Second Amendment to
Second Amended and Restated Loan
and Security
Agreement
This
Second Amendment to Second
Amended and Restated Loan and Security Agreement (this
“ Amendment ”), dated as of August 14,
2009, is by and among the lenders identified on the signature pages
hereto (the “ Lenders ”), Wells Fargo Bank, National
Association, a national banking association, as the
arranger, administrative agent and security trustee for the Lenders
(in such capacity, the “ Agent ”), Smart Modular Technologies, Inc.,
a California corporation (“ US Borrower ”),
Smart Modular Technologies
(Europe) Limited, a company incorporated under the laws of
England and Wales ( “UK Borrower” ), and
Smart Modular Technologies
(Puerto Rico) Inc., an exempted company organized under the
laws of the Cayman Islands ( “PR Borrower”
, and together with US Borrower and UK Borrower, each individually
referred to herein as a “Borrower” and
collectively, as the “Borrowers” ).
Recitals
A. Lenders, Agent, Borrowers and the other
Obligors (as defined hereafter) identified on the signature pages
thereto have previously entered into that certain Second Amended
and Restated Loan and Security Agreement, dated as of
April 30, 2007, as amended by that certain First Amendment to
Second Amended and Restated Loan and Security Agreement (the
“ Loan and Security Agreement ”).
B. Borrowers have requested that Lenders
and Agent amend (i) the Loan and Security Agreement so that
Borrowers are only required to comply with certain financial
covenants set forth in the Loan and Security Agreement during
periods when Obligations (other than any reimbursement obligations
relating to that certain Irrevocable Standby Letter of Credit,
issued by Wells Fargo (as defined hereafter) in the maximum stated
amount of $60,000 and bearing no. NZS595685)) are outstanding and
(ii) certain other terms, conditions and provisions of the
Loan and Security Agreement as further described herein.
C. In response to the requests of
Borrowers, and in reliance upon the representations made in support
thereof, and the other terms and provisions of this Amendment, the
parties hereto desire to amend the Loan and Security Agreement as
set forth herein and on the terms and conditions contained
herein.
Now, Therefore,
for good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged), the
parties hereto agree as follows:
1. Defined Terms . Each capitalized
term used but not otherwise defined herein has the meaning ascribed
thereto in the Loan and Security Agreement.
2. Amendments to Loan and Security
Agreement . Subject to the satisfaction of the conditions
precedent set forth in Section 4 of this Amendment, the
following amendments to the Loan and Security Agreement shall be
effective as of and after the Effective Date (notwithstanding the
date of execution of this Amendment):
(a) Amendments to Section 1.1
Section 1.1 of the Loan and Security Agreement is hereby
amended by inserting the following definitions in appropriate
alphabetical order:
“ Existing Letter of
Credit ” means that certain Irrevocable Standby Letter of
Credit, issued by Wells Fargo in the maximum stated amount of
$60,000 and bearing no. NZS595685, as the same may be
amended.
“ Second Amendment
” means that certain Second Amendment to Second Amended and
Restated Loan and Security Agreement, dated as of August 14, 2009,
among the Lenders party thereto, Agent, U.S. Borrower, P.R.
Borrower and U.K. Borrower.
“ Second Amendment
Effective Date ” means August 14, 2009.
(b) Amendment to
Section 2.11(a) . Section 2.11(a) of the Loan and
Security Agreement is hereby deleted in its entirety and the
following is substituted therefor:
(a) Unused Line Fee. An
annual unused line fee of One Hundred Seventy-Five Thousand Dollars
($175,000), payable on the first day of each quarter during the
term of this Agreement in arrears, in an amount equal to
Forty-Three Thousand Seven Hundred Fifty Dollars ($43,750);
provided however , that Borrowers shall receive a credit
applicable to such quarterly installment (which credit shall not
(a) otherwise reduce the quarterly installment below zero
dollars ($0), (b) be credited to future quarters or
(c) otherwise be refundable in cash to Borrower) in an
aggregate amount equal to the product of (i) Eight Hundred
Seventy-Five Dollars ($875) times (ii) the result of
(1) the average daily collected balance maintained by
Borrowers in deposit account no. 4100055896 at Wells Fargo Bank,
National Association during the quarter in which the unused line
fee otherwise accrued divided by (2) one million.
(c) Amendment to Section 3.
Section 3 of the Loan and Security Agreement is hereby amended
by inserting the following Section 3.7 immediately after the
end of Section 3.6:
Section 3.7 Additional
Borrowing Requirements . Notwithstanding anything to the contrary
contained in this Agreement, and in addition to the satisfaction of
all other requirements or other conditions to the Lenders’
obligation to make any Advance hereunder, the obligation of the
Lender Group (or any member thereof) to make any Advance hereunder
at any time or to extend any other credit hereunder) shall be
subject to the following additional conditions:
(a) Borrowers shall have
delivered to Agent a Compliance Certificate demonstrating (to
Lenders’ satisfaction) (i) Borrowers’ compliance
with each of the financial covenants set forth in
Sections 7.17 and 7.18 of this Agreement as of the date any
Advance is requested hereunder and (ii) Borrowers’ projected
compliance on a pro forma basis as of the end of the quarter in
which such Advance is requested. Such required Compliance
Certificate shall contain a certification from a Responsible
Officer of each Borrower that no Borrower is aware of any event,
condition or circumstance that would or could cause any of the
financial calculations or financial projections set forth in any
Compliance Certificate delivered pursuant to this
Section 3.7(a) hereof to be incorrect in any material manner;
and
(b) Borrowers shall have
delivered, or caused to be delivered, original executed copies of
all such other agreements, reaffirmations, opinions, certificates,
security instruments and other
