Common use of Tranche B Loan Clause in Contracts

Tranche B Loan. To request the Borrowing of the Tranche B Loan, the Borrower shall notify the Administrative Agent of such request by telephone (x) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, on the date of the proposed Borrowing and (y) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time on the date of the proposed Borrowing. Such telephonic notice shall be irrevocable and shall be confirmed promptly by hand delivery, courier or telecopy to the Administrative Agent of a written Borrowing Request in a form reasonably acceptable to the Administrative Agent and signed by the Borrower. Such telephone and written Borrowing Request shall specify the following information in compliance with Section 2.01: (i) the aggregate amount of the requested Borrowing (which shall be the amount of the Total Tranche B Commitment); (ii) the date of such Borrowing, which shall be a Business Day and the Effective Date; (iii) the portion of the Tranche B Loan that is to initially be an ABR Borrowing and that is to initially be a Eurodollar Borrowing; and (iv) in the case of such portion of the Tranche B Loan that is a Eurodollar Borrowing, the initial Interest Period applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”. If no election as to the Type of Borrowing is specified, then the Tranche B Loan shall initially be an ABR Borrowing. If no Interest Period is specified with respect to any portion of the Tranche B Loan that is to initially be a Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of the Borrowing Request in accordance with this Section 2.04(b), the Administrative Agent shall advise each Tranche B Lender of the details thereof and of the amount of such Tranche B Lender’s Loan to be made as part of the requested Borrowing (which shall be equal to such Tranche B Lender’s Tranche B Commitment).

Tranche B Loan. To request the Borrowing of the Tranche B Loan, the Borrower shall notify the Administrative Agent of such request by telephone (x) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, on the date of the proposed Borrowing and (y) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time on the date of the proposed Borrowing. Such telephonic notice shall be irrevocable and shall be confirmed promptly by hand delivery, courier or telecopy to the Administrative Agent of a written Borrowing Request in a form reasonably acceptable to the Administrative Agent and signed by the Borrower. Such telephone and written Borrowing Request shall specify the following information in compliance with Section 2.01: (i) the aggregate amount of the requested Borrowing (which shall be the amount of the Total Tranche B Commitment); (ii) the date of such Borrowing, which shall be a Business Day and the Effective Date; (iii) the portion of the Tranche B Loan that is to initially be an ABR Borrowing and that is to initially be a Eurodollar Borrowing; and (iv) in the case of such portion of the Tranche B Loan that is a Eurodollar Borrowing, the initial Interest Period applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”Period . If no election as to the Type of Borrowing is specified, then the Tranche B Loan shall initially be an ABR Borrowing. If no Interest Period is specified with respect to any portion of the Tranche B Loan that is to initially be a Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s month s duration. Promptly following receipt of the Borrowing Request in accordance with this Section 2.04(b), the Administrative Agent shall advise each Tranche B Lender of the details thereof and of the amount of such Tranche B Lender’s Lender s Loan to be made as part of the requested Borrowing (which shall be equal to such Tranche B Lender’s Lender s Tranche B Commitment).

Tranche B Loan. To request the Borrowing of the Tranche B Loan, the Borrower shall notify the Administrative Agent of such request by telephone (xa) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.1:00 p.m., New York City time, on three (3) Business Days before the date of the proposed Borrowing and (yb) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time on the date of the proposed Borrowing. Such telephonic notice shall be irrevocable and shall be confirmed promptly by hand delivery, courier delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form reasonably acceptable to approved by the Administrative Agent and signed by the Borrower. Such telephone and written Borrowing Request shall specify the following information in compliance with Section 2.01: (i) the aggregate amount of the requested Borrowing (which shall be the amount of the Total Tranche B Commitment)Borrowing; (ii) the date of such Borrowing, which shall be a Business Day and the Effective DateDay; (iii) the portion of the Tranche B Loan Borrowing that is to initially be an ABR Borrowing and that is to initially be a Eurodollar Borrowing; and (iv) in the case of such portion of the Tranche B Loan Borrowing that is a Eurodollar Borrowing, the initial Interest Period applicable thereto, which shall be a period contemplated by the definition of the term “"Interest Period”". If no election as to the Type of Borrowing is specified, then the Tranche B Loan requested Borrowing shall initially be an ABR Borrowing. If no Interest Period is specified with respect to any portion of the Tranche B Loan requested Borrowing that is to initially be a Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s 's duration. Promptly following receipt of the Borrowing Request in accordance with this Section 2.04(b), the Administrative Agent shall advise each Tranche B Lender of the details thereof and of the amount of such Tranche B Lender’s 's Loan to be made as part of the requested Borrowing. Notwithstanding that the initial Borrowing (which of the Tranche B Loan may be requested as a Eurodollar Borrowing, in the event the Agent, in its reasonable discretion, determines that such Eurodollar Borrowing is not practicable, such initial Borrowing shall be equal to such Tranche B Lender’s Tranche B Commitment)an ABR Borrowing.

Tranche B Loan. To request the Borrowing of the Tranche B Loan, the Borrower shall notify the Administrative Agent of such request by telephone (xa) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.1:00 p.m., New York City time, on three (3) Business Days before the date of the proposed Borrowing and (ya) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time on the date of the proposed Borrowing. Such telephonic notice shall be irrevocable and shall be confirmed promptly by hand delivery, courier or telecopy to the Administrative Agent of a written Borrowing Request in a form reasonably acceptable to the Administrative Agent and signed by the Borrower. Such telephone and written Borrowing Request shall specify the following information in compliance with Section 2.01: (i) the aggregate amount of the requested Borrowing (which shall be the amount of the Total Tranche B Commitment); (ii) the date of such Borrowing, which shall be a Business Day and the Effective DateDay; (iii) the portion of the Tranche B Loan that is to initially be an ABR Borrowing and that is to initially be a Eurodollar Borrowing; and (iv) in the case of such portion of the Tranche B Loan that is a Eurodollar Borrowing, the initial Interest Period applicable thereto, which shall be a period contemplated by the definition of the term “"Interest Period”". If no election as to the Type of Borrowing is specified, then the Tranche B Loan shall initially be an ABR Borrowing. If no Interest Period is specified with respect to any portion of the Tranche B Loan that is to initially be a Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s 's duration. Promptly following receipt of the Borrowing Request in accordance with this Section 2.04(b), the Administrative Agent shall advise each Tranche B Lender of the details thereof and of the amount of such Tranche B Lender’s 's Loan to be made as part of the requested Borrowing (which shall be equal to such Tranche B Lender’s 's Tranche B Commitment).

Tranche B Loan. To request the Borrowing of the Tranche B Loan, the Borrower shall notify the Administrative Agent of such request by telephone (x) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, on the date of the proposed Borrowing and [three (y) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time on 3)] Business Days before the date of the proposed Borrowing. Such telephonic notice shall be irrevocable and shall be confirmed promptly by hand delivery, courier delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form reasonably acceptable to approved by the Administrative Agent and signed by the Borrower. Such telephone and written Borrowing Request shall specify the following information in compliance with Section 2.01[2.02]: (i) the aggregate amount of the requested Borrowing (which shall be the amount of the Total Tranche B Commitment)Borrowing; (ii) the date of such Borrowing, which shall be a Business Day and the Effective DateDay; (iii) the portion of the Tranche B Loan Borrowing that is to initially be an ABR Borrowing and that is to initially be a Eurodollar Borrowing; and; (iv) in the case of such portion of the Tranche B Loan Borrowing that is a Eurodollar Borrowing, the initial Interest Period applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and (v) the location and number of the accounts of the Existing First Lien Lenders to which funds are to be disbursed. If no election as to the Type of Borrowing is specified, then the Tranche B Loan requested Borrowing shall initially be an ABR Borrowing. If no Interest Period is specified with respect to any portion of the Tranche B Loan requested Borrowing that is to initially be a Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of the Borrowing Request in accordance with this Section 2.04(b), the Administrative Agent shall advise each Tranche B Lender of the details thereof and of the amount of such Tranche B Lender’s Loan to be made as part of the requested Borrowing (which shall be equal to such Tranche B Lender’s Tranche B Commitment)Borrowing.

Tranche B Loan. To request the initial Borrowing of the Tranche B Loan or the Delayed Draw Tranche B Loan, the Borrower shall notify the Administrative Paying Agent of such request by telephone (xi) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.2:00 p.m., New York City time, on three (3) Business Days before the date of the proposed Borrowing and (yii) in the case of an ABR Borrowing, not later than 12:00 noon2:00 p.m., New York City time on time, one (1) Business Day before the date of the proposed Borrowing (subject, in the case of an ABR Borrowing, to the last sentence of this Section 2.03(b)). Such telephonic notice shall be irrevocable and shall be confirmed promptly by hand delivery, courier delivery or telecopy to the Administrative Paying Agent of a written Borrowing Request in a form reasonably acceptable to approved by the Administrative Paying Agent and signed by the Borrower. Such telephone and written Borrowing Request shall specify the following information in compliance with Section 2.01: (i) the aggregate amount of the requested Borrowing (which shall not be less than $5,000,000 (and integral multiples of $1,000,000) in the amount case of a Eurodollar Borrowing and $1,000,000 (and integral multiples of $100,000) in the Total Tranche B Commitmentcase of an ABR Borrowing); (ii) the date of such Borrowing, which shall be a Business Day and the Effective DateDay; (iii) the portion of the Tranche B Loan Borrowing that is to initially be an ABR Borrowing and that is to initially be a Eurodollar Borrowing; and (iv) in the case of such portion of the Tranche B Loan Borrowing that is a Eurodollar Borrowing, the initial Interest Period applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”. If no election as to the Type of Borrowing is specified, then the Tranche B Loan requested Borrowing shall initially be an ABR Borrowing. If no Interest Period is specified with respect to any portion of the Tranche B Loan requested Borrowing that is to initially be a Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of the Borrowing Request in accordance with this Section 2.04(b2.03(b), the Administrative Paying Agent shall advise each Tranche B Lender of the details thereof and of the amount of such Tranche B Lender’s Loan to be made as part of the requested Borrowing (which shall be equal to such Tranche B Lender’s Tranche B Commitment)Borrowing.

Tranche B Loan. To request (a) Subject to and upon the Borrowing of the Tranche B Loanterms and conditions contained herein, the Borrower shall notify the Administrative Agent of such request by telephone (x) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, on the date of the proposed Borrowing and (y) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time on the date of the proposed Borrowing. Such telephonic notice shall be irrevocable and shall be confirmed promptly by hand delivery, courier or telecopy to the Administrative Agent of a written Borrowing Request in a form reasonably acceptable to the Administrative Agent and signed by the Borrower. Such telephone and written Borrowing Request shall specify the following information in compliance with Section 2.01: (i) the aggregate amount of the requested Borrowing (which shall be the amount of the Total Tranche B Commitment); (ii) the date of such Borrowing, which shall be a Business Day and the Effective Date; (iii) the portion of the Tranche B Loan that is to initially be an ABR Borrowing and that is to initially be a Eurodollar Borrowing; and (iv) in the case of such portion of the Tranche B Loan that is a Eurodollar Borrowing, the initial Interest Period applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”. If no election as to the Type of Borrowing is specified, then the Tranche B Loan shall initially be an ABR Borrowing. If no Interest Period is specified with respect to any portion of the Tranche B Loan that is to initially be a Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of the Borrowing Request in accordance with this Section 2.04(b), the Administrative Agent shall advise each Tranche B Lender of the details thereof and of the amount of such agrees to make its Tranche B Lender’s Loan to be made as part US Borrowers in US Dollars on the Closing Date. The aggregate of the requested Borrowing (which shall be equal to such each Tranche B Lender’s Tranche B CommitmentLoan is US$16,500,000. (b) If a Priority Event has occurred and is continuing, all payments shall be applied in accordance with Section 5.4. In the absence of a continuing Priority Event, the following payments shall be made: (i) Repayment of the Tranche B Loan shall be made by US Borrowers to Agent, for the benefit of Tranche B Lenders, in quarterly installments of US$767,857 commencing on October 1, 2007 and payable on the first Business Day of each fiscal quarter of SMTC Corporation thereafter with the final payment due in respect thereof (together with all outstanding interest thereon) payable on the Maturity Date. (ii) Fifty (50%) percent of Excess Cash Flow for each fiscal year of SMTC Corporation ending December 31, 2008 and thereafter, calculated using the audited consolidated financial statements of SMTC Corporation delivered pursuant to Section 8.6(a)(ii), shall be applied as a permanent repayment of the Tranche B Loan; provided that, the foregoing repayment shall not be made in the event that: (A) Total Excess Availability would be less than US$3,000,000 immediately after giving effect to such repayment or the average Total Excess Availability is less than US$3,000,000 for the fifteen (15) days immediately preceding such repayment, provided that, at such time as Total Excess Availability would be equal to or greater than US$3,000,000 immediately after giving effect to such repayment and the average Total Excess Availability is equal to or greater than US$3,000,000 for the fifteen (15) days immediately preceding such payment, SMTC Corporation shall make such payment and such payment shall be applied as a permanent repayment of the Tranche B Loan; provided further that if SMTC Corporation fails to make such repayment as a result of the failure to meet the foregoing Total Excess Availability Tests within thirty (30) days of it otherwise being due and payable the failure to make such payment may be deemed a “Priority Event” by Tranche B Agent, in its sole discretion; or (B) a Priority Event shall have occurred and be continuing or would result from such repayment. Such repayments of the Tranche B Loan shall be applied to installments under Section 2.3(b)(i) in the inverse order of maturity. (iii) The proceeds of any Debt Offering or Equity Offering shall be applied as a permanent repayment of the Tranche B Loan provided a Priority Event shall not have occurred and be continuing or would result from such repayment. Such repayments of the Tranche B Loan shall be applied to installments under Section 2.3(b)(i) in the inverse order of maturity. (iv) The proceeds of any sale of the Tranche B Loan Priority Collateral shall be applied as a permanent repayment of the Tranche B Loan; provided that: (A) prior to a Priority Event, Agent shall apply such proceeds in accordance with this paragraph (iv) if Agent has received such proceeds and (a) on or after its receipt and prior to applying such proceeds to the Revolving Loans Agent has actual knowledge that such proceeds are proceeds of any sale of the Tranche B Loan Priority Collateral or (b) at any time after Agent has applied such proceeds to the Revolving Loans upon (x) Agent obtaining actual knowledge that it has received such proceeds of any sale of Tranche B Loan Priority Collateral and applied such proceeds to the Revolving Loans and (y) Total Excess Availability is equal to or greater than US$1,000,000; and (B) after a Priority Event, Agent shall apply such proceeds in accordance with this paragraph (iv) upon Agent’s receipt of such proceeds. Such repayments of the Tranche B Loan shall be applied to installments under Section 2.3(b)(i) in the inverse order of maturity. (v) The proceeds of any sale of Mexican Obligor Collateral (other than, in the absence of a continuing Priority Event, sales of Inventory of the Mexican Obligors and SMTC Mex Holdings, Inc. in the ordinary course of business) shall be applied as a permanent repayment of the Tranche B Loan. Such repayments of the Tranche B Loan shall be applied to installments under Section 2.3(b)(i) in the inverse order of maturity. (vi) US Borrowers may make voluntary prepayments of the Tranche B Loan upon the satisfaction of each of the following conditions: (a) Total Excess Availability would not be less than US$3,000,000 immediately after giving effect to such prepayment, (b) the average Total Excess Availability is not less than US$3,000,000 for the fifteen (15) days immediately preceding such repayment and (c) as of the date of any such prepayment and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing or would result from such prepayment. Such repayments of the Tranche B Loan shall be applied to installments under Section 2.3(b) in the inverse order of maturity. (vii) Any amounts repaid in respect of the Tranche B Loan may not be reborrowed and shall be applied to permanently reduce the aggregate amount of the Tranche B Loan. (c) Tranche B Loan Interest: (i) US Borrowers shall pay to Agent, for the benefit of Tranche B Lenders, interest on the outstanding principal amount of the Tranche B Loan at the Tranche B Loan Interest Rate. All interest accruing with respect to the Tranche B Loan hereunder on and after the Maturity Date or during the occurrence of any Event of Default or termination hereof shall be payable on demand in accordance with Section 5.4 hereof. (ii) All interest charges related to the Tranche B Loan shall (A) be calculated based upon the applicable Tranche B Loan Interest Rate, (B) be calculated on the basis of a three hundred sixty (360) day year and actual days elapsed, (C) be paid monthly in arrears to Agent, for the benefit of Tranche B Lenders, on the first Business Day of each calendar month, or at Agent’s option, charged to US Borrower’s loan account(s) maintained by Agent as of the first Business Day of each calendar month and (D) accrue from the Closing Date. (iii) In no event shall charges constituting interest payable by US Borrowers to Agent, for the benefit of Tranche B Lenders, exceed the maximum amount or the rate permitted under any applicable law or regulation, and if any such part or provision of this Agreement or any of the other Financing Agreements is in contravention of any such law or regulation, such part or provision shall be deemed amended to conform thereto. (iv) To the extent that the Canadian Tranche B Lender buys a Junior Participation in Revolving Loans pursuant to the Canadian Loan Agreement, without any further action, that portion of Revolving Loans shall bear interest at the rate of interest for the Tranche B Loan. (d) US Borrowers agree to pay Agent, for the benefit of Tranche B Lenders, the fees, including any prepayment premium, and other amounts set forth in the Tranche B Loan Fee Letter in the amounts and at the time specified therein. (e) Agent, on behalf of US Borrowers, agrees to record the Tranche B Loan on the Register referred to in Section 11.4(e) hereof. The Tranche B Loan recorded on the Register (the “Registered Tranche B Loan”) may not be evidenced by a promissory note other than a Registered Tranche B Loan Note (as defined below). Upon the registration of such Tranche B Loan, any promissory note (other than a Registered Tranche B Loan Note) evidencing the same shall be null and void and shall be returned to US Borrowers. US Borrowers agree, at the request of a Tranche B Lender, to execute and deliver to such Tranche B Lender a promissory note in registered form reasonably acceptable to such Tranche B Lender to evidence the Tranche B Loan (that is, containing registered note language) and registered as provided in Section 11.4(e) hereof (a “Registered Tranche B Loan Note”), payable to such Tranche B Lender and otherwise duly completed. Once recorded on the Register, the Obligations evidenced by such Registered Tranche B Loan Note may not be removed from the Register so long as it remains outstanding and a Registered Tranche B Loan Note may not be exchanged for a promissory note that is not a Registered Tranche B Loan Note.

Tranche B Loan. To request the Borrowing of the Tranche B Loan, the Borrower shall notify the Administrative Agent of such request by telephone (xa) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.1:00 p.m., New York City time, on three (3) Business Days before the date of the proposed Borrowing and (ya) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time on the date of the proposed Borrowing. Such telephonic notice shall be irrevocable and shall be confirmed promptly by hand delivery, courier or telecopy to the Administrative Agent of a written Borrowing Request in a form reasonably acceptable to the Administrative Agent and signed by the Borrower. Such telephone and written Borrowing Request shall specify the following information in compliance with Section 2.01: (i) the aggregate amount of the requested Borrowing (which shall be the amount of the Total Tranche B Commitment); (ii) the date of such Borrowing, which shall be a Business Day and the Effective DateDay; (iii) the portion of the Tranche B Loan that is to initially be an ABR Borrowing and that is to initially be a Eurodollar Borrowing; and (iv) in the case of such portion of the Tranche B Loan that is a Eurodollar Borrowing, the initial Interest Period applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”. If no election as to the Type of Borrowing is specified, then the Tranche B Loan shall initially be an ABR Borrowing. If no Interest Period is specified with respect to any portion of the Tranche B Loan that is to initially be a Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of the Borrowing Request in accordance with this Section 2.04(b), the Administrative Agent shall advise each Tranche B Lender of the details thereof and of the amount of such Tranche B Lender’s Loan to be made as part of the requested Borrowing (which shall be equal to such Tranche B Lender’s Tranche B Commitment).

Tranche B Loan. To request the Borrowing of the Tranche B Loan, the Borrower shall notify the Administrative Agent of such request by telephone (xa) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.1:00 p.m., New York City time, on three (3) Business Days before the date of the proposed Borrowing and (ya) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time on the date of the proposed Borrowing. Such telephonic notice shall be irrevocable and shall be confirmed promptly by hand delivery, courier or telecopy to the Administrative Agent of a written Borrowing Request in a form reasonably acceptable to the Administrative Agent and signed by the Borrower. Such telephone and written Borrowing Request shall specify the following information in compliance with Section 2.01: (i) the aggregate amount of the requested Borrowing (which shall be the amount of the Total Tranche B Commitment); (ii) the date of such Borrowing, which shall be a Business Day and the Effective DateDay; (iii) the portion of the Tranche B Loan that is to initially be an ABR Borrowing and that is to initially be a Eurodollar Borrowing; and (iv) in the case of such portion of the Tranche B Loan that is a Eurodollar Borrowing, the initial Interest Period applicable thereto, which shall be a period contemplated by the definition of the term “"Interest Period”". If no election as to the Type of Borrowing is specified, then the Tranche B Loan shall initially be an ABR Borrowing. If no Interest Period is specified with respect to any portion of the Tranche B Loan that is to initially be a Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s 's duration. Promptly following receipt of the Borrowing Request in accordance with this Section 2.04(b), the Administrative Agent shall advise each Tranche B Lender of the details thereof and of the amount of such Tranche B Lender’s 's Loan to be made as part of the requested Borrowing (which shall be equal to such Tranche B Lender’s 's Tranche B Commitment). Notwithstanding that the initial Borrowing of the Tranche B Loan may be requested as a Eurodollar Borrowing, in the event the Agent, in its reasonable discretion, determines that such Eurodollar Borrowing is not practicable, such initial Borrowing shall be an ABR Borrowing.

Tranche B Loan. To request (a) Subject to and upon the Borrowing of the Tranche B Loanterms and conditions contained herein, the Borrower shall notify the Administrative Agent of such request by telephone (x) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, on the date of the proposed Borrowing and (y) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time on the date of the proposed Borrowing. Such telephonic notice shall be irrevocable and shall be confirmed promptly by hand delivery, courier or telecopy to the Administrative Agent of a written Borrowing Request in a form reasonably acceptable to the Administrative Agent and signed by the Borrower. Such telephone and written Borrowing Request shall specify the following information in compliance with Section 2.01: (i) the aggregate amount of the requested Borrowing (which shall be the amount of the Total Tranche B Commitment); (ii) the date of such Borrowing, which shall be a Business Day and the Effective Date; (iii) the portion of the Tranche B Loan that is to initially be an ABR Borrowing and that is to initially be a Eurodollar Borrowing; and (iv) in the case of such portion of the Tranche B Loan that is a Eurodollar Borrowing, the initial Interest Period applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”. If no election as to the Type of Borrowing is specified, then the Tranche B Loan shall initially be an ABR Borrowing. If no Interest Period is specified with respect to any portion of the Tranche B Loan that is to initially be a Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of the Borrowing Request in accordance with this Section 2.04(b), the Administrative Agent shall advise each Tranche B Lender of the details thereof and of the amount of such agrees to make its Tranche B Lender’s Loan to be made as part Canadian Borrower in US Dollars on August 3, 2007. The aggregate of the requested Borrowing (which shall be equal to such each Tranche B Lender’s Tranche B CommitmentLoan is US$5,000,000. (b) If a Priority Event has occurred and is continuing, all payments shall be applied in accordance with Section 5.4. In the absence of a continuing Priority Event, the following payments shall be made: (i) Repayment of the Tranche B Loan shall be made by Canadian Borrower to Agent, for the benefit of Tranche B Lenders, in a single payment due in respect thereof (together with all outstanding interest thereon) payable on the Maturity Date. (ii) Fifty (50%) percent of Excess Cash Flow for each fiscal year of SMTC Corporation ending December 31, 2008 and thereafter, calculated using the audited consolidated financial statements of SMTC Corporation delivered pursuant to Section 8.6(a)(iii), shall be applied as a permanent repayment of the Tranche B Loan; provided that, the foregoing repayment shall not be made in the event that: (A) Total Excess Availability would be less than US$3,000,000 immediately after giving effect to such repayment or the average Total Excess Availability is less than US$3,000,000 for the fifteen (15) days immediately preceding such repayment, provided that, at such time as Total Excess Availability would be equal to or greater than US$3,000,000 immediately after giving effect to such repayment and the average Total Excess Availability is equal to or greater than US$3,000,000 for the fifteen (15) days immediately preceding such payment, SMTC Corporation shall make such payment and such payment shall be applied as a permanent repayment of the Tranche B Loan; provided further that if SMTC Corporation fails to make such repayment as a result of the failure to meet the foregoing Total Excess Availability Tests within thirty (30) days of it otherwise being due and payable the failure to make such payment may be deemed a “Priority Event” by Tranche B Agent, in its sole discretion; (B) a Priority Event shall have occurred and be continuing or would result from such repayment; or (C) payment of such amount has been made under the US Loan Agreement. (iii) The proceeds of any Debt Offering or Equity Offering shall be applied as a permanent repayment of the Tranche B Loan provided a Priority Event shall not have occurred and be continuing or would result from such repayment. (iv) The proceeds of any sale of the Tranche B Loan Priority Collateral shall be applied as a permanent repayment of the Tranche B Loan; provided that: (A) prior to a Priority Event, Agent shall apply such proceeds in accordance with this paragraph (iv) if Agent has received such proceeds and (a) on or after its receipt and prior to applying such proceeds to the Revolving Loans Agent has actual knowledge that such proceeds are proceeds of any sale of the Tranche B Loan Priority Collateral or (b) at any time after Agent has applied such proceeds to the Revolving Loans upon (x) Agent obtaining actual knowledge that it has received such proceeds of any sale of Tranche B Loan Priority Collateral and applied such proceeds to the Revolving Loans and (y) Total Excess Availability is equal to or greater than US$1,000,000; and (B) after a Priority Event, Agent shall apply such proceeds in accordance with this paragraph (iv) upon Agent’s receipt of such proceeds. (v) The proceeds of any sale of Mexican Obligor Collateral (other than, in the absence of a continuing Priority Event, sales of Inventory of the Mexican Obligors and SMTC Mex Holdings in the ordinary course of business) shall be applied as a permanent repayment of the Tranche B Loan. (vi) Canadian Borrower may make voluntary prepayments of the Tranche B Loan upon the satisfaction of each of the following conditions: (a) Total Excess Availability would not be less than US$3,000,000 immediately after giving effect to such prepayment, (b) the average Total Excess Availability is not less than US$3,000,000 for the fifteen (15) days immediately preceding such repayment and (c) as of the date of any such prepayment and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing or would result from such prepayment. (vii) Any amounts repaid in respect of the Tranche B Loan may not be reborrowed and shall be applied to permanently reduce the aggregate amount of the Tranche B Loan.

Tranche B Loan. To request the Borrowing of the Tranche B Loan, the Borrower shall notify the Administrative Agent of such request by telephone (x) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.1:00 p.m., New York City time, on three (3) Business Days before the date of the proposed Borrowing and (y) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time on the date of the proposed Borrowing. Such telephonic notice shall be irrevocable and shall be confirmed promptly by hand delivery, courier or telecopy to the Administrative Agent of a written Borrowing Request in a form reasonably acceptable to the Administrative Agent and signed by the Borrower. Such telephone and written Borrowing Request shall specify the following information in compliance with Section 2.01: (i) the aggregate amount of the requested Borrowing (which shall be the amount of the Total Tranche B Commitment); (ii) the date of such Borrowing, which shall be a Business Day and the Effective Closing Date; (iii) the portion of the Tranche B Loan that is to initially be an ABR Borrowing and that is to initially be a Eurodollar Borrowing; and (iv) in the case of such portion of the Tranche B Loan that is a Eurodollar Borrowing, the initial Interest Period applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”. If no election as to the Type of Borrowing is specified, then the Tranche B Loan shall initially be an ABR Borrowing. If no Interest Period is specified with respect to any portion of the Tranche B Loan that is to initially be a Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of the Borrowing Request in accordance with this Section 2.04(b), the Administrative Agent shall advise each Tranche B Lender of the details thereof and of the amount of such Tranche B Lender’s Loan to be made as part of the requested Borrowing (which shall be equal to such Tranche B Lender’s Tranche B Commitment).

Tranche B Loan. To request the Borrowing of the Tranche B Loan, the Borrower shall notify the Administrative Paying Agent of such request by telephone or electronic transmission (xi) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.2:00 p.m., New York City time, on three (3) Business Days before the date of the proposed Borrowing and (yii) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time time, on the date of the proposed Borrowing (subject, in the case of an ABR Borrowing, to the last sentence of this Section 2.03(b)). Such telephonic or electronic transmission notice shall be irrevocable and shall be confirmed promptly by hand delivery, courier delivery or telecopy to the Administrative Paying Agent of a written Borrowing Request in a form reasonably acceptable to approved by the Administrative Paying Agent and signed by the Borrower. Such telephone or electronic transmission and written Borrowing Request shall specify the following information in compliance with Section 2.01: (i) the aggregate amount of the requested Borrowing (which shall not be the amount less than $1,000,000 (and integral multiples of the Total Tranche B Commitment$1,000,000); (ii) the date of such Borrowing, which shall be a Business Day and the Effective DateDay; (iii) the portion of the Tranche B Loan Borrowing that is to initially be an ABR Borrowing and that is to initially be a Eurodollar Borrowing; and (iv) in the case of such portion of the Tranche B Loan Borrowing that is a Eurodollar Borrowing, the initial Interest Period applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”. If no election as to the Type of Borrowing is specified, then the Tranche B Loan requested Borrowing shall initially be an ABR Borrowing. If no Interest Period is specified with respect to any portion of the Tranche B Loan requested Borrowing that is to initially be a Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of the Borrowing Request in accordance with this Section 2.04(b2.03(b), the Administrative Paying Agent shall advise each Tranche B Lender of the details thereof and of the amount of such Tranche B Lender’s Loan to be made as part of the requested Borrowing (which shall be equal to such Tranche B Lender’s Tranche B Commitment)Borrowing.

Tranche B Loan. To request (i) Subject to the Borrowing of terms and conditions hereof, each Tranche B Lender agrees to make a term loan (collectively, the “Tranche B Loan, the Borrower shall notify the Administrative Agent of such request by telephone (x”) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, on the date of the proposed Borrowing and (y) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time on the date of the proposed Borrowing. Such telephonic notice shall be irrevocable and shall be confirmed promptly by hand delivery, courier or telecopy Closing Date to the Administrative Agent of a written Borrowing Request Borrowers in a form reasonably acceptable to the Administrative Agent and signed by the Borrower. Such telephone and written Borrowing Request shall specify the following information in compliance with Section 2.01: (i) the aggregate amount of the requested Borrowing (which shall be the amount of the Total Tranche B Commitment); (ii) the date of such Borrowing, which shall be a Business Day and the Effective Date; (iii) the portion of the Tranche B Loan that is to initially be an ABR Borrowing and that is to initially be a Eurodollar Borrowing; and (iv) in the case of such portion of the Tranche B Loan that is a Eurodollar Borrowing, the initial Interest Period applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”. If no election as to the Type of Borrowing is specified, then the Tranche B Loan shall initially be an ABR Borrowing. If no Interest Period is specified with respect to any portion of the Tranche B Loan that is to initially be a Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of the Borrowing Request in accordance with this Section 2.04(b), the Administrative Agent shall advise each Tranche B Lender of the details thereof and of the amount of such Tranche B Lender’s Loan to be made as part of the requested Borrowing (which shall be equal to such Tranche B Lender’s Tranche B Loan Commitment. The obligations of each Tranche B Lender hereunder shall be several and not joint. Each such Tranche B Loan shall be evidenced by a promissory note substantially in the form of Exhibit 1.1(b) (each a “Tranche B Note” and collectively the “Tranche B Notes”), and, except as provided in Section 1.12, all of the Borrowers shall jointly execute and deliver the Tranche B Note to the applicable Tranche B Lender. Each Tranche B Note shall represent the joint and several obligation of the Borrowers to pay the applicable Tranche B Lender’s Tranche B Loan Commitment, together with interest thereon as prescribed in Section 1.5. (ii) The aggregate outstanding principal balance of the Tranche B Loan shall be due and payable in full in immediately available funds on the Commitment Termination Date, if not sooner paid in full. No payment with respect to the Tranche B Loan may be reborrowed. (iii) Each payment of principal with respect to the Tranche B Loan shall be paid to Agent for the ratable benefit of each Tranche B Lender making a Tranche B Loan, ratably in proportion to each such Tranche B Lender’s respective Tranche B Loan Commitment. (iv) At any time during any Buyout Exercise Period, the Tranche B Lenders may (but shall not be obligated to) give notice to the Agent (the “Buyout Acceptance Notice”) of their intent to cause the assignment to the Tranche B Lenders, or their designee, by the Revolving Lenders, of all right, title and interest in, to, arising under or in respect of all Obligations of the Revolving Lenders. Such assignments shall be effected on the Business Day which is not more than three (3) Business Days following the delivery of the Buyout Acceptance Notice to the Tranche B Lender by the execution, by the Revolving Lenders, of an Assignment Agreement in exchange for the payment, in immediately available funds, of the amount of all of the Obligations in respect of the Revolving Loans (as of the date on which such assignment is made) including, without limitation, principal, accrued interest, cash collateral in an amount equal to 105% of the aggregate undrawn face amount of any issued and outstanding Letter of Credit, accrued Fees (other than the Fee relating to the Revolving Loans required to be paid pursuant to Section 1.9(c)) which shall be subject to the last sentence of this Section 1.1(b)(iv)), expenses and other amounts payable to the Revolving Lenders in respect of the Revolving Loans hereunder. The Tranche B Lenders’ buyout right under this Section 1.1(b)(iv) may only be exercised completely with respect to all of the Obligations of the Revolving Lenders. If the Tranche B Lenders do not deliver a Buyout Acceptance Notice within the Buyout Exercise Period, then the buyout right of the Tranche B Lenders hereunder shall expire and be of no force and effect. The grant of the option to purchase hereunder shall not operate to restrict any Revolving Lender from assigning or otherwise transferring any or all of the Commitments or Obligations owing to such Revolving Lender or any of such Revolving Lender’s rights or interests under the Loan Documents. Following the Tranche B Lenders’ exercise of the buyout right under this Section 1.1(b)(iv) in the event a Fee relating to the Revolving Loans required to be paid pursuant to Section 1.9(c) shall be payable within the twelve (12) month period immediately following the date of delivery of a Buyout Trigger Notice, the Tranche B Lenders shall (i) not waive or alter the provisions of Section 1.9(c) in a manner that would reduce the amount of such Fee payable with respect to the permanent reduction or termination of the Revolving Loan Commitment and (ii) after repayment of the Obligations in respect of the Revolving Credit Advances and Letter of Credit Obligations and the Tranche B Loan, upon receipt of any such Fee with respect to the permanent reduction or termination of the Revolving Loan Commitment, pay such amounts to the Agent for the accounts of the Revolving Lenders in accordance with each Revolving Lender’s Pro Rata Share as of the date of exercise of the buyout right under this Section 1.1(b)(iv).