UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

March 7, 2015

Date of Report (Date of earliest event reported)

SIGMATRON INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   0-23248 36-3918470

(State or other jurisdiction of (Commission (I.R.S. Employer

incorporation) File Number) Identification No.)

 

2201 Landmeier Road, Elk Grove Village, Illinois 60007

(Address of principal executive offices)                                           (Zip Code)

 

(847) 956-8000

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

□   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

□   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

□   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

□   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

ITEM 1.01. Entry into a Material Definitive Agreement.

 

On March 7, 2015, SigmaTron International, Inc. (the “Company”) entered into the First Amendment to Third Amended and Restated Credit Agreement (the “Amendment”) by and between the Company and Wells Fargo Bank, National Association (“Lender”), the Company’s senior lender.  A copy of the Amendment is filed herewith and the terms of the Amendment are incorporated herein by reference.  The Company and Lender first entered into that certain Credit Agreement dated January 8, 2010 (as amended, the “Credit Agreement”), which was subsequently replaced by that certain Amended and Restated Credit Agreement dated January 31, 2011 (as amended, the “First A&R Credit Agreement”) and that certain Second Amended and Restated Credit Agreement (as amended, the “Second A&R Credit Agreement” and, with the Credit Agreement and the First A&R Credit Agreement, the “Prior Agreements”).  On October 31, 2014, the Company and Lender entered into that certain Third Amended and Restated Credit Agreement (the “Agreement”), which Agreement amended and restated, superseded and replaced the Prior Agreements, and extended the term of the Company’s senior credit facility to October 31, 2017.  Capitalized terms used, but not otherwise defined, in this filing have the meanings given in the Agreement, as the same has been modified by the Amendment.

 

The Amendment:  (i) increases the amount of the Term A Loan from $2,500,000 to $2,850,000 (which amount was reflected on the Second Amended and Restated Promissory Note executed by the Company on December 8, 2014); (ii) temporarily increases the portion of the Company’s Borrowing Base that may be represented by Eligible Inventory from 50% to 60% from December 31, 2014, through June 30, 2015; (iii) permits the Company to count as Eligible Accounts from December 31, 2014, through June 30, 2015, any Accounts of Account Debtors owing $1,400,000 or less to the Company; (iv) provides for additional financial reporting obligations from the Company to the Lender from February 1, 2015 through July 10, 2015; and (v) provided for an amendment fee of $5,000.

 

The foregoing is a summary of, and should not be relied upon in lieu of a review of, the Amendment, the terms of which shall control in the event of any inconsistency between the information in the foregoing summary and the terms of the Amendment.

 

ITEM 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No. Description

 

Exhibit 10.1 First Amendment to Third Amended and Restated Credit Agreement entered into as of March 7, 2015, by and between SigmaTron International, Inc., and Wells Fargo Bank, National Association.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

SIGMATRON INTERNATIONAL, INC.

 

Date:  March 12, 2015 By:  /s/ Gary R. Fairhead

Name: Gary R. Fairhead

Title: President and Chief Executive Officer

 

 

 

 

Exhibit 10.1

FIRST   AMENDMENT TO

THIRD AMENDED AND RESTATED CREDIT AGREEMENT  

 

 

THIS FIRST   AMEND MENT TO THIRD   AMENDED AND RESTATED CREDIT AGREEMENT   (this “ Amendment ” ) is entered into as of March   6 , 2015 , by and between SIGMATRON INTERNATIONAL, INC. , a Delaware corporation ( “ Borrower ” ), and WELLS FARGO BANK , NATIONA L ASSOCIATION , a national banking association (“ Bank ” ).

 

RECITALS

 

WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that certain Third Amended and Restated Credit Agreement between Borrower and Bank dated as of October 31, 2014  ( as amended from time to time, the  “ Credit Agreement” );

 

WHEREAS, Bank and Borrower have agreed to certain changes in the terms and conditions set forth in the Credit Agreement   and have agreed to amend the same to reflect said changes.

 

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

 

ARTICLE I

 

AMENDMENTS

 

Borrower and Bank hereby agree that the Credit Agreement shall hereby be amended as follows:

 

1. Section  1.1(e ) (iii)(B) is hereby amended by deleting all of the text in that section following “provided, however” and replacing the same with the following: “that such amount shall on any given date between and including December 31, 2014 and June 30, 2015 be equal to or less than 60% of the t otal Borrowing Base and on any given date after June 30, 2015, be eq ual to or less than 50% of the t otal Borrowing Base.” 

2. Section 1.1(e)(vi) is hereby amended by inserting the following sentence at the end thereof: “ Notwithstanding subclauses (C) and (G) of this Section 1.1(e)(vi), but provided all other requirements set forth above of Eligible Accounts are satisfied, solely for the period between and including December 31, 2014 and June 30, 2015, the Borrower’s Accounts owing by any of the Account Debtors listed on Exhibit B hereto in an aggregate amount not to exceed $1,400,000 shall constitute Eligible Accounts .”

3. Section 1.2(a) is hereby amended by replacing the last sentence with “The Term Loan A shall be in an amount equal to $2,850,000.00.”

 

 

 

4. Section 4.3 is hereby amended by inserting new clauses (g) and (h) as follows and changing existing clause (g) to clause (i):

“(g) solely for the period beginning on February 1, 2015   through and including   July 10 , 2015, ten (10) days after the end of each calendar month during such period, a report describing the Accounts of the Borrower in the form of Exhibit C (the “A/R Report”) accurate as of the date immediately preceding the date of such report ;

(h) solely for the period beginning on February 1, 2015 through and including July 10, 2015, on each date when delivery is required of each of the Borrowing Base Certificate pursuant to clause (f) above and the A/R Report pursuant to clause (g) above, a report describing the historical and forecasted sales of AB Electrolux (publ) and its subsidiaries and affiliates in the form of Exhibit D ;   said report due with the A/R Report shall be accurate as of   the date immediately preceding the date of the report, and said report due with the Borrowing Base Certificate shall be accurate as of the prior month-end;”  

5. Exhibit A, Exhibit B, Exhibit C, and Exhibit D attached hereto shall be added to and made a part of the Credit Agreement as Exhibit A, Exhibit B, Exhibit C and Exhibit D thereto.

 

ARTICLE II

 

CONDITIONS PRECEDENT

 

1. This Amendment shall become effective as of the date first set forth above, provided the following conditions shall have been satisfied:

(i) the Bank (or its counsel) shall have received counterparts of this Amendment that, when taken together, bear the signatures of the Borrower and the Bank ;

(ii) the Bank (or its counsel) shall have received the executed Line of Credit Note, amended and restated as of the date hereof and in form and substance satisfactory to the Bank;

(iii) the Bank shall have received from Borrower   (a) payment in cash of an amendment fee in the amount of $5,000.00 and (b) i n accordance with Section 7.3 of the Credit Agreement, payment of all reasonable out-of-pocket payments, advances, charges, costs and expenses, including reasonable attorneys’ fees (to include reasonable outside counsel fees), expended or incurred by Bank in connection with the preparation of this Amendment and all other documents prepared in connection herewith ; and

(iv) the Bank shall have received such other information, documents and agreements as it may request.

 

 

 

ARTICLE I I I

 

GENERAL CLAUSES

 

1. Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiv er or modification. All terms defined in the Credit Agreement shall have the same meaning when used in this Amendment .   Borrower and Bank hereby agree that this Amendment constitutes a Loan Document and that the term “ Loan Document ” , as defined in the Credit Agreement , shall be read and understood , wherever it appears in the Credit Agreement and in any other Loan Document, to include this Amendment. This Amendment and the Credit Agreement shall be read together, as one document.

1. Borrower hereby remakes all representations and warranties contained in the Credit Agreement and the other Loan Documents and reaffirms all covenants set forth therein in each case as of the date hereof and as if the same had been set forth in full herein .   Borrower further certifies that as of the date of this Amendment , there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.

2. This Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.

3. This Amendment shall be governed by and construed in accordance with the laws of the State of Illinois, but giving effect to federal laws applicable to national banks.

 

[ Signature page follows. ]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first written above.

 

 

 

SIGMATRON INTERNATIONAL, INC.

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

 

 

 

B y: /s/ Linda K. Frauendorfer

 

By: /s/ Matthew P. Soper

Name: Linda K. Frauendorfer

 

Name: Matthew P. Soper

Title: CFO

 

Title:  Vice President