CONSENT AGREEMENT
This Consent Agreement is entered into as of the 13th day of June, 1997 by
and among Precise Technology, Inc., a Delaware corporation (the "Company"),
Precise Holding Corporation, a Delaware corporation ("Parent"), Sunderland
Industrial Holdings Corporation, a Delaware corporation ("Sunderland"), Xxxxxxxx
Holdings Ltd. Corporation, a Texas corporation ("Xxxxxxxx"), Xxxx Xxxxxxx Mutual
Life Insurance Company, a Massachusetts mutual life insurance company ("Xxxx
Xxxxxxx"), Xxxx Partners II, L.P., a Delaware limited partnership ("Rice"),
Delaware State Employees' Retirement Fund, a Delaware corporation ("Delaware"),
Declaration of Trust for Defined Benefit Plans of Zeneca Holdings Inc., a
Delaware corporation ("Zeneca"), and Declaration of Trust for Defined Benefit
Plans of ICI American Holdings Inc., a Delaware corporation ("ICI"). Capitalized
terms used in this Consent Agreement and not otherwise defined herein are as
defined in the Note Agreement (as hereinafter defined).
WITNESSETH
WHEREAS, the Company, Xxxx Xxxxxxx and Xxxx are parties to that certain
Note Purchase Agreement dated as of March 29, 1996 (the "Note Agreement");
WHEREAS, Parent, Xxxx Xxxxxxx, Xxxx and Pecks are parties to that certain
Warrant Purchase Agreement dated as of March 29, 1996 (the "Warrant Agreement");
WHEREAS, Parent, Sunderland, Hamilton, Xxxxx, Xxxx Xxxxxxx and Rice are
parties to that certain Shareholder Agreement dated as of March 29, 1996 (the
"Shareholder Agreement");
WHEREAS, Parent, the Company and Pecks are parties to that certain
Securities Purchase Agreement dated as of March 29, 1996 (the "Securities
Purchase Agreement");
WHEREAS, the Company is contemplating prepayment of the Senior Debt,
prepayment of the Senior Subordinated Notes, redemption of the Pecks Preferred
Stock, redemption of the Seller Preferred Stock, repurchase of 124 shares of
Common Stock from Parent, and making an approximate $6.4 million distribution to
Parent;
WHEREAS, Parent is contemplating redemption of the Xxxxxxxx Preferred Stock
(as defined in the Shareholder Agreement) and declaration and payment of a
dividend;
WHEREAS, in order to fund the foregoing transactions, the Company intends
to enter into a $30 million revolving credit facility with Fleet National Bank,
as agent (the "New Senior Debt") and issue $75 million of Senior Subordinated
Notes due 2007 (the "New Subordinated Notes");
WHEREAS, in connection with the foregoing transactions, the Company is also
contemplating amendment of the Management Agreement, payment of investment
banking fees to Mentmore in connection with the entering into of the New Senior
Debt and issuance of the
New Subordinated Notes, amendment of the Warrant Agreement and Shareholder
Agreement, and termination of the Note Agreement.
NOW, THEREFORE, in consideration of the premises and covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Consent to Transactions by the Company. To the extent that any
agreement, consent, or notice is required under the Note Agreement, Warrant
Agreement, Shareholder Agreement or Securities Purchase Agreement, or under any
other ancillary document to which the parties hereto, or one or more of them,
are parties or by which they are governed, the parties hereto hereby consent and
agree to, and waive any required notice of, the following transactions by the
Company:
a. Prepayment of the entire outstanding principal amount of the Senior
Debt, plus (i) accrued unpaid interest on the principal amount so
prepaid, plus (ii) the amount of any loss incurred by the Senior
Lender as provided in Section 2.15 of the Senior Loan Agreement, plus
(iii) any other amounts due the Senior Lender under the Senior Loan
Documents, in accordance with the terms of the Senior Loan Documents;
b. Prepayment of the entire outstanding principal amount of the Senior
Subordinated Notes, plus (i) accrued unpaid interest on the principal
amount so prepaid, plus (ii) the aggregate amount of all other Senior
Subordinated Obligations, if any, plus (iii) the applicable Prepayment
Fee, in accordance with the terms of the Note Agreement, and
termination of the Note Agreement;
c. Redemption of 575 shares of Pecks Preferred Stock for a redemption
price of $10,000 per share, plus an amount equal to all dividends
accrued thereon and unpaid;
d. Redemption of 250 shares of Seller Preferred Stock for a redemption
price of $10,000 per share, plus an amount equal to all dividends
thereon accrued and unpaid;
e. Repurchase of 124 shares of Common Stock from Parent for an aggregate
price of approximately $3,315,000;
f. Distribution of approximately $6,441,000 to Parent;
g. Execution, delivery and performance of the Credit Agreement and other
documents related to the New Senior Debt and all other related
documents, including the granting of any security interest in
connection therewith and the entering into by any of the Company's
subsidiaries of any guarantee of such New Senior Debt;
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h. Issuance of the New Subordinated Notes and execution, delivery and
performance of the Purchase Agreement, Registration Rights Agreement,
and Indenture in connection therewith and any related documents,
including the entering into by any of the Company's subsidiaries of
any guarantee of such New Subordinated Notes;
i. Amendment and restatement of the Management Agreement, in the form
attached hereto as Exhibit A and payment of an investment banking fee
to Mentmore in the amount of $500,000;
j. Amendment of the Warrant Agreement, in the form attached hereto as
Exhibit B;
k. Amendment of the Shareholder Agreement, in the form attached hereto as
Exhibit C.
2. Consent to Transactions by Parent. To the extent that any agreement,
consent, or notice is required under the Note Agreement, Warrant Agreement,
Shareholder Agreement or Securities Purchase Agreement, or under any other
ancillary document to which the parties hereto, or one or more of them, are
parties or by which they are governed, the parties hereto hereby consent and
agree to, and waive any required notice of, the following transactions by
Parent:
a. Redemption of 331.46 shares of Xxxxxxxx Preferred Stock for a
redemption price of $10,000 per share, plus an amount equal to all
dividends thereon accrued and unpaid;
b. Upon formal action of Parent's Board of Directors, declaration and
payment of a dividend on the common stock (and the related Dilution
Dividend (as defined in the Shareholder Agreement)) in an aggregate
amount of approximately $6.0 million (subject to reduction for
appropriate provision for payment of any taxes for which Parent may be
liable on such dividend), payable (subject to any withholding
obligations) as follows:
% of Total
To In Respect Of Dividend
-- ------------- --------
Sunderland 8,035 shares of common stock 80.3500%
NAP & Company, as nominee 167.67 shares of common stock 1.6767%
for Delaware
Fuelship & Company, as 33.33 shares of common stock 0.3333%
nominee for Zeneca
Northman & Co., as nominee 49 shares of common stock 0.4900%
for ICI
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NAP & Company, as nominee Warrants to purchase 385 shares of 3.8500%
for Delaware common stock
Fuelship & Company, as Warrants to purchase 77 shares of 0.7700%
nominee for Zeneca common stock
Northman & Co., as Nominee Warrants to purchase 113 shares of 1.1300%
for ICI common stock
Xxxx Xxxxxxx Warrants to purchase 371 shares of 3.7100%
common stock
Xxxx Xxxxxxx Warrants to purchase 199 shares of 1.9900%
common stock
Rice Warrants to purchase 570 shares of 5.7000%
common stock
c. Sale of 124 shares of Common Stock of the Company to the Company for
an aggregate price of $3,315,000;
d. Execution, delivery and performance of the Credit Agreement and other
documents related to the New Senior Debt and all other related
documents to be entered into by Parent, including the granting of any
security interest in Common Stock of the Company held by Parent and
the entering into by Parent of any guarantee of such New Senior Debt;
e. Amendment of the Warrant Agreement, in the form attached hereto as
Exhibit B;
f. Amendment of the Shareholder Agreement, in the form attached hereto as
Exhibit C.
3. The effectiveness of this Consent Agreement is conditioned upon
consummation of the Refinancing Transactions, as that term is defined in the
Preliminary Offering Memorandum, dated May 19, 1997, relating to the New
Subordinated Notes.
4. The parties acknowledge the terms of the Registration Rights Agreement
between the Company, the subsidiaries of the Company and the Initial Purchasers
named therein in the offering of the New Subordinated Notes, and waive any
rights to participate or have securities registered under, or to receive notice
of or consent rights to, any Registration Statement filed with the Securities
and Exchange Commission pursuant thereto.
5. This Consent Agreement shall be construed in accordance with and
governed by the laws of the State of New York, without regard to its conflict of
laws provisions.
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IN WITNESS WHEREOF, the undersigned, through their duly authorized
representatives, have set hereunto their hands as of the date first above
written.
PRECISE TECHNOLOGY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Its:
---------------------------------------
PRECISE HOLDING CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Its:
---------------------------------------
SUNDERLAND INDUSTRIAL HOLDINGS
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Its:
---------------------------------------
XXXXXXXX HOLDINGS LTD.
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Its:
---------------------------------------
XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxx
---------------------------------------
Xxxxxxx Xxxx, Senior Investment Officer
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RICE PARTNERS II, L.P.
By: Rice Capital Group IV, L.P., its
general partner
By: RMC Fund Management, L.P., its general
partner
By: Rice Mezzanine Corporation, its
general partner
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx,
Managing Director
DELAWARE STATE EMPLOYEES' RETIREMENT
FUND
By: Pecks Management Partners, Ltd., its
investment advisor
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx, Managing Director
DECLARATION OF TRUST FOR DEFINED BENEFIT
PLANS OF ZENECA HOLDINGS, INC.
By: Pecks Management Partners, Ltd., its
investment advisor
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx, Managing Director
DECLARATION OF TRUST FOR DEFINED BENEFIT
PLANS OF ICI AMERICAN HOLDINGS INC.
By: Pecks Management Partners, Ltd., its
investment advisor
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx, Managing Director
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