Document:

<PAGE>

                                                                  EXHIBIT 10.1.4

                                                                  EXECUTION COPY

                                 THIRD AMENDMENT

      THIRD AMENDMENT, dated as of May 15,2000 (this "Amendment"), to the Credit
and Guarantee Agreement, dated as of July 28, 1999 (as amended by the First
Amendment, dated as of November 4, 1999, and the Second Amendment, dated as of
December 14, 1999, and as may be further amended, supplemented or otherwise
modified from time to time, 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"), Lehman Brothers Inc., as
advisor, lead arranger and book manager (in such capacity, the "Arranger"), The
Bank of Nova Scotia, as syndication agent (in such capacity, the "Syndication
Agent"), Lehman Commercial Paper Inc., as general administrative agent (in such
capacity, the "General Administrative Agent"), The Bank of Nova Scotia, as
Canadian administrative agent (in such capacity, the "Canadian Administrative
Agent"), The Bank of Nova Scotia, as collateral monitoring agent (in such
capacity, the "Collateral Monitoring Agent"), and General Electric Capital
Corporation, as documentation agent (in such capacity, the "Documentation
Agent").

                               W I T N E S S E T H

      WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to
make, and have made, certain Loans to the Borrowers; and

      WHEREAS, Holdings and the Borrowers have requested that the Lenders amend,
and the Required Lenders, each of the Canadian Revolving Credit Lenders, and
each of the U.S. Revolving Credit Lenders have agreed to amend, certain of the
provisions of the Credit Agreement, upon the terms and subject to the conditions
set forth below;

      NOW, THEREFORE, the parties hereto hereby agree as follows:

      1. Defined Terms. As used herein, terms defined in this Amendment or in
the Credit Agreement are used herein as so defined.

      2. Amendments to Section 1.1 of the Credit Agreement. (a) The definitions
of the terms "Canadian Revolving Credit Commitment", "Consolidated Interest
Expense", "Consolidated Total Debt" and "U.S. Revolving Credit Commitment"
contained in Section 1.1 of the Credit Agreement are hereby deleted in their
entirety and replaced with the following new definitions:

            "'Canadian Revolving Credit Commitment': as to any Canadian Lender
      at any time, its obligation to make Canadian Revolving Credit Loans to,
      and/or create Acceptances and discount Acceptances on behalf of (or, in
      lieu thereof, to make loans pursuant to the Acceptance Notes to ), the
      Canadian Borrower, and participate in Canadian Swing Line Loans, in an
      aggregate amount not to exceed at any one time
<PAGE>

                                                                               2

      outstanding the U.S. Dollar amount (or the Canadian Dollar Equivalent
      thereof, as the case may be) set forth opposite such Canadian Lender's
      name under the heading "Canadian Revolving Credit Commitment" on Schedule
      I to the Lender Addendum delivered by such Lender, or, as the case may be,
      in the Assignment and Acceptance pursuant to which such Lender become a
      party hereto, as such amount may be reduced from time to time as provided
      herein. The original aggregate amount of the Canadian Revolving Credit
      Commitments was U.S.$15,000,000; such amount was reduced pursuant to the
      Second Amendment to U.S.$7,500,000 (such reduction being applied to the
      Canadian Revolving Credit Commitments of all Canadian Lenders pro rata in
      accordance with the amounts thereof); such amount is being increased on
      the Third Amendment Effective Date by U.S.$937,500 (such increase being
      applied to the Canadian Revolving Credit Commitments of all Canadian
      Lenders pro rata in accordance with the amounts thereof); and on December
      31, 2000 (or such earlier date as may be elected by the Borrower), the
      Canadian Revolving Credit Commitment of each Canadian Lender will be
      reduced by an amount equal to the amount by which it was increased on the
      Third Amendment Effective Date."

            "`Consolidated Interest Expense': of any Person for any period,
      total interest expense (including that attributable to Capital Lease
      Obligations) of such Person and its Subsidiaries for such period with
      respect to all outstanding Indebtedness of such Person and its
      Subsidiaries (including, without limitation, all commissions, discounts
      and other fees and charges owed by such Person with respect to letters of
      credit and bankers' acceptance financing and net costs of such Person
      under Hedge Agreements in respect of interest rates to the extent such net
      costs are allocable to such period in accordance with GAAP, but excluding
      any prepayment premiums or other prepayment charges to the extent
      allocable to such period in accordance with GAAP); provided, that
      Consolidated Interest Expense shall not include pay-in-kind interest on
      the 2000 Subordinated Notes or any cash interest paid on the 2000
      Subordinated Notes as permitted by Section 7.5(a).

            "`Consolidated Total Debt': at any date, the aggregate principal
      amount of all Funded Debt of Holdings and its Subsidiaries at such date,
      determined on a consolidated basis in accordance with GAAP; provided, that
      Consolidated Total Debt shall not include the Indebtedness under the 2000
      Subordinated Notes."

            "`U.S. Revolving Credit Commitment': as to any Lender, the
      obligation of such Lender, if any, to make U.S. Revolving Credit Loans and
      participate in Swing Line Loans and U.S. Letters of Credit, in an
      aggregate principal and/or face amount not to exceed the amount set forth
      under the heading "U.S. Revolving Credit Commitment" opposite such
      Lender's name on Schedule 1 to the Lender Addendum delivered by such
      Lender, or, as the case may be, in the Assignment and Acceptance pursuant
      to which such Lender became a party hereto, as the same may be changed
      from time to time pursuant to the terms hereof. The original aggregate
      amount of the U.S. Revolving Credit Commitments was U.S.$45,000,000; such
      amount was increased pursuant to the Second Amendment to U.S.$52,500,000
      (such increase being applied to the U.S. Revolving Credit Commitments of
      all U.S. Revolving Credit Lenders pro rata in accordance with the amounts
      thereof);

<PAGE>

                                                                               3

      such amount is being increased on the Third Amendment Effective Date by
      U.S.$6,562,500 (such increase being applied to the U.S. Revolving Credit
      Commitments of all U.S. Revolving Credit Lenders pro rata in accordance
      with the amounts thereof); and on December 31, 2000 (or such earlier date
      as may be elected by the Borrower), the U.S. Revolving Credit Commitment
      of each U.S. Revolving Credit Lender will be reduced by an amount equal to
      the amount by which it was increased on the Third Amendment Effective
      Date."

      (b) Section 1.1 of the Credit Agreement is hereby further amended by
adding thereto, in correct alphabetical order, the following new terms:

            "Second Amendment": the Second Amendment, dated as of December 14,
      1999, to this Agreement.

            "Third Amendment": the Third Amendment, dated as of May 8,2000, to
      this Agreement.

            "Third Amendment Effective Date": as defined in the Third Amendment.

            "2000 Subordinated Notes": U.S.$5,000,000 (plus the aggregate
      principal amount of unsecured subordinated notes issued as pay-in-kind
      interest) aggregate principal amount of unsecured subordinated notes to be
      issued by Holdings for cash at par on or before the Third Amendment
      Effective Date, such subordinated notes to have terms and conditions
      substantially equivalent to those set forth on Annex I to the Third
      Amendment. In any event, the 2000 Subordinated Notes (a) shall not mature
      prior to the date which is 10 years after the date of issuance thereof,
      (b) shall not require any cash payment of interest or principal prior to
      the maturity date (except as provided in Section 7.5(a) and in Annex 1 to
      the Third Amendment), (c) shall not be guaranteed by any Subsidiary of
      Holdings, (d) shall not be subject to being accelerated prior to the
      repayment in full of the Loans and termination of the Commitments (or, if
      earlier, the acceleration of the Loans pursuant to Section 13) (except as
      provided in Annex I to the Third Amendment), and (e) shall be subject to
      subordination provisions reasonably acceptable to the General
      Administrative Agent.

            "2000 Warrants": warrants to be issued by Holdings on or prior to
      the Third Amendment Effective Date for cash in the amount of
      U.S.$2,500,000, such warrants to have terms and conditions substantially
      equivalent to those set forth on Annex I to the Third Amendment

      3. Amendment to Section 7.5 (Mandatory Prepayments and Commitment
Reductions; Application of Prepayments). Section 7.5 of the Credit Agreement is
hereby amended by deleting clause (a) contained therein and substituting in lieu
thereof the following new clause (a):
<PAGE>

                                                                               4

            "(a) Unless the Required Prepayment Lenders shall otherwise agree,
      if Holdings receives Net Cash Proceeds from Capital Stock Sales, an amount
      equal to 100% of such Net Cash Proceeds shall be applied within three
      Business Days after the date of receipt thereof toward the prepayment of
      the Loans and Acceptances and permanent reduction of the Commitments as
      set forth in Section 7.5(e); provided, that (i) Net Cash Proceeds from
      the sale or exercise of the 2000 Warrants shall not be required to be
      applied toward such prepayment and reduction and (ii) if (A) in connection
      with any initial public offering of common stock of Holdings the Term
      Loans are repaid in full and (B) the amount of the U.S. Revolving Credit
      Commitments and the Canadian Revolving Credit Commitments has been reduced
      by U.S.$7,500,000 in the aggregate (whether such reduction occurred
      pursuant to the last clause of the definitions of U.S. Revolving Credit
      Commitment and Canadian Revolving Credit Commitment in Section 1.1 or was
      made voluntarily by the Borrower prior to the date required by such
      definitions) (and any repayment of Loans required as a result of such
      reduction has been made), any remaining Net Cash Proceeds of such initial
      public offering may be applied to redeem the 2000 Subordinated Notes and
      the 2000 Warrants."

      4. Amendment to Section 11.1 (Financial Condition Covenants). Section 11.1
of the Credit Agreement is hereby amended by:

            (a) Deleting subsection 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 (or, if less, the number of full fiscal quarters subsequent to
      the Closing Date) ending with any fiscal quarter set forth below to exceed
      the ratio set forth below opposite such fiscal quarter:

                                                       Consolidated
          Fiscal Quarter                              Leverage Ratio
          --------------                              --------------

          FQ4 1999                                     4.50 to 1.00
          FQl 2000                                     5.49 to 1.00
          FQ2 2000                                     5.25 to 1.00
          FQ3 2000                                     4.50 to 1.00
          FQ4 2000 through FQ3 2001                    4.25 to 1.00
          FQ4 2001 through FQ1 2002                    4.00 to 1.00
          FQ2 2002 through FQ3 2002                    3.75 to 1.00
          FQ4 2002 through FQ2 2003                    3.50 to 1.00
          FQ3 2003                                     3.25 to 1.00
          FQ4 2003                                     3.00 to 1.00
          FQ1 2004                                     2.75 to 1.00
          FQ2 2004 and thereafter                      2.50 to 1.00
<PAGE>

                                                                               5

            ; provided, that for purposes of determining the ratio described
      above, Consolidated EBITDA for the fiscal quarters ending March 31, 1999,
      June 30, 1999 and September 30, 1999 shall be deemed to equal $5,282,000,
      $5,282,000 and $7,583,000, respectively."

            (b) Deleting subsection 11.1(b) in its entirety and substituting
      in lieu thereof the following:

            "(b) Consolidated First Priority Debt Ratio. Permit the
      Consolidated First Priority Debt Ratio as at the last day of any period of
      four consecutive fiscal quarters of Holdings (or, if less, the number of
      full fiscal quarters subsequent to the Closing Date) ending with any
      fiscal quarter set forth below to exceed the ratio set forth below
      opposite such fiscal quarter:

                                        Consolidated First Priority
          Fiscal Quarter                         Debt Ratio
          --------------                         ----------

          FQ4 1999                                4.15 to 1.00
          FQ1 2000                                5.16 to 1.00
          FQ2 2000                                5.00 to 1.00
          FQ3 2000                                4.10 to l.00
          FQ4 2000 through FQl 2001               3.85 to 1.00
          FQ2 2001 through FQ3 2001               3.75 to 1.00
          FQ4 2001 through FQ1 2002               3.50 to 1.00
          FQ2 2002 through FQ3 2002               3.25 to 1.00
          FQ4 2002 through FQ2 2003               3.00 to 1.00
          FQ3 2003                                2.75 to 1.00
          FQ4 2003                                2.50 to 1.00
          FQ1 2004                                2.25 to 1.00
          FQ2 2004 and thereafter                 2.00 to 1.00

            ; provided, that for purposes of determining the ratio described
      above, Consolidated EBITDA for the fiscal quarters ending March 31, 1999,
      June 30, 1999 and September 30, 1999 shall be deemed to equal $5,282,000,
      $5,282,000 and $7,583,000, respectively."

      5. Amendment to Section 11.2 (Limitation on Indebtedness). Section 11.2
of the Credit Agreement is hereby amended by (x) deleting the word "and" from
the end of clause (0) of such Section and (y) inserting immediately after the
word "outstanding" at the end of clause (p), the following:

      "; and

      (q) Indebtedness represented by the 2000 Subordinated Notes."
<PAGE>

                                                                              6

      6. Amendment to Section 11.9 (Limitation on Optional Prepayments and
Modifications of Debt Instruments). Section 11.9 of the Credit Agreement is
hereby amended by adding the following sentence at the end thereof:

      "Notwithstanding the foregoing, Holdings may redeem the 2000 Subordinated
      Notes as contemplated by Section 7.5(a)."

      7. Amendment to Section 11.16 (Limitation on Activities of Holdings).
Section 11.16 of the Credit Agreement is hereby amended by adding the following
sentence at the end thereof:

      "Notwithstanding the foregoing, Holdings may engage in the transactions
      contemplated by the terms of the 2000 Subordinated Notes and the 2000
      Warrants."

      8. Effectiveness. The Amendment shall become effective on the date (the
"Third Amendment Effective Date") of satisfaction of the following conditions
precedent:

            (a) The General Administrative Agent shall have received (i)
      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 (i) the Required
      Lenders, (ii) each of the Canadian Revolving Credit Lenders, and (iii)
      each of the U.S. Revolving Credit 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 Loan Party other than Holdings and the Borrowers.

            (d) The General Administrative Agent shall have received a copy of
      the resolutions, in form and substance satisfactory to the General
      Administrative Agent, of the boards of directors of Holdings and each of
      the Borrowers authorizing the execution, delivery and performance of this
      Amendment, in each case, certified by a Responsible Officer thereof as of
      the date hereof, which certificate shall be in form and substance
      satisfactory to the General Administrative Agent and shall state that the
      resolutions thereby certified have not been amended, modified, revoked or
      rescinded.

            (e) The General Administrative Agent shall have received, dated the
      Third Amendment Effective Date and addressed to the General Administrative
      Agent and the Lenders, an opinion of Ropes & Gray in form and substance
      satisfactory to the General Administrative Agent.

            (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.
<PAGE>

                                                                               7

            (g) The General Administrative Agent shall have received for the
      account of each Lender executing and delivering this Amendment a fee of
      (i)  1/10 of 1% of the aggregate principal amount of Term Loans, Canadian
      Revolving Credit Commitments and U.S. Revolving Credit Commitments held by
      such Lender immediately prior to the Third Amendment Effective Date and
      (ii) 2/10 of 1% of the amount by which the Canadian Revolving Credit
      Commitment and/or the U.S. Revolving Credit Commitment of such Lender is
      increased on the Third Amendment Effective Date pursuant to this Third
      Amendment.

            (h) Holdings shall have received prior to or simultaneously with the
      effectiveness of this Amendment U.S.$7,500,000 in cash as proceeds of the
      2000 Subordinated Notes and the 2000 Warrants.

            (i) The General Administrative Agent shall have received evidence in
      form and substance satisfactory to it that all filings, recordings,
      registrations and other actions necessary or, in the opinion of the
      General Administrative Agent, desirable to maintain the perfection of the
      Liens created by the Security Documents after giving effect to this
      Amendment shall have been completed.

      9. Representations and Warranties. After giving effect to the amendments
contained herein, on the Third Amendment Effective Date, Holdings and each of
the Borrowers hereby confirms, reaffirms and restates the representations and
warranties set forth in Section 8 of the Credit Agreement; 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.

      10. 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 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.

      11. No Default. No Default or Event of Default shall have occurred and be
continuing as of the Third Amendment Effective Date after giving effect to this
Amendment.

      12. Counterparts. This Amendment may be executed in any number of
counterparts by the parties hereto, each of which counterparts when so executed
shall be an original, but all the counterparts shall together constitute one and
the same instrument.

      13. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
<PAGE>

                                                                               8

     IN WITNESS WHEREOF, the parties 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/ Richard Smith
                                           ----------------------------------
                                           Name:  Richard Smith
                                           Title: Vice President Finance and
                                                  Administration

                                        HTM HOLDINGS, INC.

                                        By: /s/ Richard Smith
                                           ----------------------------------
                                           Name:  Richard Smith
                                           Title: Vice President Finance and
                                                  Administration

                                        SMTC MANUFACTURING CORPORATION OF
                                        CANADA

                                        By: /s/ Richard Smith
                                           ----------------------------------
                                           Name:  Richard Smith
                                           Title: Vice President Finance and
                                                  Administration

                                        LEHMAN COMMERCIAL PAPER INC., as
                                         General Administrative Agent and as a
                                         Lender

                                        By: /s/ G. Andrew Keith
                                           ----------------------------------
                                           Name:  G. Andrew Keith
                                           Title: Authorized Signatory

<PAGE>

                                                                               9

                                        THE BANK OF NOVA SCOTIA, as Canadian
                                        Administrative Agent and Collateral
                                        Monitoring Agent

                                        By: /s/ J. Paul Phillips
                                            ------------------------------------
                                            Name:  J. Paul Phillips
                                                   -----------------------------
                                            Title: Director
                                                   -----------------------------

                                        THE BANK OF NOVA SCOTIA, as Syndication
                                        Agent and as a Lender

                                        By: /s/ Jon A. Burckin
                                            ------------------------------------
                                            Name:  Jon A. Burckin
                                                   -----------------------------
                                            Title: Director, Corporate
                                                   -----------------------------

                                        GENERAL ELECTRIC CAPITAL CORPORATION, as
                                        Documentation Agent and as a Lender

                                        By: /s/ John Goodwin
                                            ------------------------------------
                                            Name:  John Goodwin
                                                   -----------------------------
                                            Title: Duly Authorized Signatory
                                                   -----------------------------
<PAGE>

                                                                              10

                           ACKNOWLEDGMENT AND CONSENT

      Each of the undersigned parties to the Guarantee and Collateral Agreement,
dated as of July 28, 1999, as amended, supplemented or otherwise modified from
time to time, made by the undersigned in favor of Lehman Commercial Paper Inc.,
as General Administrative Agent, for the benefit of the Lenders, hereby (a)
consents to the transactions contemplated by the foregoing Amendment to the
Credit and Guarantee Agreement and (b) acknowledges and agrees that the
guarantees and grants of security interests contained in such Guarantee and
Collateral Agreement and in the Security Documents are, and shall remain, in
full force and effect after giving effect to this Amendment and all prior
modifications to the Credit and Guarantee Agreement.

                                        SMTC CORPORATION

                                        By: /s/ Richard Smith
                                            ------------------------------------
                                            Name:  Richard Smith
                                                   -----------------------------
                                            Title: Vice President Finance and
                                                   -----------------------------
                                                   Administration
                                                   -----------------------------

                                        SMTC MANUFACTURING CORPORATION OF TEXAS

                                        By: /s/ Richard Smith
                                            ------------------------------------
                                            Name:  Richard Smith
                                                   -----------------------------
                                            Title: Vice President Finance and
                                                   -----------------------------
                                                   Administration
                                                   -----------------------------

                                        SMTC MANUFACTURING CORPORATION OF
                                        CALIFORNIA

                                        By: /s/ Richard Smith
                                            ------------------------------------
                                            Name:  Richard Smith
                                                   -----------------------------
                                            Title: Vice President Finance and
                                                   -----------------------------
                                                   Administration
                                                   -----------------------------
<PAGE>

                                                                              11

                                        SMTC MANUFACTURING CORPORATION OF NORTH
                                        CAROLINA

                                        By: /s/ Richard Smith
                                            ------------------------------------
                                            Name:  Richard Smith
                                                   -----------------------------
                                            Title: Vice President Finance and
                                                   -----------------------------
                                                   Administration
                                                   -----------------------------

                                       SMTC MEX HOLDINGS, INC.

                                        By: /s/ Richard Smith
                                            ------------------------------------
                                            Name:  Richard Smith
                                                   -----------------------------
                                            Title: Vice President Finance and
                                                   -----------------------------
                                                   Administration
                                                   -----------------------------

                                       SMTC MANUFACTURING CORPORATION
                                       OF COLORADO

                                        By: /s/ Richard Smith
                                            ------------------------------------
                                            Name:  Richard Smith
                                                   -----------------------------
                                            Title: Vice President Finance and
                                                   -----------------------------
                                                   Administration
                                                   -----------------------------
<PAGE>

                                                                 [Comerica logo]
--------------------------------------------------------------------------------
Comerica Bank-Canada                              Suite 2210
                                                  Royal Bank Plaza, South Tower
                                                  200 Bay Street, P.0. Box 61
                                                  Toronto, Ontario, Canada
                                                  M5J 2J2

                                                  Tel. (416) 367-3113 ext. 242
                                                  Fax. (416) 367-2460

                             LENDER CONSENT LETTER

                               HTM HOLDINGS, INC.
                    SMTC MANUFACTURING CORPORATION OF CANADA
                         CREDIT AND GUARANTEE AGREEMENT
                            DATED AS OF JULY 28, 1999

To: Lehman Commercial Paper Inc.,
      as General Administrative Agent
    3 World Financial Center
    New York, New York 10285

Ladies and Gentlemen:

      Reference is made to the Credit and Guarantee Agreement, dated as of July
28, 1999, as amended by the First Amendment, dated as of November 4, 1999, and
the Second Amendment, dated as of December 14, 1999, and as may be further
amended, supplemented or otherwise modified from time to time (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"), Lehman Commercial Paper Inc., as general administrative agent (in
such capacity, the "General Administrative Agent"), and others. Unless
otherwise defined herein, capitalized terms used herein and defined in the
Credit Agreement are used herein as therein defined.

      The Borrowers have requested that (i) the Required Lenders, (ii) each of
the Canadian Revolving Credit Lenders, and (iii) each of the U.S. Revolving
Credit Lenders consent to amend the Credit Agreement on the terms described in
the Third Amendment to which a form of this Lender Consent Letter is attached as
Exhibit A (the "Third Amendment").

      Pursuant to Section 15.1 of the Credit Agreement, the undersigned Lender
hereby consents to the execution by the General Administrative Agent of the
Third Amendment.

                                   Very truly yours,

                                   COMERICA BANK-CANADA

                                   By: /s/ L. Geoffrey Morphy
                                       ------------------------------------
                                       Name:  L. Geoffrey Morphy
                                       Title: Vice President, International
                                              Finance

Dated as of May 10, 2000
<PAGE>

                                                                 [Comerica logo]
--------------------------------------------------------------------------------
Comerica Bank
                                               International Finance Department
                                               P O Box 75000
                                               Detroit, Michigan 48275-3328
                                               Tel.: (313) 222-9125
                                               Fax: (313) 222-3377
                                               Darlene P Persons@Comerica.com
                                               ------------------------------

                                               Darlene P. Persons, CCM
                                               First Vice President

LENDER CONSENT LETTER

HTM HOLDINGS, INC.
SMTC MANUFACTURING CORPORATION OF CANADA
CREDIT AND GUARANTEE AGREEMENT
DATED AS OF JULY 28, 1999

To: Lehman Commercial Paper Inc.,
      as General Administrative Agent
    3 World Financial Center
    New York, New York 10285

Ladies and Gentlemen:

      Reference is made to the Credit and Guarantee Agreement, dated as of July
28, 1999, as amended by the First Amendment, dated as of November 4, 1999, and
the Second Amendment, dated as of December 14, 1999, and as may be further
amended, supplemented or otherwise modified from time to time (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"), Lehman Commercial Paper Inc., as general administrative agent (in
such capacity, the "General Administrative Agent"), and others. Unless
otherwise defined herein, capitalized terms used herein and defined in the
Credit Agreement are used herein as therein defined.

      The Borrowers have requested that (i) the Required Lenders, (ii) each of
the Canadian Revolving Credit Lenders, and (iii) each of the U.S. Revolving
Credit Lenders consent to amend the Credit Agreement on the terms described in
the Third Amendment to which a form of this Lender Consent Letter is attached as
Exhibit A (the "Third Amendment").

      Pursuant to Section 15.1 of the Credit Agreement, the undersigned Lender
hereby consents to the execution by the General Administrative Agent of the
Third Amendment.

                                   Very truly yours,

                                   COMERICA BANK

                                   By: /s/ Darlene P. Persons
                                       ------------------------------------
                                       Name:  Darlene P. Persons
                                       Title: First Vice President,
                                              International Finance

Dated as of May 10, 2000
                                                                 [Comerica logo]

<PAGE>

                                                                       EXHIBIT A

                             LENDER CONSENT LETTER

                               HTM HOLDINGS, INC.
                    SMTC MANUFACTURING CORPORATION OF CANADA
                         CREDIT AND GUARANTEE AGREEMENT
                            DATED AS OF JULY 28, 1999

To: Lehman Commercial Paper Inc.,
      as General Administrative Agent
    3 World Financial Center
    New York, New York 10285

Ladies and Gentlemen:

      Reference is made to the Credit and Guarantee Agreement, dated as of July
28, 1999, as amended by the First Amendment, dated as of November 4, 1999, and
the Second Amendment, dated as of December 14, 1999, and as may be further
amended, supplemented or otherwise modified from time to time (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"), Lehman Commercial Paper Inc., as general administrative agent (in
such capacity, the "General Administrative Agent"), and others. Unless
otherwise defined herein, capitalized terms used herein and defined in the
Credit Agreement are used herein as therein defined.

      The Borrowers have requested that (i) the Required Lenders, (ii) each of
the Canadian Revolving Credit Lenders, and (iii) each of the U.S. Revolving
Credit Lenders consent to amend the Credit Agreement on the terms described in
the Third Amendment to which a form of this Lender Consent Letter is attached as
Exhibit A (the "Third Amendment").

      Pursuant to Section 15.1 of the Credit Agreement, the undersigned Lender
hereby consents to the execution by the General Administrative Agent of the
Third Amendment.

                                   Very truly yours,

                                   First Dominion Funding I
                                   ----------------------------------------
                                   (NAME OF LENDER)

                                   By: /s/ Andrew Marshak
                                       ------------------------------------
                                       Name:  Andrew Marshak
                                       Title: Authorized Signator

Dated as of May __, 2000
<PAGE>

                                                                       EXHIBIT A

                             LENDER CONSENT LETTER

                               HTM HOLDINGS, INC.
                    SMTC MANUFACTURING CORPORATION OF CANADA
                         CREDIT AND GUARANTEE AGREEMENT
                            DATED AS OF JULY 28, 1999

To: Lehman Commercial Paper Inc.,
      as General Administrative Agent
    3 World Financial Center
    New York, New York 10285

Ladies and Gentlemen:

      Reference is made to the Credit and Guarantee Agreement, dated as of July
28, 1999, as amended by the First Amendment, dated as of November 4, 1999, and
the Second Amendment, dated as of December 14, 1999, and as may be further
amended, supplemented or otherwise modified from time to time (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"), Lehman Commercial Paper Inc., as general administrative agent (in
such capacity, the "General Administrative Agent"), and others. Unless
otherwise defined herein, capitalized terms used herein and defined in the
Credit Agreement are used herein as therein defined.

      The Borrowers have requested that (i) the Required Lenders, (ii) each of
the Canadian Revolving Credit Lenders, and (iii) each of the U.S. Revolving
Credit Lenders consent to amend the Credit Agreement on the terms described in
the Third Amendment to which a form of this Lender Consent Letter is attached as
Exhibit A (the "Third Amendment").

      Pursuant to Section 15.1 of the Credit Agreement, the undersigned Lender
hereby consents to the execution by the General Administrative Agent of the
Third Amendment.

                                   Very truly yours,

                                   General Electric Capital Corporation
                                   ----------------------------------------
                                   (NAME OF LENDER)

                                   By: /s/ John Goodwin
                                       ------------------------------------
                                       Name:  John Goodwin
                                       Title: Duly Authorized Signatory

Dated as of May 8, 2000
<PAGE>

                                                                       EXHIBIT A

                             LENDER CONSENT LETTER

                               HTM HOLDINGS, INC.
                    SMTC MANUFACTURING CORPORATION OF CANADA
                         CREDIT AND GUARANTEE AGREEMENT
                            DATED AS OF JULY 28, 1999

To: Lehman Commercial Paper Inc.,
      as General Administrative Agent
    3 World Financial Center
    New York, New York 10285

Ladies and Gentlemen:

      Reference is made to the Credit and Guarantee Agreement, dated as of July
28, 1999, as amended by the First Amendment, dated as of November 4, 1999, and
the Second Amendment, dated as of December 14, 1999, and as may be further
amended, supplemented or otherwise modified from time to time (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"), Lehman Commercial Paper Inc., as general administrative agent (in
such capacity, the "General Administrative Agent"), and others. Unless
otherwise defined herein, capitalized terms used herein and defined in the
Credit Agreement are used herein as therein defined.

      The Borrowers have requested that (i) the Required Lenders, (ii) each of
the Canadian Revolving Credit Lenders, and (iii) each of the U.S. Revolving
Credit Lenders consent to amend the Credit Agreement on the terms described in
the Third Amendment to which a form of this Lender Consent Letter is attached as
Exhibit A (the "Third Amendment").

      Pursuant to Section 15.1 of the Credit Agreement, the undersigned Lender
hereby consents to the execution by the General Administrative Agent of the
Third Amendment.

                                   Very truly yours,

                                   AMMC CDO I, LIMITED
                                   ----------------------------------------
                                   (NAME OF LENDER)

                                   By: /s/ Chester M. Eng
                                       ------------------------------------
                                       Name:  Chester M. Eng
                                       Title: Attorney-in-fact

Dated as of May 8, 2000
<PAGE>

                                                                       EXHIBIT A

                             LENDER CONSENT LETTER

                               HTM HOLDINGS, INC.
                    SMTC MANUFACTURING CORPORATION OF CANADA
                         CREDIT AND GUARANTEE AGREEMENT
                            DATED AS OF JULY 28, 1999

To: Lehman Commercial Paper Inc.,
      as General Administrative Agent
    3 World Financial Center
    New York, New York 10285

Ladies and Gentlemen:

      Reference is made to the Credit and Guarantee Agreement, dated as of July
28, 1999, as amended by the First Amendment, dated as of November 4, 1999, and
the Second Amendment, dated as of December 14, 1999, and as may be further
amended, supplemented or otherwise modified from time to time (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"), Lehman Commercial Paper Inc., as general administrative agent (in
such capacity, the "General Administrative Agent"), and others. Unless
otherwise defined herein, capitalized terms used herein and defined in the
Credit Agreement are used herein as therein defined.

      The Borrowers have requested that (i) the Required Lenders, (ii) each of
the Canadian Revolving Credit Lenders, and (iii) each of the U.S. Revolving
Credit Lenders consent to amend the Credit Agreement on the terms described in
the Third Amendment to which a form of this Lender Consent Letter is attached as
Exhibit A (the "Third Amendment").

      Pursuant to Section 15.1 of the Credit Agreement, the undersigned Lender
hereby consents to the execution by the General Administrative Agent of the
Third Amendment.

                                   Very truly yours,

                                   Bankers Trust Company
                                   ----------------------------------------
                                   (NAME OF LENDER)

                                   By: /s/ Annemarie Reilly-Papazoglou
                                       ------------------------------------
                                       Name:  Annemarie Reilly-Papazoglou
                                       Title: Director

Dated as of May __, 2000
<PAGE>

                                                                       EXHIBIT A

                             LENDER CONSENT LETTER

                               HTM HOLDINGS, INC.
                    SMTC MANUFACTURING CORPORATION OF CANADA
                         CREDIT AND GUARANTEE AGREEMENT
                            DATED AS OF JULY 28, 1999

To: Lehman Commercial Paper Inc.,
      as General Administrative Agent
    3 World Financial Center
    New York, New York 10285

Ladies and Gentlemen:

      Reference is made to the Credit and Guarantee Agreement, dated as of July
28, 1999, as amended by the First Amendment, dated as of November 4, 1999, and
the Second Amendment, dated as of December 14, 1999, and as may be further
amended, supplemented or otherwise modified from time to time (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"), Lehman Commercial Paper Inc., as general administrative agent (in
such capacity, the "General Administrative Agent"), and others. Unless
otherwise defined herein, capitalized terms used herein and defined in the
Credit Agreement are used herein as therein defined.

      The Borrowers have requested that (i) the Required Lenders, (ii) each of
the Canadian Revolving Credit Lenders, and (iii) each of the U.S. Revolving
Credit Lenders consent to amend the Credit Agreement on the terms described in
the Third Amendment to which a form of this Lender Consent Letter is attached as
Exhibit A (the "Third Amendment").

      Pursuant to Section 15.1 of the Credit Agreement, the undersigned Lender
hereby consents to the execution by the General Administrative Agent of the
Third Amendment.

                                   Very truly yours,

                                   The Chase Manhattan Bank
                                   ----------------------------------------
                                   (NAME OF LENDER)

                                   By: /s/ Anna Maria Beissel
                                       ------------------------------------
                                       Name: Anna Maria Beissel
                                       Title: Vice President

Dated as of May  , 2000
<PAGE>

                                                                       EXHIBIT A

                             LENDER CONSENT LETTER

                               HTM HOLDINGS, INC.
                    SMTC MANUFACTURING CORPORATION OF CANADA
                         CREDIT AND GUARANTEE AGREEMENT
                            DATED AS OF JULY 28, 1999

To: Lehman Commercial Paper Inc.,
      as General Administrative Agent
    3 World Financial Center
    New York, New York 10285

Ladies and Gentlemen:

      Reference is made to the Credit and Guarantee Agreement, dated as of July
28, 1999, as amended by the First Amendment, dated as of November 4, 1999, and
the Second Amendment, dated as of December 14, 1999, and as may be further
amended, supplemented or otherwise modified from time to time (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"), Lehman Commercial Paper Inc., as general administrative agent (in
such capacity, the "General Administrative Agent"), and others. Unless
otherwise defined herein, capitalized terms used herein and defined in the
Credit Agreement are used herein as therein defined.

      The Borrowers have requested that (i) the Required Lenders, (ii) each of
the Canadian Revolving Credit Lenders, and (iii) each of the U.S. Revolving
Credit Lenders consent to amend the Credit Agreement on the terms described in
the Third Amendment to which a form of this Lender Consent Letter is attached as
Exhibit A (the "Third Amendment").

      Pursuant to Section 15.1 of the Credit Agreement, the undersigned Lender
hereby consents to the execution by the General Administrative Agent of the
Third Amendment.

                                   Very truly yours,

                                   IBM Credit Corporation
                                   ----------------------------------------
                                   (NAME OF LENDER)

                                   By: /s/ Brian T. Sullivan
                                       ------------------------------------
                                       Name: Brian T. Sullivan
                                       Title: Manager, U.S. Commercial Credit

Dated as of May  , 2000
<PAGE>

                                                                       EXHIBIT A

                             LENDER CONSENT LETTER

                               HTM HOLDINGS, INC.
                    SMTC MANUFACTURING CORPORATION OF CANADA
                         CREDIT AND GUARANTEE AGREEMENT
                            DATED AS OF JULY 28, 1999

To: Lehman Commercial Paper Inc.,
      as General Administrative Agent
    3 World Financial Center
    New York, New York 10285

Ladies and Gentlemen:

      Reference is made to the Credit and Guarantee Agreement, dated as of July
28, 1999, as amended by the First Amendment, dated as of November 4, 1999, and
the Second Amendment, dated as of December 14, 1999, and as may be further
amended, supplemented or otherwise modified from time to time (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"), Lehman Commercial Paper Inc., as general administrative agent (in
such capacity, the "General Administrative Agent"), and others. Unless
otherwise defined herein, capitalized terms used herein and defined in the
Credit Agreement are used herein as therein defined.

      The Borrowers have requested that (i) the Required Lenders, (ii) each of
the Canadian Revolving Credit Lenders, and (iii) each of the U.S. Revolving
Credit Lenders consent to amend the Credit Agreement on the terms described in
the Third Amendment to which a form of this Lender Consent Letter is attached as
Exhibit A (the "Third Amendment").

      Pursuant to Section 15.1 of the Credit Agreement, the undersigned Lender
hereby consents to the execution by the General Administrative Agent of the
Third Amendment.

                                   Very truly yours,

                                   Monument Capital Ltd., as Assignee

                                   By: Alliance Capital Management L.P. as
                                       Investment Manager
                                   ----------------------------------------
                                   (NAME OF LENDER)

                                   By: Alliance Capital Management Corporation,
                                       as General Partner

                                   By: /s/ Kenneth G. Ostmann
                                       ------------------------------------
                                       Name: Kenneth G. Ostmann
                                       Title: Vice President

Dated as of May 10, 2000

<PAGE>

                                 McMILLAN BINCH

                                   ----------

                            BARRISTERS & SOLICITORS

SUITE 3800 . SOUTH TOWER . ROYAL BANK PLAZA . TORONTO . ONTARIO . CANADA M5J 2J7
        FAX (416) 865-7048 . TELEPHONE (416) 865-7000 . WWW.MCBINCH.COM

                                                                    May 18, 2000

Lehman Brothers Inc.                         The Bank of Nova Scotia
Lehman Commercial Paper Inc.                 44 King Street West
3 World Financial Centre                     Toronto, Ontario
New York, New York                           M5H 1H1
U.S.A. 10285

-and to-                                     -and to-

General Electric Capital Corporation         Each of the Banks from time to
201 Mission Street                           time party to the Credit Agreement
Suite 2700                                   referred to below
San Francisco, California
U.S.A. 94105

Dear Sirs/Mesdames:

      Re: Third Amendment to Credit and Guarantee Agreement among
          SMTC Manufacturing Corporation of Canada and others

      We are counsel to SMTC Manufacturing Corporation of Canada ("SMTC
(Canada)") and have acted on behalf of SMTC (Canada) in connection with the
corporate authorization of the Third Amendment, dated as of May 15, 2000 (the
"Third Amending Agreement"), to the Credit and Guarantee Agreement, dated as of
July 28, 1999 (as amended by the First Amendment dated as of November 4, 1999,
and the Second Amendment, dated as of December 14, 1999) (the "Credit
Agreement") among SMTC (Canada), SMTC Corporation, HTM Holdings, Inc. the
several banks and other financial institutions from time to time parties thereto
(collectively, the "Banks"), Lehman Brothers Inc., as advisor, lead arranger and
book manager, the Bank of Nova Scotia, as syndication agent, Canadian
administrative agent and collateral monitoring agent, Lehman Commercial Paper
Inc., as general administrative agent and General Electric Capital Corporation,
as documentation agent.

      This opinion is being delivered in connection with the delivery by Ropes &
Gray of its opinion pursuant to Section 8(e) of the Third Amending Agreement.

Scope of Investigation

      For the purpose of this opinion, we have examined facsimile copies
executed in counterparts of the Third Amending Agreement. We did not
participate in the negotiation or preparation of the Third Amending Agreement
and have not reviewed the provisions thereof.

      We have also made such investigations and examined originals or copies,
certified or otherwise identified to our satisfaction, of the constating
documents and by-laws of SMTC (Canada), of such records of corporate proceedings
of SMTC (Canada), such certificates of public officials and of such other
certificates, documents and records as we considered necessary for the purposes
of this opinion.

      For the purposes of the opinion in paragraph 1, we have relied on a
certificate of status issued by the Ministry of Consumer and Commercial
Relations dated May 18, 2000, a copy of which has been provided to you.

Jurisdiction

      We are qualified to render opinions only as to the laws of the Province of
Ontario, including relevant federal laws of Canada, and accordingly we express
no opinion as to the laws of any other jurisdiction.

Assumptions

      The opinions expressed herein are subject to the following assumptions:

      (a)   We have assumed the genuineness of all signatures, the authenticity
            of all documents submitted to us as originals and the conformity to
            authentic original documents of all documents submitted to us as
            certified, conformed, photocopied or facsimile copies.

      (b)   We have assumed the legal capacity of all natural persons.

Opinions

      Based on and subject to the foregoing, we are of the opinion that

            1. Corporate Status. SMTC (Canada) is a corporation existing under
      the laws of Ontario.

            2. Corporate Power and Capacity. SMTC (Canada) has the corporate
      power and capacity to enter into and perform its obligations under the
      Third Amending Agreement.

            3. Authorization. SMTC (Canada) has taken all necessary corporate
      action to authorize the execution and delivery by it of the Third Amending
      Agreement.

<PAGE>

May 18, 2000                                                            Page 3

                                 McMILLAN BINCH

            4. EXECUTION. To the extent that execution of the Third Amending
      Agreement is governed by the laws of the Province of Ontario, the Third
      Amending Agreement has been duly executed by SMTC (Canada).

      This opinion is given solely for your use in connection with the
transactions contemplated by the Third Amending Agreement and may not be relied
on by any other person or for any other purpose without our prior written
consent.

                                        Yours truly,

                                        /s/ McMillan Binch
<PAGE>

Request ID: 002799472             Province of Ontario
Demande n(degree):                Province de l'Ontario
Transaction ID: 13702459          Ministry of Consumer and Commercial Relations
Transaction n(degree):            Ministere de la Consommation et du Commerce
Category ID: CT                   Companies Branch
Categorie:                        Direction des compagnies

Date Report Produced: 2000/05/18
Document produit le:
Time Report Produced: 09:04:41
Imprime a:

Certificate of Status
Certificat de Statut Documentaire

This is to certify that according to the records of the companies branch

Je certifie par les presentes que, conformement aux dossiers de la Direction des
compagnies,

                   SMTC MANUFACTURING CORPORATION OF CANADA

Ontario Corporation No.

Numero matricule de la personne morale en Ontario

                                   001095112

is a corporation incorporated, amalgamated or continued under the laws of the
Province of Ontario.

est constituee, fusionnee ou prorogee en vertu des lois de la province de
l'Ontario.

The corporation came into existence on

La personne morale a ete fondee le

                             AUGUST 31 AOUT, 1994

and has not been dissolved.

et n'a pas ete dissoute.

Dated

Fait le

MAY 18 MAI, 2000

Director
Directrice

The issuance of this certificate in electronic form is authorized by the
Director of Companies Branch.
La delivrance du present certificat sous forme electronique est autorisee par la
Directrice de la Direction des compagnies.
<PAGE>

                                  ROPES & GRAY

                            ONE INTERNATIONAL PLACE
                       BOSTON, MASSACHUSETTS 02110-2624
                                (617) 951-7000
                              FAX: (617) 951-7050

                                                             ONE FRANKLIN SOUARE
                                                             1301 K STREET, N.W.
30 KENNEDY PLAZA                                                  SUITE 800 EAST
PROVIDENCE, RI 02903-2358                              WASHINGTON, DC 20005-3333
(401) 455-4400                                                    (202) 626-3900
FAX: (401) 455-4401                                          FAX: (202) 626-3961

                                                                    May 18, 2000

To The General Administrative Agent and each
Lender Party to the Amendment referred to below

Ladies and Gentlemen:

      This opinion is being furnished to you pursuant to the Third Amendment,
dated as of May 15, 2000 (the "Amendment"), to the Credit and Guarantee
Agreement, dated as of July 28, 1999 (as amended by the First Amendment, dated
as November 4, 1999, and the Second Amendment, dated as of December 14, 1999,
and as may be further amended, supplemented or otherwise modified from time to
time, 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"), Lehman Brothers Inc., as advisor, lead arranger
and book manager (in such capacity, the "Arranger"), The Bank of Nova Scotia, as
syndication agent (in such capacity, the "Syndication Agent"), Lehman Commercial
Paper Inc., as general administrative agent (in such capacity, the "General
Administrative Agent"), The Bank of Nova Scotia, as Canadian administrative
agent (in such capacity, the "Canadian Administrative Agent"), The Bank of Nova
Scotia, as collateral monitoring agent (in such capacity, the "Collateral
Monitoring Agent"), and General Electric Capital Corporation, as documentation
agent (in such capacity, the "Documentation Agent"). Unless otherwise defined
herein, capitalized terms used herein shall have the meanings set forth, or by
reference in the Amendment.

      We have acted as U. S. counsel to Holdings, U. S. Borrower and Canadian
Borrower in connection with the Amendment.

      We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents and records and have made such investigation
of fact and such examination of law as we have deemed appropriate in order to
enable us to render the opinions set forth herein. In conducting such
investigation, we have relied, without independent verification, upon
certificates of officers of Holdings, public officials and other appropriate
persons, and on the representations and warranties as to matters of fact and on
the covenants as to the application of proceeds contained in the Amendment.

      The opinions expressed herein are limited to matters governed by the laws
of The Commonwealth of Massachusetts, the General Corporation Law of the State
of Delaware and the
<PAGE>

ROPES & GRAY

federal laws of the United States of America. We call your attention to the
fact that the Amendment provides that it is to be construed in accordance with
and governed by the laws of the State of New York. We are of the opinion that
such provision would be given effect under Massachusetts conflict of laws
principles. For purposes of rendering the opinions expressed below, we have
assumed that the Amendment provides that it is to be governed by, and construed
in accordance with, the internal laws of The Commonwealth of Massachusetts.

      Based upon the foregoing and subject to the additional qualifications set
forth below, we are of the opinion that:

      1. Each of the U.S. Borrower and Holdings is a corporation validly
existing in good standing under the laws of the State of Delaware and has the
corporate power to execute and deliver the Amendment and to perform its
obligations thereunder.

      2. Each of the U.S. Borrower and Holdings has duly authorized, executed
and delivered the Amendment and (subject to the qualifications set forth in the
unnumbered paragraphs at the end hereof) the Amendment and the Credit
Agreement, as amended by the Amendment, constitute the legal, valid and binding
obligation of each such Person and are enforceable against each such Person in
accordance with their terms.

      3. Assuming that the Canadian Borrower (i) is a corporation validly
existing in good standing under the laws of its jurisdiction of incorporation,
(ii) has the corporate power to execute and deliver the Amendment and to perform
its obligations thereunder and (iii) has duly authorized, executed and delivered
the Amendment, (subject to the qualifications set forth in the unnumbered
paragraphs at the end hereof) the Amendment and the Credit Agreement, as amended
by the Amendment, constitute the legal, valid and binding obligation of the
Canadian Borrower and are enforceable against the Canadian Borrower in
accordance with their terms.

      4. The execution and delivery by Holdings, the U. S. Borrower and the
Canadian Borrower of the Amendment and the performance by each such Person of
its obligations thereunder, (a) will not violate any provision of any
Massachusetts or federal law, statute, rule or regulation or of the General
Corporation Law of the State of Delaware, and (b) will not result in the breach
or violation of, or constitute a default, result in the creation of a Lien or
require the repurchase of securities under any court orders, judgements or
decrees known to us, or under any of the agreements or instruments listed on
Exhibit A hereto.

      5. Except as was required in order to perfect the Liens contemplated under
the Credit Agreement, under Massachusetts or federal law or the General
Corporation Law of the State of Delaware, no consent, approval, license or
exemption by, or order or authorization of, or filing, recording or registration
with, any Governmental Authority is required to be obtained by Holdings, the
U. S. Borrower or the Canadian Borrower in connection with the execution and
delivery of the Amendment or the performance by each such Person of its
obligations thereunder.

                                      -2-
<PAGE>

ROPES & GRAY

      Our opinion that the Amendment and the Credit Agreement, as amended by the
Amendment, constitute the legal, valid and binding obligation of the U.S.
Borrower, Holdings and the Canadian Borrower, enforceable against each such
Person party thereto in accordance with their terms, is subject to (i)
bankruptcy, insolvency, reorganization, moratorium and other similar laws of
general application affecting the rights and remedies of creditors and secured
parties, and (ii) general principles of equity, regardless of whether applied
in proceedings in equity or at law.

      The opinions expressed herein do not purport to cover, and we express no
opinion with respect to, the applicability of Section 548 of the federal
Bankruptcy Code or any comparable provision of state law. In addition, we
express no opinion as to whether a subsidiary may guarantee or otherwise become
liable for, or pledge its assets to secure, indebtedness incurred by its parent
or another subsidiary of its parent except to the extent such subsidiary may be
determined to have benefitted from the incurrence of such indebtedness, or as to
whether such benefit may be measured other than by the extent to which the
proceeds of such indebtedness are directly or indirectly made available to such
subsidiary for its corporate purposes. We call your attention to the fact that
certain cases have held that an obligation of a corporation which is incurred
to purchase the corporation's stock is subordinate to the claims of general
creditors upon the bankruptcy or insolvency of the corporation.

      The opinions expressed herein are subject to the qualification that the
enforceability of provisions in the Amendment and the Credit Agreement, as
amended by the Amendment, providing for indemnification or contribution may be
limited by public policy considerations. In addition, we express no opinion as
to (i) the extent to which broadly worded waivers may be enforced, (ii) the
enforceability of any provision of the Amendment or the Credit Agreement, as
amended by the Amendment, which purports to grant the right of setoff to a
purchaser of a participation in the loans outstanding thereunder or which
provides for interest on interest or automatic compounding of interest, (iii)
the enforceability of any provision which states that an oral modification of an
agreement will not be effective, or (iv) the extent to which provisions
providing for conclusive presumptions or determinations or waiver of offset or
defenses will be enforced.

      This opinion is being furnished only to the addressees and is solely for
their benefit and the benefit of their participants and assignees permitted by
the Credit Agreement. This opinion may not be relied upon for any other purpose
or by any other Person, without our prior written consent.

                                   Very truly yours,

                                   /s/ ROPES & GRAY

                                   ROPES & GRAY

                                      -3-
<PAGE>

ROPES & GRAY

EXHIBIT A

1.    Stockholders Agreement among SMTC Corporation and certain stockholders
      dated as of July 30, 1999.

2.    Reorganization and Merger Agreement dated as of July 26, 1999 by and among
      The Surface Mount Technology Centre Inc., HTM Holdings, Inc., SMTC
      Corporation, EMSIcon Investments, LLC, J&L Investments, LLC, the
      Warrantholders and the Stockholders listed therein.

                                      -4-<PAGE>

                                                                    EXHIBIT 10.5

                                    FORM OF
                                  LEASE AS TO
                           FRANKLIN INDUSTRIAL PARK
                           ------------------------

                        Dated as of:  December 22, 1998

DEFINED TERMS
-------------

1.  Landlord:                           Third Franklin Trust

2.  Landlord's Address:                 c/o Park Development Corp.
                                        295 Freeport Street
                                        Boston, MA  02122

3.  Building:                           20 Liberty Way
                                        Franklin, Massachusetts 02038

4.  Tenant:                             W.F. Wood, Inc.

5.  Tenant's Address:                   29 Everett Road
                                        Holliston, MA  01746

6.  Rentable Square Feet Leased to      29,091 square feet
    Tenant:

                                        (See Exhibit A)
                                        --------------------------------------
7.  Rentable Square Feet in Building:   97,000 square feet

8.  Base Rent:                          Years 1 - 3:  $189,091.50
                                        Years 4 and 5:  $203,637.00

9.  Term:                               Five (5) years

10. Commencement Date:                  January 4, 1999

11. Security Deposit:                   $15,757.63

12. Guarantor:                          None

13. Broker(s):                          Spaulding & Slye and Parsons
                                        Commercial Group
<PAGE>

14. Tenant's Percentage Share of Real   Twenty-Nine and Ninety-Nine One
    Property Taxes and Operating        Hundredths (29.99%) Percent
    Expenses:

15. Management Fee:                     Four percent (4%) of Base Rent

16. Permitted Uses:                     Light Non-Nuisance Manufacturing,
                                        office, warehouse and, to the extent
                                        permitted by zoning laws,
                                        manufacturing and integration of
                                        enclosures and cabinetry and systems
                                        integration.
17. Option to Extend:                   One (1) Five Year Option

18. Date and Recordation of             May 1, 1987, recorded at Norfolk
    Declaration of Protective           County Registry of Deeds in Book
    Covenants:                          7689, Page 385, as amended by First
                                        Amendment dated December 1, 1992,
                                        recorded with said Deeds in Book
                                        9702, Page 360 those Protective
                                        Covenants dated as of May 1, 1987,
                                        which are recorded with said Deeds at
                                        Book 7689, Page 385, as amended by a
                                        First Declaration of Amendment dated
                                        December 1, 1992, recorded with said
                                        Deeds in Book 9702, Page 603, as
                                        affected by a Confirmatory First
                                        Declaration of Amendment as to
                                        Protective Covenants dated as of
                                        December 12, 1994 recorded with said
                                        Deeds in Book 10798, Page 479, and as
                                        amended by a Second Declaration of
                                        Amendment dated March 29, 1995,
                                        recorded with said Deeds in Book
                                        10848, Page 251.

                                      -2-
<PAGE>

                                TABLE OF CONTENTS
                               ------------------

DEFINED TERMS                                                            1
TABLE OF CONTENTS                                                        3

EXHIBITS                                                                 4
I.               Premises.                                               5
II.              Term                                                    5
III.             Base Rent.                                              5
IV.              Additional Rent.                                        6
V.               Repairs, Maintenance and Alterations                    7
VI.              Compliance with Laws                                    8
VII.             Insurance                                               8
VIII.            Permitted Uses; Environmental Regulations               9
IX.              Damage and Destruction                                 10
X.               Eminent Domain                                         10
XI.              Events of Default                                      11
XII.             Assignment and Subletting                              12
XIII.            Miscellaneous                                          13
(a)              Waiver.                                                13
(b)              Servants, Agents and Employees                         13
(c)              Term                                                   13
(d)              Writing                                                13
(e)              Notices                                                13
(f)              Applicable Law                                         13
(g)              Entire Agreement                                       14
(h)              Broker                                                 14
(i)              Limitation of Landlord's Liability                     14
(j)              Subordination                                          14
(k)              Estoppel Certificate                                   14
(l)              Indemnification by Tenant                              15
(m)              Option to Extend                                       15
(n)              Security Deposit                                       15
(o)              Interest Rate                                          16
(p)              Notice of Lease                                        16
(q)              Occupancy Prior to Commencement Date; Landlord's Work  16

                                      -3-
<PAGE>

                                    EXHIBITS
                                   ---------

The following Exhibits are attached to this Lease and incorporated herein by
reference:

     Exhibit A -    Plan of the Premises

     Exhibit B -    Purposely Omitted

     Exhibit C -    Form of Commencement Date Agreement

     Exhibit D -    Supplemental Agreements

     Exhibit E -    Fair Rental Value Determination

                                      -4-
<PAGE>

                                     LEASE
                                     -----

     THIS LEASE made as of this 22nd day of December, 1998, by and between
Valerie A. Colbert, Trustee of Third Franklin Trust under Declaration of Trust
dated August 4, 1988, and recorded in the Norfolk County Registry of Deeds at
Book 8088, Page 627, as amended of record, (the "Registry") (hereinafter
"Landlord"), and F. W. Wood Company, Inc. with its principal place of business
at 29 Everett Road, Holliston, MA 01746 (hereinafter "Tenant").

     In consideration of these premises and the mutual covenants herein
contained, the parties hereto, for themselves, their successors and assigns,
hereby covenant and agree as follows:

 I.  Premises.
     --------

     Landlord hereby leases to Tenant, subject to the provisions of the Lease,
the premises (the "Premises"), as shown on the Plan attached as Exhibit A, in
the building (the "Building") situated at 20 Liberty Way, Franklin Industrial
Park, Franklin, Massachusetts (the "Land"), together with the right to use, in
common with others, the existing parking lots and access ways on the Land, and
certain rooms, located on the perimeter of the Premises which contain electric,
gas, telephone, fire alarm control, and sprinkler system control equipment (the
"Central Utility Rooms") which are to be used by Tenant in common with Landlord
and the other occupants of the Building.  The Premises are leased "AS IS",
without representation or warranty, whether express or implied.

 II.      Term.
          ----

     TO HAVE AND TO HOLD for a term (the "Term") of five (5) years commencing on
January 4, 1999 (the "Commencement Date").  Landlord shall deliver the Premises
to the Tenant on the Commencement Date, and the Term of this Lease, and (except
as expressly provided hereunder, Tenant's obligation to pay rent and any other
sums hereunder) shall begin on and as of that date, and Tenant shall be deemed
to have accepted the Building and the Premises as of said date.

 III.     Base Rent.
          ---------

     YIELDING AND PAYING Base Rent therefor at the annual rate or rates set
forth in paragraph (8) on page 1 of this Lease, payable in advance, without
prior demand and without deduction, set off or counterclaim, in equal monthly
installments during the Term to Landlord, at 295 Freeport Street, Boston,
Massachusetts 02122, or at such other address as Landlord shall designate in
writing.  Such installments shall be payable on the first day of each month of
the Term of this Lease (but if the Commencement Date does not fall on the first
day of a month, then the first such payment shall be made on the Commencement
Date, prorated for the portion of a month then involved, and the last such
payment due hereunder shall also be prorated appropriately) (see Exhibit D).

                                      -5-
<PAGE>

 IV. Additional Rent.
     ---------------

     Tenant shall pay to Landlord, as Additional Rent, its Percentage Share of
the following expenses incurred by Landlord, relating to the operation of the
Building and the Land as a whole during the Term and any extension hereof:

     (a) All real estate taxes and other taxes relating to the Premises,
Building and Land, municipal charges, and other like assessments (any betterment
assessments will be computed based upon payment over the longest period
permitted by law for making payments of said assessments)

     (b) Landlord's reasonable expenses in connection with its repair and
maintenance obligations pursuant to Article V(a) hereof;

     (c) Landlord's insurance expenses pursuant to Article IX(a) hereof; and

     (d) Landlord's reasonable expenses in respect of its obligations concerning
maintenance of certain "Common Areas" of the Franklin Industrial Park, as set
forth in the Protective Covenants.

     Tenant shall also pay as Additional Rent Landlord's Management Fee, which
shall be fixed at an amount equal to Four percent (4%) of the effective rate of
Base Rent (without regard to so-called "free rent" or any other like
concession), during each year of the Term or any extension thereof.

     Landlord shall reasonably estimate the total amount of all such expenses as
of June 1 for each year of this Lease, with reference to the twelve month period
beginning on the following July 1 (the "Lease Year"), and shall furnish its
computations to Tenant together with any available supporting data. Thereafter,
Tenant shall be responsible on a monthly basis for the payment of an amount
equal to the total estimate of such expenses for the Lease year as a whole,
multiplied by the Percentage Share, and further divided by twelve. Such amount
shall be payable in equal monthly installments on the first of each month (with
appropriate proration, as in the case of the Base Rent, in the event that the
Commencement Date does not fall on the first day of the month). Within forty-
five (45) days after the end of each Lease Year, Landlord shall also furnish to
Tenant computations showing its actual expenses, reasonable documentation
supporting the same, and a recomputation, if necessary, of Tenant's allocable
portion thereof. Tenant, shall, upon demand, pay any underpayments, and any
overpayments shall be paid or credited to Tenant's obligations hereunder.

     Tenant also agrees to pay all charges for utility services, including, but
not limited to heat, water, gas, and electricity, rendered to the Premises and
to be responsible for its own rubbish removal.

                                      -6-
<PAGE>

 V.  Repairs, Maintenance and Alterations.
     ------------------------------------

     (a) Landlord agrees to provide during the Term, grounds care, paving
maintenance, snow removal, and exterior maintenance of the Building, so as to
keep the same in good condition and repair, and to make all necessary repairs to
the roof and outer walls and glass in order to keep the same wind and
weathertight, and to make all necessary repairs to any building-wide utility
systems (such as the sprinkler system, and the electric, water, gas, fire alarms
and telephone equipment located in the Central Utility Rooms referred to in
Article I hereof), unless any such repairs or maintenance are necessitated as a
result of Tenant's misuse or negligence, in which event Tenant shall pay for the
cost of such repairs.

     (b) Tenant agrees during the Term, at its sole expense, except as otherwise
provided in (a) above, to keep, repair, and maintain the Premises and all
fixtures and equipment thereon and therein (including, but not limited to, all
heating, air conditioning and ventilating systems, and that portion of the
sprinkler system located within the Premises) in good order, repair and
condition, reasonable wear and tear, and damage by fire or other casualty only
excepted, and at the expiration or termination of this Lease, peaceably to yield
up the Premises and all alterations and additions thereto in good order, repair
and condition, reasonable wear and tear and damage by fire or other casualty
excepted, first removing all goods and effects of Tenant. With respect to said
heating, air conditioning and ventilating systems, Tenant, at its sole cost and
expense, shall maintain so-called maintenance contracts with reputable vendors
reasonably approved by Landlord; provided, however, that Landlord shall furnish
to Tenant all available manufacturer's warranties relating to said equipment.

     (c) Tenant agrees not to make any alterations, improvements and/or
additions to the Premises (1) without first obtaining, on each occasion, the
written consent of Landlord, except that Tenant at its own expense may make
nonstructural alterations after first submitting to Landlord plans and
specifications therefor and securing the Landlord's written approval, which
shall not be unreasonably withheld or delayed, (except any nonstructural
alterations made by Tenant within 60 days after the Commencement Date shall not
require Landlord's approval provided that Tenant provides Landlord prior to
commencing construction of any such nonstructural alterations or work a letter
describing in reasonable detail the proposed nonstructural alterations) and (2)
upon condition that such alterations shall be made in accordance with all
applicable laws and in good and workmanlike first-class manner. In the event
that the estimated cost for such alterations by Tenant shall exceed Twenty-Five
Thousand ($25,000.00) Dollars, then no consent of Landlord shall be valid or
binding upon it until Tenant furnishes Landlord a liability policy in amounts
satisfactory to Landlord protecting Landlord from any liability for injury done
to persons or property arising directly or indirectly from the making of such
alterations or additions by Tenant, its agents, servants, employees and/or
independent contractors.

     Tenant further agrees to pay when due all costs for labor and materials
furnished in connection with any work done to the Premises, and to promptly
remove or bond any and all

                                      -7-
<PAGE>

mechanics' liens filed against the Building as a result of labor or materials
furnished in connection with said work.

     Any and all alterations, additions, and improvements, which may be made or
installed by Tenant in the Premises and which are attached to the floors, walls,
or ceilings, including, without limiting the generality of the foregoing, any
linoleum, carpeting or other floor covering of similar character, which may be
cemented or otherwise adhesively affixed to the floor, shall remain upon the
Premises, and at the termination of this Lease shall be surrendered with the
Premises as a part thereof, unless Landlord shall request removal upon
expiration of this Lease or within thirty (30) days after Landlord regains
possession. It is understood and agreed that any trade fixtures, furniture and
equipment placed upon the Premises by Tenant are to remain the property of
Tenant and shall be removed by Tenant from the Premises promptly prior to the
expiration of the term of this Lease. Tenant shall repair any damage to the
Premises or the Building caused by the removal of items under either of the two
preceding sentences.

     (d) Tenant agrees during the Term to permit Landlord, upon at least twenty-
four (24) hours advance notice (except in the case of emergency) and subject to
Tenant's reasonable security requirements and without interfering with Tenant's
use, to enter upon the Premises, to perform the obligations of Landlord under
this Lease and in order to inspect the same with respect to Tenant's compliance
with the provisions of this Lease, to show same to prospective lenders, and,
during the final nine (9) months of the Term, to show same to prospective
tenants. In addition, if Tenant fails to perform any repair or maintenance work
required of it hereunder, then Landlord, after reasonable notice shall have the
right to perform same, charging the entire cost to Tenant to be paid by Tenant
in full on demand. Further, for a period of two hundred seventy (270) days prior
to the expiration or sooner termination of the Term hereof, Landlord may place
upon the Premises "for lease" signs which Tenant agrees not to disturb.

 VI. Compliance with Laws.
     --------------------

     Tenant agrees, at its sole expense, to conform promptly with all laws,
requirements, regulations, or lawful direction of any legally constituted public
official or authority relative to Tenant's occupancy and use of the Premises.
Included hereunder is any duty imposed upon Landlord or Tenant arising out of
Tenant's particular use of the Premises. Tenant agrees to procure any licenses
and permits from time to time required because of Tenant's particular use of the
Premises. Landlord represents and warrants that, to the best of Landlord's
knowledge, the Building and Premises are not currently in violation of
applicable federal, state and local laws and ordinances, including proper
handicap accessibility.

 VII.     Insurance.
          ---------

     Except as provided otherwise by this Lease and except for injury or damage
arising out of Landlord's negligence or other wrongful act or omission, Tenant
agrees to indemnify, defend and save harmless Landlord against all claims for
injury, death or damage to persons or property on

                                      -8-
<PAGE>

or about, or by reason of the Tenant's use and occupancy of, the Premises.
Tenant, at its sole cost and expense, shall maintain in full force and effect
throughout the term of this Lease the following insurance written by one or more
responsible insurance companies licensed to do business in the Commonwealth of
Massachusetts:

     (a) Comprehensive public liability insurance of not less than $2,000,000.00
on a so-called "combined single limit" basis, in responsible companies qualified
to do business in Massachusetts, which insurance shall also provide for twenty
(20) days' notice of cancellation to Landlord and shall name Landlord and any
mortgagee of the Building, of which Tenant is notified as an additional insured
thereon;

     (b) Workmen's compensation insurance covering all employees, and if Tenant
shall contract with any independent contractor for the furnishing of labor,
materials or services to Tenant, Tenant shall require such independent
contractor to maintain workmen's compensation insurance covering all its
employees and all the employees of any such subcontractor; and

     (c) Fire insurance with standard extended coverage in an amount of not less
than the full replacement value of all Tenant's contents, including leasehold
improvements.

     All policies of property and liability insurance which either party obtains
in connection with the Premises shall include a clause or endorsement denying
the insurer any rights of subrogation against the other party. Each party waives
any rights of recovery against the other for injury or loss due to hazards
covered by insurance to the extent of the proceeds recovered therefrom.

     Certificates evidencing any or all of the foregoing liability insurance
shall be provided to Landlord prior to the Commencement Date and thereafter on
written request by Landlord.

 VIII. Permitted Uses; Environmental Regulations.
       -----------------------------------------

     Tenant may use the Premises only for the Permitted Uses.

     The Premises shall not be used for any illegal purposes; nor in any manner
to create any nuisance or trespass; nor in any manner to vitiate the insurance
or increase the rate of casualty insurance on the Building unless Tenant agrees
to pay for the entire such increase.

     Tenant shall not cause any hazardous wastes, toxic substances or related
materials (collectively "Hazardous Materials") to be used, generated, stored or
disposed of on, under or about, or transported to or from, the Property
(collectively, "Hazardous Materials Activities"), without first receiving
Landlord's written consent, which may be withheld for any reason whatsoever and
which may be revoked, at any time, and then only in compliance (which shall be
at Tenant's sole cost and expense) with all applicable Regulations and using all
necessary and appropriate precautions. Landlord shall not be liable to Tenant
for any Hazardous Materials

                                      -9-
<PAGE>

Activities by Tenant, Tenant's employees, agents, contractors, licensees or
invitees. Tenant shall indemnify, defend with counsel acceptable to Landlord and
hold Landlord harmless from any, claims, damages, costs and liabilities arising
out of Tenant's Hazardous Materials Activities on, under or about the Property.
Landlord shall not be liable to Tenant regardless of whether or not Landlord has
approved Tenant's Hazardous Materials Activities. For the purposes of this
Article, Hazardous Materials shall include but not be limited to substances
defined as "hazardous substances" or "toxic substances" in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Sec. 9061 et sec.; Hazardous Materials Transportation Act, 49 U.S.C. Sec.
1802; and Resource Conservation and Recovery Act, 42 U.S.C. Sec. 6901 et seq;
and those substances defined as "Hazardous wastes" under the laws of the
Commonwealth of Massachusetts and publications promulgated pursuant to said
laws; and any substances, materials and wastes which are or become regulated
under any applicable local, state, or federal law.

 IX. Damage and Destruction.
     ----------------------

     (a) Landlord agrees to maintain as to the Building during the Term, (i) a
policy of insurance insuring against all risks of physical damage or loss from
external cause to the extent of the replacement value thereof, and (ii) so-
called rental insurance, insuring against loss of rents during the period after
the occurrence of a casualty.

     (b) This Lease is made on the condition that in case, at any time after the
execution hereof, (i) at least fifty (50%) percent of the replacement value of
the Premises or (ii) at least twenty-five (25%) percent of the replacement of
the Building shall be destroyed or damaged by fire or other casualty, this Lease
may be terminated at the election of Landlord or Tenant in the instance of
proviso (i), and at the election of Landlord only in the instance of proviso
(ii), in either event within thirty (30) days after such damage or destruction
by notice in writing to the other party, and upon the giving of such notice this
Lease shall come to an end and be terminated as of and upon the date specified
in such notice, provided, however, that Tenant shall have a reasonable time from
the giving of such notice to remove Tenant's goods and effects from the
Premises. If this Lease is not terminated, then a just proportion of the rent
reserved hereunder shall be equitably abated as to the period after any such
casualty, and prior to the restoration of the Premises or termination of this
Lease, as the case may be, provided that Landlord shall be entitled to receive
all insurance proceeds referred to in Article IX (a)(ii) hereof.

 X.  Eminent Domain.
     --------------

     This Lease is made on the further condition that in case, at any time after
the execution hereof, all or any "material part" (as hereinafter defined) of the
Premises or the Building shall be taken for any street or other public or quasi-
public use or condemned by public authority, then this Lease may be terminated
at the election of Landlord or Tenant in the instance of the Premises, and at
the election of Landlord only in the instance of the Premises, and at the
election of Landlord only in the instance of the Building by notice to the other
party within forty-five (45)

                                      -10-
<PAGE>

days after such taking or condemnation has become effective, notwithstanding
that the entire interest of Landlord has been divested thereby, and upon the
giving of such notice this Lease shall come to an end and be terminated as of
and upon the date specified in such notice, provided, however, that Tenant shall
have a reasonable time from the giving of such notice to remove Tenant's goods
and effects from the Premises. In the event that this Lease shall not be so
terminated, or if the taking is less than a "material part" thereof and if the
Premises or any part thereof are thereby rendered unfit for use and occupation,
the hereinbefore reserved rent, or a just and proportionate part thereof
according to the nature and extent to which the Premises have been rendered
unfit for use and occupation, shall be temporarily suspended or abated until the
Premises, or what remains thereof, shall have been rebuilt and restored at the
expense of Landlord to substantially the condition in which they (or what
remains thereof) were immediately prior to such taking or condemnation, and are
capable of being occupied by Tenant for the purposes of Tenant's business. If as
a result of any taking or condemnation as aforesaid, the area of the Premises
which shall, after reconstruction, be available for use and occupation shall be
diminished and this Lease shall not have been terminated as aforesaid, or if the
taking is less than a "material part" thereof, a just proportion of said
reserved rent shall be permanently abated for the balance of the Term of this
Lease in proportion to such diminution. In case of any such taking or
condemnation all damages awarded for the same shall be the sole and exclusive
property of Landlord, whether or not this Lease is terminated as a result
thereof. The term "material part" shall mean twenty percent (20%) or more of the
floor area of the Premises, or ten percent (10%) or more of the Building.

 XI. Events of Default.
     -----------------

     The following shall constitute a "default" or an "Event of Default"
hereunder:

     (a) Tenant fails to pay Rent when due and such failure continues for five
(5) business days after Landlord gives Tenant written notice thereof (except
that such notice shall not be required more than twice in any calendar year);

     (b) Tenant fails to comply with any of its covenants in this Lease
regarding maintaining insurance, or subletting or assignment and such failure
continues for ten (10) days after Landlord gives Tenant written notice thereof;

     (c) Tenant fails to comply with any of Tenant's other obligations in this
Lease and such failure continues for a period of thirty (30) days after Landlord
gives Tenant a notice specifying in reasonable detail such failure, and if such
default is susceptible to cure, such reasonable additional time as may be
necessary to cure the default so long as Tenant proceeds with diligence to cure
the default as soon as reasonably possible and continues to take all steps
necessary to complete the same;

     (d) An execution or attachment is issued against Tenant or any of its
property as a result of which the Premises are taken or occupied by any person
other than Tenant;

                                      -11-
<PAGE>

     (e) Tenant or any Guarantor dies, dissolves, reorganizes or terminates its
existence;

     (f) Tenant or any Guarantor becomes insolvent or otherwise unable to pay
its debts as they become due;

     (g) Tenant or any Guarantor makes an assignment for the benefit of
creditors;

     (h) A receiver, trustee or other officer shall be appointed to take charge
of all or any substantial part of the assets of Tenant or Guarantor;

     (i) A petition is filed by or against Tenant or Guarantor under any
bankruptcy, insolvency or other law relating to the relief or adjustment of
indebtedness of debtors and is not dismissed within sixty (60) days of filing.

     This Lease is made on the condition that, if a default or an Event of
Default occurs, Landlord may immediately or at any time thereafter exercise one
of the following remedies:

     (a) Landlord may bring suit for damages or specific performance for the
collection of unpaid rent or the performance of any of Tenant's obligations,
without entering into possession or terminating this Lease; OR

     (b) Landlord may, at its option, give Tenant a notice terminating this
Lease on a date not less than ten (10) business days after Landlord gives such
notice, (and upon such date this Lease shall terminate and all rights of
Landlord shall cease without further notice or lapse of time) or Landlord may,
without notice (beyond what may be required by subparagraphs (a) through (i)
hereof), re-enter the Premises for the purpose of re-possessing the same and
terminating this Lease (it being agreed that Landlord shall first obtain such
court orders as may be necessary in relation thereto, if any). Upon termination
of this Lease, Tenant shall surrender the Premises to Landlord. Landlord may
remove Tenant's property and store it in a public warehouse at the expense and
risk of Tenant.

     At any time after termination of this Lease, pursuant to this Article XI,
Landlord shall be entitled to recover from Tenant, and Tenant shall pay to
Landlord, on demand the amount by which the fair rental value of the Premises
for the residue of the Term, minus reletting expenses, is less than the Base and
Additional Rent for the residue of the Term, said amount to be calculated from
the date of termination of this Lease, pursuant to subparagraph (B) above.

XII. Assignment and Subletting.
     -------------------------

     Tenant may not sublet the Premises, except with the express written
approval of Landlord and any mortgagee or other lien holder referred to in
Article XII hereof, which approval by Landlord shall not be unreasonably
withheld. Landlord agrees not to withhold its consent, however, in the event of
a sublease to a parent, subsidiary, or affiliate of Tenant. If Tenant

                                      -12-
<PAGE>

receives rent or other consideration for any sublease in excess of the Base Rent
and the Additional Rent, Tenant shall pay Landlord such excess.

     In any event, it is understood and agreed that any such sublease shall be
subject to the terms and conditions of this Lease, that Tenant shall continue to
be liable to Landlord for compliance with the terms and conditions of this Lease
throughout the duration of the initial term and any extended term, and that
Landlord shall have no obligation to look to such subtenant for the enforcement
of the terms and conditions of this Lease, but may proceed directly against
Tenant whether or not Tenant occupies any portion of the Premises, it being the
intention of this clause that no sublease shall impose any obligations on
Landlord, or otherwise affect any of the rights of Landlord under this Lease.

     No assignment of this Lease shall be allowed, in any event.

XIII. Miscellaneous.
      -------------

      (a) Waiver. No consent or waiver, express or implied, by either party to,
          ------
or of any breach of, any agreement or duty of the other party shall be construed
as a consent to or waiver of any other breach of the same or any other agreement
or duty.

      (b) Servants, Agents and Employees. The terms "Landlord" and "Tenant"
          ------------------------------
shall include therein their respective servants, agents and employees.

      (c) Term. The word "Term" refers as of any particular time to the Initial
          ----
Term and also to any extension thereof with respect to which Tenant has as of
that time exercised its extension option set forth herein.

      (d) Writing. Whenever any notice, approval, consent or request is given
          -------
pursuant hereto, the same shall be in writing.

      (e) Notices. All notices shall be sent to the respective addresses for
          -------
Landlord and Tenant indicated on page 1 of this Lease. Any notice required
hereunder shall be in writing, and shall be delivered by hand, be sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed, or be sent by expedited or overnight courier. All notices required or
otherwise given hereunder shall be deemed to be received on the date of delivery
by hand or delivery by mail, or one (1) day after the date of deposit with an
expedited or overnight carrier. Delivery by mail shall be evidenced by the
signed receipt for registered or certified mail, or by an indication by the U.S.
Postal Service that delivery has been refused.

      (f) Applicable Law. This Lease shall be deemed to be a contract made under
          --------------
the laws of the Commonwealth of Massachusetts, and shall be construed in
accordance with the laws of said Commonwealth.

                                      -13-
<PAGE>

      (g) Entire Agreement. The whole agreement between the parties hereto is
          ----------------
set forth herein and neither party shall be bound by any understanding or
condition other than those expressly set forth and stipulated herein, unless in
writing subscribed by both parties.

      (h) Broker. Landlord and Tenant warrant to each other that no broker other
          ------
than as specified in paragraph (13) on page 1 hereof, introduced Tenant to these
premises, and each agrees to indemnify, defend and hold the other harmless
against any breach of said warranty.

      (i) Limitation of Landlord's Liability. The obligations of this Lease
          ----------------------------------
shall run with the land, and this Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that Landlord shall be liable only for obligations while owner of the
Land or Building and the obligations of the Landlord hereunder shall be
enforceable only against, and recovery shall be had only against, Landlord's
ownership interest in the Land and Building, and not against any trustee,
officer, agent, shareholder or beneficiary of the trust individually.

      (j) Subordination. Tenant agrees that it will at any time and from time to
          -------------
time, upon request of Landlord, subordinate this Lease to any mortgage, deed of
trust and/or any other security indenture hereafter placed upon the Building or
the Land and to any renewal, modification, replacement or extension of such
mortgage, deed of trust, or security indenture and to any and all advances made
or to be made thereunder, provided that in the instrument of subordination the
mortgagee, trustee or holder of such security indenture agrees, for itself and
its successors and assigns, that so long as Tenant shall not be in default under
this Lease, the mortgagee, trustee or holder or such security indenture and its
successors and assigns will not disturb the peaceful, quiet enjoyment of the
Premises by Tenant. Tenant hereby irrevocably appoints Landlord, its
representatives and assigns, to be Tenant's attorneys or attorneys-in-fact, to
execute and deliver any and all such instrument or instruments of subordination
for and on behalf of Tenant and its successors and assigns (in which event, a
copy thereof shall be furnished by Landlord). Tenant also agrees, for itself and
its successors and assigns, that if this Lease is so subordinated, no entry
under any such mortgage or sale for the purpose of foreclosing the same shall be
regarded as an eviction of Tenant or its successors and/or assigns, constructive
or otherwise, or give Tenant or its successors or assigns any right to terminate
this Lease, whether it or they attorn or become tenant of the mortgagee or new
owner or not.

     If any mortgagee, trustee or holder of such security indenture elects to
have this Lease and the interest of Tenant thereunder superior to any such
interest by notice to be given to Tenant, then this Lease and the interest of
Tenant hereunder shall be deemed superior to any mortgage, deed of trust, or
security indenture, whether this Lease was executed before or after such
mortgage, deed of trust or security indenture.

      (k) Estoppel Certificate. Each of the Tenant and Landlord agree from time
          --------------------
to time upon request of the other to furnish certification to the other that (i)
this Lease is then in full force and effect, if such be the case; (ii) that
there is no default hereunder, and if such shall not be

                                      -14-
<PAGE>

the case, to specify any default then existing; and (iii) to such other effects
as Landlord's lenders may reasonably request, including, without limitation,
such financial statements and other data as Tenant has made generally available
to its customers or prospective customers.

      (l) Indemnification by Tenant. In addition to and not in limitation of any
          -------------------------
other provisions of this Lease, Tenant does hereby agree to indemnify and hold
harmless Landlord of and from all costs and expenses including reasonable
attorney's fees, incurred by Landlord (after written notice to Tenant whenever
expressly required hereunder), in exercising its rights under this Lease or
enforcing the obligations and duties of Tenant hereunder.

     Also, Landlord does hereby agree to indemnify and hold harmless Tenant of
and from all costs and expenses, including reasonable attorneys fees, incurred
by Tenant in exercising its rights under this Lease or enforcing the obligations
and duties of Landlord hereunder; provided, however, that the foregoing
indemnification shall not become operative unless and until Tenant has given
Landlord no less than thirty (30) days written notice and the opportunity to
cure any such default.

      (m) Option to Extend. Tenant shall have the right and option to extend the
          ----------------
Initial Term hereof for an additional five (5) years, provided that Tenant shall
not be in default of any of the terms of this Lease, either at the time such
option is exercised, or at the expiration of the preceding Term. Said option
shall be exercisable by written notice to Landlord given not less than nine (9)
months prior to the expiration of the preceding Term. Said extension shall be on
the same terms, covenants and conditions as are contained in this Lease, except
that the Base Rent for the extended Term shall be adjusted to the Fair Rental
Value of the Premises as agreed upon by the parties as of the date which is six
months prior to the expiration of said Term (the "Determination Date"). Said
Fixed Rent adjusted shall in no event, however, be less than the Fixed Rent
during the prior Lease Period. Fair Rental Value is defined as the highest rent
that the Premises would bring if offered for lease in the open market as of the
Determination Date, allowing a reasonable time to find a tenant who leases with
the knowledge of all of the uses to which the Premises are adapted and for which
they are capable of being used. If the parties are unable to agree on said Fair
Rental Value as of the Determination Date, said question shall be submitted to
arbitration as provided in Exhibit E hereto.

      (n) Security Deposit. If an amount has been specified in Paragraph (11) on
          ----------------
page 2 of this Lease, then upon the execution of this Lease, Tenant has
deposited with Landlord said sum as a security deposit to assure the Landlord of
the full and prompt payment and performance of Tenant's obligations under this
Lease. Said amount is not advance rent and if Tenant shall have fully performed
all of its obligations under this Lease, Landlord shall return said security
deposit to Tenant at the expiration of this Lease subject to any diminution
thereof pursuant to the terms of this Lease. Landlord need not have recourse to
said security deposit but may require Tenant's performance without regard
thereto. If Landlord shall use all or any part of the said security deposit to
cure Tenants default hereunder, Tenant shall restore the part so used promptly
upon demand of Landlord. Landlord shall place said sum in a separate investment-
type account for the

                                      -15-
<PAGE>

benefit of the Tenant, and Landlord shall remit the interest on said account to
Tenant on an annual basis, together with an indication of where said account is
maintained.

      (o) Interest Rate. Unless otherwise provided in the Lease to the contrary,
          -------------
any sums due from Tenant to Landlord hereunder, if not paid within ten (10) days
of the date originally due hereunder, shall bear interest at the lower of (i)
the Prime Rate of the Bank of Boston, N.A., plus three (3%) percentage points or
(ii) the maximum rate permitted by law, from the date originally due until paid
in full.

      (p) Notice of Lease; Commencement Date Agreement. Neither party will
          --------------------------------------------
record this Lease but each party will on demand by the other execute an
appropriate memorandum or notice of this Lease, for recording pursuant to
Massachusetts General Laws, Chapter 183, Section 4, and a Commencement Date
Agreement in the form set forth on Exhibit C attached hereto.

      (q) Tenant's Access Prior to Term. Tenant and Tenant's agents may enter
          -----------------------------
the Premises prior to the Commencement Date at such times and for such purposes
as Landlord may approve, which approval shall not be unreasonably withheld, in
order to do such preparation as may be required to make the Premises ready for
Tenant's occupancy. If at any time such entry unreasonably interferes with the
orderly or timely completion of the Building or Premises, Landlord may withdrawn
such permission upon 24 hours Notice to Tenant. Any such entry into the Premises
shall be deemed to be under all of the terms of this Lease, except that the
obligation to pay rent shall not commence until the Commencement Date. If Tenant
does so enter the Premises, Landlord shall not be liable for any injury or death
to any person, or damage to any property. Such entry shall be at Tenant's sole
risk and Tenant shall indemnify, defend and hold harmless Landlord for any and
all loss, cost or expense arising or resulting from same.

     IN WITNESS WHEREOF, the parties hereto have set their respective hands and
seals as of the day first written.

Witness:                            Landlord:

                                    THIRD FRANKLIN TRUST

                                By:
------------------------------      --------------------------------
                                                             , Trustee and
                                    -------------------------
                                    Not Individually

                                    Tenant:
                                    W. F. WOOD, INC.

------------------------------      --------------------------------
                                    Its:
                                        ----------------------------
                                    Hereunto duly authorized

                                      -16-
<PAGE>

                                   EXHIBIT A
                                   ---------
                      Tenant's Floor Plan of the Premises

                                      -17-
<PAGE>

                                   EXHIBIT C
                                   ---------

                          COMMENCEMENT DATE AGREEMENT

To:______________________  Date:______________________

     Re:  Lease dated __________________, 19__ between First Franklin Trust,
Landlord, and ______________________, Tenant, located at ____________________

Gentlemen:

     In accordance with the subject Lease, we wish to advise and/or confirm as
follows:

     1.   That the Premises have been accepted herewith by the Tenant as being
substantially complete in accordance with the subject Lease, and that there is
no deficiency in construction.

     2.   That the Tenant has possession of the subject Premises and
acknowledges that under the provisions of the subject Lease, the term of said
Lease shall commence as of ("Commencement Date") for a term of _______________,
ending on _______________.

     3.   That in accordance with the subject Lease, rent commenced to accrue on
_____________________.

     4.   If the Commencement Date of the subject Lease is other than the first
day of the month, the first billing will contain a pro rata adjustment. Each
billing thereafter shall be for the full amount of the monthly installment as
provided for in said Lease.

     5.   Rent is due and payable in advance on the first day of each and every
month during the term of said Lease. Your rent checks should be made payable to
______________ at _________________.

AGREED AND ACCEPTED:

"Tenant"                            "Landlord"

__________________________________  __________________________________
a ________________________________  a ________________________________

By:_______________________________  By:_______________________________
  Its:____________________________    Its:____________________________

                                      -18-
<PAGE>

                                   EXHIBIT D
                                   ---------

                            SUPPLEMENTAL AGREEMENTS

  Anything to the contrary in the foregoing lease notwithstanding, Landlord and
Tenant hereby agree as follows:

1.   During the period from the Commencement Date to and including January 14,
     1999, Tenant shall not be obligated to pay the Rent.

2.   With respect to the requirement under Article XII for Landlord's approval
     of any sublet of the Premises by Tenant, such approval will not be
     unreasonably delayed or conditioned.

3.   In the event that Tenant enters into an agreement with Landlord to (i)
     lease or purchase another parcel in Franklin Industrial Park and (ii) build
     new premises by Landlord to suit Tenant at said parcel, then Tenant shall
     have the right to terminate this Lease effective upon the Tenant taking
     occupancy of the new premises.

                                      -19-
<PAGE>

                                   EXHIBIT E
                                   ---------

     If the parties are unable to agree on said Fair Rental Value as of the
Determination, Date, said question shall be submitted upon either party's
request to a board of appraisers two (2) in number, one named by Lessor and one
named by Lessee. Each appraiser appointed under this paragraph shall be a
reputable real estate broker of industrial and office space with at least ten
(10) years experience in the Boston Metropolitan Area. Each appraiser so
appointed shall be instructed to determine independently the Fair Rental Value
within thirty (30) days after the request of either party If (i) only one
appraiser shall have been appointed within ten (10) days after the first party's
request, or (ii) if two appraisers shall have been appointed by only one
appraiser shall have made a determination of Fair Rental Value within thirty
(30) days after the request of either party as aforesaid, then the determination
of such single appraiser shall be final and binding upon both parties. If two
appraisers shall have been appointed and shall have made their determinations
within the respective requisite periods set forth above, and if the difference
between the amounts so determined shall not exceed ten (10%) percent of the
lesser of such amounts, then the Fair Rental Value shall be the average of the
amounts so determined; if, however, the difference between the amounts so
determined shall exceed ten (10%) percent of the lesser of such amounts, then
such two appraisers shall have ten (10) days to appoint a third appraiser, but
if such appraisers fail to do so, then either party may request the President of
the Greater Boston Real Estate Board to appoint an appraiser within ten (10)
days of such request. Such third appraiser shall also be a reputable real state
broker of industrial and office space with at least ten (10) years experience in
the Boston Metropolitan Area, and shall not have acted in any capacity for
either party within five (5) years of his selection. Both parties shall be bound
by

                                      -20-
<PAGE>

any appointment so made within said ten (10) day period. If no such appraiser
shall have been appointed within said ten (10) days, either party may apply to
any court having jurisdiction to make such appointment. Any appraiser appointed
by the original appraisers, by the President of the Greater Boston Real Estate
Board, or by the court, shall be instructed to determine the Fair Rental Value
within thirty (30) days after his appointment. If the amount of the third
appraisal shall be less than the lower of the first two appraisals, the Fair
Rental Value shall be the lower of the first two appraisals. In all other cases,
the Fair Rental Value shall be equal to the third appraisal. This provision for
determination by appraisal shall be specifically enforceable to the extent such
remedy is available under applicable law, and any determination hereunder shall
be final and binding upon the parties except as otherwise provided by law.

     Each party shall bear the costs of its own appraiser, and shall share
equally the cost of a third appraiser, if any.

                                      -21-
<PAGE>

                              CERTIFICATE OF VOTE
                              -------------------

     I, _____________________________, Clerk of ______________________, a
corporation duly organized and existing under the laws of
_________________________ do hereby certify that at a duly called and held
meeting of the Board of Directors of said Corporation, at which a quorum was
present and acting throughout, it was unanimously

VOTED: That this Corporation enter into a lease for the premises at ___________,
       Franklin, Massachusetts for a term of ( ) years for such rent and upon
       such other terms, provisions and conditions, including rent and
       additional rent, as the President, Treasurer or any Vice President of
       this Corporation shall, by the execution thereof, determine.

VOTED: That the President, Treasurer or any Vice President of this Corporation
       be, and he hereby is, authorized and empowered for and on behalf of this
       Corporation, and in its corporate name, to execute, acknowledge, affix
       the corporate seal thereto, and deliver a lease pursuant to the foregoing
       vote, and such other instruments and documents as may be necessary or
       desirable to effectuate the same, upon such terms, provisions, and
       conditions as the said officer shall, by the execution thereof,
       determine.

    I do hereby further certify that _______________________ is the President of
this Corporation and that ________________________ is the Vice President of this
Corporation, and that ________________________ is the Treasurer of this
Corporation, each duly elected, qualified and acting as _______________________
such, that the foregoing votes are in full force and effect as the date hereof,
and that no provision of the charter or By-Laws of this Corporation prohibit,
condition or detract from the authority hereinabove granted.

                                ______________________________________
                                Clerk

                                      -22-

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