Exhibit 10.1

 

 

FIRST AMENDMENT TO

AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY AGREEMENT

 

This First Amendment to Amended and Restated Revolving Credit and Security
Agreement (the “Amendment”) is made as of this 29th day of March, 2019 by and
among SMTC Corporation, a Delaware corporation (“SMTC”), SMTC Manufacturing
Corporation of California, a California corporation (“SMTC California”), SMTC
Mex Holdings, Inc., a Delaware corporation (“SMTC Mex”), HTM Holdings, Inc., a
Delaware corporation (“HTM”), MC TEST SERVICE, INC., a Florida corporation (“MC
Test”), MC ASSEMBLY INTERNATIONAL LLC, a Delaware limited liability company (“MC
Assembly International”), MC ASSEMBLY LLC, a Delaware limited liability company
(“MC Assembly” and together with SMTC, SMTC California, SMTC Mex, HTM, MC Test,
and MC Assembly International, and each other Person joined hereto as a borrower
from time to time, each a “Borrower” and collectively the “Borrowers”), the
financial institutions which are now or which hereafter become a party to the
Credit Agreement (each a “Lender” and collectively, the “Lenders”) and PNC BANK,
NATIONAL ASSOCIATION (“PNC”), as agent for the Lenders (in such capacity, the
“Agent”).

 

BACKGROUND

 

A.                On November 8, 2018, Borrowers, Lenders and Agent entered
into, inter alia, a certain Amended and Restated Revolving Credit and Security
Agreement (as same has been or may be amended, modified, supplemented, renewed,
extended, replaced or substituted from time to time, the “Credit Agreement”) to
reflect certain financing arrangements between the parties thereto.

 

B.                 The Borrowers have requested, and the Agent and the Lenders
have agreed, subject to the terms and conditions of this Amendment, to modify
certain definitions, terms and provisions of the Credit Agreement.

 

NOW, THEREFORE, with the foregoing background hereinafter deemed incorporated by
reference herein and made part hereof, the parties hereto, intending to be
legally bound, promise and agree as follows:

 

1.                  Definitions.

 

(a)               Interpretation. All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Credit Agreement. In the
case of a direct conflict between the provisions of the Credit Agreement and the
provisions of this Amendment, the provisions of this Amendment shall govern and
control.

 

 

 

 

2.                  Amendment. Section 6.5(c) of the Credit Agreement is hereby
amended by deleting such Section in its entirety and replacing it with the
following:

 

(a)               Senior Leverage Ratio. Cause to be maintained a Senior
Leverage Ratio of not greater than the ratio set forth below as of the end of
each fiscal quarter set forth below during the term of this Agreement, in each
case, on a trailing twelve month basis:

 

Fiscal Quarter End Senior Leverage Ratio December 31, 2018 4.00x March 31, 2019
3.75x June 30, 2019 3.25x September 30, 2019 2.90x December 31, 2019 2.55x March
31, 2020 2.40x June 30, 2020 2.40x September 30, 2020 2.20x December 31, 2020
2.00x March 31, 2021 1.90x June 30, 2021 1.90x September 30, 2021 1.75x December
31, 2021 1.75x March 31, 2022 1.75x June 30, 2022 1.75x September 30, 2022 1.50x
December 31, 2022 1.50x March 31, 2023 1.50x June 30, 2023 1.50x September 30,
2023 1.50x December 31, 2023 1.50x

 

3.                  Representations and Warranties. Each Borrower hereby:

 

(a)             reaffirms all representations and warranties made to Agent and
Lenders under the Credit Agreement and all of the Other Documents and confirms
that all are true and correct in all respects as of the date hereof as if made
on and as of the date hereof, except for representations and warranties which
related exclusively to an earlier date, which shall be true and correct in all
respects as of such earlier date;

 

(b)            reaffirms all of the covenants contained in the Credit Agreement,
covenants to abide thereby until all Advances, Obligations and other liabilities
of Borrowers to Agent and Lenders under the Credit Agreement of whatever nature
and whenever incurred, are satisfied and/or released by Agent and Lenders;

 

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(c)             represents and warrants that no Default or Event of Default has
occurred and is continuing under the Credit Agreement or any of the Other
Documents;

 

(d)            represents and warrants that it has the authority and legal right
to execute, deliver and carry out the terms of this Amendment, that such actions
were duly authorized by all necessary corporate action and that the officers
executing this Amendment and the Equipment Note (defined below) on its behalf
were similarly authorized and empowered, and that this Amendment does not
contravene any provisions of its articles of incorporation, bylaws or other
formation documents, or of any contract or agreement to which it is a party or
by which any of its properties are bound; and

 

(e)             represents and warrants that this Amendment and all assignments,
instruments, documents, and agreements executed and delivered in connection
herewith are valid, binding and enforceable in accordance with their respective
terms except as such enforceability may be limited by equitable principles or
any applicable bankruptcy, insolvency, moratorium or similar laws affecting
creditors’ rights generally.

 

4.                  Conditions Precedent/Effectiveness Conditions. This
Amendment shall be effective upon:

 

(a)             execution and delivery of this Amendment by all parties hereto;

 

(b)            receipt by Agent of an executed copy of the Amendment No. 1 and
Waiver to Financing Agreement, in form and substance reasonably satisfactory to
Agent;

 

(c)             on the date of this Amendment and after giving effect hereto, no
Default or Event of Default shall exist or shall have occurred and be
continuing.

 

5.                  Further Assurances. Borrowers hereby agree to take all such
actions and to execute and/or deliver to Agent and Lenders all such documents,
assignments, financing statements and other documents, as Agent and Lenders may
reasonably require from time to time, to effectuate and implement the purposes
of this Amendment.

 

6.                  Waivers. Pursuant to the request of the Loan Parties and in
reliance upon the representations and warranties of the Loan Parties described
herein, the Agent and the Lenders hereby waive all Defaults and Events of
Default identified on Schedule I hereto (the "Specified Events of Default").

 

7.                  Payment of Expenses. Borrowers shall pay or reimburse Agent
and Lenders for their reasonable attorneys’ fees and expenses in connection with
the preparation, negotiation and execution of this Amendment and the documents
provided for herein or related hereto.

 

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8.                  Reaffirmation of Credit Agreement. Except as modified by the
terms hereof, all of the terms and conditions of the Credit Agreement, as
amended, and all of the Other Documents are hereby reaffirmed and shall continue
in full force and effect as therein written.

 

9.                  Acknowledgment of Guarantors. By execution of this
Amendment, each Guarantor hereby covenants and agrees that each of its
respective Amended and Restated Guaranty and Suretyship Agreements, dated
November 8, 2018, shall remain in full force and effect and shall continue to
cover the existing and future Obligations of Borrowers to Agent and Lenders.

 

10.              Miscellaneous.

 

(a)             Third Party Rights. No rights are intended to be created
hereunder for the benefit of any third party donee, creditor, or incidental
beneficiary.

 

(b)            Headings. The headings of any paragraph of this Amendment are for
convenience only and shall not be used to interpret any provision hereof.

 

(c)             Modifications. No modification hereof or any agreement referred
to herein shall be binding or enforceable unless in writing and signed on behalf
of the party against whom enforcement is sought.

 

(d)            Governing Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York applied to contracts to be
performed wholly within the State of New York.

 

(e)             Counterparts. This Amendment may be executed in any number of
counterparts and by facsimile or electronic transmission, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Any signature to this Amendment delivered
by a party by facsimile or other electronic means of transmission shall be
deemed to be an original signature hereto.

 

[Remainder of Page Intentionally Left Blank]

 

 

 

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and
delivered by their duly authorized officers as of the date first above written.

 

LOAN PARTIES: SMTC CORPORATION   By: /s/ Steve Waszak     Name: Steve Waszak    
Title Chief Financial Officer  

 

  SMTC MANUFACTURING CORPORATION OF CALIFORNIA   By: /s/ Steve Waszak     Name:
Steve Waszak     Title Chief Financial Officer  

 

  SMTC MEX HOLDINGS INC.   By: /s/ Steve Waszak     Name: Steve Waszak     Title
Chief Financial Officer  

 

  HTM HOLDINGS, INC.   By: /s/ Steve Waszak     Name: Steve Waszak     Title
Chief Financial Officer  

 

  MC TEST SERVICE, INC.   By: /s/ Steve Waszak     Name: Steve Waszak     Title
Chief Financial Officer  

 

  MC ASSEMBLY INTERNATIONAL LLC   By: /s/ Steve Waszak     Name: Steve Waszak  
  Title Chief Financial Officer  

 

  MC ASSEMBLY LLC   By: /s/ Steve Waszak     Name: Steve Waszak     Title Chief
Financial Officer  

 

 

 

[SIGNATURE PAGE TO FIRST AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AND
SECURITY AGREEMENT]

 

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AGENT AND LENDERS: PNC BANK, NATIONAL ASSOCIATION,   By: /s/ Jason T. Sylvester
    Name: Jason T. Sylvester     Title Vice President               Revolving
Commitment Amount: $45,000,000     Revolving Commitment Percentage: 100%        

 

 

 

 

 

 

 

 

[SIGNATURE PAGE TO FIRST AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AND
SECURITY AGREEMENT]

 

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