CONSENT AND FOURTH AMENDMENT TO CREDIT AGREEMENT
CONSENT
AND
FOURTH
AMENDMENT TO CREDIT AGREEMENT
FOURTH
AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT dated as of August 29, 2008
(the “Fourth Amendment”) by and among NU HORIZONS ELECTRONICS CORP., a
Delaware corporation having its executive offices at 00 Xxxxxx Xxxx, Xxxxxxxx,
Xxx Xxxx (the “Borrower”), each of the lenders that is a signatory thereto
identified under the caption “Lenders”
on
the
signature pages to the Credit Agreement (as defined below) (individually, a
“Lender”, and collectively, the “Lenders”), BANK OF AMERICA, N.A., a national
banking association, as Documentation Agent for the Lenders, JPMORGAN CHASE
BANK, N.A., a national banking association, as Syndication Agent for the
Lenders, ISRAEL DISCOUNT BANK OF NEW YORK, a New York bank, as Syndication
Agent
for the Lenders and CITIBANK, N.A., a national banking association, as
administrative agent for the Lenders (the “Administrative Agent”).
RECITALS
The
Borrower, the Lenders, the Documentation Agent, the Syndication Agents and
the
Administrative Agent entered into an Amended and Restated Credit Agreement
dated
as of January 31, 2007, as amended by a Consent and First Amendment to Credit
Agreement dated as of June 6, 2007, a Second Amendment dated as of January
4,
2008 and a Third Amendment dated as of May 30, 2008 (collectively, the “Credit
Agreement”), pursuant to which certain financial accommodations were made
available to the Borrower.
The
Borrower has requested that the Lenders and the Administrative Agent consent
to
the additional time provided for herein to comply with Section 5.11 of the
Credit Agreement and modify certain of the terms set forth in the Credit
Agreement and the Lenders and the Administrative Agent are willing to grant
such
consent and modify such terms but only upon and subject to the following terms
and conditions.
NOW
THEREFORE,
in
consideration of the premises and mutual covenants and promises exchanged
herein, the parties hereto mutually agree as follows:
Section
1. Definitions.
Except
as otherwise defined in this Fourth Amendment, terms defined in the Credit
Agreement are used herein as defined therein.
Section
2. Consent.
Subject
to the satisfaction of the conditions precedent set forth in Section 4 below,
and notwithstanding anything to the contrary contained in Section 5.11 of the
Agreement, the Lenders consent to the Borrower having a period of thirty (30)
days after the Borrower’s purchase of all of the issued and outstanding shares
of C-88 A/S, a company incorporated under the laws of Denmark, in accordance
with the terms of the Agreement as amended to provide evidence of the
Acquisition and the pledge of 65% of such entity’s capital stock to the
Administrative Agent.
Section
3. Amendment.
Subject
to the satisfaction of the conditions precedent specified in Section 4
below:
(A) Section
1.1 of the Credit Agreement is hereby amended by deleting clause (i) of the
definition of “Permitted Acquisition” and substituting the following
therefor:
“(i) The
total
consideration, including the cash purchase price for such Acquisition and any
Funded Debt incurred or assumed in connection therewith, does not exceed
$15,000,000, nor exceed a total consideration of $20,000,000 in the aggregate
for Foreign Acquisitions and the aggregate total consideration for all
Acquisitions consummated during the Commitment Period does not exceed
$25,000,000;”
(B) Section
2.4 of the Credit Agreement is hereby amended by deleting same and substituting
the following therefor:
“2.4 Interest.
Interest on each Revolving Credit Loan shall be at a per annum rate to be
elected by the Borrower, in accordance with Section 2.5 hereof, and shall be
either a fluctuating rate equal to the Prime Rate or, subject to availability,
the Reserve Adjusted LIBOR for Interest Periods selected by the Borrower plus
1.50% for the period up to an including 8/28/08 and plus 1.75% for the period
commencing 8/29/08. Interest on each Prime Rate Loan shall be payable monthly
in
arrears to the Administrative Agent for the pro rata benefit of the Lenders,
on
the first Business Day of each month, commencing on the first such day to occur
after the pertinent Revolving Credit Loan is made and upon payment in full
thereof. Interest on each Eurodollar Loan shall be payable to the Administrative
Agent for the pro rata benefit of the Lenders in arrears (i) in the case of
Eurodollar Loans with Interest Periods of three months or less, at the end
of
each applicable Interest Period and (ii) in the case of Eurodollar Loans with
Interest Periods of more than three months, on the numerically corresponding
day
that falls three months after the beginning of such Interest Period and at
the
end of the applicable Interest Period. Whenever the unpaid principal balance
of
any Revolving Credit Loan shall become due and payable (whether at the stated
maturity thereof, by acceleration or otherwise) interest shall thereafter be
payable, on demand, to the Administrative Agent for the pro rata benefit of
the
Lenders at the Involuntary Rate. Interest on each Revolving Credit Loan shall
be
calculated on the basis of a year of 360 days for the actual number of days
elapsed.”
(C) Section
2.8(a) of the Credit Agreement is hereby amended by deleting same and
substituting the following therefor:
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“(a) Commitment
Fees.
As
additional compensation for the Revolving Credit Commitments, the Borrower
agrees to pay to the Administrative Agent for the pro rata benefit of the
Lenders a commitment fee for the Commitment Period based on the average daily
unused portion of the Total Revolving Credit Commitment (without reference
to
the Borrowing Base) which fee shall accrue at a rate of .20% for the period
up
to and including 8/28/08 and at a rate of .25% thereafter.”
(D) Section
6.1 of the Credit Agreement is hereby amended by deleting same and substituting
the following therefor:
“6.1 Capital
Base.
Maintain a minimum Capital Base, as defined herein, as at 5/31/08 and at the
end
of each fiscal quarter thereafter of at least the sum of $124,000,000 plus
75%
of cumulative consolidated quarterly net income of the Borrower and its
Subsidiaries after 5/31/08. In addition, 75% of the net proceeds received by
the
Borrower or its Subsidiaries from any equity offering will be added to the
applicable Capital Base amount required as set forth above for the next
succeeding fiscal quarter and in each fiscal quarter thereafter. Net losses,
if
any, will not be deducted from the applicable calculation of Capital Base.
Capital Base shall mean for the Borrower and its Subsidiaries on a consolidated
basis the sum of Tangible Net Worth plus Subordinated Debt.”
(E) Section
6.2 of the Credit Agreement is hereby amended by deleting same and substituting
the following therefor:
“6.2 Domestic
Capital Base.
Maintain a minimum Domestic Capital Base, as defined herein, as at 5/31/08
and
at the end of each fiscal quarter thereafter of at least the sum of $116,000,000
plus 75% of cumulative consolidated quarterly net income of the Borrower and
its
Domestic Subsidiaries after 5/31/08. In addition, 75% of the net proceeds
received by the Borrower or its Domestic Subsidiaries from any equity offering
will be added to the applicable Domestic Capital Base amount required as set
forth above for the next succeeding fiscal quarter and in each fiscal quarter
thereafter. Net losses, if any, will not be deducted from the applicable
calculation of Domestic Capital Base. Domestic Capital Base shall mean for
the
Borrower and its Domestic Subsidiaries on a consolidated basis the sum of
Tangible Net Worth plus Subordinated Debt, in each case, of the Borrower and
its
Domestic Subsidiaries.”
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Section
4. Conditions
Precedent.
The
consent set forth in Section 2 and the amendments to the Credit Agreement set
forth in Section 3 hereof shall become effective, on the date of this Fourth
Amendment, upon the execution and delivery of this Fourth Amendment by the
Borrower, the Administrative Agent and each of the Lenders and the satisfaction
of the following conditions:
(A) Certified
Copies and Other Documents.
The
Administrative Agent shall have received certificates of an officer of the
Borrower and each Guarantor dated the date of this Fourth Amendment certifying
(x) no changes in their respective certificates of incorporation or by-laws
from
the date of the Agreement or attaching copies of any amendments, (y) true and
correct copies of resolutions adopted by the board of directors of the Borrower
and each Guarantor(1) authorizing the borrowings and the other extensions of
credit from the Lenders under the Agreement as amended hereby, the execution,
delivery and performance by the Borrower and each Guarantor of this Fourth
Amendment, and any related documents (2) approving forms in substantially
execution form of this Fourth Amendment, and any related documents and (3)
authorizing officers of the Borrower and each Guarantor to execute and deliver
this Fourth Amendment, and any related documents, and (z) the incumbency and
specimen signatures of the officers of the Borrower and each Guarantor executing
any documents delivered to the Administrative Agent or a Lender by the Borrower
and each Guarantor in connection herewith.
(B) Approval
of the Administrative Agent and Agent’s Counsel.
All
other documents and legal matters in connection with the transactions
contemplated by this Fourth Amendment shall be satisfactory in form and
substance to the Administrative Agent and its counsel.
Section
5. Representations
and Warranties.
The
Borrower represents and warrants to the Lenders that the representations and
warranties set forth in the Credit Agreement and in the other Loan Documents
are
true and complete on the date of this Fourth Amendment and as if made on and
as
of the date hereof (or, if such representation or warranty is expressly stated
to have been made as of a specific date, as of such specific date).
Section
6. Borrower’s
Acknowledgments.
The
Borrower acknowledges and agrees that the Borrower has no claims, counterclaims,
offsets, or defenses to the Loan Documents and the performance of the Borrower’s
obligations thereunder or if the Borrower did have any such claims,
counterclaims, offsets or defenses to the Loan Documents or any transaction
related to the Loan Documents, the same are hereby waived, relinquished and
released in consideration of execution and delivery of this Fourth
Amendment.
Section
7. Acknowledgement
of Guarantors.
The
Guarantors acknowledge and consent to all of the terms and conditions of this
Fourth Amendment and agree that this Fourth Amendment and all documents executed
in connection herewith do not operate to reduce or discharge the Guarantors’
obligations under the Credit Agreement or the other Loan Documents. The
Guarantors further acknowledge and agree that the Guarantors have no claims,
counterclaims, offsets, or defenses to the Loan Documents and the performance
of
the Guarantors’ obligations thereunder or if the Guarantors did have any such
claims, counterclaims, offsets or defenses to the Loan Documents or any
transaction related to the Loan Documents, the same are hereby waived,
relinquished and released in consideration of execution and delivery of this
Fourth Amendment.
- 4 -
Section
8. Governing
Law; Execution in Counterparts.
Except
as herein provided, the Credit Agreement shall remain unchanged and in full
force and effect. This Fourth Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
amendatory instrument and any of the parties hereto may execute this Fourth
Amendment by signing any such counterpart. This Fourth Amendment shall be
governed by, and construed in accordance with, the internal laws of the State
of
New York (without regard to New York conflicts of laws principles).
Section
9. Amendment
Fee.
The
Borrower agrees that in consideration for the Lenders executing this Fourth
Amendment, it shall pay a fee (the “Amendment Fee”) to the Administrative Agent
for the account of each Lender that executed and delivered this Fourth Amendment
on or prior to 5:00 p.m. (New York City time) on August 29, 2008 (or such later
time as the Borrower and the Administrative Agent shall agree) in an amount
equal to $75,000.00 to be shared pro rata among the Lenders so executing and
delivering this Fourth Amendment in proportion to their Revolving Credit
Commitments. The Amendment Fee shall be earned upon the effective date of this
Fourth Amendment and shall be payable on September 3, 2008.
Section
10. Expenses,
etc.
The
Borrower agrees to pay or reimburse the Administrative Agent for all reasonable
out-of-pocket costs and expenses of the Administrative Agent (including, without
limitation, the reasonable fees and expenses of Certilman Balin Xxxxx &
Xxxxx, LLP) in connection with the negotiation, preparation, execution and
delivery of this Fourth Amendment and the transactions contemplated
hereby.
Section
11. Effective
Date.
This
Fourth Amendment is dated for convenience as of August 29, 2008 and shall be
effective as of such date, on the delivery of an executed counterpart to the
Borrower upon satisfaction of the conditions precedent contained in Section
4
hereof.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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IN
WITNESS WHEREOF,
the
parties hereto have caused this Fourth Amendment to Credit Agreement to be
duly
executed and delivered by their duly authorized officers, all as of the day
and
year first above written.
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Borrower:
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By:
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/s/Xxxx
Xxxxxxxxxxx
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Xxxx
Xxxxxxxxxxx
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Executive
Vice President, Treasurer and
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Chief
Financial Officer
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Guarantors:
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NIC
COMPONENTS CORP.
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By:
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/s/Xxxx
Xxxxxxxxxxx
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Xxxx
Xxxxxxxxxxx
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Executive
Vice President, Treasurer and
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Chief
Financial Officer
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NU
HORIZONS INTERNATIONAL CORP.
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By:
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/s/Xxxx
Xxxxxxxxxxx
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Xxxx
Xxxxxxxxxxx
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Executive
Vice President, Treasurer and
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Chief
Financial Officer
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TITAN
SUPPLY CHAIN SERVICES CORP.
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By:
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/s/Xxxx
Xxxxxxxxxxx
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Xxxx
Xxxxxxxxxxx
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Executive
Vice President, Treasurer and
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Chief
Financial Officer
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RAZOR
ELECTRONICS, INC.
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By:
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/s/Xxxx
Xxxxxxxxxxx
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Xxxx
Xxxxxxxxxxx
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Executive
Vice President, Treasurer and
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Chief
Financial Officer
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NuXCHANGE
B2B SERVICES, INC.
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By:
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/s/Xxxx
Xxxxxxxxxxx
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Xxxx
Xxxxxxxxxxx
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Executive
Vice President, Treasurer and
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Chief
Financial Officer
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Administrative
Agent:
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CITIBANK,
N.A.,
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as
Administrative Agent
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By:
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/s/Xxxxxxx
Xxxxxx
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Xxxxxxx
Xxxxxx
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Senior
Vice President
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Documentation
Agent:
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BANK
OF AMERICA, N.A.,
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as
Documentation Agent
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By:
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/s/Xxxxxx
X. Xxxxxxxxxx
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Xxxxxx
X. Xxxxxxxxxx
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Senior
Vice President
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Syndication
Agent:
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JPMORGAN
CHASE BANK, N.A.,
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as
Syndication Agent
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By:
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/s/Xxxx
X. Xxxxxxxxx
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Name:
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Xxxx
X. Xxxxxxxxx
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Title:
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Senior
Vice President
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ISRAEL
DISCOUNT BANK OF NEW YORK, as Syndication Agent
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By:
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/s/Xxxxxxx
X. Xxxxxxxx
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Name:
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Xxxxxxx
X. Xxxxxxxx
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Title:
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Senior
Vice President
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By:
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/s/Xxxxx
Xxxxxxx
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Name:
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Xxxxx
Xxxxxxx
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Title:
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First
Vice President
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Notice
Addresses:
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Lenders:
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CITIBANK,
N.A.
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CITIBANK,
N.A.
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000
Xxxxxxxx Xxxxxxxx Xxxxxxx
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Xxxxxxxxx,
XX 00000
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By:
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/s/Xxxxxxx
Xxxxxx
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Xxxxxxx
Xxxxxx
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Senior
Vice President
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JPMORGAN
CHASE BANK, N.A.
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JPMORGAN
CHASE BANK, N.A.
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000
Xxxxx Xxxxxxx Xxxx, Xxxxx 0
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Xxxxxxxx,
XX 00000
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By:
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/s/Xxxx
X. Xxxxxxxxx
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Name:
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Xxxx
X. Xxxxxxxxx
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Title:
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Senior
Vice President
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ISRAEL
DISCOUNT BANK OF NEW YORK
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ISRAEL
DISCOUNT BANK OF NEW YORK
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000
Xxxxx Xxxxxx
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Xxx
Xxxx, XX 00000
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By:
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/s/Xxxxxxx
X. Xxxxxxxx
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Name:
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Xxxxxxx
X. Xxxxxxxx
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Title:
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Senior
Vice President
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By:
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/s/Xxxxxx
Xxxxxx
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Name:
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Xxxxxx
Xxxxxx
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Title:
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AVP
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BANK
OF AMERICA, N.A.
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BANK
OF AMERICA, N.A.
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0000
Xxxxxx xx xxx Xxxxxxxx
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Xxx
Xxxx, XX 00000
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By:
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/s/Xxxxxx
X. Xxxxxxxxxx
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Xxxxxx
X. Xxxxxxxxxx
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Senior
Vice President
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SOVEREIGN
BANK
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SOVEREIGN
BANK
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000
Xxxxx Xxxxxxx Xxxx
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Xxxxxxxx,
XX 00000
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By:
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/s/Xxxxxxxxx
Xxxxxx
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Xxxxxxxxx
Xxxxxx
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Senior
Vice President
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HSBC
BANK USA, NATIONAL
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HSBC
BANK USA, NATIONAL
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ASSOCIATION
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ASSOCIATION
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000
Xxxxx Xxxxxx Xxxx
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Xxxxxxxx,
XX 00000
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By:
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/s/Xxxxxxxxxxx
X. Xxxxxxxxxx
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Xxxxxxxxxxx
X. Xxxxxxxxxx
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First
Vice President
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CAPITAL
ONE, N.A.,
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CAPITAL
ONE, N.A.,
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000
Xxxxxxxxxxx Xxxx
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formerly
known as Xxxxx Xxxx Xxxx
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Xxxxxxxx,
XX 00000
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By:
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Xxxxx
Xxxxx
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Senior
Vice President
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BANK
LEUMI USA
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BANK
LEUMI USA
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000
Xxxxx Xxx.
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Xxx
Xxxx, XX 00000
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By:
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/s/Xxxx
X. Xxxxxxx
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Name:
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Xxxx
X. Xxxxxxx
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Title:
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Senior
Vice President
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NEW
YORK COMMERCIAL BANK
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NEW
YORK COMMERCIAL BANK
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0
Xxxxxxx Xxxxx
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Xxxxxxx,
XX 00000
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By:
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/s/
Xxxxxx X. Xxxxxxxxx, Xx.
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Xxxxxx
X. Xxxxxxxxx, Xx.
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Senior
Vice President
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