EXHIBIT 10.13
FOURTH AMENDMENT
TO
AMENDED AND RESTATED LOAN AGREEMENT
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FOURTH AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT dated as of April
8, 1996, by and among NU HORIZONS ELECTRONICS CORP., a Delaware corporation, NIC
COMPONENTS CORP. and NU HORIZONS INTERNATIONAL CORP., each a New York
corporation, NU VISIONS MANUFACTURING, INC., a Massachusetts corporation, and NU
HORIZONS/MERIT ELECTRONICS CORP., a Delaware corporation, having their
respective principal offices at 6000 New Horizons Boulevard, North Amityville,
New York (collectively, the "Borrowers") and NATWEST BANK, N.A., formerly known
as National Westminster Bank USA, a national banking association, having offices
at 100 Jericho Quadrangle, Jericho, New York (the "Bank").
RECITALS
The Borrowers and the Bank entered into an Amended and Restated Loan
Agreement dated as of April 29, 1994 as amended by a First Amendment dated as of
August 24, 1994, a Second Amendment dated as of November 29, 1995 and a Third
Amendment dated as of January 10, 1996 (collectively, the "Loan Agreement"),
under which certain financial accommodations were made available by the Bank to
the Borrowers. Unless otherwise expressly provided herein, all capitalized
terms used in this Fourth Amendment to Amended and Restated Loan Agreement shall
have the respective meanings ascribed to such terms in the Loan Agreement.
The Borrowers have requested that the Bank modify certain of the terms set
forth in the Loan Agreement and the Bank is willing to comply with such request
but only upon and subject to the following terms and conditions.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and promises exchanged herein, the parties hereto mutually agree as follows:
1. The Amended and Restated Loan Agreement is hereby amended by the
Borrowers and the Bank as follows:
(a) Section 1.1 is hereby amended to add new definitions to read as
follows:
"`Agreed Rate' shall mean a rate of interest agreed to by the Borrowers and
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the Bank not more than three (3) Business Days prior to the first date of the
Interest Period therefor.
`Agreed Rate Loans' shall mean Revolving Credit Loans hereunder that bear
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interest for the Interest Period applicable thereto at an Agreed Rate.
`Fixed Rate Loan' shall mean any LIBOR Rate Loan or Agreed Rate Loan.
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`Fixed Rate Loans' shall mean collectively LIBOR Rate Loans and Agreed Rate
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Loans.
`Senior Liabilities' shall mean the Borrowers' total consolidated
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liabilities less Subordinated Indebtedness."
Section 1.1 is also amended by deleting the definitions of Interest Period,
Margin, New Headquarters Premises and Termination Date and substituting the
following therefor:
"`Interest Period' shall mean with respect to any Fixed Rate Loan, the
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period commencing on the date such loan is made and ending, as a Borrower may
select, pursuant to Section 2.5 hereof on the numerically corresponding day in
the (i) with respect to LIBOR Rate Loans, first, second, third or sixth calendar
month thereafter and (ii) with respect to Agreed Rate Loans, first calendar
month thereafter, except that each such Interest Period that commences on the
last Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month;
provided that: (a) no Interest Period may extend beyond the Termination Date;
and (b) if an Interest Period would end on a day that is not a Business Day,
such Interest Period shall be extended to the next Business Day unless such
Business Day would fall in the next calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day.
`Margin' means if the Borrowers' consolidated ratio of Senior Liabilities
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to Capital Funds, as reflected in the financial statements delivered pursuant to
Section 5.1 hereof, is (i) less than .50, 1.15% per annum; (ii) equal to or more
than .5 but less than .80, 1.35% per annum; and (iii) equal to or more than .80
but less than .90, 1.50% per annum, provided, however, if the Borrowers fail to
provide the relevant financial statements by the beginning of the corresponding
Margin periods set forth in Section 2.8 hereof, the Margin shall be deemed to be
1.50% per annum until the delivery of the relevant financial statements.
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`New Headquarters Premises' shall mean certain land located in Nassau
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County or Suffolk County, New York and the new corporate headquarters building
located on or which the Company intends to construct on such land.
`Termination Date' shall mean April 8, 2000 or, if such date is not a
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Business Day, the Business Day next succeeding such date."
(b) Section 2.1(a) is hereby deleted and the following is substituted
therefor:
"Subject to the terms and conditions hereof, the Bank agrees to make
Revolving Credit Loans to each of the Borrowers and to issue Letters of Credit
and to provide steamship guarantees and airway releases and to create Bankers
Acceptances for the account of each of the Borrowers from time to time during
the Commitment Period of which the aggregate principal amount of Revolving
Credit Loans, Letters of Credit, Bankers Acceptances, steamship guarantees and
airway releases at any one time outstanding as to the Borrowers collectively
shall not exceed $25,000,000 as such amount may be reduced as provided in
Section 2.12 hereof (the "Commitment"). During the Commitment Period each of the
Borrowers may use the Commitment (i) for obtaining Revolving Credit Loans by
borrowing, paying, prepaying in whole or in part and reborrowing on a revolving
basis, all in accordance with the terms and conditions hereof and (ii) for
obtaining the issuance of Letters of Credit, the creation of Bankers Acceptances
and the providing of steamship guarantees and airway releases in accordance with
the provisions of Section 2.2 hereof."
(c) Section 2.4 is hereby deleted and the following is substituted
therefor:
"2.4 Interest. Interest on each Revolving Credit Loan shall be at a
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per annum rate to be elected by each Borrower, in accordance with Section 2.5
hereof, and shall be one of the following:
(a) a fluctuating rate equal to the Prime Rate, which
interest rate shall change when and as the Prime Rate changes;
(b) subject to the availability of funds, the Reserve
Adjusted LIBOR Rate for Interest Periods selected by each Borrower plus the
applicable Margin; or
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(c) subject to the availability of funds, the Agreed Rate.
Interest on each Revolving Credit Loan shall be payable monthly in arrears on
the first day of each month, commencing on the first such day to occur after the
pertinent loan is made, upon payment in full thereof and, with respect to Fixed
Rate Loans, interest shall also be payable on the last day of each Interest
Period applicable thereto. 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 at a rate per annum (computed daily) equal to 2% percent above
the Prime Rate for Prime Rate Loans and the greater of 2% percent above the
Prime Rate or 2% percent above the rate in effect at such maturity for Fixed
Rate Loans; provided, however, that no interest payable hereunder shall be in
excess of the rate permitted by applicable law. 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."
(d) Section 2.5 is hereby deleted and the following is substituted
therefor:
"2.5 Procedure for Revolving Credit Borrowing. Each Borrower may borrow
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under the Commitment during the Commitment Period on any Business Day by giving
the Bank notice of a request for a Revolving Credit Loan hereunder setting forth
the amount of the Revolving Credit Loan requested, which shall be in a minimum
amount of $100,000 in the case of a Fixed Rate Loan or $25,000 in the case of a
Prime Rate Loan, the date thereof and whether it is to be a LIBOR Rate Loan, a
Prime Rate Loan or an Agreed Rate Loan. Requests for LIBOR Rate Loans shall be
received by the Bank not later than 11:00 a.m. (New York City time) three (3)
Business Days prior to the first day of the Interest Period for each such
Revolving Credit Loan. Requests for Prime Rate Loans and Agreed Rate Loans may
be made up to 1:00 p.m. (New York City time) on the date each such Revolving
Credit Loan is to be made. Any request for a Revolving Credit Loan may be
written or oral, but if oral, it shall be confirmed in writing sent by a
Borrower to the Bank within two (2) Business Days thereafter."
(e) Section 2.6 is hereby deleted and the following is substituted
therefor:
"2.6 Conversion and Renewals. Each of the Borrowers may elect from time
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to time to convert all or
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a part of one type of Revolving Credit Loan into
another type of Revolving Credit Loan or to renew all or part of a Revolving
Credit Loan by giving the Bank notice at least one (1) Business Day before the
conversion into a Prime Rate Loan and at least three (3) Business Days before
the conversion into or renewal of a Fixed Rate Loan, specifying: (1) the
renewal or conversion date; (2) the amount of the Revolving Credit Loan to be
converted or renewed; (3) in the case of conversions, the type of Revolving
Credit Loan to be converted into; and (4) in the case of renewals of or a
conversion into LIBOR Rate Loans, the duration of the Interest Period applicable
thereto; provided that (a) the minimum principal amount of each Revolving Credit
Loan outstanding after a renewal or conversion to a Fixed Rate Loan shall be
$100,000 or to a Prime Rate Loan shall be $25,000; and (b) Fixed Rate Loans can
be converted only on the last day of the Interest Period of such Loan. All
notices given under this Section 2.6 shall be irrevocable and shall be given not
later than 11:00 a.m. (New York City time) on the day which is not less than the
number of Business Days specified above for such notice. Any request for a
conversion or a renewal under this Section 2.6 may be written or oral, but if
oral, it shall be confirmed in writing sent by a Borrower to the Bank within two
(2) Business Days thereafter. If any Borrower shall fail to give the Bank the
notice as specified above for the renewal or conversion of a Fixed Rate Loan
prior to the end of the Interest Period with respect thereto, such Fixed Rate
Loan shall automatically be converted into a Prime Rate Loan on the last day of
the Interest Period for such Revolving Credit Loan. Notwithstanding anything to
the contrary contained above, if an Event of Default shall have occurred and be
continuing, no Fixed Rate Loan may be continued into a subsequent Interest
Period and no Prime Rate Loan may be converted into a Fixed Rate Loan."
(f) Section 2.9 is hereby deleted and the following is substituted
therefor:
"2.9 Commitment Fee. As additional compensation for the Revolving Credit
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Commitment, the Borrowers agree to pay the Bank a commitment fee on the average
daily unused portion of the Revolving Credit Commitment for the Commitment
Period at the rate of, if the Borrower's consolidated ratio of liabilities to
Capital Funds, as reflected in the financial statements delivered pursuant to
Section 5.1 hereof, is (i) less than .80, .15 percent per annum and (ii) .80 or
greater, .25 percent per annum. Any fee payable under this Section 2.9 which is
not paid when due shall bear interest at a rate per annum equal to
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2% above the Prime Rate until paid, payable on demand. Such fee shall be
computed on the basis of a 360 day year for the actual days elapsed and shall be
payable monthly on the first day of each month during the Commitment Period and
on the Termination Date. The "unused portion of the Revolving Credit Commitment"
means, at any time, the Revolving Credit Commitment less the sum of (a) the
unpaid principal balance of all Revolving Credit Loans, (b) Letters of Credit,
(c) Bankers Acceptances, (d) steamship guarantees or (e) airway releases, then
outstanding."
(g) Section 2.10 is hereby deleted and the following is substituted
therefor:
"2.10 Requirements of Law. If any change in conditions or applicable
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law, regulation or interpretation thereof (including any request, guideline or
policy not having the force of law) by any authority charged with the
administration or interpretation thereof occurs which:
(a) subjects the Bank to any tax with respect to a Fixed Rate
Loan, or
(b) changes the basis of taxation of payments to the Bank of
principal and/or interest and/or other fees and amounts payable hereunder, or
(c) imposes, modifies or deems applicable any reserve or deposit
requirements against any assets held by, deposits with or for the account of, or
loans or commitments by, an office of the Bank, or
(d) imposes upon the Bank any other condition with respect to a
Fixed Rate Loan and the Bank determines that the result of any of the foregoing
is to increase the cost to the Bank of making or maintaining a Fixed Rate Loan,
or to reduce the amount of any payment (whether of principal, interest or
otherwise) receivable by the Bank pursuant to the Revolving Credit Note or to
require the Bank to make any payment on or calculated by reference to the gross
amount of any sum received by it pursuant to the Revolving Credit Note, then the
Bank shall promptly give notice to the Borrower of such event and determination
and in any such case the Borrowers shall pay to the Bank, on demand, from time
to time as specified by the Bank, such additional amount or amounts as will
compensate and indemnify the Bank for such additional cost, reduction or
payment. A certificate of the Bank as to the additional amounts payable pursuant
to this Section 2.10 delivered to the Borrower, shall be
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final, conclusive and binding on the Borrowers absent manifest error or bad
faith. The protection of this Section shall be available to the Bank regardless
of any possible contention of invalidity or inapplicability of the law,
regulation or condition which has been imposed. The Bank shall furnish the
Borrowers with a statement of the amount of any such loss or expense, and such
statement by the Bank shall be final, conclusive and binding on the Borrowers in
the absence of manifest error."
(h) Section 2.12 is hereby deleted and the following is substituted
therefor:
"2.12 Termination or Reduction of Commitment. Subject to the
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indemnity agreement with respect to Fixed Rate Loans set forth in Section 2.15
hereof, the Borrowers shall have the right, upon not less than three (3)
Business Days' irrevocable notice, to terminate the Commitment or, from time to
time, to reduce the amount of the Commitment, provided that (a) any such
reduction (i) shall be in the minimum amount of $1,000,000 or a multiple
thereof, (ii) shall reduce permanently the amount of the Commitment then in
effect, and (iii) shall be accompanied by prepayment of the Revolving Credit
Loans outstanding, together with accrued interest on the amount so prepaid to
the dates of each such prepayment, to the extent, if any, that the Revolving
Credit Loans then outstanding exceed the amount of the Commitment as then
reduced, and (b) any such termination of the Commitment shall be accompanied by
prepayment in full of the Revolving Credit Loans outstanding, together with
accrued interest thereon to the date of prepayment, and the payment of any
unpaid commitment fee then accrued hereunder."
(i) Section 2.13 is hereby deleted and the following is substituted
therefor:
"2.13 Prepayment. Subject to the indemnity agreement with respect to
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Fixed Rate Loans set forth in Section 2.15 hereof, the Borrowers may prepay any
Revolving Credit Loan in whole or in part without premium or penalty together
with interest accrued on the amount prepaid to the date of prepayment.
Prepayments of Revolving Credit Loans may be reborrowed on a revolving basis as
aforesaid."
(j) Section 2.14(a) is hereby deleted and the following is substituted
therefor:
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"(a) All payments (including prepayments) to be made by the Borrowers on
account of principal, interest and fees shall be made without setoff or
counterclaim and shall be made to the Bank on the date of payment at the office
of the Bank set forth in Section 10.12 hereof or at such other place as the Bank
may from time to time designate in writing on or before 11:00 a.m. (New York
City time), in each case in lawful money of the United States of America and in
immediately available funds. If any payment hereunder (other than payments on
Fixed Rate Loans) becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a Fixed Rate Loan
becomes due and payable on a day other than a Business Day, the maturity thereof
shall be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month in which
event such payment shall be made on the immediately preceding Business Day."
(k) Section 2.15 is hereby deleted and the following is substituted
therefor:
"2.15 Indemnity and Yield Protection. The Borrowers hereby agree to
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indemnify the Bank against any loss or expense which the Bank may sustain or
incur as a consequence of the following:
(a) the failure of any Borrower to borrow a Fixed Rate Loan after agreement
shall have been reached on the amount, interest rate and Interest Period
thereof;
(b) the receipt or recovery by the Bank, whether by voluntary prepayment,
acceleration or otherwise, of all or any part of a Fixed Rate Loan prior to the
last day of an Interest Period applicable thereto; or
(c) the conversion, prior to the last day of an applicable Interest Period,
of a Fixed Rate Loan into another type of Revolving Credit Loan.
Without limiting the effect of the foregoing, the amount to be paid by the
Borrowers to the Bank in order to so indemnify the Bank for any loss occasioned
by any of the events described in the preceding paragraph, and
as liquidated damages therefor, shall be equal to the excess, discounted to its
present value as of the date paid to the Bank, of (i) the amount of interest
which otherwise would have accrued on the principal amount so
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received, recovered, converted or not borrowed during the period (the "Indemnity
Period") commencing on the date of such receipt, recovery, conversion, or
failure to borrow to the day of the applicable Interest Period for such Fixed
Rate Loan at the rate of interest applicable to such Loan (or the rate of
interest agreed to in the case of a failure to borrow) provided for herein
(prior to default) over (ii) the amount of interest which would be earned by the
Bank during the Indemnity Period if it invested the principal amount so
received, recovered, converted or not borrowed at the rate per annum determined
by the Bank as the rate it would bid in the London interbank market for a
deposit of eurodollars in an amount approximately equal to such principal amount
for a period of time comparable to the Indemnity Period.
A certificate as to any additional amounts payable pursuant to this Section
2.15 setting forth the basis and method of determining such amounts shall be
conclusive, absent manifest error, as to the determination by the Bank set forth
therein if made reasonably and in good faith. The Borrowers shall pay any
amounts so certified to it by the Bank within ten (10) days of receipt of any
such certificate. For purposes of this Section 2.15, all references to the
"Bank" shall be deemed to include any participant in the Revolving Credit
Commitment and/or Revolving Credit Loans.
The indemnities set forth herein shall survive payment in full of all Fixed
Rate Loans and all other Revolving Credit Loans made pursuant to this
Agreement."
(l) Section 2.16 is hereby deleted and the following is substituted
therefor:
"2.16 Use of Proceeds. The proceeds of the Revolving Credit Loans may be
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used by the Borrowers for general corporate purposes provided that solely
through February 28, 1997 up to an aggregate amount of $6,000,000 may be used to
purchase the New Headquarters Premises provided, further, that no portion of the
proceeds of any Revolving Credit Loan shall be used by any Borrower in any
manner which might cause the borrowing or the application of such proceeds to
violate Regulation G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System."
(m) Section 3.2 is hereby amended by deleting "November 30, 1993" appearing
therein and substituting "November 30, 1996" therefor.
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(n) Section 6.1 is hereby deleted and the following is substituted
therefor:
"6.1 Quick Ratio. Maintain at all times a ratio of consolidated current
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assets composed of cash on hand or on deposit in banks and Eligible Investment
Securities plus Eligible Accounts Receivable to consolidated current liabilities
of at least (i) .85 to 1.0 from April 8, 1996 through February 28, 1998 and (ii)
.95 to 1.0 from March 1, 1998 and at all times thereafter. Solely for purposes
of calculating compliance with this Section, up to an aggregate of $6,000,000 of
Revolving Credit Loans, the proceeds of which are used for the purchase of the
New Headquarters Premises, shall be excluded from current liabilities until May
31, 1997."
(o) Section 6.2 is hereby deleted and "[Reserved]" is substituted therefor.
(p) Section 6.3 is hereby deleted and the following is substituted
therefor:
"6.3 Capital Funds; Senior Liabilities to Capital Funds Ratio. Maintain
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at all times (i) as at the end of each fiscal quarter of each of the periods
designated in the table set forth below Capital Funds in an amount not less than
that set forth opposite each such period and (ii) as at the end of each fiscal
quarter of each fiscal year a ratio of total consolidated Senior Liabilities to
Capital Funds of not more than .90 to 1.0.
Period Minimum Amount
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3/1/96 - 2/28/97 $38,000,000 plus the product of .60 times the
Consolidated Net Income for the fiscal year ending
2/28/96 (the "`96 Base Amount")
3/1/97 - 2/28/98 `96 Base Amount plus the product of .75 times the
Consolidated Net Income for the fiscal year ended
2/28/97 (the "`97 Base Amount")
3/1/98 - 2/28/99 `97 Base Amount plus the product of .75 times the
Consolidated Net Income for the fiscal year ended
2/28/98 (the "`98 Base Amount")
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3/1/99 and thereafter `98 Base Amount plus the product of .75 times the
Consolidated Net Income for the fiscal year ended
2/28/99"
(q) Section 7.7 is hereby deleted and the following is substituted
therefor:
"7.7 Capital Expenditures. Expend in any fiscal year in the aggregate for
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the Borrowers and all Subsidiaries an amount in excess of the greater of
$1,750,000 or 25% of the aggregate of the prior fiscal year's net income plus
depreciation for the acquisition of fixed assets (inclusive of rental payments
under capitalized leases) provided; however, for the fiscal year ending February
28, 1997, such amount may be increased by up to $6,000,000 for the expenditures
related to the purchase of the New Headquarters Premises. The foregoing
expenditures made within the limitations of this Section 7.7 shall be inclusive
of payments made on account of any deferred purchase price or on account of any
purchase money indebtedness incurred to finance any such purchase price.
(r) Exhibit A is hereby amended to conform to the amendment hereinabove
set forth in paragraph 1(b) and, as amended, is set forth in its entirety in an
attachment annexed hereto and make a part hereof.
2. It is expressly understood and agreed that all collateral security for
the Revolving Credit Loans and other extensions of credit set forth in the
Amended and Restated Loan Agreement prior to the amendment provided for herein
is and shall continue to be collateral security for the Revolving Credit Loans
and other extensions of credit provided in the Amended and Restated Loan
Agreement as herein amended. Without limiting the generality of the foregoing,
the Borrowers hereby absolutely and unconditionally confirm that (i) each
document and instrument executed by the Borrowers pursuant to the Amended and
Restated Loan Agreement continues in full force and effect, is ratified and
confirmed and is and shall continue to be applicable to the Amended and Restated
Loan Agreement (as herein amended), and (ii) the Amended and Restated Note is
hereby ratified and confirmed and shall remain in full force and effect in
accordance with its terms. The terms "Revolving Credit Note" and "Note" shall
include any Amended and Restated Revolving Credit Note.
3. In order to induce the Bank to enter into this Fourth Amendment to
Amended and Restated Loan Agreement, the Borrowers represent and warrant to the
Bank that each of their representations and warranties made in the Amended and
Restated
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Loan Agreement is true and correct as of the date hereof except as
otherwise set forth in writing(s) to which the Bank is a party.
4. No modification or waiver of any provisions of the Amended and Restated
Loan Agreement or any other agreement or instrument made or issued pursuant
thereto or contemplated thereby, nor consent to any departure by the Borrowers
therefrom shall, in any event, be effective unless made in writing and signed by
the Bank and the Borrowers, and then any such modification or waiver shall be
effective only in the specific instance and for the purpose for which given
unless otherwise specified therein. No notice to, or demand on, the Borrowers
in any case shall, of itself, entitle them to any further notice or demand in
similar or other circumstances.
5. The Borrowers agree to pay on demand, and the Bank may charge any
deposit or loan accounts(s) of the Borrowers, for all expenses incurred by the
Bank in connection with the negotiation, preparation and administration
(including any future waiver or modification and legal counsel as to the rights
and duties of the Bank) of this Fourth Amendment to Amended and Restated Loan
Agreement.
6. The amendments set forth herein are limited precisely as written and
shall not be deemed to (a) be a consent to or waiver of any other term or
condition of the Amended and Restated Loan Agreement or of any of the documents
referred to therein or (b) prejudice any right or rights which the Bank may now
have or may have in the future under or in connection with the Amended and
Restated Loan Agreement or any of the documents referred to therein.
7. This Fourth Amendment to Amended and Restated Loan Agreement is dated
for convenience as of April 8, 1996 and shall be effective on the delivery of an
executed counterpart hereof to the Borrowers. This Fourth Amendment to Amended
and Restated Loan Agreement may be executed in counterparts, each of which shall
constitute an original, and each of which taken together shall constitute one
and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to
Amended and Restated Loan Agreement to be duly executed and delivered by their
duly authorized officers, all as of the day and year first above written.
NU HORIZONS ELECTRONICS CORP. NIC COMPONENTS CORP.
By:/s/ Paul Durando By:/s/ Paul Durando
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Paul Durando Paul Durando
Vice President-Finance Vice President-Finance
NU HORIZONS INTERNATIONAL CORP. NU VISIONS MANUFACTURING, INC.
By:/s/ Paul Durando By:/s/ Paul Durando
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Paul Durando Paul Durando
Vice President-Finance Vice President-Finance
NU HORIZONS/ NATWEST BANK N.A.
MERIT ELECTRONICS CORP. formerly known as
National Westminster Bank USA
By:/s/ Paul Durando By:/s/ Jeffrey B. Carstens
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Paul Durando Jeffrey B. Carstens
Vice President-Finance Vice President
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STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 8th day of April, 1996, before me personally came PAUL DURANDO, to
me known, who, being by me duly sworn, did depose and say that he resides at c/o
6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU HORIZONS ELECTRONICS CORP., the corporation described in
and which executed the foregoing instrument; and that he signed his name thereto
by order of the board of directors of said corporation.
/s/ Dianne J. Judd
---------------------
Notary Public
STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 8th day of April, 1996, before me personally came PAUL DURANDO, to
me known, who, being by me duly sworn, did depose and say that he resides at c/o
6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NIC COMPONENTS CORP., the corporation described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the board of directors of said corporation.
/s/ Dianne J. Judd
---------------------
Notary Public
STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 8th day of April, 1996, before me personally came PAUL DURANDO, to
me known, who, being by me duly sworn, did depose and say that he resides at c/o
6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU HORIZONS INTERNATIONAL CORP., the corporation described
in and which executed the foregoing instrument; and that he signed his name
thereto by order of the board of directors of said corporation.
/s/ Dianne J. Judd
---------------------
Notary Public
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STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 8th day of April, 1996, before me personally came PAUL DURANDO, to
me known, who, being by me duly sworn, did depose and say that he resides at c/o
6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU VISIONS MANUFACTURING, INC., the corporation described
in and which executed the foregoing instrument; and that he signed his name
thereto by order of the board of directors of said corporation.
/s/ Dianne J. Judd
---------------------
Notary Public
STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 8th day of April, 1996, before me personally came PAUL DURANDO, to
me known, who, being by me duly sworn, did depose and say that he resides at c/o
6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU HORIZONS/MERIT ELECTRONICS CORP., the corporation
described in and which executed the foregoing instrument; and that he signed his
name thereto by order of the board of directors of said corporation.
/s/ Dianne J. Judd
---------------------
Notary Public
STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 8th day of April, 1996, before me personally came JEFFREY B.
CARSTENS, to me known, who, being by me duly sworn, did depose and say that he
resides at c/o 100 Jericho Quadrangle, Jericho, New York; that he is a Vice
President of NATWEST BANK N.A., the banking institution described in and which
executed the foregoing instrument; and that he signed his name thereto by
authority of such banking institution.
/s/ Dianne J. Judd
---------------------
Notary Public
-15-
TWELFTH AMENDMENT TO REVOLVING CREDIT
AND TERM LOAN AGREEMENT
-----------------------
TWELFTH AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT dated as of
April 8, 1996, by and between NU HORIZONS ELECTRONICS CORP., a Delaware
corporation having its executive offices at 6000 New Horizons Boulevard, North
Amityville, New York (the "Company") and NATWEST BANK, N.A. formerly known as
National Westminster Bank USA, a national banking association, having offices at
100 Jericho Quadrangle, Jericho, New York (the "Bank").
RECITALS
--------
The Company and the Bank entered into a Revolving Credit and Term Loan
Agreement dated as of May 26, 1988 (as amended by the First Amendment dated as
of March 19, 1990, the Second Amendment dated as of February 28, 1991, the Third
Amendment dated as of April 1, 1992, the Fourth Amendment dated as of April 8,
1992, a Fifth Amendment dated as of August 1, 1992, a Sixth Amendment dated as
of October 1, 1992, a Seventh Amendment dated as of May 20, 1993, an Eighth
Amendment dated as of January 14, 1994, a Ninth Amendment dated as of April 29,
1994, a Tenth Amendment dated as of November 29, 1995 and an Eleventh Amendment
dated as of January 10, 1996 and as may be further amended, the "Loan
Agreement"), pursuant to which certain financial accommodations were made
available by the Bank to the Company. Unless otherwise expressly provided
herein, all capitalized terms used in this Twelfth Amendment shall have the
respective meanings ascribed to such terms in the Loan Agreement.
The Company has requested that the Bank modify certain of the terms set
forth in the Loan Agreement and the Bank is willing to comply with such request
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:
1. The Loan Agreement is hereby amended by the Company and the Bank as
follows:
(a) Section 1.1 is hereby amended to add new definitions to read as
follows:
"`Tenth Conversion Date' shall mean February 28, 1998.
---------------------
`Eleventh Conversion Date' shall mean February 28, 1999.
------------------------
`Twelfth Conversion Date' shall mean February 29, 2000.
-----------------------
`Senior Liabilities' shall mean the Borrowers' and the Guarantors' total
------------------
consolidated liabilities less Subordinated Indebtedness."
Section 1.1 is also amended by deleting the definitions of Conversion Dates and
New Headquarters Premises and substituting the following therefor:
"`Conversion Dates' shall mean collectively the First Conversion Date, the
----------------
Second Conversion Date, the Third Conversion Date, the Fourth Conversion Date,
the Fifth Conversion Date, the Sixth Conversion Date, the Seventh Conversion
Date, the Eighth Conversion Date, the Ninth Conversion Date, the Tenth
Conversion Date, the Eleventh Conversion Date and the Twelfth Conversion Date.
`New Headquarters Premises' shall mean certain land located in Nassau or
-------------------------
Suffolk County, New York and the new corporate headquarters building located on
or which the Company intends to construct on such land."
(b) The first portion of Section 2.1 is hereby amended
to read as follows (in pertinent part):
"2.1 Revolving Credit Loan: Subject to the terms and conditions of this
---------------------
Agreement, and in reliance upon the representations and warranties hereinafter
set forth, the Bank agrees to lend to the Company, prior to February 29, 2000
(the "Twelfth Conversion Date"), such amounts as the Company may request from
time to time, which amounts may be borrowed, repaid and reborrowed
(individually, a "Revolving Credit Loan" and collectively the "Revolving Credit
Loans");...."
(c) The second sentence of Section 2.2 is hereby amended to read as
follows:
"Such note shall be dated the date hereof, and be in the amount of the lesser of
One Million Ninety-Four Thousand One Hundred Twelve and 30/100 ($1,094,112.30)
Dollars or the amount advanced hereunder as the Revolving Credit Loans and shall
mature on February 29, 2000, at which time said entire principal balance shall
be due and payable."
(d) Section 2.3 (b) (i) is hereby amended to read as follows:
-2-
"(i) on February 28, 1989 (the "First Conversion Date"), February 28, 1990
(the "Second Conversion Date"), February 28, 1991 (the "Third Conversion Date"),
February 29, 1992 (the "Fourth Conversion Date"), February 28, 1993 (the "Fifth
Conversion Date"), February 28, 1994 (the "Sixth Conversion Date"), February 28,
1995 (the "Seventh Conversion Date"), February 29, 1996 (the "Eighth Conversion
Date"), February 28, 1997 (the "Ninth Conversion Date"), February 28, 1998 (the
"Tenth Conversion Date") and February 28, 1999 (the "Eleventh Conversion Date")
the outstanding principal of the Revolving Credit Note together with accrued
interest on such dates shall be prepaid, and ...."
(e) Section 2.6 is hereby amended to read as follows:
"2.6 Reduction of the Commitment: The Commitment shall be reduced by the
---------------------------
principal amounts outstanding under the Revolving Credit Note on the First
Conversion Date, the Second Conversion Date, the Third Conversion Date, the
Fourth Conversion Date, the Fifth Conversion Date, the Sixth Conversion Date,
the Seventh Conversion Date, the Eighth Conversion Date, the Ninth Conversion
Date, the Tenth Conversion Date and the Eleventh Conversion Date and such
amounts shall not be reinstated."
(f) Section 2.9 is hereby amended by the addition of
the following at the conclusion thereof:
"The Term Loan made on the Twelfth Conversion Date shall be payable in forty-
eight (48) monthly installments commencing on the 31st day of March, 2000 and on
the last day of each month thereafter to and including February 29, 2004, when
any unpaid balance together with accrued interest shall be due and payable."
(g) Section 3.1 is hereby amended by deleting "November 30, 1987" appearing
therein and substituting "November 30, 1995" therefor.
(h) Section 5.10(b) is hereby deleted and the following is substituted
therefor:
"(b) Capital Funds; Senior Liabilities to Capital Funds. Maintain at all
--------------------------------------------------
times (y) as at the end of each fiscal quarter of each of the periods designated
in the table set forth below Capital Funds in an amount not less than that set
forth opposite each such period and (z) as at the end of each fiscal quarter of
each fiscal year a ratio of total consolidated
Senior Liabilities to Capital Funds of not more than .90 to 1.0.
-3-
Period Minimum Amount
------ --------------
3/1/96 - 2/28/97 $38,000,000 plus the product of .60 times the
Consolidated Net Income for the fiscal year ending
2/28/96 (the "`96 Base Amount")
3/1/97 - 2/28/98 `96 Base Amount plus the product of .75 times the
Consolidated Net Income for the fiscal year ended
2/28/97 (the "`97 Base Amount")
3/1/98 - 2/28/99 `97 Base Amount plus the product of .75 times the
Consolidated Net Income for the fiscal year ended
2/28/98 (the "`98 Base Amount")
3/1/99 and there- `98 Base Amount plus the product of .75 times the
after Consolidated Net Income for the fiscal year ended
2/28/99"
(i) Section 5.10(c) is hereby deleted and the following is substituted
therefor:
"(b) Quick Ratio. Maintain at all times a ratio of consolidated current
-----------
assets composed of cash on hand or on deposit in banks and marketable Eligible
Investment Securities plus Eligible Accounts Receivable to consolidated current
liabilities of at least (i) .85 to 1.0 from , April 8, 1996 through February 28,
1998 and (ii) .95 to 1.0 from March 1, 1998 and at all times thereafter. Solely
for purposes of calculating compliance with this Section, up to an aggregate of
$6,000,000 of revolving credit loans to the Company under the Amended Restated
Credit Agreement among the Company, certain other entities and the Bank dated as
of April 29, 1994, the proceeds of which are used for the purchase of the New
Headquarters Premises, shall be excluded from current liabilities until May 31,
1997."
(j) Section 5.10 (f) is hereby deleted and "[Reserved]" is substituted
therefor.
(k) Section 6.16 is hereby deleted and the following is substituted
therefor:
"6.16 Capital Expenditures. Expend in any fiscal year in the aggregate
--------------------
for the Company and its Subsidiaries an amount in excess of the greater of
$1,750,000 or 25% of the aggregate of the prior fiscal
-4-
year's net income plus
depreciation for the acquisition of fixed assets (inclusive of rental payments
under capitalized leases) provided; however, for the fiscal year ending February
28, 1997, such amount may be increased by up to $6,000,000 for the expenditures
related to the purchase of the New Headquarters Premises. The foregoing
expenditures made within the limitations of this Section shall be inclusive of
payments made on account of any deferred purchase price or on account of any
purchase money indebtedness incurred to finance any such purchase price."
(l) Exhibit A is hereby amended to conform to the amendment hereinabove
set forth in paragraph 1(c) and, as amended, is set forth in its entirety in an
attachment annexed hereto and make a part hereof. The Company acknowledges and
agrees that an Event of Taxability has occurred and agrees to pay interest at
the Taxable Rate in accordance with the provisions of the Loan Agreement.
2. It is expressly understood and agreed that all collateral security for
the Loans and other extensions of credit set forth in the Loan Agreement prior
to the amendments provided for herein is and shall continue to be collateral
security for the Loans and other extensions of credit provided in the Loan
Agreement as herein amended. Without limiting the generality of the foregoing,
the Company hereby absolutely and unconditionally confirms that (i) each
document and instrument executed by the Company pursuant to the Loan Agreement
continues in full force and effect, is ratified and confirmed and is and shall
continue to be applicable to the Loan Agreement (as herein amended) and (ii) the
Notes are hereby ratified and confirmed and shall remain in full force and
effect in accordance with their respective terms. Nonetheless, at the request of
the Bank, the Company shall promptly execute and deliver replacement notes to
evidence all indebtedness outstanding under the Loan Agreement as hereby
amended. The term "Notes" shall include any such replacement notes.
3. In order to induce the Bank to enter into this Twelfth Amendment to
Loan Agreement, the Company represents and warrants to the Bank that each of its
representations and warranties made in the Loan Agreement is true and correct as
of the date hereof except as otherwise set forth in writing(s) to which the Bank
is a party. Notwithstanding the foregoing, to the extent that the
representations and warranties contained in the Loan Agreement and in that
certain amended and restated loan agreement dated as of April 29, 1994 among the
Company, certain related corporations and
the Bank (as previously amended and as may be amended from time to time, the
"Restated Loan Agreement") differ, the representations and warranties contained
in the Restated Loan Agreement shall control.
-5-
4. No modifications or waiver or any provisions of the Loan Agreement or
any other agreement or instrument made or issued pursuant thereto or
contemplated thereby, nor consent to any departure by the Company therefore
shall, in any event, be effective unless made in writing and signed by the Bank
and the Company, and then any such modification or waiver shall be effective
only in the specific instance and for the purpose for which given unless
otherwise specified therein. No notice to, or demand on, the Company in any
case shall, of itself, entitle it to any further notice or demand in similar or
other circumstances.
5. The Company agrees to pay on demand, and the Bank may charge any
deposit or loan account(s) of the Company, for all expenses incurred by the Bank
in connection with the negotiation, preparation and administration (including
any future waiver or modification and legal counsel as to the rights and duties
of the Bank) of this Twelfth Amendment to Loan Agreement.
6. This amendment is limited precisely as written and shall not be deemed
to (a) be a consent or waiver of any other term or condition of the Loan
Agreement or of any of the documents referred to therein or (b) prejudice any
right or rights which the Bank may now have or may have in the future under or
in connection with the Loan Agreement or any of the documents referred to
therein.
7. This Twelfth Amendment to Loan Agreement is dated for convenience of as
April 8, 1996 and shall be effective on the delivery of an executed counterpart
to the Company. This Twelfth Amendment to Loan Agreement may be executed in
counterparts, each of which shall constitute an original, and each of which
taken together shall constitute one and the same agreement.
-6-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to Loan
Agreement to be duly executed and delivered by their duly authorized officers,
all as of the day and year first above written.
NU HORIZONS ELECTRONICS CORP.
By:/s/ Paul Durando
--------------------------
Paul Durando
Vice President - Finance
NATWEST BANK, N.A.
formerly known as
National Westminster Bank USA
By:/s/ Jeffrey B. Carstens
--------------------------
Jeffrey B. Carstens
Vice President
-7-
STATE OF NEW YORK )
:ss.:
COUNTY OF NASSAU )
On the 8th day of April, 1996, before me personally came PAUL DURANDO, to
me known, who, being by me duly sworn, did depose and say that he resides at c/o
6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU HORIZONS ELECTRONICS CORP., the corporation described in
and which executed the foregoing instrument; and that he signed his name thereto
by order of the board of directors of said corporation.
/s/ Dianne J. Judd
--------------------
Notary Public
STATE OF NEW YORK )
:ss.:
COUNTY OF NASSAU )
On this 8th day of April, 1996, before me personally came JEFFREY B.
CARSTENS, to me known, who, being by me duly sworn, did depose and say that he
resides at c/o 100 Jericho Quadrangle, Jericho, New York; that he is a Vice
President of NATWEST BANK N.A., the banking institution described in and which
executed the foregoing instrument; that he signed his name thereto by authority
of such banking institution.
/s/ Dianne J. Judd
--------------------
Notary Public
-8-
The undersigned Guarantors acknowledge that there are no defenses or
offsets to their respective Guaranties of the obligations under the Loan
Agreement as amended by this Twelfth Amendment and hereby agree and consent to
the foregoing Twelfth Amendment.
NIC COMPONENTS CORP.
Dated: April 8, 1996 By:/s/ Paul Durando
----------------------
Paul Durando
Vice President-Finance
NU HORIZONS INTERNATIONAL CORP.
Dated: April 8, 1996 By:/s/ Paul Durando
----------------------
Paul Durando
Vice President-Finance
NU VISIONS MANUFACTURING, INC.
Dated: April 8, 1996 By:/s/ Paul Durando
----------------------
Paul Durando
Vice President-Finance
NU HORIZONS/MERIT
ELECTRONICS CORP.
Dated: April 8, 1996 By:/s/ Paul Durando
-------------------------
Paul Durando
Vice President-Finance
-9-
STATE OF NEW YORK )
:ss.:
COUNTY OF NASSAU )
On the 8th day of April, 1996, before me personally came PAUL DURANDO, to
me known, who, being by me duly sworn, did depose and say that he resides at c/o
6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NIC COMPONENTS CORP., the corporation described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the board of directors of said corporation.
/s/ Dianne J. Judd
--------------------
Notary Public
STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 8th day of April, 1996, before me personally came PAUL DURANDO, to
me known, who, being by me duly sworn, did depose and say that he resides at c/o
6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU HORIZONS INTERNATIONAL CORP., the corporation described
in and which executed the foregoing instrument; and that he signed his name
thereto by order of the board of directors of said corporation.
/s/ Dianne J. Judd
--------------------
Notary Public
-10-
STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 8th day of April, 1996, before me personally came PAUL DURANDO, to
me known, who, being by me duly sworn, did depose and say that he resides at c/o
6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU VISIONS MANUFACTURING, INC., the corporation described
in and which executed the foregoing instrument; and that he signed his name
thereto by order of the board of directors of said corporation.
/s/ Dianne J. Judd
-----------------------
Notary Public
STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 8th day of April, 1996, before me personally came PAUL DURANDO, to
me known, who, being by me duly sworn, did depose and say that he resides at c/o
6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU HORIZONS/MERIT ELECTRONICS CORP., the corporation
described in and which executed the foregoing instrument; and that he signed his
name thereto by order of the board of directors of said corporation.
/s/ Dianne J. Judd
-----------------------
Notary Public
-11-