-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OpretChg6+9DKTulBAPl5KO2zkKSf2jriTvq16g8DgvnbPYN8WhrNm+iHTZFwiTR dl7/4/izRrOroaNwcJqTtQ== 0000049728-02-000009.txt : 20020415 0000049728-02-000009.hdr.sgml : 20020415 ACCESSION NUMBER: 0000049728-02-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020321 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020321 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IEC ELECTRONICS CORP CENTRAL INDEX KEY: 0000049728 STANDARD INDUSTRIAL CLASSIFICATION: PRINTED CIRCUIT BOARDS [3672] IRS NUMBER: 133458955 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-06508 FILM NUMBER: 02581448 BUSINESS ADDRESS: STREET 1: 105 NORTON ST CITY: NEWARK STATE: NY ZIP: 14513 BUSINESS PHONE: 3153317742 MAIL ADDRESS: STREET 1: PO BOX 271 CITY: NEWARK STATE: NY ZIP: 14513 FORMER COMPANY: FORMER CONFORMED NAME: INTERCONTINENTAL ELECTRONICS CORP DATE OF NAME CHANGE: 19730601 8-K 1 iec8k32102.txt BANK AGREEMENT AMENDMENT 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) - March 15, 2002 IEC Electronics Corp. ----------------------- (Exact name of Registrant as Specified in its Charter) Delaware ---------- (State or other jurisdiction of Incorporation) 0-6508 13-3458955 ----------------------------------------- (Commission File Number) (IRS Employer Identification No.) 105 Norton Street, Newark, New York 14513 ----------------------------------------- (Address of Principal Executive Offices) (315) 331-7742 ---------------- (Registrant's Telephone Number, including Area Code) Page 1 of 6 Item 5. Other Events and Regulation FD Disclosure - ------- ----------------------------------------- Effective as of March 15, 2002, the Company and its lenders, HSBC Bank USA and General Electric Capital Corporation, entered into Amendment No. 7 (the "Amendment") to the Loan and Security Agreement originally dated as of December 28, 1999 (the "Agreement). Pursuant to the Amendment, the term of the Agreement was extended through April 8, 2002 from the present expiration date of March 15, 2002. In addition, pursuant to the Amendment, the interest rate on the revolving credit facility was increased from prime rate plus 1.00 percent to prime rate plus 2.00 percent, and the interest rate on the term loan was increased from prime rate plus 1.25 percent to prime rate plus 2.50 percent. Under the Agreement, the revolving credit facility component, based on eligibility criteria for receivables and inventory, is $5 million. As amended, amounts borrowed are limited to 85% of qualified accounts receivable, a certain percentage of raw materials (15% through March 24, 2002; 10% from March 25, 2002 through March 31, 2002; 5% from April 1, 2002 through April 7, 2002; and 0% from April 8, 2002 and thereafter) and 0% of work in process inventory, and in no event may the inventory borrowing base be greater than $1 million. The Company is currently in discussions with other lending institutions with respect to a new credit agreement. While the Company believes it will be successful, there can be no assurance that it will meet the April 8, 2002 expiration date. Item 7. Financial Statements and Exhibits - ------- --------------------------------- (c) Exhibits 10.1 Amendment No. 7 dated as of March 15, 2002 to Loan and Security Agreement originally dated as of December 28, 1999 among IEC Electronics Corp. ("IEC") and IEC Electronics-Edinburg, Texas Inc. ("IEC-Edinburg") and HSBC Bank USA, as Agent ("Agent") and HSBC Bank USA ("HSBC Bank") and General Electric Capital Corporation ("GE Capital"). 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. IEC Electronics Corp. ----------------------------------------------------- (Registrant) Date: March 21, 2002 By: /s/ Richard L. Weiss -------------------------------------------------- Richard L. Weiss Vice President, Chief Financial Officer & Treasurer Page 2 of 6 EX-10 3 bankamendment7.txt BANK AMENDMENT NO. 7 EXHIBIT 10.1 AMENDMENT NO. 7 TO LOAN AND SECURITY AGREEMENT Amendment No. 7 dated as of March 15, 2002 ("Amendment") to Loan and Security Agreement originally dated as of December 28, 1999 and originally among IEC ELECTRONICS CORP. ("IEC" or "Debtor") and IEC ELECTRONICS-EDINBURG, TEXAS INC. ("IEC-Edinburg") and HSBC BANK USA, as Agent ("Agent") and HSBC BANK USA ("HSBC Bank") and GENERAL ELECTRIC CAPITAL CORPORATION ("GE Capital") as lenders (collectively, the "Lenders"). BACKGROUND 1. Debtor, Agent and Lenders entered into a Loan and Security Agreement dated as of December 28, 1999 and Amendment Nos. 1, 2, 3, 4, 5 and 6 thereto dated as of March 30, 2000, December 1, 2000, April 24, 2001, December 21, 2001, February 15, 2002 and February 28, 2002, respectively (collectively, the "Agreement"). On or about January 27, 2000, IEC-Edinburg merged into IEC leaving IEC as the sole Debtor under the Agreement. All capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement. 2. Debtor has requested that Agent and Lenders consider extending the term of the Agreement through April 8, 2002. 3. In response to Debtor's request and subject to all of the terms and conditions set forth herein, the Agent and the Lenders are willing to make certain amendments to the Agreement as set forth below on the conditions set forth below. NOW, THEREFORE, Debtor, the Agent and the Lenders for good and valuable consideration, receipt of which is hereby acknowledged, and in contemplation of the foregoing, hereby agree as follows: A. Conditions. The amendments and waivers contained herein shall be granted upon satisfaction of the following terms and conditions: 1. Debtor shall have executed, and shall have caused IEC Electronics, S. de R.L. de C.V. ("IEC-Mexico") and IEC Electronics Foreign Sales Corporation ("IEC-FSC") to have executed, this Amendment to indicate their consent hereto, and four executed duplicate originals of this Agreement shall have been delivered to Agent. 2. Debtor's continuing agreement, evidenced by Debtor's signature on this Amendment, that Debtor will deliver to the Agent and the Lenders: (a) A weekly 6-week rolling cash flow forecast and variance analysis report covering the business of Debtor and its Affiliates, such report to be in form and context satisfactory to the Agent and the Lenders, and to be delivered not later than one Business Day after the end of each calendar week while this Agreement is in effect; (b) A weekly analysis of the effect of the implementation of Debtor's cost reduction plan, such analysis to be in form and content satisfactory to the Agent and the Lenders, and to be delivered not later than one Business Day after the end of each calendar week while this Agreement is in effect; and (c) Such other reports and analyses as Agent and the Lenders may request from time to time regarding the financial condition, business and business plans of Debtor and its Affiliates. Page 3 of 6 3. Debtor's continuing agreement, evidenced by Debtor's signature on this Amendment, that Debtor will: (i) continue to cooperate with Getzler & Company, Inc. ("Getzler") so that Getzler may review Debtor's business and business plans in order to report thereon to Agent's counsel and the Lenders; (ii) permit Getzler to access Debtor's places of business and its books and records in order to complete such review and report; (iii) reimburse the Agent or its counsel, upon demand, for the cost and expenses of Getzler; and (iv) promptly advise in writing, any professionals engaged by Debtor or its Affiliates to advise Debtor or its Affiliates with respect to their business or financial prospects, including, without limitation, Lincoln Partners LLC (individually, an "Investment Banker" and collectively, the "Investment Bankers"), that Debtor (a) consents to Agent and the Lenders communicating with such Investment Bankers for the purpose of being advised by, and discussing with, such Investment Bankers, the Investment Bankers' timeline, process, recommendations and proposals for any asset or stock sales, or the refinancing of Debtor's indebtedness, or for the recapitalization of Debtor or any Affiliate, or any other plans for increasing Debtor's equity, reducing the indebtedness of Debtor and its Affiliates, or otherwise improving the financial condition or business of Debtor and its Affiliates, and (b) requests such Investment Bankers to provide such information to the Agent and the Lenders. 4. Payment to Agent for the account of the Lenders of a $30,000 extension fee, such fee to be paid to Agent not later than March 20, 2002 in immediately available funds. 5. Debtor's payment by April 8, 2002 of the following bills presented to Debtor by Agent: (a) Getzler and Company, Inc. ("Getzler") in connection with the consulting work performed through March 10, 2002 by Getzler at the request of counsel to the Agent; (b) Counsel to the Agent in connection with the work performed from January 31, 2002 through March 14, 2002 by such counsel in connection with the Agreement and in drafting Amendments 5, 6 and 7; and (c) Counsel to GE Capital in connection with the work performed through March 14, 2002 by such counsel in connection with the Agreement and the negotiation of Amendment 7. B. Amendments. Debtor, the Agent and the Lenders agree that upon Debtor's satisfaction of, or agreement to, as appropriate, the conditions set forth in Section A above, the Agreement and the Schedule are amended in the following respects: 1. The definition of Eligible Inventory on page 2 of the Agreement is hereby amended by deleting clause (ii) of the first paragraph thereof regarding Inventory produced under a HUB Agreement, and deleting the term "Hub Finished Goods" from subsection "x" thereof. 2. Item 1 of the Schedule to the Agreement is hereby deleted in its entirety as of the date hereof and replaced by the following: "1. Borrowing Capacity 1.1(e)) Borrowing Capacity at any time shall be the net amount determined by taking the lesser of the following amounts: (A) The applicable Maximum Limit of $5,000,000; or (B) The amount equal to the sum of the IEC Borrowing Capacity (as defined below) and subtracting from the lesser of (A) and (B) above, the sum of (a) banker's acceptances, plus (b) letters of guaranty, plus (c) Letters of Credit. Page 4 of 6 'IEC Borrowing Capacity' at any time shall be the amount equal to the sum of: (i) up to 85% of the IEC Receivables Borrowing Base; and (ii) the amount of the IEC Inventory Borrowing Base; provided however, for calculation purposes, in no event shall the amount of the IEC Inventory Borrowing Base be greater than $1,000,000. Nothing herein shall detract from the discretionary nature of any Advances requested, or made, under this Agreement." 3. Item 2 of the Schedule to the Agreement is hereby deleted in its entirety and replaced with the following new text: "2. Inventory Borrowing Base Percentages ( 1.1(bb)) The following percentages of dollar value (calculated at the lower of actual cost or market value) are applicable to the following categories of Eligible Inventory: [X] raw materials, to the extent of up to 15% on the date hereof through March 24, 2002; 10% from March 25 through March 31, 2002; and 5% from April 1 through April 7, 2002; and 0% from April 8, 2002 and thereafter. [X] work in process, to the extent of up to 0%. 4. Item 18(g) of the Schedule to the Agreement is hereby deleted in its entirety and replaced with the following new text: "(g) Pricing Grid - Advances and Term Loan. The applicable rates of interest to be charged during each time period listed below for each Prime Rate Loan and Libor Loan made or outstanding hereunder as an Advance or under the Term Note are listed below: PRICING GRIDS A. ADVANCES Period Prime Rate Option Libor Rate Option ------ ----------------- ----------------- 3/15/02 - 4/8/02 Prime Rate plus 2% None B. TERM LOAN Period Prime Rate Option Libor Rate Option ------ ----------------- ----------------- 3/15/02 - 4/8/02 Prime Rate plus 21/2% None 5. Item 32 of the Schedule to the Agreement is hereby deleted in its entirety and replaced with the following new text: "Initial Term: To expire on April 8, 2002 Renewal Term: NONE" 6. Debtor acknowledges that Debtor intends to refinance the Advances and the Term Loans under the Agreement with one or more different lenders on or before the expiration of the Initial Term as amended herein, and agrees that, upon such payment of the Advances under the Agreement, the Term Notes of the Debtor dated December 28, 1999 in favor of the Lenders become due and payable by the terms thereof since such financing would not come from internally generated funds in the ordinary course of business. Page 5 of 6 D. Reaffirmations and Release. 1. The Agreement, except as specifically modified hereby, shall remain in full force and effect and Debtor hereby reaffirms the Agreement, as modified by this Amendment, and all collateral and other documents executed and delivered to Agent and the Lenders in connection with the Agreement. 2. IEC-Mexico and IEC-FSC, by their execution hereof, consent hereto and hereby reaffirm the execution and delivery of their respective Guaranties dated December 28, 1999 and each agrees that its respective guaranty shall continue in full force and effect and shall be applicable to all indebtedness, obligations and liabilities of Debtor to Agent and the Lenders, including without limitation, all indebtedness evidenced by or arising under the Agreement, as modified by this Amendment. 3. By their execution hereof, each of Debtor, IEC-Mexico and IEC-FSC, (each individually a "Releasor", and collectively, the "Releasors"), for good and valuable consideration, and by these presents does for itself, and its representatives, successors and assigns, remise, release and forever discharge the Agent and the Lenders in any and every capacity, their predecessors, successors, assigns, directors, officers, shareholders, employees, attorneys, advisors and agents (collectively, the "Releasees") of and from all, and all manner of action and actions, cause and causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands whatsoever, in law or in equity, which against such Releasees or any one or more of them, any Releasor ever had, now has or which any Releasor or any of any Releasor's representatives, suc or assigns hereafter can, shall or may claim to have for or by reason of any cause, matter or thing whatsoever, arising from the beginning of time to and through and including the date hereof. E. Other Provisions. 1. Debtor agrees to pay on demand by Agent all expenses of Agent and Lenders including without limitation, fees and disbursements of counsel for Agent, in connection with the transactions contemplated by this Amendment, the negotiations for and preparation of this Amendment and any other documents related hereto, and the enforcement of the rights of Agent and the Lenders under the Agreement as amended by this Amendment. 2. This Amendment shall be governed by and construed under the internal laws of the State of New York, as the same may from time to time be in effect, without regard to principles of conflicts of law. Agreed to as of the date first set forth above. IEC ELECTRONICS CORP. HSBC BANK USA, as Agent as Debtor /s/ Richard L. Weiss /s/ Vincent J. Harper By:________________________________ By:_________________________________ Richard L. Weiss, Vice President Vincent J. Harper nd Chief Financial Officer First Vice President GENERAL ELECTRIC CAPITAL HSBC BANK USA, as a Lender CORPORATION, as a Lender /s/ Donald J. Cavanagh /s/ Vincent J. Harper By:____________________________ By:________________________________ Donald J. Cavanagh Vincent J. Harper Duly Authorized Signatory First Vice President CONSENTED TO AND AGREED AS OF THIS 15th DAY OF MARCH, 2002. IEC ELECTRONICOS, S. de R.L. de C.V. IEC ELECTRONICS FOREIGN SALES as Guarantor CORPORATION, as Guarantor /s/ Richard L. Weiss /s/ Richard L. Weiss By:________________________________ By:________________________________ Richard L. Weiss, Director Richard L. Weiss, Vice President and Chief Financial Officer Page 6 of 6 BFLO Doc. No. 1180286.8 -----END PRIVACY-ENHANCED MESSAGE-----