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Exhibit 3
SECOND COMBINED AMENDMENT AGREEMENT
SECOND COMBINED AMENDMENT AGREEMENT, dated as of June 30, 2001 (this
"AMENDMENT") is made among QUESTRON TECHNOLOGY, INC. (the "PARENT"), QUESTRON
OPERATING COMPANY, INC. (the "COMPANY") and ALBION ALLIANCE MEZZANINE FUND, L.P.
("MEZZANINE I"), ALBION ALLIANCE MEZZANINE FUND II, L.P. ("MEZZANINE II"),
ALLIANCE INVESTMENT OPPORTUNITIES FUND, LLC ("OPPORTUNITIES"), THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES ("EQUITABLE"), IBJ WHITEHALL BANK &
TRUST COMPANY ("IBJ WHITEHALL"), and EXETER CAPITAL PARTNERS IV, L.P. ("EXETER"
and, together with Mezzanine, Opportunities, Equitable and IBJ Whitehall, the
"PURCHASERS").
WHEREAS, pursuant to that certain Note Agreement, dated as of June 29,
1999 (the "ORIGINAL 1999 NOTE Agreement;" the Original 1999 Note Agreement, as
modified by the Omnibus Amendment Agreement, dated as of November 2000, among
the Company, the Parent, and the parties named therein and the First Combined
Amendment Agreement, dated as of May 7, 2001, among the Company, the Parent and
the Purchasers, the "EXISTING 1999 NOTE AGREEMENT;" and the Existing 1999 Note
Agreement, as amended by this Amendment, the "1999 NOTE AGREEMENT") among the
Company, on the one hand, and Mezzanine I, Opportunities, Equitable and IBJ
Whitehall (collectively, the "1999 PURCHASERS,") the Company issued to the 1999
Purchasers its 14.50% Senior Subordinated Notes due June 30, 2005 (the "SERIES A
NOTES") in the aggregate principal amount of Twenty Million Dollars
($20,000,000); and
WHEREAS, pursuant to that certain Note Agreement, dated as of November
9, 2000, (as amended by the First Combined Amendment Agreement, dated as of May
7, 2001, among the Company, the Parent and the Purchasers, the "EXISTING 2000
NOTE AGREEMENT;" as amended by this Amendment, the "2000 NOTE AGREEMENT;" the
Existing 1999 Note Agreement and the Existing 2000 Note Agreement being herein
referred to collectively as the "EXISTING NOTE AGREEMENTS;" and the 1999 Note
Agreement and the 2000 Note Agreement being herein referred to collectively as
the "NOTE AGREEMENTS"), among Mezzanine II, IBJ Whitehall and Exeter (the "2000
PURCHASERS"), the Company issued to the 2000 Purchasers its Series B 14.50%
Senior Subordinated Notes due June 30, 2005 (the "SERIES B NOTES;" and, together
with the Series A Notes, the "NOTES") in the aggregate principal amount of
Seventeen Million Five Hundred Thousand Dollars ($17,500,000); and
WHEREAS, each of the Affiliate Guarantors have entered into
Unconditional Guaranties (the "SUBORDINATED GUARANTIES") of the obligations of
the Company under the Note Agreements and the Notes; and
WHEREAS, the Purchasers are the holders of all the outstanding Series A
Notes and all the outstanding Series B Notes; and
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WHEREAS, the Company and the Purchasers desire that the Purchasers
waive a certain Events of Default in respect of the Existing 1999 Note Agreement
and the 1999 Notes, and certain Events of Default in respect of the Existing
2000 Note Agreement and the 2000 Notes, which might otherwise occur but for
their execution and delivery of this Amendment, and desire to amend the Note
Agreements and the Notes in certain respects.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiently of which is hereby acknowledged, the parties hereto agree as
follows:
1. DEFINED TERMS
Capitalized terms used and not defined herein shall have the same
meanings given to them in the Note Agreements. In addition, the following terms
as used herein have the respective meanings set forth below:
EXTRAORDINARY TRANSACTION PROCEEDS - means net proceeds, excluding all
fees, costs and out-of-pocket expenses in connection therewith (including,
without limitation, success fees, break-up fees and other fees of, and costs,
expenses and disbursements of, brokers, finders or investment bankers,
attorneys, accountants, consultants and other professionals relating thereto)
and net of any and all income taxes payable by the Company, any Subsidiary,
Finance or the Parent in respect thereof, disbursed to the Company relating to
any extraordinary event including, but not limited to, the acquisition of funds
through the sale of debt or equity, or the entering into, modification or
cancellation of any material contract.
INTERVENING EVENT OF DEFAULT - means any Event of Default which both:
(a) occurs during the period commencing on the date of this
Agreement and ending on January 2, 2002 (including, without limitation,
at any time after December 31, 2001, any Event of Default the
occurrence of which is waived pursuant to the provisions of Section 2
hereof through December 31, 2001); and
(b) is continuing on January 2, 2002.
NET TRANSACTION PROCEEDS - means, with respect to any Transaction, cash
proceeds thereof, net of all obligations (other than the Senior Bank
Obligations, other obligations in respect of the Senior Debt and the
Subordinated Obligations) required to be paid by the Parent, Finance, the
Company or any Subsidiary, fees, costs and out-of-pocket expenses in connection
therewith (including, without limitation, fees, success fees, break-up fees and
other fees of, and costs, expenses and disbursements of, brokers, finders or
investment bankers, attorneys, accountants, consultants and other professionals
relating thereto) and net of any and all income taxes payable by the Company,
any Subsidiary, Finance or the Parent in respect thereof, in each case, after
giving effect to the Transaction and all related transactions (other than the
Retirement).
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RETIREMENT - means the full and final payment in full in cash, and
retirement, of:
(a) all Senior Bank Obligations, and any and all expenses or
disbursements related thereto or any other obligations owing to the
holders thereof;
(b) the principal, interest, premium, if any, and any other
obligations whatsoever to the holders of any other Senior Debt; and
(c) all the Subordinated Debt (including, without limitation,
any deferred interest remaining unpaid, Prepayment Compensation Amount
and any fees), and any and all expenses or disbursements related
thereto or any other obligations owing to the holders thereof;
and the termination of all of the instruments and obligations relating to the
Senior Debt and the Subordinated Debt.
SUSPENSION PERIOD - means any period during which the rights of any
holder of Subordinated Debt to exercise any Remedies are suspended pursuant to
the further proviso to Section 7.4 of the Existing Note Agreements.
TRANSACTION - means any sale of the Parent, Finance or the Company
(whether structured in the form of a sale of stock held by the existing holders
of the Common Stock, a sale of all or substantially all of the Property of the
Parent, Finance or the Company or a merger or consolidation of any of the
Parent, Finance or the Company with any other Person), any recapitalization or
refinancing or any other transaction which, if consummated, would result in Net
Transaction Proceeds becoming available to fully consummate the Retirement on or
prior to December 31, 2001.
2. AMENDMENTS TO EXISTING NOTE AGREEMENTS
2.1 DEFERRAL OF CERTAIN INTEREST PAYMENTS
(a) DEFERRAL. Subject to the provisions of Section 2.1(b) and
Section 3.3(b) of this Amendment, each of the 1999 Purchasers, with
respect to the Series A Notes, and each of the 2000 Purchasers, with
respect to the Series B Notes, waives any Event of Default which may
occur by virtue of the failure of the Company or any affiliated
Guarantors to make any payment of interest on the Notes in cash at any
time prior to December 31, 2001.
(b) CONDITIONS TO THE DEFERRAL; AGREEMENTS OF THE COMPANY AND
THE PARENT. In consideration of the deferral by the Purchasers pursuant
to Section 2.1(a), the Company agrees that:
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(i) the terms of the Series A Notes and the Series B
Notes provide that interest accruing on any interest not paid
on the date fixed for payment therefor shall accrue at the
default rate set forth in the Series A Notes and the Series B
Notes, respectively;
(ii) to the extent that the Company shall pay,
whether or not on any date fixed therefor, any portion of the
accrued and unpaid interest in respect of the Notes, prior to
December 31, 2001, the Company shall make such payment ratably
among the Series A Notes and the Series B Notes in accordance
with the respective outstanding principal amounts thereof;
(iii) the failure of the Company to pay all accrued
and unpaid interest in respect of the Series A Notes or the
Series B Notes (including, without limitation, in either case,
interest accruing on overdue interest at the default rate) on
December 31, 2001, shall constitute an "Event of Default" in
respect of the Series A Notes or the Series B Notes,
respectively, immediately on December 31, 2001; and,
notwithstanding the provisions of Section 6.1(a)(ii) of each
of the Note Agreements, no grace period whatsoever shall apply
in the event of the failure to pay all such accrued and unpaid
interest in respect of both the Series A Notes and the Series
B Notes on December 31, 2001; and
(iv) the Company shall comply with Section 3.3 of
this Amendment.
2.2 WAIVER OF CERTAIN COVENANT DEFAULTS.
Each of the 1999 Purchasers, with respect to the Series A Notes, and
each of the 2000 Purchasers, in respect of the Series B Notes, waives any Event
of Default which may occur pursuant to Section 6.1(b) of the 1999 Note Agreement
or the 2000 Note Agreement, as the case may be, as a result of the failure of
the Company to comply with:
(a) Section 4.2 of the 1999 Note Agreement or the 2000 Note
Agreement, as the case may be, with respect to the ratio of
Consolidated Senior Secured Funded Debt at any time prior to December
31, 2001, to Pro Forma Combined EBITDA for the period of four (4) full
consecutive fiscal quarters of the Company then most recently ended at
such time;
(b) Section 4.3 of the 1999 Note Agreement or the 2000 Note
Agreement, as the case may be, with respect to the ratio of
Consolidated Total Funded Debt at any time prior to December 31, 2001,
to Pro Forma Combined EBITDA for the period of four (4) full
consecutive fiscal quarters of the Company then most recently ended at
such time; or
(c) Section 4.4 of the 1999 Note Agreement or the 2000 Note
Agreement, as the case may be, with respect to the ratio of Pro Forma
Combined EBITDA to Pro Forma Combined Interest Expense for either:
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(i) the period of four (4) full consecutive fiscal
quarters of the Company ended on June 30, 2001; or
(ii) the period of four (4) full consecutive fiscal
quarters of the Company ended on September 30, 2001.
2.3 WAIVER OF DEFAULT.
Each of the 1999 Purchasers, with respect to the Series A Notes, and
each of the 2000 Purchasers, in respect of the Series B Notes, waives any Event
of Default which may occur pursuant to Section 6.1(k)(ii) of the 1999 Note
Agreement or the 2000 Note Agreement, as the case may be, as a result of the
issuance to the holders of the Senior Debt by the Parent of seven hundred fifty
thousand (750,000) shares of its Series C Preferred Stock (the "SERIES C
PREFERRED STOCK"), par value $.01 per share and having a liquidation preference
of One Dollar ($1.00) per share.
2.3 RELIANCE.
Each of the 1999 Purchasers has granted the waivers contained in
Section 2 of this Amendment in reliance upon the granting by the 2000 Purchasers
of the waivers contained in Section 2 of this Amendment. Each of the 2000
Purchasers has granted the waivers contained in Section 2 of this Amendment in
reliance upon the granting by the 1999 Purchasers of the waivers contained in
Section 2 of this Amendment.
3. AGREEMENTS OF THE COMPANY
In consideration of the waivers and deferrals granted by the Purchasers
in Section 2, the Parent and the Company hereby agree for the benefit of the
holders, from time to time, of the Notes, as follows.
3.1 FEE.
In the event that Net Transaction Proceeds from a Transaction
sufficient to provide for the Retirement have not been received and applied, on
or before December 31, 2001, by the Parent, Finance or the Company to the
Retirement, then the Company shall pay to each holder of Notes by federal funds
wire transfer of immediately available funds on January 2, 2002 a fee equal to
three percent (3%) of the aggregate principal amount of the Notes held by such
holder on December 31, 2001. The Company further agrees that any failure of the
Company to pay such fee in respect of the Notes on December 31, 2001 shall
constitute an "Event of Default" pursuant to Section 6.1(a)(ii) in respect of
the Series A Notes or the Series B Notes, respectively, immediately on December
31, 2001 and, notwithstanding the provisions of Section 6.1(a)(ii) of each of
the Note Agreements, no grace period whatsoever shall apply in the event of the
failure to pay such fee in respect of both the Series A Notes and the Series B
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Notes on December 31, 2001. Interest shall accrue on the unpaid fee or any
unpaid portion thereof at the default rate of interest applicable to the Notes.
3.2 REMEDIES STANDSTILL.
The Parent and the Company agree that, notwithstanding the further
proviso to Section 7.4 of the Existing Note Agreements, the date of the
commencement of any Suspension Period in respect of any Intervening Event of
Default shall be deemed to have been June 30, 2001, with the effect that the
holders of the Notes, on or after January 2, 2002, shall be entitled to exercise
any Remedies in respect of any Intervening Event of Default without being
subject to any Suspension Period. The foregoing sentence shall not limit or
change any requirement to defer the exercise of Remedies in respect of the first
proviso to Section 7.4 or pursuant to Section 6.2, and shall not limit the
effect of any other subordination provision of the Note Agreements (including,
without limitation, Section 7.3).
3.3 CERTAIN PREPAYMENTS OF SENIOR DEBT.
(a) EXTRAORDINARY TRANSACTION PROCEEDS. In the event that the
Parent, Finance, the Company or any Subsidiary receives Extraordinary
Transaction Proceeds, the Company shall apply the entire Extraordinary
Transaction Proceeds:
(i) FIRST, to the prepayment of a principal amount of
the Term Loan Facility in respect of the Senior Credit
Agreement to the extent of principal payments which would have
been required to have been made on or prior to the date such
Extraordinary Transaction Proceeds are received in respect of
such Term Loan Facility but for their amendment by the lenders
under the Senior Credit Agreement;
(ii) SECOND, to the prepayment of a principal amount
of the Term Loan Facility in respect of the Senior Credit
Agreement to the extent of principal payments which would have
been required to have been made after the date such
Extraordinary Transaction Proceeds are received in respect of
such Term Loan Facility and prior to December 28, 2001, but
for their amendment by the lenders under the Senior Credit
Agreement; and
(iii) THIRD, subject to Section 3.3(b) of this
Amendment, to prepayment of the Revolving Credit Facility
under the Senior Credit Agreement;
PROVIDED, HOWEVER, that such payments shall not be made unless, after
giving effect to the such payments, the aggregate unused availability
in respect of the Revolving Credit Facility is greater than $4,000,000.
(b) PAYMENTS OF INTEREST IN RESPECT OF THE NOTES. In the event
that the Company shall make any payment of the principal amount of the
Term Loan Facility in respect of the Senior Credit Agreement prior to
December 28, 2001 (whether pursuant
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to Section 3.3(a) or otherwise) and, after giving effect to such
payment, the aggregate unused availability in respect of the Revolving
Credit Facility is greater than $4,000,000, then, and in each such
case, the Company shall pay to the holders of the Notes, substantially
contemporaneously with the making of such payment in respect of the
Term Loan Facility under the Senior Credit Agreement, an amount equal
to the lesser of:
(i) the aggregate amount of accrued an unpaid
interest accrued through the date of such payment in respect
of all the Notes; and
(ii) the amount by which the aggregate unused
availability in respect of the Revolving Credit Facility
exceeds $4,000,000.
Such amount shall be applied ratably among the Notes in accordance with
the unpaid principal amounts thereof and without respect to whether the
Notes are Series A Notes or Series B Notes. The failure of the Company
to make any payment required by this Section 3.3(b) shall cause the
termination of the deferral of interest in respect of the Notes
pursuant to Section 2.1.
4. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants as follows to each holder of Notes
as of the date hereof and as of the Effective Date (as defined below). The
Company acknowledges and agrees that the representations and warranties of this
Section 4 comprise representations and warranties in a written modification to
each Existing Note Agreement, as contemplated by Section 6.1(c) of the Note
Agreements.
4.1 NO OTHER DEFAULTS
No unwaived Default or Event of Default is continuing.
4.2 SENIOR CREDIT AGREEMENT
The Senior Credit Agreement (as amended as described in Section 6.4) is
the only Senior Credit Facility in existence as of the date hereof. After giving
effect to the amendment to the Senior Credit Agreement contemplated by Section
5.3, no default or event of default is continuing in respect of the Senior
Credit Agreement. Neither the Parent, Finance, the Company nor any Subsidiary or
Affiliate has made any payment whatsoever to any holder of Senior Debt in
respect of the principal due in respect of the Senior Credit Agreement on either
June 30, 2001 or September 30, 2001.
4.3 OBLIGATIONS REMAIN ENFORCEABLE
The execution, delivery and performance by the Company of this
Amendment have been duly authorized by all necessary corporate and other action
and do not and will not
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require any registration with, consent or approval of, notice to or action by,
any person (including any Governmental Authority) in order to be effective and
enforceable. Each Note Agreement (as modified by this Amendment) and each of the
Notes constitute the legal, valid and binding obligation of the Company,
enforceable against Company in accordance with its terms, except that the
enforceability thereof may be limited by applicable bankruptcy, reorganization,
arrangement, insolvency, moratorium, or other similar laws affecting the
enforceability of creditors' rights generally; and subject to the availability
of equitable remedies.
4.4 SECURITIES PURCHASE AGREEMENT REPRESENTATIONS
All representations and warranties of the Company contained in each of
the Securities Purchase Agreements, dated as of even date with each of the
Original 1999 Note Agreement and the Existing 2000 Note Agreement (other than
representations or warranties expressly made only on and as of the Closing Date
or any earlier date) are true and correct as of the date hereof, after taking
into account Section 2 above.
4.5 FINANCIAL INFORMATION
All financial statements delivered to the Purchasers by the Company
pursuant to the provisions of Section 5.1(a), Section 5.1(b) and Section 5.1(c)
of the Note Agreements since the Closing Date were, and all information
delivered to the Purchasers by the Company pursuant to Section 5.1(e) of the
Note Agreements since the Closing Date was true, complete and correct in all
material respects as of the respective dates of such information.
5. EFFECTIVENESS
This Amendment shall become effective only upon the date of the
satisfaction in full of the following conditions precedent (which date shall be
the "EFFECTIVE DATE").
5.1 EXECUTION AND DELIVERY OF THIS AMENDMENT
Each Purchaser hall have received a counterpart hereof, duly executed
and delivered by the Parent, the Company and each other Purchaser.
5.2 ACKNOWLEDGMENT BY AFFILIATE GUARANTORS
Each Affiliate Guarantor shall have duly executed and delivered the
form of acknowledgement attached to this Amendment acknowledging its obligations
in respect of the Affiliate Guaranties.
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5.3 SENIOR CREDIT AGREEMENT
The Company and each of its Affiliates and Subsidiaries as are parties
to the Senior Credit Facility shall have entered into an amendment to the Senior
Credit Agreement in the form attached hereto as EXHIBIT 5.3. Such amendment
shall provide, INTER ALIA, that the Senior Lenders agree:
(a) to defer through December 28, 2001 all principal amounts
in respect of the Senior Credit Agreement coming due during the period
commencing the day before the date hereof and ending on December 28,
2001; and
(b) and consent to, the provisions of Section 3.2 of this
Amendment.
Such amendment shall be enforceable against each holder of Senior Debt and its
respective successors and assigns.
Any fee payable to the holders of the Senior Debt in connection with
the granting of the Amendment shall be paid by virtue of the Parent issuing to
the holders of the Senior Debt up to seven hundred fifty thousand (750,000)
shares of the Series C Preferred Stock.
5.4 SERIES C PREFERRED STOCK.
The Series C Preferred Stock shall have the terms set forth in the
Certificate of Designations therefor in substantially the form hereto as EXHIBIT
5.4.
5.5 REPRESENTATIONS AND WARRANTIES
The representations and warranties of the Company made in Section 4 of
this Amendment shall remain true and correct in all respects as of the Effective
Date.
5.6 NO INJUNCTION, ETC.
No injunction, writ, restraining order or other order of any nature
prohibiting, directly or indirectly, the consummation of the transactions
contemplated herein shall have been issued and remain in force by any
Governmental Authority.
5.7 EXPENSES
The Company shall have paid all out-of-pocket expenses of the
Purchasers in connection with the execution and delivery of this Amendment,
including, without limitation, the fees and disbursements of Xxxxxxx & Xxxxxxx
LLP, as special counsel to the Required Holders.
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6. MISCELLANEOUS
6.1 SECTION HEADINGS
The titles of the Sections of this Amendment appear as a matter of
convenience only, do not constitute a part hereof and shall not affect the
construction hereof. The words "herein," "hereof," "hereunder" and "hereto"
refer to this Amendment as a whole and not to any particular Section or other
subdivision. References to Sections are, unless otherwise specified, references
to Sections of this Amendment.
6.2 GOVERNING LAW
THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
6.3 SUCCESSORS AND ASSIGNS
This Amendment shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto. The provisions hereof are
intended to be for the benefit of all holders, from time to time, of Notes, and
shall be enforceable by any such holder whether or not an express assignment to
such holder of rights hereunder all have been made by any Purchaser or its
successor or assign.
6.4 EXECUTION IN COUNTERPART
This Amendment may be executed in one or more counterparts and shall be
effective when at least one counterpart shall have been executed by each party
hereto, and each set of counterparts that, collectively, show execution by each
party hereto shall constitute one duplicate original.
6.5 NO OTHER MODIFICATIONS; CONFIRMATION
All the provisions of the Notes, and, except as expressly waived,
modified and supplemented hereby, all the provisions of the Existing Note
Agreements, are and shall remain in full force and effect. As of the Effective
Date, all references in the Financing Documents to the "Note Agreement" shall be
references to the respective Existing Note Agreement, as modified by this
Amendment and as hereafter amended, modified or supplemented in accordance with
its terms.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
QUESTRON TECHNOLOGY, INC.,
QUESTRON OPERATING COMPANY, INC.
By:
-------------------------------------
Name:
Title:
ALBION ALLIANCE MEZZANINE FUND, L.P.
By: Albion Alliance LLC, its
General Partner
By:
-------------------------------------
Name:
Title:
ALBION ALLIANCE MEZZANINE FUND II, L.P.
By: AA MEZZ II GP, LLC., its
General Partner
By: Albion Alliance LLC, its Sole Member
By:
-------------------------------------
Name:
Title:
Signature Page 1 to Second Combined Amendment Agreement, dated as of June 30,
2001, among Questron Operating Company, Inc. and the Purchasers named herein
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ALLIANCE INVESTMENT OPPORTUNITIES
FUND, LLC
By: Alliance Investment Opportunities
Management L.P., its Managing Member
By: Alliance Capital Management, L.P.,
its Managing Member
By: Alliance Capital Management
Corporation, its General Partner
By:
-------------------------------------
Name:
Title:
THE EQUITABE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
By:
-------------------------------------
Name:
Title:
IBJ WHITEHALL BANK & TRUST COMPANY
By:
-------------------------------------
Name:
Title:
EXETER CAPITAL PARTNERS IV, L.P.
By: Exeter IV Advisors, L.P.
By: Exeter IV Advisors, Inc.
By:
-------------------------------------
Name:
Title:
Signature Page 2 to Second Combined Amendment Agreement, dated as of June 30,
2001, among Questron Operating Company, Inc. and the Purchasers named herein
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ACKNOWLEDGEMENT BY AFFILIATE GUARANTORS
Reference is hereby made to the Second Combined Amendment Agreement
(the "AMENDMENT"), dated as of June 30, 2001, among QUESTRON TECHNOLOGY, INC.
(the "PARENT"), QUESTRON OPERATING COMPANY, INC. (the "COMPANY") and ALBION
ALLIANCE MEZZANINE FUND, L.P. ("MEZZANINE I"), ALBION ALLIANCE MEZZANINE FUND
II, L.P. ("MEZZANINE II"), ALLIANCE INVESTMENT OPPORTUNITIES FUND, LLC
("OPPORTUNITIES"), THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
("EQUITABLE"), IBJ WHITEHALL BANK & TRUST COMPANY ("IBJ WHITEHALL"), and EXETER
CAPITAL PARTNERS IV, L.P. ("EXETER" and, together with Mezzanine, Opportunities,
Equitable and IBJ Whitehall, the "PURCHASERS"). Capitalized terms used herein,
and not defined herein, have the respective meanings ascribed to them in, or
pursuant to the terms of, the Amendment.
Each of the undersigned is an Affiliate Guarantor of the obligations of
the Company pursuant to the Notes and the Note Agreements. Each of the
undersigned:
(a) acknowledges and reaffirms its obligations under the
Affiliate Guaranty or Affiliate Guaranties to which it is a party, and
that such obligations extend to all obligations of the Company in
respect of the Note Agreements (as modified by the Amendment),
notwithstanding the modification thereof pursuant to the terms of the
Amendment;
(b) acknowledges and reaffirms that all of its obligations in
respect of the Affiliate Guaranty or Affiliate Guaranties to which it
is a party remain in full force and effect and remain enforceable
against it in accordance with their respective terms, notwithstanding
the modification thereof pursuant to the terms of the Amendment; and
(c) acknowledges that the holders of the Notes are under no
obligation to inform it or obtain its consent in respect of the
Amendment or any future amendment, modification or supplement to the
terms of any Note or Note Agreement.
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IN WITNESS WHEREOF, we have executed this Acknowledgement of Affiliate
Guarantors as of June 30, 2001.
QUESTRON TECHNOLOGY, INC.
QUESTRON FINANCE CORP.
QUESTRON DISTRIBUTION LOGISTICS, INC.
COMP XXXX, INC.
POWER COMPONENTS, INC.
INTEGRATED MATERIAL SYSTEMS, INC.
CALIFORNIA FASTENERS, INC.
FAS-TRONICS, INC.
FORTUNE INDUSTRIES, INC.
CAPITAL FASTENERS, INC.
ACTION THREADED PRODUCTS, INC.
ACTION THREADED PRODUCTS OF MINNESOTA, INC.
ACTION THREADED PRODUCTS OF GEORGIA, INC.
R.S.D. SALES CO., INC.
B&G SUPPLY COMPANY, INC.
By:
-----------------------------------------
Name:
Title:
Signature Page to the Acknowledgement of Affiliate Guarantors regarding the
Second Combined Amendment Agreement, dated as of June 30, 2001, among Questron
Operating Company, Inc. and the Purchasers named herein
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EXHIBIT 5.3
AMENDMENT TO SENIOR CREDIT AGREEMENT
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EXHIBIT 5.4
CERTIFICATE OF DESIGNATIONS FOR SERIES C PREFERED STOCK
