SMART Global Holdings, Inc. (Form: 8-K, Received: 08/29/2022 16:20:54)

Date: August 29, 2022

SMART Global Holdings, Inc.

/s/ Ken Rizvi

Senior Vice President and Chief Financial Officer

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

Date of Report (Date of earliest event reported): August 26, 2022

SMART GLOBAL HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)

Cayman Islands

001-38102

98-1013909

(State or other Jurisdiction of

Incorporation or Organization)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

c/o Walkers Corporate Limited

190 Elgin Avenue

George Town, Grand Cayman

Cayman Islands

KY1-9008

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code: (510) 623-1231

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 240.13e4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading

Symbol

Name of Exchange

on Which Registered

Ordinary shares, $0.03 par value per share

SGH

Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01

Entry into a Material Definitive Agreement.

First Supplemental Indenture to Indenture Governing 2.25% Convertible Senior Notes due 2026

On August 26, 2022, SMART Global Holdings, Inc., a Cayman Islands exempted company (“SGH”), entered into the First Supplemental Indenture (the “First Supplemental Indenture”) to the Indenture, dated February 11, 2020 (the “Indenture”), between SGH and U.S. Bank National Association, as trustee, governing SGH’s outstanding 2.25% Convertible Senior Notes due 2026 (the “2026 Notes”). The First Supplemental Indenture became effective pursuant to its terms as of 12:01 a.m., Pacific Time, on August 27, 2022.

Pursuant to the First Supplemental Indenture, SGH irrevocably elected (i) to eliminate SGH’s option to elect Physical Settlement (as defined in the Indenture) on any conversion of 2026 Notes that occurs on or after the date of the First Supplemental Indenture and (ii) that, with respect to any Combination Settlement (as defined in the Indenture) for a conversion of the 2026 Notes, the Specified Dollar Amount (as defined in the Indenture) that will be settled in cash per $1,000 principal amount of the 2026 Notes shall be no lower than $1,000. The Indenture was filed as Exhibit 4.1 to SGH’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on February 11, 2020.

The foregoing description of the First Supplemental Indenture does not purport to be complete and is qualified in its entirety by the full text of the First Supplemental Indenture, which is attached hereto as Exhibit 4.1 and is incorporated herein by reference.

Amended Credit Agreement

On August 29, 2022, SGH and SMART Modular Technologies, Inc., a California corporation (the “Co-Borrower” and, together with SGH, the “Borrowers” and each, a “Borrower”), entered into the First Amendment, with and among the lenders party thereto and Citizens Bank, N.A., as Administrative Agent (the “Incremental Amendment”). The Incremental Amendment amends that certain Credit Agreement, dated as of February 7, 2022, by and among the Borrowers, the lenders party thereto and Citizens Bank, N.A., as Administrative Agent, Collateral Agent and an Issuing Bank (the “Original Credit Agreement”, and as amended by the Incremental Amendment, the “Amended Credit Agreement”).

The Incremental Amendment (i) provides for incremental term loans under the Amended Credit Agreement in an aggregate amount of $300 million (the “Incremental Term Loans”) which Incremental Term Loans are on the same terms as the term loans incurred under the Original Credit Agreement, (ii) increases the maximum First Lien Leverage Ratio (as defined in the Amended Credit Agreement) financial covenant from 3.00:1.00 to 3.25:1.00 and (iii) increases the aggregate amount of unrestricted cash and permitted investments netted from the definitions of Consolidated First Lien Debt and Consolidated Net Debt under the Amended Credit Agreement from $100 million to $125 million.

Substantially simultaneously with entering into the Incremental Amendment, the Borrowers applied a portion of the proceeds of the Incremental Term Loans to (i) finance a portion of the Closing Purchase Price (as defined below) and (ii) pay in full the $101.8 million outstanding under that certain Promissory Note, dated as of June 24, 2022, by and among CreeLED, Inc. and Wolfspeed, Inc., as holder. The Amended Credit Agreement matures on February 7, 2027. Loan interest will be based on a Total Leverage Ratio grid and will initially bear interest at the Term Secured Overnight Financing Rate (“SOFR”) plus 2.00% in accordance with SGH’s existing pricing grid at the closing of the acquisition.

The foregoing description of the Incremental Amendment does not purport to be complete and is qualified in its entirety by the full text of the Incremental Amendment, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Item 2.01

Completion of Acquisition or Disposition of Assets.

On August 29, 2022, SGH completed its previously announced acquisition of Storm Private Holdings I Ltd., a Cayman Islands exempted company (“Stratus Holding Company” and together with its subsidiaries, “Stratus Technologies”), pursuant to the terms of that certain Share Purchase Agreement (the “Purchase Agreement”), dated as of June 28, 2022, by and among SGH, Stratus Holding Company and Storm Private Investments LP, a Cayman Islands exempted limited partnership (“Seller”). Pursuant to the Purchase Agreement, among other matters, Seller sold to SGH, and SGH purchased from Seller, all of Seller’s right, title and interest in and to the outstanding equity securities of Stratus Holding Company (the “Share Purchase”).

At the closing of the Share Purchase, SGH paid to Seller a cash purchase price of $225 million, subject to certain adjustments as set forth in the Purchase Agreement (the “Closing Purchase Price”). In addition, pursuant to the Purchase Agreement, Seller has the right to receive, and SGH will be obligated to pay, contingent consideration (if any) of up to $50 million (the “Earn-Out”) based on the gross profit performance of the Stratus Technologies business during the first full 12 fiscal months of Stratus Technologies following the closing of the Share Purchase. The Earn-Out, if any, will be payable in cash, ordinary shares of SGH, $0.03 par value per share (“SGH Shares”), or a mix of cash and SGH Shares, at SGH’s election.

The Closing Purchase Price was funded with cash on hand and amounts borrowed under the Amended Credit Agreement.

The foregoing description of the Purchase Agreement, the Share Purchase and the other transactions contemplated by the Purchase Agreement do not purport to be complete and are qualified in their entirety by the full text of the Purchase Agreement, which was filed as Exhibit 2.1 to SGH’s Current Report on Form 8-K filed with the SEC on June 29, 2022, and is incorporated herein by reference.

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference to the extent responsive to this Item 2.03.

Item 7.01

Regulation FD Disclosure.

On August 29, 2022, SGH issued a press release announcing the completion of the Share Purchase, a copy of which is attached as Exhibit 99.1 and is incorporated herein by reference.

The information furnished pursuant to Item 7.01 on this Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Use of Forward Looking Statements

This Form 8-K contains “forward-looking statements”. These forward-looking statements are based on current expectations and preliminary assumptions that are subject to factors and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside SGH’s control, including, among others: incurring unanticipated costs in consummating the Share Purchase and other transactions contemplated by the Purchase Agreement; the ability of Stratus Technologies to generate anticipated revenue and profits post-transaction close; unforeseen issues, risks and costs associated with the integration of Stratus Technologies into the SGH group or transition of the operations, assets, systems and personnel of Stratus Technologies; unfavorable reaction to the transaction by competitors, customers, suppliers, employees and other business partners of Stratus Technologies and SGH; global business and economic conditions and growth trends in technology industries, SGH’s or Stratus Technologies’ customer markets and various geographic regions; uncertainties in the geopolitical environment; disruptions in SGH’s or Stratus Technologies’ operations or SGH’s or Stratus Technologies’ supply chain as a result of COVID-19 pandemic or otherwise; changes in trade regulations or adverse developments in international trade relations and agreements; changes in currency exchange rates; overall information technology spending; appropriations for government spending; the success of SGH’s or Stratus Technologies’ strategic initiatives including additional investments in new products and additional capacity; acquisitions of companies or technologies, the failure to successfully integrate and operate them, or customers’ negative reactions to them; limitations on or changes in the availability of supply of materials and components; fluctuations in material costs; the temporary or volatile nature of pricing trends in memory or elsewhere; deterioration in customer relationships; production or manufacturing difficulties; competitive factors; technological changes; difficulties with or delays in the introduction of new products; slowing or contraction of growth in the memory market in Brazil; reduction in or termination of incentives for local manufacturing in Brazil; changes to applicable tax regimes or rates; prices for the end products of SGH’s or Stratus Technologies’ customers; strikes or labor disputes; deterioration in or loss of relations with any of SGH’s or Stratus Technologies’ limited number of key vendors; the inability to maintain or expand government business; and other factors and risks detailed in SGH’s filings with the U.S. Securities and Exchange Commission, which include SGH’s most recent reports on Form 10-K and Form 10-Q, including SGH’s future filings. Such factors and risks as outlined above and in such filings do not constitute all factors and risks that could cause actual results of SGH to be materially different from SGH’s forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements. These forward-looking statements are made as of today, and SGH does not intend, and has no obligation, to update or revise any forward-looking statements in order to reflect events or circumstances that may arise after the date of this Current Report on Form 8-K, except as required by law.

Item 9.01

Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The financial statements required by Item 9.01(a) are not included in this Current Report on Form 8-K. To the extent such financials are required, SGH intends to include such financial statements by amendment to this Current Report on Form 8-K no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.

(b) Pro Forma Financial Information.

The pro forma financial information required by Item 9.01(b) is not included in this Current Report on Form 8-K. To the extent such pro forma financial information is required, SGH intends to include such pro forma financial information by amendment to this Current Report on Form 8-K no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.

(d) Exhibits.


Exhibit Number		Exhibit Description

2.1		Share Purchase Agreement, dated as of June 28, 2022, by and among SMART Global Holdings, Inc., a Cayman Islands exempted company, Storm Private Holdings I Ltd., a Cayman Islands exempted company, and Storm Private Investments LP, a Cayman Islands exempted limited partnership (incorporated by reference to SGH’s Current Report on Form 8-K filed with the SEC on June 29, 2022).*

4.1		First Supplemental Indenture with respect to 2.25% Convertible Senior Notes due 2026, dated August 26, 2022, between SMART Global Holdings, Inc. and U.S. Bank National Association, as trustee.

10.1		First Amendment, dated as of August 29, 2022, by and among SMART Global Holdings, Inc., a Cayman Islands exempted company, SMART Modular Technologies, Inc., a California corporation, the lenders party thereto and Citizens Bank, N.A., as administrative agent, and acknowledged and agreed to by the subsidiary loan parties party thereto.**

99.1		Press Release, issued on August 29, 2022, announcing the completion of the Share Purchase.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

*	The schedules and exhibits to the Share Purchase Agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. Registrant will furnish copies of such exhibits and schedules to the Securities and Exchange Commission upon request.

**	The schedules and exhibits to the Incremental Amendment have been omitted from this filing pursuant to Item 601(b)(10)(iv) of Regulation S-K. Registrant will furnish copies of such exhibits and schedules to the Securities and Exchange Commission upon request.

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.

Exhibit 4.1

FIRST SUPPLEMENTAL INDENTURE

This First Supplemental Indenture (this “Supplemental Indenture”) is entered into as of August 26, 2022 but effective as of 12:01 a.m. Pacific Time, on the 27^th day of August, 2022, between SMART Global Holdings, Inc., a Cayman Islands exempted company (the “Company”) and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee (the “Trustee”). Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture (as hereinafter defined).

RECITALS

WHEREAS, the Company and the Trustee entered into an Indenture, dated as of February 11, 2020 (the “Indenture”), providing for the issuance of its 2.25% Convertible Senior Notes due 2026 (the “Notes”);

WHEREAS, pursuant to Section 8.01(G) of the Indenture, the Company and the Trustee may supplement the Indenture without the consent of the Holders of the Notes to irrevocably elect or eliminate a Settlement Method and/or irrevocably elect a Specified Dollar Amount;

WHEREAS, the Company desires the Trustee to join with it in the execution and delivery of this Supplemental Indenture in order to irrevocably eliminate the right of the Company to elect Physical Settlement and to irrevocably elect a Specified Dollar Amount for any Combination Settlement, and in accordance with Sections 8.01 and 8.06 of the Indenture, the Company has duly adopted resolutions of the Board of Directors authorizing the execution and delivery of this Supplemental Indenture, and has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel stating that the execution of this Supplemental Indenture complies with the requirements of Article 8 of the Indenture and is permitted and authorized by the Indenture and this Supplemental Indenture constitutes the legal, valid and binding obligation of the Company enforceable in accordance with its terms;

WHEREAS, the conditions set forth in the Indenture for the execution and delivery of this Supplemental Indenture have been complied with; and

WHEREAS, all things necessary to make this Supplemental Indenture a valid supplement to the Indenture pursuant to its terms and the terms of the Indenture have been done.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree as follows:

SECTION 1. Irrevocable Elections.

a. Irrevocable Election to Eliminate Physical Settlement. The Company hereby irrevocably eliminates the right of the Company to elect Physical Settlement as the Settlement Method on any conversion of Notes that occurs on or after the date of this Supplemental Indenture.

b. Irrevocable Election of Specified Dollar Amount. The Company hereby irrevocably elects that, with respect to any Combination Settlement, the Specified Dollar Amount per $1,000 principal amount of the Notes shall be no lower than $1,000.

SECTION 2. Relationship to Indenture. This Supplemental Indenture is a supplemental indenture within the meaning of the Indenture. The Indenture, as supplemented and amended by this Supplemental Indenture, is in all respects ratified, confirmed and approved and, as supplemented and amended by this Supplemental Indenture, shall be read, taken and construed as one and the same instrument.

SECTION 3. Modification of the Indenture. Except as expressly modified by this Supplemental Indenture, the provisions of the Indenture shall continue to apply to the Notes

SECTION 4. Governing Law. THIS SUPPLEMENTAL INDENTURE AND THE NOTES, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS SUPPLEMENTAL INDENTURE OR THE NOTES, WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK..

SECTION 5. Execution in Counterparts; Electronic Signatures. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes. This Supplemental Indenture shall be valid, binding, and enforceable against a party when executed and delivered by an authorized individual on behalf of the party by means of (i) an original manual signature; (ii) a faxed, scanned, or photocopied manual signature, or (iii) any other electronic signature provided by DocuSign (or such other digital signature provider as specified in writing to the Trustee by an Officer of the Company), in English and permitted by the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, and/or any other relevant electronic signatures law, including any relevant provisions of the UCC (collectively, “Signature Law”), in each case to the extent applicable. Each faxed, scanned, or photocopied manual signature, or other electronic signature, shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. Each party hereto shall be entitled to conclusively rely upon, and shall have no liability with respect to, any faxed, scanned, or photocopied manual signature, or other electronic signature, of any other party and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity thereof. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute one and the same instrument. For the avoidance of doubt, original manual signatures shall be used for execution or indorsement of writings when required under the UCC or other Signature Law due to the character or intended character of the writings. The Company agrees to assume all risks arising out of the use of using digital signatures and electronic methods to submit communications to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties.

SECTION 6. Headings. The headings of sections of this Supplemental Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof, and will not modify or restrict any of the terms or provisions hereof.

SECTION 7. The Trustee. The recitals in this Supplemental Indenture are made by the Company only and not by the Trustee. The Trustee makes no representations as to and shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture, and the Trustee assumes no responsibility for the same. All of the provisions contained in the Indenture in respect of the rights, powers, privileges, and immunities of the Trustee shall be applicable in respect of this Supplemental Indenture as fully and with like force and effect as though set forth in full herein.

SECTION 8. Notice to Holders. The Company hereby requests the Trustee provide the notice to Holders (by delivering notice to DTC LENS) attached hereto as Exhibit A promptly following execution of this Supplemental Indenture.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, each of the parties hereto has caused this Supplemental Indenture to be executed by its duly authorized officers as of the date first written above.


COMPANY

SMART GLOBAL HOLDINGS, INC.

By:		/s/ Ken Rizvi
		Name: Ken Rizvi
		Title: CFO

TRUSTEE

U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee

By:		/s/ Bradley E. Scarbrough
		Name: Bradley E. Scarbrough
		Title: Vice President

EXHIBIT A

NOTICE OF FIRST SUPPLEMENTAL INDENTURE

SMART GLOBAL HOLDINGS, INC.

2.25% Convertible Senior Notes due 2026

Aggregate Principal Amount: $250,000,000

Maturity Date: February 15, 2026

CUSIP: 83205Y AB0¹

NOTICE IS HEREBY GIVEN, that on August 26, 2022, SMART Global Holdings, Inc. (the “Company”) and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee (the “Trustee”) entered into the First Supplemental Indenture (the “Supplemental Indenture”) to the Indenture (the “Indenture”), dated as of February 11, 2020, between the Company and the Trustee. Capitalized terms used but not otherwise defined herein have the meanings ascribed to such terms in the Indenture.

Pursuant to the Supplemental Indenture, the Company irrevocably elected (i) to eliminate the Company’s option to elect Physical Settlement on any conversion of Notes that occurs on or after the date of the Supplemental Indenture and (ii) that, with respect to any Combination Settlement for a conversion of Notes, the Specified Dollar Amount that will be settled in cash per $1,000 principal amount of the Notes shall be no lower than $1,000.

Date: , 2022

¹	The CUSIP number is included solely for the convenience of the Holders of Notes. No representation is made as to the correctness or accuracy of the CUSIP number with respect to the Notes or as indicated in this notice.

Exhibit 10.1

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of August 29, 2022, is by and among SMART GLOBAL HOLDINGS, INC., a Cayman Islands exempted company (the “Parent Borrower”), SMART MODULAR TECHNOLOGIES, INC., a California corporation (the “Co-Borrower” and, together with the Parent Borrower, the “Borrowers” and each a “Borrower”), the Lenders (as defined below) party hereto and CITIZENS BANK, N.A., as administrative agent (the “Agent”), and acknowledged and agreed to by the Subsidiary Loan Parties. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement (as defined below).

W I T N E S S E T H

WHEREAS, the Borrowers, the various financial institutions from time to time party thereto (the “Lenders”) and the Agent are parties to that certain Credit Agreement dated as of February 7, 2022 (as amended, modified, extended, restated, replaced, or supplemented from time to time, the “Credit Agreement”);

WHEREAS, the Loan Parties have requested that (a) certain of the existing Lenders (collectively, the “Incremental Lenders”) provide a new Incremental Term Loan in the aggregate principal amount equal to $300,000,000 to the Borrowers pursuant to Section 2.20 of the Credit Agreement (the “Incremental Term Loan”), which shall be deemed to be an increase to (and shall be the same Class and tranche as, and shall be fungible with) the existing Term Loan funded on the Effective Date, (b) the Agent amend certain provisions of the Credit Agreement as necessary to incorporate the Incremental Term Loan and (c) the Required Lenders amend certain other provisions of the Credit Agreement; and

WHEREAS, the Incremental Lenders are willing to provide the Incremental Term Loan, and the Agent and the Required Lenders are willing to make such amendments to the Credit Agreement, in accordance with and subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

AMENDMENTS TO CREDIT AGREEMENT

1.1 Amendments to Section 1.01—Additional Definitions. Section 1.01 of the Credit Agreement is hereby amended by adding the following new definitions in the correct alphabetical order:

“Cree Refinancing” means the repayment in full of all amounts outstanding under that certain Earnout Note, dated as of June 24, 2022, among the Parent Borrower and Cree, Inc., as holder.

“First Amendment” means that certain First Amendment to this Agreement dated as of August 29, 2022.

“First Amendment Effective Date” means the date on which the conditions specified in Article II of the First Amendment are satisfied.

“First Amendment Term Commitment” has the meaning assigned to such term in the definition of Term Commitment.

“First Amendment Transaction Costs” means any fees or expenses incurred or paid by the Borrowers or any Subsidiary in connection with the First Amendment Transactions, the First Amendment and the transactions contemplated hereby and thereby.

“First Amendment Transactions” means, collectively, (a) the Storm Acquisition, (b) the Cree Refinancing, (c) the funding of the Term Loans on the First Amendment Effective Date and the consummation of the other transactions contemplated by the First Amendment, (d) the consummation of any other transactions in connection with the foregoing and (e) the payment of the fees and expenses incurred in connection with any of the foregoing (including the First Amendment Transaction Costs).

“Initial Term Commitment” has the meaning assigned to such term in the definition of Term Commitment.

“Storm Acquisition” means the acquisition by the Borrowers, directly or indirectly, all of the equity interests of Storm Private Holdings I Ltd., a Cayman Islands exempted company (the “Target”), and its Subsidiaries pursuant to the terms of that certain Share Purchase Agreement, dated as of June 28, 2022, by and among the equity holders of the Target party thereto, the Target and the Borrowers.

1.2 Amendment to the Definition of Available Cash. The reference to “$100,000,000” appearing in the definition of Available Cash set forth in Section 1.01 of the Credit Agreement is hereby amended to read “$125,000,000”.

1.3 Amendment to Definition of Term Commitment. The definition of “Term Commitment” appearing in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“Term Commitment” means, with respect to each Term Lender, the commitment of such Term Lender to make a Term Loan hereunder on the Effective Date and/or the First Amendment Effective Date, expressed as an amount representing the maximum principal amount of the Term Loan to be made by such Term Lender hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to assignments by or to such Term Lender pursuant to an Assignment and Assumption. The initial amount of each Term Lender’s Term Commitment is set forth on Schedule 2.01(a) or in the Assignment and Assumption pursuant to which such Term Lender shall have assumed its Term Commitment, as the case may be. As of the Effective Date, the total Term Commitment was $275,000,000 (the “Initial Term Commitment”), and as of the First Amendment Effective Date the total Term Commitment was $300,000,000 (the “First Amendment Term Commitment”).

1.4 Amendment to Definition of Term Loan. The definition of “Term Loan” appearing in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“Term Loan” means a Loan made pursuant to clause (a) of Section 2.01 (including, for the avoidance of doubt, the Loans made on First Amendment Effective Date pursuant to the First Amendment).

1.5 Amendment to Section 2.01. Clause (a) appearing in Section 2.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(a) each Term Lender severally agrees to make a Term Loan to the Borrowers denominated in dollars on (i) the Effective Date in a principal amount not exceeding its Initial Term Commitment and (ii) the First Amendment Effective Date in a principal amount not exceeding its First Amendment Term Commitment (such Term Loan shall be deemed to be an increase to (and shall be the same Class and tranche as, and shall be fungible with) the Term Loan made pursuant to clause (a)(i)) and

1.6 Amendment to Section 2.03. Clause (a) appearing in the second sentence of Section 2.03 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(a) in the case of a SOFR Borrowing, not later than 2:00 p.m., New York City time, three (3) Government Securities Business Days before the date of the proposed Borrowing (or, in the case of any SOFR Borrowing to be made on the Effective Date or the First Amendment Effective Date, such shorter period of time as may be agreed to by the Administrative Agent) or

1.7 Amendment to Section 2.08. Clause (a) appearing in Section 2.08 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(a) Unless previously terminated, the Initial Term Commitments shall terminate at 11:59 p.m., New York City time, on the Effective Date. The Revolving Commitments shall terminate at 11:59 p.m., New York City time, on the Revolving Maturity Date. The First Amendment Term Commitments shall terminate at 11:59 p.m., New York City time, on the First Amendment Effective Date.

1.8 Amendment to Section 2.10. Clause (a) appearing in Section 2.10 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(a) Subject to adjustment pursuant to paragraph (c) of this Section 2.10, the applicable Borrower shall repay Term Loan Borrowings on the last day of each February, May, August and November (commencing on May 31, 2022) in the principal amount equal to (i) for all periods prior to the First Amendment Effective Date, $1,718,750, (ii) for the first year after the Effective Date (excluding any period prior to the First Amendment Effective Date), $3,605,542.45, (iii) for the second through fourth years after the Effective Date, $7,211,084.91 and (iv) for the fifth year after the Effective Date, $10,816,627.36.

1.9 Amendment to Section 3.17. Clause (a) appearing in Section 3.17 of the Credit Agreement is hereby amended and restated in its entirety to read as follows.

(a) the Term Loans made on (i) the Effective Date to directly or indirectly finance a portion of the Transactions and to pay Transaction Costs and (ii) the First Amendment Effective Date to directly or indirectly finance a portion of the First Amendment Transactions and to pay First Amendment Transaction Costs and

1.10 Amendment to Section 5.10. The first sentence contained in Section 5.10 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

The Borrowers will use the proceeds of the Term Loans to directly or indirectly (a) on the Effective Date, finance a portion of the Transactions and to pay Transaction Costs and (b) on the First Amendment Effective Date, finance a portion of the First Amendment Transactions and to pay First Amendment Transaction Costs.

1.11 Amendment to Section 5.13. Section 5.13 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

5.13 [Reserved].

1.12 Amendment to Section 6.10. Clause (a) appearing in Section 6.10 of the Credit Agreement is hereby amended and restated in its entirety to read as follows.

(a) the First Lien Leverage Ratio to exceed 3.25 to 1.00 as of the last day of any Test Period,

1.13 Amendment to Schedules and Exhibits. Schedule 2.01(a) to the Credit Agreement is hereby amended and restated as set forth on Exhibit A attached to this Amendment. No other Schedules and Exhibits to the Credit Agreement shall be modified or otherwise affected.

ARTICLE II

CONDITIONS TO EFFECTIVENESS

2.1 Closing Conditions. This Amendment shall be deemed effective as of the date set forth above (the “Amendment Effective Date”) upon satisfaction of the following conditions (in form and substance reasonably acceptable to the Agent):

(a) Executed Amendment. The Agent shall have received a copy of this Amendment duly executed by each Borrower, the other Loan Parties, the Agent, the Incremental Lenders and the Required Lenders.

(b) Legal Opinions. The Agent shall have received an opinion or opinions of counsel for the Loan Parties, dated the Amendment Effective Date and addressed to the Agent and the Lenders, of (i) Simpson Thacher & Bartlett LLP, New York and California counsel for the Loan Parties and (ii) Walkers, Cayman Islands counsel to the Parent Borrower.

(i) Articles of Incorporation/Charter Documents. Either (x) certified articles of incorporation or other charter documents, as applicable, of each Loan Party certified (A) by an officer of such Loan Party (pursuant to an officer’s certificate) as of the Amendment Effective Date to be true and correct and in force and effect as of such date, and (B) to be true and complete as of a recent date by the appropriate Governmental Authority of the state of its incorporation or organization, as applicable or (y) certification that there have been no changes to the articles of incorporation or other charter documents, as applicable, delivered to the Agent as of the Effective Date.

(ii) Resolutions. Copies of resolutions of the board of directors or comparable managing body of each Loan Party approving and adopting this Amendment and authorizing execution and delivery thereof, certified by an officer of such Person (pursuant to an officer’s certificate) as of the Amendment Effective Date to be true and correct and in force and effect as of such date.

(iii) Bylaws/Operating Agreement. Either (x) a copy of the bylaws or comparable operating agreement of each Loan Party certified by an officer of such Loan Party (pursuant to an officer’s certificate) as of the Amendment Effective Date to be true and correct and in force and effect as of such date or (y) certification that there have been no changes to the bylaws or operating agreements delivered to the Agent as of the Effective Date.

(iv) Good Standing. Certificates of good standing, existence or its equivalent with respect to each Loan Party certified as of a recent date by the appropriate Governmental Authorities of the state of incorporation or organization.

(v) Incumbency. Either (x) an incumbency certificate of each Responsible Officer of each Loan Party certified by an officer (pursuant to an officer’s certificate) to be true and correct as of the Amendment Effective Date or (y) certification that there have been no changes to the incumbency certificate delivered to the Agent as of the Effective Date.

(d) Acquisition; Cree Refinancing.

(i) The Storm Acquisition shall have been consummated, or substantially simultaneously with the initial borrowing of the Incremental Term Loan shall be consummated, in all material respects in accordance with the acquisition agreement delivered to the Agent (the “Acquisition Agreement”) (and no provision of the Acquisition Agreement shall have been waived, amended, supplemented or otherwise modified (including any consents thereunder) in a manner material and adverse to the Incremental Lenders without the consent of the Agent (such consent not to be unreasonably withheld, delayed or conditioned)) (it being understood that (A) any modification, amendment, consent, waiver or determination in respect of the definition of “Material Adverse Effect” (as in effect on the date hereof) shall be deemed to be material and adverse to the interests of the Incremental Lenders and (B) any reduction in the purchase price consideration shall be deemed not to be material and adverse to the Incremental Lenders so long as such reduction is applied to reduce the Incremental Term Loan).

(ii) The Agent shall have received, immediately after the consummation of the Storm Acquisition, a joinder agreement executed by Stratus Technologies, Inc., a Delaware corporation, along with such other documents necessary to satisfy the Collateral and Guarantee Requirement as required pursuant to Section 5.11 of the Credit Agreement.

(iii) The Storm Acquisition shall constitute an Investment permitted under the terms of the Credit Agreement.

(iv) The Cree Refinancing shall have been consummated, or substantially simultaneously with the initial borrowing of the Incremental Term Loan shall be consummated.

(e) Solvency Certificate. The Agent shall have received a customary solvency certificate, as of the Amendment Effective Date and after giving effect to the First Amendment Transactions, executed by a senior financial executive or officer of Smart Global Holdings.

(f) Incremental Term Loan. The conditions set forth in Section 2.20 of the Credit Agreement relating to the Incremental Term Loan shall be satisfied (including, without limitation, no Event of Default under clause (a), (b), (h) or (i) of Section 7.01 of the Credit Agreement shall have occurred and be continuing on the Incremental Closing Date).

(g) KYC; Beneficial Owner. (i) The Incremental Lenders shall have received all documentation at least two business days prior to the Amendment Effective Date and other information about the Target that shall have been reasonably requested by the Incremental Lenders in writing at least 10 business days prior to the Amendment Effective Date and that the Incremental Lenders reasonably determine is required by United States regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act and (ii) to the extent any Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation (as defined below), each Lender that so requests (which request is made through the Administrative Agent) shall have received a Beneficial Ownership Certification in relation to such Borrower; provided that the Administrative Agent has provided the Borrowers a list of each such Lender and its electronic delivery requirements at least five Business Days prior to the Amendment Effective Date.

(h) Borrowing Request. The Agent shall have received a Borrowing Request with respect to the Incremental Term Loan to be made on the Amendment Effective Date.

(i) Fees and Expenses.

(i) The Administrative Agent shall have received from the Borrowers, for the account of each Lender that executes and delivers an Amendment signature page to the Agent by 5:00 p.m. (EST) on or before August 28, 2022 (each such Lender, a “Consenting Lender”, and collectively, the “Consenting Lenders”), an amendment fee in an amount equal to 10 basis points on (A) the aggregate Revolving Commitment of such Consenting Lender and (B) the outstanding principal amount of the Term Loans (prior to giving effect to this Amendment) held by such Consenting Lender.

(ii) The Agent shall have received from the Borrowers such other fees and reasonable and documented out-of-pocket expenses that are payable in connection with the consummation of the transactions contemplated hereby, and King & Spalding LLP shall have received from the Borrowers payment of all reasonable and documented fees and expenses incurred prior to the date hereof or in connection with this Amendment.

ARTICLE III

MISCELLANEOUS

3.1 Amended Terms. On and after the Amendment Effective Date, all references to the Credit Agreement in each of the Loan Documents shall hereafter mean the Credit Agreement as amended by this Amendment. Except as specifically amended hereby or otherwise agreed, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms.

3.2 Representations and Warranties of Loan Parties. Each of the Loan Parties represents and warrants as follows:

(a) Such Loan Party has taken all necessary action to authorize the execution, delivery and performance of this Amendment.

(b) Such Loan Party has duly executed and delivered the Amendment and the Amendment constitutes such Loan Party’s legal, valid and binding obligation, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

(c) No approval is required to be obtained by such Loan Party or any of its Subsidiaries in connection with the execution, delivery or performance by such Loan Party of this Amendment; except for such approvals which have been issued or obtained by such Loan Party or any of its Subsidiaries which are in full force and effect.

(d) The representations and warranties of each Loan Party set forth in Article III of the Credit Agreement are true and correct in all material respects on the date hereof, provided that, to the extent that such representations and warranties specifically refer to an earlier date, they are true and correct in all material respects as of such earlier date; provided, further, that, with respect to any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language, they are true and correct in all respects (giving effect to any such qualifications) on the date of hereof or on such earlier date, as the case may be).

(e) After giving effect to this Amendment, no event has occurred and is continuing which constitutes a Default or an Event of Default under clause (a), (b), (h) or (i) of Section 7.01 of the Credit Agreement.

3.3 Reaffirmation of Obligations. Each Loan Party acknowledges and agrees that all Loan Document Obligations constitute the valid and binding obligations of such Loan Party enforceable against such Loan Party without setoff, counterclaim, or defense, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general principles of equity. Each Loan Party hereby ratifies the Credit Agreement and the Guarantee Agreement, and acknowledges and reaffirms that: (y) that it is bound by all terms of the Credit Agreement and the Guarantee Agreement applicable to it and (z) it is responsible for the observance and full performance of its respective Loan Document Obligations.

3.4 Loan Document. This Amendment shall constitute a Loan Document under the terms of the Credit Agreement.

3.5 Expenses. Each Borrower agrees to pay all reasonable and documented costs and expenses of the Agent in connection with the preparation, execution and delivery of this Amendment (including, without limitation, the reasonable and documented fees and expenses of the Agent’s legal counsel).

3.6 Entirety. This Amendment and the other Loan Documents embody the entire agreement among the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof.

3.7 Counterparts; Telecopy. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Amendment by signing any such counterpart. This Amendment shall be effective when it has been executed by the Borrower, the other Loan Parties, the Agent and the Lenders, and each party has transmitted executed signature pages by telefacsimile or in ‘PDF’ format by electronic mail.

3.8 GOVERNING LAW. THIS AMENDMENT AND ANY CLAIMS, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATING TO THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CHOICE OF LAW RULES (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

3.9 Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

3.10 Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. The consent to jurisdiction, consent to service of process and waiver of jury trial provisions set forth in Sections 9.09 and 9.10 of the Credit Agreement, respectively, are hereby incorporated by reference, mutatis mutandis.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

SMART GLOBAL HOLDINGS, INC.