AMENDMENT NUMBER ONE TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER ONE TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (this "Amendment") dated as of October 1, 1999, is entered into among
Questron Technology, Inc., a Delaware corporation ("QTI"), certain of the direct
and indirect Subsidiaries of QTI identified therein (individually and
collectively, and jointly and severally, the "Obligors"), each of the Lenders
signatory hereto, CONGRESS FINANCIAL CORPORATION, a Delaware 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
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 are in default under the terms of the Loan
Agreement;
WHEREAS, the parties desire to amend the Loan Agreement, in
accordance with the amendment provisions of Section 12.3 thereof, and waive the
events of default, in each case, as set forth herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree to amend the
Loan Agreement, effective immediately, 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. Section 9A [Conditions Precedent to all Credits]
of the Loan Agreement hereby is amended by inserting the following new
subsection 9A.5 after subsection 9A.4 appearing in said Section:
9A.5 Revolving Facility Usage. The prior written consent of the
Collateral Agent shall be required for any Revolving Credit Loan or Letter of
Credit Accommodation at anytime that the Revolving Facility Usage is equal to or
greater than $12,500,000, or, after giving effect to a Revolving Credit Loan or
Letter of Credit Accommodation requested by Borrower, the Revolving Facility
Usage would exceed $12,500,000.
3. WAIVER OF EVENTS OF DEFAULT. Upon the effectiveness of this Amendment, the
Required Lenders hereby waive each of the Events of Default existing as of the
date of this Amendment and identified on Schedule A attached to this Amendment
(each, a "Specified Event of Default"). Such waiver is specific in time and in
intent and does not constitute, nor should it be construed as constituting,
except to the extent expressly set forth herein, a waiver or modification of any
term of, or right, power, or privilege under, the Loan Agreement, the other Loan
Documents, or any agreement, contract, indenture, document, or instrument
mentioned therein. Such waiver does not preclude any exercise of any right,
power, or privilege under any Loan Document, based upon any Event of Default
other than the Specified Events of Default.
4. Representations and Warranties. The Obligors hereby represent and warrant to
the Required Lenders 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 obligation, enforceable against the Obligors in accordance with its
terms;
(c) There is no litigation or proceeding pending or threatened
against or affecting the Obligors, its 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;
(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
2
(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 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 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).
(b) Administrative Agent shall have received a fee of $30,000
in cash or by wire transfer of immediately available funds, such fee to be for
(and upon receipt shall be paid to) the ratable benefit of the Lenders with a
Revolving Credit Commitment.
(c) Administrative Agent shall have received a fee of $131,250
in cash or by wire transfer of immediately available funds, such fee to be for
(and upon receipt shall be paid to) the ratable benefit of the Lenders with a
Term Loan A Commitment or a Term Loan B Commitment.
(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 Lender Group.
(e) 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.
(f) 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.
(g) Collateral Agent shall have received a waiver, duly
executed by the Purchasers and the Obligors, of all events of default under the
Subordinated Debt Documents (the form and substance of such waiver to be
satisfactory to Collateral Agent).
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).
3
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.
(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.]
4
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
By /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name Xxxxxxx X. Xxxxxxxx
Title Responsible Officer for each
of the above-listed Obligors
Ableco Finance LLC, a Delaware limited
liability company, as Collateral Agent
and a Lender
By: /s/ Xxxxx Xxxxx
--------------------------------
Title: Senior Vice President
S - 1
STYX PARTNERS, L.P., a Delaware limited
partnership, as a Lender
By: Styx Associates LLC
Its: General Partner
By: /s/ Xxxx X. Neporant
----------------------------
Title: Vice President
CONGRESS FINANCIAL CORPORATION
(FLORIDA), a Florida corporation, as
Administrative Agent and a Lender
By: /s/ Xxxx Xxxxx
--------------------------------
Title: Vice President
KZH ING-2 LLC, a Delaware limited
liability company, as a Lender
By: /s/ Xxxxx Xxxx
----------------------------
Title: Authorized Agent
KZH ING-3 LLC, a Delaware limited
liability company, as a Lender
By: /s/ Xxxxx Xxxx
--------------------------
Title: Authorized Agent
S-2
ING HIGH INCOME PRINCIPAL PRESERVATION
FUND HOLDINGS, LDC, as a Lender
By: ING Capital Advisors, LLC.,
as Investment Advisor
By Xxxxxxx Xxxxxxxx
----------------------------
Its Authorized Signatory
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, as a Lender
By: /s/ Xxxx X. Xxxxx
---------------------------------
Title: Managing Director
SIMSBURY CLO LIMITED, as a Lender
By: Massachusetts Mutual Life Insurance
Company, as Collateral Agent
By: /s/ Xxxx X. Xxxxx
----------------------------
Title: Managing Director
S - 3
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 One to
Amended and Restated Loan and Security Agreement, dated as of November __, 1999
(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
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 One to
Amended and Restated Loan and Security Agreement, dated as of November __, 1999
(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:
B-1
SCHEDULE A
SPECIFIED EVENTS OF DEFAULT
(1) The Obligors have failed to maintain the minimum
Total Funded Debt Coverage Ratio required by
Section 8.3.1 of the Loan Agreement for the
quarter ending September 30, 1999.
(2) The Obligors have failed to maintain the minimum
EBITDA required by Section 8.3.2 of the Loan
Agreement for the quarter ending September 30,
1999.
(3) The Obligors have failed to maintain the minimum
Senior Debt Coverage Ratio required by Section
8.3.3 of the Loan Agreement for the quarter
ending September 30, 1999.
A-1
Each of the items identified in paragraphs (1), (2), and (3) above
constitute an Event of Default under Section 10.1 of the Loan Agreement.
