AMENDMENT TO
STOCK PURCHASE AGREEMENT
Amendment to Stock Purchase Agreement (this "Amendment") dated as of
September 18, 1998, by and between Questron Technology, Inc., a Delaware
corporation ("Questron"), Fas-Tronics, Inc., a Texas corporation
("Fas-Tronics"), Xxxxxxx Xxxxxxxxxx and Xxxxxxx Xxxxxxxxxx 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, Fas- Tronics, Xxxxxxx
Xxxxxxxxxx and Xxxxxxx Xxxxxxxxxx (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. The first sentence of Section 1.2 is hereby amended and restated in
its entirety to read as follows:
"Purchase Price Consideration and Payment for Shares. Questron shall
acquire 100% of the issued and outstanding stock of the Company for a total
purchase price up to $13,500,000, which will consist of the Initial Purchase
Price, and the 1999 Deferred Purchase Price, in each case, as defined below."
2. 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 $9,500,000 payable as
follows: (i) wire transfers (or certified checks) in an aggregate amount equal
to $7,000,000 (x) less the assumption of the net debt as of June 30, 1998
(stated debt net of cash and cash equivalents of the Company reflected on
Schedule 1.2(a) ("Net Debt")) (y) less any distributions made by the
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Company to its shareholders from April 1, 1998 to the Closing Date (as
hereinafter defined) in excess of $100,000 and (z) plus interest on $7,000,000
less the Net Debt at an interest rate of 9.5% per annum from April 1, 1998 to
the Closing Date (said amount being hereinafter referred to as the "Initial Cash
Consideration"); and (ii) delivery of 421,941 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 $2,500,000 (the "Initial
Questron Common Stock"). 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
133,615 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 $2,500,000
calculated on the basis of the Anniversary Date Price, and (ii) the Initial
Questron Common Stock, up to a maximum of 133,615 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".
3. The first and second sentences of Section 1.2(b) of the Stock
Purchase Agreement is hereby amended and restated in its entirety to read as
follows:
"The "1999 Deferred Purchase Price" will be an amount, subject to the
limitations set forth below, equal to five (5) times the difference between EBIT
(as defined below) for the Company for the twelve month period ending June 30,
1999 and $1,700,000, provided that the maximum amount payable to Sellers
pursuant to this Section 1.2(b) (as adjusted for the items set forth in Schedule
1.2(b) and in accordance with Section 1.2(c) below) shall in no event exceed
$4,000,000 in the aggregate. The 1999 Deferred Purchase Price shall be payable
as follows: (i) delivery by wire transfers (or certified checks) of an aggregate
amount equal to 80% of the 1999 Deferred Purchase Price up to a maximum of
$3,200,000 (the "1999 Deferred Cash Consideration"); and (ii) delivery of shares
of Questron Common Stock (the "Deferred Questron Common Stock"), the value of
which shall equal 20% of the 1999 Deferred Purchase Price up to a maximum of
$800,000."
4. The first sentence of Section 1.4(a) of the Stock Purchase
Agreement is hereby amended and restated in its entirety to read as follows:
"Subject to the terms and conditions of Section 1.2(b) above, on or
before April 10, 1999, Questron will deliver to Sellers 50% of the estimated
1999 Deferred Cash Consideration (the "Prepaid 1999 Deferred Cash
Consideration") which shall be based on EBIT for the Company for the nine month
period ending March 31, 1999."
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5. The first sentence of Section 1.4(b) of the Stock Purchase
Agreement is hereby amended and restated in its entirety to read as follows:
"Subject to the terms and conditions of Section 1.2(b) above, on or
before September 30, 1999, Questron will deliver to Sellers the following:"
6. Section 4.7 of the Stock Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"Questron Common Stock. All shares of Questron Common Stock delivered
to Sellers pursuant to this Agreement (which shall include all shares of Initial
Questron Common Stock, Deferred Questron Common Stock, Additional Questron
Common Stock and all shares of Questron Common Stock purchased upon exercise of
the Options), when issued as contemplated hereby, will be duly authorized, fully
paid and non-assessable."
7. 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.
8. 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.
9. This Amendment shall become effective on September 18, 1998
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IN WITNESS WHEREOF, Questron, Fas-Tronics, Xxxxxxx Xxxxxxxxxx and
Xxxxxxx Xxxxxxxxxx have caused this Amendment to be signed as of the day and
year first above written.
QUESTRON TECHNOLOGY, INC. FAS-TRONICS, INC.
By: By:
Name: Name:
Title: Title:
------------------------------
XXXXXXX XXXXXXXXXX
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XXXXXXX XXXXXXXXXX
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Schedule 1.2(a)
Fas-Tronics, Inc.
Computation of Net Debt
At December 31, 1997
* This schedule will be revised to reflect the Net Debt at
March 31, 1998 as agreed to by the parties
Amount at Amount at
December 31, 1997 June 30, 1998
----------------- -------------
Cash $218,623 ($270,979)
----------- ---------------
Current Debt:
Bank Mortgage - Landmark Bank 22,906 24,994
Note Payable - X. Xxxxxxxxxx 404,673 404,673
Loan Payable - Landmark Bank 79,600 83,652
Finance Company Motor Vehicle 7,833 8,130
Designation
Prior Shareholders N.L.B. Xxxxxxxx 170,867 179,613
Capital Lease Obligations 7,237 7,664
-------------- --------------
693,116 708,726
------------- --------------
Long-Term Debt:
Bank Mortgage - Landmark Bank 599,650 586,077
Loan Payable - Landmark Bank 129,182 93,004
Finance Company Motor Vehicle 6,243 2,130
Designation
Prior Shareholders N.L.B. Xxxxxxxx 282,862 200,208
Capital Lease Obligations 23,007 19,066
---------------- --------------
1,040,944 900,485
Less Capital Lease Obligations To Be
Retained by the Company (30,244) (26,730)
-------------- --------------
Net Debt $1,485,193 $1,311,502
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