6) Long-term Debt and Notes Payable

The Company extended and modified its existing credit facility by entering into Amendment No. 1 dated as of March 27, 2013 (the “Amendment”), to the Second Amended and Restated Credit Agreement. The Amendment provides for an increase in the Company’s revolving credit facility from $35 million to $75 million and for an extension of the maturity date of the revolving credit facility to March 27, 2018. At June 29, 2013, there was $9.0 million outstanding under the term loan under the Second Amended and Restated Credit Agreement.

Interest on both loans remains at a rate of LIBOR plus between 1.50% and 2.50% based on the Company’s Leverage Ratio under the Credit Agreement. The credit facility allocates up to $20 million of the $75 million revolving credit line for the issuance of letters of credit, including certain existing letters of credit. The credit facility is secured by substantially all of the Company’s assets.

There was $7.0 million outstanding on our credit facility at both June 29, 2013 and December 31, 2012 which is reported as long-term. The Company had available on its credit facility $58.4 million at June 29, 2013. At June 29, 2013, outstanding letters of credit totaled $9.6 million. In addition, the Company is required to pay a commitment fee quarterly at a rate of between 0.25% and 0.35% per annum on the unused portion of the total revolving credit commitment, also based on the Company’s Leverage Ratio.

On July 18, 2013, in connection with the funding of the Peco Acquisition (See Note 19), the Company amended its existing credit facility by entering into a Third Amended and Restated Credit Agreement ( the “Credit Agreement”). The Credit Agreement provides for a $75 million five-year revolving credit facility and a $190 million five-year term loan, both expiring in June 2018. The amended facilities carry an interest rate ranging from 225 basis points to 350 basis points above LIBOR, depending on the Company’s leverage ratio as defined in the Credit Agreement. Variable principal payments on the term loan will be quarterly through June 2018 with a balloon payment at maturity. The credit facility is secured by substantially all of the Company’s assets. In addition, the Company is required to pay a commitment fee of between 0.25% and 0.50% on the unused portion of the total credit commitment for the preceding quarter, based on the Company’s leverage ratio under the Credit Agreement.

Scheduled principal payments on the new term loan are as follows (in thousands):

The proceeds of the term loan were used to finance the Peco Acquisition, pay off the $7.0 million outstanding balance under the existing term loan, pay off the $7.0 million outstanding balance under the existing revolving credit facility, pay off $0.5 million of other term debt and for general corporate purposes. It will also allow for potential additional funding for a make-whole provision to the sellers should the Company exercise an option for tax purposes. This option involves making an election under IRS Code Section 338 (h)(10) that will allow the Company to deduct the amortization of acquired goodwill and other intangible assets from its taxable income. The value associated with this tax benefit, which will be decided by year-end, would require additional consideration to be paid to the sellers.

Covenants were modified on March 27, 2013, to eliminate the maximum capital expenditure limit, the cap on permitted acquisitions was increased to $25 million per acquisition and $50 million in the aggregate and the permitted allowance for share repurchases was increased to $20 million. In addition, the maximum permitted Leverage Ratio has been increased to 3.75 to 1 for each fiscal quarter ending on or after March 31, 2013 and to 3.50 to 1 for each fiscal quarter ending after March 31, 2015. The covenant for minimum fixed charge coverage as defined in the Credit Agreement is to be not less than 1.25 to 1 for each fiscal quarter end. There were no changes in these covenants resulting from the new term note.

In the event of voluntary or involuntary bankruptcy of the Company or any subsidiary, all unpaid principal and other amounts owing under the Credit Agreement automatically become due and payable. Other events of default, such as failure to make payments as they become due and breach of financial and other covenants, give the Agent the option to declare all such amounts immediately due and payable.