Document:

Exhibit 10.1

 

FOURTEENTH AMENDMENT TO

REVOLVING CREDIT AND SECURITY AGREEMENT

 

This Fourteenth Amendment to Revolving Credit and
Security Agreement (the “Amendment”) is made as of this 29 day
of June, 2018 by and among SMTC Corporation, a Delaware corporation (“SMTC”),
SMTC Manufacturing Corporation of California, a California corporation (“SMTC
California”), SMTC Mex Holdings, Inc., a Delaware corporation (“SMTC
Mex”), ZF ARRAY TECHNOLOGY, INCORPORATED, a Delaware corporation (“ZF Array”), HTM Holdings,
Inc., a Delaware corporation (“HTM” and together with SMTC, SMTC California, SMTC Mex and ZF Array each
a “US Borrower” and collectively the “US Borrowers”), SMTC
Manufacturing Corporation OF Canada, a corporation organized under the laws of the Province of Ontario (“Canadian
Borrower” and together with US Borrowers and each other Person joined to the Credit Agreement as a borrower from time
to time, each a “Borrower” and collectively the “Borrowers”), the financial institutions
which are now or which hereafter become a party to the Credit Agreement (each a “Lender” and collectively, the
“Lenders”) and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for the Lenders (in such
capacity, the “Agent”).

 

BACKGROUND

 

A.               
On September 14, 2011, Borrowers, Lenders and Agent entered into, inter alia, a certain Revolving Credit and Security
Agreement (as same has been or may be amended, modified, supplemented, renewed, extended, replaced or substituted from time to
time, the “Credit Agreement”) to reflect certain financing arrangements between the parties thereto.

 

B.                
The Borrowers have requested, and the Agent and the Lenders have agreed, subject to the terms and conditions of this Amendment,
to modify certain definitions, terms and provisions of the Credit Agreement.

 

NOW,
THEREFORE, with the foregoing background hereinafter deemed incorporated by reference herein
and made part hereof, the parties hereto, intending to be legally bound, promise and agree as follows:

 

1.                 
Definitions.

 

(a)               
Interpretation. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the
Credit Agreement. In the case of a direct conflict between the provisions of the Credit Agreement and the provisions of this Amendment,
the provisions of this Amendment shall govern and control.

 

(b)              
New Definitions. Section 1.2 of the Credit Agreement is hereby amended by adding the following defined terms in their
proper alphabetical order:

 

“Fourteenth Amendment Date” shall mean June 29, 2018.

 

“Permitted 2018 Rights Offering” shall mean
the options, warrants or other rights given on or about August 2018 to existing shareholders of Equity Interests of Borrowers to
acquire such shares, on terms and conditions disclosed to and acceptable to Agent.

 

     

    

    

 

(c)            
Definition. Section 1.2 of the Credit Agreement is hereby amended by amending and restating the following defined
term:

 

“EBITDA” shall mean, for any period, the sum
of (I) Earnings Before Interest and Taxes for such period, plus (II) depreciation expenses for such period, plus
(III) amortization expenses for such period, plus (IV) the amendment fees in the amount of (x) $50,000 payable by Borrowers
pursuant to the Eleventh Amendment (to the extent paid by Borrowers during such period) and (y) $50,000 payable by the Borrowers
pursuant to the Twelfth Amendment (to the extent paid by the Borrowers during such period), plus (V) non-cash stock compensation
expense for such period, not to exceed $1,500,000 in the aggregate during any fiscal year, plus (VI) costs incurred in connection
with restructuring and severance expenses (x) during the fiscal year ended December 31, 2016 in an aggregate amount not to
exceed $200,000 for such fiscal year and (y) during the fiscal year ending December 31, 2017 in an aggregate amount not to
exceed $2,000,000 for such fiscal year, plus (VII) non-recurring office move expenses for such period in an aggregate amount
not to exceed $1,000,000, plus (VIII) non-cash charges or impairments for such period not to exceed (x) $2,250,000 in the
aggregate during the fiscal year ending December 31, 2018 and (y) $2,000,000 in the aggregate during any other fiscal year (or
such additional amount during any fiscal year, subject to prior approval by Agent, which approval shall not be unreasonably withheld),
plus (IX) costs incurred during the fiscal year ending December 31, 2018 in connection with restructuring and severance expenses
in an amount not to exceed $500,000 in the aggregate for such period.

 

(d)           
Equipment Loans. Section 2.4(b)(i) of the Loan Agreement shall be amended and restated in its entirety as follows:

(i)                
Subject to the terms and conditions of this Agreement, each Lender, severally and not jointly, shall, from time to time,
make Advances (each, an “Equipment Loan” and collectively, the “Equipment Loans”) to one
or more US Borrowers in an amount equal to such Lender’s Equipment Loan Commitment Percentage of the applicable Equipment
Loan to finance US Borrowers’ purchase of equipment for use in Borrowers’ business. All such Equipment Loans shall
be in such amounts as are requested by Borrowing Agent, but in no event shall any Equipment Loan exceed eighty percent (80%) of
the Net Invoice Cost of the equipment being purchased by Borrowers and the total amount of all Equipment Loans advanced hereunder
shall not exceed, in the aggregate, the Maximum Equipment Loan Amount. To the extent that Equipment Loans are advanced hereunder
for the purchase of Equipment which will be located in Mexico, such Equipment shall be maintained at a facility set forth on Schedule
4.5 attached hereto and Agent shall have a valid and perfected Lien with respect to such Equipment. Once repaid, Equipment Loans
may not be reborrowed.

 

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(e)            
Establishment of Lockbox. Section 4.15(h) of the Loan Agreement shall be amended and restated in its entirety as
follows:

(h)           
Establishment of a Lockbox Account, Dominion Account. All proceeds of Collateral shall be deposited by Borrowers into either
(i) a lockbox account, dominion account or such other “blocked account” (“Blocked Accounts”) established
at a bank or banks (each such bank, a “Blocked Account Bank”) pursuant to an arrangement with such Blocked
Account Bank as may be selected by Borrowing Agent and be acceptable to Agent or (ii) depository accounts (“Depository
Accounts”) established at the Agent for the deposit of such proceeds. Each applicable Borrower, Agent and each Blocked
Account Bank shall enter into a deposit account control agreement in form and substance satisfactory to Agent directing such Blocked
Account Bank to transfer such funds so deposited to Agent, (i) to any account maintained by Agent at said Blocked Account Bank
or (ii) by wire transfer to appropriate account(s) of Agent. All funds deposited in such Blocked Accounts shall immediately become
the property of Agent and Borrowing Agent shall obtain the agreement by such Blocked Account Bank to waive any offset rights against
the funds so deposited. Neither Agent nor any Lender assumes any responsibility for such blocked account arrangement, including
any claim of accord and satisfaction or release with respect to deposits accepted by any Blocked Account Bank thereunder. All
deposit accounts and investment accounts of each Borrower and its Subsidiaries are set forth on Schedule 4.15(h). Notwithstanding
anything to the contrary contained herein, Borrowers may hold an amount not to exceed $13,500,000 in the aggregate at any time
in an investment account maintained with PNC so long as upon the earlier of (A) one hundred and eighty (180) days following the
Permitted 2018 Rights Offering or (B) the date that an Event of Default has occurred, such amount shall be (i) applied to the
Obligations in such order as Agent may determine (the “Rights Offering-Funds Payment”), or (ii) used to (x)
finance the purchase price of an acquisition or (y) to finance expenditures to acquire, upgrade or maintain physical assets of
one or more Borrowers or make improvements to new or existing properties owned by one or more Borrowers, in each case acceptable
to Agent, subject to documentation, terms, and provisions in form and substance satisfactory to Agent; provided, that,
to the extent the Rights Offering-Funded Payment is a repayment of Revolving Advances, an amount equal to such amount may be reborrowed
as a Revolving Advance to a US Borrower so long as the Borrowers have satisfied the conditions set forth in Section 8.2, use such
funds to finance the acquisition as contemplated and required in foregoing clause (ii), and, after giving pro forma effect to
such Revolving Advance, the Borrowers shall have Undrawn Availability of at least $5,000,000.

 

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(f)             
Equity Interests. Section 5.27 of the Loan Agreement shall be amended and restated in its entirety as follows:

The authorized and outstanding Equity Interests of each Borrower
is as shown on Schedule 5.27 hereto. All of the Equity Interests of each Borrower have been duly and validly authorized and issued
and are fully paid and non-assessable and have been sold and delivered to the holders thereof in compliance with, or under valid
exemption from, all federal and state laws and the rules and regulations of each Governmental Body governing the sale and delivery
of securities. Except for the rights and obligations shown on Schedule 5.27, there are no subscriptions, warrants, options, calls,
commitments, rights or agreements by which any Borrower or any of the shareholders of any Borrower is bound relating to the issuance,
transfer, voting or redemption of shares of its Equity Interests or any pre-emptive rights held by any Person with respect to the
Equity Interests of Borrowers. Except as shown on Schedule 5.27 and the Permitted 2018 Rights Offering, Borrowers have not issued
any securities convertible into or exchangeable for shares of its Equity Interests or any options, warrants or other rights to
acquire such shares or securities convertible into or exchangeable for such shares.

 

2.                 
Representations and Warranties. Each Borrower hereby:

 

(a)            
reaffirms all representations and warranties made to Agent and Lenders under the Credit Agreement and all of the Other Documents
and confirms that all are true and correct in all respects as of the date hereof as if made on and as of the date hereof, except
for representations and warranties which related exclusively to an earlier date, which shall be true and correct in all respects
as of such earlier date;

 

(b)            
reaffirms all of the covenants contained in the Credit Agreement, covenants to abide thereby until all Advances, Obligations
and other liabilities of Borrowers to Agent and Lenders under the Credit Agreement of whatever nature and whenever incurred, are
satisfied and/or released by Agent and Lenders;

 

(c)            
represents and warrants that no Default or Event of Default has occurred and is continuing under the Credit Agreement or
any of the Other Documents;

 

(d)           
represents and warrants that it has the authority and legal right to execute, deliver and carry out the terms of this Amendment,
that such actions were duly authorized by all necessary corporate action and that the officers executing this Amendment and the
Equipment Note (defined below) on its behalf were similarly authorized and empowered, and that this Amendment does not contravene
any provisions of its articles of incorporation, bylaws or other formation documents, or of any contract or agreement to which
it is a party or by which any of its properties are bound; and

 

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(e)            
represents and warrants that this Amendment, the Equipment Note, and all assignments, instruments, documents, and agreements
executed and delivered in connection herewith are valid, binding and enforceable in accordance with their respective terms except
as such enforceability may be limited by equitable principles or any applicable bankruptcy, insolvency, moratorium or similar laws
affecting creditors’ rights generally.

 

3.                 
Conditions Precedent/Effectiveness Conditions. This Amendment shall be effective upon:

 

(a)            
execution and delivery of this Amendment by all parties hereto; and

 

(b)            
on the date of this Amendment and after giving effect hereto, no Default or Event of Default shall exist or shall have occurred
and be continuing.

 

4.                 
Further Assurances. Borrowers hereby agree to take all such actions and to execute and/or deliver to Agent and Lenders
all such documents, assignments, financing statements and other documents, as Agent and Lenders may reasonably require from time
to time, to effectuate and implement the purposes of this Amendment.

 

5.                 
Payment of Expenses. Borrowers shall pay or reimburse Agent and Lenders for their reasonable attorneys’ fees
and expenses in connection with the preparation, negotiation and execution of this Amendment and the documents provided for herein
or related hereto.

 

6.                 
Reaffirmation of Credit Agreement. Except as modified by the terms hereof, all of the terms and conditions of the
Credit Agreement, as amended, and all of the Other Documents are hereby reaffirmed and shall continue in full force and effect
as therein written.

 

7.                 
Acknowledgment of Guarantors. By execution of this Amendment, each Guarantor hereby covenants and agrees that each
of its respective Guaranty and Suretyship Agreements, dated September 14, 2011, shall remain in full force and effect and shall
continue to cover the existing and future Obligations of Borrowers to Agent and Lenders.

 

8.                 
Miscellaneous.

 

(a)            
Third Party Rights. No rights are intended to be created hereunder for the benefit of any third party donee, creditor,
or incidental beneficiary.

 

(b)            
Headings. The headings of any paragraph of this Amendment are for convenience only and shall not be used to interpret
any provision hereof.

 

(c)            
Modifications. No modification hereof or any agreement referred to herein shall be binding or enforceable unless
in writing and signed on behalf of the party against whom enforcement is sought.

 

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(d)           
Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New
York applied to contracts to be performed wholly within the State of New York.

 

(e)            
Counterparts. This Amendment may be executed in any number of counterparts and by facsimile or electronic transmission,
each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same
agreement. Any signature to this Amendment delivered by a party by facsimile or other electronic means of transmission shall be
deemed to be an original signature hereto.

 

[Remainder of Page Intentionally Left Blank]

 

 

 

 

 

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IN WITNESS WHEREOF, the parties have caused this
Amendment to be executed and delivered by their duly authorized officers as of the date first above written.

 

BORROWERS:

SMTC CORPORATION

SMTC MANUFACTURING CORPORATION OF 

CALIFORNIA

SMTC MANUFACTURING CORPORATION OF

CANADA

SMTC MEX HOLDINGS INC.

ZF ARRAY TECHNOLOGY, INCORPORATED

HTM HOLDINGS INC.

 

By:/s/ Steve Waszak

Name: Steve Waszak

Title: Chief Financial Officer

 

 

GUARANTORS:

RADIO COMPONENTES
DE MEXICO, S.A. DE C.V. 

SMTC de Chihuahua,
S.A. de C.V.

SMTC Holdings,
LLC

SMTC Manufacturing
Corporation of

Massachusetts

 

By:/s/ Steve Waszak

Name: Steve Waszak

Title: Chief Financial Officer

 

 

 

 

[Signature Page
to FOURTEENTH Amendment to Revolving Credit and Security Agreement]

S-1

     

    

    

 

AGENT AND LENDERS:

PNC BANK, NATIONAL ASSOCIATION,

as Agent and Lender

 

By:/s/ Jason Sylvester

Name: Jason T. Sylvester

Title: Vice President

 

Commitment Percentage:

 

Revolving Advances: 100%

Term Loan: 100%

Equipment Loans: 100%

 

 

 

 

 

 

 

 

 

[Signature Page
to FOURTEENTH Amendment to Revolving Credit and Security Agreement]

S-2Exhibit 4.1

 

 

THE BANK OF NEW YORK MELLON

NEW YORK’S FIRST BANK-FOUNDED 1784 BY ALEXANDER HAMILTON

 

 

2 HANSON PLACE, 12TH FLOOR, BROOKLYN,
N.Y. 11217

 

 

 

July 3, 2018

 

Hennion & Walsh, Inc.

2001 Route 46, Waterview Plaza

Parsippany, New Jersey 07054

 

Smart Trust 386 (the “Fund”)

 

Dear Sirs:

The Bank of New York
Mellon is acting as trustee for the Fund, consisting of the unit investment trusts (the “Trusts”) included in
the Registration Statement relating to the Fund. We enclosed a list of the securities to be deposited in the Trusts on the date
hereof. The prices indicated therein reflect our evaluation of such securities as of close of business on July 2, 2018, in accordance
with the valuation method set forth in the applicable Standard Terms and Conditions of Trust and Trust Agreements. We consent to
the reference to The Bank of New York Mellon as the party performing the evaluations of the Trust securities in the Registration
Statement (No. 333-224600) filed with the Securities and Exchange Commission with respect to the registration of the sale of the
Units of the Trusts and to the filing of this consent as an exhibit thereto.

 

Very truly yours,

 

/s/ GERARDO CIPRIANO                                            

Gerardo Cipriano

Vice President

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