Document:

Unassociated Document

    SERVICES,
      OPERATIONS AND MANAGEMENT AGREEMENT

    

    This
      Agreement, effective as of October 8, 2008 (this “Agreement”),
      is
      made and entered into by and between Aura Sound, Inc., a Nevada corporation
      (“Aura
      Sound”),
      and
      its wholly owned subsidiary Aura Sound, Inc., a California corporation, having
      their principal place of business at 11839 E. Smith Ave., Santa Fe Springs,
      CA
      90670 (“Subsidiary”), and GGEC America Inc., a California company (“GGEC”)
      having
      its principle place of business at 1801 E. Edingar Ave. #255, Santa Ana, CA
      92705 (each, a “Party”,
      collectively the “Parties”).

    

    RECITALS

    

    WHEREAS,
      Aura
      Sound and Subsidiary (collectively “Company”) are in the business of developing,
      manufacturing and marketing premium audio products;

    

    WHEREAS,
      GGEC
      and its parent company GGEC China is currently the sole manufacturer of the
      products sold by AuraSound and/or Subsidiary;

    

    WHEREAS,
      GGEC’s
      principal place of business is located in California;

    

    WHEREAS,
      Company
      is in need of capital and immediate financial assistance and has a continuing
      need for operational assistance and desires to obtain such assistance from
      GGEC
      and whereas GGEC has expressed a desire to provide this assistance to Aura
      Sound
      and/or Subsidiary; 

    

    WHEREAS,
      in
      furtherance of this desire, GGEC has entered into a non-binding October 6,
      2008
      Letter of Intent (“LOI”) with Aura Sound to explore and pursue the acquisition
      of a controlling percentage of the common stock of Aura Sound (“Acquisition”),
      which LOI is incorporated into this Agreement by this reference; and

    

    WHEREAS,
      the
      board of directors of Aura Sound and Subsidiary, respectively, have adopted
      resolutions approving the assumption by GGEC of the operational control of
      Aura
      Sound and Subsidiary, respectively, upon the terms and conditions set forth
      in
      this Agreement.

    

    NOW,
      THEREFORE,
      the
      Parties hereto, intending to be legally bound, agree as follows:

    

    ARTICLE
      1

    SERVICES
      & FINANCING

    

    1.1 Services
      to be Provided.
      In view
      of the contemplated Acquisition, GGEC, directly or indirectly as provided in
      Section 1.2, agrees to provide Company during the term of this Agreement, the
      following services (the “Services”)
      as it
      deems appropriate for Company:

    

    (a)
      general management services, including (i) the services of executive, operations
      and financial personnel of GGEC; (ii) advice concerning the preparation of
      budgets, forecasts, capital expenditures, financing, and long range strategic
      planning; (iii) managing accounts receivables; (iv) managing accounts payables;
      and (iv) such other management services as GGEC may deem reasonably necessary
      to
      further the contemplated Acquisition or Subsidiary’s performance of its duties
      and responsibilities on the Bridge Loans; and 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (b)
      general administrative and technical services, advice and direction, including
      (i) accounting, including cost accounting and inventory control; (ii) PRC legal,
      trademark and patent advice, including advice with respect to compliance with
      applicable legal regulations, patent applications and prosecutions outside
      the
      United States; (iii) market servicing, product pricing and costs controls and
      evaluations; (iv) preparation of advertising and publicity literature and other
      materials; (v) providing, training, supervision, guidelines and policies to
      staff and consultants; (vi) compensation planning and human resources services;
      (vii) purchasing services; (viii) importing and exporting; (ix) preparation
      of
      reporting forms; and (x) such other general administrative and technical
      services as Company may reasonably request from time to time.

    

    1.2 Services
      Providers.
      It is
      understood that GGEC may provide any, all or some of the Services directly
      or
      through any of its affiliates, professional advisors or other representatives.
      (The entity providing the Services is hereinafter referred to as the
“Services
      Provider”).
      The
      Services Provider shall, in its supervision of the Services hereunder, utilize
      a
      standard of duty and care equal to that of a reasonably prudent person acting
      on
      its own behalf in similar circumstances.

    

    1.3 Property
      and Equipment.
      All
      properties and equipment owned by Company shall remain the properties and
      equipment of Company.

    

    1.4 Management.
      The
      Company shall use commercially reasonable efforts to convince all directors,
      officers, employees and consultants of Company to remain with Company in their
      current capacities and to continue to perform their day-to-day duties in
      accordance with the normal operations of the Company, as may be managed by
      GGEC
      from time to time, until such time as the Company shall determine to replace
      any
      such directors, officers, employees or consultants. 

    

    1.5 Loans.
      GGEC
      agrees to make monthly loans of up to $150,000 to Subsidiary, during the term
      of
      this Agreement, to fund Subsidiary’s operating expenses and working capital
      requirements (“Bridge Loans”), provided that Company has not breached this
      Agreement or defaulted on a Bridge Loan. Each Bridge Loan shall be evidenced
      by
      a promissory note which shall provide: (a) for simple interest at a rate of
      six
      percent (6%) per annum; (b) that the entire loan amount, principal and interest,
      be due and payable upon the earlier of the termination or breach of this
      Agreement, or completion (closing) of the Acquisition; and (c) GGEC may elect,
      in its sole discretion, to apply any or all of the principal and interest owed
      on any or all of the Bridge Loans towards the purchase price of the Aura Sound
      equity it will acquire in the contemplated Acquisition. 

     

    
      
        
        

      

      
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    ARTICLE
      2

    CONSIDERATION;
      CONFIDENTIALITY

    

    2.1 Consideration
      for the Services.
      In
      further consideration of the Services and Bridge Loans, 

    

    (a) Company
      shall cooperate with GGEC and its agents and consultants in a commercially
      reasonable due diligence review of the Company by GGEC in connection with its
      contemplated purchase of a controlling equity interest in Aura Sound.

    

    (b) Notwithstanding
      Article 1.4, during the term of this Agreement, Company and its directors,
      officers, employees and consultants shall not,
      without
      the written consent of GGEC, make any decisions; take any actions which are
      outside the ordinary course of business; enter into any material agreements;
      dispose of, transfer, assign, sell, lien, lease, license, pledge, encumber,
      alienate, hypothecate, depreciate or deplete any property, real or personal,
      tangible or intangible, owned by Company in whole or in part or in which Company
      has an ownership interest, regardless of the nature or extent of Company’s
      interest or the manner in which Company obtained such ownership interest; OR
      incur material liabilities, debts, loans or obligations of any kind in excess
      of
      $5,000 on behalf of the Company outside the ordinary course of
      business.

    

    (c) GGEC
      shall have absolute authority and discretion on the payment of any accounts
      payables or monies owed by Company to any third parties, including but not
      limited to the order, amount and timing of such payments. Subsidiary shall
      open
      a separate bank account where the Bridge Loans will be deposited (the “Bridge
      Loan Account”), in order that such Bridge Loans are segregated from other funds
      of Subsidiary or Company.

    

    (d)
      Upon
      Subsidiary’s default on the payment of interest or principal due on any
Bridge
      Loan, GGEC and Company shall each instruct Company’s customers and any other
      third parties owing monies to Company to forward such monies directly to GGEC
      until the principal and interest due on any defaulted Bridge Loan(s) has been
      paid. Upon receipt of full payment of the principal and interest due on any
      defaulted Bridge Loan(s), GGEC and Company shall so inform Company’s customers
      and other third parties owing monies to Company. 

    

    (e) It
      is the
      intent of the Parties that all existing and future loans, credit, factoring
      or
      other financing agreements and liens of the Company shall be subordinated to
      the
      Bridge Loans, and the Company shall take all reasonable steps to accomplish
      this
      subordination 

    

    (f) The
      Company shall grant in favor of GGEC a security interest in Company’s property,
      real or personal, tangible or intangible, to secure Company’s performance under
      this Agreement and payment of the principal and interest due on the Bridge
      Loans, as more specifically set forth in the accompanying Security Agreement,
      Exhibit
      “A”.
      Company shall also enter into a Deposit Account Control agreement in the form
      of
Exhibit
      “B”
for
      the
      Bridge Loan Account.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (g) During
      the period this Agreement is operative, Company shall not, without the consent
      of GGEC, solicit or engage in discussions with another to sell or exchange
      Company’s stocks or assets, merge with or into another entity, or dissolve or
      re-organize Company.

    

    (h) During
      the term of this Agreement, Company shall keep GGEC reasonably informed of
      its
      financial and operational condition, including but not limited to providing
      GGEC
      with reports, summaries and/or statements of sales, expenses, costs, purchases,
      accounts receivables, accounts payables, gross receipts, payments, debts,
      liabilities, balance sheets, profit and loss statements and agreements entered
      into; daily reports of Company’s deposit account balances, withdrawals,
      deposits, charges and fees; monthly bank statements, financial statements and
      records, minutes of meetings of Company’s directors and shareholders, corporate
      books, documents and records. 

    

    (i) During
      the term of this Agreement, so long as any Bridge Loan or interest thereon
      is
      outstanding, Company shall not, without the written approval of GGEC, issue
      dividends or make cash or earnings distributions to any Company shareholder,
      redeem the stock shares of any Company shareholder, or pay or award any
      compensation of any kind to any employee, officer or director of Company other
      than the salary and wages, none of which includes bonuses, and commissions
      they
      currently earn.

    

    (j)
      Attached
      as Exhibit “C” is a true and correct list of Company’s key assets. 

     

    (k)
      Attached
      as Exhibit “D” is a complete list of all key or senior management employees,
      officers and directors of Company. 

     

    2.2
      Confidentiality
      Agreement.
      GGEC’s
      due diligence review of Aura Sound, and GGEC’s provision of the Services
      hereunder, shall be subject to a Mutual Confidentiality Agreement in the form
      of
Exhibit
      “E”
      attached
      hereto.

    

    2.3
      Non-Solicitation.
      GGEC,
      on the one hand, and Aura Sound and Subsidiary, on the other hand, agree that
      during the term of this Agreement and for a period of two (2) years thereafter,
      GGEC shall not solicit, hire or employ any officers, employees or consultants
      of
      Aura Sound or Subsidiary, and neither Aura Sound nor Subsidiary shall solicit,
      hire or employ any officers, employees or consultants of GGEC, in either case
      without the express written consent of the non-hiring/soliciting/employing
      Party.

    

    ARTICLE
      3

    TERM
      AND TERMINATION

    

    3.1
       Term
      and Termination.
      The
      term of this Agreement shall begin on October 6, 2008 and shall continue for
      a
      period of six (6) months or until the completion (closing) of the Acquisition,
      whichever occurs earlier.
      Any
      funds loaned to the Company or Subsidiary by GGEC prior to the date hereof
      shall
      be deemed Bridge Loans within the meaning set forth herein and shall be governed
      by this Agreement and its attachments. This Agreement may be renewed in writing
      upon the mutual agreement of the Parties.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      4

    GENERAL
      PROVISIONS

    

    4.1
       Notices.
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed to have been duly given if delivered personally, sent by overnight
      courier or mailed by registered or certified mail (postage prepaid and return
      receipt requested) to the Party to whom the same is so delivered, sent or mailed
      at the addresses set forth on the signature page hereof (or at such other
      address for a Party as shall be specified by like notice).

    

    4.2
       Interpretation.
      The
      headings contained in this Agreement are for reference purposes only and shall
      not affect in any way the meaning or interpretation of this Agreement.
      References to Sections and Articles refer to sections and articles of this
      Agreement unless otherwise stated.

    

    4.3
       Severability.
      If any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, void or unenforceable, the remainder
      of
      the terms, provisions, covenants and restrictions of this Agreement shall remain
      in full force and effect and shall in no way be affected, impaired or
      invalidated and the Parties shall negotiate in good faith to modify this
      Agreement to preserve each Party's anticipated benefits under this
      Agreement.

    

    4.4
       Miscellaneous.
      This
      Agreement (a) constitutes the entire agreement and supersedes all other prior
      agreements and undertakings, both written and oral, among the Parties with
      respect to the subject matter hereof; (b) except as expressly set forth herein,
      is not intended to confer upon any other person any rights or remedies hereunder
      and (c) shall not be assigned by operation of law or otherwise, except as may
      be
      mutually agreed upon by the Parties hereto.

    

    4.5
       Governing
      Law; Venue.
      This
      Agreement shall be governed by, and construed and enforced in accordance with,
      the laws of the State of California without giving effect to any choice or
      conflict of law provision or rule. Any and all actions brought under this
      Agreement shall be brought in the California state or federal court of the
      United States sitting in the County of Orange, California and each Party hereby
      waives any right to object to the convenience of such venue.

    

    4.6
       Counterparts
      and Facsimile Signatures.
      This
      Agreement may be executed in two or more counterparts, which together shall
      constitute a single agreement. This Agreement and any documents relating to
      it
      may be executed and transmitted to any other Party by facsimile or email of
      a
“pdf” file, which facsimile or “pdf” file shall be deemed to be, and utilized in
      all respects as, an original, wet-inked document. 

    

    4.7 Amendment.
      This
      Agreement may be amended, modified or supplemented only by an instrument in
      writing executed by the Parties.

    

    4.8 Waiver.
      No
      waiver by any Party of any default or breach by the other Party of any provision
      contained in this Agreement shall be deemed to be a waiver of any subsequent
      default or breach by such Party of the same. No act, delay, omission or course
      of dealing on the part of any Party in exercising any right, power or remedy
      under this Agreement or at law or in equity shall operate as a waiver thereof
      or
      otherwise prejudice any of such Party's rights, powers and remedies. All
      remedies, whether at law or in equity, shall be cumulative and the election
      of
      any one or more shall not constitute a waiver of the right to pursue other
      available remedies.

    

    4.9
      Recitals
      Incorporated.
      The
      recitals of this Agreement are incorporated herein.

    

    [SIGNATURES
      FOLLOW]

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

     IN
      WITNESS WHEREOF,
      the
      Parties have executed this Agreement as of the date first written
      above.

     

    
      	 Aura Sound, Inc., a
              California corporation 	 	 Aura Sound, Inc., a Nevada
              corporation
	 	 	 	 	 
	 By:	 /S/
              Arthur Liu	 	 By:	 /S/
              Arthur Liu
	 Name:	 Arthur Liu	 	 Name: 	 Arthur Liu
	 Title:	 CEO & Chairman of the Board
              	 	 Title: 	 CEO & Chairman of the
              Board
	 	 	 	 	 
	 Address: 	 	 Address:
	 AuraSound, Inc. 	 	 AuraSound, Inc.
	 11839 East Smith Avenue
              	 	 11839 East Smith
              Avenue
	 Santa Fe Springs, CA 90670
              	 	 Santa Fe Springs, CA
              90670
	 	 	 	 	 

    

     

     

    
      
        	 GGEC America Inc..	 	 
	 	 	 	 
	 By:	 /S/
                Jiaxi Huang	 	 
	 Name:	 Jiaxi Huang	 	 
	 Title:	 President	 	 
	 	 	 	 

      

    

     Address:
      

     1801
      E. Edingar Ave. #255.

     Santa
      Ana, CA 92705

     

    
      
        
        

      

      
        6CONSENT
      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 70 Maxess Road, Melville,
      New York (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:

     

    
      
        
        

      

      
        - 2 -

        
          

        

      

      
        
        

      

    

    

    “(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 Adler &
Hyman, 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]

     

    
      
        
        

      

      
        - 5 -

        
          

        

      

      
        
        

      

    

    

    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.

    

      
        	
                Borrower:

              
	 	 
	
                NU
                  HORIZONS ELECTRONICS CORP.

              
	 	 
	
                By:

              	
                /s/Kurt
                  Freudenberg

              
	 	
                Kurt
                  Freudenberg

              
	 	
                Executive
                  Vice President, Treasurer and

              
	 	
                Chief
                  Financial Officer

              
	 	 
	
                Guarantors:

              
	 
	
                NIC
                  COMPONENTS CORP.

              
	 	 
	
                By:

              	
                /s/Kurt
                  Freudenberg

              
	 	
                Kurt
                  Freudenberg

              
	 	
                Executive
                  Vice President, Treasurer and

              
	 	
                Chief
                  Financial Officer

              
	 	 
	
                NU
                  HORIZONS INTERNATIONAL CORP.

              
	 	 
	
                By:

              	
                /s/Kurt
                  Freudenberg

              
	 	
                Kurt
                  Freudenberg

              
	 	
                Executive
                  Vice President, Treasurer and

              
	 	
                Chief
                  Financial Officer

              
	 	 
	
                TITAN
                  SUPPLY CHAIN SERVICES CORP.

              
	 	 
	
                By:

              	
                /s/Kurt
                  Freudenberg

              
	 	
                Kurt
                  Freudenberg

              
	 	
                Executive
                  Vice President, Treasurer and

              
	 	
                Chief
                  Financial Officer

              
	 	 
	
                RAZOR
                  ELECTRONICS, INC.

              
	 	 
	
                By:

              	
                /s/Kurt
                  Freudenberg

              
	 	
                Kurt
                  Freudenberg

              
	 	
                Executive
                  Vice President, Treasurer and

              
	 	
                Chief
                  Financial Officer

              

      

       

      
        
          
          

        

        
          - 6 -

          
            

          

        

        
          
          

        

      

       

      
        	
                NuXCHANGE
                  B2B SERVICES, INC.

              
	 	 
	
                By:

              	
                /s/Kurt
                  Freudenberg

              
	 	
                Kurt
                  Freudenberg

              
	 	
                Executive
                  Vice President, Treasurer and

              
	 	
                Chief
                  Financial Officer

              
	 	 
	
                Administrative
                  Agent:

              
	 
	
                CITIBANK,
                  N.A.,

              
	
                as
                  Administrative Agent

              
	 	 
	
                By:

              	
                /s/Richard
                  Romano

              
	 	
                Richard
                  Romano

              
	 	
                Senior
                  Vice President

              
	 	 
	
                Documentation
                  Agent:

              
	 
	
                BANK
                  OF AMERICA, N.A.,

              
	
                as
                  Documentation Agent

              
	 	 
	
                By:

              	
                /s/Steven
                  J. Melicharek

              
	 	
                Steven
                  J. Melicharek

              
	 	
                Senior
                  Vice President

              
	 	 
	
                Syndication
                  Agent:

              
	 
	
                JPMORGAN
                  CHASE BANK, N.A.,

              
	
                as
                  Syndication Agent

              
	 	 
	
                By:

              	
                /s/John
                  K. Budzynski

              
	
                Name:

              	
                John
                  K. Budzynski

              
	
                Title:

              	
                Senior
                  Vice President

              
	 	 
	
                ISRAEL
                  DISCOUNT BANK OF NEW YORK, as Syndication Agent

              
	 	 
	
                By:

              	
                /s/Jeffrey
                  S. Ackerman

              
	
                Name: 

              	
                Jeffrey
                  S. Ackerman

              
	
                Title:

              	
                Senior
                  Vice President

              
	 	 
	
                By:

              	
                /s/Barry
                  Solomon

              
	
                Name:

              	
                Barry
                  Solomon

              
	
                Title:

              	
                First
                  Vice President

              

      

    

    
       

      
        
          
          

        

        
          - 7 -

          
            

          

        

        
          
          

        

      

    

    

      
        	
                Notice
                  Addresses:

              	
                Lenders:

              
	 	 	 
	
                CITIBANK,
                  N.A.

              	
                CITIBANK,
                  N.A.

              
	
                730
                  Veterans Memorial Highway

              	 	 
	
                Hauppauge,
                  NY 11788

              	
                By:

              	
                /s/Richard
                  Romano

              
	 	 	
                Richard
                  Romano

              
	 	 	
                Senior
                  Vice President

              
	 	 	 
	
                JPMORGAN
                  CHASE BANK, N.A.

              	
                JPMORGAN
                  CHASE BANK, N.A.

              
	
                395
                  North Service Road, Floor 3

              	 	 
	
                Melville,
                  NY 11747

              	
                By:

              	
                /s/John
                  K. Budzynski

              
	 	
                Name:

              	
                John
                  K. Budzynski

              
	 	
                Title:

              	
                Senior
                  Vice President

              
	 	 	 
	
                ISRAEL
                  DISCOUNT BANK OF NEW YORK

              	
                ISRAEL
                  DISCOUNT BANK OF NEW YORK

              
	
                511
                  Fifth Avenue

              	 	 
	
                New
                  York, NY 10017

              	
                By:

              	
                /s/Jeffrey
                  S. Ackerman

              
	 	
                Name:

              	
                Jeffrey
                  S. Ackerman

              
	 	
                Title:

              	
                Senior
                  Vice President

              
	 	 	 
	 	
                By:

              	
                /s/Edward
                  Behnen

              
	 	
                Name: 

              	
                Edward
                  Behnen

              
	 	
                Title:

              	
                AVP

              
	 	 	 
	
                BANK
                  OF AMERICA, N.A.

              	
                BANK
                  OF AMERICA, N.A.

              
	
                1185
                  Avenue of the Americas

              	 	 
	
                New
                  York, NY 10036

              	
                By:

              	
                /s/Steven
                  J. Melicharek

              
	
              	 	
                Steven
                  J. Melicharek

              
	
              	 	
                Senior
                  Vice President

              
	 	 	 
	
                SOVEREIGN
                  BANK

              	
                SOVEREIGN
                  BANK

              
	
                330
                  South Service Road

              	 	 
	
                Melville,
                  NY 11747

              	
                By:

              	
                /s/Christine
                  Gerula

              
	 	 	
                Christine
                  Gerula

              
	 	 	
                Senior
                  Vice President

              
	 	 	 
	
                HSBC
                  BANK USA, NATIONAL 

              	
                HSBC
                  BANK USA, NATIONAL

              
	
                ASSOCIATION

              	
                ASSOCIATION

              
	
                534
                  Broad Hollow Road

              	 	 
	
                Melville,
                  NY 11747

              	
                By:

              	
                /s/Christopher
                  J. Mendelsohn

              
	 	 	
                Christopher
                  J. Mendelsohn

              
	 	 	
                First
                  Vice President

              

      

       

      
        
          
          

        

        
          - 8 -

          
            

          

        

        
          
          

        

      

       

      
        	
                CAPITAL
                  ONE, N.A.,

              	
                CAPITAL
                  ONE, N.A.,

              
	
                275
                  Broadhollow Road

              	
                formerly
                  known as North Fork Bank

              
	
                Melville,
                  NY 11747

              	 	 
	 	
                By:

              	    

	 	 	
                Kevin
                  Brown

              
	 	 	
                Senior
                  Vice President

              
	 	 	 
	
                BANK
                  LEUMI USA

              	
                BANK
                  LEUMI USA

              
	
                562
                  Fifth Ave.

              	 	 
	
                New
                  York, NY 10036

              	
                By:

              	
                /s/Eric
                  A. Halpern

              
	 	
                Name: 

              	
                Eric
                  A. Halpern

              
	 	
                Title:

              	
                Senior
                  Vice President

              
	 	 	 
	
                NEW
                  YORK COMMERCIAL BANK

              	
                NEW
                  YORK COMMERCIAL BANK

              
	
                1
                  Jericho Plaza

              	 	 
	
                Jericho,
                  NY 11753

              	
                By: 

              	
                /s/
                  Robert T. Stratford, Jr.

              
	 	 	
                Robert
                  T. Stratford, Jr.

              
	 	 	
                Senior
                  Vice President

              

      

    

     

    
      
        
        

      

      
        - 9 -

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