Exhibit 10.1
FIRST AMENDMENT TO
LOAN AGREEMENT
FIRST AMENDMENT, dated as of March 23, 2004 (this
"Amendment"), to the Loan Agreement, dated January 14, 2003, by and between
KELTIC FINANCIAL PARTNERS, LP, a Delaware limited partnership ("Lender"), and
IEC ELECTRONICS CORP. ("Borrower"), a corporation organized and existing
pursuant to the laws of the state of Delaware. The above referenced documents
and all other agreements, instruments, certificates and documents pursuant to or
incident thereto or in connection therewith are herein referred to as the "Loan
Documents".
W I T N E S S E T H :
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WHEREAS, Lender and Borrower are parties to that certain Loan
Agreement, dated January 14, 2003 (the "Loan Agreement"); and
WHEREAS, Borrower has notified Lender of certain operational
changes within its business; and
WHEREAS, Borrower has requested that Lender modify certain
requirements of the Loan Agreement to accommodate such operational changes; and
WHEREAS, Lender has agreed to modify certain provisions of the
Loan Agreement, but only subject to the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt, adequacy and sufficiency of which
are hereby acknowledged, the parties to this Amendment hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to such terms in the Loan Agreement.
2. Amendments.
A. Section 1.25 of the Loan Agreement is deleted in its
entirety and replaced with the following:
"1.25 "Fixed Charge Coverage Ratio" shall mean:
(a) with respect to a fiscal quarter beginning with the
fiscal quarter ending March 31, 2004 through the
fiscal quarter ending December 31, 2004, the ratio of
EBITDA for such fiscal quarter, plus the Carry
Forward Amount for such fiscal quarter, over the sum
of (i) interest and fees on Indebtedness, (ii)
principal on any loans, (iii) principal on any other
indebtedness, (iv) taxes, (v) cash dividends, and
(vi) distributions paid on subordinated debt or
equity, in each case paid of payable during such
fiscal quarter, and;
(b) with respect to a fiscal quarter beginning with the
fiscal quarter ending March 31, 2005 and thereafter,
the ratio of EBITDA for such fiscal quarter, plus the
Carry Forward Amount for such fiscal quarter, over
the sum of (i) interest and fees on Indebtedness,
(ii) principal on any loans, (iii) principal on any
other indebtedness, (iv) capital expenditures, (v)
taxes, (vi) cash dividends, and (vii) distributions
paid on subordinated debt or equity, in each case
paid of payable during such fiscal quarter"
B. Section 9.20 of the Loan Agreement is deleted in its
entirety and replaced with the following:
"9.20 Capital Expenditures. Make or agree to make Capital Expenditures
in an amount which exceeds $50,000 for each fiscal year, beginning with
the fiscal year ending September 30, 2004, provided, however, that
Borrower may make or agree to make Capital Expenditures in excess of
such amount without the prior consent of Lender if (i) such expenditure
does not exceed $15,000 individually, and (ii) aggregate Capital
Expenditures for such fiscal year does not exceed $150,000."
C. Section 9.21 of the Loan Agreement is deleted in its
entirety and replaced with the following:
"9.21 EBITDA. Permit Borrower's EBITDA to be less than (i) $400,000 for
each fiscal quarter beginning with the fiscal quarter ending March 31,
2004, through and including the fiscal quarter ending December 31,
2004, and (ii) $450,000 for each fiscal quarter beginning with the
fiscal quarter ending March 31, 2005 and thereafter, in each case
calculated for each fiscal quarter on an individual, non-cumulative
basis."
3. Representations and Warranties. To induce Lender to enter into
this Amendment, Borrower hereby represents, warrants and acknowledges that:
A. The execution, delivery and performance by Borrower
of this Amendment and the performance of the Loan Agreement, as amended hereby:
i) are within its powers; ii) have been duly authorized by all necessary
corporate action; and iii) are not in contravention of any provision of its
certificate of formation, articles of incorporation or other organizational
documents.
B. No Defaults or Events of Default have occurred and
are continuing as of the date hereof.
C. This Amendment has been duly executed and delivered
by or on behalf of Borrower.
D. The Loan Agreement, as amended hereby, constitutes a
legal, valid and binding obligation of Borrower enforceable against Borrower in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditor's rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
E. All Obligations outstanding under the Loan Agreement
are duly payable in accordance with the terms of the Loan Agreement without any
defense, offset, counterclaim or recoupment whatsoever.
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F. The representations and warranties of Borrower
contained in the Loan Agreement and each other Loan Document shall be true and
correct on and as of the date first written above with the same effect as if
such representations and warranties had been made on and as of such date, except
that any such representation and warranty which is expressly made only as of a
specified date need only be true as of such date.
4. Conditions Precedent. The obligations of Lender under this
Amendment is subject to and conditioned upon each of the following conditions
precedent:
(a) Execution of this Amendment by an authorized officer(s) of
Borrower.
5. No Other Consents/Waivers. Except as otherwise provided for
herein, the Loan Agreement shall be unmodified and shall continue in full force
and effect in accordance with its terms, and except as expressly provided for
herein, this Amendment shall not be deemed to be a waiver of, or consent under,
any term or condition of any Loan Document and shall not be deemed to prejudice
any right or rights which Lender may now have or may have in the future under or
in connection with any Loan Document or any of the instruments or agreements
referred to therein, as the same may be amended from time to time.
6. Non-Waiver. Lender's agreement to enter into this Amendment is
not and shall not be construed as a waiver of any current or future default
under the Revolving Note, the Loan Agreement or any other Loan Document, nor
shall it preclude Lender from proceeding against Borrower on any such default.
This Amendment is also not a relinquishment of any rights or remedies Lender may
have in connection with the Revolving Note, the Loan Agreement or any other Loan
Document.
7. Waiver of Rights. By its execution of this Amendment, Borrower
expressly waives any and all rights to assert a claim, counterclaim or defense
which now exists against Lender arising out of or in any way connected with the
Loan Agreement, the Revolving Note or any other Loan Document or in any other
transaction between Lender and Borrower. The foregoing waiver shall apply to any
action instituted by any of the undersigned and to any action or proceeding
brought against any of the undersigned by Lender.
8. Acknowledgement of Debt. By execution of this Amendment,
Borrower acknowledges that there is due and owing as of March 19, 2004 the
principal sum of $366,666.62, which sums are not subject to any defense,
counterclaim or set-off.
9. Further Discussions. Borrower acknowledges that discussions
may take place between itself and Lender after the date hereof concerning
additional modifications of the Revolving Note, the Term Loans, the Loan
Agreement and the Loan Documents. Lender in its sole and absolute discretion may
terminate any such discussions at any time and for any reason or no reason and
Lender shall have no liability for failing to engage in or terminating any such
discussions. While the parties hereto may reach preliminary agreement as to any
additional modifications of one or more provisions of the Loan Agreement, the
Revolving Note, the Term Loans and/or the Loan Documents, none of the
undersigned shall be bound by any such agreement on any individual point until
agreement is reached on every issue and the agreement on all such issues has
been reduced to a written agreement signed by Lender and Borrower. Further, the
Loan Agreement may only be amended by a written agreement executed by Borrower
and Lender and no negotiations or other actions undertaken by Lender shall
constitute a waiver of Lender's rights under this agreement, the Loan Agreement,
the Revolving Note, the Term Loans or other Loan Documents except to the extent
specifically set forth in a written agreement complying with the provisions of
this paragraph.
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10. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD
TO ITS CONFLICT OF LAW PRINCIPLES.
11. WAIVER OF JURY TRIAL. BORROWER AND LENDER ACKNOWLEDGE AND
AGREE THAT ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM,
BROUGHT OR INSTITUTED BY BORROWER OR LENDER ON OR WITH RESPECT TO ANY LOANS, THE
OBLIGATIONS OR THE RELEVANT DOCUMENTS OR THE DEALINGS OF THE PARTIES WITH
RESPECT HERETO OR THERETO SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY AND
EACH PARTY HEREBY WAIVES THE RIGHT TO TRIAL BY JURY.
12. Counterparts. This Amendment may be executed by the parties
hereto on any number of separate counterparts and all said counterparts, when
taken together, shall be deemed to constitute one and the same original
instrument.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of the day and year first written
above.
KELTIC FINANCIAL PARTNERS, LP
By its General Partner,
Keltic Financial Services LLC
/s/ JOHN P. REILLY
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By: John P. Reilly
Title: Managing Partner
IEC ELECTRONICS CORP.
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By:
Title:
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