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Exhibit 10.52
AMENDMENT NUMBER FIVE TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER FIVE TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT (this "Amendment") dated as of November 9, 2000, is entered
into among QUESTRON TECHNOLOGY, INC., a Delaware corporation ("QTI"), certain of
the direct and indirect Subsidiaries of QTI identified herein (individually and
collectively, and jointly and severally, the "Obligors"), each of the Lenders
signatory hereto, CONGRESS FINANCIAL CORPORATION (Florida), a Florida
corporation, as administrative agent for the Lenders ("Administrative Agent"),
and ABLECO FINANCE LLC, a Delaware limited liability company, as collateral
agent for the Lender Group ("Collateral Agent"), in light of the following:
W I T N E S S E T H
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WHEREAS, the Obligors, the Lenders, Administrative Agent, and
Collateral Agent are parties to that certain Amended and Restated Loan and
Security Agreement, dated as of June 29, 1999 (as amended, restated,
supplemented, or modified from time to time, the "Loan Agreement");
WHEREAS, the Obligors have requested that that the Lender
Group consent to the incurrence of additional Subordinated Debt; and
WHEREAS, the parties desire to amend the Loan Agreement to,
among other things, permit the incurrence of such additional Subordinated Debt,
in each case, as set forth herein.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged, the parties agree to
amend the Loan Agreement as follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Loan Agreement, as amended
hereby.
2. AMENDMENT TO LOAN AGREEMENT.
(a) Section 8.2.22 of the Loan Agreement hereby is amended by inserting
the phrase "and the Subordinated Obligations" immediately prior to the text
"(b)" appearing in said Section.
(b) Section 8.3.3 of the Loan Agreement hereby is amended and restated
as follows:
8.3.3 Senior Debt Coverage Ratio. Maintain a Senior Debt Coverage Ratio
not greater than (i) 3.50:1.00 with respect to each fiscal quarter ending on or
after September
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30, 2000 through and including the fiscal quarter ending December 31, 2000, (ii)
3.25:1.00 with respect to each fiscal quarter ending on or after March 31, 2001
through and including the fiscal quarter ending September 30, 2001, and (iii)
3.00:1.00 with respect to each fiscal quarter ending on or after December 31,
2001.
(c) Section 8.3.5 of the Loan Agreement hereby is amended and restated
as follows:
8.3.5 [Intentionally Omitted]
(d) Appendix A of the Loan Agreement hereby is amended by adding or
amending and restating, as applicable, the following defined terms in the proper
alphanumerical order:
Fifth Amendment - that certain Amendment Number Five to
Amended and Restated Loan and Security Agreement, dated as of November __, 2000,
among the Obligors, the Lenders, Administrative Agent, and Collateral Agent.
Fifth Amendment Effective Date - the date on which the
conditions precedent set forth in Section 5 of the Fifth Amendment are
satisfied.
Investors Agreement - means, collectively, the June 1999
Investors Rights Agreement and the November 2000 Investors Rights Agreement.
June 1999 Investors Rights Agreement - means that certain
Investors Rights Agreement, dated as of the Closing Date, among QTI and the
Purchasers identified therein.
June 1999 Subordinated Debt Documents - means, collectively,
(i) each of the several substantially identical Securities Purchase Agreements,
each dated as of the Closing Date, among QTI, QOC, and each of the Purchasers
identified therein, (ii) Note Agreement, dated as of the Closing Date, among QOC
and the Purchasers identified therein, (iii) the June 1999 Investors Rights
Agreement, (iv) each of the 14.50% Senior Subordinated Notes of QOC issued under
the Note Agreement referenced in clause (ii) above, and (v) the Subsidiary
Guarantee, dated as of the Closing Date, by each of QOC and its Subsidiaries in
favor of the Purchasers therein defined, and all documents and instruments to be
executed or delivered in connection therewith; in each case, as amended by the
Omnibus Amendment Agreement (the "June 1999 Subordinated Debt Amendment"), dated
as of the Fifth Amendment Date, among QTI, QOC, and the Purchasers identified
therein.
November 2000 Investors Rights Agreement - means that certain
Investors Rights Agreement, dated as of the Fifth Amendment Effective Date,
among QTI and the Purchasers identified therein.
November 2000 Subordinated Debt Documents - means,
collectively, that certain (i) Securities Purchase Agreement, dated as of the
Fifth Amendment Effective Date, among QTI, QOC, and each of the Purchasers
identified therein, (ii) Note Agreement, dated as of the Fifth Amendment
Effective Date, among QOC and the Purchasers identified
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therein, (iii) the November 2000 Investors Rights Agreement, (iv) each of the
14.50% Series B Senior Subordinated Notes of QOC issued under the Note Agreement
referenced in clause (ii) above, and (v) the Subsidiary Guarantee, dated as of
the Fifth Amendment Effective Date, by each of QOC and its Subsidiaries in favor
of the Purchasers therein defined, and all documents and instruments to be
executed or delivered in connection therewith.
Subordinated Debt Documents - means, collectively, the June
1999 Subordinated Debt Documents and the November 2000 Subordinated Debt
Documents.
Subordinated Obligations - Subordinated Debt of QOC in favor
of the Purchasers under the Subordinated Debt Documents in effect on the Fifth
Amendment Effective Date and as amended in compliance with the Loan Documents
(including without limitation, any repurchase or put obligations in respect of
"Purchaser Shares" (as such term is defined in the Investors Rights Agreement)
under the Investors Rights Agreement).
3. CONSENT. Administrative Agent, Collateral Agent, and the Required Lenders
hereby consent to the incurrence by QOC of the Subordinated Debt evidenced by
the November 2000 Subordinated Debt Documents.
4. REPRESENTATIONS AND WARRANTIES. The Obligors hereby represent and warrant to
the Lender Group that:
(a) The execution, delivery, and performance of this Amendment are
within its corporate powers, have been duly authorized by all necessary
corporate action, and are not in contravention of any law, rule, regulation, or
any order, judgment, decree, writ, injunction, or award of any arbitrator,
court, or governmental authority, or of the terms of its governing documents, or
of any contract or undertaking to which it is a party or by which any of its
properties may be bound or affected if the result thereof is reasonably likely
to result in a Material Adverse Change;
(b) This Amendment constitute the Obligors' legal, valid, and binding
obligations, enforceable against the Obligors in accordance with its terms;
(c) There is no litigation or proceeding pending or threatened against
or affecting the Obligors, their business, operations, or properties that
reasonably could be expected to have a Material Adverse Change;
(d) No written information, certification, or report submitted to the
Lender Group by the Obligors pursuant to this Amendment contains any material
misstatement of fact or omits to state a material fact or any fact necessary to
make the information not false or misleading in any material respect;
(e) The reaffirmation and consent of QTI attached hereto as Exhibit A
constitutes QTI's legal, valid, and binding obligations, enforceable against QTI
in accordance with its terms;
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(f) The reaffirmation and consent of QTI attached hereto as Exhibit A
has been duly executed and delivered by QTI;
(g) The reaffirmation and consent of QFC attached hereto as Exhibit B
constitutes QFC's legal, valid, and binding obligations, enforceable against QFC
in accordance with its terms; and
(h) The reaffirmation and consent of QFC attached hereto as Exhibit B
has been duly executed and delivered by QFC.
5. CONDITIONS PRECEDENT TO AMENDMENT. The satisfaction of each of the following
unless waived or deferred by Administrative Agent, Collateral Agent, and the
Required Lenders in their sole discretion, shall constitute conditions precedent
to the effectiveness of this Amendment and each and every provision hereof:
(a) The Obligors shall have executed and delivered the November 2000
Subordinated Debt Documents. Collateral Agent shall have received copies of each
of the material November 2000 Subordinated Debt Documents, each of which shall
be in form and substance satisfactory to Administrative Agent and Collateral
Agent and shall be accompanied by a certificate of the Secretary of QTI, dated
as of the Fifth Amendment Effective Date, certifying each such document as being
a true, correct, and complete copy thereof.
(b) Administrative Agent shall have received from the Obligors the net
cash proceeds from the consummation of the transactions contemplated by the
November 2000 Subordinated Debt Documents.
(c) The representations and warranties in the Loan Agreement as amended
by this Amendment, and the other Loan Documents shall be true and correct in all
respects on and as of the date hereof, as though made on such date (except to
the extent that such representations and warranties relate solely to an earlier
date).
(d) 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 against the Obligors or the Lender Group.
(e) No Default or Event of Default shall have occurred and be
continuing on the date hereof, nor shall result from the consummation of the
transactions contemplated herein.
(f) Collateral Agent shall have received the reaffirmation and consent
of QTI attached hereto as Exhibit A, duly executed and delivered by an
authorized official of QTI.
(g) Collateral Agent shall have received the reaffirmation and consent
of QFC attached hereto as Exhibit B, duly executed and delivered by an
authorized official of QFC.
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(h) Collateral Agent shall have received (i) a copy of the June 1999
Subordinated Debt Amendment, in form and substance satisfactory to Collateral
Agent, duly executed by the Obligors and the Purchasers identified therein, in
connection with the June 1999 Subordinated Debt Documents and relative to the
incurrence by QOC of the Subordinated Debt evidenced by the November 2000
Subordinated Debt Documents, and (ii) all other documents as may be required by
Collateral Agent in connection with the transactions contemplated by this
Amendment, in each case, duly executed and delivered by the parties thereto.
6. CONSTRUCTION. This Amendment shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to its
conflicts-of-laws principles (other than any provisions thereof validating the
choice of the laws of the State of New York as the governing law).
7. ENTIRE AMENDMENT. This Amendment, and terms and provisions hereof, constitute
the entire agreement among the parties pertaining to the subject matter hereof
and supersedes any and all prior or contemporaneous amendments relating to the
subject matter hereof. Except as expressly amended hereby, the Loan Agreement
and other Loan Documents shall remain unchanged and in full force and effect. To
the extent any terms or provisions of this Amendment conflict with those of the
Loan Agreement or other Loan Documents, the terms and provisions of this
Amendment shall control. This Amendment is a Loan Document.
8. COUNTERPARTS; TELEFACSIMILE EXECUTION. This Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Amendment by
signing any such counterpart. Delivery of an executed counterpart of this
Amendment by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Amendment. Any party delivering an
executed counterpart of this Amendment by telefacsimile also shall deliver an
original executed counterpart of this Amendment, but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment.
9. AMENDMENTS. This Amendment cannot be altered, amended, changed or modified in
any respect or particular unless each such alteration, amendment, change or
modification shall have been agreed to by each of the parties and reduced to
writing in its entirety and signed and delivered by each party.
10. MISCELLANEOUS.
(a) Upon the effectiveness of this Amendment, each reference in the
Loan Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of
like import referring to the Loan Agreement shall mean and refer to the Loan
Agreement as amended by this Amendment.
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(b) Upon the effectiveness of this Amendment, each reference in the
Loan Documents to the "Loan Agreement", "thereunder", "therein", "thereof" or
words of like import referring to the Loan Agreement shall mean and refer to the
Loan Agreement as amended by this Amendment.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed and delivered as of the date first written above.
QUESTRON TECHNOLOGY, INC.,
a Delaware corporation
QUESTRON DISTRIBUTION LOGISTICS,
INC., a Delaware corporation
INTEGRATED MATERIAL SYSTEMS,
INC., an Arizona corporation
POWER COMPONENTS, INC.,
a Pennsylvania corporation
CALIFORNIA FASTENERS, INC.,
a California corporation
COMP XXXX, INC., a Delaware
corporation
FAS-TRONICS, INC., a Texas
corporation
FORTUNE INDUSTRIES, INC.,
a Texas corporation
QUESTRON OPERATING COMPANY, INC.,
a Delaware corporation
QUESTRON FINANCE CORP.,
a Delaware corporation
ACTION THREADED PRODUCTS, INC.,
an Illinois corporation
ACTION THREADED PRODUCTS OF
GEORGIA, INC., a Georgia corporation
ACTION THREADED PRODUCTS OF
MINNESOTA, INC., a Minnesota
corporation
CAPITAL FASTENERS, INC., a
North Carolina corporation
B&G SUPPLY COMPANY, INC., a
Texas corporation
R.S.D. SALES CO., INC., a
New York corporation
By
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Name
----------------------------
Title Responsible Officer for each
of the above-listed Obligors
[signature pages continue]
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ABLECO FINANCE LLC, a Delaware
limited liability company, as
Collateral Agent and a Lender
By:
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Title:
-------------------------
A2 FUNDING LP, as a Lender
By: A2 FUND MANAGEMENT LLC,
its General Partner
By:
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Title:
--------------------------
[signature pages continue]
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CONGRESS FINANCIAL CORPORATION
(FLORIDA), a Florida corporation,
as Administrative Agent and a Lender
By:
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Title:
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[signature pages continue]
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XXX ING-2 LLC, a Delaware limited
liability company, as a Lender
By:
-----------------------------
Title:
--------------------------
KZH ING-3 LLC, a Delaware limited
liability company, as a Lender
By:
-----------------------------
Title:
--------------------------
THE ING CAPITAL SENIOR SECURED HIGH
INCOME FUND, L.P., as a Lender
By: ING Capital Advisors, LLC,
as Investment Advisor
By__________________________
Its Authorized Signatory
[signature pages continue]
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MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, as a Lender
By: Xxxxx X. Xxxxxx & Company,
Incorporated, as Investment Adviser
By:
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Its:
SIMSBURY CLO LIMITED, as a Lender
By: Xxxxx X. Xxxxxx & Company,
Incorporated under delegated
authority from Massachusetts Mutual
Life Insurance Company, as Collateral
Manager
By:
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Title:
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EXHIBIT A
REAFFIRMATION AND CONSENT
All capitalized terms used herein but not otherwise defined herein
shall have the meanings ascribed to them in that certain Amendment Number Five
to Amended and Restated Loan and Security Agreement, dated as of November __,
2000 (the "Amendment"). The undersigned hereby (a) represents and warrants to
the Lender Group that the execution, delivery, and performance of this
Reaffirmation and Consent are within its corporate powers, have been duly
authorized by all necessary corporate action, and are not in contravention of
any law, rule, or regulation, or any order, judgment, decree, writ, injunction,
or award of any arbitrator, court, or governmental authority, or of the terms of
its charter or bylaws, or of any material contract or undertaking to which it is
a party or by which any of its properties may be bound or affected; (b) consents
to the amendment of the Loan Agreement by the Amendment; (c) acknowledges and
reaffirms its obligations owing to the Lender Group under the QTI Guaranty and
any other Loan Documents to which it is a party; and (d) agrees that each of the
QTI Guaranty and any other Loan Documents to which it is a party is and shall
remain in full force and effect in accordance with the terms thereof. Although
the undersigned has been informed of the matters set forth herein and has
acknowledged and agreed to same, it understands that the Lender Group has no
obligations to inform it of such matters in the future or to seek its
acknowledgement or agreement to future amendments, and nothing herein shall
create such a duty. Delivery of an executed counterpart of this Reaffirmation
and Consent by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Reaffirmation and Consent. Any party
delivering an executed counterpart of this Reaffirmation and Consent by
telefacsimile also shall deliver an original executed counterpart of this
Reaffirmation and Consent but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Reaffirmation and Consent. This Reaffirmation and Consent shall be governed
by the laws of the State of New York, as more fully set forth in Section 20 of
the QTI Guaranty.
QUESTRON TECHNOLOGY, INC.,
a Delaware corporation
By:________________________
Title:
A - 1
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EXHIBIT B
REAFFIRMATION AND CONSENT
All capitalized terms used herein but not otherwise defined herein
shall have the meanings ascribed to them in that certain Amendment Number Five
to Amended and Restated Loan and Security Agreement, dated as of November __,
2000 (the "Amendment"). The undersigned hereby (a) represents and warrants to
the Lender Group that the execution, delivery, and performance of this
Reaffirmation and Consent are within its corporate powers, have been duly
authorized by all necessary corporate action, and are not in contravention of
any law, rule, or regulation, or any order, judgment, decree, writ, injunction,
or award of any arbitrator, court, or governmental authority, or of the terms of
its charter or bylaws, or of any material contract or undertaking to which it is
a party or by which any of its properties may be bound or affected; (b) consents
to the amendment of the Loan Agreement by the Amendment; (c) acknowledges and
reaffirms its obligations owing to the Lender Group under the QFC Guaranty and
any other Loan Documents to which it is a party; and (d) agrees that each of the
QFC Guaranty and any other Loan Documents to which it is a party is and shall
remain in full force and effect in accordance with the terms thereof. Although
the undersigned has been informed of the matters set forth herein and has
acknowledged and agreed to same, it understands that the Lender Group has no
obligations to inform it of such matters in the future or to seek its
acknowledgement or agreement to future amendments, and nothing herein shall
create such a duty. Delivery of an executed counterpart of this Reaffirmation
and Consent by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Reaffirmation and Consent. Any party
delivering an executed counterpart of this Reaffirmation and Consent by
telefacsimile also shall deliver an original executed counterpart of this
Reaffirmation and Consent but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Reaffirmation and Consent. This Reaffirmation and Consent shall be governed
by the laws of the State of New York, as more fully set forth in Section 20 of
the QFC Guaranty.
QUESTRON FINANCE CORP.,
a Delaware corporation
By:________________________
Title:
A-1
