Unassociated Document

-----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, BI8sWD8Juo+XAdir/Gtv4XA62Ek1Ix8mqMvCHPkWi1KrTjgPJujbJ9sklMz3UwUt WMDQaiJLaOwoC2p8vL22kg== 0001144204-09-015603.txt : 20090323 0001144204-09-015603.hdr.sgml : 20090323 20090323155220 ACCESSION NUMBER: 0001144204-09-015603 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20090317 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090323 DATE AS OF CHANGE: 20090323 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: 09698816 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 v143676_8k.htm Unassociated Document

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) – March 17, 2009

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)(Zipcode)

(315) 331-7742

(Registrant’s Telephone Number, Including Area Code)

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:

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01

Entry Into Material Definitive Agreement

On March 17, 2009, IEC Electronics Corp. (“IEC”) entered into a Settlement Agreement (the “Settlement Agreement”) with Val-U-Tech Corp. (“Val-U-Tech”), Kathleen Brudek, Michael Brudek and Nicholas Vaseliv (the “Shareholders”) in settlement of a dispute relating to the Merger Agreement dated as of May 23, 2009 (the “Merger Agreement”) by and among IEC, VUT Merger Corp, Val-U-Tech and the Shareholders. The Merger Agreement was previously disclosed in IEC’s Current Report on Form 8-K filed on May 30, 2008 and IEC’s acquisition of Val-U-Tech was previously disclosed in IEC’s Current Report on Form 8-K filed on June 5, 2008 as amended by the Current Report on Form 8-K/A filed on August 13, 2008.

Under the Settlement Agreement, the parties agreed to reduce the purchase price payable under the Merger Agreement by the net amount of $401,852.09 and to amend and restate the three promissory notes in the original aggregate principal amount of $3,450,000 issued by IEC to the Shareholders in payment of a portion of the purchase price to reflect such reduction. This amendment and restatement of the purchase notes was deemed to be effective as of February 28, 2009. As disclosed in IEC’s Quarterly Report on Form 10-Q for the quarterly period ended December 26, 2008 filed on January 20, 2009, the purchase price under the Merger Agreement and the aggregate principal amount of the purchase notes have previously been reduced based upon reconciliations of Val-U-Tech’s final working capital at May 30, 2008 and gross revenues for the calendar year ended December 31, 2008. After application of the net purchase price reduction under the Settlement Agreement and the previous purchase price reductions described above, the aggregate outstanding principal amount of the restated purchase notes effective as of February 28, 2009 was $2,701,741.80.

Under the Settlement Agreement, IEC also agreed to pay the Shareholders the aggregate amount of $240,488.22 in full satisfaction of IEC’s obligations under Section 6.07 of the Merger Agreement. This payment was deemed to constitute the payment of $213,471.66 in principal amount of the restated purchase notes, together with $27,016.56 in interest thereon, due on March 1, 2009. As a result of this payment, the aggregate outstanding principal amount of the restated purchase notes was further reduced to $2,488,270.14. IEC also waived its right to any further purchase price adjustments under the Merger Agreement.

Under the Settlement Agreement, in full satisfaction and release of the Shareholders’ obligations under Section 9.02 of the Merger Agreement, the Shareholders also agreed to surrender to IEC the 500,000 shares of IEC’s common stock issued to the Shareholders under the Merger Agreement. The parties also entered into mutual releases of all claims relating to the Merger Agreement and related matters.

Copies of the Settlement Agreement and of each of the three restated purchase notes are attached to this Current Report on Form 8-K as Exhibits 10.1, 10.2, 10.3 and 10.4.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 17, 2009, pursuant to the Settlement Agreement described above, Michael Brudek resigned as a member of the board of directors of IEC, effective immediately. Mr. Brudek’s resignation was not the result of a disagreement with management regarding the operations, policies or practices of IEC. A copy of Mr. Brudek’s letter of resignation is attached to this Current Report on Form 8-K as Exhibit 99.1. A copy of the press release issued by IEC announcing Mr. Brudek’s resignation is attached hereto as Exhibit 99.2.

The information contained in Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits

The following is the index of exhibits furnished in accordance with Item 601 of Regulation S-K, filed as part of this Current Report on Form 8-K or incorporated by reference herewith:

10.1	Settlement Agreement dated as of March 17, 2009 by and among IEC Electronics Corp., Val-U-Tech Corp., Kathleen Brudek, Michael Brudek and Nicholas Vaseliv
10.2	Restated Promissory Note dated effective February 28, 2009 by IEC Electronics Corp. to the order of Kathleen Brudek in the principal amount of $2,026,306.59
10.3	Restated Promissory Note dated effective February 28, 2009 by IEC Electronics Corp. to the order of Michael Brudek in the principal amount of $135,086.71
10.4	Restated Promissory Note dated effective February 28, 2009 by IEC Electronics Corp. to the order of Nicholas Vaseliv in the principal amount of $540,348.50
99.1	Letter dated March 17, 2009 from Michael Brudek
99.2	Press Release issued by IEC Electronics Corp. on March 23, 2009

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 23, 2009	By:	/s/ W. Barry Gilbert
		W. Barry Gilbert
		Chairman, Chief Executive Officer

EX-10.1 2 v143676_ex10-1.htm Unassociated Document

SETTLEMENT AGREEMENT

THIS AGREEMENT is made as of March 17, 2009, by and among IEC Electronics Corp., having an address at 105 Norton Street, Newark, New York 14513 (“Parent”) Val-U-Tech Corp., having an address at 105 Norton Street, Newark, New York 14513 (Subsidiary” and, together with Parent, “IEC”) and Kathleen Brudek, having an address at 127 Amann Road, Honeoye Falls, New York 14472 (“Kathleen Brudek”), Michael Brudek, having an address at 127 Amann Road Honeoye Falls, New York 14472 (“Michael Brudek”) and Nicholas Vaseliv, having an address at 187 Guinevere Drive, Rochester, NY 14626 ("Vaseliv" and, together with Kathleen Brudek and Michael Brudek, the “Shareholders”).

WHEREAS, the parties and VUT Merger Corp., a wholly-owned subsidiary of Parent, entered into an Agreement and Plan of Merger dated as of May 23, 2008 (the ”Merger Agreement”), pursuant to which Subsidiary became a wholly-owned subsidiary of Parent (the “Merger”); and

WHEREAS, prior to the Merger, the Shareholders were the sole shareholders of Subsidiary; and

WHEREAS, in connection with the Merger and pursuant to the Merger Agreement , the Parent issued certain promissory notes (the “Purchase Notes”) and 500,000 shares (the “Shares”) of its $.01 par value common stock to the Shareholders; and

WHEREAS, pursuant to the Merger Agreement, the Purchase Price (as defined in the Merger Agreement) and the Purchase Notes are subject to adjustment in certain circumstances, some of which have already been made, some of which Parent claims that it is now entitled to make pursuant to Section 2.01(a)(iv) of the Merger Agreement and some of which may be made in the future based upon the provisions of the Merger Agreement; and

WHEREAS, Parent believes that it is entitled to indemnification from the Shareholders for breaches of certain representations and warranties made by the Shareholders in the Merger Agreement and the Shareholders dispute such claim; and

WEHEREAS, Parent is obligated to make certain payments to the Shareholders pursuant to Section 6.07 of the Merger Agreement and, in connection with such payments, the Purchase Notes are to be further adjusted; and

WHEREAS, in order to fully and finally resolve the claims of IEC for adjustment of the Purchase Notes and for indemnification pursuant to the Merger Agreement and in order to fully satisfy the obligations of IEC to make payment to the Shareholders, the parties wish to agree to resolve the differences among them on the terms and conditions contained in this Agreement;

NOW, THEREFORE, the parties agree as follows:

1. Adjustment of Purchase Price and Purchase Notes. The Purchase Price and the Purchase Notes shall be adjusted as follows and restated promissory notes shall be issued by IEC in the form and substance attached as Exhibits A-1, A-2 and A-3 in replacement of and in substitution for the Purchase Notes ("Restated Purchase Notes"):

-1-

The Purchase Price and the Purchase Notes shall be increased in the aggregate amount of $442,278, to reflect the preliminary estimated working capital adjustment provided for in Section 2.01(a)(ii) of the Merger Agreement (“Preliminary Working Capital Adjustment”).

The Purchase Price and the Purchase Notes shall be decreased in the aggregate amount of $88,266.09, to reflect the actual working capital adjustment provided for in Section 2.01(a) (ii) of the Merger Agreement (“Actual Working Capital Adjustment”).

The Purchase Price and the Purchase Notes shall be decreased in the aggregate amount of $755,864, to reflect the adjustment provided for in Section 2.01(a)(iv) of the Merger Agreement (“2008 Clawback”).

2. Tax Advance. Concurrently with the execution of this Agreement, Parent shall pay the Shareholders the aggregate amount of $240,488.22 in full satisfaction of its obligations under Section 6.07 of the Merger Agreement, receipt of which is hereby acknowledged by the Shareholders (the "Tax Advance"). The Tax Advance is an advance payment on the Restated Purchase Notes. An aggregate of $240,488.22 of such payment shall be deemed to be payment in full of the payments due on the Restated Purchase Notes on March 1, 2009. After application of such amount, the aggregate outstanding balance of the Restated Purchase Notes shall be $2,488,270.14.

3. Indemnification Obligations. In full satisfaction and release of their obligations under Section 9.02 of the Merger Agreement, the Shareholders shall surrender the Shares to Parent. On or before April 10, 2009, the Shareholders shall deliver to Parent certificates representing the Shares, duly endorsed in blank for transfer or with duly executed stock powers attached. Parent will acknowledge receipt of such certificates. In the event any stock certificate ("Certificate") evidencing Shares shall have been lost, stolen or destroyed, the Shareholder owning the lost Certificate will make an affidavit setting forth that fact and deliver such other documents and bonds as the Parent's transfer agent requires. In the event any stock Certificate is lost, stolen or destroyed, the Shareholders of those Certificates will indemnify IEC against any claim that may be made against IEC with respect to such Certificate and provide IEC with the right to offset any claim for such indemnification against that Shareholder's Restated Purchase Note.

4. Further Purchase Note Adjustment. In consideration of the agreements of the Shareholders contained in this Agreement, Parent waives its right to a further adjustment of the Purchase Price, the Purchase Notes and Restated Purchase Notes pursuant to Section 2.01(a)(v) and (viii) of the Merger Agreement (“2009 Clawback”).

5. Resignation. Concurrently with the execution of this Agreement, Michael Brudek shall deliver to Parent his resignation as a director of IEC, in the form attached to this Agreement as Exhibit B.

-2-

6. Releases.

a. With the exception of the obligations of Parent expressly set forth in this Agreement and Restated Purchase Notes attached, each of the Shareholders releases and discharges Parent, Subsidiary, their respective subsidiaries and affiliates, their respective officers, employees and agents and their respective heirs, executors, successors and assigns (the “IEC Released Parties”) from all claims, actions or causes of action whatsoever, in law or in equity, which they may have against the IEC Released Parties arising out of or relating to the Merger Agreement, the transactions contemplated thereby, the employment by any of the Shareholders by any of the IEC Released Parties or the performance or non-performance by any of the IEC Released Parties of any obligations with respect to any of the foregoing.

b. With the exception of the obligations of the Shareholders expressly set forth in this Agreement, Parent, on its own behalf and on behalf of its subsidiaries and affiliates, and Subsidiary each releases and discharges each of the Shareholders and their respective heirs, executors, successors and assigns from all claims, actions or causes of action whatsoever, in law or in equity, which it may have against them arising out of or relating to the Merger Agreement, the performance or non-performance by any of them of any obligations under or with respect to the Merger Agreement, the employment of any of the Shareholders by any of the IEC Released Parties and any other matter related to any of the foregoing.

7. Conduct. Each of the Shareholders agrees to refrain from making any statements, whether verbal or written, which disparage any of the IEC Released Parties or any of their products or services. Parent, on its own behalf and on behalf of each of the IEC Released Parties, and Subsidiary, each agrees to refrain from making any statements, whether verbal or written, which disparage any of the Shareholders.

8. General Terms.

a. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto, their personal representatives, successors and assigns.

b. Entire Agreement. This Agreement contains the entire understanding between or among the parties hereto and supersedes any prior understanding, memoranda or other written or oral agreements between or among any of them respecting the within subject matter. There are no representations, agreements, arrangements or understandings, oral or written, between or among any of the parties relating to the subject matter of this Agreement which are not fully expressed herein.

c. Modifications; Waiver. No modification or waiver of this Agreement or any part hereof shall be effective unless in writing and signed by the party or parties sought to be charged therewith.

d. Governing Law. This Agreement and all rights of the parties shall be governed by, and construed in accordance with, the laws of the State of New York pertaining to contracts made and to be wholly performed within such state, without taking into account conflicts of laws principles.

-3-

e. Headings. The headings contained in this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

f. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of said counterparts together shall constitute but one and the same instrument.

NEXT PAGE IS SIGNATURE PAGE

-4-

IN WITNESS WHEREOF, the undersigned have hereunto signed their names on the day and date first above written.

	IEC ELECTRONICS CORP.

	By: /s/ W Barry Gilbert
	Name: W. Barry Gilbert
	Title: Chief Executive Officer


	VAL-U-TECH CORP.

	By: /s/ W Barry Gilbert
	Name: W. Barry Gilbert
	Title: President

	SHAREHOLDERS:

	/s/ Kathleen Brudek
	Kathleen Brudek

	/s/ Michael Brudek
	Michael Brudek

	/s/ Nicholas Vaseliv
	Nicholas Vaseliv

-5-

EX-10.2 3 v143676_ex10-2.htm Unassociated Document

RESTATED

PROMISSORY NOTE

$2,026,306.59	Dated Effective February 28, 2009
	Rochester, New York

For value received, IEC Electronics Corp., a Delaware Corporation (hereinafter referred to as "Undersigned" or "Maker"), promises to pay to the order of Kathleen Brudek at 127 Amann Road, Honeoye Falls, New York 14472 ("Holder"), the sum of Two Million Twenty-six Thousand Three Hundred Six and 59/100 Dollars ($2,026,306.59), with interest on the unpaid balance at the rate of four percent (4%) per annum, in eighteen (18) quarterly installments of principal and interest as follows:

1. As set forth on the amortization schedule attached hereto as Exhibit A and made a part hereof, until the entire obligation is paid in full. If not sooner paid, the entire unpaid principal balance of this Promissory Note ("Note") with accrued interest shall be all due and payable on June 1, 2013. All payments shall be applied first to interest and the balance to principal.

2. The Undersigned shall have the right to prepay this obligation in whole or in part at any time without premium or penalty.

3. In the event that any payment shall not be made within fifteen (15) days of its due date, then the Undersigned agrees to pay a "late charge" in the sum of two percent (2%) of the amount then due.

4. This Note and all other obligations of the Maker or any endorser or guarantor hereof, direct or contingent, shall immediately become all due and payable and the then unpaid balance of this Note shall be accelerated and the same, with all interest accrued thereon, shall forthwith become due and payable without notice or demand, which are hereby expressly waived, upon the occurrence, with respect to any Maker, endorser or guarantor hereof, of any of the following events of default (each hereinafter referred to as an "Event of Default" and collectively referred to as AEvents of Default@):

A. failure to pay any installment of principal or interest within thirty (30) days of the due date;

B. suspension or liquidation by any of them of their usual business;

C. filing by or against any of them of any proceeding, suit or action for reorganization, dissolution or liquidation or a petition under any of the provisions of the Bankruptcy Act not stayed, bonded or vacated within sixty (60) days of any filing;

D. application for, or appointment of, a receiver of any of them or their property, , unless the same shall be dismissed within sixty days after such application or appointment;

F. making or sending notice of an intended bulk sale or any other transfer of substantially all of the Undersigned's assets and the subsequent consummation of any such transaction, unless the purchaser or transferee of such assets also assumes this Note; or

F. if any judgment, attachment or execution against any of them or their property for any amount in excess of $100,000.00 remains unpaid, unstayed, or undismissed for a period of more than thirty (30) days.

5. Upon the occurrence and during the continuance of any Event of Default, Holder may change the rate of interest on this Note from the rate set forth herein to the rate set forth herein plus four percent (4%), such change of rate to become effective on the date notice of such Event of Default is given to Maker and to remain in effect until such Event of Default is cured or this Note is paid in full, regardless of whether Holder elects to accelerate the indebtedness evidenced by this Note by reason of such Event of Default. If this Note is not paid in full when it becomes due, or if any installment thereof is not paid when that installment becomes due, the Maker agrees to pay all costs and expenses of collection incurred after the occurrence of such Event of Default, including reasonable attorneys' fees.

6. The failure of the Holder to exercise any of its options to call this Note due and payable upon any Event of Default shall not operate as a waiver or estoppel on its part to declare the total amount of unpaid principal and interest due and payable on any subsequent default which shall not be cured.

7. This Note shall be construed in accordance with the laws of the State of New York. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR COUNTERCLAIM ARISING UNDER OR IN ANY WAY RELATED TO THIS NOTE AND UNDER ANY THEORY OF LAW OR EQUITY.

8. The Undersigned and all endorsers, sureties and guarantors hereof, hereby jointly and severally waive presentment, demand for payment, notice of dishonor, notice of protest and protest, and all other notices or demands in connection with the delivery, acceptance, performance, default, endorsement, or guarantee of this Note.

9. This Note is subject to the express condition that at no time shall Maker be obligated or required to pay interest on the principal amount of the Note at a rate which could subject Holder to either civil or criminal liability as a result of being in excess of the maximum interest rate which Maker is permitted by law to contract or agree to pay. If, by the terms of this Note, Maker would at any time be required or obligated to pay interest at the rate in excess of such maximum rate, the rate of interest under this Note shall be deemed to be immediately reduced to such maximum rate and the interest payable thereafter shall be computed at a rate not to exceed such maximum rate and all previous payments in excess of such maximum rate shall be deemed to have been payments in reduction of the principal balance of the Note instead of payments of interest thereon.

10. The covenants and obligations of this Note shall be binding upon Maker, its successors, executors and assigns and shall inure to the benefit of Holder, its successors and assigns.

11. In the event that that any Parent Indemnified Person [as that term is define in the Agreement and Plan of Merger by and among IEC Electronics Corp., VUT Merger Corp., Val-U-Tech Corp. and Holder, among others, dated May 23, 2008 (the "Merger Agreement")] determines that it has suffered a Loss for which indemnification is available pursuant to the Merger Agreement, the following procedure shall be followed (the capitalized terms set forth in this Section shall have the mean ascribed to them in the Merger Agreement unless defined herein):

A. Parent Indemnified Person shall give written notice of any such Loss (a “Loss Notice”) to the Shareholders’ Representative specifying in reasonable detail the amount of the claimed Loss (the “Loss Amount”) and the basis for such Loss and whether the Parent intends to offset the amount of such Loss against the Purchase Notes.

B. Within twenty (20) days after delivery of a Loss Notice, the Shareholders’ Representative shall provide to Parent and the Parent Indemnified Person (if not the same Person), a written response (a “Response Notice”) in which the Shareholders’ Representative will (i) agree that an offset in the full Loss Amount may be made against the Purchase Notes, (ii) agree that an offset in an amount equal to part, but not all, of the Loss Amount (the “Agreed Amount”) may be made against the Purchase Notes or (iii) contest making any offset against the Purchase Notes. The Shareholders’ Representative may contest an offset against the Purchase Notes upon a good faith belief that all or such portion of such claimed Loss does not constitute a Loss for which the Parent Indemnified Person is entitled to indemnification under the Merger Agreement. If no Response Notice is delivered by the Shareholders’ Representative within such twenty (20) day period, the Shareholders’ Representative shall be deemed to have agreed that an offset in the full Loss amount may be made against the Purchase Notes.

C. If the Shareholders’ Representative in the Response Notice agrees (or is deemed to have agreed pursuant to clause B above) that an offset may be made against the Purchase Notes in an amount equal to the Loss Amount, this Promissory Note and each other Promissory Note issued to a Company Shareholder pursuant to the Merger Agreement shall be reduced by a portion of the Loss amount that is the same percentage of the Loss as this Promissory Note is of all Purchase Notes.

D. If the Shareholders’ Representative in the Response Notice agrees that an offset in an Agreed Amount may be made against the Purchase Notes, this Promissory Note and the Purchase Note of each other Company Shareholder shall be reduced by in the same percentage of the Loss as this Promissory Note is of all Purchase Notes.

E. If the Shareholders’ Representative in the Response Notice contests an offset against the Purchase Notes equal to all or any part of the Loss Amount (the “Contested Amount”), the Parent Indemnified Person and the Shareholders’ Representative shall negotiate in good faith to resolve any such dispute. During the period of such negotiation, and thereafter until the resolution of such dispute, Parent shall make any payments due on the Purchase Notes, up to the Contested Amount, to the Escrow Agent named in Clause F below, to be held and disbursed in accordance with the provisions of the Merger Agreement. If the resolution of such Contested Amount results in a determination or agreement that the Purchase Notes shall be reduced, then the Purchase Note of each Company Shareholder shall be reduced by the same percentage of the dollar amount of the award set forth in such determination or agreement as this Note is of all Purchase Notes.

F. If the Parent claims that it is entitled to offset any Contested Sum against the Purchase Notes, it shall make each of the payments due with respect to the Purchase Notes coming due after the date of the Response Notice (up to, but not in excess of, the Contested Sum) (together, the “Escrow Sum”) to Olver Korts, LLP and Boylan, Brown, Code, Vigdor & Wilson, LLP, as Escrow Agent, to be held and disbursed in accordance with the terms set forth in Section 9.03(a)(vi) of the Merger Agreement. Parent's failure to make any payment to the Escrow Agent when due shall be an Event of Default.

Each term that is capitalized in this Section 11 that is defined in the Merger Agreement and not otherwise defined herein shall have the meaning ascribed to it in the Merger Agreement.

12. This Note and the obligation of Maker to make payments hereunder are subordinated to the obligations of Maker to Manufacturers and Traders Trust Company (the “Bank”) pursuant to a Credit Facility Agreement between Maker and the Bank, as the same may be amended from time to time, as and to the extent provided in a Subordination Agreement among the Bank, Maker, Payee and certain other persons dated May 29, 2008.

13. This Restated Promissory Note is given in replacement of and in substitution for, but not in payment of, a Promissory Note dated May 29, 2008 in the original principal amount of $2,587,500.00, issued by Maker to Holder.

IN WITNESS WHEREOF, the undersigned has caused this Note to be duly executed as of the date first above written.

	IEC ELECTRONICS CORP.



	BY:	/s/ W. Barry Gilbert
		W. Barry Gilbert, Chief Executive Officer

STATE OF NEW YORK)

COUNTY OF MONROE) ss.:

On the ______ day of March in the year 2009 before me, the undersigned, a Notary Public in and for said State, personally appeared W. Barry Gilbert, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity set forth above, and that by his signature on the instrument it was executed on behalf the entity named above.


	Notary Public

EX-10.3 4 v143676_ex10-3.htm Unassociated Document

RESTATED

PROMISSORY NOTE

$135,086.71	Dated Effective February 28, 2009
	Rochester, New York

For value received, IEC Electronics Corp., a Delaware Corporation (hereinafter referred to as "Undersigned" or "Maker"), promises to pay to the order of Michael Brudek at 127 Amann Road, Honeoye Falls, New York 14472 ("Holder"), the sum of One Hundred Thirty-five Thousand Eighty-six and 71/100 Dollars ($135,086.71), with interest on the unpaid balance at the rate of four percent (4%) per annum, in eighteen (18) quarterly installments of principal and interest as follows:

1. As set forth on the amortization schedule attached hereto as Exhibit A and made a part hereof, until the entire obligation is paid in full. If not sooner paid, the entire unpaid principal balance of this Promissory Note ("Note") with accrued interest shall be all due and payable on the June 1, 2013. All payments shall be applied first to interest and the balance to principal.