Item 1.01 Entry into a Material Definitive Agreement.
Fifth Amendment to Amended and Restated Revolving Credit and Security Agreement
On September 25, 2020, SMTC Corporation, a Delaware corporation (the "Company"),
entered into that certain Fifth Amendment to the Amended and Restated Revolving
Credit and Security Agreement ("PNC Amendment"), by and among the Company, SMTC
Manufacturing Corporation of California, a California corporation ("SMTC
California"), SMTC Mex Holdings, Inc., a Delaware corporation ("SMTC Mex"), HTM
Holdings, Inc., a Delaware corporation ("HTM"), MC Test Service, Inc., a Florida
corporation ("MC Test"), MC Assembly International LLC, a Delaware limited
liability company ("MC Assembly International"), MC Assembly LLC, a Delaware
limited liability company ("MC Assembly" and together with the Company, SMTC
California, SMTC Mex, HTM, MC Test and MC Assembly International, and each other
person joined thereto as a borrower from time to time, the "Borrowers"), the
financial institutions party to that certain Amended and Restated Revolving
Credit and Security Agreement, dated as of November 8, 2018 (as disclosed on the
Company's Current Report on Form 8-K filed on November 9, 2018), as amended on
March 29, 2019 (as disclosed on the Company's Current Report on Form 8-K filed
on April 4, 2019), as amended on August 8, 2019 (as disclosed on the Company's
Current Report on Form 8-K filed on August 12, 2019), as amended on September
27, 2019 (as disclosed on the Company's Current Report on Form 8-K filed on
October 2, 2019), as amended on June 26, 2020 (as disclosed on the Company's
Current Report on Form 8-K filed on June 29, 2020) (such agreement, the "PNC
Agreement" and, such lenders thereto, the "PNC Lenders"), and PNC Bank, National
Association ("PNC"), as agent for the PNC Lenders (in such capacity, the
"Agent"), which governs the credit facilities among the Borrowers, the PNC
Lenders and PNC (the "PNC Facilities").
The PNC Amendment, among other things, (i) amends the definition of
"Consolidated EBITDA" by permitting an addback for non-recurring labor costs,
temporary employee bonuses to reduce absenteeism, personal protective equipment
costs, facility sanitation costs, and excess freight and logistics costs, not to
exceed an additional $1,500,000 for the fiscal quarter ended September 27, 2020,
and (ii) provides for borrowings of up to $2,000,000 million on certain
consigned assets.
The foregoing description of the PNC Amendment does not purport to be complete
and is qualified in its entirety by reference to the full text of the PNC
Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and
is incorporated herein by reference.
Sixth Amendment to Financing Agreement
On September 25, 2020, the Company entered into that certain Amendment No. 6 to
the Financing Agreement (the "TCW Amendment"), by and among the Company, each
person that is a borrower under that certain Financing Agreement, dated as of
November 8, 2018 (as disclosed on the Company's Current Report on Form 8-K filed
on November 9, 2018), as amended on March 29, 2019 (as disclosed on the
Company's Current Report on Form 8-K filed on April 4, 2019), as amended on July
3, 2019 (as disclosed on the Company's Current Report on Form 8-K filed on July
5, 2019), as amended on August 8, 2019 (as disclosed on the Company's Current
Report on Form 8-K filed on August 12, 2019), as amended on September 27, 2019
(as disclosed on the Company's Current Report on Form 8-K filed on October 2,
2019), as amended on June 26, 2020 (as disclosed on the Company's Current Report
on Form 8-K filed on June 29, 2020) (as amended to date, the "Financing
Agreement"), each other loan party that is a party to the Financing Agreement,
each financial institution that is a party to the Financing Agreement
(collectively, the "TCW Lenders"), TCW Asset Management Company LLC, as
administrative agent for the TCW Lenders (in such capacity, the "Administrative
Agent"), and TCW Asset Management Company LLC, as collateral agent for the TCW
Lenders.
The TCW Amendment, among other things, amends the definition of "Consolidated
EBITDA" by permitting an addback for non-recurring labor costs, temporary
employee bonuses to reduce absenteeism, personal protective equipment costs,
facility sanitation costs, and excess freight and logistics costs, not to exceed
an additional $1,500,000 million for the fiscal quarter ended September 27,
2020.
The foregoing description of the TCW Amendment does not purport to be complete
and is qualified in its entirety by reference to the full text of the TCW
Amendment, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and
is incorporated herein by reference.
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosure provided under Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03 as if fully set forth herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
10.1 Fifth Amendment to Amended and Restated Revolving Credit and Security
Agreement, by and among SMTC Corporation, SMTC Manufacturing Corporation
of California, SMTC Mex Holdings, Inc., HTM Holdings, Inc., MC Test
Service, Inc., MC Assembly International LLC, MC Assembly LLC, the
financial institutions party thereto and PNC Bank, National Association,
as agent for the lenders, dated September 25, 2020. * †
10.2 Amendment No. 6 to Financing Agreement, by and among SMTC Corporation,
the borrowers party thereto, each other loan party thereto, the lenders
party thereto, TCW Asset Management Company LLC, as administrative agent
for the lenders, and TCW Asset Management Company LLC, as collateral
agent for the lenders, dated September 25, 2020.*
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Filed herewith.
† Pursuant to Item 602(b)(2) of Regulation S-K, certain immaterial provisions
of the agreement that would likely cause competitive harm to the Company if
publicly disclosed have been redacted or omitted.
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