FIFTH AMENDMENT, CONSENT AND
WAIVER TO CREDIT AGREEMENT
FIFTH AMENDMENT, CONSENT AND WAIVER, dated as of
October 24, 2008 (this “ Amendment ”), to the
Credit Agreement referred to below by and among MEASUREMENT
SPECIALTIES, INC., a New Jersey corporation (“
Borrower ”); the other parties signatory thereto as US
Credit Parties; the Lenders party thereto (the “
Lenders ”); WACHOVIA BANK, NATIONAL ASSOCIATION, as
Syndication Agent (the “ Syndication Agent ”),
JPMORGAN CHASE BANK, N.A., as Documentation Agent (the “
Documentation Agent ”), and GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation, as agent for the Lenders (in
such capacity, “ Agent ”).
WITNESSETH
WHEREAS , Borrower, the other US Credit Parties
signatory thereto, Lenders, Syndication Agent, Administrative
Agent, and Agent are parties to that certain Amended and Restated
Credit Agreement, dated as of April 3, 2006 (as amended, restated,
supplemented or otherwise modified prior to the date hereof, the
“ Credit Agreement ”);
WHEREAS , Borrower is in default of a certain covenant
and Borrower, Agent and Requisite Lenders have agreed to waive such
default in the manner, and on the terms and conditions, provided
for herein;
WHEREAS , Borrower has notified Agent that Borrower
desires to form a new Subsidiary named MEAS US LLC, which
Subsidiary shall be a Delaware limited liability company (“
Newco ”);
WHEREAS , Borrower has notified Agent that Borrower
desires to effect the transfer by YSIS of its ownership interests
in Nikkiso-YSI Co. Ltd. (the “ Nikkiso-YSI Ownership
Interests ”), a company organized under the laws of Japan
(“ Nikkiso-YSI ”), to MEAS Europe SAS, a company
organized under the laws of France (“ MEAS Europe
”), pursuant to the following series of transactions: (i)
YSIS shall merge with and into Newco, with Newco being the
surviving entity in such merger, (ii) Newco shall transfer the
Nikkiso-YSI Ownership Interests to Borrower, (iii) Borrower shall
transfer the Nikkiso-YSI Ownership Interests to Intermediate
Holdings, (iv) Intermediate Holdings shall transfer the Nikkiso-YSI
Ownership Interests to Kenabell Holdings, (v) Kenabell Holdings
shall transfer the Nikkiso-YSI Ownership Interests to Acalon
Holdings Ltd. and (vi) Acalon Holdings Ltd. shall transfer the
Nikkiso-YSI Ownership Interests to MEAS Europe (clauses (ii)
through (vi) above hereinafter referred to as, collectively, the
“ Transfer of Nikkiso-YSI Ownership Interests
”); and
WHEREAS, Borrower, Agent and Requisite Lenders have
agreed to amend the Credit Agreement in the manner, and on the
terms and conditions, provided for herein.
NOW THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged, Borrower, Agent and
Requisite Lenders hereby agree as follows:
1.
Definitions . Capitalized terms not
otherwise defined herein shall have the meanings ascribed to them
in the Credit Agreement or Annex A thereto, in each case, as
amended hereby.
2.
Default Waiver . Agent and Requisite Lenders
hereby waive, as of the Effective Date (as hereinafter defined) the
Event of Default under Section 8.1(b) of the Credit
Agreement resulting solely from the investment by YSIS, in March
2008, in Nikkiso-YSI in contravention of Section 6.2 of the
Credit Agreement (the “ Specified Event of Default
”).
3.
Consents . As of the Effective Date, Agent and
Requisite Lenders hereby consent to (a) the formation of Newco, and
(b) the consummation of the Transfer of Nikkiso-YSI Ownership
Interests.
4.
Amendment to Section 6.7 of the Credit Agreement
. As of the Effective Date, Section 6.7 of
the Credit Agreement is hereby amended by deleting
“and” found immediately before clause (d) thereof, and
inserting at the end of such clause (d) the following
“, and
(e) licenses and sublicenses of Intellectual Property to the extent
permitted in Section 6.8 (e) .”
5.
Amendment to Section 6.8 of the Credit Agreement
. As of the Effective Date, Section 6.8 of
the Credit Agreement is hereby amended and restated in its entirety
read as follows:
“6.8
Sale of Stock and Assets . No Credit Party shall
sell, transfer, convey, assign, license or otherwise dispose of any
of its properties or other assets, including the Stock of any of
its Subsidiaries (whether in a public or a private offering or
otherwise) or any of its Accounts, other than: (a) the
sale of Inventory in the ordinary course of business, (b) the sale,
transfer, conveyance or other disposition by a Credit Party of
Equipment, Fixtures or Real Estate that are obsolete, (c) the sale,
transfer, conveyance or other disposition by a Credit Party of
Equipment, Fixtures or Real Estate having a value not exceeding
$500,000 in any single transaction or $2,000,000 in the aggregate
in any Fiscal Year, (d) transfers contemplated under the BetaTHERM
Reorganization, (e) (i) non-exclusive licenses of Intellectual
Property to third parties (other than any Credit Party), and (ii)
exclusive and non-exclusive licenses of Intellectual Property to
another Credit Party (including the Technology License Agreement in
form and substance satisfactory to Agent), provided that, in
the case of the foregoing clauses (e)(i) and (e)(ii), such license
(and any amendment, supplement or other modification thereof) (A)
is entered into in the ordinary course of business and consistent
with past practice (and, with respect to exclusive licenses only, a
duly executed copy thereof shall have been provided to Agent
promptly after execution thereof), (B) does not involve the sale,
or transfer of title or ownership of Intellectual Property or other
assets of Borrower or any Credit Party, or any filing or
registration with any Governmental Authority other than for
informational filings that do not impact the licensor’s title
and rights under the license or create an encumbrance, and (C) does
not restrict the use of any Intellectual Property that would
prevent any Credit Party, as licensor thereof, from selling,
transferring, encumbering or otherwise disposing of any such
Intellectual Property, provided further that,
in the case of the foregoing clause (e)(ii), such license (and any
amendment, supplement or other modification thereof) (X) contains
an enforceable subordination provision in the form set forth on
Exhibit 6.8(e) , or such other subordination provisions as
are acceptable to Agent, and (Y) prohibits the sub-license or other
transfer by the licensee of the license or any of the
licensee’s interests in the Intellectual Property to any
third party that is not a Credit Party, except pursuant to a
license with such third party permitted in accordance with clause
(e)(i) hereof. With respect to any disposition of assets
or other properties permitted pursuant to clauses (b) and (c)
above, subject to Section 1.3(b) , Agent agrees on
reasonable prior written notice to release its Lien on such assets
or other properties in order to permit the applicable Credit Party
to effect such disposition and shall execute and deliver to
Borrower, at Borrower’s expense, appropriate UCC-3
termination statements and other releases as reasonably requested
by Borrower.”
6.
Amendments to Annex A of the Credit Agreement
. As of the Effective Date, Annex A of the Credit
Agreement is hereby amended by inserting the following new
definitions in alphabetical order therein:
“ MSI
China ” means Measurement Specialties (China) Ltd., a
company organized under the laws of the People’s Republic of
China.
“
Technology License Agreement ” means that certain
Technology License Agreement dated on or about October 28, 2008
between Borrower and MSI China, pursuant to which Borrower licenses
to MSI China certain technology for the purpose of manufacturing,
assembling, testing, installing, marketing and selling certain
products.
7.
Exhibit to Credit Agreement . As of
the Effective Date, the Credit Agreement is hereby amended by
inserting a new exhibit, Exhibit 6.8(e) , as provided in
Exhibit A attached hereto.
8.
Covenants . Borrower and each
US Credit Party hereby jointly and severally covenants and agrees
to deliver to Agent (a) on or prior to October 31, 2008, the
agreements, documents and instruments, each in form and substance
satisfactory to Agent, set forth on Schedule I hereto, (b)
within ninety (90) days of the Effective Date, an updated
Schedule 3.15 to the Credit Agreement listing each Patent,
Trademark, Copyright and License and (c) within ten (10) days of
the execution by Borrower and MSI China of the Technology License
Agreement and any amendments thereto, a copy thereof.
9.
Remedies . This Amendment shall
constitute a Loan Document. The breach by any Credit
Party of any representation, warranty, covenant or agreement in
this Amendment (including, without limitation, any failure to
satisfy the requirements of Section 8 hereof) shall
constitute an immediate Event of Default hereunder and under the
other Loan Documents.
10.
Representations and Warranties . To induce Agent
and Lenders to enter into this Amendment, Borrower makes the
following representations and warranties to Agent and
Lenders:
(a) The
execution, delivery and performance of this Amendment and the
performance of the Credit Agreement as amended by this Amendment
(the “ Amended Credit Agreement ”) (i) by each
US Credit Party, are within such US Credit Party’s
organizational power; (ii) by each US Credit Party have been duly
authorized by such US Credit Party by all necessary or proper
organizational and shareholder or membership action; (iii) do not
contravene any provision of any US Credit Party’s charter or
bylaws or equivalent organizational or other constituent documents;
(iv) do not violate any law or regulation, or any order or decree
of any court or Governmental Authority; (v) do not conflict with or
result in the breach or termination of, constitute a default under
or accelerate or permit the acceleration of any performance
required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which any US Credit Party is a
party or by which any US Credit Party or any of its property is
bound; (vi) do not result in the creation or imposition of any Lien
upon any of the property of any US Credit Party other than those in
favor of Agent, on behalf of itself and the Lenders, pursuant to
the Loan Documents; and (vii) do not require the consent or
appro
