SECOND AMENDMENT AND AGENCY ASSIGNMENT AGREEMENT

Exhibit 99.1

EXECUTION COPY

SECOND AMENDMENT AND AGENCY ASSIGNMENT AGREEMENT

This agreement (this “Agreement”) is entered into as of June 1, 2005 by and among SMTC CORPORATION, a Delaware corporation (“Holdings”), HTM HOLDINGS, INC., a Delaware corporation (the “Borrower”), SMTC MANUFACTURING CORPORATION OF CANADA, a corporation organized under the laws of the Province of Ontario, Canada (“SMTC-Canada” and together with Holdings and the Borrower, the “Credit Parties”), LEHMAN BROTHERS INC., as advisor, lead arranger and book manager (in such capacity, the “Arranger”), THE BANK OF NOVA SCOTIA, as syndication agent (in such capacity, the “Syndication Agent”), LEHMAN COMMERCIAL PAPER INC. (“Prior Agent”), both individually and as General Administrative Agent and Collateral Monitoring Agent (these and all other capitalized terms not defined herein shall have the meanings set forth in the “Credit Agreement” as defined below), GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (“GECC”), as documentation agent (in such capacity, the “Documentation Agent”) and as a Lender, and the other Lenders signatory hereto.

RECITALS

WHEREAS, the Credit Parties, the Arranger, the Syndication Agent, the General Administrative Agent and the Collateral Monitoring Agent, the Documentation Agent, the Lenders, and certain other parties thereto have entered into a Second Amended and Restated Secured Credit Agreement dated as of June 1, 2004 (as heretofore or hereafter amended, modified, supplemented or restated, the “Credit Agreement”);

WHEREAS, Prior Agent desires to resign as General Administrative Agent and Collateral Monitoring Agent and GECC desires to be appointed as the successor General Administrative Agent and Collateral Monitoring Agent and the parties hereto desire to consent to such resignation and appointment and to amend the Loan Documents accordingly;

WHEREAS, Holdings and the Borrower requested that the Lenders agree to amend certain of the provisions of the Credit Agreement upon the terms and subject to the conditions set forth below; and

WHEREAS, the Lenders have consented to the requested amendments in the manner set forth below;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto hereby agree as follows:

1. Resignation and Appointment of General Administrative Agent and Collateral Monitoring Agent . Prior Agent hereby notifies each Lender and the other Agents that it hereby resigns as General Administrative Agent and Collateral Monitoring Agent as provided under Section 14.9 of the Credit Agreement. GECC, in its capacity as a Lender, and each of the other Lenders party hereto, collectively constituting the Required Lenders, hereby appoint GECC, in its individual capacity, as General Administrative Agent and Collateral Monitoring Agent and

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GECC hereby accepts and approves such appointment. All parties hereto waive the notice requirements of Section 14.9 of the Credit Agreement. Each of the parties hereto agree to execute all documents GECC believes are necessary or desirable to evidence its appointment as the successor General Administrative Agent and Collateral Monitoring Agent. Each Credit Party, each Lender and GECC hereby confirm that all of the provisions of (i) Sections 7.12 (Indemnity), 7.13 (Taxes), 15.2 (Notices) and 15.5 (Payment of Expenses) of the Credit Agreement, and (ii) Section 8.4 of the Second Amended and Restated Guarantee and Collateral Agreement, dated as of June 1, 2004, made by each of the signatories thereto (the “Grantors”) in favor of the General Administrative Agent for the Lenders (as heretofore or hereafter amended, modified, supplemented or restated, the “Guarantee and Collateral Agreement”), as they pertain to the resigning General Administrative Agent or Collateral Monitoring Agent, as the case may be, shall survive Prior Agent’s resignation hereunder, and inure to the benefit of Prior Agent as to any actions taken or omitted to be taken by Prior Agent while it was General Administrative Agent or Collateral Monitoring Agent and as to any actions taken or omitted to be taken by Prior Agent pursuant to this Agreement.

2. Amendment to the Credit Agreement and Loan Documents .

(a) The following definitions contained in Section 1.1 of the Credit Agreement shall be amended and restated in their entirety to read as follows:

“ Collateral Monitoring Agent ”: General Electric Capital Corporation, together with its affiliates, as collateral monitoring agent for the Lenders under this Agreement and the other Loan Documents, and any successor thereto appointed pursuant to Section 14.9 .

“ General Administrative Agent ”: General Electric Capital Corporation, together with it affiliates, as general administrative agent for the Lenders under this Agreement and the other Loan Documents, and any successor thereto appointed pursuant to Section 14.9 .

“ Prime Rate ” means, for any day, a floating rate equal to the rate publicly quoted from time to time by The Wall Street Journal as the “base rate on corporate loans posted by at least 75% of the nation’s 30 larger banks” (or, if The Wall Street Journal ceases quoting a base rate of the type described, the highest per annum rate of interest published by the Federal Reserve Board in Federal Reserve statistical release H.15 (519) entitled “Selected Interest Rates” as the Bank prime loan rate or its equivalent). Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

(b) The definition of “Reference Lender” contained in Section 1.1 of the Credit Agreement shall be deleted in its entirety.

(c) The third sub-paragraph of Section 15.2 of the Credit Agreement is hereby amended and restated in its entirety as set forth below:

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(d) The fifth sub-paragraph of Section 15.2 of the Credit Agreement is hereby amended and restated in its entirety as set forth below:

(e) Each reference to “General Administrative Agent” or “Collateral Monitoring Agent” in the Credit Agreement, the Guarantee and Collateral Agreement, each of the other Loan Documents and all other agreements, documents or instruments previously or hereafter executed and delivered pursuant to the terms thereof shall mean a reference to “General Electric Capital Corporation” or “GECC”, in its individually capacity, as General Administrative Agent or as Collateral Monitoring Agent, as applicable.

(f) Section 11.1(e) of the Credit Agreement is hereby amended by deleting it in its entirety and replacing it with:

“(e) Minimum Cumulative Consolidated EBITDA . Permit the cumulative Consolidated EBITDA of Holdings and its Subsidiaries for the consolidated four fiscal quarters ending on each test period date set forth below to be less than the amount set forth opposite such date.

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3. Assignment of Liens; Collateral Agent .

(a) Prior Agent, as General Administrative Agent, hereby assigns all Liens and security interests under the Guarantee and Collateral Agreement and the other Loan Documents to GECC, as General Administrative Agent, including, without limitation, all Liens with respect to intellectual property filed with the United States Patent and Trademark Office and the United States Copyright Office. Notwithstanding anything to the contrary, all of such Liens and security interests shall in all respects be continuing and in effect and are hereby reaffirmed.

(b) Without limiting the generality of the foregoing and notwithstanding anything herein to the contrary, Prior Agent hereby agrees, to the extent that any Lien is not effectively assigned to GECC as of the date hereof, to act, at the cost and expense of the Borrower, as the collateral agent for GECC, as agent with respect to all Liens and security interests under the Guarantee and Collateral Agreement and the other Loan Documents for the period beginning on the Effective Date (as hereinafter defined) and ending sixty (60) days thereafter or such earlier date as GECC may request (it being understood and agreed that any reference to Prior Agent on any publicly filed document, to the extent such filing relates to the Liens assigned hereby and until s