EXHIBIT 10.1.15
EIGHTH AMENDMENT AND FIFTH WAIVER
EIGHTH AMENDMENT AND FIFTH WAIVER, dated as of December 31, 2002
(this "Amendment"), to and under the Amended and Restated Credit and Guarantee
Agreement, dated as of July 27, 2000 (as heretofore amended, supplemented or
otherwise modified, the "Credit Agreement"), among SMTC Corporation
("Holdings"), HTM Holdings, Inc. (the "U.S. Borrower"), SMTC Manufacturing
Corporation of Canada (the "Canadian Borrower"; together with the U.S. Borrower,
the "Borrowers"), the several banks and other financial institutions or entities
from time to time parties thereto (the "Lenders"), ▇▇▇▇▇▇ Brothers Inc., as
advisor, lead arranger and book manager, The Bank of Nova Scotia, as syndication
agent, ▇▇▇▇▇▇ Commercial Paper Inc., as general administrative agent (in such
capacity, the "General Administrative Agent"), The Bank of Nova Scotia, as
Canadian administrative agent, ▇▇▇▇▇▇ Commercial Paper Inc., as collateral
monitoring agent, and General Electric Capital Corporation, as documentation
agent.
W I T N E S S E T H:
WHEREAS, Holdings and the Borrowers requested that the Lenders
amend, and agree to waive, certain of the provisions of the Credit Agreement;
and
WHEREAS, the Lenders have consented to the requested amendments
and waivers in the manner set forth below;
NOW, THEREFORE, in consideration of the premises and the material
covenants herein contained, the parties hereto hereby agree as follows:
1. Defined Terms. Terms used herein and defined in the Credit
Agreement are used herein as therein defined.
2. Waivers of Events of Default. The Lenders hereby waive the
Defaults and Events of Default arising by reason of (a) the failure of Holdings
and the Borrowers to comply with the provisions of Section 7.5(g)(ii) of the
Credit Agreement for any period prior to the Amendment Effective Date (as
defined below), (b) any representation and warranty made by any Borrower, in
connection with any extension of credit under the Credit Agreement between June
30, 2002 and the Amendment Effective Date, to the effect that no Default or
Event of Default had occurred by reason of the failure of Holdings and the
Borrowers to comply with the provisions of Section 7.5(g)(ii) of the Credit
Agreement or (c) any failure of Holdings or any Borrower to give notice under
the Credit Agreement of the failure of Holdings and the Borrowers to comply with
the provisions of Section 7.5(g)(ii) of the Credit Agreement.
3. Amendment to Section 1.1 of the Credit Agreement (Defined
Terms). Section 1.1 of the Credit Agreement is hereby amended as follows:
(a) the definition of "Canadian Revolving Credit Commitment" is
hereby amended by adding at the end thereof the following: "The
aggregate amount of the
2
Canadian Revolving Credit Commitments on the Eighth Amendment
Effective Date is U.S.$7,593,750.";
(b) the definition of "Consolidated EBITDA" is hereby amended by
(i) deleting "and" immediately prior to clause (n) thereof and
substituting in lieu thereof a comma and (ii) adding immediately after
clause (n) thereof the following:
"and (o) incremental costs incurred by Holdings and its
Subsidiaries during such period pursuant to the Eighth Amendment
(including the fees and expenses of FTI Consulting, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ and any other advisors to the Lenders) and all
fees and expenses of a strategic advisor engaged by Holdings and
approved by the Lenders (such approval not to be unreasonably
withheld),";
(c) the definition of "Eligible Accounts" is hereby amended by
adding at the end thereof the following:
"It being understood that Eligible Accounts (i) shall not include
(x) any unissued credits, (y) Accounts which are owed by account
debtors located outside the United States and Canada unless,
subject to clause (z) below, a security interest (or the
substantial equivalent thereof under appropriate local law as
acceptable to the Required Lenders), is perfected under local law
to the satisfaction of the General Administrative Agent and (z)
Accounts payable to a Subsidiary of Holdings formed under the
laws of Mexico or owed by account debtors located in Mexico and
(ii) shall include Accounts payable by International Business
Machines Corporation ("IBM") net of accounts payable by any Loan
Party to IBM that are overdue more than 30 days and may be set
off in accordance with the supply contract between IBM and
Holdings as in effect on the Eighth Amendment Effective Date.";
(d) the definition of "Eligible Inventory" is hereby amended by
adding at the end thereof the following
"It being understood that Eligible Inventory shall not include
(x) parts Inventory, (y) Inventory located at hubs outside the
United States, Ireland and Canada and in transit other than up to
the $500,000 of Inventory in transit permitted under clause (d)
above and (z) Inventory located in Mexico or owned by a
Subsidiary of Holdings formed under the laws of Mexico.";
(e) the definition of "Swing Line Lender" is hereby amended by
deleting the proviso therein in its entirety and substituting in lieu
thereof the following:
"provided, however, that at any time after the Eighth Amendment
Effective Date, the term "Swing Line Lender" shall mean ▇▇▇▇▇▇
Commercial Paper Inc., in its capacity as the lender of Swing
Line Loans";
3
(f) the definition of "U.S. Revolving Credit Commitment" is
hereby amended by adding at the end thereof the following: "The
aggregate amount of the U.S Revolving Credit Commitments on the Eighth
Amendment Effective Date is U.S.$82,406,250.";
(g) deleting in their entirety the definitions of "Advance Rate"
and "Borrowing Base"; and
(h) inserting the following new defined terms in their correct
alphabetical order:
""Advance Rate": (i) with respect to Eligible Accounts, 85%,
and (ii) with respect to Eligible Inventory, valued on a
first-in, first-out basis (at the lower of cost or market), 65%.
"Availability Adjustment": at any time, the sum of (a) the
aggregate amount of scheduled amortization payments on the Term
Loans made by the U.S. Borrower at such time on and after
December 31, 2002, and (b) 65% of Inventory of the Borrowers and
their Subsidiaries and located in Mexico at such time which
satisfies all of the requirements of the definition of Eligible
Inventory in this Section 1.1; provided, however, that for the
period from the Eighth Amendment Effective Date through and
ending 90 days thereafter, such Inventory shall not be required
to satisfy the requirements set forth in subsections (b) and (h)
of such definition (and thereafter shall be required to satisfy
such requirements in the manner provided in Section 10.13)."
"Borrowing Base": with respect to the Borrowers, on any date
of determination, the sum (without duplication) of (i) the
product of (A) the aggregate outstanding Eligible Accounts of the
Borrowers and their Subsidiaries on such date and (B) the
applicable Advance Rate, plus (ii) the product of (x) the
aggregate Eligible Inventory of the Borrowers and their
Subsidiaries on such date, and (y) the applicable Advance Rate;
provided, that not more than 50% of the Borrowing Base of the
Borrowers may be attributable to Eligible Inventory. The
Borrowing Base shall be as set forth in the most recent Borrowing
Base Certificate delivered by the Borrowers absent manifest
error; such Borrowing Base so determined shall remain in effect
until the next determination thereof pursuant to this sentence.
"Borrowing Formula": at any time, the amount equal to (a)
the Borrowing Base at such time, plus (b) the Availability
Adjustment at such time, plus (c) on any day of any month set
forth on Schedule 1.1A , the amount set forth opposite such month
on such Schedule, plus (d) cash on deposit in the bank accounts
of the Borrower and its Subsidiaries at such time, less (e) the
amount equal to the checks written and automated clearinghouse
debits requested that have not been paid or debited at such time
against the bank accounts of the Borrowers (it being understood
that on the last day of each calendar month, the Borrowers shall
also be in compliance with the covenant contained in Section
11.1(g)), plus (f) the amount by which the expenses associated
with the Eighth Amendment (as
4
described by the Borrower in reasonable detail to the Lenders)
exceeds the amount for such expenses included in the Borrower's
Business Plan.
"Cash Restructuring Costs": consists of the following to the
extent paid in cash: (a) severance costs associated with
operations of Holdings and its Subsidiaries which have been
discontinued ("Discontinued Operations"); (b) costs associated
with the physical relocation of equipment in connection with
Discontinued Operations, and (c) staff site visits in connection
with Discontinued Operations.
"Eighth Amendment": the Eighth Amendment and Fifth Waiver,
dated as of December 31, 2002, to and under this Agreement.
"Eighth Amendment Effective Date": the Amendment Effective
Date under and as defined in the Eighth Amendment.
"Quarterly Budget": as defined in Section 10.2(j).
"Registration Rights Agreement": the Amended and Restated
Registration Rights Agreement, substantially in the form of
Exhibit C to the Eighth Amendment, to be entered into pursuant to
the Eighth Amendment.
"Total Revolving Extensions of Credit": as defined in
Section 11.1(f)(i).
"Warrant Agreement": the Warrant Agreement, substantially in
the form of Exhibit B to the Eighth Amendment, to be entered into
pursuant to the Eighth Amendment.".
4. Amendment to Section 2.4 of the Credit Agreement (U.S.
Revolving Commitments). Section 2.4(a) of the Credit Agreement is hereby amended
by deleting clause (B) in the first sentence thereof and substituting in lieu
thereof the following:
"(B) the Aggregate U.S. Revolving Extensions of Credit, when added to
the Aggregate Canadian Revolving Extensions of Credit, would not
exceed the Borrowing Formula.".
5. Amendment to Section 2.6 of the Credit Agreement (Swing Line
Commitment). Section 2.6(a) of the Credit Agreement is hereby amended by:
(a) deleting clause (iii)(B) in the proviso in the first
sentence thereof and substituting in lieu thereof the following:
"(B) the Aggregate U.S. Revolving Extensions of Credit, when
added to the Aggregate Canadian Revolving Extensions of Credit,
would not exceed the Borrowing Formula"; and
(b) deleting the second sentence thereof and substituting in
lieu thereof the following:
5
"Notwithstanding anything to the contrary contained in the
preceding sentence, at any time after the Eighth Amendment
Effective Date, ▇▇▇▇▇▇ Commercial Paper Inc. shall be the only
Swing Line Lender.".
6. Amendment to Section 2.7(a) of the Credit Agreement
(Procedure for Swing Line Borrowing; Refunding of Swing Line Loans). Section
2.7(a) of the Credit Agreement is hereby amended by (a) deleting the phrase
"1:30 P.M., New York City time (or, during the Fourth Amendment Waiver Period,
3:00 P.M., New York City time)" in the first sentence thereof and substituting
in lieu thereof "3:00 P.M., New York City time" and (b) deleting the phrase
"3:00 P.M., New York City time (or, during the Fourth Amendment Waiver Period,
4:30 P.M., New York City time)" in the third sentence thereof and substituting
in lieu thereof "4:30 P.M., New York City time".
7. Amendment to Section 5.1 of the Credit Agreement (Canadian
Revolving Commitments). Section 5.1(a) of the Credit Agreement is hereby amended
by deleting clause (B) in the first sentence thereof and substituting in lieu
thereof the following:
"(B) the Aggregate Canadian Revolving Extensions of Credit, when added
to the Aggregate U.S. Revolving Extensions of Credit, would not exceed
the Borrowing Formula.".
8. Amendment to Section 5.6 of the Credit Agreement (Acceptance
Commitments). Section 5.6(a) of the Credit Agreement is hereby amended by
deleting clause (ii) therein and substituting in lieu thereof the following:
"(ii) the Aggregate Canadian Revolving Extensions of Credit, when
added to the Aggregate U.S. Revolving Extensions of Credit, would not
exceed the Borrowing Formula.".
9. Amendment to Section 5.14 of the Credit Agreement (Canadian
Swing Line Commitment). Section 5.14(a) of the Credit Agreement is hereby
amended by deleting clause (ii)(B) in the proviso in the first sentence thereof
and substituting in lieu thereof the following:
"(B) the Aggregate Canadian Revolving Extensions of Credit, when added
to the Aggregate U.S. Revolving Extensions of Credit, would not exceed
the Borrowing Formula.".
10. Amendment to Section 6.1 of the Credit Agreement (L/C
Commitments). Section 6.1 of the Credit Agreement is hereby amended as follows:
(a) Section 6.1(a) of the Credit Agreement is hereby amended by:
(i) deleting clause (iii) in the first proviso in the
first sentence thereof and substituting in lieu thereof the following:
6
"(iii) the Aggregate U.S. Revolving Extensions of Credit,
when added to the Aggregate Canadian Revolving Extensions of
Credit, would exceed the Borrowing Formula"; and
(ii) deleting the following proviso at the end of the
second sentence thereof:
", provided, further, that, notwithstanding anything to the
contrary contained in this Section 6.1(a), with respect to any
U.S. Letter of Credit issued or extended at any time on or after
the Fourth Amendment Effective Date, such U.S. Letter of Credit
shall expire no later than December 31, 2002"; and
(b) Section 6.1(b) of the Credit Agreement is hereby amended by:
(i) deleting clause (iii) in the first proviso in the
first sentence thereof and substituting in lieu thereof the following:
"(iii) the Aggregate Canadian Revolving Extensions of Credit,
when added to the Aggregate U.S. Revolving Extensions of Credit,
would exceed the Borrowing Formula"; and
(ii) deleting the following proviso at the end of the
second sentence thereof:
", provided, further, that, notwithstanding anything to the
contrary contained in this Section 6.1(b), with respect to any
Canadian Letter of Credit issued or extended at any time on or
after the Fourth Amendment Effective Date, such Canadian Letter
of Credit shall expire no later than December 31, 2002".
11. Amendment to Section 7.5 of the Credit Agreement (Mandatory
Prepayments; Application of Prepayments). Section 7.5(g) of the Credit Agreement
is hereby amended by:
(a) Amending paragraph (g)(i) by:
(i) deleting the clause "the lesser of (A) the Borrowing
Base of the U.S. Borrower and (B)" therein; and
(ii) deleting the phrase "Borrowing Base of the U.S.
Borrower" in the second proviso therein and substituting in lieu
thereof "the U.S. Revolving Credit Commitments then in effect";
(b) Amending paragraph (g)(ii) by:
(i) deleting the clause "the lesser of (A) the Borrowing
Base of the Canadian Borrower and (B)" therein; and
7
(ii) deleting the phrase "Borrowing Base of the Canadian
Borrower" in the second proviso therein and substituting in lieu
thereof "the Canadian Revolving Credit Commitments then in effect";
and
(c) adding at the end of such Section the following new
paragraph (iii):
(iii) If, at any time during the U.S. Revolving Credit
Commitment Period or the Canadian Revolving Credit Commitment
Period for a period of three consecutive Business Days, the
amount of the Aggregate U.S. Revolving Extensions of Credit, when
added to the Aggregate Canadian Extensions of Credit, exceeds the
Borrowing Formula, the Borrowers shall immediately, without
notice or demand, prepay the Canadian Revolving Credit Loans, the
U.S. Revolving Credit Loans and the Swing Line Loans in an
aggregate principal amount equal to such excess, together with
interest on the principal amount being repaid accrued to the date
of such payment or prepayment; provided that if the aggregate
principal amount of the Canadian Revolving Credit Loans, the U.S.
Revolving Credit Loans and the Swing Line Loans then outstanding
is less than the amount of such excess (because U.S. L/C
Obligations and/or Canadian L/C Obligations constitute a portion
thereof), the Borrowers shall, to the extent of the balance of
such excess, replace outstanding U.S. Letters of Credit and/or
Canadian Letter of Credit and/or cash collateralize such U.S.
Letters of Credit and/or Canadian Letter of Credit in the manner
described in Section 13; provided further that if the sum of the
Aggregate U.S. Revolving Extensions of Credit and the Aggregate
Canadian Revolving Extensions of Credit, plus any cash collateral
delivered to the General Administrative Agent pursuant to the
immediately preceding proviso exceeds the Borrowing Formula for
three consecutive Business Days the General Administrative Agent,
at the request of either Borrower, shall promptly return such
cash collateral in an aggregate amount equal to such excess. All
payments made under this Section 7.5(g)(iii) shall be made
ratably between the U.S. Revolving Extensions of Credit and the
Canadian Revolving Extensions of Credit.".
12. Amendment to Section 7.14 of the Credit Agreement (Use of
Proceeds). Section 7.14 of the Credit Agreement is hereby amended to add at the
end thereof immediately prior to the period therein the following:
", and on and after the Eighth Amendment Effective Date, the proceeds
of the Loans shall also be applied to checks written or automated
clearinghouse debits requested in the ordinary course of business of
Holdings and its Subsidiaries or for Cash Restructuring Costs
permitted under this Agreement. ".
13. Amendment to Section 10.2 of the Credit Agreement
(Certificate; Other Information). Section 10.2 of the Credit Agreement is hereby
amended by (a) deleting the reference to "clause (j)" in the introductory clause
thereof and substituting in lieu thereof a reference to "clause (l)", (b)
relettering clause (j) as clause (l), (c) deleting "and" at the end of clause
(i) thereof and (d) adding immediately after clause (i) thereof the following:
8
"(j) as soon as available, but in any event no later than fifteen
Business Days prior to the end of each fiscal quarter of Holdings,
projected weekly levels of cash receipts and cash disbursements for
the immediately succeeding fiscal quarter (the "Quarterly Budget")
which reconciles with the business plan of Holdings delivered to the
General Administrative Agent on November 15, 2002, in a manner and in
detail set forth on Schedule 10.2(j);
(k) as soon as available, but in any event not later than
Wednesday of each calendar week, (i) flash reports of actual revenues
and expenditures for the calendar week most recently ended and (ii) a
comparison setting forth actual cash receipts and cash disbursements
made, checks written and automated clearinghouse debits requested
against the Quarterly Budget and a discussion of any variance with
respect thereto, all of the foregoing in detail set forth on Schedule
10.2(k); and".
14. Amendment to Section 10.3 of the Credit Agreement
(Collateral Reports). Section 10.3(a) of the Credit Agreement is hereby amended
by adding at the end thereof immediately before the semicolon therein the
following: "and a calculation of the Borrowing Formula".
15. Amendment to Section 10.13 of the Credit Agreement
(Additional Delivery of Collateral). Section 10.13 of the Credit Agreement is
hereby amended by deleting such Section in its entirety and substituting in lieu
thereof the following:
"10.13 Additional Delivery of Collateral. On and after the Eighth
Amendment Effective Date, use their reasonable best efforts to provide
the General Administrative Agent with a perfected first priority Lien
(or substantial equivalent thereof under applicable local law) on all
Inventory and real property owned by the Borrowers and, unless the
Borrowers shall have determined in good faith that it would result in
adverse tax consequences to the Borrowers or any Subsidiary thereof,
their Subsidiaries and located in Ireland. Within 90 days after the
Eighth Amendment Effective Date, provide the General Administrative
Agent with a perfected first priority Lien (or the substantial
equivalent thereof under applicable local law as shall be acceptable
to the Required Lenders) on substantially all property owned by the
Borrowers or their Subsidiaries and located in Mexico (it being
understood that the General Administrative Agent shall cooperate with
the Borrowers to minimize the fees related to obtaining such Liens).".
16. Amendment to Section 11.1 of the Credit Agreement (Financial
Condition Covenants). Section 11.1 of the Credit Agreement is hereby amended by:
(a) deleting Section 11.1(a) in its entirety and substituting in
lieu thereof the following:
"(a) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio as at the last day of any period of four
consecutive fiscal quarters of Holdings ending with any fiscal
quarter set forth on Schedule 11.1(a) to exceed the ratio set
forth on Schedule 11.1(a) opposite such fiscal quarter.";
9
(b) deleting Section 11.1(b) in its entirety and substituting in
lieu thereof the following:
"(b) [Reserved].";
(c) deleting Section 11.1(c) in its entirety and substituting in
lieu thereof the following:
"(c) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of four
consecutive fiscal quarters of Holdings ending with any fiscal
quarter set forth on Schedule 11.1(c) to be less than the ratio
set forth on Schedule 11.1(c) opposite such fiscal quarter.";
(d) deleting Section 11.1(d) in its entirety and substituting in
lieu thereof the following:
"(d) [Reserved]."; and
(e) deleting Sections 11.1(e), (f) and (g) and substituting in
lieu thereof the following:
"(e) Minimum Cumulative Consolidated EBITDA. Permit the
cumulative Consolidated EBITDA of Holdings and its Subsidiaries
for the portion of any fiscal quarter ending on any date set
forth on Schedule 11.1(e) to be less than the amount set forth
opposite such date on Schedule 11.1(e); provided that, for
purposes of determining compliance with the foregoing covenant,
if the cumulative Consolidated EBITDA for any full fiscal quarter
exceeds the amount set forth on Schedule 11.1(e) for such fiscal
quarter, 50% of such excess may be carried over and added to the
cumulative Consolidated EBITDA for the immediately following full
fiscal quarter, to the extent that the cumulative Consolidated
EBITDA for such following fiscal quarter would be less than the
required amount set forth above for such fiscal quarter.
(f) Maximum Outstanding Extensions of Credit. (i) Permit
the sum of the Aggregate U.S. Revolving Extensions of Credit and
the Aggregate Canadian Revolving Extensions of Credit (such sum,
the "Total Revolving Extensions of Credit") on any date set forth
on Schedule 11.1(f)(i) to be greater than the amount set forth
opposite such date on Schedule 11.1(f)(i).
(ii) On any day (other than the last day) of any month set
forth on Schedule 11.1(f)(ii), permit the Total Revolving
Extensions of Credit to exceed the lesser of (A) the Borrowing
Formula in effect on such day and (B) the amount set forth
opposite such month on Schedule 11.1(f)(ii).
(g) Minimum Availability Test. As at the last day of
each month on and after the Eighth Amendment Effective Date,
permit the amount equal to (i) the Borrowing Base on such date,
plus (ii) the Availability Adjustment, minus (iii) the
10
Total Revolving Extension of Credit on such date, minus (iv) if
on such date the aggregate amount of accounts payable of Holdings
and its Subsidiaries that are more than 60 days past due (the
"Past Due Accounts") exceeds 10% of the aggregate accounts
payable of Holdings and its Subsidiaries on such date, the amount
of such excess over 10%, plus (v) cash on deposit in the bank
accounts of the Borrowers and its Subsidiaries, minus (vi) checks
written and automated clearinghouse debits requested which have
not yet cleared, to be less (or, in the case of a negative
number, a larger negative number) than the amount set forth on
Schedule 11.1(g) opposite such month on Schedule 11.1(g).".
17. Amendment to Section 11.7 of the Credit Agreement (Capital
Expenditures). Section 11.7 of the Credit Agreement is hereby amended by
deleting the second paragraph therein and substituting in lieu thereof the
following:
"From and after the Eighth Amendment Effective Date, the
foregoing covenant for the 2003 and 2004 fiscal years of Holdings
shall not be applicable. Notwithstanding anything to the contrary
contained in this Section 11.7, during the period from and after the
Eighth Amendment Effective Date, Holdings shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, make or
commit to make any Capital Expenditure, except Capital Expenditures of
Holdings and its Subsidiaries in the ordinary course of business not
exceeding $1,250,000 during any fiscal quarter of Holdings.".
18. Amendment to Section 11 of the Credit Agreement (Negative
Covenants). Section 11 of the Credit Agreement is hereby amended by adding at
the end thereof a new Section 11.18 as follows:
"11.18 Limitation on Cash Restructuring Costs. Permit Cash
Restructuring Costs incurred by Holdings and its Subsidiaries on and
after the Eighth Amendment Effective Date to exceed $5,600,000, in the
aggregate.
11.19. Limitation on Location of Business. Permit Holdings or any
of its Subsidiaries, without the consent of the Required Lenders, to
move the manufacturing operations, or any material portion of the
business, of Holdings or such Subsidiary to any jurisdiction outside
of the jurisdictions in which Holdings and its Subsidiaries operate on
the Eighth Amendment Effective Date.".
19. Amendment to Section 13 of the Credit Agreement (Events of
Default). Section 13 of the Credit Agreement is hereby amended by deleting
Section 13(d) thereof in its entirety and substituting in lieu thereof the
following:
"(d) (i) Any Loan Party shall default in the observance or
performance of any agreement contained Section 10.1, 10.2(c), 10.2(f),
10.2(g), 10.2(j), 10.2(k), 10.3(a) and 10.3(e) in this Agreement, and
such default shall continue unremedied for a period of five Business
Days after the date upon which such Loan party knows or should
reasonably be expected to know the existence of such default or (ii)
any Loan Party shall default in the observance or performance of any
other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a), (b), (c) or (d)(i) of this
11
Section), and such default shall continue unremedied for a period of
30 days after the date upon which such Loan party knows or should
reasonably be expected to know the existence of such default; or".
20. Additional Schedules to the Credit Agreement. The Credit
Agreement is hereby amended by deleting Schedules 11.1(e) and (f) in their
entireties and substituting in lieu thereof and adding Schedules 1.1A, 10.2(j),
10.2(k), 11.1(a), 11.1(c), 11.1(e), 11.1(f)(i), 11.1(f)(ii) and 11.1(g) in the
forms attached hereto as Annexes A, B, C, D, E, F, G, H and I, respectively.
21. Effectiveness. The Amendment shall become effective on the
date of satisfaction of the following conditions precedent (the "Amendment
Effective Date"):
(a) The General Administrative Agent shall have received
counterparts of this Amendment, duly executed and delivered by
Holdings and each of the Borrowers.
(b) The General Administrative Agent shall have received
executed Lender Consent Letters, substantially in the form of Exhibit
A hereto ("Lender Consent Letters"), from Lenders constituting the
Required Lenders.
(c) The General Administrative Agent shall have received an
executed Acknowledgment and Consent, in the form set forth at the end
of this Amendment, from each Subsidiary Guarantor.
(d) The General Administrative Agent shall have received an
executed Acknowledgment and Consent, in the form and substance
reasonably satisfactory to the General Administrative Agent, from each
Canadian Subsidiary Guarantor.
(e) Each Loan Party shall have identified and, except as
otherwise agreed by the General Administrative Agent, provided the
General Administrative Agent (or other agent or trustee satisfactory
to the General Administrative Agent), for the benefit of the Lenders,
with a perfected first priority Lien in all material assets owned by
any Loan Party not subject of such a security interest, including with
respect to all real property of the Borrowers and their Subsidiaries
located in the United States of America pursuant to Section 10.11(b)
of the Credit Agreement.
(f) All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the
transactions contemplated by this Amendment shall be satisfactory in
form and substance to the General Administrative Agent.
(g) Holdings and the General Administrative Agent shall have
executed and delivered the Warrant Agreement and the Registration
Rights Agreement and the Warrants required to be issued pursuant to
the Warrant Agreement on the Amendment Effective Date shall have been
issued.
12
(h) The Lenders and the General Administrative Agent shall have
received a budget in form and substance satisfactory to them setting
forth Holdings' projected weekly levels of revenue and expenses from
October 31, 2002 through June 30, 2004.
(i) Holdings shall have provided a 13-week cash flow forecast
for the period beginning with the first full calendar week following
the Amendment Effective Date, in form, detail and substance reasonably
satisfactory to the General Administrative Agent and which shall, in
any event, include the total amount of checks outstanding, indicate
the available amount permitted under the U.S. Revolving Credit
Facility and the Canadian Revolving Credit Facility, and indicate
whether there is a forecasted cash surplus or deficiency.
(j) The Lenders and the General Administrative Agent shall have
received all fees required to be paid, and all expenses required to be
reimbursed for which invoices have been presented, on or before the
Amendment Effective Date.
(k) All governmental and third party approvals necessary in
connection with the Amendment shall have been obtained and be in full
force and effect.
(l) The General Administrative Agent shall have received such
legal opinions from counsel to Holdings and its Subsidiaries and such
documents and other instruments as are customary for transactions of
this type or as it may reasonably request.
(m) The General Administrative Agent shall have received from
Holdings, for the account of each Lender, an amendment fee equal to
0.50% of the sum of such Lender's Revolving Credit Commitments (as
reduced pursuant to this Amendment) and Term Loans then outstanding.
22. Representations and Warranties. After giving effect to the
amendment and waivers contained herein, on the Amendment Effective Date, each of
Holdings and the Borrowers hereby confirms, reaffirms and restates the
representations and warranties set forth in Section 8 of the Credit Agreement,
except to the extent such representations and warranties specifically relate to
an earlier date, in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date; provided that each
reference in such Section 8 to "this Agreement" shall be deemed to be a
reference both to this Amendment and to the Credit Agreement as amended by this
Amendment.
13
23. Release and Acknowledgements.
(a) In order to induce the Lenders to enter into this Amendment,
each Loan Party hereby remises, releases and forever discharges, and
by these presents does for its Subsidiaries (direct or indirect), and
for itself and its predecessors, successors, affiliates and assigns
(each, a "Releasor"), remise, release and forever discharge, each
Agent, each Lender, and each predecessor, affiliate, subsidiary
(direct or indirect), successor, assign, participant, officer,
director, employee or agent of any Agent or any Lender (collectively,
the "Released Parties"), of and from all manner of actions at law or
equity, all causes of action for damages, costs, debts, sums of money,
accounts, bills, rights of indemnity, breach of contract, provision of
labor or materials, loss of use, loss of services, expenses,
compensation, consequential or punitive damages, equitable
subordination, avoidance of preferential or fraudulent transfers, or
any other thing whatever, arising by virtue of actions taken, actions
omitted to be taken or the occurrence of any other event on or prior
to the Amendment Effective Date, relating in any way to (i) this
Amendment, the Credit Agreement, any other Loan Document or the
obligations of the Loan Parties under the Credit Agreement and the
other Loan Documents (the "Obligations"), (ii) any claims (including,
without limitation, for contribution or indemnification) which have or
could have arisen out of any of the transactions contemplated by this
Amendment or the Loan Documents or any other proceedings that have
been brought or may be brought by any party hereto or to any Loan
Document or any third party relating to the Loan Documents or the
transactions contemplated thereby, (iii) any acts, transactions or
events that are the subject matter of this Amendment or the Loan
Documents or (iv) the prosecution of any claims or any settlement
negotiations which such Releasor ever had, now or which it, its
Subsidiaries (direct or indirect), or its successors or assigns
hereafter can, shall or may have against the Released Parties by
reason of (with respect to each of clauses (i)-(iv) above) any matter,
cause or thing whatsoever on or prior to the Amendment Effective Date
relating to this Amendment or the Loan Documents; provided, however,
that nothing herein shall be construed or deemed to release any
covenants or agreements contained herein or in any Loan Document so
long as such Loan Document shall remain in full force and effect.
(b) Each Loan Party hereby acknowledges and agrees that the
Obligations are secured by valid and enforceable first priority liens
and security interests granted by the Loan Parties to an Agent, for
the ratable benefit of the Lenders, upon all of the Collateral,
subject only to Liens permitted under the Credit Agreement. The
Obligations and the liens and security interests of the Agents, for
the ratable benefit of the Lenders, in the Collateral are not subject
to avoidance, defense, objection, action, counterclaim, setoff or
subordination, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally. The Obligations constitute legal, valid and binding
obligations of each Loan Party, enforceable in accordance with the
terms of the Loan Documents and pursuant to applicable law, except as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally, and subject to the
limitations imposed by general equitable principles (regardless
whether such enforceability is considered in a
14
proceeding at law or in equity). Furthermore, no Loan Party will use
any of its cash or other assets to object to or contest in any manner,
or raise any objections, counterclaims or defenses to, the validity,
perfection, priority or enforceability of the claims or liens of the
Agents and the Lenders relating to this Amendment, the Credit
Agreement or any other Loan Document, or to investigate or assert any
claims or causes of action arising on or prior to the Amendment
Effective Date against the Agents or the Lenders relating to this
Amendment, the Credit Agreement or any other Loan Document.
(c) Except as expressly set forth in this Amendment, each of the
Loan Parties acknowledges and agrees that the execution and delivery
by the Agents of, or the consent by the Lenders to, this Amendment
shall not be deemed (i) to create a course of dealing or otherwise
obligate the Agents or the Lenders to forbear or execute similar
agreements under the same or similar circumstances in the future, (ii)
to modify, relinquish or impair any right of the Agents or the Lenders
to receive any indemnity or similar payment from any Person or entity
as a result of any matter arising from or relating to this Amendment,
(iii) to waive any right of the Lenders to receive interest at an
increased rate as a result of any Events of Default that may occur
under the Credit Agreement as amended by this Amendment, (iv) to
obligate the Lenders in any way to forbear from individually or
collectively enforcing remedies under the Credit Agreement as amended
by this Amendment in any manner or (v) a commitment from any of the
Lenders to forbear or "stand still". Except as expressly set forth in
this Amendment, no past or future forbearance on the part of any of
the Lenders should be viewed as a limitation upon or waiver of the
absolute right and privilege of the Lenders in exercising rights and
remedies that currently exist or may exist after the Amendment
Effective Date.
24. Continuing Effect; No Other Amendments. Except as expressly
amended or waived hereby, all of the terms and provisions of the Credit
Agreement and the other Loan Documents are and shall remain in full force and
effect. The amendments and waivers contained herein shall not constitute an
amendment or waiver of any other provision of the Credit Agreement or the other
Loan Documents or for any purpose except as expressly set forth herein.
25. No Default. No Default or Event of Default shall have
occurred and be continuing as of the Amendment Effective Date after giving
effect to this Amendment.
26. Counterparts. This Amendment may be executed in any number
of counterparts by the parties hereto, each of which shall be an original, and
all of which when taken together shall constitute one and the same instrument.
Delivery of an executed counterpart by facsimile transmission shall be effective
as delivery of a manually executed counterpart hereof.
27. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
15
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
SMTC CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President
HTM HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President
SMTC MANUFACTURING CORPORATION OF
CANADA
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President
16
▇▇▇▇▇▇ COMMERCIAL PAPER INC., as
General Administrative Agent
By: /s/ G. ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: G. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
ACKNOWLEDGMENT AND CONSENT
Each of the undersigned parties to the Amended and Restated
Guarantee and Collateral Agreement, dated as of July 27, 2000, as amended,
supplemented or otherwise modified from time to time, made by the undersigned in
favor of ▇▇▇▇▇▇ Commercial Paper Inc., as General Administrative Agent, for the
benefit of the Lenders, hereby (a) consents to the transactions contemplated by
the Eighth Amendment to the Amended and Restated Credit and Guarantee Agreement
(the "Eighth Amendment"), (b) acknowledges and agrees that the guarantees and
grants of security interests contained in such Amended and Restated Guarantee
and Collateral Agreement and in the other Security Documents are, and shall
remain, in full force and effect after giving effect to the Eighth Amendment and
all prior modifications to the Amended and Restated Credit and Guarantee
Agreement and (c) agrees to and acknowledges the provisions of Section 23 of the
Eighth Amendment which are incorporated herein by reference.
SMTC CORPORATION
HTM HOLDINGS, INC.
SMTC MANUFACTURING CORPORATION OF
CALIFORNIA
SMTC MANUFACTURING CORPORATION OF
COLORADO
SMTC MANUFACTURING CORPORATION OF
MASSACHUSETTS
SMTC MANUFACTURING CORPORATION OF
NORTH CAROLINA
SMTC MANUFACTURING CORPORATION OF
TEXAS
SMTC MANUFACTURING CORPORATION OF
WISCONSIN
SMTC MEX HOLDINGS, INC.
QUALTRON, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name:
Title: