's Investment requested by Quincy to be assigned at such time; (b) such
Bank Purchaser's Maximum Assignment Amount (minus any unrecovered principal
amount of such Bank Purchaser's investments pursuant to Quincy's related Program
Support Agreement) and (c) in the case of an assignment on or after the Conduit
Investment Termination Date, the sum of such Bank Purchaser's Conduit Related
Percentage of the aggregate principal balance of the Purchaser's Investment
being transferred by Quincy plus any Earned Discount accrued and to accrue
thereon minus (after the occurrence of a "Trigger Event" (as defined in the
Program Support Agreement)) the excess, if any, of "DR" over "FLP" (each, as
defined and calculated in the Program Support Agreement).

      "Average Maturity" has the meaning set forth in Appendix B .

      "Bank Credit Agreement" means that certain Amended and Restated Credit
Agreement dated as of August 4, 1995, by and among Guarantor, as borrower
thereunder, Citibank, N.A., as agent, ABN AMRO Bank N.V., as co-agent, and the
other lenders signatory thereto, as the same has been and may be amended,
supplemented, extended, renewed, restated, refinanced or replaced from time to
time.

      "Bank Purchaser" has the meaning set forth in the preamble.

      "Bank Rate" has the meaning set forth in Appendix B.

      "BofA" has the meaning set forth in the preamble.

      "Business Day" means a day on which commercial banks in Chicago, Illinois,
Charlotte, North Carolina, New York City and Huntsville, Alabama are not
authorized or required to be closed for business.

      "Change of Control" means (i) that Seller ceases to be a Wholly Owned
Subsidiary of SCI, (ii) that SCI or any other Originator ceases to be a Wholly
Owned Subsidiary of Guarantor or (iii) in relation to Guarantor, the acquisition
by any Person or group of Persons (within the meaning of Section 13 or 14 of the
Exchange Act), of beneficial ownership (within the meaning of Rule 13d-3
promulgated by the SEC

                                       A-3
<PAGE>

under the Exchange Act) of issued and outstanding shares of the capital stock of
Guarantor entitled (without regard to the occurrence of any contingency) to vote
for the election of members of the board of directors of Guarantor and having a
then present right to exercise 50% or more of the voting power for the election
of members of the board of directors of Guarantor attached to all such
outstanding shares of capital stock of Guarantor.

      "Collections" means, with respect to any Receivable, all funds which
either (a) are received by Seller, any Originator or Servicer from or on behalf
of the related Obligors in payment of any amounts owed (including, without
limitation, purchase prices, finance charges, interest and all other charges) in
respect of such Receivable, or applied to such amounts owed by such Obligors
(including, without limitation, insurance payments that Seller, any Originator
or Servicer applies in the ordinary course of its business to amounts owed in
respect of such Receivable and net proceeds of sale or other disposition of
repossessed goods or other collateral or property of the Obligor or any other
party directly or indirectly liable for payment of such Receivable and available
to be applied thereon), or (b) are deemed to have been received, by Seller or
any other Person as a Collection pursuant to Section 3.03.

      "Commercial Paper Notes" means short-term promissory notes issued or to be
issued by a Conduit Purchaser to fund its investments in accounts receivable or
other financial assets.

      "Commercial Paper Rate" has the meaning set forth in Appendix B.

      "Commitment" with respect to any Purchaser means the amount listed as such
Purchaser's Commitment on Schedule I. Notwithstanding the use of the term
"Commitment" in this Agreement with respect to any Conduit Purchaser, no Conduit
Purchaser shall have any obligation hereunder to fund any Purchase or
Reinvestment, all of such fundings being at such Conduit Purchaser's sole
discretion.

      "Concentration Limit" has the meaning set forth in Section 2.04(b).

      "Conditions Precedent" has the meaning set forth in Section 5.02.

      "Conduit Purchaser" has the meaning set forth in the preamble.

      "Conduit Related Percentage" means with respect to any Bank Purchaser and
any Related Group the ratio, expressed as a percentage, of (i) such Bank
Purchaser's Commitment divided by (ii) the aggregate of the Commitments of each
of the Bank Purchasers in such Related Group.

      "Consistent Basis" means, in reference to the application of GAAP, that
the accounting principles observed in the period referred to are comparable in
all material respects to those applied in the preceding

                                       A-4
<PAGE>

period, except to the extent required to reflect a change in GAAP or any other
changes consented to by the Required Purchasers.

      "Contingent Obligation" as to any Person means any obligation of such
Person guaranteeing or in effect guaranteeing any indebtedness, leases,
dividends or other contractual obligations ("primary obligations") of any other
Person (the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or hold harmless
the owner of such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not state or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by such Person
in good faith.

      "Contract" means a contract between an Originator and any Person, or an
invoice from an Originator to any Person or a purchase order from any Person to
an Originator, in each case pursuant to or under which such Person shall be
obligated to make payments to an Originator.

      "Credit Agreement" means that certain Amended and Restated 364-Day Credit
Agreement dated as of June 29, 2001 among SCI Systems, Inc., the Banks party
thereto, Citicorp USA, Inc., as Administrative Agent and the other parties
thereto, as in effect on August 10, 2001.

      "Credit and Collection Procedure" means those credit and collection
policies and practices relating to Contracts and Receivables described in the
PriceWaterhouseCoopers report attached as Schedule 6.01(m)-2, as modified
without violating Section 7.03(c).

      "Credit Reserve" at any time means an amount equal to the greater of (1)
$5,000,000 and (2) the product of (i) the Total Purchasers' Investment at such
time, times (ii) the greatest of (A) 28%, (B) the sum of (I) the Dilution
Reserve, plus (II) the product of (1) two times (2) the highest Sales-Based
Default Ratio to have occurred for the most recent twelve Month End Dates times
the quotient of (x) the cumulative billings over the most recent four months
(provided that billings for the most recent five months shall be used if
required by any Purchaser at any time) divided by (y) the aggregate Unpaid
Balance of Eligible Receivables as of the most recent Month End Date and (C) the
sum of (I) the Dilution Reserve, plus (II) the product of (1) 2.5 times (2) the
highest Delinquency Ratio to have occurred for the most recent twelve Month End
Dates.

                                       A-5
<PAGE>

      "Deemed Collection" has the meaning assigned thereto in the applicable
Second Tier Sale Agreement.

      "Defaulted Receivable" means a Receivable:

            (a) as to which any payment, or part thereof, remains unpaid for 120
      days (or 150 days if the Obligor thereof is a Governmental Authority) from
      the invoice date, other than amounts deemed uncollectible, in Servicer's
      reasonable judgment, due to contract cancellations and adjustments, which,
      in each case, are not related to and do not result from credit problems,

            (b) is due from an Obligor with respect to which an Event of
      Bankruptcy has occurred and remains continuing,

            (c) as to which payments have been extended, or the terms of payment
      thereof rewritten, without the Required Purchasers' consent, other than as
      permitted in Section 8.02(c), or

            (d) which has been or, consistent with the Credit and Collection
      Procedure, should be, written off Seller's books as uncollectible.

      "Delinquency Ratio" means the ratio (expressed as a percentage) computed
as of each Month End Date by dividing (x) the aggregate Unpaid Balance of all
Pool Receivables that were Delinquent Receivables on each of such Month End Date
and the five (5) immediately preceding Month End Dates by (y) the aggregate
Unpaid Balance of all Pool Receivables on such Month End Dates.

      "Delinquent Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for 90 days from the invoice date, other than
amounts deemed uncollectible, in Servicer's reasonable judgment, due to billing
disputes, contract cancellations for other than credit reasons and adjustments.

      "Designated Obligor" means, at any time, all Obligors except Excluded
Obligors and any such Obligor as to which any Bank Purchaser has, at least three
(3) Business Days prior to the date of determination, given written notice to
Seller and the Administrative Agent that such Obligor shall not be considered a
Designated Obligor.

      "Dilution Factors" means any event or condition described in clause (i) of
Section 3.03(a) that would cause any Pool Receivable or portion thereof to be
deemed a Collection.

      "Dilution Horizon Ratio" means as of any Month End Date (i) the aggregate
billings for the three months preceding such Month End Date, divided by (ii) the
aggregate Unpaid Balance of all Eligible Receivables at such Month End Date.

                                       A-6
<PAGE>

      "Dilution Reserve" at any time means an amount equal to (i) (a) two times
the Expected Dilution Ratio, plus (b) the Spike Factor, times (ii) the Dilution
Horizon Ratio.

      "Dilution Spike" means the highest Sales-Based Dilution Ratio to have
occurred during the twelve month period preceding such Month End Date.

      "Discount Factor" has the meaning set forth in Appendix B.

      "Dollars" means dollars in lawful money of the United States of America.

      "Earned Discount" has the meaning set forth in Appendix B.

      "Eligible Contract" means a Contract similar to one of the forms set forth
in Schedule 6.01(m)-1 or in another form approved by SCI in the exercise of its
reasonable business judgment.

      "Eligible Receivable" means, at any time, a Receivable:

      (a) the Obligor of which (i) is not an Affiliate of Seller, and (ii) is a
Designated Obligor at the time of the creation of an interest in such Receivable
hereunder;

      (b) the Obligor of which is located in the United States (or is fully
guaranteed by an Affiliate of the Obligor that is located in the United States
pursuant to a guaranty in substantially the form attached hereto as Exhibit I-1
or such other form satisfactory in form to the Required Purchasers) or Canada,
provided that the Administrative Agent and the Required Purchasers have
determined, to their reasonable satisfaction, that such Receivables are not
subject to any offset or withholding of any kind and has received an opinion of
counsel, in form and substance satisfactory to the Required Purchasers, as to
the true sale of such Receivables to Seller, the perfection of the
Administrator's interest therein and such other matters as the Administrative
Agent or any Bank Purchaser shall reasonably request;

      (c) which is not a Defaulted Receivable;

      (d) (i) which arose in the ordinary course of an Originator's business
from the sale of such Originator's merchandise, insurance or services; provided
that, if such Receivable was not originated by

                                       A-7
<PAGE>

SCI, the Unpaid Balance of such Receivable, when added to the aggregate Unpaid
Balance of all other Pool Receivables not originated by SCI, does not exceed 5%
of the aggregate Unpaid Balance of all Eligible Receivables and (ii) which,
according to the Contract related thereto, is required to be paid in full within
thirty (30) days of the original billing date or statement date therefor;

      (e) which is an account receivable representing all or part of the sales
price of merchandise, insurance or services within the meaning of Section
3(c)(5) of the Investment Company Act of 1940, as amended;

      (f) which is denominated and payable only in United States dollars;

      (g) which arises under an Eligible Contract which has been duly authorized
and which, together with such Receivable, is in full force and effect and
constitutes the legal, valid and binding obligation of the Obligor of such
Receivable enforceable against such Obligor, as to all material terms thereof,
in accordance with its terms;

      (h) the Obligor of which is not the Obligor of Defaulted Receivables that
represent more than 10% of the aggregate Unpaid Balance of all Receivables of
such Obligor;

      (i) which is not subject to any existing dispute, offset, counter-claim or
defense whatsoever, except for Accounts Payable Amounts;

      (j) which, together with the Contract related thereto, does not contravene
any laws, rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) in any material respect and with respect to
which no party to the Contract related thereto is in violation of any such law,
rule or regulation in any material respect;

      (k) as to which, at or prior to the time of the initial creation of an
interest in such Receivable through a Purchase, the Administrative Agent has not
notified the Seller that any Bank Purchaser (exercising its reasonable credit
judgment) has determined that such Receivable (or the class of Receivables into
which such Receivable falls) is not acceptable for purchase hereunder;

      (l) no portion of which includes any amounts payable in respect of sales
taxes;

      (m) which is not a progress billing;

      (n) which constitutes an account as defined in the UCC (or applicable
Canadian law) as in effect in the jurisdiction governing the perfection of the
Administrative Agent's ownership interest;

                                       A-8
<PAGE>

      (o) with regard to which the warranty of Seller in Section 6.01(i) is true
and correct;

      (p) which arises out of a current transaction, or the proceeds of which
have been or are to be used for current transactions, within the meaning of
Section 3(a)(3) of the Securities Act of 1933, as amended;

      (q) which (i) satisfies all applicable requirements of the related Credit
and Collection Procedure and (ii) complies with such other criteria and
requirements as any Bank Purchaser (exercising its reasonable credit judgment)
may from time to time specify to the Seller and the Administrative Agent;

      (r) if such Receivable was originated by an Originator other than SCI,
which was sold in a true sale to SCI pursuant to a Purchase and Sale Agreement
that has been approved by the Required Purchasers and with respect to which all
conditions precedent have been met to the satisfaction of the Required
Purchasers (including, without limitation, the delivery of opinions of counsel),
and, in each case, was sold to Seller pursuant to a Second Tier Sale Agreement;
and

      (s) if the Obligor of such Receivable is an Account Payable Obligor, the
Contract related to such Receivable between such Obligor and the related
Originator that is the master contract for such Obligor has a "take or pay"
clause and has been approved by the Required Purchasers.

      "End Date" means the date after the Facility Termination Date on which the
Undivided Interest has been reduced to zero and all other amounts payable to any
Purchaser or the Administrative Agent hereunder have been paid in full.

      "ERISA" means the U.S. Employee Retirement Income Security Act of 1974, as
amended from time to time.

      "Eurodollar Rate (Reserve Adjusted)" has the meaning set forth in Appendix
B.

      "Event of Bankruptcy" shall be deemed to have occurred with respect to a
Person if either:

            (a) a case or other proceeding shall be commenced, without the
      application or consent of such Person, in any court, seeking the
      liquidation, reorganization, debt arrangement, dissolution, winding up, or
      composition or readjustment of debts of such Person, the appointment of a
      trustee, receiver, custodian, liquidator, assignee, sequestrator or the
      like for such Person or all or substantially all of its assets, or any
      similar action with respect to such Person under any law relating to
      bankruptcy, insolvency, reorganization, winding up or composition or
      adjustment of debts, and such case or proceeding shall continue
      undismissed, or unstayed and in effect, for a period of 60 consecutive
      days; or an order for relief in respect of such Person shall be entered in
      an involuntary case under the federal bankruptcy laws or other similar
      laws now or hereafter in effect; or

                                       A-9
<PAGE>

            (b) such Person shall commence a voluntary case or other proceeding
      under any applicable bankruptcy, insolvency, reorganization, debt
      arrangement, dissolution or other similar law now or hereafter in effect,
      or shall consent to the appointment of or taking possession by a receiver,
      liquidator, assignee, trustee, custodian, sequestrator (or other similar
      official) for, such Person or for any substantial part of its property, or
      shall make any general assignment for the benefit of creditors, or shall
      fail to, or admit in writing its inability to, pay its debts generally as
      they become due, or, if a corporation or similar entity, its board of
      directors shall vote to implement any of the foregoing.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "Excluded Data" means any information or data pertaining to an Obligor,
the disclosure of which information and data by Seller, Guarantor or any
Affiliate of either of them (collectively, the "Disclosing Parties") to the
Administrative Agent or a Purchaser could violate, in the good faith belief of
counsel, any applicable "fair credit" law, privacy law or any similar statute,
rule or regulation, or any contractual provision binding on any such Disclosing
Party.

      "Excluded Obligors" means (i) each Governmental Authority (provided that
Governmental Authorities shall only constitute "Excluded Obligors" from and
after the date any Purchaser provides notice of such designation to the Seller
and the Servicer) and (ii) any other Obligor approved as an "Excluded Obligor"
by all Bank Purchasers in a written consent accompanied by a certificate from
the Seller and the Servicer that such designation will not cause a Termination
Event or Unmatured Termination Event to occur (provided, that each Bank
Purchaser hereby consents to the future designation of NEC as an "Excluded
Obligor" upon delivery of the certificate described above).

      "Executive Officer" means any of those officers of Guarantor, SCI or
Seller, as the case may be, who are deemed to be "Executive Officers" thereof
pursuant to Rule 405 of Regulation C of the Exchange Act or any officer of
Guarantor or Seller, as the case may be, who is a senior vice president thereof,
or any individual performing a similar role as any individual who is a senior
vice president of Guarantor or Seller on the date of this Agreement.

      "Exiting Purchaser" has the meaning set forth in the preamble.

      "Expected Dilution Ratio" for any Month End Date means the average of the
Sales-Based Dilution Ratios for the twelve months preceding such Month End Date.

      "Facility" means the purchase and reinvestment facility provided by the
Purchasers pursuant to this Agreement.

      "Facility Termination Date" has the meaning set forth in Section 1.05.

                                      A-10
<PAGE>

      "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.

      "Fee Letter" has the meaning set forth in Section 4.01.

      "Financing Lease(s)" shall mean (a) any lease of property, real or
personal, the then present value of the minimum rental commitment of which
should, in accordance with GAAP, be capitalized on a balance sheet of the
lessee, and (b) any other such lease the obligations under which are capitalized
on a consolidated balance sheet of SCI or Guarantor and its Subsidiaries.

      "Financing Statement" means any financing statement that lists the Seller
(under any current name, any previous name or any trade name) as debtor and that
is filed in any jurisdiction in which filings would be appropriate under the UCC
or any comparable law to perfect a security interest in any Receivable, any
Collections with respect thereto, any Related Security or any Contract.

      "Funded Percentage" with respect to any Purchaser at any time means the
ratio, expressed as a percentage, of (i) such Purchaser's Purchaser's Investment
divided by (ii) the Total Purchasers' Investment, in each case, at such time.

      "Funding" means a drawing under a letter of credit, surety bond or other
instrument issued pursuant to a Program Support Agreement, a drawing on a cash
collateral account funded pursuant to a Program Support Agreement, a purchase,
loan or other extension of credit made by a Program Support Provider to a
Conduit Purchaser under a Program Support Agreement, or any other advance or
disbursement of funds from or to a Conduit Purchaser or for such Conduit
Purchaser's account or for which such Conduit Purchaser is obligated to
reimburse a Program Support Provider pursuant to a Program Support Agreement.

      "GAAP" means United States generally accepted accounting principles.

      "Governmental Authority" means any nation or government (including,
without limitation, the United States government), any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative function of or pertaining to government.

      "Group Percentage" means, with respect to any Related Group, the ratio,
expressed as a percentage, of (i) the aggregate of the Commitments of each of
the Bank Purchasers in such Related Group divided by (ii) the aggregate of the
Commitments of all Bank Purchasers.

      "Guarantor" has the meaning set forth in the preamble.

                                      A-11
<PAGE>

      "Indebtedness" of a Person, at a particular date, means any of the
following at such date, without duplication, (a) indebtedness of such Person for
borrowed money or evidenced by notes, bonds, debentures or like instruments, (b)
indebtedness of such Person for the deferred purchase price of property or
services, except current accounts payable and accrued expenses arising in the
ordinary course of business, (c) obligations of such Person under any Financing
Lease, (d) indebtedness of such Person arising under acceptance facilities, (e)
unreimbursed draws on letters of credit and (f) Contingent Obligations.

      "Indemnified Amounts" has the meaning set forth in Section 13.01.

      "Indemnified Party" has the meaning set forth in Section 13.01.

      "Information" has the meaning set forth in Section 15.07.

      "Information Provider" has the meaning set forth in Section 15.07.

      "Initial Purchaser Note" has the meaning set forth in the applicable
Second Tier Sale Agreement.

      "Inventory" means, with respect to any Person, all goods, merchandise and
other personal property held for sale, and all raw materials, components, work
or goods in process, finished goods, goods in transit and packing and shipping
materials, accretions and accessions thereto, trust receipts and similar
documents covering the same products, all whether now owned or hereafter
acquired by such Person, all as determined in accordance with GAAP.

      "Lien" means a lien, security interest, charge or encumbrance.

      "Liquidations" means all funds described in clause (a) of the definition
of Collections.

      "Liquidity Agreement" means, with respect to each Conduit Purchaser, any
liquidity agreement entered into from time to time by such Conduit Purchaser
related to this Agreement.

      "Liquidity Banks" means the purchasers or lenders from time to time
parties to a Liquidity Agreement.

      "Lock-Box Account" means any bank account in which Collections (other than
Collections of Receivables with respect to which the Obligors are Excluded
Obligors) are received or deposited.

      "Lock-Box Agreement" means a letter agreement, in substantially the form
of Exhibit 5.01(i), between Seller and any Lock-Box Bank.

                                      A-12
<PAGE>

      "Lock-Box Bank" means any of the banks party to a Lock-Box Agreement
holding one or more Lock-Box Accounts for receiving Collections from Pool
Receivables.

      "Losses to Liquidations Ratio" means the percentage that (x) the
write-offs (net of recoveries) recognized during the six month period ending on
the most recent Month End Date on all Receivables owned by Seller was of (y)
Collections of such Receivables during such period.

      "Manager" means SCI Systems (Alabama), Inc., an Alabama corporation and
the immediate parent company of SCI.

      "Management Agreement" means the Management Agreement, dated as of
September 27, 1996, between Manager and Seller, as amended, supplemented or
otherwise modified from time to time.

      "Material Adverse Effect" means a material adverse effect on:

            (i) the financial condition, business, assets, prospects or
      operations of Guarantor and its Subsidiaries, taken as a whole;

            (ii) the ability of Servicer or Guarantor to perform its obligations
      under this Agreement or the other Agreement Documents to which it is a
      party;

            (iii) the validity, enforceability, status, perfection or priority
      of any Purchaser's or the Administrative Agent's interest in the Pool; or

            (iv) the collectibility or enforceability of a significant portion
      of the Pool Receivables.

      "Maximum Assignment Amount" equals, for any Bank Purchaser in the Quincy
Related Group, an amount equal to (A) 1.02 multiplied by its aggregate
Commitment (used and unused) minus (B) the aggregate Purchaser's Investment of
such Bank Purchaser.

      "Month End Date" means the last day of each fiscal month.

      "Moody's" means Moody's Investors Service, Inc., and any successor
thereto.

      "Negative Spread Fee" has the meaning set forth in Appendix B.

      "Net Income" means, as applied to any Person for any fiscal period, the
aggregate amount of net income (or net loss) of such Person, after taxes, for
such period as determined in accordance with GAAP.

      "Net Pool Balance" has the meaning set forth in Section 2.04(a).

                                      A-13
<PAGE>

      "Obligor" means a Person obligated to make payments with respect to a
Receivable.

      "Original Receivables Agreement" has the meaning set forth in the
Background.

      "Originator Loan" is defined in the applicable Second Tier Sale Agreement.

      "Originator Note" is defined in the applicable Second Tier Sale Agreement.

      "Originators" means SCI, SCI Systems (Canada), Inc., a Canadian
corporation formed under the laws of the Province of Quebec, SCI Brockville
Corp., a Nova Scotia Company and their respective successors and permitted
assigns.

      "Owner" means, for each Purchase, the Purchasers funding such Purchase;
provided, however, that, upon any assignment of any interest in the Undivided
Interest (or portion thereof) made in accordance with Article XII, the assignee
thereof shall be the Owner of such interest in the Undivided Interest (or
portion thereof).

      "Percentage" with respect to any Purchaser means the percentage set forth
opposite such Purchaser's name on Schedule I hereto.

      "Periodic Report" means a report in substantially the form of Exhibit
3.04(a) or such other form acceptable to the Purchasers.

      "Permitted Subordinated Debentures" means debentures contemplated to be
issued from time to time by Guarantor after the date of the Original Agreement
that (i) are subordinated in writing to all obligations of Guarantor, SCI and
Seller hereunder, such subordination provisions to be on terms and conditions
reasonably satisfactory in all respects to the Required Purchasers (approval
under the Bank Credit Agreement constitutes approval hereunder) and (ii) do not
exceed $800,000,000 in the aggregate at any time.

      "Person" means an individual, partnership, corporation (including a
business trust), joint stock company, limited liability company, trust,
unincorporated association, joint venture, government or any agency or political
subdivision thereof or any other entity.

      "Pool" has the meaning set forth in Section 2.01.

      "Pool Receivable" means a Receivable in the Receivables Pool.

      "Program Fee Rate" has the meaning set forth in the Fee Letter.

                                      A-14
<PAGE>

      "Program Support Agreement" with respect to any Conduit Purchaser means
and includes the Liquidity Agreement to which such Conduit Purchaser is a party
and any other agreement entered into by any Program Support Provider providing
for the issuance of one or more letters of credit for the account of such
Conduit Purchaser, the issuance of one or more surety bonds for which such
Conduit Purchaser is obligated to reimburse the applicable Program Support
Provider for any drawings thereunder, the sale by such Conduit Purchaser to any
Program Support Provider of interests in the Undivided Interest (or portions
thereof) and/or the making of loans and/or other extensions of credit to such
Conduit Purchaser in connection with such Conduit Purchaser's securitization
program, together with any letter of credit, surety bond or other instrument
issued thereunder.

      "Program Support Provider" with respect to any Conduit Purchaser means and
includes the Liquidity Banks party to the Liquidity Agreement with such Conduit
Purchaser and any other or additional Person (other than any customer of such
Conduit Purchaser) now or hereafter extending credit or having a commitment to
extend credit to or for the account of such Conduit Purchaser or issuing a
letter of credit, surety bond or other instrument to support any obligations
arising under or in connection with such Conduit Purchaser's securitization
program.

      "Purchase" has the meaning set forth in Section 1.01(a).

      "Purchase and Sale Agreement" means a Purchase and Sale Agreement between
SCI and an Originator, as it may be amended, supplemented or otherwise modified
from time to time.

      "Purchase and Sale Termination Date" means the earlier of the End Date and
the termination of the Commitments under Section 10.02.

      "Purchase Limit" has the meaning set forth in Section 1.02(a).

      "Purchase Termination Date" has the meaning set forth in Section 1.06.

      "Purchaser" means any of the Conduit Purchasers or the Bank Purchasers,
and "Purchasers" means all of the Conduit Purchasers and the Bank Purchasers.

      "Purchaser Rate" has the meaning set forth in Appendix B.

      "Purchaser's Interest" means, with respect to any Purchaser, all of such
Purchaser's right, title and interest in the Pool and the Agreement Documents.

      "Purchaser's Investment" has the meaning set forth in Section 2.03.

      "Purchasers' Share" has the meaning set forth in Section 2.05.

                                      A-15
<PAGE>

      "Quincy" has the meaning set forth in the preamble.

      "Rate Variance Factor" has the meaning set forth in Appendix B.

      "RCC" has the meaning set forth in the preamble.

      "Receivable" means any right to payment from a Person, whether
constituting an account, chattel paper, instrument or general intangible,
arising from the sale by any Originator of merchandise or services rendered by
such Originator, as the case may be, and includes the right to payment of any
interest or finance charges and other obligations of such Person with respect
thereto.

      "Receivables Pool" means at any time all then outstanding Receivables as
to which the Obligors thereunder are Designated Obligors. If a Receivable is a
Pool Receivable on the day immediately preceding the Facility Termination Date,
such Receivable shall continue to be considered a Pool Receivable at all times
thereafter.

      "Regulation D" means Regulation D of the Federal Reserve Board, or any
other regulation of the Federal Reserve Board that prescribes reserve
requirements applicable to nonpersonal time deposits or "Eurocurrency
Liabilities" as currently defined in Regulation D, as in effect from time to
time.

      "Regulatory Change" means, relative to any Affected Party

            (a) any change in (or the adoption, implementation, phase-in or
      commencement of effectiveness of) any

                  (i) United States federal or state law or foreign law
            applicable to such Affected Party;

                  (ii) regulation, interpretation, directive, requirement or
            request (whether or not having the force of law) applicable to such
            Affected Party of (A) any court, government authority charged with
            the interpretation or administration of any law referred to in
            clause (a)(i) or of (B) any fiscal, monetary or other authority
            having jurisdiction over such Affected Party; or

                  (iii) generally accepted accounting principles or regulatory
            accounting principles applicable to such Affected Party and
            affecting the application to such Affected Party of any law,
            regulation, interpretation, directive, requirement or request
            referred to in clause (a)(i) or (a)(ii) above; or

                                      A-16
<PAGE>

            (b) any change in the application to such Affected Party of any
      existing law, regulation, interpretation, directive, requirement, request
      or accounting principles referred to in clause (a)(i), (a)(ii) or (a)(iii)
      above.

      "Reinvestment" has the meaning set forth in Section 1.01(b).

      "Related Administrator" with respect to (i) Quincy means BofA and (ii)
Amsterdam means ABN.

      "Related Bank Purchaser" with respect to any Conduit Purchaser means each
Bank Purchaser designated as a "Related Bank Purchaser" for such Conduit
Purchaser on Schedule I hereto.

      "Related Group" means each of (i) Quincy and its Related Bank Purchasers
and Related Administrator, and (ii) Amsterdam and its Related Bank Purchasers
and Related Administrator.

      "Related Security" means, with respect to any Pool Receivable: (a) all of
Seller's and the related Originator's right, title and interest in, under and to
all security agreements or other agreements that relate to such Pool Receivable;
(b) all of Seller's and the related Originator's interest in the merchandise
(including returned merchandise), if any, relating to the sale which gave rise
to such Pool Receivable; (c) all other security interests or liens and property
subject thereto from time to time purporting to secure payment of such Pool
Receivable, whether pursuant to the Contract related to such Pool Receivable or
otherwise; (d) all UCC financing statements or similar filings covering any
collateral securing payment of such Pool Receivable; (e) all guarantees and
other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Pool Receivable whether pursuant to the
Contract related to such Pool Receivable or otherwise; and (f) all of Seller's
rights and claims under the Purchase and Sale Agreement and the Second Tier Sale
Agreements.

      "Remaining Collections" has the meaning set forth in Section 3.01(a)(ii).

      "Required Allocation" at any time means the sum of the Total Purchasers'
Investment, Discount Factor, Servicer's Fee Reserve and Credit Reserve at such
time as calculated pursuant to Section 2.02.

      "Required Allocation Limit" has the meaning set forth in Section 1.02(b).

      "Required Purchasers" means the Bank Purchasers having aggregate
Percentages of 60% or more (but not less than two Bank Purchasers).

      "Requirement of Law" for any Person shall mean the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or

                                      A-17
<PAGE>

determination of an arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

      "Run Off Day" means any of (a) each day which occurs on or after the date
designated by the Administrative Agent or the Required Purchasers to Seller to
be the "Run Off Commencement Date" during a time when any of the conditions
precedent set forth in Section 5.02 are not satisfied, (b) each day which occurs
on or after the Termination Date or (c) each day which occurs on or after the
Seller shall have given written notice to the Administrative Agent and each Bank
Purchaser that it no longer wishes to sell the Undivided Interest in the
Receivables Pool pursuant to this Agreement.

      "Run Off Discount" has the meaning set forth in Appendix B.

      "Run Off Period" means one or more successive Run Off Days.

      "Run Off Servicer's Fee" has the meaning set forth in Appendix B.

      "Sales-Based Default Ratio" means, as of any Month End Date, the ratio,
expressed as a percentage, of (i) the aggregate Unpaid Balance of all Pool
Receivables that were more than 91, but less than 120, days past due for the
three successive months occurring immediately prior to the month ending on such
Month End Date, plus the aggregate write-offs for the month ending on such Month
End Date and for the immediately preceding two months, divided by (ii) the
aggregate billings for the fifth, sixth and seventh preceding months. For
example, as of April 30, the numerator of the Sales-Based Default Ratio would be
the aggregate Unpaid Balance of all Pool Receivables that were more than 91, but
less than 120, days past due as of January 31, February 28 and March 31, plus
the aggregate write-offs for the months of February, March and April; the
denominator of the Sales-Based Default Ratio would be the aggregate billings for
the months of October, November and December. For purposes of calculating the
Sales-Based Default Ratio (i) for the months of October, November and December
of 1999, Receivables owed by Monorail shall be excluded , (ii) for the month of
January of 2000, Receivables owed by Compaq shall be excluded and (iii) for the
month of February of 2001, Receivables owed by Echostar shall be excluded.

      "Sales-Based Dilution Ratio" as of any Month End Date means (a) the
aggregate reduction in the Unpaid Balance of Pool Receivables attributable to
Dilution Factors which Dilution Factors were granted during the month ending on
such Month End Date, divided by (b) billings for the third month preceding such
Month End Date.

      "Second Tier Sale Agreements" means, collectively, each Second Tier Sale
Agreement between an Originator and Seller, as it may be amended, supplemented
or otherwise modified from time to time.

                                      A-18
<PAGE>

      "Second Tier Sale Termination Event" has the meaning set forth in the
applicable Second Tier Sale Agreement.

      "S&P" means Standard and Poor's Ratings Group, a division of McGraw Hill,
Inc., and any successor thereto.

      "Scheduled Facility Termination Date" has the meaning set forth in Section
1.05(a).

      "SCI" has the meaning set forth in the preamble.

      "SCI Party" means each of SCI, Seller, Guarantor and each Originator.

      "SEC" means the Securities and Exchange Commission.

      "Seller" has the meaning set forth in the preamble.

      "Seller Material Adverse Effect" means a material adverse effect on:

            (i) the financial condition, business, assets, prospects or
      operations of Seller;

            (ii) the ability of Seller to perform its obligations under this
      Agreement or the other Agreement Documents to which it is a party;

            (iii) the validity, enforceability, status, perfection or priority
      of any Purchaser's or the Administrative Agent's interest in the Pool; or

            (iv) the collectibility or enforceability of a significant portion
      of the Pool Receivables.

      "Servicer" has the meaning set forth in Section 8.01(a).

      "Servicer Transfer Event" has the meaning set forth in Section 8.01(b).

      "Servicer's Fee" has the meaning set forth in Appendix B.

      "Servicer's Fee Reserve" has the meaning set forth in Appendix B.

      "Settlement Date" means the 15th day of each month or if such day is not a
Business Day, the next succeeding Business Day, commencing July 17, 2000;
provided, that the initial Settlement Date with respect to amounts accrued prior
to the date hereof shall be June 20, 2000.

                                      A-19
<PAGE>

      "Settlement Period" means each period from and including a Settlement Date
to but excluding the next succeeding Settlement Date; provided, however that
with respect to the first Settlement Period occurring after the date hereof, the
period from the date hereof through July 17, 2000.

      "Special Concentration Limit" has the meaning set forth in Section
2.04(c).

      "Spike Factor" means (i) the Dilution Spike minus the Expected Dilution
Ratio at such time, times (ii) the Dilution Spike divided by the Expected
Dilution at such time.

      "Subordinated Debt" means (i) the Permitted Subordinated Debentures and
(ii) any other Indebtedness of Guarantor or any Subsidiary of Guarantor which is
subordinated in writing to all obligations of Guarantor or such Subsidiary on
terms and conditions satisfactory in all respects to the Required Purchasers and
approved in writing by the Required Purchasers (which approval shall not be
unreasonably withheld or delayed) including, without limitation, with respect to
interest rates, payment terms, maturities, amortization schedules, covenants,
defaults, remedies and subordination provisions.

      "Subsidiary" of any Person shall mean a corporation or other entity of
which shares of stock or other ownership interests having ordinary voting power
(other than stock or other ownership interests having such power only by reason
of the happening of a contingency) to elect a majority of the directors of such
corporation, or other Persons performing similar functions for such entity, are
owned, directly or indirectly, including through other Subsidiaries, by such
Person.

      "Successor Notice" has the meaning set forth in Section 8.01(b).

      "Support Termination Date" for any Bank Purchaser means the date set forth
opposite such Bank Purchaser's name on Schedule I, as such date may be extended
from time to time with the written consent of such Bank Purchaser.

      "Termination Date" means the Facility Termination Date.

      "Termination Event" has the meaning set forth in Section 10.01.

      "Total Capital" means, as to any Person at a particular date, the sum of
(i) all items which would, in accordance with GAAP, be properly classified on
the balance sheet of such Person as (A) total shareholders' equity plus (B)
long-term deferred income taxes, plus (ii) Total Debt.

      "Total Debt" means, as to any Person at a particular date, the sum of all
items which would, in accordance with GAAP, be properly classified on such
Person's balance sheet as (i) short-term debt for money borrowed, plus (ii)
current maturities of long-term debt, plus (iii) long-term debt, including,
without

                                      A-20
<PAGE>

limitation, with respect to Guarantor, the Subordinated Debt and to the extent
issued, the Permitted Subordinated Debentures.

      "Total Purchasers' Investment" at any time means the sum of the
Purchaser's Investment for all Purchasers hereunder.

      "Trigger Event" shall be deemed to have occurred and be continuing if (i)
the Guarantor does not maintain at least one investment grade long-term senior
debt rating by S&P, Moody's or Fitch, Inc. and (ii) any Purchaser has provided
notice to the Seller and the Servicer that Accounts Payable Amounts are to be
deducted from the Net Pool Balance.

      "UCC" means the Uniform Commercial Code as from time to time in effect in
the applicable jurisdiction or jurisdictions.

      "Undivided Interest" has the meaning set forth in Section 2.01.

      "Unmatured Termination Event" means any event which, with the giving of
notice or lapse of time, or both, would become a Termination Event.

      "Unpaid Balance" of any Receivable means at any time the sum of (x) the
unpaid principal amount thereof, minus (y) any amounts representing any sales or
other similar tax.

      "Wholly Owned Subsidiary" means a Subsidiary all of whose issued and
outstanding capital stock (other than directors' qualifying shares) is owned by
Guarantor or another Wholly Owned Subsidiary.

      B. Other Terms. All accounting terms not specifically defined herein shall
be construed in of New York, and not specifically defined herein, are used
herein as defined in such Article 9.

      C. Computation of Time Periods. Unless otherwise stated in this Agreement,
in the computation of a period of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to but excluding".

                                      A-21
<PAGE>

                                   APPENDIX B

                       CALCULATION OF DISCOUNT AND RESERVE

      This is Appendix B to the Second Amended and Restated Receivables Purchase
Agreement dated as of June 14, 2000 among SCI Funding, Inc., as Seller, SCI
Technology, Inc., as initial Servicer, SCI Systems, Inc., as Guarantor,
Receivables Capital Corporation, as Exiting Purchaser, Quincy Capital
Corporation and Amsterdam Funding Corporation, as Conduit Purchasers, Bank of
America, National Association, and ABN AMRO Bank N.V., as Bank Purchasers, and
Bank of America, National Association, as Administrative Agent (as amended,
supplemented or otherwise modified from time to time, and including the Original
Agreement for as long as it was in effect, the "Agreement"). Capitalized terms
used in this Appendix B without definition have the meanings assigned to such
terms in Appendix A to the Agreement. Each reference in this Appendix B to any
Section refers to such Section of the Agreement. Each reference in this Appendix
B to any Part refers to the part of this Appendix B so designated.

                                      INDEX

                                     PART I
                                 DISCOUNT FACTOR

Sub-
Part      Term                                                          Page No.
----      ----                                                          --------

   A.       Discount Factor.................................................B-2
   B.       Earned Discount.................................................B-3
   C.       Negative Spread Fee.............................................B-3
   D.       Run Off Discount................................................B-4
   E.       Rate Definitions ...............................................B-4
             Alternate Reference Rate.......................................B-4
             Bank Rate......................................................B-5
             Bank Rate Spread...............................................B-5
             Commercial Paper Rate..........................................B-5
             Eurodollar Rate (Reserve Adjusted).............................B-7
             Pricing Grid Margin............................................B-8
             Purchaser Rate.................................................B-8
   F.       Rate Variance Factor............................................B-9

                                       B-1
<PAGE>

                                       B-2
<PAGE>

                                     PART II

                                 CREDIT RESERVE

Sub-
Part      Term                                                          Page No.
----      ----                                                          --------

   A.       Credit Reserve..................................................B-9

                                    PART III

                                DILUTION RESERVE

   A.       Dilution Reserve................................................B-9

                                     PART IV

                             SERVICER'S FEE RESERVE

  A.        Servicer's Fee Reserve......................................... B-9
  B.        Servicer's Fee..................................................B-10
  C.        Run Off Servicer's Fee. . . . . . . . . . . ....................B-10

                                     PART V

                            ADJUSTED AVERAGE MATURITY

   A.       Adjusted Average Maturity.......................................B-10
   B.       Average Maturity................................................B-11

                                    --------

                                     PART I
                                 DISCOUNT FACTOR

                                       B-3
<PAGE>

      A. Discount Factor. The "Discount Factor" at any time in a Settlement
Period means an amount determined as follows:

      DF = ED + ROD

      where:

      DF = the Discount Factor at such time;

      ED = Earned Discount for all Purchasers accrued and unpaid at such time,
           as determined pursuant to Part I.B;

      ROD = Run Off Discount at such time, as determined pursuant to Part I.D.

      B. Earned Discount. The "Earned Discount" with respect to any Purchaser
for each day in a related Settlement Period means an amount determined as
follows:

      ED = PI x PR x 1/360 + NSF (if any);

provided, however, that if, pursuant to the definition of "Purchaser Rate" in
Part I.E., different Purchaser Rates would apply to different portions of such
Purchaser's Purchaser's Investment, then Earned Discount shall be calculated
separately with respect to each such portion, and the Earned Discount for such
Purchaser shall be the sum of the Earned Discount so calculated for such
portions;

      where:

      ED = Earned Discount accrued on such day;

      PI = the Purchaser's Investment of such Purchaser on such day, as
determined pursuant to Section 2.03; and

      PR = the Purchaser Rate of such Purchaser on such day, as defined in
           Part I.E.

      NSF = the Negative Spread Fee on such day, as defined in Part C.

No provision of the Agreement shall require the payment or permit the collection
of Earned Discount in excess of the maximum permitted by applicable law. Earned
Discount shall not be considered paid by any distribution if at any time such
distribution is rescinded or must otherwise be returned for any reason.

                                       B-4
<PAGE>

      C. Negative Spread Fee. The "Negative Spread Fee" means with respect to
any Purchaser for each day in any Settlement Period during which any Run Off Day
or Termination Date occurs, the amount, if any, by which;

            (i) the additional Earned Discount (calculated without taking into
      account any Negative Spread Fee) which would have accrued on the
      reductions of the related Purchaser's Investment during such Settlement
      Period (as so computed) if such reductions had remained as Purchaser's
      Investment, exceeds

            (ii) the income, if any, received by such Purchaser from such
      Purchaser's investing the proceeds of such reductions of its Purchaser's
      Investment.

      D. Run Off Discount. The "Run Off Discount" at any time means an amount
determined as follows:

            ROD = (PI x (PR + RVF) x AAM) / 360

            where:

            ROD = the Run Off Discount at such time;

            PI =  the Total Purchasers' Investment at such time;

            PR =  the Alternate Reference Rate at such time;

            AAM = the Adjusted Average Maturity of the Receivables Pool, as
                  determined pursuant to Part V; and

            RVF = the Rate Variance Factor deemed to be in effect at such time,
                  as determined pursuant to Part I.F.

      E. Rate Definitions. The "Alternate Reference Rate" means, on any date, a
fluctuating rate of interest per annum equal to the higher of

            (a) the rate of interest most recently announced by BofA at its
      principal office in Charlotte, North Carolina as its reference rate; and

            (b) the Federal Funds Rate (as defined below) most recently
      determined by BofA plus 1.0% per annum.

                                       B-5
<PAGE>

For purposes of this definition, "Federal Funds Rate" means, for any day, the
average of (i) the rates per annum as determined by the applicable Bank
Purchaser at which overnight Federal funds are offered to such Bank Purchaser
for such day by major banks in the interbank market, and (ii) if the applicable
Bank Purchaser is borrowing overnight funds from a Federal Reserve Bank that
day, the rates per annum at which such overnight borrowings are made on that
day. Each determination of the Federal Funds Rate by the applicable Bank
Purchaser shall be conclusive and binding on the Seller except in the case of
manifest error.

The Alternate Reference Rate is not necessarily intended to be the lowest rate
of interest determined by the Administrative Agent or the Bank Purchasers in
connection with extensions of credit.

      "Bank Rate" for any Settlement Period means an interest rate per annum
equal to the sum of (a) the Bank Rate Spread, plus (b) the Eurodollar Rate
(Reserve Adjusted) for such Settlement Period; provided, however, that if (i) it
shall become unlawful for the Administrative Agent or any Bank Purchaser or
Program Support Provider to obtain funds in the offshore dollar interbank market
in order to fund any Purchase or to maintain any interest in the Undivided
Interest, or if such funds shall not be reasonably available to the
Administrative Agent or any Bank Purchaser or Program Support Provider, or (ii)
there shall not be time prior to the commencement of an applicable Settlement
Period to determine a Eurodollar Rate in accordance with its terms, then the
"Bank Rate" for any Settlement Period shall be equal to the Alternate Reference
Rate in effect from time to time during such Settlement Period.

      "Bank Rate Spread" means 0.25% plus the all-in drawn margin over the
Eurodollar Rate (or comparable rate) then applicable in the Bank Credit
Agreement (or if the Bank Credit Agreement has been terminated or is no longer
in effect, in the replacement revolving credit agreement or, if there is no such
replacement, such margin as would have been in effect if the Bank Credit
Agreement were effective at such time).

      "Commercial Paper Rate" means, for any Conduit Purchaser for any
Settlement Period for any portion of its Purchaser's Investment funded by
issuing Commercial Paper Notes, a rate per annum equal to the sum of (i) the
rate or, if more than one rate, the weighted average of the rates per annum at
which such Conduit Purchaser's Commercial Paper Notes having a term selected by
its Related Administrator and issued (or allocated by its Related Administrator
from time to time during such period, but which may also be allocated to the
funding of other assets of such Conduit Purchaser) to fund such portion of the
Purchaser's Investment was or may be sold by any placement agent or commercial
paper dealer selected by its Related Administrator, as agreed between each such
agent or dealer and its Related Administrator, plus (ii) 0.05% per annum,
representing the commissions and other charges charged by such placement agent
or commercial paper dealer with respect to such Commercial Paper Notes expressed
as a percentage of the face amount of such Commercial Paper Notes and converted
to an interest-bearing equivalent rate per annum, plus (iii) certain
documentation and transaction costs directly associated with the issuance of
such Commercial Paper Notes, as are customarily charged by such Conduit
Purchaser to

                                       B-6
<PAGE>

its customers in similar transactions (including incremental carrying costs
incurred with respect to Commercial Paper Notes maturing on dates other than
those on which corresponding funds are received by the Conduit Purchaser), plus
(iv) costs of other related borrowings by such Conduit Purchaser, including
borrowings to fund small or odd dollar amounts that are not easily accommodated
in the commercial paper market, expressed as a percentage of the face amount of
such Commercial Paper Notes and converted to an interest-bearing equivalent rate
per annum; provided, however that if any component of such rate is a discount
rate, in calculating the "Commercial Paper Rate", such Conduit Purchaser shall
for such component use the rate resulting from converting such discount rate to
an interest-bearing equivalent rate per annum.

      "Eurodollar Rate (Reserve Adjusted)" means, with respect to any Settlement
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) determined pursuant to the following formula:

            Eurodollar Rate   =  Eurodollar Rate
           (Reserve Adjusted)      1-Eurodollar
                                Reserve Percentage

where:

      "Eurodollar Rate" means, with respect to any Settlement Period, the rate
      per annum at which Dollar deposits in immediately available funds are
      offered to the Eurodollar Office of the related Bank Purchaser two
      Eurodollar Business Days prior to the beginning of such period by prime
      banks in the offshore dollar interbank market at or about the relevant
      local time of such Eurodollar Office, for delivery on the first day of
      such Settlement Period, for the number of days comprised therein and in an
      amount equal or comparable to the amount of the related Purchaser's
      Investment.

      "Relevant local time" as to any Eurodollar Office shall mean 11:00 a.m.,
      London time when such Eurodollar Office is located in Europe or the Middle
      East, or 11:00 a.m., New York time, when such Eurodollar Office is located
      in North America or the Caribbean.

      "Eurodollar Business Day" means a day of the year on which dealings are
      carried on in the offshore dollar interbank market of the related Bank
      Purchaser's Eurodollar Office and banks are open for business in the
      location of the related Bank Purchaser's Eurodollar Office and are not
      required or authorized to close in New York City.

      "Eurodollar Office" shall mean the office of the related Bank Purchaser
      located in the Cayman Islands, Grand Cayman B.W.I. or such other office or
      offices through which such Bank Purchaser determines the Eurodollar Rate.
      A Eurodollar Office of the related Bank Purchaser may be, at the option of
      such Bank Purchaser, either a domestic or foreign office.

                                       B-7
<PAGE>

      "Eurodollar Reserve Percentage" means, with respect to any Yield Period,
      the reserve percentage (expressed as a decimal and rounded upward to the
      nearest 1/100th of 1%) equal to the maximum aggregate reserve requirements
      (including all basic, emergency, supplemental, marginal and other reserves
      and taking into account any transitional adjustments or other scheduled
      changes in reserve requirements) specified under regulations issued from
      time to time by the Federal Reserve Board and then applicable to assets or
      liabilities consisting of and including "Eurocurrency Liabilities", as
      currently defined in Regulation D of the Federal Reserve Board, of the
      related Bank Purchaser having a term approximately equal or comparable to
      such Settlement Period.

      "Purchaser Rate" for any Purchaser for any Settlement Period means:

            (a) in all cases other than one referred to in clause (b) or (c) of
      this definition, the sum of (i) the Commercial Paper Rate of such
      Purchaser for such Settlement Period plus (ii) the Program Fee Rate;

            (b) in the case of the portion of such Purchaser's Purchaser's
      Investment (i) owned by any Program Support Provider or any other assignee
      (other than a Conduit Purchaser), or funded pursuant to a Program Support
      Agreement, (ii) funded by a Funding, or (iii) funded by a Bank Purchaser
      and at a time when clause (c) of this definition is not applicable, the
      Bank Rate for such Undivided Interest (or such portion) for such
      Settlement Period; and

            (c) when a Termination Event has occurred and is continuing, a rate
      per annum equal for each day during such Settlement Period to the
      Alternate Reference Rate in effect on such day plus 2% per annum.

      F. Rate Variance Factor. The "Rate Variance Factor" means such percentage
per annum not exceeding 2% as the Administrative Agent (upon direction of the
Required Purchasers) may designate from time to time.

                                     PART II

                                 CREDIT RESERVE

      A. Credit Reserve. The "Credit Reserve" on any day means an amount
determined in accordance with the definition of Credit Reserve in Appendix A.

                                    PART III

                                       B-8
<PAGE>

                                DILUTION RESERVE

      A. Dilution Reserve. The "Dilution Reserve" on any day means an amount
determined in accordance with the definition of Dilution Reserve in Appendix A.

                                     PART IV

                             SERVICER'S FEE RESERVE

      A. Servicer's Fee Reserve. The "Servicer's Fee Reserve" at any time means
an amount determined as follows:

            SFR = SF + ROSF

      where:

            SFR   = the Servicer's Fee Reserve at any time;

            SF    = the unpaid Servicer's Fee accrued to such time and unpaid as
                    determined pursuant to Part IV.B; and

            ROSF  = the Run Off Servicer's Fee at such time, as determined
                    pursuant to Part IV.C.

      B. Servicer's Fee. The "Servicer's Fee" relating to any Undivided Interest
accrued for any day means

            (i) an amount equal to (x) 0.50% per annum, times (y) the amount of
      the Total Purchasers' Investment at the close of business on such day,
      times (z) 1/360; or

            (ii) on and after Servicer's reasonable request made at any time
      when Seller or any of its Affiliates shall no longer be Servicer, an
      alternative amount specified by Servicer not exceeding (x) 110% of
      Servicer's cost and expenses of performing its obligations under the
      Agreement during the Settlement Period when such day occurs, divided by
      (y) the number of days in such Settlement Period.

      C. Run Off Servicer's Fee. The "Run Off Servicer's Fee" at any time means
an amount equal to

            (x) Total Purchasers' Investment at such time, times

                                       B-9
<PAGE>

            (y) (A) the percentage per annum set forth in clause (i)(x) of the
      definition of "Servicer's Fee", or (B) if Servicer's Fee is calculated
      pursuant to clause (ii) of such definition, the percentage per annum
      determined for each day by dividing the amount of the Servicer's Fee
      accrued for such day by the Total Purchasers' Investment at the close of
      business on such day, multiplying the quotient by 360 and expressing the
      product as a percentage, times

            (z) a fraction, the numerator of which is the number of days equal
      to the then Adjusted Average Maturity, and the denominator of which is 360
      days.

                                     PART V

                            ADJUSTED AVERAGE MATURITY

      "Adjusted Average Maturity" means, on any day, the product of (i) three
(3) times (ii) the Average Maturity for such day.

      "Average Maturity" means, on any day, that time period (expressed in days)
equal to the weighted average maturity of the Pool Receivables as shall be
calculated by Servicer, as set forth in the most recent Periodic Report in
accordance with the provisions thereof. If the Administrative Agent shall
disagree with any such calculation, the Administrative Agent may recalculate the
Average Maturity for such day, which calculation shall, absent manifest error,
be binding upon Servicer, Seller and the Purchasers.

                                      B-10
<PAGE>

                                   SCHEDULE I
                            PURCHASERS - COMMITMENTS

<TABLE>
<CAPTION>
                     Related                                  Conduit       Support
   Name of Bank      Conduit                                  Related     Termination
    Purchaser       Purchaser     Commitment    Percentage   Percentage      Date
--------------------------------------------------------------------------------------------
<S>                <C>           <C>            <C>          <C>           <C>
Bank of America,   Quincy
National           Capital
Association        Corporation   $120,000,000   57.1429%     100.0000%     November 10, 2001
--------------------------------------------------------------------------------------------
                   Amsterdam
ABN AMRO           Funding
Bank, N.V.         Corporation   $90,000,000    42.8571%     100.0000%     November 10, 2001
--------------------------------------------------------------------------------------------
</TABLE>

                                      B-11
<PAGE>

                                SCHEDULE 2.04(c)
                          SPECIAL CONCENTRATION LIMITS

Obligor Name            Commercial Paper/            Special
                           Short-Term          Concentration
                          Debt Rating*                 Limit

Hewlett-Packard      A-1+/P-1                            40%
   Company           A-1/P-1 or better                   30%
                     A-2/P-2                             10%
                     below A-2/P-2                        5%

Nortel               A-1/P-1                             30%
                     A-2/P-2 or better                   10%
                     below A-2/P-2                        5%

* The ratings from each of Standard and Poor's and Moody's must be maintained;
if the two ratings are different, the Special Concentration Limit shall be
determined by reference to the lower rating.

                                      B-12
<PAGE>

                   COMPARISON OF FOOTNOTES

-FOOTNOTE 1-
/Conformed as amended by the Second Amendment dated as of August 10, 2001.

                   COMPARISON OF HEADERS

-HEADER 1-
EXHIBIT A

                   COMPARISON OF FOOTERS

-FOOTER 1-
8834883 94169752

-FOOTER 2-
Footer Discontinued

-FOOTER 3-
SECOND AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

-FOOTER 4-
B-1

                                      B-13
<PAGE>

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original document : C:\WINDOWS\TEMP\CHDB03_8834883_6
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                                      B-14
<PAGE>

                               SECOND AMENDMENT TO
           SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

      This Second Amendment to Second Amended and Restated Receivables Purchase
Agreement, dated as of August 10, 2001 (this "Amendment"), is among SCI FUNDING,
INC. ("Seller"), SCI TECHNOLOGY, INC. ("SCI"), SCI SYSTEMS, INC. ("Guarantor"),
the Purchasers party hereto (the "Purchasers"), and BANK OF AMERICA, N.A., a
national banking association, as administrative agent for the Purchasers
("Administrative Agent").

                                   Background

      1. Seller, SCI, Guarantor, Purchasers and the Administrative Agent are
parties to that certain Second Amended and Restated Receivables Purchase
Agreement, dated as of June 14, 2000 (as amended prior to the date hereof, the
"Receivables Purchase Agreement").

      2. The parties hereto desire to amend the Receivables Purchase Agreement
in certain respects as set forth herein.

      NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows.

      SECTION 1. Definitions. Capitalized terms used in this Amendment and not
otherwise defined herein shall have the meanings assigned thereto in the
Receivables Purchase Agreement.

      SECTION 2. Amendments to the Receivables Purchase Agreement.

            2.1. Effective as of the date hereof, the Receivables Purchase
Agreement is hereby amended to incorporate the changes shown on the marked pages
of the Receivables Purchase Agreement (conformed as amended) attached hereto as
Exhibit A.

      SECTION 3. Assignment on Date Hereof. On the date hereof, Four Winds
Funding Corporation shall assign and transfer to (i) Quincy Capital Corporation
all of its right, title and interest in and to that portion of its Purchaser's
Investment and the related Undivided Interest under the Receivables Purchase
Agreement equal to $29,340,000 upon receipt from Quincy Capital Corporation of
$29,340,000 in immediately available funds by 11:00 a.m. New York City time, and
(ii) Amsterdam Funding Corporation all of its right, title and interest in and
to that portion of its Purchaser's Investment and the related Undivided Interest
under the Receivables Purchase Agreement equal to $22,005,000 upon receipt from
Amsterdam Funding Corporation of $22,005,000 in immediately available funds by
<PAGE>

11:00 a.m. New York City time. Each such assignment is made without recourse
except that Four Winds Funding Corporation hereby represents and warrants that
it has not created any Adverse Claim upon or with respect to its Purchaser's
Investment or its interest in the Undivided Interest. From and after the date
hereof and following payment of the amounts specified above and in the following
sentence, Four Winds Funding Corporation and Commerzbank Aktiengesellschaft
shall no longer be parties to the Receivables Purchase Agreement. The Earned
Discount and other amounts due and payable to Four Winds Funding Corporation and
Commerzbank Aktiengesellschaft through the date hereof shall be payable by the
Seller on the date hereof in immediately available funds by 11:00 a.m. New York
City time.

      SECTION 4. Upfront Fee. On the date hereof, the Seller shall pay to each
Bank Purchaser an upfront fee equal to 0.03% multiplied by such Bank Purchaser's
Commitment.

      SECTION 5. Representations and Warranties. Each of Seller, SCI and
Guarantor hereby represent and warrant that (i) the representations and
warranties set forth in Article VI of the Receivables Purchase Agreement are
true and correct on and as of the date of this Amendment as though made on and
as of such date and shall be deemed to have been made on such date (except to
the extent they relate solely to an earlier date, in which event they were true
and correct as of such earlier date) and (ii) after giving effect to this
Amendment, no event has occurred and is continuing, or would result from this
Amendment, that constitutes a Termination Event or Unmatured Termination Event.

      SECTION 6. Miscellaneous. The Receivables Purchase Agreement, as amended
hereby, remains in full force and effect. Any reference to the Receivables
Purchase Agreement from and after the date hereof shall be deemed to refer to
the Receivables Purchase Agreement as amended hereby, unless otherwise expressly
stated. This Amendment shall be governed by, and construed in accordance with,
the internal laws of the State of Illinois. This Amendment may be executed in
any number of counterparts, and by the different parties hereto on separate
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. Seller, SCI and Guarantor, jointly and severally, agree to pay on
demand all costs and expenses, including all reasonable attorneys' fees and
disbursements, actually incurred by the Administrative Agent in connection with
the negotiation, preparation, execution or delivery of this Amendment.

                                        2
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the date first above
written.

                                       QUINCY CAPITAL CORPORATION,
                                       as a Conduit Purchaser

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                       FOUR WINDS FUNDING CORPORATION,
                                       as a Conduit Purchaser

                                       By: Commerzbank Aktiengesellschaft,
                                           New York Branch, Attorney-in-Fact

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                       AMSTERDAM FUNDING CORPORATION,
                                       as a Conduit Purchaser

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                       BANK OF AMERICA, NATIONAL ASSOCIATION,
                                       as the Administrative Agent

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                                       SECOND AMENDMENT TO
                                                   SECOND AMENDED AND RESTATED
                                       S-1        RECEIVABLES PURCHASE AGREEMENT
<PAGE>

                                       BANK OF AMERICA, NATIONAL ASSOCIATION,
                                       as a Bank Purchaser

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                       COMMERZBANK AKTIENGESELLSCHAFT,
                                       NEW YORK BRANCH,
                                       as a Bank Purchaser

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                       ABN AMRO BANK N.V.,
                                       as a Bank Purchaser

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                       By
                                          --------------------------------------
                                        Title
                                              ----------------------------------

                                                       SECOND AMENDMENT TO
                                                   SECOND AMENDED AND RESTATED
                                       S-2        RECEIVABLES PURCHASE AGREEMENT
<PAGE>

                                       SCI FUNDING, INC.

                                       By:
                                           -------------------------------------
                                       Name Printed:
                                                     ---------------------------
                                       Its
                                           -------------------------------------

                                       SCI TECHNOLOGY, INC.

                                       By:
                                           -------------------------------------
                                       Name Printed:
                                                     ---------------------------
                                       Its
                                           -------------------------------------

                                       SCI SYSTEMS, INC.

                                       By:
                                           -------------------------------------
                                       Name Printed:
                                                     ---------------------------
                                       Its
                                           -------------------------------------

                                                       SECOND AMENDMENT TO
                                                   SECOND AMENDED AND RESTATED
                                       S-3        RECEIVABLES PURCHASE AGREEMENT

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