Exhibit 10.10.2
AMENDMENT NO. 3 TO CREDIT AGREEMENT
This Amendment dated as of the 24th day of September, 2002 by and
between Smtek International, Inc., a Delaware corporation ("Company") and
Comerica Bank, a Michigan banking corporation, ("Bank").
WITNESSETH:
WHEREAS, Company and Bank entered into a Credit Agreement dated
September 25, 2001, as amended by an Amendment dated December 21, 2001 and an
Amendment dated May 1, 2002 ("Agreement").
WHEREAS, Company and Bank desire to amend the Agreement as set forth
herein.
NOW, THEREFORE, the Company and the Bank agree as follows:
1. The following definitions set forth in Section 1 of the Agreement
are amended to read in their entireties as follows:
"'Applicable Eurodollar Margin' shall mean three and one
half percent (3 1/2%).
"'Borrowing Base' shall mean as of any date of
determination, the sum of (a) eighty five percent (85%) of
Eligible Accounts plus (b) the lesser of (i) thirty percent (30%)
of Eligible Inventory and (ii) $4,000,000.
"'Applicable Prime Margin' shall mean three quarters of one
percent (3/4%)."
2. The following definition is added to Section 1 in alphabetical
order:
"'Daily Reporting Event' shall be deemed to have occurred
if Availability is below $1,000,000 for five (5) days (whether or
not consecutive) during any thirty (30) day period."
3. Section 8.1(c)(iv) of the Agreement is amended to read in its
entirety as follows:
"(iv) a borrowing base report, each in form acceptable to
Bank; provided however, at all times after the occurrence of the
Daily Reporting Event, updated borrowing base reports shall be
due each Business Day;"
4. Section 8.11 of the Agreement is amended to read in its entirety
as follows:
"Maintain as of the end of each fiscal quarter an Adjusted
Tangible Net Worth of not less than the following amounts during
the periods specified below:
September 30, 2002 through December 30, 2002 $5,150,000
December 31, 2002 through June 29, 2003 $4,500,000
June 30, 2003 and thereafter $6,000,000"
5. Section 8.12 of the Agreement is amended to read in its entirety
as follows:
"Maintain as of the end of each fiscal quarter a ratio of
Total Debt to Adjusted Tangible Net Worth of not more than the
following amounts during the periods specified below:
September 30, 2002 through June 29, 2003 8.0 to 1.0
June 30, 2003 and thereafter 6.5 to 1.0"
6. Section 8.15 of the Agreement is amended to read in its entirety
as follows:
"Not permit during fiscal year 2003 a year to date loss of
greater than $1,800,000 and not permit the year end loss for
fiscal year 2003 to be greater than $400,000."
7. Following the occurrence of the Daily Reporting Event, the
remittance basis provisions of Sections 3.2 and 3.3 of the Security
Agreements from Company and the Guarantors in favor of the Bank shall apply
and any failure by Company or any of the Guarantors to comply with such
remittance basis provisions shall be an Event of Default under the Agreement.
8. Company hereby represents and warrants that, after giving effect
to the amendments contained herein, (a) execution, delivery and performance
of this Amendment and any other documents and instruments required under this
Amendment or the Agreement are within Company's corporate powers, have been
duly authorized, are not in contravention of law or the terms of Company's
Certificate of Incorporation or Bylaws, and do not require the consent or
approval of any governmental body, agency, or authority; and this Amendment
and any other documents and instruments required under this Amendment or the
Agreement, will be valid and binding in accordance with their terms; (b) the
continuing representations and warranties of Company set forth in Sections
7.1 through 7.5 and 7.7 through 7.12 (after, in the case of Section 7.9,
giving effect to the formation of Smtek Santa Xxxxx, Inc. and Smtek New
England, Inc.) of the Agreement are true and correct on and as of the date
hereof with the same force and effect as made on and as of the date hereof;
(c) the continuing representations and warranties of Company set forth in
Section 7.6 of the Agreement are true and correct as of the date hereof with
respect to the most recent financial statements furnished to the Bank by
Company in accordance with Section 8.1 of the Agreement; and (d) no event of
default, or condition or event which, with the giving of notice or the
running of time, or both, would constitute an event of default under the
Agreement, has occurred and is continuing as of the date hereof.
9. This Amendment shall be effective upon (i) execution of this
Amendment by Company and Bank, (ii) execution of the attached Affirmation by
the Guarantors, and (iii) payment by Company to Bank of a non-refundable
amendment fee in the amount of $15,000.
10. Except as modified hereby, all of the terms and conditions of the
Agreement shall remain in full force and effect.
WITNESS the due execution hereof on the day and year first above
written.
COMERICA BANK SMTEK INTERNATIONAL, INC.
/s/ Xxxx X. Xxxxxxxxx /s/ Xxxx X. Xxxxxxx
By:_______________________________ By:_________________________________
Vice President CFO
Its:_______________________________ Its:_________________________________
AFFIRMATION
The undersigned Guarantors acknowledge the foregoing amendment and
ratify and confirm their obligations under their Guaranties dated September
25, 2001 and October 18, 2001, which Guaranties remain in full force and
effect in accordance with their respective terms.
SMTEK, INC.
/s/ Xxxx X. Xxxxxxx
By:_________________________________
Signature of Xxxx X. Xxxxxxx
Its: Treasurer
JOLT TECHNOLOGY, INC.
/s/ Xxxx X. Xxxxxxx
By:_________________________________
Signature of Xxxx X. Xxxxxxx
Its: Treasurer
TECHNETICS, INC.
/s/ Xxxx X. Xxxxxxx
By:_________________________________
Signature of Xxxx X. Xxxxxxx
Its: Treasurer
SMTEK SANTA XXXXX, INC.
/s/ Xxxx X. Xxxxxxx
By:_________________________________
Signature of Xxxx X. Xxxxxxx
Its: Treasurer
SMTEK NEW ENGLAND, INC.
/s/ Xxxx X. Xxxxxxx
By:_________________________________
Signature of Xxxx X. Xxxxxxx
Its: Treasurer
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