Exhibit 10.1

 

SECOND AMENDMENT TO

FOURTH AMENDED AND RESTATED CREDIT FACILITY AGREEMENT

 

THIS SECOND AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT FACILITY AGREEMENT
(this “Amendment”) is made as of the 6th day of August, 2013, by and between IEC
ELECTRONICS CORP., a corporation formed under the laws of the State of Delaware
(“Borrower”) and MANUFACTURERS AND TRADERS TRUST COMPANY (“Lender”).

 

W I T N E S S E T H:

 

WHEREAS, the parties hereto are parties to a Fourth Amended and Restated Credit
Facility Agreement dated as of January 18, 2013, as amended by the First
Amendment to Fourth Amended and Restated Credit Facility Agreement dated as of
May 15, 2013 (as amended, modified, supplemented or restated from time to time,
the “Credit Agreement”);

 

WHEREAS, Section 12.1 and Section 12.3 of the Credit Agreement require that the
Borrower maintain certain financial covenants unless the Lender otherwise
consents in writing; and

 

WHEREAS, Borrower has requested and the Lender has agreed to (i) waive Events of
Default arising from non-compliance with the aforementioned covenants for the
Fiscal Quarter ending June 28, 2013, (ii) modify the covenant in Section 12.1
for a future Fiscal Quarter, and (iii) make certain additional amendments to the
Credit Agreement, all on the terms and conditions herein set forth.

 

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

 

1. DEFINITIONS. All capitalized terms used herein and not defined shall have the
meaning given such terms in the Credit Agreement.

 

2. AMENDMENTS. Effective as of the date of this Amendment:

 

(A) Section 1.1 of the Credit Agreement is hereby amended by (i) amending the
definition of “Applicable Margin” to replace the pricing grid set forth therein
in its entirety with the pricing grid set forth below, which pricing shall be
effective immediately:

 

Level  Debt to EBITDARS  Revolving Line Facility*   Mortgage Loan Facility  
Term Loan B Facility  I  ≥ 3.25 to 1   3.50%   3.75%   2.50% II  ≥ 2.75 to 1 and
< 3.25 to 1   3.00%   3.25%   2.50% III  ≥ 2.25 to 1 and < 2.75 to 1   2.75% 
 3.00%   2.50% IV  ≥ 1.75 to 1 and < 2.25 to 1   2.50%   2.75%   2.50% V  ≥ 1.25
to 1 and < 1.75 to 1   2.25%   2.50%   2.50% VI  < 1.25 to 1   2.00%   2.25% 
 2.50%

 

 

 

 

(ii) amending the definition of “Applicable Unused Fee” to (a) replace the “July
1, 2013” date referenced therein with “June 28, 2013” and (b) replace the
pricing grid set forth therein in its entirety with the pricing grid set forth
below, which pricing shall be effective immediately:

 

Level  Debt to EBITDARS  Unused Fee  I  ≥ 3.25 to 1   0.500% II  ≥ 2.75 to 1 and
< 3.25 to 1   0.500% III  ≥ 2.25 to 1 and < 2.75 to 1   0.375% IV  ≥ 1.75 to 1
and < 2.25 to 1   0.250% V  ≥ 1.25 to 1 and < 1.75 to 1   0.250% VI  < 1.25 to
1   0.250%

 

and (iii) by amending and restating the following definitions, in their entirety
to read as follows:

 

“Interest Expense” means, for the applicable period, all interest paid,
capitalized, or accrued, and amortization of debt discount with respect to all
Debt determined after giving effect to the net cash cost or benefit associated
with Rate Management Transactions net cash benefit or loss.

 

“Net Income” means for the applicable period, the net earnings of the Borrower
on a consolidated basis, determined in accordance with GAAP on a consistent
basis, but excluding:

 

(a) any gain or loss arising from the sale of capital assets;

 

(b) any non-cash gain or non-cash loss arising from any write-up or write-down
of assets;

 

(c) net earnings or losses of any Subsidiary of Borrower accrued prior to the
date it became a Subsidiary;

 

(d) net earnings or losses of any Person, substantially all the assets of which
have been acquired in any manner by Borrower, realized by such Person prior to
the date of such acquisition;

 

(e) net earnings or losses of any Person in which Borrower has an ownership
interest, except any such net earnings which have actually been received by
Borrower in the form of cash distributions and except the net earnings or losses
of any Guarantor;

 

(f) any portion of the net earnings of any Subsidiary of Borrower which for any
reason is unavailable for payment of dividends to Borrower;

 

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(g) the net earnings or losses of any Person to which any assets of Borrower
shall have been sold, transferred or disposed of after the date of such
transaction,

 

(h) the net earnings or losses of any Person into which Borrower shall have
merged, or been a party to any consolidation or other form of reorganization,
prior to the date of such transaction;

 

(i) any gain arising from the acquisition of any securities of Borrower; and

 

(j) any gain or loss arising from extraordinary items;

 

plus, beginning with the Fiscal Quarter ending June 28, 2013 and ending with,
and including, the Fiscal Quarter ending June 27, 2014, up to $1,100,000 in the
aggregate for all such Fiscal Quarters of one-time legal and accounting expenses
associated with Borrower’s restatement of earnings in the first half of calendar
year 2013.

 

(B) Section 12.1 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

 

“12.1 Debt to EBITDARS. Maintain at all times a Debt to EBITDARS Ratio, on a
consolidated basis, no greater than the following ratios for the following
periods, reported at the end of each Fiscal Quarter:

 

6/28/2013 through and including 12/27/2013  < 3.50 to 1.00     12/28/2013
through and including 3/28/2014 < 3.00 to 1.00     3/29/2014 and thereafter <
2.75 to 1.00”

  

(C) Exhibit A of the Credit Agreement is hereby amended and restated to read in
its entirety as Exhibit A attached hereto.

 

(D) Schedule 8.5 of the Credit Agreement is hereby amended and restated to read
in its entirety as Schedule 8.5 attached hereto.

 

3. WAIVER. Lender hereby waives any Event of Default arising under Section
14.1(b) of the Credit Agreement as a result of Borrower’s non-compliance with
Section 12.1 and Section 12.3 of the Credit Agreement for the Fiscal Quarter
ending June 28, 2013. Borrower acknowledges and agrees that the foregoing waiver
shall not constitute a waiver of any Event of Default arising under (i) any
other covenant in the Credit Agreement for any period not specified herein or
(ii) any financial covenant in the Credit Agreement for any other period.

 

4. Representations and Warranties. Borrower hereby makes the following
representations and warranties to the Lender as of the date hereof, each of
which shall survive the effectiveness of this Amendment and continue in effect
as of the date hereof so long as any Obligations remain unpaid:

 

4.1 Authorization. Borrower has full power and authority to borrow under the
Credit Agreement, as amended by this Amendment, and to execute, deliver and
perform this Amendment and any documents delivered in connection with it and all
other related documents and transactions, all of which have been duly authorized
by all proper and necessary corporate action. The execution and delivery of this
Amendment by Borrower will not violate the provisions of, or cause a default
under, Borrower’s Organizational Documents, any law or any agreement to which
Borrower is a party or by which it or its assets are bound.

 

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4.2 Binding Effect. This Amendment has been duly executed and delivered by
Borrower, and the Credit Agreement, as amended by this Amendment, is the legal,
valid and binding obligation of Borrower enforceable against Borrower in
accordance with its terms, except to the extent that enforcement of any such
obligations of the Borrower may be limited by bankruptcy, insolvency,
reorganization or similar laws of general application affecting the rights and
remedies of creditors generally.

 

4.3 Consents; Governmental Approvals. No consent, approval or authorization of,
or registration, declaration or filing with, any Governmental Authority or any
other Person is required in connection with the valid execution, delivery or
performance of this Amendment or any other document executed and delivered by
Borrower herewith or in connection with any other transactions contemplated
hereby.

 

4.4 Representations and Warranties. The representations and warranties contained
in the Credit Agreement, as amended by this Amendment, are true on and as of the
date hereof with the same force and effect as if made on and as of the date
hereof, except for those representations that by their terms are made as of a
specific date.

 

4.5 No Events of Default. No Event of Default and no event which, with notice
and/or the passage of time, would constitute an Event of Default has occurred or
is continuing, except as waived by this Amendment.

 

4.6 No Material Misstatements. Neither this Amendment nor any document delivered
to Lender by Borrower or any Credit Party to induce Lender to enter into this
Amendment contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements herein or therein not misleading
in light of the circumstances in which they were made.

 

5. CONDITIONS OF AMENDMENT. The Lender shall have no obligation to execute or
deliver this Amendment until each of the following conditions shall have been
satisfied:

 

5.1 Authorization. Borrower shall have taken all appropriate corporate action to
authorize, and its directors, if and as required by Borrower’s Organizational
Documents, shall have adopted resolutions authorizing the execution, delivery
and performance of this Amendment and the taking of all other action
contemplated by this Amendment, and Lender shall have been furnished with copies
of all such corporate action, certified by an authorized officer of Borrower as
being true and correct and in full force and effect without amendment on the
date hereof, and such other corporate documents as Lender may request.

 

5.2 Consents. Borrower shall have delivered to Lender any and all consents, if
any, necessary to permit the transactions contemplated by this Amendment.

 

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5.3 Fees. Borrower shall have paid all reasonable fees and disbursements of
Lender’s counsel and all recording fees, search fees, charges and taxes in
connection with this Amendment and all transactions contemplated hereby or made
other arrangements with respect to such payment as are satisfactory to Lender.

 

5.4 Deliveries. Borrower shall have delivered to Lender, this Amendment and such
additional documents, consents, authorizations, insurance certificates,
governmental consents and other instruments and agreements as Lender or its
counsel may reasonably require and all documents, instruments and other legal
matters in connection with the Loan Documents shall be reasonably satisfactory
to Lender and its counsel.

 

5.6 Representations and Warranties. The representations and warranties set forth
in this Amendment and in the Loan Documents shall be true, correct and complete
on the date hereof, except those representations that by their terms are made as
of a specific date.

 

5.7 No Event of Default. No Event of Default or Default shall have occurred and
be continuing on the date hereof, except as waived by this Amendment.

 

5.8 No Material Misstatements. Neither this Amendment nor any document delivered
to Lender by or on behalf of Borrower to induce Lender to enter into this
Amendment contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements herein or therein not misleading
in light of the circumstances in which they were made.

 

6. MISCELLANEOUS.

 

6.1 Reaffirmation of Security Documents. Borrower hereby (a) acknowledges and
reaffirms the execution and delivery of the Security Documents, (b)
acknowledges, reaffirms and agrees that the security interests granted under the
Security Documents continue in full force and effect as security for all
indebtedness, obligations and liabilities under the Loan Documents, as may be
amended from time to time, and (c) remakes the representations and warranties
set forth in the Security Documents as of the date hereof.

 

6.2 Entire Agreement; Binding Effect. The Credit Agreement, as amended by this
Amendment, represents the entire understanding and agreement between the parties
hereto with respect to the subject matter hereof. This Amendment supersedes all
prior negotiations and any course of dealing between the parties with respect to
the subject matter hereof. This Amendment shall be binding upon Borrower and its
successors and assigns, and shall inure to the benefit of, and be enforceable by
the Lender and its respective successors and assigns. The Credit Agreement, as
amended hereby, is in full force and effect and, as so amended, is hereby
ratified and reaffirmed in its entirety.

 

6.3 Severability. If any provision of this Amendment shall be determined by a
court to be invalid, such provision shall be deemed modified to conform to the
minimum requirements of applicable law.

 

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6.4 Headings. The section headings inserted in this Amendment are provided for
convenience of reference only and shall not be used in the construction or
interpretation of this Amendment.

 

6.5 Counterparts. This Amendment may be executed by the parties hereto in
separate counterparts (including those delivered by facsimile or other
electronic means), each of which, when so executed and delivered, shall be an
original, but all such counterparts shall together constitute one and the same
instrument.

  

[signature page follows]

 

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[Second Amendment to Amended and Restated Credit Facility Agreement]

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be signed
by their duly authorized officers as of the day and year first above written.

   

MANUFACTURERS AND TRADERS TRUST COMPANY,     By: /s/ J. Theodore Smith   Name:
J. Theodore Smith   Title Vice President     IEC ELECTRONICS CORP.   By: /s/
Vincent A. Leo   Name: Vincent A. Leo   Title:Chief Financial Officer