LETTER WAIVER
Exhibit 10.57.1
LETTER WAIVER
Dated as of August 10, 2006
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To the banks and other
financial institutions |
Ladies and Gentlemen:
We refer to the Revolving Trade Receivables Purchase Agreement, dated as of September 23, 2005, among Sanmina-SCI Magyarorszag Elektronikai Gyarto Kft and Sanmina-SCI Systems de Mexico, S.A. de C.V., as originators, Sanmina-SCI Corporation (“Sanmina-SCI”) and Sanmina-SCI UK Ltd., as servicers, the Purchasers from time to time party thereto and the Administrative Agent (the “Purchase Agreement”). Capitalized terms not otherwise defined in this Letter Waiver have the same meanings as specified in the Purchase Agreement.
Section 5.1(b) of the Purchase Agreement requires that the Originators and Servicers deliver to the Administrative Agent “as soon as available, but in any event not later than 60 days after the end of each of the first three quarterly periods of each fiscal year of Sanmina-SCI, the unaudited consolidated balance sheet of Sanmina-SCI as at the end of such quarter and the related unaudited consolidated statements of income and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in comparison form the figures for the previous year, certified by a Responsible Financial Officer of Sanmina-SCI”.
We believe that we will be unable to deliver the financial statements for the fiscal quarter ended July 1, 2006, and the Responsible Financial Officer certification thereof, within the 60 day period required under Section 5.1(b). Such failure to the deliver such financial statements, and the Responsible Financial Officer certification thereof, within the required period will constitute an Incipient Termination Event under the Purchase Agreement. This Letter Waiver shall constitute notice of such Incipient Termination Event pursuant to Section 5.6(a) and 6.3(b) of the Purchase Agreement.
Section 7(b) of the Purchase Agreement provides for a Termination Event under the Purchase Agreement if, among other things, any Originator or any Servicer shall default in the observance or performance of any agreement or condition relating to Indebtedness in the aggregate outstanding principal amount of more than $45,000,000 or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or permit the holder or beneficiary of such Indebtedness to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or to become payable. We have been advised that it is a possibility that the trustees in respect of, or the holders of, the 8.125% Senior
Subordinated Notes due 2016 issued by Sanmina-SCI and the 6.75% Senior Subordinated Notes due 2013 issued by Sanmina-SCI (collectively, the “Senior Subordinated Notes”) and the 3% Convertible Subordinated Notes due 2007 issued by SCI Systems, Inc. and guaranteed by Sanmina-SCI (the “Convertible Notes”), respectively, may notify us, in accordance with the respective terms thereof that Sanmina-SCI’s failure to deliver the financial statements for the fiscal quarter ended July 1, 2006 constitutes a default thereunder and will become an event of default if not cured or waived within the applicable grace period, at which time they may declare such Indebtedness due and payable as a consequence of such failure.
We hereby request that you waive the requirements of Section 5.1(b) and Section 7(e) of the Purchase Agreement, solely for the period commencing on the date first above written through October 10, 2006 (the “Waiver Termination Date”), and solely with respect to the delivery of the financial statements of Sanmina-SCI for the fiscal quarter of Sanmina-SCI ended July 1, 2006 and the Responsible Financial Officer certification thereof. On the Waiver Termination Date, without any further action by the Administrative Agent and the Purchasers, all of the terms and provisions set forth in the Purchase Agreement with respect to the Incipient Termination Events thereunder that are waived hereunder and not cured prior to the Waiver Termination Date shall have the same force and effect as if this Letter Waiver had not been entered into by the parties hereto, and the Administrative Agent and the Purchasers shall have all of the rights and remedies afforded to them under the Purchase Agreement with respect to such Incipient Termination Events as though no waiver had been granted by them hereunder.
We further request that you waive the requirements of (i) Section 4.2(b) with respect to the representations and warranties contained in Section 3.7 of the Purchase Agreement through the Waiver Termination Date and solely with respect to any defaults under Contractual Obligations arising from the failure of Sanmina-SCI to deliver the financial statements of Sanmina-SCI for the fiscal quarter ended July 1, 2006 or to file and deliver its Quarterly Report on Form 10-Q for the fiscal quarter ended July 1, 2006, (ii) Section 4.2(b) with respect to the representations and warranties contained in Sections 3.1, 3.2, 3.6 and 3.12 of the Purchase Agreement through the Waiver Termination Date and solely with respect to the review by Sanmina-SCI of its stock option practices, the inquiry by the SEC with respect thereto and the results of the foregoing and the matters referred to in clause (i), and (iii) Section 4.2(c) solely with respect to the Incipient Termination Events for which waivers are granted under this Letter Waiver (it being understood that the Originators may qualify any Purchase Notice with respect to the foregoing clauses (i) through (iii)).
This Letter Waiver and the waivers requested herein shall become effective as of the date first above written when, and only when, the Administrative Agent shall have received counterparts of this Letter Waiver executed by us, the Administrative Agent and the Required Purchasers. This Letter Waiver is subject to the provisions of Section 9.1 of the Purchase Agreement.
The Purchase Agreement and each of the other Transaction Documents, except to the extent of the waiver specifically provided above, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. The execution, delivery and effectiveness of this Letter Waiver shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Purchaser or any Agent under any of the
Transaction Documents, nor constitute a waiver of any provision of any of the Transaction Documents.
If you agree to the terms and provisions of this Letter Waiver, please evidence such agreement by executing and returning four counterparts of this Letter Waiver to Xxxxxxxx X. Xxxxxxx at Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, XX 00000, Facsimile: (000) 000-0000, Telephone (000) 000-0000 by no later than 5:00 P.M. (New York City time) on August 10, 2006.
This Letter Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Letter Waiver by telecopier shall be effective as delivery of a manually executed counterpart of this Letter Waiver.
This Letter Waiver shall be governed by, and construed in accordance with, the laws of the State of New York.
[BALANCE OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
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Very truly yours, |
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SANMINA-SCI MAGYARORSZAG |
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By |
/s/ [ILLEGIBLE] |
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Title: Managing Director |
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SANMINA-SCI
SYSTEMS DE MEXICO, S.A. DE |
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By |
/s/ [ILLEGIBLE] |
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Title: Chairman/Director |
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SANMINA-SCI CORPORATION |
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By |
/s/ Xxxxxx Xxxxxxx |
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Title: VP and Treasurer |
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SANMINA-SCI UK LTD. |
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By |
/s/ [ILLEGIBLE] |
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Title: Director |
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Agreed as of the date firstabove written: |
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Deutsche Bank AG New York, |
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as Administrative Agent and as Purchaser |
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By |
/s/ [ILLEGIBLE] |
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Title: Vice President |
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By |
/s/ [ILLEGIBLE] |
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Title: Vice President |
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