Exhibit 10.22
AMENDED AND RESTATED
REVOLVING CREDIT, TERM LOAN
AND
SECURITY AGREEMENT
Amended and Restated Revolving Credit, Term Loan and Security
Agreement dated as of February 28, 2001 (this "Agreement") among MEASUREMENT
SPECIALTIES, INC., a corporation organized under the laws of the State of New
Jersey ("MSI"), MEASUREMENT SPECIALTIES UK LIMITED, a company incorporated in
England and Wales and a wholly owned subsidiary of MSI ("MSUK" and collectively
with MSI, the "Borrowers"), SUMMIT BANK ("Summit"), THE CHASE MANHATTAN BANK
("Chase"), FIRST UNION NATIONAL BANK ("First Union") and FIRST UNION NATIONAL
BANK, as agent (in such capacity, "Agent").
WHEREAS, MSI, Lenders and Agent are parties to that certain Revolving
Credit, Term Loan and Security Agreement dated as of August 7, 2000, as amended
(as so amended, the "Existing Loan Agreement") pursuant to which Lenders agreed
to extend to MSI: (i) a revolving loan and letter of credit facility of up to
FIFTEEN MILLION DOLLARS ($15,000,000) (the "Revolving Credit Commitment"), and
(ii) a term loan in the original principal amount of TWENTY FIVE MILLION DOLLARS
($25,000,000) (the "Term Loan");
WHEREAS, pursuant to Section 6.17 of the Existing Loan Agreement, MSI
and the Lenders agreed to negotiate in good faith to establish, within sixty
(60) days of the date of the Existing Loan Agreement Closing Date, a credit
facility for the benefit of MSUK (the "MSUK Sublimit") to serve its working
capital needs and enable MSUK to repay a portion of the Intercompany Loan (as
hereinafter defined);
WHEREAS, pursuant to that certain letter agreement dated September 18,
2000, MSI, Lenders and Agent, among other things, agreed to extend the time
frame for the creation of the MSUK Sublimit until December 5, 2000;
WHEREAS, pursuant to that certain letter agreement dated December 5,
2000, MSI, Lenders and Agent, among other things, agreed to extend the time
frame for the creation of the MSUK Sublimit until January 31, 2001; and
WHEREAS, pursuant to that certain letter agreement dated January 31,
2001, MSI, Lenders and Agent, among other things, agreed to extend the time
frame for the creation of the MSUK Sublimit until February 28, 2001; and
WHEREAS, in order to implement the MSUK Sublimit, MSI, Lenders and
Agent have agreed that the Existing Loan Agreement should be amended and
restated.
IN CONSIDERATION of the mutual covenants and undertakings herein
contained, the parties hereto hereby agree that the Existing Loan Agreement be
amended and restated as follows:
1. DEFINITIONS.
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1.1. ACCOUNTING TERMS.
Terms used in the recitals hereto and not otherwise defined shall be
defined as in the Existing Agreement or herein. As used in this Agreement, the
Notes, or any certificate, report or other document made or delivered pursuant
to this Agreement, accounting terms not defined in Section 1.2 or elsewhere in
this Agreement and accounting terms partly defined in Section 1.2 to the extent
not defined, shall have the respective meanings given to them under GAAP;
provided, however, whenever such accounting terms are used for the purposes of
determining compliance with financial covenants in this Agreement, such
accounting terms shall be defined in accordance with GAAP as applied in
preparation of the audited financial statements of MSI for the fiscal year ended
March 31, 2000.
1.2. GENERAL TERMS.
For purposes of this Agreement the following terms shall have the
following meanings:
"Accountants" shall have the meaning set forth in Section 9.7 hereof.
"Acquired Entity" shall mean any business, assets or Person subject to
an Acquisition permitted under Section 7.11.
"Acquisition" shall mean any transaction, or any series of related
transactions, consummated after the date of this Agreement, by which MSI and/or
any of its Subsidiaries (a) acquires any going business or entity or all or
substantially all of the assets of any corporation, partnership, joint venture,
limited liability company or other firm or any division of any corporation,
partnership, joint venture or other firm or entity or the right to use or manage
or otherwise exploit any such business or assets, whether through purchase or
lease of assets, merger or otherwise, (b) directly or indirectly acquires
control of at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors or
(c) directly or indirectly acquires control of a majority ownership interest in
or voting control of any partnership, joint venture, limited liability company
or other firm or entity. The terms "Acquire" and "Acquired" used as a verb shall
have a correlative meaning.
"Acquisition Agreements" shall mean, collectively, (a) the Agreement
of Purchase and Sale including all exhibits and schedules thereto dated as of
August 4, 2000 between TRW Sensors & Components, Inc., a Virginia corporation,
as seller and MSI, as buyer, and (b) the U.K. Purchase and Sale Agreement
including all exhibits and schedules thereto dated as of August 4, 2000 between
MSUK, as buyer, and TRW Limited and Xxxxx Xxxxxxxxx Limited, as sellers.
"Acquisition Transaction" shall have the meaning set forth in Section
2.2(i).
"Advances" shall mean and include the Revolving Advances, the Term
Loan and the Letters of Credit.
"Advance Rates" shall mean, collectively, the Receivables Advance
Rate, the Canadian Receivables Advance Rate, the MSUK Receivables Advance Rate
and the Inventory Advance Rate.
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"Affiliate" of any Person shall mean (a) any Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with such Person, or (b) any Person who is a director
or officer (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of
any Person described in clause (a) above. For purposes of this definition,
control of a Person shall mean the power, direct or indirect, (x) to vote 5% or
more of the securities having ordinary voting power for the election of
directors of such Person, or (y) to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"Agent" shall have the meaning set forth in the preamble to this
Agreement and shall extend to all successor and assigns of such Person.
"Assignments of Patents" shall mean, collectively, the assignments of
patents each dated as of August 7, 2000 executed by MSI and Sensors to the Agent
for the ratable benefit of the Lenders, and any assignment of patents executed
by any Obligor to the Agent for the ratable benefit of the Lenders subsequent to
the date hereof, as any of them may be amended, supplemented or otherwise
modified from time to time.
"Assignments of Trademarks" shall mean the assignment of trademarks
dated as of August 7, 2000 executed by MSI to the Agent for the ratable benefit
of the Lenders and any assignment of trademarks executed by any Obligor to the
Agent for the ratable benefit of the Lenders subsequent to the date hereof, as
any of them may be amended, supplemented or otherwise modified from time to
time.
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement by and among a Purchasing Lender, a Transferor Lender and
the Agent, as Agent and on behalf of the remaining Lenders, substantially in the
form of Exhibit 1.1(A), as amended, supplemented or otherwise modified from time
to time.
"Authority" shall have the meaning set forth in Section 4.19(d).
"Blocked Accounts" shall have the meaning set forth in Section
4.15(h).
"Borrowers" shall have the meaning set forth in the preamble to this
Agreement and shall extend to all permitted successors and assigns of such
Persons.
"Borrowers' Accounts" shall have the meaning set forth in Section 2.9.
"Borrowing Base" shall have the meaning set forth in Section 2.1(a)
"Borrowing Base Certificate" shall have the meaning set forth in
Section 2.1(b) hereto.
"Business Day" shall mean with respect to LIBOR Rate Loans, any day on
which commercial banks are open for domestic and international business,
including dealings in Dollar deposits in London, England and New York, New York
and with respect to all other matters, any day other than a day on which
commercial banks in New Jersey are authorized or required by law to close.
"Canadian Eligible Receivable" shall mean any Eligible Receivable in
which the Customer is located in Canada.
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"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sec. 9601 et seq.
"Change in Control" shall mean (i) with respect to MSI: (a) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities Exchange Act of 1934
and the rules of the Securities and Exchange Commission thereunder as in effect
on the date hereof), of shares representing more than twenty percent (20%) of
the aggregate ordinary voting power represented by the issued and outstanding
capital stock of MSI; or (b) occupation of a majority of the seats on the board
of directors of MSI by Persons who were neither (1) nominated by the board of
directors of MSI nor (2) appointed by directors so nominated; and (ii) with
respect to any other Obligor, any merger, consolidation, or sale of all or
substantially all of the property or assets of or any other circumstance which
results in a change from the date hereof in MSI's or any other Obligor's ability
to directly or indirectly: (x) to vote 100% of the securities having ordinary
voting power for the election of directors of such other Obligor, or (y) to
direct or cause the direction of the management and policies of such other
Obligor by contract or otherwise.
"Charges" shall mean all taxes, charges, fees, imposts, levies or
other assessments, including, without limitation, all net income, gross income,
gross receipts, sales, use, ad valorem, value added, transfer, franchise,
profits, inventory, capital stock, license, withholding, payroll, employment,
social security, unemployment, excise, severance, stamp, occupation and property
taxes, custom duties, fees, assessments, liens, claims and charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts, imposed by any taxing or other authority, domestic or
foreign (including, without limitation, the Pension Benefit Guaranty Corporation
or any environmental agency or superfund), upon the Collateral, any Subsidiary
Collateral, MSI, any other Obligor or any Affiliates of MSI or such other
Obligor.
"Chase" shall mean The Chase Manhattan Bank, a New York banking
corporation.
"Closing Date" shall mean the date hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated thereunder.
"Collateral" shall mean and include all assets of MSI now owned or
hereafter acquired or arising including, without limitation, all of MSI's now
owned or hereafter acquired or arising:
(a) Receivables;
(b) Equipment;
(c) General Intangibles;
(d) Inventory;
(e) Leasehold Interests (other than MSI's interest as tenant
under the Norristown, Pennsylvania lease);
(f) right, title and interest in and to (i) its respective goods
and other property including, but not limited to, all merchandise returned or
rejected by Customers, relating to or securing any of the Receivables and any
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and all Collateral (as defined under the Stock Pledge Agreements); (ii) all of
MSI's rights as a consignor, a consignee, an unpaid vendor, mechanic, artisan,
or other lien or, including stoppage in transit, setoff, detinue, replevin,
reclamation and repurchase; (iii) all additional amounts due to MSI from any
Customer relating to the Receivables; (iv) other property, including warranty
claims, relating to any goods securing this Agreement; (v) all of MSI's contract
rights, rights of payment which have been earned under a contract right,
instruments, documents, chattel paper, warehouse receipts, deposit accounts,
money, securities and investment property, including all indemnity and other
rights for the benefit of MSI with respect to the Acquisition Agreements and all
of MSI's rights under the Intercompany Note and under the Second Mortgage
Debenture; (vi) if and when obtained by MSI, all real and personal property of
third parties in which MSI has been granted a lien or security interest as
security for the payment or enforcement of Receivables; and (vii) any other
goods, personal property or real property now owned or hereafter acquired in
which MSI has expressly granted a security interest or may in the future grant a
security interest to Agent, for the benefit of Lenders hereunder, or in any
amendment or supplement hereto or thereto, or under any other agreement between
Agent or any Lender and MSI;
(g) ledger sheets, ledger cards, files, correspondence, records,
books of account, business papers, computers, computer software (owned by MSI or
in which it has an interest), computer programs, tapes, disks and documents
relating to (a), (b), (c), (d), (e), or (f) of this Paragraph; and
(h) all proceeds and products of (a), (b), (c), (d), (e), (f),
and (g) in whatever form, including, but not limited to: cash, deposit accounts
(whether or not comprised solely of proceeds), certificates of deposit,
insurance proceeds (including hazard, flood and credit insurance), negotiable
instruments and other instruments for the payment of money, chattel paper,
security agreements, documents, eminent domain proceeds, condemnation proceeds
and tort claim proceeds.
"Commitment" shall mean as to any Lender the aggregate of its
Revolving Credit Commitment and Term Loan Commitment, and Commitments shall mean
the aggregate of the Revolving Credit Commitment and Tern Loan Commitments of
all of the Lenders.
"Consents" shall mean all filings and all licenses, permits, consents,
approvals, authorizations, qualifications and orders of governmental authorities
and other third parties, domestic or foreign, necessary to carry on MSI's or any
other Obligor's business, including, without limitation, any Consents required
under all applicable federal, state or other applicable law.
"Consolidated Funded Indebtedness" means, as to MSI and the other
Obligors on a consolidated basis, all interest bearing Indebtedness (including
capital leases and subordinate debt).
"Contingent Obligations" means, as to any Person, any obligation of
such Person guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(A) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (B) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
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capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (C) to purchase property,
securities or services primarily for the purpose of assuring the beneficiary of
any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, (D) for the obligations of a limited
liability company in which such Person is a member, or (E) otherwise to assure
or hold harmless the beneficiary of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligations shall
not include the endorsement of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by the Agent in good faith.
"Contract Rate" shall mean, as applicable, the Revolving Interest Rate
or the Term Loan Rate.
"Controlled Group" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with MSI or Obligors, are treated as a single
employer under Section 414 of the Code.
"Corporate Purpose Advance" shall have the meaning set forth in
Section 2.1(a).
"Customer" shall mean and include the account debtor with respect to
any Receivable and/or the prospective purchaser of goods, services or both with
respect to any contract or contract right, and/or any party who enters into or
proposes to enter into any contract or other arrangement with MSI, Sensors or
MSUK, pursuant to which MSI, Sensors or MSUK is to deliver any personal property
or perform any services.
"Default" shall mean an event which, with the giving of notice or
passage of time or both, would constitute an Event of Default.
"Default Rate" shall have the meaning set forth in Section 3.1 hereof.
"Depository Accounts" shall have the meaning set forth in Section
4.15(h) hereof.
"Documents" shall have the meaning set forth in Section 8.1(c) hereof.
"Dollar" and the sign "$" shall mean lawful money of the United States
of America.
"Domestic Rate Loan" shall mean any Advance that bears interest based
upon the Prime Rate.
"Duty Deferment Bond" means the duty deferment bond in the amount of
60,000 issued on or about February 23, 2001 by the Agent for the benefit of MSI,
as the same may be renewed, extended or replaced.
"Earnings Before Interest and Taxes" shall mean for any period the sum
of (i) consolidated net income (or loss) of MSI for such period (excluding
extraordinary gains), plus (ii) all consolidated interest expense of such
period, plus (iii) all consolidated charges against income of MSI for such
period for federal, state and local income taxes.
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"EBITDA" shall mean for any period the sum of (i) Earnings Before
Interest and Taxes for such period plus (ii) depreciation expenses for such
period, plus (iii) amortization expenses for such period, all determined on a
consolidated basis.
"Eligible Inventory" shall mean and include Inventory, with respect to
MSI and Sensors, valued at the lower of cost or market value, determined on a
first-in-first-out basis, which shall be raw materials and finished goods as
certified by MSI and Sensors which is not, in Agent's opinion, obsolete, slow
moving or unmerchantable and which Agent, in its sole discretion, shall not deem
ineligible Inventory, based on such considerations as Agent may from time to
time deem appropriate including, without limitation, whether the Inventory is
subject to a perfected, first priority security interest in favor of Agent and
whether the Inventory conforms to all standards imposed by any governmental
agency, division or department thereof which has regulatory authority over such
goods or the use or sale thereof.
"Eligible Receivables" shall mean and include with respect to MSI,
Sensors or MSUK, each Receivable of MSI, Sensors or MSUK arising in the ordinary
course of MSI's, Sensors' or MSUK's respective business and which Agent, in its
reasonable credit judgment, shall deem to be an Eligible Receivable, based on
such considerations as Agent may from time to time deem appropriate. A
Receivable shall not be deemed eligible unless such Receivable is subject to
Agent's first priority perfected security interest and no other Lien (other than
Permitted Encumbrances), and is evidenced by an invoice or other documentary
evidence satisfactory to Agent. In addition, no Receivable shall be an Eligible
Receivable if:
(a) it arises out of a sale made by MSI, Sensors or MSUK to an
Affiliate or Subsidiary of MSI, Sensors or MSUK or to a Person controlled by an
Affiliate or Subsidiary of MSI, Sensors or MSUK;
(b) it is due or unpaid more than sixty (60) days after the
original due date or greater than ninety (90) days after original invoice date;
(c) fifty percent (50%) or more of the aggregate amount of all
amounts owed by a particular Customer are overdue more than sixty (60) days from
the due date unless extended payment terms are granted, in which case not more
than fifty percent (50%) of the aggregate amount of all amounts owed by a
particular Customer are more than ninety (90) days from the original invoice
date, or MSI, MSUK or Sensors has not received any notice nor has it any
knowledge of any facts which adversely affect the credit of such Customer. Such
percentage may, in Agent's sole discretion, be increased or decreased from time
to time;
(d) any covenant, representation or warranty contained in this
Agreement with respect to such Receivable has been breached;
(e) the Customer shall (i) apply for, suffer, or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property or call
a meeting of its creditors, (ii) admit in writing its inability, or be generally
unable, to pay its debts as they become due or cease operations of its present
business, (iii) make a general assignment for the benefit of creditors, (iv)
commence a voluntary case under any state or federal bankruptcy laws (as now or
hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a
petition seeking to take advantage of any other law providing for the relief of
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debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is
filed against it in any involuntary case under such bankruptcy laws, or (viii)
take any action for the purpose of effecting any of the foregoing;
(f) the sale is to a Customer outside the United States of
America, unless the sale is on letter of credit, guaranty or acceptance terms,
in each case acceptable to Agent in its sole discretion and unless the sale
qualifies as a Canadian Eligible Receivable or a MSUK Eligible Receivable;
(g) the sale to the Customer is on a xxxx-and-hold, guaranteed
sale, sale-and-return, sale on approval, consignment or any other repurchase or
return basis or is evidenced by chattel paper unless the sale qualifies as a
Permitted Guaranteed Sale Arrangement;
(h) Agent believes, in its reasonable judgment, that collection
of such Receivable is insecure or that such Receivable may not be paid by reason
of the Customer's financial inability to pay;
(i) the Customer is the United States of America, any state or
any department, agency or instrumentality of any of them, unless MSI, MSUK or
Sensors, as the case may be, assigns its respective right to payment of such
Receivable to Agent pursuant to the Assignment of Claims Act of 1940, as amended
U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.) or has
otherwise complied with other applicable statutes or ordinances;
(j) the goods giving rise to such Receivable have not been
shipped and delivered to and accepted by the Customer or the services giving
rise to such Receivable have not been performed by MSI, Sensors or MSUK and
accepted by the Customer or the Receivable otherwise does not represent a final
sale;
(k) the Receivables of the Customer exceed a credit limit
determined by Agent, in its sole and reasonable discretion, to the extent such
Receivable exceeds such limit;
(l) to the extent the Receivable is subject to any offset,
deduction, defense, dispute, or counterclaim, the Customer is also a creditor or
supplier of MSI, Sensors or MSUK or the Receivable is contingent in any respect
or for any reason;
(m) MSI, Sensors or MSUK has made any agreement with any Customer
for any deduction therefrom, except for discounts or allowances made in the
ordinary course of business for prompt payment, all of which discounts or
allowances are reflected in the calculation of the face value of each respective
invoice related thereto;
(n) shipment of the merchandise or the rendition of services in
connection with such Receivable has not been completed;
(o) any return, rejection or repossession of the merchandise sold
in connection with such Receivable has occurred;
(p) such Receivable is not payable to MSI, Sensors or MSUK; or
(q) such Receivable is not otherwise satisfactory to Agent as
determined in good faith by Agent in the exercise of its discretion in a
reasonable manner.
"Double Taxation Treaty" means any convention between the government
of the United Kingdom and any other government for the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes on income
and capital gains.
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"Environmental Complaint" shall have the meaning set forth in Section
4.19(d) hereof.
"Environmental Laws" shall mean all federal, state and local
environmental, land use, zoning, health, chemical use, safety and sanitation
laws, statutes, ordinances and codes relating to the protection of the
environment and/or governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances and the rules, regulations, policies, guidelines, interpretations,
decisions, orders and directives of federal, state and local governmental
agencies and authorities with respect thereto.
"Equipment" shall mean and include all of MSI's, MSUK's and Sensors'
goods (other than Inventory) whether now owned or hereafter acquired and
wherever located including, without limitation, all equipment, machinery,
apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts,
accessories and all replacements and substitutions therefor or accessions
thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time and the rules and regulations promulgated
thereunder.
"Event of Default" shall mean the occurrence of any of the events set
forth in Article X hereof.
"Existing Loan Agreement Closing Date" means August 7, 2000.
"Expiration Date" shall mean with respect to the Revolving Advances,
August 7, 2002.
"Federal Funds Rate" shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or if such rate is not so published for any
day which is a Business Day, the average of quotations for such day on such
transactions received by Agent from three Federal funds brokers of recognized
standing selected by Lender.
"First Mortgage Debenture" shall mean the Mortgage Debenture dated the
date hereof in which MSUK assigns, charges and grants to Agent for the ratable
benefit of Lenders a continuing security interest in and to all Subsidiary
Collateral of MSUK, as amended, supplemented or modified from time to time.
"Fixed Charge Coverage Ratio" shall mean and include, with respect to
any fiscal period, the ratio of (a) EBITDA minus capitalized expenditures made
and taxes paid during such period to (b) all Senior Debt Payments, all as
determined on a consolidated basis.
"Formula Amount" shall have the meaning set forth in Section 2.1(a).
"Form 395 Documents" shall mean, collectively, the Companies Form No.
395 to be filed with Companies House in connection with the registration of the
First Mortgage Debenture, the Second Mortgage Debenture, the applicable Stock
Pledge Agreement and this Agreement.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time.
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"General Intangibles" shall mean and include all of MSI's, MSUK's and
Sensors' general intangibles, whether now owned or hereafter acquired including,
without limitation, all choses in action, causes of action, corporate or other
business records, inventions, designs, patents, patent applications, equipment
formulations, manufacturing procedures, quality control procedures, trademarks,
tradenames, service marks, trade secrets, goodwill, copyrights, design rights,
registrations, licenses, franchises, customer lists, tax refunds, tax refund
claims, computer programs, all claims under guaranties, security interests or
other security held by or granted to MSI or MSUK to secure payment of any of the
Receivables by a Customer all rights of indemnification and all other intangible
property of every kind and nature (other than Receivables).
"Guaranties" shall mean, collectively, MSI Guaranty, the Sensors
Guaranty and any other guaranty agreements executed by any Guarantor in favor of
Agent and Lenders, as amended, supplemented or modified from time to time.
"Guarantor(s)" shall mean, individually or collectively, Sensors, MSI
(in its capacity as guarantor under the MSI Guaranty) and any other Person who
hereafter becomes a guarantor of the Obligations.
"Hazardous Discharge" shall have the meaning set forth in Section
4.19(d) hereof.
"Hazardous Substance" shall mean, without limitation, any flammable
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and petroleum products,
methane, hazardous materials, Hazardous Wastes, hazardous or Toxic Substances or
related materials as defined in CERCLA, the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Sections 1801, et seq.), or any other applicable
Environmental Law of the State of New Jersey, Commonwealth of Pennsylvania,
State of California or any other Official Body and in the regulations adopted
pursuant thereto.
"Hazardous Wastes" shall mean all waste materials subject to
regulation under CERCLA, RCRA or applicable state law, and any other applicable
Federal and state laws now in force or hereafter enacted relating to hazardous
waste disposal.
"Indebtedness" of a Person shall mean at a particular time, all items
which, in accordance with GAAP, would be classified as liabilities on a balance
sheet of such Person as at such time and which constitute, without duplication,
(a) indebtedness for borrowed money or the deferred purchase price of property
(other than trade credit extended to such Person for the purchase of goods or
services rendered in the ordinary course of business to the extent the same
would otherwise constitute Indebtedness), (b) indebtedness evidenced by notes,
bonds, debentures or similar instruments, (c) obligations under leases which, in
accordance with GAAP, are required to be capitalized on a balance sheet, (d)
obligations under conditional sales or other title retention agreements, (e)
indebtedness arising under letters of credit (both documentary and standby) and
acceptance facilities and the face amount of all letters of credit issued for
the account of such Person and, without duplication, all drafts drawn thereunder
to the extent such Person shall not have reimbursed the issuer in respect of the
issuer's payment of such drafts (including, with limitation, any Letters of
Credit Outstanding for which such Person is liable), (f) all liabilities secured
by any Lien on any property owned by such Person even though such Person has not
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assumed or otherwise become liable for the payment thereof (other than
carriers', warehousemen's, mechanics', repairmen's or other like nonconsensual
liens arising in the ordinary course of business to the extent such liens are
Permitted Encumbrances) and liens for taxes, assessments or similar charges
incurred in the ordinary course of business to the extent such liens are
Permitted Encumbrances, (g) mandatory obligations of such Person to redeem or
purchase stock or to purchase or repay Indebtedness, and (h) Contingent
Obligations of such Person in respect of any of the foregoing.
"Insolvency Proceeding" shall mean, with respect to any Person, (a) a
case, action or proceeding with respect to such Person (i) before any court or
any other Official Body under any bankruptcy, insolvency, reorganization or
other similar Law now or hereafter in effect, or (ii) for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of MSI, MSUK or Sensors or otherwise relating to the
liquidation, dissolution, winding-up or relief of such Person, or (b) any
general assignment for the benefit of creditors, composition, marshaling of
assets for creditors, or other, similar arrangement in respect of such Person's
creditors generally or any substantial portion of its creditors; undertaken
under any Law.
"Intercompany Loan" shall mean the loan in the amount of up to
$3,421,032 from MSI to MSUK to finance MSUK's acquisition of certain assets of
the Seller and evidenced by the Intercompany Note.
"Intercompany Note" means the demand promissory note dated February
28, 2001 in the principal amount of $3,421,032 from MSUK to MSI.
"Intercreditor Agreement" shall mean the Intercreditor Agreement dated
the date hereof by and among MSI, MSUK and Agent, as amended, supplemented or
modified from time to time.
"Interest Period" shall mean the interest period provided for any
LIBOR Rate Loan.
"Interest Rate Protection" shall mean rate protected loans, options,
customary swap or other yield protection and prepayment cost recovery
agreements, with terms and conditions reasonably acceptable to Agent and MSI.
"Inventory" shall mean and include all of MSI's, MSUK's and Sensors'
now owned or hereafter acquired goods, merchandise and other personal property,
wherever located, to be furnished under any contract of service or held for sale
or lease, all raw materials, work in process, finished goods and materials and
supplies of any kind, nature or description which are or might be used or
consumed in MSI's, MSUK's and Sensors' business or used in selling or furnishing
such goods, merchandise and other personal property, and all documents of title
or other documents representing them.
"Inventory Advance Rate" shall have the meaning set forth in Section
2.1(a)(y)(iii) hereof.
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order
injunction, writ, decree or award of any Official Body.
"Leasehold Interests" shall mean all of MSI's and any other Obligor's
right, title and interest in and to the premises located on Schedule 1.2(a).
11
"Lenders" shall mean Summit, Chase, First Union and any other party
who may hereafter become a lender hereunder and their respective successors,
assigns and transferees as permitted hereunder, each of which is referred to
herein as a Lender.
"Letter of Credit" or "Letters of Credit" shall have the meaning
assigned to that term in Section 2.14, together with the Duty Deferment Bond.
"Letter of Credit Borrowing" shall mean an extension of credit
resulting from a drawing under any Letter of Credit which shall not have been
reimbursed on the date when made and shall not have been converted into a
Revolving Advance under Section 2.15(d).
"Letter of Credit Fees" shall have the meaning assigned to that term
in Section 2.14(b).
"Letters of Credit Outstanding" shall mean at any time the sum of (i)
the aggregate undrawn face amount of outstanding Letters of Credit and (ii) the
aggregate amount of all unpaid and outstanding Reimbursement Obligations.
"LIBOR Rate (Dollars)" shall mean for any LIBOR Rate Loan for the then
current Interest Period or other period relating thereto, the interest rate per
annum determined by Agent by dividing (the resulting quotient rounded upwards,
if necessary, to the nearest 1/100th of 1% per annum) (i) the rate of interest
determined by Agent in accordance with its usual procedures (which determination
shall be conclusive absent manifest error) to be the average of the London
interbank offered rates for U.S. Dollars quoted by the British Bankers'
Association as set forth on Dow Xxxxx Markets Service (formerly known as
Telerate) display page 3750 (or appropriate successor or if the British Bankers'
Association or its successor ceases to provide such quotes, a comparable
replacement determined by the Agent) at or about 12:00 p.m. (showing the rate
as at 11:00 a.m.) two (2) Business Days prior to the first day of such Interest
Period for an amount comparable to such LIBOR Rate Loan and having a borrowing
date and a maturity comparable to such Interest Period, by (ii) a number equal
to 1.00 minus the Reserve Percentage.
"LIBOR Rate (Pounds Sterling)" shall mean for any LIBOR Rate Loan for
the then current Interest Period or other period relating thereto, the interest
rate per annum determined by Agent by dividing (the resulting quotient rounded
upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the rate of
interest determined by Agent in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) to be the average of
the London interbank offered rates for Pounds Sterling quoted by the British
Bankers' Association as set forth on Dow Xxxxx Markets Service (formerly known
as Telerate) display page 3750 (or appropriate successor or if the British
Bankers' Association or its successor ceases to provide such quotes, a
comparable replacement determined by the Agent) at or about 12:00 p.m. (showing
the rate as at 11:00 a.m.) two (2) Business Days prior to the first day of such
Interest Period for an amount comparable to such LIBOR Rate Loan and having a
borrowing date and a maturity comparable to such Interest Period, by (ii) a
number equal to 1.00 minus the Reserve Percentage.
"LIBOR Rate Loan" shall mean an Advance at any time that bears
interest based on the LIBOR Rate (Dollars) or the LIBOR Rate (Pounds Sterling).
12
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, lien (whether statutory or otherwise), Charge,
claim or encumbrance, or preference, priority or other security agreement or
preferential arrangement held or asserted in respect of any asset of any kind or
nature whatsoever including, without limitation, any conditional sale or other
title retention agreement, any lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement under the Uniform Commercial Code or comparable law of any
jurisdiction.
"London Branch" shall mean Agent's branch office located at 0
Xxxxxxxxxxx, Xxxxxx XX0X 0XX Xxxxxxx.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the condition, operations, assets, business or prospects of MSI and the other
Obligors taken as a whole, (b) MSI's, MSUK's and Sensors' ability taken as a
whole to pay the Obligations in accordance with the terms thereof, (c) the value
of the Collateral and the Subsidiary Collateral or Agent's Liens on the
Collateral and the Subsidiary Collateral or the priority of any such Lien or (d)
the practical realization of the benefits of Agent's rights and remedies under
this Agreement and the Other Documents.
"Maximum Leverage Ratio" shall mean and include, with respect to any
fiscal period of MSI, the ratio of (a) all Indebtedness (other than any
subordinate Indebtedness) to (b) EBITDA, all calculated on a consolidated basis.
"Maximum Revolving Advance Amount" shall mean $15,000,000, including:
(i) the MSUK Sublimit; and (ii) a $1,000,000 sublimit for the issuance of
Letters of Credit.
"MSI" shall have the meaning set forth in the preamble to this
Agreement and shall extend to all permitted successors and assigns of such
Persons.
"MSI Guaranty" shall mean the guaranty agreement dated the date hereof
executed by MSI in favor of Agent and Lenders pursuant to which MSI
unconditionally guarantees the payment and performance of the Obligations of
MSUK under the MSUK Sublimit, as amended, supplemented or modified from time to
time.
"MSUK" shall have the meaning set forth in the preamble to this
Agreement and shall extend to all permitted successors and assigns of such
Persons.
"MSUK Eligible Receivable" shall mean any Eligible Receivable of MSUK
in which the Customer is located in the United Kingdom.
"MSUK Sublimit" shall mean the sublimit for Advances to MSUK in the
maximum principal amount of the Pounds Sterling equivalent of $3,500,000.
"Monthly Advances" shall have the meaning set forth in Section 3.1
hereof.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Sections 3(37) and 4001(a)(3) of ERISA.
"Note" or "Notes" shall mean collectively, the Term Notes and the
Revolving Credit Notes.
"Obligations" shall mean and include any and all of MSI's, MSUK's and
Sensors' Indebtedness and/or liabilities to Agent or any of the Lenders
(including, but not limited to, any foreign exchange exposure provided to MSI or
13
MSUK by any Lender, and any Letter of Credit Borrowing) or any corporation that
directly or indirectly controls or is controlled by or is under common control
with Agent or any of the Lenders, of every kind, nature and description, direct
or indirect, secured or unsecured, joint, several, joint and several, absolute
or contingent, due or to become due, now existing or hereafter arising,
contractual or tortious, liquidated or unliquidated, which may arise out of,
under or in connection with the Existing Agreement, this Agreement, the Notes,
the Guaranties, any Interest Rate Protection with any Lender or the Other
Documents, and all obligations of MSI, MSUK and Sensors to Agent or any Lender
hereunder or thereunder to perform acts or refrain from taking any action.
"Obligors" means, collectively, MSI, Sensors, MSUK, Measurement
Limited, a Hong Kong corporation, Jingliang Electronics (Shenzhen) Co. Ltd., a
Chinese corporation, and any other entity which hereafter becomes a Guarantor of
the Obligations, a co-borrower or a Subsidiary of an existing Obligor.
"Official Body" shall mean any national, federal, state, local or
other government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
"Other Documents" shall mean the Notes, Stock Pledge Agreements,
Assignments of Patents, Assignments of Trademarks, Guaranties, Sensors Security
Agreement, the First Mortgage Debenture, the Second Mortgage Debenture, the
Intercreditor Agreement, the Form 395 Documents, any and all agreements relating
to Interest Rate Protection, the fee letter between MSI and Agent of dated
August 7, 2000, and any and all other agreements, instruments and documents,
including, without limitation, guaranties, pledges, letter of credit agreements,
powers of attorney, consents, and all other writings heretofore, now or
hereafter executed by MSI, MSUK, Sensors or any other Obligor and/or delivered
to Agent and/or any Lender in respect of the transactions contemplated by this
Agreement.
"Parent" of any Person shall mean a corporation or other entity
owning, directly or indirectly at least 50% of the shares of stock or other
ownership interests having ordinary voting power to elect a majority of the
directors of the Person, or other Persons performing similar functions for any
such Person.
"Participant" shall mean each Person who shall be granted the right by
Agent to participate in any of the Advances and who shall have entered into an
Assignment and Assumption Agreement in form and substance satisfactory to Agent.
"Participation Advance" shall mean, with respect to any Lender's
payment in respect of its participation in a Letter of Credit Borrowing
according to its Ratable Share pursuant to Section 2.15.
"Payment Office" shall mean initially 000 Xxxxx Xxxx, Xxxxxx, Xxx
Xxxxxx 00000, and as to Revolving Advances to and payments from MSUK denominated
in Pounds Sterling, the London Branch; and thereafter, such other office(s) of
Agent, if any, which it may designate by notice to MSI and/or MSUK to be the
Payment Office.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
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"Permitted Encumbrances" shall mean (a) Liens in favor of Agent for
the ratable benefit of Lenders; (b) Liens for taxes, assessments or other
governmental charges not delinquent or being contested in good faith and by
appropriate proceedings and with respect to which proper reserves have been
taken by MSI, by MSUK or by Sensors; provided, that, the Lien shall have no
effect on the priority of the Liens in favor of Agent for the ratable benefit of
Lenders or the value of the assets in which Agent has such a Lien and a stay of
enforcement of any such Lien shall be in effect; (c) Liens disclosed in the
financial statements referred to in Section 5.5, the existence of which Agent
has consented to in writing; (d) deposits or pledges to secure obligations under
worker's compensation, social security or similar laws, or under unemployment
insurance; (e) deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations, surety
and appeal bonds and other obligations of like nature arising in the ordinary
course of MSI's, MSUK's or Sensors' business; (f) judgment Liens that have been
stayed within 30 days of being entered or bonded and mechanics', workers',
materialmen's or other like Liens arising in the ordinary course of MSI's,
MSUK's or Sensors' business with respect to obligations which are not due or
which are being contested in good faith by MSI, MSUK or Sensors; (g) Liens
placed upon fixed assets hereafter acquired to secure a portion of the purchase
price thereof, provided that any such lien shall not encumber any other property
of MSI, MSUK or Sensors; and (h) Liens disclosed on Schedule 1.2(b).
"Permitted Guaranteed Sale Arrangement" means a sale of goods by MSI,
consistent with current MSI practice, in which the Customer is located in the
United States of America and may return the goods to MSI if same are not sold;
provided the Receivable created by such sale is immediately canceled upon MSI
adding the returned goods to Inventory.
"Person" shall mean any individual, sole proprietorship, partnership,
corporation, business trust, joint stock company, trust, unincorporated
organization, association, limited liability company, institution, public
benefit corporation, joint venture, entity or government (whether Federal,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof).
"Plan" shall mean any employee benefit plan within the meaning of
Section 3(3) of ERISA, maintained for employees of MSI or any member of the
Controlled Group or any such Plan to which any MSI or any member of the
Controlled Group is required to contribute on behalf of any of its employees.
"Pounds Sterling" and the sign " " shall mean lawful money of the
United Kingdom.
"Prime Rate" shall mean the prime commercial lending rate of Agent as
publicly announced to be in effect from time to time, such rate to be adjusted
automatically, without notice, on the effective date of any change in such rate.
This rate of interest is determined from time to time by Agent as a means of
pricing some loans to its customers and is neither tied to any external rate of
interest or index nor does it necessarily reflect the lowest rate of interest
actually charged by Agent to any particular class or category of customers of
Agent.
"Projections" shall have the meaning set forth in Section 5.5(b)
hereof.
"Purchase Price" shall mean with respect to any Acquisition under Section
7.11(c), an amount equal to the sum of (i) the aggregate consideration, whether
cash, property or securities (including, without limitation, any Indebtedness
incurred pursuant to Section 7.7), paid or delivered by MSI and its Subsidiaries
15
(but excluding any fees or expenses payable) in connection with such Acquisition
plus (ii) the aggregate amount of liabilities of the Acquired Entity (net of
current assets of the Acquired Entity) that would be reflected on a balance
sheet (if such were to be prepared) of MSI and its Subsidiaries after giving
effect to such acquisition.
"Purchasing Lender" shall mean the purchasing Lender pursuant to an
Assignment and Assumption Agreement.
"Qualifying Lender" means (a) a bank as defined in section 840A of the
Income and Corporation Taxes Act 1988 which, for the purposes of section 349 of
the Income and Corporation Taxes Xxx 0000, is within the charge to United
Kingdom corporation tax as regards any interest received by it under this
Agreement, except that, if either such section is repealed, modified, extended
or re-enacted, the Agent may at any time and from time to time (acting
reasonably) amend this definition to reflect such repeal, modification,
extension or re-enactment by giving notice of the amended definition to MSI and
MSUK; or (b) a Person carrying on a bona fide banking business who is resident
(as such term is defined in the appropriate Double Taxation Treaty) in a country
with which the United Kingdom has an appropriate Double Taxation Treaty giving
residents of that country, subject only to a direction given to MSUK by the
Inland Revenue pursuant to an application by that person (or another person on
its behalf), exemption from United Kingdom taxation on interest and does not
carry on business in the United Kingdom through a permanent establishment with
which the Indebtedness under this Agreement in respect of which the interest is
paid is effectively connected.
"Ratable Share" shall mean the proportion that a Lender's Commitment
bears to the Commitments of all of the Lenders. As of the date hereof, the
Ratable Share of First Union is 40%, the Ratable Share of Chase is 30% and the
Ratable Share of Summit is 30%, as any such Ratable Share may be increased by
any Lender's separate exposure under any Interest Rate Protection Agreement or
foreign exchange contract in connection with any distributions to the Lenders
upon any realization of any Collateral or after an acceleration of the
Obligations.
"RCRA" shall mean the Resource Conservation and Recovery Act, 42
U.S.C. Sec.6901 et seq., as same may be amended from time to time.
"Real Property" shall mean all of MSI's and any other Obligor's right,
title and interest in and to the owned and leased premises identified on
Schedule 5.2(c) hereto.
"Receivables" shall mean and include all of MSI's, Sensors' or MSUK's
accounts, contract rights, instruments (including those evidencing indebtedness
owed to MSI, Sensors or MSUK by their respective Affiliates), documents, chattel
paper, general intangibles relating to accounts, drafts and acceptances, and all
other forms of obligations owing to MSI, Sensors or MSUK arising out of or in
connection with the sale or lease of Inventory or the rendition of services, all
guarantees and other security therefor, whether secured or unsecured, in each
case whether now existing or hereafter created, and whether or not specifically
sold or assigned to Agent hereunder.
"Receivables Advance Rate" shall have the meaning set forth in Section
2.1(a)(y)(i) hereof.
"Reimbursement Obligation" shall have the meaning assigned to such
term in Section 2.15.
16
"Release" shall have the meaning set forth in Section 5.7(c)(i)
hereof.
"Reportable Event" shall mean a reportable event described in Section
4043(b) of ERISA or the regulations promulgated thereunder.
"Required Lenders" shall mean
(a) if there are no Advances or Obligations outstanding, Lenders
whose Commitment aggregate greater than seventy-five percent (75%) of the
Commitments of all of the Lenders.
(b) at all other times, Lenders holding greater than seventy-five
percent (75%) of the Advances at such time.
"Reserve Percentage" shall mean the maximum effective percentage in
effect on any day as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the reserve requirements (including,
without limitation, supplemental, marginal and emergency reserve requirements)
with respect to eurocurrency funding.
"Revolving Advances" shall mean Advances made other than the Term
Loan.
"Revolving Credit Commitment" shall mean as to any Lender at any time,
the amount initially set forth opposite its name on Schedule 1.1(A) in the
column labeled "Amount of Commitment for Revolving Credit Loans," and thereafter
on Schedule I to the most recent Assignment and Assumption Agreement. "Revolving
Credit Commitments" shall mean the aggregate Revolving Credit Commitments of all
of the Lenders.
"Revolving Credit Notes" shall mean, collectively, the promissory
notes referred to in Section 2.1(a) hereof.
"Revolving Interest Rate" shall mean (a) as to Revolving Advances to
MSI, the LIBOR Rate (Dollars) plus two and three quarters percent (2.75%) per
annum; (b) as to Revolving Advances to MSUK, the LIBOR Rate (Pounds Sterling)
plus two and three quarters percent (2.75%) per annum; or (c) as to Revolving
Advances to MSI, the Prime Rate, plus one percent (1%), in each case for the
initial period following the Existing Loan Agreement Closing Date through
December 31, 2000, to be adjusted quarterly thereafter, based on the ratio of
Consolidated Funded Indebtedness as of the end of such quarter to the last
twelve (12) months of EBITDA (as adjusted quarterly based upon MSI's
consolidated financial statements provided to Agent, such adjustment to occur
five (5) business days after Agent's receipt thereof), as follows:
Consolidated Funded LIBOR Rate (Dollars) or LIBOR Prime Rate Plus
Indebtedness/EBITDA Rate (Pounds Sterling) Plus
Less than 2.25:1.00 2.25% 0.50%
Greater than or equal to 2.25:1.00 2.75% 1.00%
"Second Mortgage Debenture" shall mean the Mortgage Debenture dated
the date hereof in which MSUK assigns, charges and grants to MSI a continuing
security interest in and to the Subsidiary Collateral of MSUK as described
therein, as amended, supplemented or modified from time to time.
17
"Seller" shall mean, collectively, TRW Sensors & Components, Inc., a
Virginia corporation, TRW Limited, an English corporation and Xxxxx Xxxxxxxxx
Limited, an English corporation.
"Senior Debt" shall mean the sum of the outstanding balance of the
Term Loan, the Revolving Advances, including any and all Letters of Credit
Outstanding and any other Indebtedness due and owing by MSI or MSUK to any of
the Lenders.
"Senior Debt Payments" shall mean and include all cash actually
expended by MSI or MSUK to make (a) interest payments on any Advances hereunder,
plus, (b) regularly scheduled principal payments on the Term Loan plus (c)
payments for all fees, commissions and charges set forth herein and with respect
to any Advances, plus (d) capitalized lease payments, plus (e) payments with
respect to any other Indebtedness for borrowed money.
"Sensors" shall mean IC Sensors, Inc., a California corporation, a
wholly owned subsidiary of MSI.
"Sensors Guaranty" shall mean the amended and restated guaranty
agreement dated the date hereof executed by Sensors in favor of Agent and
Lenders pursuant to which Sensors unconditionally guaranteed the payment and
performance of the Obligations of MSUK under the MSUK Sublimit and the
Obligations of MSI hereunder, under the Notes and under the Other Documents, as
amended, supplemented or modified from time to time.
"Sensors Security Agreement" shall mean the amended and restated
security agreement dated the date hereof assigning, pledging and granting to
Agent for the ratable benefit of Lenders a continuing security interest in and
to all Subsidiary Collateral of Sensors, as amended, supplemented or modified
from time to time.
"Settlement Date" shall mean the Closing Date and thereafter Wednesday
of each week unless such day is not a Business Day in which case it shall be the
next succeeding Business Day.
"Stock Pledge Agreements" shall mean collectively the amended and
restated pledge agreement dated the date hereof executed by MSI pledging the
Subsidiary Stock of Sensors and MSUK to the Agent for the ratable benefit of
Lenders and the pledge agreement dated the date hereof executed by MSI pledging
the Subsidiary Stock of Measurement Limited to the Agent for the ratable benefit
of Lenders.
"Subsidiary" shall mean a corporation or other entity of whose shares
of stock or other ownership interests having ordinary voting power to elect a
majority of the directors of such corporation, or other Persons performing
similar functions for such entity, are owned, directly or indirectly, by such
Person.
"Subsidiary Collateral" shall mean "Collateral" as defined in or
provided by the Sensors Security Agreement and each of the Stock Pledge
Agreements, the "Patents" as defined in the Assignments of Patents from MSI and
Sensors to Agent, the "Trademarks" as defined in the Assignments of Trademarks
from MSI to Agent, and the "Charged Property" as defined in or provided by the
First Mortgage Debenture and the Second Mortgage Debenture.
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"Subsidiary Stock" shall mean sixty-five percent (65%) of the issued
and outstanding shares of stock of Measurement Limited, MSUK and any other
hereafter created foreign Subsidiary and all of the issued and outstanding
shares of stock of Sensors and any other hereafter created domestic Subsidiary.
"Summit" shall mean Summit Bank, a New Jersey banking institution.
"Tangible Net Worth" shall mean total assets minus total liabilities.
For purposes of this computation, the aggregate amount of any intangible assets
of MSI and the other Obligors including, without limitation, goodwill,
franchises, licenses, patents, trademarks, trade names, copyrights, service
marks, and brand names, shall be subtracted from total assets, and total
liabilities shall include debt fully subordinated to Senior Debt on terms and
conditions acceptable to Agent.
"Term" shall have the meaning set forth in Section 14.1 hereof.
"Term Loan" shall mean the Advances made pursuant to Section 2.5
hereof.
"Term Loan Commitment" shall mean, as to any Lender at any time, the
amount initially set forth opposite the name of Schedule 1.1(A) in the column
labeled "Amount of Commitment for Term Loans," and thereafter on Schedule I to
the most recent Assignment and Assumption Agreement, and Term Loan Commitments
shall mean the aggregate Term Loan Commitments of all of the Lenders.
"Term Loan Maturity Date" means August 7, 2006.
"Term Loan Rate" shall mean the LIBOR Rate (Dollars) plus three and
one-quarter percent (3.25%), for the initial period following the Existing Loan
Agreement Closing Date through December 31, 2000, to be adjusted quarterly
thereafter, based on the ratio of Consolidated Funded Indebtedness as of the end
of such quarter to the last twelve (12) months of EBITDA (adjusted quarterly
based upon MSI's consolidated financial statements provided to Agent such
adjustment to occur five (5) Business Days after Agent's receipt thereof) as
follows:
Consolidated Funded Indebtedness/EBITDA LIBOR Rate (Dollars) Plus
Less than or equal to 2.25 2.75%
Greater than or equal to 2.25:1.00 3.25%
"Term Notes" shall mean, collectively, the promissory notes described
in Section 2.5 hereof.
"Termination Event" shall mean (i) a Reportable Event with respect to
any Plan or Multiemployer Plan; (ii) the withdrawal of MSI, any other Obligor or
any member of the Controlled Group from a Plan or Multiemployer Plan during a
plan year in which such entity was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to
terminate a Plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the institution by the PBGC of proceedings to terminate a Plan or
Multiemployer Plan; (v) any event or condition (a) which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
19
of a trustee to administer, any Plan or Multiemployer Plan, or (b) that may
result in termination of a Multiemployer Plan pursuant to Section 4041A of
ERISA; or (vi) the partial or complete withdrawal within the meaning of Sections
4203 and 4205 of ERISA, of MSI, any other Obligor or any member of the
Controlled Group from a Multiemployer Plan.
"Toxic Substance" shall mean and include any material present on the
Real Property or the Leasehold Interests which has been shown to have
significant adverse effect on human health or which is subject to regulation
under the Toxic Substances Control Act (TSCA), 15 U.S.C. Sec. 2601 et seq.,
applicable state law, or any other applicable Federal or state laws now in force
or hereafter enacted relating to toxic substances. "Toxic Substance" includes
but is not limited to asbestos, polychlorinated biphenyls (PCBs) and lead-based
paints.
"Transactions" shall have the meaning set forth in Section 5.5 hereof.
"Transferee" shall have the meaning set forth in Section 14.3(b)
hereof.
"Transferor Lender" shall mean the selling Lender pursuant to an
Assignment and Assumption Agreement.
"Undrawn Availability" at a particular date shall mean an amount equal
to (a) the lesser of (i) the Formula Amount or (ii) the Maximum Revolving
Advance Amount, minus (b) the sum of (i) the outstanding amount of Revolving
Advances to MSI and MSUK plus (ii) Letters of Credit Outstanding, plus (iii)
fees and expenses for which MSI or MSUK is liable but which have not been paid
or charged to Borrowers' Accounts.
"Week" shall mean the time period commencing with the opening of
business on a Wednesday and ending on the end of business the following Tuesday.
1.3. UNIFORM COMMERCIAL CODE TERMS.
All terms used herein and defined in the Uniform Commercial Code as
currently adopted and as hereafter may be adopted in the State of New Jersey
shall have the meaning given therein unless otherwise defined herein.
1.4. CERTAIN MATTERS OF CONSTRUCTION.
The terms "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
section, paragraph or subdivision. Any pronoun used shall be deemed to cover
all genders. Wherever appropriate in the context, terms used herein in the
singular also include the plural and vice versa. All references to statutes and
related regulations shall include any amendments of same and any successor
statutes and regulations. Unless otherwise provided, all references to any
instruments or agreements to which Lender is a party, including, without
limitation, references to any of the Other Documents, shall include any and all
modifications or amendments thereto and any and all extensions or renewals
thereof.
1.5. AGENT'S DISCRETION AND CONSENT.
Whenever the Agent or the Lenders are granted the right herein to act
in its or their sole discretion or to grant or withhold consent such right shall
be exercised in good faith.
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2. THE CREDIT FACILITIES.
----------------------
2.1. ADVANCES, PAYMENTS.
(a) Revolving Advances.
-------------------
Subject to the terms and conditions set forth in this Agreement,
each Lender, will severally make on a ratable basis according to the Ratable
Share of each Lender, Revolving Advances to MSI or MSUK in aggregate amounts
outstanding at any time equal to the lesser of (x) the Maximum Revolving Advance
Amount or (y) an amount equal to the sum of:
(i) up to 85% ("Receivables Advance Rate") of Eligible
Receivables which are not Canadian Eligible
Receivables, MSUK Eligible Receivables or Eligible
Receivables generated by Permitted Guaranteed Sale
Arrangements, plus
(ii) up to the lesser of 70% or $1,000,000 ("Canadian
Receivables Advance Rate"), of Canadian Eligible
Receivables;
(iii) up to 60% ("Inventory Advance Rate"), of the value of
the Eligible Inventory;
(iv) up to the lesser of 60% or $1,000,000 ("MSUK
Receivables Advance Rate"), of MSUK Eligible
Receivables;
(v) up to the lesser of 60% or $1,000,000 (the "Guaranteed
Sale Advance Rate") of Eligible Receivables generated
by Permitted Guaranteed Sale Arrangements;
(vi) up to 50% of the face amount of outstanding documentary
Letters of Credit; minus
(vii) reserves (calculated after applying such reduction
percentages set forth above as further described in
Exhibit 2.1(b)) determined by Agent for advertising
allowances, warranty claims and other customary
contingencies plus all Letters of Credit Outstanding
and such other reserves as Agent may reasonably deem
proper and necessary from time to time.
The amount derived from the sum of (x) Sections 2.1(a)(y)(i), (ii), (iii), (iv),
(v) and (vi) minus (y) Section 2.1 (a)(y)(vii) at any time and from time to time
shall be referred to as the "Formula Amount" or the "Borrowing Base". The
Revolving Advances shall be evidenced by the secured promissory notes dated the
date hereof from MSI and MSUK to each of the Lenders (the "Revolving Credit
Notes") substantially in the form attached hereto as Exhibit 2.1(a).
Notwithstanding the foregoing, the maximum amount of Revolving Advances to MSUK
shall not exceed the MSUK Sublimit. The availability of Revolving Advances which
will be used for other than working capital purposes, including to finance in
whole or in part any Acquisition Transaction (a "Corporate Purpose Advance"),
shall be subject to the further limitation that the maximum amount of Corporate
21
Purpose Advances at any time outstanding may not exceed the then Borrowing Base
minus the sum of (i) one-third (1/3) of the then Borrowing Base and (ii) the
total amount of then outstanding Revolving Advances, Letters of Credit
Outstanding and fees and expenses for which MSI or MSUK is liable but which have
not been paid or charged to Borrowers' Accounts. The limitations herein shall
not prevent the initial extension of any Revolving Advances used to assist in
financing the transactions described in the Acquisition Agreements but any such
Revolving Advances shall thereafter be included in the calculation set forth
herein.
(b) Borrowing Base Certificate.
----------------------------
On the date hereof, and thereafter within fifteen (15) days after
the end of each month, MSI shall furnish to Agent and Lenders a certificate (a
"Borrowing Base Certificate") substantially in the form attached hereto as
Exhibit 2.1(b), executed by the respective Chief Financial Officer of MSI,
setting forth the Borrowing Base and the other information required therein as
of MSI's close of business on the last day of the immediately preceding month
together with such other information with respect to Eligible Receivables and
Eligible Inventory of MSI as Agent may reasonably request including, but not
limited to, an accounts receivable aging and an accounts payable aging.
(c) Nature of Lenders' Obligations with Respect to Revolving
---------------------------------------------------------------
Advances.
--------
The aggregate of each Lender's Revolving Advances outstanding
hereunder to MSI and MSUK at any time shall never exceed its Revolving Credit
Commitment. The obligations of each Lender hereunder are several. The failure of
any Lender to perform its obligations hereunder shall not affect the Obligations
of MSI and MSUK to any other party nor shall any other party be liable for the
failure of such Lender to perform its obligations hereunder. The Lenders shall
have no obligations to make Revolving Advances hereunder on or after the
Expiration Date.
2.2. PROCEDURE FOR REVOLVING ADVANCES BORROWING.
(a) As to Revolving Advances requested by MSI which are to be Domestic
Rate Loans, MSI shall notify Agent prior to 11:00 a.m. on a Business Day which
is at least one (1) Business Day prior to the Business Day on which MSI wishes
to incur, on that day, a Revolving Advance hereunder. Should any amount required
to be paid as interest hereunder, or as fees or other charges under this
Agreement or any other agreement with Agent, or with respect to any other
Obligation, become due, same shall be deemed a request for a Revolving Advance
as of the date such payment is due, in the amount required to pay in full such
interest, fee, charge or Obligation under this Agreement or any other agreement
with Agent or any of the Lenders, and such request shall be irrevocable.
Revolving Advances which are Domestic Rate Loans shall be in minimum amounts of
$500,000 and additional increments of $100,000.
(b) In the event MSI or MSUK desires to obtain a Revolving Advance as
a LIBOR Rate Loan, MSI or MSUK, as applicable, shall give Agent (at its Summit,
New Jersey and London Payment Offices) at least three (3) Business Days' prior
written notice, specifying (i) the date of the proposed borrowing (which shall
be a Business Day), (ii) the type of borrowing and the amount on the date of
such Advance to be borrowed, which amount shall be in minimum amounts of (A) as
to MSI, $1,000,000 and additional increments of $100,000, and (B) as to MSUK,
150,000 and additional increments of 75,000, (iii) the duration of the Interest
22
Period therefor. Interest Periods for Revolving Advances to MSI which are LIBOR
Rate Loans shall be for one or three months and Interest Periods for Revolving
Advances to MSUK shall be for three months; provided, if an Interest Period
would end on a day that is not a Business Day, it shall end on the next
succeeding Business Day unless such day falls in the next succeeding calendar
month in which case the Interest Period shall end on the next preceding Business
Day. No such LIBOR Rate Loan shall be made available to MSI or MSUK during the
continuance of a Default or an Event of Default. No more than five (5) Revolving
Advances as LIBOR Rate Loans may be outstanding at any one time.
(c) Each Interest Period of any Revolving Advance which is a LIBOR
Rate Loan shall commence on the date such LIBOR Rate Loan is made and shall end
on such date as MSI or MSUK may elect as set forth in (b)(iii) above provided
that the exact length of each Interest Period shall be determined in accordance
with the practice of the London interbank market for the currency of such
Revolving Advance and no Interest Period shall end after the last day of the
Expiration Date or the Term as the case may be.
(d) MSI and MSUK shall each elect the initial Interest Periods
applicable to each Revolving Advance which is a LIBOR Rate Loan by its notice of
borrowing given to Agent pursuant to Section 2.2(b) or in the case of MSI by its
notice of conversion given to Agent pursuant to Section 2.2(e), as the case may
be. MSI and MSUK shall elect the duration of each succeeding Interest Period by
giving irrevocable written notice to Agent of such duration not less than three
(3) Business Days prior to the last day of the then current Interest Period
applicable to such LIBOR Rate Loan. If Agent does not receive timely notice of
the Interest Period elected by MSI or MSUK, as applicable: (i) MSI shall be
deemed to have elected to convert to a Domestic Rate Loan subject to Section
2.2(e) hereof; and (ii) MSUK shall be deemed to have elected to continue the
LIBOR Rate Loan for a similar Interest Period.
(e) Provided that no Event of Default shall have occurred and be
continuing, MSI may, on the last Business Day of the then current Interest
Period applicable to any outstanding Revolving Advance which is a LIBOR Rate
Loan, or on any Business Day with respect to Domestic Rate Loans, convert any
such loan into a loan of another type in the same aggregate principal amount
provided that any conversion of a LIBOR Rate Loan shall be made only on the last
Business Day of the then current Interest Period applicable to such LIBOR Rate
Loan. If MSI desires to convert a loan, MSI shall give Agent not less than three
(3) Business Days' prior written notice to convert from a Domestic Rate Loan to
a LIBOR Rate Loan or one (1) Business Day's prior written notice to convert from
a LIBOR Rate Loan to a Domestic Rate Loan, specifying the date of such
conversion, the loans to be converted and if the conversion is from a Domestic
Rate Loan to any other type of loan, the duration of the first Interest Period
therefor. After giving effect to each such conversion, there shall not be
outstanding more than five (5) LIBOR Rate Loans or Domestic Rate Loans, in the
aggregate. No such conversion option shall exist for any Revolving Advances
under the MSUK Sublimit.
(f) At its option and upon three (3) Business Days' prior written
notice, MSI or MSUK may prepay the LIBOR Rate Loans in whole at any time or in
part from time to time, without premium or penalty (except as hereinafter
provided), but with accrued interest on the principal being prepaid to the date
of such repayment. MSI or MSUK, as applicable, shall specify the date of
prepayment of Advances which are LIBOR Rate Loans and the amount of such
prepayment. In the event that any prepayment of a LIBOR Rate Loan is made on a
23
date other than the last Business Day of the then current Interest Period with
respect thereto, MSI or MSUK, as applicable, shall indemnify each Lender
therefor in accordance with Section 2.2(g) hereof.
(g) MSI or MSUK, as applicable, shall indemnify each Lender and hold
each Lender harmless from and against any and all losses or expenses that such
Lender may sustain or incur as a consequence of any prepayment, conversion of or
any default by MSI or MSUK in the payment of the principal of or interest on any
LIBOR Rate Loan or failure by MSI or MSUK to complete a borrowing of, a
prepayment of or conversion of or to a LIBOR Rate Loan after notice thereof has
been given, including, but not limited to, any interest payable by such Lenders
to lenders of funds obtained by it in order to make or maintain its LIBOR Rate
Loans hereunder. A certificate as to any additional amounts payable pursuant to
the foregoing sentence submitted by such Lender to MSI or MSUK shall be
conclusive absent manifest error.
(h) Notwithstanding any other provision hereof, if any applicable law,
treaty, regulation or directive, or any change therein or in the interpretation
or application thereof, shall make it unlawful for any Lender (for purposes of
this subsection (g), the term "Lender" shall include any Lender and the office
or branch where any Lender or any corporation or bank controlling such Lender
makes or maintains any LIBOR Rate Loans) to make or maintain its LIBOR Rate
Loans, the obligation of such Lender to make LIBOR Rate Loans hereunder, shall
forthwith be canceled and MSI or MSUK shall, if any affected LIBOR Rate Loans
are then outstanding, promptly upon request from such Lender, either pay all
such affected LIBOR Rate Loans or in the case of MSI convert such affected LIBOR
Rate Loans into loans of another type. If any such payment or conversion of any
LIBOR Rate Loan is made on a day that is not the last day of the Interest Period
applicable to such LIBOR Rate Loan, MSI or MSUK shall pay such Lender, upon
Lender's request, such amount or amounts as may be necessary to compensate such
Lender for any loss or expense sustained or incurred by such Lender in respect
of such LIBOR Rate Loan as a result of such payment or conversion, including
(but not limited to) any interest or other amounts payable by such Lender to
lenders of funds obtained by such Lender in order to make or maintain such LIBOR
Rate Loan. A certificate as to any additional amounts payable pursuant to the
foregoing sentence submitted by such Lender to MSI or MSUK shall be conclusive
absent manifest error.
(i) Each request by MSI or MSUK for a Revolving Advance shall specify
whether such Revolving Advance is for general corporate or working capital
purposes. If the purpose of the Revolving Advance shall be to finance in whole
or in part an acquisition by MSI of stock or assets or a merger or other such
transaction (an "Acquisition Transaction") which is otherwise permitted hereby,
MSI shall (i) provide to Agent copies of all documentation relating to the
Acquisition Transaction, (ii) execute and deliver such security and other
documentation as Agent requires so as to create and perfect a security interest
in the acquired assets or stock/equity interests, (iii) if the acquired entity
becomes a direct or indirect Subsidiary of MSI, cause such entity to become a
co-borrower hereunder or to execute and deliver a Guaranty and security
agreement as required by Agent and (iv) provide such other documents, opinions
and other matters as Agent reasonably requests.
(j) All Revolving Advances shall be subject to compliance with the
provisions of Section 2.11(c) hereof at the time of such Revolving Advances.
24
(k) The provisions of subsections (e), (f), (g) and (h) hereof shall
be applicable to Revolving Advances which are LIBOR Rate Loans and to the Term
Loan.
2.3. DISBURSEMENT OF ADVANCE PROCEEDS.
All Advances shall be disbursed from whichever office or other place
Agent may designate from time to time (including the London Branch as to
Revolving Advances to MSUK) and, together with any and all other Obligations of
MSI and MSUK to Agent and Lenders, shall be charged to Borrowers' Accounts on
Agent's books. Prior to the Expiration Date, MSI and MSUK may use the Revolving
Advances by borrowing, prepaying and reborrowing, all in accordance with the
terms and conditions hereof. The proceeds of each Revolving Advance requested by
MSI or MSUK or deemed to have been requested by MSI or MSUK under Section 2.2(a)
hereof shall, with respect to requested Revolving Advances to the extent Lenders
make such Revolving Advances, be made available to MSI or MSUK on the day so
requested by way of credit to MSI's or MSUK's, as applicable, operating account
at the Agent, in immediately available federal funds or other immediately
available funds or, with respect to Revolving Advances deemed to have been
requested by MSI or MSUK, as applicable, be disbursed to Agent to be applied to
the outstanding Obligations giving rise to such deemed request.
2.4. MAKING REVOLVING ADVANCES.
The Agent shall, promptly after receipt by it of a request for a
Revolving Advance pursuant to Section 2.2, notify the Lenders of its receipt of
such request specifying: (i) the date of the proposed borrowing and the time and
method of disbursement of the Revolving Advance requested thereby; (ii) the
amount and type of each such Revolving Advance and the applicable Interest
Period (if any); and (iii) the apportionment among the Lenders of such Revolving
Advance as determined by the Agent in accordance with Section 2.1(c), and (iv)
whether the requested Revolving Advance is to be disbursed in Dollars (to MSI)
or Pounds Sterling (to MSUK). Each Lender shall remit its Ratable Share of the
principal amount of each Revolving Advance to the Agent such that the Agent is
able to, and Agent shall, to the extent the Lenders have made funds available to
it for such purpose, fund such Revolving Advances to MSI in U.S. Dollars and
immediately available funds and to MSUK in Pounds Sterling and immediately
available funds at the applicable Payment Office prior to 2:00 p.m., on the
applicable borrowing date provided that if any Lender fails to remit such funds
to the Agent in a timely manner, the Agent may elect in its sole discretion to
fund with its own funds the Revolving Advances of such Lender on such borrowing
date, and such Lender shall be subject to the repayment obligation in Section
13.16. If any Lender so notified fails to make available to the Agent for the
account of the Agent the amount of such Lender's portion of the Revolving
Advance no later than 2:00 p.m., on the applicable borrowing date, then interest
shall accrue on such Lender's obligation to make such payment, from the
applicable borrowing date to the date on which such Lender makes such payment
(1) with respect to Revolving Advances to MSI: (i) at a rate per annum equal to
the Federal Funds Rate during the first three (3) days following the applicable
borrowing date; and (ii) at a rate per annum equal to the rate applicable to
Revolving Advances which are Domestic Rate Loans on and after the fourth day
following the applicable borrowing date; and (2) with respect to Revolving
Advances to MSUK, at the applicable Revolving Interest Rate, in each case for
such period(s) as selected by the Agent.
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2.5. TERM LOAN.
Subject to the terms and conditions of the Existing Loan Agreement and
this Agreement, each Lender, severally on a ratable basis in accordance with its
Ratable Share made a term loan to MSI which when aggregated with the term loans
made by the other Lenders totals $25,000,000. The Term Loan was advanced by the
Lenders in their Ratable Share on the Existing Loan Agreement Closing Date and
is, with respect to principal, payable as follows, subject to acceleration upon
the occurrence of an Event of Default under this Agreement or termination of
this Agreement:
(a) Quarterly payments of principal of the Term Loan in the amount of
$1,000,000 each plus interest is payable on the first Business Day of each
calendar quarter, commencing on September 1, 2000, and each December 1, March 1,
June 1 and September 1 thereafter, provided, however that the last such
installment shall be in the amount necessary to repay in full the unpaid
principal amount of the Term Loan. All remaining principal amounts outstanding
under the Term Loan together with all accrued interest thereon shall be due and
payable in full on the Term Loan Maturity Date.
(b) In addition to the Term Loan payment set forth in Section 2.4 (a),
MSI shall pay, as additional principal payments on the Term Loan an amount equal
to the net proceeds of any sale or issuance of equity of MSI in an amount equal
to the greater of $5,000,000 or 33% of such net proceeds realized from equity
sales or issuances by MSI. Amounts prepaid in accordance with this Section
2.5(b) shall be applied against principal installments of the Term Loan in
inverse order of maturity. The Term Loan is evidenced by secured promissory
notes dated August 7, 2000 from MSI to each of the Lenders (the "Term Notes").
(c) The obligations of each Lender to make the Term Loan to MSI shall
be in the proportion that such Lender's Term Loan Commitment bears to the Term
Loan Commitments of all Lenders to MSI, but each Lender's Term Loan to MSI shall
never exceed its Term Loan Commitment. The failure of any Lender to make a Term
Loan shall not relieve any other Lender of its obligations to make a Term Loan
nor shall it impose any additional liability on any other Lender hereunder. The
Term Loan Commitments are not revolving credit commitments and MSI shall not
have the right to borrow, repay and reborrow under this Section 2.5.
(d) Interest Periods for the Term Loan shall be for three months;
provided, if such Interest Period would end on a day that is not a Business Day,
it shall end on the next succeeding Business Day unless such day falls in the
next succeeding calendar month in which case the Interest Period shall end on
the next preceding Business Day.
2.6. MAXIMUM ADVANCES.
The aggregate balance of Revolving Advances outstanding at any time
shall not exceed the lesser of (a) the Maximum Revolving Advance Amount or (b)
the Formula Amount.
2.7. REPAYMENT OF ADVANCES.
(a) The Revolving Advances shall be due and payable by MSI or MSUK, as
the case may be, in full on the Expiration Date subject to earlier prepayment as
herein provided. The Term Loan shall be due and payable as provided in Section
2.5 hereof and in the Term Note.
26
(b) All payments of principal, interest and other amounts payable
hereunder, or under any of the Other Documents shall be made to Agent at the
applicable Payment Office not later than 2:00 p.m. (New York or London time, as
applicable) on the due date therefor in Dollars (as to MSI) or in Pounds
Sterling (as to MSUK), in each case in federal funds or other funds immediately
available to Agent. Agent shall have the right to effectuate payment on any and
all Obligations due and owing hereunder by charging Borrowers' Accounts or by
making Advances as provided in Section 2.2 hereof.
(c) MSI and MSUK shall pay principal, interest, and all other amounts
payable hereunder, or under any Other Documents, without any deduction
whatsoever, including, but not limited to, any deduction for any setoff or
counterclaim.
2.8. REPAYMENT OF EXCESS ADVANCES.
The aggregate balance of Advances outstanding at any time in excess of
the Maximum Revolving Advance Amount shall be immediately due and payable
without the necessity of any demand, at the Payment Office, whether or not a
Default or Event of Default has occurred.
2.9. STATEMENT OF ACCOUNT.
Agent shall maintain, in accordance with its customary procedures,
loan accounts in the name of MSI and MSUK ("Borrowers' Accounts") in which shall
be recorded the date, currency and amount of each Advance made by each Lender
and the date, currency and amount of each payment in respect thereof; provided,
however, the failure by Agent to record the date, currency or amount of any
Advance shall not adversely affect Agent or any Lenders. The records of Agent
with respect to the loan account shall be conclusive evidence absent manifest
error of the amounts of Advances and other charges thereto and of payments
applicable thereto.
2.10. ADDITIONAL PAYMENTS.
Any sums expended by Agent or any Lender due to MSI's, MSUK's or
Sensors' failure to perform or comply with its obligations under this Agreement
or any Other Document including, without limitation, MSI's and MSUK's
obligations under Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1 hereof, may be
charged to Borrowers' Accounts as Revolving Advances and added to the
Obligations.
2.11. MANDATORY PREPAYMENTS.
(a) When MSI, MSUK, Sensors or any other Guarantor sells or otherwise
disposes of any Collateral or Subsidiary Collateral, as the case may be, other
than Inventory or collection of Receivables in the ordinary course of business,
MSI or MSUK, as applicable, shall, except as otherwise permitted under Section
4.3, repay the Advances in an amount equal to the net proceeds of such sale
(i.e., gross proceeds less the reasonable costs of such sales or other
dispositions), such repayments to be made promptly but in no event more than one
(1) Business Day following receipt of such net proceeds, and until the date of
payment, such proceeds shall be held in trust for Agent and Lenders. The
foregoing shall not be deemed to be implied consent to any such sale otherwise
27
prohibited by the terms and conditions hereof. Such repayments shall be applied
first, ratably to the outstanding principal installments on the Term Loan in the
inverse order of the maturities thereof and, second, to the remaining Advances
in such order as Agent may determine, subject to MSI's or MSUK's ability to
reborrow Revolving Advances in accordance with the terms hereof.
(b) Upon any issuance of additional equity by MSI, MSI shall prepay
the outstanding amount of the Term Loan in an amount equal to net proceeds of
any sale or issuance of equity of MSI in an amount equal to the greater of
$5,000,000 or 33% of such net proceeds of such equity issuance, which amount
shall be applied first, ratably to the outstanding principal installments of the
Term Loan in the inverse order of the maturities thereof and, second, to the
remaining Advances in such order as Agent determines subject to MSI's and MSUK's
ability to reborrow Revolving Advances in accordance with the terms hereof.
(c) If at the end of any Interest Period the sum of the principal
amount of Revolving Advances outstanding to MSI plus all Letters of Credit
Outstanding plus the principal amount of Revolving Advances outstanding to MSUK
under the MSUK Sublimit exceeds the Borrowing Base or the Maximum Revolving
Advance Amount, such excess shall be immediately repaid by MSI and/or MSUK to
Agent. If at the time of any extension of any Revolving Advance, the issuance of
any Letter of Credit or at the end of any Interest Period the principal amount
of Revolving Advances outstanding to MSUK under the MSUK Sublimit (including
Letters of Credit Outstanding for the account of MSUK) exceeds the Pounds
Sterling equivalent of $3,500,000, such excess shall be immediately repaid by
MSI and/or MSUK to Agent and/or the amount of any Revolving Advance to be
extended shall be reduced accordingly.
2.12. OPTIONAL PREPAYMENT.
MSI shall have the right, upon three (3) days prior written notice to
the Agent, to prepay the Term Loan, in compliance with the terms of this
Agreement, in whole or in part, plus accrued interest to the date of prepayment.
Any such prepayment shall be applied ratably to the outstanding principal
installments of the Term Loan in inverse order of maturities thereof. In the
event that any prepayment of portion of the Term Loan that is a LIBOR Rate Loan
is required or permitted under Sections 2.11 or 2.12 on a date other than the
last Business Day of then current Interest Period with respect hereto, MSI shall
indemnify each Lender therefor in accordance with Section 2.2(g) hereof.
2.13. USE OF PROCEEDS.
MSI shall apply (or has applied) the proceeds of Advances (i) to
restructure and continue its debt to the Lenders under the Existing Loan
Agreement, (ii) to provide for its working capital needs, and (iii) for general
corporate purposes. MSUK shall use the proceeds of the initial Revolving Advance
under the MSUK Sublimit to repay to MSI the Pounds Sterling equivalent of
$2,500,000, which amount shall be applied by MSI against the Intercompany Loan
and which amount shall then be repaid by MSI to Agent as a reduction of the
Revolving Advances. All subsequent Revolving Advances under the MSUK Sublimit
shall be for general working capital purposes of MSUK or for the repayment of
all or part of the Intercompany Loan.
2.14. LETTER OF CREDIT SUBLIMIT.
(a) MSI or MSUK may request the issuance of a documentary letter of
credit or a standby letter of credit (each, a "Letter of Credit") by delivering
to the Agent at its Summit, New Jersey Payment Office a completed application
28
and agreement for letters of credit in such form as the Agent may specify from
time to time by no later than 10:00 a.m., New York time, and in the case of a
Letter of Credit denominated in Pounds Sterling, by also notifying the Agent at
the London Branch by no later than 10:00 a.m., London time, in each case at
least three (3) Business Days, or such shorter period as may be agreed to by the
Agent, in advance of the proposed date of issuance. A Letter of Credit requested
by MSI shall be in Dollars and a Letter of Credit requested by MSUK shall be in
Pounds Sterling. Subject to the terms and conditions hereof and in reliance on
the agreements of the Lenders set forth in this Section 2.14, First Union will
issue a Letter of Credit provided that each Letter of Credit shall (A) have a
maximum maturity of twelve (12) months from the date of issuance, and (B) in no
event expire later than ten (10) Business Days prior to the Expiration Date and
providing that in no event shall (i) the face amount of Letters of Credit
Outstanding exceed, at any one time, $1,000,000, or (ii) the sum of the Letters
of Credit Outstanding plus the outstanding Revolving Advances exceed the Formula
Amount.
(b) MSI or MSUK, as applicable, shall pay to the Agent quarterly fees
(the "Letter of Credit Fees") on (i) the average aggregate face amount of all
documentary Letters of Credit outstanding during the prior fiscal quarter at a
per annum rate equal to 1.0%; and (ii) the average aggregate face amount of all
standby Letters of Credit outstanding during the prior fiscal quarter at a per
annum rate equal to 2.0%, which fees shall be payable in arrears on the last
Business Day of each fiscal quarter and on the Expiration Date. One-half of the
Letter of Credit Fees shall be shared by the Lenders (other than First Union) in
accordance with their Ratable Share and the other half of the Letter of Credit
Fees shall be paid to First Union. MSI or MSUK shall also pay to the Agent for
First Union's sole account First Union's then in effect customary fees and
administrative expenses payable with respect to the Letter of Credit as First
Union may generally charge or incur from time to time in connection with the
issuance, maintenance, modification (if any), assignment or transfer (if any),
negotiation, and administration of Letters of Credit. The Letter of Credit Fees
and any other fees and expenses described in this subsection shall be payable in
the currency in which the applicable Letter of Credit is issued.
2.15. DISBURSEMENTS, REIMBURSEMENT.
(a) Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from First Union a participation in such Letter of Credit and each
drawing thereunder in an amount equal to such Lender's Ratable Share of the
maximum amount available to be drawn under such Letter of Credit and the amount
of such drawing, respectively.
(b) In the event of any request for a drawing under a Letter of Credit
by the beneficiary or transferee thereof, the Agent will promptly notify MSI or
MSUK. Upon receiving such notice, MSI or MSUK, as applicable, shall reimburse
(such obligation to reimburse the Agent shall sometimes be referred to as a
"Reimbursement Obligation") the Agent prior to 12:00 noon, New York time in the
case of any payment denominated in Dollars and 12:00 noon London time in the
case of any payment denominated in Pounds Sterling on each date that an amount
is paid by the Agent under any Letter of Credit (each such date, a "Drawing
Date") in an amount equal to the amount so paid by the Agent and in the same
currency in which the Letter of Credit was issued. In the event MSI or MSUK
fails to reimburse the Agent for the full amount of any drawing under any Letter
of Credit, by 12:00 noon (New York time or London time, as applicable), on the
Drawing Date, the Agent will promptly notify each Lender thereof, and MSI or
29
MSUK shall be deemed to have requested that Revolving Advances of Domestic Rate
Loans (as to MSI) or LIBOR Rate Loans (as to MSUK) for such period(s) as
selected by the Agent be made by the Lenders to be disbursed on the Drawing Date
under such Letter of Credit, subject to the amount of the unutilized portion of
the Revolving Credit Commitment and subject to the conditions set forth in
Section 8.2 other than any notice requirements. Any notice given by the Agent
pursuant to this Section 2.15(b) may be oral if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.
(c) Each Lender shall upon any notice pursuant to Section 2.15(b) make
available to the Agent an amount in immediately available funds equal to its
Domestic Rate Loan or LIBOR Rate Loan for such period(s) as selected by the
Agent, as applicable, its Ratable Share of the amount of the drawing, whereupon
the participating Lenders shall (subject to Section 2.15 (d)) each be deemed to
have made a Revolving Advance of a Domestic Rate Loan to MSI or a LIBOR Rate
Loan to MSUK, as applicable, in that amount and in the same currency in which
the Letter of Credit was issued. If any Lender so notified fails to make
available to the Agent for the account of First Union the amount of such
Lender's Ratable Share of such amount by no later than 2:00 p.m. on the Drawing
Date, then interest shall accrue on such Lender's obligation to make such
payment from the Drawing Date to the date on which such Lender makes such
payment (1) with respect to Revolving Advances to MSI: (i) at a rate per annum
equal to the Federal Funds Rate during the first three (3) days following the
Drawing Date; and (ii) at a rate per annum equal to the rate applicable to
Advances of a Domestic Rate Loan, on and after the fourth day following the
Drawing Date; and (2) with respect to Revolving Advances to MSUK, at the
applicable Revolving Interest Rate, in each case for such period(s) as selected
by the Agent. The Agent will promptly give notice of the occurrence of the
Drawing Date, but failure of the Agent to give any such notice on the Drawing
Date or in sufficient time to enable any Lender to effect such payment on such
date shall not relieve such Lender from its obligation under this Section
2.15(c).
(d) With respect to any unreimbursed drawing that is not converted
into Revolving Advances of Domestic Rate Loans to MSI or a continuation of a
LIBOR Rate Loan to MSUK, as applicable, in whole or in part as contemplated by
Section 2.15(b), because of MSI's or MSUK's failure to satisfy the conditions
set forth in this Agreement other than any notice requirements or for any other
reason, MSI or MSUK, as applicable, shall be deemed to have incurred from the
Agent a Letter of Credit Borrowing in the amount of such drawing and in the same
currency in which the Letter of Credit was issued. Such Letter of Credit
Borrowing shall be due and payable on demand (together with interest) and shall
bear interest at the rate per annum applicable to the Revolving Advances of
Domestic Rate Loans or LIBOR Rate Loans, as applicable, in each case for such
period(s) as selected by the Agent. Each Lender's payment to the Agent pursuant
to Section 2.15(c) shall be deemed to be a payment in respect of its
participation in such Letter of Credit Borrowing and shall constitute a
Participation Advance in the same currency in which the Letter of Credit was
issued from such Lender in satisfaction of its participation obligation under
this Section 2.15.
2.16. REPAYMENT OF PARTICIPATION ADVANCES.
(a) Upon (and only upon) receipt by the Agent for its account of
immediately available funds from MSI or MSUK, as applicable (i) in reimbursement
of any payment made by the Agent under any Letter of Credit with respect to
which any Lender has made a Participation Advance to the Agent, or (ii) in
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payment of interest on such a payment made by the Agent under such a Letter of
Credit, the Agent will pay to each Lender, in the same funds as those received
by the Agent, the amount of such Lender's Ratable Share of such funds, except
the Agent shall retain the amount of the Ratable Share of such funds of any
Lender that did not make a Participation Advance in respect of such payment by
Agent.
(b) If the Agent is required at any time to return to MSI, MSUK or to
a trustee, receiver, liquidator, custodian, or any official in any Insolvency
Proceeding, any portion of the payments made by any MSI or MSUK to the Agent
pursuant to Section 2.16(a) in reimbursement of a payment made under the Letter
of Credit or interest or fee thereon, each Lender shall, on demand of the Agent,
forthwith return to the Agent the amount of its Ratable Share of any amounts so
returned by the Agent plus interest thereon from the date such demand is made to
the date such amounts are returned by such Lender to the Agent, at a rate per
annum equal to the Federal Funds Rate (for amounts in Dollars) and the
applicable Revolving Interest Rate (for amounts in Pounds Sterling) in effect
from time to time, in each case for such period(s) as selected by the Agent.
2.17. DOCUMENTATION.
MSI and MSUK agree to be bound by the terms of First Union's
application and agreement for letters of credit executed by MSI and MSUK and
First Union's written regulations and general customary practices relating to
letters of credit. In the event of a conflict between such application or
agreement and this Agreement, this Agreement shall govern. It is understood and
agreed that, except in the case of gross negligence or willful misconduct, First
Union shall not be liable for any error, negligence and/or mistakes, whether of
omission or commission, in following any MSI's or MSUK's instructions or those
contained in the Letters of Credit or any modifications, amendments or
supplements thereto.
2.18. DETERMINATIONS TO HONOR DRAWING REQUESTS.
In determining whether to honor any request for drawing under any
Letter of Credit by the beneficiary thereof, First Union shall be responsible
only to determine that the documents and certificates required to be delivered
under such Letter of Credit have been delivered and that they comply on their
face with the requirements of such Letter of Credit.
2.19. NATURE OF PARTICIPATION AND REIMBURSEMENT OBLIGATIONS.
Each Lender's obligation in accordance with this Agreement to make the
Revolving Credit Advances or Participation Advances, as contemplated by Section
2.15, as a result of a drawing under a Letter of Credit, and the Obligations of
MSI and MSUK to reimburse the Agent upon a draw under a Letter of Credit, shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Section 2.19 under all circumstances,
including the following circumstances:
(i) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against the Agent, MSI, MSUK or any other Person for
any reason whatsoever;
(ii) the failure of MSI, MSUK or any other Person to comply, in
connection with a Letter of Credit Borrowing, with the conditions set forth in
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Sections 2.1, 2.2, 2.3, 2.4 or 8.2 or as otherwise set forth in this Agreement
for the making of a Revolving Credit Advance, it being acknowledged that such
conditions are not required for the making of a Letter of Credit Borrowing and
the obligation of the Lenders to make Participation Advances under Section 2.15;
(iii) any lack of validity or enforceability of any Letter of
Credit;
(iv) the existence of any claim, set-off, defense or other right
which MSI, MSUK or any Lender may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons for whom any such transferee
may be acting), the Agent or any Lender or any other Person or, whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between Lender or
Subsidiaries of MSI and the beneficiary for which any Letter of Credit was
procured);
(v) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any respect even
if First Union has been notified thereof;
(vi) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of MSI, MSUK, Sensors,
Subsidiaries of MSI or any other Obligor;
(vii) any breach of this Agreement or any Other Document by any
party thereto;
(viii) the occurrence or continuance of an Insolvency Proceeding
with respect to MSI, MSUK or any other Obligor;
(ix) the fact that an Event of Default shall have occurred and be
continuing;
(x) the fact that the Term shall have passed or this Agreement or
the Commitments hereunder shall have been terminated; and
(xi) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing.
2.20. INDEMNITY.
In addition to amounts payable as provided in Section 13.5, MSI and
MSUK hereby agree to protect, indemnify, pay and save harmless First Union from
and against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable fees, expenses and disbursements of
counsel and allocated costs of internal counsel) which First Union may incur or
be subject to as a consequence, direct or indirect, of (i) the issuance of any
Letter of Credit for their respective accounts, other than as a result of (A)
the gross negligence or willful misconduct of First Union as determined by a
final judgment of a court of competent jurisdiction or (B) subject to the
following clause (ii), the wrongful dishonor by First Union of a proper demand
for payment made under any Letter of Credit for their respective accounts, or
(ii) the failure of First Union to honor a drawing under any such Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental authority (all
such acts or omissions herein called "Governmental Acts").
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2.21. LIABILITY FOR ACTS AND OMISSIONS.
As between MSI and MSUK on the one hand and First Union on the other
hand, MSI and MSUK assume all risks of the acts and omissions of, or misuse of
the Letters of Credit by, the respective beneficiaries of such Letters of
Credit. In furtherance and not in limitation of the foregoing, First Union shall
not be responsible for: (i) the validity, accuracy, genuineness or legal effect
of any document submitted by any party in connection with the application for an
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged
(even if the Agent shall have been notified thereof); (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) the failure of the beneficiary of
any Letter of Credit, or any other party to which any Letter of Credit may be
transferred, to comply fully with any conditions required in order to draw upon
such Letter of Credit, or any other claim of MSI or MSUK against any beneficiary
of any Letter of Credit, or any such transferee, or any dispute between or among
MSI or MSUK and any beneficiary of any Letter of Credit or any such transferee;
(iv) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of First Union, including any Governmental Acts,
and none of the above shall affect or impair, or prevent the vesting of, any of
First Union's rights or powers hereunder. Nothing in the preceding sentence
shall relieve the Agent from liability for First Union's gross negligence or
willful misconduct in connection with actions or omissions described in such
clauses(i) through (viii) of such sentence. In furtherance and extension and not
in limitation of the specific provisions set forth above, any action taken or
omitted by First Union under or in connection with the Letters of Credit issued
by it or any documents and certificates delivered thereunder, if taken or
omitted in good faith, shall not put First Union under any resulting liability
to MSI, MSUK or any Lender.
2.22. PRO RATA TREATMENT OF LENDERS.
Each borrowing shall be allocated to each Lender according to its
Ratable Share, and each selection of, conversion to or renewal of any interest
rate and each payment or prepayment by MSI or MSUK with respect to principal,
interest, commitment fees, facility fees, or other fees (except for the Letter
of Credit Fees and other fees payable only to First Union) or amounts due from
MSI or MSUK hereunder to the Lenders with respect to the Advances, shall (except
in the case of an event specified in Section 2.16, 3.6 or 3.7) be made in
proportion to the applicable Advances outstanding from each Lender and, if no
such Advances are then outstanding, in proportion to the Ratable Share of each
Lender.
2.23. REPLACEMENT OF A LENDER.
In the event any Lender (i) gives notice under Section 3.5 or Section
3.6, (ii) does not fund Revolving Advances because the making of such Advances
would contravene any Law applicable to such Lender, or (iii) becomes subject to
the control of an Official Body (other than normal and customary supervision),
then MSI and MSUK shall have the right at their option, with the consent of the
Agent, which shall not be unreasonably withheld, to prepay the Advances of such
Lender in whole, together with all interest accrued thereon, and terminate such
Lender's Commitment within ninety (90) days after (w) receipt of such Lender's
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notice under Section 3.5 or 3.6, (x) the date such Lender has failed to fund
Revolving Advances because the making of such Advances would contravene Law
applicable to such Lender or (y) the date such Lender became subject to the
control of an Official Body, as applicable; provided that MSI and MSUK shall
also pay to such Lender at the time of such prepayment any amounts required
under Sections 2.2(g) and 3.5 and any accrued interest due on such amount and
any related fees; provided, however, that the Commitment and any Term Loan of
such Lender shall be provided by one or more of the remaining Lenders (at their
option) or a replacement bank acceptable to the Agent; provided, further, the
remaining Lenders shall have no obligation hereunder to increase their
Commitments. Notwithstanding the foregoing, the Agent may only be replaced
subject to the requirements of Section 13.14 and provided that all Letters of
Credit have expired or been terminated or replaced.
2.24. LETTERS OF CREDIT OUTSTANDING.
Upon an Event of Default, the full amount of all Letters of Credit
Outstanding shall be deemed to increase the principal amount outstanding of the
Revolving Advances (and any unpaid interest thereon and on unpaid letter of
credit fees shall be deemed principal on such Revolving Advances, provided that
-------- ----
no interest shall be charged on the amount of the Letters of Credit unless and
until such Letters of Credit are drawn upon) for purposes of (x) distribution of
payments hereunder and (y) application of proceeds; provided, however, if any
such Letter of Credit thereafter expires without being drawn upon, the amount
thereof shall reduce the principal amount of the Revolving Advances (as
previously increased pursuant to this section 2.24) and the distributions of
payments and proceeds to the Agent and Lenders shall be adjusted accordingly.
2.25. CURRENCY CONVERSION.
In calculating the maximum Dollar amounts referenced in Sections
2.1(a)(ii), 2.1(a)(iv), 2.6, 2.8, 2.11(c) and 2.14(a) hereof, the Agent shall
convert Pounds Sterling or Canadian dollars, as applicable, into Dollars at the
closing spot exchange rate of the Agent then prevailing (as conclusively
determined by the Agent) for purchasing Dollars with such other currency. All
moneys received or held by the Agent or any of the Lenders hereunder may, from
time to time, after demand has been made, be converted into such other currency
as the Agent or such Lender considers necessary or desirable to cover the
Obligations of the applicable Obligor in that other currency at the closing spot
exchange rate of the Agent or such Lender, as the case may be, then prevailing
(as conclusively determined by the Agent or such Lender) for purchasing that
other currency with the existing currency. If and to the extent that the
applicable Obligor fails to pay any amount due on demand, the Agent may, in its
absolute discretion and without notice to the Obligor, purchase at any time
thereafter so much of any currency as the Agent considers necessary or desirable
to cover the Obligations of the applicable Obligor in such currency hereby
secured at the closing spot exchange rate of the Agent then prevailing (as
conclusively determined by the Agent) for purchasing such currency with Dollars,
and the Obligor shall indemnify the Agent and the Lenders and each of them in
respect of the amount of Dollars used by the Agent for such purchase together
with any related costs or expenses necessary to effect such conversion. No
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payment to the Agent or any of the Lenders (whether under any judgment or court
order or otherwise) shall discharge the Obligations of any Obligor in respect of
which it was made unless and until the Agent and the Lenders shall have received
payment in full in the currency in which such Obligations were incurred and to
the extent that the amount of any such payment shall on actual conversion into
such currency fall short of such Obligations expressed in that currency, the
Agent and the Lenders shall have a further separate cause of action against the
applicable Obligor and shall be entitled to enforce the Liens hereby created to
recover the amount of the shortfall.
3. INTEREST AND FEES.
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3.1. INTEREST.
Interest on Advances shall be payable by MSI or MSUK, as the case may
be, in arrears on the first day of each month with respect to Domestic Rate
Loans and, with respect to LIBOR Rate Loans, at the end of each Interest Period.
Interest charges shall be computed on the actual principal amount of Advances
outstanding during the month (the "Monthly Advances") at a rate per annum equal
to (i) with respect to Revolving Advances, the applicable Revolving Interest
Rate and (ii) with respect to the Term Loan, the Term Loan Rate (collectively,
as applicable, the "Contract Rate"). All Revolving Advances under the MSUK
Sublimit shall be LIBOR Rate Loans. Whenever, subsequent to the date of this
Agreement, the Prime Rate is increased or decreased, the applicable Contract
Rate for Domestic Rate Loans shall be similarly changed without notice or demand
of any kind by an amount equal to the amount of such change in the Prime Rate
during the time such change or changes remain in effect. The LIBOR Rate
(Dollars) and LIBOR Rate (Pounds Sterling) shall be adjusted with respect to
LIBOR Rate Loans without notice or demand of any kind on the effective date of
any change in the Reserve Percentage as of such effective date. Upon and after
the occurrence of an Event of Default, and during the continuation thereof, the
Obligations shall bear interest at the applicable Contract Rate plus two percent
(2%) per annum (the "Default Rate").
3.2. COMMITMENT FEE.
If, for any month during the Term, the average daily unused balance of
the Revolving Advances for each day of such month does not equal the Maximum
Revolving Advance Amount, then MSI shall pay to Agent, for the ratable benefit
of Lenders, a fee at a rate equal to (i) three-eighths of one percent (0.375%)
per annum if the ratio of Consolidated Funded Indebtedness to EBITDA is less
than 2.25 to 1.00 and, (ii) one half of one percent (0.5%) per annum if the
ratio of Consolidated Funded Indebtedness to EBITDA is equal to or greater than
2.25 to 1.00, in either case on the amount by which the Maximum Revolving
Advance Amount exceeds such average daily unused balance. Such fee shall be
payable to Agent in arrears on the last day of each calendar quarter. The
calculation of the above ratio (and any adjustment in fee) shall be made
quarterly based upon MSI's consolidated financial statements provided to Agent
and shall become effective five (5) days after Agent receives such financial
statements as same are provided as required by Section 9.8 hereof.
3.3. COMPUTATION OF INTEREST AND FEES.
Interest and fees hereunder shall be computed on the basis of a year
of 360 days (with respect to Advances in Dollars) and 365 days (with respect to
Advances in Pounds Sterling) and for the actual number of days elapsed. If any
35
payment to be made hereunder becomes due and payable on a day other than a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and interest thereon shall accrue at the applicable Contract Rate
during such extension and be payable with such payment.
3.4. MAXIMUM CHARGES.
In no event whatsoever shall interest and other charges charged
hereunder exceed the highest rate permissible under law. In the event interest
and other charges as computed hereunder would otherwise exceed the highest rate
permitted under law, such excess amount shall be first applied to any unpaid
principal balance owed by MSI and MSUK, and if the then remaining excess amount
is greater than the previously unpaid principal balance, Lender shall promptly
refund such excess amount to MSI and MSUK and the provisions hereof shall be
deemed amended to provide for such permissible rate.
3.5. INCREASED COSTS.
(a) In the event that subsequent to the date hereof any applicable
law, treaty or governmental regulation, or any change therein or in the
interpretation or application thereof, or compliance by any Lender and the
office or branch where Agent or any Lender makes or maintains any LIBOR Rate
Loans with any request or directive (whether or not having the force of law)
from any central bank or other financial, monetary or other authority, shall:
(1) subject Agent or such Lender to any tax of any kind
whatsoever with respect to this Agreement or any Other Document or change the
basis of taxation of payments to Agent or such Lender of principal, fees,
interest or any other amount payable hereunder or under any Other Documents
(except for changes in the rate of tax on the overall net income of Agent or
such Lender by the jurisdiction in which it maintains its principal office);
(2) impose, modify or hold applicable any reserve, special
deposit, assessment or similar requirement against assets held by, or deposits
in or for the account of, advances or loans by, or other credit extended by, any
office of Agent or such Lender, including (without limitation) pursuant to
Regulation D of the Board of Governors of the Federal Reserve System; or
(3) impose on Agent or such Lender or the London interbank market
any other condition with respect to this Agreement or any Other Document;
and the result of any of the foregoing is to increase the cost to Agent or such
Lender of making, renewing or maintaining its Advances hereunder by an amount
that Agent or such Lender deems to be material or to reduce the amount of any
payment (whether of principal, interest or otherwise) in respect of any of the
Advances by an amount that Agent or such Lender deems to be material, then, in
any such case, MSI or MSUK, as the case may be, shall promptly pay Agent or such
Lender, within ten (10) days following its demand, such additional amount as
will compensate Agent or such Lender for such additional cost or such reduction,
as the case may be. Lender shall certify the amount of such additional cost or
reduced amount to MSI or MSUK, and such certification shall be conclusive absent
manifest error.
(b) In the event that any Revolving Advances (or any part thereof) are made
to MSUK or MSI from a London branch of the Lenders, then MSUK or MSI, as the
case may be, shall promptly pay Agent, within ten (10) days following its
demand, the amounts calculated in accordance with Section 15.23 hereof if so
36
required by the Agent. Agent shall certify the amount of such additional cost to
MSUK or MSI, as the case may be, and such certification shall be conclusive
absent manifest error.
3.6. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR.
(a) In the event that Agent or any Lender shall have determined that
(i) reasonable means do not exist for ascertaining the LIBOR Rate (Dollars)
applicable pursuant to Section 2.2 hereof for any Interest Period; or (ii)
Dollar deposits in the relevant amount and for the relevant maturity are not
available in the London interbank market, with respect to an outstanding LIBOR
Rate Loan, a proposed LIBOR Rate Loan, or a proposed conversion of a Domestic
Rate Loan into a LIBOR Rate Loan, then each affected Lender shall give Agent,
and Agent shall give MSI, prompt written, telephonic or telegraphic notice of
such determination. If such notice is given, (i) any such requested LIBOR Rate
Loan shall be made as a Domestic Rate Loan, unless MSI shall notify Agent no
later than 10:00 a.m. (New York time) two (2) Business Days prior to the date of
such proposed borrowing, that its request for such borrowing shall be canceled
or made as an unaffected type of LIBOR Rate Loan, (ii) any Domestic Rate Loan or
LIBOR Rate Loan which was to have been converted to an affected type of LIBOR
Rate Loan shall be continued as or converted into a Domestic Rate Loan, or, if
MSI shall notify Agent, no later than 10:00 a.m. (New York time) two (2)
Business Days prior to the proposed conversion, shall be maintained as an
unaffected type of LIBOR Rate Loan, and (iii) any outstanding affected LIBOR
Rate Loans shall be converted into a Domestic Rate Loan, or, if MSI shall notify
Agent, no later than 10:00 a.m. (New York time) two (2) Business Days prior to
the last Business Day of the then current Interest Period applicable to such
affected LIBOR Rate Loan, shall be converted into an unaffected type of LIBOR
Rate Loan, on the last Business Day of the then current Interest Period for such
affected LIBOR Rate Loans. Until such notice has been withdrawn, Lenders shall
have no obligation to make an affected type of LIBOR Rate Loan or maintain
outstanding affected LIBOR Rate Loans and MSI shall not have the right to
convert a Domestic Rate Loan or an unaffected type of LIBOR Rate Loan into an
affected type of LIBOR Rate Loan.
(b) In the event that Agent or any Lender shall have determined that
for any Interest Period (i) reasonable means do not exist for ascertaining the
LIBOR Rate (Pounds Sterling) applicable pursuant to Section 2.2 hereof, or (ii)
Pounds Sterling is unavailable to a Lender at a rate equivalent to the screen
rate quoted by the British Bankers' Association as set forth on Dow Xxxxx
Markets Service (formerly known as Telerate) display page 3750 (or appropriate
successor or if the British Bankers' Association or its successor ceases to
provide such quotes, a comparable replacement determined by the Agent), then
each affected Lender shall give Agent, and Agent shall give MSI, prompt written,
telephonic or telegraphic notice of such determination. If such notice is given,
then no Revolving Advances shall be made to MSUK during such period.
3.7. CAPITAL ADEQUACY.
(a) In the event that subsequent to the date hereof Agent or any
Lender shall have determined that any applicable law, rule, regulation or
guideline regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by Agent or Lender and the office or
branch where such Agent or Lender makes or maintains any LIBOR Rate Loans with
37
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on Agent's or such Lender's
capital as a consequence of its obligations hereunder to a level below that
which Agent or such Lender could have achieved but for such adoption, change or
compliance (taking into consideration Agent's or such Lender's policies with
respect to capital adequacy) by an amount deemed by Agent or such Lender to be
material, then, from time to time, MSI or MSUK, as the case may be, shall pay
within ten (10) days following demand to Agent or such Lender such additional
amount or amounts as will compensate Agent or such Lender for such reduction. In
determining such amount or amounts, Lender may use any reasonable averaging or
attribution methods. The protection of this Section 3.7 shall be available to
Agent and Lenders regardless of any possible contention of invalidity or
inapplicability with respect to the applicable law, regulation or condition.
(b) A certificate of such Lender setting forth such amount or amounts
as shall be necessary to compensate Agent or such Lender with respect to Section
3.7(a) hereof when delivered to MSI and MSUK shall be conclusive absent manifest
error.
3.8. CURRENCY CHANGE IN THE UNITED KINGDOM.
(a) If a change in the currency of the United Kingdom occurs (a
"Currency Change"), this Agreement shall be amended to the extent that the Agent
specifies to be necessary to reflect the Currency Change and to put the Lenders
in the same position, so far as possible, as they would have been in if no
Currency Change had occurred.
(b) Without prejudice to paragraph (a) above, any references in this
Agreement to a Business Day, day-count fraction or other convention (whether for
the calculation of interest, determination of payment dates or otherwise) shall
be amended, with effect from or at any time after a Currency Change, to the
extent that the Agent specifies to be necessary, to comply with, or otherwise
reflect or accommodate, any generally accepted conventions and market practice
applicable to obligations in the relevant currency in the London Interbank
Market.
(c) The Agent shall promptly notify the other parties to this
Agreement of any amendment effected under subsections (a) and (b) and any such
amendment shall be binding on all parties to this Agreement.
4. COLLATERAL: GENERAL TERMS
---------------------------
4.1. SECURITY INTEREST IN THE COLLATERAL AND SUBSIDIARY COLLATERAL.
(a) Pursuant to the Existing Loan Agreement, MSI granted to the Agent
for the ratable benefit of the Lenders a continuing security interest in and to
all of the Collateral, whether then owned or existing or thereafter acquired or
arising and wherever located, which security interest is ratified, confirmed and
continued. To secure the prompt payment and performance to Agent and Lenders of
the Obligations (as such term is modified hereby), MSI hereby assigns, pledges,
charges and grants to Agent for the ratable benefit of Lenders a continuing
security interest in and to all of the Collateral, whether now owned or existing
or hereafter acquired or arising and wherever located. MSI shall xxxx its books
38
and records as may be necessary or appropriate to evidence, protect and perfect
Agent's security interest and shall cause its financial statements to reflect
such security interest.
(b) Pursuant to the First Mortgage Debenture, MSUK has assigned and
charged to Agent for the ratable benefit of Lenders a continuing security
interest in and to all of the Subsidiary Collateral of MSUK, whether now owned
or existing or hereafter acquired or arising and wherever located, which
security interest secures the obligations of MSUK hereunder and under the Notes
executed by MSUK and the Other Documents executed by MSUK. MSUK shall xxxx its
books and records as may be necessary or appropriate to evidence, protect and
perfect Agent's security interest and shall cause its financial statements to
reflect such security interest.
(c) Pursuant to the Security Agreement of Sensors dated August 7,
2000, Sensors agreed to assign, pledge and grant to Agent for the ratable
benefit of Lenders a continuing security interest in and to all of the
Subsidiary Collateral of Sensors, whether then owned or existing or thereafter
acquired or arising and wherever located, which security interest is hereby
ratified, confirmed and continued by Sensors in the Sensors Security Agreement.
Sensors shall xxxx its books and records as may be necessary or appropriate to
evidence, protect and perfect Agent's security interest and shall cause its
financial statements to reflect such security interest.
4.2. PERFECTION OF SECURITY INTEREST.
MSI, MSUK and Sensors shall take all action that may be necessary or
desirable, or that Agent may request, so as at all times to maintain the
validity, perfection, enforceability and priority of Agent's security interest
in the Collateral and in Subsidiary Collateral or to enable Agent to protect,
exercise or enforce its rights hereunder and in the Collateral and in Subsidiary
Collateral, including, but not limited to, (i) immediately discharging all Liens
other than Permitted Encumbrances, (ii) making a good faith effort to obtain
landlords' or mortgagees' lien waivers, (iii) delivering to Agent, endorsed or
accompanied by such instruments of assignment as Agent may specify, and stamping
or marking, in such manner as Agent may specify, any and all chattel paper,
instruments, letters of credits and advices thereof and documents evidencing or
forming a part of the Collateral and the Subsidiary Collateral, (iv) entering
into warehousing, lockbox and other custodial arrangements satisfactory to
Agent, and (v) executing and delivering financing statements, instruments of
pledge, mortgages, notices and assignments, in each case in form and substance
satisfactory to Agent, relating to the creation, validity, perfection,
maintenance or continuation of Agent's security interest under the Uniform
Commercial Code or other applicable law. All charges, expenses and fees Agent
and/or Lenders may incur in doing any of the foregoing, and any local taxes
relating thereto, shall be charged to Borrowers' Accounts as a Revolving Advance
of a Domestic Rate Loan and added to the Obligations, or, at Agent's or such
Lender's option, shall be paid to Agent or such Lender immediately upon demand.
4.3. DISPOSITION OF COLLATERAL.
MSI, MSUK and Sensors will safeguard and protect all Collateral and
Subsidiary Collateral for Agent's general account and make no disposition
thereof whether by sale, lease or otherwise except (a) the sale of Inventory in
the ordinary course of business and (b) the disposition or transfer of obsolete
39
and worn-out Equipment in the ordinary course of business (which obsolete or
worn-out Equipment shall not have an aggregate fair market value of more than
$100,000 in any one fiscal year) and only to the extent that (i) the proceeds of
any such disposition are used to acquire replacement Equipment which is subject
to Agent's first priority security interest or (ii) the proceeds of which are
remitted to Agent, for the account of Lenders as a principal prepayment on the
Term Loan.
4.4. PRESERVATION OF COLLATERAL AND SUBSIDIARY COLLATERAL.
In addition to the rights and remedies set forth in Section 11.1
hereof, Agent: (a) may at any time take such steps as Agent deems necessary to
protect Agent's and each Lender's interest in and to preserve the Collateral and
the Subsidiary Collateral, including the hiring of such security guards or the
placing of other security protection measures as Agent may deem appropriate; (b)
may employ and maintain at any of MSI's, MSUK's or any other Obligor's premises
a custodian who shall have full authority to do all acts necessary to protect
Agent's and each Lender's interests in the Collateral and the Subsidiary
Collateral; (c) may lease warehouse facilities to which Agent may move all or
part of the Collateral and the Subsidiary Collateral; (d) may use any of MSI's,
MSUK's or any other Obligor's owned or leased lifts, hoists, trucks and other
facilities or equipment for handling or removing the Collateral and the
Subsidiary Collateral; and (e) shall have, and is hereby granted, a right of
ingress and egress to the places where the Collateral and the Subsidiary
Collateral is located, and may proceed over and through any of MSI's, MSUK's or
any other Obligor's owned or leased property. MSI, MSUK and the other Obligors
shall cooperate fully with all of Agent's efforts to preserve the Collateral and
the Subsidiary Collateral and will take such actions to preserve the Collateral
and the Subsidiary Collateral as Agent may direct. All of Agent's and or any
Lender's expenses of preserving the Collateral and the Subsidiary Collateral,
including any expenses relating to the bonding of a custodian, shall be charged
to Borrowers' Accounts as a Revolving Advance of a Domestic Rate Loan and added
to the Obligations.
4.5. OWNERSHIP OF COLLATERAL AND SUBSIDIARY COLLATERAL.
With respect to the Collateral and Subsidiary Collateral, at the time
the Collateral and Subsidiary Collateral becomes subject to Agent's security
interest: (a) MSI, MSUK and Sensors, as applicable, shall be the sole owner of
and fully authorized and able to sell, transfer, pledge, charge and/or grant a
first priority security interest in each and every item of the Collateral and
Subsidiary Collateral to Agent; and, except for Permitted Encumbrances the
Collateral shall be free and clear of all Liens and encumbrances whatsoever; (b)
each document and agreement executed by MSI, MSUK and Sensors, as applicable, or
delivered to Agent and/or any Lender in connection with this Agreement shall be
true and correct in all respects; (c) all signatures and endorsements of MSI,
MSUK and Sensors that appear on such documents and agreements shall be genuine,
and MSI, MSUK and Sensors, as applicable, shall have full capacity to execute
same; and (d) MSI's, MSUK's and Sensor's Equipment and Inventory shall be
located as set forth on Schedule 4.5 and shall not be removed from such
location(s) without the prior written consent of Agent except with respect to
the sale of Inventory in the ordinary course of business and Equipment to the
extent permitted in Section 4.3 hereof.
4.6. DEFENSE OF AGENT'S AND EACH LENDER'S INTERESTS.
Until (a) unavoidable payment and performance in full of all of the
Obligations (including cash collateralizing any Letters of Credit Outstanding)
and (b) termination of this Agreement and all obligations of the Lenders to
extend credit hereunder, Agent's and each Lender's interests in the Collateral
40
shall continue in full force and effect. During such period MSI and MSUK shall
not, without Agent's prior written consent, pledge, charge, sell (except
Inventory sold in the ordinary course of business and Equipment to the extent
permitted in Section 4.3 hereof), assign, transfer, create or suffer to exist a
Lien upon or encumber or allow or suffer to be encumbered in any way except for
Permitted Encumbrances, any part of the Collateral or the Subsidiary Collateral.
MSI, MSUK and Sensors, as applicable, shall defend Agent's and each Lender's
interests in the Collateral and the Subsidiary Collateral against any and all
Persons whatsoever. At any time following demand by Agent and/or any Lender for
payment of all Obligations, Agent shall have the right to take possession of the
indicia of the Collateral and the Subsidiary Collateral in whatever physical
form contained, including without limitation: labels, stationery, documents,
instruments and advertising materials. If Agent exercises such right to take
possession of the Collateral and/or Subsidiary Collateral, MSI, MSUK and
Sensors, as applicable, shall, upon demand, assemble it in the best manner
possible and make it available to Agent at a place reasonably convenient to
Agent. In addition, with respect to all Collateral and the Subsidiary
Collateral, Agent shall be entitled to all of the rights and remedies set forth
herein and further provided by the Uniform Commercial Code or other applicable
law. MSI, MSUK and Sensors, as applicable, shall, and Agent may, at its option,
instruct all suppliers, carriers, forwarders, warehouses or others receiving or
holding cash, checks, Inventory, documents or instruments in which Agent holds a
security interest to deliver same to Agent and/or subject to Agent's order and
if they shall come into MSI's, MSUK's and Sensor's possession, they, and each of
them, shall be held by MSI, MSUK and Sensors, as applicable, in trust as Agent's
trustee, and MSI or MSUK will immediately deliver them to Agent Lender in their
original form together with any necessary endorsement.
4.7. BOOKS AND RECORDS.
MSI, MSUK and the other Obligors shall (a) keep proper books of record
and account in which full, true and correct entries will be made of all dealings
or transactions of or in relation to its business and affairs; (b) set up on its
books accruals with respect to all taxes, assessments, charges, levies and
claims; and (c) on a reasonably current basis set up on its books, from its
earnings, allowances against doubtful Receivables, advances and investments and
all other proper accruals (including without limitation by reason of
enumeration, accruals for premiums, if any, due on required payments and
accruals for depreciation, obsolescence, or amortization of properties), which
should be set aside from such earnings in connection with its business. All
determinations pursuant to this subsection shall be made in accordance with, or
as required by, GAAP consistently applied in the opinion of such independent
public accountant as shall then be regularly engaged by MSI and/or MSUK.
4.8. FINANCIAL DISCLOSURE.
MSI and MSUK hereby irrevocably authorize and direct all accountants
and auditors employed by MSI and MSUK at any time during the Term to exhibit and
deliver to Agent and Lenders copies of any of MSI's, MSUK's or other Obligor's
financial statements, trial balances or other accounting records of any sort in
the accountant's or auditor's possession, and to disclose to Agent and Lenders
any information such accountants may have concerning MSI's, MSUK's and/or other
Obligor's financial status and business operations. MSI and MSUK hereby
authorize all federal, state and municipal authorities to furnish to Agent and
41
Lenders copies of reports or examinations relating to MSI, MSUK and/or another
Obligor, whether made by MSI, MSUK or otherwise; however, Agent and Lenders will
attempt to obtain such information or materials directly from MSI or MSUK prior
to obtaining such information or materials from such accountants or such
authorities.
4.9. COMPLIANCE WITH LAWS.
MSI, MSUK and the other Obligors shall comply with all acts, rules,
regulations and orders of any legislative, administrative or judicial body or
official applicable to the Collateral and/or the Subsidiary Collateral or any
part thereof or to the operation of MSI's, MSUK's or any other Obligor's
business the non-compliance with which could reasonably be expected to have a
Material Adverse Effect. The Collateral and the Subsidiary Collateral at all
times shall be maintained in accordance with the requirements of all insurance
carriers which provide insurance with respect to the Collateral and/or the
Subsidiary Collateral so that such insurance shall remain in full force and
effect.
4.10. INSPECTION OF PREMISES.
At all reasonable times and upon reasonable advance notice Agent shall
have full access to and the right to audit, check, inspect and make abstracts
and copies from MSI's, MSUK's and the other Obligors' books, records, audits,
correspondence and all other papers relating to the Collateral and/or the
Subsidiary Collateral and the operation of MSI's, MSUK's and/or the other
Obligors' business. Agent, may enter upon any of MSI's, MSUK's and/or any
Obligor's premises at any time during business hours and at any other reasonable
time, and from time to time, for the purpose of inspecting the Collateral and
any and all records pertaining thereto and the operation of MSI's, MSUK's and/or
any other Obligor's business. So long as no Event of Default then exists and is
continuing, Agent may conduct one field exam of MSI, MSUK, Sensors and of any
other Guarantor each year, at the expense of MSI, MSUK, Sensors or such other
Guarantor. Any field exams or other audits after an Event of Default which is
continuing shall be at the expense of MSI or MSUK.
4.11. INSURANCE.
MSI shall bear the full risk of any loss of any nature whatsoever with
respect to the Collateral and MSUK and Sensors, as applicable, shall bear the
full risk of any loss of any nature whatsoever with respect to the Subsidiary
Collateral. At MSI's, MSUK's and the other Obligor's own cost and expense in
amounts and with carriers acceptable to Agent, MSI, MSUK and the other Obligors
shall: (a) keep all its insurable properties and properties in which any of them
has an interest insured against the hazards of fire, flood, sprinkler leakage,
those hazards covered by extended coverage insurance and such other hazards, and
for such amounts, as is customary in the case of companies engaged in similar
businesses including, without limitation, business interruption insurance; (b)
maintain a bond in such amounts as is customary in the case of companies engaged
in similar businesses insuring against larceny, embezzlement or other criminal
misappropriation of insured's officers and employees who may either singly or
jointly with others at any time have access to the assets or funds of MSI, MSUK
and/or the other Obligors either directly or through authority to draw upon such
funds or to direct generally the disposition of such assets; (c) maintain public
and product liability insurance against claims for personal injury, death or
property damage suffered by others; (d) maintain all such worker's compensation
or similar insurance as may be required under the laws of any state or
jurisdiction in which any of them is engaged in business; (e) furnish Agent with
(i) copies of all policies and evidence of the maintenance of such policies by
the renewal thereof at least thirty (30) days before any expiration date, and
(ii) appropriate loss payable endorsements in form and substance satisfactory to
42
Agent, naming Agent as a co-insured and loss payee as its interests may appear
with respect to all insurance coverage referred to in clauses (a), and (c) and
(e) above with respect to MSI, MSUK and the other Obligors, and providing (A)
that all proceeds thereunder shall be payable to Agent, (B) no such insurance
shall be affected by any act or neglect of the insured or owner of the property
described in such policy, and (C) that such policy and loss payable clauses may
not be canceled, amended or terminated unless at least thirty (30) days' prior
written notice is given to Agent. In the event of any loss thereunder, the
carriers named therein hereby are directed by Agent, MSI, MSUK and the other
Obligors to make payment for such loss to Agent and not to MSI, MSUK and/or the
other Obligors and Agent jointly. If any insurance losses are paid by check,
draft or other instrument payable to MSI, MSUK and/or the other Obligors and
Agent jointly, Agent may endorse MSI's, MSUK's and/or the other Obligors' name
thereon and do such other things as Agent may deem advisable to reduce the same
to cash. Agent is hereby authorized to adjust and compromise claims under
insurance coverage referred to in clauses (a), and (b) and (e) above. All loss
recoveries received by Agent upon any such insurance may be applied to the
Obligations, in such order as Agent in its sole discretion shall determine,
except as may be required by law. Any surplus shall be paid by Agent to MSI or
MSUK or applied as may be otherwise required by law. Any deficiency thereon
shall be paid by MSI or MSUK to Agent, on demand.
4.12. FAILURE TO PAY INSURANCE.
If MSI or MSUK fails to obtain insurance as hereinabove provided, or
to keep the same in force, Agent, if Agent so elects, may obtain such insurance
and pay the premium therefor on behalf of MSI, MSUK and/or any other Obligor,
and charge Borrowers' Accounts therefor as a Revolving Advance of a Domestic
Rate Loan and such expenses so paid shall be part of the Obligations.
4.13. PAYMENT OF TAXES.
MSI, MSUK and the other Obligors will pay, when due, all taxes,
assessments and other Charges lawfully levied or assessed upon MSI, MSUK the
other Obligors or any of the Collateral or Subsidiary Collateral including,
without limitation, real and personal property taxes, assessments and charges
and all franchise, income, employment, social security benefits, withholding,
and sales taxes. If any tax by any governmental authority is or may be imposed
on or as a result of any transaction between MSI, MSUK and/or Sensors and Agent
and/or any Lender which Agent and/or any Lender may be required to withhold or
pay or if any taxes, assessments, or other Charges remain unpaid after the date
fixed for their payment, or if any claim shall be made which, in Agent's or any
Lender's opinion, may possibly create a valid Lien on the Collateral and/or the
Subsidiary Collateral, Agent may without notice to MSI or MSUK pay the taxes,
assessments or other Charges and MSI and MSUK hereby indemnify and hold Agent
and each Lender harmless in respect thereof. The amount of any payment by Agent
under this Section 4.13 shall be charged to Borrowers' Accounts as a Revolving
Advance and added to the Obligations and, until MSI and/or MSUK shall furnish
43
Agent with an indemnity therefor (or supply Agent with evidence satisfactory to
Agent that due provision for the payment thereof has been made), Agent may hold
without interest any balance standing to MSI's or MSUK's credit and Agent shall
retain its security interest in any and all Collateral held by Agent.
4.14. PAYMENT OF LEASEHOLD OBLIGATIONS.
MSI, MSUK and the other Obligors shall at all times pay, when and as
due, its rental obligations under all leases under which it is a tenant, and
shall otherwise comply, in all material respects, with all other terms of such
leases and keep them in full force and effect and, at Agent's request will
provide evidence of having done so.
4.15. RECEIVABLES.
(a) Nature of Receivables.
-----------------------
Each of the Receivables shall be a bona fide and valid account
representing a bona fide indebtedness incurred by the Customer therein named,
for a fixed sum as set forth in the invoice relating thereto (provided
immaterial or unintentional invoice errors shall not be deemed to be a breach
hereof) with respect to an absolute sale or lease and delivery of goods upon
stated terms of MSI or MSUK, or work, labor or services theretofore rendered by
MSI or MSUK as of the date each Receivable is created. Same shall be due and
owing in accordance with MSI's or MSUK's standard terms of sale without dispute,
setoff or counterclaim except as may be stated on the accounts receivable
schedules delivered by MSI and MSUK to Agent.
(b) Solvency of Customers.
-----------------------
Each Customer, to the best of MSI's and MSUK's knowledge, as of
the date each Receivable is created, is and will be solvent and able to pay all
Receivables on which the Customer is obligated in full when due or with respect
to such Customers of MSI and MSUK who are not solvent MSI and MSUK has set up on
its books and in its financial records bad debt reserves adequate to cover such
Receivables.
(c) Locations of MSI and MSUK.
------------------------------
MSI's chief executive office is located at 00 Xxxxxx Xxxxx Xxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000. Until written notice is given to Agent by MSI of
any other office at which MSI keeps its records pertaining to Receivables, all
such records shall be kept at such executive office. MSUK's chief executive
office is located at 000/000 Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxxx XX0 0XX, England.
Until written notice is given to Agent by MSUK of any other office at which MSUK
keeps its records pertaining to Receivables, all such records shall be kept at
such executive office.
(d) Collection of Receivables.
---------------------------
Until MSI's or MSUK's authority to do so is terminated by Agent
(which notice Agent may give at any time following the occurrence of an Event of
Default or a Default or when Agent in its sole discretion deems it to be in
Agent's and each Lenders' best interest to do so), MSI and MSUK will, at MSI's
and MSUK's sole cost and expense, but on Agent's behalf and for Agent's account,
collect as Lender's property and in trust for Lenders all amounts received on
Receivables, and shall not commingle such collections with MSI's or MSUK's funds
or use the same except to pay Obligations. MSI and MSUK shall, upon request by
Agent, deliver to Agent, or deposit in the Blocked Account, in original form and
44
on the date of receipt thereof, all checks, drafts, notes, money orders,
acceptances, cash and other evidences of indebtedness, the proceeds of which
shall be applied to repayment of the Revolving Advances.
(e) Notification of Assignment of Receivables.
---------------------------------------------
At any time following the occurrence of an Event of Default or a
Default, Agent shall have the right to send notice of the assignment of, and
Agent's security interest in, the Receivables to any and all Customers or any
third party holding or otherwise concerned with any of the Collateral and/or
Subsidiary Collateral. Thereafter, Agent shall have the sole right to collect
the Receivables, take possession of the Collateral and/or Subsidiary Collateral,
or both. Agent's actual collection expenses, including, but not limited to,
stationery and postage, telephone and telegraph, secretarial and clerical
expenses and the salaries of any collection personnel used for collection, may
be charged to Borrowers' Accounts and added to the Obligations.
(f) Power of Agent to Act on MSI's and MSUK's Behalf.
---------------------------------------------------------
Agent shall have the right to receive, endorse, assign and/or
deliver in the name of Agent or MSI or MSUK any and all checks, drafts and other
instruments for the payment of money relating to the Receivables, and MSI and
MSUK hereby waive notice of presentment, protest and non-payment of any
instrument so endorsed. MSI and MSUK hereby constitute Agent or Agent's designee
as MSI's and MSUK's attorney with power (i) to endorse MSI's and MSUK's names
upon any notes, acceptances, checks, drafts, money orders or other evidences of
payment or Collateral or Subsidiary Collateral; (ii) to sign MSI's and MSUK's
names on any invoice or xxxx of lading relating to any of the Receivables,
drafts against Customers, assignments and verifications of Receivables; (iii)
after an Event of Default, to send verifications of Receivables to any Customer;
(iv) to sign MSI's and MSUK's names on all financing statements or any other
documents or instruments deemed necessary or appropriate by Agent to preserve,
protect, or perfect Agent's interest in the Collateral or Subsidiary Collateral
and to file same; (v) after an Event of Default, to demand payment of the
Receivables; (vi) after an Event of Default, to enforce payment of the
Receivables by legal proceedings or otherwise; (vii) to exercise all of MSI's
and MSUK's rights and remedies with respect to the collection of the Receivables
and any other Collateral or Subsidiary Collateral; (viii) after an Event of
Default, to settle, adjust, compromise, extend or renew the Receivables; (ix) to
settle, adjust or compromise any legal proceedings brought to collect
Receivables; (x) to prepare, file and sign MSI's and MSUK's names on a proof of
claim in bankruptcy or similar document against any Customer; (xi) after an
Event of Default, to prepare, file and sign MSI's and MSUK's names on any notice
of Lien, assignment or satisfaction of Lien or similar document in connection
with the Receivables; and (xii) to do all other acts and things necessary to
carry out this Agreement. All acts of said attorney or designee are hereby
ratified and approved, and said attorney or designee shall not be liable for any
acts of omission or commission nor for any error of judgment or mistake of fact
or of law, unless done maliciously or with gross (not mere) negligence; this
power being coupled with an interest is irrevocable while any of the Obligations
remain unpaid. Agent shall have the right at any time following the occurrence
of an Event of Default or Default, to change the address for delivery of mail
addressed to MSI and MSUK to such address as Agent may designate and to receive,
open and dispose of all mail addressed to MSI and MSUK.
45
(g) No Liability.
-------------
Neither Agent nor any Lender shall, under any circumstances or in
any event whatsoever, have any liability for any error or omission or delay of
any kind occurring in the settlement, collection or payment of any of the
Receivables or any instrument received in payment thereof, or for any damage
resulting therefrom. Following the occurrence of an Event of Default or Default,
Agent may, without notice or consent from MSI or MSUK, on or otherwise collect,
extend the time of payment of, compromise or settle for cash, credit or upon any
terms any of the Receivables or any other securities, instruments or insurance
applicable thereto and/or release any obligor thereof. Agent is authorized and
empowered to accept following the occurrence of an Event of Default or Default
the return of the goods represented by any of the Receivables, without notice to
or consent by MSI or MSUK, all without discharging or in any way affecting MSI's
or MSUK'S liability hereunder.
(h) Establishment of a Lockbox Account; Dominion Account.
----------------------------------------------------------
All proceeds of Collateral and Subsidiary Collateral of MSUK
shall, at the direction of Agent, be deposited by MSI and MSUK into a lockbox
account, dominion account or such other "blocked account" ("Blocked Accounts")
as Agent may require. All funds deposited in any such Blocked Account shall
immediately become the property of Agent for the benefit of Lenders. Agent does
not assume any responsibility for such "blocked account" arrangement, including
without limitation, any claim of accord and satisfaction or release with respect
to deposits accepted by any bank thereunder. Alternatively, Agent may establish
depository accounts ("Depository Accounts") in the name of Agent for the deposit
of such funds, and MSI and MSUK shall deposit all proceeds of Collateral and
Subsidiary Collateral of MSUK or cause same to be deposited, in kind, in such
Depository Accounts of Agent in lieu of depositing same to the Blocked Accounts.
(i) Adjustments.
-----------
MSI and MSUK will not, without Agent's consent, compromise or
adjust any material amount of the Receivables (or extend the time for payment
thereof) or accept any material returns of merchandise or grant any additional
discounts, allowances or credits thereon except for those compromises,
adjustments, returns, discounts, credits and allowances as have been heretofore
customary in the business of MSI or MSUK.
(j) Receivables of Sensors and MSUK
-----------------------------------
Sensors and MSUK will be bound by the terms and provisions of
this Section 4.15 in addition to Sensors and MSUK being bound by the provisions
of the Sensors Security Agreement and the First Mortgage Debenture,
respectively. In the event of any conflict between such agreements and this
Agreement, the terms of the agreement which provides the most benefits to the
Agent and the Lenders shall prevail.
4.16. INVENTORY.
To the extent Inventory held for sale or lease has been produced by
MSI, it has been and will be produced by MSI in accordance with the Federal Fair
Labor Standards Act of 1938, as amended, and all rules, regulations and orders
thereunder.
46
4.17. MAINTENANCE OF EQUIPMENT.
Except for obsolete or unnecessary Equipment, the Equipment shall be
maintained in good operating condition and repair (reasonable wear and tear
excepted) and all necessary replacements of and repairs thereto shall be made so
that the value and operating efficiency of the Equipment shall be maintained and
preserved. MSI and MSUK shall not use or operate the Equipment in violation of
any law, statute, ordinance, code, rule or regulation. MSI and MSUK shall have
the right to sell Equipment to the extent set forth in Section 4.3 hereof.
4.18. EXCULPATION OF LIABILITY.
Neither Agent nor any Lender shall be responsible or liable for any
shortage, discrepancy, damage, loss or destruction of any part of the Collateral
wherever the same may be located and regardless of the cause thereof, except for
willful misconduct or gross negligence. Neither Agent nor any Lender, whether by
anything herein or in any assignment or otherwise, shall assume any of MSI's or
MSUK'S obligations under any contract or agreement assigned to Agent, and
neither Agent nor any Lender shall be responsible in any way for the performance
by MSI or MSUK of any of the terms and conditions thereof.
4.19. ENVIRONMENTAL MATTERS.
(a) MSI, MSUK and the other Obligors shall ensure that the Real
Property remains in compliance with all Environmental Laws and they shall not
place or permit to be placed any Hazardous Substances on any Real Property
except as not prohibited by applicable law or appropriate governmental
authorities.
(b) MSI, MSUK and the other Obligors shall establish and maintain a
system to assure and monitor continued compliance with all applicable
Environmental Laws which system shall include periodic reviews of such
compliance.
(c) MSI, MSUK and the other Obligors shall (i) employ in connection
with the use of the Real Property appropriate technology necessary to maintain
compliance with any applicable Environmental Laws and (ii) dispose of any and
all Hazardous Waste generated at the Real Property only at facilities and with
carriers that maintain valid permits under RCRA and any other applicable
Environmental Laws. MSI, MSUK and the other Obligors shall use their best
efforts to obtain certificates of disposal, such as hazardous waste manifest
receipts, from all treatment, transport, storage or disposal facilities or
operators employed by MSI, MSUK and the other Obligors in connection with the
transport or disposal of any Hazardous Waste generated at the Real Property.
(d) In the event MSI, MSUK and/or the other Obligors obtains, gives or
receives notice of any Release or threat of Release of a reportable quantity of
any Hazardous Substances at the Real Property (any such event being hereinafter
referred to as a "Hazardous Discharge") or receives any notice of violation,
request for information or notification that it is potentially responsible for
investigation or cleanup of environmental conditions at the Real Property,
demand letter or complaint, order, citation, or other written notice with regard
to any Hazardous Discharge or violation of Environmental Laws affecting the Real
Property or any MSI's, MSUK's or any other Obligors' interest therein (any of
the foregoing is referred to herein as an "Environmental Complaint") from any
Person, including any state agency responsible in whole or in part for
environmental matters in the state in which the Real Property is located or the
47
United States Environmental Protection Agency (any such person or entity
hereinafter the "Authority"), then MSI, MSUK and/or the other Obligors shall,
within five (5) Business Days, give written notice of same to Agent detailing
facts and circumstances of which MSI, MSUK and/or the other Obligors is aware
giving rise to the Hazardous Discharge or Environmental Complaint. Such
information is to be provided to allow Agent to protect its security interest in
the Real Property (if any) and is not intended to create nor shall it create any
obligation upon Agent or any Lenders with respect thereto.
(e) MSI, MSUK and the other Obligors shall promptly forward to Agent
copies of any request for information, notification of potential liability,
demand letter relating to potential responsibility with respect to the
investigation or cleanup of Hazardous Substances at any other site owned,
operated or used by MSI, MSUK and/or any other Obligor to dispose of Hazardous
Substances and shall continue to forward copies of correspondence between MSI,
MSUK and/or any other Obligor and the Authority regarding such claims to Agent
until the claim is settled. MSI, MSUK and the other Obligors shall promptly
forward to Agent copies of all documents and reports concerning a Hazardous
Discharge at the Real Property that MSI, MSUK and/or any other Obligor is
required to file under any Environmental Laws. Such information is to be
provided solely to allow Agent to protect Agent's security interest in the Real
Property, the Collateral and the Subsidiary Collateral.
(f) MSI, MSUK and the other Obligors shall respond promptly to any
Hazardous Discharge or Environmental Complaint and take all necessary action in
order to safeguard the health of any Person and to avoid subjecting the
Collateral, Subsidiary Collateral or Real Property to any Lien. If MSI, MSUK or
any other Obligor shall fail to respond promptly to any Hazardous Discharge or
Environmental Complaint or MSI, MSUK or any other Obligor shall fail to comply
with any of the requirements of any Environmental Laws, Agent on behalf of
Lenders may, but without the obligation to do so, for the sole purpose of
protecting Agent's interest in Collateral and/or Subsidiary Collateral: (A) give
such notices or (B) enter onto the Real Property (or authorize third parties to
enter onto the Real Property) and take such actions as Agent (or such third
parties as directed by Agent) deem reasonably necessary or advisable, to clean
up, remove, mitigate or otherwise deal with any such Hazardous Discharge or
Environmental Complaint. All reasonable costs and expenses incurred by Agent and
Lenders (or such third parties) in the exercise of any such rights, including
any sums paid in connection with any judicial or administrative investigation or
proceedings, fines and penalties, together with interest thereon from the date
expended at the Default Rate for Domestic Rate Loans constituting Revolving
Advances shall be paid upon demand by MSI or MSUK, and until paid shall be added
to and become a part of the Obligations secured by the Liens created by the
terms of this Agreement or any other agreement between Agent, any Lenders, MSI,
MSUK and Sensors.
(g) Promptly upon the written request of Agent from time to time,
based on the Agent's reasonable determination that such an assessment is
reasonable, MSI, MSUK and the other Obligors shall provide Agent, at MSI's or
MSUK's expense, with an environmental site assessment or environmental audit
report prepared by an environmental engineering firm acceptable in the
reasonable opinion of Agent, to assess with a reasonable degree of certainty the
existence of a Hazardous Discharge and the potential costs in connection with
abatement, cleanup and removal of any Hazardous Substances found on, under, at
or within the Real Property. Any report or investigation of such Hazardous
Discharge proposed and acceptable to an appropriate Authority that is charged to
oversee the clean-up of such Hazardous Discharge shall be acceptable to Agent.
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If such estimates, individually or in the aggregate, exceed $100,000, Agent
shall have the right to require MSI or MSUK to post a bond, letter of credit or
other security reasonably satisfactory to Agent to secure payment of these costs
and expenses.
(h) MSI, MSUK and the other Obligors shall defend and indemnify Agent
and Lenders and hold Agent, Lenders and their respective employees, directors
and officers harmless from and against all loss, liability, damage and expense,
claims, costs, fines and penalties, including attorney's fees, suffered or
incurred by Agent or Lenders under or on account of any violation of
Environmental Laws related to the Real Property, including, without limitation,
the assertion of any Lien thereunder, with respect to any Hazardous Discharge,
the presence of any Hazardous Substances affecting the Real Property, whether or
not the same originates or emerges from the Real Property or any contiguous real
estate, including any loss of value of the Real Property as a result of the
foregoing except to the extent such loss, liability, damage and expense is
attributable to any Hazardous Discharge resulting from actions on the part of
Agent or any Lender. MSI's, MSUK's and the other Obligors' obligations under
this Section 4.19 shall arise upon the discovery of the presence of any
Hazardous Substances at the Real Property, whether or not any federal, state, or
local environmental agency has taken or threatened any action in connection with
the presence of any Hazardous Substances. MSI's, MSUK's and the other Obligors'
obligations and the indemnifications hereunder shall survive the termination of
this Agreement.
(i) For purposes of Section 4.19 and 5.7, all references to Real
Property shall be deemed to include all of MSI's, MSUK's and the other Obligor's
right, title and interest in and to its owned and leased premises.
4.20. FINANCING STATEMENTS.
Except with respect to the financing statements filed by Agent and the
financing statements described on Schedule 4.20, no financing statement covering
any of the Collateral or any proceeds thereof is on file in any public office.
5. REPRESENTATIONS AND WARRANTIES.
--------------------------------
MSI, MSUK and the other Obligors, where applicable, represent and warrant
as follows:
5.1. AUTHORITY.
MSI, MSUK and the other Obligors each has full power, authority and
legal right to enter into this Agreement and the Other Documents and to perform
all their respective Obligations hereunder and thereunder. The execution,
delivery and performance of this Agreement and of the Other Documents (a) are
within MSI's, MSUK's and the other Obligors' respective corporate or other
powers, have been duly authorized, are not in contravention of law or the terms
of MSI's, MSUK's and the other Obligors' respective by-laws, certificate of
incorporation or other applicable documents relating to MSI's, MSUK's and the
other Obligors' respective incorporation or to the conduct of MSI's, MSUK's or
the other Obligors' business or of any material agreement or undertaking to
which MSI, MSUK or another Obligor is a party or by which MSI, MSUK or any other
Obligor is bound, and (b) will not conflict with nor result in any breach in any
of the provisions of or constitute a default under or result in the creation of
any Lien except Permitted Encumbrances upon any asset of MSI or any other
Obligor under the provisions of any agreement, charter document, instrument,
49
by-law, or other instrument to which MSI, MSUK or any other Obligor or its
respective property is a party or by which it may be bound.
5.2. INCORPORATION AND QUALIFICATION.
(a) MSI, MSUK and each other Obligor have each been duly incorporated
as a corporation or duly formed, if not a corporation, and is in good standing
under the laws of the state or country listed on Schedule 5.2(a) and each is
qualified to do business and is in good standing in the states or country listed
on Schedule 5.2(a) which constitute all states or countries in which
qualification and good standing are necessary for MSI, MSUK and such other
Obligors to conduct their respective business and own their respective property
and where the failure to so qualify could reasonably be expected to have a
Material Adverse Effect. MSI, MSUK and each other Obligor have each delivered to
Agent true and complete copies of its certificate of incorporation and by-laws
or other equivalent applicable documents and will promptly notify Agent of any
amendment or changes thereto.
(b) Except as set forth on Schedule 5.2(b), MSI has no Subsidiaries.
(c) Schedule 5.2(c) sets forth all Real Property owned or occupied by
MSI, MSUK and the other Obligors.
5.3. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties of MSI, MSUK and the other Obligors
contained in this Agreement and the Other Documents shall be true at the time of
MSI's, MSUK's and the other Obligors', as the case maybe, execution of this
Agreement and the Other Documents, and shall survive the execution, delivery and
acceptance thereof by the parties thereto and the closing of the transactions
described therein or related thereto.
5.4. TAX RETURNS.
MSI's and Sensors' federal tax identification number is set forth on
Schedule 5.4. MSI, MSUK and the other Obligors have filed all federal, state and
local tax returns and other reports each is required by law to file and has paid
all taxes, assessments, fees and other governmental charges that are due and
payable. Federal, state and local income tax returns of MSI and the other
Obligors, as applicable, have been examined and reported upon by the appropriate
taxing authority or closed by applicable statute and satisfied for all fiscal
years prior to and including the fiscal year ending March 31, 1991. The
provision for taxes on the books of MSI, MSUK and of Sensors are adequate for
all years not closed by applicable statutes of limitation, and for its current
fiscal year, and MSI, MSUK and Sensors have no knowledge of any deficiency or
additional assessment in connection therewith not provided for on its respective
books.
5.5. FINANCIAL STATEMENTS.
(a) The projected financial statements furnished to Agent and each
Lender reflect the consummation of the transactions contemplated by the
Acquisition Agreements and under this Agreement (the "Transactions") and fairly
reflect the financial condition of MSI as of the Closing Date after giving
effect to the Transactions, and have been prepared in good faith by MSI.
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(b) The projected financial statements of MSI described in Section
5.5(a) (the "Projections") were prepared by the Chief Financial Officer of MSI,
are based on underlying assumptions which provide a reasonable basis for the
projections contained therein and reflect MSI's judgment based on present
circumstances of the most likely set of conditions and course of action for the
projected period.
5.6. CORPORATE NAME.
Neither MSI, MSUK, nor Sensors have been known by any other corporate
name in the past five years and do not sell Inventory under any other name
except as set forth on Schedule 5.6, nor, except as set forth on Schedule 5.6,
has MSI, MSUK or Sensors been the surviving corporation of a merger or
consolidation or acquired all or substantially all of the assets of any Person
during the preceding five (5) years.
5.7. O.S.H.A., ENVIRONMENTAL AND OTHER COMPLIANCE.
(a) To the best of their knowledge, MSI, MSUK and the other Obligors
have duly complied with, and their facilities, business, assets, property,
leaseholds and Equipment are in compliance in all material respects with all
applicable laws including, without limitation, the provisions of the Federal
Occupational Safety and Health Act, the Environmental Protection Act, RCRA and
all other Environmental Laws; to the best of their knowledge, there have been no
outstanding citations, notices or orders of non-compliance issued to MSI, MSUK
or the other Obligors or relating to its business, assets, property, leaseholds
or Equipment under any such laws, rules or regulations.
(b) MSI, MSUK and the other Obligors have been issued all required
federal, state and local licenses, certificates or permits relating to all
applicable Environmental Laws.
(c) (i) There are no visible signs of releases, spills, discharges,
leaks or disposal (collectively referred to as "Releases") of Hazardous
Substances at, upon, under or within any Real Property or any premises leased by
MSI, MSUK or any other Obligor; (ii) there are no underground storage tanks or
polychlorinated biphenyls on the Real Property or any premises leased by MSI,
MSUK or any other Obligor; (iii) neither the Real Property nor any premises
leased by MSI, MSUK or any other Obligor has ever been used as a treatment,
storage or disposal facility of Hazardous Waste; and (iv) no Hazardous
Substances are present on the Real Property or any premises leased by MSI, MSUK
or any other Obligor, excepting such quantities as are handled in accordance
with all applicable manufacturer's instructions and governmental regulations and
in proper storage containers and as are necessary for the operation of the
commercial business of MSI, MSUK or any other Obligor or of its tenants.
5.8. SOLVENCY; NO LITIGATION, VIOLATION, INDEBTEDNESS OR DEFAULT.
(a) After giving effect to the Transactions, MSI, MSUK and Sensors
will be solvent, able to pay their debts as they mature, have capital sufficient
to carry on their business and all businesses in which they are about to engage,
and (i) as of the date hereof, the fair present saleable value of their
respective assets, calculated on a going concern basis, is in excess of the
amount of their respective liabilities taking into account all rights of
subrogation and contribution and (ii) subsequent to the date hereof, the fair
saleable value of their respective assets (calculated on a going concern basis)
will be in excess of the amount of their respective liabilities taking into
account all rights of subrogation and contribution.
51
(b) Except as disclosed in Schedule 5.8(b), neither MSI, MSUK nor any
other Obligor has (i) any pending or threatened litigation, arbitration, actions
or proceedings which involve the possibility of having a Material Adverse Effect
on MSI, MSUK or such other Obligor, and (ii) any liabilities nor indebtedness
for borrowed money other than the Obligations.
(c) Neither MSI, MSUK nor any other Obligor is in violation of any
applicable statute, regulation or ordinance in any respect which could
reasonably be expected to have a Material Adverse Effect on MSI, MSUK or such
other Obligor, nor is MSI, MSUK or any other Obligor in violation of any order
of any court, governmental authority or arbitration board or tribunal.
(d) Neither MSI nor any member of the Controlled Group maintains or
contributes to any Plan other than those listed on Schedule 5.8(d) hereto.
Except as set forth in Schedule 5.8(d), (i) no Plan has incurred any
"accumulated funding deficiency," as defined in Section 302(a)(2) of ERISA and
Section 412(a) of the Code, whether or not waived, and MSI and each member of
the Controlled Group has met all applicable minimum funding requirements under
Section 302 of ERISA in respect of each Plan, (ii) each Plan which is intended
to be a qualified plan under Section 401(a) of the Code as currently in effect
has been determined by the Internal Revenue Service to be qualified under
Section 401(a) of the Code and the trust related thereto is exempt from federal
income tax under Section 501(a) of the Code, (iii) neither MSI nor any member of
the Controlled Group has incurred any liability to the PBGC other than for the
payment of premiums, and there are no premium payments which have become due
which are unpaid, (iv) no Plan has been terminated by the plan administrator
thereof nor by the PBGC, and there is no occurrence which would cause the PBGC
to institute proceedings under Title IV of ERISA to terminate any Plan, (v) at
this time, the current value of the assets of each Plan exceeds the present
value of the accrued benefits and other liabilities of such Plan and neither MSI
nor any member of the Controlled Group knows of any facts or circumstances which
would materially change the value of such assets and accrued benefits and other
liabilities, (vi) neither MSI nor any member of the Controlled Group has
breached any of the responsibilities, obligations or duties imposed on it by
ERISA with respect to any Plan, (vii) neither MSI nor any member of a Controlled
Group has incurred any liability for any excise tax arising under Section 4972
or 4980B of the Code, and no fact exists which could give rise to any such
liability, (viii) neither MSI nor any member of the Controlled Group nor any
fiduciary of, nor any trustee to, any Plan, has engaged in a "prohibited
transaction" described in Section 406 of the ERISA or Section 4975 of the Code
nor taken any action which would constitute or result in a Termination Event
with respect to any such Plan which is subject to ERISA, (ix) MSI and each
member of the Controlled Group has made all contributions due and payable with
respect to each Plan, (x) there exists no event described in Section 4043(b) of
ERISA, for which the thirty (30) day notice period contained in 29 CFR Sec.
2615.3 has not been waived, (xi) neither MSI nor any member of the Controlled
Group has any fiduciary responsibility for investments with respect to any plan
existing for the benefit of persons other than employees or former employees of
MSI and any member of the Controlled Group, and (xii) neither MSI nor any member
of the Controlled Group has withdrawn, completely or partially, from any
Multiemployer Plan so as to incur liability under the Multiemployer Pension Plan
Amendments Act of 1980.
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5.9. PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES.
All patents, patent applications, trademarks, trademark applications,
service marks, service xxxx applications, copyrights, copyright applications,
design rights, tradenames, assumed names, trade secrets and licenses owned or
utilized by MSI, MSUK and Sensors are set forth on Schedule 5.9, are valid and
have, where required, been duly registered or filed with all appropriate
governmental authorities and constitute all of the intellectual property rights
which are necessary for the operation of its business; there is no objection to
or pending challenge to the validity of any such material patent, trademark,
copyright, design right, tradename, trade secret or license and neither MSI,
MSUK nor Sensors are aware of any grounds for any challenge, except as set forth
in Schedule 5.9 hereto. Each patent, patent application, patent license,
trademark, trademark application, trademark license, service xxxx, service xxxx
application, service xxxx license, copyright, copyright application and
copyright license owned or held by MSI, MSUK or Sensors and all trade secrets
used by MSI, MSUK or Sensors consist of original material or property developed
by MSI, MSUK and Sensors or was lawfully acquired by MSI, MSUK or Sensors from
the proper and lawful owner thereof. Each of such items has been maintained so
as to preserve the value thereof from the date of creation or acquisition
thereof. With respect to proprietary software used by MSI, MSUK and Sensors,
MSI, MSUK and Sensors, are in possession of all source and object codes related
to each piece of software or is the beneficiary of a source code escrow
agreement, each such source code escrow agreement being listed on Schedule 5.9
hereto.
5.10. LICENSES AND PERMITS.
Except as set forth in Schedule 5.10, MSI, MSUK and the other Obligors
(a) are in compliance with and (b) have procured and are now in possession of,
all material licenses or permits required by any applicable federal, state or
local law or regulation for the operation of their business in each jurisdiction
wherein each is now conducting or proposes to conduct business and where the
failure to procure such licenses or permits could have a Material Adverse
Effect.
5.11. DEFAULT OF INDEBTEDNESS.
MSI, MSUK and the other Obligors are not in default in the payment of
the principal of or interest on any Indebtedness in excess of $25,000 or under
any instrument or agreement under or subject to which any Indebtedness has been
issued and no event has occurred under the provisions of any such instrument or
agreement which with or without the lapse of time or the giving of notice, or
both, constitutes or would constitute an event of default thereunder.
5.12. NO DEFAULT.
MSI, MSUK and the other Obligors are not in default in the payment or
performance of any of their material contractual obligations and no default has
occurred under the provisions of any such obligation.
5.13. NO BURDENSOME RESTRICTIONS.
Neither MSI, MSUK nor any other Obligor is a party to any contract or
agreement the performance of which could have a Material Adverse Effect. Neither
MSI, MSUK nor any other Obligor has agreed or consented to cause or permit in
53
the future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a Lien which
is not a Permitted Encumbrance.
5.14. NO LABOR DISPUTES.
Neither MSI, MSUK nor any other Obligor is involved in any labor
dispute; there are no strikes or walkouts or union organization of MSI's, MSUK's
or of such other Obligor's employees threatened or in existence and no labor
contract is scheduled to expire during the Term other than as set forth on
Schedule 5.14 hereto.
5.15. MARGIN REGULATIONS.
Neither MSI, MSUK nor any other Obligor is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U or Regulation G of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect. No part of the proceeds
of any Advance will be used for "purchasing" or "carrying" "margin stock" as
defined in Regulation U of such Board of Governors.
5.16. INVESTMENT COMPANY ACT.
Neither MSI, MSUK nor any other Obligor is an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, nor is it controlled by such a company.
5.17. DISCLOSURE.
No representation or warranty made by MSI, MSUK or any other Obligor
in this Agreement, any Other Document or in the Acquisition Agreements, or in
any financial statement, report, certificate or any other document furnished in
connection herewith or therewith contains any untrue statement of a material
fact or omits to state any material fact necessary to make the statements herein
or therein not misleading. There is no fact known to MSI, MSUK or any other
Obligor or which reasonably should be known to MSI or MSUK which MSI or MSUK or
any other Obligor has not disclosed to Agent and Lenders in writing with respect
to the transactions contemplated by the Acquisition Agreements, or this
Agreement which could reasonably be expected to have a Material Adverse Effect.
5.18. DELIVERY OF ACQUISITION AGREEMENTS.
Agent has received complete copies of the Acquisition Agreements
(including all exhibits, schedules and disclosure letters referred to therein or
delivered pursuant thereto, if any) and all amendments thereto, waivers relating
thereto and other side letters or agreements affecting the terms thereof. None
of such documents and agreements has been amended or supplemented, nor have any
of the provisions thereof been waived, except pursuant to a written agreement or
instrument which has heretofore been delivered to Agent.
5.19. CONFLICTING AGREEMENTS.
No provision of any mortgage, indenture, contract, agreement,
judgment, decree or order binding on MSI, MSUK or on Sensors or affecting the
Collateral or the Subsidiary Collateral conflicts with, or requires any Consent
54
which has not already been obtained to, or would in any way prevent the
execution, delivery or performance of, the terms of this Agreement or the Other
Documents.
5.20. APPLICATION OF CERTAIN LAWS AND REGULATIONS.
Neither MSI, MSUK, Sensors nor any Affiliate of MSI is subject to any
statute, rule or regulation which regulates the incurrence of any Indebtedness,
including without limitation, statutes or regulations relative to common or
interstate carriers or to the sale of electricity, gas, steam, water, telephone,
telegraph or other public utility services.
5.21. LIENS AND ENCUMBRANCES.
Each of MSI, MSUK and the other Obligors has good and marketable title
to all of their respective assets and owns same free and clear of all Liens
except Permitted Encumbrances.
6. AFFIRMATIVE COVENANTS.
----------------------
MSI and MSUK shall, and MSI shall cause Sensors and the other Obligors to,
until payment in full of the Obligations and termination of this Agreement:
6.1. PAYMENT OF FEES.
Pay to Agent on demand all usual and customary fees and expenses which
Agent incurs in connection with (a) the forwarding of Advance proceeds and (b)
the establishment and maintenance of any Blocked Accounts or Depository Accounts
as provided for in Section 4.15(h). Agent may, without making demand, charge
Borrowers' Accounts for all such fees and expenses.
6.2. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE AND ASSETS.
(a) Conduct continuously and operate actively its business according
to good business practices and maintain all of its properties useful or
necessary in its business in good working order and condition (reasonable wear
and tear excepted and except as may be disposed of in accordance with the terms
of this Agreement), including, without limitation, all licenses, patents,
copyrights, design rights, tradenames, trade secrets and trademarks and take all
actions necessary to enforce and protect the validity of any intellectual
property right or other right included in the Collateral and Subsidiary
Collateral; (b) keep in full force and effect its existence and comply in all
material respects with the laws and regulations governing the conduct of its
business where the failure to do so could reasonably be expected to have a
Material Adverse Effect; and (c) make all such reports and pay all such
franchise and other taxes and license fees and do all such other acts and things
as may be lawfully required to maintain its rights, licenses, leases, powers and
franchises under the laws of the United States or any political subdivision
thereof.
6.3. VIOLATIONS.
Promptly notify Agent in writing of any violation of any law, statute,
regulation or ordinance of any Official Body, or of any agency thereof,
applicable to MSI, MSUK or any other Obligor which could reasonably be expected
to have a Material Adverse Effect on MSI, MSUK or such other Obligor.
55
6.4. GOVERNMENT RECEIVABLES.
When requested by Agent to do so, take all steps necessary to protect
Agent's and Lenders' interest in the Collateral and the Subsidiary Collateral
under the Federal Assignment of Claims Act or other applicable state or local
statutes or ordinances and deliver to Agent appropriately endorsed, any
instrument or chattel paper connected with any Receivable arising out of
contracts between MSI and the government of the United States (or accounts
receivable arising out of contracts between MSUK or Sensors and the government
of the United States or the government of the United Kingdom), any state or any
department, agency or instrumentality of any of them.
6.5. MINIMUM FIXED CHARGE COVERAGE.
Maintain at all times on a consolidated basis, a ratio of Fixed Charge
Coverage of greater than 1.50 to 1, measured quarterly on a rolling trailing
four quarter basis beginning with the fiscal quarter ending December 31, 2000.
6.6. MINIMUM TANGIBLE NET WORTH.
Cause or permit the Tangible Net Worth: at fiscal year end March 31,
2001 to be not less than $2,000,000; at fiscal year end March 31, 2002 to be not
less than $9,000,000; and at each fiscal year end thereafter to be not less than
$15,000,000.
6.7. MAXIMUM LEVERAGE RATIO.
Cause or permit the Maximum Leverage Ratio to be: not greater than the
ratio of 2.75 to 1.00 during fiscal year ending March 31, 2001; not greater than
2.50 to 1.00 during fiscal year ending March 31, 2002; and not greater than 2:00
to 1.00 at any times thereafter. The Leverage Ratio will be measured quarterly
on a rolling trailing four quarter basis beginning with the fiscal quarter
ending December 31, 2000.
6.8. EXECUTION OF SUPPLEMENTAL INSTRUMENTS.
Execute and deliver to Agent from time to time, upon demand, such
supplemental agreements, statements, assignments and transfers, or instructions
or documents relating to the Collateral or the Subsidiary Collateral, and such
other instruments as Agent may request, in order that the full intent of this
Agreement may be carried into effect.
6.9. PAYMENT OF INDEBTEDNESS; TAXES.
Pay, discharge or otherwise satisfy at or before maturity (subject,
where applicable, to specified grace periods and, in the case of the trade
payables, to normal payment practices) all its obligations and liabilities of
whatever nature, including but not limited to federal, state and local taxes
except when the failure to do so could not reasonably be expected to have a
Material Adverse Effect or when the amount or validity thereof is currently
being contested in good faith by appropriate proceedings and MSI, MSUK or
Sensors shall have provided for such reserves as Agent may reasonably deem
proper and necessary, subject at all times to any applicable subordination
arrangement in favor of Agent and/or Lenders.
6.10. STANDARDS OF FINANCIAL STATEMENTS.
Cause all financial statements referred to in Sections 9.7, 9.8, 9.9,
9.10, 9.11, 9.12, and 9.13 as to which GAAP is applicable to be complete and
correct in all material respects (subject, in the case of interim financial
statements, to normal year-end audit adjustments) and to be prepared in
56
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein (except as concurred in by such reporting
accountants or officer, as the case may be, and disclosed therein).
6.11. EXERCISE OF RIGHTS.
Enforce all of its material rights under the Acquisition Agreements
including, but not limited to, all indemnification rights and pursue all
remedies available to it with diligence and in good faith in connection with the
enforcement of any such rights.
6.12. INTEREST RATE PROTECTION.
Obtain Interest Rate Protection as to not less than 50% of the Term
Loan's interest expense on terms and conditions reasonably acceptable to Agent
and MSI and maintain such Interest Rate Protection for at least three (3) years
from the Existing Loan Agreement Closing Date.
6.13. NO LOSSES.
Not cause or permit there to occur net losses in any two (2) fiscal
quarters during any twelve (12) month period, measured quarterly.
6.14. MAINTENANCE OF ACCOUNTS.
Maintain MSI's and MSUK's primary depository and cash management
accounts with Agent. Any payments due under the Revolving Loan, Term Loan or any
other credit facility hereunder may be made by a debit against any such account.
6.15. REPAYMENT OF INTERCOMPANY LOAN.
MSUK shall use the proceeds of the initial Revolving Advance under the
MSUK Sublimit to repay to MSI the Pounds Sterling equivalent of $2,500,000,
which amount shall be applied by MSI against the Intercompany Loan and which
amount shall then be repaid by MSI to Agent as a reduction of the Revolving
Advances.
6.16. NOTICE OF CERTAIN EVENTS.
In the event of (i) an acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of shares
representing more than five (5%) of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of MSI, (ii) the
acquisition of direct or indirect control of MSI by any Person or group not
presently having such control; (iii) any circumstance which results in a direct
or indirect material change in MSI's or any other Obligor's management or
policies, whether by contract or otherwise; and (iv) any other circumstance
which permits any Person to materially influence the business and operations of
MSI or any other Obligor not presently having such influence, then MSI shall
provide written notice to the Agent in accordance with Section 15.9 hereof of
any such occurrence not less than thirty (30) days prior thereto and provide the
Agent with copies of all relevant documentation related thereto and execute
whatever further documentation related hereto as the Agent may require.
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7. NEGATIVE COVENANTS.
-------------------
MSI and MSUK shall not, and MSI shall cause Sensors and the other Obligors
not to, until satisfaction in full of the Obligations and termination of this
Agreement:
7.1. MERGER, CONSOLIDATION, ACQUISITION AND SALE OF ASSETS.
(a) Except as permitted by Section 7.11(c), enter into any merger,
consolidation or other reorganization with or into any other Person or acquire
all or a substantial portion of the assets or stock of any Person or permit any
other Person to consolidate with or merge with it.
(b) Sell, lease, transfer or otherwise dispose of any Collateral
(except as permitted hereunder) or, in the case of Sensors or MSUK, Subsidiary
Collateral (except as permitted under the Sensors Security Agreement and the
First Mortgage Debenture), or in the case of the other Obligors, any of their
properties or assets, except in the ordinary course of their business.
7.2. CREATION OF LIENS.
Create or suffer to exist any Lien upon or against any of its property
or assets or the properties or assets of any other Obligor, whether now owned or
hereafter acquired, except Permitted Encumbrances.
7.3. GUARANTEES.
Become liable upon the obligations of any Person by assumption,
endorsement or guaranty thereof or otherwise (other than to Agent and/or
Lenders) except (i) the endorsement of checks in the ordinary course of
business, (ii) any guaranty by MSI of Sensors' obligations under its lease,
(iii) the guaranty by MSI of MSUK's lease with Slough Trading Estate Limited,
(iv) the Guaranties, and (v) MSI's guaranty of MSUK's obligations under its
Acquisition Agreement.
7.4. INVESTMENTS.
Except as permitted pursuant to Section 7.11(c), purchase or acquire
obligations or stock of, or any other interest in, any Person including, without
limitation, capital contributions to MSUK, Sensors or any other Obligors, except
(a) obligations issued or guaranteed by the United States of America or any
agency thereof, (b) commercial paper with maturities of not more than 180 days
and a published rating of not less than A-1 or P-1 (or the equivalent rating),
(c) (i) checking accounts or (ii) certificates of time deposit and bankers'
acceptances having maturities of not more than 180 days and repurchase
agreements backed by United States government securities of a commercial bank if
(i) such bank has a combined capital and surplus of at least $500,000,000, or
(ii) its debt obligations, or those of a holding company of which it is a
Subsidiary, are rated not less than A (or the equivalent rating) by a nationally
recognized investment rating agency, (d) U.S. money market funds that invest
solely in obligations issued or guaranteed by the United States of America or an
agency thereof; or (e) the Intercompany Loan.
7.5. LOANS.
Except as permitted pursuant to Section 7.11(c), make advances, loans
or extensions of credit to any Person, including without limitation, any Parent,
Subsidiary or Affiliate.
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7.6. DIVIDENDS.
Declare, pay or make any dividend or distribution on any shares of the
common stock or preferred stock of MSI (other than dividends or distributions
payable in its stock or split-ups or reclassifications of its stock or
membership interests) or apply any of its funds, property or assets to the
purchase, redemption or other retirement of any common or preferred stock, or of
any options to purchase or acquire any such shares of common or preferred stock
of MSI, MSUK, Sensors or of any other Obligor.
7.7. INDEBTEDNESS.
Create, incur, assume or suffer to exist Indebtedness except (i)
Indebtedness to Lenders; (ii) trade debt (except that trade debt of MSUK shall
at no time exceed $1,000,000); (iii) Indebtedness permitted by Section 7.11(c),
including the Intercompany Loan; and (iv) other Indebtedness in an amount not to
exceed $250,000 in the aggregate.
7.8. NATURE OF BUSINESS.
Substantially change the nature of the business in which it is
presently engaged, nor except as specifically permitted hereby purchase or
invest, directly or indirectly, in any assets or property other than in the
ordinary course of business for assets or property which are useful in,
necessary for and are to be used in its business as presently conducted.
7.9. TRANSACTIONS WITH AFFILIATES.
Except for transactions between MSI and its Subsidiaries, directly or
indirectly, purchase, acquire or lease any property from, or sell, transfer or
lease any property to, or otherwise deal with, any Affiliate of MSI or of any
other Obligor.
7.10. LEASES.
Enter as lessee into any lease arrangement not currently existing for
real or personal property (unless capitalized leases) if after giving effect
thereto (including subtracting any lease payments it is no longer obligated to
pay because such lease is being replaced by the new lease), aggregate annual
rental payments for all additional leased property would exceed $500,000 in any
one fiscal year.
7.11. SUBSIDIARIES/ACQUISITIONS.
(a) Form or acquire any Subsidiary unless (i) such Subsidiary (which
is a domestic Subsidiary) expressly joins in this Agreement as a borrower and
becomes jointly and severally liable for the obligations of MSI hereunder, under
the Notes, and under any other agreement between MSI and Agent and/or any
Lender, (ii) the stock of such newly formed or acquired Subsidiary (100% of a
domestic Subsidiary and 65% of a foreign Subsidiary) is pledged and/or charged
to the Agent and (iii) Agent shall have received all documents, including legal
opinions, it may reasonably require to establish compliance with each of the
foregoing conditions.
(b) Enter into any partnership, joint venture or similar arrangement.
(c) Permit investment in or cash due to MSI from all of MSI's foreign
and domestic subsidiaries in an amount at any time outstanding aggregating in
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excess of $7,500,000 (including the Intercompany Loan) during any fiscal year of
MSI outstanding at any time, to be determined quarterly.
(d) Notwithstanding the foregoing and subject to Section 7.11(a)
hereof, this Section 7.11 shall not prohibit any Acquisition if (i) such
Acquisition, if the Acquired Entity is a publicly held corporation, shall have
been approved by the Board of Directors of the Acquired Entity, (ii) after
giving effect to such Acquisition, MSI and/or its Subsidiaries own in excess of
50% of the Acquired Entity; (iii) MSI has delivered to the Agent, not less than
ten (10) Business Days prior to such Acquisition, a reasonably detailed
description of such Acquisition (including, without limitation, the business,
assets or Person, the Purchase Price thereof and the method and structure of
payment thereof); (iv) the Acquired Entity is engaged in a line of business (A)
similar to the business of MSI or (B) otherwise acceptable to the Required
Lenders; (v) MSI has provided the Agent with pro forma financial statements
prior to such acquisition demonstrating compliance with Sections 6.5, 6.6, 6.7,
6.13, 7.2 and 7.7 and a certificate of the chief financial officer of MSI
certifying compliance such provisions in each case after giving effect thereto,
(vi) no Default or Event of Default shall have occurred and be continuing; and
(vii) the total Purchase Price for the Acquisition and any other Acquisitions
during the immediately preceding twelve month period is not in excess of
$10,000,000 in the aggregate and the aggregate Purchase Price for all
Acquisitions (including the proposed Acquisition) during the Term does not
exceed $20,000,000.
7.12. FISCAL YEAR AND ACCOUNTING CHANGES.
Change MSI's or MSUK's fiscal year or make any change (i) in
accounting treatment and reporting practices except as required by GAAP or (ii)
in tax reporting treatment except as required by law.
7.13. PLEDGE OF CREDIT.
Now or hereafter pledge Lender's credit on any purchases or for any
purpose whatsoever or use any portion of any Advance in or for any business
other than MSI's or MSUK's business as conducted on the date of this Agreement.
7.14. AMENDMENT OF CERTIFICATE OF INCORPORATION , BY-LAWS.
Amend, modify or waive any term or material provision of its
Certificate of Incorporation or By-Laws (or comparable corporate organizational
documents) unless required by law.
7.15. COMPLIANCE WITH ERISA.
(i) (x) Maintain, or permit any member of the Controlled Group to
maintain, or (y) become obligated to contribute, or permit any member of the
Controlled Group to become obligated to contribute, to any Plan, other than
those Plans disclosed on Schedule 5.8(d), (ii) engage, or permit any member of
the Controlled Group to engage, in any non-exempt "prohibited transaction", as
that term is defined in section 406 of ERISA and Section 4975 of the Code, (iii)
incur, or permit any member of the Controlled Group to incur, any "accumulated
funding deficiency", as that term is defined in Section 302 of ERISA or Section
412 of the Code, (iv) terminate, or permit any member of the Controlled Group to
terminate, any Plan where such event could result in any liability of MSI, MSUK,
Sensors or any member of the Controlled Group or the imposition of a lien on the
property of MSI, MSUK, Sensors or any member of the Controlled Group pursuant to
Section 4068 of ERISA, (v) assume, or permit any member of the Controlled Group
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to assume, any obligation to contribute to any Multiemployer Plan not disclosed
on Schedule 5.8(d), (vi) incur, or permit any member of the Controlled Group to
incur, any withdrawal liability to any Multiemployer Plan; (vii) fail promptly
to notify Agent of the occurrence of any Termination Event, (viii) fail to
comply, or permit a member of the Controlled Group to fail to comply, with the
requirements of ERISA or the Code or other applicable laws in respect of any
Plan, (ix) fail to meet, or permit any member of the Controlled Group to fail to
meet, all minimum funding requirements under ERISA or the Code or postpone or
delay or allow any member of the Controlled Group to postpone or delay any
funding requirement with respect of any Plan.
7.16. PREPAYMENT OF INDEBTEDNESS.
Except for the repayment of the Intercompany Loan as required by
Sections 2.13 and 6.15 hereof, at any time, directly or indirectly, prepay any
Indebtedness of MSI or MSUK to an Affiliate or Subsidiary, or repurchase,
redeem, retire or otherwise acquire any Indebtedness of MSI or MSUK to an
Affiliate or Subsidiary.
7.17. OTHER AGREEMENTS.
Enter into any material amendment, waiver or modification of the
Acquisition Agreements or any related agreements.
8. CONDITIONS PRECEDENT.
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8.1. CONDITIONS TO CREATION OF MSUK SUBLIMIT.
The agreement of Agent and Lenders to amend and restate the Existing
Loan Agreement and to create the MSUK Sublimit is subject to the satisfaction,
or waiver by Lenders, immediately prior to the date hereof (unless otherwise
specified), of the following conditions precedent:
(a) Notes.
Agent shall have received the Revolving Credit Notes duly
executed and delivered by an authorized officer of MSI and MSUK, as applicable;
(b) Filings, Registrations and Recordings.
Each document (including, without limitation, any Uniform
Commercial Code financing statement) required by this Agreement, any related
agreement or under law or reasonably requested by the Agent to be filed,
registered or recorded in order to create, in favor of Agent, a perfected
security interest in or lien upon the Collateral and Subsidiary Collateral shall
have been properly filed, registered or recorded in each jurisdiction in which
the filing, registration or recordation thereof is so required or requested, and
Agent shall have received an acknowledgment copy, or other evidence satisfactory
to it, of each such filing, registration or recordation and satisfactory
evidence of the payment of any necessary fee, tax or expense relating thereto;
(c) Corporate Proceedings of MSI, MSUK and Sensors.
Agent shall have received a copy of the resolutions in form and
substance reasonably satisfactory to Agent, of the Board of Directors of MSI,
MSUK and of Sensors (and as Sensors and MSUK, the consent of MSI as their sole
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shareholder) authorizing (i) the execution, delivery and performance of this
Agreement, the Notes, the Other Documents and the Acquisition Agreements
(collectively the "Documents") and (ii) the granting by MSI, MSUK or Sensors, as
the case may be, of the security interests in and liens upon the Collateral or
the Subsidiary Collateral certified by the Secretary or an Assistant Secretary
or other authorized representative of MSI, MSUK or Sensors, as the case may be,
as of the date hereof; and, such certificate shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded as of
the date of such certificate;
(d) Incumbency Certificates of MSI, MSUK and Sensors.
Agent shall have received a certificate of the Secretary or an
Assistant Secretary or other authorized representative of MSI, MSUK and Sensors,
dated the Date hereof, as to the incumbency and signature of the officers of
MSI, MSUK and Sensors, as the case maybe, executing this Agreement, the Other
Documents, any certificate or other documents to be delivered by it pursuant
hereto, together with evidence of the incumbency of such Secretary or Assistant
Secretary or other authorized representative of MSI, MSUK or Sensors, as the
case may be;
(e) Certificates.
Agent shall have received a copy of the Certificates of
Incorporation (or comparable organizational documents) of MSI, MSUK and Sensors,
and all amendments thereto, certified by the Secretary of State or other
appropriate official of its jurisdiction of formation together with copies of
the By-Laws of MSI, MSUK and Sensors certified as accurate and complete by the
Secretary or other authorized representative of MSI, MSUK or Sensors, the case
may be;
(f) Good Standing Certificates.
Agent shall have received good standing certificates for MSI,
MSUK and for Sensors dated not more than 10 days prior to the Date hereof,
issued by the Secretary of State or other appropriate official of MSI's, MSUK's
or of Sensors' jurisdiction of incorporation and each jurisdiction where the
conduct of MSI's, MSUK's or of Sensors' business activities or the ownership of
its properties necessitates qualification;
(g) Legal Opinions.
Agent shall have received (at MSI's expense) the executed legal
opinions of (i) Xxxx X. Xxxxxx, Esq., (ii) XxXxxxxx & English LLP, (iii) counsel
admitted to practice in the United Kingdom; and (iv) counsel admitted to
practice in Hong Kong (which confirms that the pledge of Measurement Limited
stock by MSI is enforceable against MSI and represents an effective pledge of
65% of the stock of Measurement Limited), each in form and substance
satisfactory to Agent which shall cover such matters incident to the
transactions contemplated by this Agreement, the Notes, and the Other Documents,
as Agent reasonably requires and MSI hereby authorizes and directs such counsel
to deliver such opinions to Agent and Lenders.
(h) No Litigation.
No litigation, investigation or proceeding before or by any
arbitrator or Official Body shall be continuing or threatened against MSI, MSUK
or Sensors, or against the members, officers or directors of MSI, MSUK, Sensors
and any other Obligor or against the Seller or its officers and directors (A) in
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connection with the Documents or any of the transactions contemplated thereby
and which, in the reasonable opinion of Agent, is deemed material or (B) which
could, in the reasonable opinion of Agent have a Material Adverse Effect; and no
injunction, writ, restraining order or other order of any nature materially
adverse to MSI, MSUK, Sensors and any other Obligor or Seller or the conduct of
its business or inconsistent with the due consummation of the Transactions shall
have been issued by any Official Body;
(i) Financial Condition Certificates.
Agent shall have received an executed Financial Condition
Certificate in the form of Exhibit 8.1(i).
(j) Fees.
Agent shall have received all fees payable to Agent and Lenders
on or prior to the date hereof pursuant to Article III hereof;
(k) Insurance.
Agent shall have received in form and substance satisfactory to
Agent, certified copies of MSI's, MSUK's and Sensors' casualty insurance
policies, together with loss payable endorsements on Agent's standard form of
loss payee endorsement naming Agent as loss payee, and certified copies of
MSI's, MSUK's and Sensors' liability insurance policies, together with
endorsements naming Agent as a co-insured;
(l) Stock Pledge Agreements, Other Documents.
Agent shall have received the duly executed Stock Pledge
Agreements, Assignment of Patents, Assignments of Trademarks and all Other
Documents, each in form and substance satisfactory to Lenders. In the event
modifications to or a replacement of the applicable Stock Pledge Agreement of
MSI is deemed advisable by such Hong Kong counsel, MSI shall enter into any such
modification to or replacement of such Stock Pledge Agreement;
(m) Consents.
Agent shall have received any and all Consents necessary to
permit the effectuation of the transactions contemplated by this Agreement and
the Documents; and, Agent shall have received such Consents and waivers of such
third parties as might assert claims with respect to the Collateral and the
Subsidiary Collateral, as Agent and its counsel shall deem necessary;
(n) No Adverse Material Change.
(i) since September 30, 2000, there shall not have occurred any
event, condition or state of facts which could reasonably be expected to have a
Material Adverse Effect and (ii) no representations made or information supplied
to Agent shall have been proven to be inaccurate or misleading in any material
respect;
(o) Closing Certificate.
Agent shall have received a closing certificate signed by the
Chief Financial Officer of MSI, MSUK and of Sensors dated as of the date hereof,
stating that (i) all representations and warranties set forth in this Agreement
and the Other Documents are true and correct on and as of such date, (ii) MSI,
MSUK and Sensors are on such date in compliance with all the terms and
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provisions set forth in this Agreement and the Other Documents, (iii) MSI, MSUK
and Sensors is on such date in compliance with all applicable laws, statutes,
rules and regulations of any applicable Official Body, and (iv) on such date no
Default or Event of Default has occurred or is continuing;
(p) Borrowing Base.
Agent shall have received evidence from MSI, MSUK and Sensors
that the aggregate amount of Eligible Receivables and Eligible Inventory is
sufficient in value and amount to support Revolving Advances and Letters of
Credit in the amounts requested by MSI or MSUK;
(q) Guaranties.
Agent shall have received the MSI Guaranty and the Sensors
Guaranty, duly executed by appropriate authorized officers of MSI and Sensors.
(r) Security Agreements.
Agent shall have received the First Mortgage Debenture and the
Sensors Security Agreement, duly executed by appropriate authorized officers of
MSUK and Sensors.
(s) Intercreditor Agreement
Agent shall have received the Intercreditor Agreement, duly
executed by appropriate authorized officers of MSI and MSUK.
(t) Financial Statements of Seller.
Agent shall have received (i) the post-closing audited balance
sheet (as described in the Acquisition Agreements) of the division of the Seller
purchased by MSI (or MSUK) pursuant to the Acquisition Agreements, and (ii)
audited (defined in the Acquisition Agreements as the SEC Financial Statements)
financial statements for the prior two (2) years of the division of the Seller
purchased by MSI (or MSUK) pursuant to the Acquisition Agreements, which in both
cases shall confirm in all material respects the information previously provided
to the Lenders by MSI.
(u) Assignments of Patents and Trademarks.
Agent shall have received within thirty (30) days of the Closing
Date at MSI's expense new assignments of patents (or amendments to the
assignments of patents dated as of August 7, 2000) from MSI and/or Sensors and a
new assignment of trademarks (or an amendment to the assignment of trademarks
dated as of August 7, 2000) from MSI, each in form and substance satisfactory to
Agent and its counsel, reflecting, as applicable, the proper owners of the
existing patents and trademarks and/or the addition of new patents and
trademarks acquired by MSI and Sensors since the Existing Loan Agreement Closing
Date.
(v) Other.
All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the Transactions shall be
satisfactory in form and substance to Agent and its counsel.
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8.2. CONDITIONS TO EACH ADVANCE.
The agreement of Agent and Lenders to make any Advance requested to be
made on any date (including, without limitation, the initial Advance), is
subject to the satisfaction of the following conditions precedent as of the date
such Advance is made:
(a) Representations and Warranties.
Each of the representations and warranties made by MSI, MSUK and
by each Obligor in or pursuant to this Agreement and any Other Document to which
it is a party, and each of the representations and warranties contained in any
certificate, document or financial or other statement furnished at any time
under or in connection with this Agreement or any Other Document shall be true
and correct in all material respects on and as of such date as if made on and as
of such date;
(b) No Default.
No Event of Default or Default shall have occurred and be
continuing on such date, or would exist after giving effect to the Advances
requested to be made, on such date and, in the case of the initial Advance,
after giving effect to the consummation of the transactions contemplated by the
Acquisition Agreements; provided, however that Lenders, in their sole
discretion, may continue to make Advances notwithstanding the existence of an
Event of Default or Default and that any Advances so made shall not be deemed a
waiver of any such Event of Default or Default; and
(c) Maximum Advances.
In the case of any Advances requested to be made, after giving
effect thereto, the aggregate Advances shall not exceed the maximum amount of
Advances permitted under Section 2.1 hereof. Each request for an Advance by MSI
or MSUK hereunder shall constitute a representation and warranty by MSI or MSUK
as of the date of such Advance that the conditions contained in this subsection
shall have been satisfied.
9. INFORMATION AS TO MSI, MSUK AND SENSORS.
---------------------------------------------
MSI and MSUK shall and MSI shall cause Sensors, until satisfaction in full
of the Obligations and the termination of this Agreement:
9.1. DISCLOSURE OF MATERIAL MATTERS.
Immediately upon learning thereof, report to Agent all matters
materially affecting the value, enforceability or collectibility of any portion
of the Collateral or Subsidiary Collateral, including, without limitation,
MSI's, MSUK's or Sensors' reclamation or repossession of, or the return to MSI,
MSUK or to Sensors of, a material amount of goods or claims or disputes asserted
by any Customer or other obligor.
9.2. SCHEDULES.
Deliver to Agent on or before the fifteenth (15th) day of each month
as and for the prior month (a) accounts receivable agings, (b) accounts payable
schedules, (c) Inventory reports and (d) a Borrowing Base Certificate, all in
form and substance satisfactory to Agent. In addition, MSI, MSUK and Sensors
will deliver to Agent at such intervals as Agent may require: (i) confirmatory
assignment schedules, (ii) copies of Customer's invoices, (iii) evidence of
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shipment or delivery, and (iv) such further schedules, documents and/or
information regarding the Collateral, Subsidiary Collateral or Receivables as
Agent may require including, without limitation, trial balances and test
verifications. Agent shall have the right to confirm and verify all Receivables
by any manner and through any medium it considers advisable and do whatever it
may deem reasonably necessary to protect its interests hereunder. The items to
be provided under this Section are to be in form satisfactory to Agent and
executed by MSI, MSUK or Sensors, as the case may be and delivered to Agent from
time to time solely for Agent's convenience in maintaining records of the
Collateral and the Subsidiary Collateral and reviewing the Receivables, and
MSI's, MSUK's or Sensors' failure to deliver any of such items to Agent shall
not affect, terminate, modify or otherwise limit Lender's Lien with respect to
the Collateral or Subsidiary Collateral.
9.3. ENVIRONMENTAL REPORTS.
Furnish Agent, concurrently with the delivery of the financial
statements referred to in Sections 9.7 and 9.8, with a certificate signed by the
President or Manager of MSI stating, to the best of his knowledge, that MSI,
MSUK and the other Obligors are in compliance in all material respects with all
federal, state and local laws relating to environmental protection and control
and occupational safety and health. To the extent MSI, MSUK or another Obligor
is not in compliance with the foregoing laws, the certificate shall set forth
with specificity all areas of non-compliance and the proposed action MSI, MSUK
or such other Obligor will implement in order to achieve full compliance.
9.4. LITIGATION.
Promptly notify Agent in writing of any litigation, suit or
administrative proceeding affecting MSI, MSUK or any other Obligor, whether or
not the claim is covered by insurance, and of any suit or administrative
proceeding, which in any such case could reasonably be expected to have a
Material Adverse Effect.
9.5. MATERIAL OCCURRENCES.
Promptly notify Agent in writing upon the occurrence of (a) any Event
of Default or Default; (b) any event, development or circumstance whereby any
financial statements or other reports furnished to Agent fail in any material
respect to present fairly, in accordance with GAAP consistently applied, the
financial condition or operating results of MSI as of the date of such
statements; (c) any accumulated retirement plan funding deficiency which, if
such deficiency continued for two plan years and was not corrected as provided
in Section 4971 of the Code, could subject MSI, MSUK or Sensors to a tax imposed
by Section 4971 of the Code; (d) each and every default by MSI, MSUK or Sensors
which might result in the acceleration of the maturity of any Indebtedness,
including the names and addresses of the holders of such Indebtedness with
respect to which there is a default existing or with respect to which the
maturity has been or could be accelerated, and the amount of such Indebtedness;
(e) notice of any default under any of the leases or occupancy agreements as to
any Real Property; and (f) any other development in the business or affairs of
MSI, MSUK or any other Obligor which could reasonably be expected to have a
Material Adverse Effect; in each case describing the nature thereof and the
action MSI, MSUK or another Obligor, as the case may be, proposes to take with
respect thereto.
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9.6. GOVERNMENT RECEIVABLES.
Notify Agent immediately if any of its Receivables arise out of
contracts between MSI, MSUK (or Sensors) and the United States, any state, or
any department, agency or instrumentality of any of them.
9.7. ANNUAL FINANCIAL STATEMENTS.
(a) MSI.
Furnish Agent and each Lender within ninety (90) days after the end of
each fiscal year of MSI on a consolidated and consolidating basis, audited
financial statements of MSI including, but not limited to, statements of income
and stockholders' or members' equity and cash flow from the beginning of the
current fiscal year to the end of such fiscal year and the balance sheet as at
the end of such fiscal year, all prepared in accordance with GAAP applied on a
basis consistent with prior practices, and in reasonable detail and reported
upon without qualification by an independent certified public accounting firm
selected by MSI and satisfactory to Agent (the "Accountants") together with
MSI's annual 10k audit and internally prepared annual consolidated and
consolidating statements. The report of the Accountants may not be audited as to
the consolidating results and shall be accompanied by a statement of the
Accountants certifying that (i) they have caused the Loan Agreement to be
reviewed, (ii) in making the examination upon which such report was based either
no information came to their attention which to their knowledge constituted an
Event of Default or a Default under this Agreement or any related agreement or,
if such information came to their attention, specifying any such Default or
Event of Default, its nature, when it occurred and whether it is continuing, and
such report shall contain or have appended thereto calculations which set forth
MSI's compliance with the requirements or restrictions imposed by Sections 6.5,
6.6, 6.7, 6.8, 6.13 and 7.10 hereof. In addition, the reports shall be
accompanied by a certificate of MSI's Chief Financial Officer which shall state
that, based on an examination sufficient to permit him to make an informed
statement, no Default or Event of Default exists, or, if such is not the case,
specifying such Default or Event of Default, its nature, when it occurred,
whether it is continuing and the steps being taken by MSI with respect to such
event, and such certificate shall have appended thereto calculations which set
forth MSI's compliance with the requirements or restrictions imposed by Sections
6.5, 6.6, 6.7, 6.13 and 7.10 hereof.
(b) MSUK
Furnish Agent and each Lender within ninety (90) days after the end of
each fiscal year of MSUK, internally prepared financial statements of MSUK
including, but not limited to, statements of income and stockholders' or
members' equity and cash flow from the beginning of the current fiscal year to
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the end of such fiscal year and the balance sheet as at the end of such fiscal
year, each in a form acceptable to Agent and prepared on a basis consistent with
prior practices and complete and correct in all material respects, accompanied
by a certificate of MSUK's Chief Financial Officer which shall state that, based
on an examination sufficient to permit him to make an informed statement, no
Default or Event of Default exists, or, if such is not the case, specifying such
Default or Event of Default, its nature, when it occurred, whether it is
continuing and the steps being taken by MSUK with respect to such event.
9.8. MONTHLY AND QUARTERLY FINANCIAL STATEMENTS.
(a) MSI
Furnish Agent and each Lender on a consolidated basis within 60 days
after the end of each fiscal quarter, an unaudited consolidated balance sheet of
MSI and unaudited statements of income and stockholders' or members' equity and
cash flow of MSI reflecting results of operations from the beginning of the
fiscal year to the end of such quarter and for such quarter, prepared on a basis
consistent with prior practices and complete and correct in all material
respects, subject to normal year end adjustments, and internally prepared
quarterly consolidating statements for each of the three quarters of June,
September and December and fiscal year end March, together with MSI's quarterly
10-Q report. The reports shall be accompanied by a certificate signed by the
Chief Financial Officer of MSI, which shall state that, based on an examination
sufficient to permit him to make an informed statement, no Default or Event of
Default exists, or, if such is not the case, specifying such Default or Event of
Default, its nature, when it occurred, whether it is continuing and the steps
being taken by MSI with respect to such default and, such certificate shall have
appended thereto calculations which set forth MSI's compliance with the
requirements or restrictions imposed by Sections 6.5, 6.6, 6.7, 6.13 and 7.10
hereof.
(b) MSUK
Furnish Agent and each Lender within 60 days after the end of each
fiscal quarter, an internally prepared balance sheet of MSUK and statements of
income and stockholders' or members' equity and cash flow of MSUK reflecting
results of operations from the beginning of the fiscal year to the end of such
quarter and for such quarter, each in a form acceptable to Agent and prepared on
a basis consistent with prior practices and complete and correct in all material
respects, subject to normal year end adjustments, and internally prepared
quarterly statements for each of the three quarters of June, September and
December and fiscal year end March, accompanied by a certificate signed by the
Chief Financial Officer of MSUK, which shall state that, based on an examination
sufficient to permit him to make an informed statement, no Default or Event of
Default exists, or, if such is not the case, specifying such Default or Event of
Default, its nature, when it occurred, whether it is continuing and the steps
being taken by MSUK with respect to such default.
9.9. OTHER REPORTS.
Furnish Agent and each Lender on a consolidated basis as soon as
available, but in any event within ten (10) days after the issuance thereof,
with copies of such financial statements, reports and returns as MSI, MSUK or
Sensors shall send to MSI's stockholders. Furnish Agent and each Lender within
ninety (90) days after the end of each fiscal year of MSI, consolidated and
consolidating financial projections of MSI's operations on a quarterly basis for
each fiscal year, all in reasonable detail and in such form as the Agent may
require and prepared by MSI's Chief Financial Officer.
9.10. ADDITIONAL INFORMATION.
Furnish Agent and each Lender with such additional information as
Agent shall reasonably request in order to enable Agent to determine whether the
terms, covenants, provisions and conditions of this Agreement, the Notes and
Other Documents have been complied with by MSI, MSUK and the other Obligors
including, without limitation and without the necessity of any request by Agent,
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(a) copies of all environmental audits and reviews, (b) at least thirty (30)
days prior thereto, notice of MSI's, MSUK's or Sensors' opening of any new
office or place of business or MSI's, MSUK's or Sensors' closing of any existing
office or place of business, and (c) promptly upon MSI's, MSUK's or any other
Obligor's learning thereof, notice of any labor dispute to which MSI, MSUK or
such other Obligor may become a party, any strikes or walkouts relating to any
of its plants or other facilities, and the expiration of any labor contract to
which MSI, MSUK or any other Obligor is a party or by which MSI, MSUK or any
other Obligor is bound.
9.11. NOTICE OF SUITS, ADVERSE EVENTS.
Furnish Agent with prompt notice of (i) any lapse or other termination
of any Consent issued to MSI, MSUK or to another Obligor by any Official Body or
any other Person that is material to the operation of MSI's, MSUK's or such
other Obligor's business, (ii) any refusal by any Official Body or any other
Person to renew or extend any such Consent; (iii) copies of any periodic or
special reports filed by MSI, MSUK or another Obligor with any Official Body or
Person, if such reports indicate any material change in the business,
operations, affairs or condition of MSI, MSUK or such other Obligor, or if
copies thereof are requested by Agent, and (iv) copies of any material notices
and other communications from any Official Body or Person which specifically
relate to MSI, MSUK or to another Obligor.
9.12. ERISA NOTICES AND REQUESTS.
Furnish Agent with immediate written notice in the event that (i) MSI
or any member of the Controlled Group knows or has reason to know that a
Termination Event has occurred, together with a written statement describing
such Termination Event and the action, if any, which MSI or member of the
Controlled Group has taken, is taking, or proposes to take with respect thereto
and, when known, any action taken or threatened by the Internal Revenue Service,
Department of Labor or PBGC with respect thereto, (ii) MSI or any member of the
Controlled Group knows or has reason to know that a prohibited transaction (as
defined in Sections 406 of ERISA and 4975 of the Code) has occurred together
with a written statement describing such transaction and the action which such
MSI or any member of the Controlled Group has taken, is taking or proposes to
take with respect thereto, (iii) a funding waiver request has been filed with
respect to any Plan together with all communications received by MSI or any
member of the Controlled Group with respect to such request, (iv) any increase
in the benefits of any existing Plan or the establishment of any new Plan or the
commencement of contributions to any Plan to which MSI or any member of the
Controlled Group was not previously contributing shall occur, (v) MSI or any
member of the Controlled Group shall receive from the PBGC a notice of intention
to terminate a Plan or to have a trustee appointed to administer a Plan,
together with copies of each such notice, (vi) MSI or any member of the
Controlled Group shall receive any favorable or unfavorable determination letter
from the Internal Revenue Service regarding the qualification of a Plan under
Section 401(a) of the Code, together with copies of each such letter; (vii) MSI
or any member of the Controlled Group shall receive a notice regarding the
imposition of withdrawal liability, together with copies of each such notice;
(viii) MSI or any member of the Controlled Group shall fail to make a required
69
installment or any other required payment under Section 412 of the Code on or
before the due date for such installment or payment; (ix) MSI or any member of
the Controlled Group knows that (a) a Multiemployer Plan has been terminated,
(b) the administrator or plan sponsor of a Multiemployer Plan intends to
terminate a Multiemployer Plan, or (c) the PBGC has instituted or will institute
proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan.
9.13. ADDITIONAL DOCUMENTS.
Execute and deliver to Agent, upon request, such documents and
agreements as Agent may, from time to time, reasonably request to carry out the
purposes, terms or conditions of this Agreement and the Other Documents.
10. EVENTS OF DEFAULT.
-------------------
The occurrence of any one or more of the following events shall constitute
an "Event of Default":
10.1. Failure by MSI or MSUK to pay any principal or interest on the
Obligations when due, whether at maturity or by reason of acceleration pursuant
to the terms of this Agreement or by notice of intention to prepay, or by
required prepayment or failure to pay any other liabilities or make any other
payment, fee or charge provided for herein when due or in any Other Document; or
10.2. Any representation or warranty made or deemed made by MSI, MSUK or by
any other Obligor in this Agreement or any Other Document or related agreement
or in any certificate, document or financial or other statement furnished at any
time in connection herewith or therewith shall prove to have been misleading in
any material respect on the date when made or deemed to have been made; or
10.3. Failure by MSI, MSUK or any other Obligor to (i) furnish financial
information when due or when requested which is unremedied for a period of
fifteen (15) days, or (ii) permit the inspection of its books or records; or
10.4. Issuance of a notice of Lien, levy, assessment, injunction or
attachment against a material portion of MSI's, MSUK's or any other Obligor's
property which is not stayed or lifted within forty (40) days; or
10.5. Except as otherwise provided for in Sections 10.1 and 10.3, failure
or neglect of MSI, MSUK or of any other Obligor to perform, keep or observe any
term, provision, condition, covenant herein contained, or contained in any other
agreement or arrangement, now or hereafter entered into between MSI, MSUK or any
other Obligor, on the one hand, and Agent or any Lender, on the other hand,
except for a failure or neglect of MSI, MSUK or of any other Obligor to perform,
keep or observe any term, provision, condition or covenant, contained in
Sections 4.6, 4.7, 4.9, 4.11, 6.3, 6.4 or 9.6 hereof which is cured within 30
days from the occurrence of such failure or neglect; or
10.6. Any judgment or judgments are rendered or judgment liens filed
against MSI, MSUK and/or any other Obligor for an aggregate amount in excess of
$250,000 unless such are contested in good faith, MSI, MSUK and/or any other
Obligor has established adequate reserves in the judgment of the Agent and which
within forty (40) days of such rendering or filing is not either satisfied,
stayed or discharged of record; or
10.7. MSI, MSUK or any other Obligor shall (i) apply for, consent to or
suffer the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar fiduciary of itself or of all or a
substantial part of its property, (ii) make a general assignment for the benefit
70
of creditors, (iii) commence a voluntary case under any state or federal or
foreign bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a
bankrupt or insolvent, (v) file a petition seeking to take advantage of any
other law providing for the relief of debtors, (vi) acquiesce to, or fail to
have dismissed, within sixty (60) days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (vii) take any action for the
purpose of effecting any of the foregoing; or
10.8. MSI, MSUK or any other Obligor shall admit in writing its inability,
or be generally unable, to pay its debts as they become due or cease operations
of its present business; or
10.9. Any Affiliate or any Subsidiary of MSI, shall (i) apply for, consent
to or suffer the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar fiduciary of itself or of all or a
substantial part of its property, (ii) admit in writing its inability, or be
generally unable, to pay its debts as they become due or cease operations of its
present business, (iii) make a general assignment for the benefit of creditors,
(iv) commence a voluntary case under any state or federal or foreign bankruptcy
laws (as now or hereafter in effect), (v) be adjudicated a bankrupt or
insolvent, (vi) file a petition seeking to take advantage of any other law
providing for the relief of debtors, (vii) acquiesce to, or fail to have
dismissed, within thirty (30) days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (viii) take any action for the
purpose of effecting any of the foregoing; or
10.10. Any change in MSI's, MSUK's or in any other Obligor's condition or
affairs (financial or otherwise) which in Agent's opinion has a Material Adverse
Effect; or
10.11. Any Lien created hereunder or provided for hereby or under any
related agreement for any reason ceases to be or is not a valid and perfected
Lien having a first priority interest; or
10.12. A default of any obligations of MSI, MSUK or any other Obligor under
any other agreement to which it is a party shall occur which adversely affects
its condition, affairs or prospects (financial or otherwise) which default is
not cured within any applicable grace period;
10.13. Any Change in Control shall occur; or
10.14. Any material provision of this Agreement or any Other Document
shall, for any reason, cease to be valid and binding on MSI, MSUK or Sensors, or
MSI, MSUK or Sensors shall so claim in writing to Agent; or
10.15. any Official Body shall (A) revoke, terminate, suspend or adversely
modify any license, permit, patent trademark or tradename of MSI, MSUK or any
other Obligor, or (B) commence proceedings to suspend, revoke, terminate or
adversely modify any such license, permit, trademark, tradename or patent and
such proceedings shall not be dismissed or discharged within sixty (60) days, or
(c) schedule or conduct a hearing on the renewal of any license, permit,
trademark, tradename or patent necessary for the continuation of MSI's, MSUK's
or of any other Obligor's business and the staff of such Official Body issues a
report recommending the termination, revocation, suspension or material, adverse
modification of such license, permit, trademark, tradename or patent and any
such revocation, termination or other action would reasonably be expected to
have a Material Adverse Effect; or
71
10.16. any agreement which is necessary or material to the operation of
MSI's, MSUK's or of any other Obligor's business shall be revoked or terminated
and not replaced by a substitute acceptable to Agent within thirty (30) days
after the date of such revocation or termination, and such revocation or
termination and non-replacement would reasonably be expected to have a Material
Adverse Effect; or
10.17. Any portion of the Collateral or Subsidiary Collateral shall be
seized or taken by a Official Body, or MSI, MSUK or Sensors or the title and
rights of MSI, MSUK or Sensors shall have become the subject matter of
litigation which might, in the opinion of Agent, upon final determination,
result in impairment or loss of the security provided by this Agreement or the
Other Documents; or
10.18. An event or condition specified in Sections 7.15 or 9.12 hereof
shall occur or exist with respect to any Plan and, as a result of such event or
condition, together with all other such events or conditions, MSI, MSUK or any
member of the Controlled Group shall incur, or in the opinion of Agent be
reasonably likely to incur, a liability to a Plan or the PBGC (or both) which,
in the reasonable judgment of Agent, would have a Material Adverse Effect; or
10.19. Termination of any Guaranty, or if MSI, MSUK or Sensors attempts to
terminate or challenge the validity of, or its liability under, its respective
Guaranty; or
10.20 There occurs, in relation to MSI, MSUK or any other Obligor or any
Affiliate or Subsidiary of any of them or the assets of any of them, in any
country or territory in which it is incorporated or transacts business, any
event which appears to the Agent, to correspond in that country or territory
with any of those events mentioned in subsections 10.7 through 10.9 hereof.
11. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.
-----------------------------------------------
11.1. RIGHTS AND REMEDIES.
Upon the occurrence of (i) an Event of Default pursuant to Sections
10.7 or 10.9 hereof, all Obligations shall be immediately due and payable and
the obligation of Agent and Lenders to make Advances shall be deemed terminated;
and, (ii) any of the other Events of Default and at any time thereafter (such
default not having previously been cured), at the option of Required Lenders all
Obligations shall be immediately due and payable and the Required Lenders shall
have the right to terminate this Agreement and to terminate the obligation of
Agent and Lenders to make Advances and (iii) a filing of a petition against MSI,
MSUK or Sensors in any involuntary case under any state or federal bankruptcy
laws (or, as to MSUK, equivalent laws under the laws of England and Wales), the
obligation of Agent and Lenders to make Advances hereunder shall be terminated
other than as may be required by an appropriate order of the bankruptcy court
having jurisdiction over MSI, MSUK or Sensors. Upon the occurrence of any Event
of Default, Agent shall have the right to exercise any and all other rights and
remedies provided for herein, under the Uniform Commercial Code and at law or
equity generally, including, without limitation, the right to foreclose the
security interests granted herein and to realize upon any Collateral or any
Subsidiary Collateral by any available judicial procedure and/or to take
possession of and sell any or all of the Collateral or Subsidiary Collateral
with or without judicial process. Agent may enter any of MSI's, MSUK's or
Sensors' premises or other premises without legal process and without incurring
liability to MSI, MSUK or Sensors therefor, and Agent may thereupon, or at any
time thereafter, in its discretion without notice or demand, take the Collateral
or Subsidiary Collateral and remove the same to such place as Agent may deem
advisable and Agent may require MSI, MSUK and Sensors to make the Collateral or
Subsidiary Collateral available to Agent at a convenient place. With or without
having the Collateral or Subsidiary Collateral at the time or place of sale,
Agent may sell the Collateral or Subsidiary Collateral, or any part thereof, at
public or private sale, at any time or place, in one or more sales, at such
price or prices, and upon such terms, either for cash, credit or future
delivery, as Agent may elect. Except as to that part of the Collateral or
Subsidiary Collateral which is perishable or threatens to decline speedily in
72
value or is of a type customarily sold on a recognized market, Agent shall give
MSI, MSUK and Sensors reasonable notification of such sale or sales, it being
agreed that in all events written notice mailed to MSI, MSUK and Sensors at
least ten (10) days prior to such sale or sales is reasonable notification. At
any public sale Agent may bid for and become the purchaser, and Agent or any
other purchaser at any such sale thereafter shall hold the Collateral and the
Guarantee Collateral sold absolutely free from any claim or right of whatsoever
kind, including any equity of redemption and such right and equity are hereby
expressly waived and released by MSI, MSUK or Sensors, as the case may be. In
connection with the exercise of the foregoing remedies, Agent is granted
permission to use all of MSI's, MSUK's and Sensors' trademarks, trade styles,
trade names, patents, patent applications, licenses, franchises and other
proprietary rights which are used in connection with (a) Inventory for the
purpose of disposing of such Inventory and (b) Equipment for the purpose of
completing the manufacture of unfinished goods. The proceeds realized from the
sale of any Collateral and any Subsidiary Collateral shall be applied as
follows: first, to the reasonable costs, expenses and attorneys' fees and
expenses incurred by Agent and each Lender for collection and for acquisition,
completion, protection, removal, storage, sale and delivery of the Collateral
and Subsidiary Collateral; second, to interest due upon any of the Obligations
and any fees payable under this Agreement; and, third, to the principal of the
Obligations. If any deficiency shall arise, MSI and Sensors shall remain liable
to Agent and Lenders therefor.
11.2. AGENT'S DISCRETION.
Agent shall have the right in its sole discretion to determine which
rights, Liens, security interests or remedies Agent may at any time pursue,
relinquish, subordinate, or modify or to take any other action with respect
thereto and such determination will not in any way modify or affect any of
Agent's or any Lender's rights hereunder.
11.3. SETOFF.
In addition to any other rights which Agent and Lenders may have under
applicable law, upon the occurrence of an Event of Default hereunder, Agent and
Lenders shall have a right to apply MSI's, MSUK's or Sensors' property held by
Agent and such Lender to reduce the Obligations.
11.4. RIGHTS AND REMEDIES NOT EXCLUSIVE.
The enumeration of the foregoing rights and remedies is not intended
to be exhaustive and the exercise of any right or remedy shall not preclude the
exercise of any other right or remedies provided for herein or otherwise
provided by law, all of which shall be cumulative and not alternative.
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12. WAIVERS AND JUDICIAL PROCEEDINGS.
-----------------------------------
12.1. WAIVER OF NOTICE.
MSI, MSUK and Sensors each hereby waives notice of non-payment of any
of the Receivables, demand, presentment, protest and notice thereof with respect
to any and all instruments, notice of acceptance hereof, notice of loans or
advances made, credit extended, Collateral or Subsidiary Collateral received or
delivered, or any other action taken in reliance hereon, and all other demands
and notices of any description, except such as are expressly provided for
herein.
12.2. DELAY.
No delay or omission on Agent's or any Lender's part in exercising any
right, remedy or option shall operate as a waiver of such or any other right,
remedy or option or of any default.
12.3. JURY WAIVER.
EACH PARTY TO THIS AGREEMENT AND SENSORS HEREBY EXPRESSLY WAIVE ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A)
ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO AND SENSORS OR
ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS
RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY
HEREBY CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
13. THE AGENT.
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13.1. APPOINTMENT.
Each Lender hereby confirms the appointment of the Agent pursuant to
the Existing Loan Agreement and hereby irrevocably designates, appoints and
authorizes First Union National Bank to act as Agent for such Lender under this
Agreement and to execute and deliver or accept on behalf of each of the Lenders
the other Loan Documents. Each Lender hereby irrevocably authorizes, and each
holder of any Note by the acceptance of a Note shall be deemed irrevocably to
authorize, the Agent to take such action on its behalf under the provisions of
this Agreement and the Other Documents and any other instruments and agreements
referred to herein, and to exercise such powers and to perform such duties
74
hereunder as are specifically delegated to or required of the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto. First
Union National Bank agrees to act as the Agent on behalf of the Lenders to the
extent provided in this Agreement. For purposes of Revolving Advances to MSUK
hereunder, each Lender hereby irrevocably designates, appoints and authorizes
the London Branch to act as sub-agent for the Agent. Each Lender further
authorizes the London Branch to make any and all necessary and appropriate
filings with the applicable office of the United Kingdom Inland Revenue with
respect to the transactions contemplated hereunder so as to ensure exemption
from withholding taxes.
13.2. DELEGATION OF DUTIES.
The Agent may perform any of its duties hereunder by or through agents
or employees (provided such delegation does not constitute a relinquishment of
its duties as Agent) and, subject to Sections 13.5 and 13.6, shall be entitled
to engage and pay for the advice or services of any attorneys, accountants or
other experts concerning all matters pertaining to its duties hereunder and to
rely upon any advice so obtained.
13.3. NATURE OF DUTIES; INDEPENDENT CREDIT INVESTIGATION.
The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants, functions,
responsibilities, duties, obligations, or liabilities shall be read into this
Agreement or the Other Documents or otherwise exist. The duties of the Agent
shall be mechanical and administrative in nature; the Agent shall not have by
reason of this Agreement or the Other Documents a fiduciary or trust
relationship in respect of any Lender (except to the extent specifically
required pursuant to the First Mortgage Debenture and the Intercreditor
Agreement); and nothing in this Agreement or the Other Documents, expressed or
implied, is intended to or shall be so construed as to impose upon the Agent any
obligations in respect of this Agreement or the Other Documents except as
expressly set forth herein and therein. Without limiting the generality of the
foregoing, the use of the term "agent" in this Agreement and the Other Documents
with reference to the Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any applicable
law. Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
independent contracting parties. Each Lender expressly acknowledges (i) that the
Agent has not made any representations or warranties to it and that no act by
the Agent hereafter taken, including any review of the affairs of MSI, MSUK and
of Sensors, shall be deemed to constitute any representation or warranty by the
Agent to any Lender; (ii) that it has made and will continue to make, without
reliance upon the Agent, its own independent investigation of the financial
condition and affairs and its own appraisal of the creditworthiness of MSI, MSUK
or of Sensors in connection with this Agreement and the making and continuance
of the Advances hereunder; and (iii) except as expressly provided herein, that
the Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before the making of
any Advance or at any time or times thereafter.
13.4. ACTIONS IN DISCRETION OF AGENT; INSTRUCTIONS FROM THE LENDERS.
The Agent agrees, upon the written request of the Required Lenders, to
take or refrain from taking any action of the type specified as being within the
Agent's rights, powers or discretion herein, provided that the Agent shall not
be required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement or any Other Document or applicable law. In
75
the absence of a request by the Required Lenders, the Agent shall have
authority, in its sole discretion, to take or not to take any such action,
unless this Agreement specifically requires the consent of the Required Lenders
or all of the Lenders. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Lenders, subject to Section
13.6. Subject to the provisions of Section 13.6, no Lender shall have any right
of action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Lenders, or in the absence of such instructions, in the absolute
discretion of the Agent.
13.5. REIMBURSEMENT AND INDEMNIFICATION OF AGENT BY MSI AND MSUK.
MSI and MSUK unconditionally agree to pay or reimburse the Agent and
hold the Agent harmless against (a) liability for the payment of all reasonable
out-of-pocket costs, expenses and disbursements, including fees and expenses of
counsel (including the allocated costs of staff counsel), appraisers and
environmental consultants, incurred by the Agent (i) in connection with the
development, negotiation, preparation, printing, execution, administration,
syndication, interpretation and performance of this Agreement and the Other
Documents, (ii) relating to any requested amendments, waivers or consents
pursuant to the provisions hereof or the Other Documents, (iii) in connection
with the enforcement of this Agreement or any Other Document or collection of
amounts due hereunder or thereunder or the proof and allowability of any claim
arising under this Agreement or any Other Document, whether in bankruptcy or
receivership proceedings or otherwise, and (iv) in any workout or restructuring
or in connection with the protection, preservation, exercise or enforcement of
any of the terms hereof or of any rights hereunder or under any Other Document
or in connection with any foreclosure, collection or bankruptcy proceedings, and
(b) all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Agent,
in its capacity as such, in any way relating to or arising out of this Agreement
or any Other Documents or any action taken or omitted by the Agent hereunder or
thereunder, provided that MSI and MSUK shall not be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements if the same results from the Agent's
gross negligence or willful misconduct, or if MSI or MSUK was not given notice
of the subject claim and the opportunity to participate in the defense thereof,
at its expense (except that MSI and MSUK shall remain liable to the extent such
failure to give notice does not result in a loss to MSI or MSUK), or if the same
results from a compromise or settlement agreement entered into without the
consent of MSI and MSUK, which shall not be unreasonably withheld. In addition,
MSI and MSUK agree to reimburse and pay all reasonable out-of-pocket expenses of
the Agent's regular employees and agents engaged periodically to perform audits
of MSI's and MSUK's books, records and business properties.
13.6. EXCULPATORY PROVISIONS; LIMITATION OF LIABILITY.
Neither the Agent nor any of its directors, officers, employees,
agents, attorneys or Affiliates shall (a) be liable to any Lender for any action
taken or omitted to be taken by it or them hereunder, or in connection herewith
including pursuant to any Other Document, unless caused by its or their own
gross negligence or willful misconduct, (b) be responsible in any manner to any
of the Lenders for the effectiveness, enforceability, genuineness, validity or
the due execution of this Agreement or any Other Documents or for any recital,
representation, lien warranty, document, certificate, report or statement herein
or made or furnished under or in connection with this Agreement or any Other
Documents, or (c) be under any obligation to any of the Lenders to ascertain or
76
to inquire as to the performance or observance of any of the terms, covenants or
conditions hereof or thereof on the part of MSI, MSUK or Sensors, or the
financial condition of MSI, MSUK or Sensors, or the existence or possible
existence of any Event of Default. No claim may be made by any MSI, MSUK,
Sensors, any Lender, the Agent or any of their respective Subsidiaries against
the Agent, any Lender or any of their respective directors, officers, employees,
agents, attorneys or Affiliates, or any of them, for any special, indirect or
consequential damages or, to the fullest extent permitted by law, for any
punitive damages in respect of any claim or cause of action (whether based on
contract, tort, statutory liability, or any other ground) based on, arising out
of or related to this Agreement or any Other Document or the transactions
contemplated hereby or any act, omission or event occurring in connection
herewith or therewith, including the negotiation, documentation, administration
or collection of the Advances, and MSI (for itself and on behalf of MSUK,
Sensors and each of its Subsidiaries), the Agent and each Lender hereby or
thereby waive, releases and agree never to xxx upon any claim for any such
damages, whether such claim now exists or hereafter arises and whether or not it
is now known or suspected to exist in its favor. Each Lender agrees that, except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Agent hereunder or given to the Agent for the account of or
with copies for the Lenders, the Agent and each of its directors, officers,
employees, agents, attorneys or Affiliates shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of MSI, MSUK or Sensors which may come
into the possession of the Agent or any of its directors, officers, employees,
agents, attorneys or Affiliates.
13.7. REIMBURSEMENT AND INDEMNIFICATION OF AGENT BY LENDERS.
Each Lender agrees to reimburse and indemnify the Agent (to the extent
not reimbursed by MSI or MSUK and without limiting the Obligation of MSI and
MSUK to do so) in proportion to its Ratable Share from and against all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements, including attorneys' fees and disbursements
(including the allocated costs of staff counsel), and costs of appraisers and
environmental consultants, of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Agent, in its capacity as such, in any
way relating to or arising out of this Agreement or any Other Documents or any
action taken or omitted by the Agent hereunder or thereunder, provided that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
(a) if the same results from the Agent's gross negligence or willful misconduct,
or (b) if such Lender was not given notice of the subject claim and the
opportunity to participate in the defense thereof, at its expense (except that
such Lender shall remain liable to the extent such failure to give notice does
not result in a loss to the Lender), or (c) if the same results from a
compromise and settlement agreement entered into without the consent of such
Lender, which shall not be unreasonably withheld. In addition, each Lender
agrees promptly upon demand to reimburse the Agent (to the extent not reimbursed
by MSI or MSUK and without limiting the Obligation of MSI to do so) in
proportion to its Ratable Share for all amounts due and payable by MSI and MSUK
to the Agent in connection with the Agent's periodic audit of MSI's and MSUK's
books, records and business properties.
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13.8. RELIANCE BY AGENT.
The Agent shall be entitled to rely upon any writing, telegram, telex
or teletype message, resolution, notice, consent, certificate, letter,
cablegram, statement, order or other document or conversation by telephone or
otherwise believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon the advice and opinions of
counsel and other professional advisers selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action hereunder unless it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
13.9. NOTICE OF DEFAULT.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless the Agent has received
written notice from a Lender or MSI referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default."
13.10. NOTICES.
The Agent shall send to each Lender a copy of all notices received
from MSI and MSUK pursuant to the provisions of this Agreement or the Other
Documents promptly after receipt thereof. The Agent shall promptly notify MSI
and the other Lenders of each change in the Prime Rate and the effective date
thereof but failure to do so shall not effect any change in the interest rates
herein.
13.11. LENDERS IN THEIR INDIVIDUAL CAPACITIES.
With respect to its Revolving Credit Commitment, the Revolving
Advances, the Term Loan Commitment and the Term Loan made by it and any other
rights and powers given to it as a Lender hereunder or under any of the Other
Documents, the Agent shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not the Agent, and the
term "Lenders" shall, unless the context otherwise indicates, include the Agent
in its individual capacity. First Union National Bank and its Affiliates and
each of the Lenders and their respective Affiliates may, without liability to
account, except as prohibited herein, make loans to, accept deposits from,
discount drafts for, act as trustee under indentures of, and generally engage in
any kind of banking or trust business with, MSI and its Affiliates, in the case
of the Agent, as though it were not acting as Agent hereunder and in the case of
each Lender, as though such Lender were not a Lender hereunder. The Lenders
acknowledge that, pursuant to such activities, the Agent or its Affiliates may
(i) receive information regarding MSI or MSUK (including information that may be
subject to confidentiality obligations in favor of MSI or MSUK) and acknowledge
that the Agent shall be under no obligation to provide such information to them,
and (ii) accept fees and other consideration from MSI or MSUK for services in
connection with this Agreement and otherwise without having to account for the
same to the Lenders.
13.12. HOLDERS OF NOTES.
The Agent may deem and treat any payee of any Note as the owner
thereof for all purposes hereof unless and until written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
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request, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
13.13. EQUALIZATION OF LENDERS.
The Lenders and the holders of any participations in any Notes agree
among themselves that, with respect to all amounts received by any Lender or any
such holder for application on any Obligation hereunder or under any Note or
under any such participation, whether received by voluntary payment, by
realization upon security, by the exercise of the right of set-off or banker's
lien, by counterclaim or by any other non-pro rata source, equitable adjustment
will be made in the manner stated in the following sentence so that, in effect,
all such excess amounts will be shared ratably among the Lenders and such
holders in proportion to their interests in payments under the Notes, except as
otherwise provided in Sections 2.22 or in Article III. The Lenders or any such
holder receiving any such amount shall purchase for cash from each of the other
Lenders an interest in such Lender's Advances in such amount as shall result in
a ratable participation by the Lenders and each such holder in the aggregate
unpaid amount under the Notes, provided that if all or any portion of such
excess amount is thereafter recovered from the Lender or the holder making such
purchase, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, together with interest or other amounts, if any,
required by law (including court order) to be paid by the Lender or the holder
making such purchase.
13.14. SUCCESSOR AGENT.
The Agent (i) may resign as Agent or (ii) shall resign if such
resignation for cause is requested by the Required Lenders (if the Agent is a
Lender, the Agent's Advances and its Commitment shall be considered in
determining whether the Required Lenders have requested such resignation), in
either case of (i) or (ii) by giving not less than thirty (30) days' prior
written notice to MSI. If the Agent shall resign under this Agreement, then
either (a) the Required Lenders shall appoint from among the Lenders a successor
agent for the Lenders, subject to the consent of MSI, such consent not to be
unreasonably withheld, or (b) if a successor agent shall not be so appointed and
approved within the thirty (30) day period following the Agent's notice to the
Lenders of its resignation, then the Agent shall appoint, with the consent of
MSI, such consent not to be unreasonably withheld, a successor agent who shall
serve as Agent until such time as the Required Lenders appoint and MSI consents
to the appointment of a successor agent. Upon its appointment pursuant to either
clause (a) or (b) above, such successor agent shall succeed to the rights,
powers and duties of the Agent, and the term "Agent" shall mean such successor
agent, effective upon its appointment, and the former Agent's rights, powers and
duties as Agent shall be terminated without any other or further act or deed on
the part of such former Agent or any of the parties to this Agreement. After the
resignation of any Agent hereunder, the provisions of this Article XIII shall
inure to the benefit of such former Agent and such former Agent shall not by
reason of such resignation be deemed to be released from liability for any
actions taken or not taken by it while it was an Agent under this Agreement.
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13.15. AVAILABILITY OF FUNDS.
The Agent may assume that each Lender has made or will make the
proceeds of an Advance available to the Agent unless the Agent shall have been
notified by such Lender on or before the later of (1) the close of business on
the Business Day preceding the date of Borrowing with respect to such Advance or
two (2) hours before the time on which the Agent actually funds the proceeds of
such Advance to MSI or MSUK (whether using its own funds pursuant to this
Section 13.15 or using proceeds deposited with the Agent by the Lenders and
whether such funding occurs before or after the time on which Lenders are
required to deposit the proceeds of such Advance with the Agent). The Agent may,
in reliance upon such assumption (but shall not be required to), make available
to MSI or MSUK a corresponding amount. If such corresponding amount is not in
fact made available to the Agent by such Lender, the Agent shall be entitled to
recover such amount on demand from such Lender (or, if such Lender fails to pay
such amount forthwith upon such demand from MSI or MSUK) together with interest
thereon, in respect of each day during the period commencing on the date such
amount was made available to MSI or MSUK and ending on the date the Agent
recovers such amount, at a rate per annum equal to (i) the Federal Funds Rate
during the first three (3) days after such interest shall begin to accrue and
(ii) the applicable interest rate in respect of such Advance after the end of
such three-day period.
13.16. CALCULATIONS.
In the absence of gross negligence or willful misconduct, the Agent
shall not be liable for any error in computing the amount payable to any Lender
whether in respect of the Advances, fees or any other amounts due to the Lenders
under this Agreement or any Other Document. In the event an error in computing
any amount payable to any Lender is made, the Agent, MSI, MSUK and each affected
Lender shall, forthwith upon discovery of such error, make such adjustments as
shall be required to correct such error, and any compensation therefor will be
calculated at the Federal Funds Rate.
13.17. BENEFICIARIES.
Except as expressly provided herein, the provisions of this Article
XIII are solely for the benefit of the Agent and the Lenders, and MSI, MSUK and
Sensors shall not have any rights to rely on or enforce any of the provisions
hereof. In performing its functions and duties under this Agreement, the Agent
shall act solely as agent of the Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for MSI, MSUK or Sensors.
13.18. NO LIABILITY FOR FAILURE TO MAKE FILINGS.
The Agent in its limited capacity as trustee as specifically required
pursuant to the First Mortgage Debenture and the Intercreditor Agreement or
otherwise shall not be liable for any failure, omission or defect in perfecting
the security granted pursuant to the First Mortgage Debenture or any security
created thereby including, without limitation, any failure to: (i) register the
same in accordance with the provisions of any of the documents of title of MSUK
to any of the property thereby charged; or (ii) effect or procure registration
of or otherwise protect any floating charge or any other such security created
by the First Mortgage Debenture under the Land Registration Act 1925 or any
other registration laws in any jurisdiction.
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13.19. ACCEPTANCE OF TITLE.
The Agent in its limited capacity as trustee as specifically required
pursuant to the First Mortgage Debenture and the Intercreditor Agreement or
otherwise may accept without inquiry such title as MSUK may have to the property
secured pursuant to the First Mortgage Debenture.
13.20. NO OBLIGATION TO HOLD TITLE DEEDS.
The Agent in its limited capacity as trustee as specifically required
pursuant to the First Mortgage Debenture and the Intercreditor Agreement or
otherwise shall not be under any obligation to hold the First Mortgage
Debenture, the Intercreditor Agreement, any title deed or any other documents in
connection therewith or any other documents in connection with the assets
charged by the First Mortgage Debenture or any other such security in its own
possession or to take any steps to protect or preserve the same. The Agent may
permit MSUK to retain the First Mortgage Debenture, the Intercreditor Agreement,
any title deeds and any other documents in its possession. The Agent will use
all reasonable care to ensure the safe custody of the First Mortgage Debenture,
the Intercreditor Agreement, any title deeds, and other documents in its
possession but shall not be liable for the damage or destruction of any of such
documents unless caused by the gross negligence or willful default of the Agent.
13.21. TRUSTEE POWERS.
Except as otherwise provided in this Agreement and in any of the Other
Documents, the Agent, in its limited capacity as trustee as specifically
required pursuant to the First Mortgage Debenture and the Intercreditor
Agreement, shall have: (i) the benefit of all the provisions of this Article
XIII; (ii) all the powers of an absolute owner of the security granted pursuant
to the First Mortgage Debenture; (iii) the power of appointing new and/or
additional trustees; and (iv) all of the powers and discretion conferred on
trustees by the Trustee Xxx 0000 (to the extent not inconsistent with this
Agreement and the Other Documents) and on the Agent by this Agreement and Other
Documents (including without limitation the power to invest all monies which are
received by the Agent under the trusts contained in the First Mortgage Debenture
and the Intercreditor Agreement in its name or under its control in any
investment for the time being authorized by English law for the investment by
trustees of trust money or in any other investments which may be selected by the
Agent). Additionally, the Agent shall have the power to place such monies on
deposit in its name or under its control at such bank or institution (including
at the Agent) and on such terms as the Agent may deem appropriate.
14. EFFECTIVE DATE AND TERMINATION.
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14.1. TERM.
This Agreement, which shall inure to the benefit of and shall be
binding upon the parties hereto and the respective successors and permitted
assigns of MSI, MSUK, the other Obligors, Agent and Lenders, shall be deemed
effective as of August 7, 2000 and shall continue in full force and effect until
indefeasible payment in full by MSI or MSUK, as applicable, of the Obligations
(including cash collateralizing any Letters of Credit Outstanding) and
termination of all Commitments (the "Term").
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14.2. TERMINATION.
The termination of the Agreement shall not affect MSI's, MSUK's, any
other Obligor's, any of Lender's or Agent's rights or any of the Obligations
having their inception prior to the effective date of such termination, and the
provisions hereof shall continue to be fully operative until all transactions
entered into, rights or interests created or Obligations have been fully
disposed of, concluded or liquidated. The security interests, Liens and rights
granted to Agent and/or Lenders hereunder and the financing statements filed
hereunder shall continue in full force and effect, notwithstanding the
termination of this Agreement or the fact that Borrowers' Accounts may from time
to time be temporarily in a zero or credit position, until all of the
Obligations of MSI, MSUK and Sensors have been paid or performed in full after
the termination of this Agreement or MSI and/or MSUK has furnished Agent and/or
Lenders with an indemnification satisfactory to Lenders with respect thereto.
Accordingly, MSI, MSUK and Sensors waive any rights which each may have under
Section 9-404(1) of the Uniform Commercial Code to demand the filing of
termination statements with respect to the Collateral, and Agent and/or Lenders
shall not be required to send such termination statements to MSI, MSUK or
Sensors, or to file them with any filing office, unless and until this Agreement
shall have been terminated in accordance with its terms and all Obligations paid
(or cash collateralized) in full in immediately available funds. All
representations, warranties, covenants, waivers and agreements contained herein
shall survive termination hereof until all Obligations are paid or performed in
full.
15. MISCELLANEOUS.
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15.1. MODIFICATIONS, AMENDMENTS OR WAIVERS.
With the written consent of the Required Lenders, the Agent, acting on
behalf of all the Lenders, and MSI may from time to time enter into written
agreements amending or changing any provision of this Agreement or any Other
Document or the rights of the Lenders or MSI or MSUK hereunder or thereunder, or
may grant written waivers or consents to a departure from the due performance of
the Obligations of MSI and MSUK hereunder or thereunder. Any such agreement,
waiver or consent made with such written consent shall be effective to bind all
the Lenders and MSI and MSUK; provided, that, without the written consent of all
the Lenders, no such agreement, waiver or consent may be made which will:
(a) Increase the amount of the Revolving Credit Commitment or Term
Loan Commitment of any Lender hereunder or extend the Expiration Date;
(b) Whether or not any Revolving Advance or Term Loan are outstanding,
extend the time for payment of principal or interest of any Revolving Advance or
Term Loan, the commitment fee or any other fee payable to any Lender, or reduce
the principal amount of or the rate of interest borne by any Advance or reduce
the commitment fee or any other fee payable to any Lender, or otherwise affect
the terms of payment of the principal of or interest of any Advance, the
commitment fee or any other fee payable to any Lender; or
(c) increase the Advance Rates above the Advance Rates effective on
the Closing Date; or
(d) Except for sales of assets permitted by Section 7.1(b), release
any Collateral or any Subsidiary Collateral during any calendar year having an
aggregate value in excess of five hundred thousand dollars ($500,000) or release
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any Guaranty; or consisting of capital stock or other ownership interests of
MSI, MSUK, Sensors or any Subsidiary of MSI or substantially all of the assets
of MSI, MSUK, Sensors or any other security for any of MSI's or MSUK's
Obligations; or
(e) Amend Sections 2.15, 13.6, 13.13 or this Section 15.1(e), alter
any provision regarding the pro rata treatment of the Lenders, change the
definition of Required Lenders, or change any requirement providing for the
Lenders or the Required Lenders to authorize the taking of any action hereunder;
provided, further, that no agreement, waiver or consent which would modify the
interests, rights or obligations of the Agent in its capacity as Agent or the
issuance of Letters of Credit shall be effective without the written consent of
the Agent.
15.2. NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED.
No course of dealing and no delay or failure of the Agent or any
Lender in exercising any right, power, remedy or privilege under this Agreement
or any Other Document shall affect any other or future exercise thereof or
operate as a waiver thereof, nor shall any single or partial exercise thereof or
any abandonment or discontinuance of steps to enforce such a right, power,
remedy or privilege preclude any further exercise thereof or of any other right,
power, remedy or privilege. The rights and remedies of the Agent and the Lenders
under this Agreement and any Other Documents are cumulative and not exclusive of
any rights or remedies which they would otherwise have. Any waiver, permit,
consent or approval of any kind or character on the part of any Lender of any
breach or default under this Agreement or any such waiver of any provision or
condition of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing.
15.3. REIMBURSEMENT AND INDEMNIFICATION OF LENDERS BY MSI AND MSUK; TAXES.
MSI and MSUK agree unconditionally upon demand to pay or reimburse to
each Lender (other than the Agent, as to which MSI's and MSUK's Obligations are
set forth in Section 13.5) and to save such Lender harmless against (i)
liability for the payment of all reasonable out-of-pocket costs, expenses and
disbursements (including fees and expenses of counsel (including allocated costs
of staff counsel) for each Lender) except with respect to (a) and (b) below,
incurred by such Lender (a) in connection with the administration and
interpretation of this Agreement, and other instruments and documents to be
delivered hereunder, (b) relating to any amendments, waivers or consents
pursuant to the provisions hereof, (c) in connection with the enforcement of
this Agreement or any Other Document, or collection of amounts due hereunder or
thereunder or the proof and allowability of any claim arising under this
Agreement or any Other Document, whether in bankruptcy or receivership
proceedings or otherwise, and (d) in any workout or restructuring or in
connection with the protection, preservation, exercise or enforcement of any of
the terms hereof or of any rights hereunder or under any Other Document or in
connection with any foreclosure, collection or bankruptcy proceedings, or (ii)
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
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may be imposed on, incurred by or asserted against such Lender, in its capacity
as such, in any way relating to or arising out of this Agreement or any Other
Documents or any action taken or omitted by such Lender hereunder or thereunder,
provided that MSI and MSUK shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (A) if the same results from such Lender's
gross negligence or willful misconduct, or (B) if MSI was not given notice of
the subject claim and the opportunity to participate in the defense thereof, at
its expense (except that MSI and MSUK shall remain liable to the extent such
failure to give notice does not result in a loss to MSI or MSUK), or (C) if the
same results from a compromise or settlement agreement entered into without the
consent of MSI, which shall not be unreasonably withheld. The Lenders will
attempt to minimize the fees and expenses of legal counsel for the Lenders which
are subject to reimbursement by MSI hereunder by considering the usage of one
law firm to represent the Lenders and the Agent if appropriate under the
circumstances. MSI and MSUK agree unconditionally to pay all stamp, document,
transfer, recording or filing taxes or fees and similar impositions now or
hereafter determined by the Agent or any Lender to be payable in connection with
this Agreement or any Other Document, and MSI and MSUK agree unconditionally to
save the Agent and the Lenders harmless from and against any and all present or
future claims, liabilities or losses with respect to or resulting from any
omission to pay or delay in paying any such taxes, fees or impositions.
15.4. HOLIDAYS.
Whenever payment of an Advance to be made or taken hereunder shall be
due on a day which is not a Business Day such payment shall be due on the next
Business Day and such extension of time shall be included in computing interest
and fees, except that (a) all outstanding Revolving Advances shall be due on the
Business Day preceding the Expiration Date if the Expiration Date is not a
Business Day, and (b) the Term Loan shall be due on the Business Day preceding
the Term Loan Maturity Date if the Term Loan Maturity Date is not a Business
Day. Whenever any payment or action to be made or taken hereunder (other than
payment of the Revolving Advance and the Term Loan) shall be stated to be due on
a day which is not a Business Day, such payment or action shall be made or taken
on the next following Business Day (except as provided with respect to Interest
Periods under the LIBOR Rate Loans), and such extension of time shall not be
included in computing interest or fees, if any, in connection with such payment
or action.
15.5. FUNDING BY BRANCH, SUBSIDIARY OR AFFILIATE.
(a) Each Lender shall have the right from time to time, without notice
to MSI or MSUK, to deem any branch, Subsidiary or Affiliate (which for the
purposes of this Section 15.5 shall mean any corporation or association which is
directly or indirectly controlled by or is under direct or indirect common
control with any corporation or association which directly or indirectly
controls such Lender) of such Lender to have made, maintained or funded any
LIBOR Rate Loan at any time, provided that immediately following (on the
assumption that a payment were then due from MSI or MSUK to such other office),
and as a result of such change, MSI or MSUK would not be under any greater
financial obligation pursuant to Sections 2.2(g), 3.5 and 3.7 than it would have
been in the absence of such change. Notional funding offices may be selected by
each Lender without regard to such Lender's actual methods of making,
maintaining or funding the Advances or any sources of funding actually used by
or available to such Lender.
(b) Each Lender shall have the right from time to time to make or
maintain any Advance by arranging for a branch, Subsidiary or Affiliate of such
Lender to make or maintain such Advance subject to the last sentence of this
Section 15.5(b). If any Lender causes a branch, Subsidiary or Affiliate to make
or maintain any part of the Advances hereunder, all terms and conditions of this
Agreement shall, except where the context clearly requires otherwise, be
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applicable to such part of the Advances to the same extent as if such Advances
were made or maintained by such Lender, but in no event shall any Lender's use
of such a branch, Subsidiary or Affiliate to make or maintain any part of the
Advances hereunder cause such Lender or such branch, Subsidiary or Affiliate to
incur any cost or expenses payable by MSI or MSUK hereunder or require MSI or
MSUK to pay any other compensation to any Lender (including any expenses
incurred or payable pursuant to Sections 2.2(g), 3.5 and 3.7) which would
otherwise not be incurred.
15.6. GOVERNING LAW.
This Agreement shall be deemed a contract under and shall be governed
by and construed in accordance with the laws of the State of New Jersey, without
giving effect to the principles of conflicts of law. Any judicial proceeding
brought by or against MSI, MSUK or another Obligor with respect to any of the
Obligations, this Agreement or any Other Document may be brought in any court of
competent jurisdiction in the State of New Jersey, United States of America,
and, by execution and delivery of this Agreement, MSI, MSUK and the other
Obligors accept for themselves and in connection with their properties,
generally and unconditionally, the non-exclusive jurisdiction of the aforesaid
courts, and irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement. MSI, MSUK and the other Obligors hereby waive
personal service of any and all process upon them and consent that all such
service of process may be made by registered mail (return receipt requested)
directed to MSI, MSUK and the other Obligors at MSI's address set forth in
Schedule 15.9 and service so made shall be deemed completed five (5) days after
the same shall have been so deposited in the mails of the United States of
America, and MSUK hereby appoints MSI as its agent for service of process in the
United States of America. Nothing herein shall affect the right to serve process
in any manner permitted by law or shall limit the right of Agent or any Lender
to bring proceedings against MSI, MSUK or any other Obligor in the courts of any
other jurisdiction. MSI, MSUK and the other Obligors waive any objection to
jurisdiction and venue of any action instituted hereunder and shall not assert
any defense based on lack of jurisdiction or venue or based upon forum non
conveniens. Any judicial proceeding by MSI, MSUK or any other Obligor against
Agent or Lenders involving, directly or indirectly, any matter or claim in any
way arising out of, related to or connected with this Agreement or any Other
Document, shall be brought only in a federal or state court located in the State
of New Jersey. Each Letter of Credit and Section 2.14 shall be subject to the
Uniform Customs and Practice for Documentary Credits (1998 Revision),
International Chamber of Commerce Publication No. 500, as the same may be
revised or amended from time to time, and to the extent not inconsistent
therewith, the internal laws of the State of New Jersey without regard to its
conflict of laws principles, except that each Letter of Credit denominated in
Pounds Sterling shall be governed by and construed in accordance with the laws
of England and Wales, without regard to its conflict of laws principles.
15.7. ENTIRE UNDERSTANDING.
This Agreement and the documents executed concurrently herewith
contain the entire understanding among MSI, MSUK, Sensors, the other Obligors,
Agent and Lenders and supersedes all prior agreements and understandings, if
any, relating to the subject matter hereof. Any promises, representations,
warranties or guarantees not herein contained and hereinafter made shall have no
85
force and effect unless in writing, signed by MSI, MSUK, Sensors, Agent and
Lender's respective officers. Neither this Agreement nor any portion or
provisions hereof may be changed, modified, amended, waived, supplemented,
discharged, canceled or terminated orally or by any course of dealing, or in any
manner other than by an agreement in writing, signed by the party to be charged.
MSI, MSUK and Sensors acknowledge that each has been advised by counsel in
connection with the execution of this Agreement and Other Documents and is not
relying upon oral representations or statements inconsistent with the terms and
provisions of this Agreement.
15.8. SUCCESSORS AND ASSIGNS; PARTICIPATIONS; NEW LENDERS.
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Lenders, the Agent, MSI, MSUK, Sensors, the other Obligors and
their respective successors and assigns, except that MSI and MSUK may not assign
or transfer any of their respective rights and Obligations hereunder or any
interest herein. Each Lender may, at its own cost, make assignments of or sell
participations in all or any part of its Commitments and the Advances made by it
to one or more banks or other entities, subject to the consent of MSI and the
Agent with respect to any assignee, such consent not to be unreasonably
withheld, provided that (1) no consent of any Obligor shall be required (A) if
an Event of Default exists and is continuing, or (B) in the case of an
assignment by a Lender to an Affiliate of such Lender, and (2) any assignment by
a Lender to a Person other than an Affiliate of such Lender may not be made in
amounts less than the lesser of $5,000,000 or the amount of the assigning
Lender's Commitment. In the case of an assignment, upon receipt by the Agent of
the Assignment and Assumption Agreement, the assignee shall have, to the extent
of such assignment (unless otherwise provided therein), the same rights,
benefits and obligations as it would have if it had been a signatory Lender
hereunder, the Commitments shall be adjusted accordingly, and upon surrender of
any Revolving Credit Notes or Term Notes subject to such assignment, MSI and/or
MSUK shall execute and deliver new Revolving Credit Notes or Term Notes to the
assignee in an amount equal to the amount of the Revolving Credit Commitment or
Term Loan assumed by it and a new Revolving Credit Notes or Term Notes to the
assigning Lender in an amount equal to the Revolving Credit Commitment or Term
Loan retained by it hereunder. Any Lender which assigns any or all of its
Commitment or Loans to a Person other than an Affiliate of such Lender shall pay
to the Agent a service fee in the amount of $3,000 for each assignment. In the
case of a participation, the participant shall only have the rights specified in
Section 11.3 (the participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by such Lender in
favor of the participant relating thereto and not to include any voting rights
except with respect to changes of the type referenced in Section 15.1) and all
of such Lender's obligations under this Agreement or any Other Document shall
remain unchanged, and all amounts payable by MSI, MSUK and Sensors hereunder or
thereunder shall be determined as if such Lender had not sold such
participation.
(b) Any assignee or participant which is not incorporated under the
Laws of the United States of America or a state thereof shall deliver to MSI and
MSUK and the Agent the form of certificate described in Section 15.18 relating
to federal income tax withholding. Each Lender may furnish any publicly
available information concerning MSI or its Subsidiaries and any other
information concerning MSI or its Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective assignees
or participants), provided that such assignees and participants agree to be
bound by the provisions of Section 15.18.
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(c) Notwithstanding any other provision in this Agreement, any Lender
may at any time pledge or grant a security interest in all or any portion of its
rights under this Agreement, its Note and the Other Documents to any Federal
Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury
Regulation 31 CFR Section 203.14 without notice to or consent of MSI, MSUK or
the Agent. No such pledge or grant of a security interest shall release the
transferor Lender of its obligations hereunder or under any Other Document.
15.9. NOTICES.
Any notice, request, demand, direction or other communication (for
purposes of this Section 15.9 only, a "Notice") to be given to or made upon any
party hereto under any provision of this Agreement shall be given or made by
telephone or in writing in accordance with this Section 15.9. Any such Notice
must be delivered to the applicable parties hereto at the addresses and numbers
set forth under this respective names on Schedule 15.9 hereof or in accordance
with any subsequent unrevoked Notice from any such party that is given in
accordance with this Section 15.9. Any Notice shall be effective:
(a) In the case of hand-delivery, when delivered;
(b) If given by mail, four days after such Notice is deposited with
the United States Postal Service, with first-class postage prepaid, return
receipt requested;
(c) In the case of a telephonic Notice, when a party is contacted by
telephone, if delivery of such telephone Notice is confirmed no later than the
next Business Day by hand delivery, a facsimile or electronic transmission, or
an overnight courier delivery of a confirmatory Notice (received at or before
noon on such next Business Day);
(d) In the case of a facsimile transmission, when sent to the
applicable party's facsimile machine' telephone number, if the party sending
such Notice receives confirmation of the delivery thereof from its own facsimile
machine; and
(e) If given by any other means (including by overnight courier), when
actually received. Any Lender giving a Notice to MSI or MSUK shall concurrently
send a copy thereof to the Agent, and the Agent shall promptly notify the other
Lenders of its receipt of such Notice.
15.10. SURVIVAL.
The obligations of MSI, MSUK and/or the other Obligors under Sections
2.2(f), 2.2(g), 2.12, 2.14, 2.20, 3.6, 3.7, 4.19(h), 13.5, 13.6, 13.7 and 15.3
shall survive termination of this Agreement and the Other Documents and payment
in full of the Obligations.
15.11. SEVERABILITY.
If any part of this Agreement is contrary to, prohibited by, or deemed
invalid under applicable laws or regulations, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given effect so far as possible.
15.12. INJUNCTIVE RELIEF.
MSI, MSUK and the other Obligors recognize that, in the event MSI,
MSUK or another Obligor fails to perform, observe or discharge any of its
obligations or liabilities under this Agreement, any remedy at law may prove to
be inadequate relief to Agent or Lender; therefore, Agent or Lender, if Agent or
87
Lender so requests, shall be entitled to temporary and permanent injunctive
relief in any such case without the necessity of proving that actual damages are
not an adequate remedy.
15.13. CAPTIONS.
The captions at various places in this Agreement are intended for
convenience only and do not constitute and shall not be interpreted as part of
this Agreement.
15.14. COUNTERPARTS; TELECOPIED SIGNATURES.
This Agreement may be executed in any number of and by different
parties hereto on separate counterparts, all of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same agreement. Any signature delivered by a party by facsimile transmission
shall be deemed to be an original signature hereto.
15.15. CONSTRUCTION.
The parties acknowledge that each party and its counsel have reviewed
this Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments, schedules or exhibits
thereto.
15.16. CONFIDENTIALITY; SHARING INFORMATION.
(a) Agent, each Lender and each assignee of a Lender shall hold all
non-public information obtained by Agent, such Lender, or such assignee pursuant
to the requirements of this Agreement in accordance with Agent's, such Lender's
and such assignee's customary procedures for handling confidential information
of this nature; provided, however, Agent, Lender and each assignee of a Lender
may disclose such confidential information (a) to its examiners, affiliates,
outside auditors, counsel and other professional advisors, (b) to Agent, to
Lender or to any prospective assignee of a Lender or participant in any Advance,
and (c) as required or requested by any Official Body or representative thereof
or pursuant to legal process; provided, further that (i) unless specifically
prohibited by applicable law or court order, Agent, Lender and each assignee of
a Lender shall use its best efforts prior to disclosure thereof, to notify MSI
or MSUK of the applicable request for disclosure of such non-public information
(A) by a Official Body or representative thereof (other than any such request in
connection with an examination of the financial condition of a Lender or a
Transferee by such Official Body) or (B) pursuant to legal process and (ii) in
no event shall Lender, any Lender or any assignee of a Lender be obligated to
return any materials furnished by MSI or MSUK other than those documents and
instruments in possession of Agent or any Lender in order to perfect its Lien on
the Collateral once the Obligations have been paid in full and this Agreement
has been terminated.
(b) MSI, MSUK and the other Obligors acknowledge that from time to
time financial advisory, investment banking and other services may be offered or
provided to MSI or one or more of its Affiliates (in connection with this
Agreement or otherwise) by Agent and Lenders or by one or more Subsidiaries or
Affiliates of Agent and Lenders and MSI, MSUK and the other Obligors hereby
authorize Agent and Lenders to share any information delivered to Agent and
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Lenders by MSI and its Subsidiaries pursuant to this Agreement, or in connection
with the decision of Lender to enter into this Agreement, to any such Subsidiary
or Affiliate of Agent and Lender, it being understood that any such Subsidiary
or Affiliate of Agent and Lender receiving such information shall be bound by
the provision of this Section 15.16 as if it were a Lender hereunder. Such
authorization shall survive the repayment of the other Obligations and the
termination of the Agreement.
15.17. PUBLICITY.
MSI and MSUK hereby authorizes Agent to make appropriate
announcements, with prior notice to MSI, of the financial arrangement entered
into between MSI, MSUK, Sensors, Agent and Lenders, including, without
limitation, announcements which are commonly known as tombstones, in such
publications and to such selected parties as Agent shall in its sole and
absolute discretion deem appropriate.
15.18. TAX WITHHOLDING CLAUSE.
Each Lender or assignee or participant of a Lender that is not
incorporated under the Laws of the United States of America or a state thereof
agrees that it will deliver to MSI, MSUK and the Agent two (2) duly completed
copies of the following: (i) Internal Revenue Service Form W-9, 4224 or 1001, or
other applicable form prescribed by the Internal Revenue Service, certifying
that such Lender, assignee or participant is entitled to receive payments under
this Agreement and the Other Documents without deduction or withholding of any
United States federal income taxes, or is subject to such tax at a reduced rate
under an applicable tax treaty, or (ii) Internal Revenue Service Form W-8 or
other applicable form or a certificate of such Lender, assignee or participant
indicating that such exemption or reduced rate is allowable with respect to such
payments. Each Lender, assignee or participant required to deliver to MSI, MSUK
and the Agent a form or certificate pursuant to the preceding sentence shall
deliver such form or certificate as follows: (A) each Lender which is a party
hereto on the Closing Date shall deliver such form or certificate at least five
(5) Business Days prior to the first date on which any interest or fees are
payable by MSI or MSUK hereunder for the account of such Lender; (B) each
assignee or participant shall deliver such form or certificate at least five (5)
Business Days before the effective date of such assignment or participation
(unless the Agent in its sole discretion shall permit such assignee or
participant to deliver such form or certificate less than five (5) Business Days
before such date in which case it shall be due on the date specified by the
Agent). Each Lender, assignee or participant which so delivers a Form W-8, W-9,
4224 or 1001 further undertakes to deliver to each of MSI, MSUK and the Agent
two (2) additional copies of such form (or a successor form) on or before the
date that such form expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by MSI, MSUK or the Agent, either certifying that such Lender,
assignee or participant is entitled to receive payments under this Agreement and
the Other Documents without deduction or withholding of any United States
federal income taxes or is subject to such tax at a reduced rate under an
applicable tax treaty or stating that no such exemption or reduced rate is
allowable. The Agent shall be entitled to withhold United States federal income
taxes at the full withholding rate unless the Lender, assignee or participant
establishes an exemption or that it is subject to a reduced rate as established
pursuant to the above provisions.
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15.19. APPLICATION OF PAYMENTS.
Agent shall have the continuing and exclusive right to apply or
reverse and reapply any payment and any and all proceeds of Collateral and the
Subsidiary Collateral to any portion of the Obligations. To the extent that MSI,
MSUK and/or Sensors makes a payment or Agent or any Lender receives any payment
or proceeds of the Collateral or the Subsidiary Collateral for MSI's, MSUK's or
Sensors' benefit, which are subsequently invalidated, declared to be fraudulent
or preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver, custodian or any other party under any bankruptcy law,
common law or equitable cause, then, to such extent, the Obligations or part
thereof intended to be satisfied shall be revived and continue as if such
payment or proceeds had not been received by Agent or such Lender.
15.20. REAFFIRMATION OF OBLIGATIONS; NO DEFENSES.
By executing this Agreement, MSI does hereby represent and warrant
that as of the date hereof: (i) (A) there is outstanding under the Revolving
Credit Notes, the aggregate principal sum of $14,200,000.36, plus accrued and
----
unpaid interest thereon, (B) there are currently $5,500.00 of Letters of Credit
Outstanding and 60,000 outstanding under the Duty Deferment Bond; and (C) there
is outstanding under the Term Notes, the aggregate principal sum of
$23,000,000.00, plus accrued and unpaid interest thereon; and (ii) all such
----
amounts are owing to the Lenders without defense, offset or counterclaim against
the Lenders in connection with any of the Obligations hereunder or any of the
Other Documents, as any of the same has been amended, restated, confirmed or
modified.
15.21. NET PAYMENTS
All payments made by MSI and MSUK hereunder and under the Notes will
be made without setoff, counterclaim or other defense and will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income, net profits or gross receipts of any Lender
and any taxes imposed solely on deposits or net assets of any Lender), and all
interest, penalties or similar liabilities with respect to such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Non-Excluded Taxes"). If any Non-Excluded
Taxes are so levied or imposed, MSI or MSUK, as applicable, shall pay the full
amount of such Non-Excluded Taxes and such additional amounts as may be
necessary so that every payment of all amounts due under this Agreement or under
any Note, after withholding or deduction for or on account of any Non-Excluded
Taxes, will not be less than the amount provided for herein or in such Note. If
any amounts are payable in respect of Non-Excluded Taxes pursuant to the
preceding sentence, MSI or MSUK, as applicable, shall reimburse the Agent, upon
the written request of the Agent, for taxes imposed on or measured by the net
income, net profits or gross receipts of any Lender and for any withholding of
taxes as such Lender shall determine is payable by, or withheld from, such
90
Lender, in respect of such amounts so paid to or on behalf of such Lender
pursuant to the preceding sentence and in respect of any amounts paid to or on
behalf of such Lender pursuant to this sentence. MSI or MSUK, as applicable,
shall furnish to the Agent within 45 days after the date the payment of any
Non-Excluded Taxes is due pursuant to applicable law certified copies of tax
receipts evidencing such payment by MSI or MSUK, as applicable. MSI or MSUK, as
applicable, shall indemnify and hold the Lenders harmless against, and reimburse
the Lenders upon written request for, the amount of any Non-Excluded Taxes so
levied or imposed and paid by any Lender. The provisions hereof shall survive
the final payment of the Obligations. No additional amount will be payable by
MSUK to a Lender (or to the Agent on a Lender's behalf) under this section
unless it is a Qualifying Lender (unless the reason it is not a Qualifying
Lender is by reason of change in a law, regulation, treaty or official directive
or request or a change in the interpretation or application thereof by any court
or regulatory authority having jurisdiction over such Lender).
15.22. JUDGMENTS AGAINST MSUK
In the event that Agent and/or the Lenders obtain a judgment against
MSUK arising out of or in connection with this Agreement in Dollars, such
judgment shall be satisfied in Dollars or in Pounds Sterling in an amount which,
upon receipt by the Lenders, shall be the real equivalent (after any exchange
commissions) of the Dollar amount of such judgment, as determined by the
currency conversion provisions set forth in Section 2.25 hereof.
15.23. MANDATORY COSTS RATE FORMULAE
(a) The Mandatory Costs Rate, to compensate the Lenders for the cost
attributable to the MSUK Sublimit, or other sum denominated in Pounds Sterling
(or any other currency, where applicable) for any period for which such cost is
to be computed under this Agreement resulting from the imposition from time to
time under or pursuant to the Bank of England Act 1998 and/or by the Bank of
England and/or by the Financial Services Authority of a requirement or request
to place non interest-bearing deposits or Special Deposits (as hereinafter
defined), whether interest-bearing or not, with the Bank of England and/or pay
fees to the Financial Services Authority calculated by reference to liabilities
used to fund the MSUK Sublimit or other sum, will be the rate determined by the
Agent (rounded upwards, if necessary, to four decimal places) as the rate
resulting from the application (as appropriate) of the following formulae by
reference to the circumstances existing on the first day of the relevant period
and for the duration of such period (but with respect to a period of longer than
three (3) months, on a three (3) monthly basis during such period):
In relation to Pounds Sterling Advances or sums: XL + S(X-X) + F x 0.01
----------------------
100 - (X + S)
In relation to other Advances or sums: F x 0.01
------------
300
Where, in each case, on the day of application of a formula:
"X" is the amount required to be maintained by the Agent and/or the Lenders on
current account with the Bank of England expressed as a percentage of Eligible
Liabilities (as hereinafter defined), assuming these to be in excess of any
stated minimum;
91
"L" is the offered quotation of the Agent for one month or, as the case may be,
two or three month Pounds Sterling deposits in the London Interbank Market at or
about 11.00 a.m. on the relevant quotation day;
"S" is the amount of Special Deposits required to be maintained by the Agent
with the Bank of England expressed as a percentage of Eligible Liabilities;
"D" is the rate of interest paid by the Bank of England on Special Deposits;
"F" is the rate of charge payable by the Agent and/or the Lenders to the
Financial Services Authority pursuant to paragraphs 2.02 or paragraph 2.03 (as
the case may be) of the Fees Regulations (as hereinafter defined), but for this
purpose the figure at paragraph 2.02b or paragraph 2.03b (as the case may be) of
the Fees Regulations shall be deemed to be zero, and expressed in Pounds
Sterling per 1,000,000 of the Fee Base (as hereinafter defined) of the Agent
and/or the Lenders; and
"X", "L", "S" and "D" are to be expressed in the relevant formula as numbers and
not as percentages per annum, and any negative result obtained from subtracting
"D" from "L" shall be counted as zero.
(b) For the purposes of this Section:
(i) References to the "Bank of England" and to the "Financial
Services Authority" include, in each case, any other governmental or regulatory
authorities or agencies for the time being serving the same or similar functions
as the Bank of England and/or the Financial Services Authority, as the case may
be.
(ii) The terms "Eligible Liabilities" and "Special Deposits"
have the meanings ascribed to them under or pursuant to the Bank of Xxxxxxx Xxx
0000 or by the Bank of England (as may be appropriate) on the day of the
application of the relevant formula.
(iii) The term "Fee Base" has the meaning ascribed to it for
the purposes of, and shall be calculated in accordance with, the Fees
Regulations.
(iv) The term "Fees Regulations" means, as appropriate,
either: (A) the Banking Supervision (Fees) Regulations 2000; or (B) such
other regulations as may be in force from time to time in respect of the payment
of fees for banking supervision.
(c) The Agent may from time to time determine and notify the
Borrowers of any amendments or variations which are required to be made to the
formulae set forth above in order to comply with any existing or future
requirements or requests from time to time of the Bank of England and/or the
Financial Services Authority in relation to the MSUK Sublimit or other sums
denominated in Pounds Sterling (including, without limitation, any requirements
or requests relating to Pounds Sterling primary liquidity) or any other
currency, where applicable, and any such determination shall, in the absence of
manifest error, be conclusive and binding.
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IN WITNESS WHEREOF, each of the parties has signed this Agreement as
of the day and year first above written.
MEASUREMENT SPECIALTIES, INC.
By:_______________________________
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chief Executive Officer
MEASUREMENT SPECIALTIES UK LIMITED
By:_______________________________
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Director
FIRST UNION NATIONAL BANK,
as Agent and Lender
By:_______________________________
Name: Xxxx Xxxx
Title: Senior Vice President
THE CHASE MANHATTAN BANK
By:_______________________________
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
SUMMIT BANK
By:_______________________________
Name: Xxxxxxx Xxxxxxx
Title: Vice President
[Signatures Continued on Next Page]
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AGREEING TO BE BOUND BY THE PROVISIONS HEREOF APPLICABLE TO THEM AND MAKING THE
REPRESENTATIONS AND WARRANTIES MADE HEREIN BY THEM.
IC SENSORS, INC.
By:_______________________________
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President
MEASUREMENT LIMITED
By:_______________________________
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Director
JINGLIANG ELECTRONICS
(SHENZHEN) CO. LTD.
By:_______________________________
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Director
FIRST AMENDMENT TO AMENDED AND RESTATED
REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT
First Amendment to Amended and Restated Revolving Credit, Term Loan
and Security Agreement dated as of March 2, 2001 (this "Amendment") among
MEASUREMENT SPECIALTIES, INC., a corporation organized under the laws of the
State of New Jersey ("MSI"), MEASUREMENT SPECIALTIES UK LIMITED, a company
incorporated in England and Wales and a wholly owned subsidiary of MSI ("MSUK"
and collectively with MSI, the "Borrowers"), FLEET NATIONAL BANK, successor by
merger to Summit Bank ("Fleet"), THE CHASE MANHATTAN BANK ("Chase"), FIRST UNION
NATIONAL BANK ("First Union" and collectively with Fleet and Chase, the
"Lenders") and FIRST UNION NATIONAL BANK, as agent (in such capacity, "Agent").
WHEREAS, the Borrowers, the Lenders and Agent are parties to that
certain Amended and Restated Revolving Credit, Term Loan and Security Agreement
dated as of February 28, 2001(as same is being and may hereafter be amended,
modified or restated, the "Loan Agreement"; terms used herein and not otherwise
defined are as defined in the Loan Agreement) pursuant to which Lenders agreed
to extend to MSI: (i) a revolving loan and letter of credit facility of up to
FIFTEEN MILLION DOLLARS ($15,000,000) (the "Revolving Credit Commitment"), and
(ii) a term loan in the original principal amount of TWENTY FIVE MILLION DOLLARS
($25,000,000) (the "Term Loan");
WHEREAS, the Borrowers have requested and the Lenders have agreed in
order to increase the Revolving Credit Commitment on a temporary basis on the
terms and conditions set forth herein.
IN CONSIDERATION of the mutual covenants and undertakings herein
contained, the parties hereto hereby agree that the Loan Agreement be amended as
follows:
1. Article 1 of the Loan Agreement shall be amended so that the
following new or revised definitions are hereby included therein:
"First Amendment" shall mean that certain First Amendment to Amended
and Restated Revolving Credit, Term Loan and Security Agreement dated as of
March 2, 2001 among the Borrowers, the Lenders and the Agent.
"Maximum Revolving Advance Amount" shall mean: (a) for the period from
March 2, 2001 through April 30, 2001, $17,000,000, including: (i) the MSUK
Sublimit; and (ii) a $1,000,000 sublimit for the issuance of Letters of Credit,
and (b) at all other times, $15,000,000, including: (i) the MSUK Sublimit; and
(ii) a $1,000,000 sublimit for the issuance of Letters of Credit.
"Revolving Credit Commitment" shall mean as to any Lender at any time,
the amount initially set forth opposite its name on Schedule 1.1(A) to the First
Amendment in the columns labeled "Revolving Credit Commitment," and thereafter
on Schedule I to the most recent Assignment and Assumption Agreement. "Revolving
Credit Commitments" shall mean the aggregate Revolving Credit Commitments of all
of the Lenders.
2. The third sentence of Section 2.1(a) of the Loan Agreement is hereby
amended to read as follows:
"The Revolving Advances shall be evidenced by the secured promissory
notes dated the date hereof from MSUK to each of the Lenders
substantially in the form attached hereto as Exhibit 2.1(a) and the
restated secured promissory notes dated March 2, 2001 from MSI to each
of the Lenders substantially in the form attached to the First
Amendment as Exhibit 2.1(a) (the "Revolving Credit Notes").
3. Section 2.8 of the Loan Agreement is hereby amended so that the
following is added thereto:
"The aggregate balance of Advances outstanding on April 30, 2001 in
excess of $15,000,000.00 shall be immediately due and payable at the
Payment Office without the necessity of any demand, whether or not a
Default or Event of Default has occurred."
4. By executing this Amendment, each of the Borrowers and the
other Obligors confirms and acknowledges that, as of the date hereof, it has no
defenses, offsets or counterclaims against any of the Obligations under the Loan
Agreement or any of the Other Documents and that, as of the date hereof, all
amounts outstanding under the Notes and any other Loan Document are owing to the
Lenders without defense, off-set or counterclaim.
5. All references to the "Agreement" or "this Agreement" in the Loan
Agreement shall mean the Loan Agreement, as amended and reaffirmed by this
Amendment. All references to the "Obligations" in the Loan Agreement shall mean
and include the joint and several obligations of the Borrowers to the Lenders
pursuant to the Loan Agreement and the Other Documents, as amended and
reaffirmed pursuant to this Amendment, including, but not limited to the
Borrowers' obligations under the Notes.
6. By executing this Amendment, each of the Borrowers and Guarantors
confirm and acknowledge that (i) the representations and warranties contained in
Article 5 of the Loan Agreement (pertaining to each of them) are true and
correct as of the date hereof, (ii) after giving effect to this Amendment, the
Borrowers are in compliance with all covenants contained in the Loan Agreement
and all of the Other Documents, and (iii) after giving effect to this Amendment,
no Event of Default, or an event which with the giving of notice or passage of
time or both would constitute an Event of Default, has occurred and is
continuing.
7. By executing this Amendment, the Guarantors confirm and acknowledge
effective as of the date hereof, all of the terms and provisions of the
Guaranties and any amendments, renewals, modifications or supplements thereto,
or substitutions therefor, shall remain unchanged and continue in full force and
effect on the date hereof, and by executing this Amendment, the Guarantors
confirm the continued validity of such Guaranties.
2
8. By executing this Amendment, the parties hereto confirm the
continued accuracy of all Schedules and Exhibits attached to and made a part of
the Loan Agreement and the Other Documents. If any such Schedule or Exhibit is
no longer fully accurate or needs updating, such revised or updated Schedule or
Exhibit shall be delivered to the Lenders concurrently with the execution of
this Amendment and attached hereto and shall be deemed to replace the prior
Schedule or Exhibit for all purposes of the Loan Agreement or such other Loan
Document.
9. As conditions precedent to the effectiveness of this Amendment, the
following shall be delivered to the Lenders by or on behalf of the Obligors:
a) This Amendment, duly executed by all parties hereto;
b) The restated Revolving Credit Notes, duly executed by MSI;
c) Resolutions of the Boards of Directors or managing members, as
applicable, of each of MSI, MSUK and Sensors, certified on the date hereof by
the Secretary of each such entity, authorizing: (i) the execution, delivery and
performance of this Amendment; and (ii) the consummation of the transactions
contemplated hereby and thereby;
d) A certificate of the Secretary of each of MSI, MSUK and
Sensors, dated the date hereof, certifying: as to the incumbency and signature
of the officers or members, as applicable, executing each of the Loan Agreement
and Other Documents and any other document to be delivered pursuant to any of
such documents, together with evidence of the incumbency of such Secretary;
e) Payment of the fees described in Section 16 of this Amendment;
and
f) Such other approvals, opinions of counsel or documents as the
Agent may reasonably request.
10. This Amendment is incorporated by reference into the Loan Agreement
and the Other Documents. Except as otherwise provided herein, all other
provisions of the Loan Agreement and the Other Documents are hereby confirmed
and ratified and shall remain in full force and effect as of the date of this
Amendment
11. By executing this Amendment, the Obligors confirm and acknowledge
that the liens and security interests granted to the Agent for the ratable
benefit of the Lenders pursuant to the Loan Agreement and the Other Documents
are hereby continued and confirmed in all respects and shall continue to secure
the repayment of all Obligations under the Loan Agreement, as amended hereby.
12. The restated Revolving Credit Notes executed by MSI concurrently
herewith shall (along with the Revolving Credit Notes executed by MSUK on
February 28, 2001) be the "Revolving Credit Notes" for all purposes of the Loan
Agreement and all of the Other Documents.
3
13. This Amendment may be executed in any number of counterparts, each
of which shall be an original and all of which shall constitute one and the same
instrument.
14. This Amendment shall be binding upon and inure to the benefit of
the parties hereto and their heirs, executors, administrators, successors and/or
assigns.
15. This Amendment shall be governed by, and construed in accordance
with, the laws of the State of New Jersey.
16. The Borrowers shall pay the Agent an amendment fee for the ratable
benefit of the Lenders in the amount of $7,500 and shall reimburse Agent for all
of its fees and expenses incurred in connection with this Amendment, including,
without limitation, all reasonable attorneys fees and expenses of counsel to the
Agent.
17. In the event any provision of this Amendment or any other Loan
Document executed and delivered in connection herewith shall be held invalid or
unenforceable by a court of competent jurisdiction, such holdings shall not
invalidate or render unenforceable any other provision hereof or thereof.
4
IN WITNESS WHEREOF, each of the parties has signed this Amendment as
of the day and year first above written.
MEASUREMENT SPECIALTIES, INC.
By:
------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chief Executive Officer
MEASUREMENT SPECIALTIES UK LIMITED
By:
------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Director
FIRST UNION NATIONAL BANK,
as Agent and Lender
By:
------------------------------------
Name: Xxxx Xxxx
Title: Senior Vice President
THE CHASE MANHATTAN BANK
By:
------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
FLEET NATIONAL BANK, successor by merger
to Summit Bank
By:
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
[Signatures Continued on Next Page]
5
AGREEING TO BE BOUND BY THE PROVISIONS HEREOF APPLICABLE TO THEM AND MAKING THE
REPRESENTATIONS AND WARRANTIES MADE HEREIN BY THEM.
IC SENSORS, INC.
By:
------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President
MEASUREMENT LIMITED
By:
------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Director
JINGLIANG ELECTRONICS
(SHENZHEN) CO. LTD.
By:
------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Director
6
SECOND AMENDMENT TO AMENDED AND RESTATED
REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT
Second Amendment to Amended and Restated Revolving Credit, Term Loan
and Security Agreement dated as of April 30, 2001 (this "Amendment") among
MEASUREMENT SPECIALTIES, INC., a corporation organized under the laws of the
State of New Jersey ("MSI"), MEASUREMENT SPECIALTIES UK LIMITED, a company
incorporated in England and Wales and a wholly owned subsidiary of MSI ("MSUK"
and collectively with MSI, the "Borrowers"), FLEET NATIONAL BANK, successor by
merger to Summit Bank ("Fleet"), THE CHASE MANHATTAN BANK ("Chase"), FIRST UNION
NATIONAL BANK ("First Union" and collectively with Fleet and Chase, the
"Lenders") and FIRST UNION NATIONAL BANK, as agent (in such capacity, "Agent").
WHEREAS, the Borrowers, the Lenders and Agent are parties to that
certain Amended and Restated Revolving Credit, Term Loan and Security Agreement
dated as of February 28, 2001, as amended (as so amended and as the same is
being and may hereafter be amended, modified or restated, the "Loan Agreement";
terms used herein and not otherwise defined are as defined in the Loan
Agreement) pursuant to which Lenders agreed to extend to MSI: (i) a revolving
loan and letter of credit facility of up to SEVENTEEN MILLION DOLLARS
($17,000,000) (the "Revolving Credit Commitment"), and (ii) a term loan in the
original principal amount of TWENTY FIVE MILLION DOLLARS ($25,000,000) (the
"Term Loan");
WHEREAS, the Borrowers have requested and the Lenders have agreed to
extend the increase of the Revolving Credit Commitment effected by the First
Amendment from April 30, 2001 until the Expiration Date on the terms and
conditions set forth herein.
IN CONSIDERATION of the mutual covenants and undertakings herein
contained, the parties hereto hereby agree that the Loan Agreement be amended as
follows:
1. Article 1 of the Loan Agreement shall be amended so that the
following new or revised definitions are hereby included therein:
"Second Amendment" shall mean that certain Second Amendment to Amended
and Restated Revolving Credit, Term Loan and Security Agreement dated as of
April 30, 2001 among the Borrowers, the Lenders and the Agent.
"Maximum Revolving Advance Amount" shall mean $17,000,000, including:
(i) the MSUK Sublimit; and (ii) a $1,000,000 sublimit for the issuance of
Letters of Credit.
"Revolving Credit Commitment" shall mean as to any Lender at any time,
the amount initially set forth opposite its name on Schedule 1.1(A) to the
Second Amendment in the columns labeled "Revolving Credit Commitment," and
thereafter on Schedule I to the most recent Assignment and Assumption Agreement.
"Revolving Credit Commitments" shall mean the aggregate Revolving Credit
Commitments of all of the Lenders.
2. The third sentence of Section 2.1(a) of the Loan Agreement is hereby
amended to read as follows:
"The Revolving Advances shall be evidenced by the secured promissory
notes dated the date hereof from MSUK to each of the Lenders
substantially in the form attached hereto as Exhibit 2.1(a) and the
restated secured promissory notes dated as of April 30, 2001 from MSI
to each of the Lenders substantially in the form attached to the
Second Amendment as Exhibit 2.1(a) (the "Revolving Credit Notes").
3. Section 2.8 of the Loan Agreement is hereby amended so that the
following sentence added thereto by the First Amendment is deleted:
"The aggregate balance of Advances outstanding on April 30, 2001 in
excess of $15,000,000.00 shall be immediately due and payable at the
Payment Office without the necessity of any demand, whether or not a
Default or Event of Default has occurred."
4. By executing this Amendment, each of the Borrowers and the other
Obligors confirms and acknowledges that, as of the date hereof, it has no
defenses, offsets or counterclaims against any of the Obligations under the Loan
Agreement or any of the Other Documents and that, as of the date hereof, all
amounts outstanding under the Notes and any other Loan Document are owing to the
Lenders without defense, off-set or counterclaim.
5. All references to the "Agreement" or "this Agreement" in the Loan
Agreement shall mean the Loan Agreement, as amended and reaffirmed by this
Amendment. All references to the "Obligations" in the Loan Agreement shall mean
and include the joint and several obligations of the Borrowers to the Lenders
pursuant to the Loan Agreement and the Other Documents, as amended and
reaffirmed pursuant to this Amendment, including, but not limited to the
Borrowers' obligations under the Notes.
6. By executing this Amendment, each of the Borrowers and Guarantors
confirm and acknowledge that (i) the representations and warranties contained in
Article 5 of the Loan Agreement (pertaining to each of them) are true and
correct as of the date hereof, (ii) after giving effect to this Amendment, the
Borrowers are in compliance with all covenants contained in the Loan Agreement
and all of the Other Documents, and (iii) after giving effect to this Amendment,
no Event of Default, or an event which with the giving of notice or passage of
time or both would constitute an Event of Default, has occurred and is
continuing.
7. By executing this Amendment, the Guarantors confirm and acknowledge
effective as of the date hereof, all of the terms and provisions of the
Guaranties and any amendments, renewals, modifications or supplements thereto,
or substitutions therefor, shall remain unchanged and continue in full force and
effect on the date hereof, and by executing this Amendment, the Guarantors
confirm the continued validity of such Guaranties.
2
8. By executing this Amendment, the parties hereto confirm the
continued accuracy of all Schedules and Exhibits attached to and made a part of
the Loan Agreement and the Other Documents. If any such Schedule or Exhibit is
no longer fully accurate or needs updating, such revised or updated Schedule or
Exhibit shall be delivered to the Lenders concurrently with the execution of
this Amendment and attached hereto and shall be deemed to replace the prior
Schedule or Exhibit for all purposes of the Loan Agreement or such other Loan
Document.
9. As conditions precedent to the effectiveness of this Amendment, the
following shall be delivered to the Lenders by or on behalf of the Obligors:
a) This Amendment, duly executed by all parties hereto;
b) The restated Revolving Credit Notes, duly executed by MSI;
c) Resolutions of the Boards of Directors or managing members, as
applicable, of each of MSI, MSUK and Sensors, certified on the date hereof by
the Secretary of each such entity, authorizing: (i) the execution, delivery and
performance of this Amendment; and (ii) the consummation of the transactions
contemplated hereby and thereby;
d) A certificate of the Secretary of each of MSI, MSUK and
Sensors, dated the date hereof, certifying: as to the incumbency and signature
of the officers or members, as applicable, executing each of the Loan Agreement
and Other Documents and any other document to be delivered pursuant to any of
such documents, together with evidence of the incumbency of such Secretary;
e) Payment of the fees described in Section 16 of this Amendment;
and
f) Such other approvals, opinions of counsel or documents as the
Agent may reasonably request.
10. This Amendment is incorporated by reference into the Loan Agreement
and the Other Documents. Except as otherwise provided herein, all other
provisions of the Loan Agreement and the Other Documents are hereby confirmed
and ratified and shall remain in full force and effect as of the date of this
Amendment
11. By executing this Amendment, the Obligors confirm and acknowledge
that the liens and security interests granted to the Agent for the ratable
benefit of the Lenders pursuant to the Loan Agreement and the Other Documents
are hereby continued and confirmed in all respects and shall continue to secure
the repayment of all Obligations under the Loan Agreement, as amended hereby.
12. The restated Revolving Credit Notes executed by MSI concurrently
herewith shall (along with the Revolving Credit Notes executed by MSUK on
February 28, 2001) be the "Revolving Credit Notes" for all purposes of the Loan
Agreement and all of the Other Documents.
3
13. This Amendment may be executed in any number of counterparts, each
of which shall be an original and all of which shall constitute one and the same
instrument.
14. This Amendment shall be binding upon and inure to the benefit of
the parties hereto and their heirs, executors, administrators, successors and/or
assigns.
15. This Amendment shall be governed by, and construed in accordance
with, the laws of the State of New Jersey.
16. The Borrowers shall pay the Agent an amendment fee for the ratable
benefit of the Lenders in the amount of $7,500.00 and shall reimburse Agent for
all of its fees and expenses incurred in connection with this Amendment,
including, without limitation, all reasonable attorneys fees and expenses of
counsel to the Agent.
17. In the event any provision of this Amendment or any other Loan
Document executed and delivered in connection herewith shall be held invalid or
unenforceable by a court of competent jurisdiction, such holdings shall not
invalidate or render unenforceable any other provision hereof or thereof.
4
IN WITNESS WHEREOF, each of the parties has signed this Amendment as
of the day and year first above written.
MEASUREMENT SPECIALTIES, INC.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chief Executive Officer
MEASUREMENT SPECIALTIES UK LIMITED
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Director
FIRST UNION NATIONAL BANK,
as Agent and Lender
By:
-------------------------------------
Name: Xxxx Xxxx
Title: Senior Vice President
THE CHASE MANHATTAN BANK
By:
-------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
FLEET NATIONAL BANK, successor by merger
to Summit Bank
By:
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
[Signatures Continued on Next Page]
5
AGREEING TO BE BOUND BY THE PROVISIONS HEREOF APPLICABLE TO THEM AND MAKING THE
REPRESENTATIONS AND WARRANTIES MADE HEREIN BY THEM.
IC SENSORS, INC.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President
MEASUREMENT LIMITED
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Director
JINGLIANG ELECTRONICS
(SHENZHEN) CO. LTD.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Director
6
