THIRD AMENDMENT TO CREDIT AGREEMENT
THIRD AMENDMENT TO CREDIT
AGREEMENT
THIRD
AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 30, 2008 (the
“Third 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 and a Second Amendment dated as of January 4,
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 modify
certain of the terms set forth in the Credit Agreement and the Lenders and the
Administrative Agent are willing to 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 Third Amendment, terms defined in the Credit
Agreement are used herein as defined therein.
Section 2. 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 clauses (b)
and (n) of the definition of “Eligible Accounts” and substituting the following
therefor:
“(b) such
Accounts are not unpaid more than ninety (90) days after date of original
invoice provided, however, for those Account Debtors identified by the Borrower
as of the date of the Third Amendment and other Account Debtors hereinafter
designated by the Borrower for whom the Borrower and its Domestic Subsidiaries
extend payment terms of ninety (90) days (the “Extended Account Debtors”) on the
basis of credit considerations they deem appropriate (subject to approval by the
Administrative Agent), the number of days shall be increased to one hundred
twenty (120) days after date of original invoice with respect to the Accounts of
such Extended Account Debtors;”
“(n)
such Accounts are not owed by an Account Debtor who has Accounts unpaid more
than ninety (90) days (or in the case of an Extended Account Debtor, more than
one hundred twenty (120) days) after the date of the original invoice and which
constitute more than fifty (50%) percent of the total of Accounts of such
Account Debtor or Extended Account Debtor, as the case may be;”
(B)
Section 1.1 of the Credit Agreement is hereby amended by deleting the definition
of “Eligible Inventory” and substituting the following therefor:
“‘Eligible
Inventory’ shall mean all unencumbered inventory of raw material work in process
and finished goods of the Borrower and its Domestic Subsidiaries exclusive of
End of Life Inventory, other than up to $20,000,000.00 of the value of Eligible
End of Life Inventory, as each of such terms is herein defined, from time to
time on hand valued at the lowest of (a) cost, (b) market value, or (c) the
valuation consistent with that employed in the preparation of the financial
statements of the Borrower referred to in Section 5.1 hereof. ‘End of
Life Inventory’ shall mean inventory that the vendor of which has discontinued
or declared obsolete and whose sale is final and without return
privileges. ‘Eligible End of Life Inventory’ means End of Life
Inventory located in the United States for which the Borrower or its Domestic
Subsidiaries have irrevocable purchase orders to sell to creditworthy Account
Debtors who are obligated to take delivery of same within two years of the date
of the relevant purchase order.”
Section 3. Conditions
Precedent. The amendments to the Credit Agreement set
forth in Section 2 hereof shall become effective, on the date of this Third
Amendment, upon the execution and delivery of this Third Amendment by the
Borrower, the Administrative Agent and each of the Lenders necessary to
constitute the Required 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 dated the date of this Third
Amendment certifying (x) no changes in the certificate 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 (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 of this Third Amendment, and any related
documents (2) approving forms in substantially execution form of this Third
Amendment, and any related documents and (3) authorizing officers of the
Borrower to execute and deliver this Third Amendment, and any related documents,
and (z) the incumbency and specimen signatures of the officers of the Borrower
executing any documents delivered to the Administrative Agent or a Lender by the
Borrower in connection herewith.
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(B) Approval of the
Administrative Agent and Agent’s Counsel. All other documents and legal
matters in connection with the transactions contemplated by this Third Amendment
shall be satisfactory in form and substance to the Administrative Agent and its
counsel.
Section 4. 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 Third 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 5. 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 Third Amendment.
Section 6. Acknowledgement of
Guarantors. The Guarantors acknowledge and consent to all of
the terms and conditions of this Third Amendment and agree that this Third
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 Third Amendment.
Section 7. Governing Law; Execution in
Counterparts. Except as herein provided, the Credit Agreement
shall remain unchanged and in full force and effect. This Third
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 Third Amendment by signing any such
counterpart. This Third 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 8. Amendment
Fee. The Borrower agrees that in consideration for the Lenders
executing this Third Amendment, it shall pay a fee (the “Amendment Fee”) to the
Administrative Agent for the account of each Lender that executed and delivered
this Third Amendment on or prior to 5:00 p.m. (New York City time) on May 30,
2008 (or such later time as the Borrower and the Administrative Agent shall
agree) in an amount equal to $15,000.00 to be shared pro rata among the Lenders
so executing and delivering this Third Amendment in proportion to their
Revolving Credit Commitments. The Amendment Fee shall be earned upon
the effective date of this Third Amendment and shall be payable on June 4,
2008.
Section 9. 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 Third Amendment and the
transactions contemplated hereby.
Section 10. Effective
Date. This Third Amendment is dated for convenience as of May
30, 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 3 hereof.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the
parties hereto have caused this Third 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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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/ Xxxxxx X.
Xxxxxx
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Xxxxxx
X. Xxxxxx
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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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Xxxxxx
X. Xxxxxxxxxxxx
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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/ Xxxxx
Xxxxxxxx
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Xxxxx
Xxxxxxxx
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First
Vice President
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By:
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/s/ Xxx
Xxxxxxxx
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Name:
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Xxx
Xxxxxxxx
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Title:
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Senior
Vice President 1
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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/ Xxxxxx X.
Xxxxxx
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Xxxxxx
X. Xxxxxx
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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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Xxxxxx
X. Xxxxxxxxxxxx
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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/ Xxxxx
Xxxxxxxx
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Xxxxx
Xxxxxxxx
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First
Vice President
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By:
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/s/ Xxx
Xxxxxxxx
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Name:
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Xxx
Xxxxxxxx
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Title:
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Senior
Vice President 1
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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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/s/ Xxxxx
Xxxxx
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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/ Xxxxxxx X.
Xxxxxxx
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Xxxxxxx
X. Xxxxxxx
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Vice
President
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