EXHIBIT 10.20
SMTC Corporation
000 Xxxx Xxxx
Xxxxxxx, Xxxxxxx, Xxxxxx, X0X 0X0
June 19, 2000
XXXXXX BROTHERS INC.
RBC DOMINION SECURITIES, INC.
FLEETBOSTONROBERTSON XXXXXXXX, INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
As Representatives of the several underwriters (the "Underwriters")
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, XX 00000
Re: Stockholders Agreement Lock-Up
Dear Sirs:
In connection with the proposed initial public offering of shares of our
common stock and the concurrent public offering by our Canadian subsidiary, SMTC
Manufacturing Corporation of Canada, of exchangeable shares, you have requested
that we obtain "lock-up" letter agreements from each director, officer and
stockholder of the Company, as of the date hereof and the date the public
offering is consummated. We hereby undertake to use our commercially reasonable
efforts to have lock-up agreements, in the form attached hereto as Annex A,
executed by all of our directors, officers and stockholders, as soon as
reasonably practicable. In the interim, reference is made to the Stockholders
Agreement dated as of July 30, 1999 by and among SMTC Corporation (the
"Company") and its stockholders (the "Stockholders Agreement"). The Company
hereby represents and warrants to each of you that the Stockholders Agreement is
in full force and effect.
The Company hereby covenants and agrees with each of you that it will not
(a) agree to amend or otherwise modify or terminate the lock-up provisions of
Section 6.4.4 of the Stockholders Agreement or (b) waive the application of
Section 6.4.4 of the Stockholders Agreement with respect to any holder(s) of
securities of the Company without the prior written consent of both Xxxxxx
Brothers Inc. and RBC Dominion Securities Inc.
Further, the Company agrees that it shall instruct the Company's transfer
agent to place stop transfer restrictions on the shares held by the individuals
and entities who are parties to the Stockholders Agreement, which stop transfer
restrictions shall not be removed until 180
Xxxxxx Brothers, Inc., et. al. June 19, 2000
days after the date of the final prospectus or until such individual or entity
shall have executed a lock-up letter agreement reasonably satisfactory to you.
The provisions of the foregoing paragraphs shall terminate upon the earlier
of (a) notification by the Company that it does not intend to proceed with the
offering of its shares of common stock to the public, (b) 180 days following the
effective date of the Company's registration statement No. 333-33208 or (c) the
Company has delivered lock-up's in the form attached as Annex A for all of the
stockholders who are party to the Stockholders Agreement.
Sincerely,
SMTC CORPORATION
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Vice President Finance and Administration
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Annex A
LOCK-UP LETTER AGREEMENT
XXXXXX BROTHERS INC.
RBC DOMINION SECURITIES INC.
FLEETBOSTONROBERTSON XXXXXXXX, INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
As Representatives of the several underwriters
c/x XXXXXX BROTHERS INC.
Three World Financial Center
Xxx Xxxx, XX 00000
Dear Sirs:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Common Stock, par value $0.01 per share (the "Common Stock"), of
SMTC Corporation (the "Company") and that the Underwriters propose to reoffer
the Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that without the prior written consent of Xxxxxx
Brothers Inc. and RBC Dominion Securities Inc., the undersigned will not,
directly or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose
of (or enter into any transaction or device that is designed to, or could
reasonably be expected to, result in the disposition by any person at any time
in the future of) any shares of Common Stock (including, without limitation,
shares of Common Stock that may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations of the Securities and
Exchange Commission and shares of Common Stock that may be issued upon exercise
of any option or warrant) or securities convertible into or exchangeable for
Common Stock (other than the Shares but including the exchangeable shares of
SMTC Manufacturing Corporation of Canada, an Ontario corporation (the
"Exchangeable
Shares")) owned by the undersigned on the date of execution of this Lock-Up
Letter Agreement and on the date of the completion of the Offering, or (2) enter
into any swap or other derivatives transaction that transfers to another, in
whole or in part, any of the economic benefits or risks of ownership of such
shares of Common Stock or Exchangeable Shares, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock, Exchangeable Shares or other securities, in cash or otherwise, for a
period of 180 days after the date of the final Prospectus relating to the
Offering; provided however, that the foregoing restrictions shall not apply to
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(i) transactions relating to Common Stock or Exchangeable Shares acquired in
open market transactions after the completion of the Offering, (ii) transfers of
Common Stock to certain investors in Pensar Corporation, the Company or its
affiliates pursuant to that certain Escrow Agreement dated ______ among the
Company, certain investors in Pensar Corporation and Xxxxx Brothers Xxxxxxxx &
Co., as Escrow Agent or (iii) transfers to affiliates, partners, shareholders or
stakeholders of the undersigned; provided that prior to any transfer pursuant to
this clause (iii), the transferee delivers an executed copy of this Lock-Up
Letter Agreement to Xxxxxx Brothers Inc. and RBC Dominion Securities Inc.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Company notifies you that it does not intend
to proceed with the Offering, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Shares, we will be released from our obligations under this
Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
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The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon reasonable request, the undersigned will execute any additional documents
reasonably necessary in connection herewith. Any obligations of the undersigned
shall be binding upon the heirs, personal representatives, successors and
assigns of the undersigned.
Very truly yours,
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By:
---------------------------------
Name:
Title:
Dated:
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