Exhibit 10.24.2
TERMINATION AGREEMENT
This Termination Agreement (this "Agreement") is entered into as of the
27th day of July, 2000 by and between SMTC Corporation, a Delaware corporation
(the "Company"), Xxxx Capital Partners VI, L.P., a Delaware limited partnership
("Bain"), Celerity Management Co., Inc., a Delaware corporation ("Celerity") and
Xxxxxx Electronics Group Limited, an Ontario corporation ("KEGL" and
collectively with Bain and Celerity, the "Service Providers").
WHEREAS, the Company and the Service Providers are party to a
Management Agreement dated as of July 30, 1999 (the "Management
Agreement");
WHEREAS, in connection with the initial public offering of common
stock of the Company and exchangeable shares of SMTC Manufacturing
Corporation of Cananda (the "IPO"), the Company and the Service Providers
desire to discontinue the provision of services by the Service Providers to
the Company and the Company's payment of fees to the Service Providers for
such services, each as described in the Management Agreement; and
WHEREAS, the Company may agree in the future to retain one or more of
the Service Providers or their affiliated or associated entities to provide
certain management and advisory services to the Company in connection with
certain transactions;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. DEFINITIONS. Capitalized terms used but not defined in this Agreement
shall have the definitions set forth in the Management Agreement.
2. TERMINATION. The Company and each of the Service Providers hereby agree
that:
(a) the Management Agreement is hereby terminated, effective as of the
closing of the IPO;
(b) the Company shall pay Bain the sum of Seven Hundred Twenty Thousand
Dollars ($720,000), Celerity the sum of Seven Hundred-Twenty Thousand
Dollars ($720,000), and KEGL the sum of Three Hundred Sixty Thousand
Dollars ($360,000) upon the effectiveness of this Agreement;
(c) notwithstanding the foregoing:Sections 4, 5, 7, 9 and 10 of the
Management Agreement shall survive the termination of the Management
Agreement and are hereby incorporated by reference herein, mutatis
mutandis, for all purposes to have the same effect as if fully set
forth herein, with appropriate modifications as the context may
require; and
(d) nothwithstanding the provisions of this Agreement, the Company may
agree in the future to retain any of the Service Providers or their
respective affiliates to provide certain management and advisory
services to the Company, on terms mutually satisfactory to each party
in the discretion thereof.
3. FREEDOM TO PURSUE OPPORTUNITIES. Without limiting the generality of the
foregoing Section 2(c) as it relates to Section 7(a) of the Management
Agreement, in consideration of the agreements of the Service Providers set
forth herein and of the agreement of certain individuals affiliated or
otherwise associated with the Service Providers to serve on the Board of
Directors of the Company, the Company and the Service Providers hereby
agree that in anticipation that the Company and one or more of the Service
Providers (or one or more of their respective affiliates, associated
investment funds or portfolio companies, clients or individuals associated
with any of the foregoing including, without limitation, certain
individuals who may from time to time serve as directors, officers,
employees of, or consultants to, the Company) may engage in the same or
similar activities or lines of business and have an interest in the same
areas of corporate opportunities, except as any Service Provider may
otherwise agree in writing (solely as to itself), after the date hereof:
(a) each Service Provider shall have the right to, and shall have no duty
(contractual or otherwise) not to, directly or indirectly: (i) engage
in the same or similar business activities or lines of business as the
Company, including those competing with the Company and (ii) do
business with any client or customer of the Company;
(b) No Service Provider nor any officer, director, employee, partner,
affiliate or associated person or entity thereof shall be liable to
the Company or its affiliates for breach of any duty (contractual or
otherwise) by reason of any such activities of or of such person's
participation therein; and
(c) In the event that any Service Provider acquires knowledge of a
potential transaction or matter that may be a corporate opportunity
for both the Company and one or more Service Providers or any other
person, such Service Provider shall have no duty (contractual or
otherwise) to communicate or present such corporate opportunity to the
Company and, notwithstanding any provision of this Agreement to the
contrary, shall not be liable to the Company or its affiliates for
breach of any duty (contractual or otherwise) by reason of the fact
-2-
that such Service Provider directly or indirectly pursues or acquires
such opportunity for itself, directs such opportunity to another
person, or does not present such opportunity to the Company.
4. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic substantive laws of the State of Delaware
without giving effect to any choice or conflict of law provision or rule
that would cause the application of the domestic substantive laws of any
other jurisdiction.
5. AMENDMENTS AND WAIVERS. No amendment or waiver of any term, provision or
condition of this Agreement shall be effective as against any party, unless
in writing and executed such party. No waiver on any one occasion shall
extend to or effect or be construed as a waiver of any right or remedy on
any future occasion. No course of dealing of any person nor any delay or
omission in exercising any right or remedy shall constitute an amendment of
this Agreement or a waiver of any right or remedy of any party hereto.
6. MERGER/ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof and supersedes any
prior communication or agreement with respect thereto.
7. COUNTERPARTS. This Agreement may be executed in any number of counterparts
and by each of the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which
together shall constitute one and the same agreement.
[Remainder of this page intentionally left blank]
3
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf as an instrument under seal as of the date first above
written by its officer or representative thereunto duly authorized.
The Company: SMTC CORPORATION
By /s/ Xxxx Xxxxxx
--------------------------------
Title: President
Bain: XXXX CAPITAL PARTNERS VI, L.P.
By Xxxx Capital Investors VI, Inc.,
its general partner
By /s/ [signature appears here]
------------------------------
Title: Authorized signatory
Celerity: CELERITY MANAGEMENT CO., INC.
By /s/ Xxxxxxx Xxxxxxx
------------------------------
Title: President
KEGL: XXXXXX ELECTRONICS GROUP LIMITED
By /s/ Xxxxxxx Xxxxxxxxx
------------------------------
Title: Secretary-Treasurer
