EXECUTION COPY
EXHIBIT 10.18
THIRD SECURED TERM LOAN AGREEMENT
DATED AS OF AUGUST 1, 2003
AMONG
MSX INTERNATIONAL, INC.,
MSX INTERNATIONAL LIMITED
AS BORROWERS,
CITICORP MEZZANINE III, L.P.
AS LENDER
AND
THE SUBSIDIARY GUARANTORS SIGNATORIES HERETO
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS............................................................................................. 1
SECTION 1.1. Certain Defined Terms................................................................................ 1
SECTION 1.2. Other Definitions; Rules of Construction............................................................. 26
SECTION 1.3. Accounting Terms and Determinations.................................................................. 26
ARTICLE 2 AMOUNT AND TERMS OF NOTES AND LOAN...................................................................... 26
SECTION 2.1. Loans and Notes...................................................................................... 26
SECTION 2.2. Interest on the Loan; Tax Amounts.................................................................... 26
SECTION 2.3. Prepayments and Payments............................................................................. 27
SECTION 2.4. Closing Fees ........................................................................................ 30
SECTION 2.5. Security and Collateral.............................................................................. 30
ARTICLE 3 CONDITIONS.............................................................................................. 32
SECTION 3.1. Conditions to this Agreement......................................................................... 32
ARTICLE 4 REPRESENTATIONS AND WARRANTIES.......................................................................... 34
SECTION 4.1. Corporate Existence and Power........................................................................ 34
SECTION 4.2. Corporate Authority.................................................................................. 35
SECTION 4.3. Binding Effect....................................................................................... 35
SECTION 4.4. Subsidiaries......................................................................................... 35
SECTION 4.5. Proceedings.......................................................................................... 35
SECTION 4.6. Financial Condition.................................................................................. 35
SECTION 4.7. Consents, Etc........................................................................................ 36
SECTION 4.8. Payment of Taxes; Tax Returns........................................................................ 36
SECTION 4.9. Title to Properties; Applicable Agreements; Real Property............................................ 36
SECTION 4.10. Employee Benefit Plans; ERISA....................................................................... 36
SECTION 4.11. Disclosure.......................................................................................... 37
SECTION 4.12. Environmental and Safety Matters.................................................................... 37
SECTION 4.13. No Default.......................................................................................... 37
SECTION 4.14. Intellectual Property............................................................................... 37
SECTION 4.15. Labor Matters....................................................................................... 38
SECTION 4.16. Solvency............................................................................................ 38
SECTION 4.17. Not an Investment Company........................................................................... 38
SECTION 4.18. Insurance........................................................................................... 39
ARTICLE 5 AFFIRMATIVE COVENANTS................................................................................... 39
SECTION 5.1. SEC Reports.......................................................................................... 39
SECTION 5.2. Real Estate Mortgages and Filings.................................................................... 39
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SECTION 5.3. Designation of Restricted and Unrestricted Subsidiaries.............................................. 40
SECTION 5.4. Compliance Certificate............................................................................... 41
SECTION 5.5. Further Instruments and Acts......................................................................... 41
SECTION 5.6. Payment of Taxes and Other Claims.................................................................... 41
SECTION 5.7. Corporate Existence.................................................................................. 41
SECTION 5.8. Additional Subsidiary Guarantees..................................................................... 41
SECTION 5.9. Change of Control.................................................................................... 42
SECTION 5.10. Excess Cash Flow Offer.............................................................................. 43
ARTICLE 6 NEGATIVE COVENANTS...................................................................................... 44
SECTION 6.1. Limitation on Incurrence of Indebtedness............................................................. 44
SECTION 6.2. Limitation on Liens.................................................................................. 46
SECTION 6.3. Limitation on Sales of Assets and Subsidiary Stock................................................... 46
SECTION 6.4. Limitation on Restricted Payments.................................................................... 48
SECTION 6.5. Limitation on Affiliate Transactions................................................................. 50
SECTION 6.6. Impairment of Security Interests..................................................................... 51
SECTION 6.7. Limitations on Restrictions on Distributions from Restricted Subsidiaries............................ 51
SECTION 6.8. Limitation on Issuance or Sale of Capital Stock of Restricted Subsidiaries........................... 52
SECTION 6.9. Merger and Consolidation............................................................................. 52
SECTION 6.10. Waiver of Stay, Extension and Usury Laws............................................................ 54
SECTION 6.11. Limitation on Capital Expenditures.................................................................. 54
SECTION 6.12. Limitation on Duties in Respect of Collateral; Indemnification...................................... 54
SECTION 6.13. Limitation on Transfer of Accounts Receivable....................................................... 55
ARTICLE 7 DEFAULTS AND REMEDIES................................................................................... 55
SECTION 7.1. Events of Default.................................................................................... 55
SECTION 7.2. Acceleration......................................................................................... 57
SECTION 7.3. Other Remedies....................................................................................... 57
SECTION 7.4. Proceeds............................................................................................. 57
ARTICLE 8 GUARANTEES.............................................................................................. 58
SECTION 8.1. Guarantees........................................................................................... 58
SECTION 8.2. Limitation on Liability.............................................................................. 59
SECTION 8.3. Successors and Assigns............................................................................... 60
SECTION 8.4. No Waiver............................................................................................ 60
SECTION 8.5. Modification......................................................................................... 60
SECTION 8.6. Release of Subsidiary Guarantor...................................................................... 60
SECTION 8.7. Execution of Supplement Agreement for Future Subsidiary Guarantors................................... 60
SECTION 8.8. Waiver of Stay, Extension or Usury laws.............................................................. 61
ARTICLE 9 MISCELLANEOUS........................................................................................... 61
SECTION 9.1. Participations in Loans and Notes.................................................................... 61
SECTION 9.2. Expenses 62
SECTION 9.3. Indemnity............................................................................................ 62
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SECTION 9.4. Amendments and Waivers............................................................................... 63
SECTION 9.5. Independence of Covenants............................................................................ 63
SECTION 9.6. Notices, Demands and Communications.................................................................. 63
SECTION 9.7. Survival of Warranties and Certain Agreements........................................................ 65
SECTION 9.8. Failure or Indulgence Not Waiver; Remedies Cumulative................................................ 65
SECTION 9.9. Severability......................................................................................... 65
SECTION 9.10. Headings............................................................................................ 65
SECTION 9.11. Applicable Law...................................................................................... 65
SECTION 9.12. Successors and Assigns; Subsequent Holders of Notes................................................. 65
SECTION 9.13. Consent to Jurisdiction and Service of Process...................................................... 65
SECTION 9.14. Waiver of Jury Trial................................................................................ 66
SECTION 9.15. Counterparts; Effectiveness......................................................................... 66
SECTION 9.16. Entirety............................................................................................ 66
SECTION 9.17. Confidentiality..................................................................................... 66
SECTION 9.18. Conversion of Currency.............................................................................. 67
SECTION 9.19. Acknowledgments..................................................................................... 67
Schedules
Schedule 4.4 - Subsidiaries
Schedule 4.8 - Taxes
Schedule 4.14 - Labor Matters
Exhibits
Exhibit A-1 - Form of Company Note
Exhibit A-2 - Form of MSXI Limited Note
Exhibit B Form of Note Guarantee
Exhibit C Form of Security Agreement
Exhibit D - Form of U.K. Deed
Exhibit E Form of Supplement Agreement
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THIRD SECURED TERM LOAN AGREEMENT (the "Agreement"), dated as
of August 1, 2003, by and among MSX INTERNATIONAL, INC., a Delaware corporation
(the "Company"), MSX INTERNATIONAL LIMITED, a company incorporated under the
laws of England and Wales ("MSXI Limited" and together with the Company, each a
"Borrower" and collectively the "Borrowers"), CITICORP MEZZANINE III, L.P., a
Delaware limited partnership (the "Lender") and the SUBSIDIARY GUARANTORS
signatories hereto.
WHEREAS, the Company desires to refinance certain debt
obligations by entering into (i) that certain Amended and Restated Credit
Agreement, dated the date hereof, among the Company, each of the borrowing
subsidiaries of the Company party thereto from time to time, the lenders party
thereto from time to time (the "Senior Lenders") and Bank One, N.A., a national
banking association, as agent for the Senior Lenders (as amended or modified
from time to time, the "Restated Senior Credit Agreement") and (ii) that certain
Senior Secured Indenture, dated the date hereof, among the Company, and MSXI
Limited as issuers, the subsidiary guarantors named therein and BNY Midwest
Trust Company, as trustee (as amended or modified from time to time, the "Senior
Secured Note Indenture") and (iii) the Fourth Lien Loan Agreement (as defined
herein).
WHEREAS, in conjunction with entering into the Restated Senior
Credit Agreement, the Senior Secured Note Indenture and the Fourth Lien Loan
Agreement, the Company and MSXI Limited have requested that the Lender lend to
the Company $21,500,000 and to MSXI Limited $3,500,000 in order to assist in its
refinance of certain debt obligations, and the Lender is willing to agree to
lend such amounts on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the Borrower and the
Lender hereby agree that, effective as of the Effective Date, they shall agree
as follows:
ARTICLE 1 DEFINITIONS
SECTION 1.1. Certain Defined Terms.
The following terms used in this Agreement shall have the
following meanings:
"Acquired Indebtedness" means Indebtedness of a Person or any
of its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of the Company or at the time it merges or consolidates with or into
the Company or any of its Restricted Subsidiaries or assumed in connection with
the acquisition of assets from such Person and in each case not incurred by such
Person in connection with, or in anticipation or contemplation of, such Person
becoming a Restricted Subsidiary of the Company or such acquisition, merger or
consolidation. Acquired Indebtedness shall be deemed to be Incurred on the date
of the related acquisition of assets from a Person on the date the acquired
Person becomes a Restricted Subsidiary.
"Act" means the Securities Act of 1933, as amended.
"Additional Tax Amounts" has the meaning assigned that term in
Section 2.2(e) of this Agreement.
"Additional Assets" means (i) any property or assets (other
than Indebtedness and Capital Stock) in a Related Business, including
improvements to existing assets, used by the Company or a Restricted Subsidiary
in a Related Business; (ii) the Capital Stock of a Person that becomes a
Restricted Subsidiary as a result of the acquisition of such Capital Stock by
the Company or another Restricted
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Subsidiary; provided, however, that any such Restricted Subsidiary is primarily
engaged in a Related Business; (iii) Capital Stock constituting an additional
equity interest in any Person that at such time is a Restricted Subsidiary that
is not a Wholly-Owned Subsidiary; or (iv) the costs of improving or developing
any property owned by the Company or a Restricted Subsidiary that is used in a
Related Business.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Section 6.4 (Limitation on Restricted Payments), Section 6.5
(Limitation on Affiliate Transactions) and Section 6.3 (Limitations on Sales of
Assets and Subsidiary Stock) only, "Affiliate" shall also mean any beneficial
owner of Capital Stock representing 10% or more of the total voting power of the
Voting Stock (on a fully diluted basis) of the Company or of rights or warrants
to purchase such Capital Stock (whether or not currently exercisable) and any
Person who would be an Affiliate of any such beneficial owner pursuant to the
first sentence hereof.
"Affiliate Transaction" has the meaning assigned to that term
in Section 6.5(a) of this Agreement.
"Agent" means Bank One, NA, as agent under the Senior Credit
Facility, and any replacement or substitute agent under the Senior Credit
Facility.
"Applicable Agreements" mean any bond, debenture, note, or
other evidence of indebtedness, indenture, mortgage, deed of trust, lease, or
any other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them or their respective property is
bound.
"Applicable Indebtedness" means:
(1) in respect of any asset that is the subject of an Asset
Disposition at a time when such asset is included in the Collateral,
Pari Passu Indebtedness or Indebtedness of a Subsidiary of the Company
that, in each case, is secured at such time by Collateral under a Lien
that is senior or prior to the Lien securing the Notes pursuant to the
Security Documents; or
(2) in respect of any other asset, any Pari Passu Indebtedness
or any unsubordinated Indebtedness of any Guarantor, and in the case of
an Asset Disposition by a Subsidiary that is not a Guarantor,
Indebtedness of such Subsidiary, or any other obligations under the
Senior Credit Facility.
"Applicable Pari Passu Indebtedness" means:
(1) in respect of any asset that is the subject of an Asset
Disposition at a time when such asset is included in the Collateral,
Pari Passu Indebtedness that is secured at such time by all or any part
of the Collateral; or
(2) in respect of any other asset, any Pari Passu
Indebtedness.
"Asset Disposition" means any sale, lease, transfer,
Sale/Leaseback Transaction or other disposition (or series of related sales,
leases, transfers or dispositions) by the Company or any Restricted Subsidiary,
including any disposition by means of a merger, consolidation or similar
transaction (each
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referred to for the purposes of this definition as a "disposition"), of
(i) any shares of Capital Stock of a Restricted Subsidiary
(other than directors' qualifying shares and shares owned by foreign
shareholders to the extent required by applicable local laws in foreign
countries),
(ii) all or substantially all the assets of any division,
business segment or comparable line of business of the Company or any
Restricted Subsidiary or
(iii) any other assets of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company or
such Restricted Subsidiary.
Notwithstanding the foregoing, the term "Asset Disposition" shall not
include: (x) a disposition by a Restricted Subsidiary to the Company or by the
Company or a Restricted Subsidiary to a Guarantor, (y) for purposes of Section
6.3 (Limitation on Sales of Assets and Subsidiary Stock), a disposition that
constitutes a Permitted Investment or a Restricted Payment permitted by the
covenant described under Section 6.4 (Limitation on Restricted Payments), and
(z) any single disposition or series of related dispositions of assets having a
fair market value of less than $1,000,000.
"Assignees" has the meaning assigned to that term in Section
9.1(b) of this Agreement.
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Senior Secured Notes, compounded annually) of the
total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with
respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by (ii) the sum of all
such payments.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
amended, and codified 11 U.S.C. Sections 101 et seq.
"Bankruptcy Law" has the meaning assigned to that term in
Section 7.1 of this Agreement.
"Board of Directors" means the Board of Directors of the
Company or MSXI Limited, as applicable, or any committee thereof duly authorized
to act on behalf of such Board of Directors.
"Borrowers" has the meaning assigned to that term in the
introduction to this Agreement and shall include any successors and permitted
assignees of the Loans or Notes in accordance with Section 9.1 hereof.
"Business Day" means each day that is not a Legal Holiday.
"Capital Expenditures" means for any period all direct or
indirect (by way of acquisition of securities of a Person or the expenditure of
cash or the transfer of property or the incurrence of
3
Indebtedness) expenditures in respect of the purchase or other acquisition of
fixed or capital assets determined in conformity with GAAP.
"Capital Lease Obligations" means an obligation that is
required to be classified and accounted for as a capital lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity.
"Cash" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Cash Equivalents" means (i) cash in Dollars or, so long as
not held for speculative purposes, any Eligible Currency, (ii) securities issued
or directly and fully guaranteed or insured by the United States of America,
France, Germany, the U.K., any other member state of the European Union,
Australia or any other sovereign nation acceptable to the Lender or any agency
or instrumentality thereof having maturities of not more than six months from
the date of acquisition, (iii) marketable direct obligations issued by any state
of the United States of America or any political subdivision of any such state
or any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor's Corporation ("S&P") or
▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"), (iv) certificates of deposit and
eurodollar time deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case with any Lender or with any domestic or
foreign commercial bank or U.S. branch of a foreign bank licensed under the laws
of the United States or a State thereof having capital and surplus in excess of
$250,000,000 and a ▇▇▇▇▇ Bank Watch Rating of "B" or better or the equivalent
rating from comparable foreign rating agencies, and certificates of deposit and
time deposits with maturities of one month or less from the date of acquisition
and overnight bank deposits with reputable foreign commercial banks, (v)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii), (iii) and (iv) above entered
into with any financial institution meeting the qualifications specified in
clause (iv) above, (vi) commercial paper having one of the two highest ratings
obtained from Moody's or S&P or the equivalent ratings from comparable foreign
rating agencies and in each case maturing within six months after the date of
acquisition and (vii) investments in money market funds which invest
substantially all their assets in securities of the type described in clauses
(i) through (vi) above.
"Cash Management Obligations" means, with respect to any
Person, all obligations, whether absolute or contingent, of such Person in
respect of overdrafts, returned items and other liabilities owed to any other
Person that arises from treasury, depository, foreign exchange (including
without limitation foreign currency hedging obligations) or cash management
services, including without limitation in connection with any automated clearing
house transfers of funds, wire transfer services, controlled disbursement
accounts or similar transactions, and all obligations in connection with any
commercial credit cards or stored value cards..
"Change of Control" means the occurrence of one or more of the
following events:
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(1) prior to the first public offering of common stock of
the Company or MSXI Limited, as applicable, the Permitted Holders cease to be
entitled (by "beneficial ownership" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act) of Voting Stock, contract or otherwise) to elect or cause the
election of directors having, a majority in the aggregate of the total voting
power of the Board of Directors, whether as a result of issuance of securities
of the Company or MSXI Limited, as applicable, any merger, consolidation,
liquidation or dissolution of the Company or MSXI Limited, as applicable, any
direct or indirect transfer of securities by the Permitted Holders or otherwise
(for purposes of this clause (i) and clause (ii) below, the Permitted Holders
shall be deemed to beneficially own any Voting Stock of any entity (the
"specified entity") held by any other entity (the "parent entity") so long as
the Permitted Holders beneficially own (as so defined), directly or indirectly,
in the aggregate a majority of the voting power of the Voting Stock of such
parent entity);
(2) after the first public offering of common stock of
the Company or MSXI Limited, as applicable, after the Effective Date, any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act),
other than one or more Permitted Holders, is or becomes the beneficial owner (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for
purposes of this clause (2) such person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 35% of the total voting power of the Voting
Stock of the Company or MSXI Limited, as applicable, and one or more Permitted
Holders beneficially own (as defined in clause (1) above), directly or
indirectly, in the aggregate a lesser percentage of the total voting power of
the Voting Stock of the Company or MSXI Limited, as applicable, than such other
Person and do not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the Board of
Directors of the Company or MSXI Limited, as applicable;
(3) during any two year period, individuals who on the
Effective Date constituted the Board of Directors of the Company or MSXI
Limited, as applicable, (together with any new directors whose election by such
shareholders of the Company or MSXI Limited, as applicable, or whose nomination
for election by the Board of Directors of the Company or MSXI Limited, as
applicable, was approved by a vote of a majority of the directors of the Company
or MSXI Limited, as applicable, then still in office who were either directors
on the Effective Date or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company or MSXI Limited, as applicable, then in
office;
(4) the approval by the holders of Capital Stock of the
Company or MSXI Limited, as applicable, of a plan for the liquidation or
dissolution of the Company or MSXI Limited, as applicable; or
(5) the merger or consolidation of the Company or MSXI
Limited, as applicable, with or into another Person or the merger of another
Person with or into the Company or MSXI Limited, as applicable, or the sale of
all or substantially all the assets of the Company or MSXI Limited, as
applicable, (determined on a consolidated basis) to another Person (other than,
in all such cases, a Person that is controlled by one or more of the Permitted
Holders), other than a transaction following which (A) in the case of a merger
or consolidation transaction, holders of securities that represented 100% of the
Voting Stock of the Company or MSXI Limited, as applicable, immediately prior to
such transaction (or other securities into which such securities are converted
as part of such merger or consolidation transaction) own directly or indirectly
at least a majority of the voting power of the Voting Stock of the surviving
Person in such merger or consolidation transaction immediately after such
transaction or have the right or ability by voting power, contract or otherwise
to elect or designate for election a majority of the Board of Directors of the
Company or MSXI Limited, as applicable, and (B) in the case of a sale of
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assets transaction, each transferee becomes an obligor in respect of the Notes
and a Subsidiary of the transferor of such assets.
A Change of Control of MSXI Limited does not constitute a
Change of Control of the Company.
"Charged Assets" shall have the meaning set forth in the U.K.
Deed.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" shall mean collateral as such term is defined in
the Security Agreement, all property mortgaged under the Mortgages acquired
after the Effective Date, the Charged Assets and any other property, whether now
owned or hereafter acquired, upon which a Lien securing the Obligations under
this Agreement and the Notes is granted or purported to be granted under any
Loan Document.
"Collateral Agent" means the collateral agent under the
Security Agreement and each Mortgage, which shall initially be the Lender.
"Commitments" has the meaning assigned to such term in the
Senior Credit Facility.
"Company" means MSX International, Inc., a Delaware
corporation, together with its permitted successors and assigns.
"Company Guarantee" means the Guarantee of the Company of MSXI
Limited's obligations with respect to the MSXI Limited Notes.
"Company Notes" means one or more of the notes of the Company
issued pursuant to the terms and conditions of Sections 2.1 or 9.1 hereof,
substantially in the form attached to this Agreement as Exhibit A-1.
"Comparable Treasury Issue" has the meaning assigned to that
term in Section 2.3(a)(i)(B) of this Agreement.
"Comparable Treasury Price" has the meaning assigned to that
term in Section 2.3(a)(i)(C) of this Agreement.
"Consolidated Coverage Ratio" as of any date of determination
means the ratio of: (i) the aggregate amount of EBITDA for the period of the
most recent four consecutive fiscal quarters ending at least 45 days (or, if
less, the number of days after the end of such fiscal quarter as the
consolidated financial statements of the Company shall be available) prior to
the date of such determination to (ii) Consolidated Interest Expense for such
four fiscal quarters; provided, however, that:
(1) if the Company or any Restricted Subsidiary has
Incurred any Indebtedness since the beginning of such period that remains
outstanding on such date of determination or if the transaction giving rise to
the need to calculate the Consolidated Coverage Ratio is an Incurrence of
Indebtedness, or both, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of such
period and the discharge of any other Indebtedness repaid, repurchased, defeased
or otherwise discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first day of such period (except that, in the case
of Indebtedness used to finance working capital needs incurred
6
under a revolving credit or similar arrangement, the amount thereof shall be
deemed to be the average daily balance of such Indebtedness during such
four-fiscal-quarter period);
(2) if since the beginning of such period the Company or
any Restricted Subsidiary shall have made any Asset Disposition, the EBITDA for
such period shall be reduced by an amount equal to the EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset
Disposition for such period, or increased by an amount equal to the EBITDA (if
negative) directly attributable thereto for such period, and Consolidated
Interest Expense for such period shall be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness of the
Company or any Restricted Subsidiary repaid, repurchased, defeased, assumed by a
third person (to the extent the Company and its Restricted Subsidiaries are no
longer liable for such Indebtedness) or otherwise discharged with respect to the
Company and its continuing Restricted Subsidiaries in connection with such Asset
Disposition for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary to the extent the
Company and its continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale);
(3) if since the beginning of such period the Company
shall have consummated a Public Equity Offering following which there is a
Public Market, Consolidated Interest Expense for such period shall be reduced by
an amount equal to the Consolidated Interest Expense directly attributable to
any Indebtedness of the Company or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to the Company and
its Restricted Subsidiaries in connection with such Public Equity Offering for
such period;
(4) if since the beginning of such period the Company or
any Restricted Subsidiary (by merger or otherwise) shall have made an Investment
in any Restricted Subsidiary (or any Person which becomes a Restricted
Subsidiary) or an acquisition of assets, which acquisition constitutes all or
substantially all of an operating unit of a business, including any such
Investment or acquisition occurring in connection with a transaction requiring a
calculation to be made hereunder, EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving pro forma effect thereto (including
the Incurrence of any Indebtedness) as if such Investment or acquisition
occurred on the first day of such period; and
(5) if since the beginning of such period any Person
(that subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period) shall
have made any Asset Disposition, any Investment or acquisition of assets that
would have required an adjustment pursuant to clause (3) or (4) above if made by
the Company or a Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving
pro forma effect thereto as if such Asset Disposition, Investment or acquisition
occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is
to be given to an acquisition of assets, the amount of income or earnings
relating thereto and the amount of Consolidated Interest Expense associated with
any Indebtedness Incurred in connection therewith, the pro forma calculations
shall be determined in good faith by a responsible financial or accounting
Officer of the Company in accordance with Article 11 of Regulation S-X. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest on such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Agreement applicable to such
Indebtedness if such Interest Rate Agreement has a remaining term in excess of
12 months).
7
"Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its consolidated Restricted
Subsidiaries, plus, to the extent not included in such total interest expense,
and to the extent incurred by the Company or its Restricted Subsidiaries, (i)
interest expense attributable to Capital Lease Obligations, (ii) amortization of
debt discount, (iii) capitalized interest, (iv) non-cash interest expenses, (v)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (vi) net costs associated with
Hedging Obligations (including amortization of fees), and (vii) interest
actually paid on any Indebtedness of any other Person that is Guaranteed by the
Company or any Restricted Subsidiary.
"Consolidated Net Income" means, for any period, the net
income of the Company and its consolidated Subsidiaries; provided, however, that
there shall not be included in such Consolidated Net Income:
(i) any net income (or loss) of any Person if such Person
is not a Restricted Subsidiary, except that subject to the exclusion contained
in clause (iv) below, the Company's equity in the net income of any such Person
for such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Person during such period
to the Company or a Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution paid to a Restricted
Subsidiary, to the limitations contained in clause (iii) below);
(ii) for purposes of subclause (a)(iii)(A) of Section 6.4
(Limitation on Restricted Payments) only, any net income (or loss) of any Person
acquired by the Company or a Subsidiary in a pooling of interests transaction
for any period prior to the date of such acquisition;
(iii) any net income of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that (A) subject to
the exclusion contained in clause (iv) below, the Company's equity in the net
income of any such Restricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the aggregate amount of cash that could have
been distributed by such Restricted Subsidiary consistent with such restriction
during such period to the Company or another Restricted Subsidiary as a dividend
or other distribution (subject, in the case of a dividend or other distribution
paid to another Restricted Subsidiary, to the limitation contained in this
clause) and (B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such Consolidated
Net Income;
(iv) any gain (or loss) realized upon the sale or other
disposition of any assets of the Company or its consolidated Subsidiaries
(including pursuant to any sale-and-leaseback arrangement) which is not sold or
otherwise disposed of in the ordinary course of business and any gain (or loss)
realized upon the sale or other disposition of any Capital Stock of any Person;
(v) extraordinary gains or losses; and
(vi) the cumulative effect of a change in accounting
principles.
Notwithstanding the foregoing, for the purposes of Section 6.4
(Limitation on Restricted Payments) only, there shall be excluded from
Consolidated Net Income any dividends, repayments of loans or advances or other
transfers of assets from Unrestricted Subsidiaries to the Company or a
Restricted Subsidiary to the extent such dividends, repayments or transfers
increase the amount of Restricted Payments permitted under such Section pursuant
to clause (a)(iii)(D) thereof.
8
"Consolidated Net Worth" means the total of the amounts shown
on the balance sheet of the Company and its consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP, as of the end of the
most recent fiscal quarter of the Company ending at least 45 days prior to the
taking of any action for the purpose of which the determination is being made,
as (i) the par or stated value of all outstanding Capital Stock of the Company
plus (ii) paid-in capital or capital surplus relating to such Capital Stock plus
(iii) any retained earnings or earned surplus less (A) any accumulated deficit
and (B) any amounts attributable to Disqualified Stock.
"Court Square" means Court Square Capital Limited, a Delaware
corporation.
"Currency Agreement" means, with respect to any Person, any
foreign exchange contract, currency swap agreement or other similar agreement to
which such Person is a party or a beneficiary.
"Custodian" has the meaning assigned to that term in Section
7.1 of this Agreement.
"CVC" means Citicorp Venture Capital, Ltd., a New York
corporation.
"CVC Investor" means (i) CVC or any direct or indirect
Subsidiary of CVC, (ii) Citigroup Inc. or any direct or indirect Subsidiary of
Citigroup Inc. or any other Person controlled by Citigroup Inc. and (iii) any
officer, employee or director of CVC so long as such person shall be an
employee, officer or director of CVC or any direct or indirect Wholly-Owned
Subsidiary of CVC.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Designee" has the meaning assigned to that term in Section
5.3(a) of this Agreement.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable) or upon the happening of any
event (i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (ii) is convertible or exchangeable, at the option of
the Holder thereof, for Indebtedness or Disqualified Stock or (iii) is
redeemable at the option of the Holder thereof, in whole or in part, in each
case on or prior to the eleven month anniversary of the Stated Maturity of the
Senior Secured Notes. Disqualified Stock shall not include any Capital Stock
that is not otherwise Disqualified Stock if by its terms the Holders have the
right to require the issuer to repurchase such stock (or such stock is
mandatorily redeemable) upon a Change of Control (or upon an event substantially
similar to a Change of Control).
"Dollar" and "$" means dollars in the lawful currency of the
United States of America.
"Dollar Equivalent" means as of any date, with respect to any
amount in a currency other than Dollars, the sum in Dollars resulting from the
conversion of such amount from such currency into Dollars at the most favorable
spot exchange rate determined by the Lender to be available to it for the
purchase of such currency with Dollars at approximately 11:00 a.m. local time of
any office(s), branch(es), Subsidiary(ies) or Affiliate(s) of the Lender
selected by the Lender and notified to the Company on such date as a
determination of the Dollar Equivalent is made.
"Domestic Restricted Subsidiary" means any Restricted
Subsidiary of the Company other than a Foreign Restricted Subsidiary.
9
"EBITDA" for any period means the sum of Consolidated Net
Income plus, without duplication, the following to the extent deducted in
calculating such Consolidated Net Income: (i) Consolidated Interest Expense,
(ii) income tax expense (including Michigan Single Business Tax expense and the
Imposta Reginole Sulle Attivista Producttive expense in Italy), (iii)
depreciation expense, (iv) amortization expense and (v) all other non-cash items
reducing Consolidated Net Income (other than items that will require cash
payments and for which an accrual or reserve is, or is required by GAAP to be,
made, other than accruals for post-retirement benefits other than pensions),
less all non-cash items increasing Consolidated Net Income, in each case for
such period. Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation and amortization of, a Subsidiary of
the Company shall be added to Consolidated Net Income to compute EBITDA only to
the extent (and in the same proportion) that the net income of such Subsidiary
was included in calculating Consolidated Net Income.
"Effective Date" means August 1, 2003, provided that the
effectiveness of this Agreement is subject to the satisfaction of all of the
conditions set forth in Article 3.
"Eligible Currency" means the euro, Francs, Deutsche Marks,
Pounds Sterling, Italian Lire, Australian Dollars (all as defined in the Senior
Credit Facility) and any other currency (other than Dollars) which is approved
and designated as an Eligible Currency by the Lender, provided that each of the
foregoing currencies is and remains readily available, freely traded, in which
deposits are customarily offered to banks in the London interbank market,
convertible into Dollars in the international interbank market and as to which
the Dollar Equivalent may be readily calculated. If, after the designation of
any currency as an Eligible Currency, currency control or other exchange
regulations are imposed in the country in which such currency is issued with the
result that different types of such currency are introduced, or such country's
currency is, in the determination of the Lender, no longer readily available or
freely traded or as to which, in the determination of the Lender, a Dollar
Equivalent is not readily calculable, then the Lender shall promptly notify the
Company and such country's currency shall no longer be an Eligible Currency
until such time as the Lender agrees to reinstate such country's currency as an
Eligible Currency.
"Environmental Laws" has the meaning assigned to that term in
Section 4.12 of this Agreement.
"ERISA" has the meaning assigned to that term in Section 4.10
of this Agreement.
"ERISA Affiliate" has the meaning assigned to that term in
Section 4.10 of this Agreement.
"Event of Default" has the meaning assigned to that term in
Section 7.1 of this Agreement.
"Excess Cash Flow" means, for any fiscal year, the Company's
Consolidated EBITDA for such year, adjusted as follows: (i) minus the cash
portion of the Company's consolidated interest expense (net of interest income)
and the cash portion of any related financing fees for such year; (ii) minus the
cash portion of all federal, state and foreign income taxes (including Michigan
Single Business Tax expense and the Imposta Reginole Sulle Attivista Producttive
expense in Italy) and franchise taxes paid (without duplication) by the Company
and its Restricted Subsidiaries during such year; (iii) minus all Capital
Expenditures made during such year by the Company and its Restricted
Subsidiaries; and (iv) minus or plus, respectively, any net increase or decrease
in Working Capital for such year.
10
"Excess Cash Flow Offer Amount" has the meaning assigned to
that term in Section 5.10 of this Agreement.
"Excess Proceeds" has the meaning assigned to that term in
Section 6.3(a) of this Agreement.
"Excess Proceeds Offer" has the meaning assigned to that term
in Section 6.3(a) of this Agreement.
"Excess Proceeds Payment" has the meaning assigned to that
term in Section 6.3(a) of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means any notes exchanged for the Senior
Secured Notes pursuant to the Registration Rights Agreement.
"Existing Affiliate Agreements" means the Stockholders'
Agreement, the MSXI Registration Rights Agreement and any other existing
agreement with CVC, the Lender, or any Affiliates of CVC or the Company listed
on Schedule I to the Senior Secured Note Indenture.
"Filing Agent" has the meaning assigned to that term in
Section 3.1(xiii) of this Agreement.
"Filing Statements" has the meaning assigned to that term in
Section 3.1(xiii) of this Agreement.
"Final Offering Circular" means the final offering circular of
the Company, dated July 25, 2003, prepared in connection with the offering of
the Units of Senior Secured Notes.
"Financial Statements" has the meaning assigned to that term
in Section 4.6 of this Agreement.
"Foreign Restricted Subsidiary" means any Restricted
Subsidiary of the Company which is not organized under the laws of the United
States of America or any State thereof or the District of Columbia.
"Foreign Subsidiary" means any Subsidiary not organized under
the laws of the United States of America or any State thereof or the District of
Columbia.
"Fourth Lien Lender" means Court Square and its assigns under
the Fourth Lien Loan Agreement.
"Fourth Lien Loan Agreement" means the fourth secured term
loan, from the Fourth Lien Lender to the Company and MSXI Limited under the
amended and restated fourth second term loan agreement, dated the Effective
Date, and including all related or ancillary documents executed at any time,
including, without limitation, and any instruments, guarantee agreements and
security documents.
"Fourth Lien Notes" means the notes issued by the Company and
MSXI Limited to the Fourth Lien Lender, as amended or modified from time to
time.
11
"GAAP" means generally accepted accounting principles in the
United States of America as then in effect on the date of this Agreement,
including those set forth in (i) the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants, (ii) statements and pronouncements of the Financial Accounting
Standards Board and (iii) such other statements by such other entity as approved
by a significant segment of the accounting profession.
"Governmental Authority" means any federal, state, local or
other governmental authority, governmental or regulatory agency or body, court,
arbitrator or self-regulatory organization, domestic or foreign.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation of such Person
(whether arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to take-or-pay or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Indebtedness
or other obligation of the payment thereof or to protect such obligee against
loss in respect thereof (in whole or in part); provided, however, that the term
"Guarantee" shall not include (x) endorsements for collection or deposit in the
ordinary course of business or (y) guarantees among Restricted Subsidiaries or
guarantees by the Company of Restricted Subsidiaries; provided that the
Indebtedness being guaranteed is permitted to be Incurred. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guaranteed Obligations" has the meaning assigned to that term
in Section 8.1 of this Agreement.
"Guarantors" means the Subsidiary Guarantors and, in
connection with the Guarantee of the MSXI Limited Notes, the Company.
"Hedging Obligations" of any Person mean the obligations of
such Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a
Note, is registered on the Registrar's books, which shall initially be the
Lender.
"Incur" means issue, assume, Guarantee, incur or otherwise
become liable for; provided, however, that any Indebtedness of a Person existing
at the time such Person becomes a Subsidiary (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at
the time it becomes a Subsidiary; provided, further, however, that in the case
of a discount security, neither the accrual of interest nor the accretion of
original issue discount shall be considered an Incurrence of Indebtedness, but
the entire face amount of such security shall be deemed Incurred upon the
issuance of such security. The term "Incurrence" when used as a noun shall have
a correlative meaning.
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication): (i) the principal of and premium (if
any) in respect of (A) indebtedness of such Person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which such Person is responsible or liable; (ii) all Capital
Lease Obligations of such Person and all Attributable Debt in respect of
Sale/Leaseback Transactions entered into by such Person; (iii) all obligations
of such Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations of such Person, all obligations of such Person
under any title retention
12
agreement, and any obligation to pay rent or other payment amounts of such
Person with respect to any Sale/Leaseback Transaction (but excluding trade
accounts payable arising in the ordinary course of business), which purchase
price or obligation is due more than six months after the date of placing such
property in service or taking delivery and title thereto or the completion of
such services (provided that, in the case of obligations of an acquired Person
assumed in connection with an acquisition of such Person, such obligations would
constitute Indebtedness of such Person); (iv) all obligations of such Person for
the reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (i) through
(iii) above) entered into in the ordinary course of business of such Person to
the extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the tenth Business Day
following receipt by such Person of a demand for reimbursement following payment
on the letter of credit); (v) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary of such Person, any Preferred Stock
(but excluding, in each case, any accrued dividends); (vi) all obligations of
the type referred to in clauses (i) through (v) of other Persons and all
dividends of other Persons for the payment of which, in either case, such Person
is responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, including by means of any Guarantee; (vii) all obligations of the
type referred to in clauses (i) through (vi) of other Persons secured by any
Lien on any property or asset of such Person (whether or not such obligation is
assumed by such Person), the amount of such obligation being deemed to be the
lesser of the value of such property or assets or the amount of the obligation
so secured; and (viii) to the extent not otherwise included in this definition,
Hedging Obligations of such Person.
The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations as
described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations as
described above at such date; provided, however, that the amount outstanding at
any time of any Indebtedness issued with original issue discount shall be deemed
to be the face amount of such Indebtedness less the remaining unamortized
portion of the original issue discount of such Indebtedness at such time as
determined in conformity with GAAP.
"Indemnified Liabilities" has the meaning assigned to that
term in Section 9.3 of this Agreement.
"Indemnitees" has the meaning assigned to that term in Section
9.3 of this Agreement.
"Indemnitors" has the meaning assigned to that term in Section
9.3 of this Agreement.
"Intellectual Property" has the meaning assigned to that term
in Section 4.14 of this Agreement.
"Intercreditor Agreement" means the Intercreditor Agreement,
dated as of the date hereof, among the Fourth Lien Lender, the Lender, the
Agent, the Trustee, the Senior Secured Collateral Agent, the Company, MSXI
Limited and the Subsidiary Guarantors, (as applicable) as amended, supplemented
or modified from time to time.
"Interest Payment Date" means each February 1 and August 1
occurring after the Effective Date and commencing on February 1, 2004.
13
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect the Company or any Restricted Subsidiary against
fluctuations in interest rates.
"Investment" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course of
business that are recorded as accounts receivable on the balance sheet of such
Person) or other extensions of credit (including by way of Guarantee or similar
arrangement) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others), or any purchase or acquisition of Capital Stock, Indebtedness
or other similar instruments issued by such Person. For purposes of the
definition of "Unrestricted Subsidiary," the definition of "Restricted Payment"
and Section 6.4 (Limitation on Restricted Payments), (i) "Investment" shall
include the portion (proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the net assets of any Subsidiary of the
Company at the time that such Subsidiary is designated an Unrestricted
Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Company shall be deemed to continue to have a
permanent "Investment" in an Unrestricted Subsidiary equal to an amount (if
positive) equal to (x) the Company's "Investment" in such Subsidiary at the time
of such redesignation less (y) the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the net assets
of such Subsidiary at the time of such redesignation; and (ii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer, in each case as determined in good
faith by the Board of Directors of the Company.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions are not required to be open in the State of New York or the
State of Illinois.
"Lender" has the meaning assigned to that term in the
introduction to this Agreement and shall include any assignees of the Loans or
Notes pursuant to the terms and conditions of Section 9.1 hereof.
"Lender Obligations" means all "Obligations" as that term is
defined in the Senior Credit Facility.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien, hypothecation, standard security, assignment by way of
security or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Loan" means the loans made by the Lender to the Company and
to MSXI Limited pursuant to Section 2.1 hereof.
"Loan Documents" means this Agreement, the Notes, the Warrant,
the Warrant Agreement, the Security Documents, the Intercreditor Agreement and
any other agreement, instrument or document executed in connection with any of
the foregoing at any time, each as amended, supplemented or modified from time
to time.
"Management Investors" means each of the officers, employees
and directors of the Company who own Voting Stock in the Company on the
Effective Date, in each case so long as such person shall remain an officer,
employee or director of the Company.
"Material Adverse Change" has the meaning assigned to that
term in Section 4.6 to this Agreement.
14
"Material Adverse Effect" means a material adverse effect on
(i) the properties, business, prospects, operations, earnings, assets,
liabilities or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, (ii) the ability of the Company to perform its
obligations in all material respects under any Loan Document or (iii) the
validity of any of the Loan Documents or the consummation of any of the
transactions contemplated therein.
"Maturity Date" means the earlier of (i) October 15, 2007 and
(ii) the earlier of (x) six months after the latest stated maturity under the
Senior Credit Facility or (y) the date the loans and advances under the Senior
Credit Facility, or the Senior Secured Notes under the Senior Secured Note
Indenture, become due and payable by acceleration or otherwise or are paid in
full.
"Mortgages" means the mortgages, deeds of trust, deeds to
secure Indebtedness or other similar documents creating Liens in favor of the
Lender upon the owned real property constituting Collateral of the Company or
any of its Domestic Restricted Subsidiaries from time to time.
"MSXI Limited" means MSX International Limited, a company
incorporated under the laws of England and Wales, together with its permitted
successors and assigns.
"MSXI Limited Notes" means one or more of the notes of MSXI
Limited issued pursuant to the terms and conditions of Sections 2.1 or 9.1
hereof, substantially in the form attached to this Agreement as Exhibit A-2.
"MSXI Registration Rights Agreement" means the amended and
restated registration rights agreement dated November 28, 2000 by and among the
Company, CVC and certain CVC Investors and executive officers and directors of
the Company, as amended by Amendment No. 1 dated as of August 1st, 2003, and as
amended from time to time.
"Net Available Cash" from an Asset Disposition (or, for
purposes of Article II hereof, any other sale or disposition of assets) means
cash payments received by the Company or any of its Subsidiaries therefrom
(including any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise, but only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations relating
to such properties or assets or received in any other non-cash form) in each
case net of
(i) all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP, as a consequence of such Asset Disposition (or, for
purposes of Article II hereof, any other sale or disposition of assets),
(ii) all payments made on any Indebtedness which is
secured by any assets subject to such Asset Disposition (or, for purposes of
Article II hereof, any other sale or disposition of assets), in accordance with
the terms of any Lien upon or other security agreement of any kind with respect
to such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of the
proceeds from such Asset Disposition,
(iii) all distributions and other payments required to be
made to minority interest holders in Subsidiaries or joint ventures as a result
of such Asset Disposition (or, for purposes of Article II hereof, any other sale
or disposition of assets) and
15
(iv) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any liabilities associated
with the property or other assets disposed in such Asset Disposition (or, for
purposes of Article II hereof, any other sale or disposition of assets) and
retained by the Company or any Restricted Subsidiary after such Asset
Disposition, including without limitation liabilities under any indemnification
obligations associated with such Asset Disposition.
"Net Cash Proceeds" means with respect to any issuance or sale
of Capital Stock or debt securities or instruments or the incurrence of loans,
means the cash proceeds of such issuance, sale or incurrence net of attorneys'
fees, accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees and expenses actually
incurred in connection with such issuance, sale or incurrence and net of taxes
paid or payable as a result thereof.
"Note Guarantees" means the Subsidiary Guarantees and the
Company Guarantee.
"Notes" mean the Company Notes and the MSXI Limited Notes.
"Notice of Default" has the meaning assigned to that term in
Section 7.1 of this Agreement.
"Obligations" means all present and future obligations for
principal, premium, interest (including, without limitation, any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law), penalties, fees,
indemnifications, reimbursements (including, without limitation, all
reimbursement and other obligation pursuant to any letters of credit, bankers
acceptances or similar instruments or documents), damages and other liabilities
payable under the documentation at any time governing any Indebtedness.
"Offering" has the meaning assigned to that term in the Final
Offering Circular.
"Officer" means the Chief Executive Officer, the President,
the Chief Financial Officer or any Vice President of the Company, MSXI Limited,
as applicable, or any director in the case of MSXI Limited.
"Officers' Certificate" means a certificate signed by two
Officers of the Company or MSXI Limited, as applicable, at least one of whom
shall be the principal financial officer of the Company, and delivered to the
Lender.
"Pari Passu Indebtedness" means any unsubordinated
Indebtedness of the Company (other than any Indebtedness owed to any Subsidiary
of the Company).
"Permitted Foreign Transaction" means a transaction in which
one or more Foreign Subsidiaries acquire Capital Stock or Indebtedness of a
Person in connection with any sale, lease, transfer, contribution or other
disposition, including any disposition by merger, consolidation or similar
transaction (each referred to for the purposes of this definition as a
"disposition"), of (i) any shares of Capital Stock of a Foreign Subsidiary or a
group of Foreign Subsidiaries, or (ii) all or substantially all of the assets of
any division, business segment or comparable line of business of any Foreign
Subsidiary or group of Foreign Subsidiaries; provided that EBITDA for the period
of the most recent four consecutive fiscal quarters ending at least 45 days
prior to the date of the disposition (treated as a single accounting period),
after giving pro forma effect thereto as if such disposition occurred on the
first day of such period, is greater than EBITDA for the same period without
giving pro forma effect to such disposition.
16
"Permitted Holders" means the CVC Investors, the Management
Investors and their respective Permitted Transferees, and in addition, in the
case of MSXI Limited, the Company or any of its Subsidiaries; provided, however,
that any Management Investor and any CVC Investor and any Permitted Transferee
of a Management Investor or CVC Investor (other than CVC or Citigroup Inc. or
any direct or indirect Subsidiary of CVC or Citigroup Inc. or any other Person
controlled by CVC or Citigroup Inc.) shall not be a "Permitted Holder" if such
Person is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of Voting Stock that represents at least
30% of the aggregate voting power of all classes of the Voting Stock of the
Company, voting together as a single class (without giving effect to the
attribution of beneficial ownership as a result of any stockholders' agreement
as in effect on the Effective Date, and any amendment to such agreement that
does not materially change the allocation of voting power provided in such
agreement).
"Permitted Investment" means an Investment in: (i) the Company
or, to the extent used to make any redemption, repurchase or other retirement
for value or payment on the U.K. Senior Secured Notes, in MSXI Limited; (ii) any
Person that is or will become immediately after such Investment a Guarantor or
that will merge or consolidate with or into the Company or a Guarantor, or
transfers or conveys all or substantially all of its assets to the Company or a
Guarantor; provided, however, that the primary business of such Person is a
Related Business; (iii) any Foreign Restricted Subsidiary of the Company by any
other Foreign Restricted Subsidiary of the Company; (iv) any Foreign Restricted
Subsidiary of the Company by the Company or any Domestic Restricted Subsidiary
of the Company in an aggregate amount not to exceed (x) $2.0 million in any
fiscal year and (y) the aggregate amount of Investments permitted by this clause
(iv) and not used by the Company in the immediately preceding fiscal year (after
giving effect to any amounts permitted pursuant to this clause (y) in the
immediately preceding year); (v) Temporary Cash Investments; (vi) receivables
owing to the Company or any Restricted Subsidiary if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; provided, however, that such trade terms may include such
concessionary trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances; (vii) payroll, travel and similar advances
to cover matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the ordinary
course of business; (viii) loans or advances to employees of the Company or a
Restricted Subsidiary in an aggregate amount not to exceed $1.5 million; (ix)
stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments; (x) Persons received in connection
with a Permitted Foreign Transaction; (xi) any Person to the extent such
Investment represents the non-cash portion of the consideration received for an
Asset Disposition as permitted pursuant to Section 6.3 (Limitation on Sales of
Assets and Subsidiary Stock); and (xii) additional Investments not to exceed
$5.0 million at any time outstanding.
"Permitted Liens" means:
(1) Liens for taxes, assessments or governmental charges
or claims either (a) not delinquent or (b) contested in good faith by
appropriate proceedings and as to which the Company or its Restricted
Subsidiaries shall have set aside on its books such reserves as may be required
pursuant to GAAP;
(2) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law or pursuant to customary reservations or retentions of title
incurred in the ordinary course of business for sums not yet delinquent or being
contested in good faith, if such reserve or other appropriate provision, if any,
as shall be required by GAAP shall have been made in respect thereof;
17
(3) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security, including any Lien securing
letters of credit issued in the ordinary course of business consistent with past
practice in connection therewith, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(4) judgment Liens not giving rise to an Event of Default
so long as such Lien is adequately bonded and any appropriate legal proceedings
which may have been duly initiated for the review of such judgment shall not
have been finally terminated or the period within which such proceedings may be
initiated shall not have expired;
(5) easements, rights-of-way, zoning restrictions and
other similar charges or encumbrances in respect of real property not
interfering in any material respect with the ordinary conduct of the business of
the Company or any of its Restricted Subsidiaries;
(6) any interest or title of a lessor under any
Capitalized Lease Obligation permitted pursuant to clause (b)(8) of Section 6.1
(Limitation on Incurrence of Indebtedness); provided that such Liens do not
extend to any property or assets which is not leased property subject to such
Capitalized Lease Obligation;
(7) Liens securing Capitalized Lease Obligations and
Purchase Money Indebtedness permitted pursuant to clause (b)(8) of Section 6.1
(Limitation on Incurrence of Indebtedness); provided, however, that in the case
of Purchase Money Indebtedness (a) the Indebtedness shall not exceed the cost of
the real property acquired, together with the cost of the construction thereof
and improvements thereto, and shall not be secured by any property or assets of
the Company or any Restricted Subsidiary of the Company other than such property
and improvements thereto so acquired or constructed and (b) the Lien securing
such Indebtedness shall be created within 180 days of such acquisition or
construction or, in the case of a refinancing of any Purchase Money
Indebtedness, within 180 days of such refinancing;
(8) Liens upon specific items of inventory or other goods
and proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other goods;
(9) Liens securing indebtedness permitted under clause
(b)(9) of Section 6.1 (Limitation on Incurrence of Indebtedness);
(10) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual, or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset and
set-off;
(11) Liens securing Hedging Obligations permitted pursuant
to clause (b)(7) of Section 6.1 (Limitation on Incurrence of Indebtedness);
(12) Liens securing Acquired Indebtedness incurred in
accordance with Section 6.1 (Limitation on Incurrence of Indebtedness); provided
that:
(a) such Liens secured such Acquired Indebtedness at the
time of and prior to the incurrence of such Acquired Indebtedness by the Company
or a Restricted Subsidiary of the Company and were not granted in connection
with, or in anticipation of, the incurrence of such Acquired Indebtedness by the
Company or a Restricted Subsidiary of the Company; and
18
(b) such Liens do not extend to or cover any property or
assets of the Company or of any of its Restricted Subsidiaries other than the
property or assets that secured the Acquired Indebtedness prior to the time such
Indebtedness became Acquired Indebtedness of the Company or a Restricted
Subsidiary of the Company and are no more favorable to the lienholders than
those securing the Acquired Indebtedness prior to the incurrence of such
Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company;
(13) Liens existing as of the Effective Date and securing
Indebtedness permitted to be outstanding under clause (b)(3) of Section 6.1
(Limitation on Incurrence of Indebtedness) to the extent and in the manner such
Liens are in effect on the Effective Date;
(14) Liens securing the Notes, all monetary obligations
under this Agreement and the Note Guarantees;
(15) Liens securing Indebtedness under the Senior Credit
Facility to the extent such Indebtedness is permitted under clause (b)(1) of
Section 6.1 (Limitation on Incurrence of Indebtedness);
(16) Liens of the Company or a Wholly-Owned Subsidiary of
the Company on assets of any Restricted Subsidiary of the Company;
(17) Liens securing Refinancing Indebtedness which is
incurred to Refinance any Indebtedness which has been secured by a Lien
permitted under this paragraph and which has been incurred in accordance with
Section 6.1 (Limitation on Incurrence of Indebtedness); provided, however, that
such Liens: (i) are no less favorable to the holders of Senior Secured Notes and
are not more favorable to the lienholders with respect to such Liens than the
Liens in respect of the Indebtedness being Refinanced; and (ii) do not extend to
or cover any property or assets of the Company or any of its Restricted
Subsidiaries not securing the Indebtedness so Refinanced;
(18) Liens in favor of custom and revenue authorities;
(19) Liens securing Cash Management Obligations;
(20) Liens securing Indebtedness permitted under clause
(b)(13) of Section 6.1 (Limitation on Incurrence of Indebtedness);
(21) Liens securing Indebtedness of Foreign Restricted
Subsidiaries to the extent such Indebtedness is permitted under clause (b)(12)
of Section 6.1 (Limitation on Incurrence of Indebtedness) (provided, however,
that no asset of the Company or any Domestic Restricted Subsidiary shall be
subject to any such Lien); and
(22) Liens securing Indebtedness under the Senior Secured
Note Indenture.
"Permitted Securitization Transaction" means any transaction
or series of transactions pursuant to which Company or any of its Subsidiaries
may sell, convey, or otherwise transfer to a Securitization Entity (in the case
of a transfer by Company or any of its Subsidiaries) or any other Person (in
case of a transfer by a Securitization Entity), or may grant a security interest
in, any accounts receivable (whether now existing or arising or acquired in the
future) of Company or any of its Subsidiaries, and any assets related thereto
including, without limitation, all collateral securing such accounts receivable,
all contracts and contract rights and all guarantees or other obligations in
respect to such accounts receivable, proceeds of such accounts receivable and
other assets (including contract rights) which are customarily transferred or in
respect of which security interests are customarily granted in
19
connection with asset securitization transactions involving accounts receivable,
provided (i) the aggregate Indebtedness with respect to all such transactions
shall not exceed the amount permitted under this Agreement and (ii) the terms
and conditions of such transactions are reasonably acceptable to the Lender.
"Permitted Transferee" means (a) with respect to any CVC
Investor who is an employee, officer or director of CVC, the Lender or any
Wholly Owned Subsidiary of CVC or the Lender, any spouse or lineal descendant
(including by adoption) of such CVC Investor so long as such CVC Investor shall
be an employee, officer or director of CVC or the Lender; and (b) with respect
to any Management Investor, any spouse or lineal descendant (including by
adoption) of such Management Investor so long as such Management Investor shall
be an employee, officer or director of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Preferred Stock" as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Preliminary Offering Circular" means the preliminary offering
circular of the Company, dated July 7, 2003, prepared in connection with the
offering of the Senior Secured Notes.
"Premises" has the meaning assigned to that term in Section
5.2 of this Agreement.
"Primary Treasury Dealer" has the meaning assigned to that
term in Section 2.3(a)(i)(E) of this Agreement.
"Proceedings" has the meaning assigned to that term in Section
4.5 of this Agreement.
"Public Equity Offering" means an underwritten primary public
offering of common stock of the Company pursuant to an effective registration
statement under the Securities Act.
"Public Market" means any time after (i) a Public Equity
Offering has been consummated and (ii) at least 10% of the total issued and
outstanding common stock of the Company has been distributed by means of an
effective registration statement under the Securities Act or sales pursuant to
Rule 144 under the Securities Act.
"Purchase Money Indebtedness" mean Indebtedness (i) consisting
of the deferred purchase price of property, conditional sale obligations,
obligations under any title retention agreement, other purchase money
obligations and obligations in respect of industrial revenue bonds or similar
Indebtedness, in each case where the maturity of such Indebtedness does not
exceed the anticipated useful life of the asset being financed, and (ii)
Incurred to finance the acquisition by the Company or a Restricted Subsidiary of
such asset, including additions and improvements; provided, however, that any
Lien arising in connection with any such Indebtedness shall be limited to the
specified asset being financed or, in the case of real property or fixtures,
including additions and improvements, the real property on which such asset is
attached; and provided, further, however, that such Indebtedness is Incurred
within 180 days after such acquisition of such asset by the Company or
Restricted Subsidiary.
"Qualified Finance Subsidiary" means a Subsidiary of the
Company constituting a "finance subsidiary" within the meaning of Rule 3a-5
under the Investment Company Act of 1940, as
20
amended (the "1940 Act"), or an issuer of asset-backed securities within the
meaning of Rule 3a-7 of the 1940 Act or any other vehicle under a similar
exemption, formed for the purpose of engaging in a Qualified TIPS Transaction
and having no assets other than those necessary to consummate the Qualified TIPS
Transaction.
"Qualified TIPS Transaction" means an issuance by a Qualified
Finance Subsidiary of preferred trust securities or similar securities in
respect of which any dividends, liquidation preference or other obligations
under such securities are Guaranteed by the Company to the extent required by
the 1940 Act, as amended, or customary for transactions of such type.
"Reference Treasury Dealer" has the meaning assigned to that
term in Section 2.3(a)(i)(E) of this Agreement.
"Reference Treasury Dealer Quotation" has the meaning assigned
to that term in Section 2.3(a)(i)(D) of this Agreement.
"Refinance" means, in respect of any Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances
any Indebtedness of the Company or any Restricted Subsidiary existing on the
Effective Date or Incurred in compliance with the Senior Secured Note Indenture;
provided, however, that (i) such Refinancing Indebtedness has a Stated Maturity
no earlier than the Stated Maturity of the Indebtedness being Refinanced, (ii)
such Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of
the Indebtedness being Refinanced and (iii) such Refinancing Indebtedness has an
aggregate principal amount (or if Incurred with original issue discount, an
aggregate issue price) that is equal to or less than the aggregate principal
amount (or if Incurred with original issue discount, the aggregate accreted
value) then outstanding or committed (plus fees and expenses, including any
premium and defeasance costs) under the Indebtedness being Refinanced; provided,
further, however, that Refinancing Indebtedness shall not include Indebtedness
of the Company or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Effective Date, between the Company, MSXI Limited,
the Guarantors and ▇▇▇▇▇▇▇▇▇ & Company, Inc., as the same may be amended or
modified from time to time in accordance with the terms thereof.
"Related Business" means any business related, ancillary or
complementary (as determined in good faith by the Board of Directors of the
Company) to the businesses of the Company and the Restricted Subsidiaries on the
Effective Date.
"Restated Senior Credit Agreement" has the meaning assigned to
that term in the introduction to this Agreement.
"Restricted Payment" means, with respect to any Person, (i)
the declaration or payment of any dividends or any other distributions on or in
respect of its Capital Stock (including any such payment in connection with any
merger or consolidation involving such Person) or similar payment to the holders
of its Capital Stock, except dividends or distributions payable solely in its
Capital Stock (other than Disqualified Stock) and except dividends or
distributions payable solely to the Company or a Restricted Subsidiary (and, if
such Restricted Subsidiary is not wholly owned, to its other shareholders on a
pro rata basis or on a basis that results in the receipt by the Company or a
Restricted Subsidiary of
21
dividends or distributions of greater value than it would receive on a pro rata
basis), (ii) the purchase, redemption or other acquisition or retirement for
value of any Capital Stock of the Company held by any Person or of any Capital
Stock of a Restricted Subsidiary held by any Affiliate of the Company (other
than a Restricted Subsidiary), including the exercise of any option to exchange
any Capital Stock (other than into Capital Stock of the Company that is not
Disqualified Stock), (iii) the purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any Subordinated
Obligations (other than the purchase, repurchase or other acquisition of
Subordinated Obligations purchased in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due within one
year of the date of acquisition); (iv) the purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value, prior to the original
due date, scheduled maturity, scheduled repayment or scheduled sinking fund
payment of any Obligations (other than interest, fees and expenses) under the
Fourth Lien Loan Agreement or the Fourth Lien Notes; or (v) the making of any
Investment in any Person (other than a Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company
that is not an Unrestricted Subsidiary under the Senior Secured Note Indenture.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a Restricted
Subsidiary leases it from such Person and such lease is reflected on such
Person's balance sheet as a Capital Lease Obligation.
"SEC" means the Securities and Exchange Commission.
"Securitization Entity" means a wholly-owned Subsidiary that
engages in no activities other than Permitted Securitization Transactions and
any necessary related activities and that is designated by the Board of
Directors of the Company as a Securitization Entity, (i) no portion of the
Indebtedness (contingent or otherwise) of which (a) is guaranteed by Company or
any Subsidiary of the Company, (b) is recourse to or obligates Company or any
Subsidiary of Company in any way, other than pursuant to customary
representations, warranties, covenants and indemnities entered into in
connection with a Permitted Securitization Transaction, and (ii) to which
neither Company nor any Subsidiary of Company has any obligation to maintain or
preserve such entity's financial condition or cause such entity to achieve
certain levels of operating results.
"Security Agreement" means the Pledge and Security Agreement,
dated as of the Effective Date, made by the Company and the Subsidiary
Guarantors in favor of the Collateral Agent, as amended or supplemented from
time to time in accordance with its terms, substantially in the form attached to
this Agreement as Exhibit C.
"Security Documents" mean the Security Agreement, this
Agreement, the Mortgages, the Intercreditor Agreement, the U.K. Deed and all
other agreements and documents delivered pursuant to this Agreement or otherwise
entered into by any Person to secure or guaranty the Obligations of the
Borrowers under this Agreement.
"Security Interests" means the Liens on the Collateral created
by this Agreement and the Security Documents in favor of the Collateral Agent
for the benefit of the Lender.
"Senior Credit Facility" means the Restated Senior Credit
Agreement, as the same may be amended, extended, renewed, restated, supplemented
or otherwise modified (in each case, in whole or in part, and without limitation
as to amount, terms, conditions, covenants and other provisions) from time
22
to time, and any agreement governing Indebtedness Incurred to refund, replace or
refinance any borrowings and commitments then outstanding or permitted to be
outstanding under such Senior Credit Facility or any such prior agreement as the
same may be amended, extended, renewed, restated, supplemented or otherwise
modified (in each case, in whole or in part, and without limitation as to
amount, terms, conditions, covenants and other provisions). The term "Senior
Credit Facility" shall include all related or ancillary documents executed at
any time, including, without limitation, any instruments, guarantee agreements
and security documents. All Cash Management Obligations owing by the Company or
any of its Subsidiaries to the Agent, any Senior Lender or their respective
Affiliates shall also be deemed obligations under the Senior Credit Facility.
"Senior Debt Documents" means, collectively, the Senior Credit
Facility, and all "Loan Documents" (as defined in the Senior Credit Facility).
"Senior Lenders" has the meaning assigned to that term in the
introduction to this Agreement, and shall include any lenders from time to time
under the Senior Credit Facility.
"Senior Secured Collateral Agent" means the collateral agent
under the Senior Secured Security Agreement and each Mortgage, which shall
initially be the Trustee.
"Senior Secured Company Guarantee" means the Guarantee of the
Company of MSXI Limited's obligations with respect to the U.K. Senior Secured
Notes.
"Senior Secured Debt Documents" means the Senior Secured Note
Indenture, the Senior Secured Notes and all agreements and documents executed in
connection therewith at any time.
"Senior Secured Note Indenture" has the meaning assigned to
that term in the introduction to this Agreement.
"Senior Secured Notes" means the 11% Senior Secured Notes
issued by the Company and MSXI Limited in the aggregate principal amount of
$75,500,000 due 2007 issued pursuant to the Senior Secured Note Indenture and
any other securities issued pursuant to the Senior Secured Note Indenture at any
time, including the Exchange Notes.
"Senior Secured Note Guarantees" means the Senior Secured
Subsidiary Guarantees and the Senior Secured Company Guarantee.
"Senior Secured Security Agreement" means the security
agreement securing the obligations under the Senior Secured Note Indenture, as
amended or modified from time to time.
"Senior Secured Subsidiary Guarantee" means the Guarantee by a
subsidiary Guarantor of the Company's and MSXI Limited's obligations with
respect to the Senior Secured Notes.
"Senior Subordinated Notes" means the 11-3/8% Senior
Subordinated Notes issued by the Company in the aggregate principal amount of
$130,000,000 due 2008 issued pursuant to the Senior Subordinated Note Indenture
and any other securities issued pursuant to the Senior Subordinated Note
Indenture at any time.
"Senior Subordinated Note Indenture" means the Senior
Subordinated Indenture between the Company, the subsidiary guarantors named
therein and Bank of New York (as successor trustee to IBJ ▇▇▇▇▇▇▇▇ Bank & Trust
Company), as trustee, dated as of January 15, 1998, as amended or modified from
time to time.
23
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "Significant Subsidiary" of the Company within the meaning of Rule
1-02 under Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Stockholders' Agreement" means the amended and restated
stockholders' agreement dated November 28, 2000 by and among the Company, CVC,
and certain CVC Investors, the Lender and executive officers and directors of
the Company, as amended by Amendment No. 1 dated January 31, 2003 and Amendment
No. 2 dated as of August 1, 2003, and as amended from time to time.
"Subordinated Obligations" means any Indebtedness of the
Company (whether outstanding on the Effective Date or thereafter Incurred) which
is subordinate or junior in right of payment to the Notes pursuant to a written
agreement to that effect. "Subordinated Obligation" of any Guarantor has a
correlative meaning.
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership, business trust or other business entity of which more
than 50% of the total voting power of shares of Capital Stock or other interests
(including partnership interests or trust interests) entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of
such Person or (iii) one or more Subsidiaries of such Person.
"Subsidiary Guarantee" means the Guarantee by a Subsidiary
Guarantor of the Company's and MSXI Limited's obligations with respect to the
Notes.
"Subsidiary Guarantor" means each Subsidiary of the Company
designated as a Guarantor on the signature pages of this Agreement and any other
Subsidiary that has issued either on or after the Effective Date a Subsidiary
Guarantee.
"Successor Company" has the meaning assigned to that term in
the Section 6.9 of this Agreement.
"Supplement Agreement" has the meaning assigned to that term
in the Section 5.8(a) of this Agreement.
"Tax" has the meaning assigned to that term in Section 4.8 of
this Agreement.
"Temporary Cash Investments" means any of the following: (i)
any investment in direct obligations of the United States of America or any
agency thereof or obligations Guaranteed by the United States of America or any
agency thereof, (ii) investments in time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States of America, any state thereof or any foreign
country recognized by the United States, and which bank or trust company has
capital, surplus and undivided profits aggregating in excess of $250,000,000 (or
the foreign currency equivalent thereof) and has outstanding debt which is rated
"A" (or such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under
24
the Securities Act) or any money-market fund sponsored by a registered broker
dealer or mutual fund distributor, (iii) repurchase obligations with a term of
not more than 30 days for underlying securities of the types described in clause
(i) above entered into with a bank meeting the qualifications described in
clause (ii) above, (iv) investments in commercial paper, maturing not more than
90 days after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America, any State thereof or the District of Columbia or any
foreign country recognized by the United States of America with a rating at the
time as of which any investment therein is made of "P-1" (or higher) according
to ▇▇▇▇▇'▇ Investors Service, Inc. or "A-1" (or higher) according to Standard
and Poor's Ratings Group, and (v) investments in securities with maturities of
six months or less from the date of acquisition issued or fully Guaranteed by
any state, commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A" by
Standard & Poor's Ratings Group or "A" by ▇▇▇▇▇'▇ Investors Service, Inc.
"Treasury Rate" has the meaning assigned to that term in
Section 2.3(a)(i) of this Agreement.
"Trustee" means the trustee under the Senior Secured Note
Indenture, initially BNY Midwest Trust Company.
"U.K. Deed" means the debenture, dated as of the date hereof,
made by MSXI Limited in favor of the Lender, substantially in the form attached
to this Agreement as Exhibit D, as amended or supplemented from time to time in
accordance with its terms.
"U.K. Senior Secured Notes" means the Senior Secured Notes
issued by MSXI Limited.
"Unit" means a unit consisting of $860 principal amount of
U.S. Senior Secured Notes and $140 principal amount of U.K. Senior Secured
Notes.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors of the Company in the manner provided above
under Section 5.3 (Designation of Restricted and Unrestricted Subsidiaries) and
(ii) any Subsidiary of an Unrestricted Subsidiary.
"U.S. Senior Secured Notes" means the Senior Secured Notes
issued by the Company.
"Voting Stock" of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"WARN" has the meaning assigned to that term in Section 4.15
of this Agreement.
"Warrant" means the Warrant issued pursuant to the terms of
the Warrant Agreement, and issued in connection with this Agreement.
"Warrant Agreement" means the Warrant Agreement, dated as of
August 1, 2003, between the Company and the Lender.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all
the Capital Stock of which (other than directors' qualifying shares) is owned by
the Company and/or one or more Wholly Owned Subsidiaries.
25
"Withholding Taxes" has the meaning assigned to that term in
Section 2.2(e) of this Agreement.
"Working Capital" means as of any date the difference between
(x) current assets, other than cash and Cash Equivalents of the Company and its
Restricted Subsidiaries for such date and (y) current liabilities of the Company
and its Restricted Subsidiaries for such date; provided, however, that the
amount of accounts receivable at any date should be the average of accounts
receivable on the last day of each of the three fiscal months immediately
preceding such date.
SECTION 1.2. Other Definitions; Rules of Construction.
As used herein, the terms "Company," "Lender" and the "Agreement" shall have the
respective meanings ascribed thereto in the introductory paragraph of this
Agreement. Such terms, together with the other defined terms in Section 1.1
shall include both the singular and the plural forms thereof and shall be
construed accordingly. Use of the terms "herein", "hereof", and "hereunder"
shall be deemed references to this Agreement in its entirety and not to the
Section or clause in which such term appears. References to "Sections" and
"subsections" shall be to Sections and subsections, respectively, of this
Agreement unless otherwise specifically provided. Use of the term "including"
shall mean including without limitation.
SECTION 1.3. Accounting Terms and Determinations. For
purposes of this Agreement, unless otherwise specified, all accounting terms
used herein or in any other Loan Document shall be interpreted, all accounting
determinations and computations hereunder or thereunder shall be made, and all
financial statements required to be delivered hereunder or thereunder shall be
prepared in accordance with GAAP.
ARTICLE 2 AMOUNT AND TERMS OF NOTES AND LOAN
SECTION 2.1. Loans and Notes.
(a) Loans and Notes. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of the Company herein set forth, the Lender has provided a loan to
the Company and MSXI Limited on the Effective Date in an amount equal to
$25,000,000 (the "Loan"). In connection with the Loan, (i) the Company shall
issue a Company Note, dated the date hereof, in the aggregate principal amount
of $21,500,000, evidencing the Loan made by the Lender to the Company and (ii)
MSXI Limited shall issue a MSXI Limited Note, dated the date hereof, in the
aggregate principal amount of $3,500,000, evidencing the Loan made by the Lender
to MSXI Limited. Each U.S. Note shall have attached to it an executed a
Subsidiary Guarantee substantially in the form of Exhibit B hereto, from each of
the Subsidiary Guarantors. Each MSXI Limited Note shall have attached to it an
executed Note Guarantee substantially in the form attached to this Agreement as
Exhibit B hereto, from the Company and each of the Subsidiary Guarantors.
(b) Payment of Loans. The unpaid principal amount of
the Loans plus all accrued and unpaid interest thereon and all other amounts
owed hereunder with respect thereto shall be paid in full in Cash on the
Maturity Date.
SECTION 2.2. Interest on the Loan; Tax Amounts.
(a) Rate of Interest. Except as provided in Section
2.2(c) below, the Loans shall bear interest on the unpaid principal amount
thereof from the date made through maturity (whether at stated maturity, by
acceleration or otherwise) at a rate equal to 11.5% per annum.
(b) Interest Payments.
26
(i) All Interest shall be payable in Cash with
respect to the Loans, in arrears on and to each Interest Payment Date, and upon
any prepayment of the Loans (to the extent of accrued interest on the principal
amount of the Loan so prepaid) and at maturity of the Loans.
(c) Default Interest. Upon the occurrence and during
the continuance of an Event of Default and, to the extent permitted by
applicable law, the Loans shall bear interest payable upon demand at a rate
which is 2.00% per annum in excess of the rate of interest otherwise payable
under this Agreement for the Loans.
(d) Computation of Interest. Interest on the Loans
shall be computed on the basis of a 360-day year. In computing such interest,
the date or dates of the making of the Loans shall be included and the date of
payment shall be excluded.
(e) Tax Amounts. All payments by MSXI Limited and any
Guarantor in respect of the MSXI Limited Notes shall be made without withholding
or deduction for or on account of any present or future taxes, duties,
assessments or other governmental charges of whatsoever nature, including
penalties, interest and any other liabilities related thereto ("Withholding
Taxes"), imposed or levied by or on behalf of the United Kingdom or any relevant
jurisdiction or any political subdivision or authority thereof or therein having
power to tax, unless MSXI Limited is compelled by law to deduct or withhold such
Withholding Taxes. In such event, MSXI Limited or such Guarantor shall pay such
additional amounts ("Additional Tax Amounts") as may be necessary to ensure that
the net amounts received by the Lender after such withholding or deduction shall
equal the amounts of such payments that would have been receivable in respect of
the MSXI Limited Notes in the absence of such withholding or deduction. MSXI
Limited and any Guarantor will also (a) make such withholding or deduction
compelled by applicable law and (b) remit the full amount deducted or withheld
to the relevant authority in accordance with applicable law. MSXI Limited and
any Guarantor will furnish copies of such receipts evidencing the payment of any
Withholding Taxes so deducted or withheld in such form as provided in the normal
course by the taxing authority imposing such Withholding Taxes and as is
reasonably available to MSXI Limited or the Guarantors within 60 days after the
date of receipt of such evidence.
All references herein and in the MSXI Limited Notes to the
principal of or interest on a MSXI Limited Note shall be deemed to include any
Additional Tax Amounts payable in connection therewith. MSXI Limited will pay
any present or future stamp, court or documentary taxes or any other excise or
property taxes, charges or similar levies that arise in any jurisdiction from
the execution, delivery or registration of the MSXI Limited Notes or any other
document or instrument referred to in this Agreement.
The Lender shall reasonably cooperate with MSXI Limited and
shall use all reasonable efforts to reduce or eliminate, or secure a refund of
Withholding Taxes with respect to payments made under the MSXI Limited Notes,
including, but not limited to, complying with any and all administrative
procedures under the UK-US income tax treaty to secure the reduction,
elimination or refund of such Withholding Taxes. If MSXI Limited has paid any
Additional Tax Amounts to the Lender and the Lender, or any beneficial owner of
the Lender, in its sole discretion determines that it has received a refund of
Withholding Taxes to which such Additional Tax Amounts are attributable, then
the Lender shall use any and all reasonable efforts to cause such refund to be
promptly paid over to MSXI Limited. The prior two sentences shall not be
construed to require any Lender to make available its (or any of its beneficial
owners') tax returns (or any other information relating to taxes which it deems
confidential) to MSXI Limited or any other Person or entity.
SECTION 2.3. Prepayments and Payments.
27
(a) Voluntary Prepayments.
(i) At any time prior to August 1, 2005, the
Company may, at its option, on one or more occasions prepay all or part of the
Notes, at a redemption price equal to the greater of (1) 100% of the principal
amount of the Notes being prepaid and (2) the sum of the present values of
105.750% of the principal amount of the Notes being prepaid and scheduled
payments of interest on such Notes to and including August 1, 2005 discounted to
the date of redemption on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points,
together in either case with accrued and unpaid interest, if any, to the date of
redemption. The foregoing optional prepayment of the Notes prior to August 1,
2005 shall include both Company Note and the MSXI Limited Notes on a pro rata
basis based on the aggregate principal amount of the Notes outstanding at the
time of repayment, unless a Change of Control of MSXI Limited has occurred.
(A) "Treasury Rate" means, with respect
to any repayment date, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption period.
(B) "Comparable Treasury Issue" means
the United States Treasury security selected by a Reference Treasury Dealer
appointed by the Company as having a maturity comparable to the remaining term
of the Notes (as if the final maturity of the Notes was August 1, 2005) that
would be utilized at the time of selection and in accordance with customary
financial practice in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Notes (as if the final maturity
of the Notes was August 1, 2005).
(C) "Comparable Treasury Price" means,
with respect to any repayment date, (1) the average of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third business day preceding such redemption date, as
set forth in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (2) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (A) the average of the Reference Treasury Dealer Quotations (as
defined below) for such redemption date, after excluding the highest and lowest
such Reference Treasury Dealer Quotation or (B) if the Company obtains fewer
than three such Reference Treasury Dealer Quotations, the average of all such
Reference Treasury Dealer Quotations.
(D) "Reference Treasury Dealer
Quotation" means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Company, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Company by such Reference
Treasury Dealer at 5:00 p.m. on the third business date preceding such
redemption date.
(E) "Reference Treasury Dealer" means
any primary U.S. government securities dealer in the City of New York (a
"Primary Treasury Dealer") selected by the Company..
(ii) Optional Prepayment on or After August 1,
2005. On or after August 1, 2005, the Notes will be prepayable, at the Company's
option, in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice mailed by first-class mail to each
Holder's registered address, at the following redemption prices (expressed in
percentages of principal amount), plus accrued and unpaid interest to the
redemption date (subject to the right of Holders
28
of record on the relevant record date receive interest due on the relevant
interest payment date), if prepaid during the period commencing on the date set
forth below:
PREPAYMENT
DATE PRICE
---- -----
August 1, 2005........................ 105.750%
February 1, 2006...................... 102.875%
August 1, 2006 and thereafter......... 100.00%
The foregoing optional prepayment of the Notes on or after
August 1, 2005 shall include both Company Note and the MSXI Limited Notes on a
pro rata basis based on the aggregate principal amount of the Notes outstanding
at the time of repayment, unless a Change of Control of MSXI Limited has
occurred.
(iii) Prepayment Upon Equity Offering. In
addition, at any time and from time to time prior to August 1, 2005, the Company
may prepay at its option in the aggregate up to 35% of the original principal
amount of the Notes with the proceeds of one or more Public Equity Offerings
following which there is a Public Market, at a prepayment price (expressed as a
percentage of principal amount) of 111.500% plus accrued and unpaid interest and
Additional Tax Amounts, if any, to the prepayment date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date); provided, however, that at least 65% of the
original aggregate principal amount of the Notes must remain outstanding after
each such repayment.
The foregoing optional prepayment of the Notes shall include
both the Company Notes and the MSXI Limited Notes on a pro rata basis based on
the aggregate principal amount of the Notes outstanding at the time of
repayment, unless a Change of Control of MSXI Limited has occurred.
(iv) Tax Prepayment. MSXI Limited Notes may be
prepaid, at the option of MSXI Limited, as a whole, but not in part (limited to
MSXI Limited Notes with respect to which an Additional Tax Amount (as described
below) is or may be required), at any time, upon giving notice to the Lender not
less than 30 days nor more than 60 days prior to the date fixed for repayment
(which notice shall be irrevocable), at a repayment price equal to the principal
amount thereof, together with interest accrued to the date fixed for repayment
and any Additional Tax Amounts payable with respect thereto, if MSXI Limited
determines and certifies to the Lender immediately prior to the giving of such
notice that (i) they have or will become obligated to pay Additional Tax Amounts
in respect of such MSXI Limited Notes as a result of any change in or amendment
to the laws (or any regulations or rulings promulgated thereunder) of the United
Kingdom or any relevant jurisdiction or any political subdivision or taxing
authority thereof or therein affecting taxation, or any change in the official
position regarding the application or interpretation of such laws, regulations
or rulings (including a holding by a court of competent jurisdiction) which
change or, amendment becomes effective on or after the date of issuance of such
MSXI Limited. Notes and (ii) such obligation cannot be avoided by MSXI Limited
taking reasonable measures available to it, provided, that no such notice of
repayment shall be given earlier than 60 days prior to the earliest date on
which MSXI Limited would be obligated to pay such Additional Tax Amounts if a
payment in respect of such MSXI Limited Notes was then due. Prior to the giving
of any notice of repayment described in this paragraph, MSXI Limited shall
deliver to the Lender (a) a certificate signed by two directors of MSXI Limited
stating that the obligation to pay Additional Tax Amounts cannot be avoided by
MSXI Limited taking reasonable measures available to them and (b) a written
opinion of independent legal counsel to MSXI Limited to the effect that MSXI
Limited has become obligated to pay Additional Tax Amounts as a result of such a
change or, amendment described above and
29
that MSXI Limited cannot avoid payment of such Additional Tax Amounts by taking
reasonable measures available to them.
(b) Application of Prepayments. All prepayments on the
Loans (whether voluntary or mandatory or whether pursuant to this Section 2.3,
Sections 5.9 or 5.10 or otherwise under this Agreement) shall include payment of
accrued interest on the principal amount of the Loan so prepaid and shall be
applied to payment of interest and fees before application to principal. All
prepayments (whether voluntary or mandatory or whether pursuant to this Section
2.3, Sections 5.9 or 5.10 or otherwise under this Agreement) on the Loans, shall
be made and applied to the Company Notes and the MSXI Limited Notes on a pro
rata basis based on the aggregate principal amount of the Notes outstanding at
the time of prepayment unless a Change of Control of MSXI Limited has occurred.
(c) Manner and Time of Payment. All payments by the
Borrowers hereunder and under the Notes of principal, interest, premium, and
fees shall be made without defense, set-off, or counterclaim, in same day funds
and delivered to the Lender not later than 2:00 p.m. (New York time) on the date
due at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, or such other place
designated in writing by the Lender and delivered to the Borrowers, for the
account of the Lender. Funds received by the Lender after such time shall be
deemed to have been paid by the Borrowers on the next succeeding Business Day.
(d) Payments on Non-Business Days. Whenever any
payment to be made hereunder or under the Notes shall be stated to be due on a
day which is not a Business Day, the payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or under the Notes.
(e) Notation of Payment. The Lender agrees that before
disposing of a Note held by it, or any part thereof (other than by granting
participations therein), the Lender will make a notation thereon of all
principal payments previously made thereon and of the date to which interest
thereon has been paid and will notify the Borrowers of the name and address of
the transferee of that Note; provided that the failure to make (or any error in
the making of) a notation of the Loan made under such Note or to notify the
Borrowers of the name and address of a transferee shall not limit or otherwise
affect the obligations of the Borrowers hereunder or under such Note with
respect to the Loans and payments of principal or interest on such Notes.
SECTION 2.4. Closing Fees. On the Effective Date, the
Company shall pay to the Lender a nonrefundable closing fee in the amount of
$750,000 in cash by wire transfer of immediately available funds. Such closing
fee shall be nonrefundable under all circumstances.
SECTION 2.5. Security and Collateral.
(a) Grant of Security Interest. To secure the due and
punctual payment of the principal of, premium, if any, and interest on the Loans
and the Notes when and as the same shall be due and payable, whether on an
Interest Payment Date, at maturity, by acceleration, purchase, repurchase,
redemption or otherwise, and interest on the overdue principal of, premium, if
any, and interest (to the extent permitted by law), if any, on the Loans and the
Notes and the performance of all other Obligations of the Borrowers to the
Lender under this Agreement and the Loans, the Borrowers hereby covenant to
cause the Security Documents to be executed and delivered concurrently with this
Agreement. Subject to the Intercreditor Agreement, the Security Documents shall
grant to the Collateral Agent Security Interests in the Collateral and shall be
deemed hereby incorporated by reference herein to the same extent and as fully
as if set forth in their entirety at this place, and reference is made hereby to
each Security Document for a more complete description of the terms and
provisions thereof.
30
(b) Consent to Security Documents. The Lender, by its
acceptance of the Notes, consents and agrees to the terms of each Security
Document and the Intercreditor Agreement, as the same may be in effect or may be
amended from time to time in accordance with its terms.
(c) Further Assurances. The Borrowers shall, and shall
cause each of their Subsidiaries to, do or cause to be done all such actions and
things as may be necessary or proper, or as may be required by the provisions of
the Security Documents, to assure and confirm to the Lender and the Collateral
Agent the Security Interests in the Collateral contemplated hereby and by the
Security Documents, as from time to time constituted, so as to render the same
available for the security and benefit of this Agreement and of the Notes
secured hereby, according to the intent and purpose herein and therein
expressed. The Borrowers shall, and shall cause each of its Subsidiaries to,
take, upon request of the Lender or the Collateral Agent, any and all actions
required to cause the Security Documents to create and maintain, as security for
the Obligations contained in this Agreement and the Notes, valid and
enforceable, perfected (except as expressly provided herein, therein or in the
Intercreditor Agreement) Security Interests in and on all the Collateral, in
favor of the Collateral Agent superior to and prior in rights to all third
Persons, and subject to no other Liens (except as expressly provided herein,
therein or in the Intercreditor Agreement) as follows:
(i) the Borrowers and the Guarantors which are
Domestic Restricted Subsidiaries shall execute and deliver such agreements and
documents reasonably requested by the Lender, including the Security Documents,
to grant a third priority lien and security interest on all real property owned
by the Company and the Guarantors (subject to Section 5.2 hereof);
(ii) each other Domestic Restricted Subsidiary
shall execute and deliver all agreements and documents reasonably requested by
the Lender, including the Security Documents, to grant a third priority lien and
security interest on all assets owned by such Subsidiary, to secure the
indebtedness and other obligations of such Subsidiary owing pursuant to the Loan
Documents, unless it is prohibited by applicable law or existing contractual
restrictions from doing so or it is reasonably determined by the Lender to be
impractical or unreasonably costly; and
(iii) the Borrowers shall take or cause to be
taken all action required to perfect, maintain, preserve and protect the
Security Interests in the Collateral granted by the Security Documents to the
extent set forth in such Security Document, subject to the Intercreditor
Agreement. The Borrowers shall from time to time promptly pay all financing and
continuation statement recording and/or filing fees, charges and taxes relating
to this Agreement, the Security Documents, the Intercreditor Agreement and any
amendments hereto or thereto and any other instruments of further assurance
required pursuant hereto or thereto.
Notwithstanding anything to the contrary herein, the security
interests granted hereunder shall be junior to the security interests in favor
of the Agent under the Senior Credit Facility securing the Lender Obligations
and the security interests in favor of the Senior Secured Collateral Agent under
the Senior Secured Note Indenture, in whole or in part, all as described in the
Intercreditor Agreement, shall only be third priority liens and security
interests so long as the first and second priority liens and security interests
in favor of the Agent under the Senior Credit Agreement securing the Lender
Indebtedness and in favor of the Senior Secured Collateral Agent under the
Senior Secured Note Indenture securing the Senior Secured Notes have not
terminated. Except to the extent provided in the U.K. Deed, the Lender shall not
be entitled to any liens or security interests on any assets of any Foreign
Subsidiaries.
For the avoidance of doubt, the security interests in whole or
in part in favor of the Fourth Lien Lender securing the Fourth Lien Notes, all
as described in the Intercreditor Agreement, shall be fourth priority liens and
junior to the security interests in favor of the Agent under the Senior Credit
31
Agreement securing the Lender Obligations, the Senior Secured Collateral Agent
under the Senior Secured Note Indenture securing the Senior Secured Notes and
the Lender and the Collateral Agent securing the Notes.
ARTICLE 3 CONDITIONS
SECTION 3.1. Conditions to this Agreement. The
effectiveness of this Agreement is subject to the satisfaction of all of the
following conditions:
(a) Loan Documents. Delivery to the Lender of this
Agreement, the Company Notes, the MSXI Limited Notes, the Security Documents,
the U.K. Deed and any other Loan Documents to be dated the date hereof and duly
executed on behalf of the Company, Limited and the Guarantors, as the case may
be, in a form and in substance reasonably satisfactory to the Lender.
(b) Representations and Warranties. The
representations and warranties of the Borrowers and their respective
Subsidiaries contained in this Agreement and in each of the Loan Documents shall
be true and correct as of the Effective Date. On or prior to the Effective Date,
the Borrowers and each other party to the Loan Documents shall have performed or
complied with all of the agreements and satisfied all conditions on their
respective parts to be performed, complied with or satisfied pursuant to the
Loan Documents (other than conditions to be satisfied by such other parties,
which the failure to so satisfy would not, individually or in the aggregate,
have a Material Adverse Effect).
(c) No Injunction. No injunction, restraining order or
order of any nature by a Governmental Authority shall have been issued as of the
Effective Date that would prevent or materially interfere with the consummation
of any of the transactions contemplated under this Agreement or any of the
transactions contemplated under the Loan Documents; and no stop order suspending
the qualification or exemption from qualification of any of the Notes in any
jurisdiction shall have been issued and no Proceeding for that purpose shall
have been commenced or, to the knowledge of the Company after reasonable
inquiry, be pending or contemplated as of the Effective Date.
(d) Proceedings. No action shall have been taken and
no applicable law shall have been enacted, adopted or issued that would, as of
the Effective Date, prevent the consummation of the transactions contemplated
under this Agreement or any of the transactions contemplated under the Loan
Documents. No Proceeding shall be pending or, to the knowledge of the Company
after reasonable inquiry, threatened other than Proceedings that (A) if
adversely determined would not, individually or in the aggregate, adversely
affect the issuance or marketability of the Notes, and (B) would not,
individually or in the aggregate, have a Material Adverse Effect.
(e) Material Adverse Change. Subsequent to the
respective dates as of which data and information is given in the Final Offering
Circular, there shall not have been any Material Adverse Change.
(f) Fees and Expenses. The Lender shall have received
payment in full for all expenses (including reasonable attorneys' fees) incurred
in connection with the negotiation and execution of this Agreement and the Loan
Documents dated the date hereof (including, without limitation any fees payable
pursuant to Section 2.4 of this Agreement).
(g) Other Agreements. The Restated Senior Credit
Agreement, the Senior Secured Note Indenture, the Intercreditor Agreement, the
Fourth Lien Loan Agreement, the MSXI Registration Rights Agreement, and the
Stockholders Agreement shall each have been duly executed by
32
the parties thereto and shall each be in full force and effect, and each of the
foregoing agreements shall be in a form reasonably satisfactory to the Lender.
(h) Deliveries to the Lender. The Lender shall have
received on the Effective Date:
(i) certificates dated the Effective Date,
signed by (1) a Vice President, or where appropriate, a Director and (2) the
principal financial or accounting officer of the Company or where appropriate, a
Director on behalf of the Borrowers, to the effect that (a) the representations
and warranties set forth in Article 4 hereof are true and correct in all
material respects as of the Effective Date, (b) the Borrowers have complied with
all agreements and satisfied all conditions in all material respects on their
part to be performed or satisfied at or prior to the Effective Date, (c) at the
Effective Date, since the date hereof or since the date of the most recent
financial statements in the Final Offering Circular (exclusive of any amendment
or supplement thereto after the date hereof) no event or events have occurred,
no information has become known to the Borrowers nor does any condition exist
that, individually or in the aggregate, would have a Material Adverse Effect,
(d) since the date of the most recent financial statements in the Final Offering
Circular (exclusive of any amendment or supplement thereto after the date
hereof), other than as described in the Final Offering Circular or contemplated
hereby, neither the Company nor any Subsidiary of the Company has incurred any
liabilities or obligations, direct or contingent, not in the ordinary course of
business, that would have a Material Adverse Effect or entered into any
transactions not in the ordinary course of business that would have a Material
Adverse Effect, and there has not been any change in the capital stock or
long-term indebtedness of the Company or any Subsidiary of the Company that is
material to the business, condition (financial or otherwise) or results of
operations or prospects of the Company and its Subsidiaries, taken as a whole,
and (e) the sale of the Notes has not been enjoined (temporarily or permanently)
by a Government Authority with applicable jurisdiction;
(ii) a certificate, dated the Effective Date,
executed by the Secretary, or where appropriate, a Director of each of the
Borrowers and each Subsidiary Guarantor, certifying such matters as the Lender
may reasonably request;
(iii) a certificate of solvency, dated the
Effective Date, executed by the principal financial or accounting officer of the
Borrowers or where appropriate, a Director of each substantially in the form
previously approved and reasonably requested by the Lender;
(iv) the Lender shall have received substantially
contemporaneously with the Effective Date a copy of the receipt of the payoff
letter from Bank One, N.A;
(v) the opinions of Dechert LLP, counsel to the
Company, dated the Effective Date,reasonably satisfactory to the Lender;
(vi) the opinion of a local counsel to MSXI
Limited, dated the Effective Date, reasonably satisfactory to the Lender;
(vii) the opinion of local counsel to the Company
in Michigan and Missouri, reasonably satisfactory to the Lender;
(viii) appropriately completed copies of Uniform
Commercial Code financing statements naming the Company and each Subsidiary
Guarantor as a debtor and the Lender as the secured party, or other similar
instruments or documents to be filed under the UCC of all jurisdictions
33
as may be necessary or, in the reasonable opinion of the Lender and its counsel,
desirable to perfect the security interests of the Lender pursuant to the
Security Agreements;
(ix) appropriately completed copies of Uniform
Commercial Code Form UCC-3 termination statements, if any, necessary to release
all Liens (other than Permitted Liens) of any Person, in any collateral
described in any Security Agreements previously granted by any Person;
(x) certified copies of Uniform Commercial Code
Requests for Information or Copies (Form UCC-11), or a similar search report
certified by a party reasonably acceptable to the Lender, dated a date
reasonably near to the Effective Date, listing all effective financing
statements which name the Company or any Subsidiary Guarantor (under its present
name and any previous names) as the debtor, together with copies of such
financing statements (none of which shall cover any collateral described in any
Security Documents, other than such financing statements that evidence Permitted
Liens);
(xi) such other approvals, opinions, or documents
as the Lender may reasonably request in form and substance reasonably
satisfactory to the Lender;
(xii) the Collateral Agent and its counsel shall
be satisfied that (1) the Lien granted to the Collateral Agent, for the benefit
of the Lender in the collateral described above is of the priority described in
the Intercreditor Agreement; and (2) no Lien exists on any of the collateral
described above other than the Lien created in favor of: the Agent, for the
benefit of the Senior Lenders, Senior Secured Collateral Agent, for the benefit
of the holders of the Senior Secured Notes, the Collateral Agent, for the
benefit of the Lender, and Court Square, in each case subject to the Permitted
Liens; and
(xiii) All Uniform Commercial Code financing
statements or other similar financing statements and Uniform Commercial Code
Form UCC-3 termination statements required pursuant to clause (h)(ix) and (x)
above (collectively, the "Filing Statements") shall have been delivered to CT
Corporation System or another similar filing service company acceptable to the
Collateral Agent and the Lender (the "Filing Agent"). The Filing Agent shall
have acknowledged in a writing reasonably satisfactory to the Collateral Agent
and its counsel (1) the Filing Agent's receipt of all Filing Statements, (2)
that the Filing Statements have either been submitted for filing in the
appropriate filing offices or will be submitted for filing in the appropriate
offices within ten days following the Effective Date and (3) that the Filing
Agent will notify the Lender and its counsel of the results of such submissions
within 30 days following the Effective Date.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement and to make
the Loan, each of the Borrowers, on behalf of itself and its Subsidiaries,
represents and warrants to the Lender that, as of the date hereof and as of the
Effective Date:
SECTION 4.1. Corporate Existence and Power. Each of the
Borrowers and the Guarantors is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of incorporation or
organization, and is duly qualified to do business, and is in good standing, in
all additional jurisdictions where such qualification is necessary under
applicable law, except for those jurisdictions where the failure to so qualify
or be in good standing could not reasonably be expected to result in any
Material Adverse Effect. Each of the Borrower and the Guarantors has all
requisite corporate power to own or lease the properties used in its business
and to carry on its business substantially as now being conducted and as
proposed to be conducted, and to execute and deliver the
34
Loan Documents to which it is a party and to engage in the transactions
contemplated by the Loan Documents.
SECTION 4.2. Corporate Authority. The execution, delivery
and performance by each of the Borrowers and the Guarantors of the Loan
Documents to which it is a party have been duly authorized by all necessary
corporate action and are not in contravention of any law, rule or regulation, or
any judgment, decree, writ, injunction, order or award of any arbitrator, court
or governmental authority, or of the terms of any Borrower's or any Guarantor's
charter or by-laws or comparable organizational documents, or of any material
contract or undertaking to which any Borrower or any Guarantor is a party or by
which any Borrower or any Guarantor or their respective material property may be
bound or affected or result in the imposition of any Lien except for Permitted
Liens.
SECTION 4.3. Binding Effect. The Loan Documents to which
the any Borrower or any Guarantor is a party are the legal, valid and binding
obligations of the Borrowers and the Guarantors, respectively, enforceable
against the Borrowers and Guarantors in accordance with their respective terms,
subject to the effect of bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the rights of creditors generally and by general
principles of equity.
SECTION 4.4. Subsidiaries. Each corporation, partnership,
or other entity in which the Company, directly or indirectly through any of its
subsidiaries, owns more than fifty percent (50%) of any class of equity
securities or interests is listed on Schedule 4.4 attached hereto. All of the
outstanding shares of capital stock or other equity interests of each of the
Subsidiaries are owned, directly or indirectly, by the Company, free and clear
of all Liens, other than Permitted Liens and those Liens imposed by the Act and
the securities or "Blue Sky" laws of certain domestic or foreign jurisdictions.
Except as disclosed in the Final Offering Circular, there are no outstanding (A)
options, warrants or other rights to purchase from the Company or any of its
Subsidiaries (other than those options granted to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in June
2003), (B) agreements, contracts, arrangements or other obligations of the
Company or any of its Subsidiaries to issue or (C) other rights to convert any
obligation into or exchange any securities for, in the case of each of clauses
(A) through (C), shares of capital stock of or other ownership or equity
interests in any of the Subsidiaries.
SECTION 4.5. Proceedings. Except as disclosed in the
Final Offering Circular, there is no action, claim, suit, demand, hearing,
notice of violation or deficiency, or proceeding, domestic or foreign
(collectively, "Proceedings"), pending or, to the knowledge of the Borrowers,
threatened, that either (i) seeks to restrain, enjoin, prevent the consummation
of, or otherwise challenge any of the Loan Documents or any of the transactions
contemplated therein, or (ii) would, individually or in the aggregate, have a
Material Adverse Effect. The Borrowers are not subject to any judgment, order,
decree, rule or regulation of any Governmental Authority that would,
individually or in the aggregate, have a Material Adverse Effect.
SECTION 4.6. Financial Condition. The audited
consolidated financial statements and related notes of the Company contained in
the Final Offering Circular (the "Financial Statements") present fairly in all
material respects the financial position, results of operations and cash flows
of the Company and its consolidated Subsidiaries, as of the respective dates and
for the respective periods to which they apply and have been prepared in
accordance with GAAP and comply as to form with the requirements of Regulation
S-X of the Act. The financial data set forth under "Summary Consolidated
Financial Data" and "Selected Consolidated Financial Data" included in the Final
Offering Circular has been prepared on a basis consistent with that of the
Financial Statements and present fairly in all material respects the financial
position and results of operations of the Company and its consolidated
Subsidiaries as of the respective dates and for the respective periods
indicated. All other financial, statistical, and market and industry-related
data included in the Final Offering Circular are fairly and
35
accurately presented in all material respects and are based on or derived from
sources that the Company believes to be reliable and accurate in all material
respects. Subsequent to the respective dates as of which information is given in
the Final Offering Circular, except as disclosed in the Final Offering Circular,
(i) neither the Company nor any of its Subsidiaries has (x) incurred any
liabilities, direct or contingent, that are material, individually or in the
aggregate, to the Company, or (y) has entered into any transactions not in the
ordinary course of business which are material with respect to the Company and
its Subsidiaries considered as one enterprise, (ii) there has not been any
material decrease in the capital stock or any material increase in long-term
indebtedness or any material increase in short-term indebtedness of the Company,
or any payment of or declaration to pay any dividends or any other distribution
with respect to the Company, and (iii) there has not been any material adverse
change in the business, prospects, results of operations, or financial condition
of the Company and its Subsidiaries in the aggregate (each of clauses (i), (ii)
and (iii), a "Material Adverse Change").
SECTION 4.7. Consents, Etc. No consent, approval,
authorization or order of any Governmental Authority, or third party is required
in connection with the execution, delivery and performance of any Loan Document
or the consummation by the Borrowers of the transactions contemplated hereby,
except such as have been obtained.
SECTION 4.8. Payment of Taxes; Tax Returns. Except as set
forth on Schedule 4.8 attached hereto, all Tax returns required to be filed
(taking into account all applicable extensions) by the Company and each of its
Subsidiaries have been filed and all such returns are true, complete, and
correct in all material respects. All material Taxes that are due from the
Company and its respective Subsidiaries have been paid other than those (i)
currently payable without penalty or interest or (ii) being contested in good
faith and by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP consistently applied. To the knowledge of
the Company, after reasonable inquiry, there are no proposed Tax assessments
against the Company or any of its Subsidiaries that would, individually or in
the aggregate, have a Material Adverse Effect. The accruals and reserves on the
books and records of the Company and its respective Subsidiaries in respect of
any material Tax liability for any period not finally determined are adequate to
meet any assessments of Tax for any such period. For purposes of this Agreement,
the term "Tax" and "Taxes" shall mean all Federal, state, local and foreign
taxes, and other assessments of a similar nature (whether imposed directly or
through withholding), including any interest, additions to tax, or penalties
applicable thereto.
SECTION 4.9. Title to Properties; Applicable Agreements;
Real Property. Each of the Company and its respective Subsidiaries has good and
marketable title to all personal property owned by it and good and indefeasible
title to all leasehold estates in real and personal property being leased by it
and, as of the date hereof, will be free and clear of all Liens (other than
Permitted Liens). All Applicable Agreements to which the Company or any of its
Subsidiaries is a party or by which any of them is bound are valid and
enforceable against each of the Company or such Subsidiary, as applicable, and
are valid and enforceable against the other party or parties thereto and are in
full force and effect with only such exceptions as would not, individually or in
the aggregate, have a Material Adverse Effect. Neither the Borrowers nor any
Domestic Restricted Subsidiary owns any Real Property with a fair market value
of greater than $1.0 million.
SECTION 4.10. Employee Benefit Plans; ERISA. Each of the
Company, its Subsidiaries, and each ERISA Affiliate has fulfilled its
obligations, if any, under the minimum funding standards of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee Retirement Income Security Act of 1974, as amended
("ERISA") with respect to each "pension plan" (as defined in Section 3(2) of
ERISA), subject to Section 302 of ERISA which the Company, its Subsidiaries, or
any ERISA Affiliate sponsors or maintains, or with respect to which it has (or
within the last three years had) any obligation to make contributions, and each
such plan is in compliance in all material respects with the presently
applicable
36
provisions of ERISA and the Code. Neither the Company, its Subsidiaries, nor any
ERISA Affiliate has incurred any unpaid liability to the Pension Benefit
Guaranty Corporation (other than for the payment of premiums in the ordinary
course) or to any such plan under Title IV of ERISA. "ERISA Affiliate" means a
corporation, trade or business that is, along with the Company or any
Subsidiary, a member of a controlled group of corporations or a controlled group
of trades or businesses, as described in Section 414 of the Code or Section 4001
of ERISA.
SECTION 4.11. Disclosure. The Preliminary Offering
Circular as of its date did not, and the Final Offering Circular as of its date
did not, and as of the date hereof does not, and each supplement or amendment
thereto as of its date will not, contain any untrue statement of a material fact
or omit to state any material fact (except, in the case of the Preliminary
Offering Circular, for pricing terms and other financial terms intentionally
left blank) necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the Borrowers make no representation or warranty as to the information
furnished in writing to the Borrowers ▇▇▇▇▇▇▇▇▇ & Company, Inc. specifically for
use therein.
SECTION 4.12. Environmental and Safety Matters. Each of
the Company and its Subsidiaries is (i) in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of the environment or hazardous or toxic substances of wastes,
pollutants or contaminants ("Environmental Laws"), (ii) has received and is in
compliance with all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct its respective businesses and (iii) has
not received notice of any actual or potential liability for the investigation
or remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals, or liability would not, individually or in the aggregate, have a
Material Adverse Effect, whether or not arising from transactions in the
ordinary course of business. Neither the Company nor any of the Subsidiaries has
been named as a "potentially responsible party" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended.
SECTION 4.13. No Default. Neither the Company nor any
Subsidiary is in breach of or default under any Applicable Agreements, other
than as disclosed in the Final Offering Circular and except for breaches and
defaults that could not result in a Material Adverse Effect. There exists no
condition that, with the passage of time or otherwise, (a) would constitute a
breach of or default under any Applicable Agreement or (b) result in the
imposition of any penalty or the acceleration of any indebtedness, that in (a)
or (b) above could result in a Material Adverse Effect. Immediately after
consummation of the transactions contemplated by Fourth Lien Loan Agreement,
this Agreement, the Loan Documents, the Senior Secured Debt Documents, and the
Senior Debt Documents, no Default or Event of Default will exist.
SECTION 4.14. Intellectual Property. Each of the Company
and its Subsidiaries owns, or is licensed under, and has the right to use, or
can acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
"Intellectual Property") necessary for the conduct of its businesses and, as of
the date hereof, are free and clear of all Liens, other than Permitted Liens. To
the Company's knowledge, no claims or notices of any potential claim have been
asserted by any person challenging the use of any such Intellectual Property by
the Company or any of its Subsidiaries or questioning the validity or
effectiveness of the Intellectual Property or any license or agreement related
thereto (other than any claims that, if successful, would not, individually or
in the aggregate, have a Material Adverse Effect).
37
To the Company's knowledge, the use of such Intellectual Property by the Company
or any of its Subsidiaries will not infringe on the Intellectual Property rights
of any other person.
SECTION 4.15. Labor Matters. (i) Other than the collective
bargaining agreements listed in Schedule 4.15 attached hereto, neither the
Company nor any of the Guarantors is party to or bound by any collective
bargaining agreement with any labor organization; (ii) there is no union
representation question existing with respect to the employees of the Company or
the Guarantors, and, to the knowledge of the Company, no union organizing
activities are taking place that could, individually or in the aggregate, have a
Material Adverse Effect; (iii) to the Company's knowledge, no union organizing
or decertification efforts are underway or threatened against the Company or the
Guarantors that, could, individually or in the aggregate, have a Material
Adverse Effect; (iv) no labor strike, work stoppage, slowdown, or other labor
dispute is pending against the Company or the Guarantors, or, to the knowledge
of the Company, threatened against the Company or the Guarantors that, could,
individually or in the aggregate, have a Material Adverse Effect; (iv) there is
no worker's compensation liability, experience or matter that, could,
individually or in the aggregate, have a Material Adverse Effect; (v) to the
knowledge of the Company, there is no threatened or pending liability against
the Company or the Guarantors pursuant to the Worker Adjustment Retraining and
Notification Act of 1988, as amended ("WARN") or any similar state or local law
that, could, individually or in the aggregate, have a Material Adverse Effect;
(vi) there is no employment-related charge, complaint, grievance, investigation,
unfair labor practice claim, or inquiry of any kind, pending against the Company
or the Guarantors that could, individually or in the aggregate, have a Material
Adverse Effect; (vii) to the knowledge of the Company, no employee or agent of
the Company or the Guarantors has committed any act or omission giving rise to
liability for any violation identified in subsection (v) and (vi) above, other
than such acts or omissions that would not, individually or in the aggregate,
have a Material Adverse Effect; and (viii) no term or condition of employment
exists through arbitration awards, settlement agreements, or side agreement that
is contrary to the express terms of any applicable collective bargaining
agreement other than such term or condition that, could not, individually or in
the aggregate, have a Material Adverse Effect.
SECTION 4.16. Solvency. On the Effective Date, the
Borrowers will be solvent. As used in this paragraph, "solvent" means, with
respect to a particular date, that on such date the present fair market value
(present fair saleable value) of the assets of each of the Borrowers is not less
than the total amount required to pay the probable liabilities of the Borrowers
on its total existing debts and liabilities (including contingent liabilities)
as they become absolute and matured, the Borrowers are able to realize upon
their assets and pay their debts and other liabilities, contingent obligations
and commitments as they mature and become due in the normal course of business,
assuming on the Effective Date the sale of the Senior Secured Notes, the Notes
and the Fourth Lien Notes, the Borrowers are not incurring debts or liabilities
beyond their ability to pay as such debts and liabilities mature, and the
Borrowers are not engaged in any business or transaction, and are not about to
engage in any business or transaction, for which their property would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which the Borrowers are engaged. In computing the
amount of such contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in the light of all the facts
and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
SECTION 4.17. Not an Investment Company. Neither of the
Borrowers is nor, after giving effect to the offering and sale of the Senior
Secured Notes and the application of the proceeds thereof as described in the
Final Offering Circular, will be an "investment company" as defined in the
Investment Company Act of 1940.
38
SECTION 4.18. Insurance. Each of the Company and each of
its respective Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged. All policies of
insurance insuring the Company or any of its respective Subsidiaries or their
respective businesses, assets, employees, officers and directors are in full
force and effect. The Company and its Subsidiaries are in compliance with the
terms of such policies and instruments in all material respects, and there are
no claims by the Company or any of its Subsidiaries under any such policy or
instrument as to which any insurance company is denying liability or defending
under a reservation of rights clause. Neither the Company nor any such
Subsidiary has been refused any insurance coverage sought or applied for, and
neither the Company nor any such Subsidiary has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not, individually or in
the aggregate, have a Material Adverse Effect.
ARTICLE 5 AFFIRMATIVE COVENANTS
SECTION 5.1. SEC Reports. Until such time as the Company
shall become subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall provide the Lender (upon request) with such
annual reports and such information, documents and other reports as are
specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S.
corporation subject to such Sections, such information, documents and other
reports to be so provided at the times specified for the filing of such
information, documents and reports under such Sections. Thereafter,
notwithstanding that the Company may not be required to remain subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall file with the SEC and provide the Lender (upon request) such annual
reports and such information, documents and other reports as are specified in
such Sections and applicable to a U.S. corporation subject to such Sections,
such information, documents and other reports to be so filed and provided at the
times specified for the filing of such information, documents and reports under
such Sections; provided, however, that the Company shall not be required to file
any report, document or other information with the SEC if the SEC does not
permit such filing. The Company shall simultaneously deliver to the Lender any
notice or other documentation delivered to the Agent or the Senior Lenders
pursuant to the Senior Credit Facility.
SECTION 5.2. Real Estate Mortgages and Filings. With
respect to any real property other than a leasehold (individually and
collectively, the "Premises") acquired by the Company or any Domestic Restricted
Subsidiary after the date hereof with a fair market value of greater than $1.0
million on the date of acquisition, if requested by the Lender:
(a) the Company shall deliver to the Lender, as
mortgagee, fully-executed counterparts of Mortgages, each dated as of the date
of acquisition of such property, duly executed by the Company or the applicable
Subsidiary, together with evidence of the completion (or satisfactory
arrangements for the completion), of all recordings and filings of such Mortgage
as may be necessary to create a valid, perfected Lien, subject to Permitted
Liens, against the properties purported to be covered thereby;
(b) the Lender shall have received mortgagee's title
insurance policies in favor of the Lender in amounts and in form and substance
and issued by insurers reasonably acceptable to the Lender, with respect to the
property purported to be covered by such Mortgage, insuring that title to such
property is marketable and that the interests created by the Mortgage constitute
valid Liens thereon free and clear of all Liens, defects and encumbrances other
than Permitted Liens, and such policies shall also include, to the extent
available, a revolving credit endorsement and such other endorsements as
necessary and shall be accompanied by evidence of the payment in full of all
premiums thereon; and
39
(c) the Company shall deliver to the Lender, with
respect to each of the covered Premises, filings, surveys, local counsel
opinions and fixture filings, along with such other documents, instruments,
certificates and agreements as the Lender and its counsel shall reasonably
request.
SECTION 5.3. Designation of Restricted and Unrestricted
Subsidiaries. The Board of Directors of the Company may designate any Subsidiary
of the Company (including any newly acquired or newly formed Subsidiary) to be
an Unrestricted Subsidiary if:
(a) the Subsidiary to be so designated (the
"Designee") does not own any Capital Stock or Indebtedness of, or own or hold
any Lien on any property of, the Company or any other Subsidiary (other than a
direct or indirect Subsidiary of the Designee, provided, however, that any such
direct or indirect Subsidiary of the Designee shall otherwise comply with
clauses (a) through (f) of this Section 5.3);
(b) the Subsidiary to be so designated is not
obligated under any Indebtedness, Lien or other obligation that, if in default,
would result (with the passage of time or notice or otherwise) in a default on
any Indebtedness of the Company or of any Subsidiary (other than the Designee or
a Subsidiary of the Designee that is an Unrestricted Subsidiary);
(c) the Company certifies that such designation
complies with Section 6.4 (Limitation on Restricted Payments);
(d) such Subsidiary, either alone or in the aggregate
with all other Unrestricted Subsidiaries, does not operate, directly or
indirectly all or substantially all of the business of the Company and its
Subsidiaries;
(e) such Subsidiary does not directly or indirectly,
own any Indebtedness of or Capital Stock in, and has no Investments in, the
Company or any Restricted Subsidiary; and
(f) such Subsidiary is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation (i) to subscribe for additional Capital Stock or (ii) to
maintain or preserve such Person's financial condition or to cause such Person
to achieve any specified levels of operating results.
If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Agreement and any Indebtedness of
such Subsidiary shall be deemed to be Incurred as of such date. For purposes of
making any such designation, all outstanding Investments by the Company and its
Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary
will be deemed to be Restricted Payments at the time of such designation and
will reduce the amount available for Restricted Payments under clause (a)(iii)
of Section 6.4 (Limitation on Restricted Payments). Such designation shall only
be permitted if such Restricted Payment would be permitted at such time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
Any such designation or redesignation by the Board of Directors will be
evidenced to the Lender by delivering to the Lender a board resolution giving
effect to such designation or redesignation and an Officers' Certificate (a)
certifying that such designation or redesignation complies with the foregoing
provisions and (b) giving the effective date of such designation or
redesignation, such delivery to the Lender to occur within 45 days after the end
of the fiscal quarter of the Company in which such designation or redesignation
is made (or, in the case of a designation or redesignation made during the last
40
fiscal quarter of the Company's fiscal year, within 90 days after the end of
such fiscal year). Unless designated as an Unrestricted Subsidiary as herein
provided, each Subsidiary of the Company shall be a Restricted Subsidiary.
Except as provided herein, no Restricted Subsidiary shall be redesignated as an
Unrestricted Subsidiary.
The Board of Directors of the Company may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary, if immediately after giving pro forma effect to
such designation (a) the Company could Incur $1.00 of additional Indebtedness
under paragraph (a) of Section 6.1 (Limitation on Incurrence of Indebtedness)
and (b) no Default or Event of Default shall have occurred and be continuing or
would result therefrom.
SECTION 5.4. Compliance Certificate. Each Borrower shall
deliver to the Lender within 120 days after the end of each fiscal year of the
Borrowers a certificate, one of the signers of which shall be the principal
executive, financial or accounting officer of the Company, stating that to the
best of such Officer's actual knowledge, no breach of covenant or other
obligations or any Default occurred during such year, if the signers know of any
breach of covenant or other obligation or any Default that occurred during such
period, and if the Company shall not be in compliance with all conditions and
covenants under this Agreement, specifying such noncompliance and the nature and
status thereof.
SECTION 5.5. Further Instruments and Acts. Upon request
of the Lender, each Borrower will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Agreement.
SECTION 5.6. Payment of Taxes and Other Claims. The
Borrowers shall, and shall cause each of their Subsidiaries to, pay or discharge
or cause to be paid or discharged, before the same shall become delinquent, all
material taxes, assessments and governmental charges levied or imposed upon
their or their Subsidiaries' income, profits or property; provided, however,
that neither the Borrowers nor any of their Subsidiaries shall be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate negotiations or proceedings and for which disputed
amounts adequate reserves have been made in accordance with GAAP.
SECTION 5.7. Corporate Existence. Subject to Sections 6.3
and 6.9, each Borrower shall do or cause to be done, at its own cost and
expense, all things necessary to, and will cause each of its Restricted
Subsidiaries to, preserve and keep in full force and effect the corporate or
partnership existence and rights (charter and statutory), licenses and/or
franchises of such Borrower and each of its Restricted Subsidiaries; provided,
however, that neither the Borrowers nor any of their Restricted Subsidiaries
shall be required to preserve any such rights, licenses or franchises if the
Board of Directors of the Company shall reasonably determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Borrowers and the Subsidiaries, taken as a whole.
SECTION 5.8. Additional Subsidiary Guarantees. If the
Company or any of its Restricted Subsidiaries transfers or causes to be
transferred, in one transaction or a series of related transactions, any
property to any Domestic Subsidiary that is not a Subsidiary Guarantor but
becomes a Domestic Restricted Subsidiary as a result of such transaction, or if
the Company or any of its Restricted Subsidiaries shall organize, acquire or
otherwise invest in another Domestic Subsidiary that is not a Subsidiary
Guarantor but becomes a Domestic Restricted Subsidiary as a result of such
transaction, then such transferee or acquired or other Subsidiary shall:
41
(a) execute and deliver to the Lender a Supplement to
this Agreement, substantially in the form of Exhibit E hereto (a "Supplement
Agreement") pursuant to which such Domestic Restricted Subsidiary shall
unconditionally guarantee on a senior secured basis all of the Company's
obligations under the Notes and this Agreement on the terms set forth in this
Agreement;
(b) execute and deliver to the Collateral Agent such
amendments to the Security Documents as the Collateral Agent reasonably
determines to be necessary or advisable in order to grant to the Collateral
Agent, for the benefit of the Lender, a perfected third priority security
interest (subject to Liens securing the Senior Credit Facility and the Senior
Secured Notes) in the Capital Stock of such new Domestic Restricted Subsidiary
and any debt securities of such new Domestic Restricted Subsidiary, subject to
Permitted Liens, which are owned by the Company or such new Domestic Restricted
Subsidiary and required to be pledged pursuant to the Security Agreement, and
(b) subject to the terms of the Intercreditor Agreement, deliver to the
Collateral Agent any certificates representing such Capital Stock and debt
securities, together with (i) in the case of such Capital Stock, undated stock
powers or instruments of transfer, as applicable, endorsed in blank, and (ii) in
the case of such debt securities, endorsed in blank, in each case executed and
delivered by an Officer of the Company or such Subsidiary, as the case may be;
(c) cause such new Domestic Restricted Subsidiary to
take such other actions necessary to grant to the Collateral Agent for the
benefit of the Lender a perfected third priority security interest (subject to
Liens securing the Senior Credit Facility and the Senior Secured Notes) in the
personal property of such new Domestic Restricted Subsidiary to the extent
required pursuant to the terms of the Security Documents and the Intercreditor
Agreement, subject to the Permitted Liens, including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by
the Security Agreement or by law;
(d) take such further action and execute and deliver
such other documents specified in this Agreement to effectuate the foregoing;
and
(e) deliver to the Lender and the Collateral Agent an
opinion of counsel that such Supplement Agreement and any other documents
required to be delivered have been duly authorized, executed and delivered by
such Domestic Restricted Subsidiary and constitutes a legal, valid, binding and
enforceable obligation of such Domestic Restricted Subsidiary and such other
opinions regarding the perfection of such Liens in the Collateral of or
consisting of the Capital Stock of such Domestic Restricted Subsidiary as
provided for in this Agreement.
Thereafter, such Domestic Restricted Subsidiary shall be a
Subsidiary Guarantor for all purposes of this Agreement.
SECTION 5.9. Change of Control.(a) Upon the occurrence of
a Change of Control of the Company, the Lender shall have the right to require
that the Company repurchase all or a portion of the Notes at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest and Additional Tax Amounts, if any, to the date of repurchase (subject
to the right of Holders of record on the relevant record date to receive
interest due on the relevant interest payment date), in accordance with the
provisions of this Section 5.9. Any such repurchase of the Notes shall include
both Company Notes and MSXI Limited Notes on a pro rata basis based upon the
aggregate principal amount of the Notes outstanding at the time of such
repurchase, unless a Change of Control of MSXI Limited has occurred.
(b) Upon the occurrence of the Change of Control of
MSXI Limited, MSXI Limited may, at its option at any time, prepay the MSXI
Limited Notes in whole, and not in part, at the
42
optional prepayment prices specified (i) in Section 2.3(a)(i) for prepayments
prior to August 1, 2005 and (ii) the first paragraph of Section 2.3(a)(ii) for
prepayments on or after August 1, 2005. If MSXI Limited has not delivered a
notice of repayment within 30 days following a Change of Control of MSXI
Limited, each Holder of a MSXI Limited Note shall have the right to require that
MSXI Limited repurchase all or a portion of such Holder's MSXI Limited Notes at
a purchase price in cash equal to 101% of the principal amount thereof plus
accrued and unpaid interest and Additional Tax Amounts, if any, to the date of
repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date), in
accordance with the next paragraph; provided that at any time prior to the
consummation of the offer to purchase required by MSXI Limited in accordance
with the next paragraph, MSXI Limited may deliver an optional repayment notice
to prepay all of the MSXI Limited Notes in lieu of completing such offer to
purchase.
(c) Within 30 days following any Change of Control of
the Company, the Company shall, and within 30 days following any Change of
Control of MSXI Limited, MSXI Limited shall, mail a notice to each Holder with a
copy to the Lender stating: (1) that a Change of Control has occurred and that
such Holder has the right to require the Company or MSXI Limited, as applicable,
to purchase such Holder's Notes at a purchase price in cash equal to 101% of the
principal amount outstanding at the repurchase date, plus accrued and unpaid
interest and Additional Tax Amounts, if any, to the date of repurchase (subject
to the right of Holders of record on the relevant record date to receive
interest on the relevant interest payment date); (2) the circumstances and
relevant facts and relevant financial information regarding such Change of
Control; (3) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and (4) the
instructions determined by the Borrowers, consistent with this Section 5.9, that
a Holder must follow in order to have its Notes repurchased.
Holders electing to have a Note purchased will be required to
surrender the Note, together with all necessary endorsements and other
appropriate materials duly completed, to the Company at the address specified in
the notice at least three Business Days prior to the purchase date. Holders will
be entitled to withdraw their election if the Company receives not later than
one Business Day prior to the purchase date, a facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Note which was
delivered for purchase by the Holder as to which such notice of withdrawal is
being submitted and a statement that such Holder is withdrawing his election to
have such Note purchased.
On the purchase date, all Notes purchased by the Company under
this Section 5.9 shall be delivered to the Company for cancellation, and the
Company shall pay the purchase price plus accrued and unpaid interest, if any,
to the Holders entitled thereto.
(d) The Borrowers shall comply, to the extent
applicable, with the requirements of Section 14(e) of the Exchange Act and any
other securities laws or regulations in connection with the repurchase of Notes
pursuant to Section 5.9. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of Section 5.9, the Borrowers
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 5.9 by virtue
thereof.
SECTION 5.10. Excess Cash Flow Offer. Within 90 days after
the end of each fiscal year (beginning with the fiscal year ending January 2,
2005), the Borrowers will make an offer to the Lender to purchase the maximum
principal amount of Notes that may be purchased with 50% of Excess Cash Flow for
such fiscal year (the "Excess Cash Flow Offer Amount"), at a purchase price in
cash equal to 101% of the principal amount of the Notes to be purchased, plus
accrued and unpaid interest, if any, to the date of such purchase. Each Excess
Cash Flow offer shall remain open for a period
43
of 20 Business Days, unless a longer period is required by law. If the aggregate
amount of Notes tendered pursuant to any Excess Cash Flow offer is less than the
Excess Cash Flow Offer Amount, the Borrowers may, subject to the other
provisions of this Agreement, use any such Excess Cash Flow for general
corporate purposes. Upon receiving notice of the Excess Cash Flow offer, the
Lender may elect to tender its Notes, in whole or in part, in integral multiples
of $1,000 principal amount in exchange for Cash. Any such repurchase of the
Notes shall include both Company Notes and MSXI Limited Notes on a pro rata
basis based upon the aggregate principal amount of the Notes outstanding at the
time of such repurchase, unless a Change of Control of MSXI Limited has
occurred.
Within 20 Business Days prior to the required purchase date,
the Company shall mail an offer to the Lender, which offer will govern the terms
of the Excess Cash Flow offer and will state, among other things (1) the
purchase price; (2) the purchase date, (3) that the Borrowers are making an
Excess Cash Flow offer; (4) that Holders whose Notes are purchased only in part
will be issued new Notes in a principal amount equal to the unpurchased portion
of the Notes surrendered; provided that each Note purchased and each new Note
issued shall be in an original principal amount of $1,000 or integral multiples
thereof.
The Borrowers shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of the Notes pursuant to this
Section 5.10. To the extent that the provisions of any securities laws or
regulations conflict with the provisions this Section 5.10, the Borrowers shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 5.10 by virtue
thereof.
Notwithstanding anything in this Section 5.10, the repurchase
of the Notes by the Borrowers under this Section 5.10 shall not be required if
it would breach any covenant under the Senior Credit Facility or the Senior
Secured Note Indenture and shall be limited to amounts as provided under the
Senior Credit Facility and the Senior Secured Note Indenture, respectively, in
each case to the extent the Senior Credit Facility and the Senior Secured Note
Indenture is still in effect, as the case may be.
ARTICLE 6 NEGATIVE COVENANTS
SECTION 6.1. Limitation on Incurrence of Indebtedness.
(a) The Company shall not, and shall not permit any
Restricted Subsidiaries to, Incur, directly or indirectly, any Indebtedness;
provided, however, that the Company and the Guarantors may Incur Indebtedness
if, immediately after giving effect to such Incurrence, the Consolidated
Coverage Ratio exceeds 2.25 to 1.
(b) Notwithstanding Section 6.1(a), the Company and the
Restricted Subsidiaries may Incur any or all of the following Indebtedness:
(1) Indebtedness Incurred pursuant to the Senior Credit
Facility and Guarantees of Indebtedness Incurred pursuant to the Senior Credit
Facility; provided, however, that, after giving effect to any such Incurrence,
the aggregate principal amount of such Indebtedness then outstanding does not
exceed the sum of (i) the greater of (x) $40.0 million less the amount of Net
Available Cash from Asset Dispositions used to permanently reduce indebtedness
under the Senior Credit Facility and (y) 20% of the net book value of the
accounts receivable of the Company and its Restricted Subsidiaries, determined
in accordance with GAAP and 20% of the net book value of the inventory of the
Company and its Restricted Subsidiaries, determined in accordance with GAAP,
(ii) Cash Management Obligations owing to the
44
Agent, the Senior Lenders or their respective Affiliates, and (iii) the amount
by which the U.S. dollar equivalent of the principal amount of the loans and
letters of credit under the Senior Credit Facility exceeds the amount allowed
under the forgoing clauses (i) and (ii) as a result of currency fluctuations;
(2) Indebtedness represented by (i) the Senior Secured
Notes issued in the Offering (and the Exchange Notes), and (ii) Indebtedness
represented by any Senior Secured Note Guarantees;
(3) Indebtedness pursuant to agreements as in effect on
the Effective Date (other than Indebtedness described in clause (1) or (2) of
this Section 6.1(b)), including without limitation the Fourth Lien Notes;
(4) Indebtedness of the Company owed to and held by a
Wholly-Owned Subsidiary or Indebtedness of a Wholly-Owned Subsidiary owed to and
held by the Company or a Wholly-Owned Subsidiary; provided, however, that (i)
any such Indebtedness of the Company or any Guarantor shall be unsecured and
subordinated to the Notes and (ii) any subsequent issuance or transfer of any
Capital Stock which results in any such Wholly-Owned Subsidiary ceasing to be a
Wholly-Owned Subsidiary or any subsequent transfer of such Indebtedness (other
than to the Company or a Wholly-Owned Subsidiary) shall be deemed, in each case,
to constitute the Incurrence of such Indebtedness by the issuer thereof;
(5) Refinancing Indebtedness in respect of Indebtedness
Incurred pursuant to Section 6.1(a) or pursuant to clause (2), (3) or this
clause (5) of Section 6.1(b);
(6) Indebtedness in respect of performance bonds,
bankers' acceptances, letters of credit and surety or appeal bonds entered into
by the Company or a Restricted Subsidiary in the ordinary course of business (in
each case other than an obligation for borrowed money);
(7) Hedging Obligations consisting of Interest Rate
Agreements and Currency Agreements entered into in the ordinary course of
business and not for the purpose of speculation; provided, however, that, in the
case of Currency Agreements and Interest Rate Agreements, such Currency
Agreements and Interest Rate Agreements do not increase the Indebtedness of the
Company outstanding at any time other than as a result of fluctuations in
foreign currency exchange rates or interest rates or by reason of fees,
indemnities and compensation payable thereunder;
(8) Purchase Money Indebtedness and Capital Lease
Obligations Incurred to finance the acquisition or improvement by the Company or
a Restricted Subsidiary of any assets in the ordinary course of business and
which do not exceed $3.0 million in the aggregate at any time outstanding;
(9) Indebtedness Incurred in respect of letters of credit
in an aggregate principal amount not to exceed $5 million, plus the amount by
which the U.S. dollar equivalent of the principal amount of such letters of
credit exceeds $5 million as a result of currency fluctuations;
(10) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business, provided that such
Indebtedness is extinguished within five business days of Incurrence;
(11) Indebtedness Incurred after the Effective Date
representing interest paid-in-kind;
(12) Indebtedness of Foreign Restricted Subsidiaries of
the Company, in an aggregate principal amount not to exceed $5.0 million at any
time outstanding;
45
(13) Indebtedness in an aggregate principal amount which,
together with all other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the date of such Incurrence (other than Indebtedness
permitted by clauses (1) through (12) above or Section 6.1(a)), does not exceed
$10.0 million; or
(14) Indebtedness incurred pursuant to this Agreement and
represented by the Notes, and (ii) Indebtedness represented by the Guarantees
entered into pursuant to this Agreement.
(c) For purposes of determining compliance with the
foregoing covenant, (i) in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described in Section
6.1(b), the Company, in its sole discretion, will classify such item of
Indebtedness and only be required to include the amount and type of such
Indebtedness in Section 6.1(b) and (ii) an item of Indebtedness may be divided
and classified in more than one of the types of Indebtedness described in
Section 6.1(b).
SECTION 6.2. Limitation on Liens. The Company shall not,
and shall not permit any Restricted Subsidiary to, directly or indirectly, Incur
or permit to exist any Lien (other than Permitted Liens) of any nature
whatsoever on any property of the Company or any Restricted Subsidiary
(including Capital Stock of a Restricted Subsidiary), whether owned at the
Effective Date or thereafter acquired.
SECTION 6.3. Limitation on Sales of Assets and Subsidiary
Stock.
(a) The Company shall not, and shall not permit any
Restricted Subsidiary to, consummate any Asset Disposition unless:
(i) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to the fair
market value (including as to the value of all non-cash consideration), as
determined in good faith by the Board of Directors of the Company, of the shares
and assets subject to such Asset Disposition, and
(ii) at least 75% of the consideration therefor received
by the Company or such Restricted Subsidiary is in the form of cash or cash
equivalents, provided, however, that this clause (ii) shall not apply if the
Company or a Restricted Subsidiary is disposing of assets in exchange for
Additional Assets.
For the purposes of this covenant, the assumption of
Indebtedness of the Company or any Restricted Subsidiary and the release of the
Company or such Restricted Subsidiary from all liability on such Indebtedness in
connection with such Asset Disposition is deemed to be cash.
With respect to any Asset Disposition occurring on or after
the Effective Date from which the Company or any Restricted Subsidiary receives
Net Available Cash, the Company or such Restricted Subsidiary shall:
(i) within 365 days after the date such Net Available
Cash is received and to the extent the Company or such Restricted Subsidiary
elects to:
(A) apply an amount equal to such Net Available
Cash to prepay, repay, purchase or legally defease Applicable Indebtedness of
the Company or such Restricted Subsidiary, in each case owing to a Person other
than the Company or any Affiliate of the Company, or
46
(B) invest an equal amount, or the amount not so
applied pursuant to clause (A), in Additional Assets (including by means of an
Investment in Additional Assets by a Subsidiary Guarantor with Net Available
Cash received by the Company or another Subsidiary Guarantor); and
(ii) apply such excess Net Available Cash (to the extent
not applied pursuant to clause (i)) as provided in the following paragraphs of
this Section 6.3; provided, however, that in connection with any prepayment,
repayment or purchase of Applicable Indebtedness pursuant to clause (A) above
(other than the repayment of Applicable Indebtedness Incurred under the Senior
Credit Facility to fund the purchase of an asset which is sold by the Company
within 180 days of its purchase pursuant to a Sale/Leaseback Transaction), the
Company or such Restricted Subsidiary shall retire such Applicable Indebtedness
and shall cause the related loan commitment (if any) to be permanently reduced
in an amount equal to the principal amount so prepaid, repaid or purchased.
The amount of Net Available Cash required to be applied
pursuant to clause (ii) above and not theretofore so applied shall constitute
"Excess Proceeds." Pending application of Net Available Cash pursuant to this
provision, such Net Available Cash shall be invested in Temporary Cash
Investments. Notwithstanding the foregoing, the Company may use Excess Proceeds
to acquire Notes through open market or privately negotiated purchases, and
Excess Proceeds at any time will be reduced by the principal amount of Notes
acquired (and surrendered to the Trustee for cancellation) by the Company and
its Restricted Subsidiaries through open market or privately negotiated
purchases on or after the date of the applicable Asset Disposition.
If at any time the aggregate amount of Excess Proceeds not
theretofore subject to an Excess Proceeds Offer (as defined below) totals at
least $3 million, the Company shall, not later than 30 days after the end of the
period during which the Company is required to apply such Excess Proceeds
pursuant to clause (i) of the immediately preceding paragraph of this Section
6.3(a) (or, if the Company so elects, at any time within such period), make an
offer (an "Excess Proceeds Offer") to purchase from the Holders of Notes and the
Applicable Pari Passu Indebtedness (determined on a pro rata basis according to
the accreted value or aggregate principal amount, as the case may be, of the
Notes and the Applicable Pari Passu Indebtedness) in an amount equal to the
Excess Proceeds (rounded down to the nearest multiple of $1,000) on such date,
at a purchase price equal to 100% of the principal amount of such Notes, plus,
in each case, accrued and unpaid interest (and Additional Tax Amounts, if any),
to the date of purchase (the "Excess Proceeds Payment"). Upon completion of an
Excess Proceeds Offer the amount of Excess Proceeds remaining after application
pursuant to such Excess Proceeds Offer, (including payment of the purchase price
for Notes duly tendered) may be used by the Company for any corporate purpose
(to the extent not otherwise prohibited by this Agreement).
(b) Any repurchase of Notes pursuant to an Excess
Proceeds Offer shall include both Company Notes and MSXI Limited Notes on a pro
rata basis based upon the aggregate principal amount of the Notes outstanding at
the time of such repurchase, unless a Change of Control of MSXI Limited has
occurred.
(c) The Company shall comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations thereunder in the event that such Excess Proceeds
are received by the Company under the covenant described hereunder and the
Company is required to repurchase Notes as described above. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Section 6.3, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 6.3 by virtue thereof
47
(d) This Section 6.3 and any Excess Proceeds Offer
hereunder shall be subject to the terms and the restrictions of the
Intercreditor Agreement.
SECTION 6.4. Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any
Restricted Subsidiary, directly or indirectly, to make a Restricted Payment if
at the time the Company or such Restricted Subsidiary makes such Restricted
Payment:
(i) a Default or an Event of Default shall
have occurred and be continuing (or would result therefrom);
(ii) the Company is not able to Incur an
additional $1.00 of Indebtedness pursuant to Section 6.1(a); or
(iii) the aggregate amount of such Restricted
Payment together with all other Restricted Payments (the amount of any payments
made in property other than cash to be valued at the fair market value of such
property, as determined in good faith by the Board of Directors of the Company)
declared or made since the Effective Date would exceed the sum of:
(A) 50% of the Consolidated Net Income
accrued during the period (treated as one accounting period) from the Effective
Date to the end of the most recent fiscal quarter prior to the date of such
Restricted Payment for which financial statements of the Company are available
(or, in case such Consolidated Net Income accrued during such period (treated as
one accounting period) shall be a deficit, minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds
received subsequent to the Effective Date by the Company from the issuance or
sale of (i) its Capital Stock (other than Disqualified Stock or the issuance or
sale of Capital Stock to a Subsidiary of the Company) or (ii) the Capital Stock
of a Restricted Subsidiary pursuant to a Qualified TIPS Transaction (other than
any issuance or sale to a Subsidiary of the Company);
(C) the amount by which Indebtedness of
the Company or its Restricted Subsidiaries is reduced on the Company's balance
sheet upon the conversion or exchange (other than by a Subsidiary of the
Company) subsequent to the Effective Date, of any Indebtedness of the Company or
its Restricted Subsidiaries convertible or exchangeable for Capital Stock (other
than Disqualified Stock) of the Company (less the amount of any cash, or the
fair market value of any other property, distributed by the Company or any
Restricted Subsidiary upon such conversion or exchange); and
(D) an amount equal to the sum of the
net reduction in Investments resulting from repayments of loans or advances or
other transfers of assets subsequent to the Effective Date, in each case to the
Company or any Restricted Subsidiary; provided, however, that the foregoing
amount shall not exceed the amount of Investments previously made (and treated
as a Restricted Payment) by the Company or any Restricted Subsidiary in such
Person.
(b) The provisions of Section 6.4(a) shall not
prohibit:
(i) any purchase or redemption of Capital Stock,
Subordinated Obligations, the Fourth Lien Notes of the Company or any Restricted
Subsidiary made in exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company (other than
48
Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary
of the Company); provided, however,
(A) such purchase or redemption shall
be excluded from the calculation of the amount of Restricted Payments; and
(B) the Net Cash Proceeds from such
sale shall be excluded from the calculation of amounts under clause (iii)(B) of
Section 6.4(a) above;
(ii) any purchase or redemption of (A)
Subordinated Obligations of the Company made in exchange for, or out of the
proceeds of the substantially concurrent sale of, Subordinated Obligations of
the Company which is permitted to be Incurred pursuant to Section 6.1(b) and (c)
or (B) Subordinated Obligations of a Restricted Subsidiary made in exchange for,
or out of the proceeds of the substantially concurrent sale of, Subordinated
Obligations of such Restricted Subsidiary or the Company which is permitted to
be Incurred pursuant to Section 6.1(b) and (c); provided, however, that such
purchase or redemption shall be excluded from the calculation of the amount of
Restricted Payments;
(iii) any purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value of the Fourth Lien Notes
made in exchange for, or out of the proceeds of the substantially concurrent
sale of Indebtedness constituting Refinancing Indebtedness which is permitted to
be Incurred pursuant to Section 6.1(b)(5); provided, however, that such
purchase, repurchase, redemption, defeasance or other acquisition or retirement
for value shall be excluded from the calculation of the amount of Restricted
Payments;
(iv) dividends paid within 60 days after the date
of declaration thereof if at such date of declaration such dividend would have
complied with this Section 6.4; provided, however, that at the time of payment
of such dividend, no other Default shall have occurred and be continuing (or
would result therefrom); provided, further, however, that such dividend shall be
included in the calculation of the amount of Restricted Payments;
(v) any purchase or redemption or other
retirement for value of Capital Stock of the Company required pursuant to any
shareholders agreement, management agreement or employee stock option agreement
in accordance with the provisions of any such arrangement in an amount not to
exceed $1.5 million in the aggregate; provided, however, that at the time of
such purchase or redemption, no other Default shall have occurred and be
continuing (or would result therefrom); provided, further, however, that such
purchase or redemption shall be included in the amount of Restricted Payments;
(vi) Guarantees by the Company or any Restricted
Subsidiary of Indebtedness Incurred by the Company or a Restricted Subsidiary,
provided, however, that at the time such Guarantee is Incurred it would be
permitted under the covenant described under Section 6.1; provided, further,
however, that such Guarantee shall be excluded from the amount of Restricted
Payments;
(vii) any purchase or redemption of Senior
Subordinated Notes; provided, however, that the aggregate purchase price of all
such purchases and redemptions shall not exceed $10.0 million; or
49
(viii) if no Default or Event of Default will have
occurred and be continuing, Restricted Payments (in addition to those permitted
by clauses (i) through (vii) above) in an aggregate amount not to exceed $5.0
million subsequent to the Effective Date.
SECTION 6.5. Limitation on Affiliate Transactions.
(a) The Company shall not, and shall not permit
any Restricted Subsidiary to, enter into or permit to exist any transaction or
series of related transactions (including the purchase, sale, lease or exchange
of any property, employee compensation arrangements or the rendering of any
service) with any Affiliate of the Company (an "Affiliate Transaction") unless
the terms thereof:
(1) are no less favorable to the Company or such
Restricted Subsidiary than those that could be obtained at the time of such
transaction in arm's-length dealings with a Person who is not such an Affiliate;
(2) if such Affiliate Transaction (or series of related
Affiliate Transactions) involves aggregate payments in an amount in excess of
$1.0 million (i) are set forth in writing and (ii) comply with clause (1) of
this Section 6.5(a);
(3) if such Affiliate Transaction (or series of related
Affiliate Transactions) involves aggregate payments in an amount in excess of
$2.5 million in any one year, (i) are set forth in writing, (ii) comply with
clause (2) of this Section 6.5(a) and (iii) have been approved by a majority of
the disinterested members of the Board of Directors of the Company, and
(4) if such Affiliate Transaction (or series of related
Affiliate Transactions) involves aggregate payments in an amount in excess of
$10.0 million in any one year, (i) comply with clause (3) of this Section 6.5(a)
and (ii) have been determined by a nationally recognized investment banking firm
to be fair, from a financial standpoint, to the Company and its Restricted
Subsidiaries.
(b) Section 6.5(a) shall not prohibit:
(i) any Restricted Payment permitted to
be paid pursuant to Section 6.4;
(ii) any issuance of securities, or
other payments, awards or grants in cash, securities or otherwise, pursuant to,
or the funding of, employment arrangements, stock options and stock ownership
plans in the ordinary course of business and approved by the Board of Directors
of the Company;
(iii) the grant of stock options or
similar rights to employees and directors of the Company in the ordinary course
of business and pursuant to plans approved by the Board of Directors of the
Company;
(iv) loans or advances to employees of
the Company or its Subsidiaries, provided, however, the aggregate amount of such
loans or advances made after the Effective Date and outstanding at any one time
shall not exceed $1.5 million;
(v) fees, compensation or employee
benefit arrangements paid to and indemnity provided for the benefit of
directors, officers or employees of the Company or any Subsidiary in the
ordinary course of business;
50
(vi) any Affiliate Transaction between
the Company and a Restricted Subsidiary or between Restricted Subsidiaries in
the ordinary course of business (so long as the other stockholders of any
participating Restricted Subsidiaries which are not Wholly Owned Subsidiaries
are not themselves Affiliates of the Company), or
(vii) Existing Affiliate Agreements,
including amendments thereto or replacements thereof entered into after the
Effective Date, provided, however, that the terms of any such amendment or
replacement are at least as favorable to the Company as those that could be
obtained at the time of such amendment or replacement in arm's-length dealings
with a Person which is not an Affiliate.
If the Company or any Restricted Subsidiary has complied with
all of the provisions of the foregoing paragraph (a) of this Section 6.5 other
than clause (4)(ii) thereof, such paragraph shall not prohibit the Company or
any Restricted Subsidiary from entering into Affiliate Transactions pursuant to
which the Company or any Restricted Subsidiary renders services in the ordinary
course of business to CVC or to Affiliates of CVC or to the Lender or to
Affiliates of the Lender.
SECTION 6.6. Impairment of Security Interests. Subject to
the Intercreditor Agreement, neither the Company nor any Guarantor will take or
omit to take any action which would adversely affect or impair the Liens in
favor of the Lender with respect to the Collateral. Neither the Company nor any
of its Restricted Subsidiaries shall grant to any Person, or permit any Person
to retain (other than the Lender), any interest whatsoever in the Collateral
other than Permitted Liens. Neither the Company nor any of its Restricted
Subsidiaries will enter into any agreement that requires the proceeds received
from any sale of Collateral to be applied to repay, redeem, defease or otherwise
acquire or retire any Indebtedness of any Person, other than as permitted by
this Agreement, the Intercreditor Agreement and the Loan Documents. The Company
shall, and shall cause each Guarantor to, at their sole cost and expense,
execute and deliver all such agreements and instruments to more fully or
accurately describe the property intended to be Collateral, or the obligations
intended to be secured by the Security Documents. The Company shall, and shall
cause each Restricted Subsidiary to, at their sole cost and expense, file any
such notice filings or other agreements or instruments as may be reasonably
necessary or desirable under applicable law to perfect the Liens created by the
Security Documents at such times and at such places as necessary.
SECTION 6.7. Limitations on Restrictions on Distributions
from Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or consensual restriction on the ability of
any Restricted Subsidiary: (a) to pay dividends or make any other distributions
on its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) to make any loans or advances to the
Company or (c) to transfer any of its property or assets to the Company, except:
(i) any encumbrance or restriction pursuant to an
agreement in effect at or entered into on the Effective Date;
(ii) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness Incurred by such Restricted Subsidiary which was entered
into on or prior to the date on which such Restricted Subsidiary was
acquired by the Company (other than as consideration in, or to provide
all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant
to which such Restricted Subsidiary became a Restricted Subsidiary or
was acquired by the Company) and outstanding on such date;
51
(iii) any encumbrance or restriction pursuant to an
agreement effecting a Refinancing of Indebtedness Incurred pursuant to
an agreement referred to in clause (i) or (ii) of this Section 6.7 (or
effecting a Refinancing of such Refinancing Indebtedness pursuant to
this clause (iii)) or contained in any amendment to an agreement
referred to in clause (i) or (ii) of this Section 6.7 or this clause
(iii); provided, however, that the encumbrances and restrictions with
respect to such Restricted Subsidiary contained in any such refinancing
agreement or amendment are no more restrictive in any material respect
than the encumbrances and restrictions with respect to such Restricted
Subsidiary contained in such agreements;
(iv) any such encumbrance or restriction consisting of
customary non-assignment provisions in leases governing leasehold
interests to the extent such provisions restrict the transfer of the
lease or the property leased thereunder;
(v) in the case of Section 6.7(c) above, restrictions
contained in security agreements or mortgages securing Indebtedness of
a Restricted Subsidiary to the extent such restrictions restrict the
transfer of the property subject to such security agreements or
mortgages;
(vi) any restriction with respect to (x) a Restricted
Subsidiary imposed pursuant to an agreement entered into for the sale
or disposition of all or substantially all the Capital Stock or assets
of such Restricted Subsidiary or (y) an asset of a Restricted
Subsidiary pursuant to an agreement entered into for the sale or
disposition of such asset, in each case pending the closing of such
sale or disposition;
(vii) any restriction imposed by applicable law; and
(viii) any encumbrance or restriction with respect to a
Foreign Restricted Subsidiary which is contained in agreements
evidencing Indebtedness permitted under Section 6.1 hereof and which
encumbrance or restriction is customary in agreements of such type.
SECTION 6.8. Limitation on Issuance or Sale of Capital
Stock of Restricted Subsidiaries. The Company shall not (i) sell, pledge,
hypothecate or otherwise dispose of any shares of Capital Stock of a Restricted
Subsidiary (other than pledges of Capital Stock securing the Senior Credit
Facility, the Senior Secured Notes, the Fourth Lien Notes or the Notes) or (ii)
permit any Restricted Subsidiary, directly or indirectly, to issue or sell or
otherwise dispose of any shares of its Capital Stock other than (A) to the
Company or a Restricted Subsidiary, (B) directors' qualifying shares and shares
owned by foreign shareholders, to the extent required by applicable local laws
in foreign countries, (C) pursuant to a Qualified TIPS Transaction, (D) the
disposition of shares of a Foreign Restricted Subsidiary that is the subject of
a Permitted Foreign Transaction or (E) if, immediately after giving effect to
such issuance or sale, such Restricted Subsidiary would no longer constitute a
Subsidiary. The proceeds of any sale of such Capital Stock permitted hereby
(other than any Capital Stock received by the Company and its Restricted
Subsidiaries in connection with a Permitted Foreign Transaction) will be treated
as Net Available Cash from an Asset Disposition and must be applied in
accordance with Section 6.3.
SECTION 6.9. Merger and Consolidation. The Company shall
not consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of related transactions, all or substantially all its
assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") shall be a corporation organized and existing
under the laws of the United States of America, any State thereof or
the District of Columbia and the Successor Company (if not the Company)
shall expressly assume, (a) by an instrument executed and delivered to
the Lender, in form satisfactory
52
to the Lender, all the obligations of the Company under the Notes and
this Agreement and (b) by an instrument (in form and substance
satisfactory to the Lender), executed and delivered to the Lender, all
obligations of the Company under the Security Documents, and shall
cause such amendments, supplements or other instruments to be filed and
recorded in such jurisdictions and take such other actions as may be
required by applicable law to preserve and protect the Lien on the
Collateral owned by or transferred to the surviving entity, together
with such financing statements as may be required to perfect any
security interest in such Collateral which may be perfected by the
filing of a financing statement under the Uniform Commercial Code of
the relevant states;
(ii) immediately after giving effect to such transaction
on a pro forma basis (and treating any Indebtedness which becomes an
obligation of the Successor Company or any Subsidiary as a result of
such transaction as having been Incurred by such Successor Company or
such Subsidiary at the time of such transaction), no Default shall have
occurred and be continuing;
(iii) except in the case of a merger the sole purpose of
which is to change the Company's jurisdiction of incorporation,
immediately after giving effect to such transaction on a pro forma
basis, the Successor Company would be able to Incur an additional $1.00
of Indebtedness pursuant to Section 6.1(a) (Limitation on Incurrence of
Indebtedness);
(iv) immediately after giving effect to such transaction
on a pro forma basis, the Successor Company shall have Consolidated Net
Worth in an amount that is not less than the Consolidated Net Worth of
the Company immediately prior to such transaction; and
(v) the Company shall have delivered to the Lender an
Officers' Certificate and an opinion of counsel, each stating that such
consolidation, merger or transfer and such instruments delivered to the
Lender in connection therewith comply with this Agreement.
Notwithstanding the foregoing clauses (ii), (iii) and (iv) of
this Section 6.9, any Restricted Subsidiary may consolidate with, merge into or
transfer all or part of its properties and assets to the Company or another
Restricted Subsidiary.
The Successor Company shall be the successor to the Company
and shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Agreement, but the predecessor Company in the
case of a conveyance, transfer or lease shall not be released from the
obligation to pay the principal of and interest on the Notes.
The Company shall not permit any Guarantor to consolidate with
or merge with or into, or convey, transfer or lease, in one transaction or a
series of transactions, all or substantially all its assets to, any Person
(other than the Company or a Wholly-Owned Subsidiary), unless: (i) the
resulting, surviving or transferee Person (if not such Subsidiary) shall be a
corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and the Successor Company
(if not such Subsidiary) shall expressly assume (a) by an instrument (in form
and substance satisfactory to the Lender), executed and delivered to the Lender,
all of the obligations of the Guarantor under the Guaranty and (b) by instrument
(in form and substance satisfactory to the Lender) executed and delivered to the
Lender, all obligations of the Guarantor under the Security Documents, and in
connection therewith shall cause such instruments to be filed and recorded in
such jurisdictions and take such other actions as may be required by applicable
law to perfect or continue the perfection of the Lien created thereunder on the
Collateral owned by or transferred to the surviving entity; (ii) immediately
after giving effect to such transaction on a pro forma basis (and treating any
Indebtedness which becomes an
53
obligation of the resulting, surviving or transferee Person as a result of such
transaction as having been Incurred by such Person at the time of such
transaction), no Default shall have occurred and be continuing; and (iii) the
Company shall have delivered to the Lender an Officers' Certificate and an
opinion of counsel, each stating that such consolidation, merger or transfer and
such Guaranty agreement comply with this Agreement. The provisions of clauses
(i) and (iii) above shall not apply to any transactions which constitute an
Asset Disposition if the Company has complied with the applicable provisions of
Section 6.3 (Limitation on Sales of Assets and Subsidiary Stock) hereof.
The Company shall not permit MSXI Limited to consolidate with
or merge with or into, or convey, transfer or lease, in one transaction or a
series of transactions, all or substantially all its assets to, any Person
(other than the Company or a Wholly-Owned Subsidiary), unless: (i) the
resulting, surviving or transferee Person (if not such Subsidiary) shall be a
company incorporated under the laws of England and Wales and the Successor
Company (if not such Subsidiary) shall expressly assume (a) by an instrument (in
form and substance satisfactory to the Lender), executed and delivered to the
Lender, all of the obligations of MSXI Limited under the MSXI Limited Notes and
this Agreement and (b) by instrument (in form and substance satisfactory to the
Lender) executed and delivered to the Lender, all obligations of MSXI Limited
under the Security Documents, and in connection therewith shall cause such
instruments to be filed and recorded in such jurisdictions and take such other
actions as may be required by applicable law to perfect or continue the
perfection of the Lien created thereunder on the Collateral owned by or
transferred to the surviving entity; (ii) immediately after giving effect to
such transaction on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the resulting, surviving or transferee Person as a
result of such transaction as having been Incurred by such Person at the time of
such transaction), no Default shall have occurred and be continuing; and (iii)
the Company shall have delivered to the Lender an Officers' Certificate and an
opinion of counsel, each stating that such consolidation, merger or transfer and
such instrument comply with this Agreement. The provisions of clauses (i) and
(iii) above shall not apply to any transactions which constitute an Asset
Disposition if the Company has complied with the applicable provisions of
Section 6.3 (Limitation on Sales of Assets and Subsidiary Stock) hereof.
SECTION 6.10. Waiver of Stay, Extension and Usury
Laws. Each Borrower covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Borrowers from paying all or any
portion of the principal of, premium, if any, or interest on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Agreement; and (to the
extent that it may lawfully do so) each Borrower hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Lender or the Collateral Agent, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 6.11. Limitation on Capital Expenditures. The
aggregate amount of Capital Expenditures made by the Company and its Restricted
Subsidiaries in any fiscal year shall not exceed (x) $15.0 million and (y) up to
$5 million of amounts available for Capital Expenditures and not used by the
Company and its Restricted Subsidiaries in the immediately preceding fiscal
year.
SECTION 6.12. Limitation on Duties in Respect of
Collateral; Indemnification.
(a) Beyond the exercise of reasonable care in
the custody thereof, the Lender and the Collateral Agent shall have no duty as
to any Collateral in their possession or control or in the possession or control
of any agent or bailee or any income thereon or as to preservation of rights
against prior parties or any other rights pertaining thereto and the Lender and
the Collateral Agent shall not be
54
responsible for filing any financing or continuation statements or recording any
documents or instruments in any public office at any time or times or otherwise
perfecting or maintaining the perfection of any security interest in the
Collateral. The Lender and the Collateral Agent shall be deemed to have
exercised reasonable care in the custody of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that which it
accords its own property and shall not be liable or responsible for any loss or
diminution in the value of any of the Collateral, by reason of the act or
omission of any carrier, forwarding agency or other agent or bailee selected by
the Lender and the Collateral Agent in good faith.
(b) The Lender and the Collateral Agent shall
not be responsible for the existence, genuineness or value of any of the
Collateral or for the validity, perfection, priority or enforceability of the
Liens in any of the Collateral, whether impaired by operation of law or by
reason of any action or omission to act on its part hereunder, except to the
extent such action or omission constitutes gross negligence or willful
misconduct on the part of the Lender and the Collateral Agent, for the validity
or sufficiency of the Collateral or any agreement or assignment contained
therein, for the validity of the title of the Company to the Collateral, for
insuring the Collateral or for the payment of taxes, charges, assessments or
Liens upon the Collateral or otherwise as to the maintenance of the Collateral.
The Lender and the Collateral Agent shall have no duty to ascertain or inquire
as to the performance or observance of any of the terms of this Agreement, the
Security Agreement, the U.K. Deed or the Intercreditor Agreement.
SECTION 6.13. Limitation on Transfer of Accounts
Receivable. MSXI Limited shall not be permitted to transfer its Charged Assets
to any Subsidiaries that are not Subsidiary Guarantors.
ARTICLE 7 DEFAULTS AND REMEDIES
SECTION 7.1. Events of Default. An an "Event of Default"
occurs if:
(i) the Borrowers default in the payment of interest on
the Loans, any Notes or any other amount under this Agreement when the
same becomes due and payable, and such default continues for a period
of 30 days;
(ii) the Borrowers default in the payment of the principal
of any Loans when the same becomes due and payable at its Stated
Maturity, by notice of prepayment, upon required repurchase, upon
declaration or otherwise;
(iii) the Borrowers fails to comply for 60 days after the
notice specified below with any of their respective obligations under
Section 6.1 (Limitation on Incurrence of Indebtedness), Section 6.4
(Limitation on Restricted Payments), Section 6.3 (Limitation on Sales
of Assets and Subsidiary Stock) and Section 6.9 (Merger and
Consolidation);
(iv) the Borrowers fail to comply with any of their other
agreements contained in this Agreement or in the other Loan Documents
and such failure continues for 60 days after the notice specified
below;
(v) any Loan Document at any time for any reason ceases
to be in full force and effect (except as provided by the terms of this
Agreement and the other Loan Documents), or shall cease to be effective
in all material respects to give the Lender the Liens with the priority
purported to be created thereby subject to no other Liens except as
expressly permitted by the applicable Loan Document;
55
(vi) the Company or any of its Subsidiaries, directly or
indirectly, contests in any manner the effectiveness, validity, binding
nature or enforceability of any Loan Document;
(vii) the Borrowers or any Restricted Subsidiary of the
Company fails to pay any Indebtedness within any applicable grace
period after final maturity or acceleration of any such Indebtedness by
the holders thereof because of a default and the total amount of such
Indebtedness unpaid or accelerated exceeds $5.0 million;
(viii) the Company, MSXI Limited or any Significant
Subsidiary of the Company pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case in which it is the debtor;
(C) consents to the appointment of a Custodian
of it or for any substantial part of its property; or
(D) makes a general assignment for the benefit
of creditors; or
(E) takes any comparable action under any
foreign laws relating to insolvency;
(ix) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company, MSXI
Limited or any Significant Subsidiary of the Company in an Involuntary Case
(B) appoints a Custodian of the Company, MSXI
Limited or any Significant Subsidiary of the Company or for any substantial part
of the property of the Company or a Significant Subsidiary; or
(C) orders the winding up or liquidation of the
Company, MSXI Limited or any Significant Subsidiary;
(or any similar relief is granted under any foreign
laws) and the order or decree remains unstayed and in effect for 60 days.
(x) the rendering of any judgment or decree for the
payment of money in excess of $5 million against the Company, MSXI
Limited or any Restricted Subsidiary, if such judgment or decree
remains unpaid and outstanding following such judgment and is not
discharged, waived or stayed within 60 days after entry of such
judgment or decree, or
(xi) a Note Guarantee ceases to be in full force and
effect (other than in accordance with the terms of such Note Guarantee)
or a Guarantor denies or disaffirms its obligations under its Note
Guarantee and such default continues for 10 days.
The foregoing will constitute Events of Default whatever the reason for
such Event of Default and whether it is voluntary or involuntary or is effected
by the operation of law or pursuant to any
56
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
The term "Bankruptcy Law" means the Bankruptcy Code or any similar
federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
A Default under clause (iii) or (iv) of this Section 7.1 is not an
Event of Default until the Lender notifies the Company of the Default and the
Company does not cure such Default within the time specified after receipt of
such notice. Such notice must specify the Default, demand that it be remedied
and state that such notice is a "Notice of Default".
The Borrowers shall deliver to the Lender, within 15 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (vii) of this Section 7.1 and any event which
with the giving of notice or the lapse of time would become an Event of Default
under clause (iii), (iv) or (x) of this Section 7.1, its status and what action
the Company is taking or proposes to take with respect thereto.
SECTION 7.2. Acceleration. If an Event of Default occurs
and is continuing, the Lender by notice to the Company, may declare the
principal of and accrued but unpaid interest on the Loan and all of the Notes to
be due and payable. Upon such a declaration, such principal and interest shall
be due and payable immediately. If an Event of Default specified in Section
7.1(viii) or (ix) with respect to the Company occurs and is continuing, the
principal of and interest on all the Notes will ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Lender. The Lender may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of acceleration. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
SECTION 7.3. Other Remedies. If an Event of Default
occurs and is continuing, the Lender may pursue any available remedy to collect
the payment of principal of or interest on the Notes or to enforce the
performance of any provision of the Notes or this Agreement.
The Lender may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Lender in exercising any right or remedy accruing upon
an Event of Default shall not impair the right or remedy or constitute a waiver
of or acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are, to the extent permitted by law, cumulative.
The Lender may, in addition to the remedies provided above,
and subject to the Intercreditor Agreement, exercise and enforce any and all
other rights and remedies available to it, whether arising under this Agreement
or any other Loan Document or under applicable law, in any manner deemed
appropriate by the Lender, including suit in equity, action at law, or other
appropriate proceedings, whether for the specific performance (to the extent
permitted by law) of any covenant or agreement contained in any other Loan
Document or in aid of the exercise of any power granted in any other Loan
Document.
SECTION 7.4. Proceeds. All proceeds of any realization on
the Collateral pursuant to the Security Documents and any payments received by
the Lender pursuant to the Note Guarantees subsequent to and during the
continuance of any Event of Default, shall be allocated and distributed by the
Lender as follows:
57
(a) First, to the payment of all reasonable
costs and expenses, including without limitation all reasonable attorneys' fees,
of the Lender in connection with the enforcement of the Security Documents and
otherwise administering this Agreement;
(b) Second, to the payment of all fees required
to be paid under any Loan Document owing to the Lender, for application to
payment of such liabilities;
(c) Third, to the Lender consisting of interest
owing to the Lender, for application to payment of such liabilities;
(d) Fourth, to the Lender consisting of
principal owing to the Lender, for application to payment of such liabilities;
(e) Fifth, to the payment of any and all other
amounts owing to the Lender, for application to payment of such liabilities; and
(f) Sixth, to the Borrowers, or such other
Person as may be legally entitled thereto.
ARTICLE 8 GUARANTEES
SECTION 8.1. Guarantees.
(a) Each Guarantor hereby irrevocably and
unconditionally guarantees, jointly and severally, to Lender and the Collateral
Agent and their respective successors and assigns the full and punctual payment
of all Obligations under this Agreement, the Loan Documents and the Notes,
including, without limitation, principal of, premium, if any, and interest on
the Company Notes when due, whether at Stated Maturity, by acceleration or
otherwise, and all other obligations of the Company under this Agreement and the
Company Notes and the Company and each Guarantor hereby irrevocably and
unconditionally guarantees, jointly and severally, to the Lender and the
Collateral Agent and their respective successors and assigns the full and
punctual payment of all Obligations under this Agreement, the Loan Documents and
the Notes, including, without limitation, principal of, premium, if any, and
interest on the MSXI Limited Notes when due, whether at Stated Maturity, by
acceleration or otherwise, and all other obligations of MXSI Limited under this
Agreement and the MSXI Limited Notes (all the foregoing being hereinafter
collectively called the "Guaranteed Obligations"). Each Guarantor further agrees
that the Guaranteed Obligations may be extended or renewed, in whole or in part,
without notice or further assent from such Guarantor and that such Guarantor
will remain bound under this Article 8 notwithstanding any extension or renewal
of any Guaranteed Obligation.
(b) Each Guarantor waives presentation to,
demand of, payment from and protest to the Company and MSXI Limited of any of
the Guaranteed Obligations and also waives notice of protest for nonpayment.
Each Guarantor waives notice of any default under the Notes or the Guaranteed
Obligations. The obligations of each Guarantor hereunder shall not be affected
by (a) the failure of the Lender or the Collateral Agent to assert any claim or
demand or to enforce any right or remedy against the Company or any other Person
under this Agreement, the Notes or any other agreement or otherwise; (b) any
extension or renewal of any thereof; (c) any rescission, waiver, amendment or
modification of any of the terms or provisions of this Agreement, the Notes or
any other agreement; (d) the release of any security held by the Lender for the
Guaranteed Obligations or any of them; (e) the failure of the Lender or the
Collateral Agent to exercise any right or remedy against any other guarantor of
the Guaranteed Obligations; or (f) any change in the ownership of such
Guarantor.
58
(c) Each Guarantor further agrees that its
Subsidiary Guarantee herein constitutes a guarantee of payment, performance and
compliance when due (and not a guarantee of collection) and waives any right to
require that any resort be had by the Lender to any security held for payment of
the Guaranteed Obligations.
(d) Except as expressly set forth in Section 8.2
and 8.6, the obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of the Lender or the Collateral
Agent to assert any claim or demand or to enforce any remedy under this
Agreement, the Notes or any other agreement, by any waiver or modification of
any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Guaranteed Obligations, or by any other act or thing or
omission or delay to do any other act or thing which may or might in any manner
or to any extent vary the risk of such Guarantor or would otherwise operate as a
discharge of such Guarantor as a matter of law or equity.
(e) Each Guarantor further agrees that its
Subsidiary Guarantee herein shall continue to be effective or be reinstated, as
the case may be, if at any time payment, or any part thereof, of principal of,
premium, if any, or interest on any Guaranteed Obligation is rescinded or must
otherwise be restored by the Lender or the Collateral Agent upon the bankruptcy
or reorganization of the Company or otherwise.
(f) In furtherance of the foregoing and not in
limitation of any other right which the Lender or the Collateral Agent has at
law or in equity against any Guarantor by virtue hereof, upon the failure of the
Company to pay the principal of, premium, if any, or interest on any Obligation
when and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, or to perform or comply with any other Guaranteed
Obligation, each Guarantor hereby promises to and will, upon receipt of written
demand by the Lender, forthwith pay, or cause to be paid, in cash, to the Lender
an amount equal to the sum of (i) the unpaid amount of such Guaranteed
Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations
(but only to the extent not prohibited by law) and (iii) all other monetary
Guaranteed Obligations of the Company to the Lender.
(g) Each Guarantor agrees that it shall not be
entitled to any right of subrogation in respect of any Guaranteed Obligations
guaranteed hereby until payment in full of all Guaranteed Obligations. Each
Guarantor further agrees that, as between it, on the one hand, and the Lender,
on the other hand, (x) the maturity of the Guaranteed Obligations hereby may be
accelerated as provided in Article 7 for the purposes of such Guarantor's Note
Guarantee herein, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed hereby,
and (y) in the event of any declaration of acceleration of such Obligations as
provided in Article 7, such Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
Section 8.1.
(h) Each Guarantor also agrees to pay any and
all costs and expenses (including reasonable attorneys' fees) incurred by the
Lender in enforcing any rights under this Section 8.1.
SECTION 8.2. Limitation on Liability.
59
Any term or provision of this Agreement to the contrary
notwithstanding, the maximum aggregate amount of the obligations guaranteed
hereunder by any Guarantor shall not exceed the maximum amount that can be
hereby guaranteed without rendering this Agreement, as it relates to such
Guarantor, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors generally.
To effectuate the foregoing intention, the obligations of each Guarantor shall
be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Note Guarantee or
pursuant to its contribution obligations hereunder, result in the obligations of
such Guarantor under its Note Guarantee not constituting a fraudulent conveyance
or fraudulent transfer under Federal, state or foreign law. Each Guarantor that
makes a payment or distribution under a Note Guarantee shall be entitled to a
contribution from each other Guarantor in an amount based on the consolidated
net worth of each Guarantor.
SECTION 8.3. Successors and Assigns.
This Article 8 shall be binding upon each Guarantor and its
successors and assigns and shall enure to the benefit of the successors and
assigns of the Lender and, in the event of any transfer or assignment of rights
by the Lender, the rights and privileges conferred upon that party in this
Agreement and in the Notes shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions of this
Agreement.
SECTION 8.4. No Waiver.
Neither a failure nor a delay on the part of either the Lender
in exercising any right, power or privilege under this Article 8 shall operate
as a waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise of any right, power or privilege. The rights, remedies
and benefits of the Lender herein expressly specified are cumulative and not
exclusive of any other rights, remedies or benefits which either may have under
this Article 8 at law, in equity, by statute or otherwise.
SECTION 8.5. Modification.
No modification, amendment or waiver of any provision of this
Article 8, nor the consent to any departure by any Guarantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Lender, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on any
Guarantor in any case shall entitle such Guarantor to any other or further
notice or demand in the same, similar or other circumstances.
SECTION 8.6. Release of Subsidiary Guarantor.
A Guarantor may, by execution and delivery to the Lender of a
supplement to this Agreement satisfactory to the Lender, be released from its
Guarantee upon the sale of all of its Capital Stock, or all or substantially all
of the assets of the applicable Guarantor, to any Person that is not a
Subsidiary of the Company, if such sale is made in compliance with this
Agreement.
SECTION 8.7. Execution of Supplement Agreement for Future
Subsidiary Guarantors.
60
Each Subsidiary which is required to become a Subsidiary
Guarantor pursuant to Section 5.8 shall, and the Company shall cause each such
Subsidiary to, promptly execute and deliver to the Lender a Supplement Agreement
pursuant to which such Subsidiary shall become a Subsidiary Guarantor under this
Article 8 and shall guarantee the Obligations under this Agreement and the
Notes. Concurrently with the execution and delivery of such supplement to this
Agreement, the Company shall deliver to the Lender Opinions of Counsel to the
effect that such supplement to this Agreement has been duly authorized, executed
and delivered by such Subsidiary and that, subject to the application of
bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other
similar laws relating to creditors' rights generally and to the principles of
equity, whether considered in a proceeding at law or in equity, the Subsidiary
Guarantee of such Subsidiary Guarantor is a legal, valid and binding obligation
of such Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in
accordance with its terms.
SECTION 8.8. Waiver of Stay, Extension or Usury laws.
Each Guarantor covenants to the extent permitted by law that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury law
or other law that would prohibit or forgive such Guarantor from performing its
Guarantee as contemplated herein, wherever enacted, now or at any time hereafter
in force, or which may affect the covenants or the performance of its Note
Guarantee; and each Guarantor hereby expressly waives to the extent permitted by
law all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the Lender,
but shall suffer and permit the execution of every such power as though no such
law had been enacted.
ARTICLE 9 MISCELLANEOUS
SECTION 9.1. Participations in Loans and Notes.
(a) Subject to the terms of the Intercreditor
Agreement, the Lender shall have the right at any time, with the prior written
consent of the Company, which consent from the Company shall not be unreasonably
withheld or delayed and shall not be required if any Event of Default has
occurred and is continuing or if such assignment is to an Affiliate of the
Lender, to sell, assign, transfer, or negotiate, or grant participation in, all
or any part of the Loans or Notes to one or more Persons. In the case of any
sale, assignment, transfer, or negotiation of all or part of the Loans or Notes
as authorized under this Section 9.1(a), the assignee, transferee, or recipient
shall have, to the extent of such sale, assignment, transfer, or negotiation,
the same rights, benefits, and obligations as it would if it were a Lender with
respect to such Loans or Notes. Unless and Event of Default has occurred or
there has been a Change of Control of MSXI Limited, any such assignments or
transfers shall be made with respect to the Company Notes and U.K. Notes on a
pro rata basis based upon the aggregate principal amount of the Notes
outstanding at the time of such assignment or transfer.
(b) In connection with any sales, assignments,
or transfers of any Loan or Notes referred to in Section 9.1(a), the Lender
shall give notice to the Company, the Agent and the Trustee of the identity of
such parties and obtain agreements from the purchasers, assignees and
transferees, as the case may be (the "Assignees"), that all information given to
such parties will be held in strict confidence pursuant to a confidentiality
agreement reasonably satisfactory to the Company. Each Borrower shall maintain a
register on which it will record the name and address of the Lender and all
Assignees and shall be entitled to treat the holder or holders of record as the
Lender for all purposes hereunder.
61
(c) In the event of an assignment by the Lender,
or any subsequent assignment, the term "Lender" herein shall be deemed to refer
to each such Lender, the term "Note" shall be deemed to refer to each "Note",
and any action requiring the consent of the Lender shall be deemed to require
the consent of Persons holding in excess of 50% of the outstanding principal
amount of the Notes.
SECTION 9.2. Expenses. Whether or not the transactions
contemplated hereby shall be consummated, the Borrowers agree to pay promptly,
or reimburse the Lender, as the case may be, for the payment of, on demand, (i)
all the actual and reasonable costs and expenses of preparation of this
Agreement and the Loan Documents and all the costs of furnishing all opinions by
counsel for the Borrowers (including, without limitation, any opinions requested
by the Lender as to any legal matters arising hereunder), and of the Lender's
performance of and compliance with all agreements and conditions contained
herein on its part to be performed or complied with (including all stamp and
other taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing or recording of this Agreement and the Loan
Documents and the consummation of the transactions contemplated hereby and
thereby, and any and all liabilities with respect to or resulting from any delay
in paying or omitting to pay such taxes or fees); (ii) the reasonable fees,
expenses, and disbursements of counsel to the Lender in connection with the
negotiation, preparation, execution, and administration of this Agreement, the
Loan Documents and the Loans hereunder, and any amendments and waivers hereto or
thereto (other than assignments of, or sales of participations in, the Notes
pursuant to Section 9.1) and (iii) after the occurrence of an Event of Default,
all costs and expenses (including reasonable attorneys' fees) incurred by the
Lender in enforcing any Obligations of or in collecting any payments due from
the Borrowers hereunder or under the Notes by reason of such Event of Default or
in connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a workout, or any insolvency or
bankruptcy proceedings
SECTION 9.3. Indemnity. In addition to the payment of
expenses pursuant to the terms and conditions of Section 9.2 hereof, whether or
not the transactions contemplated hereby shall be consummated, each Borrower
(the "Indemnitors") agrees to indemnify, pay, and hold the Lender and any Holder
of the Notes, and the officers, directors, employees, agents, and Affiliates of
the Lender and such Holders (collectively, the "Indemnitees") harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including, without limitation, the reasonable fees and
disbursements of one counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitee shall be designated a party thereto), which may
be imposed on, incurred by, or asserted against that Indemnitee, in any manner
relating to or arising out of this Agreement, the other Loan Documents, the
Lender's agreement to make the Loans or the use or intended use of the proceeds
of any of the Loans hereunder (the "Indemnified Liabilities"); provided, that
the Indemnitors shall not have any obligation to any Indemnitee hereunder with
respect to an Indemnified Liability to the extent that such Indemnified
Liability arises from the gross negligence or willful misconduct of any other
Indemnitee as determined by a court of competent jurisdiction. Each Indemnitee
shall give the Indemnitors prompt written notice of any claim that might give
rise to Indemnified Liabilities setting forth a description of those elements of
such claim of which such Indemnitee has knowledge; provided, that any failure to
give such notice shall not affect the obligations of the Indemnitors unless (and
then solely to the extent) the Indemnitors are materially prejudiced. The
Indemnitors shall have the right at any time during which such claim is pending
to select counsel to defend and control the defense thereof and settle any
claims for which it is responsible for indemnification hereunder (provided that
the Indemnitors will not settle any such claim without (i) the appropriate
Indemnitee's prior written consent or (ii) obtaining an unconditional release of
the appropriate Indemnitee from all claims arising out of or in any way relating
to the circumstances involving such claim) so long as in any such event, the
Indemnitors shall have stated in a writing delivered to the Indemnitee that, as
between the Indemnitors and the Indemnitee, the Indemnitors are responsible to
the
62
Indemnitee with respect to such claim to the extent and subject to the
limitations set forth herein; provided, that the Indemnitors shall not be
entitled to control the defense of any claim in the event that in the reasonable
opinion of counsel for the Indemnitee there are one or more material defenses
available to the Indemnitee which are not available to the Indemnitors;
provided, further, that with respect to any claim as to which the Indemnitee is
controlling the defense, the Indemnitors will not be liable to any Indemnitee
for any settlement of any claim pursuant to this Section 9.3 that is effected
without its prior written consent. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Borrowers
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them.
SECTION 9.4. Amendments and Waivers. No amendment,
modification, termination or waiver of any provision of this Agreement or of the
Notes, or consent to any departure by the Borrowers therefrom, shall in any
event be effective without the written concurrence of the Holders of at least
51% of the principal amount of the Loans and the Borrowers and an Officers'
Certificate of the Company to the effect that such amendment, modification,
termination, or waiver does not violate the Senior Credit Agreement or the
Senior Secured Note Indenture; provided, that no amendment, modification,
waiver, or consent shall, unless in writing and signed by all the Lenders, do
any of the following: (a) increase or subject the Lender to any additional
obligations; (b) reduce the principal of, or interest on the Notes payable
hereunder pursuant to Section 2.1 or 2.2 hereof; (c) postpone any date fixed for
any payment of principal of, or premium or interest on, the Notes or any fees or
other amounts payable hereunder; or (d) amend this Section 9.4. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on the Borrowers in any
case shall entitle the Borrowers to any further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver, or
consent effected in accordance with this Section 9.4 shall be binding upon each
Holder of the Notes at the time outstanding and each future Holder of the Notes.
SECTION 9.5. Independence of Covenants. All covenants
hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation of, another
covenant shall not avoid the occurrence of an Event of Default if such action is
taken or condition exists.
SECTION 9.6. Notices, Demands and Communications. All
notices, demands or other communications to be given or delivered under or by
reason of the provisions of this Agreement shall be in writing and delivered
personally, mailed by certified or registered mail, return receipt requested and
postage prepaid, sent via a nationally recognized overnight courier, or via
facsimile. Such notices, demands and other communications will be sent to the
address indicated below:
To the Company or the Borrowers:
c/o MSX International, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Legal Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
63
c/o MSX International, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies (which shall not
constitute notice to the Company) to:
Court Square Capital Limited
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ 4
New York, New York 10043
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Dechert LLP
4000 ▇▇▇▇ Atlantic Tower
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
To the Lender:
c/o Citicorp Capital Investors, Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
14th Floor, Zone 4
New York, New York 10043
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not
constitute notice to the Lender) to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or to the attention of such other Person as the recipient
party shall have specified by prior written notice to the sending party;
provided, that the failure to deliver copies of notices as indicated above shall
not affect the validity of any notice. Any such communication shall be deemed to
have been received (i) when delivered, if personally delivered, or sent by
nationally-recognized overnight courier or sent via facsimile or (ii) on the
third Business Day following the date on which the piece of mail containing such
communication is posted if sent by certified or registered mail.
64
SECTION 9.7. Survival of Warranties and Certain
Agreements. All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement, the making of the Loans
hereunder and the execution and delivery of the Notes and shall continue until
repayment of the Notes and the Obligations under this Agreement and the Notes in
full; provided, that if all or any part of such payment is set aside, the
representations and warranties in the Loan Documents shall continue as if no
such payment had been made. Notwithstanding anything in this Agreement or
implied by law to the contrary, the agreements of the Borrowers set forth in
Sections 9.2 and 9.3 shall survive the payment of the Loans and the Notes and
the termination of this Agreement.
SECTION 9.8. Failure or Indulgence Not Waiver; Remedies
Cumulative. No failure or delay on the part of any Lender or any Holder of any
Note in the exercise of any power, right or privilege hereunder or under the
Notes shall impair such power, right or privilege or be construed to be a waiver
of any default or acquiescence therein, nor shall any single or partial exercise
of any such power, right or privilege preclude other or further exercise thereof
or of any other right, power or privilege. All rights and remedies existing
under this Agreement or the Note are cumulative to and not exclusive of, any
rights or remedies otherwise available.
SECTION 9.9. Severability. In case any provision in or
obligation under this Agreement or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 9.10. Headings. Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 9.11. Applicable Law. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICT OF LAWS TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY. MSXI LIMITED HAS, BY A SEPARATE WRITTEN INSTRUMENT,
IRREVOCABLY APPOINTED THE COMPANY, AS ITS AUTHORIZED AGENT UPON WHICH PROCESS
MAY BE SERVED IN ANY SUCH SUIT OR PROCEEDING, AND AGREES THAT SERVICE OF PROCESS
UPON SUCH AGENT, AND WRITTEN NOTICE OF SAID SERVICE TO MSXI LIMITED, BY THE
PERSON SERVING THE SAME TO MSX INTERNATIONAL, INC. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, SHALL BE DEEMED IN EVERY RESPECT TO EFFECT SERVICE OF
PROCESS UPON MSXI LIMITED IN ANY SUCH SUIT OR PROCEEDING.
SECTION 9.12. Successors and Assigns; Subsequent Holders
of Notes. This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of the Lender. The terms and provisions of
this Agreement and all other certificates delivered pursuant to Article 3 shall
inure to the benefit of any assignee or transferee of the Notes pursuant to
Section 9.1(a), and in the event of such transfer or assignment, the rights and
privileges herein conferred upon the Lender shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
hereof. The Borrowers' rights or any interest therein hereunder may not be
assigned without the written consent of the Lender.
SECTION 9.13. Consent to Jurisdiction and Service of
Process. Each of the parties hereto and (by their acceptance of the Notes) the
Holders irrevocably consents to the jurisdiction
65
of any court of the State of New York or any United States federal court sitting
in the Borough of ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, and any
appellate court from any thereof and each of the parties hereto submits to the
jurisdiction of their respective corporate domiciles only in respect of any
actions or proceedings brought against them hereunder, and waives any immunity
from the jurisdiction of such courts over any suit, action or proceeding that
may be brought in connection with this Agreement or the Notes. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, any objection to any suit, action, or proceeding that may be brought in
connection with this Agreement or the Notes in such courts whether on the
grounds of venue, residence or domicile or on the ground that any such suit,
action or proceeding has been brought in an inconvenient forum. Additionally,
each of the parties hereby waives the right to trial by jury and to assert
counterclaim in any such proceedings. Each of the parties hereto hereby agrees
that final judgment in any such suit, action or proceeding brought in such court
shall be conclusive and binding upon such party and may be enforced in any court
of the jurisdiction to which the Borrowers or such judgment Guarantor, as the
case may be, is subject by a suit upon such judgment provided that service of
process is effected upon such party in the manner provided by this Agreement.
SECTION 9.14. Waiver of Jury Trial. EACH OF THE PARTIES
HERETO AND THE HOLDERS (BY THEIR ACCEPTANCE OF A NOTE) HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, THE NOTES, THE GUARANTEES, THE SECURITY DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.
SECTION 9.15. Counterparts; Effectiveness. This Agreement
and any amendments, waivers, consents, or supplements may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument.
This Agreement shall become effective upon the execution of a counterpart hereof
by each of the parties hereto, and written or telephonic notification of such
execution and authorization of delivery thereof has been received by the Company
and the Lender.
SECTION 9.16. Entirety. This Agreement and the other Loan
Documents embody the entire agreement among the parties and supersede all prior
agreements and understandings, if any, relating to the subject matter hereof and
thereof.
SECTION 9.17. Confidentiality. The Lender shall keep any
information delivered or made available by the Borrowers or the Guarantors to it
confidential from anyone other than persons employed or retained by the Lender
who are expected to become engaged in evaluating, approving, structuring or
administering the Loan; provided that nothing herein shall prevent the Lender
from disclosing such information (a) to any other Person if reasonably
incidental to the administration of the Loan, (b) upon the order of any court or
administrative agency or otherwise required by law, (c) upon the request or
demand of any regulatory agency or authority, (d) which had been publicly
disclosed other than as a result of a disclosure by the Lender prohibited by
this Agreement, (e) in connection with any litigation to which the Lender or its
subsidiaries or parent corporation may be a party, (f) to the extent necessary
in connection with the exercise of any remedy hereunder, (g) to the Lender's
legal counsel and independent auditors and (h) subject to a confidentiality
agreement containing provisions substantially similar to those contained in this
Section made for the benefit of the Borrowers by such actual or proposed
participation in or assignee of any Indebtedness incurred hereunder, to any
actual or proposed participate or assignee of any of the Indebtedness incurred
hereunder.
66
SECTION 9.18. Conversion of Currency. The Borrowers and
the Subsidiary Guarantors covenant and agree that the following provisions shall
apply to conversion of currency in the case of the Notes, and this Agreement:
(a) If for the purpose of obtaining judgment in,
or enforcing the judgment of, any court in any country, it becomes necessary to
convert into any other currency (the "judgment currency") an amount due in U.S.
dollars, then the conversion shall caused by the Borrowers and the Subsidiary
Guarantors to be made at the rate of exchange prevailing on the Business Day
before the day on which the judgment is given or the order of enforcement is
made, as the case may be (unless a court shall otherwise determine).
(b) (b) The term "rate(s) of exchange"
shall mean the rate at which the Lender or its agent bank located in the City of
New York, as the case may be, are able or would have been able on the relevant
date to purchase U.S. dollars with the judgment currency other than U.S. dollars
referred to in subsections (a) above and includes any costs of exchange payable
to such bank in connection with such exchange.
(c) This is an international financing
transaction in which the specification of Dollars and payment in New York, New
York, is of the essence, and Dollars shall be the currency of account in all
events. The obligation of the Borrowers and Subsidiary Guarantors in respect of
any sum due from them to any Holder hereunder or under a Note held by such
Holder shall, notwithstanding any judgment in a currency other than Dollars, be
discharged only to the extent that on the Business Day following receipt by such
Holder of any sum adjudged to be so due in such other currency such Holder
purchases Dollars with such other currency; if the Dollars so purchased are less
than the sum originally due to such Holder in Dollars, the Company and
Subsidiary Guarantors with respect to the Company Notes, and MSXI Limited and
Guarantors with respect to the MSXI Limited Notes, agree, as a separate
obligation and notwithstanding any such judgment, to indemnify such Holder
against such loss, and if the Dollars so purchased exceed the sum originally due
to any Holder in Dollars, such Holder agrees to remit to any Borrower such
excess.
SECTION 9.19. Acknowledgments. Each Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents;
(b) the Lender has no fiduciary relationship
with or duty to the Borrowers arising out of or in connection with this
Agreement or any of the other Loan Documents, and the relationship between the
Lender, on the one hand, and the Borrowers, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the
other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby between the Lender and the Borrowers.
* * * * *
67
IN WITNESS WHEREOF the due execution hereof by the respective
duly authorized officers of the undersigned as of the date first written above.
BORROWERS:
MSX INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MSX INTERNATIONAL LIMITED
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
GUARANTORS:
MSX INTERNATIONAL (HOLDINGS), INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MSX INTERNATIONAL SERVICES (HOLDINGS), INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MSX INTERNATIONAL EUROPEAN (HOLDINGS), L.L.C.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MSX INTERNATIONAL DEALERNET SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MSX INTERNATIONAL BUSINESS SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CREATIVE TECHNOLOGY SERVICES, L.L.C.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MSX INTERNATIONAL TECHNOLOGY SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MSX INTERNATIONAL ENGINEERING SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
INTRANATIONAL COMPUTER CONSULTANTS, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
PROGRAMMING MANAGEMENT & SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CHELSEA COMPUTER CONSULTANTS, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MILLENNIUM COMPUTER SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MANAGEMENT RESOURCES INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
PILOT COMPUTER SERVICES, INCORPORATED
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MSX INTERNATIONAL PLATFORM SERVICES, LLC
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MEGATECH ENGINEERING, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MSX INTERNATIONAL STRATEGIC TECHNOLOGY, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
THE LENDER:
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CITICORP MEZZANINE III, L.P.
By: Citicorp Capital Investors, Ltd.
Its: General Partner
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
