AMENDMENT TO
STOCK PURCHASE AGREEMENT
Amendment to Stock Purchase Agreement (this "Amendment") dated
as of September 24, 1998, by and between Questron Technology, Inc., a Delaware
corporation ("Questron"), Fortune Industries, Inc., a Texas corporation
("Fortune") and the stockholders of Fortune listed on the signature pages hereto
amending the Stock Purchase Agreement, dated as of June 12, 1998, and first
amended on July 29, 1998 (the "First Amendment"), by and among Questron, Fortune
and the stockholders of Fortune listed on Schedule 1.1 thereto (the
"Agreement").
RECITALS
WHEREAS, the parties have entered into the Agreement and the
First Amendment (the Agreement and the First Amendment, collectively, the "Stock
Purchase Agreement");
WHEREAS, the parties hereto desire to amend the Stock Purchase
Agreement in certain respects as set forth in this Amendment; and
WHEREAS, unless otherwise defined herein, capitalized terms
shall have the same meanings herein as in the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree to amend the Stock Purchase
Agreement as follows:
1. Section 1.2 (a) of the Stock Purchase Agreement is hereby
amended and restated in its entirety to read as follows:
The "Initial Purchase Price" will equal $13,014,174 payable as
follows: (i) wire transfers (or certified checks) in an aggregate amount equal
to $9,944,419 (which includes an adjustment of $523,614 for the Company's net
profit as of March 31, 1998) plus the Initial Purchase Price Adjustment (as
defined below) (said amount being hereinafter referred to as the "Initial Cash
Consideration"); and (ii) delivery of 518,102 shares of Questron's common stock,
par value $0.001 per share (the "Questron Common Stock"), which, based on an
assumed price per share of $5.925, has a value equal to $3,069,754 (the "Initial
Questron Common Stock"). The "Initial Purchase Price Adjustment" shall equal
ninety percent (90%) of the Company's income before taxes (as determined in
accordance with generally accepted accounting principles, consistently applied
to the Company prior to Closing ("GAAP")) for the period from April 1, 1998
through the last day of the full calendar month preceding the
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Closing (as hereinafter defined) (the "Adjustment Period") less (i) all
distributions declared and paid by the Company to any of its stockholders during
such period, and (ii) as set forth on Schedule 1.2(a)(i), accruals for the
employee bonuses to certain of the Company's employees and accruals for certain
other expenses to be paid by the Company. On the one year anniversary of the
Closing Date, Questron shall calculate the price (the "Anniversary Date Price")
of the Questron Common Stock based on the average last reported sale price for
the Questron Common Stock for the five (5) trading days ending on the third
trading day immediately prior to the one year anniversary of the Closing Date.
If the Anniversary Date Price is $4.50 or less, Questron shall deliver to the
Sellers 164,065 shares of Questron Common Stock. If the Anniversary Date Price
is greater than $4.50 and less than $5.925, Questron shall deliver to the
Sellers the number of shares of Questron Common Stock equal to the difference
between (i) the number of shares of Questron Common Stock having a value of
$3,069,754 calculated on the basis of the Anniversary Date Price, and (ii) the
Initial Questron Common Stock, up to a maximum of 164,065 shares of Questron
Common Stock. If the Anniversary Date Price is $5.925 or greater, no additional
shares will be issued. Any shares of Questron Common Stock issued on the one
year anniversary of the Closing Date pursuant to this Section 1.2(a) are
referred to herein as "Additional Questron Common Stock". The shares of
Additional Questron Common Stock shall be allocated among the Accredited
Investor Sellers in the same proportion as the shares of Initial Questron Common
Stock are allocated among the Accredited Investor Sellers. The Initial Cash
Consideration and the Initial Questron Common Stock shall be allocated among the
Sellers as provided on Schedule 1.2(a)(ii). Only the Sellers who are identified
on Schedule 1.2(a)(ii) as accredited investors (the "Accredited Investor
Sellers") shall receive shares of the Initial Questron Common Stock and
Additional Questron Common Stock."
2. Schedule 1.2(a)(ii) is amended and restated in its entirety
as set forth on Exhibit A hereto.
3. Except to the extent each is expressly amended by the terms
of this Amendment, all terms and conditions of the Stock Purchase Agreement and
all other instruments and agreements executed thereunder or in connection
therewith shall remain in full force and effect in accordance with their terms.
This Amendment may be amended, supplemented or otherwise modified only by
written instrument executed by the parties hereto.
4. This Amendment may be executed in any number of
counterparts, and by the different parties hereto on separate counterparts, each
of which shall constitute one and the same agreement, fully effective upon the
execution of at least one counterpart by each party regardless of whether or not
the execution by all parties shall appear on any single counterpart.
5. This Amendment shall become effective on September __, 1998
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IN WITNESS WHEREOF, Questron, Fortune and the stockholder of
Fortune have caused this Amendment to be signed as of the day and year first
above written.
QUESTRON TECHNOLOGY, INC. FORTUNE INDUSTRIES, INC.
By: By:
Name: Name:
Title: Title:
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XXXX X. XXXXXXX
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XXXXXXX X. XXXXXXXXX
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XXXXXXX X. XXXXX
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DOC. X. XXXXXXXX
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XXXXXXX X. XXXXXXX
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XXXXXXX XXXXXXX
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XXXXX XXXXXXXX
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XXXXXXX X. XXXXX
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XXXXXX XXXXXXX, JR.
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XXXXXXX X. XXXXXXX
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Fortune Industries, Inc.
EXHIBIT A
Schedule 1.2(a)(ii)
Initial Purchase Price
Investor
Shareholders % Status* Cash Shares
------------------------------ -------------- --------------- -------------------- ------------------
Xxxxxxx 2.4153 A $235,834 13,249
Xxxxxxxxx 6.4926 A 633,949 35,613
Xxxxx 1.0388 A 101,430 5,698
Xxxxxxxx 4.9344 A 481,803 27,066
Xxxxxxx 1.9218 250,109
Xxxxxxx 79.573 A 7,769,646 436,476
Drechel 0.7661 99,702
XxXxxxxx 0.7531 98,010
Xxxxxxx 0.4415 57,458
Xxx 1.0129 131,821
Xxxxx 0.5012 65,227
Xxxxxxx 0.1493 19,430
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$9,944,419 518,102
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* A means that such Seller is an accredited investor as such term is
defined in Regulation D under the Act.
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