SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
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THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "SECOND
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AMENDMENT"), effective as of the 11th day of April, 2003, is by and among
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MEASUREMENT SPECIALTIES, INC., a New Jersey corporation ("MSI"), IC SENSORS,
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INC., a California corporation ("IC," together with MSI, are collectively
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referred to herein as the "BORROWERS" and individually as a "BORROWER"), and
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FLEET CAPITAL CORPORATION, a Rhode Island corporation ("LENDER").
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W I T N E S S E T H:
WHEREAS, Borrowers and Lender are parties to that certain Loan and Security
Agreement dated as of January 31, 2003 (as amended by that certain First
Amendment to Loan and Security Agreement dated as of March 28, 2003, the "LOAN
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AGREEMENT") (unless otherwise defined herein, all capitalized terms used herein
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which are defined in the Loan Agreement shall have the meaning given such terms
in the Loan Agreement);
WHEREAS, Borrowers desire to enter into a Second Amendment to Senior
Secured Note and Warrant Purchase Agreement (the "CASTLETOP AMENDMENT," a true
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and correct copy of which is attached hereto as Exhibit A) with Castletop and
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pursuant to which Castletop will loan to MSI an additional $3,000,000 and MSI
will execute an allonge to its note in favor of Castletop such that the
principal amount of the Subordinate Debt owing to Castletop shall be $5,000,000;
and
WHEREAS, Borrowers have requested that Lender (a) consent to the execution
of the Castletop Amendment and (b) amend certain provisions of the Loan
Agreement in connection with the Castletop Amendment.
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed,
Borrowers and Lender hereby agree as follows:
SECTION 1 AMENDED DEFINITION. In reliance on the representations,
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warranties, covenants and agreements contained in this Second Amendment, and
subject to the satisfaction of each condition precedent set forth in Section 3
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hereof, the definition of "SUBORDINATED DEBT" contained in Appendix A of the
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Loan Agreement shall be amended and restated in full to read as follows:
SUBORDINATED DEBT Indebtedness of Borrower(s) that is subordinated to
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the Obligations in a manner satisfactory to Lender in its sole and absolute
discretion, including principal of up to $5,000,000 owing to Castletop and
covered by the Castletop Subordination Agreement.
SECTION 2 LIMITED CONSENT. In reliance on the representation,
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warranties, covenants and agreements contained in this Second Amendment, and
subject to the limitations set forth herein and the satisfaction of each
condition precedent contained in Section 3 of this Second Amendment, Lender
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hereby consents to the Castletop Amendment. Borrowers hereby acknowledge
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that the consent herein contained is a limited one-time event, and nothing
contained herein shall obligate Lender to grant any additional or future
consent.
SECTION 3 CONDITIONS PRECEDENT. The effectiveness of the amendments to
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the Loan Agreement contained in Section 1 hereof and the consent contained in
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Section 2 hereof is subject to the satisfaction of each of the following
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conditions precedent:
3.1 CASTLETOP AMENDMENTS. Borrowers shall have (a) executed and
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delivered to Lender a fully executed copy of the Castletop Amendment and (b)
executed and delivered to Lender a fully executed amendment to the Castletop
Subordination Agreement in the form attached hereto as Exhibit B.
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3.2 ABSENCE OF DEFAULTS. No Default or Event of Default exists.
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3.3 REPRESENTATIONS AND WARRANTIES. Each representation and
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warranty contained in Section 4 hereof is true and correct in all material
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respects.
SECTION 4 REPRESENTATIONS AND WARRANTIES. In order to induce Lender to
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enter into this Second Amendment, each Borrower hereby jointly and severally
represents and warrants to Lender that:
4.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. Each
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representation and warranty of such Borrower contained in the Loan Documents is
true and correct in all material respects as of the date hereof (except to the
extent that such representations and warranties are expressly made as of a
particular date, in which event such representations and warranties were true
and correct as of such date).
4.2 DUEAUTHORIZATION, NO CONFLICTS. The execution, delivery and
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performance by Borrowers of this Second Amendment are within Borrowers'
corporate powers, have been duly authorized by necessary action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not violate or constitute a default under any provision of
applicable law or any material agreement binding upon any Borrower or any of
their Subsidiaries, or result in the creation or imposition of any Lien upon any
of the assets of any Borrower or any of their Subsidiaries except for Permitted
Liens.
4.3 VALIDITY AND BINDING EFFECT. This Second Amendment
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constitutes the valid and binding obligations of Borrowers enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting creditor's rights generally,
and the availability of equitable remedies may be limited by equitable
principles of general application.
4.4 ABSENCE OF DEFAULTS. Neither a Default nor an Event of
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Default has occurred which is continuing.
4.5 NODEFENSE. Borrowers have no defenses to payment,
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counterclaims or rights of set-off with respect to the Obligations on the date
hereof.
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4.6 REVIEWAND CONSTRUCTION OF DOCUMENTS. Each Borrower has had
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the opportunity to consult with legal counsel of its own choice and has been
afforded an opportunity to review this Second Amendment with its legal counsel,
has reviewed this Second Amendment and fully understands the effects thereof and
all terms and provisions contained herein, and has executed this Second
Amendment of its own free will and volition. Furthermore, each Borrower
acknowledges that (i) this Second Amendment shall be construed as if jointly
drafted by Borrowers and Lender, and (ii) the recitals contained in this Second
Amendment shall be construed to be part of the operative terms and provisions of
this Second Amendment.
SECTION 5 MISCELLANEOUS.
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5.1 LOAN DOCUMENT. This Second Amendment is a Loan Document for
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all purposes of the Loan Agreement and the other Loan Documents.
5.2 REAFFIRMATION OF LOAN DOCUMENTS; EXTENSION OF LIENS. Any and
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all of the terms and provisions of the Loan Agreement and the other Loan
Documents shall, except as amended and modified hereby, remain in full force and
effect. Borrowers hereby reaffirm the Liens securing the Obligations until the
Obligations have been paid in full, and agree that the amendments and
modifications herein contained shall in no manner affect or impair the
Obligations or the Liens securing payment and performance thereof.
5.3 PARTIES IN INTEREST. All of the terms and provisions of this
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Second Amendment shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns.
5.4 LEGAL EXPENSES. Borrowers hereby agree to pay on demand all
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reasonable fees and expenses of counsel to Lender incurred by Lender in
connection with the preparation, negotiation and execution of this Second
Amendment and all related documents.
5.5 COUNTERPARTS. This Second Amendment may be executed in
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counterparts, and all parties need not execute the same counterpart; however, no
party shall be bound by this Second Amendment until this Second Amendment has
been executed by Borrowers and Lender at which time this Second Amendment shall
be binding on, enforceable against and inure to the benefit of Borrowers and
Lender. Facsimiles shall be effective as originals.
5.6 COMPLETE AGREEMENT. THIS SECOND AMENDMENT, THE LOAN AGREEMENT
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AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
5.7 HEADINGS. The headings, captions and arrangements used in
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this Second Amendment are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify or modify the terms of this Second
Amendment, nor affect the meaning thereof.
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5.8 NO IMPLIED WAIVERS. No failure or delay on the part of Lender
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in exercising, and no course of dealing with respect to, any right, power or
privilege under this Second Amendment, the Loan Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under this Second Amendment, the Loan
Agreement or any other Loan Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
5.9 ARMS-LENGTH/GOOD FAITH. This Second Amendment has been
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negotiated at arms-length and in good faith by the parties hereto.
5.10 INTERPRETATION. Wherever the context hereof shall so
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require, the singular shall include the plural, the masculine gender shall
include the feminine gender and the neuter and vice versa. The headings,
captions and arrangements used in this Second Amendment are for convenience only
and shall not affect the interpretation of this Second Amendment.
5.11 SEVERABILITY. In case any one or more of the provisions
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contained in this Second Amendment shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision hereof, and this Second
Amendment shall be construed as if such invalid, illegal, or unenforceable
provision had never been contained herein.
5.12 FURTHER ASSURANCES. Each Borrower agrees to execute,
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acknowledge, deliver, file and record such further certificates, instruments and
documents, and to do all other acts and things, as may be requested by Lender as
necessary or advisable to carry out the intents and purposes of this Second
Amendment.
5.13 WAIVERS BY BORROWERS. BORROWERS JOINTLY AND SEVERALLY WAIVE
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THE RIGHT TO TRIAL BY JURY (WHICH LENDER HEREBY ALSO WAIVES) IN ANY ACTION,
SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF
THE LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL; PRESENTMENT, DEMAND AND
PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY,
RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL
PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND
GUARANTIES AT ANY TIME HELD BY LENDER ON WHICH BORROWERS MAY IN ANY WAY BE
LIABLE AND HEREBY RATIFY AND CONFIRM WHATEVER LENDER MAY DO IN THIS REGARD;
NOTICE PRIOR TO TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR
SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING LENDER TO
EXERCISE ANY OF LENDER'S REMEDIES; THE BENEFIT OF ALL VALUATION, APPRAISEMENT
AND EXEMPTION LAWS; NOTICE OF ACCEPTANCE HEREOF; AND EXCEPT AS PROHIBITED BY
LAW, ANY RIGHT TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY OR PUNITIVE.
BORROWERS ACKNOWLEDGE THAT THE FOREGOING
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WAIVERS ARE A MATERIAL INDUCEMENT TO LENDER'S ENTERING INTO THIS SECOND
AMENDMENT AND THAT LENDER IS RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE
DEALINGS WITH BORROWERS. BORROWERS JOINTLY AND SEVERALLY WARRANT AND REPRESENT
THAT THEY HAVE REVIEWED THE FOREGOING WAIVERS WITH THEIR LEGAL COUNSEL AND HAVE
KNOWINGLY AND VOLUNTARILY WAIVED THEIR JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS SECOND AMENDMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be duly executed by their respective authorized officers on the date and year
first above written.
BORROWERS:
MEASUREMENT SPECIALTIES, INC.
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
Chief Financial Officer
IC SENSORS, INC.
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
Chief Financial Officer
LENDER:
FLEET CAPITAL CORPORATION
By: /s/ H. Xxxxxxx Xxxxx
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H. Xxxxxxx Xxxxx
Senior Vice President
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