-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KEDNSjruDziCy9BSaewDpJ2YVzVH3EM0aXvpqS6hDd0az6K/VZqWFQ/7ju07jjVU LbfD1ho6cFX8imhlqmpE8g== 0001019056-05-000861.txt : 20050810 0001019056-05-000861.hdr.sgml : 20050810 20050810152631 ACCESSION NUMBER: 0001019056-05-000861 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050808 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050810 DATE AS OF CHANGE: 20050810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALL AMERICAN SEMICONDUCTOR INC CENTRAL INDEX KEY: 0000818074 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065] IRS NUMBER: 592814714 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-16207 FILM NUMBER: 051013421 BUSINESS ADDRESS: STREET 1: 16115 N W 52ND AVENUE CITY: MIAMI STATE: FL ZIP: 33014 BUSINESS PHONE: 3056218282 MAIL ADDRESS: STREET 1: 16115 NW 52ND AVENUE CITY: MIAMI STATE: FL ZIP: 33014 8-K 1 aa_8k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 8, 2005 All American Semiconductor, Inc. (Exact name of registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation) 0-16207 59-2814714 (Commission File Number) (I.R.S. Employer Identification No.) 16115 Northwest 52nd Avenue, Miami, Florida 33014 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (305) 621-8282 Not Applicable (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 1.01 Entry into a Material Definitive Agreement. On August 8, 2005, All American Semiconductor, Inc. (the "Company") entered into a second amendment (the "Second Amendment") to the Credit Agreement dated May 14, 2003 (the "Credit Amendment") among the Company, as borrower, and Harris N.A., successor by merger to Harris Trust and Savings Bank, as a lender and administrative agent, U.S. Bank National Association, as a lender and co-agent, and the other lenders party thereto (previously filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2003), as previously amended by the First Amendment to Credit Agreement (the "First Amendment"), dated as of June 11, 2004 (previously filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2004) (the First Amendment and the Second Amendment, together with the Credit Agreement, collectively the "Credit Facility").The Second Amendment provides, among other things, for: an increase in the line of credit facility from $85 million to $100 million; an extension of the expiration date of the Credit Facility from May 14, 2006 to May 31, 2009; improved pricing levels based on the Company's debt service coverage ratio; an increase in the advance rate from 40% to 50% on certain of the Company's inventory in determining the borrowing base under the Credit Facility; a reduction in the debt service coverage ratio from 1.20:1.0 to 1.10:1.0 beginning with the quarterly period ending September 30, 2005; and for a reduction in the unused commitment fee to .15%. Borrowings under the Credit Facility, after giving effect to the new pricing levels under the Second Amendment, bear interest at one of five pricing levels dependent on the Company's debt service coverage ratio at the quarterly pricing date (as defined), and are secured by all of the Company's assets including accounts receivable, inventories and equipment. At the first pricing level, at the Company's option, the rate will be either (a) .25% below the greater of the Federal funds rate plus .5% and prime or (b) 1.75% over LIBOR. At the second level, at the Company's option, the rate will be either (a) the greater of the Federal funds rate plus .5% and prime or (b) 2.00% over LIBOR. At the third level, at the Company's option, the rate will be either (a) .25% over the greater of the Federal funds rate plus .5% and prime or (b) 2.25% over LIBOR. At the fourth level, at the Company's option, the rate will be either (a) .5% over the greater of the Federal funds rate plus .5% and prime or (b) 2.50% over LIBOR. At the fifth level, at the Company's option, the rate will be either (a) ..75% over the greater of the Federal funds rate plus .5% and prime or (b) 2.75% over LIBOR. The amounts that the Company may borrow under the Credit Facility are based upon specified percentages of the Company's eligible accounts receivable and inventories (as defined) and the Company is required to comply with certain affirmative and negative covenants and certain financial ratios. The covenants, among other things, place limitations and restrictions on the Company's borrowings, investments, capital expenditures and transactions with affiliates; prohibit dividends and acquisitions; and prohibit stock redemptions in excess of an aggregate cost of $2.0 million during the term of the Credit Facility. The Credit Facility requires the Company to maintain certain minimum levels of tangible net worth throughout the term of the Credit Facility as well as a minimum debt service coverage ratio and a minimum inventory turnover level, each tested on a quarterly basis. The Company also issued a press release on August 10, 2005 announcing its entering into the Second Amendment, a copy of which is also filed herewith and incorporated herein by this reference. 1 The foregoing is a brief description of the Credit Facility, including the changes provided by the Second Amendment, and is qualified in its entirety by reference to the Credit Agreement (previously filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 and incorporated herein by this reference), as amended by the First Amendment (previously filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 and incorporated herein by this reference) and the Second Amendment (filed as Exhibit 10.1 to this report and incorporated herein by this reference). The Second Amendment was executed on August 8, 2005 and became effective as of that date. Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information included in Item 1.01 of this report is incorporated by reference into this Item 2.03. Item 9.01 Financial Statements and Exhibits. (c) Exhibits Exhibit No. Exhibit Description ----------- ------------------- 10.1 Second Amendment to Credit Agreement, dated as of August 8, 2005, among the Company, as borrower, and Harris N.A., successor by merger to Harris Trust and Savings Bank, as a lender and administrative agent, U.S. Bank National Association, as a lender and co-agent, and the other lenders party thereto. 99 Press Release dated August 10, 2005. 2 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ALL AMERICAN SEMICONDUCTOR, INC. Date: August 10, 2005 By: /s/ HOWARD L. FLANDERS ----------------------------------- Howard L. Flanders Executive Vice President and Chief Financial Officer 3 EXHIBIT INDEX ------------- Exhibit No. Exhibit Description ----------- ------------------- 10.1 Second Amendment to Credit Agreement, dated as of August 8, 2005, among the Company, as borrower, and Harris N.A., successor by merger to Harris Trust and Savings Bank, as a lender and administrative agent, U.S. Bank National Association, as a lender and co-agent, and the other lenders party thereto. 99 Press Release dated August 10, 2005. 4 EX-10.1 3 ex10_1.txt EXHIBIT 10.1 Exhibit 10.1 SECOND AMENDMENT TO CREDIT AGREEMENT This SECOND AMENDMENT TO CREDIT AGREEMENT ("Amendment") is dated as of August 8, 2005 by and among All American Semiconductor, Inc., a Delaware corporation (the "Company"), Harris N.A., successor by merger to Harris Trust and Savings Bank, as Administrative Agent (the "Agent"), U.S. Bank National Association, as Co-Agent (the "Co-Agent") and the lenders from time to time party thereto (the "Lenders"). WHEREAS, the Company, the Agent, the Co-Agent and the Lenders are parties to a certain Credit Agreement dated as of May 14, 2003, as amended by that certain First Amendment to Credit Agreement dated June 11, 2004 (as such agreement may have been or may hereafter be amended, supplemented or otherwise modified from time to time, the "Credit Agreement"); and WHEREAS, the Company has requested that the Agent and the Lenders agree to amend certain provisions of the Credit Agreement, as more particularly set forth herein; NOW THEREFORE, in consideration of the mutual conditions and agreements set forth in the Credit Agreement and this Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Definitions. Capitalized terms used in this Amendment, unless otherwise defined herein, shall have the meanings ascribed to such terms in the Credit Agreement. 2. Amendments. Subject to prior satisfaction of the conditions set forth in Section 4 below and in reliance on the representations and warranties set forth in Section 5 below, the Credit Agreement is hereby amended as follows: (a) Section 1.12(b) (Commitment Terminations) of the Credit Agreement is hereby amended and restated in its entirety as follows: "(b) On the effective date of any termination of all of the Revolving Credit Commitments and prepayment of all the Obligations, if such termination and prepayment occurs on or before August 31, 2007, the Borrower shall pay a prepayment premium to the Administrative Agent for the ratable benefit of the Lenders in proportion to their respective Revolver Percentages of the Revolving Credit Commitments, as liquidated damages for the loss of bargain and not as a penalty, in an amount equal to the percentage set forth below of the amount of the relevant Revolving Credit Commitments: PREPAYMENT PREMIUM SHALL BE THE FOLLOWING PERCENTAGE OF THE IF PREPAYMENT OCCURS DURING THE PERIOD REVOLVING CREDIT COMMITMENTS FROM AND INCLUDING TO AND INCLUDING August 8, 2005 August 31, 2007 1.0%" (b) The last sentence of Section 2.1(d) (Audit Fees) of the Credit Agreement is hereby amended and restated in its entirety as follows: "Notwithstanding the foregoing, in the absence of any Default or Event of Default, the Borrower shall not be required to pay the Administrative Agent or any Lender for the charges, costs or expenses of more than 2 such audits per calendar year." (c) The grid contained in the definition of "Applicable Margin" set forth in Section 5.1 (Definitions) of the Credit Agreement is hereby amended and restated in its entirety as follows:
APPLICABLE MARGIN APPLICABLE MARGIN FOR BASE RATE LOANS FOR EURODOLLAR UNDER REVOLVING LOANS UNDER APPLICABLE CREDIT AND REVOLVING CREDIT MARGIN FOR DEBT SERVICE COVERAGE REIMBURSEMENT AND LETTER OF CREDIT COMMITMENT FEES "LEVEL RATIO FOR SUCH PRICING DATE OBLIGATIONS SHALL BE: FEES SHALL BE: SHALL BE: I Greater than 2.75 to 1.0 -0.25% 1.75% 0.15% II Less than or equal to 2.75 to 0.00% 2.00% 0.15% 1.0, but greater than 2.00 to 1.0 III Less than or equal to 2.00 to 0.25% 2.25% 0.15% 1.0, but greater than 1.25 to 1.0 IV Less than or equal to 1.25 to 0.50% 2.50% 0.15% 1.0, but greater than 1.05 to 1.0 V Less than or equal to 1.05 to 0.75% 2.75% 0.15%" 1.0
(d) Clause (a) of the definition of "Borrowing Base" set forth in Section 5.1 (Definitions) of the Credit Agreement is hereby amended and restated in its entirety as follows: "(a) the sum of (i) up to 85% of the difference between the then outstanding unpaid amount of Eligible Receivables (other than foreign insured Eligible Receivables described in clause (g)(ii) of the definition of Eligible Receivables) less any and all returns, rebates, discounts, claims, credits, allowances and/or finance charges of any nature at any time issued, owing, 2 available to or claimed by Account Debtors, granted, outstanding or payable in connection with such Eligible Receivables at such time and (ii) up to 90% of the difference between the then outstanding unpaid amount of foreign insured Eligible Receivables described in clause (g)(ii) of the definition of Eligible Receivables less any and all returns, rebates, discounts, claims, credits, allowances and/or finance charges of any nature at any time issued, owing, available to or claimed by Account Debtors, granted, outstanding or payable in connection with such Eligible Receivables at such time; plus" (e) Clause (b) of the definition of "Borrowing Base" set forth in Section 5.1 (Definitions) of the Credit Agreement is hereby amended and restated in its entirety as follows: "(b) the least of (i) $53,000,000, (ii) the sum of (w) up to 50% of the value (computed at the lower of market or cost using the first-in first-out method of Inventory valuation applied by the Borrower in accordance with GAAP but excluding from any such value inventoriable variances (defined herein to mean that portion of capitalized overhead costs which represent the portion of such costs in excess of standard overhead costs which are needed to state the Borrower's Inventory at actual FIFO cost and intercompany profits associated with intercompany sales)) of Eligible Inventory other than in-transit Eligible Inventory plus (x) up to 40% of the Inventory Value (as computed above) of Eligible Slow-Moving Inventory plus (y) the lesser of (A) up to 20% of the value (as computed above) of Eligible Non-Franchise Inventory other than in-transit Eligible Non-Franchise Inventory and (B) $600,000 plus (z) the lesser of (A) up to 50% of the value of in-transit Eligible Inventory and in-transit Eligible Non-Franchise Inventory and (B) $1,500,000; and (iii) 100% of the amount derived pursuant to clause (a) above;" (f) Clause (j) of the definition of "Eligible Inventory" set forth in Section 5.1 (Definitions) of the Credit Agreement is hereby amended and restated in its entirety as follows: "(j) [Intentionally omitted];" (g) Clause (d) of the definition of "Eligible Receivables" set forth in Section 5.1 (Definitions) of the Credit Agreement is hereby amended and restated in its entirety as follows: "(d) it has not remained unpaid in whole or in part more than 90 days from and after its invoice date; or, in the case of an aggregate amount of up to $5,000,000 of Receivables subject to 30 to 60 day extended payment terms, it has not remained unpaid in whole or in part more than 120 days after its invoice date;" 3 (h) The definition of "Revolving Credit Commitment" set forth in Section 5.1 (Definitions) of the Credit Agreement is hereby amended and restated in its entirety as follows: " 'Revolving Credit Commitment' means, as to any Lender, the obligation of such Lender to make Revolving Loans and to participate in Letters of Credit issued for the account of the Borrower hereunder in an aggregate principal or face amount at any one time outstanding not to exceed the amount set forth opposite such Lender's name on Schedule 1 attached hereto and made a part hereof, as the same may be reduced or modified at any time or from time to time pursuant to the terms hereof. The Borrower and the Lenders acknowledge and agree that the Revolving Credit Commitments of the Lenders aggregate $100,000,000 on the date hereof." (i) The definition of "Slow-Moving Inventory" set forth in Section 5.1 (Definitions) of the Credit Agreement is hereby amended and restated in its entirety as follows: " 'Slow-Moving Inventory' means Inventory that is aged more than 12 months, from the date of last receipt." (j) The definition of "Termination Date" set forth in Section 5.1 (Definitions) of the Credit Agreement is hereby amended and restated in its entirety as follows: " 'Termination Date' means May 31, 2009, or such earlier date on which the Revolving Credit Commitments are terminated in whole pursuant to Sections 1.12, 9.2 or 9.3 hereof." (k) The following definition of "Eligible Non-Franchise Inventory" is hereby inserted into Section 5.1 (Definitions) of the Credit Agreement in appropriate alphabetical order: " 'Eligible Non-Franchise Inventory' means any Inventory other than (i) Franchise Inventory and (ii) up to $2,500,000 of Inventory of the AVED Memory division of AVED Industries, Inc. consisting of memory components or memory modules, which Inventory satisfies all eligibility requirements contained in the definition of Eligible Inventory other than the requirement set forth in clause (a) of such definition." (l) The following definition of "Eligible Slow Moving Inventory" is hereby inserted into Section 5.1 (Definitions) of the Credit Agreement in appropriate alphabetical order: " 'Eligible Slow-Moving Inventory' means Inventory that constitutes Eligible Inventory, except that it does not comply with clause (d) of the definition thereof." 4 (m) The following definition of "Inventory Value" is hereby inserted into Section 5.1 (Definitions) of the Credit Agreement in appropriate alphabetical order: " 'Inventory Value' means that the sum of (a) 100% of the value of Inventory aged more than 12 months from the date of last receipt, but less than or equal to 18 months from the date of last receipt, (b) 50% of the value of Inventory aged more than 18 months from the date of last receipt, but less than or equal to 36 months from the date of last receipt, and (c) 0% of the value of Inventory aged more than 36 months." (n) Clause (g) of Section 8.9 (Investments, Acquisitions, Loans and Advances) of the Credit Agreement is hereby amended and restated in its entirety as follows: "(g) intercompany advances and capital contributions made from time to time by the Borrower to AASI UK, at a time when no Event of Default is in existence (unless otherwise agreed by the Required Lenders), in an aggregate amount not to exceed $5,000,000 at any time outstanding;" (o) Clause (n) of Section 8.9 (Investments, Acquisitions, Loans and Advances) of the Credit Agreement is hereby amended and restated in its entirety as follows: "(n) intercompany advances, capital contributions and other investments made from time to time by the Borrower to AASI Korea, at a time when no Event of Default is in existence (unless otherwise agreed by the Required Lenders), in an aggregate amount not to exceed $4,000,000 at any time outstanding; and;" (p) Clause (c) of Section 8.22 (Financial Covenants) of the Credit Agreement is hereby amended and restated in its entirety as follows: "(c) Debt Service Coverage Ratio. The Debt Service Coverage Ratio shall not, on the last day of any calendar quarter in any period set forth below, for the 12 month period ending on such date, be less than the ratio set forth below opposite such period: Period Ratio ------ ----- September 30, 2005 and thereafter 1.10 to 1.0 (q) Schedule 1 (Revolving Credit Commitments) to the Credit Agreement is hereby amended and restated in its entirety as set forth on Exhibit A attached hereto. 3. Addition of New Lender. By its execution hereof, FB Commercial Finance, Inc. ("FB") has agreed to become a Lender under the Credit Agreement and to provide a Revolving Credit Commitment equal to $15,000,000. 5 4. Conditions. The effectiveness of this Amendment is subject to the following conditions precedent: (a) The Company shall have executed and delivered this Amendment, together with such other documents, agreements and instruments as Agent may require, each in form and substance satisfactory to Agent, including, without limitation, each Reaffirmation of Guaranty attached hereto, fully-executed Second Amended and Restated Revolving Notes ("A/R Notes") or in the case of FB, a Revolving Note (the "FB Revolving Note"), issued to each Lender in an aggregate principal amount of $100,000,000, fully-executed certified board resolutions of the Company authorizing the execution of this Amendment and the A/R Notes and the FB Revolving Note, a good standing certificate of the Company from the State of Delaware, the Company's Certificate of Incorporation certified by the State of Delaware, and a legal opinion issued by the Company's counsel; (b) no Default or Event of Default shall have occurred and be continuing; and (c) the Company shall have paid to the Agent, for the pro rata benefit of the Lenders, an amendment fee equal to $85,000. 5. Representations and Warranties. To induce the Agent and the Lenders to enter into this Amendment, the Company represents and warrants to the Agent and the Lenders that (a) the execution, delivery and performance of this Amendment has been duly authorized by all requisite corporate action on the part of the Company and that this Amendment has been duly executed and delivered by the Company, (b) each of the representations and warranties set forth in Section 6 of the Credit Agreement (other than those which, by their terms, specifically are made as of a certain date prior to the date hereof) are true and correct in all material respects as of the date hereof and after giving effect to the terms hereof, and (c) no Default or Event of Default shall have occurred and be continuing before or immediately after giving effect to this Amendment. 6. References. Any reference to the Credit Agreement contained in any document, instrument or agreement executed in connection with the Credit Agreement shall be deemed to be a reference to the Credit Agreement as modified by this Amendment. 7. Severability; Counterparts. Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable. This Amendment may be executed in one or more counterparts, each of which shall constitute an original, but all of which taken together shall be one and the same instrument. 8. Ratification. The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions of the Credit Agreement and shall not be deemed to be a consent to the modification or waiver of any other term or condition of the 6 Credit Agreement. Except as expressly modified and superseded by this Amendment, the terms and provisions of the Credit Agreement are ratified and confirmed and shall continue in full force and effect. 9. Return of Revolving Notes. Each Lender (other than FB) agrees that promptly after the effectiveness of this Amendment and delivery to such Lender of the applicable A/R Note, it shall deliver to Agent, and Agent shall promptly deliver to the Company for cancellation, such Lender's existing Revolving Note. 7 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed under seal and delivered by their respective duly authorized officers on the date first written above. ALL AMERICAN SEMICONDUCTOR, INC., a Delaware corporation By: /s/ BRUCE M. GOLDBERG ---------------------------------------- Name: Bruce M. Goldberg ----------------------------------- Title: President and CEO ---------------------------------- HARRIS N.A., SUCCESSOR BY MERGER TO HARRIS TRUST AND SAVINGS BANK, as Administrative Agent and as a Lender By: /s/ JEAN R. ELIE ---------------------------------------- Name: Jean R. Elie ----------------------------------- Title: Vice President ---------------------------------- U.S. BANK NATIONAL ASSOCIATION, as Co-Agent and as a Lender By: /s/ THOMAS VISCONTI ---------------------------------------- Name: Thomas Visconti ----------------------------------- Title: Vice President ---------------------------------- GMAC COMMERCIAL FINANCE LLC, as a Lender By: /s/ PAMELA D. PETRICK ---------------------------------------- Name: Pamela D. Petrick ----------------------------------- Title: First Vice President ---------------------------------- PNC BANK, NATIONAL ASSOCIATION, as a Lender By: /s/ BRUCE METTEL ---------------------------------------- Name: Bruce Mettel ----------------------------------- Title: Vice President ---------------------------------- 8 FB COMMERCIAL FINANCE, INC., as a Lender By: /s/ WALTER CASTILLO ---------------------------------------- Name: Walter Castillo ----------------------------------- Title: Vice President ---------------------------------- 9 EXHIBIT A --------- SCHEDULE 1 TO CREDIT AGREEMENT Revolving Credit Commitments NAME OF LENDER REVOLVING CREDIT COMMITMENT Harris N.A., successor by merger to Harris Trust $ 25,000,000.00 and Savings Bank U.S. Bank National Association $ 20,000,000.00 GMAC Commercial Finance LLC $ 20,000,000.00 PNC Bank, National Association $ 20,000,000.00 FB Commercial Finance, Inc. $ 15,000,000.00 ---------------------------- TOTAL $100,000,000.00 REAFFIRMATION OF GUARANTY In order to induce Harris N.A., successor by merger to Harris Trust and Savings Bank, as Administrative Agent ("Agent") for various lenders ("Lenders"), and Lenders to execute and deliver that certain Second Amendment to Credit Agreement of even date herewith (the "Amendment"), each of the undersigned hereby reaffirms its obligations under that certain Master Corporate Guaranty dated as of May 14, 2003 by it in favor of Agent (the "Guaranty"). Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Credit Agreement dated as of May 14, 2003, as amended by that certain First Amendment to Credit Agreement dated as of June 11, 2004, by and among Agent, Lenders and All American Semiconductor, Inc. (as the same has been, and may be from time to time, amended, supplemented or otherwise modified, the "Credit Agreement"). Each of the undersigned further agrees that the Guaranty shall remain in full force and effect following the execution and delivery of the Amendment and that all references to the "Credit Agreement" in the Guaranty executed by it shall be deemed to refer to the Credit Agreement as amended by the Amendment. Except as set forth in the immediately preceding sentence, the Guaranty shall remain unmodified and in full force and effect. This Reaffirmation of Guaranty is dated as of August 8, 2005. Access Micro Products, Inc. All American A.V.E.D., Inc. All American Added Value, Inc. All American Semiconductor of Atlanta, Inc. All American Semiconductor of Chicago, Inc. All American Semiconductor of Florida, Inc. All American Semiconductor of Huntsville, Inc. All American Semiconductor of Massachusetts, Inc. All American Semiconductor of Michigan, Inc. All American Semiconductor of Minnesota, Inc. All American Semiconductor of New York, Inc. All American Semiconductor of Philadelphia, Inc. All American Semiconductor of Phoenix, Inc. All American Semiconductor of Portland, Inc. All American Semiconductor of Rockville, Inc. All American Semiconductor of Salt Lake, Inc. All American Semiconductor of Texas, Inc. All American Semiconductor-Northern California, Inc. All American Semiconductor of Washington, Inc. All American Technologies, Inc. All American Transistor of California, Inc. Aved Industries, Inc. Palm Electronics Manufacturing Corp. All American Semiconductor of Ohio, Inc. All American Semiconductor of Wisconsin, Inc. All American Semiconductor of Rhode Island, Inc. All American IDT, Inc. AGD China, Inc. Each by: /s/ BRUCE M. GOLDBERG ------------------------------------------- Its: President and CEO AMERICAPITAL, LLC By: All American Semiconductor, Inc., its sole member By: /s/ BRUCE M. GOLDBERG ------------------------------------------------ Its: President & CEO REAFFIRMATION OF GUARANTY In order to induce Harris N.A., successor by merger to Harris Trust and Savings Bank, as Administrative Agent ("Agent") for various lenders ("Lenders"), and Lenders to execute and deliver that certain Second Amendment to Credit Agreement of even date herewith (the "Amendment"), the undersigned hereby reaffirms its obligations under that certain Corporate Guaranty and Covenant dated as of May 14, 2003 by it in favor of Agent (the "Guaranty"). Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Credit Agreement dated as of May 14, 2003, as amended by that certain First Amendment to Credit Agreement dated as of June 11, 2004, by and among Agent, Lenders and All American Semiconductor, Inc. (as the same has been, and may be from time to time, amended, supplemented or otherwise modified, the "Credit Agreement"). The undersigned further agrees that the Guaranty shall remain in full force and effect following the execution and delivery of the Amendment and that all references to the "Credit Agreement" in the Guaranty executed by it shall be deemed to refer to the Credit Agreement as amended by the Amendment. Except as set forth in the immediately preceding sentence, the Guaranty shall remain unmodified and in full force and effect. This Reaffirmation of Guaranty is dated as of August 8, 2005. ALL AMERICAN SEMICONDUCTOR OF CANADA, INC. By: /s/ BRUCE M. GOLDBERG ------------------------------- Its: President and CEO EX-99 4 ex_99.txt EXHIBIT 99 Exhibit 99 FOR IMMEDIATE RELEASE --------------------- ALL AMERICAN SEMICONDUCTOR RECEIVES INCREASE IN CREDIT FACILITY Amendment Boosts Line to $100 Million to Support Growth; Term Extended and Interest Rate Margins Improved Miami, FL - August 10, 2005 -- All American Semiconductor, Inc. (The Nasdaq Stock Market:SEMI), a leading distributor of electronic components, today announced that it has amended its revolving line of credit facility with a consortium of banks led by Harris N.A. The amendment provides, among other things, for: an increase in the credit facility from $85 million to $100 million; an extension of the expiration date from May 14, 2006 to May 31, 2009; and improved interest rate margins based on the Company's debt service coverage ratio. Howard L. Flanders, Executive Vice President and Chief Financial Officer of All American, commented, "We are very pleased with this vote of confidence from our bank group. The increased facility and the significantly improved terms provide All American with greater flexibility to address our working capital needs as we pursue our initiatives for continued growth and improved profitability." All American is recognized as the nation's 4th largest distributor of semiconductors and the 9th largest electronic components distributor overall. The Company has offices in 36 strategic locations throughout North America, as well as operations in both Asia and Europe. To the extent that this press release discusses future performance, expectations, beliefs or intentions about our growth, profitability, bookings, sales, markets or otherwise makes statements about market conditions and business activity, the statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results, performance or achievements to differ materially from the statements made. Factors that could adversely affect the Company's future results, performance or achievements include, without limitation: the strength of industry and market conditions and business activity being less than we believe or failing to continue and/or further improve; a slowdown in sales; the health of the overall economy; insufficient funds from operations, from the Company's credit facility and from other sources (debt and/or equity) to support the Company's operations, including being able to obtain additional debt and/or equity on terms satisfactory to the Company; an increase in interest rates; and the other risks and factors including those detailed in the Company's reports on Forms 10-K and Forms 10-Q and other press releases. The Company undertakes no obligation to update publicly or revise any forward-looking statements, business risks and/or uncertainties. CONTACT: Bruce M. Goldberg, CEO Howard L. Flanders, CFO (305) 621-8282 x1417 -----END PRIVACY-ENHANCED MESSAGE-----