EXHIBIT 10.48
CONSENT AGREEMENT
April 1,1999
Uniroyal Technology Corporation
Uniroyal Engineered Products, Inc.
0 Xxxxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000-0000
Gentlemen:
Reference is made to the Financing Agreement between Uniroyal Technology
Corporation ("UTC") and us dated June 5, 1996 (herein the "Financing Agreement")
together with all amendments, supplements, documents and instruments executed in
conjunction therewith (herein collectively with the Financing Agreement the
"Financing Documents"). Capitalized terms used herein and defined in the
Financing Documents shall have the meanings specified therein unless otherwise
specifically defined herein,
You have advised us that effective as of April 1, 1999 (the "Effective Date") as
part of a corporate restructuring (the "Restructuring") UTC will assign,
transfer and convey to its wholly owned subsidiary, Uniroyal Engineered
Products, Inc. (herein "UEP") all of the assets of the Specialty Adhesives and
Coated Fabrics segments of UTC (including but not limited to all Collateral
under the Financing Agreement but excluding Port Clinton, Ohio real property) as
an equity investment and UEP will assume substantially all of the liabilities of
the Specialty Adhesives and Coated Fabrics segments of UTC (including but not
limited to all Obligations under the Financing Agreement).
This letter is to confirm our agreement that, effective immediately upon
fulfillment to our satisfaction of the Conditions Precedent (as defined below),
we hereby consent to the Restructuring.
In addition, as of the Effective Date and effective immediately upon fulfillment
to our satisfaction of the Conditions Precedent (as defined below), it is hereby
mutually agreed that Section 6, Paragraph 9 of the Financing Agreement shall be,
and hereby is amended by the addition thereto of the following additional
negative covenants as clauses H and I:
"H. Declare or pay any dividend of any kind on, or purchase, acquire,
redeem or retire, any of the capital stock or equity interest, of any
class whatsoever, whether now or hereafter outstanding, except that the
Company may declare and pay dividends on its capital stock to Uniroyal
Technology Corporation (herein the "Parent"), provided that after
giving effect to any such dividend payment (x) the Company's
Availability (to be computed on the basis of all of the Company's
debts, obligations and payables being current in accordance with the
Company's normal business practices) hereunder is at least $1,500,000
and (y) no Default or Event of Default has occurred or would occur
hereunder; and
"I. Pay management, consulting or other similar fees to any person,
corporation or other entity affiliated with the Company, except that
the Company may pay management fees to the Parent subject to and in
accordance with the existing Management Agreement between the Company
and the Parent, provided that (x) the aggregate amount of such fees
during any fiscal year shall not exceed the amount set forth in such
Management Agreement as in effect on the date hereof and (y) no such
fees shall be paid if a Default or Event of Default has occurred or
would occur after giving effect to any such payment."
The foregoing consent shall be, and hereby is, subject to the fulfillment to our
satisfaction of each of the following conditions precedent (herein each a
"Condition Precedent" and collectively the "Conditions Precedent").
(i) the execution of, and delivery to, CITBC of the following documents;
(x) an assumption agreement (herein the "Assumption Agreement") (in the
form of Exhibit A annexed hereto); and (y) a guaranty (in the form of
Exhibit B annexed hereto) executed by UTC (the "UTC Guaranty") covering
all of UEP's Obligations to CITBC.
(ii) CITBC's receipt of, and satisfaction with, the following:
(x) a Secretary's Certificate (in form and substance satisfactory to
CITBC) certifying Board of Directors Resolutions for each of UTC and
UEP authorizing the Restructuring and the execution and delivery of
this Consent Agreement, the Assumption Agreement, the UTC Guaranty and
all other documents and/or agreements executed in conjunction herewith
and/or therewith; (y) an opinion of counsel to UTC and UEP (in form and
substance satisfactory to CITBC) as to the due authorization and
consummation of the Restructuring, and the due authorization,
execution, delivery and binding effect of this Consent Agreement, the
Assumption Agreement, the UTC Guaranty and all documents and agreements
executed in connection with the Restructuring and this Consent
Agreement; (z) the results of all UCC, Tax and Judgement Lien searches
requested by CITBC in connection with the Restructuring; (aa) a
Certificate of Insurance together with a Loss Payable Endorsement in
CITBC's favor (in form and substance satisfactory to CITBC) confirming
continuing insurance coverage of the Collateral for UEP after the
Restructuring; and (bb) executed Landlord Waivers and other appropriate
Notices of Security Interest to Warehouses and/or Processors for all
Inventory locations of UEP, provided that, in lieu of any such waiver
or notice CITBC may (at its option) establish an Availability Reserve
in accordance with the terms and provisions of the Financing Agreement.
You further agree to pay all Out-of-Pocket Expenses incurred in connection with
this Consent Agreement and the transactions contemplated hereby, all of which
may (at our option) be charged to your Revolving Loan Account.
Except to the extent set forth herein, no other waiver of, or change in any of
the terms, provisions or conditions of the Financing Agreement is intended or
implied.
If the foregoing is in accordance with your understanding of our agreement,
kindly so indicate by signing and returning the enclosed copy of this letter.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, INC.
By:/s/ Xxxxx X'Xxxx
Title: AVP
Read and Agreed to:
UNIROYAL TECHNOLOGY CORPORATION
By:/s/ Xxxxxx X. Xxxxxxx, Xx.
Title: VP
UNIROYAL ENGINEERED PRODUCTS, INC.
By:/s/ Xxxxxx X. Xxxxx
Title: President
