exv10w12



 






Amendment No. 2, Consent and Waiver to

Suntron Corporation’s

Second Amended and Restated Credit Agreement




          Amendment No. 2, Consent and Waiver (this “Amendment”), dated as of August 19, 2005, to the
Second Amended and Restated Credit Agreement, dated as of July 7, 2004 (as amended to the date
hereof, the “Credit Agreement”), among K*TEC Operating Corp. and EFTC Operating Corp., each a
Delaware corporation, as borrowers (each a “Borrower” and collectively, the “Borrowers”), Suntron
Corporation (the “Company”), the Lenders party thereto (the “Lenders”), the Issuers party thereto
(the “Issuers”), Citicorp USA, Inc. as Administrative Agent and Collateral Agent (in such capacity,
the “Administrative Agent”) and Wachovia Capital Finance Corporation (Western), as successor in
interest to Congress Financial Corporation (Western), as Syndication Agent (the “Syndication
Agent”). Capitalized terms used herein but not defined herein are used as defined in the Credit
Agreement.




W
i t n e s s e t h:




          Whereas, the Company, the Borrowers, the Lenders, the Issuers, the Administrative
Agent and the Syndication Agent are party to the Credit Agreement;




          Whereas, the Lenders have entered into that certain Participation Agreement (the
“Participation Agreement”) with Thayer Equity Investors IV, L.P., the participant (the
“Participant”), attached hereto as Exhibit A;




          Whereas, the Borrowers have asked for an extension of 5 business days (the “Delivery
Extension”) to deliver the Financial Statements required to be delivered pursuant to Section 6.1(b)
of the Credit Agreement with respect to the Fiscal Quarter ended July 3, 2005 (the “Specified
Fiscal Quarter”) and the other documents expressly required to be delivered pursuant to Section
6.1(d), (h) or (i) of the Credit Agreement at the time of delivery of such Financial Statements
(collectively, the “Specified Documents”);




          Whereas, it is a condition precedent to the Participation Agreement that the Company,
the Borrowers, the Lenders, the Issuers, the Administrative Agent and the Syndication Agent enter
into this Amendment; and




          Whereas, the Company, the Borrowers, the Administrative Agent, the Syndication Agent
and the Lenders have agreed, subject to certain limitations and conditions set forth below, to (a)
consent to the Delivery Extension and to the parties entering into the Participation Agreement and
(b) make certain amendments to the Credit Agreement, as more specifically set forth below;




          Now, Therefore, in consideration of the premises and the covenants and obligations
contained herein the parties hereto agree as follows:




     Section 1. Consent, Waiver and Covenants



          (a) As of the Amendment Effective Date, the Agents and Lenders party hereto agree to the
Delivery Extension and waive compliance with Section 6.1(Financial Statements) of the Credit
Agreement with respect to the delivery of the Specified Documents (and





 









 








Amendment No. 2, Consent and Waiver to

Second Amended and Restated Credit Agreement

Suntron Corporation



any Event of Defaults that may arise solely because of the non-compliance with such delivery
requirements within the periods specified in such section) so long as all such Specified Documents
are delivered within 52 days after the end of the Specified Fiscal Quarter. The Company hereby
agrees to deliver all such Specified Documents within such period.




          (b) The Company hereby agrees that, within 30 days after the Amendment Effective Date, it
shall have hired a financial advisor reasonably acceptable to each Agent on terms and conditions
reasonably acceptable to each Agent. Each party hereto acknowledges and agrees (without prejudice
to the Administrative Agent’s ability to establish Availability Reserves, Eligibility Reserves and
other reserves from time to time under and as provided in the Credit Agreement) that, on the date
hereof, the aggregate amount of Eligibility Reserves and Availability Reserves is $5,000,000.




          (c) The parties hereto hereby consent to the execution and delivery of the Participation
Agreement and the consummation of the transactions contemplated therein.




     Section 2. Amendments



          (a) Amendments to Article I (Definitions, Interpretation and Accounting Terms)




               (i) Clause (p) of the definition of “Eligible Receivables” in Section 1.1 (Defined Terms) of
the Credit Agreement is hereby amended by inserting at the end of the parenthetical “or, if such
Account Debtor is Hart Intercivic, for any time of determination prior to December 31, 2005, 20%”.



               (ii) The following is hereby inserted at the end of the definition of “Borrowing Base” to
replace the period therein:



               “; and



          plus (c) the Participation Increase.”




               (iii) The following new definitions are hereby inserted in Section 1.1 (Defined Terms) of the
Credit Agreement in an appropriate position so as to preserve the alphabetical order of definitions
in such Section:



          “Participant” means Thayer Equity Investors IV, L.P.




          “Participation Increase” means the amount of the “Purchase Price” under and as defined in the
Participation Agreement, dated as of August 19, 2005, among each Lender as a seller and the
Participant, as participant, as amended, supplemented or otherwise modified; provided, however,
that, upon receipt by the Company, the Borrowers or any of their Subsidiaries of the Net Cash
Proceeds of any Equity Issuance or Debt Issuance after August 19, 2005 for which a mandatory
prepayment is required under Section 2.9(a) or, without duplication, upon receipt by the
Participant of any other payment with respect to the principal amount of the “Specified Loans”
under and as defined in such Participation Agreement (including as a result of a purchase of the
interest of the Participant by any Lender), the amount of the “Participation Increase” shall be
reduced by the amount of such Net Cash Proceeds or, as the case may be, such payment unless
otherwise agreed by the Agents in their sole discretion.





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Amendment No. 2, Consent and Waiver to

Second Amended and Restated Credit Agreement

Suntron Corporation




     Section 3. Conditions Precedent to the Effectiveness of this Amendment



          This Amendment (including the consents and waivers set forth herein) shall become effective as
of the “Effective Date” (under and as defined in the Participation Agreement) when, and only when,
each of the following conditions precedent shall have been satisfied or waived by the
Administrative Agent (the “Amendment Effective Date”):




          (a) Certain Documents. The Administrative Agent shall have received each of the following,
each dated as of the Amendment Effective Date (unless otherwise agreed by the Administrative
Agent), in form and substance satisfactory to the Administrative Agent and in sufficient copies for
each Lender:





               (i) this Amendment, executed by the Company, each Borrower, the Administrative Agent,
the Syndication Agent and the Lenders;




               (ii) the Participation Agreement, executed by the Participant and the Lenders (and the
“Effective Date” under and as defined therein shall have occurred); and




               (iii) such additional documentation as the Administrative Agent may reasonably
require;



          (b) Corporate and Other Proceedings. 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 all respects to the Administrative Agent;




          (c) No Default or Event of Default. After giving effect to this Amendment, no Default or
Event of Default shall have occurred and be continuing, either on the date hereof or on the
Amendment Effective Date; and




          (d) Fees and Expenses Paid. Each Borrower shall have paid all Obligations due, after giving
effect to this Amendment, on or before the later of the date hereof and the Amendment Effective
Date including, without limitation, the fees set forth in Section 5 (Fees and Expenses) hereof.




     Section 4. Representations and Warranties



          On and as of the date hereof and as of the Amendment Effective Date, after giving effect to
this Amendment, the Company and each Borrower hereby represent and warrant to the Administrative
Agent and each Lender as follows:




          (a) this Amendment has been duly authorized, executed and delivered by the Company and each
Borrower and constitutes a legal, valid and binding obligation of the Company and each Borrower,
enforceable against the Company and each Borrower in accordance with its terms and the Credit
Agreement as amended by this Amendment and constitutes the legal, valid and binding obligation of
the Company and each Borrower, enforceable against the Company and each Borrower in accordance with
its terms;




          (b) all of the representations and warranties of the Company and each Borrower contained in
Article IV (Representations and Warranties) of the Credit Agreement and in any other Loan Document
are true and correct in all material respects on and as of the date




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Amendment No. 2, Consent and Waiver to

Second Amended and Restated Credit Agreement

Suntron Corporation



hereof and the Amendment Effective Date, in each case as if made on and as of such date and
except to the extent that such representations and warranties specifically relate to a specific
date, in which case such representations and warranties shall be true and correct in all material
respects as of such specific date; and




          (c) no Default or Event of Default has occurred and is continuing.




     Section 5. Fees and Expenses



          Each Borrower and each other Loan Party agrees to pay on demand in accordance with the terms
of Section 11.3 (Costs and Expenses) of the Credit Agreement all costs and expenses of the
Administrative Agent (including, without limitation, the reasonable fees and out-of-pocket expenses
of counsel for the Administrative Agent) and all reasonable fee and expenses of counsel to the
Syndication Agent, in each case in connection with the preparation, reproduction, execution and
delivery of this Amendment, the Participation Agreement and all other Loan Documents entered into
in connection herewith.




     Section 6. Release



          In further consideration for the Administrative Agent and the Syndication Agent’s execution of
this Agreement, each Borrower and each other Loan Party hereby release each of the Administrative
Agent, the Syndication Agent, each Lender and each Issuer and their respective Affiliates,
officers, employees, directors, agents and advisors (collectively, the “Releasees”) from any and
all claims, demands, liabilities, responsibilities, disputes, causes of action (whether at law or
equity) and obligations of any nature whatsoever, whether liquidated or unliquidated, known or
unknown, matured or unmatured, fixed or contingent that any of the Loan Parties may have against
any Releasee and that arise from or relate to the Obligations, any Collateral, any Loan Document,
the Participation Agreement or any document, dealing or other matter in connection with any of the
Loan Documents, the Participation Agreement or the Collateral, and any third party liable in whole
or in part for any of the Obligations, in each case to the extent arising (a) on or prior to the
date hereof or the Amendment Effective Date or (b) out of, or relating to, actions, dealings or
other matters occurring on or prior to the date hereof or the Amendment Effective Date (including,
without limitation, any actions or inactions of any Releasee prior to the date hereof or the
Amendment Effective Date).




     Section 7. Reference to the Effect on the Loan Documents



          (a) As of the Amendment Effective Date, each reference in the Credit Agreement to “this
Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and each reference in the
other Loan Documents to the Credit Agreement (including, without limitation, by means of words like
“thereunder”, “thereof” and words of like import), shall mean and be a reference to the Credit
Agreement as modified hereby, and this Amendment and the Credit Agreement shall be read together
and construed as a single instrument. Each of the table of contents and lists of Exhibits and
Schedules of the Credit Agreement shall be amended to reflect the changes made in this Amendment as
of the Amendment Effective Date.




          (b) Except as expressly amended hereby, all of the terms and provisions of the Credit
Agreement and all other Loan Documents are and shall remain in full force and effect and are hereby
ratified and confirmed.




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Amendment No. 2, Consent and Waiver to

Second Amended and Restated Credit Agreement

Suntron Corporation




          (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of the Lenders, the Issuers, the
Administrative Agent or the Syndication Agent under any of the Loan Documents, nor constitute a
waiver or amendment of any other provision of any of the Loan Documents or for any purpose except
as expressly set forth herein.




          (d) This Amendment is a Loan Document and, notwithstanding the provisions of Section 9.1 of
the Credit Agreement, the parties acknowledge and agree that a failure to comply with the covenants
set forth herein shall constitute an immediate “Event of Default”, as and to the extent provided in
Section 9.1(d)(i) (Events of Default) of the Credit Agreement.




     Section 8. Consents by Loan Parties



          Each Loan Party hereby consents to the provisions hereof, including, without limitation, the
amount, reductions and other terms of the “Participation Increase” as set forth above, and agrees
that the terms hereof shall not affect in any way its obligations and liabilities under the Loan
Documents (as amended and otherwise expressly modified hereby), all of which obligations and
liabilities shall remain in full force and effect and each of which is hereby reaffirmed (as
amended and otherwise expressly modified hereby).




     Section 9. Execution in Counterparts



          This Amendment may be executed in any number of counterparts and by different parties in
separate counterparts, 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. Signature pages may be detached
from multiple separate counterparts and attached to a single counterpart so that all signature
pages are attached to the same document. Delivery of an executed counterpart by telecopy or e-mail
shall be effective as delivery of a manually executed counterpart of this Amendment.




     Section 10. Governing Law



          This Amendment shall be governed by and construed in accordance with the law of the State of
New York.




     Section 11. Section Titles



          The section titles contained in this Amendment are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the parties hereto,
except when used to reference a section, in which case they shall govern absent manifest error.




     Section 12. Notices



          All communications and notices hereunder shall be given as provided in the Credit Agreement.




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Amendment No. 2, Consent and Waiver to

Second Amended and Restated Credit Agreement

Suntron Corporation




     Section 13. Severability



          The fact that any term or provision of this Agreement is held invalid, illegal or
unenforceable as to any person in any situation in any jurisdiction shall not affect the validity,
enforceability or legality of the remaining terms or provisions hereof or the validity,
enforceability or legality of such offending term or provision in any other situation or
jurisdiction or as applied to any person




     Section 14. Successors



          The terms of this Amendment shall be binding upon, and shall inure to the benefit of, the
parties hereto and their respective successors and assigns.




     Section 15. Waiver of Jury Trial



          Each of the parties hereto irrevocably waives trial by jury in any action or proceeding
with respect to this Amendment or any other Loan Document.




[Signature Pages Follow]





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     In Witness Whereof, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first written above.



	 	 	 	 	 
	 	Suntron Corporation

 	 
	 	By:  	 	 
	 	 	Name:  	Peter W. Harper 	 
	 	 	Title:  	CFO 	 
	 



	 	 	 	 	 
	 	K*TEC Operating Corp., 

     as Borrower

 	 
	 	By:  	 	 
	 	 	Name:  	Peter W. Harper 	 
	 	 	Title:  	CFO 	 
	 



	 	 	 	 	 
	 	EFTC Operating Corp., 

     as Borrower

 	 
	 	By:  	 	 
	 	 	Name:  	Peter W. Harper 	 
	 	 	Title:  	CFO 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	Citicorp USA, Inc., 

     as Administrative Agent and Lender

 	 
	 	By:  	 	 
	 	 	Name:  	Keith R. Gerding 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	 	Citibank, N.A.,

     as Issuer

 	 
	 	By:  	 	 
	 	 	Name:  	Keith R. Gerding 	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	Wachovia Capital Finance Corporation

(Western), successor in interest to Congress

Financial Corporation (Western),

as Syndication Agent and Lender

 	 
	 	By:  	 	 
	 	 	Name:  	Gary Cassianni 	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



Exhibit A




Participation Agreement