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Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective.


(1)	Each unit consists of $860 principal amount of 11% senior secured notes due 2007 of MSX International, Inc. and $140 principal amount of 11% senior secured notes due 2007 of MSX International Limited.

(2)	Estimated pursuant to Rule 457(f) under the Securities Act of 1933, as amended, solely for purposes of calculating the registration fee.


(3)	The other companies listed in the Table of Additional Registrants below have guaranteed, jointly and severally, the 11% Senior Secured Units Due 2007 being registered hereby. The Guarantors are registering the Guarantees. Pursuant to Rule 457(n) under the Securities Act of 1933, no registration fee is required with respect to the Guarantees or the notes.

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The address for service of each of the additional registrants is c/o MSX International, Inc., 22355 West Eleven Mile Road, Southfield, Michigan. The telephone number at that address is (248) 299-1000.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.


	•	We will exchange all old units that are validly tendered and not withdrawn prior to the expiration of the exchange offer.

	•	You may withdraw tenders of old units at any time prior to the expiration of the exchange offer.

	•	We believe that the exchange of old units will not be a taxable event for U.S. federal income tax purposes, but you should see “Certain United States Federal Income Tax Considerations” on page 132 for more information.

	•	We will not receive any proceeds from the exchange offer.

	•	The terms of the new units are substantially identical to the old units, except that the new units are registered under the Securities Act of 1933 and the transfer restrictions and registration rights applicable to the old units do not apply to the new units.

See “Risk Factors” beginning on page 17 for a discussion of risks that should be considered by holders prior to tendering their old units.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

You should rely only on the information contained or incorporated by reference in this prospectus. MSX International, Inc. and MSX International Limited have not authorized anyone to provide you with information that is different. If anyone provides you with different or inconsistent information, you should not rely on it. MSX International, Inc. and MSX International Limited are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted, where the person making the offer is not qualified to do so, or to any person who cannot legally be offered the securities. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus or any supplement.

Each broker-dealer that receives new units for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of new units. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act of 1933, as amended, which we refer to as the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new units received in exchange for old units where the old units were acquired by the broker-dealer as a result of market-making activities or other trading activities. MSX International, Inc. has agreed that, for a period of 180 days after the expiration date, it will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”

The market share, ranking and other data contained in this prospectus are based either on management’s own estimates, independent industry publications, reports by market research firms or other published independent sources and, in each case, are believed by management to be reasonable estimates. However, market share data is subject to change and cannot always be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey of market shares. In addition, consumption patterns and consumer preferences can and do change. We believe that market share, ranking and other similar data set forth herein, and estimates and beliefs based on such data are reliable, but we have not independently verified them and cannot guarantee their accuracy or completeness.

We make “forward-looking statements” throughout this prospectus. Whenever you read a statement that is not solely a statement of historical fact (such as when we state that we “believe,” “expect,” “anticipate” or “plan” that an event will occur, and other similar statements), you should understand that our expectations may not be correct, although we believe they are reasonable, and that our plans may change. We do not guarantee that the transactions and events described in this prospectus will happen as described or that any positive trends noted in the prospectus will continue. The forward-looking information contained in this prospectus is generally located under the headings “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” but may be found in other locations as well. These forward-looking statements generally relate to our strategies, plans and objectives for future operations and are based upon management’s current plans and beliefs or estimates of future results or trends.

Forward-looking statements regarding management’s present plans or expectations for new product offerings, capital expenditures, sales-building, cost-saving strategies, and growth involve risks and uncertainties relative to return expectations and related allocation of resources, and changing economic or competitive conditions, as well as the negotiation of agreements with third parties, which could cause actual results to differ from present plans or expectations, and such differences could be material. Similarly, forward-looking statements regarding management’s present expectations for operating results and cash flow involve risks and uncertainties relative to these and other factors, such as the ability to increase revenues and/or to achieve cost reductions (and other factors discussed under “Risk Factors” or elsewhere in this prospectus), which also would cause actual results to differ from present plans. Such differences could be material. Many of the forward-looking statements in this prospectus are a result of any number of factors, many of which are beyond the control of management. These important factors include: our leverage and related exposure to changes in interest rates; our reliance on major customers in the automotive industry and the timing of their product development and other initiatives; the market demand for our technical business services in general; our ability to recruit and place qualified personnel; delays or unexpected costs associated with cost reduction efforts; risks associated with operating internationally, including economic, political and currency risks; and risks associated with our acquisition strategy.

You should read this prospectus completely and with the understanding that actual future results may be materially different from what we expect. We will not update these forward-looking statements, even if our situation changes in the future.

The following summary is qualified in its entirety by the more detailed information included elsewhere in this prospectus. Because this is a summary, it may not contain all of the information that may be important to you. You should read this prospectus carefully before participating in the exchange offer. Unless the context requires otherwise, references in this prospectus to (i) “our company,” “we,” “our,” “us” and similar expressions refer to MSX International, Inc., a Delaware corporation, and its consolidated subsidiaries; (ii) “MSXI” refers to MSX International, Inc. and not its subsidiaries; and (iii) “MSXI Limited” refers to MSX International Limited, a company organized under the laws of England and Wales and not its subsidiaries. As used herein, references to any “fiscal” year of our company refer to our fiscal year ended or ending on the Sunday closest to December 31 of such year.

On August 1, 2003, MSXI and MSXI Limited issued and sold 75,500 units, consisting of $860 principal amount of 11% Senior Secured Notes due 2007 of MSXI and $140 principal amount of 11% Senior Secured Notes due 2007 of MSXI Limited, which we refer to collectively as the old units and the old notes. In connection with that sale, we entered into a registration rights agreement with the initial purchaser of the old units in which we agreed to deliver this prospectus to you and to complete an exchange offer for the old units. As requested by the registration rights agreement, we are offering to exchange 75,500 new units, consisting of $860 principal amount of new 11% Senior Secured Notes due 2007 of MSXI and $140 principal amount of new 11% Senior Secured Notes due 2007 of MSXI Limited, referred to collectively as the new units and the new notes, the issuance of which new units will be registered under the Securities Act, for a like aggregate principal amount of our old units. We urge you to read the discussions under the headings “The Exchange Offer” and “The New Units” in this summary for further information regarding the exchange offer and the new units.

We are a global provider of outsourced technical business services. Our broad range of technical services improves the business performance of our customers by reducing costs, enhancing operating effectiveness, and improving quality. Our customers value our in-depth knowledge of their business requirements and systems, our international delivery capability, and our proprietary processes and unique technical skills. As of May 31, 2003, we have over 7,000 employees providing technical services to more than 700 clients in 25 countries. For the twelve months ended June 29, 2003, we generated net sales of $758.9 million.

Several benefits which drive increased outsourcing include reduced operating costs, lower capital investment, and increased management focus on core activities. Outsourcing also improves operating flexibility by increasing the variability of a company’s cost structure. While our services provide these benefits to our customers, we also focus on delivering higher value outsourcing services by providing our customers access to unique expertise and technologies. This expertise and these proprietary technologies enhance the value of outsourcing to our customers and provide greater margin opportunities for our company.

Our business is organized into three segments: collaborative engineering management, technical and marketing services, and human capital management services. In fiscal 2002, these service lines generated 27%, 33% and 40% of our net sales, respectively.


	•	Collaborative Engineering Management. Our capabilities include product design and engineering from concept to production launch. This includes creation of production drawings, prototype development, testing, tool design, plant layout and overall program management. We also manage show cars and assemble low-volume, niche vehicles. A current example of our engineering services


		capability involves a comprehensive review of a customer’s product portfolio, including redesigning vehicles and components to reduce overall production costs. Based on our technical expertise and knowledge of the customer’s systems, we quickly deployed a team of approximately 150 engineers and technicians to conduct this review. In 2002, this program generated substantial product savings that represented many multiples of the program’s cost.

	•	Technical and Marketing Services. We deliver an extensive range of technical and marketing services to meet the outsourcing requirements of our customers. These services complement our engineering expertise and include:


	•	Quality Relationship Management. We compile and analyze product, market and end-user information that our customers need to improve product quality, reduce costs, and improve customer loyalty and satisfaction. Our services include in-bound technical call centers, dealership consulting, and warranty administration. A current program involves the coordination of a field team of approximately 100 technical specialists who evaluate warranty processes at European automotive dealerships. The team then works with the OEM customer to implement procedures that improve the quality of customer service, while standardizing and streamlining the warranty process. In this case, our pan-European delivery capability and our ability to deploy a highly-trained team of warranty specialists were critical to the success of the project. We have generated considerable and sustainable warranty cost savings for the OEM of approximately three times the program’s cost.

	•	Custom Communication Services. We create and manage technical documents and commercial publications on behalf of our customers. Competencies include content development and management, translation services, multimedia publishing, and distribution. We convert images into digital formats, host document centers, and support large format document printing. For example, we support the loan documentation requirements of a subsidiary of ABN AMRO by imaging an average of 700,000 mortgage documents per month. This service involves digital imaging of paper documents and cataloging of records based on specific field information. We believe our proprietary processes for imaging, archiving and web-hosting large quantities of technical documentation for automotive customers were integral to winning this financial services industry contract.

	•	Supply Chain Management. We work with our customers to streamline their procurement process and reduce systems costs. This involves all elements of supply chain management from process consulting to contract assembly. One of our current customers is a medical products company, for whom we procure all components, manage supply logistics, and assemble an FDA-regulated product under a multi-year contract.


	•	Human Capital Management Services. We are an international leader in automotive technical staffing, providing engineers, designers and technicians on a contract basis to support our customers’ product development programs. We also provide information technology professionals through 19 offices located in key regional markets. By using our services, customers benefit from reduced direct personnel costs, improved operating flexibility, and access to personnel with specialized skills. Our ability to identify and retain qualified personnel with unique technical skills is a competitive advantage.


		Increasingly, large companies are outsourcing the management of their entire staffing function. Our comprehensive vendor management system is among the largest in the United States based on the number of personnel provided to our customers. We currently manage the staffing supply chain for three of the five largest domestic automotive OEMs and suppliers. Our proprietary system allows us to manage workforce procurement, vendor relations, and purchase order administration and payment on behalf of each customer in a web-enabled environment. Our customers benefit from the elimination of internal overhead, greater economies of scale through aggregated procurement as well as access to a proprietary system which improves the efficiency and quality of the staffing workforce. The increased value we provide to our customers results in our vendor management


	services generating a relatively high return on investment for our company while also providing the opportunity to enhance our staffing business through greater understanding of our customers’ staffing needs.

Leading Market Position and Strong Global Presence. We believe we are the largest provider of engineering services to the automotive industry with a significant presence in both the Americas and Europe. In addition, we are one of the largest providers of vendor management systems for staffing in the United States. Our customers are increasingly seeking a smaller group of service providers that can provide global reach and breadth of service offerings and experience. Our service delivery capabilities in 25 countries and broad technical service offerings provide us with a unique competitive advantage in servicing the complex technical needs of large global customers.

Longstanding Customer Relationships. Our company and its predecessors have had longstanding relationships with our top five customers dating as far back as the 1930’s. Our top customers include leading U.S. and European automotive OEMs and suppliers such as Ford Motor Co., DaimlerChrysler AG, General Motors Corporation, Fiat S.p.A., Delphi Corporation and Visteon Corporation, as well as non-automotive customers such as Johnson & Johnson, Chase Manhattan Bank, Metropolitan Life Insurance Company and Verizon Communications. At each of these customers, we provide multiple business services across our product portfolio, evidencing our strategic focus on developing broad, embedded relationships with our principal accounts. In many cases, these services extend across the customer’s organization in multiple geographic locations. We believe our enduring customer relationships present a unique opportunity to cross-sell other services.

Unique Skills and Technical Capabilities. Many of our service offerings are based on the specialized skills of our employees and on proprietary processes or technologies. Our technical and marketing services employ a variety of proprietary technologies, including systems for digital document management, survey analysis, and technical hotlines. Our comprehensive vendor management system, which was first implemented a decade ago, incorporates a variety of proprietary features and processes. In addition, over 90% of our employees are trained in engineering and other technical disciplines.

Broad Service Offerings. We believe our competency in a variety of related technical services creates an opportunity to cross-sell discrete services to our existing customers and also to implement comprehensive outsourcing solutions that deliver greater value. Our current customer relationships present opportunities to extend our existing services across their organizations as well as deliver additional services. We consider our broad array of service offerings to be a key competitive advantage in winning new customers, especially among large companies seeking to outsource business requirements to a limited number of vendors.

Variable Cost Structure. Our principal operating costs consist of personnel and leased facilities. This variable cost structure allows us to adjust to changes in our customers’ business needs. Many of our employees have a broad set of technical skills that can be redeployed to multiple customers based on changing business needs. We have significant flexibility to redeploy our domestic employees since fewer than 1% are subject to collective bargaining arrangements. We have demonstrated our ability to adjust the size of our workforce to reflect changes in market demand by decreasing the number of our employees from 10,142 as of December 31, 2001, to 7,158 as of May 31, 2003. In addition, a majority of the more than 70 facilities we operate are under short-to-medium term operating leases with staggered terms, providing us with a more flexible cost structure.

Committed Equity Sponsorship. Citicorp Venture Capital Ltd. (“CVC”) and its affiliates own approximately 76.2% of the outstanding shares of MSXI’s common stock. Founded in 1968, CVC is a leading private equity firm managing over $10 billion of capital. Since 1997, CVC has invested more than $82.0 million in equity in our company.

Solid Credit Profile. As of June 29, 2003, we had $430.5 million of total assets, including $215.2 million of net accounts receivable and $33.7 million of net property and equipment. The new US notes will have a collateral package of substantially all of MSXI’s assets and the assets of MSXI’s domestic restricted subsidiaries. In addition, the new UK notes are also secured by the accounts receivables of MSXI Limited. MSXI’s domestic restricted subsidiaries had $112.5 million of net accounts receivable and $17.9 million of net property and equipment as of June 29, 2003. MSXI Limited had $30.5 million of net accounts receivable as of June 29, 2003. A substantial portion of our accounts receivable are from large corporations.

Our business segments are affected by differing industry dynamics. As a result of recent trends, we experienced an overall decline in revenues during 2001 and 2002. Key factors which have impacted the revenues of our segments are discussed below. We believe, however, that our revenues are not directly dependent on the level of new vehicle production volume.


	•	Collaborative Engineering Management. Revenues in this segment have been negatively impacted by delays and cancellations of product development activities at our principal customers. Beginning in early 2001, several of our automotive customers deferred or reassessed their product development spending due to weak economic conditions. We believe this resulted in new product development spending that was below normalized levels for the industry. Recently, we have seen increased activity from several customers as they finalize their new product development plans.

	•	Technical and Marketing Services. Demand for these services has remained relatively constant in recent years, despite challenging economic conditions. This stability reflects the favorable trends in outsourcing and the recurring nature of our programs once they are implemented. Economic uncertainty stimulates interest in outsourcing as companies seek ways to lower costs and respond to a rapidly changing market environment.

	•	Human Capital Management Services. Beginning in 2001, our results were negatively impacted by contraction in technology spending. Due to a general reduction in technology spending, most information technology and technical staffing vendors experienced a significant decline in business volumes. In the automotive industry, reduced spending on new product development had a similar impact on technical staffing. More recently, as general economic conditions have begun to improve, demand for technical staffing has strengthened.

In recent fiscal quarters, our annualized revenues approximated $740 million, when adjusted for businesses we have exited. Our revenue remains under pressure from continuing cost containment actions at our customers and longer than normal seasonal shutdowns. We believe, however, that automotive OEM product development budgets will improve in the next 12 to 24 months as our customers pursue cost reductions on their existing platforms and launch new concepts and products. Notwithstanding these trends, we proactively adjusted our business model and cost structure to improve profitability and liquidity despite the difficult market environment. Our actions to enhance profitability include the following:

The exit of such operations improves our future operating results and also generated incremental cash from the liquidation of these businesses, allowing us to reduce outstanding debt. EBITDA losses generated by businesses sold or disposed included $4.5 million from certain procurement and consulting businesses, $1.8 million from selected collaborative engineering operations in Germany, $1.1 million from our executive recruiting operations, $1.1 million from our Mexican staffing operations, $1.0 million from our staffing operations in Italy, and $0.4 million from our specialty paint operations. For further discussion of EBITDA measures, refer to “— Summary Selected Financial Data.”

Cost Savings Initiatives Completed. We began implementing focused cost reduction programs in late 2001 in response to economic developments. To date, our cost reduction programs have focused primarily on indirect and administrative support functions, purchased services and consulting costs, facility consolidations, and tax planning strategies. Since these initiatives began in late 2001, our cost reduction efforts have resulted in the elimination of over 550 indirect and administrative staff positions through structural realignment and consolidation of support functions. Consulting and purchased services have been reduced through consolidation or elimination of related operational and support functions. We have reduced our number of operating facilities from 102 locations as of December 30, 2001 to 78 as of December 29, 2002. In addition, we took steps to optimize the legal structure of our U.S. operations, resulting in significant administrative and tax savings.

Through these cost savings initiatives, we achieved significant savings in both operating and overhead costs. Our operating results for the first six months of 2003 reflect a $19.4 million reduction in indirect operating expenses versus the first six months of 2001. After adjusting for the impact of foreign exchange rates, the reduction totaled $25.9 million, or $51.8 million on an annual basis. In addition, we expect to continue realizing benefits from these actions throughout 2003. For example, our 2003 second quarter operating results reflect a $3.4 million, or $13.6 million on an annual basis, reduction in selling, general and administrative expenses versus the fourth quarter of 2002 largely as a result of these programs.

Liquidity Initiatives. As a complement to our profit improvement actions, we have engaged in disciplined working capital management to generate cash flow. This was enhanced by proceeds collected from the sale or disposal of under-performing operations. Finally, by eliminating funding for selected discretionary programs, we reduced our capital spending from $19.2 million in fiscal year 2001 to $9.0 million in fiscal year 2002. We believe that this level of capital spending is sustainable for the next several years at current levels of business.

Continued Cost Savings Initiatives. In 2003, our management team remains focused on aligning our organization to match current business needs and geographic requirements. We intend to increase our free cash flow through lower overhead, headcount rationalization, closing of unprofitable operations and under-utilized facilities, working capital management improvements and prudent capital spending. Additional profit improvement opportunities include (i) further overhead consolidations in Europe and the U.S., which we believe could yield $2.5 million in annual savings, (ii) consolidation of operating locations into an existing engineering technical center, potentially saving up to $4.0 million annually, (iii) reduction of under-utilized facilities and computers, which currently cost $4.0 million on an annualized basis to support, (iv) utilization of potential offshore information technology resources which we believe will further reduce costs, and (v) cost reductions through continuous improvement initiatives.

We believe we are positioned for growth through the implementation of the following business strategy:

Capitalize on Growing Trend Toward Outsourcing. In many instances, our principal competition is our customers’ in-house operations. Although technically competent, these internal resources often have other operational priorities, or they have become relatively costly or non-responsive to organizational requirements. We believe our customers are implementing outsourcing strategies in order to reduce costs, increase flexibility, and gain access to unique expertise or technologies. To illustrate, we recently helped an automotive OEM customer increase its sales of new vehicle accessories by recruiting and training a team

Grow Our Non-Automotive Client Base. Based on our significant experience delivering complex technical services to the automotive industry, we possess the credibility and technical expertise to serve other industries with similar outsourcing requirements. We are expanding and diversifying our client base by cross-selling our capabilities to existing non-automotive customers and by continuing to develop new customers. To support this initiative, we package our technical competencies into standardized and scalable service offerings with common applicability across a wide range of industries. We also work with prospective customers to assess and demonstrate value creation opportunities available to them. Our recent new contract awards include large clients in the medical products, financial services, and defense-related industries. We have grown our non-automotive revenues from less than 5% of sales in fiscal 1998 to 22.1% of sales in fiscal 2002.

Increase Market Share by Delivering Integrated Services and Cross-Selling. We have a diverse, international client base of over 700 corporations in 25 countries. Our goal is to provide our customers with an integrated portfolio of technical business services and to enhance our revenues per customer by cross-selling services. To illustrate, we currently provide engineering support for a new health care device that is being commercialized by a large international health care industry customer. The customer initially came to us because of our unique expertise in vehicle engineering. Following successful completion of the pre-production stage of the program, we were contracted to manage the supply chain and final assembly of the product. An opportunity exists to deliver integrated marketing services when the consumer device is launched. Our expertise in the engineering, procurement and assembly activities, combined with our capabilities in developing customized communications for technical products, provided a one-stop solution that the customer would otherwise have had to manage separately. Based on the customer’s experience with us on these programs, we were recently awarded another product development project.

Increase Margins through Introduction of Proprietary Service Offerings. In addition to integrating our service offerings, we are committed to developing higher value-added, proprietary business solutions to address the complex and evolving outsourcing needs of our customers. We believe this will both enhance profitability and solidify our position as a one-stop outsourced business service provider. An example of this is an outsourced procurement process that we designed for a major automotive OEM to handle the purchasing of certain commodities. Using our in-depth knowledge of the customer and our own expertise in supply chain management, we have implemented a process to organize purchases from suppliers, compile profiles on all suppliers, and perform a cost-saving analysis of all purchases. As a result, our customer’s costs have decreased, and we have now expanded the scope of our services to include additional purchased commodities.

MSX International Limited is an indirect wholly-owned subsidiary of MSX International, Inc. and is a company incorporated under the laws of England and Wales. MSX International Limited is a provider of outsourced technical business services, including collaborative engineering management, technical and marketing services and human capital management services, primarily to large corporations.

For the fiscal years ended December 31, 2000, December 30, 2001 and December 29, 2002, MSX International Limited had revenue of $135.7 million, $120.3 million and $110.5 million, and operating income/(loss) of $7.9 million, $1.3 million and $(0.1) million, respectively. MSX International Limited generated EBITDA of $11.2 million, $4.4 million and $3.2 million, for the fiscal years ended December 31, 2000, December 30, 2001 and December 29, 2002, respectively. For further discussion of EBITDA measures, refer to “— Summary Selected Financial Data.”

As of June 29, 2003, MSX International Limited had a nominal amount of cash and cash equivalents, net accounts receivable of $30.5 million, total assets of $36.8 million, total accounts payable and other current liabilities of $19.4 million, total debt of $0.1 million and total liabilities of $31.2 million.

The proceeds from the offering of the old units were used to refinance our existing bank indebtedness. Concurrently with the consummation of the offering of the old units, we entered into a new credit facility and issued the mezzanine term notes, the terms of which are more fully described under “Description of Certain Indebtedness.”

MSXI was incorporated in Delaware in 1996. MSXI’s principal offices are located at 22355 West Eleven Mile Road, Southfield, Michigan 48034-4735. MSXI’s telephone number is (248) 299-1000. Our website address is www.msxi.com. Information on our website does not constitute part of this prospectus.

On August 1, 2003, we completed a private offering of 75,500 old units, each old unit consisting of:


	$860 principal amount of 11% Senior Secured Notes due 2007 of MSXI, referred to as the old US notes; and

	$140 principal amount of 11% Senior Secured Notes due 2007 of MSXI Limited, referred to as the old UK notes.

In connection with that sale, we entered into a registration rights agreement with the initial purchaser of the old units in which we agreed to deliver this prospectus to you and to complete an exchange offer for the old units.


		approvals and the absence of any actions or proceedings of any governmental agency or court which could materially impair MSXI’s or MSXI Limited’s ability to consummate the exchange offer. See “The Exchange Offer— Conditions to the Exchange Offer.”

Procedure for Tendering Old Units		If you wish to accept the exchange offer and tender your old units, you must either:

		complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal, in accordance with its instructions and the instructions in this prospectus, and mail or otherwise deliver such letter of transmittal, or the facsimile, together with the old units and any other required documentation, to the exchange agent at the address set forth herein; or

		if old units are tendered pursuant to book-entry procedures, the tendering holder must deliver a completed and duly executed letter of transmittal or arrange with The Depository Trust Company, or DTC, to cause an agent’s message to be transmitted through DTC’s Automated Tender Offer Program System with the required information (including a book-entry confirmation) to the exchange agent.

		See “The Exchange Offer— Procedures for Tendering Old Units.”

Broker-Dealers		Each broker-dealer that receives new units for its own account in exchange for old units, where such old units were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such new units. See “Plan of Distribution.”

Use of Proceeds		We will not receive any proceeds from the exchange offer. See “Use of Proceeds.”

Exchange Agent		BNY Midwest Trust Company is serving as the exchange agent in connection with the exchange offer. The address, telephone number and facsimile number of the exchange agent are provided in the section “The Exchange Offer,” as well as in the letter of transmittal.

Federal Income Tax Consequences		We believe that the exchange of old units for new units pursuant to the exchange offer will not be a taxable event for United States federal income tax purposes. You are referred to the discussion of the tax consequences of the exchange offer under “Certain Tax Considerations,” “Certain United States Federal Income Tax Considerations” and “Certain United Kingdom Tax Consequences.” You should consult your tax advisor about the tax consequences as they apply to your individual circumstances.

Based on certain interpretive letters issued by the staff of the Securities and Exchange Commission to third parties in unrelated transactions, we are of the view that holders of old units (other than any holder who is an “affiliate” of MSXI or MSXI Limited within the meaning of Rule 405 under the Securities Act) who exchange their old units for new units pursuant to the exchange offer generally may offer the new units for resale, resell such new units and otherwise transfer the new units without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:


	the new units are acquired in the ordinary course of the holders’ business;

	the holders have no arrangement or understanding with any person to participate in a distribution of the new units; and

	neither the holder nor any other person is engaging in or intends to engage in a distribution of the new units.

Each broker-dealer that receives new units for its own account in exchange for old units must acknowledge that it will deliver a prospectus in connection with any resale of the new units. See “Plan of Distribution.” In addition, to comply with the securities laws of applicable jurisdictions, the new units may not be offered or sold unless they have been registered or qualified for sale in the applicable jurisdiction or in compliance with an available exemption from registration or qualification. MSXI and MSXI Limited have agreed, under the registration rights agreement and subject to limitations specified in the registration rights agreement, to register or qualify the new units for offer or sale under the securities or blue sky laws of the applicable jurisdictions as any holder of the units reasonably requests in writing. If a holder of old units does not exchange the old units for new units according to the terms of the exchange offer, the old units will continue to be subject to the restrictions on transfer contained in the indenture governing the units and in the legend printed on the old units. In general, the old units may not be offered or sold, unless registered under the Securities Act, except under an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Holders of old units do not have any appraisal or dissenters’ rights in connection with the exchange offer. See “The Exchange Offer— Resales of New Units.”

The old units are currently eligible for trading in the Private Offerings, Resales and Trading through Automated Linkages (PORTAL) market, and MSXI and MSXI Limited have applied to list the old units on the Luxembourg Stock Exchange. Following commencement of the exchange offer but prior to its completion, the old units may continue to be traded in the PORTAL market, and the old units may continue to be listed on the Luxembourg Stock Exchange. Following completion of the exchange offer, however, the new units will not be eligible for trading in the PORTAL market.

The terms of the new units and the old units are identical in all material respects, except for transfer restrictions, registration rights relating to the old units and certain provisions relating to increased interest rates in connection with the old units under circumstances relating to the timing of the exchange offer. The new units will evidence the same debt as the old units and will be governed by the same indenture. For a more complete description of the terms of the new units, see “Description of the New Units.”


		accrued and unpaid interest and all additional amounts on the new notes issued by MSXI Limited which will become due as a result of redemption or otherwise in the event of certain changes affecting U.K. withholding taxes, if any, to the date of purchase. Any such repurchase of the new notes shall include both new US notes and new UK notes on a pro rata basis based upon the aggregate principal amount of the new notes outstanding at the time of such repurchase, unless a change of control of MSXI Limited has occurred. In the event of a change of control of MSXI Limited, any such repurchase of the new notes shall include only the new US notes.

Excess Cash Flow Offers		Within 90 days of each fiscal year ending after January 1, 2004, MSXI must offer to repurchase new notes at 101% of their aggregate principal amount, plus accrued and unpaid interest and all additional amounts on the new notes issued by MSXI Limited which will become due as a result of redemption of otherwise in the event of certain changes affecting U.K. withholding taxes, if any, to the date of purchase with 50% of its excess cash flow from such fiscal year (less the amount of any open market repurchases of new units prior to the offer date); provided that such repurchases are not prohibited under the terms of the senior credit facility. Any such repurchase of the new notes shall include both new US notes and new UK notes on a pro rata basis based upon the aggregate principal amount of the new notes outstanding at the time of such repurchase, unless a change of control of MSXI Limited has occurred. In the event of a change of control of MSXI Limited, any such repurchase of the new notes shall include only the new US notes.

Restrictive Covenants		The indenture governing all of the units and the notes contains covenants that, among other things, limit the ability of the issuers to:

		• incur additional indebtedness or issue disqualified capital stock;

		• pay dividends or make other restricted payments;

		• issue capital stock of certain subsidiaries;

		• enter into transactions with affiliates;

		• create or incur liens;

		• transfer or sell assets;

		• make capital expenditures;

		• incur dividend or other payment restrictions affecting certain subsidiaries; and

		• consummate a merger, consolidation or sale of all or substantially all of our assets.

		These covenants are subject to a number of important exceptions described below in “Description of the New Notes— Certain Covenants.”

An investment in the new units and the new notes involves risks. You should carefully consider all of the information in this prospectus. In particular, you should evaluate the specific risk factors set forth under the caption “Risk Factors” in this prospectus.

The following summary consolidated results of operations and other financial data for fiscal 2000, 2001 and 2002 have been derived from our audited consolidated financial statements. The summary consolidated results of operations and other financial data for the fiscal six months ended June 30, 2002 and June 29, 2003 and the summary balance sheet data as of June 29, 2003 have been derived from our unaudited consolidated financial statements and, in our opinion, reflect all adjustments, consisting of normal accruals, necessary for a fair presentation of the data.

You should read the information set forth below in conjunction with our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.


(1)	EBITDA is not an alternative measure of operating results or cash flows from operations, as determined in accordance with accounting principles generally accepted in the United States. We have included EBITDA because we believe it is an indicative measure of operating performance and is used by investors and analysts to evaluate companies with our capital structure. As presented by us, EBITDA may not be comparable to similarly titled measures reported by other companies. EBITDA should be considered in addition to, not as a substitute for, operating income, net income (loss), cash flows and other measures of financial performance and liquidity reported in accordance with accounting principles generally accepted in the United States.

	EBITDA for each period is presented as defined in the senior secured note indenture and is calculated as income (loss) before the cumulative effect of accounting changes plus (i) income tax expense/(benefit), (ii) Michigan single business and similar taxes, (iii) minority interests and equity in affiliates, (iv) net interest expense, (v) loss on asset impairment and sale, (vi) depreciation and amortization and (vii) goodwill impairment charges, if applicable. Losses on asset impairment and sale and goodwill impairment charges have been added back for EBITDA purposes as these represent


	charges that will not require cash settlement at any future date. Michigan single business and similar taxes are treated like other income-based taxes for purposes of EBITDA calculations, although U.S. generally accepted accounting principles require that such amounts are included as a component of operating income due to the nature of the tax.


	The following table reconciles income (loss) before the cumulative effect of an accounting change to EBITDA:

You should carefully consider each of the risks and uncertainties we describe below and all of the other information in this prospectus before deciding whether to exchange your old units. The risks and uncertainties we describe below are not the only ones we face. Additional risks and uncertainties of which we are currently unaware or that we currently believe to be immaterial may also adversely affect our business.

The old units were not registered under the Securities Act or under the securities laws of any state and may not be resold, offered for resale or otherwise transferred unless they are subsequently registered or resold under an exemption from the registration requirements of the Securities Act and applicable state securities laws. If you do not exchange your old units for new units under the exchange offer, you will not be able to resell, offer to resell or otherwise transfer the old units unless they are registered under the Securities Act or unless you resell them, offer to resell or otherwise transfer them under an exemption from the registration requirements of, or in a transaction not subject to, the Securities Act. In addition, we will no longer be under an obligation to register the old units under the Securities Act except in the limited circumstances provided under the registration rights agreement. In addition, if you want to exchange your old units in the exchange offer for the purpose of participating in a distribution of the new units, you may be deemed to have received restricted securities, and, if so, will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.

While the old units are currently eligible for trading on the PORTAL market and application has been made to list the old units on the Luxembourg Stock Exchange, even if the registration statement becomes effective, which will generally allow resale of the new units, there is no established trading market for the new units. Neither issuer intends to list its new notes on any U.S. national securities exchange or automated quotation system. We cannot assure you that an active trading market will develop for the new units. If no active trading market develops, you may not be able to resell your new units at their fair market value or at all. Future trading prices of the new units will depend on many factors, including, among other things, prevailing interest rates, our operating results, our ability to complete the exchange offer and the market for similar securities. The initial purchaser has advised us that it currently intends to make a market in the new units, but it is not obligated to do so and may discontinue any market making in the new units at any time.

To the extent that the old units are tendered for exchange and accepted in the exchange offer, the trading market for the untendered and tendered but unaccepted old units could be adversely affected.

The new units will be issued in exchange for the old units only after timely receipt by the exchange agent of the old units or a book-entry confirmation or a confirmation of blocking instructions related thereto, a properly completed and executed letter of transmittal, or an agent’s message and all other required documentation. If you want to tender your old units in exchange for new units, you should allow sufficient time to ensure timely delivery. None of MSXI, MSXI Limited nor the exchange agent are under any duty to give you notification of defects or irregularities with respect to tenders of old units for exchange. Old units that are not tendered or are tendered but not accepted will, following the exchange

offer, continue to be subject to the existing transfer restrictions. In addition, if you tender the old units in the exchange offer to participate in a distribution of the new units, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. For additional information, please refer to the sections entitled “The Exchange Offer” and “Plan of Distribution” later in this prospectus.

We are highly leveraged. As of June 29, 2003, on a pro forma basis after giving effect to the offering of the old units, the issuance of the mezzanine term notes and the use of proceeds therefrom, our total debt and capital lease obligations totaled $249.5 million and our ratio of total debt and capital lease obligations to total capitalization was 116%. Our ratio of total debt to total capitalization reflects the impact of carryover basis accounting rules dating back to our formation. These rules required that amounts paid in excess of book value totaling $28.7 million for certain acquisitions were recorded as a reduction to additional paid in capital. The degree to which we are leveraged could have important consequences to holders of the new units, including the following:


	•	making it more difficult for us to satisfy our obligations with respect to the new units;

	•	impairing our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes;

	•	dedicating a substantial portion of our cash flow from operations to the payment of principal and interest on our indebtedness, thereby reducing the funds available to us for operations and expansion plans; and

	•	making us more vulnerable to a downturn in general economic conditions or our business.

If our financial condition, operating results and liquidity deteriorate, our relations with our creditors, including our suppliers, may also be adversely affected. Our creditors could restrict our ability to obtain future financing and our suppliers could require prepayment or cash on delivery rather than extend credit to us. Our ability to generate cash flows from operations sufficient to service our short and long-term debt obligations will be further diminished.

Our ability to make scheduled payments or to refinance our obligations with respect to our indebtedness depends on our financial and operating performance, which, in turn, is subject to prevailing economic conditions and to financial, business and other factors beyond our control and to our ability to access payments and advances from our subsidiaries in amounts and at times sufficient to fund our debt obligations. There can be no assurance that our operating results or access to payments and advances from our subsidiaries will be sufficient for payment of our indebtedness, including the new notes (and any of our outstanding existing notes). See “—MSXI’s holding company structure may impair the ability of holders to receive payment on the new notes” below.

The discretion of our management with respect to certain business matters is limited by covenants contained in the new senior credit facility we entered into in connection with the offering of the old units and the indenture as well as other current and future debt instruments. Among other things, the covenants contained in the indenture restrict, condition or prohibit us from incurring additional indebtedness, creating liens on our assets, making certain asset dispositions and entering into certain transactions with affiliates. In addition, the new senior credit facility contains financial and operating covenants and prohibitions, including requirements that we maintain certain financial ratios. There can be no assurance that our leverage and these restrictions will not materially and adversely affect our ability to finance future

operations or capital needs or to engage in other business activities. Moreover, a failure to comply with the obligations contained in the indenture or any other agreements with respect to additional financing, including the new senior credit facility or any replacement facility, could result in an event of default under these agreements, which could permit acceleration of the related debt and acceleration of debt under future debt agreements that may contain cross acceleration or cross default provisions. See “Description of the New Notes.”

MSXI is a holding company and conducts all of its operations through subsidiaries. Consequently, MSXI’s ability to pay its obligations, including its obligation to pay interest on and principal of the new US notes, whether at their maturity or upon an earlier redemption at its option or the holders of these new US notes, will be dependent on MSXI’s ability to receive dividends and other payments or advances from its subsidiaries or to obtain additional capital or other payments or advances, in cash or otherwise, from its subsidiaries, which have no obligation to provide any dividends, payments or advances, other than pursuant to the subsidiary guarantees of the new notes, or from another source. Each of MSXI’s domestic restricted subsidiaries that is an obligor or guarantor with respect to any obligations under the senior credit facility is a subsidiary guarantor.

MSXI’s right to receive assets of any of its subsidiaries upon liquidation or reorganization (and the consequent right of holders to participate in those assets) of a non-guarantor subsidiary will be subject to the prior claims of that subsidiary’s creditors (including trade creditors). Accordingly, the holders of the new US notes will not have the same rights as the creditors of our non-guarantor subsidiaries, including trade creditors, except to the extent that MSXI itself is recognized as a creditor of a non-guarantor subsidiary, in which case MSXI still would not have the same rights as a creditor with any security interest in the assets of that subsidiary, or any creditor for indebtedness senior to MSXI. The aggregate amount of debt of MSXI’s non-guarantor subsidiaries was approximately $7.2 million as of June 29, 2003 (excluding debt owed by any subsidiary to MSXI).

We may be able to incur additional debt in the future, including debt secured by the collateral that secures the new notes as well as other assets that do not secure the new notes. Although the indenture governing the new notes and our senior credit facility contain restrictions on our ability to incur indebtedness, those restrictions are subject to a number of exceptions. In addition, if we are able to designate some of our restricted subsidiaries under the indenture governing the new notes as unrestricted subsidiaries, those unrestricted subsidiaries would be permitted to borrow beyond the limitations specified in the indenture and engage in other activities in which restricted subsidiaries may not engage. Adding new debt to current debt levels could intensify the related risks that we and our subsidiaries now face. See “Capitalization” and “Description of Certain Indebtedness.”

The new notes will be secured by second priority liens on the collateral described in this prospectus, which will also secure on a first priority basis our and our subsidiaries’ obligations under the new senior credit facility and other obligations to lenders and their affiliates permitted by the terms of the new senior credit facility, such as in connection with interest rate and currency agreements. The collateral also secures additional indebtedness to the extent permitted by the terms of the indenture governing the new notes and the new senior credit facility. Your rights to the collateral would be diluted by any increase in the indebtedness secured by the collateral. Additional assets secure our obligations and the obligations of our

In the event of foreclosure on the collateral, the proceeds from the sale of the collateral securing indebtedness under the new notes may not be sufficient to satisfy the new notes. This is because proceeds from a sale of the collateral would be distributed to satisfy indebtedness and all other obligations under the new senior credit facility and any other indebtedness secured by a first priority lien on the collateral before any such proceeds are distributed in respect of the new notes. Only after all of our obligations under the new senior credit facility and any such other first priority indebtedness have been satisfied will proceeds from the sale of collateral be available to holders of the new notes at which time such proceeds will be distributed to satisfy our obligations under the new notes and any additional new second priority indebtedness incurred after the offering.

The value of the collateral and the amount to be received upon a sale of such collateral will depend upon many factors including, among others, the condition of the collateral, the state of the technical business services and automotive industries, the ability to sell the collateral in an orderly sale, the condition of the international, national and local economies, the availability of buyers and similar factors. The book value of the collateral should not be relied on as a measure of realizable value for such assets. By their nature, portions of the collateral may be illiquid and may have no readily ascertainable market value. In addition, a significant portion of the collateral includes assets that may only be usable, and thus retain value, as part of our existing operating businesses. Accordingly, any such sale of the collateral separate from the sale of certain operating businesses may not be feasible or of significant value. The collateral is located in a number of locations, and the multi-jurisdictional nature of any foreclosure on the collateral may limit the realizable value of the collateral. To the extent that holders of other secured indebtedness or third parties enjoy liens (including statutory liens), whether or not permitted by the indenture governing the new notes, such holders or third parties may have rights and remedies with respect to the collateral securing the new notes that, if exercised, could reduce the proceeds available to satisfy the obligations under the new notes.

The indenture governing the new notes and the agreements governing our other secured indebtedness may also permit us to designate one or more of our restricted subsidiaries as an unrestricted subsidiary. If we designate an unrestricted subsidiary, all of the liens on any collateral owned by the unrestricted subsidiary or any of its subsidiaries and any guarantees of the new notes by the unrestricted subsidiary or any of its subsidiaries will be released under the indenture but not under the new senior credit facility. Designation of an unrestricted subsidiary will reduce the aggregate value of the collateral to the extent that liens on the assets of the unrestricted subsidiary and its subsidiaries are released and the new notes will be structurally subordinated to the debt and other obligations of the unrestricted subsidiary and its subsidiaries. This may materially reduce the collateral available to secure the new notes. We conduct portions of our business through certain foreign subsidiaries which are not subsidiary guarantors of the new notes. For the fiscal year ended December 29, 2002, our foreign subsidiaries accounted for $346.8 million of consolidated net sales, or 42.9% of our total consolidated net sales. As of December 29, 2002, our foreign subsidiaries accounted for 38.8% of our total assets.

The security interest in the collateral securing the new notes includes our assets and assets of our subsidiary guarantors, both tangible and intangible, whether now owned or acquired or arising in the future. Applicable law requires that certain property and rights acquired after the grant of a general security interest can only be perfected at the time such property and rights are acquired and identified. There can be no assurance that the trustee or the collateral agent will monitor, or that we will inform the trustee or the collateral agent of, the future acquisition of property and rights that constitute collateral, and that the necessary action will be taken to properly perfect the security interest in such after acquired collateral. Neither the trustee nor the collateral agent for the new notes has an obligation to monitor the acquisition of additional property or rights that constitute collateral or the perfection of any security

The indenture governing the new notes and the security documents provides that, to the extent that any rule is adopted, amended or interpreted which would require the filing with the SEC (or any other governmental agency) of separate financial statements of any of our subsidiaries due to the fact that such subsidiary’s capital stock or other securities secure the new notes, then the capital stock and other securities of that subsidiary will automatically be deemed not to be part of the collateral securing the new notes to the extent necessary to not be subject to this requirement. In that event, the security documents will be amended, without the consent of any holder of new notes, to the extent necessary to release the liens of the new notes on the capital stock and securities of the subsidiary or subsidiaries in question. As a result, holders of the new notes could lose all or a portion of their security interest in the capital stock and other securities of the guarantor subsidiaries if any such rule comes into effect.

In addition to the collateral from time to time securing the new notes and the new note guarantees, the obligations of the borrowers and the guarantors under the new senior credit facility are further secured by:


	•	pledges of (a) the capital stock of substantially all of our U.S. subsidiaries and (b) the capital stock of certain of our foreign subsidiaries;

	•	that portion of our cash flow and the cash flow of our subsidiaries which would, in accordance with the terms of the new senior credit facility, be required to be applied to repay borrowings under the new senior credit facility but which is, in lieu thereof, deposited in a segregated account for the purpose of repaying borrowings under the new senior credit facility at a future date as may be provided for in the new senior credit facility; and

	•	substantially all of the assets (including, without limitation, capital stock and intercompany indebtedness) of any of our subsidiaries that are obligors under the new senior credit facility and which are not guarantors of the new notes.

The assets described in the preceding paragraph (except as set forth therein) will not secure the new notes. As a result, to the extent that our and our subsidiaries’ assets secure our obligations under the new senior credit facility and any other obligations we may have to lenders thereunder and their affiliates, such as in connection with interest rate and currency agreements, but do not secure the new notes, the new notes will not have the same rights with regards to the collateral as such lenders and their affiliates. In the event of our or our subsidiaries’ bankruptcy, liquidation, reorganization or other winding up, those assets that do not secure the new notes will not be available to pay obligations under the new notes unless and until payment in full of the obligations under the new senior credit facility and such other obligations is made. Likewise, if the lenders under the new senior credit facility accelerate the obligations under such facility, then those lenders would be entitled to exercise the remedies available to a secured creditor under applicable law, and those lenders would have a claim on those assets that do not secure the new notes before any holder of new notes.

If a bankruptcy proceeding were to be commenced under the federal bankruptcy laws by or against us or any other guarantor, it is likely that delays will occur in any payment upon acceleration of the new US notes and in enforcing remedies under the related indenture, including with respect to the liens securing the new US notes and the new note guarantees, because of specific provisions of such laws or by a court applying general principles of equity. Provisions under federal bankruptcy laws or general principles of equity that could result in the impairment of your rights include, but are not limited to:


	•	the automatic stay;

	•	avoidance of preferential transfers by a trustee or debtor-in-possession;

	•	substantive consolidation;

	•	limitations on collectability of unmatured interest or attorney fees;

	•	fraudulent conveyance; and

	•	forced restructuring of the new notes, including reduction of principal amounts and interest rates and extension of maturity dates, over the holders’ objections.

Additionally, applicable federal bankruptcy laws generally permit a debtor to continue to retain and to use collateral, including capital stock, even if the debtor is in default under the applicable debt instruments, provided that the secured creditor is given “adequate protection.” The interpretation of the term “adequate protection” may vary according to circumstances, but it is intended in general to protect the value of the secured creditor’s interest in collateral. Because the term “adequate protection” is subject to varying interpretation and because of the broad discretionary powers of a bankruptcy court, it is impossible to predict (1) whether payments under any of the new US notes would be made following commencement of and during a bankruptcy case, (2) whether or when the lenders under the senior credit facility could foreclose upon or sell any collateral or (3) whether or to what extent holders of the new US notes would be compensated for any delay in payment or loss of value of the collateral under the doctrine of “adequate protection.” Furthermore, in the event a bankruptcy court were to determine that the value of the collateral was not sufficient to repay all amounts due on the new US notes, the holders of such new notes would become holders of “undersecured claims.” Applicable federal bankruptcy laws generally do not permit the payment or accrual of interest, costs and attorneys’ fees for “undersecured claims.”

Although the new notes are the obligations of MSXI and MSXI Limited, they will be unconditionally guaranteed on a senior secured basis by the subsidiary guarantors and, in the case of the new UK notes, by MSXI. MSXI is a holding company that derives all of its operating income and cash flow from its subsidiaries. The performance by each subsidiary guarantor of its obligations with respect to its subsidiary guarantee of the new notes may be subject to review under relevant federal and state fraudulent conveyance and similar statutes in a bankruptcy or reorganization case or lawsuit by or on behalf of unpaid creditors of such subsidiary guarantor. Under these statutes, if a court were to find under relevant federal or state fraudulent conveyance statutes that a subsidiary guarantor did not receive fair consideration or reasonably equivalent value for incurring its subsidiary guarantee of the new notes, and that, at the time of incurrence, the subsidiary guarantor: (1) was insolvent, (2) was rendered insolvent by reason of the incurrence or grant, (3) was engaged in a business or transaction for which the assets remaining with the subsidiary guarantor constituted unreasonably small capital or (4) intended to incur, or believed that it would incur, debts beyond its ability to pay these debts as they matured, then the court, subject to applicable statutes of limitation, could void the subsidiary guarantor’s obligations under its subsidiary guarantee of the new notes, recover payments made under the subsidiary guarantee of the new notes,

The measure of insolvency for these purposes will depend upon the governing law of the relevant jurisdiction. Generally, however, a company will be considered insolvent for these purposes if the sum of that company’s debts is greater than the fair value of all of that company’s property or if the present fair salable value of that company’s assets is less than the amount that will be required to pay its probable liability on its existing debts as they become absolute and matured or if a company is not able to pay its debts as they become due. Moreover, regardless of solvency, a court could void an incurrence of indebtedness, including the subsidiary guarantees of the new notes, if it determined that the transaction was made with the intent to hinder, delay or defraud creditors. In addition, a court could subordinate the indebtedness, including the subsidiary guarantees of the new notes, to the claims of all existing and future creditors on similar grounds. The subsidiary guarantees of the new notes could also be subject to the claim that, since the subsidiary guarantees of the new notes were incurred for our benefit, and only indirectly for the benefit of the subsidiary guarantors, the obligations of the subsidiary guarantors thereunder were incurred for less than reasonably equivalent value or fair consideration. Neither we nor any subsidiary guarantor believes that, after giving effect to the exchange offer, any of the subsidiary guarantors (1) was insolvent or rendered insolvent by the incurrence of the guarantees in connection with the exchange offer, (2) was not in possession of sufficient capital to run their business effectively or (3) incurred debts beyond its ability to pay as the same mature or become due.

There can be no assurance as to what standard a court would apply in order to determine whether a subsidiary guarantor was “insolvent” upon the exchange of the old notes for new notes or that, regardless of the method of valuation, a court would not determine that the subsidiary guarantor was insolvent at the time of the exchange of the old notes for new notes.

Upon the occurrence of a Change of Control, each holder of new notes will have the right to require us to repurchase all or a portion of these holder’s new notes at a price in cash equal to 101% of the aggregate principal amount of these new notes, plus accrued and unpaid interest, if any, to the date of repurchase. However, our ability to repurchase the new notes upon a Change of Control may be limited by the terms of our then existing contractual obligations and the obligations of our subsidiaries. In addition, the occurrence of a Change of Control will constitute an event of default under the new senior credit facility. The new senior credit facility prohibits the purchase of the new notes unless and until the time the indebtedness under the new senior credit facility is paid in full. There can be no assurance that we will have the financial resources to repay amounts due under the new senior credit facility, or to repurchase or redeem the new notes. If we fail to repurchase all of the new notes tendered for purchase upon the occurrence of a Change of Control, this failure will constitute an event of default under the indenture. See “— Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under the new notes and the new note guarantees” above.

With respect to the sale of assets referred to in the definition of Change of Control, the meaning of the phrase “all or substantially all” as used in that definition varies according to the facts and circumstances of the subject transaction, has no clearly established meaning under the relevant law and is subject to judicial interpretation. Accordingly, in certain circumstances there may be a degree of uncertainty in ascertaining whether a particular transaction would involve a disposition of “all or substantially all” of the assets of a person and therefore it may be unclear whether a Change of Control has occurred and whether the new notes are subject to an offer to repurchase.

The Change of Control provision may not necessarily afford the holders protection in the event of a highly leveraged transaction, including a reorganization, restructuring, merger or other similar transaction involving us that may adversely affect the holders, because these transactions may not involve a shift in voting power or beneficial ownership or, even if they do, may not involve a shift of the magnitude required under the definition of Change of Control to trigger these provisions. Except as described under

Under U.K. insolvency law currently in effect, the liabilities of MSXI Limited will be paid in the event of an insolvency before certain of MSXI Limited’s debts and after certain other debts of MSXI Limited, depending on whether or not the new notes enjoy the benefit of a fixed charge over MSXI Limited’s accounts receivable (which requires a high level of control by the creditor over the accounts receivable), or merely a floating charge. Debts that may be paid ahead of the holders of a floating charge in accounts receivable include all or a portion of (i) amounts owed in respect of occupational pension schemes and (ii) amounts owed to employees. These debts owed to preferential creditors would not be paid ahead of a creditor with a fixed charge on the accounts receivable. We cannot assure you that the new UK notes will enjoy the benefit of a fixed charge on all of the accounts receivable of MSXI Limited.

Under U.K. insolvency law, the liquidator or administrator of a company may apply to the court with jurisdiction over the matter to set aside certain types of preliquidation transactions and rescind a transaction entered into by a company at an undervalue (which is similar to less than fair value), if the company was insolvent at the time of, or in consequence of, the transaction and enters into a liquidation or administration within two years of the completion of the transaction. A transaction might be challenged if it involved a gift by a company or the company received consideration of significantly less value than the consideration given by the company. A court generally will not intervene, however, if a company entered the transaction in good faith and for the purpose of carrying on its business and there were reasonable grounds for believing the transaction would benefit the company. There can be no assurance, however, that the issuance of the new UK notes will not be challenged by a liquidator or administrator.

We intend for the new notes to qualify as “quoted Eurobonds” within the meaning of Section 349(4) of the Income and Corporation Taxes Act 1988 (the “Act”). In order to qualify as quoted Eurobonds, the new notes must be listed on a “recognized stock exchange.” We intend for the new UK notes to be listed on the Luxembourg Stock Exchange, which is currently a recognized stock exchange. So long as the new UK notes are and continue to be quoted Eurobonds, payments of interest should be exempt from withholding or deduction on account of United Kingdom income tax. If the new UK notes cease to be listed on a recognized stock exchange, interest will generally be paid under deduction of income tax at a rate which is currently 20 percent, subject to the availability of any applicable double taxation treaty. We cannot assure you that we will be able to successfully list the new UK notes on the Luxembourg Stock Exchange or that the Luxembourg Stock Exchange will continue to be a recognized stock exchange. If we are unable to list the new UK notes on a recognized stock exchange and keep them listed on a recognized stock exchange, our liquidity and results of operations may be materially adversely affected because we would be obliged to pay any additional amounts necessary so that the net amount received by you after any withholding or deduction that may occur as a result of the new UK notes not being listed on a recognized stock exchange will not be less than the amount you would have received without this withholding or deduction.

The new UK notes will be issued and paid for, and the interest paid on these new notes will be paid, in U.S. dollars. MSXI Limited, however, receives its revenues primarily in U.K. sterling. As a result, the financial condition of MSXI Limited might be materially adversely affected if the U.S. dollar appreciates against the U.K. sterling. From time to time, if we determine it is appropriate and advisable to do so, we

Sales of our services to the automotive market (including OEM suppliers) accounted for approximately 77.9% of our net sales for the fiscal year ended December 29, 2002. As a result, our principal operations are directly related to domestic and foreign automotive vehicle design, planning and production. Automotive sales and production are highly cyclical, dependent on consumer spending and subject to the impact of domestic and international economic conditions. In addition, automotive production and sales can be affected by labor relations issues, regulatory requirements, trade agreements and other factors. A decline in automotive sales and design planning and production could materially adversely affect our results of operations or financial condition. Because of our reliance on the automotive industry, which is centered in Southeastern Michigan, as of December 29, 2002, approximately 24.4% of our facilities were located in Michigan and over 43% of our employees were based in Michigan. In the future, a majority of our business is likely to remain in Michigan, and therefore might be affected by any extraordinarily adverse conditions in Michigan.

In the fiscal year ended December 29, 2002, sales to Ford, DaimlerChrysler, General Motors and Fiat accounted for approximately 38.4%, 8.7%, 8.4% and 8.0% of our consolidated sales, respectively. There can be no assurance that any of our top customers will continue to require all of the services currently provided or that any of our top customers will not develop alternative sources, including their own in-house operations, for the services they currently purchase. If Ford decreases the amount of services it purchases from us or if Ford or any one of our major customers is no longer our customer, it could have a material adverse effect on our results of operations and financial condition.

In connection with the services we provide to Ford, we collect receivables at approximately the same time we make payments to our suppliers. However, in connection with other programs, we typically are reimbursed by our customers within invoicing terms, which is generally a 60-day period after we pay our employees. If any of our large customers, including Ford, DaimlerChrysler, General Motors or Fiat were to experience a liquidity problem that resulted in the customer being unable to reimburse us, we could, in turn, develop a liquidity problem. This could have a material adverse effect on our business, operating results or financial condition.

We are currently implementing cost reduction measures, including exiting under-performing businesses, adjusting our workforce and facilities, and reducing operating costs. If we are unsuccessful in our efforts to rationalize our costs, or if the results of our cost reduction efforts do not occur as quickly as expected, we may incur unanticipated expenses and costs that would adversely effect our results of operations and financial condition.

As a leading, single source provider of staffing, engineering and business services, we provide our customers with a broad range of complementary services tailored to suit our customers’ needs. Accordingly, as customers’ needs arise, we must often make significant financial commitments and incur overhead expenses in order to complete projects or fulfill purchase orders. In the event that our customers cancel or cease to maintain their arrangements with us or we are unable to procure similar business from new customers, we may not be able to generate sufficient revenues to offset our financial commitments or overhead expenses. There can be no assurance that the work flow under our current arrangements will

Most of our contracts do not ensure that we will generate a minimum level of revenues, and the profitability of each customer program may fluctuate, sometimes significantly, throughout the various stages of such program. Although we seek to sign multi-year contracts with our customers, our contracts generally enable the customers to terminate the contract, or terminate or reduce customer interaction volumes, on relatively short notice. We are usually not designated as our customer’s exclusive service provider as we are with Ford, however, we believe that meeting our customers’ expectations can have a more significant impact on revenues generated by us than the specific terms of our customer contracts.

As of June 29, 2003, CVC and its affiliates beneficially owned approximately 76.2% of MSXI’s outstanding Common Stock. Accordingly, CVC will be able to:


	•	elect MSXI’s entire Board of Directors;

	•	control MSXI’s management and policies; and

	•	determine, without the consent of MSXI’s other stockholders, the outcome of any corporate transaction or other matter submitted to MSXI’s stockholders for approval, including mergers, consolidations and the sale of all or substantially all of MSXI’s assets.

CVC will also be able to prevent or cause a change in control of MSXI and will be able to amend its Certificate of Incorporation and Bylaws without the approval of any other of our stockholders. Further, CVC and certain members of management have entered into a Stockholders’ Agreement (as defined) in which they have agreed to vote their shares in a manner so as to elect MSXI’s entire Board of Directors. See “Related Party Transactions — Amended and Restated Stockholders’ Agreement.”

Each industry in which we operate is highly competitive. We compete not only with full-service and highly specialized companies in national, regional and local markets, but also compete with the in-house units of our customers. Our competitors may have greater name recognition and greater marketing, financial and other resources than us, and some of our in-house competitors may have the capability to offer more highly integrated services at lower cost. In addition, there are limited barriers to entry in the industries in which we compete, which potentially limits our ability to maintain or increase our market share or profitability. There can be no assurance that we will be able to compete effectively against our competitors in the future or that businesses will continue to outsource the types of services that we offer. Continued or increased competition could limit our ability to maintain or increase our market share and margins and could have a material adverse effect on our business, financial condition or results of operation.

Recently, the general level of economic activity has significantly affected the demand for our services. As economic activity has slowed, the use of third-party services often has been curtailed before permanent employees have been laid off. An economic downturn on a national or local basis may adversely affect the demand for our services and may have a material adverse effect on our results of operations or financial condition.

We depend upon our ability to attract and retain personnel, particularly technical personnel, who possess the skills and experience necessary to meet the needs of our customers. Competition for individuals with proven technical or professional skills is intense. We compete with other staffing companies as well as our customers and other employers for qualified personnel. There can be no assurance that qualified personnel will continue to be available to us in sufficient numbers and upon economic terms acceptable to us. If the cost of attracting and retaining personnel increases, there can be no assurance that we will be able to pass this increased cost through to our customers, and therefore these increases may have a significant effect on our results of operations and financial condition.

We currently provide services in 25 countries. For the fiscal year ended December 29, 2002, our foreign subsidiaries accounted for $346.8 million, or 42.9% of our total consolidated net sales. International operations are subject to various risks which could have a material adverse effect on those operations or our business as a whole, including:


	•	exposure to local economic conditions;

	•	exposure to local political conditions, including the risk of seizure of assets by foreign government;

	•	exposure to local social unrest, including any resultant acts of war, terrorism or similar events and the resultant impact on economic and political conditions;

	•	currency exchange rate fluctuations;

	•	hyperinflation in certain foreign countries, including Brazil;

	•	controls on the repatriation of cash, including imposition or increase of withholding and other taxes on remittances and other payments by foreign subsidiaries; and

	•	export and import restrictions.

As a result of our global expansion, non-United States net sales accounted for approximately 42.9% of our net sales for the fiscal year ended December 29, 2002. A significant percentage of these sales are denominated in currencies other than U.S. dollars.

To the extent we are unable to match revenues received in foreign currencies with costs paid in the same currency, exchange rate fluctuations in that currency could have a material adverse effect on our business. For example, if a foreign currency appreciates against the U.S. dollar in a jurisdiction where we have significantly more costs than revenues generated in a foreign currency, the appreciation may effectively increase our costs in that location. From time to time, if we determine it is appropriate and advisable to do so, we may seek to lessen the effect of exchange rate fluctuations through the use of derivative financial instruments. We cannot assure you, however, that we will be successful in these efforts.

The financial condition and results of operations of some of our operating entities are reported in foreign currencies and then translated into U.S. dollars at the applicable exchange rate for inclusion in our consolidated financial statements. As a result, appreciation of the U.S. dollar against these foreign currencies will have a negative impact on our reported revenues and operating profit while depreciation of the U.S. dollar against these foreign currencies will have a positive effect on reported revenues and operating profit. For example, our European operations were positively impacted in 2002 due to the strengthening of the Euro against the U.S. dollar. Although not materially significant, our South American operations were negatively impacted by the devaluation in 2000 of the Brazilian Real. We do not generally seek to mitigate this translation effect through the use of derivative financial instruments.

Results for any quarter or fiscal year are not necessarily indicative of the results that we may achieve for any subsequent quarter or fiscal year. The timing or completion of material projects, as well as the number of billing days in a period could result in fluctuations in our results of operations for particular quarterly or annual periods.

In the course of providing services to our customers, we place our employees in the workplaces of other businesses. An attendant risk of this activity includes possible claims of errors and omissions, misuse of customer proprietary information, discrimination and harassment, theft of customer property, other criminal activity or torts, workers’ compensation claims and other claims. While we have not historically experienced any material claims of these types, there can be no assurance that we will not experience these types of claims in the future. In addition, there can be no assurance that we may not incur fines or other losses or negative publicity with respect to such problems that could have a material affect on our business. In some instances, we have agreed to indemnify customers against some of the foregoing matters.

Businesses use temporary staffing in part to shift certain employment costs and risks to personnel services companies. For example, we are responsible for and pay unemployment insurance premiums and workers’ compensation for our temporary employees. These costs have generally risen as a result of increased claims and governmental regulation, as have the level of wages generally. There can be no assurance that we will be able to increase the fees charged to our customers in the future to keep pace with increased costs. Price competition in the personnel services industry is intense and has led to lower margins. There can be no assurance that we will maintain our margins, and if we do not, our profitability could be adversely affected.

We are dependent on the proper functioning of our information systems in operating our business. Our critical information systems used in our daily operations identify and match staffing resources and customer assignments and perform billing and accounts receivable functions. Our information systems are protected through physical and software safeguards and we have backup remote processing capabilities. They are still vulnerable, however, to hurricanes, other storms, flood, fire, earthquakes, power loss, telecommunications failures, physical or software break-ins and similar events. If our critical information systems fail or are otherwise unavailable, we would have to accomplish these functions manually, which could temporarily impact our ability to identify business opportunities quickly, to maintain billing and staffing records reliably, and to bill for services efficiently.

For the fiscal years ended December 30, 2001, and December 29, 2002, MSXI Limited had operating income (losses) of $1.3 million and $(0.1) million, respectively. MSXI Limited is in substantially the same business as MSX International, Inc. We expect that MSXI Limited may continue to incur losses in the future based upon current levels of demand. In addition, it may incur delays and costs associated with its cost reduction efforts as a result of protective employee security laws in the United Kingdom and limits on its ability to reduce real estate and equipment lease expenses.

We will not receive any proceeds from this exchange offer. In consideration for issuing the new units, we will receive in exchange a like amount of the old units, the terms of which are identical in all material respects to the new units. The old units surrendered in exchange for the new units will be retired and cancelled and cannot be reissued. Accordingly, issuance of the new notes will not result in any increase in our indebtedness. We have agreed to bear the expenses of this exchange offer. No underwriter is being used in connection with the exchange offer.

The net proceeds from the sale of the old units were approximately $71.4 million, after deducting estimated fees and expenses and discount from the offering of the old units. We also received net proceeds of $24.1 million from the concurrent sale of senior secured notes of MSX International, Inc. and MSX International Limited to Citicorp Mezzanine III, L.P., or the mezzanine term notes. See “Description of Certain Indebtedness” and “Related Party Transactions” for more information. These net proceeds were used to repay existing senior indebtedness and fund related refinancing fees.

The following table sets forth our cash and cash equivalents and capitalization as of June 29, 2003 on a pro forma basis giving effect to the offering of the old units and our use of the proceeds from the offering of the old units as described under “Use of Proceeds.”

You should read the table below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our unaudited consolidated financial statements and the related notes included elsewhere in this prospectus.


(1)	Assuming completion of this offering on June 29, 2003, we would have had approximately $40 million of unused borrowing capacity under the new senior credit facility, not including $5.0 million exclusively reserved for letters of credit. Amounts actually drawn under the new senior credit facility will be subject to change based on daily sources and uses of cash, and may vary up to $20.0 million.

(2)	Pro forma shareholders’ deficit reflects the write-off of approximately $1.5 million, net of tax benefit, in financing costs as a result of modifications made to our existing credit facility.

The selected consolidated results of operations and balance sheet data for fiscal 1998, 1999, 2000, 2001 and 2002 have been derived from our audited consolidated financial statements. The selected results of operations and balance sheet data for the fiscal six months ended June 30, 2002 and June 29, 2003, have been derived from our unaudited consolidated financial statements and, in our opinion, reflect all adjustments, consisting of normal accruals, necessary for a fair presentation of the data for that period. Our results of operations for the six months ended June 29, 2003 may not be indicative of results that may be expected for the fiscal year.

During the periods presented, we have completed numerous acquisitions and closed or divested of certain businesses and investments, the most recent of which are discussed further in Note 3 of our consolidated financial statements. The results of operations of acquired companies have been included in our results of operations from the effective date of each transaction.


(1)	The cumulative effect of accounting change resulted from goodwill impairment charges recorded in conjunction with the adoption of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets.”

(2)	EBITDA is not an alternative measure of operating results or cash flows from operations, as determined in accordance with accounting principles generally accepted in the United States. We have included EBITDA because we believe it is an indicative measure of operating performance and is used by investors and analysts to evaluate companies with our capital structure. As presented by us, EBITDA may not be comparable to similarly titled measures reported by other companies. EBITDA should be considered in addition to, not as a substitute for, operating income, net income (loss), cash flows and other measures of financial performance and liquidity reported in accordance with accounting principles generally accepted in the United States.

	EBITDA for each period is presented as defined in the senior secured note indenture and is calculated as income (loss) before the cumulative effect of accounting changes, plus (i) income tax expense/(benefit), (ii) Michigan single business and similar taxes, (iii) minority interests and equity in affiliates, (iv) net interest expense, (v) loss on asset impairments and sale, (vi) depreciation and amortization and (vii) goodwill impairment charges. Losses on asset impairment and sale and goodwill impairment charges have been added back for EBITDA purposes as these represent charges that will not require cash settlement at any future date. Michigan single business and similar taxes are treated like other income based taxes for purposes of EBITDA calculations, although U.S. generally accepted accounting principles require that such amounts are included as a component of operating income due to the nature of the tax.


	The following table reconciles income (loss) before the cumulative effect of an accounting change to EBITDA:

(3)

The ratio of earnings to fixed charges is calculated by dividing fixed charges into net income (loss) before income taxes, minority interests and equity in affiliates, and fixed charges. “Fixed charges” include interest, whether expensed or capitalized, amortization of debt expense and the estimated interest component of rent expense. Earnings were insufficient to cover fixed charges by $25.3 million for the fiscal year ended December 29, 2002, $0.3 million for the fiscal six months ended June 30, 2002, and $3.5 million for the fiscal six months ended June 29, 2003.

The following unaudited pro forma financial statements have been derived from our audited historical consolidated financial statements for the fiscal year ended December 29, 2002 and from our unaudited historical consolidated financial statements as of and for the fiscal six months ended June 29, 2003, adjusted to give effect to the offering of the old units, the mezzanine term notes and related modifications to our bank credit facility.

The unaudited pro forma consolidated income statements give effect to the offering as if it had occurred at the beginning of the earliest pro forma period presented. The unaudited pro forma condensed balance sheet has been prepared as if the offering had occurred on June 29, 2003.

The unaudited pro forma condensed consolidated financial statements do not purport to represent what our results of operations or financial position would actually have been had these transactions occurred on the date or for the periods indicated. This data also does not purport to project our results of operations or financial position for or at any future period or date. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the related historical financial statements and notes thereto.

The pro forma adjustments are based on available information and certain management estimates and assumptions. We believe that these adjustments provide a reasonable basis for presenting all of the significant effects of the August 1, 2003 offering and that the pro forma adjustments are properly applied in the unaudited pro forma condensed consolidated financial statements.

Adjustments to Pro Forma Consolidated Income Statement for the Fiscal Year Ended December 29, 2002

(a) Record the reduction of interest expense associated with the use of $95.5 million of net proceeds to reduce amounts outstanding under our credit facility at an assumed interest rate of 5.47%, which is based on the weighted average of the interest rates in effect during the pro forma period.

(b) Record interest expense associated with $75.5 million of senior secured notes and $25.0 million of mezzanine term notes at an annual interest rate of 11% and 11.5%, respectively.

(c) Record amortization of the costs associated with the offering of the notes, net of the amortization of costs relating to our refinanced credit facility.

(d) Record the income tax benefit from the pro forma adjustments related to the offering of the notes, at an assumed effective income tax rate of 40%.

Adjustments to Pro Forma Consolidated Income Statement for the Fiscal Six Months Ended June 29, 2003

(e) Record the reduction of interest expense associated with the use of $95.5 million of net proceeds to reduce amounts outstanding under our credit facility at an assumed interest rate of 5.97%, which is based on the weighted average of the interest rates in effect during the pro forma period.

(f) Record interest expense associated with $75.5 million of senior secured notes and $25.0 million of mezzanine term notes at an annual interest rate of 11% and 11.5%, respectively.

(g) Record amortization of the costs associated with the offering of the notes, net of the amortization of costs relating to our refinanced credit facility.

(h) Record the income tax benefit from the pro forma adjustments related to the offering of the notes, at an assumed effective income tax rate of 40%.

Adjustments to Pro Forma Condensed Consolidated Balance Sheet as of June 29, 2003

(i) To record proceeds from the offering of the senior secured notes and mezzanine term notes, net of discount, related fees and the value assigned to common stock purchase warrants.

(j) To record the repayment of amounts outstanding under our existing credit facility.

(k) To reflect the write-off of financing costs as a result of modifications made to our existing credit facility, net of tax benefit, and record the payment of fees associated with amending the facility.

The following analysis of our results of operations and liquidity and capital resources should be read in conjunction with our consolidated financial statements and the related notes beginning on page F-1. Our results of operations for the periods presented include the results of operations of acquired companies from the effective date of their acquisition. As a result, our financial performance for each fiscal year is not directly comparable without taking into account the impact of acquisitions.

As previously disclosed in our annual report on Form 10-K for the fiscal year ended December 29, 2002, prior financial statements reflect a change in the treatment of accumulated dividends on preferred stock. As reflected in the consolidated balance sheets and statements of shareholders’ deficit, accumulated dividends on preferred stock, which had been disclosed in previous filings, have been deducted from shareholders’ deficit and included with the related preferred stock. This change in treatment has no impact on the reported net income (loss) or cash flows for any of the periods presented.

Our significant accounting policies are more fully described in Note 2 to our consolidated financial statements for the fiscal year ended December 29, 2002. Certain accounting policies applied require management’s judgment in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to a degree of uncertainty. Management judgments are based on historical experience, information from our customers, market and regional trends, and other information. Significant accounting policies include:


	•	Valuation of goodwill and long-lived assets— we periodically review the carrying value of our goodwill and long-lived assets for impairment based on projections of anticipated discounted cash flows. Determining market values based on discounted cash flows requires management to make significant estimates and assumptions including, but not limited to, long-term projections of cash flows, market conditions, and appropriate discount rates. Management judgments are based on historical experience, information from our customers, market and regional trends, and other information. During the first quarter of 2002, we recorded a cumulative charge upon adoption of Statement of Financial Accounting Standards (SFAS) No. 142 as described below. We updated our fair value analysis during the fourth quarter of 2002 resulting in an additional charge of $8.7 million. While we believe that the estimates and assumptions underlying our valuation models are valid, different assumptions could result in a larger or smaller charge to earnings.

	•	Deferred income taxes— at June 29, 2003, our consolidated balance sheet includes net deferred tax assets of $20.8 million, including $22.1 million related to net operating losses generated by certain operations. As of June 29, 2003, a valuation allowance totaling $8.5 million exists for certain deferred tax assets where, based on current facts and circumstances, management determined that the likelihood of realization was not sufficient to allow for continued recognition of the assets. Realization of the remaining net deferred tax assets is dependent primarily on the generation of future taxable income within certain regions and implementation of tax utilization strategies by management.

As reflected in our year over year operating results, our business has been challenged by reduced demand for information technology staffing solutions, cost containment actions at our major customers, and deferrals of product development initiatives in the automotive industry resulting from economic uncertainties. Our revenue remains under pressure from continuing cost containment actions at our customers and longer than normal seasonal shutdowns. In response to these trends, we have taken, and continue to take, actions to

We remain focused on building our customized services into standardized and scalable product offerings. We believe that this positioning of our services as integrated solutions will improve our value proposition to existing and prospective customers. Our strategy is to sell high value solutions by leveraging our global organization and existing customer base. Although we cannot provide assurance about the future, our actions are expected to improve profitability, increase operating efficiencies, and expand our customer base, including growth in non-automotive markets.

Net Sales. For the first six months of fiscal 2003, consolidated net sales decreased $48.5 million, or 11.6%, from $417.6 million during fiscal 2002 to $369.1 million during fiscal 2003. For the second quarter of fiscal 2003, consolidated net sales decreased $26.4 million, or 12.4%, from $212.1 million in fiscal 2002 to $185.7 million during fiscal 2003. Overall, the decline in sales reflects lower demand for automotive engineering and human capital management services and reductions from the closure/sale of certain operations. Spending on information technology projects and product development programs remains lower versus early 2002. Although sales for the second quarter remain unfavorable compared to last year, our sales have leveled off versus the first quarter of 2003 and late 2002. Our sales by service line, net of intercompany sales, were as follows:

Sales of collaborative engineering services reflect declining volumes in our European operations partially offset by favorable exchange rates on sales resulting in a net decrease of $10.6 million and $19.8 million in Europe versus the second quarter and first six months of 2002, respectively. Our sales were relatively flat for our North American engineering operations. Our European engineering operations have been challenged by cost reduction programs and delayed product development efforts at key customers. The decline in human capital management services reflects reduced volumes in our engineering staffing in North America and Europe and reduced volumes of information technology and technical staffing services in our North American markets. The decrease in human capital management sales during the second quarter and the first six months of 2003 includes $7.4 million and an $11.8 million, respectively, of reductions as a result of the closure/sale of certain unprofitable operations as part of our 2002 cost reduction plan. In addition, our master vendor programs reflect price reductions negotiated with customers. Sales of technical and marketing services improved versus 2002 as a result of favorable exchange rate changes in our European operations. The net impact of year over year exchange rate changes was to increase sales of technical and marketing services by $8.7 million and $16.5 million for the second quarter and first six months of 2003, respectively. Excluding the impact of foreign exchange rate changes, sales of technical and marketing services for the second quarter and the first six months of 2003

Operating Profit. Our consolidated gross profit and operating income for the periods presented were:

Overall, gross profit declined year over year as a result of reduced volumes and pricing pressures, primarily in our collaborative engineering and human capital management services. The impact of reduced volumes and pricing pressures was partially offset by cost reductions implemented throughout the company. Our cost reduction programs have focused primarily on indirect labor and related fringe benefit costs, elimination of unprofitable operations, and other indirect operating costs. These initiatives resulted in overall savings in excess of $4.0 million for the first six months of 2003. Gross profit as a percentage of sales declined to 12.4% for the second quarter and 11.7% for the first six months of 2003 compared to 12.5% and 12.8% during the corresponding periods of 2002. The decrease as a percent of sales for the first six months of 2003 reflects unfavorable absorption of certain fixed costs, including unutilized facilities. In response to this trend, several facility consolidations and/or closures were completed during the first six months of 2003 resulting in lease termination penalties of $0.9 million included in gross margin.

Selling, general and administrative expenses decreased $5.0 million and $9.1 million compared to the second quarter and first six months of 2002, respectively. Selling, general and administrative expenses, as a percentage of net sales, were 8.5% during the first six months of fiscal 2003 compared to 9.7% in the comparable period of fiscal 2002. The decreases resulted from cost reduction programs implemented across the company in late 2001 and throughout 2002. These reductions are expected to result in annualized savings of approximately $16 million during 2003. Cost savings achieved were partially offset by additional restructuring costs totaling $2.0 million for the first six months of 2003. Restructuring costs include additional severance for targeted areas in Europe and North America, primarily in our engineering and supply chain management businesses.

Interest expense. Interest expense increased from $6.3 million during the second quarter of 2002 to $6.6 million during the second quarter of 2003, a $0.3 million increase. For the first six months of 2003, interest expense increased $0.7 million versus 2002. The impact of reductions in average bank borrowings outstanding were more than offset by increased interest on our second secured term loan and additional amortization of debt issuance costs associated with amendments to our bank facility. Interest rates on bank debt for the second quarter and for the six months ended 2003 were slightly higher than the comparable periods of 2002 primarily as a result of amendments to our bank facility during the third quarter of 2002 and first quarter of 2003. Additional information on interest rate market risk is included under “— Quantitative and Qualitative Disclosures about Market Risk.”

Income taxes. Income tax expense was $0.1 million and $0.2 million during the second quarter and first six months of 2003, respectively. This compares to income tax expense of $1.6 million and

$1.7 million for the comparable periods of 2002. A tax provision was recorded on pre-tax losses during 2003 primarily as a result of valuation allowances established against losses from certain European and North American operations. The effect of valuation allowances, combined with taxable income in other tax jurisdictions, resulted in a net provision during 2003 despite an overall loss before taxes for the six months ended 2003. Valuation allowances were required for selected operations where, based on current facts and circumstances, management determined that the likelihood of realizing deferred tax assets, including net operating loss carryforwards, was not sufficient to allow for recognition of the assets.

Minority interest/equity in affiliates. Minority interests and equity losses improved from an expense of $0.6 million during the first six months of 2002 to income of $0.2 million during the first six months of 2003. Expense during 2002 included minority interest cost of $0.5 million related to a 25% minority stake in Satiz and $0.2 million of equity losses from our investment in MTE Groups LLC. We acquired the minority interest in Satiz and wrote off our remaining investment in MTE during the fourth quarter of 2002.

Cumulative effect of accounting change for goodwill impairment. During the first quarter of fiscal 2002 we adopted the provisions of SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 142 requires that goodwill be evaluated for impairment charges based on a fair value approach instead of amortizing such intangibles over specified periods. Effective January 1, 2002, we evaluated the fair value of our operating units as of December 30, 2001 based on a discounted cash flow methodology as prescribed by the standard. The result of this analysis was a one-time non-cash charge of $47.8 million ($38.1 million after taxes). The impairment charge relates to our collaborative engineering and human capital management service lines. Both of these areas experienced significant downturns during 2001 due to reduced demand for selected services and price reductions implemented by certain customers. The impact of the declines had a significant impact on current valuations when compared to prior performance levels and growth rates. Adoption of SFAS No. 142 required that we record this charge during the first quarter of 2002 as a cumulative adjustment from adoption of the new rules.

Determining fair values based on discounted cash flows requires management to make significant estimates and assumptions including, but not limited to, long term projections of cash flows, market conditions, and appropriate discount rates. Management judgments are based on historical experience, information from our customers, market and regional trends, and other information. While we believe that the estimates and assumptions underlying our valuation models are valid, different assumptions could result in a different outcome.

Net Sales. Overall, our net sales during 2002 reflect weak demand for automotive engineering and human capital management services as our customers have reduced or delayed spending on information technology projects and product development programs. Reductions in Europe were partially offset by improved exchange rates versus the dollar. Our sales by service line, net of intercompany sales, were as follows:

Engineering sales during fiscal 2002 included $16.5 million of incremental sales from the consolidation of Cadform-MSX Engineering GmbH effective January 1, 2002. Excluding incremental sales from the consolidation of Cadform, collaborative engineering sales decreased $47.4 million, or 18.7% compared to fiscal 2001. The decrease reflects lower demand for automotive design and specialty work in substantially

all of our geographic markets and mandatory price reductions from certain customers. Sales of our technical and marketing services decreased slightly from fiscal 2001. The 2002 results include $6.8 million of incremental sales from the acquisition of Draupner Associates AB effective January 1, 2002. Excluding the incremental sales from acquisitions, sales of our technical and marketing services declined $7.1 million, or 2.7%, reflecting relatively flat demand for our services. The decline in human capital management services reflects lower volumes in our engineering staffing business in North America and Europe and reduced volumes of information technology staffing services in our North American market. In addition, our human capital programs have been subject to customer mandated price reductions. During the fourth quarter of fiscal 2002, we completed the sale of our Italian staffing operations, which reported sales of $13.2 million during 2002.

Operating Income. Our consolidated gross profit and operating income for the periods presented were:

Gross profit during fiscal 2002 includes a $2.2 million benefit related to the early termination of a long-term engagement. Gross profit during 2002 also includes $6.0 million of product development and start up costs for our supply chain management service offerings. Excluding these development costs and the early termination benefit, overall gross profits decreased 14% compared to fiscal 2001. The overall decrease reflects reductions in collaborative engineering and human capital management profits. The reduced profitability primarily reflects lower volumes and reduced margins resulting from price reductions. Reductions in sales volume and the impact of price reductions were partially offset by cost reductions implemented throughout the company and improved results from our technical and marketing services. Overall our cost reduction programs, which began in the fourth quarter of 2001, resulted in savings in excess of $23 million for the full 2002 year, primarily in indirect labor, related fringe and benefit costs, and other operating costs.

Selling, general and administrative expenses, as a percentage of net sales, were 9.7% during fiscal 2002 compared to 8.7% during fiscal 2001, despite an overall decrease of $2.5 million. The increase as a percentage of sales reflects the impact of lower volumes during fiscal 2002 and investments in our sales efforts. To date, the impact of cost reductions that we started implementing during the fourth quarter of 2001 and throughout 2002 have been partially offset by investments to develop our marketing, sales, and product portfolio to support and grow our service offerings and incremental costs from acquired companies that were consolidated for the first time in 2002. We are continuing to review and take actions to optimize our cost structure based on current and forecast business levels as discussed further below.

Operating results during 2001 and 2002 include charges totaling $1.3 million and $8.0 million, respectively, for termination benefits and related costs associated with our cost reduction programs. A substantial portion of the 2002 charge was recorded during the fourth quarter with payment expected early in 2003. Actions taken during 2001 and early in 2002 resulted in operating costs savings in excess of $23 million during 2002. Restructuring activities during the fourth quarter of 2002 are expected to reduce operating costs by about $25 million during 2003 and $32 million on an annualized basis. These cost reductions impacted substantially all of our operations. Amortization of goodwill and intangibles was $6.2 million during fiscal 2001 while goodwill impairment charges totalled $8.7 million during fiscal 2002. The 2002 charge was calculated based on a fair value impairment analysis in accordance with SFAS No. 142. Goodwill amortization expense during 2001 was based on an amortization approach prior to adoption of SFAS No. 142. The fair value approach used during 2002 resulted in a larger charge due to current market conditions.

Loss on asset impairment and sale. During the fourth quarter of 2002 we sold our human capital management operations in Italy and recognized a loss on our investment in Prototipo Holding BV. The sale of Quandoccorre Interinale and QR Quandoccorre, our Italian staffing operations, was completed as part of our restructuring efforts in response to current and forecasted operating losses resulting from developments in the staffing markets these businesses competed in. The sale proceeds totaled about $1.0 million, resulting in a non-cash loss on the sale of $2.7 million during the fourth quarter of 2002. The operations, which were acquired in a series of transactions beginning in 1999, had reported operating losses of about $1.0 million through November of 2002. The loss on Prototipo Holding BV amounted to $1.6 million and reflected a reduction in the market value of the business due to their weakened economic performance.

Interest Expense. Interest expense decreased $2.0 million, from $27.9 million during fiscal 2001 to $25.9 million during fiscal 2002. Reduced interest expense during 2002 reflects improved base interest rates on variable rate debt and reductions in our average daily borrowings outstanding. Improvements in interest expense on our bank debt were partially offset by amortization of additional debt issuance costs associated with amending our primary credit facility, increased margins over base interest rates following the amendment, and incremental interest on a second secured term loan, referred to herein as the fourth lien term note, issued during the third quarter of 2002. Additional information on interest rate market risk is included under the heading “—Quantitative and Qualitative Disclosures About Market Risk.”

Income taxes. Our income tax benefit during fiscal 2002 represents an effective rate of 13.8% compared to an effective rate of 41.2% during fiscal 2001. Income taxes during 2002 reflect the establishment of valuation allowances totaling $6.1 million for certain deferred tax assets in our European operations. The valuation allowances were required for selected operations where, based on current facts and circumstances, management determined that the likelihood of realization was not sufficient to allow for continued recognition of the assets.

Minority interests and equity in net losses of affiliates. Minority interests and equity losses during 2002 include $2.6 million in losses related to MTE Groups LLC, an equity investee. During 2002, MTE generated substantial operating losses, eventually leading to liquidity concerns. As a result of their performance, the remaining value of our investment was written off during the fourth quarter of 2002. Equity losses during 2001 include our portion of MTE Group losses totaling $0.8 million in addition to minority interest expense of $0.4 million and equity losses from Cadform-MSX Engineering GmbH totaling $0.8 million. Cadform-MSX Engineering was consolidated effective January 1, 2002.

Cumulative effect of accounting change for goodwill impairment. During the first quarter of fiscal 2002 we adopted the provisions of SFAS No. 142, Goodwill and Other Intangible Assets. The cumulative effect charge related to this adoption is discussed in further detail under our results of operations for the six months ended June 30, 2002 compared to the six months ended June 29, 2003.

Net Sales. Our sales by service line, net of intercompany sales, were as follows:

Consolidated net sales were $929.3 million during fiscal 2001 compared to $1,035.2 million during fiscal 2000, a decrease of $105.9 million, or 10.2%. Comparable fiscal 2001 sales were negatively impacted by depressed foreign currency exchange rates in certain countries in which we operate. The net impact of year over year exchange rate changes was to reduce consolidated net sales by about $13.4 million for the fiscal 2001 year. Excluding the impact of foreign exchange rate changes, consolidated fiscal 2001 net sales decreased $92.5 million, or 8.9%, compared to 2000.

After adjusting for the impact of foreign exchange rates, sales of collaborative engineering services and human capital management services remained lower versus fiscal 2000 whiles sales of technical and marketing services improved slightly. The decrease in engineering sales reflects price reduction pressures and reduced volumes of engineering services in North America and Europe as our automotive customers have delayed their engineering programs due to current economic conditions. Sales of our technical and marketing services improved slightly despite the divestiture of a non-core business during fiscal 2000. The improvement primarily reflects strong sales of technical publishing services in Europe while other service offerings were stable. Sales of human capital management services decreased during fiscal 2001 due to reduced demand in North American markets for information technology development, automotive engineering, and permanent placement services. Reductions in human capital management sales volumes, on a year to date basis, were partially offset by the impact of businesses acquired during the first quarter of fiscal 2000.

Operating Income. Our consolidated gross profit and operating income for the periods presented were:

Gross profit, as a percentage of sales, decreased to 13.0% during fiscal 2001 compared to 14.1% during fiscal 2000. The decrease in gross profit reflects the pricing pressures and unfavorable volumes in our engineering and human capital management operations, particularly in the second half of 2001, resulting in less favorable absorption of fixed and indirect operating costs. Overall, operating income decreased during 2001 due to reduced sales volumes, pricing pressures and costs incurred to position the company for growth and expansion into targeted vertical markets. The overall decline in our operating results is attributable to the general economic downturn, which has impacted demand for technical services in the automotive and telecommunications sectors.

We took initial steps to reduce our cost structure commensurate with the current levels of business during 2001. As a result, we recorded about $1.3 million of severance related costs during the fourth quarter of 2001 and took other steps to reduce our cost structure. We began realizing annual benefits in excess of $23 million from our cost reduction efforts starting in the first quarter of fiscal 2002.

Selling, general and administrative expenses, as a percentage of net sales, were 8.7% during fiscal 2001 compared to 8.0% during fiscal 2000. The increase as a percentage of sales reflects the impact of lower volumes during fiscal 2001, particularly in the second half of the year. Overall, selling, general and administrative expenses decreased in comparison to 2000 reflecting reductions in incentive compensation totaling $7.7 million. After adjusting for reductions in incentive compensation, selling, general and administrative expenses increased on a year over year basis. The increase reflects costs incurred to develop our service offerings and sales efforts within our developing vertical markets.

Interest Expense. Interest expense decreased $2.2 million, from $30.1 million during fiscal 2000 to $27.9 million during fiscal 2001. Average daily borrowings outstanding increased slightly during fiscal 2001 in order to fund investments in businesses and product development. However, the impact of increased

Net Income. Net income during fiscal 2001 was $0.5 million, compared to net income of $14.9 million in fiscal 2000. The decrease reflects lower operating earnings and increased equity losses during the year. Our effective income tax rate during fiscal 2001 was 41.2% versus 42.0% during fiscal 2000. The improvement resulted from certain legal reorganization changes that took effect in 2001 combined with a favorable mix of taxable earnings compared to fiscal 2000. Minority interests and equity losses increased $1.2 million compared to fiscal 2000 primarily as a result of losses reported by our equity investees during 2001. Our equity investees are experiencing the same pricing pressures and volume reductions that are impacting our business.

General. Our principal capital requirements are for working capital, product development initiatives, and capital expenditures for customer programs. These requirements have been met through a combination of bank debt, the issuance of senior subordinated and second secured term notes and cash generated from operations. Cash balances in excess of amounts required to fund daily operations are generally used to pay down debt outstanding under the revolving credit portion of our credit facility. We typically pay our employees on a weekly basis and receive payment from our customers within invoicing terms, which is generally a 60-day period after the invoice date. However, in connection with certain of our master vendor and supply chain management programs, we collect related receivables at approximately the same time we make payment to suppliers.

Operating Activities. Net cash used for operating activities was $1.4 million for the first six months of 2003 compared to $9.8 million during the comparable period of 2002. The improvement in cash used resulted from changes in our working capital due primarily to the timing of vendor payments relative to the close of the fiscal period.

Investing Activities. Net cash used for investing activities decreased $4.8 million from $7.7 million for the first six months of 2002 to $2.9 million for the first six months of 2003. Capital expenditure requirements for current programs decreased commensurate with the current lower volumes in business while discretionary spending was reduced as a result of management initiatives. Cash used to acquire businesses during 2002 included funding of the Draupner Associates AB acquisition and the acquisition of the remaining outstanding common stock of Cadform-MSX Engineering GmbH. Proceeds from the sale/disposal of equipment were the result of the company disposing of idle or obsolete equipment. Other cash from investing activities during the first six months of 2002 primarily represents the refund of escrow funds related to an investment in MTE Groups LLC as a result of their non-attainment of earnings targets.

Financing Activities. Net cash used in financing activities was $2.7 million for the first six months of 2003 compared to cash provided by financing activities of $16.9 million for the first six months of 2002. Financing requirements during the first six months of 2002 increased to fund investments and provide for changes in working capital. Repayment of debt during 2002 includes a mandatory prepayment totaling $9.1 million as a result of excess cash flows generated during fiscal 2001. Under the terms of our credit agreement, we are subject to mandatory partial prepayments of amounts outstanding under the term loan portion of the credit facility if excess cash flows, as defined, are generated on an annual basis.

Operating Activities. Net cash provided by operating activities totaled $26.6 million in fiscal 2002, a $31.8 million decrease from $58.4 million in fiscal 2001. Operating cash flows during 2002 reflect a $19.4 million reduction in earnings before non-cash charges and taxes due to factors described in our operating results. The remaining decrease reflects reductions in working capital primarily related to the timing of accounts receivable collections versus payments to our employees, contractors and vendors.

Investing Activities. Net cash used for investing activities decreased to $12.8 million during fiscal 2002, from $35.1 million during fiscal 2001. The decrease includes a reduction in funds used to acquire businesses of $9.8 million and reductions in capital expenditures totaling $10.2 million compared to the prior year. Cash used to acquire businesses during 2002 included funding of the Draupner and Cadform transactions totaling $3.1 million and payment for the remaining shares of Satiz Srl from Fiat. Acquisitions during fiscal 2001 included minority investments in MTE Groups L.L.C. and itiliti, Inc. totaling about $6.6 million as well as the payment of contingent consideration related to certain prior acquisitions. Proceeds from the sale/disposal of equipment and investments during fiscal 2002 include $1.0 million from the sale of our human capital management business in Italy. Other cash from investing activities during fiscal 2002 primarily represents the return of funds that had been escrowed to cover contingent purchase price for our MTE investment had MTE achieved certain earnings targets.

Financing Activities. Net cash used for financing activities was $9.1 million during fiscal 2002 compared to net cash used of $23.8 million in 2001, a decrease of $14.7 million. Cash generated from operations in excess of investing requirements was utilized to reduce revolving debt and make scheduled term loan repayments. Under the terms of our credit agreement as of 2001 and 2002, we are also subject to mandatory partial prepayments of amounts outstanding under the term loan portion of our credit facility if excess cash flows, as defined, are generated on an annual basis. Repayment of debt during 2002 includes a mandatory prepayment during the second quarter totaling $9.1 million as a result of cash flows generated during fiscal 2001. Repayment of debt also includes a $15 million repayment of term loans due to refinancing under a second secured term loan as described below.

During the first quarter of fiscal 2001, a subsidiary of MSX International, Inc. completed a sale of unregistered securities to certain directors and members of management. The securities were sold in units with each unit comprised of MSX International, Inc.’s Series A Preferred Stock, par value $0.01 per share, and Class A Common Stock, par value $0.01 per share. In total, 9,936 shares of Series A Preferred Stock and 482,400 shares of Class A Common Stock were sold. The shares of Series A Preferred Stock and Class A Common Stock, which comprised the units sold, were acquired from Citicorp, our majority stockholder, at a price equal to the price at which the units were sold to management. The entire proceeds of $3.6 million were used to pay the purchase price of the shares acquired from Citicorp.

Operating Activities. Net cash provided by operating activities during fiscal 2001 decreased $0.7 million from $59.1 million in fiscal 2000 to $58.4 million in fiscal 2001. Cash from operations during fiscal 2000 includes significant improvements in accounts receivable collections resulting from the transition of Satiz S.r.l. into our cash management system. The reduction in Satiz accounts receivable resulted in a one-time improvement in cash from operations of about $12 million during fiscal 2000. Excluding the one-time improvements during fiscal 2000, cash provided by operations increased about $11 million during fiscal 2001 despite reduced profits during the year. The improvement resulted from our efforts to maximize working capital through accounts receivable collections and management of vendor payment terms.

Investing Activities. Net cash used for investing activities during fiscal 2001 decreased $40.3 million, from $75.4 million during fiscal 2000 to $35.1 million. The decrease includes a reduction in funds used to acquire businesses of $43.6 million. Cash used to acquire businesses during fiscal 2001 included investments in MTE Groups L.L.C. and itiliti, Inc. totaling about $6.6 million as well as the payment of contingent consideration related to certain prior acquisitions. Cash used to acquire businesses during fiscal

2000 includes the acquisition of certain operations from Corporate Staffing Resources, Inc. and payments of contingent consideration from prior acquisitions. The increase of $1.1 million in capital expenditures during fiscal 2001 reflects an increase in capital invested for future programs and services while capital required to maintain current programs declined year over year. Proceeds from the sale/disposal of property and equipment during fiscal 2000 include proceeds from the sale of certain non-core assets, primarily real estate and equipment, associated with our offset printing business.

Financing Activities. Net cash used for financing activities was $23.8 million during fiscal 2001 compared to net cash provided by financing activities of $21.8 million in fiscal 2000, a decrease of $45.6 million. Financing requirements decreased consistent with the reduction in funds required to acquire companies. Therefore, cash generated from operations in excess of investing requirements were utilized to reduce revolving debt and make scheduled term loan repayments.

Following are descriptions of our current debt arrangements other than the new and old units and the mezzanine term notes, which are described in the sections titled “Description of Certain Indebtedness,” “Related Party Transactions” and “Description of the New Units”.

Senior Subordinated Notes. At June 29, 2003, we had $130 million of 11 3/8% unsecured senior subordinated notes outstanding, which are registered under the Securities Act of 1933. The notes mature on January 15, 2008 with interest payable semi-annually. The notes may be redeemed subsequent to January 15, 2003 at premiums that begin at 105.6875% and decline each year to face value for redemptions taking place after January 15, 2006.

Senior Credit Facility and Second Secured Term Notes. In December 1999, we completed an amended and restated credit facility with commercial banks and institutional lenders led by Bank One, N.A, as agent. The revolving credit portion of the amended and restated agreement expires December 7, 2004. As of June 29, 2003, the credit facility provided for revolving credit up to $85.0 million with existing five and seven year term loans outstanding totaling $64.1 million. We repaid all outstanding indebtedness under our existing senior credit facility with proceeds from the old unit offering and proceeds from mezzanine term notes offered concurrently. We will fund any future working capital needs with our new revolving credit facility as described below.

Concurrently with the consummation of the old unit offering, we entered into a new three-year, senior secured revolving credit facility with Bank One, N.A., as agent. The facility consists of a $40 million revolver plus an additional $5 million available exclusively for the issuance of letters of credit. For more information regarding the senior credit facility, see “Description of Certain Indebtedness— Senior Credit Facility.”

In conjunction with the second amendment to our credit facility on July 10, 2002, we entered into a second secured term note with an affiliate of Citicorp, our majority owners. Terms of the note are described more fully in Note 9 of our consolidated financial statements. Upon consummation of the old unit offering, the note was amended and restated into a $14.7 million note issued by MSX International, Inc. and a $2.4 million note issued by MSX International Limited. The amended and restated notes are referred to in this prospectus as the “fourth lien term notes.”

note issued by MSX International Limited is guaranteed on a senior secured basis by MSX International, Inc. and all of the existing and future domestic restricted subsidiaries of MSX International, Inc, and is secured by a fourth priority lien on the accounts receivable, and the related guarantees are secured by a fourth priority lien on substantially all of the assets of MSX International, Inc. and the assets of its domestic restricted subsidiaries.

Pursuant to the terms of an intercreditor agreement, the security interests securing the fourth lien term notes are subject to liens securing our senior credit facility, the new notes offered hereby, and the mezzanine term notes.

The amendments to the note also included extending the maturity from June 7, 2007 to January 15, 2008, and resetting the covenants in the notes so that they are equivalent to the covenants in the Indenture for the new notes. Interest on the notes continues to accrue at a rate of 10% per annum and is not payable until January 15, 2008. In addition, the $10.8 million supplemental funding agreement and related guarantee that was added when the note was amended in February 2003 terminated by its terms when our prior credit facility was repaid in full upon consummation of the offering of the old units.

Satiz Facility. Satiz Srl, a subsidiary of our company which was acquired effective December 31, 1999, maintains a financing arrangement that provides for lines of credit up to 100% of its eligible accounts receivable, as defined in the agreement. As of June 29, 2003, about $1.3 million was outstanding under this arrangement. The original term of the agreement expired on December 12, 2001, and renews annually unless terminated by either party.

Additional information regarding these obligations is set forth in Note 9 and Note 18 to our consolidated financial statements for the year ended December 29, 2002, included elsewhere in this prospectus.

Our total indebtedness as of June 29, 2003 consists of senior subordinated notes, our second secured term loan, borrowings under our credit facilities and borrowings under various short-term arrangements. In addition to our total indebtedness, we also have contingent commitments under letters of credit totaling about $4.9 million, without duplication, at June 29, 2003.

Available borrowings under our credit facility as of June 29, 2003 are subject to adequate accounts receivable balance requirements. As of June 29, 2003 we have $65.6 million of unutilized capacity under the revolving credit portion of our credit facility of which $46.9 million was available for immediate borrowing based on eligible accounts receivable as determined in accordance with our credit agreement, as amended.

On August 1, 2003 we completed a private offering of senior secured notes and mezzanine term notes, both maturing October 15, 2007. We also entered into a new three-year senior secured revolving credit facility that consists of a $40.0 million revolving credit agreement plus an additional $5 million available exclusively for the issuance of letters of credit. In addition we also amended the terms of certain of our other debt obligations. Proceeds from the offering were used to repay term loans and revolving debt under our credit facilities that matured between December 2004 and December 2006. These transactions refinance our current obligations over a longer term and remove certain restrictive covenants in place under prior arrangements.

We believe that our current financing arrangements and the financing arrangements we entered into upon consummation of the offering of the old units provide us with sufficient financial flexibility to fund our operations and debt service requirements through the term of our new senior credit facility with an expected maturity of July 2006, although there can be no assurance that will be the case. Financing requirements over the longer term will require additional access to capital markets. Our ability to access additional capital in the long term depends on availability of capital markets and pricing on commercially reasonable terms as well as our credit profile at the time we are seeking funds. From time to time, we review our long-term financing and capital structure. As a result of our review, we may periodically explore

alternatives to our current financing, including the issuance of additional long-term debt, refinancing our new credit facility and other restructurings or financings. In addition, we may from time to time seek to retire our outstanding notes and the notes being issued in this exchange offer in open market purchases, privately negotiated transactions or otherwise. These repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amount of repurchases of our notes may be material and may involve significant amounts of our cash and/or financing availability.

Our material obligations under firm contractual arrangements, including commitments for future payments under long-term debt arrangements, operating lease arrangements and other long-term obligations as of December 29, 2002 are summarized below.

In addition to our total indebtedness, we also have contingent commitments under letters of credit totaling about $4.5 million, without duplication. Except for our letters of credit, we have no other existing off-balance sheet financing arrangements.

At December 29, 2002, we have accruals totaling $10.5 million related to contingent earnout obligations which are the subject of current legal proceedings. As with any legal proceeding, it is impossible to determine the final outcome of the litigation or the impact on the company. If the final liability is significantly more than our current accrual, funding of such an obligation could have a material adverse impact on our liquidity and capital resources.

Our past acquisitions have expanded our geographic coverage, increased our service offerings to existing customers and increased our reach to customers outside of the automotive industry. These acquisitions along with our existing businesses provide us with a solid platform to grow our business globally and into a variety of industries. In total, we have completed over 15 acquisitions since 1998 and made certain other investments that continue to support our ongoing business and growth opportunities. While we are currently focused on developing our business through internal growth, we may pursue opportunistic strategic acquisitions, alliances and other corporate development activities.

Although we cannot anticipate future inflation, we do not believe that inflation has had, or is likely in the foreseeable future to have, a material impact on our results of operations. Our contracts typically do not include automatic adjustments for inflation.

The number of billing days in the period and the seasonality of our customers’ businesses primarily affect our quarterly operating results. Demand for our services has historically been lower during automotive shutdown periods, including the year-end holidays.

In May 2003, the Financial Accounting Standards Board (FASB) issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. SFAS No. 150 establishes standards for how companies classify and measure in their statement of financial position certain financial instruments with characteristics of both liabilities and equity. It requires that a company classify certain financial instruments as liabilities because they embody an obligation of the company. This statement is effective for financial instruments entered into or modified after May 31, 2003 except for mandatorily redeemable financial instruments. For mandatorily redeemable financial instruments of nonpublic entities, such as MSXI, this statement is effective for the first fiscal period beginning after December 15, 2004. We are currently assessing the impact that SFAS No. 150 will have on our consolidated results of operations and financial position.

We are exposed to certain market risks, including interest rate and currency exchange rate risks. Risk exposures relating to these market risks are summarized below. This information should be read in connection with the consolidated financial statements and the related notes thereto included elsewhere in this prospectus.

For fiscal 2002, about 43% of our net sales were from markets outside of the United States. To date, the majority of our exposure has been naturally hedged since our foreign operation’s revenues and operating costs are typically denominated in the same currency. We may periodically hedge specific transactions or obligations in non-functional currencies in order to mitigate any additional risk. However, we do not enter into financial instruments for trading or speculative purposes. For the fiscal years ended December 30, 2001 and December 29, 2002, adjustments from the translation of the financial results of our foreign operations increased equity by about $38 thousand and $6.3 million, respectively.

We manage interest cost using a combination of fixed and variable rate debt. As of June 29, 2003, we had $130 million of senior subordinated notes outstanding at a fixed interest rate of 11 3/8% with a remaining duration of five years. Under our new senior credit facility, we have a $40 million revolver with variable interest rates as described in “Description of Certain Indebtedness — Senior Credit Facility.” As of June 29, 2003, the fair value of the senior subordinated notes was $80.6 million compared to its carrying value of $130 million.

Our current business is heavily reliant on the domestic and foreign automotive industries. Ford, DaimlerChrysler, General Motors and Fiat, including their automotive subsidiaries, accounted for approximately 38.4%, 8.7%, 8.4% and 8%, respectively, of our consolidated net sales for fiscal 2002. Significant future price or volume reductions from these customers could adversely affect our earnings and financial condition. We believe we can expand our services to other less cyclical industries and have had some success in doing so. However, there can be no assurance that our diversification efforts will fully offset the impact of any further declines in our automotive markets.


	•	Collaborative Engineering Management. Our capabilities include product design and engineering from concept to production launch. This includes creation of production drawings, prototype development, testing, tool design, plant layout and overall program management. We also manage show cars and assemble low-volume, niche vehicles. A current example of our engineering services capability involves a comprehensive review of a customer’s product portfolio, including redesigning vehicles and components to reduce overall production costs. Based on our technical expertise and knowledge of the customer’s systems, we quickly deployed a team of approximately 150 engineers and technicians to conduct this review. In 2002, this program generated substantial product savings that represented many multiples of the program’s cost.

	•	Technical and Marketing Services. We deliver an extensive range of technical and marketing services to meet the outsourcing requirements of our customers. These services complement our engineering expertise and include:


	•	Quality Relationship Management. We compile and analyze product, market and end-user information that our customers need to improve product quality, reduce costs, and improve customer loyalty and satisfaction. Our services include in-bound technical call centers, dealership consulting, and warranty administration. A current program involves the coordination of a field team of approximately 100 technical specialists who evaluate warranty processes at European automotive dealerships. The team then works with the OEM customer to implement procedures that improve the quality of customer service, while standardizing and streamlining the warranty process. In this case, our pan-European delivery capability and our ability to deploy a highly-trained team of warranty specialists were critical to the success of the project. We have generated considerable and sustainable warranty cost savings for the OEM of approximately three times the program’s cost.

	•	Custom Communication Services. We create and manage technical documents and commercial publications on behalf of our customers. Competencies include content development and management, translation services, multimedia publishing, and distribution. We convert images into digital formats, host document centers, and support large format document printing. For example, we support the loan documentation requirements of a subsidiary of ABN AMRO by imaging an average of 700,000 mortgage documents per month. This service involves digital imaging of paper documents and cataloging of records based on specific field information. We believe our proprietary processes for imaging, archiving and web-hosting large quantities of


		technical documentation for automotive customers were integral to winning this financial services industry contract.

	•	Supply Chain Management. We work with our customers to streamline their procurement process and reduce systems costs. This involves all elements of supply chain management from process consulting to contract assembly. One of our current customers is a medical products company, for whom we procure all components, manage supply logistics, and assemble an FDA-regulated product under a multi-year contract.


	•	Human Capital Management Services. We are an international leader in automotive technical staffing, providing engineers, designers and technicians on a contract basis to support our customers’ product development programs. We also provide information technology professionals through 19 offices located in key regional markets. By using our services, customers benefit from reduced direct personnel costs, improved operating flexibility, and access to personnel with specialized skills. Our ability to identify and retain qualified personnel with unique technical skills is a competitive advantage.

Increasingly, large companies are outsourcing the management of their entire staffing function. Our comprehensive vendor management system is among the largest in the United States based on the number of personnel provided to our customers. We currently manage the staffing supply chain for three of the five largest domestic automotive OEMs and suppliers. Our proprietary system allows us to manage workforce procurement, vendor relations, and purchase order administration and payment on behalf of each customer in a web-enabled environment. Our customers benefit from the elimination of internal overhead, greater economies of scale through aggregated procurement as well as access to a proprietary system which improves the efficiency and quality of the staffing workforce. The increased value we provide to our customers results in our vendor management services generating a relatively high return on investment for our company while also providing the opportunity to enhance our staffing business through greater understanding of our customers’ staffing needs.

Longstanding Customer Relationships. Our company and its predecessors have had longstanding relationships with our top five customers dating as far back as the 1930’s. Our top customers include leading U.S. and European automotive OEMs and suppliers such as Ford Motor Co., DaimlerChrysler AG, General Motors Corporation, Fiat S.p.A., Delphi Corporation and Visteon Corporation, as well as non-automotive customers such as Johnson & Johnson, Chase Manhattan Bank, Metropolitan Life Insurance Company, and Verizon Communications. At each of these customers, we provide multiple business services across our product portfolio, evidencing our strategic focus on developing broad, embedded relationships with our principal accounts. In many cases, these services extend across the customer’s organization in multiple geographic locations. We believe our enduring customer relationships present a unique opportunity to cross-sell other services.

Experienced Management Team. We benefit from the collective expertise of an experienced and committed management team under the leadership of Thomas T. Stallkamp, our Vice Chairman and Chief Executive Officer. Prior to joining our company in January 2000, Mr. Stallkamp was Vice Chairman for DaimlerChrysler Corporation and also served as President of Chrysler Corporation from 1998. He is widely recognized for his influential work at Chrysler Corporation in the area of vendor relations and supply chain management. Robert Netolicka joined the company on June 2, 2003, when he was appointed President and Chief Operating Officer. Prior to joining us, Mr. Netolicka was President, Integrated Facilities Management, at Johnson Controls, Inc. where he expanded the facilities management service business. After giving effect to the exercise of all options, our management team would collectively own 17.0% of our common stock.

Solid Credit Profile. As of June 29, 2003, we had $430.5 million of total assets, including $215.2 million of net accounts receivable and $33.7 million of net property and equipment. The new US notes will have a collateral package of substantially all of MSXI’s assets and the assets of MSXI’s domestic restricted subsidiaries. In addition, the new UK notes are also secured by the accounts receivable of MSXI Limited. MSXI’s domestic restricted subsidiaries had $112.5 million of net accounts receivable and $17.9 million of net property and equipment as of June 29, 2003. MSXI Limited had $30.5 million of net accounts receivable as of June 29, 2003. A substantial portion of our accounts receivable are from large corporations.


	•	Collaborative Engineering Management. Revenues in this segment have been negatively impacted by delays and cancellations of product development activities at our principal customers. Beginning in early 2001, several of our automotive customers deferred or reassessed their product development


		spending due to weak economic conditions. We believe this resulted in new product development spending that was below normalized levels for the industry. Recently, we have seen increased activity from several customers as they finalize their new product development plans.

	•	Technical and Marketing Services. Demand for these services has remained relatively constant in recent years, despite challenging economic conditions. This stability reflects the favorable trends in outsourcing and the recurring nature of our programs once they are implemented. Economic uncertainty stimulates interest in outsourcing as companies seek ways to lower costs and respond to a rapidly changing market environment.

	•	Human Capital Management Services. Beginning in 2001, our results were negatively impacted by the contraction in technology spending. Due to a general reduction in technology spending, most information technology and technical staffing vendors experienced a significant decline in business volumes. In the automotive industry, reduced spending on new product development had a similar impact on technical staffing. More recently, as general economic conditions have begun to improve, demand for technical staffing has strengthened.

In recent fiscal quarters, our annualized revenues approximated $740 million, when adjusted for businesses we have exited. We believe, however, that automotive OEM product development budgets will improve in the next 12 to 24 months as our customers pursue cost reductions on their existing platforms and launch new concepts and products. Notwithstanding these trends, we proactively adjusted our business model and cost structure to improve profitability and liquidity despite the difficult market environment. Our actions to enhance profitability include the following:

Sale or Disposal of Underperforming Operations. Since the third quarter of fiscal 2002, we have exited several underperforming businesses as part of our efforts to improve overall profitability and return on capital. Businesses we exited generated combined EBITDA losses of $9.9 million during fiscal 2002. The exit of such operations improves our future operating results and also generated incremental cash from the liquidation of these businesses, allowing us to reduce outstanding debt. EBITDA losses generated by businesses sold or disposed included $4.5 million from certain procurement and consulting businesses, $1.8 million from selected collaborative engineering operations in Germany, $1.1 million from our executive recruiting operations, $1.1 million from our Mexican staffing operations, $1.0 million from our staffing operations in Italy, and $0.4 million from our specialty paint operations. For further discussion of EBITDA measures, refer to “— Summary Selected Financial Data.”

Liquidity Initiatives. As a complement to our profit improvement actions, we have engaged in disciplined working capital management to generate cash flow. This was enhanced by proceeds collected

We believe we are positioned for growth through the implementation of the following business strategy:

The following is a more detailed summary of our offerings through each of our service lines as well as a description of some of our competitors for each of our service lines. Additional information on our operating results by service line is set forth in Note 16 of our consolidated financial statements included elsewhere in this prospectus.

We provide a complete range of engineering services, including consultancy, product and process development and full program management. Our advice, innovation and solutions can be delivered through all phases of the product development cycle. Our service offerings cover the following key areas:


	•	Technical consultancy— consultancy based on our more than 30 years of experience in complete engineering and niche vehicle programs and in the applications of processes and technology tools to achieve best in class product quality, timing and cost

	•	Technology applications— using the latest technology and CAE tools to execute projects for our customers, including virtual engineering (digital design, predictive analysis, dimensional management, CAD engineering and manufacturing simulation). This reduces development process cycle time and minimizes the requirement for physical proto-types and testing, thereby reducing overall cost

	•	Engineering services— in support of the above specialist skills we provide general engineering services capable of delivering successful products, including studio services, product engineering (body structures, chassis and trim), system integration in powertrain and electronics, prototype build, manufacturing engineering, and low volume vehicle build

Competitors vary in our industry depending on the specific services provided and geographic reach. Customers are focused on companies that can provide global reach, depth and breadth of experience. In North America, we compete with Magna, Porsche, Roush Industries, and Wagon Inc., among others. European competition includes Bertrandt, Rücker, IVM, Magna-Steyr, Porsche, Stola, Pininfarina, Italdesign, Engineering & Design AG and Hawtal Whiting, a subsidiary of Wagon plc.

We provide a broad range of technology-based business services to help support the objectives of our customers. Our service offerings include:


	•	Quality Relationship Management— we believe our quality relationship management programs give our customers a competitive edge by providing the actionable product, market and customer


		information they need to improve product quality, reduce costs and improve customer loyalty and satisfaction. Examples of our services include:


	•	Warranty support programs— management and operation of parts return centers, warranty process improvement consulting, claims assessment and analysis, and contract administration of extended warranty programs

	•	Product quality improvement programs— supplier quality assurance, technical call centers, and quality training and consulting programs

	•	Retail support programs— process improvement consulting, customer satisfaction program management, and training programs


	•	Custom Communication Services— we offer a full spectrum of solutions to provide our customers with a competitive advantage in facilitating communications through creating, maintaining and delivering information. Our services include the following:


	•	Technical and consumer publishing— assists our customers in reducing cost and cycle time by facilitating the reuse and repurposing of content in technical writing, translation, print and distribution

	•	Integrated marketing support and research services— supports the development and implementation of personalized marketing programs including copy and design, translation, printing and distribution

	•	Integrated document management— assists our customers in facilitating the internal development and distribution of knowledge across their organizations. Our services include document imaging and on-site document centers


	•	Supply Chain Management— through supply chain management, we work with our customers to streamline their procurement process, reduce procurement systems costs, and reduce fixed costs in the process. We do this by providing personnel with the required expertise and recommending process improvements through technology solutions required to achieve the desired results. Our services include the following:


	•	Outsourced purchasing services— management of the procurement process from initial requisition to supplier payment

	•	Contract manufacturing— supply chain management services that provide full product life cycle support, from concept/design to shipment of product

	•	Supply chain management consulting to meet specific customer needs

There is a high level of competition among suppliers of the outsourced business services we provide. In many cases, our principal competition is the customer’s in-house operations. For certain of our services there are numerous outside competitors, many of whom presently have greater name recognition and resources than we do. For quality relationship management and supply chain management services we compete with other national, regional and global service companies such as Accenture, EDS, IBM, ICG Commerce, Maritz, TeleTech/ Percepta, Atisae and other consulting firms. In the custom communications area we compete with companies such as Valley Forge/ SPX, Bowne, Xerox, Budco and Lason.

We provide a broad range of services to help maximize the effectiveness, flow and utilization of human capital, particularly in technology-oriented environments. Through this practice we provide custom staffing solutions, including:


	•	Contingent staffing— traditional temporary and/or permanent staffing solutions for information technology, engineering or other professional staff needs. Our staffing capabilities include design and production engineers, computer operators, database specialists, network administrators and


		specialists, PC support staff, software engineers, systems analysts and administrators, and technical support specialists

	•	Vendor management programs— management of the entire contract staffing procurement and deployment process on a regional, national or global basis utilizing web enabled supporting technologies

	•	Specialized training— training programs and virtual training courseware

Our competitors in human capital management services include Adecco International, CDI, Keane, kforce, Manpower, Kelly Services Technical, Olsten, Randstad (in Europe only), TechAid, Volt, and numerous regional information technology-staffing firms. Other indirect competitors include Monster.com (a subsidiary of Monster Worldwide) and other internet-based staffing resources.

We currently have more than 700 customers. These include the major United States and European automotive OEMs and automotive suppliers. Ford, DaimlerChrysler AG, General Motors Corporation and Fiat S.p.A., including their automotive subsidiaries, together accounted for 63.5% of our net sales for the fiscal year ended December 29, 2002.

A substantial portion of our sales to selected large customers are sales of services that we and our predecessors have been providing to these customers for numerous years. We often deliver these services on a preferred or sole supplier basis, frequently in multiple countries or customer subsidiaries. We are integrated with or utilize our customers’ systems and processes, and in many instances, we are co-located in our customers’ facilities. Our services are an integral part of our customers’ day-to-day operations, allowing us to better serve their needs. Although dependent on actual market demand, such relationships permit a degree of forward revenue visibility. They also give us the opportunity to expand existing customer relationships by providing cross-selling opportunities for our other technical business services.

A substantial portion of our $310 million in sales to Ford during 2002 were made pursuant to the Ford Master Vendor Agreement and the Ford Master Supply Agreement which we entered into as part of our 1997 acquisition of Geometric Results, Inc. Upon expiration of the original term of the Ford Master Vendor Agreement in August 2002, both Ford and MSXI verbally agreed to extend the term of the Master Vendor Agreement pending the negotiation of a revised one-year arrangement, which has been executed and is effective from January 1, 2003 to December 31, 2003. Details of specific services previously performed under the Ford Master Supply Agreement were generally subject to annual renegotiation. These services are now performed by the company for Ford on an annual purchase order basis.

Significant portions of our $64.8 million in sales to Fiat during 2002 were made pursuant to purchase orders with Fiat’s principal manufacturing companies, including Fiat Auto. The purchase orders were modified and extended when we acquired Satiz S.r.l. in December 1999. These agreements were extended to five-year terms and include exclusivity provisions for selected services, which are subject to agreed quality benchmarking procedures. Our services to Fiat are subject to annual price reductions based on the volume of sales. Contractual price reductions as a result of this agreement have not had a significant impact on our business.

We believe we have developed strong relationships with our customers and have a reputation for quality, reliability and service that has been recognized through Ford’s Q1 award, among others. In addition, most of our operations comply with ISO quality standards. Certification to ISO standards requires a determination by an independent assessor that the operation is in compliance with a documented quality management system.

Except as noted above, no material portion of our business is dependent upon any one customer or is subject to contractual renegotiation of prices. In general, equipment and technologies required to support our service offerings are obtainable from various sources in the quantities desired.

Our international presence is an important competitive advantage in winning and retaining new business and meeting the global sourcing, quality and engineering requirements of many of our customers. We are currently providing services in 25 countries. We believe we are the only company currently providing such a broad range of services to the automotive industry on a worldwide basis. Foreign operations are subject to political, monetary, economic and other risks associated with international businesses. For the fiscal year ended December 29, 2002, 42.9% of our net sales were generated outside of the United States. Our global capabilities have continued to grow and strengthen our product offerings as a result of acquisitions completed during past years.

Additional financial information concerning our geographical coverage is set forth in Note 16 to our consolidated financial statements included elsewhere in this prospectus.

The following table sets forth certain recent information regarding our employees by region as of May 31, 2003:

A small portion of our employees in the United States are members of unions. We believe our current relations with our employees and their unions are good.

We depend upon our ability to attract, retain and develop personnel, particularly technical personnel, who possess the skills and experience necessary to meet the needs of our customers. Competition for individuals with proven technical or professional skills is intense. We compete with other technical service companies, as well as customers and other employers for qualified personnel.

We are committed to improving the professional development of our employees. In April 2000, we combined and expanded several existing training resources to launch MSX International University. This is a global learning resource that focuses on providing market-driven education to support both our internal needs and our customers’ strategic and operational training needs. The university uses web-based administration and embraces all forms of technologies and learning delivery methods. It delivers courses through two schools: the School of Technology and the School of Business and Leadership Education. It has also formed alliances with academic institutions in the United States, the United Kingdom and Germany, which allow employees to pursue Bachelor of Science and Master of Science degrees in engineering and other technical disciplines.

We hold a number of United States and foreign patents, licenses, copyrights, tradenames and trademarks. Although we regard our intellectual property to be valuable, we do not believe that there is any reasonable likelihood of the loss of any rights that would have a material effect on our operating units, services or present business as a whole.

The following table sets forth the number of facilities we operated by region as of December 29, 2002. We believe that substantially all of our property and equipment is in good condition and that we have sufficient capacity to meet our current and projected operating needs. The number of facilities in any region is dictated by the local demographics and requirements to support our customers’ needs. Our facilities are utilized to provide all or any combination of our service offerings.

Substantially all of our facilities are leased. We believe that the termination of any one lease would not have a material adverse affect on our business.

We are involved in various legal proceedings incidental to the ordinary conduct of our business. One such matter is proceeding in both federal court and in an arbitration proceeding. It involves claims and counter claims asserted by both parties in connection with a contingent earnout obligation related to the acquisition of Lexstra International, Inc. and Lexus Temporaries, Inc. and various other claims by and against two former employees. See “Management’s Discussion and Analysis — Liquidity and Capital Resources” for further discussion regarding the potential impact of this case. Litigation is subject to significant uncertainty and any final result could be greater or less than what management anticipates. However, we believe that none of the legal proceedings will have a material adverse effect on our financial condition, results of operation or long-term cash flows.

The following table sets forth certain information with respect to individuals who currently serve as the directors and executive officers of MSXI.

Erwin H. Billig served as Chief Executive Officer from April 28, 1998 until January 2000 and has been Chairman of the Board of Directors since January 3, 1997. He served as Vice Chairman of MascoTech from 1994 to 1997 and was President and Chief Operating Officer of MascoTech from 1986 to 1994. He is also the Chairman of the Board of Directors of Titan Wheel International, Inc., and a director and Vice Chairman of Delco Remy International, Inc.

Thomas T. Stallkamp was appointed Vice Chairman and Chief Executive Officer of MSX International effective January 2000. He also serves on the Board of Directors for Baxter International and Visteon Corporation. Prior to joining MSX International, Mr. Stallkamp was Vice Chairman for DaimlerChrysler Corporation and also served as President of Chrysler Corporation from 1998. Prior to becoming President, Mr. Stallkamp served in various executive level positions during his 20-year career with Chrysler Corporation.

Robert Netolicka was appointed President and Chief Operating Officer of MSX International in June 2003. Prior to joining MSX International, Mr. Netolicka held various positions at Johnson Controls, Inc., including most recently, the positions of President, Integrated Facilities Management from 1997 to 2001, and Corporate Vice President for Johnson Controls, Inc.’s non-automotive service management businesses from 1997 to 2003. During Mr. Netolicka’s 25-year career with Johnson Controls, Inc. he held key leadership positions for diverse business operations in Asia Pacific, Europe and North America.

Frederick K. Minturn has been Executive Vice President and Chief Financial Officer since January 3, 1997. Prior to joining MSX International, Mr. Minturn was a Vice President of MascoTech’s Automotive Operations group from 1994 through December 1996 and was a Group Controller of such operations since 1991.

David E. Cole has been a director since January 3, 1997. Dr. Cole is currently the President of the Center for Automotive Research at the Altarium Institute (formerly ERIM). He was formerly the Director of the Office for the Study of Automotive Transportation (OSAT) at the University of Michigan’s Transportation Research Institute since 1978. Dr. Cole is a director of Campfire Interactive, Inc., Saturn Electronics and Engineering, Inc., R.L. Polk, Inc., and Plastech, Inc. Dr. Cole is also director of the Automotive Hall of Fame, on the Board of the Michigan Economic Development Corp., and is on the Board of Trustees of Hope College.

Michael A. Delaney has been a director since January 3, 1997. Mr. Delaney has been a Managing Partner of Citicorp Venture Capital since 1997. Mr. Delaney is also a director of ChipPAC, Inc., Palomar Technologies, Inc., Great Lakes Dredge & Dock, Inc., Trianon Industries Corporation, ERICO Corporation, and Delco Remy International, Inc.

Richard A. Manoogian has been a director since January 3, 1997. Mr. Manoogian served as Chairman, Chief Executive Officer and a director of MascoTech (now Metaldyne, Inc.) from 1984 to 1998, as Chairman from 1998 to November 2000, and continues to serve as a director. Mr. Manoogian is also Chairman of the Board and Chief Executive Officer of Masco Corporation and a director of Bank One Corporation, Detroit Renaissance, Ford Motor Company and The American Business Conference.

Charles E. Corpening joined the Board of Directors in February 2002. Mr. Corpening is a partner with Citigroup Venture Capital Equity Partners L.P. and a Vice President at Citicorp Venture Capital where he has worked since 1994. Prior to joining Citicorp, Mr. Corpening was with Roundtree Capital Corporation, a private investment firm, the Rockefeller Group, and the investment banking department of Paine Webber, Inc. He received his BA from Princeton University and his MBA from Columbia Business School. Mr. Corpening serves on the board of directors of FastenTech, Inc. and Royster-Clark group.

Each of our directors holds office until a successor is elected and qualified or until such director’s earlier resignation or removal.

The following Summary Compensation Table sets forth certain information with respect to all compensation paid or earned for services rendered to us for the last three fiscal years (except for certain bonus amounts, which are compensation for services rendered in the immediately preceding year) of (i) those persons who served as our Chief Executive Officer during fiscal 2002 and (ii) certain executive officers other than the Chief Executive Officer who served in such positions during fiscal 2002 (collectively, the “Named Executive Officers”):


(1)	Mr. Risk left the company in the fourth quarter of 2002, but continues to provide services to the company as a consultant. Mr. Netolicka, the successor of Mr. Risk, is not included in this table because he was not hired until June 2003. Mr. Miller left the Company in January 2003.


(2)	Company match of amounts of employee salary deferrals pursuant to our Deferred Compensation Plan.

(3)	Represents the value, on the date of vesting, of shares of common stock of MascoTech granted pursuant to MascoTech’s 1991 Stock Incentive Plan for services performed prior to 1997. Other compensation during 2000 also includes company match of amounts of employee salary deferrals pursuant to our Deferred Compensation Plan totaling $13,457.

Pursuant to our Deferred Compensation Plan, certain of our management employees have the option of deferring salary and bonus amounts up to a maximum amount of 10% of salary and 100% of bonuses. In addition, deferred discretionary bonuses may be awarded to participants in the Deferred Compensation Plan.

Such deferred amounts and company matches are credited to an account on the books of MSXI, which is credited annually with earnings. In 2000 and 2001, we matched 100% of the first five percent of participant deferrals in the Deferred Compensation Plan. The employer match under the deferred compensation plan was suspended for the fiscal 2002 year.

At December 29, 2002, MSXI held a $3.2 million note receivable from Mr. Stallkamp. The balance represents original principal of $3.0 million and unpaid interest of $0.2 million that was rolled into the principal balance in accordance with an exchange agreement effective February 28, 2002. The loan has a 10-year term maturing on February 28, 2011 and bears interest at a rate of 2.48% per year. The loan accrues interest each year, with the principal due at maturity or the occurrence of certain events. The loan is secured by a pledge to MSXI of shares of our Class A Common Stock purchased by Mr. Stallkamp.

The following table shows the stock options granted during the three fiscal years ended December 29, 2002, to the executive officers named in the Summary Compensation Table.


(1)	In general, non-qualified stock options granted during 2000 and 2001 vest over five years and expire ten years from the effective date of grant. Non-qualified stock options granted to Mr. Billig vest automatically upon his termination of directorship or service with MSXI or upon the occurrence of certain other events, as defined. In general, if a grantee voluntarily terminates employment, their vested options continue to be exercisable for six months in the case of death or disability and for 30 days in all other cases. Upon his retirement from active employment, options granted to Mr. Risk were not terminated and continue to vest until the termination of his consulting agreement with MSXI.

(2)	In June 2003, the company reset the exercise price of the outstanding options held by all employees at that time. The exercise prices presented do not reflect the June 2003 repricing.

(3)	Securities and Exchange Commission regulations require information as to the potential realizable value of each of these option grants assuming that the fair value of our stock appreciates in value from the date of grant to the end of the option term at annualized rates of five percent and ten percent. These amounts are based on assumed rates of appreciation only. Actual gains, if any, on stock option exercises will depend on overall market conditions and the future performance of MSXI. There can be no assurance that the amounts reflected in this table will be realized.

Outside directors, who are not affiliated with our company or Citicorp, are entitled to receive $10,000 in annual compensation and $500 per meeting attended. For the year ended December 29, 2002, Dr. Cole was the only outside director compensated for his services.

Frederick K. Minturn. Effective as of January 3, 1997, we entered into an employment agreement with Mr. Minturn to serve as Executive Vice President and Chief Financial Officer for an initial term of two years. The agreement automatically renews for successive one-year terms unless otherwise terminated in writing by either us or Mr. Minturn. Mr. Minturn is entitled to an annual performance bonus pursuant to the Performance Incentive Plan described below. Mr. Minturn is also entitled to all other employee benefits maintained for officers and employees of the company. MSXI may terminate his employment upon death or disability. Either we or Mr. Minturn may terminate the agreement, with or without cause (as defined therein). If the agreement is terminated without cause by us or with good reason (as defined therein) by Mr. Minturn, we will pay to Mr. Minturn the full base salary for the remainder of the term then in effect. The agreement also provides that, during the term of his employment, and thereafter for the

The members of the compensation committee are Messrs. Billig and Delaney. Messrs. Billig and Delaney also serve on the compensation committee of Delco Remy International, Inc. The compensation committee recommended adoption of our Performance Incentive Plan to reflect our compensation policy.

We introduced the Performance Incentive Plan (“PIP”) in April 1998. Substantially all of our salaried employees, including most executive officers, are eligible to receive payments under PIP. PIP offers target awards based on a percentage of an employee’s annual base salary. Actual awards are based on individual and corporate performance. Under PIP, Mr. Minturn may receive an annual performance bonus of up to 150% of his annual base salary, depending on the degree to which MSXI meets or exceeds its target performance. Mr. Billig is eligible to receive discretionary annual bonuses as determined by the Board of Directors.

MSXI indirectly beneficially owns all of the capital stock of MSXI Limited. The following table provides certain information regarding the beneficial ownership, as defined in Rule 13d-3 of the Securities Exchange Act of 1934 (the “Exchange Act”), of MSXI’s common stock as of June 29, 2003 by (i) each stockholder known to us to be the beneficial owner of 5% or more of any class of MSXI’s voting securities, (ii) each of our directors and executive officers and (iii) all directors and executive officers as a group. So far as is known to us, the persons named in the table below as beneficially owning the shares set forth therein have sole voting power and sole investment power with respect to such shares, unless otherwise indicated.


*	Represents less than 1%.

(1)	Consists of an equal number of shares of each of Series A-1 Common Stock, Series A-2 Common Stock, Series A-3 Common Stock and Series A-4 Common Stock (collectively, the “Class A Common Stock”).

(2)	In name of Billig Family Limited Partnership.

MSXI’s Certificate of Incorporation (“Certificate of Incorporation”) provides that MSXI is authorized to issue 400,000,000 shares of Common Stock, par value $0.01 per share, divided into two classes: Class A Common Stock (“Class A Stock”) and Class B Common Stock (“Class B Stock” and, together with the Class A Stock, the “Common Stock”).

Class A Stock is divided into five series consisting of 25,000,000 shares each of Series A-1 Common Stock (“Series A-1”), Series A-2 Common Stock (“Series A-2”), Series A-3 Common Stock (“Series A-3”), Series A-4 Common Stock (“Series A-4”) and 100,000,000 Shares of Series I Common Stock (“Series I”). Class B Stock is divided into five series consisting of 25,000,000 shares each of Series B-1 Common Stock (“Series B-1”), Series B-2 Common Stock (“Series B-2”), Series B-3 Common Stock (“Series B-3”), Series B-4 Common Stock (“Series B-4”) and 100,000,000 Shares of Series II Common Stock (“Series II”).

The holders of Class A Stock are entitled to one vote for each share held of record on all matters to be voted on by MSXI’s stockholders. The holders of Class B Stock have no voting rights except as required by law or in the Certificate of Incorporation.

The holders of all classes of Common Stock receive dividends ratably. If dividends are declared in shares of Common Stock, the dividend must be declared and paid at the same rate per share on each class or series of Common Stock and unless 51% of the shares of each class or series approves, the dividends payable in shares of a particular class or series of Common Stock are payable only to holders of the particular class or series of Common Stock; however, any dividend payable to one class or series of Common Stock entitles the other class or series to a dividend in the same form and amount on the same date. If the dividends consist of voting securities of MSXI, at the request of each holder of Class B Stock, MSXI must pay dividends to holders of Class B Stock in nonvoting securities of the company which are identical to the voting securities and convertible into or exchangeable for voting securities on the same terms as the Class B Stock is convertible to Class A Stock. The holders of all classes are entitled to share ratably in all distributions resulting from any liquidation, dissolution or winding up.

The holders of (a) Series A-1 can convert their shares into Series B-1, (b) Series A-2 can convert their shares into Series B-2, (c) Series A-3 can convert their shares into B-3, (d) Series A-4 can convert their shares into B-4, and (e) Series I can convert their shares into Series II, in each case at a one-to-one conversion rate. Such conversion may occur at any time in the event that the holder thereof has determined that it might be subject to a Regulatory Problem (as defined in the Certificate of Incorporation) or an Accounting Determination (as defined in the Certificate of Incorporation). The holders of each series of Class B Stock can convert their shares into Class A Stock in the same manner as described in (a) through (e) above. Upon the occurrence of a Qualifying Offering (as defined in the Stockholders’ Agreement) or a Sale Transaction (as defined in the Stockholders’ Agreement), (a) each share of Series A-1, Series A-2, Series A-3, and Series A-4 will be automatically converted into one fully paid and non-assessable share of Series I Stock and (b) each share of Series B-1, Series B-2, Series B-3, and Series B-4 will be automatically converted into one fully paid and non-assessable share of Series II Stock.

MSXI’s Certificate of Incorporation provides that the company is authorized to issue 1,500,000 shares of preferred stock, divided into two classes: 500,000 shares of Redeemable Series A Preferred Stock, par value $0.01 and 1,000,000 of New Preferred Stock, par value $0.01 (“New Preferred”).

The Redeemable Series A Preferred Stock has a stated value of $100 per share, and no additional shares may be issued. As long as any shares of the Redeemable Series A Preferred Stock are outstanding, the company may not issue preferred stock that is senior or pari passu with respect to payment of

dividends, other distributions, or preference on redemption or liquidation without the consent of the holders of more than 51% of all of the Redeemable Series A Preferred Stock. Except as required by law or to validate certain actions of the company which adversely affect the rights or powers, ranking, or authorized number of shares, the holders of Redeemable Series A Preferred Stock have no voting rights. Dividends on the Redeemable Series A Preferred Stock are payable in cash at a rate per annum equal to 12% of the sum of $100 plus an amount equal to any accrued and unpaid dividends. Dividends on the Redeemable Series A Preferred Stock accrue daily and are cumulative. MSXI may not declare or pay any dividend or other distribution in respect of the Common Stock or other class or series of stock ranking junior to the Redeemable Series A Preferred Stock (collectively the “Junior Stock”) unless all accrued and unpaid dividends with respect to Redeemable Series A Preferred Stock have either been paid or contemporaneously are declared and paid; however, the company may (a) acquire Junior Stock in an exchange or conversion, (b) pay dividends in shares of Junior Stock, and (c) acquire shares of Common Stock pursuant to the Stockholders’ Agreement.

The New Preferred shall be authorized in one or more series and shall have voting powers, preferences, and other rights and qualifications as the Board of Directors state in a restitution or resolutions provided for an issuance of the New Preferred.

The Redeemable Series A Preferred Stock is mandatorily redeemable by MSXI at the earlier of (a) June 30, 2007 or (b) the date on which a Sale Transaction (as defined in the Certificate of Incorporation) by CVC occurs. However, in conjunction with the Offering, the company extended the date on which the Redeemable Series A Preferred Stock is mandatorily redeemable to December 31, 2008. MSXI may redeem any or all of the Redeemable Series A Preferred Stock at its election prior to the mandatory redemption date. In both instances, the redemption price for the Redeemable Series A Preferred Stock shall be the sum of $100 plus an amount equal to any accrued and unpaid dividends. MSXI may also elect to acquire shares of the Redeemable Series A Preferred Stock from time to time without redeeming or otherwise acquiring all or any other issued shares of the Redeemable Series A Preferred Stock (a “Special Redemption”) pursuant to the terms of the Stockholders’ Agreement.

The Redeemable Series A Preferred Stock may be exchanged for the company’s 12% Junior Subordinated Debentures (“Junior Debentures”) at the election of the company. MSXI must make its election within 45 days of receipt of notice from CVC of their offer to exchange and sell their Redeemable Series A Preferred Stock (“Exchange Notice”). The Junior Debentures will mature on the mandatory redemption date of the Redeemable Series A Preferred Stock. If the company elects to exchange the shares, it must exchange all of the shares designated to be exchanged in the Exchange Notice and all of the shares designated by other holders of Redeemable Series A Preferred Stock in an additional notice. The new senior credit facility and the Indenture restrict the incurrence of additional Indebtedness, including the exchange of the Redeemable Series A Preferred Stock.

In March 2001, as a result of the sale by MascoTech, Inc. of its interest in MSXI, MSXI amended and restated our stockholders’ agreement (the “Stockholders’ Agreement”) with CVC and its permitted transferees (together with CVC, the “Institutional Stockholders”) and certain executive officers and directors of MSXI (the “Management Stockholders” and, together with the Institutional Stockholders, the “Stockholders”). The Stockholders’ Agreement imposes certain restrictions on, and rights with respect to, the transfer of shares of MSXI’s Common Stock (as defined) and Series A Preferred Stock held by the Stockholders. The Stockholders’ Agreement also entitles the Stockholders to certain rights regarding corporate governance of MSXI, and to CVC the right to purchase its pro rata share in connection with the issuance of any new shares of Common Stock.

The Stockholders’ Agreement sets forth conditions under which the parties may transfer their shares. The Stockholders’ Agreement provides for a right of first refusal in favor of MSXI in the event that any Stockholder (the “Selling Stockholder”) desires to transfer its shares of Common Stock pursuant to a bona fide third party offer or an involuntary transfer (as defined in the Stockholders’ Agreement). To the extent that MSXI elects to purchase fewer than all of the shares proposed to be sold by such Selling Stockholder, the Stockholders’ Agreement provides for rights of first refusal on a pro rata basis in favor of the Institutional Stockholders. In the case of a bona fide third party offer, without the consent of the Selling Stockholders, neither MSXI nor the Institutional Stockholders may purchase any of the shares pursuant to the right of first refusal unless all such shares are purchased. If such Selling Stockholder is CVC, and such Selling Stockholder proposes to sell shares representing more than 25% of the outstanding shares of Common Stock on a fully diluted basis or if any Selling Stockholder proposes to transfer shares of Series A Preferred Stock, then such Selling Stockholder must also cause the buyer to give the other Stockholders an option to sell a pro rata number of their respective shares of the same class and on the same terms and conditions as the Selling Stockholder. In the event that a Management Stockholder’s shares of capital stock are subject to an involuntary transfer (such as a seizure pursuant to a judgement item or in connection with any voluntary or involuntary bankruptcy proceeding), the Stockholders’ Agreement grants similar rights to purchase such shares first to MSXI and then to the Institutional Stockholders, pro rata.

If the Institutional Stockholders propose to sell or otherwise transfer for value to an unaffiliated third party 51% or more of their MSXI Common Stock or Series A Preferred Stock, the Institutional Stockholders have the right to require the other stockholders to sell or transfer a similar percentage of their Class A Common Stock, equity equivalents or Series A Preferred Stock, as applicable, to such party on the same terms. If the Institutional Stockholders propose the sale or other transfer for value of all or substantially all of the assets or business of MSX International to a third party, the Institutional Stockholders have the right to require the other stockholders to approve such transaction in their capacity as stockholders of MSXI. If the Institutional Stockholders propose to transfer Class A Common Stock representing 25% or more of the Class A Common Stock (on a fully-diluted basis), other than in a registered public offering or other permitted transactions, the other stockholders have the option to sell to the same offeree pursuant to tag-along rights a similar percentage of their Class A Common Stock or equity equivalents on the same terms. If any stockholder proposes to transfer any shares of Series A Preferred Stock, the other stockholders have the option to sell to the same offeree pursuant to tag along rights a similar percentage of their Series A Preferred Stock on the same terms.

The Stockholders’ Agreement provides that the Board of Directors of MSXI shall consist of seven members consisting of four nominees of CVC, one nominee of the Management Stockholders and two disinterested directors.

In January 2003, the Stockholders’ Agreement was amended to permit stockholders who are trusts, corporations, limited liability companies or partnerships and who are terminating or liquidating to distribute

In August 2003, the Stockholders’ Agreement was amended to join Citicorp Mezzanine III, L.P. as a party and provide customary observers’ and other rights to Citicorp Mezzanine III, L.P.

Pursuant to the Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”), the Institutional Stockholders are entitled to require MSXI to effect a public offering of Common Stock underwritten on a firmly committed basis which (taken together with all other similar previous offerings) raises at least $50 million of aggregate net proceeds to MSXI or results in at least 25% of the Common Stock on a fully-diluted basis being sold. The Institutional Stockholders (as a group) are entitled to three long-form registrations and unlimited short-form registrations on demand, in each case at the expense of MSXI (other than underwriting commissions and discounts). The other stockholders are entitled to include shares of Common Stock in these registrations, subject to a right of first priority in favor of the Institutional Stockholders and customary underwriters’ cutback rights. The Institutional Stockholders and all other stockholders are entitled to include, at the expense of MSXI, their shares of Common Stock in any primary registrations initiated by MSXI or any secondary registration on behalf of other stockholders requested by such stockholders on a pro-rata basis, subject to customary underwriters cutback rights.

In August 2003, the Registration Rights Agreement was amended to join Citicorp Mezzanine III, L.P. as a party and to provide the same registration rights as the other Institutional Stockholders.

In conjunction with the second amendment to our credit facility on July 10, 2002, we entered into a secured term note with an affiliate of CVC, our majority owners. Terms of the note are described more fully in Note 9 of our consolidated financial statements. Concurrently with the consummation of the offering of the old units, the note was amended and restated into a $14.7 million note issued by MSX International, Inc. and a $2.4 million note issued by MSX International Limited. The amended and restated notes are referred to in this prospectus as the “fourth lien term notes.”

The fourth lien term note issued by MSX International, Inc. ranks equal in right of payment with all other senior indebtedness of MSX International, Inc., including indebtedness under our new senior credit facility and the new notes issued by MSX International, Inc. hereby. This fourth lien term note is guaranteed on a senior secured basis by all of the existing and future domestic restricted subsidiaries of MSX International, Inc, and, together with the related guarantees, is secured by a fourth priority lien on substantially all of the assets of MSX International, Inc. and the assets of its domestic restricted subsidiaries. The fourth lien term note issued by MSX International Limited ranks equal in right of payment with all other senior indebtedness of MSX International Limited, including indebtedness under our new senior credit facility and the new notes issued by MSX International Limited hereby. The fourth lien term note issued by MSX International Limited is guaranteed on a senior secured basis by MSX International, Inc. and all of the existing and future domestic restricted subsidiaries of MSX International, Inc, and is secured by a fourth priority lien on the accounts receivable, and the related guarantees are secured by a fourth priority lien on substantially all of the assets of MSX International, Inc. and the assets of its domestic restricted subsidiaries.

Pursuant to the terms of an intercreditor agreement, the security interests securing the fourth lien term notes are subject to liens securing our new senior credit facility, the new notes, and the mezzanine term notes.

At December 29, 2002, MSXI held a $3.2 million note from Mr. Stallkamp, our Vice Chairman and Chief Executive Officer. For additional information, see “Management— Executive Compensation.”

An affiliate of CVC has, from time to time, made open-market purchases of MSXI’s senior subordinated notes, and as of September 16, 2003, held about $37 million of MSXI’s senior subordinated notes. In the future, this affiliate of CVC may, from time to time, purchase MSXI’s senior subordinated notes, the old units or the new units in open-market purchases.

In connection with the offering of the old units, MSX International, Inc. issued to Citicorp Mezzanine III, L.P., an affiliate of CVC, a senior secured note in the aggregate principal amount of $21.5 million, with an interest rate of 11.5%, which ranks equal in right of payment with all other senior indebtedness of MSX International, Inc., including indebtedness under our new senior credit facility and the new notes issued by MSX International, Inc hereby. The mezzanine term note issued by MSX International, Inc. is guaranteed on a senior secured basis by all of the existing and future domestic restricted subsidiaries of MSX International, Inc, and is, together with the related guarantees, secured by a third priority lien on substantially all of the assets of MSX International, Inc. and the assets of its domestic restricted subsidiaries.

In addition, MSX International Limited issued to Citicorp Mezzanine III, L.P. a senior secured note in the aggregate principal amount of $3.5 million, with an interest rate of 11.5%, which ranks equal in right of payment with all other senior indebtedness of MSX International Limited, including indebtedness under our senior credit facility and the new notes issued by MSX International Limited hereby. This mezzanine term note issued by MSX International Limited is guaranteed on a senior secured basis by MSX International, Inc. and all of the existing and future domestic restricted subsidiaries of MSX International, Inc. The mezzanine term note of MSX International Limited is secured by a third priority lien on the accounts receivable, and the related guarantees are secured by a third priority lien on substantially all of the assets of MSX International, Inc. and the assets of its domestic restricted subsidiaries.

Each mezzanine term note bears interest at a rate of 11.5% per year and will mature on October 15, 2007. In connection with the issuance, Citicorp Mezzanine III, L.P. received a placement fee equal to $750,000.

Pursuant to the terms of an intercreditor agreement, the security interests securing the mezzanine term notes issued to Citicorp Mezzanine III, L.P. are subject to liens securing our new senior credit facility and the new notes.

In connection with the issuances of the mezzanine term notes, MSX International, Inc. granted to Citicorp Mezzanine III, L.P. the right to purchase 666,649 shares of our Class A common stock. The purchase warrants are exercisable at a price of $0.01 per share, subject to certain anti-dilution adjustments, through July 31, 2013.

Concurrently with the consummation of the offering of the old units, we entered into a new three-year, senior secured revolving credit facility with Bank One, N.A., as agent. Of the $40 million revolving facility, up to $7 million of the revolver is available under a swingline facility and up to $5 million of the revolver is available for the issuance of commercial and standby letters of credit. We also have an additional $5 million available exclusively for the issuance of letters of credit. The senior secured revolving credit facility is referred to in this prospectus, as the “new senior credit facility.”

The new senior credit facility is secured by a first priority lien on substantially all of the current and future assets of MSXI and each subsidiary guarantor, as well as a pledge of 100% of the shares of capital stock of our domestic subsidiaries and a pledge of 65% of the shares of capital stock of our foreign subsidiaries and 100% of the non-voting shares of capital stock of our foreign subsidiaries. Additionally, as further collateral for all borrowings by each of our foreign subsidiary borrowers, such foreign subsidiary borrowers and their parent companies and subsidiaries may grant a lien on all or certain of their assets. In addition, each domestic subsidiary of MSXI is required to guarantee the obligations of MSXI and all foreign subsidiary borrowers and certain of their parent companies and subsidiaries and MSXI and each domestic subsidiary is required to guarantee the obligations of each foreign subsidiary borrower.

The new senior credit facility bears interest based on a pricing schedule. Prior to the fiscal quarter ending June 27, 2004, the facility bears interest at either a variable rate based on a fluctuating rate of interest equal to the higher of (i) the prime rate announced by Bank One or its parent and (ii) the sum of the federal funds effective rate most recently determined by Bank One plus 1/2% per annum, or a eurocurrency rate based on the applicable British Bankers’ Association London interbank offered rate for deposits in the particular agreed currency as reported by any generally recognized financial information reporting service, plus 3% per annum.

In addition to the usual and customary affirmative and negative covenants, the new senior credit facility limits our, the subsidiary borrowers’ and the guarantors’ ability to: (1) incur additional debt, leasehold obligations and contingent liabilities; (2) pay dividends and other distributions on capital stock; and (3) be party to mergers, consolidations or similar transactions. The new senior credit facility also requires satisfaction of certain financial tests, including a fixed charge coverage ratio, and provides for usual and customary events of default.

For information regarding the mezzanine term notes that were issued concurrently with the old unit offering, please see “Related Party Transactions.”

For information regarding the fourth lien term notes that were issued concurrently with the old unit offering, please see “Related Party Transactions.”

At June 29, 2003, we had $130 million of 11 3/8% unsecured senior subordinated notes outstanding and registered under the Securities Act. The notes are unsecured senior subordinated obligations of the company and mature on January 15, 2008. Interest on the subordinated notes is payable semi-annually at 11 3/8% per annum and commenced July 15, 1998. The notes may be redeemed subsequent to January 15, 2003 at premiums that begin at 105.6875% and decline each year to face value for redemptions taking place after January 15, 2006. Upon the occurrence of a Change of Control, as defined in the indenture for the senior subordinated notes, the notes may be redeemed at the option of the noteholders at a premium of one percent, plus accrued and unpaid interest, if any. The notes contain covenants which, among others,

The senior subordinated notes are guaranteed on a senior subordinated basis by each of our significant domestic restricted subsidiaries, as defined in the indenture for the senior subordinated notes.

Satiz Srl, a subsidiary of our company which was acquired on December 31, 1999, maintains a financing arrangement with Fidis S.p.A. that provides for borrowings up to 100% of its eligible accounts receivable, as defined in the agreement. As of December 29, 2002, borrowings under the arrangement bear interest at the Euribor rate plus 1.25% and are collateralized by the underlying accounts receivable. The agreement is renewed annually unless terminated by either party. Fidis S.p.A. is a subsidiary of Fiat S.p.A., who owned a minority investment in Satiz until December 2002.

Certain of our foreign subsidiaries maintain lines of credit with local banks to provide backup liquidity or to finance operational cash flows as needed. In general, interest accrues on the lines of credit at floating rates, as determined by the applicable bank, with amounts outstanding payable on demand. Agreements are subject to termination at any time with proper notice provided by the bank. Included in other debt at December 29, 2002 is $3.3 million outstanding under the BHF Bank Credit Facility maintained by our subsidiary Cadform-MSX Engineering GmbH. This facility was paid down in full in May 2003 and was terminated as a result of the payment in full of all outstanding amounts under the facility.

An Intercreditor Agreement sets forth the relative rights to our collateral of (i) the collateral agent that acts on behalf of the lenders under the new senior credit facility, (ii) the collateral agent that acts on behalf of the holders of the new notes and the old notes, (iii) the collateral agent that acts on behalf of the affiliate of CVC, who is the holder of the fourth lien term notes, and (iv) the collateral agent that acts on behalf of Citicorp Mezzanine III, L.P., who is the holder of the mezzanine term notes. Proceeds from the sale of collateral will be used first to satisfy obligations under the new senior credit facility and, thereafter, the new notes and the old notes, then the mezzanine term notes, and finally, the fourth lien term notes. See “Description of New Notes— Security.”

Simultaneously with the sale of the old units, MSXI, MSXI Limited and the guarantors entered into a registration rights agreement with Jefferies & Company, Inc., the initial purchaser of the old units. We are conducting the exchange offer to satisfy our obligations under the registration rights agreement.

The form and terms of the new units are identical in all material respects to the form and terms of the old units, except that the new units will be registered under the Securities Act; will not bear restrictive legends restricting their transfer under the Securities Act; will not be entitled to the registration rights that apply to the old units; and will not contain provisions relating to increased interest rates in connection with the old units under circumstances related to the timing of the exchange offer.

The new units will evidence the same debt as the old units. The new units will be issued under and entitled to the benefits of the same indenture that authorized the issuance of the old units. Consequently, both the old units and the new units will be treated as a single series of debt securities under the indenture. For a description of the indenture, see “Description of the New Notes.”

The exchange offer is not extended to, nor will we accept tenders for exchange from, old unit holders in any jurisdiction where the exchange offer does not comply with the securities or blue sky laws of that jurisdiction.

We are offering to exchange an aggregate number of up to 75,500 units, each unit consisting of:


	$860 principal amount of 11% Senior Secured Notes due 2007 of MSXI; and

	$140 principal amount of 11% Senior Secured Notes due 2007 of MSXI Limited.

Holders may only exchange old units for new units. The old units must be tendered properly in accordance with the conditions set forth in this prospectus and the accompanying letter of transmittal on or prior to the expiration date and not withdrawn as permitted below. The exchange offer is not conditioned upon holders tendering a minimum number of old units. As of the date of this prospectus, all of the old units are outstanding.

Only whole units will be accepted in the exchange offer; no fractions of old units will be accepted.

Holders of the old units do not have any appraisal or dissenters’ rights in connection with the exchange offer. If you do not tender your old units or if you tender old units that we do not accept, your old units will remain outstanding and continue to accrue interest and you will be entitled to the rights and benefits holders have under the indenture relating to the old units and the new units. Existing transfer restrictions would continue to apply to such old units. See “Risk Factors—If you fail to exchange your old units for new units, your old units will continue to be subject to restrictions on transfer” for more information regarding old units outstanding after the exchange offer.

None of MSXI, MSXI Limited or the guarantors, or our respective boards of directors or management, recommends that you tender or not tender old units in the exchange offer or has authorized anyone to make any recommendation. You must decide whether to tender in the exchange offer and, if you decide to tender, the aggregate number of old units to tender.

The expiration date is 5:00 p.m., New York City time, on , 2003, or such later date and time to which the exchange offer is extended.


	to delay the acceptance of the old units;

	to terminate the exchange offer and not accept any old units for exchange if we determine that any of the conditions to the exchange offer have not occurred or have not been satisfied;


	to extend the expiration date of the exchange offer and retain all old units tendered in the exchange offer other than those units properly withdrawn; and

	to waive any condition or amend the terms of the exchange offer in any manner.

If we materially amend the exchange offer, we will as promptly as practicable distribute a prospectus supplement to the holders of the old units disclosing the change and extend the exchange offer for a period of five to ten business days, depending upon the significance of the amendment and the manner of disclosure to the registered holders, if the exchange offer would otherwise expire during the five to ten business day period.

If we exercise any of the rights listed above, we will as promptly as practicable give oral notice, promptly confirmed in writing, to the exchange agent and will make a public announcement of such action. In the case of an extension, an announcement will be made no later than 9:00 a.m., New York City time on the next business day after the previously scheduled expiration date. Without limiting the manner in which we may choose to make public announcements of any delay in acceptance, extension, termination or amendment of the exchange offer, we will have no obligation to publish, advertise, or otherwise communicate any public announcement, other than by making a timely release to a financial news service.

During an extension, all old units previously tendered will remain subject to the exchange offer and may be accepted for exchange by us. Any old units not accepted for exchange for any reason will be returned without cost to the holder that tendered them promptly after the expiration or termination of the exchange offer.

We will accept all old units validly tendered and not withdrawn. Promptly after the expiration date, we will issue new units registered under the Securities Act and deliver them to the exchange agent.

The exchange agent might not deliver the new units to all tendering holders at the same time. The timing of delivery depends upon when the exchange agent receives and, after the expiration date, processes the required documents.

We will be deemed to have exchanged old units validly tendered and not withdrawn when we give oral notice, promptly confirmed in writing, to the exchange agent of our acceptance of the tendered old units. The exchange agent is our agent for receiving tenders of old units, letters of transmittal and related documents.

In tendering old units, you must warrant in the letter of transmittal or in an agent’s message (described below) that:


	you have full power and authority to tender, exchange, sell, assign and transfer old units;

	we will acquire good, marketable and unencumbered title to the tendered old units, free and clear of all liens, restrictions, charges and other encumbrances; and

	the old units tendered for exchange are not subject to any adverse claims or proxies.

You also must warrant and agree that you will, upon request, execute and deliver any additional documents requested by us or the exchange agent to complete the exchange, sale, assignment and transfer of the old units.

We have forwarded to you, along with this prospectus, a letter of transmittal relating to this exchange offer. The letter of transmittal is to be completed by a holder of old units either if (1) a tender of old units is to be made by delivering physical certificates for such old units to the exchange agent, (2) a tender of old units is to be made by book-entry transfer to the account of the exchange agent for the exchange offer at DTC, or by confirmation of blocking instructions in accordance with the standard operating procedures of Clearstream, Luxembourg, as the case may be, pursuant to the procedures set

Only a holder of record of old units may tender old units in the exchange offer. To tender in the exchange offer, a holder must comply with the procedures of DTC or Clearstream, Luxembourg, as applicable, and either:


	complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal; have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires; and deliver the letter of transmittal or facsimile to the exchange agent prior to the expiration date; or

	in lieu of delivering a letter of transmittal, instruct DTC or Clearstream, Luxembourg, as the case may be, to transmit on behalf of the holder a computer-generated message to the exchange agent in which the holder of the old units acknowledges and agrees to be bound by the terms of, and to make all of the representations contained in, the letter of transmittal, which agent’s message (as defined below) shall be received by the exchange agent prior to 5:00 p.m., New York City time, on the expiration date.


	the exchange agent must receive old units along with the letter of transmittal; or

	the exchange agent must receive, before expiration of the exchange offer, timely confirmation of book-entry transfer of such old units into the exchange agent’s account at DTC, according to the procedure for book-entry transfer described below; or

	the exchange agent must receive, before the expiration date, timely confirmation from Clearstream, Luxembourg that the securities account to which the old units are credited has been blocked from and including the day on which the confirmation is delivered to the exchange agent and that no transfers will be effected in relation to such old units at any time after such date.

To be tendered effectively, the exchange agent must receive any physical delivery of the letter of transmittal and other required documents at the address set forth below under the caption “—Exchange Agent” before expiration of the exchange offer. To receive confirmation of valid tender of old units, a holder should contact the exchange agent at the telephone number listed under the caption “—Exchange Agent.”

The tender by a holder that is not withdrawn before expiration of the exchange offer will constitute a binding agreement between that holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal. Only a registered holder of old units may tender the old units in the exchange offer. If you tender fewer than all of your old units, you should fill in the amount of units tendered in the appropriate box on the letter of transmittal. The amount of old units delivered to the exchange agent will be deemed to have been tendered unless otherwise indicated.

The method of delivery of the certificates for the old units, the letter of transmittal and all other required documents is at the election and sole risk of the holders. If delivery is by mail, we recommend registered mail with return receipt requested, properly insured, or overnight delivery service. In all cases, you should allow sufficient time to assure timely delivery. No letters of transmittal or old units should be sent directly to MSXI or MSXI Limited. Delivery is complete when the exchange agent actually receives the items to be delivered. Delivery of documents to DTC or Clearstream, Luxembourg, as the case may be, in accordance with their respective procedures does not constitute delivery to the exchange agent.

If you beneficially own old units and those units are registered in the name of a broker, dealer, commercial bank, trust company or other nominee or custodian and you wish to tender your old units in the exchange offer, you should contact the registered holder as soon as possible and instruct it to tender the old units on your behalf and comply with the instructions set forth in this prospectus and the letter of transmittal.

If the applicable letter of transmittal is signed by the record holder(s) of the old units tendered, the signature must correspond with the name(s) written on the face of the old unit without alteration, enlargement or any change whatsoever. If the applicable letter of transmittal is signed by a participant in DTC or Clearstream, Luxembourg, as applicable, the signature must correspond with the name as it appears on the security position listing as the holder of the old units.

If any letter of transmittal, endorsement, bond power, power of attorney, or any other document required by the letter of transmittal is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, that person must indicate such capacity when signing. In addition, unless waived by us, the person must submit proper evidence satisfactory to us, in our sole discretion, of his or her authority to so act.

Holders should receive copies of the letter of transmittal with the prospectus. A holder may obtain additional copies of the letter of transmittal for the old units from the exchange agent at its offices listed under the caption “—Exchange Agent.”

Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an eligible institution unless the old units surrendered for exchange are tendered:


	by a registered holder of old units who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal; or

	for the account of an eligible institution.

An “eligible institution” is a firm or other entity which is identified as an “Eligible Guarantor Institution” in Rule 17Ad-15 under the Exchange Act, including:


	a bank;

	a broker, dealer, municipal securities broker or dealer or government securities broker or dealer;

	a credit union;

	a national securities exchange, registered securities association or clearing agency; or

	a savings association.

If old units are registered in the name of a person other than the signer of the letter of transmittal, the old units surrendered for exchange must be endorsed or accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by us in our sole discretion, duly executed by the registered holder with the holder’s signature guaranteed by an eligible institution.

For tenders by book-entry transfer of old units cleared through DTC, the exchange agent will make a request to establish an account at DTC for purposes of the exchange offer. Any financial institution that is a DTC participant may make book-entry delivery of old units by causing DTC to transfer the old units into the exchange agent’s account at DTC in accordance with DTC’s procedures for transfer. The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC may use the Automated Tender Offer Program, or ATOP, procedures to tender old units. Accordingly, any participant in DTC may make book-entry delivery of old units by causing DTC to transfer those old units into the exchange agent’s account in accordance with its ATOP procedures for transfer.

Notwithstanding the ability of holders of old units to effect delivery of old units through book-entry transfer at DTC, the letter of transmittal or a facsimile thereof, or an agent’s message in lieu of the letter of transmittal, with any required signature guarantees and any other required documents must be transmitted to and received by the exchange agent prior to the expiration date at the address given below under “—Exchange Agent.” In this context, the term “agent’s message” means a message, transmitted by

The registered holder of the old units on the records of Clearstream, Luxembourg must instruct Clearstream, Luxembourg to block the securities in the account in Clearstream, Luxembourg to which such old units are credited. In order for the exchange offer to be accepted, the exchange agent must have received, prior to the expiration date, a confirmation from Clearstream, Luxembourg that the securities account of old units tendered has been blocked from and including the day on which the confirmation is delivered to the exchange agent and that no transfers will be effected in relation to the old units at any time after such date. Old units should be blocked in accordance with the procedures of Clearstream, Luxembourg, as the case may be. The exchange of the old units so tendered will only be made after a timely receipt by the exchange agent of an agent’s message and any other documents required by the letter of transmittal. In this context, the term “agent’s message” means a message, transmitted by Clearstream, Luxembourg and received by the exchange agent which states that Clearstream, Luxembourg has received an express acknowledgment from a participant tendering old units that the participant has received and agrees to be bound by the terms of the letter of transmittal, and that we may enforce that agreement against the participant.

If a registered holder of the old units desires to tender the old units and the old units are not immediately available, or time will not permit the holder’s old units or other required documents to reach the exchange agent before the expiration date of the exchange offer, or the procedure for book-entry transfer or a confirmation of blocking instructions cannot be completed on a timely basis, a tender may nonetheless be effected if:


	the tender is made through a firm which is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States;

	prior to the expiration date of the exchange offer, the exchange agent received from the firm which is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc. or commercial bank or trust company having an office or correspondent in the United States a properly completed and duly executed Letter of Transmittal (or a facsimile of the Letter of Transmittal) and Notice of Guaranteed Delivery, substantially in the form provided by us (by facsimile transmission, mail or hand delivery), setting forth the name and address of the holder of old units and the amount of old units tendered, stating that the tender is being made and guaranteeing that within five New York Stock Exchange trading days after the date of execution of the Notice of Guaranteed Delivery, the certificates for all physically tendered old units, in proper form for transfer, or a confirmation of a book-entry transfer or a confirmation of blocking instructions, as the case may be, and any other documents required by the Letter of Transmittal will be deposited by the firm which is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc. or commercial bank or trust company having an office or correspondent in the United States with the exchange agent; and

	the certificates for all physically tendered old units, in proper form for transfer, or a confirmation of a book-entry transfer or a confirmation of blocking instructions, as the case may be, and all other documents required by the Letter of Transmittal are received by the exchange agent within five New York Stock Exchange trading days after the date of execution of the Notice of Guaranteed Delivery.

We, in our sole discretion, will resolve all questions regarding the form of documents, validity, eligibility, including time of receipt, and acceptance for exchange and withdrawal of any tendered old units. Our determination of these questions as well as our interpretation of the terms and conditions of the exchange offer, including the letter of transmittal, will be final and binding on all parties. A tender of old units is invalid until all defects and irregularities have been cured or waived. Holders must cure any defects and irregularities in connection with tenders of old units for exchange within such reasonable period of time as we will determine, unless we waive the defects or irregularities. Neither us, any of our affiliates or assigns, the exchange agent nor any other person is under any obligation to give notice of any defects or irregularities in tenders nor will we or they be liable for failing to give any such notice.


	to reject any tenders determined to be in improper form or unlawful;

	to waive any of the conditions of the exchange offer; and

	to waive any condition or irregularity in the tender of old units by any holder.

You can withdraw tenders of old units at any time prior to 5:00 p.m., New York City time, on the expiration date.

For a withdrawal to be effective, you must deliver a written notice of withdrawal to the exchange agent. The notice of withdrawal must:


	specify the name of the person tendering the old units to be withdrawn;

	identify the old units to be withdrawn, including the total principal amount of old units to be withdrawn; and

	where certificates for old units are transmitted, the name of the registered holder of the old units if different from the person withdrawing the old units.

If you delivered or otherwise identified old units to the exchange agent, you must submit the serial numbers of the old units to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an eligible institution, except in the case of old units tendered for the account of an eligible institution. If you tendered old units as a book-entry transfer or through the blocking procedures described above, the notice of withdrawal must specify the name and number of the account at DTC or Clearstream, Luxembourg, as applicable, to be credited with the withdrawn old units and you must deliver the notice of withdrawal to the exchange agent and otherwise comply with the procedures of the facility. You may not rescind withdrawals of tender; however, properly withdrawn old units may again be tendered by following one of the procedures described under “—Procedures for Tendering Old Units” above at any time prior to 5:00 p.m., New York City time, on the expiration date.

We will determine all questions regarding the form of withdrawal, validity, eligibility, including time of receipt, and acceptance of withdrawal notices. Our determination of these questions as well as our interpretation of the terms and conditions of the exchange offer (including the letter of transmittal) will be final and binding on all parties. Neither us, any of our affiliates or assigns, the exchange agent nor any other person is under any obligation to give notice of any irregularities in any notice of withdrawal, nor will we be liable for failing to give any such notice.

Withdrawn old units will be returned to the holder after withdrawal. In the case of old units tendered by book-entry transfer through DTC, the old units withdrawn or not exchanged will be credited to an account maintained with DTC. The old units will be returned or credited to the account maintained with DTC promptly after withdrawal, rejection of tender or termination of the exchange offer. In the case of old

Notwithstanding any other provision of the exchange offer, we are not required to accept for exchange, or to issue new units in exchange for, any old units, and we may terminate or amend the exchange offer, if at any time prior to 5:00 p.m., New York City time, on the expiration date, we determine that:


	the new units to be received will not be tradable by the holder, without restriction under the Securities Act and the Exchange Act and without material restrictions under the blue sky or securities laws of substantially all of the states of the United States;

	we have not received all applicable governmental approvals;

	the exchange offer, or the making of any exchange by a holder of old units, would violate applicable law or any applicable interpretation or policy of the staff of the SEC; or

	any action or proceeding has been instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer that would reasonably be expected to impair our ability to proceed with the exchange offer.

The foregoing conditions are for our sole benefit, and we may assert them regardless of the circumstances giving rise to any such condition, or we may waive the conditions, completely or partially, whenever or as many times as we choose, in our reasonable discretion. The foregoing rights are not deemed waived because we fail to exercise them, but continue in effect, and we may still assert them whenever or as many times as we choose. However, any such waiver, other than a waiver involving governmental approval, must be satisfied or waived before the expiration of the offer. If we determine that a waiver of conditions materially changes the exchange offer, the prospectus will be amended or supplemented, and the exchange offer extended, if appropriate, as described under “—Terms of the Exchange Offer.”

In addition, at a time when any stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or with respect to the qualification of the indenture under the Trust Indenture Act of 1939, as amended, we will not accept for exchange any old units tendered, and no new units will be issued in exchange for any such old units.

If we terminate or suspend the exchange offer based on a determination that the exchange offer violates applicable law or SEC policy, the registration rights agreement requires that we, as soon as practicable after such determination, use all commercially reasonable efforts to cause a shelf registration statement covering the resale of the old units to be filed and declared effective by the SEC. See “—Registration Rights and Additional Interest on the Old Units.”

We appointed BNY Midwest Trust Company as exchange agent for the exchange offer. You should direct questions and requests for assistance, requests for additional copies of this prospectus, the Letter of

If you deliver letters of transmittal and any other required documents to an address or facsimile number other than those listed above, your tender is invalid.

The registration rights agreement provides that we will bear all expenses in connection with the performance of our obligations relating to the registration of the new units and the conduct of the exchange offer. These expenses include registration and filing fees, accounting and legal fees and printing costs, among others. We will pay the exchange agent reasonable and customary fees for its services and reasonable out-of-pocket expenses. We will also reimburse brokerage houses and other custodians, nominees and fiduciaries for customary mailing and handling expenses incurred by them in forwarding this prospectus and related documents to their clients that are holders of old units and for handling or tendering for such clients.

We have not retained any dealer-manager in connection with the exchange offer and will not pay any fee or commission to any broker, dealer, nominee or other person, other than the exchange agent, for soliciting tenders of old units pursuant to the exchange offer.

Holders who tender their old units for exchange will not be obligated to pay any transfer taxes in connection with the exchange. If, however, new units issued in the exchange offer are to be delivered to, or are to be issued in the name of, any person other than the holder of the old units tendered, or if a transfer tax is imposed for any reason other than the exchange of old units in connection with the exchange offer, then the holder must pay any such transfer taxes, whether imposed on the registered holder or on any other person. If satisfactory evidence of payment of, or exemption from, such taxes is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to the tendering holder.

The new units will be recorded at the same carrying value as the old units. Accordingly, MSXI will not recognize any gain or loss for accounting purposes. MSXI intends to amortize the expenses of the exchange offer and issuance of the old units over the term of the new units.


	because of any change in law or in currently prevailing interpretations of the Staff of the SEC, the Issuers are not permitted to effect an exchange offer;

	the exchange offer is not consummated within 30 days from the date the Exchange Offer Registration Statement was declared effective;


	in certain circumstances, certain holders of unregistered old units so request; or


	in the case of any holder that participates in the exchange offer, such holder does not receive new units on the date of the exchange that may be sold without restriction under state and Federal securities laws (other than due solely to the status of such holder as an affiliate of ours or within the meaning of the Securities Act),

then in each case, the Company will (x) promptly deliver to the holders and the Trustee written notice thereof and (y) at the Company’s sole expense, (a) as promptly as practicable, file a shelf registration statement covering resales of the units (the “Shelf Registration Statement”), and (b) use its reasonable best efforts to keep effective the Shelf Registration Statement until the earlier of two years after the Issue Date or such time as all of the applicable units have been sold thereafter.

The Company will, in the event that a Shelf Registration Statement is filed, provide to each holder copies of the prospectus that is a part of the Shelf Registration Statement, notify each such holder when the Shelf Registration Statement for the units has become effective and take certain other actions as are required to permit unrestricted sales of the units. A holder that sells units pursuant to the Shelf Registration Statement will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement that are applicable to such a holder (including certain indemnification rights and obligations).

If the Company fails to meet the targets listed above, then additional interest shall become payable in respect of the notes if:


	(1) neither the Exchange Offer Registration Statement nor the Shelf Registration Statement is filed with the SEC on or prior to 90 days after the Issue Date;

	(2) notwithstanding that the Company has have consummated or will consummate an exchange offer, the Company is required to file a Shelf Registration Statement and such Shelf Registration Statement is not filed on or prior to the date required by the Registration Rights Agreement;

	(3) neither the Exchange Offer Registration Statement nor a Shelf Registration Statement is declared effective by the SEC on or prior to 180 days after the Issue Date;

	(4) notwithstanding that the Company has consummated or will consummate an exchange offer, the Company is require to file a Shelf Registration Statement and such Shelf Registration Statement is not declared effective by the SEC on or prior to the 90th day following the date such Shelf Registration Statement was filed;

	(5) the Company has not exchanged new units for all old units validly tendered in accordance with the terms of the exchange offer on or prior to the date that is 30 days from the date the Exchange Offer Registration Statement was required to be effective; or

	(6) if applicable, the Shelf Registration Statement has been declared effective and such Shelf Registration Statement ceases to be effective at any time prior to the second anniversary of the Issue Date (other than after such time as all units have been disposed of thereunder);

then, in each case, Additional Interest will accrue on the principal amount of the notes at the rate of 0.25% per annum for the first 90 days following such event and at the rate of 0.50% per annum thereafter, and shall accrue to and including the date on which such default is cured; provided however, that (a) upon the filing of the Exchange Registration Statement or Initial Shelf Registration (in the case of clauses (1) or (2) above), (b) upon the effectiveness of the Exchange Registration Statement or Initial Shelf Registration (in the case of clauses (3) or (4) above), or (c) upon the exchange of new units for all old units tendered (in the case of clause (5) above), or upon the effectiveness of the Exchange Registration Statement that had ceased to remain effective (in the case of clause (6) above), Additional Interest on the notes as a result of such clause shall cease to accrue.

Any amounts of Additional Interest will be payable in cash on the same original interest payment dates as ordinary interest on the notes.

Based on existing SEC interpretations issued to third parties in unrelated transactions, we believe that the new units will be freely transferable by holders other than affiliates of us after the registered exchange offer without further registration under the Securities Act if the holder of the new units is acquiring the new units in the ordinary course of its business, has no arrangement or understanding with any person to participate in the distribution of the new units and is not an affiliate of us, as such terms are interpreted by the SEC; provided that broker-dealers receiving new units in the exchange offer will have a prospectus delivery requirement with respect to resales of such new units. While the SEC has not taken a position with respect to this particular transaction, under existing SEC interpretations relating to transactions structured substantially like the exchange offer, participating broker-dealers may fulfill their prospectus delivery requirements with respect to the new units (other than a resale of an unsold allotment of the units) with the prospectus contained in the exchange offer registration statement. We will not seek our own interpretive letter. As a result, we cannot assure you that the staff will take the same position on this exchange offer as it did in interpretive letters to other parties in similar transactions.

By tendering old units, the holder, other than participating broker-dealers, as defined below, of those old units will represent to us that, among other things:


	the new units acquired in the exchange offer are being obtained in the ordinary course of business of the person receiving the new units, whether or not that person is the holder;

	neither the holder nor any other person receiving the new units is engaged in, intends to engage in or has an arrangement or understanding with any person to participate in a “distribution” (as defined under the Securities Act) of the new units; and

	neither the holder nor any other person receiving the new units is an “affiliate” (as defined under the Securities Act) of us.

If any holder or any such other person is an “affiliate” of us or is engaged in, intends to engage in or has an arrangement or understanding with any person to participate in a “distribution” of the new units, such holder or other person:


	may not rely on the applicable interpretations of the staff of the SEC referred to above; and

	must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.

Each broker-dealer that receives new units for its own account in exchange for old units must represent that the old units to be exchanged for the new units were acquired by it as a result of market-making activities or other trading activities and acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any offer to resell, resale or other retransfer of the new units. Any such broker-dealer is referred to as a participating broker-dealer. However, by so acknowledging and by delivering a prospectus, the participating broker-dealer will not be deemed to admit that it is an “underwriter” (as defined under the Securities Act). If a broker-dealer acquired old units as a result of market-making or other trading activities, it may use this prospectus, as amended or supplemented, in connection with offers to resell, resales or retransfers of new units received in exchange for the old units pursuant to the exchange offer. We have agreed that, starting on the expiration date of the exchange offer and ending at the latest on the close of business 180 days after the expiration date, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution” for a discussion of the exchange and resale obligations of broker-dealers in connection with the exchange offer.

We are offering 75,500 New Units. Each New Unit consists of $860 principal amount of 11% senior secured notes due 2007 of MSX International, Inc. and $140 principal amount of 11% senior secured notes due 2007 of MSX International Limited. The New Notes of each issuer that comprise the New Units will not trade separately unless an event of default has occurred, a tax redemption of the New Notes issued by MSX International Limited related to certain changes affecting withholding taxes has occurred or there has been a change of control of MSX International Limited. See “Description of the New Notes” for further information concerning the New Notes.

The Company and MSX International Limited (the “Issuers”) issued the old notes and will issue the new notes under an indenture (the “Indenture”), among themselves, the Subsidiary Guarantors and BNY Midwest Trust Company, as Trustee (the “Trustee”). For purposes of the “Description of The New Notes”:


	the new notes are collectively referred to as the “New Notes”;

	the new units are collectively referred to the “New Units”;

	the new U.S. notes are referred to as the “U.S. Notes”;

	the new U.K. notes are referred to as the “U.K. Notes”;

	the new note guarantees are referred to as the “Note Guarantees”;

	the new units and the old units are collectively referred to as the “Units”; and

	the new notes and the old notes are collectively referred to as the “Notes.”

You can find definitions of certain capitalized terms used in this description under “—Certain Definitions.”

The following is a summary of the material provisions of the Indenture. It does not include all of the provisions of the Indenture. We urge you to read the Indenture because it, and not this description, defines your rights. The terms of the New Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “TIA”). A copy of the Indenture may be obtained from the Company. For purposes of this section, references to the “Company” include only MSX International, Inc. and not its Subsidiaries.

The terms of the new notes are the same as the terms of the old notes, except that:


	the new notes will be registered under the Securities Act of 1933, as amended;

	the new notes will not bear restrictive legends restricting their transfer under the Securities Act;


	the holder of the new notes are not entitled to certain rights under the registration rights agreement; and

	the new notes will not contain provisions relating to increased interest rates in connection with the old notes under circumstances related to the timing of the exchange offer.

The New Notes issued by the Company (the “U.S. Notes”) will be senior secured obligations of the Company and will rank equally in right of payment with all other senior obligations of the Company and senior in right of payment with all Indebtedness which by its terms is subordinated to the U.S. Notes. The U.S. Notes will be secured by security interests in substantially all of the assets of the Company and its Domestic Restricted Subsidiaries, subject to Permitted Liens. The U.S. Notes will be guaranteed, jointly

The New Notes issued by MSX International Limited (the “U.K. Notes”) will be senior secured obligations of MSX International Limited and will rank equally in right of payment with all other senior obligations of MSX International Limited and senior in right of payment with all Indebtedness which by its terms is subordinated to the U.K. Notes. The U.K. Notes will be secured by the accounts receivable of MSX International Limited and substantially all of the assets of the Company and its Domestic Restricted Subsidiaries, subject to Permitted Liens. The U.K. Notes will be guaranteed, jointly and severally on a senior secured basis by the Company and the Subsidiary Guarantors.

The Issuers will issue the New Units in fully registered form in denominations of $1,000 and integral multiples thereof, each New Unit consisting of $860 principal amount of U.S. Notes and $140 principal amount of U.K. Notes. The Trustee will initially act as paying agent and registrar for the New Units and New Notes. The New Units and New Notes may be presented for registration or transfer and exchange at the offices of the registrar. No service charge will be made for any registration of transfer or exchange or redemption of New Units or New Notes, but the Issuers may require payment in certain circumstances of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. The Issuers may change any paying agent and registrar without notice to holders of the New Notes (the “Holders”). The Issuers will pay principal (and premium, if any) on the New Notes at the Trustee’s corporate trust office in New York, New York. At the Issuers’ option, interest and Additional Interest (as defined below), if any, may be paid at the Trustee’s corporate trust office or by check mailed to the registered address of Holders.

The Notes of each Issuer will not trade separately unless (i) an Event of Default on the Notes has occurred, (ii) a redemption of the U.K. Notes as described under “—Taxation; Redemption For Taxation Reasons” has occurred or (iii) a Change of Control of MSX International Limited has occurred (each, a “Separation Event”).

Application has been made for the Units to be listed on the Luxembourg Stock Exchange.

The U.S. Notes are unlimited in aggregate principal amount, of which $64.9 million in aggregate principal amount will be issued in this offering. The U.K. Notes are unlimited in aggregate principal amount, of which $10.6 million in aggregate principal amount will be issued in this offering. The Issuers may issue, from time to time, additional notes (“Additional Notes”) in additional Units subject to the limitations set forth under “—Certain Covenants—Limitation on Incurrence of Additional Indebtedness.” The Notes and any Additional Notes will be substantially identical other than the issuance dates and the dates from which interest will accrue. Unless the context otherwise requires, for all purposes of the Indenture and this “Description of The New Notes,” references to the Notes include any Additional Notes actually issued. Any Notes that remain outstanding after the completion of the Exchange Offer, together with the New Notes issued in connection with this offering and any other Exchange Offer, will be treated as a single class of securities under the Indenture. Because, however, any Additional Notes may not be fungible with the Notes for federal income tax purposes, they may have a different CUSIP number or numbers, be represented by a different Global Note or Notes, and otherwise be treated as a separate class or classes of Notes for other purposes.

Interest on the Notes will accrue at the rate of 11.0% per annum and will be payable semiannually in cash on each February 1 and August 1 commencing on February 1, 2004, to the Persons who are registered Holders at the close of business on each January 15 and July 15 immediately preceding the applicable interest payment date. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including the date of issuance. The Issuers will pay interest on overdue principal at 1% per annum in excess of the above rate and will pay interest on

Pursuant to the terms of the Collateral Agreements, the Company and its Domestic Restricted Subsidiaries will grant to the Collateral Agent or one or more sub-Collateral Agents appointed under the Intercreditor Agreement, security interests in, and pledge in favor of the Collateral Agent or one or more such sub-Collateral Agents, substantially all of our domestic assets, including all of the capital stock of each of our respective Subsidiaries, subject to Permitted Liens; provided, however, that:


	(i) no more than 65% of the Voting Stock of Foreign Subsidiaries directly owned by the Company or any of its Domestic Restricted Subsidiaries and 100% of the non-Voting Stock of Foreign Subsidiaries directly owned by us or any Domestic Restricted Subsidiary shall be pledged in connection therewith;

	(ii) notwithstanding clause (i) above, neither the Company nor any of its Domestic Restricted Subsidiaries shall be required to pledge the Voting Stock of MSX International Netherlands (Holdings) C.V.; provided, further, however that the Company and its Domestic Restricted Subsidiaries will pledge 65% of their respective rights to receive any payments under the partnership agreement governing MSX International Netherlands (Holdings) C.V. (but such pledge shall not create, or be deemed to create, a pledge of or direct claim on the assets of MSX International Netherlands (Holdings) C.V.);

	(iii) the Collateral shall not include any Capital Stock, securities or other payment rights of Subsidiaries of the Company (excluding MSX International (Holdings) Inc.) to the extent the Applicable Value of such Capital Stock, securities and other payment rights (on a Subsidiary-by-Subsidiary basis) is greater than or equal to 20% of the aggregate principal amount of the New Notes then outstanding; and

	(iv) and the Collateral shall not include (A) motor vehicles, instruments and chattel paper with an aggregate fair market value for all of the foregoing less than $1,000,000, (B) real property leases and (C) rights arising under any contracts or licenses (other than, in each of the foregoing cases, any right to receive payment) as to which a grant of a security interest would constitute a violation of a valid and enforceable restriction in favor of a third party on such grant, unless and until any required consents shall have been obtained.

Pursuant to the terms of the Collateral Agreements and subject to the exceptions set forth above, the Notes of MSX International Limited and related guarantees will be secured by the Collateral described above and a charge by way of security over the accounts receivable granted by MSX International Limited, in favor of the Collateral Agent, subject to Permitted Liens.

In addition, in the event that Rule 3-16 or Rule 3-10 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any other governmental agency) of separate financial statements of any Subsidiary of the Company due to the fact that such Subsidiary’s Capital Stock, securities or other payment rights secure the New Notes, then the Capital Stock, securities or other payment rights of such Subsidiary shall automatically be deemed not to be part of the Collateral but only to the extent necessary to not be subject to such requirement. In such event, the Collateral Agreements may be amended or modified, without the consent of any Holder of New Notes, to the extent necessary to release the Liens on the shares of Capital Stock, securities or other payment rights that are so deemed to no longer constitute part of the Collateral. In the event that Rule 3-16 and Rule 3-10 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to permit (or are replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would permit) such Subsidiary’s Capital Stock, securities and other payment rights to secure the New Notes in excess of the amount then pledged without the filing with the SEC (or any other

Upon the occurrence of an Event of Default, the proceeds from the sale of Collateral securing the Notes will likely be insufficient to satisfy the Company’s obligations under the Notes. No appraisals of any of the Collateral have been prepared in connection with the Exchange Offer. Moreover, the amount to be received upon such a sale would be dependent upon numerous factors, including the condition, age and useful life of the Collateral at the time of such sale, as well as the timing and manner of such sale. By its nature, all or some of the Collateral will be illiquid and may have no readily ascertainable market value. Accordingly, there can be no assurance that the Collateral, if saleable, can be sold in a short period of time.

To the extent third parties hold Permitted Liens (as defined herein), such third parties may have rights and remedies with respect to the property subject to such Liens that, if exercised, could adversely affect the value of the Collateral. Given the intangible nature of certain of the Collateral, any such sale of such Collateral separately from the Company as a whole may not be feasible. Additionally, the inclusion of the Company’s fixtures in the Collateral securing the New Notes will be limited by the extent to which (a) such fixtures are deemed not to be personal property, and (b) any applicable state laws would, for purposes of perfecting security interests with respect thereto, require that the Collateral Agent effectuate certain filings in applicable real estate land records. The ability of the Company to grant a first priority security interest (subject to Liens securing the Senior Credit Facility) in certain Collateral may be limited by legal or other logistical considerations. The ability of the Holders of New Notes to realize upon the Collateral may be subject to certain bankruptcy law limitations in the event of a bankruptcy. See “—Certain Bankruptcy Limitations.”

The Company is permitted to form new Domestic Restricted Subsidiaries and to transfer all or a portion of the Collateral to one or more of its Domestic Restricted Subsidiaries; provided, that each such new Domestic Restricted Subsidiary will be required to execute a guarantee in respect of the Company’s obligations under the New Notes and the Indenture and a security agreement granting to the Collateral Agent a security interest in all of the assets of such Domestic Restricted Subsidiary on the same basis and subject to the same limitations as our currently existing Domestic Restricted Subsidiaries as described in the first paragraph under “—Security.”

MSX International Limited is not permitted to transfer its accounts receivable to any Subsidiaries of the Company that are not Subsidiary Guarantors.

Subject to the restrictions on incurring Indebtedness set forth herein, the Company and its Restricted Subsidiaries will have the right to grant (and suffer to exist) Liens securing, among other Permitted Indebtedness and other Obligations, (x) Capitalized Lease Obligations and Purchase Money Indebtedness and respecting fixed assets of the Company or such Restricted Subsidiaries and to acquire any such assets subject to such Liens and (y) obligations outstanding under the Senior Credit Facility. The Collateral Agent’s Liens in the Collateral are intended to be, and shall be, at all times automatically subject to the priority of all such Liens. Loans under the Fourth Lien Term Loan and the New Third Lien Notes are secured by a Lien on all of the assets which secure the Notes. The Liens on such assets are intended to be, and shall be, at all times automatically subject to the priority of the Liens securing the Senior Credit Facility and the Notes. The Term Loan Lender’s Liens in the Collateral are intended to be, and shall be, at all times automatically subject to the priority of the Liens securing the New Third Lien Notes. In furtherance of the foregoing, the Company, MSX International Limited, the Term Loan Lender, the New Third Lien Lender, the Subsidiary Guarantors, the Trustee and the Collateral Agent, on behalf of the Holders of the Notes, and the Administrative Agent, on behalf of the Lenders, entered into the Intercreditor Agreement. The Intercreditor Agreement provides, among other things, that (1) the security interest of the Administrative Agent for the benefit of itself and the Lenders in the assets of the Company and its Domestic Restricted Subsidiaries and MSX International Limited and other assets securing the obligations under the Senior Credit Facility are senior in priority to the Collateral Agent’s security interest

for the benefit of itself, the Trustee and the Holders in such assets securing the Obligations, and consequently, the Administrative Agent and the Lenders are entitled to receive proceeds resulting from the foreclosure of any Collateral prior to the Collateral Agent, the Trustee and the Holders, (2) the security interest of (a) the Administrative Agent for the benefit of itself and the Lenders and (b) the Collateral Agent’s security interest for the benefit of itself, the Trustee and the Holders, in the assets of the Company and its Domestic Restricted Subsidiaries securing the obligations under the Senior Credit Facility and the Obligations are senior in priority to the Term Loan Lender’s and New Third Lien Lender’s security interests in such assets securing the New Third Lien Notes Obligations and Fourth Lien Term Loan Obligations and consequently, the Administrative Agent, the Lenders, the Collateral Agent, the Trustee and the Holders will be entitled to receive proceeds resulting from the foreclosure of any Collateral prior to the Term Loan Lender and New Third Lien Lender, (3) the security interest of the New Third Lien Lender in the assets of the Company and its Domestic Restricted Subsidiaries and MSX International Limited and other assets securing the obligations under the New Third Lien Notes shall be senior in priority to the Term Loan Lender’s security interest in such assets securing the Obligations under the Fourth Lien Term Loan, and consequently, the New Third Lien Lender will be entitled to receive proceeds resulting from the foreclosure of any Collateral prior to the Term Loan Lender, (4) during any insolvency proceedings, the Administrative Agent and the Collateral Agent and the Term Loan Lender and New Third Lien Lender will coordinate their efforts to give effect to the relative priority of their security interests in such assets and (5) following an Event of Default or an event of default under the Senior Credit Facility or the New Third Lien Notes or the Fourth Lien Term Loan, all decisions with respect to such collateral, including the time and method of any disposition thereof, will be made in accordance with the terms of the Intercreditor Agreement.

Neither the Company nor any of its Restricted Subsidiaries will encumber any asset or property of the Company or such Restricted Subsidiaries or suffer to exist any Lien thereon, other than Permitted Liens or as otherwise expressly permitted by the Indenture.

So long as no Event of Default shall have occurred and be continuing, and subject to certain terms and conditions in the Indenture and the Collateral Agreements (including, without limitation, the Intercreditor Agreement), the Company will be entitled to receive all cash dividends, interest and other payments made upon or with respect to the capital stock of any of its Subsidiaries and to exercise any voting, consensual rights and other rights pertaining to such Collateral pledged by it. Upon the occurrence and during the continuance of an Event of Default, subject to the terms of the Intercreditor Agreement, upon notice from the Collateral Agent, (a) all rights of the Company to exercise such voting, consensual rights, or other rights with respect to any capital stock included in the Collateral shall cease and all such rights shall become vested in the Collateral Agent, which, to the extent permitted by law, shall have the sole right to exercise such voting, consensual rights or other rights, (b) all rights of the Company to receive all cash dividends, interest and other payments made upon or with respect to any capital stock included in the Collateral shall cease, and such cash dividends, interest and other payments shall be paid to the Collateral Agent, and (c) the Collateral Agent may sell the Collateral or any part thereof in accordance with, and subject to the terms of, the Collateral Agreements. All funds distributed under the Collateral Agreements and received by the Collateral Agent for the ratable benefit of the Holders of the New Notes shall be distributed by the Collateral Agent in accordance with the provisions of the Indenture.

The collateral release provisions of the Indenture permit the release of Collateral without substitution of collateral having at least equal value under certain circumstances, including asset sales made in compliance with the Indenture.

The right of the Collateral Agent to repossess and dispose of the Collateral upon the occurrence of an Event of Default is likely to be significantly impaired by applicable bankruptcy law if a bankruptcy proceeding were to be commenced by or against the Company or any of its Subsidiary Guarantors prior to the Collateral Agent having repossessed and disposed of the Collateral or otherwise completed the realization of the Collateral. Under the Bankruptcy Code, a secured creditor such as the Collateral Agent

is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from such debtor, without bankruptcy court approval. Moreover, the Bankruptcy Code permits the debtor to continue to retain and to use collateral even though the debtor is in default under the applicable debt instruments; provided that, under the Bankruptcy Code, the secured creditor is given “adequate protection.” The meaning of the term “adequate protection” may vary according to circumstances, but it is intended in general to protect the value of the secured creditor’s interest in the collateral securing the obligations owed to it and may include cash payments or the granting of additional security, if and at such times as the bankruptcy court in its discretion determines, for any diminution in the value of such collateral as a result of the stay of repossession or disposition or any use of the collateral by the debtor during the pendency of the bankruptcy case. In view of the lack of a precise definition of the term “adequate protection” and the broad discretionary powers of a bankruptcy court, it is impossible to predict how long payments under the Notes could be delayed following commencement of a bankruptcy case, whether or when the Collateral Agent could repossess or dispose of the Collateral or whether or to what extent Holders of the Notes would be compensated for any delay in payment or loss of value of the Collateral through the requirement of “adequate protection.”

In addition, because a portion of the Collateral consists of pledges of a portion of the Capital Stock of certain of our Foreign Subsidiaries, the validity of those pledges under local law, if applicable, and the ability of the Holders to realize upon that Collateral under local law, to the extent applicable, may be limited by such local law, which limitations may or may not affect such Liens.

Under insolvency legislation which is currently in force in England and Wales as at the date hereof, a secured creditor with a fixed charge over the assets of MSX International Limited, which has priority over the security created by the UK Deed, will have the ability to enforce their security and will be able to appoint an administrative receiver (in accordance with terms of the security agreement which authorizes the receivers appointment). The purpose of the appointment of the receiver is to allow the sale of the assets secured by the fixed charge and the payment of the proceeds of its sale to the secured creditor, with any surplus being distributed pursuant to the terms of statutory order.

The Issuers are not required to make any mandatory redemption or sinking fund payments with respect to the Notes. However, under certain circumstances, the Issuers may be required to offer to purchase the Notes as described under the captions “—Change of Control” and “—Certain Covenants —Limitation on Sales of Assets and Subsidiary Stock.” The Issuers may at any time and from time to time purchase Units or Notes (in the event that a Separation Event has occurred) in the open market or otherwise.

Optional Redemption Prior to August 1, 2005. At any time prior to August 1, 2005, the Issuers may, at their option, on one or more occasions redeem all or part of their Notes at a redemption price equal to the greater of (1) 100% of the principal amount of the Notes being redeemed and (2) the sum of the present values of 105.5% of the principal amount of the Notes being redeemed 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 redemption of the Notes prior to August 1, 2005 shall include both U.S. Notes and U.K. Notes on a pro rata basis based on the aggregate principal amount of the Notes outstanding at the time of redemption, unless a Change of Control of MSX International Limited has occurred.


	“Treasury Rate” means, with respect to any redemption 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.


	“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).

	“Comparable Treasury Price” means, with respect to any redemption 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.

	“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.

	“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.

Optional Redemption on or After August 1, 2005. On or after August 1, 2005, the Notes will be redeemable, at the Issuers’ 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 and Additional Amounts, if any, to the redemption date (subject to the right of Holders of record on the relevant record date receive interest due on the relevant interest payment date), if redeemed during the period commencing on the date set forth below:

In addition, at any time and from time to time prior to August 1, 2005, the Issuers may redeem at their 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 redemption price (expressed as a percentage of principal amount) of 111.0% plus accrued and unpaid interest and Additional Amounts, if any, to the redemption 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 redemption.

The foregoing optional redemption of the Notes on or after August 1, 2005 shall include both U.S. Notes and U.K. Notes on a pro rata basis based on the aggregate principal amount of the Notes outstanding at the time of redemption, unless a Change of Control of MSX International Limited has occurred.

All payments by MSX International Limited and any guarantor in respect of the U.K. 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 (“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 MSX International Limited or such guarantor is compelled by law to deduct or withhold such taxes, duties, assessments or other governmental charges. In such event, MSX International Limited or such guarantor shall pay such additional amounts (“Additional Amounts”) as may be necessary to ensure that the net amounts received by the holders of the U.K. Notes after such withholding or deduction shall equal the amounts of such payments that would have been receivable in respect of the U.K. Notes in the absence of such withholding or deduction, except that no such Additional Amounts shall be payable in respect of any U.K. Note (i) presented for payment of principal more than 60 days after the later of (x) the date on which such payment first became due and (y) if the full amount payable has not been received in New York City by the Trustee on or prior to such due date, the date on which, the full amount having been so received, notice to that effect shall have been given to the holders by the Trustee, except to the extent that the holders would have been entitled to such Additional Amounts on presenting such U.K. Note for payment on the last day of the applicable 60 day period, (ii) if any tax, assessment or other governmental charge is imposed or withheld by reason of the failure to comply by the holder or, if different, the beneficial owner of the interest payable on the U.K. Note with a timely request of MSX International Limited addressed to such holder or beneficial owner to complete and return an official document concerning the nationality, residence, identity or connection with the United Kingdom or any relevant jurisdiction of such holder or beneficial owner which is required or imposed by a statute, treaty, regulation or administrative practice of the United Kingdom or any relevant jurisdiction as a precondition to exemption from all or part of such tax, assessment or governmental charge and provided that the request to so comply is made in writing and delivered to such holder or beneficial owner, as applicable, not later than 60 days prior to the date by which the delivery of such official document is required, (iii) held by or on behalf of a holder who is liable for Taxes giving rise to such Additional Amounts in respect of such U.K. Note by reason of having some connection with the United Kingdom or any relevant jurisdiction (or any political subdivision or authority thereof) other than the mere purchase, holding or disposition of any U.K. Note, or the receipt of principal or interest in respect thereof, including, without limitation, such holder being or having been a citizen or resident thereof or being or having been present or engaged in a trade or business therein or having had a permanent establishment therein, (iv) where such withholding or deduction is imposed on a payment to an individual who is resident for tax purposes in a jurisdiction which is a member state of the European Union (whether such payment is made through a paying agent or otherwise) and is required to be made pursuant to European Union Directive 2003/48/EC of 3 June 2003 on the taxation of savings or any law implementing or complying with, or introduced in order to conform to such Directive and any combination of (i), (ii), (iii), or (iv) nor shall Additional Amounts be paid with respect to any payment of the principal of, or any interest on, any U.K. Note to any holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent that a beneficiary or settlor or beneficial owner would not have been entitled to any Additional Amounts had such beneficiary or settlor or beneficial owner been the holder. MSX International Limited or such 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. MSX International Limited or such guarantor will furnish copies of such receipts evidencing the payment of any Taxes so deducted or withheld in such form as provided in the normal course by the taxing authority imposing such Taxes and as is reasonably available to MSX International Limited or such guarantor to the Trustee within 60 days after the date of receipt of such evidence. The Trustee will make such evidence available to the holders of U.K. Notes upon request.

All references herein and in the Indenture or the U.K. Notes to the principal of or interest on a U.K. Note shall be deemed to include, without duplication, any Additional Amounts payable in connection therewith.

MSX International 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 U.K. Notes or any other document or instrument referred to in the Indenture or U.K. Notes.

U.K. Notes may be redeemed, at the option of MSX International Limited, as a whole, but not in part (limited to U.K. Notes with respect to which an Additional Amount (as described below) is or may be required), at any time, upon giving notice to holders not less than 30 days nor more than 60 days prior to the date fixed for redemption (which notice shall be irrevocable), at a redemption price equal to the principal amount thereof, together with interest accrued to the date fixed for redemption and any Additional Amounts payable with respect thereto, if MSX International Limited determines and certifies to the Trustee immediately prior to the giving of such notice that (i) they have or will become obligated to pay Additional Amounts in respect of such U.K. 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 U.K. Notes and (ii) such obligation cannot be avoided by MSX International Limited taking reasonable measures available to it, provided, that no such notice of redemption shall be given earlier than 60 days prior to the earliest date on which MSX International Limited would be obligated to pay such Additional Amounts if a payment in respect of such U.K. Notes was then due. Prior to the giving of any notice of redemption described in this paragraph, MSX International Limited shall deliver to the Trustee (a) a certificate signed by two directors of MSX International Limited stating that the obligation to pay Additional Amounts cannot be avoided by MSX International Limited taking reasonable measures available to them and (b) a written opinion of independent legal counsel to MSX International Limited to the effect that MSX International Limited has become obligated to pay Additional Amounts as a result of such a change or amendment described above and that MSX International Limited cannot avoid payment of such Additional Amounts by taking reasonable measures available to them.

In the case of any partial redemption, selection of the Notes for redemption will be made by the Trustee on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate, although no Note of $1,000 in original principal amount or less will be redeemed in part. If any Note is to be redeemed in part only, the notice of redemption relating to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note.

Each of the Company’s Domestic Restricted Subsidiaries will irrevocably and unconditionally Guarantee on a joint and several basis, as primary obligors and not merely as sureties, on a senior secured basis the performance and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all obligations of the Issuers under the Indenture and the Notes, whether for payment of principal of or interest on the Notes, expenses, indemnification or otherwise and the Company will irrevocably and unconditionally Guarantee, as primary obligor and not merely as a surety, on a senior secured basis the performance and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all obligations of MSX International Limited under the Indenture and the U.K. Notes, whether for payment of principal of or interest on the Notes, expenses, indemnification or otherwise (all such obligations Guaranteed by the Subsidiary Guarantors and the Company being herein called the “Guaranteed Obligations”). The Guarantors will agree to pay, in addition to the amount stated above, any and all expenses (including reasonable counsel fees and expenses) incurred by the Trustee or

Each Note Guarantee is a continuing Guarantee and shall (a) remain in full force and effect until payment in full of all the Guaranteed Obligations, (b) be binding upon each Subsidiary Guarantor and the Company, as applicable, and (c) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns. A Subsidiary Guarantee will be released upon the sale of all the Capital Stock, or all or substantially all of the assets, of the applicable Subsidiary Guarantor if such sale is made in compliance with the Indenture.

Upon the occurrence of a Change of Control of the Company, each Holder shall have the right to require that the Issuers repurchase all or a portion of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest and Additional 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 below. Any such repurchase of the Notes shall include both U.S. 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 repurchase, unless a Change of Control of MSX International Limited has occurred.

Upon the occurrence of the Change of Control of MSX International Limited, MSX International Limited may, at its option at any time, redeem its Notes in whole, and not in part, at the optional redemption prices specified in (i) “—Optional Redemption — Optional Redemption Prior to August 1, 2005” for redemptions prior to August 1, 2005 and (ii) the first paragraph of “—Optional Redemption — Optional Redemption on or After August 1, 2005” for redemptions on or after August 1, 2005. If MSX International Limited has not delivered a notice of redemption within 30 days following a Change of Control of MSX International Limited, each Holder of a U.K. Note shall have the right to require that MSX International Limited repurchase all or a portion of such Holder’s U.K. Notes at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest and Additional 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 MSX International Limited in accordance with the next paragraph, MSX International Limited may deliver an optional redemption notice to redeem all of the U.K. Notes in lieu of completing such offer to purchase.

Within 30 days following any Change of Control of the Company, the Company shall, and within 30 days following any Change of Control of MSX International Limited, MSX International Limited shall, mail a notice to each Holder with a copy to the Trustee stating: (1) that a Change of Control has occurred and that such Holder has the right to require the Issuers or MSX International 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 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 Issuers, consistent with the covenant described hereunder, that a Holder must follow in order to have its Notes repurchased.

The Issuers’ 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 the covenant described hereunder. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the covenant described hereunder, the Issuers’ shall comply with

The occurrence of certain of the events which would constitute a Change of Control would constitute a default under the Senior Credit Facility. In addition, the Issuers’ ability to pay cash to the Holders upon a repurchase may be limited by the Issuers’ then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any repurchases required in connection with a Change of Control. The Issuers’ failure to purchase the Notes in connection with a Change in Control would result in a default under the Indenture which would, in turn, constitute a default under the Senior Credit Facility.

Within 90 days after the end of each fiscal year (beginning with the fiscal year ending January 2, 2005), the Issuers will make an offer to all Holders 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 and Additional Interest, if any, to the date of such purchase; provided, however, the Excess Cash Flow Offer Amount shall be reduced by the aggregate principal amount of Notes purchased by the Issuers in the open market completed prior to the date of such Excess Cash Flow offer. The Indenture will provide for each Excess Cash Flow offer to remain open for a period 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 Issuers may, subject to the other provisions of the Indenture, use any such Excess Cash Flow for general corporate purposes. Upon receiving notice of the Excess Cash Flow offer, Holders may elect to tender their 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 U.S. 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 repurchase, unless a change of control of MSX International Limited has occurred.

Within 20 Business Days prior to the required purchase date, the Issuers shall mail an offer to each Holder, with a copy to the Trustee, which offer will govern the terms of the Excess Cash Flow offer. Such offer will state, among other things the purchase date and price.

The Issuers 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 the covenant described hereunder. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the covenant described hereunder, the Issuers shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the covenant described hereunder by virtue thereof.

Notwithstanding anything in this section, the repurchase of the Notes by the Issuers under this section shall not be required if it would breach any covenant under the Credit Agreement and shall be limited to amounts as provided under the Credit Agreement.

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 Subsidiary Guarantors may Incur Indebtedness if, immediately after giving effect to such Incurrence, the Consolidated Coverage Ratio exceeds 2.25 to 1.


	(b) Notwithstanding the foregoing paragraph (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 Administrative Agent, the 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 foregoing clauses (i) and (ii) as a result of currency fluctuations;

	(2) Indebtedness represented by (i) the Notes issued in the Exchange Offer (and the Old Notes), and (ii) Indebtedness represented by the Note Guarantees;

	(3) Indebtedness pursuant to agreements as in effect on the Issue Date (other than Indebtedness described in clause (1) of this paragraph), including without limitation the New Third Lien Notes and the Fourth Lien Term Loan;

	(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 Subsidiary 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 paragraph (a) or pursuant to clause (2), (3) or this clause (5);

	(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 Issue 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; or

	(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 paragraph (a)), does not exceed $10.0 million.

(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 above, 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 one of the above clauses and (ii) an item of Indebtedness may be divided and classified in more than one of the types of Indebtedness described above.

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:


	(1) a Default or an Event of Default shall have occurred and be continuing (or would result therefrom);

	(2) the Company is not able to Incur an additional $1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under “—Limitation on Incurrence of Indebtedness”; or

	(3) 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) declared or made since the Issue Date would exceed the sum of:


	(A) 50% of the Consolidated Net Income accrued during the period (treated as one accounting period) from the Issue 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 Issue 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 Issue 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 Issue 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.

(i) any purchase or redemption of Capital Stock, Subordinated Obligations, the Third Term Lien Note or the New Third Lien Note 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 Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company); provided, however, that


	(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 (3)(B) of paragraph (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 paragraphs (b) and (c) of the covenant described under “—Limitation on Incurrence of Indebtedness” 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 paragraphs (b) and (c) of the covenant described under “—Limitation on Incurrence of Indebtedness”; 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 New Third Lien Note or Fourth Lien Term Loan 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 paragraph (b)(5) of the covenant described under “—Limitation on Incurrence of Indebtedness”; 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 covenant; 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 “—Limitation on Incurrence of Indebtedness” provided, further, however, that such Guarantee shall be excluded from the amount of Restricted Payments;

	(vii) any purchase or redemption of the Company’s 11 3/8% Senior Subordinated Notes due 2008; provided, however, that the aggregate purchase price of all such purchases and redemptions shall not exceed $10.0 million; or

	(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 Issue Date.

Limitation 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 Issue 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;

	(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 covenant (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 covenant 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 clause (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 the covenant described under “—Limitation on Incurrence of Indebtedness” and which encumbrance or restriction is customary in agreements of such type.

Limitation on Sales of Assets and Subsidiary Stock. 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 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 Issue 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

	(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 the covenant described hereunder; 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 New Notes through open market or privately negotiated purchases, and Excess Proceeds at any time will be reduced by the principal amount of New 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 (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 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 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 the Indenture).

Any repurchase of Notes pursuant to an Excess Proceeds Offer shall include both U.S. 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 repurchase, unless a Change of Control of MSX International Limited has occurred.

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 the covenant described hereunder, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the covenant described hereunder by virtue thereof.

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);

	(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) and (iii) have been approved by a majority of the disinterested members of the Board of Directors; 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) 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.


	(i) any Restricted Payment permitted to be paid pursuant to the covenant described under “—Limitation on Restricted Payments,”

	(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;

	(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;

	(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 Issue 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;

	(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 Issue 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) 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.

Limitation on the 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 New Third Lien Notes or the Fourth Lien Term Loan) 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 the terms of the covenant described under “—Limitation on Sales of Assets and Subsidiary Stock.”

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 Issue Date or thereafter acquired.

Designation of Restricted and Unrestricted Subsidiaries. The Board of Directors 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 covenant);

	(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 the covenant described under “Certain Covenants— 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 the Indenture 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 (3) of the covenant described under “Certain Covenants— 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 Trustee by filing with the Trustee 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 filing with the Trustee 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 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 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 the covenant described under “Certain Covenants— Limitation on Incurrence of Indebtedness” and (b) no Default shall have occurred and be continuing or would result therefrom.

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 indenture supplemental thereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the New Notes and the Indenture and (b) by amendment, supplement or other instrument (in form and substance satisfactory to the Trustee and the Collateral Agent), executed and delivered to the Trustee, all obligations of the Company under the Collateral Agreements, 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 paragraph (a) of the covenant described under “—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 Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Indenture.

Notwithstanding the foregoing clauses (ii), (iii) and (iv), 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 the Indenture, 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 Subsidiary 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 supplemental indenture (in form and substance satisfactory to the Trustee), executed and delivered to the Trustee, all of the obligations of the Subsidiary Guarantor under the Guarantee and the Intercreditor Agreement and (b) by amendment, supplement or other instrument (in form and substance satisfactory to the Trustee and the Collateral Agent) executed and delivered to the Trustee and the Collateral Agent, all obligations of the Subsidiary Guarantor under the Collateral Agreements, 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 Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such Guarantee agreement comply with the Indenture.

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 the covenant described under “—Limitation on Sales of Assets and Subsidiary Stock” above.

The Company shall not permit MSX International 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 supplemental indenture (in form and substance satisfactory to the Trustee), executed and delivered to the Trustee, all of the obligations of MSX International Limited under the U.K. Notes and the Indenture and (b) by amendment, supplement or other instrument (in form and substance satisfactory to the Trustee and the Collateral Agent) executed and delivered to the Trustee and the Collateral Agent, all obligations of MSX International Limited under the Collateral Agreements, 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 Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplementary indenture (if any) comply with the Indenture.

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 Trustee, the Initial Purchaser, the Noteholders and prospective Noteholders (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 Trustee and Noteholders and prospective Noteholders (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.

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:


	(1) execute and deliver to the Trustee a supplemental indenture in form reasonably satisfactory to the Trustee 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 the Indenture on the terms set forth in the Indenture;

	(2) (a) execute and deliver to the Collateral Agent such amendments to the Collateral Agreements as the Collateral Agent reasonably determines to be necessary or advisable in order to grant to the Collateral Agent, for the benefit of the Holders, a perfected first priority security interest (subject to Liens securing the Senior Credit Facility) 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;

	(3) cause such new Domestic Restricted Subsidiary to take such other actions necessary or as the Collateral Agent reasonably determines to be advisable to grant to the Collateral Agent for the benefit of the Holders a perfected first priority security interest in the personal property of such new Domestic Restricted Subsidiary to the extent required pursuant to the terms of the Collateral Agreements 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 or as may be reasonably requested by the Collateral Agent;

	(4) take such further action and execute and deliver such other documents specified in the Indenture to effectuate the foregoing; and

	(5) deliver to the Trustee an opinion of counsel that such supplemental indenture 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 the Indenture.

Thereafter, such Domestic Restricted Subsidiary shall be a Subsidiary Guarantor for all purposes of the Indenture.

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 not used by the Company and its Restricted Subsidiaries in the immediately preceding fiscal year.

Impairment of Security Interest. Subject to the Intercreditor Agreement, neither the Company nor any of its Subsidiary Guarantors will take or omit to take any action which would adversely affect or impair the Liens in favor of the Collateral Agent, on behalf of itself, the Trustee and the Holders of the Notes, 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 Collateral Agent or a sub-Collateral Agent), 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 the Indenture, the Notes, the Intercreditor Agreement and the Collateral Agreements (including, without limitation, the Intercreditor Agreement). The Company shall, and shall cause each Subsidiary Guarantor to, at their sole cost and expense, execute and deliver all such agreements and instruments as the Collateral Agent or the Trustee shall reasonably request to more fully or accurately describe the property intended to be Collateral or the obligations intended to be secured by the Collateral Agreements. 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 Collateral Agreements at such times and at such places as the Collateral Agent or the Trustee may reasonably request.

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


	(1) the Company shall deliver to the Collateral Agent, 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 or, in the reasonable opinion of the Collateral Agent desirable, to create a valid, perfected Lien, subject to Permitted Liens, against the properties purported to be covered thereby;

	(2) the Collateral Agent shall have received mortgagee’s title insurance policies in favor of the Collateral Agent, as mortgagee for the ratable benefit of the Collateral Agent, the Trustee and the Holders in amounts and in form and substance and issued by insurers reasonably acceptable to the Collateral Agent, 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 the Collateral Agent shall reasonably request and shall be accompanied by evidence of the payment in full of all premiums thereon; and

	(3) the Company shall deliver to the Collateral Agent, 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 Collateral Agent and its counsel shall reasonably request.

Unless an Event of Default shall have occurred and be continuing, the Issuers and the Restricted Subsidiaries shall have the right to remain in possession and retain exclusive control of the Collateral (other than as set forth in the Collateral Agreements and the Intercreditor Agreement), to freely operate the Collateral, to alter or repair the Collateral and to collect, invest and dispose of any income therefrom.

Release of Collateral. Upon compliance by the Company and its Restricted Domestic Subsidiaries with the conditions set forth below in respect of any release of items of Collateral, and upon delivery by the Company to the Collateral Agent of an opinion of counsel to the effect that such conditions have been met, the Collateral Agent will terminate and release its Lien on the applicable Released Interests (as hereinafter defined) and reconvey the Released Interests to the Company, and the Collateral Agent shall, at the sole cost and expense of the Company or such Domestic Restricted Subsidiary, execute and deliver to the Company or such Domestic Restricted Subsidiary such documents, as the Company or such Domestic Restricted Subsidiary shall reasonably request to effect or evidence such termination.

Asset Disposition Release. The Company and the Restricted Subsidiaries have the right to obtain a release of items of Collateral (the “Released Interests”) subject to an Asset Disposition or other asset sale permitted under the Indenture upon compliance with the condition that the Company deliver to the Collateral Agent the following:

(1) A notice from the Company requesting the release of Released Interests: (i) describing the proposed Released Interests; (ii) specifying the value of such Released Interests on a date within 60 days of such notice (the “Valuation Date”); (iii) stating that the purchase price received is at least equal to the Fair Market Value of the Released Interests (other than with respect to an Asset Disposition for which the consideration is Additional Assets, in which case such notice shall include a statement that the Fair Market Value of such Additional Assets is at least equal to the Fair Market Value of such Released Interests); (iv) stating that the release of such Released Interests would not be expected to interfere in any material respect with the Collateral Agent’s ability to realize the value of the remaining Collateral and will not impair in any material respect the maintenance and operation


	of the remaining Collateral; and (v) certifying that such Asset Disposition or other asset sale complies with the terms and conditions of the Indenture with respect thereto; and

	(2) An Officers’ Certificate of the Company stating that: (i) such Asset Disposition covers only the Released Interests and complies with the terms and conditions of the Indenture with respect to Asset Dispositions; (ii) there is no Default or Event of Default in effect or continuing on the date thereof or the date of such Asset Disposition or other asset sale; (iii) the release of such Released Interests will not result in a Default or Event of Default under the Indenture; and (iv) all conditions precedent in the Indenture relating to the release in question have been or will be complied with.

If the Company or any Domestic Restricted Subsidiary engages in any direct or indirect sale, issuance, conveyance, transfer, lease, assignment or other transfer for value of any Collateral of the type described in clause (y) or (z) of the proviso to the definition of the term “Asset Disposition”, the Liens of the Collateral Agent on such Collateral shall automatically terminate and be released without any action by the Collateral Agent, and the Collateral Agent shall, at the sole cost and expense of the Company or such Domestic Restricted Subsidiary, execute and deliver to the Company or such Domestic Restricted Subsidiary such documents, as the Company or such Domestic Restricted Subsidiary shall reasonably request to effect or evidence such termination.

Release of Inventory and Accounts Receivable Collateral. Notwithstanding any provision to the contrary in the Indenture, Collateral comprised of accounts receivable, inventory or (prior to the occurrence and during the continuance of an Event of Default) the proceeds of the foregoing shall be subject to release upon sales of such inventory and collection of the proceeds of such accounts receivable in the ordinary course of business. If requested in writing by the Company, the Trustee shall instruct the Collateral Agent to execute and deliver such documents, instruments or statements and to take such other action as the Company may request to evidence or confirm that the Collateral falling under this “Release of Inventory and Accounts Receivable Collateral” provision has been released from the Liens of each of the Collateral Agreements. The Collateral Agent shall execute and deliver such documents, instruments and statements and shall take all such actions promptly upon receipt of such instructions from the Trustee.

Release upon Satisfaction or Defeasance of all Outstanding Obligations. The Liens on, and pledges of, all Collateral will also be terminated and released upon (i) payment in full of the principal of, premium, if any, on, accrued and unpaid interest and Additional Interest, if any, on the Notes and all other Obligations under the Indenture, the Guarantees and the Collateral Agreements that are due and payable at or prior to the time such principal, premium, if any, accrued and unpaid interest and Additional Interest, if any, are paid, (ii) a satisfaction and discharge of the Indenture as described below under the caption “—Satisfaction and Discharge” and (iii) the occurrence of a legal defeasance or covenant defeasance as described below under “—Legal Defeasance and Covenant Defeasance.”


	(i) a default in the payment of interest on the Notes when due, continued for 30 days;

	(ii) a default in the payment of principal of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;

	(iii) the failure by the Issuers, to comply for 60 days after notice with any of their obligations under the covenants described under “—Limitation on Incurrence of Indebtedness,” “—Limitation on Restricted Payments,” “—Limitation on Sales of Assets and Subsidiary Stock” and “—Merger and Consolidation;”

	(iv) the failure by the Issuers to comply for 60 days after notice with their other agreements contained in the Indenture or in the Collateral Agreements;

	(v) any Collateral Agreement at any time for any reason ceases to be in full force and effect (except as provided by the terms of the Collateral Agreements and Indenture), or shall cease to be


	effective in all material respects to give the Collateral Agent the Liens with the priority purported to be created thereby subject to no other Liens except as expressly permitted by the applicable Collateral Agreement;

	(vi) the Company or any of its Subsidiaries, directly or indirectly, contests in any manner the effectiveness, validity, binding nature or enforceability of any Collateral Agreement;

	(vii) Indebtedness of the Company or any Restricted Subsidiary is not paid within any applicable grace period after final maturity or is accelerated by the Holders thereof because of a default and the total amount of such Indebtedness unpaid or accelerated exceeds $5.0 million (the “cross-acceleration provision”);

	(viii) certain events of bankruptcy, insolvency or reorganization of the Company, MSX International Limited or a Significant Subsidiary (the “bankruptcy provisions”);

	(ix) any judgment or decree for the payment of money in excess of $5 million is rendered against the Company or a Restricted Subsidiary, remains outstanding following such judgment and is not discharged, waived or stayed within 60 days after entry of such judgment or decree (the “judgment default provision”); or

	(x) 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.

However, a default under clause (iii) or (iv) above will not constitute an Event of Default until the Trustee or the Holders of 25% in principal amount of the outstanding Notes notify the Company of the default and the Company does not cure such default within the time specified in clauses (iii) and (iv) hereof after receipt of such notice.

If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding Notes may declare the principal of and accrued but unpaid interest on all 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 relating to certain events of bankruptcy, insolvency or reorganization of 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 Trustee or any Holders of the Notes. Under certain circumstances, the Holders of a majority in principal amount of the outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences.

Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity or security reasonably satisfactory to the Trustee against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect to the Indenture or the Notes unless:


	(i) such Holder has previously given the Trustee notice that an Event of Default is continuing;

	(ii) Holders of at least 25% in principal amount of the outstanding Notes have requested the Trustee to pursue the remedy;

	(iii) such Holders have offered the Trustee security or indemnity reasonably satisfactory to the Trustee against any loss, liability or expense;

	(iv) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity reasonably satisfactory to the Trustee; and

	(v) the Holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

Subject to certain restrictions, the Holders of a majority in principal amount of the outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability.

The Indenture provides that if a Default occurs and is continuing and is actually known to the Trustee, the Trustee must mail to each Holder notice of the Default within 90 days after it occurs. Except in the case of a Default in the payment of principal of or interest on any Note, the Trustee may withhold notice if and so long as a committee of its trust officers determines that withholding notice is not opposed to the interest of the Holders. In addition, the Company is required to deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signer thereof knows of any Default that occurred during the previous year. The Company also is required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which would constitute certain Defaults, their status and what action the Company is taking or proposes to take in respect thereof.

Subject to certain exceptions, the Indenture may be amended with the consent of the Holders of a majority in principal amount of the New Notes then outstanding (including consents obtained in connection with a tender offer or exchange for the New Notes) and any past default or compliance with any provisions may also be waived with the consent of the Holders of a majority in principal amount of the New Notes then outstanding. However, without the consent of each Holder of an outstanding Note affected thereby, no amendment may, among other things,


	(i) reduce the amount of Notes whose Holders must consent to an amendment;

	(ii) reduce the rate of or extend the time for payment of interest on any Note;

	(iii) reduce the principal of or change the Stated Maturity of any Note;

	(iv) reduce the premium payable upon the redemption of any New Note or change the time at which any Note may be redeemed as described under “—Optional Redemption” above;

	(v) make any New Note payable in money other than that stated in the Note;

	(vi) impair the right of any Holder to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes or any Subsidiary Guarantee;

	(vii) make any change in the amendment provisions which require each Holder’s consent or in the waiver provisions;

	(viii) after the Company’s obligation to purchase Notes arises thereunder, amend, change or modify in any material respect the obligation of the Company to make and consummate a Change of Control offer or make and consummate an offer with respect to any Asset Disposition that has been consummated or, after such Change of Control has occurred or such Asset Disposition has been consummated, modify any of the provisions or definitions with respect thereto;

	(ix) modify or change any provision of the Indenture or the related definitions affecting the ranking of the Notes or any Subsidiary Guarantee in a manner which adversely affects the Noteholders; or

	(x) except as permitted by the Indenture, release all or substantially all of the Collateral.

Without the consent of any Holder, the Issuers and Trustee may amend the Indenture to cure any ambiguity, omission, defect or inconsistency, to provide for the assumption by a successor corporation of the obligations of the Issuers under the Indenture, to provide for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for

purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code), to add Guarantees with respect to the New Notes, to release Subsidiary Guarantors when permitted by the Indenture, to secure the Notes, to add to the covenants of the Issuers for the benefit of the Holders or to surrender any right or power conferred upon the Issuers, to make any change that does not adversely affect the rights of any Holder or to comply with any requirement of the SEC in connection with the qualification of the Indenture under the Trust Indenture Act.

The consent of the Holders is not necessary under the Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

After an amendment under the Indenture becomes effective, the Issuers are required to mail to Holders a notice briefly describing such amendment. However, the failure to give such notice to all Holders, or any defect therein, will not impair or affect the validity of the amendment.

The Issuers at any time may terminate all their obligations under the Notes and the Indenture (“legal defeasance”), except for certain obligations, including those respecting the defeasance trust and obligations to register the transfer or exchange of the Notes, to replace mutilated, destroyed, lost or stolen Notes and to maintain a registrar and paying agent in respect of the Notes. The Issuers at any time may terminate their obligations under “—Change of Control” and under the covenants described under “—Certain Covenants” (other than the covenant described under “—Merger and Consolidation”), the operation of the cross-acceleration provision, the bankruptcy provisions with respect to Significant Subsidiaries and the judgment default provision described under “—Defaults” above and the limitations contained in clauses (iii) and (iv) under “Certain Covenants— Merger and Consolidation” above (“covenant defeasance”).

The Issuers may exercise its legal defeasance option notwithstanding their prior exercise of their covenant defeasance option. If the Issuers exercise their legal defeasance option, payment of the Notes may not be accelerated because of an Event of Default with respect thereto. If the Company exercises its covenant defeasance option, payment of the Notes may not be accelerated because of an Event of Default specified in clause (iii), (iv), (v), (vi) (vii), (viii) or (ix) under “—Defaults” above or because of the failure of the Company to comply with clause (iii) or (iv) under “Certain Covenants— Merger and Consolidation” above. If the Issuers exercise their legal defeasance option or its covenant defeasance option, each Subsidiary Guarantor will be released from all of its obligations with respect to its Subsidiary Guarantee.

In order to exercise either defeasance option, the Issuers must irrevocably deposit in trust (the “defeasance trust”) with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of an Opinion of Counsel to the effect that Holders of the Notes will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and defeasance and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or other change in applicable Federal income tax law).

BNY Midwest Trust Company is the Trustee under the Indenture and has been appointed by the Company as Registrar and Paying Agent with regard to the Notes.

The Holders of a majority in principal amount of the outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that if an Event of Default occurs (and is

not cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of his or her own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of Notes, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to the Trustee against any loss, liability or expense and then only to the extent required by the terms of the Indenture.

The Indenture provides that it and the Notes will be governed by, and construed in accordance with, the laws of the State of New York without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby.

Since the operating assets of the MSX International Limited are outside the United States, any judgment obtained in the United States against MSX International Limited, including judgments with respect to the payment of principal, premium, if any, interest, Additional Amounts, if any, Additional Interest, if any, redemption price and any purchase price with respect to the New Notes, may not be collectible within the United States. You may not be able to enforce a U.S. judgment against MSX International Limited or its officers and directors in England. MSX International Limited is an English company and several of its officers and directors are resident outside the United States. A substantial portion of MSX International Limited’s and such persons’ assets are located outside the United States. MSX International Limited will arrange that it may be served with process with respect to actions based on offers and sales of securities made hereby in the United States by serving MSX International, Inc., 22355 West Eleven Mile Road, Southfield, MI 48034, United States, as United States agent appointed for that purpose. We have been advised by our English counsel, Dechert, that there is doubt as to whether English courts would enforce judgments of United States courts obtained in actions against such persons or us that are predicated upon the civil liability provisions of the Securities Act. There is no treaty in effect between the United States and England providing for such enforcement, and there are grounds upon which English courts may not enforce judgments of United States courts. MSX International Limited has been advised by its English legal counsel, Dechert, that there is also doubt as to the direct enforceability in England against any of these persons in an original action of civil liabilities predicated solely upon the federal securities laws of the United States.

“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.

“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 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.

“Administrative Agent” has the meaning set forth in the definition of the term Senior Credit Facility.

“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 the provisions described under “Certain Covenants— Limitation on Restricted Payments,” “Certain Covenants— Limitation on Affiliate Transactions” and “Certain Covenants— 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.


	(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 Collateral Agreements; or

	(2) in respect of any other asset, any Pari Passu Indebtedness or any unsubordinated Indebtedness of any Subsidiary Guarantor, and in the case of an Asset Disposition by a Subsidiary that is not a Subsidiary Guarantor, Indebtedness of such Subsidiary, or any other Obligations under the Senior Credit Facility.


	(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.

“Applicable Value” shall mean the greatest of the aggregate principal amount, par value, book value as carried by the Company or the market value, as applicable, of Capital Stock, securities or other payment rights of a Subsidiary.

“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 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 Subsidiary Guarantor, (y) for purposes of the covenant described under “Certain Covenants— 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 “Certain Covenants—Limitation on Restricted

“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 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 as 11 U.S.C. §§101 et seq.

“Board of Directors” means the Board of Directors of the Company or any committee thereof duly authorized to act on behalf of such Board of Directors.

“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 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 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:

(1) prior to the first public offering of common stock of the Company or MSX International 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 MSX International Limited, as applicable, any merger, consolidation, liquidation or dissolution of the Company or MSX International 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 MSX International Limited, as applicable, after the Issue 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 MSX International 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 MSX International 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 MSX International Limited, as applicable;

	(3) during any two year period, individuals who on the Issue Date constituted the Board of Directors of the Company or MSX International Limited, as applicable, (together with any new directors whose election by such shareholders of the Company or MSX International Limited, as applicable, or whose nomination for election by the Board of Directors of the Company or MSX International Limited, as applicable, was approved by a vote of a majority of the directors of the Company or MSX International Limited, as applicable, then still in office who were either directors on the Issue 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 MSX International Limited, as applicable, then in office;

	(4) the approval by the holders of Capital Stock of the Company or MSX International Limited, as applicable, of a plan for the liquidation or dissolution of the Company or MSX International Limited, as applicable; or

	(5) the merger or consolidation of the Company or MSX International Limited, as applicable, with or into another Person or the merger of another Person with or into the Company or MSX International Limited, as applicable, or the sale of all or substantially all the assets of the Company or MSX International 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 MSX International 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 MSX International Limited, as applicable, and (B) in the case of a sale of 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 MSX International Limited does not constitute a Change of Control of the Company.

“Collateral” shall mean collateral as such term is defined in the Security Agreement, all property mortgaged under the Mortgages acquired after the Issue Date and any other property, whether now owned

“Collateral Agent” means the collateral agent under the Security Agreement and each Mortgage, which shall initially be the Trustee.

“Collateral Agreements” means, collectively, the Intercreditor Agreement, the Security Agreement, the U.K. Deed and each Mortgage, in each case, as the same may be in force from time to time.

“Company Guarantee” means the Guarantee of the Company of MSX International Limited’s obligations with respect to the U.K. Notes.

“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 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).

“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)(3)(A) of the covenant described under “Certain Covenants—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 the covenant described under “Certain Covenants—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 covenant pursuant to clause (a)(3)(D) thereof.

“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.

“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.

“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.

“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 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).

“Domestic Restricted Subsidiary” means any Restricted Subsidiary of the Company other than a Foreign Restricted Subsidiary.

“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.

“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 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.

“Existing Affiliate Agreements” means the Stockholders’ Agreement, the MSXI Registration Rights Agreement and any other existing agreement with CVC or any Affiliates of CVC or the Company listed on Schedule I to the Indenture.

“Foreign Subsidiary” means a Subsidiary not organized under the laws of the United States of America or any State thereof or the District of Columbia.

“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.

“Fourth Lien Term Loan” means the fourth secured term loan, from the Term Loan Lender to the Company and MSX International Limited under the amended and restated fourth term loan agreement, dated the Issue Date, and including all related or ancillary documents executed at any time, including, without limitation, any instruments, guarantee agreements and security documents.

“GAAP” means generally accepted accounting principles in the United States of America as then in effect on the date of the Indenture, 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.

“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.

“Guarantors” shall mean the Subsidiary Guarantors and, in connection with the Guarantee of the U.K. Notes, the Company.

“Hedging Obligations” of any Person means 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.

“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 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

“Intercreditor Agreement” means the Intercreditor Agreement among the Administrative Agent, the Trustee, the Collateral Agent, the New Third Lien Lender, the Term Loan Lender, the Company and the Subsidiary Guarantors, (as applicable) dated as of the Issue Date, as the same may be amended, supplemented or modified from time to time.

“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 the covenant described under “Certain Covenants—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.

“Issue Date” means August 1, 2003, the date on which the old notes were originally issued under the Indenture.

“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.

“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).

“Management Investors” means each of the officers, employees and directors of the Company who own Voting Stock of the Company on the Issue Date, in each case so long as such person shall remain an officer, employee or director of the Company.

“Mortgages” means the mortgages, deeds of trust, deeds to secure Indebtedness or other similar documents creating Liens in favor of the Collateral Agent upon the owned real property constituting Collateral of the Company or any of its Domestic Restricted Subsidiaries from time to time.

“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 from time to time.

“Net Available Cash” from an Asset Disposition 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


	(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;

	(ii) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, 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; and

	(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 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,” with respect to any issuance or sale of Capital Stock, means the cash proceeds of such issuance or sale 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 or sale and net of taxes paid or payable as a result thereof.

“New Third Lien Lender” means Citicorp Mezzanine III, L.P. and its assigns.

“New Third Lien Notes” means the notes issued by the Company and MSX International Limited to the New Third Lien Lender on the Issue Date.

“Note Guarantees” means the Subsidiary Guarantees and the Company Guarantee.

“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.

“Officer” means the Chief Executive Officer, the President, the Chief Financial Officer or any Vice President of the Company.

“Officers’ Certificate” means a certificate signed by two Officers of the Company, at least one of whom shall be the principal financial officer of the Company, and delivered to the Trustee.

“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.

“Permitted Holders” means the CVC Investors, the Management Investors and their respective Permitted Transferees and in addition, in the case of MSX International 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 Issue Date, and any amendment to such agreement that does not materially change the allocation of voting power provided in such agreement).


	(i) the Company or, to the extent used to make any redemption, repurchase or other retirement for value or payment on the U.K. Notes, in MSX International Limited;

	(ii) any Person that is or will become immediately after such Investment a Subsidiary Guarantor or that will merge or consolidate with or into the Company or a Subsidiary Guarantor, or transfers or conveys all or substantially all of its assets to the Company or a Subsidiary 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 the covenant described under “Certain Covenants— Limitation on Sales of Assets and Subsidiary Stock;” and

	(xii) additional Investments not to exceed $5.0 million at any time outstanding.


	(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;

	(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 the “Limitation on Incurrence of Indebtedness” covenant; 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 the “Limitation on Incurrence of Indebtedness” covenant; 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 the “Limitation on Incurrence of Indebtedness” covenant;

	(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 the “Limitation on Incurrence of Indebtedness” covenant;


	(12) Liens securing Acquired Indebtedness incurred in accordance with the “—Limitation on Incurrence of Additional Indebtedness” covenant; 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

	(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 Issue Date and securing Indebtedness permitted to be outstanding under clause (b)(3) of the “Limitation on Incurrence of Indebtedness” covenant to the extent and in the manner such Liens are in effect on the Issue Date;

	(14) Liens securing the Notes, all monetary obligations under the Indenture and the Guarantees;

	(15) Liens securing Indebtedness under the Senior Credit Facility to the extent such Indebtedness is permitted under clause (b)(1) of the “Limitation on Incurrence of Indebtedness” covenant;

	(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 the “—Limitation on Incurrence of Additional Indebtedness” provisions of the Indenture; provided, however, that such Liens: (i) are no less favorable to the Holders 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 the “Limitation on Incurrence of Indebtedness” covenant; and

	(21) Liens securing Indebtedness of Foreign Restricted Subsidiaries to the extent such Indebtedness is permitted under clause (b)(12) of the “Limitation on Incurrence of Indebtedness” covenant (provided, however, that no asset of the Company or any Domestic Restricted Subsidiary shall be subject to any such Lien).

“Permitted Transferee” means, (a) with respect to any CVC Investor who is an employee, officer or director of CVC or any Wholly Owned Subsidiary of CVC, 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; 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.

“Principal” of a Note means the principal of the Note plus the premium, if any, payable on the Note which is due or overdue or is to become due at the relevant time.

“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 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.

“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 Issue Date or Incurred in compliance with the 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 Issue Date, between the Company, the Subsidiary Guarantors and the Initial Purchaser, 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) to the businesses of the Company and the Restricted Subsidiaries on the Issue Date.


	(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 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 under the Fourth Lien Term Loan or New Third Lien Note; 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.

“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.

“Security Agreement” means the security agreement, dated as of the Issue 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.

“Senior Credit Facility” means the Credit Agreement dated as of August 1, 2003, in effect on the Issue Date, by and among the Company, as borrower and guarantor, and certain subsidiaries, as borrowing subsidiaries, the Lenders referred to therein and Bank One, N.A., as administrative agent (in such capacity, together with its successors and assigns, the “Administrative Agent”), 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 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 Administrative Agent, any Lender or their respective Affiliates shall also be deemed Obligations under the Senior Credit Facility.

“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 between the Company, CVC, and certain CVC Investors and executive officers and directors of the Company, as amended by Amendment No. 1 dated January 31, 2003 and as amended from time to time.

“Subordinated Obligation” means any Indebtedness of the Company (whether outstanding on the Issue 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 Subsidiary 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 Issuers’ obligations with respect to the Notes.

“Subsidiary Guarantor” means each Subsidiary designated as such on the signature pages of the Indenture and any other Subsidiary that has issued a Subsidiary Guarantee.

“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 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 Moody’s Investors Service, Inc. or “A-1” (or higher) according to Standard and Poor’s Ratings Group, and (v) investments in securities with

“Unit” means a unit consisting of $860 principal amount of U.S. Notes and $140 principal amount of U.K. 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 in the manner provided above under “Certain Covenants—Designation of Restricted and Unrestricted Subsidiaries” and (ii) any Subsidiary of an Unrestricted Subsidiary.

“U.K. Deed” means the debenture, dated as of the Issue Date, made by MSX International Limited in favor of the Collateral Agent, as amended or supplemented from time to time in accordance with its terms.

“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable at the issuer’s option.

“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.

“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.

“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.

We have filed the registration statement of which this prospectus forms a part and are conducting the exchange offer in accordance with our obligations under the Registration Rights Agreement dated August 1, 2003, by and among the Issuers and the Initial Purchaser.

The certificates representing each New Unit, will be issued in fully registered, global form without interest coupons in minimum denominations of $1,000 and integral multiples of $1,000. New Units will be issued at the closing of the exchange offer only against surrender of corresponding old units.

Units originally sold in reliance on Rule 144A will be represented by global units (each a “Domestic Global Unit”) consisting of U.S. Notes and U.K. Notes in fully registered form with interest coupons (each a “Domestic Global Note”) and will be deposited with the Trustee as a custodian for The Depository Trust Company (“DTC”) and registered in the name of a nominee of such depositary.

Units originally sold in offshore transactions in reliance on Regulation S under the Securities Act will be represented by global units (each a “Offshore Global Unit”) consisting of U.S. Notes and U.K. Notes in fully registered form without interest coupons (each a “Offshore Global Note”) and will be deposited with the Trustee as custodian for DTC, as depository, and registered in the name of a nominee of such depository for the account of the operator of the Clearstream Banking, Société Anonyme, Luxembourg.

Book-entry interests for Domestic Global Units and Offshore Global Units (together the “Global Units”) will be shown on, and transfers thereof will be effected only through, records maintained by Clearstream and their participants. The laws of some jurisdictions, including some states of the United States, may require that certain purchasers of securities take physical delivery of those securities in definitive form.

We expect that pursuant to procedures established by DTC (i) upon the issuance of the Global Units, DTC or its custodian will credit, on its internal system, the principal amount at maturity of the individual beneficial interests represented by the underlying Global Notes to the respective accounts of Persons who have accounts with such depositary and (ii) ownership of beneficial interests in the Global Units will be shown on, and the transfer of such ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of Persons other than participants). Such accounts initially will be designated by or on behalf of the initial purchaser and ownership of beneficial interests in the Global Units will be limited to Persons who have accounts with DTC (“participants”) or Persons who hold interests through participants. Holders may hold their interests in the Global Units directly through DTC if they are participants in such system, or indirectly through organizations that are participants in such system.

So long as DTC, Clearstream or their nominees, is the registered owner or holder of the Units, DTC, Clearstream or such nominee, as the case may be, will be considered the sole owner or holder of the New Notes represented by such Global Units for all purposes under the indenture. No beneficial owner of an interest in the Global Units will be able to transfer that interest except in accordance with DTC’s or Clearstream’s, as applicable, procedures, in addition to those provided for under the indenture with respect to the Units.

Payments of the principal of, premium (if any), interest (including Additional Interest) on, the Global Notes will be made to DTC, Clearstream or their nominees, as the case may be, as the registered owner thereof. None of us, the Trustee or any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Units or for maintaining, supervising or reviewing any records relating to such beneficial ownership interest.

We expect that DTC, Clearstream or their nominees, upon receipt of any payment of principal, premium, if any, interest (including Additional Interest) on the Global Notes, will credit participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the Global Notes as shown on the records of DTC, Clearstream or their nominees. We also expect that payments by participants to owners of beneficial interests in the Global Units held through such participants will be governed by standing instructions and customary practice, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such participants.

Transfers between participants in DTC will be effected in the ordinary way through DTC’s same-day funds system in accordance with DTC rules and will be settled in same day funds. If a Holder requires physical delivery of a Certificated Security for any reason, including to sell New Units to Persons in states which require physical delivery of the New Units, or to pledge such securities, such Holder must transfer its interest in a Global Unit, in accordance with the normal procedures of DTC and with the procedures set forth in the indenture.

Participants in Clearstream must rely upon the procedures of Clearstream in order to transfer their interests in the Global Units, and indirect participants must rely on the procedures of the participants through which they own book-entry interests to transfer their interests or to exercise any rights of holders under the indenture.

DTC and Clearstream have advised us that they will take any action permitted to be taken by a Holder of New Units and New Notes (including the presentation of New Units and New Notes for exchange as described below) only at the direction of one or more participants to whose account the DTC or Clearstream interests in the Global Units are credited and only in respect of such portion of the aggregate principal amount of New Notes as to which such participant or participants has or have given such direction. However, if there is an event of default under the Indenture, DTC and Clearstream will exchange the Global Units and Global Notes for Certificated Securities, which they will distribute to their participants.

DTC has advised us as follows: DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code and a “Clearing Agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations and certain other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly.

Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Units among participants of DTC, it is under no obligation to perform such procedures, and such procedures may be discontinued at any time. Neither the Trustee nor we will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

We understand as follows with respect to Clearstream: Clearstream holds securities for participating organizations and facilitate the clearance and settlement of securities transactions between their respective participants through electronic book-entry changes in accounts of such participants. Clearstream provides to its participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream interfaces with domestic securities markets. Clearstream participants are financial institutions such as underwriters, securities brokers and dealers, banks, trust companies and certain other organizations. Indirect access to Clearstream is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodian relationship with Clearstream participants, either directly or indirectly.

Certificated Securities shall be issued in exchange for beneficial interests in the Global Units and underlying Global Notes (i) for Global Units or Global Notes held by DTC, if requested by a Holder of such interests or (ii) if DTC or Clearstream is at any time unwilling or unable to continue as a depositary for the Global Notes and a successor depositary is not appointed by us within 90 days.

This section summarizes the material U.S. federal income tax consequences of the exchange to holders of old notes. However, the discussion is limited in the following ways:


	•	The discussion only covers you if you bought your old notes in the initial offering.

	•	The discussion only covers you if you hold your old notes as capital assets (that is, for investment purposes), and you are not a person in a special tax situation, such as a financial institution, an insurance company, a regulated investment company, a dealer in securities or currencies, a person holding the old notes as a hedge against currency risks, as a position in a “straddle” or as part of a “hedging” or “conversion” transaction for tax purposes, or a person whose functional currency is not the United States dollar.

	•	The discussion does not cover tax consequences that depend upon your particular tax situation.

	•	The discussion is based on current law. Changes in the law may change the tax treatment of the exchange of the old notes.

	•	The discussion does not cover state, local or foreign law.

	•	We have not requested a ruling from the Internal Revenue Service (“IRS”) on the tax consequences of any matter discussed herein. As a result, the IRS could disagree with portions of this discussion.

A “U.S. holder” is (i) a citizen or resident of the U.S., (ii) a corporation or a partnership (including an entity treated as a corporation or a partnership for federal income tax purposes) created or organized in or under the laws of the U.S., any state thereof or the District of Columbia (unless, in the case of a partnership, Treasury regulations are adopted that provide otherwise), (iii) an estate whose income is subject to U.S. federal income tax regardless of its source, or (iv) a trust if a court within the U.S. is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust. Certain trusts not described in clause (iv) above in existence on August 20, 1996 that elect to be treated as a U.S. person will also be a U.S. holder for purposes of the following discussion. All references to “holders” (including U.S. holders) are to beneficial owners of the old notes.

The term “Non-U.S. holder” refers to any beneficial owner of an old note who or which is not a U.S. holder.

If you are considering exchanging notes, we urge you to consult your tax advisor about the particular U.S. federal, state, local and foreign tax consequences of the exchange, ownership and disposition of the old notes and the application of the U.S. federal income tax laws to your particular situation.

The exchange of old notes for new notes, which are identical debt securities, registered under the Securities Act, in the exchange offer will not constitute a taxable exchange. As a result, (i) you will not recognize a taxable gain or loss as a result of exchanging your old notes for new notes; (ii) the holding period of the new notes you receive will include the holding period of the old notes you exchange; and (iii) the adjusted tax basis of the new notes you receive will be the same as the adjusted tax basis of the old notes you exchange determined immediately before the exchange.

Taxation of Interest. If you are a U.S. holder, you will be required to recognize as ordinary income any interest paid or accrued on the new notes, in accordance with your regular method of accounting for

Sale, Exchange or Redemption of New Notes. On the sale, retirement or redemption of your new note:


	•	You will have taxable gain or loss equal to the difference between the amount received by you (to the extent such amount does not represent accrued but unpaid interest, which will be treated as such) and your adjusted tax basis in the new note. Your adjusted tax basis in a new note generally will equal the portion of your purchase price for a Unit that was allocated to the old note. Under Treasury regulations, we are required to allocate your purchase price for a Unit among each note comprising a part of the Unit based on the respective fair market values of the notes. We intend to take the position that a ratable portion (based on principal amounts) of your purchase price of a Unit will be allocated to each of the Unit’s notes. Our allocation is binding on you for federal income tax purposes unless you disclose on a statement attached to your federal income tax return for the taxable year that includes the year of your acquisition of the related Unit that you are using an allocation that is different from our allocation.

	•	Your gain or loss will be capital gain or loss, and will be long-term capital gain or loss if you held the note (including the holding period for the old note) for more than one year. For an individual, the maximum tax rate on long-term capital gains is currently 15%. The deductibility of capital losses is subject to limitations.

Withholding Tax on Payments of Principal and Interest on New Notes. Generally, payments of principal and interest on a new note to a non-U.S. holder will not be subject to U.S. federal withholding tax, provided that in the case of an interest payment:


	•	you do not actually or constructively own 10% or more of the total combined voting power of all our voting stock;

	•	you are not a controlled foreign corporation that is related to us within the meaning of U.S. federal income tax laws; and

	•	you are either (A) the beneficial owner of the new note and you certify to the applicable payor or its agent, under penalties of perjury, that you are not a United States person and provide your name and address on a signed IRS Form W-8BEN (or a suitable substitute form), or (B) a securities clearing organization, bank or other financial institution, that holds customers’ securities in the ordinary course of your trade or business (a “financial institution”) and that certifies under penalties of perjury that such an IRS Form W-8BEN (or suitable substitute form) has been received from the beneficial owner by it or by a financial institution between it and the beneficial owner and furnishes the payor with a copy thereof.

Except to the extent otherwise provided under an applicable tax treaty, you generally will be taxed in the same manner as a U.S. holder with respect to interest payments on a new note if such interest is effectively connected with your conduct of a trade or business in the United States.

Gain on Disposition of the New Notes. You generally will not be subject to U.S. federal income tax on gain realized on the sale, exchange or redemption of a new note (except with respect to accrued and unpaid interest, which would be taxable as described above), unless:


	•	you are an individual present in the U.S. for 183 days or more in the year of such sale, exchange or redemption and either (A) you have a “tax home” in the U.S. and certain other requirements are met, or (B) the gain from the disposition is attributable to your office or other fixed place of business in the U.S.;


	•	the gain is effectively connected with your conduct of a trade or business in the U.S.; or

	•	you are subject to provisions in the Internal Revenue Code applicable to certain U.S. expatriates.

U.S. Holders. Information reporting will apply to payments of interest made by us on, or the proceeds of the sale or other disposition of, the new notes with respect to certain non-corporate U.S. holders, and backup withholding may apply unless the recipient of such payment has supplied a taxpayer identification number, certified under penalties of perjury, as well as certain other information or otherwise establishes an exemption from backup withholding. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against that holder’s U.S. federal income tax liability provided the required information is furnished to the IRS.

Non-U.S. Holders. Backup withholding and information reporting on Form 1099 will not apply to payments of principal and interest on the new notes by us or our agent to a Non-U.S. holder provided the Non-U.S. holder has provided the certification described above under “—Non-U.S. Holders— Withholding Tax on Payments of Principal and Interest on New Notes” or otherwise has established an exemption (provided that neither we nor our agent has actual knowledge that the holder is a U.S. person or that the conditions of any other exemptions are not in fact satisfied). Interest payments made to a Non-U.S. holder may, however, be reported to the IRS and to such Non-U.S. holder on Form 1042-S.

Information reporting and backup withholding generally will not apply to a payment of the proceeds of a sale of notes effected outside the U.S. by a foreign office of a foreign broker. However, information reporting requirements (but not backup withholding) will apply to a payment of the proceeds of a sale of new notes effected outside the U.S. by a foreign office of a broker if the broker (i) is a U.S. person, (ii) derives 50 percent or more of its gross income for certain periods from the conduct of a trade or business in the U.S., (iii) is a “controlled foreign corporation” for U.S. federal income tax purposes, or (iv) is a foreign partnership that, at any time during its taxable year is 50 percent or more (by income or capital interest) owned by U.S. persons or is engaged in the conduct of a U.S. trade or business, unless in any such case the broker has documentary evidence in its records that the holder is a Non-U.S. holder and certain conditions are met, or the holder otherwise establishes an exemption. Payment of the proceeds of a sale of new notes by a U.S. office of a broker will be subject to both backup withholding and information reporting unless the holder certifies its Non-U.S. status under penalties of perjury or otherwise establishes an exemption.

Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against that holder’s U.S. federal income tax liability provided the required information is furnished to the IRS.

The comments below are of a general nature and relate solely to holders of the old notes issued by MSX International, Ltd. They reflect the issuer’s understanding of current United Kingdom taxation law and United Kingdom Inland Revenue practice and they are subject to changes therein. They do not purport to constitute legal or tax advice. In addition, the comments relate only to the position of persons who are the absolute beneficial owners of the old notes and the coupons and may not apply to certain classes of person (such as dealers in securities and persons connected with the Issuer) to whom special rules may apply. These comments are not exhaustive.

Holders of old notes and prospective investors who are in any doubt as to their tax position or who may be subject to tax in any other jurisdiction should consult their professional advisers concerning the consequences of ownership and transfer of new notes issued by MSX International Limited (the “new UK notes”) on their own situation.

Payments on the new UK notes may be made without withholding or deduction on account of United Kingdom income tax so long as they are listed on a “recognized stock exchange” and are thus treated as “quoted Eurobonds” within the meaning of Section 349(4) of the Income and Corporation Taxes Act of 1988 (the “Act”). The new unit that includes the new UK notes will be listed on the Luxembourg or London Stock Exchange, each of which is currently a recognized stock exchange. Accordingly, so long as the UK notes are on the Luxembourg Stock Exchange, payments of interest should be exempt from withholding under the Act.

In all cases falling outside the exemption described above, interest on the new UK notes will be paid under deduction of United Kingdom income tax at the lower rate (currently 20 percent) subject to such relief as may be available either under the provisions of any applicable double taxation treaty or, in certain circumstances, where an exemption for payments between certain companies and partnerships applies. The latter exemption can apply where (inter alia) the person beneficially entitled to the interest is (i) a company resident in the United Kingdom, (ii) a company not resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which is required to bring the interest into account in computing its profits chargeable to United Kingdom corporation tax or (iii) a partnership each member of which is a company falling within (i) or (ii) above.

Interest on the new UK notes has a United Kingdom source and accordingly may be chargeable to United Kingdom tax by direct assessment. Where interest is paid without withholding or deduction, the interest will not be assessed to United Kingdom tax in the hands of holders of the new UK notes (other than certain trustees) who are not resident for tax purposes in the United Kingdom, except where such persons carry on a trade through a permanent establishment in the United Kingdom in connection with which the interest is received or to which the new UK notes are attributable, in which case tax may be levied on the United Kingdom permanent establishment. There are exemptions for interest received by certain categories of agents (such as some brokers and investment managers). Exemption from, or reduction of, such United Kingdom tax liability might be available under an applicable double taxation treaty.

In general, holders of new UK notes who are within the charge to United Kingdom corporation tax in respect of new UK notes will be charged to tax and obtain relief as income on all returns on and fluctuations in value of the new UK notes broadly in accordance with the statutory accounting treatment of the new UK notes in their hands.

The exchange of old notes for new UK notes is not expected to give rise to any additional charge UK corporation tax than would have arisen if the exchange had not taken place.

It is expected that the new UK notes will not be regarded by the Inland Revenue as constituting “qualifying corporate bonds” within the meaning of section 117 of the Taxation of Chargeable Gains Act 1992. Accordingly, a disposal of the new UK notes may give rise to a chargeable gain or an allowable loss for the purposes of the United Kingdom taxation of chargeable gains. There are provisions to prevent any particular gain (or loss) from being charged (or relieved) at the same time under these provisions and also under the provisions of the “accrued income scheme” described below.

The exchange of old notes for new UK notes, which are identical debt securities, is not expected to give rise to a charge to UK taxation.

On disposal of new UK notes by a holder, any interest which has accrued since the last interest payment date may be chargeable to tax as income under the rules of the “accrued income scheme” if that holder of new UK notes is resident or ordinarily resident in the United Kingdom or carries on a trade through a permanent establishment in the United Kingdom to which the new UK notes are attributable.

Persons in the United Kingdom (1) paying interest to or receiving interest on behalf of another person, or (2) paying amounts due on the redemption of the new UK notes to or receiving such amounts on behalf of another person, may be required to provide certain information to the United Kingdom Inland Revenue regarding the identity of the payee or person entitled to the interest and, in certain circumstances, such information may be exchanged with tax authorities in other countries.

On 3 June 2003 the EU Council of Economic and Finance Ministers adopted a new directive regarding the taxation of savings income. The directive is scheduled to be applied by Member States from 1 January 2005, provided that certain non-EU countries adopt similar measures from the same date. Under the directive each Member State will be required to provide to the tax authorities of another Member State details of payments of interest or other similar income paid by a person within its jurisdiction to an individual resident in that other Member State; however, Austria, Belgium and Luxembourg may instead apply a withholding system for a transitional period in relation to such payments, deducting tax at rates rising from 15% initially to 20% in 2008 and 35% in 2011. However, no withholding tax will be levied if a certificate is produced by the individual evidencing that he has declared his ownership of the bond to his local tax authority. The transitional period is to commence on the date from which the directive is to be applied by Member States and to terminate at the end of the first fiscal year following agreement by certain non-EU countries to the exchange of information relating to such payments.

No United Kingdom stamp duty or stamp duty reserve tax is payable on the issue of a note.

THE ABOVE SUMMARIES REFLECT CERTAIN ASPECTS OF CURRENT LAW AND PRACTICE IN THE UNITED STATES AND THE UNITED KINGDOM. HOLDERS OF OLD NOTES AND PROSPECTIVE NOTEHOLDERS WHO ARE IN DOUBT AS TO THEIR TAX POSITION OR WHO MAY BE SUBJECT TO TAX IN ANY OTHER JURISDICTION SHOULD CONSULT THEIR PROFESSIONAL ADVISERS CONCERNING THE OVERALL CONSEQUENCES OF OWNERSHIP AND TRANSFER OF THE NEW NOTES ON THEIR OWN SITUATION.

The exchange offer is not being made to, nor will we accept surrenders of old units for exchange from, holders of old units in any jurisdiction in which the exchange offer or the acceptance thereof would not be in compliance with the securities or blue sky laws of such jurisdiction.

This communication is directed solely at persons who (1) are outside the United Kingdom, or (2) are persons falling within Article 43(2)(a) of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (all such persons together are referred to as “relevant persons”). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.

The distribution of this prospectus and the offer and sale of the new units may be restricted by law in certain jurisdictions. Persons who come into possession of this prospectus or any of the new units must inform themselves about and observe any such restrictions. You must comply with all applicable laws and regulations in force in any jurisdiction in which you purchase, offer or sell the new units or possess or distribute this prospectus and, in connection with any purchase, offer or sale by you of the new units, must obtain any consent, approval or permission required under the laws and regulations in force in any jurisdiction to which you are subject or in which you make such purchase, offer or sale.

Under existing SEC interpretations, the new units will be freely transferable by holders other than our affiliates after the exchange offer without further registration under the Securities Act if the holder of the new units represents that it is acquiring the new units in the ordinary course of its business, that it has no arrangement or understanding with any person to participate in the distribution of the new units and that it is not an affiliate of ours, as such terms are interpreted by the SEC; provided that broker-dealers receiving new units in the exchange offer will have a prospectus delivery requirement with respect to resales of such new units. While the SEC has not taken a position with respect to this particular transaction, under existing SEC interpretations relating to transactions structured substantially like this exchange offer, participating broker-dealers may fulfill their prospectus delivery requirements with respect to new units (other than a resale of an unsold allotment of the new units) with the prospectus contained in the exchange offer registration statement.

Each broker-dealer that receives new units for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such new units. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new units received in exchange for old units where such old units were acquired as a result of market-making activities or other trading activities. We have agreed that, starting on the expiration date of the exchange offer and ending on the close of business one year after the expiration date, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until , 2003, all dealers effecting transactions in the new units may be required to deliver a prospectus.

A broker-dealer intending to use this prospectus in the resale of new units must so notify us on or prior to the expiration date. This notice may be given in the space provided in the letter of transmittal or may be delivered to the exchange agent.

We may, in certain cases, issue a notice suspending use of this exchange offer registration statement. If we do so, the period during which the registration statement must remain effective will be extended for a number of days equal to the number of days the registration statement was in suspense.

We will not receive any proceeds from any sale of new units by brokers-dealers. New units received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new units or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the

form of commissions or concessions from any such broker-dealer and/or the purchasers of any such new units. Any broker-dealer that resells the new units that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such new units may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit of any such resale of new units and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

For a period of 180 days after the expiration date of the exchange offer, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holder of the old units) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the old units (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

Certain legal matters with respect to the new units and the guarantees offered hereby will be passed upon for the company by Dechert LLP, Philadelphia, Pennsylvania and Dechert, London, England.

The financial statements of MSXI as of December 29, 2002 and December 30, 2001 and for each of the three fiscal years in the period ended December 29, 2002 included in this prospectus have been so included in reliance on the report (which contains an explanatory paragraph relating to the company’s accounting for preferred stock dividends) of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.

MSXI voluntarily complies with the informational requirements of the Securities Exchange Act of 1934 and files reports and other information with the SEC. You may read and copy the information that MSXI files with the SEC at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. In addition, MSXI files electronic versions of those materials with the SEC through the SEC’s EDGAR system. The SEC maintains a web site at http://www.sec.gov that contains reports and other information that registrants such as MSXI file electronically with the SEC.

MSXI has filed with the SEC a registration statement on Form S-4 under the Securities Act of 1933, covering the new units to be issued in the exchange offer (Registration No. 333- ). This prospectus, which is a part of the registration statement, does not contain all of the information included in the registration statement. Any statement made in this prospectus concerning the contents of any contract, agreement or other document is not necessarily complete. For further information regarding MSXI and the new units to be issued in the exchange offer, please reference the registration statement, including its exhibits. If MSXI has filed any contract, agreement or other document as an exhibit to the registration statement, you should read the exhibit for a more complete understanding of the documents or matter involved.

Copies of the registration statement, including all related exhibits and schedules, may be inspected without charge at the public reference facilities maintained by the SEC, or obtained at prescribed rates from the Public Reference Section of the SEC. In addition, you may request a copy of any of these filings, at no cost, by writing us at MSX International, Inc., 22355 West Eleven Mile Road, Southfield, MI 48034, Attention: David Crittenden.

The following documents filed by MSXI with the SEC under the Exchange Act are incorporated by reference in this prospectus:


	MSXI’s Annual Report on Form 10-K for the year ended December 29, 2002;

	MSXI’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2003;

	MSXI’s Quarterly Report on Form 10-Q for the quarter ended June 29, 2003; and

	MSXI’s Current Reports on Form 8-K filed with the SEC on July 7, 2003 and July 28, 2003.

Any future filings MSXI makes with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and before the offering is terminated are also incorporated by reference into this prospectus. The information incorporated by reference is considered a part of this prospectus, and subsequent information that MSXI files with the SEC will automatically update and

Upon written or oral request, you will be provided with a copy of the incorporated document without charge (not including exhibits to the document unless the exhibits are specifically incorporated by reference into the document). You may submit such a request for this material at the following address and telephone number:

In addition, documents incorporated by reference will be made available free of charge at the office of the paying agent in Luxembourg.

MSXI Limited is a private limited company incorporated under the laws of England and Wales. Certain of its directors and executive officers are resident outside of the United States and many of its assets are located outside of the United States. Although MSXI Limited has agreed, in accordance with the terms of the indenture, to accept service of process in the United States by agents designated for such purpose, it may not be possible for holders of new notes (a) to effect service of process upon certain of its directors or officers or (b) to enforce judgements of courts of the United States predicated upon the civil liability of such persons under the United States securities law against any such persons in the courts of a foreign jurisdiction. MSXI Limited has been advised by our English legal counsel, Dechert, that there is also doubt as to the direct enforceability in England against any of these persons, in an original action or in an action for the enforcement of judgements of United States courts, of civil liabilities predicated solely upon the federal securities law of the United States.

MSXI Limited is a company incorporated under the laws of England and Wales on September 24, 1985. Its registered office is located at Endeavour Drive, Festival Business Park, Basildon, Essex SS14 3WF, England. Its correspondence address is at its registered office.

The corporate object of MSXI Limited is to provide outsourced technical business services. MSXI Limited is entitled to enter into all business transactions and take any measures which are deemed to be necessary or useful to accomplish its corporate objects. MSXI Limited has an issued share capital of 17,500 preference shares and 8,880,000 ordinary shares of £1 each, all of which have been issued on a fully paid basis.

Erwin H. Billig is a Director of MSX International Limited, served as Chief Executive Officer of MSX International, Inc. from April 28, 1998 until January 2000 and has been Chairman of the Board of Directors of MSX International, Inc. since January 3, 1997. He served as Vice Chairman of MascoTech from 1994 to 1997 and was President and Chief Operating Officer of MascoTech from 1986 to 1994. He is also the Chairman of the Board of Directors of Titan Wheel International, Inc., and a director and Vice Chairman of Delco Remy International, Inc.

John Stewart Garnett has been Chief Financial Officer for European operations since July 1, 1997. Prior to joining MSX International Limited, Mr. Garnett served as Financial Director of a U.K. subsidiary of Lear Corporation Inc.

Frederick K. Minturn is a Director of MSX International Limited and has been Executive Vice President and Chief Financial Officer of MSX International, Inc. since January 3, 1997. Prior to joining MSX International, Inc., Mr. Minturn was a Vice President of MascoTech’s Automotive Operations group from 1994 through December 1996 and was a Group Controller of such operations since 1991.

John Bignall qualified as a lawyer in 1968 and has been associated with MSX International Limited, including its predecessors, for almost twenty years, during which he has acted both as a lawyer and as a director. At present, he is Secretary of MSX International Limited and of its immediate holding company.

Application has been made to list the old units on the Luxembourg Stock Exchange in accordance with the rules of that exchange, and the new units are expected to be listed on the Luxembourg Stock Exchange upon the expiration of the exchange offer. As soon as practicable after listing, a legal notice relating to the issue of the new units and the certified organizational documents of the issuers will be deposited with the Luxembourg Trade and Companies Registrar (Registre de Commerce et des Socíetes), where such documents may be examined and copies obtained. Notice of any optional redemption, change of control or any change in the rate of interest payable on the new units will be published in a Luxembourg newspaper of general circulation.

Pursuant to Chapter VI, Article 3, clause A/11/2 of the Rules and Regulations of the Luxembourg Stock Exchange, the new units are freely transferable on the Luxembourg Stock Exchange and therefore, no transaction involving the new units made on the Luxembourg Stock Exchange may be cancelled.

For so long as the new units are listed on the Luxembourg Stock Exchange and the rules of that exchange require, copies of the following documents may be inspected and obtained at the specified office of the listing agent in Luxembourg during normal business hours on any weekday:


	•	the organizational documents of MSXI and MSXI Limited;

	•	the most recent audited consolidated financial statements of MSXI and MSXI Limited, and any interim financial statements published by MSXI and MSXI Limited;

	•	the purchase agreement relating to the new units; and

	•	the indenture relating to the new units (which includes the form of the new notes).

We will maintain a listing agent in Luxembourg for as long as any of the new units are listed on the Luxembourg Stock Exchange. We reserve the right to vary such appointment and will publish notice of such change of appointment in a newspaper having a general circulation in Luxembourg. So long as the new units are listed on the Luxembourg Stock Exchange and so long as the rules of such stock exchange require, we will maintain a paying and transfer agent in Luxembourg.

The new units will be accepted for clearance through the facilities of Clearstream and notice will be given to the Luxembourg Stock Exchange and to a newspaper having a general circulation in Luxembourg announcing the relevant common codes and international securities identification numbers.

The creation and issuance of the new units has been authorized by a resolution of the board of directors of each of MSXI and MSXI Limited.

Under New York’s statute of limitations, any legal action upon the new units in respect of principal or interest must be commenced within six years after the payment thereof is due. Thereafter, such principal or interest will become generally unenforceable.


	•	there has been no material adverse change in our financial position since December 29, 2002; and

	•	we have not been involved in any litigation, administrative proceeding or arbitration relating to claims or amounts which are material in the context of the issue of the new units, and, so far as we are aware, no such litigation, administrative proceeding or arbitration is pending or threatened.

The accompanying notes are an integral part of the consolidated financial statements.

The accompanying financial statements present the consolidated assets and liabilities and results of operations of MSX International, Inc. and its majority owned subsidiaries (“MSXI”). MSXI is a holding company owned by Citicorp and affiliates and certain members of management. We are principally engaged in providing technical business services to automobile manufacturers and suppliers and other industries primarily in North America and Europe. We utilize a 52-53 week fiscal year, which ends on the Sunday nearest December 31.

All intercompany transactions and balances have been eliminated. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of only normal recurring items, which are necessary for a fair presentation. The operating results for the fiscal quarters and fiscal six months ended June 29, 2003 and June 30, 2002 are not necessarily indicative of the results of operations for the entire year. Reference should be made to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 29, 2002. Certain prior year amounts have been reclassified to conform to the presentation adopted during the current period.

Effective in December 2002 we acquired the remaining 25% of the outstanding common stock of Satiz Srl from Fiat SpA. The transaction had been contemplated as part of the original acquisition of 75% of the outstanding common stock of Satiz in December of 1999. The total purchase price was about $3.5 million based on formulas established at the time of the original 75% acquisition. The transaction was accounted for under the purchase method of accounting resulting in additional goodwill of $2.4 million. Satiz specializes in commercial and technical publishing in Europe and derives a significant portion of its sales from Fiat and related subsidiaries.

Effective January 1, 2002, we adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142. Under the new standard, goodwill is no longer amortized but is tested periodically for impairment. Additionally, SFAS No. 142 changes the methodology of assessing goodwill impairment. Under the new standard, goodwill is considered impaired if the book value of an operating unit exceeds its estimated fair value. Upon adoption of SFAS No. 142 we recorded a one-time, non-cash charge of about $47.8 million ($38.1 million net of taxes), to reduce the carrying value of goodwill. The charge is reflected as a cumulative effect of an accounting change in our consolidated results of operations, net of taxes. In calculating the impairment charge, the fair value of the operating units underlying our business was estimated using a discounted cash flow methodology.

The following summarizes the changes in our goodwill balances during the six months ended June 29, 2003:

As of December 29, 2002, accrued restructuring and severance costs totaled $4.5 million. Approximately $2.0 million and $4.9 million were charged to the restructuring and severance accrual during the second quarter and the first six months of 2003, respectively. These charges are comprised of severance and termination benefits associated with headcount reductions approved by management during the fourth quarter of 2002. Additional charges of $2.0 million were recorded during the first six months of 2003 primarily for additional severance and termination benefits approved and communicated by management prior to June 29, 2003. Remaining accrued severance costs totaled $1.6 million as of June 29, 2003 and are expected to be paid during 2003.

Accounts receivable includes both billed and unbilled receivables. Unbilled receivables amounted to $82.8 million and $66.8 million at June 29, 2003 and December 29, 2002, respectively. All such billings are expected to be collected within the ensuing year. Accounts receivable also include the portion of our billings for certain master vendor and supply chain management services attributable to services provided by our vendors which are passed on to our customers. These amounts totaled $41.9 million as of June 29, 2003 and $37.1 million as of December 29, 2002. A corresponding liability to our vendors for these amounts is recorded in accounts payable at the time the receivable is recognized.

As of June 29, 2003, $19.4 million was outstanding under the revolving credit portions of our credit facility and has been classified as long-term debt as we have both the ability and intent to refinance such amounts under the credit facility. Recent developments related to our debt arrangements are discussed in Note 13.

As of June 29, 2003 and December 29, 2002 there are 359,448 shares of 12% Series A Cumulative Mandatorily Redeemable Preferred Stock (the “Preferred Stock”) outstanding with a stated value of $100 per share or about $36 million in total. We are authorized to issue up to 1,500,000 shares of Preferred Stock, divided into two classes: 500,000 shares of Redeemable Series A Preferred Stock, par value $0.01, and 1,000,000 shares of New Preferred Stock, par value $0.01. As of June 29, 2003, we have not declared or paid any dividends. However, due to the mandatory redemption features of the preferred stock, dividends accrued totaled $41.1 million as of June 29, 2003. We may not declare or pay any dividends or other distribution with respect to any common stock or other class or series of stock ranking junior to the Preferred Stock without first complying with restrictions specified in the Amended and Restated Stockholders’ Agreement. Our ability to pay cash dividends, and to acquire or redeem the preferred stock, is subject to restrictions contained in our debt agreements.

Prior results of operations reflect a change in the treatment of accumulated dividends on the Preferred Stock. Accumulated dividends on Preferred Stock, which had been disclosed in previous filings, have been deducted from shareholders’ deficit and included with the related Preferred Stock on the consolidated balance sheets. The change in treatment was adopted during the fourth quarter of 2002 and had no impact on cash flows for any of the periods presented.

We account for stock options under the recognition and measurement principles of Accounting Principles Board Opinion No. 25 (“APB 25”), “Accounting for Stock Issued to Employees,” and related interpretations. Under APB 25 we have not recognized any expense related to employee stock options, as no options have been granted at a price below the estimated market price on the day of the grant. The following table illustrates the effect on net income for the fiscal quarters and fiscal six months ended June 30, 2002 and June 29, 2003 if we had applied the fair value recognition provisions of Statement of Financial and Accounting Standards (SFAS) No. 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation.

MSXI is a global provider of technical business services to the automotive and other industries. Our business includes: collaborative engineering services, human capital management services, and technical and marketing services. Collaborative engineering offers a full range of total product, custom, or single point engineering solutions. Human capital management services include a full range of staffing solutions, including direct support of our engineering and other collaborative services. Our technical and marketing services include solutions to quality, supply chain, and communication related customer needs. Certain operations within each of our segments have been aggregated following the provisions of SFAS No. 131 due to the similar characteristics of their operations, including the nature of their service offerings, processes supporting the delivery of the services, customers, and marketing and sales processes.

The accounting policies of our segments are the same as those for MSXI except that the financial results for each segment are presented using a management approach. We evaluate performance based on earnings before interest, taxes, amortization and non-cash charges (EBITA), including the Michigan Single Business Tax and other similar taxes. The results of each segment include certain allocations for general, administrative, and other shared costs. However, certain shared costs and termination and restructuring costs, are not allocated to the segments.

A reconciliation of total segment EBITA to consolidated income (loss) before income taxes, minority interests and equity in affiliates is as follows:

In May 2003, the Financial Accounting Standards Board (FASB) issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. SFAS No. 150 establishes standards for how companies classify and measure in their statement of financial position certain financial instruments with characteristics of both liabilities and equity. It requires that a company classify certain financial instruments as liabilities because they embody an obligation of the company. This statement is effective for financial instruments entered into or modified after May 31, 2003 except for mandatorily redeemable financial instruments. For mandatorily redeemable financial instruments of nonpublic entities, such as MSXI, this statement is effective for the first fiscal period beginning after December 15, 2004. We are in the process of assessing the impact that SFAS No. 150 will have on our consolidated results of operations and financial position.

In connection with our $130 million of senior subordinated notes outstanding, each of our significant domestic restricted subsidiaries, as defined in the related bond indenture (the “Guarantor Subsidiaries”), irrevocably and unconditionally guarantee MSXI’s performance as primary obligor. The following condensed consolidating financial data provides information regarding the financial position, results of operations and cash flows of the Guarantor Subsidiaries as set forth below. Separate financial statements of the Guarantor Subsidiaries are not presented because management has determined those would not be material to the holders of the senior subordinated notes.

The Guarantor Subsidiaries account for their investments in the non-guarantor subsidiaries, if any, on the equity method. The principal elimination entries are to eliminate the investments in subsidiaries and intercompany balances and transactions. The following presentation does not reflect changes in the makeup of guarantors and non-guarantors which will result from the refinancing transactions discussed in Note 13. As a result of the refinancing transactions, certain subsidiaries classified as non-guarantor subsidiaries will be presented as guarantor subsidiaries in future filings.

On August 1, 2003 we completed a private offering of senior notes totaling $100.5 million that mature October 15, 2007. The transaction included the issuance of $75.5 million aggregate principal amount of 11% senior secured notes, priced to yield 11.25%, and $25.0 million aggregate principal amount of 11.5% notes. The notes were issued by both MSX International, Inc. and MSX International Limited (MSXI Limited), a wholly-owned subsidiary in the United Kingdom. The $25.0 million of notes were issued to Citicorp Mezzanine III, L.P. In connection with the $25.0 million issuance, we also granted to Citicorp Mezzanine III, L.P. the right to purchase a total of 666,649 shares of common stock at a price of $0.01 per share through August 1, 2013. Proceeds from the combined offering totaled $95.5 million, net of related expenses and discount and were used to repay substantially all debt outstanding under our credit facility.

Upon consummation of this offering, our second secured term note was amended and restated into a $14.7 million note issued by MSX International, Inc. and a $2.4 million note issued by MSXI Limited. The amendments to the note also include extending the maturity from June 7, 2007 to January 15, 2008, and resetting the covenants in the notes so that they are equivalent to the covenants in the senior notes sold on August 1, 2003.

Concurrent with the offering, we entered into an amended and restated credit facility with Bank One, N.A. Terms of the amendment allow for revolving debt up to $40.0 million on a secured basis through July 2006 plus an additional $5 million available exclusively for the issuance of letters of credit. Available borrowings are subject to adequate accounts receivable balance requirements.

The senior secured notes issued by MSX International, Inc. are secured by security interests in substantially all of the assets of the company and its domestic subsidiaries, subject to permitted liens. Payment obligations under the senior secured notes issued by MSX International, Inc. are guaranteed by all domestic subsidiaries of MSX International, Inc. Upon completion of the senior secured note offering, the guarantor subsidiaries under the senior subordinated notes were expanded to include all domestic subsidiaries consistent with the senior secured notes.


	•	MSXI—the parent company and issuer

	•	The guarantor subsidiaries

	•	The non-guarantor subsidiaries

	•	MSXI on a consolidated basis

Investments in subsidiaries, if any, are accounted for under the equity method. The principal elimination entries are to eliminate the investments in subsidiaries and intercompany balances and transactions. Separate financial statements for the guarantor and non-guarantor subsidiaries are not presented because management has determined those would not be material to the holders of the senior subordinated or senior secured notes.

The senior secured notes issued by MSXI Limited are secured by the accounts receivable of MSXI Limited and substantially all of the assets of MSXI and its domestic subsidiaries, subject to permitted liens. Payment obligations under the senior secured notes issued by MSXI Limited are guaranteed jointly and severally by MSX International, Inc. and all of its domestic subsidiaries. Because of the parent and subsidiary guarantee structure we are required to present the following condensed consolidating financial information for:

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of MSX International, Inc. and its subsidiaries at December 29, 2002 and December 30, 2001, and the results of their operations and their cash flows for each of the three fiscal years in the period ended December 29, 2002, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As explained in Note 7 to the consolidated financial statements, the Company changed its method of accounting for goodwill effective December 31, 2001.

As explained in Note 12 to the consolidated financial statements, the Company revised the accounting for preferred stock dividends.

The accompanying notes are an integral part of the consolidated financial statements.

The accompanying financial statements present the assets, liabilities and results of operations of MSX International, Inc. and its consolidated subsidiaries (“MSXI”). MSXI is a holding company owned by Citicorp and affiliates and certain members of management. Since our formation we have completed numerous acquisitions, the most recent of which are disclosed in Note 3. The results of operations of acquired companies have been included in the results of operations of MSXI from the effective date of each transaction.

We are principally engaged in providing technical business services to automobile manufacturers and suppliers and other industries primarily in North America and Europe.

a. Principles of Consolidation: The accompanying financial statements include the accounts of MSX International, Inc. and all majority owned subsidiaries. Significant intercompany transactions have been eliminated. Companies that are 20 to 50 percent owned by MSX International, Inc. or its wholly owned subsidiaries are accounted for by the equity method of accounting. We use a 52-53 week fiscal year that ends on the Sunday nearest December 31.

b. Cash and Cash Equivalents: All highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.

c. Receivables: Receivables are presented net of aggregate allowances for doubtful accounts of $2.7 million and $4.3 million at December 30, 2001 and December 29, 2002, respectively.

d. Inventory: Inventory is comprised of raw materials, parts and supplies which are stated at the lower of cost or net realizable value, with cost determined using the first-in, first-out method.

e. Property and Equipment: Property and equipment, including significant betterments to leased facilities, are recorded at cost. Upon retirement or disposal of property and equipment, the cost and accumulated depreciation are removed from the accounts, and any gain or loss is included in income. Maintenance and repair costs are charged to expense as incurred.

Under the provisions of Statement of Position 98-1, costs associated with software developed or obtained for internal use are capitalized when both the preliminary project stage is complete and management has authorized funding of the development program. Such costs are included in computers, peripherals and software. Capitalized costs include both external costs of software and consulting as well as payroll and payroll related costs of MSXI personnel working directly on the development project. Internal costs capitalized are not material to the consolidated balance sheet at December 30, 2001 and December 29, 2002.

f. Goodwill and Other Intangibles: The excess of purchase price, including direct cost of acquisition, over the estimated fair value of acquired assets and assumed liabilities is allocated to goodwill. Management evaluates the carrying value of goodwill when events or circumstances warrant such a review, and in any case, annually during the fourth quarter of each year.

g. Fair Value of Financial Instruments: The estimated fair value of cash and cash equivalents, accounts receivable, accounts payable, and short-term debt approximate their carrying amounts. The estimated fair value and carrying amounts of long-term debt borrowings are reported in Note 9.

h. Stock Options: We account for stock options in accordance with Accounting Principles Board Opinion No. 25 (“APB 25”), “Accounting for Stock Issued to Employees”. Under APB 25, we recognize no compensation expense related to stock options issued as no options have been granted at a price below the estimated market price on the day of grant. Had compensation cost for stock options issued during the last three fiscal years been determined consistent with SFAS No. 123, “Accounting for Stock-Based Compensation”, our net income (loss) would have been $14.9 million, $(0.5) million, and $(62.7) million during fiscal 2000, 2001 and 2002, respectively. The weighted average fair value of options granted was $0.65, $0.0, and $0.42 during 2000, 2001, and 2002, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

i. Foreign Currency Translation and Transactions: Net assets of operations outside of the United States are translated into U.S. dollars using current exchange rates with the effects of translation adjustments included in shareholders’ deficit as a separate component of comprehensive income. Revenues and expenses of operations outside of the United States are translated at the average rates of exchange during the period. Gains and losses arising from transactions denominated in currencies other than the functional currency of a particular entity are included in income. Net transaction gains and losses were not material to our results of operations during the periods presented.

j. Revenue Recognition: Our revenue is primarily comprised of revenue from fixed price contracts and time and material contracts. Revenues from fixed price contracts are recognized using the percentage of completion method, measured by comparing the percentage of labor costs incurred to date to the estimated total labor costs for each contract. Revenues from time and material contracts are valued at selling price based on contractual billing rates. Revenues from certain master vendor and supply chain management programs are recorded, net of billings from sub-suppliers, at the completion of each individual service.

Contract costs include all direct material and labor costs and indirect costs such as indirect labor, supplies, tools and repairs. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in fixed price contracts may result in revisions to estimates of costs and revenues and are recognized in the period in which the revisions are determined.

k. Depreciation: Depreciation is computed using the straight-line method over the estimated useful lives of assets as follows:

Leasehold improvements are amortized on a straight-line basis over their estimated useful lives or the term of the lease, whichever is shorter.

l. Income Taxes: Deferred income taxes are recorded to reflect the differences between the tax basis and financial reporting basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

m. Foreign Currency Contracts: MSXI has significant operations outside of the United States that are subject to foreign currency exchange risk. We may periodically hedge transactions or obligations in non-functional currencies in order to mitigate this risk. During the fiscal year ended December 31, 2000, we entered into forward foreign currency contracts to hedge certain foreign currency financing transactions. Unrealized gains/losses on the forward contracts are recognized as an adjustment to the gains/losses recognized on the underlying hedged transaction to the extent they are correlated. The uncorrelated net losses on such contracts were not material to our results of operations during fiscal 2000. No such contracts were entered into during fiscal 2001 or 2002.

n. Reclassifications: Certain prior year amounts have been reclassified to conform to the presentation adopted during fiscal 2002.

o. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from such estimates and assumptions.

p. Recently Issued Accounting Pronouncements: In July 2002, the FASB issued SFAS No. 146 “Accounting for Costs Associated with Exit or Disposal Activities”. This statement requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of the commitment to an exit or disposal plan. This statement will be effective for any exit or disposal activities initiated after December 31, 2002. The adoption of this statement will principally impact the ultimate timing of when costs associated with any future exit or disposal activities are recorded as expense.

In December 2002, the FASB issued SFAS No. 148 “Accounting for Stock-Based Compensation Transition and Disclosure”. This statement provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this statement amended the disclosure requirements of SFAS No. 123 to require more prominent and more frequent disclosures in financial statements about the effects of stock-based compensation. The disclosure provisions will be adopted in the first quarter of fiscal 2003.

In November 2002, the FASB issued FASB Interpretation (FIN) No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” FIN No. 45 requires a guarantor to recognize, at the inception of a qualified guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. MSXI is currently reviewing these recognition and measurement provisions, which are effective on a prospective basis for qualified guarantees issued or modified after December 31, 2002, to determine whether they will have a material impact on its consolidated financial statements. The disclosure requirements of FIN No. 45, which are effective for fiscal 2002, are presented in Note 11 to these consolidated financial statements.

On February 23, 2000 we acquired the professional staffing operations of Corporate Staffing Resources, Inc. (the “CSR Acquisition”). Specifically, we acquired 100% of the outstanding common stock of Intranational Computer Consultants, Inc. and Programming Management and Systems, Inc. and selected assets and liabilities of CMS Management Services and Ascend. The total purchase price, upon

settlement of certain contractual matters, was about $31.8 million. These companies provide information technology and technical professional staffing services throughout the United States with combined historical annual sales in excess of $57 million. The CSR Acquisition was accounted for under the purchase method of accounting, resulting in goodwill of $26.9 million.

Effective January 1, 2002, we completed the acquisition of selected assets and liabilities of Draupner Associates AB in Gottenberg, Sweden for a total purchase price at closing of about $2.4 million, before acquisition related costs, with an additional amount payable contingent on the achievement of an annual earnings target. Draupner’s principal business is digital documentation and translation services for the automotive and related industries. Upon completion, the Draupner business was integrated with our custom communication service offerings. Also effective January 1, 2002, we acquired the remaining 51% of the outstanding common stock of Cadform-MSX Engineering GmbH through a series of transactions that were contemplated at the time of our previous investment in Cadform. Specifically, we exercised our option to acquire an additional 16% of the common stock of Cadform for about $0.3 million. The remaining 35% of their common stock was acquired in exchange for a 7.8% interest in our existing engineering business in Germany. Prior to these transactions, we owned 49% of the outstanding common stock of Cadform. The transactions were accounted for under the purchase method of accounting resulting in goodwill of $8.3 million.

In addition to the above, in September 2001 we completed a strategic investment of about $1.6 million in itiliti, Inc., in the form of a bridge loan convertible to preferred stock. The investment is accounted for under the cost method. itiliti is a strategic partner in our human capital management practice.

All of the above transactions were funded through a combination of cash from operations and borrowings under our credit facility. The operating results of acquired companies have been included in our consolidated operating results from the effective date of the acquisition. The proforma effects of the above transactions would not be materially different from reported results for the periods presented.

The terms of certain of our acquisition agreements provide for additional contingent consideration to be paid over a period of up to two years if the acquired entity’s future operating results exceed targeted levels. Contingent consideration is earned when the acquired entity’s financial performance grows in excess of the targeted levels established at the time of acquisition. Such additional consideration is recorded, when earned, as additional purchase price. In this regard, we recorded additional liabilities for consideration during 2000 and 2001 related to prior year acquisitions, which resulted in additional goodwill capitalization of about $15.4 million and $2.1 million, respectively. No such consideration was recorded or paid during 2002.

During the fourth quarter of 2002, we completed the sale of our human capital management businesses in Italy and recognized losses on the valuation of certain long-term investments. Quandoccorre Interinale and QR Quandoccorre were sold for net proceeds of about $1.0 million, resulting in a loss on sale of $2.7 million. The sale was completed as part of our restructuring efforts in response to current and forecasted operating losses generated by these businesses. These companies had been acquired through a series of transactions during fiscal 1999 and 2000.

Also during the fourth quarter of 2002, we recognized losses on our investments in Prototipo Holding BV and MTE Groups LLC totaling $1.6 million and $2.4 million, respectively, reflecting reductions in the market value of our investments. The investment in Prototipo Holding BV, representing a 2% interest, was acquired in November of 2000 and was accounted for under the cost method. A remaining investment of $0.6 million is included in our consolidated balance sheet after the write-down. The investment in MTE Groups, representing a 49% interest, was acquired in 2001 and had been accounted for under the equity method. The write-down of MTE comprised the balance of our investment and $0.7 million of receivables for certain services provided to MTE. The charges were determined based upon an evaluation of the financial stability of these businesses and the best available market information.

During fiscal 2001 and 2002, we recorded restructuring and severance costs totaling $1.3 million and $8.0 million, respectively. Charges recorded during 2002 included $0.3 million related to unfavorable sub-leasing arrangements and related closure costs with the balance of 2001 and 2002 charges comprised of severance and termination benefit costs associated with headcount reductions primarily in North America and Europe. Restructuring actions were taken in accordance with approved management plans. Remaining accrued severance costs totaled $4.0 million as of December 29, 2002 and are expected to be paid during fiscal 2003.

A significant portion of our sales is made to manufacturers in the automotive and transportation related industries. Sales to significant automotive customers, including their automotive subsidiaries, as a percent of total net sales were:

At December 30, 2001 and December 29, 2002 the foregoing four customers and their subsidiaries accounted for approximately 52% and 58%, respectively, of the billed accounts receivable balance.

Accounts receivable includes both billed and unbilled receivables. Unbilled receivables amounted to $99.1 million and $66.8 million at December 30, 2001 and December 29, 2002, respectively. All such billings are expected to be collected within the ensuing year. Accounts receivable also include the portion of our billings for certain master vendor and supply chain management services attributable to services provided by our vendors, which are passed on to our customers. These amounts totaled $49.7 million as of December 30, 2001 and $37.1 million as of December 29, 2002. A corresponding liability to our vendors for these amounts is recorded in accounts payable at the time the related receivables are recorded.

Effective January 1, 2002, we adopted the provisions of SFAS No. 142. Under the standard, goodwill is no longer amortized but is tested periodically for impairment. Additionally, SFAS No. 142 changes the methodology of assessing goodwill impairment. Under the standard, goodwill is considered impaired if the book value of an operating unit exceeds its estimated fair value. Upon adoption of SFAS No. 142 we recorded a one-time, non-cash charge of $47.8 million, before related taxes, to reduce the carrying value of goodwill. The initial charge is reflected as a cumulative effect of an accounting change in our consolidated results of operations. During the fourth quarter of 2002 we updated our annual goodwill valuation analysis resulting in an additional pre-tax charge of $8.7 million. In calculating both of the impairment charges, the fair value of the operating units underlying our business was estimated using a discounted cash flow methodology.

Actual results for the year ended December 29, 2002 and pro forma results for the years ended December 31, 2000 and December 30, 2001 had we applied the non-amortization provisions of SFAS No. 142 are as follows:

The following summarizes the changes in our goodwill balances by service line during the fiscal year ended December 29, 2002:

Goodwill recorded during the period was generated from the consolidation of Cadform-MSX Engineering and the purchase of the Draupner business and the remaining shares of Satiz Srl, as disclosed in Note 3. Goodwill generated from these transactions is generally not deductible. A substantial portion of goodwill generated from the consolidation of Cadform was previously included in the carrying amount of our investment in Cadform-MSX Engineering as of December 30, 2001.

Deferred income/advance payments represent both payments from customers received in advance of revenues recognized under the percentage of completion method and payments received in advance of billings from sub-contract vendors.

The aggregate maturities of borrowings outstanding at December 29, 2002 are as follows:

At December 29, 2002, we have $130 million of 11 3/8% unsecured senior subordinated notes outstanding and registered under the Securities Act of 1933. The notes are unsecured senior subordinated obligations of the company and mature on January 15, 2008. Interest on the notes is payable semi-annually at 11 3/8% per annum and commenced July 15, 1998. The notes may be redeemed subsequent to January 15, 2003 at premiums that begin at 105.6875% and decline each year to face value for redemptions taking place after January 15, 2006. Upon the occurrence of a Change of Control, as defined in the bond indenture, the notes may be redeemed at the option of the noteholders at a premium of one percent, plus accrued and unpaid interest, if any. The notes contain covenants which, among others, limit the incurrence of additional indebtedness and restrict capital transactions, distributions and asset dispositions of certain subsidiaries.

In connection with the $130 million of senior subordinated notes, each of our significant domestic restricted subsidiaries, as defined in the bond indenture (the “Guarantor Subsidiaries”), irrevocably and unconditionally guarantees MSXI’s performance under the notes as primary obligors. See Note 18 for additional information.

In December 1999, we completed an amended and restated credit facility with commercial banks and institutional lenders led by Bank One N.A., as agent. The facility provided revolving credit up to $100 million and five and seven-year term loans totaling $105 million, all on a senior secured basis. During 2001 and 2002, we completed the first and second amendments to the amended and restated credit facility. As a result of the second amendment, available funds under the revolving credit portion of the credit facility were reduced from $100 million to $85 million. Also in conjunction with the second amendment, we entered into a second secured term loan on July 31, 2002 as discussed below. Effective February 14, 2003, we completed the third amendment to our amended and restated credit facility. As part of the third amendment, our equity sponsors, Citicorp and affiliates, committed to provide up to $10.8 million of alternative senior funding pursuant to an amendment to our second secured term loan. Such funding would be triggered to resolve potential future defaults in our senior leverage and our fixed charge coverage ratios through June 30, 2004. Proceeds, if utilized, would be used to make partial principal repayments of the existing bank term loans.

Both the revolving credit and term loan borrowings are subject to satisfaction of borrowing base requirements, based on accounts receivable balances, and financial reporting and operating covenants. The revolving credit portion of the facility provides for borrowings as revolving credit loans, letters of credit and swingline loans. Revolving credit loans, swingline loans and letters of credit (collectively “Revolving Debt”) are payable on demand. Interest on loans under the credit facility is payable monthly or, if earlier, at the end of each interest period, and accrues at an annual rate equal to a floating rate, as defined, except for swingline loans which accrue at an annual rate equal to a fixed or floating rate as negotiated at the time of borrowing.

The five-year $30 million term loan, as amended and restated, matures on December 7, 2004 with principal payments due quarterly, on a graduated basis, until maturity. The seven-year $75 million senior secured institutional term loan matures on December 7, 2006. Principal payments of 0.25% of the $75 million institutional term loan are payable quarterly in years one through six with the balance payable in year seven. The term loans are also subject to mandatory prepayments if MSXI generates excess cash flows, as defined, during any fiscal year. As a result of excess cash flows generated during 2001, a prepayment of $9.1 million was made on outstanding term loans during fiscal 2002.

Each of our significant domestic subsidiaries and selected other subsidiaries guarantee all obligations of MSXI under the credit facility. In addition, MSXI has pledged the stock of such domestic subsidiaries and 65% of the stock of significant foreign subsidiaries. Additionally, a first lien exists on substantially all assets of such domestic subsidiaries. Pursuant to the agreement, we also provide a lien, pledge or comparable security interest on material assets in the United Kingdom, the Netherlands and Australia. The obligations of MSXI under the credit facility and the second secured term loan rank senior to all other indebtedness, including the senior subordinated notes.

The credit facility contains certain reporting covenants, customary affirmative covenants and various negative covenants including, but not limited to, certain limitations on mergers, sales of assets, acquisitions, liens, investments, capital expenditures, indebtedness, contingent obligations, dividends, subsidiaries’ ability to agree to dividend restrictions, affiliate transactions and changes of business. The credit facility also contains certain covenants with respect to employee benefit arrangements and environmental matters and certain financial covenants. Financial covenants include minimum levels of EBITDA, net worth, and required total leverage, senior leverage, fixed charge and interest coverage ratios, all as defined in the agreement. As of December 29, 2002, $12.6 million was outstanding under the revolving credit portion of our credit facility and has been classified as long-term debt as we have both the ability and intent to refinance such amounts under the credit facility.

In conjunction with the second amendment to our credit facility on July 10, 2002 we entered into a second secured term loan with an affiliate of Citicorp, our majority owners, totaling about $15.5 million. The second secured term loan is secured by a second priority security interest on all assets securing our amended and restated credit agreement. The loan matures on June 7, 2007, with quarterly interest accruing at 10% per annum. Interest is not payable until the later of June 7, 2007, or the date on which payment in full of all obligations under the amended and restated credit agreement are made. In connection with the third amendment to our credit facility, as discussed above, the second secured term loan was amended to provide up to $10.8 million of additional funding if required under the terms of the amendment.

Satiz S.r.l., which was acquired on December 31, 1999, maintains a financing arrangement with Fidis S.p.A. that provides for borrowings up to 100% of its eligible accounts receivable, as defined in the agreement. As of December 29, 2002, borrowings under the arrangement bear interest at the Euribor rate plus 1.25% and are collateralized by the underlying accounts receivable. The agreement is renewed annually unless terminated by either party. Fidis S.p.A. is a subsidiary of Fiat S.p.A., who owned a minority investment in Satiz until December 2002.

Certain of our foreign subsidiaries maintain lines of credit with local banks to provide backup liquidity or to finance operational cash flows as needed. In general, interest accrues on the lines of credit at floating rates, as determined by the applicable bank, with amounts outstanding payable on demand. Agreements are subject to termination at any time with proper notice provided by the bank. Included in other debt at December 29, 2002 is $3.3 million outstanding under the BHF Bank Credit Facility maintained by Cadform-MSX Engineering GmbH. This facility provides for borrowings up to 4.7 million euro at both fixed and floating interest rates. Amounts outstanding are currently payable on demand and are partially secured by a guarantee and letter of credit provided by MSX International.

The estimated fair values and carrying amounts of debt outstanding are as follows:

The fair value of senior subordinated notes was determined based on quoted market prices. The fair value of the second secured term loan approximates its carrying value based on best available market information. The fair values of amounts outstanding under the credit facilities approximate their carrying amounts as the variable rates inherent in the related financial instruments reflect changes in the overall market interest rates.

Book overdrafts represent checks drawn on zero balance accounts that have not yet been presented to our banks for funding. Such overdrafts are funded when the related checks are presented and are not subject to finance charges. There were aggregate book overdrafts of $17.6 million and $26.9 million at December 30, 2001 and December 29, 2002, respectively. Such balances are included in accounts payable and drafts in the consolidated balance sheets.

MSXI is from time to time subject to various legal actions and claims incidental to our business. Litigation is subject to many uncertainties and the outcome of individual litigated matters is not predictable with assurance. It is the opinion of management that the outcome of such matters will not have a material adverse impact on the consolidated financial position, results of operations or cash flows of MSXI.

In conjunction with certain transactions and in the ordinary course of business, MSXI occasionally provides routine indemnifications relating to the enforceability of trademarks, coverage for legal and environmental issues, as well as provisions for other items. Currently, MSXI has several such agreements in place with various expiration dates. Based on historical experience and evaluation of the specific indemnities, we do not believe that any material loss related to such indemnifications is likely and therefore no related liability has been recorded. In addition, MSXI has several standby letter of credit agreements, none of which are considered material as of December 29, 2002.

MSXI and its subsidiaries have leases for real estate and equipment utilized in its business. In most cases, management expects that in the normal course of business these leases will be renewed or replaced by other leases. Future minimum rental payments required under leases that have an initial or remaining non-cancelable lease term in excess of one year are as follows:

Rental expense approximated $22.6 million, $24.4 million and $26.3 million, net of rental reimbursements, in each of fiscal 2000, 2001 and 2002, respectively.

As of December 30, 2001 and December 29, 2002 there are 360,000 shares and 359,448 shares, respectively of 12% Series A Cumulative Mandatorily Redeemable Preferred Stock (the “Preferred Stock”) outstanding with a stated value of $100 per share or about $36 million in total. We are authorized to issue up to 1,500,000 shares of Preferred Stock, divided into two classes: 500,000 shares of Redeemable Series A Preferred Stock, par value $0.01, and 1,000,000 shares of New Preferred Stock, par value $0.01.

Dividends on the Preferred Stock are payable in cash at the rate per annum equal to 12% of the stated value plus an amount equal to any accumulated and unpaid dividends. The Preferred Stock, which has no voting rights, is mandatorily redeemable at the earlier of December 31, 2008 or the date on which a sale transaction, as defined, occurs. We may redeem any or all of the Preferred Stock at our election prior to December 31, 2008. In both instances, the redemption price shall be the sum of $100 plus an amount equal to all accrued and unpaid dividends. We may also elect to acquire shares of the Preferred Stock from time to time without redeeming or otherwise acquiring all or any other issued shares of the Preferred Stock pursuant to the terms of the Amended and Restated Stockholders’ Agreement. Upon liquidation, dissolution or winding up, holders of preferred stock are entitled to receive out of MSXI’s legally available assets, before any amount is paid to holders of common stock, an amount equal to $100 per share of preferred stock, plus all accrued and unpaid dividends to the date of final distribution. If available assets are insufficient to pay the holders of the outstanding shares of preferred stock in full, the assets, or proceeds from the sale of the assets, will be distributed ratably among the holders of the preferred stock.

As of December 29, 2002, we have not declared or paid any dividends. However, due to the mandatory redemption features of the preferred stock, dividends accrued totaled $36.7 million as of December 29, 2002. We may not declare or pay any dividends or other distribution with respect to any common stock or other class or series of stock ranking junior to the Preferred Stock without first complying with restrictions specified in the Amended and Restated Stockholders’ Agreement. Our ability to pay cash dividends, and to acquire or redeem the preferred stock, is subject to restrictions contained in credit agreements as discussed in Note 9.

Prior financial statements reflect a change in the treatment of the accumulated dividends on the Preferred Stock. As reflected in the consolidated balance sheets and statements of shareholders’ deficit, accumulated dividends on the Preferred Stock, which had been disclosed in previous filings, have been deducted from shareholders’ deficit and included with the related Preferred Stock. The change in treatment has no impact on net income (loss) or cash flows for any of the periods presented.

Effective December 28, 2000, the Board of Directors approved an increase in the number of authorized shares of Common Stock from 2,000,000 shares to 400,000,000 shares (consisting of 200,000,000 shares of each of Class A and Class B Common Stock, respectively). Effective on the same day, the Board of Directors approved a 200-for-one stock split on all issued and outstanding Common Stock in the form of a stock dividend. Accordingly, all share amounts have been restated to reflect the stock split.

During the first quarter of fiscal 2001, a subsidiary of MSX International, Inc. completed a sale of unregistered securities to certain directors and members of management. The securities were sold in units with each unit comprised of MSX International Inc.’s Series A Preferred Stock, par value $0.01 per share, and Class A Common Stock, par value $0.01 per share. In total, 9,936 shares of Series A Preferred Stock and 482,400 shares of Class A Common Stock were sold. The shares of Series A Preferred Stock and Class A Common Stock, which comprised the units sold, were acquired from Citicorp, our majority stockholder, at a price equal to the price at which the units were sold to management. The entire proceeds of $3.6 million were used to pay the purchase price of the shares acquired from Citicorp.

Included in additional paid-in-capital at December 30, 2001 and December 29, 2002 is $(28.7) million related to the acquisition of selected assets and operations from MascoTech Automotive Systems Group, Inc. and MascoTech, Inc. on January 3, 1997. As this acquisition did not involve a change in control, it was recorded at carry-over basis with amounts paid to MascoTech, Inc. in excess of book value reducing additional paid-in-capital.

As of December 29, 2002, MSXI held a $3.2 million note receivable from an officer of the company. The loan bears interest at 2.48% per year and matures on February 28, 2011. Interest accrues and is payable annually with the principal amount due upon maturity or the occurrence of certain events. The loan is collateralized by a pledge to MSXI of shares of our Class A Common Stock. Interest income related to this note approximated $0.2 million and $0.1 million during fiscal 2001 and 2002, respectively.

We maintain a qualified cash or deferred compensation plan under Section 401(k) of the Internal Revenue Code. Participation in this plan is available to substantially all salaried employees and to certain groups of hourly employees. Under the plan, employees may elect to defer up to 20 percent of their annual wages, subject to the limitations of the Internal Revenue Code. For the periods presented, MSXI contributed matching contributions, at varying rates, for all participating employees. Effective December 1, 2001, substantially all matching contributions were suspended until a future date to be determined by MSXI. The annual cost to administer the plan and fund matching contributions was $2.1 million in fiscal 2000, $1.7 million in fiscal 2001 and $0.1 million in fiscal 2002.

Contributions to union-sponsored, multi-employer pension plans were about $0.3 million in each of fiscal 2000, 2001, and 2002. These plans are not administered by MSXI and contributions are determined in accordance with provisions of negotiated labor contracts. Effective in August 2001, we withdrew our participation in these multi-employer pension plans. The pension liability assigned to MSXI upon withdrawal of $0.8 million is being funded on a quarterly basis over a period of 5 years.

We also have an unfunded deferred compensation plan for certain salaried employees. Individual participants make pre-tax contributions to the plan and MSXI matches up to 5 percent of the individual’s annual salary. MSXI contributions vest over a period of time. Individuals may elect to receive a lump sum or defined payments of vested balances upon retirement or termination. The deferred compensation plan liability was $3.9 million and $3.2 million December 30, 2001 and December 29, 2002, respectively. This deferred compensation plan liability is an unfunded and unsecured obligation of MSXI.

Included in deferred compensation liabilities at December 30, 2001 and December 29, 2002 is $8.0 million and $8.2 million, respectively, of deferred employee termination indemnities. The accrued indemnities are obligations of Satiz, which was acquired effective December 31, 1999. Under Italian labor laws and regulations all employees are entitled to an indemnity upon termination of their employment relationship. The benefit accrues to the employees on a pro-rata basis during their employment period and is based upon individual salaries. The vested benefit payable accrues interest, and employees can receive advances thereof, in certain specified situations, all defined in the applicable labor contract regulations. The liability at December 30, 2001 and December 29, 2002 reflects the total amount of the indemnities on an undiscounted basis, net of any advances taken, that applicable employees would be entitled to receive if termination were to occur as of that date.

With the acquisition of APX International during 1997, we acquired certain obligations with respect to a frozen defined benefit pension plan. The plan was frozen in 1988 and covers certain union and non-union employees who were formerly employed by Autodynamics Corporation of America, Inc., a company acquired previously by one of the companies that comprised APX International. This plan is not administered by MSXI. Contributions are determined in accordance with provisions of the plan. This plan, which is fully funded, is not material to our financial position, results of operations or cash flows.

At December 29, 2002 we have net U.S. federal tax loss carryforwards totaling $4.7 million, which expire in 2022. In addition, we have tax loss carryforwards related to certain foreign operations totaling $13.7 million. Of the $13.7 million of foreign tax losses, $5.4 million will expire in 2007 and $7.1 million can be carried forward indefinitely, with the balance expiring in varying amounts between 2004 and 2012. Realization of deferred tax assets is dependent on various limitations as provided within current tax laws, including generation of sufficient taxable income within specific tax jurisdictions. At December 29, 2002, a $6.1 million valuation allowance has been provided for specific items where management has determined that the likelihood of realization was not sufficient to allow for recognition of the asset, primarily related to net operating loss carryovers. Although realization is not assured, management believes that it is more likely than not, that the remaining net deferred tax assets will be realized as of December 30, 2001 and December 29, 2002. Additionally, we intend to utilize tax planning strategies, where possible, to ensure utilization of tax assets that are available.

The following is a reconciliation of taxes at the U.S. federal statutory rate to the provision for income taxes:

For the three fiscal years ended December 29, 2002, a provision has not been made for United States or additional foreign taxes on accumulated undistributed tax earnings of foreign subsidiaries, as those earnings were intended to be permanently reinvested. There are no net undistributed earnings on a cumulative basis as of December 29, 2002. Generally, such earnings become taxable upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability on such undistributed earnings.

MSXI is global provider of technical business services to the automotive and other industries. Our business includes: collaborative engineering services, technical and marketing services and human capital management services. Collaborative engineering offers a full range of total product, custom, or single point engineering solutions. Our technical and marketing services include solutions to quality, supply chain, and communication related customer needs. Human capital management services include a full range of staffing solutions, including direct support of our engineering and technical and marketing services. Certain operations within each of our segments have been aggregated following the provisions of SFAS No. 131 due to the similar characteristics of their operations, including the nature of their service offerings, processes supporting the delivery of the services, customers, and marketing and sales processes.

The accounting policies of our segments are the same as those described in the summary of significant accounting polices except that the financial results for each segment are presented using a management approach. We evaluate performance based on earnings before interest, taxes, amortization and non-cash charges (EBITA), including the Michigan Single Business Tax and other similar taxes. The results of each segment include certain allocations for general, administrative, and other shared costs. However, certain shared costs and termination and restructuring costs, are not allocated to the segments.

A reconciliation of total segment EBITA to consolidated income (loss) before income taxes, minority interests and equity in affiliates is as follows:

Net sales are attributed to geographic areas based upon billings to third party customers. Geographic sales are presented net of sales between divisions of MSXI. Sales and long-lived asset information by geographic area are as follows:

During the fourth quarter of fiscal 2000, we approved the MSXI 2000 Stock Option Plan (the “Stock Option Plan”). Under the terms of the Stock Option Plan, officers, directors and certain employees may be granted both incentive and non-qualified options to purchase our common stock. Incentive stock options may not be issued at less than 100% of the estimated market price on the date the option is granted. Options generally vest over a five-year period and have a maximum term of ten years. We may grant up to one million shares of stock under the Stock Option Plan. Also during fiscal 2000, we approved a one-time grant of 400,000 non-qualified stock options to an officer of MSXI. The 400,000 non-qualified stock options were not issued under the MSXI 2000 Stock Option Plan.

The following summarizes stock option activity during the two most recent fiscal years:

On August 1, 2003 we completed a private offering of senior notes totaling $100.5 million that mature October 15, 2007. The transaction included the issuance of $75.5 million aggregate principal amount of 11% notes, priced to yield 11.25%, and $25.0 million aggregate principal amount of 11.5% notes. The notes were issued by both MSX International, Inc. and MSX International Limited (MSXI Limited), a wholly-owned subsidiary in the United Kingdom. The $25.0 million of notes were issued to Citicorp Mezzanine III, L.P. In connection with the $25.0 million issuance, we also granted to Citicorp Mezzanine III, L.P. the right to purchase a total of 666,649 shares of common stock at a price of $0.01 per share through August 1, 2013. Proceeds from the combined offering totaled $95.5 million, net of related expenses and discount and were used to repay substantially all debt outstanding under our credit facility. The $75.5 million of notes issued are guaranteed, jointly and severally on a senior secured basis, by MSX International, Inc. and all of its domestic subsidiaries.

Each broker-dealer that receives new units for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the new units. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act of 1933, as amended. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new units received in exchange for old units where the old units were acquired by the broker-dealer as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the Commission declares the registration statement effective, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”

Section 145 of the Delaware General Corporation Law provides, generally, that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any action, suit or proceeding (except actions by or in the right of the corporation) by reason of the fact that such person is or was a director or officer of the corporation against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the corporation, and, with respect to any criminal action or proceeding, had not reasonable cause to believe his conduct was unlawful. A corporation may similarly indemnify such person for expenses actually and reasonably incurred by him in connection with the defense or settlement of any action or suit by or in the right of the corporation, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, in the case of claims, issues and matters as to which such person shall have been adjudged liable to the corporation, provided that a court shall have determined, upon application, that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnify for such expenses which such court shall deem proper.

Section 102(b)(7) of the Delaware General Corporation Law provides, generally, that the certificate of incorporation may contain a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision may not eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, (iii) under section 174 of Title 8, or (iv) for any transaction form which the director derived an improper personal benefit. No such provision may eliminate or limit the liability of a director for any act or omission occurring prior to the date which such provision becomes effective.

“The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was or has agreed to become a Director of officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a Director or officer of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, and may indemnify any person who was or is a party or is threatened to be made a party to such an action, suit or proceeding by reason of the fact that he is or was or has agreed to become an employee or agent of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with such action suit or proceeding and any appeal therefrom, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; except that in the case of an action or suit by or in the right of the Corporation to procure a judgment in its favor (1) such indemnification shall be limited to expenses (including attorneys’ fees) actually and reasonably incurred by such person in the defense or settlement of such action or suit, and (2) no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case,

such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to be believed that his conduct was unlawful.”


	(1)	Incorporated by reference to the Exhibits filed with MSX International’s Registration Statement on Form S-4 filed July 21, 1998 (Amendment No. 3).

	(2)	Incorporated by reference to the Exhibits filed with MSX International’s Quarterly Report on Form 10-Q filed November 11, 1998.

	(3)	Incorporated by reference to the Exhibits filed with MSX International’s Current Report on Form 8-K filed June 30, 1999.

	(4)	Incorporated by reference to the Exhibits filed with MSX International’s Current Report on Form 8-K filed October 26, 1999.

	(5)	Incorporated by reference to the Exhibits filed with MSX International’s Annual Report on Form 10-K filed March 24, 2000.

	(6)	Incorporated by reference to the Exhibits filed with MSX International’s Current Report on Form 8-K filed March 14, 2000.

	(7)	Incorporated by reference to the Exhibits filed with MSX International’s Quarterly Report on Form 10-Q filed November 14, 2001.

	(8)	Incorporated by reference to the Exhibits filed with MSX International’s Annual Report on Form 10-K filed March 9, 2001.

	(9)	Incorporated by reference to the Exhibits filed with MSX International’s Quarterly Report on Form 10-Q filed August 14, 2002.


(10)	Incorporated by reference to the Exhibits filed with MSX International’s Annual Report on Form 10-K filed March 27, 2003.

Our audits of the consolidated financial statements referred to in our report dated February 28, 2003, except for Note 19 as to which the date is September 12, 2003, appearing in this Registration Statement on Form S-4 also included an audit of the financial statement schedule listed in Item 21(b) of this Registration Statement on Form S-4. In our opinion, the financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.


(A)	Allowances of companies acquired in fiscal 2000.

(B)	Doubtful accounts charged off, net of recoveries.

Schedules not listed above are omitted because of the absence of the conditions under which they are required or because the information required by such omitted schedules is set forth in the financial statements or the notes thereto.


	(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:


	(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

	(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

	(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;


	(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

	(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(d) The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(e) The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Southfield, State of Michigan on September 30, 2003.


	By:	/s/ FREDERICK K. MINTURN



	Name: Frederick K. Minturn


	Title:	Executive Vice President, Chief Financial Officer, Treasurer and Secretary

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Frederick K. Minturn as his attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place, and stead, in any and all capacities, to sign and file this Registration Statement (and any additional Registration Statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933) and any and all pre- or post-effective amendments to such Registration Statement(s), with all exhibits thereto and hereto, and other documents with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.


	MSX INTERNATIONAL (HOLDINGS), INC.
	MSX INTERNATIONAL SERVICES (HOLDINGS), INC.
	MSX INTERNATIONAL BUSINESS SERVICES, INC.
	MSX INTERNATIONAL ENGINEERING SERVICES, INC.
	PILOT COMPUTER SERVICES, INCORPORATED
	MEGATECH ENGINEERING, INC.
	CHELSEA COMPUTER CONSULTANTS, INC.
	MILLENNIUM COMPUTER SYSTEMS, INC.
	MANAGEMENT RESOURCES INTERNATIONAL, INC.
	INTRANATIONAL COMPUTER CONSULTANTS
	PROGRAMMING MANAGEMENT & SYSTEMS, INC.
	MSX INTERNATIONAL STRATEGIC TECHNOLOGY, INC.
	MSX INTERNATIONAL TECHNOLOGY SERVICES, INC.
	MSX INTERNATIONAL DEALERNET SERVICES, INC.


	By:	/s/ FREDERICK K. MINTURN



	Name: Frederick K. Minturn
	Title: Vice President, Secretary and Treasurer

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.


	By:	/s/ FREDERICK K. MINTURN



	Name: Frederick K. Minturn
	Title: Vice President, Secretary and Treasurer

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.


	By:	/s/ FREDERICK K. MINTURN



	Name: Frederick K. Minturn
	Title: Vice President and Treasurer

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.


	(1)	Incorporated by reference to the Exhibits filed with MSX International’s Registration Statement on Form S-4 filed July 21, 1998 (Amendment No. 3).

	(2)	Incorporated by reference to the Exhibits filed with MSX International’s Quarterly Report on Form 10-Q filed November 11, 1998.

	(3)	Incorporated by reference to the Exhibits filed with MSX International’s Current Report on Form 8-K filed June 30, 1999.

	(4)	Incorporated by reference to the Exhibits filed with MSX International’s Current Report on Form 8-K filed October 26, 1999.

	(5)	Incorporated by reference to the Exhibits filed with MSX International’s Annual Report on Form 10-K filed March 24, 2000.

	(6)	Incorporated by reference to the Exhibits filed with MSX International’s Current Report on Form 8-K filed March 14, 2000.

	(7)	Incorporated by reference to the Exhibits filed with MSX International’s Quarterly Report on Form 10-Q filed November 14, 2001.

	(8)	Incorporated by reference to the Exhibits filed with MSX International’s Annual Report on Form 10-K filed March 9, 2001.

	(9)	Incorporated by reference to the Exhibits filed with MSX International’s Quarterly Report on Form 10-Q filed August 14, 2002.


(10)	Incorporated by reference to the Exhibits filed with MSX International’s Annual Report on Form 10-K filed March 27, 2003.

EX-3.3 3 k79382exv3w3.txt AMENDED MEMORANDUM OF ASSOCIATION OF MSX INTER LTD EXHIBIT 3.3 [SEAL] CERTIFICATE OF INCORPORATION ON CHANGE OF NAME Company No. 1949542 The Registrar of Companies for England and Wales hereby certifies that MASCOTECH ENGINEERING-EUROPE LIMITED having by special resolution changed its name, is now incorporated under the name of MSX INTERNATIONAL LIMITED Given at Companies House, Cardiff, the 20th November 1996 /s/ R.C. Edwards R.C. EDWARDS For the Registrar of Companies [SEAL] CERTIFICATE OF INCORPORATION ON CHANGE OF NAME No. 1949542 I hereby certify that CANEWDON CONSULTANTS GROUP LIMITED having by special resolution changed its name, is now incorporated under the name of MASCOTECH ENGINEERING-EUROPE LIMITED Given under my hand at the Companies Registration Office, Cardiff the 25 JUNE 1993 /s/ P. Bevan P. BEVAN an authorised officer [SEAL] THE COMPANIES ACT 1985 Company No. 1949542 The Registrar of Companies for England and Wales hereby certifies that MSX INTERNATIONAL LIMITED, (originally called REDMAST LIMITED, changed its name on 19th November 1985 to CANEWDON CONSULTANTS GROUP LIMITED, which was changed on 25th June 1993 to MASCOTECH ENGINEERING-EUROPE LIMITED, which was changed on 20th November 1996 to MSX INTERNATIONAL LIMITED, each change having been made by special resolution) was incorporated under the Companies Act 1985 as a limited company on 24th September 1985. According to the documents on the file of the company in the custody of the Registrar of Companies, the company has been in continuous and unbroken existence since the date of its incorporation. No action is currently being taken by the Registrar of Companies for striking the company off the register and dissolving it as defunct, and as far as the Registrar is aware:- a) the company is not in liquidation or subject to an administration order, and b) no receiver or manager of the company's property has been appointed.************************************************************* Given at Companies House, Cardiff, the 14th July 1998 /s/ M. Jeya MRS. M. JEYA for the Registrar of Companies THE COMPANIES ACT 1985 PRIVATE COMPANY LIMITED BY SHARES AMENDED MEMORANDUM OF ASSOCIATION OF MSX INTERNATIONAL LIMITED 1. The Company's name is "MSX International Limited". 2. The Company's registered once is to be situated in England and Wales. 3. The Company's objects are:- (a) To carry on the business of providing design, general engineering and clay modelling services to the automotive and engineering industries. (b) To carry on any other trade or business whatever which can in the opinion of the Board of Directors be advantageously carried-on in connection with or ancillary to any of the businesses of the Company. (c) To purchase or by any other means acquire and take options over any property whatever, and any rights or privileges of any kind over or in respect of any property. (d) To apply for, register, purchase, or by other means acquire and protect, prolong and renew, whether in the United Kingdom or elsewhere any patents, patent rights, brevets d'invention, licences, secret processes, trade marks, designs, protections and concessions and to disclaim, alter, modify, use and turn to account and to manufacture under or grant licences or privileges in respect of the same, and to expend money in experimenting upon, testing and improving any patents, inventions or rights which the Company may acquire or propose to acquire. (e) To acquire or undertake the whole or any part of the business, goodwill, and assets of any person, firm, or company carrying on or proposing to carry on any of the businesses which the Company is authorised to carry on and as part of the consideration for such acquisition to undertake all or any of the liabilities of such person, firm or company, or to acquire an interest in, amalgamate with, or enter into partnership or into any arrangement for sharing profits, or for co-operation, or for mutual assistance with any such person, firm or company, or for subsidising or otherwise assisting any such person, firm or company, and to give or accept, by way of consideration for any of the acts or things aforesaid or property acquired, any shares, debentures, debenture stock or securities that may be agreed upon, and to hold and retain, or sell, mortgage and deal with any shares, debentures, debenture stock or securities so received. (f) To improve, manage, construct, repair, develop, exchange, let on lease or otherwise, mortgage, charge, sell, dispose of, turn to account, grant licences, options, rights and privileges in respect of, or otherwise deal with all or any part of the property and rights of the Company. (g) To invest and deal with the moneys of the Company not immediately required in such manner as may from time to time be determined and to hold or otherwise deal with any investments made. (h) To lend and advance money or give credit on any terms and with or without security to any person, firm or company (including without prejudice to the generality of the foregoing any holding company, subsidiary or fellow subsidiary of, or any other company associated in any way with, the Company), to enter into guarantees, contracts of indemnity and suretyships of all kinds, to receive money on deposit or loan upon any terms, and to secure or guarantee in any manner and upon any terms the payment of any sum of money or the performance of any obligation by any person, firm or company (including without prejudice to the generality of the foregoing any such holding company, subsidiary, fellow subsidiary or associated company as aforesaid). (i) To borrow and raise money in any manner and to secure the repayment of any money borrowed, raised or owing by mortgage, charge, standard security, lien or other security upon the whole or any part of the Company's property or assets (whether present or future), including its uncalled capital, and also by a similar mortgage, charge, standard security, lien or security to secure and guarantee the performance by the Company of any obligation or liability it may undertake or which may become binding on it. (j) To draw, make, accept, endorse, discount, negotiate, execute and issue cheques, bills of exchange, promissory notes, bills of lading, warrants, debentures, and other negotiable or transferable instruments. (k) To apply for, promote, and obtain any Act of Parliament, order, or licence of the Department of Trade or other authority for enabling the Company to carry any of its objects into effect, or for effecting any modification of the Company's constitution, or for any other purpose which may seem calculated directly or indirectly to promote the Company's interests, and to oppose any proceedings or applications which may seem calculated directly or indirectly to prejudice the Company's interests. (l) To enter into any arrangements with any government or authority (supreme, municipal, local, or otherwise) that may seem conducive to the attainment of the Company's objects or any of them, and to obtain from any such government or authority any charters, decrees, rights, privileges or concessions which the Company may think desirable and to carry out, exercise, and comply with any such charters, decrees, rights, privileges, and concessions. (m) To subscribe for, take, purchase, or otherwise acquire, hold, sell, deal with and dispose of, place and underwrite shares, stocks, debentures, debenture stocks, bonds, obligations or securities issued or guaranteed by any other company constituted or carrying on business in any part of the world, and debentures, debenture stocks, bonds, obligations or securities issued or guaranteed by any government or authority, municipal, local or otherwise, in any part of the world. (n) To control, manage, finance, subsidise, co-ordinate or otherwise assist any company or companies in which the Company has a direct or indirect financial interest, to provide secretarial, administrative, technical, commercial and other services and facilities of all kinds for any such company or companies and to make payments by way of subvention or otherwise and any other arrangements which may seem desirable with respect to any business or operations of or generally with respect to any such company or companies. (o) To promote any other company for the purpose of acquiring the whole or any part of the business or property or undertaking or any of liabilities of the Company, or of undertaking any business or operations which may appear likely to assist or benefit the Company or to enhance the value of any property or business of the Company, and to place or guarantee the placing of, underwrite, subscribe for, or otherwise acquire all or any part of the shares or securities of any such company as aforesaid. (p) To sell or otherwise dispose of the whole or any part of business or property of the Company, either together or in portions, for such consideration as the Company may think fit, and in particular for shares debentures, or securities of any company purchasing the same. (q) To act as agents or brokers and as trustees for any person, firm or company, and to undertake and perform sub-contracts. (r) To remunerate any person, firm or company rendering services to the Company either by cash payment or by the allotment to him or them of shares or other securities of the Company credited as paid up in full or in part or otherwise as may be thought expedient. (s) To pay all or any expenses incurred in connection with the promotion, formation and incorporation of the Company, or to contract with any person, firm or company to pay the same, and to pay commissions to brokers and others for underwriting, placing, selling, or guaranteeing the subscription of any shares or other securities of the Company. (t) To support and subscribe to any charitable or public object and to support and subscribe to any institution, society, or club which may be for the benefit of the Company or its Directors or employees, or may be connected with any town or place where the Company carries on business; to give or award pensions, annuities, gratuities, and superannuation or other allowances or benefits or charitable aid and generally to provide advantages, facilities and services for any persons who are or have been Directors of, or who are or have been employed by, or who are serving or have served the Company, or any company which is a subsidiary of the Company or the holding company of the Company or a fellow subsidiary of the Company or the predecessors in business of the Company or of any such subsidiary, holding or fellow subsidiary company and to the wives, widows, children and other relatives and dependants of such persons; to make payments towards insurance; and to set up, establish, support and maintain superannuation and other funds or schemes (whether contributory or non-contributory) for the benefit of any of such persons and of their wives, widows, children and other relatives and dependants; and to set up, establish, support and maintain profit sharing or share purchase schemes for the benefit of any of the employees of the Company or of any such subsidiary, holding or fellow subsidiary company and to lend money to any such employees or to trustees on their behalf to enable any such purchase schemes to be established or maintained. (u) Subject to and in accordance with a due compliance with the provisions of Sections 155 to 158 (inclusive) of the Act (if and so far as such provisions shall be applicable), to give, whether directly or indirectly, any kind of financial assistance (as defined in Section 152(l)(a) of the Act) for any such purpose as is specified in Section 151(1) and/or 151(2) of the Act. (v) To distribute among the Members of the Company in kind any property of the Company of whatever nature. (w) To procure the Company to be registered or recognised in any part of the world. (x) To do all or any of the things or matters aforesaid in any part of the world and either as principals, agents, contractors or otherwise, and by or through agents, brokers, sub-contractors or otherwise and either alone or in conjunction with others. (y) To do all such other things as may be deemed incidental or conducive to the attainment of the Company's objects or any of them. AND so that:- (1) None of the objects set forth in any sub-clause of this Clause shall be restrictively construed but the widest interpretation shall be given to each such object, and none of such objects shall, except where the context expressly so requires, be in any way limited or restricted by reference to or inference from any other object or objects set forth in such sub-clause, or by reference to or inference from the terms of any other sub-clause of this Clause, or by reference to or inference from the name of the Company. (2) None Of the sub-clauses of this Clause and none of the objects therein specified shall be deemed subsidiary or ancillary to any of the objects specified in any other such sub-clause, and the Company shall have as full a power to exercise each and every one of the objects specified in each sub-clause of this Clause as though each such sub-clause contained the objects of a separate company. (3) The word "company" in this Clause, except where used in reference to the Company, shall be deemed to include any partnership or other body of persons, whether incorporated or unincorporated and whether domiciled in the United Kingdom or elsewhere. (4) In this Clause the expression "the Act" means the Companies Act 1985, but so that any reference in this Clause to any provision of the Act shall be deemed to include a reference to any statutory modification or re-enactment of that provision for the time being in force. 4. The liability of the Members is limited. 5. The Company's share capital is 1,000,000 pound sterling divided into 1,000,000 shares of 1 pound sterling each. * By Special Resolution passed on the 29th day of November 1985 the share capital of the Company was increased from 100 pound sterling to 1,000,000 pound sterling divided into 1,000,000 shares of 1 pound sterling each. By special resolutions passed on 24 July 1986 and 15 April 1988 17,500 of the ordinary shares were converted into convertible cumulative redeemable preference shares of 1 pound sterling each. EX-3.4 4 k79382exv3w4.txt AMENDED ARTICLES OF ASSOCIATION OF MSX INTER LTD EXHIBIT 3.4 THE COMPANIES ACT 1985 PRIVATE COMPANY LIMITED BY SHARES AMENDED ARTICLES OF ASSOCIATION OF MSX INTERNATIONAL LIMITED PRELIMINARY 1. (a) The Regulations contained in Table A in the Schedule to the Companies (Tables A to F) Regulations 1985 as amended by the Companies (Tables A to F) (Amendment) Regulations 1985 (such Table being hereinafter called "Table A") shall apply to the Company save in so far as they are excluded or varied hereby and such Regulations (save as so excluded or varied) and the Articles hereinafter contained shall be the regulations of the Company. (b) In these Articles the expression "the Act" means the Companies Act 1985, but so that any reference in these Articles to any provision of the Act shall be deemed to include a reference to any statutory modification or re-enactment of that provision for the time being in force. ALLOTMENT OF SHARES 2. (a) Shares which are comprised in the authorised share capital with which the Company is incorporated shall be under the control of the Directors who may (subject to Section 80 of the Act and to paragraph (d) below) allot, grant options over or otherwise dispose of the same, to such persons, on such terms and in such manner as they think fit. (b) All shares which are not comprised in the authorised share capital with which the Company is incorporated and which the Directors propose to issue shall first be offered to the Members in proportion as nearly as may be to the number of the existing shares held by them respectively unless the Company in General Meeting shall by Special Resolution otherwise direct. The offer shall be made by notice specifying the number of shares offered, and limiting a period (not being less than fourteen days) within which the offer, if not accepted, will be deemed to be declined. After the expiration of that period, those shares so deemed to be declined shall be offered in the proportion aforesaid to the persons who have, within the said period, accepted all the shares offered to them; such further offer shall be made in like terms in the same manner and limited by a like period as the original offer. Any shares not accepted pursuant to such offer or further offer as aforesaid or not capable of being offered as aforesaid except by way of fractions and any shares released from the provisions of this Article by any such special Resolution as aforesaid shall be under the control of the Directors, who may allot, grant options over or otherwise dispose of the same to such persons, on such terms, and in such manner as they think fit, provided that, in the case of shares not accepted as aforesaid, such shares shall not be disposed of on terms which are more favourable to the subscribers therefor than the terms on which they were offered to the Members. The foregoing of this paragraph (b) shall have effect subject to Section 80 of the Act. (c) In accordance with Section 91(l) of the Act, Sections 89(l) and 90(1) to (6) (inclusive) of the Act shall not apply to the Company. (d) The Directors are generally and unconditionally authorised for purposes of Section 80 of the Act, to exercise any power of the Company to allot and grant rights to subscribe for or convert securities into shares of the Company up to the amount of the authorised share capital with which the Company is incorporated at any time or times during the period of five years from the date of incorporation and the Directors may, after that period, allot any shares or grant any such rights under this authority in pursuance of an offer or agreement so to do made by the Company within that period. The authority hereby given may at any time (subject to the said Section 80) be renewed, revoked or varied by Ordinary Resolution of the Company in General Meeting. SHARES 3. The lien conferred by Clause 8 in Table A shall attach also to fully paid-up shares, and the Company shall also have a first and paramount lien on all shares, whether fully paid or not, standing registered in the name of any person indebted or under liability to the Company, whether he shall be the sole registered holder thereof or shall be one of two or more joint holders, for all moneys presently payable by him or his estate to the Company. Clause 8 in Table A shall be modified accordingly. 4. The liability of any Member in default in respect of a call shall be increased by the addition at the end of the first sentence of Clause 18 in Table A of the words "and all expenses that may have been incurred by the Company by reason of such non-payment". GENERAL MEETINGS AND RESOLUTIONS 5. (a) A notice convening a General Meeting shall be required to specify the general nature of the business to be transacted only in the case of special business and Clause 38 in Table A shall be modified accordingly. All business shall be deemed special that is transacted at an Extraordinary General Meeting, and also all that is transacted at an Annual General Meeting, with the exception of declaring a dividend, the consideration of the accounts balance sheets, and the reports of the Directors and Auditors, and the appointment of, and the fixing of the remuneration of the Auditors. (b) Every notice convening a General Meeting shall comply with the provisions of Section 372(3) of the Act as to giving information to Members in regard to their right to appoint proxies; and notices of and other communications relating to any General Meeting which any Member is entitled to receive shall be sent to the Directors and to the Auditors for the time being of the Company. 6. (a) Clause 40 in Table A shall be read and construed as if the words "at the time when the Meeting proceeds to business" were added at the end of the first sentence. (b) If a quorum is not present within half an hour from the time appointed for a General Meeting the General Meeting shall stand adjourned to the same day in the next week at the same time and place or to such other day and at such other time and place as the Directors may determine; and if at the adjourned General Meeting a quorum is not present within half an hour from the time appointed therefor such adjourned General Meeting shall be dissolved. (c) Clause 41 in Table A shall not apply to the Company. APPOINTMENT OF DIRECTORS 7. (a) Clause 64 in Table A shall not apply to the Company. (b) The maximum number and minimum number respectively of the Directors may be determined from time to time by Ordinary Resolution in General Meeting of the Company. Subject to and in default of any such determination there shall be no maximum number of Directors and the minimum number of Directors shall be one. Whensoever the minimum number of Directors shall be one, a sole Director shall have authority to exercise all the powers and discretions by Table A and by these Articles expressed to be vested in the Directors generally, and Clause 89 in Table A shall be modified accordingly. (c) The Directors shall not be required to retire by rotation and Clauses 73 to 80 (inclusive) in Table A shall not apply to the Company. (d) No person shall be appointed a Director at any General Meeting unless either: (i) he is recommended by the Directors; or (ii) not less than fourteen nor more than thirty-five clear days before the date appointed for the General Meeting, notice executed by a Member qualified to vote at the General Meeting has been given to the Company of the intention to propose that person for appointment, together with notice executed by that person of his willingness to be appointed. (e) Subject to paragraph (d) above, the Company may be Ordinary Resolution in General Meeting appoint any person who is willing to act to be a Director, either to fill a vacancy or as an additional Director. (f) The Directors may appoint a person who is willing to act to be a Director, either to fill a vacancy or as an additional Director, provided that the appointment does not cause the number of Directors to exceed any number determined in accordance with paragraph (b) above as the maximum number of Directors and for the time being in force. BORROWING POWERS 8. The Directors may exercise all the powers of the Company to borrow money without limit as to amount and upon such terms and in such manner as they think fit, and subject (in the case of any security convertible into shares) to Section 80 of the Act to grant any mortgage, charge or standard security over its undertaking, property and uncalled capital, or any part thereof, and to issue debentures, debenture stock, and other securities whether outright or as security for any debt, liability or obligation of the Company or of any third party. ALTERNATE DIRECTORS 9. (a) An alternate Director shall not be entitled as such to receive any remuneration from the Company, save that he may be paid by the Company such part (if any) of the remuneration otherwise payable to his appointor as such appointor may by notice in writing to the Company from time to time direct, and the first sentence of Clause 66 in Table A shall be modified accordingly. (b) A Director, or any such other person as is mentioned in Clause 65 in Table A, may act as an alternate Director to represent more than one Director, and an alternate Director shall be entitled at any meeting of the Directors or of any committee of the Directors to one vote for every Director whom he represents in addition to his own vote (if any) as a Director, but he shall count as only one for the purpose of determining whether a quorum is present. DISQUALIFICATION OF DIRECTORS 10. The office of a Director shall be vacated if he becomes incapable by reason of illness or injury of managing and administering his property and affairs, and Clause 81 in Table A shall be modified accordingly. 10.A. In addition to the power of removal provided by Section 303 of the Act, the Company may at any time by special resolution remove any director from office. 11. (a) The Directors may exercise the powers of the Company conferred by Clause 3(t) of the Memorandum of Association of the Company and shall be entitled to retain any benefits received by them or any of them by reason of the exercise of any such powers. (b) Clause 87 in Table A shall not apply to the Company. PROCEEDINGS OF DIRECTORS 12. (a) A Director may vote, at any meeting of the Directors or of any committee of the Directors, on any resolution, notwithstanding that it in any way concerns or relates to a matter in which he has, directly or indirectly, any kind of interest whatsoever, and if he shall vote on any such resolution as aforesaid his vote shall be counted; and in relation to any such resolution as aforesaid he shall (whether or not he shall vote on the same) be taken into account in calculating the quorum present at the meeting. (b) Clauses 94 to 97 (inclusive) in Table A shall not apply to the Company. INDEMNITY 13. (a) Every Director or other officer of the Company shall be indemnified out of the assets of the Company against all losses or liabilities which he may sustain or incur in or about the execution of the duties of his office or otherwise in relation thereto, including any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or in connection with any application under Section 144 or Section 727 of the Act in which relief is granted to him by the Court, and no Director or other officer shall be liable for any loss, damage or misfortune which may happen to or be incurred by the Company in the execution of the duties of his office or in relation thereto. But this Article shall only have effect in so far as its provisions are not avoided by Section 310 of the Act. (b) Clause 118 in Table A shall not apply to the Company. TRANSFER OF SHARES 14. The Directors may, in their absolute discretion and without assigning any reason therefor, decline to register the transfer of a share, whether or not it is a fully paid share, and the first sentence of Clause 24 in Table A shall not apply to the Company. 15. The Company may purchase its own shares including any redeemable shares. No. 1949542 THE COMPANIES ACT 1985 SPECIAL RESOLUTION of CANEWDON CONSULTANTS GROUP LIMITED ------------------ PASSED ON 24th JULY 1986 ------------------ AT AN EXTRAORDINARY GENERAL MEETING of the above named company duly convened and held at The Maltings, Locks Hill, South Street, Rochford, Essex SS4 1BB on 24th July 1986 the following resolution was duly passed as a special resolution: RESOLUTION That: (1) 10,500 of the existing unissued ordinary shares of 1 pound sterling each of the company be converted into 10,500 convertible 1 cumulative redeemable preference shares of 1 pound sterling each ("the preference shares") with and subject to the following rights and restrictions: (A) Dividends: The right to receive, in priority to all other shares in the company, out of the profits available for distribution in respect of any financial year or other accounting period of the company, a cumulative preferential dividend at the rate of 9 per cent per annum on the capital for the time being paid up thereon (including any premium), such dividend to be payable half yearly in arrears on 30th June and 31st December in each year, the first of such payments to be made on 31st December 1986. (B) Capital: On a return of assets in liquidation or otherwise, the right in priority to all other shares in the company, to a return of the full amount of the capital paid up thereon (including any premium) together with all arrears of the said dividend to be calculated down to the date of repayment of capital whether or not such dividend has been declared or earned. 2 (C) CONVERSION: (i) Holders of the preference shares will be entitled to convert all or any of their preference shares into fully paid ordinary shares of 1 pound sterling each in the company ("ordinary shares") at the rate of one ordinary share for each preference share on the terms set out below. (ii) The right to convert will be exercisable at any time by holders giving to the company at its registered office notice in writing requesting conversion and stating the number of preference shares to be converted (a "conversion notice"), together with such other evidence as the board of directors of the company ("the board") may reasonably require to prove the title of the person exercising the right to convert. A conversion notice may be withdrawn by notice in writing to that effect given to the company at its registered office at any time before conversion takes place. (iii) Conversion will take place within 28 days from the date of the conversion notice and will be made in such manner as the board may from time to time lawfully determine, and in particular may be effected by redemption of the preference shares at the full amount of capital paid up 3 thereon (including any premium) and the application of the proceeds of redemption by way of subscription for fully paid ordinary shares. (iv) For the purposes of redemption of any of the preference shares out of the profits of the company otherwise available for that purpose, the board may appoint some person to act on behalf of the holder of the preference shares concerned to take all such steps as may in the opinion of the board be necessary or desirable to effect such redemption. (v) The ordinary shares issued on conversion will rank in all respects equally with the ordinary shares then in issue and in particular will entitle the holder to all dividends and (except to the extent that adjustments have been made under sub-paragraph (vi) below) other distributions on the ordinary shares in respect of the financial year of the company in which conversion takes place, and the dividend on the preference shares concerned will continue to accrue up to the date of conversion and will be payable within 14 days after conversion has taken place. (vi) If the company makes any issue by way of capitalisation of profits or reserves (including 4 any share premium account and capital redemption reserve fund) to ordinary shareholders on the register on a date when there remain outstanding any preference shares, such issue will be made only to the holders of the ordinary shares and the nominal amount of the ordinary shares to be issued on any subsequent conversion of preference shares will be increased rateably. Notice of any such capitalisation issue showing the rate of conversion applicable as a result will be sent to holders of the preference shares within 28 days of such issue. (vii) Within 14 days after conversion has taken place, the company will forward to the holders of the preference shares concerned fully paid certificates for the ordinary shares and new certificates for any unconverted balance of their preference shares. (viii) The company will at all times maintain sufficient unissued ordinary shares in order to implement conversion in full of all the preference shares. (D) REDEMPTION: (i) The company will redeem at the full amount of capital paid up thereon (including any premium) 5 together with all arrears or accruals of dividend to be calculated down to the date on which redemption takes place, such of the preference shares for the time being outstanding at any time upon a holder of the preference shares giving to the company at its registered office not less than 6 months notice in writing to that effect stating the numbers of preference shares to be redeemed and the required dates of redemption (a "redemption notice"). The company may not be required to redeem more than 5250 of the preference shares in any period of 6 months and for this purpose redemption notices will be taken in order of service on the company and the dates of redemption will be adjusted as necessary. A redemption notice may be withdrawn by notice in writing to that effect given to the company at its registered office at any time before redemption takes place. (ii) Redemption will take place at the registered office of the company, where the certificates for preference shares will be presented for redemption and cancellation. The company will against delivery of such certificates pay to the holders the amount due on redemption and will within 14 days after redemption has taken place forward to the holders of the preference shares concerned new certificates for any unredeemed 6 balance of their preference shares. (iii) The dividend on any preference shares in respect of which a redemption notice has been given will continue to accrue up to the date on which repayment in full is tendered, and will be payable at the same time as the repayment. (E) Voting: Holders of the preference shares will be entitled to receive notice of all general meetings but not to attend or vote at any general meeting unless at the date of the meeting: (a) the said dividend is in arrear; (b) the company has failed to redeem any of the preference shares on the due date; or (c) the company has failed to convert any of the preference shares into ordinary shares on the due date. in which event the holder of each preference share will have fourteen votes for each preference share of which he is the holder. (2) The articles of association of the company be amended by the insertion of the following new article as article : 7 "The company may purchase its own shares including any redeemable shares." (3) The board be generally and unconditionally authorised to exercise all the powers of the company to allot up to 10,500 preference shares and 498 ordinary shares within the period of six months from the date on which this resolution is passed as if section 89 of the Companies Act 1985 and article 2 (b) of the articles of association of the company did not apply to the allotment, and to allot up to 10,500 ordinary shares in total within the period of five years from such date and thereafter for the purpose of implementing the right to convert attached to the preference shares issued under the authority of this resolution in pursuance of any offer or agreement made by the company. /s/ Russell Bay Russell Bay Secretary 8 NO. 1949542 THE COMPANIES ACTS 1985 TO 1989 ORDINARY RESOLUTION OF MSX INTERNATIONAL LIMITED ------------------------------- PASSED ON 30 DECEMBER 1998 ------------------------------- BY A WRITTEN RESOLUTION of the company pursuant to Regulation 53 of Table A in the Schedule to the Companies (Tables A to F) Regulation 1985 (as amended) incorporated by Article l(a) of its Articles of Association dated 29 December 1998, the following Resolution was duly passed as an Ordinary Resolution. RESOLUTION That the capital of the company be increased to 8,897,500 pounds sterling by the creation of an additional 7,897,500 ordinary shares of l pound sterling each, and that the directors be generally and unconditionally authorised to exercise all the powers of the company to issue all the 8,830,000 unissued ordinary shares of the company within the period of six months from the date of this resolution as if Section 89(l) of the Companies Act 1985 did not apply to the allotment. John Bignall Director EX-4.4 5 k79382exv4w4.txt INDENTURE DATED AS OF AUGUST 1, 2003 EXECUTION COPY EXHIBIT 4.4 ================================================================================ MSX INTERNATIONAL, INC., AND MSX INTERNATIONAL LIMITED as Issuers, THE GUARANTORS NAMED HEREIN AND BNY MIDWEST TRUST COMPANY, as Trustee and as Collateral Agent ----------------------------------------------- INDENTURE Dated as of August 1, 2003 ----------------------------------------------- UNITS CONSISTING OF $860 PRINCIPAL AMOUNT OF 11% SENIOR SECURED NOTES DUE 2007 OF MSX INTERNATIONAL, INC. AND $140 PRINCIPAL AMOUNT OF 11% SENIOR SECURED NOTES DUE 2007 OF MSX INTERNATIONAL LIMITED ================================================================================ CROSS-REFERENCE TABLE

---------------------------- N.A. means Not Applicable. NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture. TABLE OF CONTENTS

-i- TABLE OF CONTENTS (Continued)

-ii- TABLE OF CONTENTS (Continued)

-iii- TABLE OF CONTENTS (Continued)

-iv- TABLE OF CONTENTS (Continued)

-v- Exhibit A - Form of Unit........................................................................ A-1 Exhibit B - Form of Exchange Unit............................................................... B-1 Exhibit C - Form of Certificate To Be Delivered in Connection with Transfers to Non-QIB Accredited Investors..................................................... C-1 Exhibit D - Form of Certificate To Be Delivered in Connection with Transfers Pursuant To Regulation S......................................................... D-1 Exhibit E - Form of Guarantee................................................................... E-1 Exhibit F - Form of Supplemental Indenture...................................................... F-1 Exhibit G - Form of Incumbency Certificate...................................................... G-1

NOTE: This Table of Contents shall not, for any purpose, be deemed to be part of the Indenture. -vi- INDENTURE dated as of August 1, 2003, among MSX INTERNATIONAL, INC., a Delaware corporation (the "Company"), as an issuer and its Wholly Owned Subsidiary, MSX INTERNATIONAL LIMITED, a company incorporated under the laws of England and Wales ("MSXI Limited" and, together with the Company, the "Issuers"), the Company, as a guarantor of the U.K. Notes, certain of the Company's subsidiaries signatory hereto (each, a "Subsidiary Guarantor" and, together with the Company, the "Guarantors") and BNY MIDWEST TRUST COMPANY, an Illinois trust company, as trustee (in such capacity, the "Trustee") and collateral agent (in such capacity, the "Collateral Agent"). WHEREAS, the Issuers and the Guarantors with respect to the Note Guarantees have duly authorized the creation of the Senior Secured Note Units due 2007 (each an "Initial Unit" and, collectively, the "Initial Units"), the underlying 11% Senior Secured Notes due 2007 issued by the Company (the "Initial U.S. Notes"), 11% Senior Secured Notes due 2007 issued by MSXI Limited (the "Initial U.K. Notes", together with the Initial U.S. Notes, the "Initial Notes"), the Senior Secured Exchange Note Units due 2007 (each an "Exchange Unit" and, collectively, the "Exchange Units", the Exchange Units and the Initial Units, together with any Additional Units, as herein defined, the "Units"), and the underlying 11% Senior Secured Exchange Notes due 2007 issued by the Company (the "Exchange U.S. Notes") and 11% Senior Secured Notes due 2007 issued by MSXI Limited (the "Exchange U.K. Notes" and, together with the Exchange U.S. Notes, the "Exchange Notes"). The Exchange Notes, the Initial Notes and any Additional Notes shall collectively be referred to herein as the "Notes"; and WHEREAS, all things necessary to make the Units and Notes, when each is duly issued and executed by the Issuers, and authenticated and delivered hereunder, the valid obligations of each of the Issuers and the Guarantors, and to make this Indenture a valid and binding agreement of each of the Issuers and the Guarantors, have been done, NOW, THEREFORE, each party hereto agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders: ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.1 Definitions. "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. "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 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. "Administrative Agent" has the meaning set forth in the definition of the term Senior Credit Facility. "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 the provisions described under Section 4.4, Section 4.6 and Section 4.7 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. "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 Collateral Agreements; or (2) in respect of any other asset, any Pari Passu Indebtedness or any unsubordinated Indebtedness of any Subsidiary Guarantor, and in the case of an Asset Disposition by a Subsidiary that is not a Subsidiary 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 referred to for the purposes of this definition as a "disposition"), of (1) 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), (2) all or substantially all the assets of any division, business segment or comparable line of business of the Company or any Restricted Subsidiary or (3) any other assets of the Company or any Restricted Subsidiary outside of the ordinary course of business of the Company or such Restricted Subsidiary. 2 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 Subsidiary Guarantor, (y) for purposes of the covenant described under Section 4.6, a disposition that constitutes a Permitted Investment or a Restricted Payment permitted by the covenant described under Section 4.4, and (z) any single disposition or series of related dispositions of assets having a fair market value of less than $1,000,000. "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 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. "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. "Business Day" means each day which 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 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 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. 3 "Change of Control" means the occurrence of one or more of the following events: (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 Issue 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 Issue 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 Issue 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 4 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 assets transaction, each transferee becomes an obligor in respect of the Notes and a Subsidiary of the transferor of such assets. (6) 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 Issue Date, the "Charged Assets" as such term is defined in the U.K. Deed and any other property, whether now owned or hereafter acquired, upon which a Lien securing the Obligations is granted or purported to be granted under any Collateral Agreement. "Collateral Agent" means the collateral agent under the Security Agreement and each Mortgage, which shall initially be the Trustee. "Collateral Agreements" means, collectively, the Intercreditor Agreement, the Security Agreement, the U.K. Deed and each Mortgage, in each case, as the same may be in force from time to time. "Company Guarantee" means the Guarantee of the Company of MSXI Limited's obligations with the respect to the U.K. Notes. "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 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 5 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). "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 6 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: (1) 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 (4) 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 (3) below); (2) for purposes of subclause (a)(3)(A) of the covenant described under Section 4.4 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; (3) 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 (4) 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; (4) 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; (5) extraordinary gains or losses; and (6) the cumulative effect of a change in accounting principles. Notwithstanding the foregoing, for the purposes of the covenant described under Section 4.4 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 covenant pursuant to clause (a)(3)(D) thereof. "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 7 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. "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. "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. "Depository" means The Depository Trust Company, its nominees and their respective successors. "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 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). "Domestic Restricted Subsidiary" means any Restricted Subsidiary of the Company other than a Foreign Restricted Subsidiary. "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. "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 8 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. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exchange Notes" has the meaning set forth in the preamble to this Indenture. "Exchange U.K. Notes" has the meaning set forth in the preamble to this Indenture. "Exchange Units" has the meaning set forth in the preamble to this Indenture. "Exchange U.S. Notes" has the meaning set forth in the preamble to this Indenture. "Existing Affiliate Agreements" means the Stockholders' Agreement, the MSXI Registration Rights Agreement and any other existing agreement with CVC or any Affiliates of CVC or the Company listed on Schedule I to this Indenture. "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 a Subsidiary not organized under the laws of the United States of America or any State thereof or the District of Columbia. "Fourth Lien Term Loan" means the fourth secured term loan, from the Term Loan Lender to the Company and MSXI Limited under the amended and restated fourth second term loan agreement, dated the Issue Date, and including all related or ancillary documents executed at any time, including, without limitation, any instruments, guarantee agreements and security documents. "GAAP" means generally accepted accounting principles in the United States of America as then in effect on the date of this Indenture, 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. "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. 9 "Guarantors" shall mean the Subsidiary Guarantors and, in connection with the Guarantee of the U.K. Notes, the Company. "Hedging Obligations" of any Person means the obligations of such Person pursuant to any Interest Rate Agreement or Currency Agreement. "Holder" or "Noteholder" means the Person in whose name a Unit or, if a Separation Event has occurred, a Note, is registered on the Registrar's books. "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), (1) 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; (2) all Capital Lease Obligations of such Person and all Attributable Debt in respect of Sale/Leaseback Transactions entered into by such Person; (3) 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 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); (4) 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 (1) through (3) 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); (5) 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); (6) all obligations of the type referred to in clauses (1) through (5) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is 10 responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee; (7) all obligations of the type referred to in clauses (1) through (6) 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 (8) 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. "Indenture" means this Indenture, as amended or supplemented from time to time in accordance with the terms hereof. "Initial Notes" has the meaning set forth in the preamble to this Indenture. "Initial Purchaser" means Jefferies & Company, Inc. "Initial U.K. Notes" has the meaning set forth in the preamble to this Indenture. "Initial Units" has the meaning set forth in the preamble to this Indenture. "Initial U.S. Notes" has the meaning set forth in the preamble to this Indenture. "Institutional Accredited Investor" means an institution that is an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3), or (7) under the Securities Act. "Intercreditor Agreement" means the Intercreditor Agreement among the Administrative Agent, the Trustee, the Collateral Agent, the New Third Lien Lender, the Term Loan Lender, the Issuers and the Subsidiary Guarantors (as applicable) dated as of the Issue Date, as the same may be amended, supplemented or modified from time to time. "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 the covenant 11 described under Section 4.4, (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. "Issue Date" means the date on which the Units and the Notes are originally issued. "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. "Lenders" means the Lenders under 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). "Management Investors" means each of the officers, employees and directors of the Company who own Voting Stock of the Company on the Issue Date, in each case so long as such person shall remain an officer, employee or director of the Company. "Moody's" means Moody's Investors Service, Inc. "Mortgages" means the mortgages, deeds of trust, deeds to secure Indebtedness or other similar documents creating Liens in favor of the Collateral Agent upon the owned real property constituting Collateral of the Company or any of its Domestic Restricted Subsidiaries from time to time. "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 from time to time. "Net Available Cash" from an Asset Disposition 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: (1) 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; (2) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, 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 12 obtain a necessary consent to such Asset Disposition, or by applicable law, be repaid out of the proceeds from such Asset Disposition; (3) 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; and (4) 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 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," with respect to any issuance or sale of Capital Stock, means the cash proceeds of such issuance or sale 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 or sale and net of taxes paid or payable as a result thereof. "New Third Lien Lender" means Citicorp Mezzanine III, L.P. and its assigns. "New Third Lien Notes" means the notes issued by the Company and MSXI Limited to the New Third Lien Lender on the Issue Date. "Note Guarantees" means the Subsidiary Guarantees and the Company Guarantee. "Non-U.S. Person" means a Person who is not a U.S. Person, as defined in Regulation S. "Notes" has the meaning set forth in the preamble to this Indenture. "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. "Officer" means the Chief Executive Officer, the President, the Chief Financial Officer or any Vice President of the Company or 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 Trustee. "Opinion of Counsel" means a written opinion from legal counsel who is reasonably acceptable to the Trustee; such counsel may be an employee of or counsel to the Company. "Pari Passu Indebtedness" means any unsubordinated Indebtedness of the Company (other than any Indebtedness owed to any Subsidiary of the Company). 13 "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 (1) any shares of Capital Stock of a Foreign Subsidiary or a group of Foreign Subsidiaries; or (2) 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. "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 Issue 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: (1) the Company or, to the extent used to make any redemption, repurchase or other retirement for value or payment on the U.K. Notes, MSXI Limited; (2) any Person that is or will become immediately after such Investment a Subsidiary Guarantor or that will merge or consolidate with or into the Company or a Subsidiary Guarantor, or transfers or conveys all or substantially all of its assets to the Company or a Subsidiary Guarantor; provided, however, that the primary business of such Person is a Related Business; (3) any Foreign Restricted Subsidiary of the Company by any other Foreign Restricted Subsidiary of the Company; (4) 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 (4) 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); (5) Temporary Cash Investments; (6) 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 14 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; (7) 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; (8) loans or advances to employees of the Company or a Restricted Subsidiary in an aggregate amount not to exceed $1.5 million; (9) 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; (10) Persons received in connection with a Permitted Foreign Transaction; (11) 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 4.6; and (12) additional Investments not to exceed $5.0 million at any time outstanding. "Permitted Lien" 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; (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; 15 (6) any interest or title of a lessor under any Capitalized Lease Obligation permitted pursuant to clause (b)(8) of Section 4.3; 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 4.3; 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 4.3; (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 4.3; (12) Liens securing Acquired Indebtedness incurred in accordance with Section 4.3; 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 (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 Issue Date and securing Indebtedness permitted to be outstanding under clause (b)(3) of Section 4.3 to the extent and in the manner such Liens are in effect on the Issue Date; (14) Liens securing the Notes, all monetary obligations under this Indenture and the Subsidiary Guarantees; 16 (15) Liens securing Indebtedness under the Senior Credit Facility to the extent such Indebtedness is permitted under clause (b)(1) of Section 4.3; (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 4.3; provided, however, that such Liens: (i) are no less favorable to the Holders 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 4.3; and (21) Liens securing Indebtedness of Foreign Restricted Subsidiaries to the extent such Indebtedness is permitted under clause (b)(12) of Section 4.3; provided, however, that no asset of the Company or any Domestic Restricted Subsidiary shall be subject to any such Lien). "Permitted Transferee" means, (a) with respect to any CVC Investor who is an employee, officer or director of CVC or any Wholly Owned Subsidiary of CVC, 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; 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. "Physical Note" means a Note issued in exchange for interests in a Global Note pursuant to Section 2.14 in the form of a permanent certificated Note in registered form in substantially the form set forth in Exhibit A. "Physical Unit" means a Unit issued in exchange for interests in a Global Unit pursuant to Section 2.14 in the form of a permanent certificated Unit in registered form in substantially the form set forth in Exhibit A. "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. "principal" of a Note means the principal of the Note plus the premium, if any, payable on the Note which is due or overdue or is to become due at the relevant time. 17 "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. "QIB" means a "qualified institutional buyer" as defined in Rule 144A. "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 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. "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 Issue Date or Incurred in compliance with this 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. 18 "Registration Rights Agreement" means the Registration Rights Agreement, dated as of the Issue Date, between the Issuers, the Guarantors and the Initial Purchaser, as the same may be amended or modified from time to time in accordance with the terms thereof. "Regulation S" means Regulation S under the Securities Act. "Related Business" means any business related, ancillary or complementary (as determined in good faith by the Board of Directors) to the businesses of the Company and the Restricted Subsidiaries on the Issue Date. "Responsible Officer" means, when used in respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be officers, respectively, or to whom any corporate trust matter is referred because of such person's knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture. "Restricted Payment" means, with respect to any Person, (1) 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 dividends or distributions of greater value than it would receive on a pro rata basis); (2) 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); (3) 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); (4) 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 Term Loan or New Third Lien Note; or (5) the making of any Investment in any Person (other than a Permitted Investment). "Restricted Security" has the meaning assigned to such term in Rule 144(a)(3) under the Securities Act; provided that the Trustee shall be entitled to request and conclusively rely on an Opinion of Counsel with respect to whether any Unit or Note constitutes a Restricted Security. 19 "Restricted Subsidiary" means any Subsidiary of the Company that is not an Unrestricted Subsidiary. "Rule 144A" means Rule 144A under the Securities Act. "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. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder. "Security Agreement" means the security agreement, dated as of the Issue 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. "Security Interests" means the Liens on the Collateral created by this Indenture and the Collateral Agreements in favor of the Collateral Agent for the benefit of the Collateral Agent and the Holders. "Senior Credit Facility" means the Credit Agreement dated as of August 1, 2003, in effect on the Issue Date, by and among the Company, as borrower and guarantor, and certain subsidiaries, as borrowing subsidiaries, the Lenders referred to therein and Bank One, N.A., as administrative agent (in such capacity, together with its successors and assigns, the "Administrative Agent"), 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 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 Administrative Agent, any Lender or their respective Affiliates shall also be deemed Obligations under the Senior Credit Facility. "Separation Event" means (i) an Event of Default on the Notes has occurred, (ii) a redemption of the U.K. Notes pursuant to Section 3.1(d) has occurred or (iii) the occurrence of a Change of Control of MSXI Limited. "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 20 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 between the Company, CVC, and certain CVC Investors and executive officers and directors of the Company, as amended by Amendment No. 1 dated January 31, 2003 and as amended from time to time. "Subordinated Obligation" means any Indebtedness of the Company (whether outstanding on the Issue 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 Subsidiary 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 Issuers' obligations with respect to the Notes. "Subsidiary Guarantor" means each Subsidiary designated as such on the signature pages of this Indenture and any other Subsidiary that has issued a Subsidiary Guarantee. "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 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 Moody's 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 Moody's Investors Service, Inc. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb), as in effect and amended on the date of this Indenture, except as otherwise set forth in Section 9.3. 21 "Trustee" shall have the meaning set forth in the Recital. "Term Loan Lender" means Court Square Capital Limited and its assigns. "Unit" has the meaning set forth in the preamble to this Indenture. "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 in the manner provided above under Section 4.10 and (ii) any Subsidiary of an Unrestricted Subsidiary. "U.K. Deed" means the debenture, dated as of the Issue Date, made by MSXI Limited in favor of the Collateral Agent, as amended or supplemented from time to time in accordance with its terms. "U.K. Notes" means the Initial U.K. Notes and the Exchange U.K. Notes. "U.S. Government Obligations" means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable at the issuer's option. "U.S. Notes" means the Initial U.S. Notes and the Exchange U.S. Notes. "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. "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. "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.
Term Defined in Section ---- ------------------ "Additional Amounts" 4.24 "Additional Interest Notice" 4.21 "Additional Notes" 2.2 "Additional Units" 2.2 "Affiliate Transaction" 4.7 "Authenticating Agent" 2.2 "Bankruptcy Law" 6.1 "Comparable Treasury Issue" 3.1 "Comparable Treasury Price" 3.1 "covenant defeasance option" 8.1(b)
22 "Custodian" 6.1 "defeasance trust" 8.2 "Designee" 4.10 "Event of Default" 6.1 "Excess Cash Flow Offer Amount" 4.23 "Excess Proceeds" 4.6(a) "Excess Proceeds Offer" 4.6(a) "Excess Proceeds Payment" 4.6(a) "Global Notes" 2.1(b) "Global Units" 2.1(b) "Global U.K. Note" 2.1(b) "Global U.S. Note" 2.1(b) "Guaranteed Obligations" 11.1 "legal defeasance option" 8.1(b) "Notice of Default" 6.1 "Participants" 2.6 "Paying Agent" 2.3 "Premises" 4.19 "Primary Treasury Dealer" 3.1 "Private Placement Legend" 2.13 "Purchase Date" 4.6(b) "Reference Treasury Dealer" 3.1 "Reference Treasury Dealer Quotation" 3.1 "Registrar" 2.3 "Released Interests" 10.5(a) "Register" 2.3 "Successor Company" 5.1 "Taxes" 4.24 "Treasury Rate" 3.1 "Valuation Date" 10.5(b)

SECTION 1.3 Incorporation by Reference of Trust Indenture Act. This Indenture is subject to the mandatory provisions of the TIA, which are incorporated by reference in and made a part of this Indenture. The following TIA terms have the following meanings: "Commission" means the SEC. "indenture notes" means the Notes. "obligor" on the Notes means the Company and any other obligor on the indenture notes. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions. SECTION 1.4 Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; 23 (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) "including" means including without limitation; (5) in the singular include the plural and words in the plural include the singular; (6) the principal amount of any non-interest-bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the Company dated such date prepared in accordance with GAAP; (7) all references to $, US$, dollars or United States dollars shall refer to the lawful currency of the United States; and (8) "herein," "hereof" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. ARTICLE 2 THE SECURITIES SECTION 2.1 Form and Dating. The Initial Units, the Notes forming the Initial Units and the Trustee's certificate of authentication relating thereto shall be substantially in the form of Exhibit A, which is hereby incorporated in and expressly made a part of this Indenture. The Exchange Units, the Notes forming the Exchange Units and the Trustee's certificate of authentication relating thereto shall be substantially in the form of Exhibit B hereto. The Units and Notes may have notations, legends or endorsements required by law, stock exchange rules, agreements to which the Issuers are subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Issuers). Each Unit and Note shall be dated the date of its authentication. If required, the Notes may bear the appropriate legend regarding any original issue discount for Federal income tax purposes. Each U.S. Note shall have attached to it an executed Subsidiary Guarantee substantially in the form of Exhibit E, from each of the Subsidiary Guarantors. Each U.K. Note shall have attached to it an executed Note Guarantee substantially in the form of Exhibit E, from the Company and each of the Subsidiary Guarantors. The Notes of each Issuer will not trade separately unless a Separation Event has occurred. The terms and provisions contained in the Units and the Notes, annexed hereto as Exhibits A and B, shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Issuers, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. Global Units. The Units offered and sold in reliance on Rule 144A, the Units offered and sold in reliance on Regulation S and the Units offered and sold in reliance on Rule 501(a)(1), (2), (3) or (7) under the Securities Act shall be issued initially in the form of one or more permanent global units ("Global Units"), each Global Unit consisting of a global U.S. Note ("Global U.S. Note") and global U.K. Note ("Global U.K. Note" and, together with the Global U.S. Notes, the "Global Notes") in definitive, fully registered form without interest coupons, in substantially the form of Exhibit A, which shall be 24 deposited on behalf of the purchasers of the Units represented thereby with the Trustee, at the Trustee's office in Chicago, Illinois, as custodian for the Depository, and registered in the name of the Depository or a nominee of the Depository, duly executed by the Issuers (and having executed Note Guarantees endorsed thereon) and authenticated by the Trustee as hereinafter provided and shall bear the legend set forth in Section 2.13. The aggregate principal amount of the Global Notes underlying the Units may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee in the limited circumstances hereinafter provided. All Global Units and Notes offered and sold in reliance on Regulation S shall remain in the form of Global Units and Global Notes until the consummation of the Exchange Offer pursuant to the Registration Rights Agreement; provided, however, that all of the time periods specified in the Registration Rights Agreement to be complied with by the Issuers have been so complied with. The definitive Units and Notes shall be typed, printed or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any securities exchange on which the Notes may be listed, all as determined by the Officers executing such Units and Notes, as evidenced by their execution of such Units and Notes. SECTION 2.2 Execution and Authentication; Aggregate Principal Amount. An Officer (who shall have been duly authorized by all requisite corporate actions) shall sign the Units for the Issuers by manual or facsimile signature. An Officer (who shall have been duly authorized by all requisite corporate actions) shall sign the U.S. Notes for the Issuers by manual or facsimile signature. An Officer (who shall have been duly authorized by all requisite corporate actions) shall sign the U.K. Notes for the Issuers by manual or facsimile signature. If an Officer whose signature is on a Unit or a Note was an Officer at the time of such execution but no longer holds that office or position at the time the Trustee authenticates the Unit or Note, such Unit or Note shall nevertheless be valid. A Unit or Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on such Unit or Note. The signature shall be conclusive evidence that the Unit or Note has been authenticated under this Indenture. The Trustee shall authenticate (i) 75,500 Initial Units, each Unit consisting of (a) $860 principal amount of Initial U.S. Notes and (b) $140 principal amount of Initial U.K. Notes for original issue, (ii) Exchange Units, each Exchange Unit consisting of (a) $860 principal amount of Exchange U.S. Notes and (b) $140 principal amount of Exchange U.K. Notes, from time to time after the Issue Date for issue only in exchange for a like principal amount of Initial Notes and (iii) subject to compliance with Section 4.3, additional Units ("Additional Units"), each such Unit consisting of a U.S. Note and U.K. Note ("Additional Notes") for original issue after the Issue Date in an unlimited amount in each case upon written orders of the Issuers in the form of an Officers' Certificate, which Officers' Certificate shall, in the case of any issuance of Additional Units, certify that such issuance is in compliance with Section 4.3. In addition, each Officers' Certificate shall specify the amount of Units and Notes to be authenticated and the date on which the Units and Notes are to be authenticated, whether the Units are to be Initial Units, Exchange Units or Additional Units, and shall further specify the amount of such Units to be issued as Global Units. All Notes issued under this Indenture shall vote and consent together on all 25 matters as one class and no Additional Notes will have the right to vote or consent as a separate class on any matter. The Trustee may appoint an authenticating agent (the "Authenticating Agent") reasonably acceptable to the Issuers to authenticate Units and Notes. Unless otherwise provided in the appointment, an Authenticating Agent may authenticate Units and Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such Authenticating Agent. An Authenticating Agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demand. The Units and Notes shall be issuable in fully registered form only, without coupons, in denominations of (i) $860 for the U.S. Notes, (ii) $140 for the U.K. Notes and (iii) $1,000 for the Units; or, in each case, any integral multiple thereof. In the event the Issuers shall issue and the Trustee shall authenticate any Additional Units, the Issuers shall use their best efforts to obtain the same "CUSIP" number for such Additional Units as is printed on the Units outstanding at such time; provided, however, that if any such Additional Units issued under this Indenture are determined to be a different class of Unit than the Units outstanding for Federal income tax purposes, the Issuers may obtain a "CUSIP" number for such Additional Units that is different from the "CUSIP" number printed on the Units then outstanding. Notwithstanding the foregoing, all Notes and Additional Notes issued under this Indenture shall vote and consent together on all matters as one class and neither the Notes nor Additional Notes will have the right to vote or consent as a separate class on any matter. SECTION 2.3 Registrar and Paying Agent. The Issuers shall maintain an office or agency in New York City where Units or, if a Separation Event has occurred, Notes may be presented for registration of transfer or for exchange (the "Registrar") and an office or agency where Units or Notes may be presented for payment (the "Paying Agent"). The Registrar, acting on behalf of and as agent for the Issuers, shall keep a register (the "Register") of the Units and Notes and of their transfer and exchange. The Issuers may have one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent. The Issuers shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Issuers shall promptly notify the Trustee in writing of the name and address of any such agent. If the Issuers fail to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation and indemnification therefor pursuant to Section 7.7. The Issuers may act as Paying Agent, Registrar, co-Registrar or transfer agent. The Issuers initially appoint the Trustee as Registrar and Paying Agent in connection with the Units and Notes, until such time as the Trustee has resigned or a successor has been appointed pursuant to Section 7.8. Any of the Registrar, the Paying Agent or any other agent may resign upon 30 days' notice to the Issuers. SECTION 2.4 Paying Agent To Hold Money in Trust. On or prior to 10:00 a.m. New York City time on each due date of the principal and interest on any Note, the Issuers shall deposit with the Paying Agent a sum sufficient to pay such principal and interest when so becoming due. The Issuers shall require each Paying Agent (other than the 26 Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all sums held by the Paying Agent for the payment of principal of or interest on the Notes and shall notify the Trustee of any default by the Issuers or any other obligor in making any such payment. If the Issuers or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Issuers at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section 2.4, the Paying Agent shall have no further liability for the money delivered to the Trustee. SECTION 2.5 Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Issuers shall furnish or cause the Registrar to furnish to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list as of such date and in such form as the Trustee may reasonably request of the names and addresses of Holders; provided that as long as the Trustee is the Registrar, no such list need be furnished. SECTION 2.6 Transfer and Exchange. The Units (including the underlying Notes) shall be issued in registered form and shall be transferable only upon the surrender of a Unit (or, if a Separation Event has occurred, Notes) for registration of transfer. When a Unit (or, if a Separation Event has occurred, a Note) is presented to the Registrar or a co-registrar with a request to register a transfer, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Registrar shall record in the Register the transfer as requested if the requirements of Section 8-401(1) of the Uniform Commercial Code are met, and thereupon one or more new Units (including underlying Notes) or, if a Separation Event has occurred, new Notes in the same aggregate principal amount shall be issued to the designated assignee or transferee and the old Unit or Note will be returned to the Issuers. When Units (or, if a Separation Event has occurred, a Note) are presented to the Registrar or a co-registrar with a request to exchange them for an equal principal amount of Notes of other denominations, the Registrar shall make the exchange as requested, in the same manner, if the same requirements are met. To permit registration of transfers and exchanges, the Issuers shall execute and the Trustee shall authenticate Units and Notes and each of the Guarantors shall execute a Note Guarantee thereon at the Registrar's or co-registrar's request. The Issuers may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section 2.6. The Issuers shall not be required to make and the Registrar need not register transfers or exchanges of Notes selected for redemption (except, in the case of Notes to be redeemed in part, the portion thereof not to be redeemed) or any Notes during a period beginning at the opening of business fifteen (15) days before the mailing of a notice of redemption of Notes and ending at the close of business on the day of such mailing or 15 days before an interest payment date. Prior to the due presentation for registration of transfer of any Unit (or, if a Separation Event occurs, Note), the Issuers, the Trustee, the Paying Agent, the Registrar or any co-registrar may deem and treat the person in whose name a Unit or Note is registered as the absolute owner of such Unit or Note for the purpose of receiving payment of principal of and interest and for all other purposes whatsoever, whether or not such Unit or Note is overdue, and none of the Issuers, the Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected by notice to the contrary. 27 All Units and Notes issued upon any transfer or exchange pursuant to the terms of this Indenture will evidence the same debt and will be entitled to the same benefits under this Indenture as the Units or Notes surrendered upon such transfer or exchange. With respect to Global Units and Global Notes: (1) Each Global Unit and Global Note authenticated under this Indenture shall (i) be registered in the name of the Depository designated for such Global Unit and in the name of the Trustee for the Global Note or a nominee thereof, (ii) be deposited with such Depository or a nominee thereof or custodian therefor, (iii) bear legends as set forth in Section 2.13 and (iv) constitute a single Unit or Note for all purposes of this Indenture. Members of, or participants in, the Depository ("Participants") shall have no rights under this Indenture with respect to any Global Unit or Global Note held on their behalf by the Depository, or the Trustee as its custodian, or under the Global Unit or Global Notes, and the Depository may be treated by the Issuers, the Trustee and any Agent of the Issuers or the Trustee as the absolute owner of such Global Unit and underlying Global Notes for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the Trustee or any Agent of the Issuers or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Participants, the operation of customary practices governing the exercise of the rights of a Holder of any Unit or Note. Neither the Trustee nor any agent shall have any responsibility for any actions taken or not taken by the Depository. (2) Transfers of a Global Unit or Global Note, as the case may be, shall be limited to transfers in whole, but not in part, to the Depository, its successors or their respective nominees. In addition, a Global Unit or Global Note is exchangeable for certificated Units or Notes, as applicable, if (i) the Depository notifies the Issuers that it is unwilling or unable to continue as a Depository for such Global Unit or Global Note or if at any time the Depository ceases to be a clearing agency registered under the Exchange Act and a successor Depository is not appointed by the Issuers within ninety (90) days of such notice, (ii) the Issuers execute and deliver to the Trustee a notice that such Global Unit or Global Note shall be so transferable, registrable, and exchangeable, and such transfers shall be registrable or (iii) there shall have occurred and be continuing an Event of Default or an event which, with the giving of notice or lapse of time or both, would constitute an Event of Default with respect to the Units or Notes represented by such Global Unit or Global Note, as applicable. Any Global Unit or Global Note that is exchangeable for certificated Units or Notes, as applicable, pursuant to the preceding sentence will be transferred to, and registered and exchanged for, certificated Units or Notes, as applicable, in authorized denominations, without legends applicable to a Global Unit or Global Note, and registered in such names as the Depository holding such Global Unit or Global Note may direct. Subject to the foregoing, a Global Unit or Global Note is not exchangeable, except for a Global Unit or Global Note of like denomination to be registered in the name of the Depository or its nominee. In the event that a Global Unit becomes exchangeable for certificated Units, (i) certificated Units will be issued only in fully registered form in denominations of (i) $860 for the U.S. Notes, (ii) $140 for the U.K. Notes and (iii) $1,000 for the Units; or, in each case, any integral multiple thereof, (ii) payment of principal, any repurchase price, and interest on the underlying certificated Notes will be payable, and the transfer of the certificated Notes will be registrable, at the office or agency of the Issuers maintained for such purposes, and (iii) no service charge will be made for any registration or transfer or exchange of the certificated Units, although the Issuers may require payment of a sum sufficient to cover any tax or governmental charge imposed in connection therewith. If a Separation Event has occurred and a Global Note becomes 28 exchangeable for certificated Notes, (i) certificated Notes will be issued only in fully registered form in denominations of $860 for the U.S. Notes and $140 for the U.K. Notes, (ii) payment of principal, any repurchase price, and interest on the certificated Notes will be payable, and the transfer of the certificated Notes will be registrable, at the office or agency of the Issuers maintained for such purposes, and (iii) no service charge will be made for any registration or transfer or exchange of the certificated Notes, although the Issuers may require payment of a sum sufficient to cover any tax or governmental charge imposed in connection therewith. (3) Units and Notes issued in exchange for a Global Unit or Global Note or any portion thereof shall have an aggregate principal amount equal to that of such Global Unit or Global Note or portion thereof to be so exchanged, shall be registered in such names and be in such authorized denominations as the Depository shall designate and shall bear the applicable legends provided for herein. Any Global Unit or Global Note to be exchanged in whole shall be surrendered by the Depository to the Trustee. With respect to any Global Unit or Global Note to be exchanged in part, either such Global Unit or Global Note shall be so surrendered for exchange or, if the Trustee is acting as custodian for the Depository or its nominee with respect to such Global Unit or Global Note, the principal amount thereof shall be reduced, by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of the Trustee. Upon any such surrender or adjustment, the Trustee shall authenticate and deliver the Unit or Note issuable on such exchange to or upon the order of the Depository or an authorized representative thereof. (4) Every Unit and Note authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Unit or Global Note or any portion thereof, whether pursuant to this Section 2.6, Section 2.7, 2.9, 2.14 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Unit or Global Note, as applicable, unless such Unit is registered (i) in the name of a Person other than the Depository or a nominee thereof for such Global Unit or (ii) in the name of a Person other than the Trustee for such Global Note or a nominee thereof. Participants shall have no rights under this Indenture with respect to any Global Unit or Global Note held on their behalf by the Depository or by the Trustee as the custodian of the Depository or under such Global Unit or Global Note, and the Depository may be treated by the Issuers, the Trustee and any agent of the Issuers or the Trustee as the absolute owner of such Global Unit or Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the Trustee or any agent of the Issuers or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Participants, the operation of customary practices of such Depository governing the exercise of the rights of a holder of a beneficial interest in any Global Unit or Global Note. Neither the Trustee nor any agent shall have any responsibility for any actions taken or not taken by the Depository. SECTION 2.7 Replacement Units and Notes. If a mutilated Unit or Note is surrendered to the Trustee or Registrar or if the Holder of a Unit or Note claims that the Unit or Note has been lost, destroyed or wrongfully taken, the Issuers shall issue and the Trustee shall authenticate a replacement Unit or Note and Guarantors shall execute a Note Guarantee thereon if the requirements of Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies any other reasonable requirements of the Trustee and the Issuers. Except with respect to mutilated Units and Notes, such Holder must provide an affidavit of lost certificate and furnish an indemnity bond sufficient in the judgment of the Issuers, the Guarantors and the Trustee to protect the Issuers, the Guarantors, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss, 29 liability, cost or expense which any of them may suffer if a Unit or Note is replaced. The Issuers and the Trustee may charge the Holder for their expenses in replacing a Unit or Note. In case any such mutilated, lost, destroyed or wrongfully taken Unit or Note has become or is about to become due and payable, the Issuers in their discretion may pay such Unit or Note instead of issuing a new Unit or Note in replacement thereof. Every replacement Unit or Note issued pursuant to the terms of this Section 2.7 shall constitute an additional obligation of the Issuers and the Guarantors under this Indenture. The provisions of this Section 2.7 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Units or Notes. SECTION 2.8 Outstanding Units and Notes. Units or Notes outstanding at any time are all Units or Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.8 as not outstanding. Subject to the provisions of Section 12.6, a Unit or Note does not cease to be outstanding because the Issuers or an Affiliate of the Issuers holds such Unit or Note. If a Unit or Note is replaced pursuant to Section 2.7 (other than a mutilated Unit or Note surrendered for replacement), it ceases to be outstanding unless the Trustee and the Issuers receive proof satisfactory to them that the replaced Unit or Note is held by a bona fide purchaser. A mutilated Unit or Note ceases to be outstanding upon surrender of such Unit or Note and replacement thereof pursuant to Section 2.7. If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date or, pursuant to Section 8.1(a), within 91 days prior thereto, money sufficient to pay all principal and interest payable on that redemption or maturity date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, then on and after such date such Notes (or portions thereof) cease to be outstanding and on and after such redemption or maturity date interest on them ceases to accrue. SECTION 2.9 Temporary Units and Notes. Until definitive Units or Notes are ready for delivery, the Issuers may prepare and execute and the Trustee shall authenticate temporary Units or Notes upon receipt of a written order of the Issuers in the form of an Officers' Certificate. The Officers' Certificate shall specify the amount of temporary Units or Notes to be authenticated and the date on which the temporary Units or Notes are to be authenticated. Temporary Units and Notes shall be substantially in the form of definitive Units and Notes but may have variations that the Issuers considers appropriate for temporary Units and Notes. Without unreasonable delay, the Issuers shall prepare and the Trustee shall authenticate definitive Units and Notes and deliver them in exchange for temporary securities. SECTION 2.10 Cancellation. The Issuers at any time may deliver Units or Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Units or Notes surrendered to them for registration of transfer, exchange or payment. The Trustee, or at the discretion of the Trustee, the Registrar or the Paying Agent, and no one else shall cancel all Units or Notes surrendered for registration 30 of transfer, exchange, payment or cancellation and deliver such canceled Units or Notes to the Issuers. The Trustee shall from time to time provide the Issuers a list of all Units or Notes that have been canceled as requested by the Issuers. Subject to Section 2.7, the Issuers may not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for cancellation. The Trustee shall dispose of all cancelled Units and Notes in accordance with customary procedures, or, at the written request of the Issuers, shall return the same to the Issuers. SECTION 2.11 Defaulted Interest. If the Issuers default in a payment of interest on the Notes, the Issuers shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner in accordance with Section 4.1. The Issuers may pay the defaulted interest to the persons who are Holders on a subsequent special record date. The Issuers shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail to each Holder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid. SECTION 2.12 CUSIP Numbers. The Issuers in issuing the Units shall use "CUSIP" numbers. If a Separation Event Occurs, the Company and MSXI Limited shall as soon as practicable obtain "CUSIP" numbers for the U.S. Notes and U.K. Notes, respectively. The Trustee shall use "CUSIP" numbers in notices of redemption, purchase or exchange as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Units or Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Units or Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuers will promptly notify the Trustee in writing of any change in the CUSIP numbers. SECTION 2.13 Restrictive Legends. Each Global Unit, Global Note, Physical Unit and Physical Note that constitutes a Restricted Security or is sold in compliance with Regulation S shall bear the following legend (the "Private Placement Legend") on the face thereof until after the second anniversary of the later of the Issue Date and the last date on which the Issuers or any Affiliate of the Issuers was the owner of such Unit or Note (or any predecessor security) (or such shorter period of time as permitted by Rule 144(k) under the Securities Act or any successor provision thereunder) (or such longer period of time as may be required under the Securities Act or applicable state securities laws in the opinions of counsel for the Issuers, unless otherwise agreed by the Issuers and the Holder thereof): THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS A NON-U.S. PURCHASER AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS AN INSTITUTIONAL 31 "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT, AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE UNITS ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S, OR TRANSFER AGENT'S, AS APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E), OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE OR TRANSFER AGENT. Each Global Unit shall also bear the following legend on the face thereof: UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS UNIT MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ITS NOMINEES AND THEIR RESPECTIVE SUCCESSORS (THE "DEPOSITORY") TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO AN ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL UNIT SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF 32 OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL UNIT SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.14 OF THE INDENTURE. Each Global Note shall also bear the following legend on the face thereof: UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ITS NOMINEES AND THEIR RESPECTIVE SUCCESSORS (THE "DEPOSITORY") TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO AN ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.14 OF THE INDENTURE. SECTION 2.14 Special Transfer Provisions. (a) Transfers to Non-QIB Institutional Accredited Investors and Non-U.S. Persons. The following provisions shall apply with respect to the registration of any proposed transfer of a Unit (including the underlying Notes) or, if a Separation Event has occurred, a Note constituting a Restricted Security to any Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person: (i) the Registrar shall register the transfer of any Unit or Note constituting a Restricted Security whether or not such Unit or Note bears the Private Placement Legend, if (x) the requested transfer is after the second anniversary of the Issue Date (provided, however, that neither the Issuers nor any Affiliate of the Issuers have held any beneficial interest in such Unit or Note, or portion thereof, at any time on or prior to the second anniversary of the Issue Date) or (y) (1) in the case of a transfer to an Institutional Accredited Investor which is not a QIB (excluding Non-U.S. Persons), the proposed transferee has delivered to the Registrar a certificate substantially in the form of Exhibit C hereto and any legal opinions and certifications required thereby or (2) in the case of a transfer to a Non-U.S. Person, the proposed transferor has delivered to the Registrar a certificate substantially in the form of Exhibit D hereto; and (ii) if the proposed transferor is a Participant holding a beneficial interest in the Global Unit or Global Note, upon receipt by the Registrar of (x) the certificate, if any, required by paragraph (i) above and (y) written instructions given in accordance with the Depository's and the Registrar's procedures, 33 whereupon (a) the Registrar shall reflect on its books and records the date and (if the transfer does not involve a transfer of outstanding Physical Units (including underlying Notes) or, if a Separation Event has occurred, Physical Notes) a decrease in the principal amount of the Global Notes underlying such Global Unit or, if a Separation Event has occurred, the principal amount of such Global Note in an amount equal to the principal amount of the beneficial interest in the Global Notes to be transferred, and (b) the Issuers shall execute, the Guarantors shall execute the Note Guarantees on, and the Trustee shall authenticate and deliver, one or more Physical Notes of like tenor and principal amount. (b) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer of a Unit (including the underlying Notes) or, if a Separation Event has occurred, a Note constituting a Restricted Security to a QIB (excluding transfers to Non-U.S. Persons): (i) the Registrar shall register the transfer if such transfer is being made by a proposed transferor who has checked the box provided for on the form of Unit or Note stating, or has otherwise advised the Issuers and the Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on the form of Unit or Note stating, or has otherwise advised the Issuers and the Registrar in writing, that it is purchasing the Unit or Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuers as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A; and (ii) if the proposed transferee is a Participant, and the Units or Notes to be transferred consist of Physical Units or Physical Notes, as applicable, which after transfer are to be evidenced by an interest in a Global Unit (including an interest in the underlying Global Notes) or a Global Note, as applicable, upon receipt by the Registrar of written instructions given in accordance with the Depository's and the Registrar's procedures, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Notes underlying such Global Unit or, if a Separation Event has occurred, the principal amount of such Global Note in an amount equal to the principal amount of the Physical Notes to be transferred, and the Trustee shall cancel the Physical Notes so transferred. (c) Private Placement Legend. Upon the transfer, exchange or replacement of Units and Notes not bearing the Private Placement Legend, the Registrar shall deliver Units and Notes that do not bear the Private Placement Legend. Upon the transfer, exchange or replacement of Units and Notes bearing the Private Placement Legend, the Registrar shall deliver only Units and Notes that bear the Private Placement Legend unless (i) the requested transfer is after the second anniversary of the Issue Date (provided, however, that neither the Issuers nor any Affiliate of the Issuers have held any beneficial interest in such Unit or Note, or portion thereof, at any time prior to or on the second anniversary of the Issue Date), or (ii) there is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the Issuers and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act. The Registrar shall not register a transfer of any Unit or Note unless such transfer complies with the restrictions on transfer of such Unit or Note set forth in this Indenture. In connection with any transfer of Units or Notes, each Holder agrees by its acceptance of the Units or Notes to furnish the Registrar or the Issuers such certifications, legal opinions or other information as either the Registrar or the Issuers may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or a transaction not 34 subject to, the registration requirements of the Securities Act; provided that the Registrar shall not be required to determine (but may conclusively rely on a determination made by the Issuers and provided to the Trustee orally (promptly confirmed in writing) or in writing with respect to) the sufficiency of any such certifications, legal opinions or other information. (d) General. By its acceptance of any Unit or Note bearing the Private Placement Legend, each Holder acknowledges the restrictions on transfer of such Unit or Note set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Unit or Note only as provided in this Indenture. The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.6 or this Section 2.14. The Issuers shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time during the Registrar's normal business hours upon the giving of reasonable written notice to the Registrar. Each Holder agrees to indemnify the Issuers and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder's Unit or Note in violation of any provision of this Indenture and/or applicable United States Federal or state securities law. The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Unit or Note (including any transfers between or among Participants or beneficial owners of interests in any Global Unit or Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. (e) Transfers of Notes Held by Affiliates. Any certificate (i) evidencing a Unit or Note that has been transferred to an Affiliate of the Issuers within two years after the Issue Date, as evidenced by a notation on the Assignment Form for such transfer or in the representation letter delivered in respect thereof or (ii) evidencing a Unit or Note that has been acquired from an Affiliate (other than by an Affiliate) in a transaction or a chain of transactions not involving any public offering, shall, until two years after the last date on which either the Issuers or any Affiliate of the Issuers was an owner of such Unit or Note, in each case, bear a legend in substantially the form set forth in Section 2.13 hereof, unless otherwise agreed by the Issuers (with written notice thereof to the Trustee). ARTICLE 3 REDEMPTION SECTION 3.1 Redemption. (a) Optional Redemption Prior to August 1, 2005. At any time prior to August 1, 2005, the Issuers may, at their option, on one or more occasions redeem all or part of their Notes at a redemption price equal to the greater of (1) 100% of the principal amount of the Notes being redeemed and (2) the sum of the present values of 105.5% of the principal amount of the Notes being redeemed 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 redemption of the Notes prior to August 1, 2005 shall include 35 both U.S. Notes and U.K. Notes on a pro rata basis based on the aggregate principal amount of the Notes outstanding at the time of redemption, unless a Change of Control of MSXI Limited has occurred. (i) "Treasury Rate" " means, with respect to any redemption 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. (ii) "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). (iii) "Comparable Treasury Price" means, with respect to any redemption 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. (iv) "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. (v) "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. (b) Optional Redemption on or After August 1, 2005. On or after August 1, 2005, the Notes will be redeemable, at the Issuers' 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 and Additional Amounts, if any, to the redemption date (subject to the right of Holders of record on the relevant record date receive interest due on the relevant interest payment date), if redeemed during the period commencing on the date set forth below:
REDEMPTION DATE PRICE - ---- ---------- ~~August 1, 2005.......................... 105.500% February 1, 2006........................ 102.750% August 1, 2006 and thereafter.............................. 100.000%~~
36 The foregoing optional redemption of the Notes on or after August 1, 2005 shall include both U.S. Notes and U.K. Notes on a pro rata basis based on the aggregate principal amount of the Notes outstanding at the time of redemption, unless a Change of Control of MSXI Limited has occurred. (c) Redemption Upon Equity Offering. In addition, at any time and from time to time prior to August 1, 2005, the Issuers may redeem at their 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 redemption price (expressed as a percentage of principal amount) of 111.0% plus accrued and unpaid interest and Additional Amounts, if any, to the redemption 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 redemption. The foregoing optional redemption of the Notes shall include both U.S. Notes and U.K. Notes on a pro rata basis based on the aggregate principal amount of the Notes outstanding at the time of redemption, unless a Change of Control of MSXI Limited has occurred. (d) Tax Redemption. U.K. Notes may be redeemed, at the option of MSXI Limited, as a whole, but not in part (limited to U.K. Notes with respect to which an Additional Amount (as described below) is or may be required), at any time, upon giving notice to Holders not less than 30 days nor more than 60 days prior to the date fixed for redemption (which notice shall be irrevocable), at a redemption price equal to the principal amount thereof, together with interest accrued to the date fixed for redemption and any Additional Amounts payable with respect thereto, if MSXI Limited determines and certifies to the Trustee immediately prior to the giving of such notice that (i) they have or will become obligated to pay Additional Amounts in respect of such U.K. 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 U.K. Notes and (ii) such obligation cannot be avoided by MSXI Limited taking reasonable measures available to it, provided, that no such notice of redemption shall be given earlier than 60 days prior to the earliest date on which MSXI Limited would be obligated to pay such Additional Amounts if a payment in respect of such U.K. Notes was then due. Prior to the giving of any notice of redemption described in this Section 3.1(d), MSXI Limited shall deliver to the Trustee (a) a certificate signed by two directors of MSXI Limited stating that the obligation to pay Additional Amounts cannot be avoided by MSXI Limited taking reasonable measures available to them and (b) an Opinion of Counsel to the effect that MSXI Limited has become obligated to pay Additional Amounts as a result of such a change or amendment described above and that MSXI Limited cannot avoid payment of such Additional Amounts by taking reasonable measures available to them. SECTION 3.2 Notices to Trustee. If the Issuers elect to redeem Notes pursuant to Section 3.1, they shall notify the Trustee in writing of the redemption date, the principal amount of Notes to be redeemed and the paragraph of the Notes pursuant to which the redemption will occur. The Issuers shall give each notice to the Trustee provided for in this Section 3.2 at least 45 days before the redemption date unless the Trustee consents to a shorter period. Such notice shall be accompanied by an Officers' Certificate from the Issuers to the effect that such redemption will comply with the provisions herein. 37 SECTION 3.3 Selection of Notes To Be Redeemed. If fewer than all the Notes are to be redeemed, the Trustee shall select the Notes to be redeemed pro rata or by lot or by such other method that complies with applicable legal and securities exchange requirements, if any, and that the Trustee in its sole discretion shall deem to be fair and appropriate and in accordance with customary practice. The Trustee shall make the selection from outstanding Notes not previously called for redemption. The Trustee may select for redemption portions of the principal of Notes that have denominations larger than $1,000. Notes and portions of them that the Trustee selects shall be in amounts of $1,000 or a whole multiple of $1,000. No Note of $1,000 in original principal amount or less will be redeemed in part. If any Note is to be redeemed in part only, the notice of redemption relating to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. The Trustee shall notify the Issuers promptly of the Notes or portions of Notes to be redeemed. In the event the Issuers are required to make an offer to repurchase Notes pursuant to Sections 4.7, 4.12 or 4.23 and the amount available for such offer is not evenly divisible by $1,000, the Trustee shall promptly refund to the Issuers any remaining funds, which in no event will exceed $1,000. SECTION 3.4 Notice of Redemption. At least 30 days but not more than 60 days before a date for redemption of Notes, the Issuers shall mail or cause to be mailed a notice of redemption by first-class mail to the registered address appearing in the Note Register of each Holder of Notes to be redeemed. The notice shall identify the Notes to be redeemed and shall state: (1) the redemption date; (2) the redemption price and the amount of accrued interest, if any, to be paid; (3) the name and address of the Paying Agent; (4) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price plus accrued interest, if any; (5) if fewer than all the outstanding Notes are to be redeemed, the identification and principal amounts of the particular Notes to be redeemed; (6) that, unless the Issuers default in making such redemption payment, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date; (7) the paragraph of the Notes pursuant to which the Notes called for redemption are being redeemed; (8) the CUSIP number, if any, printed on the Notes being redeemed; and (9) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes. At the Issuers' written request, the Trustee shall give the notice of redemption in the Issuers' name and at the Issuers' sole expense; provided that such request by the Issuers to the Trustee is 38 received by the Trustee at least seven (7) Business Days prior to the date the Trustee is requested to give notice to the Holders whose Notes are to be redeemed. In such event, the Issuers shall provide the Trustee with the information required by this Section 3.4. SECTION 3.5 Effect of Notice of Redemption. Once notice of redemption is mailed in accordance with Section 3.4, Notes called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to the Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus accrued interest to the redemption date. Such notice if mailed in the manner herein provided shall be conclusively presumed to have been given, whether or not the Holder receives such notice. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder. SECTION 3.6 Deposit of Redemption Price. Prior to 10:00 a.m. (New York City time) on the redemption date, the Issuers shall deposit with the Trustee or Paying Agent (or, if the Issuers or a Subsidiary is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest (if any) on all Notes or portions thereof to be redeemed on that date other than Notes or portions of Notes called for redemption which have been delivered by the Issuers to the Trustee for cancellation. The Trustee or Paying Agent shall promptly return to the Issuers any money so deposited which is not required for that purpose. Unless the Issuers default in the payment of such Redemption Price plus accrued interest, if any, interest on the Notes to be redeemed will cease to accrue on and after the applicable redemption date, whether or not such Notes are presented for payment. SECTION 3.7 Notes Redeemed in Part. Upon surrender of a Note that is redeemed in part (with, if the Issuers or the Trustee so require, due endorsement by, or a written instrument of transfer in form satisfactory to the Issuers and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), the Issuers shall execute, and the Trustee shall authenticate and deliver to the Holder of such Note without service charge, a new Note or Notes of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Note so surrendered, except that if a Global Note is so surrendered, the Issuers shall execute, and the Trustee shall authenticate and deliver to the Depository for such Global Note, without service charge, a new Global Note in denomination equal to and in exchange for the unredeemed portion of the principal of the Global Note so surrendered. ARTICLE 4 COVENANTS SECTION 4.1 Payment of Notes. The Company shall promptly pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and in this Indenture. Principal and interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and interest then due. The Company shall pay interest on 39 overdue principal at 1% per annum in excess of the rate per annum set forth in the Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. Notwithstanding anything to the contrary contained in this Indenture, the Company may, to the extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal or interest payments hereunder. SECTION 4.2 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 Trustee, the Initial Purchaser, the Holders and prospective Holders (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 Trustee and Holders and prospective Holders (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. SECTION 4.3 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 Subsidiary Guarantors may Incur Indebtedness if, immediately after giving effect to such Incurrence, the Consolidated Coverage Ratio exceeds 2.25 to 1. (b) Notwithstanding the foregoing paragraph (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 Administrative Agent, the 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 foregoing clauses (i) and (ii) as a result of currency fluctuations; (2) Indebtedness represented by (i) the Notes issued in the Offering (and the Exchange Notes), and (ii) Indebtedness represented by the Note Guarantees; 40 (3) Indebtedness pursuant to agreements as in effect on the Issue Date (other than Indebtedness described in clause (1) of this Section 4.3(b)), including without limitation the New Third Lien Notes and the Fourth Lien Term Loan; (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 Subsidiary 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 paragraph (a) or pursuant to clause (2), (3) or this clause (5) of this Section 4.3(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 Issue 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; or (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 4.3(a)), does not exceed $10.0 million. 41 (c) For purposes of determining compliance with this Section 4.3, (i) in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 4.3(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 4.3(b) and (ii) an item of Indebtedness may be divided and classified in more than one of the types of Indebtedness described in Section 4.3(b). SECTION 4.4 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: (1) a Default or an Event of Default shall have occurred and be continuing (or would result therefrom); (2) the Company is not able to Incur an additional $1.00 of Indebtedness pursuant to Section 4.3(a); or (3) 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) declared or made since the Issue Date would exceed the sum of: (A) 50% of the Consolidated Net Income accrued during the period (treated as one accounting period) from the Issue 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 Issue 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 Issue 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 Issue 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. 42 (b) The provisions of Section 4.4(a) shall not prohibit: (i) any purchase or redemption of Capital Stock, Subordinated Obligations, the Third Term Lien Note or the New Third Lien Note 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 Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company); provided, however, that (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 (3)(B) of paragraph (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 4.3(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 4.3(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 New Third Lien Note or Fourth Lien Term Loan 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 4.3(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 4.4; 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 Section 4.3 hereof; provided, further, however, that such Guarantee shall be excluded from the amount of Restricted Payments; 43 (vii) any purchase or redemption of the Company's 11 3/8% Senior Subordinated Notes due 2008; provided, however, that the aggregate purchase price of all such purchases and redemptions shall not exceed $10.0 million; or (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 Issue Date. SECTION 4.5 Limitation 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 Issue 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; (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 4.5 (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 4.5 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 clause (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; 44 (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 4.3 hereof and which encumbrance or restriction is customary in agreements of such type. SECTION 4.6 Limitation on Sales of Assets and Subsidiary Stock. 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 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 Section 4.6, 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 Issue 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 (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 4.6; 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. 45 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 4.6(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 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 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 Indenture). Any repurchase of Notes pursuant to an Excess Proceeds Offer shall include both U.S. 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 repurchase, unless a Change of Control of MSXI Limited has occurred. 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 this Section 4.6 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 4.6, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.6 by virtue thereof. SECTION 4.7 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 4.7(a); 46 (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 4.7(a) and (iii) have been approved by a majority of the disinterested members of the Board of Directors; 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 4.7(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) The provisions of the foregoing paragraph (a) shall not prohibit: (i) any Restricted Payment permitted to be paid pursuant to Section 4.4; (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; (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; (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 Issue 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; (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 Issue 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 in paragraph (a) of this Section 4.7 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. SECTION 4.8 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 New Third Lien Notes or the Fourth Lien Term Loan) or (ii) permit any Restricted 47 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 4.6. SECTION 4.9 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 Issue Date or thereafter acquired. SECTION 4.10 Designation of Restricted and Unrestricted Subsidiaries. The Board of Directors 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 4.10); (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 4.4; (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 Indenture 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 48 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)(3) of Section 4.4. 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 pursuant to this Section 4.10 by the Board of Directors will be evidenced to the Trustee by filing with the Trustee 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 filing with the Trustee 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 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 provided in this Section 4.10, each Subsidiary of the Company shall be a Restricted Subsidiary. Except as provided in this Section 4.10, no Restricted Subsidiary shall be redesignated as an Unrestricted Subsidiary. The Board of Directors 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 Section 4.3(a) and (b) no Default shall have occurred and be continuing or would result therefrom. SECTION 4.11 Change of Control. (a) Upon the occurrence of a Change of Control of the Company, each Holder shall have the right to require that the Issuers repurchase all or a portion of such Holder's Notes at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest and Additional 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 4.11. Any such repurchase of the Notes shall include both U.S. 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 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, redeem the U.K Notes in whole, and not in part, at the optional redemption prices specified in (i) Section 3.1(a) for redemptions prior to August 1, 2005 and (ii) the first paragraph of Section 3.1(b) for redemptions on or after August 1, 2005. If MSXI Limited has not delivered a notice of redemption within 30 days following a Change of Control of MSXI Limited, each Holder of a U.K. Note shall have the right to require that MSXI Limited repurchase all or a portion of such Holder's U.K. Notes at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest and Additional 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 redemption notice to redeem all of the U.K. Notes in lieu of completing such offer to purchase. 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 Trustee stating: (1) that a Change of Control has occurred and that such Holder has the right to require the Issuers 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 Amounts, if any, to the date of 49 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 Issuers, consistent with this Section 4.11, 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 Trustee 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 4.11 shall be delivered to the Trustee for cancellation, and the Company shall pay the purchase price plus accrued and unpaid interest, if any, to the Holders entitled thereto. The Issuers 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 4.11. To the extent that the provisions of any securities laws or regulations conflict with the provisions of Section 4.11, the Issuers shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.11 by virtue thereof. SECTION 4.12 Compliance Certificate. The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company a certificate signed by 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 Indenture, specifying such noncompliance and the nature and status thereof. SECTION 4.13 Further Instruments and Acts. Upon request of the Trustee, the Company 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 Indenture. SECTION 4.14 Payment of Taxes and Other Claims. The Company shall, and shall cause each of its 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 its or its Subsidiaries' income, profits or property; provided, however, that neither the Company nor any of its Subsidiaries shall be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, 50 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 4.15 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: (1) execute and deliver to the Trustee a supplemental indenture in form reasonably satisfactory to the Trustee 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 Indenture on the terms set forth in this Indenture; (2) (a) execute and deliver to the Collateral Agent such amendments to the Collateral Agreements as the Collateral Agent reasonably determines to be necessary or advisable in order to grant to the Collateral Agent, for the benefit of the Holders, a perfected first priority security interest (subject to Liens securing the Senior Credit Facility) 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; (3) cause such new Domestic Restricted Subsidiary to take such other actions necessary to grant to the Collateral Agent for the benefit of the Holders a perfected first priority security interest in the personal property of such new Domestic Restricted Subsidiary to the extent required pursuant to the terms of the Collateral Agreements 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; (4) take such further action and execute and deliver such other documents specified in this Indenture to effectuate the foregoing; and (5) deliver to the Trustee an Opinion of Counsel that such supplemental indenture 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 Indenture. Thereafter, such Domestic Restricted Subsidiary shall be a Subsidiary Guarantor for all purposes of this Indenture. 51 SECTION 4.16 Maintenance of Office or Agency. The Company shall maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office or agency of the Trustee, Registrar or co-Registrar) as required pursuant to Section 2.3, where Notes may be surrendered for registration of transfer or exchange or for presentation for payment and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee's office in New York City as set forth in Section 12.2. The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, the City of New York, for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby initially designates the Trustee's office in New York City as set forth in Section 12.2 as an agency of the Company in accordance with Section 2.3. SECTION 4.17 Corporate Existence. Subject to Article 5 and Section 4.6, the Company 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 the Company and each of its Restricted Subsidiaries; provided, however, that the Company or any of its Restricted Subsidiaries shall not be required to preserve any such rights, licenses or franchises if the Board of Directors shall reasonably determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and the Subsidiaries, taken as a whole. SECTION 4.18 Impairment of Security Interest. Subject to the Intercreditor Agreement, neither the Company nor any of its Subsidiary Guarantors will take or omit to take any action which would adversely affect or impair the Liens in favor of the Collateral Agent, on behalf of itself, the Trustee and the Holders of the Notes, 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 Collateral Agent or a sub-Collateral Agent), 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 Indenture, the Notes, the Intercreditor Agreement and the Collateral Agreements (including, without limitation, the Intercreditor Agreement). The Company shall, and shall cause each Subsidiary 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 Collateral Agreements. 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 Collateral Agreements at such times and at such places as necessary. 52 SECTION 4.19 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 Issue Date with a Fair Market Value of greater than $1.0 million on the date of acquisition: (1) the Company shall deliver to the Collateral Agent, 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; (2) the Collateral Agent shall have received mortgagee's title insurance policies in favor of the Collateral Agent, as mortgagee for the ratable benefit of the Collateral Agent, the Trustee and the Holders in amounts and in form and substance and issued by insurers reasonably acceptable to the Collateral Agent, 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 (3) the Company shall deliver to the Collateral Agent, 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 Collateral Agent and its counsel shall reasonably request. SECTION 4.20 Waiver of Stay, Extension or Usury Laws. The Company 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 Company 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 Indenture; and (to the extent that it may lawfully do so) the Company 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 Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. SECTION 4.21 Additional Interest Notice. In the event that the Issuers are required to pay Additional Interest to Holders pursuant to the Registration Rights Agreement, the Issuers will provide written notice ("Additional Interest Notice") to the Trustee of its obligation to pay Additional Interest no later than fifteen days prior to the proposed payment date for the Additional Interest, and the Additional Interest Notice shall set forth the amount of Additional Interest to be paid by the Issuers on such payment date. The Trustee shall not at any time be under any duty or responsibility to any Holder to determine the Additional Interest, or with respect to the nature, extent, or calculation of the amount of Additional Interest owed, or with respect to the method employed in such calculation of the Additional Interest. 53 SECTION 4.22 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 not used by the Company and its Restricted Subsidiaries in the immediately preceding fiscal year. SECTION 4.23 Excess Cash Flow Offer. Within 90 days after the end of each fiscal year (beginning with the fiscal year ending January 2, 2005), the Issuers will make an offer to all Holders 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 and Additional Interest, if any, to the date of such purchase; provided, however, the Excess Cash Flow Offer Amount shall be reduced by the aggregate principal amount of Notes purchased by the Issuers in the open market completed prior to the date of such Excess Cash Flow offer. Each Excess Cash Flow offer shall remain open for a period 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 Issuers may, subject to the other provisions of this Indenture, use any such Excess Cash Flow for general corporate purposes. Upon receiving notice of the Excess Cash Flow offer, Holders may elect to tender their 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 U.S. 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 repurchase, unless a Change of Control of MSXI Limited has occurred. Within 20 Business Days prior to the required purchase date, the Issuers shall mail an offer to each Holder, with a copy to the Trustee, which offer will govern the terms of the Excess Cash Flow offer and will state, (1) the purchase price; (2) the purchase date, (3) that the Issuers 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 Issuers 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 4.23. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.23, the Issuers shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.23 by virtue thereof. Notwithstanding anything in this Section 4.23, the repurchase of the Notes by the Issuers under this Section 4.23 shall not be required if it would breach any covenant under the Credit Agreement and shall be limited to amounts as provided under the Credit Agreement. SECTION 4.24 Additional Amounts. All payments by MSXI Limited and any Guarantor in respect of the U.K. 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 ("Taxes"), imposed or levied by or on behalf of the United Kingdom or any 54 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 taxes, duties, assessments or other governmental charges. In such event, MSXI Limited or such Guarantor shall pay such additional amounts ("Additional Amounts") as may be necessary to ensure that the net amounts received by the Holders of the U.K. Notes after such withholding or deduction shall equal the amounts of such payments that would have been receivable in respect of the U.K. Notes in the absence of such withholding or deduction, except that no such Additional Amounts shall be payable in respect of any U.K. Note (i) presented for payment of principal more than 60 days after the later of (x) the date on which such payment first became due and (y) if the full amount payable has not been received in New York City by the Trustee on or prior to such due date, the date on which, the full amount having been so received, notice to that effect shall have been given to the Holders by the Trustee, except to the extent that the Holders would have been entitled to such Additional Amounts on presenting such U.K. Note for payment on the last day of the applicable 60 day period, (ii) if any tax, assessment or other governmental charge is imposed or withheld by reason of the failure to comply by the Holder or, if different, the beneficial owner of the interest payable on the U.K. Note with a timely request of MSXI Limited addressed to such Holder or beneficial owner to complete and return an official document concerning the nationality, residence, identity or connection with the United Kingdom or any relevant jurisdiction of such Holder or beneficial owner which is required or imposed by a statute, treaty, regulation or administrative practice of the United Kingdom or any relevant jurisdiction as a precondition to exemption from all or part of such tax, assessment or governmental charge and provided that the request to so comply is made in writing and delivered to such Holder or beneficial owner, as applicable, not later than 60 days prior to the date by which the delivery of such official document is required, (iii) held by or on behalf of a Holder who is liable for Taxes giving rise to such Additional Amounts in respect of such U.K. Note by reason of having some connection with the United Kingdom or any relevant jurisdiction (or any political subdivision or authority thereof) other than the mere purchase, holding or disposition of any U.K. Note, or the receipt of principal or interest in respect thereof, including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been present or engaged in a trade or business therein or having had a permanent establishment therein, (iv) where such withholding or deduction is imposed on a payment to an individual who is resident for tax purposes in a jurisdiction which is a member state of the European Union (whether such payment is made through a paying agent or otherwise) and is required to be made pursuant to European Union Directive 2003/48/EC of 3 June 2003 on the taxation of savings or any law implementing or complying with, or introduced in order to conform to such Directive. and any combination of (i), (ii), (iii), or (iv) nor shall Additional Amounts be paid with respect to any payment of the principal of, or any interest on, any U.K. Note to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent that a beneficiary or settlor or beneficial owner would not have been entitled to any Additional Amounts had such beneficiary or settlor or beneficial owner been the Holder. MSXI Limited or such 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 or such Guarantor will furnish copies of such receipts evidencing the payment of any Taxes so deducted or withheld in such form as provided in the normal course by the taxing authority imposing such Taxes and as is reasonably available to MSXI Limited or such Guarantor to the Trustee within 60 days after the date of receipt of such evidence. The Trustee will make such evidence available to the Holders of U.K. Notes upon request. All references herein and in this Indenture or the U.K. Notes to the principal of or interest on a U.K. Note shall be deemed to include, without duplication, any Additional 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, 55 delivery or registration of the U.K. Notes or any other document or instrument referred to in this Indenture or U.K. Notes. SECTION 4.25 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 5 SUCCESSOR COMPANY SECTION 5.1 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 indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the Notes and this Indenture and (b) by amendment, supplement or other instrument (in form and substance satisfactory to the Trustee and the Collateral Agent), executed and delivered to the Trustee, all obligations of the Company under the Collateral Agreements, 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 4.3(a); (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 Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture. 56 Notwithstanding the foregoing clauses (ii), (iii) and (iv) of this Section 5.1, 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 Indenture, 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 Subsidiary 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 supplemental indenture (in form and substance satisfactory to the Trustee), executed and delivered to the Trustee, all of the obligations of the Subsidiary Guarantor under the Guarantee and (b) by amendment, supplement or other instrument (in form and substance satisfactory to the Trustee and the Collateral Agent) executed and delivered to the Trustee and the Collateral Agent, all obligations of the Subsidiary Guarantor under the Collateral Agreements, 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 Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such Guarantee agreement comply with this Indenture. 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 4.6. 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 supplemental indenture (in form and substance satisfactory to the Trustee), executed and delivered to the Trustee, all of the obligations of MSXI Limited under the U.K. Notes and this Indenture and (b) by amendment, supplement or other instrument (in form and substance satisfactory to the Trustee and the Collateral Agent) executed and delivered to the Trustee and the Collateral Agent, all obligations of MSXI Limited under the Collateral Agreements, 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 57 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 Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplementary indenture (if any) comply with this Indenture. 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 4.6. ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.1 Events of Default. An "Event of Default" occurs if: (i) the Issuers default in the payment of interest on any Note when the same becomes due and payable, and such default continues for a period of 30 days; (ii) the Issuers default in the payment of the principal of any Note when the same becomes due and payable at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise; (iii) the Issuers fail to comply for 60 days after notice with any of their obligations under Section 4.3, 4.4, 4.6 or 5.1 hereof; (iv) the Issuers fail to comply with any of their other agreements contained in this Indenture or in the Collateral Agreements and such failure continues for 60 days after the notice specified below; (v) any Collateral Agreement at any time for any reason ceases to be in full force and effect (except as provided by the terms of the Collateral Agreements and Indenture), or shall cease to be effective in all material respects to give the Collateral Agent the Liens with the priority purported to be created thereby subject to no other Liens except as expressly permitted by the applicable Collateral Agreement; (vi) the Company or any of its Subsidiaries, directly or indirectly, contests in any manner the effectiveness, validity, binding nature, or enforceability of any Collateral Agreement; (vii) the Company 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; 58 (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; (D) makes a general assignment for the benefit of its 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 Significant Subsidiary; or (C) orders the winding up or liquidation of the Company, MSXI Limited or any Significant Subsidiary of the Company; (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 $5.0 million against the Company or any Restricted Subsidiary if such judgment or decree remains unpaid and outstanding for a period of 60 days following such judgment and is not discharged, waived or stayed within 60 days after such judgment or decree thereof; 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 any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. The term "Bankruptcy Law" means Title 11, United States Code, as amended, 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. 59 A Default under clause (iii) or (iv) of this Section 6.1 is not an Event of Default until the Trustee or the Holders of at least 25% in aggregate principal amount of the outstanding Notes notify the Issuers of the Default and the Issuers do 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 Issuers shall deliver to the Trustee, 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 6.1 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 6.1, its status and what action the Issuers are taking or propose to take with respect thereto. SECTION 6.2 Acceleration. If an Event of Default occurs and is continuing, the Trustee by notice to the Issuers, or the Holders of at least 25% in aggregate principal amount of the outstanding Notes by notice to the Issuers and the Trustee, may declare the principal of and accrued but unpaid interest on all 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 6.1(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 Trustee or any Holders. The Holders of a majority in aggregate principal amount of the outstanding Notes by notice to the Trustee 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 6.3 Other Remedies. If an Event of Default occurs and is continuing, the Trustee 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 Indenture. The Trustee 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 Trustee or any Holder 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. SECTION 6.4 Waiver of Past Defaults. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may waive any past or existing Default and its consequences except (i) a Default in the payment of the principal of or interest on a Note or (ii) a Default in respect of a provision that under Section 9.2 cannot be amended without the consent of each Holder affected. When a Default is waived, it is deemed cured, and any Event of Default arising therefrom shall be deemed to have been cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right. 60 SECTION 6.5 Control by Majority. The Holders of a majority in aggregate principal amount of the Notes then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.1, that the Trustee determines is unduly prejudicial to the rights of other Holders or would involve the Trustee in personal liability (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forebearances are unduly prejudicial to such Holders); provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification from the Holders satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. SECTION 6.6 Limitation on Suits. Subject to Section 6.7 hereof, a Holder may not pursue any remedy with respect to this Indenture or the Notes unless: (1) the Holder gives to the Trustee written notice stating that an Event of Default is continuing; (2) the Holders of at least 25% in aggregate principal amount of the Notes then outstanding make a written request to the Trustee to pursue the remedy; (3) such Holder offer to the Trustee security or indemnity reasonably satisfactory to the Trustee against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity reasonably satisfactory to the Trustee; and (5) the Holders of a majority in aggregate principal amount of the Notes then outstanding do not give the Trustee a direction inconsistent with the request during such 60-day period. A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder. SECTION 6.7 Rights of Holders To Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal, premium (if any) or interest on the Notes held by such Holder, on or after the respective due dates expressed in the Notes, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. SECTION 6.8 Collection Suit by Trustee. If an Event of Default specified in Section 6.1(i) or (ii) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuers or any other obligor upon the Notes for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.7. 61 SECTION 6.9 Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Issuers, their creditors or their property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the compensation and reasonable expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.7. SECTION 6.10 Priorities. If the Trustee collects any money or property pursuant to this Article 6, it shall pay out the money or property in the following order, subject to applicable law: FIRST: to the Trustee for amounts due under Section 7.7; SECOND: to Holders for amounts due and unpaid on the Notes for principal (including any premium) and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal (including any premium) and interest, respectively; and THIRD: to the Issuers. The Trustee may, upon prior written notice to the Issuers, fix a record date and payment date for any payment to Holders pursuant to this Section 6.10. At least 15 days before such record date, the Company shall mail to each Holder and the Trustee a notice that states the record date, the payment date and amount to be paid. SECTION 6.11 Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court may in its discretion require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in aggregate principal amount of the outstanding Notes. ARTICLE 7 TRUSTEE SECTION 7.1 Duties of the Trustee. The duties and responsibilities of the Trustee shall be as provided by the TIA and as set forth herein. 62 (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise thereof as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (b) Except during the continuance of an Event of Default: (1) the Trustee need perform only those duties as are specifically set forth in this Indenture, and no covenants or obligations shall be implied in this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). (c) Notwithstanding anything to the contrary herein contained, the Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (1) this paragraph does not limit the effect of paragraph (b) of this Section 7.1; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.2, 6.4 or 6.5 of this Indenture. (d) No provision of this Indenture or the Collateral Agreements shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (e) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.1 and Section 7.2 of this Indenture. (f) The Trustee shall not be liable for interest on any money or assets received by it except as the Trustee may agree in writing with the Issuers. Assets held in trust by the Trustee need not be segregated from other assets except to the extent required by law. SECTION 7.2 Rights of Trustee. Subject to Section 7.1: 63 (a) The Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any document reasonably believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document; (b) Before the Trustee acts or refrains from acting, it may consult with counsel of its selection and may require an Officers' Certificate or an Opinion of Counsel, or both, which shall conform to Sections 12.4 and 12.5 of this Indenture. The Trustee may conclusively rely upon and shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel; (c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (d) The Trustee shall not be liable for any action that it takes or omits to take in good faith which it reasonably believes to be authorized or within its rights or powers under this Indenture; (e) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, notice, request, direction, consent, order, bond, debenture, or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled, upon reasonable notice to the Issuers, to examine the books, records, and premises of the Issuers, personally or by agent or attorney and to consult with the officers and representatives of the Issuers, including the Issuers' accountants and attorneys at the sole cost of the Issuers and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation; (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders pursuant to the provisions of this Indenture, unless such Holders shall have offered to the Trustee security or indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities which may be incurred by it in compliance with such request, order or direction; (g) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder; (h) Any permissive right or power available to the Trustee under this Indenture shall not be construed to be a mandatory duty or obligation; (i) Except with respect to Section 4.1 hereof, the Trustee shall have no duty to inquire as to the performance of the Issuers' covenants in Article 4 hereof; (j) Delivery of reports, information and documents to the Trustee under Section 4.2 is for informational purposes only and the Trustee's receipt of the foregoing shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of the covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates); (k) Any request or direction of the Company or MSXI Limited mentioned herein shall be sufficiently evidenced by a written request of the Company or MSXI Limited in the form of an 64 Officers' Certificate and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (l) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (m) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action; (n) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture; (o) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder; and (p) The Trustee may request that the Company or MSXI Limited deliver an Officers' Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers' Certificate may be signed by any person authorized to sign an Officers' Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded. SECTION 7.3 Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuers, any Subsidiary of the Company, or their respective Affiliates, with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11 of this Indenture, and the Trustee is subject to TIA Sections 310(b) and 311. SECTION 7.4 Trustee's Disclaimer. The Trustee makes no representation as to the validity or adequacy of this Indenture, the Collateral Agreements, the Units or the Notes, and it shall not be accountable for the Issuers' use of the proceeds from the Units, and it shall not be responsible for any statement of the Issuers in this Indenture, the Units or the Notes other than the Trustee's certificate of authentication or any document used in connection with the offer or sale of the Units. SECTION 7.5 Notice of Defaults. If a Default or an Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to the Issuers and each Holder in the manner and to the extent provided in TIA Section 313(c) notice of the Default or Event of Default within 90 days after such Default or Event of Default occurs, unless such Default or Event of Default has been cured. Except in the case of a Default 65 or an Event of Default in payment of principal of, or interest on, any Note, including an accelerated payment and the failure to make payment on the Change of Control Payment Date pursuant to a Change of Control Offer, the Trustee may withhold the notice of a Default or an Event of Default if and so long as its Board of Directors, the executive committee or trust committee of directors and/or Responsible Officers in good faith determines that withholding the notice is in the interest of the Holders. SECTION 7.6 Reports by Trustee to Holders. Within 60 days after each August 1, beginning with August 1, 2004, the Trustee shall, to the extent that any of the events described in Section 313(a) of the TIA occurred within the previous twelve months, but not otherwise, mail to each Holder a brief report dated as of such date that complies with Section 313(a) of the TIA. The Trustee also shall comply with Sections 313(b) and (c) of the TIA. A copy of each report at the time of its mailing to Holders shall be mailed to the Issuers and filed with the SEC and each stock exchange or market, if any, on which the Units or the Notes are listed or quoted. The Issuers shall promptly notify the Trustee in writing if the Units or Notes become listed or quoted on any stock exchange or market and the Trustee shall comply with Section 313(d) of the TIA and any delisting thereof. SECTION 7.7 Compensation and Indemnity. The Issuers and the Subsidiary Guarantors shall pay to the Trustee from time to time such compensation for its services in its role as Trustee and Collateral Agent as may be agreed upon in writing for all services rendered by it hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuers and the Subsidiary Guarantors shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by it in connection with the performance of its duties under this Indenture, except any such expense as may arise from its negligence, bad faith or willful misconduct in its role as Trustee and gross negligence or willful misconduct in its role as Collateral Agent. Such expenses shall include but not be limited to the reasonable fees and expenses of the Trustee's agents and counsel. The obligations under this Section 7.7 are joint and several obligations of the Issuers and the Subsidiary Guarantors. The Issuers and the Subsidiary Guarantors shall indemnify each of the Trustee (or any predecessor Trustee), and its agents, employees, stockholders and directors and officers for, and hold them harmless against, any loss, liability, damage, claim or expense (including reasonable fees and expenses of counsel), including taxes (other than taxes based on the income of the Trustee) incurred by them, except for such actions to the extent caused by any negligence, bad faith or willful misconduct in its role as Trustee and gross negligence or willful misconduct in its role as Collateral Agent, arising out of or in connection with the administration of this trust including the reasonable costs and expenses of enforcing this Indenture against the Issuers and the Subsidiary Guarantors (including this Section 7.7) and defending themselves against any claim (whether asserted by any Holder, the Issuers or any Subsidiary Guarantor or any other Person) or liability in connection with the exercise or performance of any of their rights, powers or duties hereunder. The Trustee shall notify the Issuers and the Subsidiary Guarantors promptly of any claim asserted against the Trustee for which it may seek indemnity. Failure by the Trustee to so notify the Issuers shall not relieve the Issuers of their obligations hereunder. At the Trustee's sole discretion, the Issuers shall defend the claim and the Trustee shall cooperate and may participate in the defense; provided that any settlement of a claim shall be approved in writing by the Trustee. Alternatively, the Trustee may at its option have separate counsel of its own choosing and the Issuers shall pay the reasonable fees and expenses of such counsel; provided that the Issuers will not be 66 required to pay such fees and expenses if it assumes the Trustee's defense and there is no conflict of interest between the Issuers and the Trustee in connection with such defense as reasonably determined by the Trustee. The Issuers need not pay for any settlement made without its written consent, which consent shall not be unreasonably withheld, delayed or conditioned. The Issuers need not reimburse any expense (other than attorney fees and expenses for which the Collateral Agent may have liability to the Administrative Agent under Section 11 of the Intercreditor Agreement) or indemnify against any loss or liability to the extent incurred by the Trustee in its role as Trustee through its negligence, bad faith or willful misconduct and to the extent incurred by the Trustee in its role as Collateral Agent through its gross negligence or willful misconduct. To secure the Company's and the Subsidiary Guarantors' payment obligations in this Section 7.7, the Trustee shall have a lien prior to the Notes on all assets or money held or collected by the Trustee, in its capacity as Trustee, for any amount owing it or any predecessor Trustee except assets or money held in trust to pay principal of or interest on particular Notes. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.1(viii) of this Indenture occurs, such expenses (including the reasonable charges and expenses of its counsel) and the compensation for such services are intended to constitute expenses of administration under any Bankruptcy Law. The obligations of the Company and the Subsidiary Guarantors under this Section 7.7 shall survive the satisfaction and discharge of this Indenture. SECTION 7.8 Replacement of Trustee. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment, as provided in this Section 7.8. The Trustee may resign by so notifying the Issuers in writing at least 30 days prior to the date of the proposed resignation. The Holders of a majority in principal amount of the outstanding Notes may remove the Trustee by so notifying the Issuers and the Trustee and may appoint a successor Trustee. The Issuers may remove the Trustee if: (a) the Trustee fails to comply with Section 7.10; (b) the Trustee is adjudged bankrupt or insolvent; (c) a receiver or other public officer takes charge of the Trustee or its property; or (d) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuers shall notify each Holder of such event and shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuers. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers. Immediately after that, the retiring Trustee shall transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided in Section 7.7, the resignation or removal 67 of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The Issuers and the successor Trustee shall mail notice of the successor Trustee's succession to each Holder. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or the Holders of at least 10% in principal amount of the outstanding Notes may petition any court of competent jurisdiction, at the Issuers' expense, for the appointment of a successor Trustee. If the Trustee is no longer eligible under or otherwise fails to comply with Section 7.10, any Holder who satisfies the requirements of TIA Section 310(b) may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. The Issuers shall give notice of any resignation and any removal of the Trustee and each appointment of a successor Trustee to all Holders. Each notice shall include the name of the successor Trustee and the address of its corporate trust office. Notwithstanding any resignation or replacement of the Trustee pursuant to this Section 7.8, the Company's and the Subsidiary Guarantors' obligations under Section 7.7 of this Indenture shall continue for the benefit of the retiring Trustee. SECTION 7.9 Successor Trustee by Merger, Etc. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another Person the resulting, surviving or transferee Person without any further act shall, if such resulting, surviving or transferee Person is otherwise eligible hereunder, be the successor Trustee; provided, however, that such Person shall be otherwise qualified and eligible under this Article 7. SECTION 7.10 Eligibility; Disqualification. (a) This Indenture shall always have a Trustee who satisfies the requirements of TIA Sections 310(a)(1), (2) and (5). The Trustee (or, in the case of a corporation included in a bank holding company system, the related bank holding company) shall have combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. In addition, if the Trustee is a corporation included in a bank holding company system, the Trustee, independently of such bank holding company, shall meet the capital requirements of TIA Section 310(a)(2). The Trustee shall comply with TIA Section 310(b); provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any indenture or indentures under which other securities, or certificates of interest or participation in other securities, of the Issuers are outstanding, if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met. The provisions of TIA Section 310 shall apply to the Guarantors, as obligor of the Notes. (b) If the Trustee has or acquires a conflicting interest within the meaning of the TIA, the Trustee will either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the TIA and this Indenture. SECTION 7.11 Preferential Collection of Claims Against Issuers. The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA 68 Section 311(a) to the extent indicated therein. The provisions of TIA Section 311(a) shall apply to the Guarantors, as obligor on the Notes. SECTION 7.12 Trustee as Collateral Agent. References to the Trustee in Sections 7.1(f), 7.2, 7.3, 7.4, 7.7 and 7.8 shall include the Trustee in its role as Collateral Agent. SECTION 7.13 Co-Trustees, co-Collateral Agent and Separate Trustees, Collateral Agent. At any time or times, for the purpose of meeting the legal requirements of any jurisdiction in which any of the Collateral may at the time be located, the Issuers and the Trustee shall have power to appoint, and, upon the written request of the Trustee or of the Holders of at least 25% in principal amount of the Notes outstanding, the Issuers shall for such purpose join with the Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Trustee either to act as co-trustee, jointly with the Trustee, of all or any part of the Collateral, to act as co-Collateral Agent, jointly with the Collateral Agent, or to act as separate trustees or Collateral Agent of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section 7.13. If the Issuers does not join in such appointment within 15 days after the receipt by it of a request so to do, or in case an Event of Default has occurred and is continuing, the Trustee alone shall have power to make such appointment. Should any written instrument from the Issuers be required by any co-trustee, co-Collateral Agent or separate trustee or separate Collateral Agent so appointed for more fully confirming to such co-trustee or separate trustee such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Issuers. Every co-trustee, co-collateral agent or separate trustee or separate collateral agent shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms, namely: (a) The Units and Notes shall be authenticated and delivered, and all rights, powers, duties and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder, shall be exercised solely, by the Trustee. (b) The rights, powers, duties and obligations hereby conferred or imposed upon the Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Trustee or by the Trustee and such co-trustee or separate trustee jointly, or by the Collateral Agent and such co-Collateral Agent or separate Collateral Agent, jointly as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations (including the holding of title to the collateral or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such co-trustee or separate trustee, but solely at the discretion of the Trustee or Collateral Agent, as applicable. 69 (c) The Trustee at any time, by an instrument in writing executed by it, with the concurrence of the Issuers evidenced by a Board Resolution, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section 7.13, and, in case an Event of Default has occurred and is continuing, the Trustee shall have power to accept the resignation of, or remove, any such co-trustee, co-collateral agent or separate trustee, separate collateral agent without the concurrence of the Issuers. Upon the written request of the Trustee, the Issuers shall join with the Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee, co-collateral agent or separate trustee, separate collateral agent so resigned or removed may be appointed in the manner provided in this Section 7.13. (d) No co-trustee, co-collateral agent, separate trustee or separate collateral agent hereunder shall be personally liable by reason of any act or omission of the Trustee, the Collateral Agent or any other such trustee or collateral agent hereunder. Any act of Holders delivered to the Trustee or Collateral Agent shall be deemed to have been delivered to each such co-trustee, co-collateral agent, separate trustee and separate collateral agent. Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture and the conditions of this Article 7. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection or rights (including the rights to compensation, reimbursement and indemnification hereunder) to, the Trustee. Every such instrument shall be filed with the Trustee. ARTICLE 8 DISCHARGE OF INDENTURE; DEFEASANCE SECTION 8.1 Discharge of Liability on Notes; Defeasance. (a) When (i) the Issuers deliver to the Trustee all outstanding Notes (other than Notes replaced pursuant to Section 2.7) for cancellation or (ii) all outstanding Notes have become due and payable, whether at maturity or as a result of the mailing of a notice of redemption pursuant to Article 3 hereof, and, in each case of this clause (ii), the Issuers irrevocably deposit or cause to be deposited with the Trustee United States dollars or U.S. Government Obligations sufficient to pay and discharge the entire Indebtedness on the Notes not heretofore delivered to the Trustee for cancellation, for the principal of, premium, if any, and interest to the date of deposit (other than Notes replaced pursuant to Section 2.7), and if in either case the Issuers pay all other sums payable hereunder by the Issuers, then this Indenture shall, subject to Section 8.1(c), cease to be of further effect. The Trustee shall acknowledge satisfaction and discharge of this Indenture on demand of the Issuers accompanied by an Officers' Certificate from the Issuers that all conditions precedent provided for herein relating to satisfaction and discharge of this Indenture have been complied with and at the cost and expense of the Issuers. (b) Subject to Sections 8.1(c) and 8.2, the Issuers at any time may terminate (i) all of their obligations under the Notes and this Indenture ("legal defeasance option") or (ii) their obligations under Article 4 and the operation of Sections 6.1(iii), 6.1(iv), 6.1(vii), 6.1(viii) and 6.1(ix) (but only with respect to a Significant Subsidiary), 6.1(x) and 5.1(iii) and 5.1(iv) ("covenant defeasance option"). The 70 Issuers may exercise their legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If the Issuers exercise their legal defeasance option, payment of the Notes may not be accelerated because of an Event of Default with respect thereto. If the Issuers exercises their covenant defeasance option, payment of the Notes may not be accelerated due to a failure to comply with Article 5 or the operation of Sections 6.1(iii), 6.1(iv), 6.1(vii), 6.1(viii) and 6.1(ix) (but only with respect to a Significant Subsidiary), or 6.1(x) or because of the failure of the Issuers to comply with 5.1(iii) and 5.1(iv). If the Issuers exercise their legal defeasance option or its covenant defeasance option, each Guarantor will be released from all of its obligations under Article 11. Upon satisfaction of the conditions set forth herein and upon request of the Issuers, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuers terminate. (c) Notwithstanding clauses (a) and (b) above, the Issuers' obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 7.2, 7.7, 7.8, 8.3, 8.4, 8.5 and 8.6 shall survive until the Notes have been paid in full. Thereafter, the Issuers' obligations in Sections 7.7, 8.4 and 8.5 shall survive. SECTION 8.2 Conditions to Defeasance. The Issuers may exercise their legal defeasance option or their covenant defeasance option only if: (1) the Issuers irrevocably deposit or cause to be deposited in trust (the "defeasance trust") with the Trustee money or U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide cash at such times and in such amounts as will be sufficient to pay principal and interest when due on all outstanding Notes (except Notes replaced pursuant to Section 2.7) to maturity or redemption, as the case may be; (2) the Issuers deliver to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal and interest when due on all outstanding Notes (except Notes replaced pursuant to Section 2.7) to maturity or redemption, as the case may be; (3) 91 days pass after the deposit is made and during the 91-day period no Default specified in Section 6.1(viii) or (ix) with respect to the Issuers occurs which is continuing at the end of the period; (4) the deposit does not result in a breach of, or otherwise constitute a default under any other agreement or investment with respect to any Senior Indebtedness and no default exists under any Indebtedness; (5) the Issuers shall have delivered to the Trustee Opinions of Counsel stating that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel 71 must be based on a ruling of the Internal Revenue Service or other change in applicable Federal income tax law); (6) in the case of the covenant defeasance option, the Issuers shall have delivered to the Trustee Opinions of Counsel to the effect that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and covenant defeasance had not occurred; and (7) the Issuers deliver to the Trustee Officers' Certificates and Opinions of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Notes as contemplated by this Article 8 have been complied with. Opinions of Counsel required to be delivered under this Section 8.2 may have qualifications customary for opinions of the type required and counsel delivering such Opinions of Counsel may rely on certificates of the Issuers or government or other officials customary for opinions of the type required, including certificates certifying as to matters of fact. Before or after a deposit, the Issuers may make arrangements satisfactory to the Trustee for the redemption of Notes at a future date in accordance with Article 3. SECTION 8.3 Application of Trust Money. The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to this Article 8. It shall apply the deposited money and the money from U.S. Government Obligations either directly or through the Paying Agent (including the Issuers acting as their own Paying Agent as the Trustee may determine) and in accordance with this Indenture to the payment of principal of and interest on the Notes. Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the Company's written request any money or U.S. Government Obligations held by it as provided in Section 8.2 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof that would be required to be deposited to effect an equivalent legal defeasance option or covenant defeasance option. SECTION 8.4 Repayment to Issuers. The Trustee and the Paying Agent shall notify the Issuers of any excess money or Notes held by them at any time and shall promptly turn over to the Issuers upon request any excess money or securities held by them at any time. Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Issuers upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Issuers for payment as general creditors. SECTION 8.5 Indemnity for Government Obligations. The Issuers shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest 72 received on such U.S. Government Obligations other than any such tax, fee or other charge which by law is for the account of the Holders of the defeased Notes; provided that the Trustee shall be entitled to charge any such tax, fee or other charge to such Holder's account. SECTION 8.6 Reinstatement. If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article 8 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers' obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to this Article 8 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article 8; provided, however, that, (a) if the Issuers have made any payment of interest on or principal of any Notes following the reinstatement of their obligations, the Issuers shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent and (b) unless otherwise required by any legal proceeding or any order or judgment of any court or governmental authority, the Trustee or Paying Agent shall return all such money and U.S. Government Obligations to the Issuers promptly after receiving a written request therefor at any time, if such reinstatement of the Issuers' obligations has occurred and continues to be in effect. ARTICLE 9 AMENDMENTS SECTION 9.1 Without Consent of Holders. The Issuers, when authorized by a Board Resolution, and the Trustee, together, may amend or supplement this Indenture or the Notes without notice to or consent of any Holder: (1) to cure any ambiguity, omission, defect or inconsistency; provided that such amendment or supplement does not adversely affect the rights of any Holder; (2) to provide for the assumption of the Issuers' obligations to Holders in the case of a merger, consolidation or similar transaction and otherwise to comply with Article Five; (3) to provide for uncertificated Units and Notes in addition to or in place of certificated Units and Notes; provided, however, that the uncertificated Units and Notes are issued in registered form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated Units and Notes are as described in Section 163(f)(2)(B) of the Code; (4) to add Guarantees with respect to the Notes; (5) to release Guarantors when permitted by this Indenture; (6) to secure the Notes; (7) to add to the covenants of the Issuers for the benefit of the Holders or to surrender any right or power herein conferred upon the Issuers; (8) to make any change that does not adversely affect the rights of any Holder; or 73 (9) to comply with any requirements of the SEC in connection with qualifying this Indenture under the TIA. After an amendment under this Section 9.1 becomes effective, the Issuers shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.1. No amendment may be made to this Section 9.1 that adversely affects the rights of any Holders. SECTION 9.2 With Consent of Holders. The Issuers and the Trustee may amend this Indenture or the Notes without notice to any Holder but with the written consent of the Holders of at least a majority in principal amount of the Notes then outstanding. However, without the consent of each Holder affected, an amendment may not: (1) reduce the principal amount of Notes whose Holders must consent to an amendment; (2) reduce the rate of or change the time for payment of interest on any Note; (3) reduce the principal of or change the Stated Maturity of any Note or alter the provisions with respect to repurchases or redemptions of the Notes upon a change in control; (4) reduce the premium payable upon the redemption of any Note or change the time at which any Note may be redeemed in accordance with Article 3; (5) make any Note payable in money other than that stated in the Note; (6) impair the right of any Holder to institute suit for the enforcement of any payment on or with respect to such Holder's Notes or any Note Guarantee; (7) make any change in the amendment provisions which require each Holder's consent or in the waiver provisions; (8) after the Issuers' obligation to purchase Notes arises hereunder, amend, change or modify in any material respect the obligation of the Company to make and consummate a Change of Control offer or make and consummate an offer with respect to any Asset Disposition that has been consummated or, after such Change of Control has occurred or such Asset Disposition has been consummated, modify any of the provisions or definitions with respect thereto; (9) modify or change any provision of this Indenture or the related definitions affecting the ranking of the Notes or any Note Guarantee in a manner which adversely affects the Holders; or (10) except as permitted by this Indenture, release all or substantially all of the Collateral. It shall not be necessary for the consent of the Holders under this Section 9.2 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. 74 After an amendment under this Section 9.2 becomes effective, the Issuers shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.2. SECTION 9.3 Compliance with Trust Indenture Act. Every amendment to this Indenture or the Notes shall comply with the TIA as then in effect. SECTION 9.4 Revocation and Effect of Consents and Waivers. A consent to an amendment or a waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of that Note or portion of the Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent or waiver is not made on the Note. An amendment or waiver becomes effective once the requisite number of consents are received by the Issuers or the Trustee. After an amendment or waiver becomes effective, it shall bind every Holder. The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date. After an amendment, supplement or waiver becomes effective, it shall bind every Holder unless it makes a change described in any of clauses (1) through (9) of Section 9.2, in which case, the amendment, supplement or waiver shall bind only each Holder who has consented to it and every subsequent Holder that evidences the same debt as the consenting Holder's Note; provided that any such waiver shall not impair or affect the right of any holder to receive payment of principal and interest on a Note, on or after the respective due dates expressed in such Note, or to bring suit for the enforcement of any such payment on or after such respective dates without the consent of such Holder. SECTION 9.5 Notation on or Exchange of Notes. If an amendment changes the terms of a Note, the Trustee may require the Holder of the Note to deliver it to the Trustee. The Trustee may, and at the written direction of the Issuers shall, place an appropriate notation on the Note regarding the changed terms and return it to the Holder. Alternatively, if the Issuers or the Trustee so determine, the Issuers in exchange for the Note shall issue and the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment. SECTION 9.6 Trustee To Sign Amendments. The Trustee shall sign any amendment authorized pursuant to this Article 9 if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and shall receive, and (subject to Section 7.1) shall be fully 75 protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that such amendment complies with the provisions of this Article 9. ARTICLE 10 SECURITY SECTION 10.1 Grant of Security Interest. To secure the due and punctual payment of the principal of, premium, if any, and interest on 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 Notes and the performance of all other Obligations of the Company to the Holders or the Trustee under this Indenture and the Notes, the Company hereby covenants to cause the Collateral Agreements to be executed and delivered concurrently with this Indenture. Subject to the Intercreditor Agreement, the Collateral Agreements 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 Collateral Agreement for a more complete description of the terms and provisions thereof. Each Holder, by its acceptance of a Note, consents and agrees to the terms of each Collateral Agreement and the Intercreditor Agreement, as the same may be in effect or may be amended from time to time in accordance with its terms, and authorizes and directs the Trustee and the Collateral Agent to enter into the Collateral Agreements and to perform its obligations and exercise its rights thereunder in accordance therewith. The Company shall, and shall cause each of its 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 Collateral Agreements, to assure and confirm to the Trustee and the Collateral Agent the Security Interests in the Collateral contemplated hereby and by the Collateral Agreements, as from time to time constituted, so as to render the same available for the security and benefit of this Indenture and of the Notes secured hereby, according to the intent and purpose herein and therein expressed. The Company shall, and shall cause each of its Subsidiaries to take any and all actions required to cause the Collateral Agreements to create and maintain, as security for the Obligations contained in this Indenture 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 to the rights of all third Persons, and subject to no other Liens, in each case, except as expressly provided herein, therein, or in the Intercreditor Agreement. SECTION 10.2 Intercreditor Agreement. This Indenture is subject to the terms, limitations and conditions set forth in the Intercreditor Agreement. Each Holder of a Note, by its acceptance thereof, is deemed to have authorized and instructed the Trustee to enter into the Intercreditor Agreement on its behalf and acknowledges BNY Midwest Trust Company will act as the Collateral Agent for the Holders under the Intercreditor Agreement. SECTION 10.3 Recording and Opinions. (a) The Company 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 Collateral Agreements to the extent set forth in such Collateral Agreement, subject to the Intercreditor Agreement. 76 The Company shall from time to time promptly pay all financing and continuation statement recording and/or filing fees, charges and taxes relating to this Indenture, the Collateral Agreements, the Intercreditor Agreement and any amendments hereto or thereto and any other instruments of further assurance required pursuant hereto or thereto. (b) The Company shall furnish to the Trustee and the Collateral Agent (if other than the Trustee), on the Closing Date, at such time as required by TIA Section 314(b), and promptly after the execution and delivery of any other instrument of further assurance or amendment granting, perfecting, protecting, preserving or making effective a security interest pursuant to any Collateral Agreement, an Opinion of Counsel either (i) stating that, in the opinion of such counsel, this Indenture and the Collateral Agreements, financing statements and fixture filings then executed and delivered, as applicable, and all other instruments of further assurance or amendment then executed and delivered have been properly recorded, registered and filed, and all certificates evidencing Pledged Securities pledged to the Trustee and the Holders under the Security Agreement have been, subject to the terms of the Intercreditor Agreement and the Security Agreement delivered and duly endorsed in blank, to the extent necessary to perfect the Security Interests created by this Indenture and the Collateral Agreements and reciting the details of such action or referring to prior Opinions of Counsel in which such details are given, and stating that as to such Collateral Agreements and such other instruments, such recording, registering, filing and delivery are the only recordings, registerings, filings and deliveries necessary to perfect such security interest and that no re-recordings, re-registerings, re-filings or re-deliveries are necessary to maintain such perfection, and further stating that all financing statements and continuation statements have been executed and filed, and all such certificates have been delivered, that are necessary fully to preserve and protect the rights of and perfect such security interests of the Holders, the Trustee and the Collateral Agent hereunder and under the Collateral Agreements or (ii) stating that, in the Opinion of such Counsel, no such action is necessary to perfect any Security Interest created under this Indenture, the Notes or any of the Collateral Agreements as intended by this Indenture, the Notes and such Collateral Agreements. (c) Annually, within 30 days after August 1 and beginning with the year 2004, the Company shall furnish to the Trustee and the Collateral Agent (if other than the Trustee), an Opinion of Counsel, dated as of such date, either (i) stating that: (A) in the opinion of such counsel, action has been taken with respect to the registering, recording, filing, re-recording, re-registering and refiling of financing statements, continuation statements and other documents, and delivery of all certificates, as are then necessary to perfect or continue the perfection of the Security Interests created by the Collateral Agreements, subject to the terms of the Intercreditor Agreement and the Security Agreement and reciting the details of such action or referring to prior Opinions of Counsel in which such details are given; and (B) based on relevant laws as in effect on the date of such Opinion of Counsel, all financing statements, continuation statements and other documents have been executed (if necessary) and filed that are necessary as of such date and during the succeeding 24 months fully to maintain, perfect or continue the perfection of such Security Interests under the Collateral Agreements with respect to the Collateral and to maintain, preserve, and protect the rights of the Holders and the Trustee hereunder and under the Collateral Agreements or (ii) stating that, in the opinion of such counsel, no such action is then necessary to perfect or continue the perfection of such Security Interests. SECTION 10.4 Release of Collateral. (a) Subject to the Intercreditor Agreement, neither the Collateral Agent nor the Trustee, in its capacity as Collateral Agent under the Collateral Agreements, shall at any time release Collateral from the Security Interests created by this Indenture and the Collateral Agreements unless such release is in accordance with the provisions of this Indenture, the Intercreditor Agreement and the applicable Collateral Agreements. 77 (b) Subject to the Intercreditor Agreements, at any time when a Default or an Event of Default shall have occurred and be continuing, no release of Collateral pursuant to the provisions of this Indenture and the Collateral Agreements shall be effective as against the Holders. (c) The release of any Collateral from the terms of the Collateral Agreements shall not be deemed to impair the security under this Indenture in contravention of the provisions hereof if and to the extent the Collateral is released pursuant to this Indenture and the Collateral Agreements or pursuant to the Intercreditor Agreement. To the extent applicable, the Company shall cause TIA Section 314(d) relating to the release of property from the Security Interests created by this Indenture and the Collateral Agreements to be complied with. Any certificate or opinion required by TIA 314(d) may be made by an Officer of the Company, except in cases where TIA Section 314(d) requires that such certificate or opinion be made by an independent Person, which Person shall be an independent engineer, appraiser or other expert selected or approved by the Trustee in the exercise of reasonable care. A Person is "independent" if such Person (a) is in fact independent, (b) does not have any direct financial interest or any material indirect financial interest in the Company or in any Affiliate of the Company and (c) is not an officer, employee, promoter, underwriter, trustee, partner or director or person performing similar functions to any of the foregoing for the Company. The Trustee shall be entitled to receive and conclusively rely upon a certificate provided by any such Person confirming that such Person is independent within the foregoing definition. (d) Notwithstanding anything contained in this Indenture to the contrary, (i) the provisions of Section 10.4(c) of this Indenture will not be applicable to any release or withdrawal of inventory, receivables and cash from the Company's deposit accounts in the ordinary course of the Company's business pursuant to the terms of the Collateral Agreements and (ii) the fair value of inventory, receivables and cash from the Company's deposit accounts released pursuant to this Section 10.4(d) need not be considered in determining whether the aggregate fair value of inventory, receivables and cash from the Company's deposit accounts released in any calendar year exceeds the 10% threshold specified in Section 314(d)(1) of the TIA; provided, that the Company's right to rely on this Section 10.4(d) will be conditioned upon the Company delivering to the Trustee, within 30 calendar days following the end of each six-month period beginning on August 1 and February 1 of any year, an Officers' Certificate to the effect that all such releases and withdrawals of inventory, receivables and cash from the Company's deposit accounts during such six-month period in respect of which the provisions of Section 10.4(c) were not complied with were to make payments or investment in the ordinary course of the company's business, which were not prohibited by this Indenture. SECTION 10.5 Specified Releases of Collateral. (a) The Company shall be entitled to obtain a full release of items of Collateral (the "Released Interests") from the Security Interests created by this Indenture and the Collateral Agreements upon compliance with the conditions precedent set forth in Sections 4.6, 8.1 or 8.2 of this Indenture, the applicable Collateral Agreements and to the extent applicable, the Intercreditor Agreement. So long as no Default or Event of Default exists, upon the request of the Company and the furnishing of each of the items required by Section 10.5(b), the Collateral Agent upon the direction of the Trustee (or the Trustee if acting as Collateral Agent) shall forthwith take all necessary action (at the request of and the expense of the Company, without recourse or warranty and without any representation of any kind), including the delivery of appropriate UCC-3 termination statements (and authorization to file such termination statements) or any other filing required to be made, to release and reconvey to the Company all of the Released Interests, and shall deliver such Released Interests in its possession to the Company and the applicable Guarantors. 78 (b) So long as no Default or Event of Default exists, the Company shall be entitled to obtain a release of, and the Collateral Agent and the Trustee shall release, the Released Interests upon compliance with the condition precedent that the Company shall have satisfied all applicable conditions precedent to any such release set forth in this Indenture, the applicable Collateral Agreements and to the extent applicable, the Intercreditor Agreement and shall have delivered to the Trustee and the Collateral Agent the following, as applicable: (i) in connection with release of Collateral resulting from an Asset Sale under Section 4.6, written notice from the Company requesting the release of Released Interests: (A) describing the proposed Released Interests; (B) specifying the value of such Released Interests on a date within 60 days of such notice (the "Valuation Date"); (C) stating that the purchase price received is at least equal to the Fair Market Value of the Released Interests; (D) stating that the release of such Released Interests will not be expected to interfere with the Collateral Agent's ability to realize the value of the remaining Collateral and will not impair the maintenance and operation of the remaining Collateral; and (E) certifying that such Asset Sale complies with the terms and conditions of this Indenture and the applicable Collateral Agreements with respect thereto; (ii) in connection with release of Collateral resulting from an Asset Sale under Section 4.6, an Officers' Certificate of the Company stating that (A) such Asset Sale covers only the Released Interests and complies with the terms and conditions of this Indenture with respect to Asset Sales; (B) all Net Cash Proceeds from the sale of any of the Released Interests will be applied pursuant to the provisions of this Indenture in respect of Asset Sales; (C) there is no Default or Event of Default in effect or continuing on the date thereof, the Valuation Date or the date of such Asset Sale; (D) the release of the Collateral will not result in a Default or Event of Default under this Indenture; and (E) all conditions precedent in this Indenture relating to the release in question have been or will be complied with; (iii) in connection with release of Collateral resulting from an Asset Sale under Section 4.6, the Net Cash Proceeds and other non-cash consideration from the Asset Sale to the extent required to be delivered to the Collateral Agent pursuant to this Indenture; (iv) an Officers' Certificate of the Company and an Opinion of Counsel certifying that all conditions precedent to the release of the Released Interests have been met and that such release complies with the terms and conditions of this Indenture, the applicable Collateral Agreements and to the extent applicable, the Intercreditor Agreement; and (v) all applicable certificates, opinions and other documentation required by the TIA or this Indenture, if any. Upon compliance by the Company with the conditions precedent set forth above, the Trustee shall cause to be released and reconveyed, without recourse and without representation or warranty of any kind, to the Company, the Released Interests. SECTION 10.6 Form and Sufficiency of Release. In the event that the Company has sold, exchanged, or otherwise disposed of or proposes to sell, exchange or otherwise dispose of any portion of the Collateral that may be sold, exchanged or otherwise disposed of by the Company, and the Company requests in writing that the Trustee or the Collateral Agent furnish a written disclaimer, release or quit-claim of any interest in such property under this Indenture and the Collateral Agreements, the Collateral Agent and the Trustee, in its capacity as 79 Collateral Agent under the Collateral Agreements, shall execute, acknowledge and deliver to the Company (in proper form) such an instrument promptly after satisfaction of the conditions set forth herein for delivery of any such release. Notwithstanding the preceding sentence, all purchasers and grantees of any property or rights purporting to be released herefrom shall be entitled to rely upon any release executed by the Trustee hereunder as sufficient for the purpose of this Indenture and as constituting a good and valid release of the property therein described from the Lien of this Indenture or of the Collateral Agreements. SECTION 10.7 Purchaser Protected. No purchaser or grantee of any property or rights purporting to be released herefrom shall be bound to ascertain the authority of the Trustee or the Collateral Agent to execute the release or to inquire as to the existence of any conditions herein prescribed for the exercise of such authority; nor shall any purchaser or grantee of any property or rights permitted by this Indenture to be sold or otherwise disposed of by the Company be under any obligation to ascertain or inquire into the authority of the Company to make such sale or other disposition. SECTION 10.8 Authorization of Actions To Be Taken by the Trustee Under the Collateral Agreements. Subject to the provisions of the applicable Collateral Agreements and the Intercreditor Agreement, (a) the Trustee and the Collateral Agent may, in their sole discretion and without the consent of the Holders, take all actions they deem necessary or appropriate in order to (i) enforce any of the terms of the Collateral Agreements and (ii) collect and receive any and all amounts payable in respect of the Obligations of the Company hereunder, and (b) the Trustee and the Collateral Agent shall have power to institute and to maintain such suits and proceedings as they may deem expedient to prevent any impairment of the Collateral by any act that may be unlawful or in violation of the Collateral Agreements or this Indenture, and suits and proceedings as the Trustee and the Collateral Agent may deem expedient to preserve or protect their interests and the interests of the Holders in the Collateral (including the power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest thereunder or be prejudicial to the interests of the Holders, the Trustee or the Collateral Agent). Notwithstanding the foregoing, the Trustee may, at the expense of the Company, request the direction of the Holders with respect to any such actions and upon receipt of the written consent of the Holders of at least a majority in aggregate principal amount of the outstanding Notes, shall take such actions; provided that all actions so taken shall, at all times, be in conformity with the requirements of the Intercreditor Agreement. SECTION 10.9 Authorization of Receipt of Funds by the Trustee Under the Collateral Agreements. The Trustee is authorized to receive any funds for the benefit of the Holders distributed under the Collateral Agreements, and to make further distributions of such funds to the Holders in accordance with the provisions of Section 6.10 and the other provisions of this Indenture. SECTION 10.10 Limitation on Duty of Trustee and Collateral Agent in Respect of Collateral; Indemnification. (a) Beyond the exercise of reasonable care in the custody thereof, the Trustee and the Collateral Agent shall have no duty as to any Collateral in their possession or 80 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 Trustee and the Collateral Agent shall not be 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 Trustee 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 Trustee and the Collateral Agent in good faith. (b) The Trustee 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 Trustee 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 Trustee 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 Indenture, the Security Agreement, the U.K. Deed or the Intercreditor Agreement. ARTICLE 11 GUARANTEES SECTION 11.1 Guarantees. Each Subsidiary Guarantor hereby irrevocably and unconditionally guarantees, jointly and severally, to each Holder and to the Trustee and the Collateral Agent and their respective successors and assigns the full and punctual payment of principal of, premium, if any, and interest on the U.S. Notes when due, whether at Stated Maturity, by acceleration or otherwise, and all other obligations of the Company under this Indenture and the U.S. Notes and the Company and each Subsidiary Guarantor hereby irrevocably and unconditionally guarantees, jointly and severally, to each Holder and to the Trustee and the Collateral Agent and their respective successors and assigns the full and punctual payment of principal of, premium, if any, and interest on the U.K. Notes when due, whether at Stated Maturity, by acceleration or otherwise, and all other obligations of MXSI Limited under this Indenture and the U.K. 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 11 notwithstanding any extension or renewal of any Guaranteed Obligation. 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 any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Company or any other Person under this Indenture, 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 Indenture, the Notes or any other agreement; (d) the release of any security held by any Holder or the Trustee for the Guaranteed Obligations or any of them; (e) the failure 81 of any Holder or the Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (f) any change in the ownership of such Guarantor. Each Guarantor further agrees that its 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 any Holder or the Trustee to any security held for payment of the Guaranteed Obligations. Except as expressly set forth in Sections 8.2, 11.2 and 11.6, 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 any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, 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. Each Guarantor further agrees that its Note 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 any Holder or the Trustee upon the bankruptcy or reorganization of the Company or otherwise. In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee 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 Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee 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 Holders and the Trustee. 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 Holders and the Trustee, on the other hand, (x) the maturity of the Guaranteed Obligations hereby may be accelerated as provided in Article 6 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 6, such Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of this Section 11.1. Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys' fees) incurred by the Trustee or any Holder in enforcing any rights under this Section 11.1. 82 SECTION 11.2 Limitation on Liability. Any term or provision of this Indenture 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 Indenture, 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 11.3 Successors and Assigns. This Article 11 shall be binding upon each Guarantor and its successors and assigns and shall enure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture 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 Indenture. SECTION 11.4 No Waiver. Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article 11 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 Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article 11 at law, in equity, by statute or otherwise. SECTION 11.5 Modification. No modification, amendment or waiver of any provision of this Article 11, 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 Trustee, 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 11.6 Release of Guarantor. A Guarantor may, by execution and delivery to the Trustee of a supplemental indenture satisfactory to the Trustee, 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 Indenture. 83 SECTION 11.7 Execution of Supplemental Indenture for Future Subsidiary Guarantors. Each Subsidiary which is required to become a Subsidiary Guarantor pursuant to Section 4.15 shall, and the Issuers shall cause each such Subsidiary to, promptly execute and deliver to the Trustee a supplemental indenture in the form of Exhibit F hereto pursuant to which such Subsidiary shall become a Subsidiary Guarantor under this Article 11 and shall guarantee the Obligations. Concurrently with the execution and delivery of such supplemental indenture, the Issuers shall deliver to the Trustee Opinions of Counsel to the effect that such supplemental indenture 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 11.8 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 Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE 12 MISCELLANEOUS SECTION 12.1 Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. If this Indenture excludes any provision of the TIA that is required to be included, such provision shall be deemed included herein. SECTION 12.2 Notices. Any notice or communication shall be in writing and delivered in person, by overnight courier or facsimile (if to the Issuers, with receipt confirmed by an Officer) or mailed by first-class mail addressed as follows: If to the Issuers or any Subsidiary Guarantor: MSX International Inc. 22355 West Eleven Mile Road Southfield, MI 48304-4375 Attention: Corporate Legal Department If to the Trustee: BNY Midwest Trust Company 84 2 North LaSalle Street, Suite 1020 Chicago, Il 60602 Attention: Corporate Trust Department Facsimile: 312-827-8542 Telephone: 312-827-8500 The Issuers or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. All notices and communications (other than those sent to Holders) will be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication mailed first class, postage pre-paid to a Holder, including any notice delivered in connection with TIA Section 310(b), 313(c), 314(a) and 315(b), shall be sent to the Holder at the Holder's address as it appears on the registration books of the Registrar and shall be sufficiently given if so sent within the time prescribed. To the extent required by the TIA, any notice or communication shall also be mailed to any Person described in TIA Section 313(c). Failure to send a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is sent in the manner provided above, it is duly given, whether or not the addressee receives it. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. SECTION 12.3 Communication by Holders with Other Holders. Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuers, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). With respect to the disclosure of any information as to the names and addresses of the Holders, the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under TIA Section 312(b). SECTION 12.4 Certificate and Opinion as to Conditions Precedent. Except with respect to the issuance of the Initial Units and the Initial Notes on the Issue Date, upon any request or application by the Issuers to the Trustee to take or refrain from taking any action under this Indenture, the Issuers shall furnish to the Trustee to the extent required by the TIA or this Indenture: (1) an Officers' Certificate (which in connection with the original issuance of the Notes need only be executed by one Officer for the Issuers) in form and substance reasonably satisfactory to the Trustee stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and 85 (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with. SECTION 12.5 Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include: (1) a statement that the individual making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with. SECTION 12.6 When Notes Disregarded. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuers or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuers shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which a Responsible Officer the Trustee actually knows are so owned shall be so disregarded. Also, subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination. SECTION 12.7 Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of Holders. The Trustee shall provide the Issuers reasonable notice of such rules. The Registrar and the Paying Agent may make reasonable rules for their functions. SECTION 12.8 Legal Holidays. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected. SECTION 12.9 Governing Law; Appointment of Agent for Service of Process. THIS INDENTURE , THE UNITS 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 IRREVOCABLY APPOINTED THE COMPANY AS 86 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., 22355 WEST ELEVEN MILE ROAD SOUTHFIELD, MI 48304-4375, SHALL BE DEEMED IN EVERY RESPECT TO EFFECT SERVICE OF PROCESS UPON MSXI LIMITED IN ANY SUCH SUIT OR PROCEEDING. SECTION 12.10 No Recourse Against Others. No recourse for the payment of the principal of, premium, if any, or interest on any of the Notes or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Issuers in this Indenture, or in any of the Notes or because of the creation of any Indebtedness represented hereby and thereby, shall be had against any past, present or future incorporator, stockholder, officer, director, employee or controlling person of the Issuers or any Successor Person thereof. Each Holder, by accepting a Note, waives and releases all such liability. The waiver and release shall be part of the consideration for the issuance of the Notes. SECTION 12.11 Successors. All agreements of the Company and the Subsidiary Guarantors in this Indenture, the Notes and the Subsidiary Guarantees shall bind their successors. All agreements of the Trustee and the Collateral Agent in this Indenture shall bind their successors. SECTION 12.12 Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. SECTION 12.13 Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. SECTION 12.14 Severability Clause. In case any one or more of the provisions in this Indenture, the Notes or in the Subsidiary Guarantees shall be held invalid, illegal or unenforceable, in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions shall not in any way be affected or impaired thereby, it being intended that all of the provisions hereof shall be enforceable to the full extent permitted by law. SECTION 12.15 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 INDENTURE, THE NOTES, THE GUARANTEES, THE COLLATERAL AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED BY THIS INDENTURE. 87 SECTION 12.16 Conversion of Currency. The Issuers and the Subsidiary Guarantors covenant and agree that the following provisions shall apply to conversion of currency in the case of the Units, Notes, and this Indenture: (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 be caused by the Issuers 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) The term "rate(s) of exchange" shall mean the rate at which the Issuers or their 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 U.S. dollars and payment in New York, New York, is of the essence, and U.S. dollars shall be the currency of account in all events. The obligation of the Issuers 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 U.S. 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 U.S. dollars with such other currency; if the U.S. dollars so purchased are less than the sum originally due to such Holder in U.S. dollars, the Company and Subsidiary Guarantors with respect to the U.S. Notes, and MSXI Limited and the Guarantors with respect to the U.K. Notes, agree, as a separate obligation and notwithstanding any such judgment, to indemnify such Holder against such loss, and if the U.S. dollars so purchased exceed the sum originally due to any Holder in U.S. dollars, such Holder agrees to remit to the Issuers such excess. SECTION 12.17 Consent to Jurisdiction. Each of the parties hereto and (by their acceptance of the Units and the Notes) the Holders irrevocably consents to the jurisdiction of any court of the State of New York or any United States federal court sitting in the Borough of Manhattan, New York City, New York, United States, 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 Indenture, the Units 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 Indenture, the Units 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 Issuers 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 Indenture. 88 IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above. MSX INTERNATIONAL, INC. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL LIMITED By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Director BNY MIDWEST TRUST COMPANY, as Trustee By: /s/ Roxane Ellwanger ------------------------------------------------ Name: Roxane Ellwanger Title: Assistant Vice President BNY MIDWEST TRUST COMPANY, as Collateral Agent By: /s/ Roxane Ellwanger ------------------------------------------------ Name: Roxane Ellwanger Title: Assistant Vice President MSX INTERNATIONAL (HOLDINGS), INC. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President G-1 MSX INTERNATIONAL SERVICES (HOLDINGS), INC. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL EUROPEAN (HOLDINGS), L.L.C. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL DEALERNET SERVICES, INC. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL BUSINESS SERVICES, INC. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President CREATIVE TECHNOLOGY SERVICES, L.L.C. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President G-2 MSX INTERNATIONAL TECHNOLOGY SERVICES, INC. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL ENGINEERING SERVICES, INC. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President INTRANATIONAL COMPUTER CONSULTANTS, INC. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President PROGRAMMING MANAGEMENT & SYSTEMS, INC. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President CHELSEA COMPUTER CONSULTANTS, INC. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President G-3 MILLENNIUM COMPUTER SYSTEMS, INC. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President MANAGEMENT RESOURCES INTERNATIONAL, INC. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President PILOT COMPUTER SERVICES, INCORPORATED By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL PLATFORM SERVICES, LLC By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President MEGATECH ENGINEERING, INC. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President G-4 MSX INTERNATIONAL STRATEGIC TECHNOLOGY, INC. By: /s/ Frederick K. Minturn ------------------------------------------------ Name: Frederick K. Minturn Title: Vice President G-5 EX-4.5 6 k79382exv4w5.txt FORM OF NEW UNITS EXHIBIT 4.5 [FACE OF UNIT] MSX INTERNATIONAL, INC. AND MSX INTERNATIONAL LIMITED Units Consisting of $860 Principal Amount of 11% Senior Secured Notes Due 2007 of MSX International, Inc. and $140 Principal Amount of 11% Senior Secured Notes Due 2007 of MSX International Limited No. ___ CUSIP No. _________ Certificate for _______ Units Each of MSX International, Inc., a Delaware corporation (the "Company"), which term includes any successor corporation, and MSX International Limited, a company organized under the laws of England and Wales ("MSXI Limited"), which term includes any successor company, hereby certifies that is the owner of Units as described above, transferable only on the books of the Company and MSXI Limited by the Holder thereof in person or by his or her duly authorized attorney on surrender of this Certificate properly endorsed. Each Unit consists of $860 principal amount of 11% Senior Secured Notes due 2007 of the Company and $140 principal amount of 11% Senior Secured Notes due 2007 of MSXI Limited (together, the "Notes"). This Unit is issued pursuant to the Indenture, dated as of August 1, 2003 among the Company, MSXI Limited, the Guarantors and BNY Midwest Trust Company, as Trustee, (the "Indenture") and is subject to the terms and provisions contained therein, to all of which terms and provisions the Holder of this Unit Certificate consents by acceptance hereof. The terms of the Notes and the Note Guarantees are governed by the Indenture, and are subject to the terms and provisions contained therein, to all of which terms and provisions the Holder of this Unit Certificate consents by acceptance hereof. Reference is made to the further provisions of this Unit Certificate contained herein, which will for all purposes have the same effect as if set forth at this place. Copies of the Indenture are on file at the office of the Company and MSXI Limited and are available to any Holder on written request and without cost. The Notes will not trade separately unless (i) an Event of Default on the Notes has occurred, (ii) a redemption of the U.K. Notes pursuant to Section 3.1(d) of the Indenture has occurred, or (iii) the occurrence of a Change of Control of MSXI Limited. The Indenture, this Unit and the Notes shall be governed by and construed in accordance with the laws of the State of New York. All terms used in this Unit which are defined in the Indenture shall have the meanings assigned to them in the Indenture. B-1 IN WITNESS WHEREOF, the Company and MSXI Limited have caused this Unit to be signed manually or by facsimile by one of its duly authorized officers. MSX INTERNATIONAL, INC. By:___________________________ Name: Title: MSX INTERNATIONAL LIMITED By:___________________________ Name: Title: TRUSTEE'S CERTIFICATE OF AUTHENTICATION The BNY Midwest Trust Company, as Trustee, certifies that this is one of the Units referred to in the within-mentioned Indenture. BNY MIDWEST TRUST COMPANY, as Trustee By: ------------------------------------- Authorized Signatory Date of Authentication: ASSIGNMENT FORM If you the Holder want to assign this Unit, fill in the form below and have your signature guaranteed: I or we assign and transfer this Unit to: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type name, address and zip code and social security or tax ID number of assignee) and irrevocably appoint ________________________________________________________ agent to transfer this Unit on the books of the Company and MSXI Limited. The agent may substitute another to act for him. Dated: Signed: ------------------------------ ----------------------------- (Sign exactly as your name appears on the other side of this Unit) Signature Guarantee: --------------------------------- [FACE OF U.S. NOTE] MSX INTERNATIONAL, INC. 11% Senior Secured Notes Due 2007 No. $ CUSIP No. MSX INTERNATIONAL, INC., a Delaware corporation, promises to pay to Cede & Co., or registered assigns, the principal sum of Dollars on October 15, 2007. Interest Rate: 11.0% Interest Payment Dates: August 1 and February 1, commencing February 1, 2004. Record Dates: July 15 and January 15. Additional provisions of this Note are set forth on the reverse side of this Note. IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by one of its duly authorized officers. MSX INTERNATIONAL, INC. By: ------------------------------------- Name: Title: TRUSTEE'S CERTIFICATE OF AUTHENTICATION The BNY Midwest Trust Company, as Trustee, certifies that this is one of the U.S. Notes referred to in the within-mentioned Indenture. BNY MIDWEST TRUST COMPANY, as Trustee By: ------------------------------------- Authorized Signatory Date of Authentication: [REVERSE OF U.S. NOTE] 11% SENIOR SECURED NOTE DUE 2007 1. Separable. This U.S. Note, together with the 11% Senior Secured Note due 2007 of MSX International Limited ("MSXI Limited") (the "U.K. Note"), comprise a unit (each a "Unit"). The U.S. Notes and U.K. Notes are collectively referred to in this Note as the "Notes." The Notes will not trade separately unless (i) an Event of Default on the Notes has occurred, (ii) a redemption of the U.K. Notes pursuant to Section 3.1(d) of the Indenture has occurred, or (iii) the occurrence of a Change of Control of MSXI Limited. 2. Interest. MSX INTERNATIONAL, INC., a Delaware corporation (such entity, and its successors and assigns under the Indenture hereinafter referred to, and each other entity which is required to become the Company pursuant to the Indenture, and its successors and assigns under the Indenture, being herein called the "Company"), promises to pay interest on the principal amount of this U.S. Note at the rate per annum shown above. The Company will pay interest semi-annually on August 1 and February 1 of each year, commencing February 1, 2004. Interest on the U.S. Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from August 1, 2003. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal at 1% per annum in excess of the rate borne by the U.S. Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. 3. Method of Payment. The Company will pay interest on the U.S. Notes (except defaulted interest) to the Persons who are registered Holders of U.S. Notes at the close of business on the record date immediately preceding the interest payment date even if U.S. Notes are canceled on registration of transfer or registration of exchange (including pursuant to an Exchange Offer (as defined in the Registration Rights Agreement)) after the record date. Holders must surrender U.S. Notes to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts ("U.S. Legal Tender"). However, the Company may pay principal and interest by its check payable in such U.S. Legal Tender. The Company may deliver any such interest payment to the Paying Agent or to a Holder's registered address. 4. Paying Agent and Registrar. Initially, BNY Midwest Trust Company, an Illinois trust company ("Trustee"), will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-Registrar without notice. The Company may act as Paying Agent, Registrar, co-Registrar or transfer agent. 5. Indenture. The Company issued the U.S. Notes under an Indenture dated as of August 1 , 2003 (the "Indenture"), among the Company, the Guarantors, the Trustee and the Collateral Agent. This U.S. Note is one of a duly authorized issue of Initial U.S. Notes of the Company designated as its 11% Senior Secured Notes due 2007 (the "Initial U.S. Notes"). The U.S. Notes include the Initial U.S. Notes and the Exchange U.S. Notes issued in exchange for the Initial U.S. Notes pursuant to the Registration Rights Agreement. The Initial U.S. Notes, the Exchange U.S. Notes, the Initial U.K. Notes and the Exchange U.K. Notes are treated as a single class of securities under the Indenture. The terms of the U.S. Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in effect and amended on the date of the Indenture (the "TIA"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The U.S. Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of those terms. Any conflict between this U.S. Note and the Indenture will be governed by the Indenture. 6. Redemption. (a) Optional Redemption Prior to August 1, 2005. At any time prior to August 1, 2005, the Issuers may, at their option, on one or more occasions redeem all or part of their Notes at a redemption price equal to the greater of (1) 100% of the principal amount of the Notes being redeemed and (2) the sum of the present values of 105.5% of the principal amount of the Notes being redeemed 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 redemption of the Notes prior to August 1, 2005 shall include both U.S. Notes and U.K. Notes on a pro rata basis based on the aggregate principal amount of the Notes outstanding at the time of redemption, unless a Change of Control of MSXI Limited has occurred. (i) "Treasury Rate" means, with respect to any redemption 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. (ii) "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). (iii) "Comparable Treasury Price" means, with respect to any redemption 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. (iv) "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. (v) "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. (b) Optional Redemption on or After August 1, 2005. On or after August 1, 2005, the Notes will be redeemable, at the Issuers' 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 and Additional Amounts, if any, to the redemption date (subject to the right of Holders of record on the relevant record date receive interest due on the relevant interest payment date), if redeemed during the period commencing on the date set forth below:
REDEMPTION DATE PRICE ---- ----------- ~~August 1, 2005........................ 105.500% February 1, 2006...................... 102.750% August 1, 2006 and thereafter......... 100.000%~~
The foregoing optional redemption of the Notes on or after August 1, 2005 shall include both U.S. Notes and U.K. Notes on a pro rata basis based on the aggregate principal amount of the Notes outstanding at the time of redemption, unless a Change of Control of MSXI Limited has occurred. (c) Redemption Upon Equity Offering. In addition, at any time and from time to time prior to August 1, 2005, the Issuers may redeem at their 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 redemption price (expressed as a percentage of principal amount) of 111.0% plus accrued and unpaid interest and Additional Amounts, if any, to the redemption 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 redemption. The foregoing optional redemption of the Notes shall include both U.S. Notes and U.K. Notes on a pro rata basis based on the aggregate principal amount of the Notes outstanding at the time of redemption, unless a Change of Control of MSXI Limited has occurred. 7. Notice of Redemption. Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of U.S. Notes to be redeemed at his registered address. U.S. Notes in denominations larger than $860 may be redeemed in part but only in whole multiples of $860. If money sufficient to pay the redemption price of and accrued interest on all U.S. Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before 10:00 a.m. New York City time on the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such U.S. Notes (or such portions thereof) called for redemption. If a notice or communication is sent in the manner provided in the Indenture, it is duly given, whether or not the addressee receives it. Failure to send a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. 8. Offers to Purchase. Sections 4.6, 4.11(a) and 4.23 of the Indenture provide that after certain Asset Sales, upon the occurrence of a Change of Control Triggering Event and upon the Company having Excess Cash Flow, and subject to further limitations contained therein, the Company and MSXI Limited will make an offer to purchase certain amounts of the Notes in accordance with the procedures set forth in the Indenture. 9. Denominations. The U.S. Notes are in registered form, without coupons, and in denominations of $860 and integral multiples of $860. 10. Persons Deemed Owners. The registered Holder of this U.S. Note may be treated as the owner of it for all purposes. 11. Unclaimed Money. If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment. 12. Discharge and Defeasance. Subject to certain conditions, the Company at any time may terminate some or all of its obligations under the U.S. Notes and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the U.S. Notes to redemption or maturity, as the case may be. 13. Amendment, Waiver. Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Notes may be amended with the consent of the Holders of at least a majority in principal amount outstanding of the Notes and (ii) any past default or compliance with any provision may be waived with the consent of the Holders of a majority in principal amount outstanding of the Notes. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company, the Subsidiary Guarantors and the Trustee may amend the Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency, to comply with Article 5 of the Indenture, to provide for uncertificated Notes in addition to or in place of certificated Notes, to add guarantees with respect to the Notes, to release Subsidiary Guarantors when permitted by the Indenture, to secure the Notes, to add additional covenants or surrender rights and powers conferred on the Company, to make any change that does not adversely affect the rights of any Holder or to comply with any request of the SEC in connection with qualifying the Indenture under the TIA. 14. Trustee Dealings with the Company. Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of U.S. Notes and may otherwise deal with and collect obligations owed to it by the Company or any of its Affiliates and may otherwise deal with the Company or any of its Affiliates with the same rights it would have if it were not Trustee. 15. No Recourse Against Others. No recourse for the payment of the principal of, premium, if any, or interest on any of the U.S. Notes or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture, or in any of the U.S. Notes or because of the creation of any Indebtedness represented hereby and thereby, shall be had against any past, present and future incorporator, stockholder, officer, director, employee or controlling person of the Company, a Subsidiary Guarantor or any Successor Person thereof. Each Holder, by accepting a U.S. Note, waives and releases all such liability. 16. Guarantees. This U.S. Note will be entitled to the benefits of certain Guarantees, if any, made for the benefit of the Holders. Reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Subsidiary Guarantors, the Trustee and the Holders. 17. Governing Law. THE INDENTURE AND THE U.S. 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. 18. Waiver of Jury Trial. EACH OF THE PARTIES HERETO AND THE HOLDERS (BY THEIR ACCEPTANCE OF A U.S. 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 THE INDENTURE, THIS U.S. NOTE, THE GUARANTEES, THE COLLATERAL AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED BY THE INDENTURE. 19. Authentication. This U.S. Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this U.S. Note. 20. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with rights of survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gift to Minors Act). 21. CUSIP Numbers. Upon the occurrence of a Separation Event, the Company will, as soon as practicable, obtain CUSIP numbers and have such CUSIP numbers printed on the U.S. Notes and direct the Trustee to use such CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the U.S. Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company will furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture. Requests may be made to: MSX International Limited, c/o MSX International, Inc., 22355 West Eleven Mile Road, Southfield, MI 48304-4375, Tel: 248-829-6300, Attention: Corporate Legal Department. ASSIGNMENT FORM If you the Holder want to assign this Note, fill in the form below and have your signature guaranteed: I or we assign and transfer this Note to: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type name, address and zip code and social security or tax ID number of assignee) and irrevocably appoint ________________________________________ agent to transfer this Note on the books of the Company and MSXI Limited. The agent may substitute another to act for him. Dated: Signed: ------------------------ ------------------------------------- (Sign exactly as your name appears on the other side of this Note) Signature Guarantee: -------------------------------- OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this U.S. Note purchased by the Company pursuant to Section 4.6, 4.11 or 4.23 of the Indenture, check the box: / / If you want to elect to have only part of this U.S. Note purchased by the Company pursuant to Section 4.6, 4.11 or 4.23 of the Indenture, state the amount: $ Date: Your Signature: ---------------- ----------------------------------- (Sign exactly as your name appears on the other side of the U.S. Note) Signature Guarantee: -------------------------------------------- (Signature must be guaranteed) [FACE OF U.K. NOTE] MSX INTERNATIONAL LIMITED 11% Senior Secured Notes Due 2007 No. $ CUSIP No. MSX INTERNATIONAL LIMITED, a company under the laws of England and Wales, promises to pay to Cede & Co., or registered assigns, the principal sum of Dollars on October 15, 2007. Interest Rate: 11.0% Interest Payment Dates: August 1 and February 1, commencing February 1, 2004. Record Dates: July 15 and January 15. Additional provisions of this Note are set forth on the reverse side of this Note. IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by one of its duly authorized officers. MSX INTERNATIONAL LIMITED By: ----------------------------------- Name: Title: TRUSTEE'S CERTIFICATE OF AUTHENTICATION The BNY Midwest Trust Company, as Trustee, certifies that this is one of the U.K. Notes referred to in the within-mentioned Indenture. BNY MIDWEST TRUST COMPANY, as Trustee By: ------------------------------------ Authorized Signatory Date of Authentication: [REVERSE OF U.K. NOTE] 11% SENIOR SECURED NOTE DUE 2007 1. Separable. This U.K. Note, together with the 11% Senior Secured Note due 2007 of MSX International, Inc. (the "U.S. Note"), comprise a unit (each a "Unit"). The U.S. Notes and U.K. Notes are collectively referred to in this Note as the "Notes." The Notes will not trade separately unless (i) an Event of Default on the Notes has occurred, (ii) a redemption of the U.K. Notes pursuant to Section 3.1(d) of the Indenture has occurred, or (iii) the occurrence of a Change of Control of MSXI Limited. 2. Interest. MSX INTERNATIONAL LIMITED, a company under the laws of England and Wales (such entity, and its successors and assigns under the Indenture hereinafter referred to, and each other entity which is required to become the Company pursuant to the Indenture, and its successors and assigns under the Indenture, being herein called the "Company"), promises to pay interest on the principal amount of this U.K. Note at the rate per annum shown above. The Company will pay interest semi-annually on August 1 and February 1 of each year, commencing February 1, 2004. Interest on the U.K. Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from August 1, 2003. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal at 1% per annum in excess of the rate borne by the U.K. Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. 3. Method of Payment. The Company will pay interest on the U.K. Notes (except defaulted interest) to the Persons who are registered Holders of U.K. Notes at the close of business on the record date immediately preceding the interest payment date even if U.K. Notes are canceled on registration of transfer or registration of exchange (including pursuant to an Exchange Offer (as defined in the Registration Rights Agreement)) after the record date. Holders must surrender U.K. Notes to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts ("Legal Tender"). However, the Company may pay principal and interest by its check payable in such Legal Tender. The Company may deliver any such interest payment to the Paying Agent or to a Holder's registered address. 4. Paying Agent and Registrar. Initially, BNY Midwest Trust Company, an Illinois trust company ("Trustee"), will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-Registrar without notice. The Company may act as Paying Agent, Registrar, co-Registrar or transfer agent. 5. Indenture. The Company issued the U.K. Notes under an Indenture dated as of August 1 , 2003 (the "Indenture"), among the Company, the Guarantors, the Trustee and the Collateral Agent. This U.K. Note is one of a duly authorized issue of Initial U.K. Notes of the Company designated as its 11% Senior Secured Notes due 2007 (the "Initial U.K. Notes"). The U.K. Notes include the Initial U.K. Notes and the Exchange U.K. Notes issued in exchange for the Initial U.K. Notes pursuant to the Registration Rights Agreement. The Initial U.K. Notes, the Exchange U.K. Notes, the Initial U.S. Notes and the Exchange U.S. Notes are treated as a single class of securities under the Indenture. The terms of the U.K. Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in effect and amended on the date of the Indenture (the "TIA"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The U.K. Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of those terms. Any conflict between this U.K. Note and the Indenture will be governed by the Indenture. 6. Redemption. (a) Optional Redemption Prior to August 1, 2005. At any time prior to August 1, 2005, the Issuers may, at their option, on one or more occasions redeem all or part of their Notes at a redemption price equal to the greater of (1) 100% of the principal amount of the Notes being redeemed and (2) the sum of the present values of 105.5% of the principal amount of the Notes being redeemed 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 redemption of the Notes prior to August 1, 2005 shall include both U.S. Notes and U.K. Notes on a pro rata basis based on the aggregate principal amount of the Notes outstanding at the time of redemption, unless a Change of Control of the Company has occurred. (i) "Treasury Rate" means, with respect to any redemption 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. (ii) "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). (iii) "Comparable Treasury Price" means, with respect to any redemption 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. (iv) "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. (v) "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. (b) Optional Redemption on or After August 1, 2005. On or after August 1, 2005, the Notes will be redeemable, at the Issuers' 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 and Additional Amounts, if any, to the redemption date (subject to the right of Holders of record on the relevant record date receive interest due on the relevant interest payment date), if redeemed during the period commencing on the date set forth below:
REDEMPTION DATE PRICE ---- ---------- ~~August 1, 2005....................... 105.500% February 1, 2006..................... 102.750% August 1, 2006 and thereafter........ 100.000%~~
The foregoing optional redemption of the Notes on or after August 1, 2005 shall include both U.S. Notes and U.K. Notes on a pro rata basis based on the aggregate principal amount of the Notes outstanding at the time of redemption, unless a Change of Control of MSXI Limited has occurred. (c) Redemption Upon Equity Offering. In addition, at any time and from time to time prior to August 1, 2005, the Issuers may redeem at their 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 redemption price (expressed as a percentage of principal amount) of 111.0% plus accrued and unpaid interest and Additional Amounts, if any, to the redemption 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 redemption. The foregoing optional redemption of the Notes shall include both U.S. Notes and U.K. Notes on a pro rata basis based on the aggregate principal amount of the Notes outstanding at the time of redemption, unless a Change of Control of MSXI Limited has occurred. (d) Tax Redemption. U.K. Notes may be redeemed, at the option of MSXI Limited, as a whole, but not in part (limited to U.K. Notes with respect to which an Additional Amount (as described below) is or may be required), at any time, upon giving notice to Holders not less than 30 days nor more than 60 days prior to the date fixed for redemption (which notice shall be irrevocable), at a redemption price equal to the principal amount thereof, together with interest accrued to the date fixed for redemption and any Additional Amounts payable with respect thereto, if MSXI Limited determines and certifies to the Trustee immediately prior to the giving of such notice that (i) they have or will become obligated to pay Additional Amounts in respect of such U.K. 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 U.K. Notes and (ii) such obligation cannot be avoided by MSXI Limited taking reasonable measures available to it, provided, that no such notice of redemption shall be given earlier than 60 days prior to the earliest date on which MSXI Limited would be obligated to pay such Additional Amounts if a payment in respect of such U.K. Notes was then due. Prior to the giving of any notice of redemption described in this Section 6(d), MSXI Limited shall deliver to the Trustee (a) a certificate signed by two directors of MSXI Limited stating that the obligation to pay Additional Amounts cannot be avoided by MSXI Limited taking reasonable measures available to them and (b) an Opinion of Counsel to MSXI Limited to the effect that MSXI Limited has become obligated to pay Additional Amounts as a result of such a change or amendment described above and that MSXI Limited cannot avoid payment of such Additional Amounts by taking reasonable measures available to them. 7. Notice of Redemption. Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of U.K. Notes to be redeemed at his registered address. U.K. Notes in denominations larger than $140 may be redeemed in part but only in whole multiples of $140. If money sufficient to pay the redemption price of and accrued interest on all U.K. Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before 10:00 a.m. New York City time on the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such U.K. Notes (or such portions thereof) called for redemption. If a notice or communication is sent in the manner provided in the Indenture, it is duly given, whether or not the addressee receives it. Failure to send a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. 8. Offers to Purchase. Sections 4.6, 4.11(a) and 4.23 of the Indenture provide that after certain Asset Sales, upon the occurrence of a Change of Control of the Company and upon the Company having Excess Cash Flow, and subject to further limitations contained therein, the Company and MSXI Limited will make an offer to purchase certain amounts of the Notes in accordance with the procedures set forth in the Indenture. Section 4.11(b) of the Indenture provides that upon the occurrence of the Change of Control of MSXI Limited, MSXI Limited may, at its option at any time, redeem the U.K Notes in whole, and not in part, at the optional redemption prices specified in (i) Section 6(a) for redemptions prior to August 1, 2005 and (ii) the first paragraph of Section 6(b) for redemptions on or after August 1, 2005. If MSXI Limited has not delivered a notice of redemption within 30 days following a Change of Control of MSXI Limited, each Holder of a U.K. Note shall have the right to require that MSXI Limited repurchase all or a portion of such Holder's U.K. Notes in accordance with the procedures set forth in the Indenture. 9. Denominations. The U.K. Notes are in registered form, without coupons, and in denominations of $140 and integral multiples of $140. 10. Persons Deemed Owners. The registered Holder of this U.K. Note may be treated as the owner of it for all purposes. 11. Unclaimed Money. If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment. 12. Discharge and Defeasance. Subject to certain conditions, the Company at any time may terminate some or all of its obligations under the U.K. Notes and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the U.K. Notes to redemption or maturity, as the case may be. 13. Amendment, Waiver. Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Notes may be amended with the consent of the Holders of at least a majority in principal amount outstanding of the Notes and (ii) any past default or compliance with any provision may be waived with the consent of the Holders of a majority in principal amount outstanding of the Notes. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company, the Subsidiary Guarantors and the Trustee may amend the Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency, to comply with Article 5 of the Indenture, to provide for uncertificated Notes in addition to or in place of certificated Notes, to add guarantees with respect to the Notes, to release Subsidiary Guarantors when permitted by the Indenture, to secure the Notes, to add additional covenants or surrender rights and powers conferred on the Company, to make any change that does not adversely affect the rights of any Holder or to comply with any request of the SEC in connection with qualifying the Indenture under the TIA. 14. Trustee Dealings with the Company. Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of U.K. Notes and may otherwise deal with and collect obligations owed to it by the Company or any of its Affiliates and may otherwise deal with the Company or any of its Affiliates with the same rights it would have if it were not Trustee. 15. No Recourse Against Others. No recourse for the payment of the principal of, premium, if any, or interest on any of the U.K. Notes or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture, or in any of the U.K. Notes or because of the creation of any Indebtedness represented hereby and thereby, shall be had against any past, present or future incorporator, stockholder, officer, director, employee or controlling person of the Company, a Subsidiary Guarantor or any Successor Person thereof. Each Holder, by accepting a U.K. Note, waives and releases all such liability. 16. Guarantees. This U.K. Note will be entitled to the benefits of certain Guarantees, if any, made for the benefit of the Holders. Reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Subsidiary Guarantors, the Trustee and the Holders. 17. Governing Law. THE INDENTURE AND THE U.K. 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. 18. Waiver of Jury Trial. EACH OF THE PARTIES HERETO AND THE HOLDERS (BY THEIR ACCEPTANCE OF A U.K. 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 THE INDENTURE, THIS U.K. NOTE, THE GUARANTEES, THE COLLATERAL AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED BY THE INDENTURE. 19. Authentication. This U.K. Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this U.K. Note. 20. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with rights of survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gift to Minors Act). 21. CUSIP Numbers. Upon the occurrence of a Separation Event, the Company will, as soon as practicable, obtain CUSIP numbers and have such CUSIP numbers printed on the U.K. Notes and direct the Trustee to use such CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the U.K. Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company will furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture. Requests may be made to: MSX International, Inc., 22355 West Eleven Mile Road, Southfield, MI 48304-4375, Tel: 248-829-6300, Attention: Corporate Legal Department. ASSIGNMENT FORM If you the Holder want to assign this Note, fill in the form below and have your signature guaranteed: I or we assign and transfer this Note to: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type name, address and zip code and social security or tax ID number of assignee) and irrevocably appoint ___________________________________________ agent to transfer this Note on the books of the Company and MSX International, Inc. The agent may substitute another to act for him. Dated: Signed: ------------------ ----------------------------------------- (Sign exactly as your name appears on the other side of this Note) Signature Guarantee: -------------------------------------------- OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this U.K. Note purchased by the Company pursuant to Section 4.6, 4.11 or 4.23 of the Indenture, check the box: / / If you want to elect to have only part of this U.K. Note purchased by the Company pursuant to Section 4.6, 4.11 or 4.23 of the Indenture, state the amount: $ Date: Your Signature: ------------- ----------------------------------------- (Sign exactly as your name appears on the other side of the U.K. Note) Signature Guarantee: -------------------------------------- (Signature must be guaranteed) EX-4.8 7 k79382exv4w8.txt REGISTRATION AGREEMENT EXHIBIT 4.8 EXECUTION COPY $75,500,000 PRINCIPAL AMOUNT AT MATURITY MSX INTERNATIONAL, INC. AND MSX INTERNATIONAL LIMITED 11% OF SENIOR SECURED NOTE UNITS DUE 2007 REGISTRATION RIGHTS AGREEMENT August 1, 2003 JEFFERIES & COMPANY, INC. 520 Madison Avenue 12th Floor New York, NY 10022 Ladies and Gentlemen: MSX INTERNATIONAL, INC., a Delaware corporation (the "Company"), and its wholly-owned subsidiary MSX INTERNATIONAL LIMITED, ("MSXI Limited" and together with the Company, the "Issuers") are issuing and selling to Jefferies & Company, Inc. (the "Initial Purchaser"), upon the terms set forth in the Purchase Agreement dated July 25, 2003, by and between the Issuers and the Initial Purchaser (the "Purchase Agreement"), 75,500 Units (each, a "Unit" and collectively, the "Units"), each Unit consisting of $860 principal amount of 11% Senior Secured Notes due 2007 issued by MSX International Inc. (the "U.S. Notes") and $140 principal amount of 11% Senior Secured Notes due 2007 issued by MSX International Limited (the "U.K. Notes" and, together with U.S. Notes, the "Notes"). As an inducement to the Initial Purchaser to enter into the Purchase Agreement, the Issuers and the Guarantors (as defined below) agree with the Initial Purchaser, for the benefit of the Holders (as defined below) of the Units (including, without limitation, the Initial Purchaser), as follows: 1. DEFINITIONS Capitalized terms that are used herein without definition and are defined in the Purchase Agreement shall have the respective meanings ascribed to them in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: ADDITIONAL INTEREST: See Section 4(a). ADVICE: See Section 5(v). AGREEMENT: This Registration Rights Agreement, dated as of the Closing Date, among the Issuers and the Initial Purchaser. APPLICABLE PERIOD: See Section 2(e). BUSINESS DAY: A day that is not a Saturday, a Sunday or a day on which banking institutions in the City of New York are authorized or required by law or executive order to be closed. CLOSING DATE: August 1, 2003. COLLATERAL AGREEMENTS: Shall have the meaning set forth in the Indenture. COMPANY: See the introductory paragraph to this Agreement. DAY: Unless otherwise expressly provided, a calendar day. EFFECTIVENESS DATE: The 180th day after the Issue Date. EFFECTIVENESS PERIOD: See Section 3(a). EVENT DATE: See Section 4(b). EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. EXCHANGE NOTES: The Exchange U.S. Notes and the Exchange U.K. Notes. EXCHANGE OFFER: See Section 2(a). EXCHANGE REGISTRATION STATEMENT: See Section 2(a). EXCHANGE U.K. NOTES: The Senior Secured Notes due 2007 of MSXI Limited identical in all material respects to the U.K. Notes, including the guarantees endorsed thereon, except for restrictive legends and additional interest provisions. EXCHANGE UNITS: The Senior Secured Note Units, each consisting of the $860 principal amount of Exchange U.S. Notes and $140 principal amount of Exchange U.K. Notes, identical to the Units, except for references to series and restrictive legends. EXCHANGE U.S. NOTES: The Senior Secured Notes due 2007 of the Company, identical in all material respects to the U.S. Notes, including the guarantees endorsed thereon, except for restrictive legends and additional interest provisions. FILING DATE: The 90th day after the Issue Date. GUARANTORS: Shall mean the Company and the Subsidiary Guarantors with respect to the U.S. Notes and the Subsidiary Guarantors with respect to the U.K. Notes. HOLDER: Any registered holder of Registrable Units. INDEMNIFIED PARTY: See Section 7(c). INDEMNIFYING PARTY: See Section 7(c). 2 INDENTURE: The Indenture, dated as of the Closing Date, among the Issuers, the Subsidiary Guarantors and BNY Midwest Trust Company, as trustee, pursuant to which the Units are being issued, as amended or supplemented from time to time in accordance with the terms hereof. INITIAL PURCHASER: See the introductory paragraph to this Agreement. INITIAL SHELF REGISTRATION: See Section 3(a). INSPECTORS: See Section 5(o). ISSUE DATE: August 1, 2003. ISSUERS: See the introductory paragraph to this Agreement. LOSSES: See Section 7(a). MSXI LIMITED: See the introductory paragraph to this Agreement NASD: National Association of Securities Dealers, Inc. NOTES: Shall mean the U.S. Notes and the U.K. Notes. PARTICIPATING BROKER-DEALER: See Section 2(e). PERSON: An individual, trustee, corporation, partnership, limited liability company, joint stock company, trust, unincorporated association, union, business association, firm, government or agency or political subdivision thereof, or other legal entity. PROSPECTUS: The prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Units covered by such Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. PURCHASE AGREEMENT: See the introductory paragraph to this Agreement. RECORDS: See Section 5(o). REGISTRABLE NOTES: Notes. REGISTRABLE UNITS: Units (including the underlying Registrable Notes). REGISTRATION STATEMENT: Any registration statement of the Issuers and the Guarantors filed with the SEC under the Securities Act (including, but not limited to, the Exchange Registration Statement, the Shelf Registration and any subsequent Shelf Registration) that covers 3 any of the Registrable Units or Registrable Notes pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. RULE 144: Rule 144 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144A) or regulation hereafter adopted by the SEC providing for offers and sales of securities made in compliance therewith resulting in offers and sales by subsequent holders that are not affiliates of an issuer or such securities being free of the registration and prospectus delivery requirements of the Securities Act. RULE 144A: Rule 144A promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144) or regulation hereafter adopted by the SEC. RULE 415: Rule 415 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. RULE 430A: Rule 430A promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. SEC: The Securities and Exchange Commission. SECURITIES: The Units, the Exchange Units, the Notes and the Exchange Notes. SECURITIES ACT: The Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder. SEPARATION EVENT: Shall have the meaning set forth in the Indenture. SHELF NOTICE: See Section 2(i). SHELF REGISTRATION: See Section 3(b). SUBSEQUENT SHELF REGISTRATION: See Section 3(b). SUBSIDIARY GUARANTOR: Each subsidiary of the Company that guarantees the obligations of the Issuers under the Notes and the Indenture. TIA: The Trust Indenture Act of 1939, as amended. TRUSTEE: The trustee under the Indenture and, if existent, the trustee under any indenture governing the Exchange Units and the Notes. UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in which securities of the Issuers are sold to an underwriter for reoffering to the public. UNITS: See the introductory paragraph to this Agreement. 4 U.S. NOTES: See the introductory paragraph to this Agreement. U.K. NOTES: See the introductory paragraph to this Agreement. 2. EXCHANGE OFFER (a) Unless the Exchange Offer would not be permitted by applicable federal law or a policy of the SEC, the Issuers shall (and shall cause each Guarantor with respect to its guarantee to) (i) prepare and file with the SEC promptly after the date hereof, but in no event later than the Filing Date, a registration statement (the "Exchange Registration Statement") on an appropriate form under the Securities Act with respect to an offer (the "Exchange Offer") to the Holders of Registrable Units to issue and deliver to such Holders, in exchange for the Units, a like principal amount of Exchange Units, (ii) use commercially reasonable efforts to cause the Exchange Registration Statement to become effective as promptly as practicable after the filing thereof, but in no event later than the Effectiveness Date, (iii) use commercially reasonable efforts to keep the Exchange Registration Statement effective until the consummation of the Exchange Offer in accordance with its terms, and (iv) commence the Exchange Offer and use commercially reasonable efforts to issue on or prior to 30 days after the date on which the Exchange Registration Statement is declared effective, Exchange Units in exchange for all Units tendered prior thereto in the Exchange Offer. The Exchange Offer shall not be subject to any conditions, other than that the Exchange Offer does not violate applicable law or any applicable interpretation of the staff of the SEC. (b) The Exchange Units shall be issued under, and entitled to the benefits of, (i) the Indenture or a trust indenture that is identical to the Indenture (other than such changes as are necessary to comply with any requirements of the SEC to effect or maintain the qualifications thereof under the TIA) and (ii) the Collateral Agreements. (c) Interest on the Exchange Notes will accrue from the last interest payment date on which interest was paid on the Notes surrendered in exchange therefor or, if no interest has been paid on the Notes, from the date of original issue of the Notes. Each Exchange Note shall bear interest at the rate set forth thereon; provided, that interest with respect to the period prior to the issuance thereof shall accrue at the rate or rates borne by the Notes from time to time during such period. (d) The Issuers may require each Holder as a condition to participation in the Exchange Offer to represent in writing, that at the time of consummation of the Exchange Offer (i) any Exchange Units received by it will be acquired in the ordinary course of its business, (ii) at the time of the commencement and consummation of the Exchange Offer such Holder has not entered into any arrangement or understanding with any Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Units in violation of the provisions of the Securities Act, (iii) such Holder is not an "affiliate," as 5 defined in Rule 405 of the Securities Act, of the Issuers, or if such Holder is an affiliate of the Issuers it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable to it, (iv) if such Holder is not a broker-dealer, it is not engaged in, and does not intend to engage in, the distribution of the Units and (v) if such Holder is a Participating Broker-Dealer, it will deliver a Prospectus in connection with any resale of the Exchange Units. (e) The Issuers shall include within the Prospectus contained in the Exchange Registration Statement a section entitled "Plan of Distribution" which shall contain all information that the SEC may require with respect to the potential "underwriter" status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange Units received by such broker-dealer in the Exchange Offer for its own account in exchange for Units that were acquired by it as a result of market-making or other trading activity (a "Participating Broker-Dealer"). Such "Plan of Distribution" section shall also allow, to the extent permitted by applicable policies and regulations of the SEC, the use of the Prospectus by all Persons subject to the prospectus delivery requirements of the Securities Act, including, to the extent so permitted, all Participating Broker-Dealers, and include a statement describing the manner in which Participating Broker-Dealers may resell the Exchange Units. The Issuers shall use reasonable best efforts to keep the Exchange Registration Statement effective and to amend and supplement the Prospectus contained therein, in order to permit such Prospectus to be lawfully delivered by all Persons subject to the prospectus delivery requirements of the Securities Act for 180 days after consummation of the Exchange Offer; provided, however, that (i) in the case where such Prospectus and any amendment or supplement thereto must be delivered by a Participating Broker-Dealer or the Initial Purchaser, such period shall be the lesser of 180 days and the date on which all Participating Broker-Dealers and the Initial Purchaser have sold all Exchange Units held by them (unless such period is extended pursuant to Section 5(k) below) and (ii) the Issuers shall make such Prospectus and any amendment or supplement thereto available to any Participating Broker-Dealer for use in connection with any resale of any Exchange Units for a period not less than 90 days after the consummation of the Exchange Offer (the "Applicable Period"). (f) In connection with the Exchange Offer, the Issuers shall: (i) mail to each Holder a copy of the Prospectus forming part of the Exchange Registration Statement, together with an appropriate letter of transmittal and related documents; (ii) utilize the services of a depository for the Exchange Offer with an address in the Borough of Manhattan, the City of New York, which may be the Trustee or an affiliate thereof; 6 (iii) permit Holders to withdraw tendered Registrable Units at any time prior to the close of business, New York time, on the last Business Day on which the Exchange Offer shall remain open; and (iv) otherwise comply in all material respects with all applicable laws. (g) As soon as practicable after the close of the Exchange Offer the Issuers shall: (i) accept for exchange all Registrable Units validly tendered pursuant to the Exchange Offer and not validly withdrawn; (ii) deliver to the Trustee for cancellation all Registrable Units so accepted for exchange; and (iii) cause the Trustee to authenticate and deliver promptly to each Holder tendering such Registrable Units and underlying Registrable Notes or Exchange Units and underlying Exchange Notes, equal in principal amount at maturity to the Notes of such Holder so accepted for exchange. (h) The Exchange Units may be issued under (i) the Indenture or (ii) an indenture identical in all material respects to the Indenture, which in either event will provide that the Exchange Units will not be subject to the transfer restrictions or additional interest provisions set forth in the Indenture and that the Exchange Units and Exchange Notes, if any, will be deemed one class of security (subject to the provisions of the Indenture) and entitled to participate in all the security granted by the Issuers pursuant to the Collateral Agreements and in any Guarantee (as such terms are defined in the Indenture) on an equal and ratable basis. (i) If, (i) any change in law or applicable interpretations of the staff of the SEC would not permit the consummation of the Exchange Offer as contemplated by this Section 2, (ii) the Exchange Offer is not consummated within 30 Business Days after the Effectiveness Date for any reason, (iii) in the case of any Holder not permitted by applicable law or SEC policy to participate in the Exchange Offer or any Holder that participates in the Exchange Offer but does not receive Exchange Units on the date of the exchange that may be sold without restriction under state and federal securities laws (other than due solely to the status of such Holder as an affiliate of the Issuers within the meaning of the Securities Act) and so notifies the Issuers within 45 days of consummation of the Exchange Offer, or (iv) the Issuers so elect, then the Issuers (and any then existing Guarantor) shall promptly deliver to the Holders and the Trustee written notice thereof (the "Shelf Notice") and shall file an Initial Shelf Registration pursuant to Section 3. 3. SHELF REGISTRATION If a Shelf Notice is delivered pursuant to Section 2(i), then this Section 3 shall apply to all Registrable Units. Otherwise, upon consummation of the Exchange Offer in accordance with Section 2, the provisions of this Section 3 shall apply solely with respect to (i) Units held by any Holder thereof not permitted by applicable law or SEC policy to participate in the Exchange 7 Offer and (ii) Exchange Units that are not freely tradeable as contemplated by Section 2(i)(iii) hereof, provided in each case that the relevant Holder has duly notified the Issuers within 45 days of the Exchange Offer as required by Section 2(i)(iii). (a) Initial Shelf Registration. The Issuers shall as promptly as practicable after the date of the Shelf Notice file (and shall cause any then existing Guarantor to file) with the SEC a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 covering all of the Registrable Units (the "Initial Shelf Registration"). If the Issuers (and any then existing Guarantor) have not yet filed an Exchange Registration Statement prior to receiving the Shelf Notice, the Issuers shall file (and shall cause any then existing Guarantor to file) with the SEC the Initial Shelf Registration on or prior to the Filing Date and shall use commercially reasonable efforts to cause such Initial Shelf Registration to be declared effective under the Securities Act on or prior to the Effectiveness Date. Otherwise, the Issuers shall use commercially reasonable efforts to file (and shall cause any then existing Guarantor to file) with the SEC the Initial Shelf Registration within 30 days of the delivery of the Shelf Notice and shall use commercially reasonable efforts to cause such Shelf Registration to be declared effective under the Securities Act as promptly as practicable thereafter (but in no event more than 90 days after delivery of the Shelf Notice). The Initial Shelf Registration shall be on Form S-1 or another appropriate form permitting registration of such Registrable Units for resale by Holders in the manner or manners reasonably designated by them (including, without limitation, one or more underwritten offerings). The Issuers and Guarantors shall not permit any securities other than the Registrable Units to be included in any Shelf Registration. No Holder of Registrable Units shall be entitled to include any of its Registrable Units in any Shelf Registration pursuant to this Agreement unless such Holder furnishes to the Issuers and the Trustee in writing, within 20 days after receipt of a written request therefor, such information as the Issuers and the Trustee after conferring with counsel with regard to information relating to Holders that would be required by the SEC to be included in such Shelf Registration or Prospectus included therein, may reasonably request for inclusion in any Shelf Registration or Prospectus included therein. The Issuers shall use their reasonable best efforts to keep the Initial Shelf Registration continuously effective under the Securities Act until the date which is two years from the Closing Date (the "Effectiveness Period"), or such shorter period ending when (i) all Registrable Units covered by the Initial Shelf Registration have been sold in the manner set forth and as contemplated in the Initial Shelf Registration, (ii) a Subsequent Shelf Registration covering all of the Registrable Units covered by and not sold under the Initial Shelf Registration or an earlier Subsequent Shelf Registration has been declared effective under the Securities Act or (iii) the date on which the Units become eligible for resale without volume restrictions pursuant to Rule 144 under the Securities Act. (b) Subsequent Shelf Registrations. If the Initial Shelf Registration or any Subsequent Shelf Registration (as defined below) ceases to be effective for any reason at any time during the Effectiveness Period (other than because of the sale 8 of all of the securities registered thereunder), the Issuers shall use their reasonable best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within 30 days of such cessation of effectiveness amend such Shelf Registration in a manner designed to obtain the withdrawal of the order suspending the effectiveness thereof, or file (and cause any then existing Guarantor to file) an additional "shelf" Registration Statement pursuant to Rule 415 covering all of the Registrable Units (a "Subsequent Shelf Registration"). If a Subsequent Shelf Registration is filed, the Issuers shall use their reasonable best efforts to cause the Subsequent Shelf Registration to be declared effective as soon as practicable after such filing and to keep such Subsequent Shelf Registration continuously effective for a period equal to the number of days in the Effectiveness Period less the aggregate number of days during which the Initial Shelf Registration or any Subsequent Shelf Registration was previously continuously effective. As used herein the term "Shelf Registration" means the Initial Shelf Registration and any Subsequent Shelf Registrations. (c) Supplements and Amendments. The Issuers shall promptly supplement and amend any Shelf Registration if required by the rules, regulations or instructions applicable to the registration form used for such Shelf Registration, if required by the Securities Act. 4. ADDITIONAL INTEREST (a) The Issuers acknowledge and agree that the Holders of Registrable Units will suffer damages if the Issuers fail to fulfill their material obligations under Section 2 or Section 3 hereof and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, the Issuers agree to pay additional cash interest on the Notes ("Additional Interest") under the circumstances and to the extent set forth below (each of which shall be given independent effect): (i) if neither the Exchange Registration Statement nor the Initial Shelf Registration has been filed on or prior to the Filing Date, Additional Interest shall accrue on the Notes over and above any stated interest at a rate of 0.25% per annum of the principal amount of such Notes for the first 90 days immediately following the Filing Date, such Additional Interest rate increasing by an additional 0.25% per annum at the beginning of each subsequent 90-day period, subject to the proviso in the last sentence of this paragraph; (ii) if neither the Exchange Registration Statement nor the Initial Shelf Registration is declared effective on or prior to the Effectiveness Date, Additional Interest shall accrue on the Notes over and above any stated interest at a rate of 0.25% per annum of the principal amount of such Notes for the first 90 days immediately following the Effectiveness Date, such Additional Interest rate increasing by an additional 0.25% per annum 9 at the beginning of each subsequent 90-day period, subject to the proviso in the last sentence of this paragraph; (iii) if (A) the Issuers (and any then existing Guarantor) have not exchanged Exchange Units for all Units validly tendered in accordance with the terms of the Exchange Offer on or prior to 30 Business Days after the Effectiveness Date, (B) the Exchange Registration Statement ceases to be effective at any time prior to the time that the Exchange Offer is consummated, (C) if applicable, a Shelf Registration has been declared effective and such Shelf Registration ceases to be effective at any time prior to the second anniversary of its effective date (other than such time as all Units have been disposed of thereunder) and is not declared effective again within 30 days, or (D) pending the announcement of a material corporate transaction, the Issuers issue a written notice pursuant to Section 5(e)(v) or (vi) that a Shelf Registration Statement or Exchange Registration Statement is unusable and the aggregate number of days in any 365-day period for which all such notices issued or required to be issued, have been, or were required to be, in effect exceeds 120 days in the aggregate or 30 days consecutively, in the case of a Shelf Registration statement, or 15 days in the aggregate in the case of an Exchange Registration Statement, then Additional Interest shall accrue on the Notes, over and above any stated interest, at a rate of 0.25% per annum in excess of the interest rate of the principal amount of such Notes commencing on (w) the 31st Business Day after the Effectiveness Date, in the case of (A) above, or (x) the date the Exchange Registration Statement ceases to be effective without being declared effective again within 30 days, in the case of clause (B) above, or (y) the day such Shelf Registration ceases to be effective in the case of (C) above, or (z) the day the Exchange Registration Statement or Shelf Registration ceases to be usable in case of clause (D) above, such Additional Interest rate increasing by an additional 0.25% per annum at the beginning of each such subsequent 90-day period, subject to the proviso in the last sentence of this paragraph; provided, however, that the maximum Additional Interest rate on the Notes may not exceed in the aggregate 0.50% per annum; and provided further, that (1) upon the filing of the Exchange Registration Statement or Initial Shelf Registration (in the case of (i) above), (2) upon the effectiveness of the Exchange Registration Statement or Initial Shelf Registration (in the case of (ii) above), or (3) upon the exchange of Exchange Units for all Units tendered (in the case of (iii)(A) above), or upon the effectiveness of the Exchange Registration Statement that had ceased to remain effective (in the case of clause (iii)(B) above), or upon the effectiveness of a Shelf Registration which had ceased to remain effective (in the case of (iii)(C) above), Additional Interest on the Notes as a result of such clause (or the relevant subclause thereof) or upon the effectiveness of such Registration Statement or Exchange Registration Statement (in the case of clause (iii)(D) above), as the case may be, shall cease to accrue. 10 (b) The Issuers shall notify the Trustee within 3 Business Days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an "Event Date"). Any amounts of Additional Interest due pursuant to clause (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be payable in cash, on the dates and in the manner provided in the Indenture and whether or not any cash interest would then be payable on such date, commencing with the first such semi-annual date occurring after any such Additional Interest commences to accrue. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest rate by the principal amount of the Notes, multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months and, in the case of a partial month, the actual number of days elapsed), and the denominator of which is 360. 5. REGISTRATION PROCEDURES In connection with the filing of any Registration Statement pursuant to Section 2 or 3 hereof, the Issuers shall effect such registrations to permit the exchange or sale of such securities covered thereby in accordance with the intended method or methods of disposition thereof, and pursuant thereto and in connection with any Registration Statement filed by the Issuers hereunder, the Issuers shall: (a) Prepare and file with the SEC as soon as practicable but in any event on or prior to the Filing Date, the Exchange Registration Statement or if the Exchange Registration Statement is not filed because of the circumstances contemplated by Section 2(i), a Shelf Registration as prescribed by Section 3, and use their reasonable best efforts to cause each such Registration Statement to become effective and remain effective as provided herein; provided that, if (1) a Shelf Registration is filed pursuant to Section 3 or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Units during the Applicable Period before filing any Registration Statement or Prospectus or any amendments or supplements thereto the Issuers shall, if requested, furnish to and afford the Holders of the Registrable Units to be registered pursuant to such Shelf Registration Statement, or each Participating Broker-Dealer and to their counsel and the managing underwriters, if any, a reasonable opportunity to review copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed (in each case at least 5 Business Days prior to such filing). The Issuers shall use their reasonable best efforts to reflect in each such Registration Statement or Prospectus or any amendments or supplements thereto when filed with the SEC, such comments as the Holders of a majority in aggregate principal amount of the Registrable Units may reasonably prepare, if the Holders must provide information for the inclusion in such Registration Statement or prospectus or any amendment or supplement thereto. 11 (b) Provide an indenture trustee for the Registrable Units or the Exchange Units, as the case may be, and use their reasonable best efforts to cause the Indenture (or other indenture relating to the Registrable Units) to be qualified under the TIA not later than the effective date of the first Registration Statement; and in connection therewith, use their reasonable best efforts to effect such changes to such indenture as may be required for such indenture to be so qualified in accordance with the terms of the TIA; and execute, and use their reasonable best efforts to cause such trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable such indenture to be so qualified in a timely manner. (c) Prepare and file with the SEC such amendments and post-effective amendments to each Shelf Registration or Exchange Registration Statement, as the case may be, as may be necessary to keep such Registration Statement continuously effective for the Effectiveness Period or the Applicable Period, as the case may be; cause the related Prospectus to be supplemented by any Prospectus supplement required by applicable law, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; and comply with the provisions of the Securities Act and the Exchange Act applicable to them with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented and with respect to the subsequent resale of any securities being sold by a Participating Broker-Dealer covered by any such Prospectus. The Issuers shall not, during the Applicable Period, voluntarily take any action that would result in selling Holders of the Registrable Units covered by a Registration Statement or Participating Broker-Dealers seeking to sell Exchange Units not being able to sell such Registrable Units or such Exchange Units during that period, unless such action is required by applicable law, rule or regulation or permitted by this Agreement. (d) Furnish to such selling Holders and Participating Broker-Dealers who so request in writing (i) upon the Issuers' receipt, a copy of the order of the SEC declaring such Registration Statement and any post effective amendment thereto effective, (ii) such reasonable number of copies of such Registration Statement and of each amendment and supplement thereto (in each case including any documents incorporated therein by reference and all exhibits) and (iii) such reasonable number of copies of the Prospectus included in such Registration Statement (including each preliminary Prospectus) and each amendment and supplement thereto, and such reasonable number of copies of the final Prospectus as filed by the Issuers pursuant to Rule 424(b) under the Securities Act, in conformity with the requirements of the Securities Act and each amendment and supplement thereto. The Issuers hereby consent to the use of the Prospectus by each of the selling Holders of Registrable Units or each such Participating Broker-Dealer, as the case may be, and the underwriters or agents, if any, and dealers, if any, in connection with the offering and sale of the Registrable Units covered by, or the sale by Participating Broker-Dealers of the Exchange Units pursuant to, such Prospectus and any amendment thereto. 12 (e) If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Units during the Applicable Period relating thereto, the Issuers shall notify in writing the selling Holders of Registrable Units, or each such Participating Broker-Dealer, as the case may be, their counsel and the managing underwriters, if any, promptly (but in any event within 5 Business Days) (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective (including in such notice a written statement that any Holder may, upon request, obtain, without charge, one conformed copy of such Registration Statement or post-effective amendment including financial statements and schedules, documents incorporated or deemed to be incorporated by reference and exhibits), (ii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any Prospectus or the initiation of any proceedings for that purpose, (iii) if at any time when a Prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Units the representations and warranties of the Issuers contained in any agreement (including any underwriting agreement) contemplated by Section 5(n) hereof cease to be true and correct, (iv) of the receipt by the Issuers of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Registrable Units or the Exchange Units to be sold by any Participating Broker-Dealer for offer or sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any event, the existence of any condition of any information becoming known to the Issuers that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in, or amendments or supplements to, such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement and the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (vi) of any reasonable determination by the Issuers that a post-effective amendment to a Registration Statement would be appropriate. (f) Use their reasonable best efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification) of any of the Registrable Units or the Exchange Units to be sold by any Participating Broker-Dealer, for sale in any jurisdiction, and, if any such order is issued, to use their reasonable best efforts to obtain the withdrawal of any such order at the earliest possible date. 13 (g) If (A) a Shelf Registration is filed pursuant to Section 3 or (B) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Units during the Applicable Period or (C) reasonably requested in writing by the managing underwriters, if any, or the Holders of a majority in aggregate principal amount of the Registrable Units being sold in connection with an underwritten offering, (i) promptly incorporate in a Prospectus supplement or post-effective amendment such information or revisions to information therein relating to such underwriters or selling Holders as the managing underwriters, if any, or such Holders or their counsel reasonably request in writing to be included or made therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Issuers have received notification of the matters to be incorporated in such Prospectus supplements or post-effective amendment. (h) Prior to any public offering of Registrable Units or any delivery of a Prospectus contained in the Exchange Registration Statement by any Participating Broker-Dealer who seeks to sell Exchange Units during the Applicable Period, use their reasonable best efforts to register or qualify, and to cooperate with the selling Holders of Registrable Units or each such Participating Broker-Dealer, as the case may be, the underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Units or Exchange Units, as the case may be, for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder, Participating Broker-Dealer or any managing underwriter or underwriters, if any, reasonably request in writing; provided that where Exchange Units held by Participating Broker-Dealers or Registrable Units are offered other than through an underwritten offering, the Issuers agree to cause their counsel to perform Blue Sky investigations and file any registrations and qualifications required to be filed pursuant to this Section 5(h), keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Exchange Units held by Participating Broker-Dealers or the Registrable Units covered by the applicable Registration Statement; provided that neither the Issuers nor any existing Guarantor shall be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified, (B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or (C) subject itself to taxation in any such jurisdiction where it is not then so subject. (i) If (A) a Shelf Registration is filed pursuant to Section 3 or (B) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is requested to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Units during the Applicable Period, cooperate with the selling Holders of Registrable Units and the managing underwriter or 14 underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Units to be sold, which certificates shall not bear any restrictive legends and shall be in a form eligible for deposit with The Depository Trust Company, and enable such Registrable Units to be in such denominations and registered in such names as the managing underwriter or underwriters, if any, or Holders may reasonably request in writing. (j) Use their reasonable best efforts to cause the Registrable Units covered by any Registration Statement to be registered with or approved by such governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter, if any, to consummate the disposition of such Registrable Units, except as may be required solely as a consequence of the nature of such selling Holder's business, in which case the Issuers will cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals; provided that neither the Issuers nor any existing Guarantor shall be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified, (B) take any action that would subject it to general service of process in any jurisdiction where it is not then so subject or (C) subject itself to taxation in any such jurisdiction where it is not then so subject. (k) If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Units during the Applicable Period, upon the occurrence of any event contemplated by paragraph 5(e)(v) or 5(e)(vi) hereof, as promptly as practicable, prepare and file with the SEC, at the expense of the Issuers, a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Units being sold thereunder or to the purchasers of the Exchange Units to whom such Prospectus will be delivered by a Participating Broker-Dealer, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (l) Use their reasonable best efforts to (a) if the Registrable Units covered by a Registration Statement have been rated prior to the Closing Date, confirm that such ratings will apply to the Exchange Units covered by such Registration Statement, or (b) if the Registrable Units were not previously rated, cause the Exchange Units covered by such Registration Statement to be rated with the appropriate rating agencies, if so requested in writing by the Holders of a majority in aggregate principal amount of the Registrable Units covered by such Registration Statement or the managing underwriter or underwriters, if any. 15 (m) Prior to the initial issuance of the Exchange Units, (i) provide the Trustee with one or more certificates for the Registrable Units in a form eligible for deposit with The Depository Trust Company and (ii) use its reasonable best efforts to provide a CUSIP number for the Exchange Units. (n) If a Shelf Registration is filed pursuant to Section 3, enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwritten offerings of debt securities similar to the Units, as may be appropriate in the circumstances) and take all such other actions in connection therewith as may be reasonably requested in writing by the managing underwriters, if any, or the Holders of a majority in aggregate principal amount of the Registrable Units being sold in order to expedite or facilitate the registration or the disposition of such Registrable Units, and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, (i) make such representations and warranties to the Holders and the underwriters, if any, with respect to the business of the Issuers and their subsidiaries as then conducted, and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings of debt securities similar to the Units, as may be appropriate in the circumstances, and confirm the same if and when reasonably required; (ii) obtain opinions of counsel to the Issuers and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any, and the Holders of a majority in aggregate principal amount of the Registrable Units being sold), addressed to each selling Holder and each of the underwriters, if any, covering the matters customarily covered in opinions of counsel to the Issuers requested in underwritten offerings of debt securities similar to the Units, as may be appropriate in the circumstances; (iii) obtain "cold comfort" letters and updates thereof (which letters and updates (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters) from the independent certified public accountants of the Issuers (and, if necessary, any other independent certified public accountants of any subsidiary of the Issuers or of any business acquired by the Issuers for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to each of the underwriters, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with underwritten offerings of debt securities similar to the Units, as may be appropriate in the circumstances, and such other matters as reasonably requested in writing by the underwriters; and (iv) deliver such documents and certificates as may be reasonably requested in writing by the Holders of a majority in aggregate principal amount of the Registrable Units being sold and the managing underwriters, if any, to evidence the continued validity of the representations and warranties of the Issuers and their subsidiaries made pursuant to clause (i) above and to evidence compliance with any conditions contained in the underwriting agreement or other similar agreement entered into by the Issuers. 16 (o) If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Units during the Applicable Period, make available for inspection by any selling Holder of such Registrable Units being sold, or each such Participating Broker-Dealer, as the case may be, any underwriter participating in any such disposition of Registrable Units, if any, and any attorney, accountant or other agent retained by any such selling Holder or each such Participating Broker-Dealer, as the case may be, or underwriter (collectively, the "Inspectors"), at the offices where normally kept, during reasonable business hours, all financial and other records and pertinent corporate documents of the Issuers and their subsidiaries (collectively, the "Records") as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the officers, directors and employees of the Issuers and their subsidiaries to supply all information reasonably requested in writing by any such Inspector in connection with such Registration Statement. Each Inspector shall agree in writing that it will keep the Records confidential and not disclose any of the Records unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such Registration Statement, (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, (iii) the information in such Records is public or has been made generally available to the public other than as a result of a disclosure or failure to safeguard by such Inspector or (iv) disclosure of such information is, in the reasonable written opinion of counsel for any Inspector, necessary or advisable in connection with any action, claim, suit or proceeding, directly or indirectly, involving or potentially involving such Inspector and arising out of, based upon, related to, or involving this Agreement, or any transaction contemplated hereby or arising hereunder. Each selling Holder of such Registrable Units and each such Participating Broker-Dealer will be required to agree that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Issuers unless and until such is made generally available to the public. Each Inspector, each selling Holder of such Registrable Units and each such Participating Broker-Dealer will be required to further agree that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Issuers and, to the extent practicable, use their best efforts to allow the Issuers, at their expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential at their expense. (p) Comply with all applicable rules and regulations of the SEC and make generally available to the security holders of the Issuers with regard to any applicable Registration Statement earning statements satisfying the provisions of section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which 17 Registrable Units are sold to underwriters in a firm commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Issuers after the effective date of a Registration Statement, which statements shall cover said 12-month periods. (q) Upon consummation of an Exchange Offer, obtain an opinion of counsel to the Issuers (in form, scope and substance reasonably satisfactory to the Initial Purchaser), addressed to the Trustee for the benefit of all Holders participating in the Exchange Offer, to the effect that (i) the Issuers and the existing Guarantors have duly authorized, executed and delivered the Exchange Units and the Indenture, (ii) the Exchange Units and the Indenture constitute legal, valid and binding obligations of the Issuers and the existing Guarantors, enforceable against the Issuers and the existing Guarantors in accordance with their respective terms, except as such enforcement may be subject to customary United States and foreign exceptions and (iii) all obligations of the Issuers and the existing Guarantors under the Exchange Units and the Indenture are secured to the same extent as the Units. (r) If the Exchange Offer is to be consummated, upon delivery of the Registrable Units by the Holders to the Issuers (or to such other Person as directed by the Issuers) in exchange for the Exchange Units the Issuers shall mark, or caused to be marked, on such Registrable Units that the Exchange Units are being issued as substitute evidence of the indebtedness originally evidenced by the Registrable Units; provided that in no event shall such Registrable Units be marked as paid or otherwise satisfied. (s) Cooperate with each seller of Registrable Units covered by any Registration Statement and each underwriter, if any, participating in the disposition of such Registrable Units and their respective counsel in connection with any filings required to be made with the NASD. (t) Use their reasonable best efforts to take all other steps reasonably necessary to effect the registration of the Registrable Units covered by a Registration Statement contemplated hereby. (u) The Issuers may require each seller of Registrable Units or Participating Broker-Dealer as to which any registration is being effected to furnish to the Issuers such information regarding such seller or Participating Broker-Dealer and the distribution of such Registrable Units as the Issuers may, from time to time, reasonably request in writing. The Issuers may exclude from such registration the Registrable Units of any seller who fails to furnish such information within a reasonable time (which time in no event shall exceed 45 days) after receiving such request. Each seller of Registrable Units or Participating Broker-Dealer as to which any registration is being effected agrees to furnish promptly to the Issuer all information required to be disclosed in order to make the information previously furnished by such seller not materially misleading. 18 (v) Each Holder of Registrable Units and each Participating Broker-Dealer agrees by acquisition of such Registrable Units or Exchange Units to be sold by such Participating Broker-Dealer, as the case may be, that, upon receipt of any notice from the Issuers of the happening of any event of the kind described in Section 5(e)(ii), 5(e)(iv), 5(e)(v), or 5(e)(vi), such Holder will forthwith discontinue disposition of such Registrable Units covered by a Registration Statement and such Participating Broker-Dealer will forthwith discontinue disposition of such Exchange Units pursuant to any Prospectus and, in each case, forthwith discontinue dissemination of such Prospectus until such Holder's or Participating Broker-Dealer's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5(k), or until it is advised in writing (the "Advice") by the Issuers that the use of the applicable Prospectus may be resumed, and has received copies of any amendments or supplements thereto and, if so directed by the Issuers, such Holder or Participating Broker-Dealer, as the case may be, will deliver to the Issuers all copies, other than permanent file copies, then in such Holder's or Participating Broker-Dealer's possession, of the Prospectus covering such Registrable Units current at the time of the receipt of such notice. In the event the Issuers shall give any such notice, the Applicable Period shall be extended by the number of days during such periods from and including the date of the giving of such notice to and including the date when each Participating Broker-Dealer shall have received (x) the copies of the supplemented or amended Prospectus contemplated by Section 5(k) or (y) the Advice. 6. REGISTRATION EXPENSES (a) All fees and expenses incident to the performance of or compliance with this Agreement by the Issuers shall be borne by the Issuers, whether or not the Exchange Offer or a Shelf Registration is filed or becomes effective, including, without limitation, (i) all registration and filing fees, including, without limitation, (A) fees with respect to filings required to be made with the NASD in connection with any underwritten offering and (B) fees and expenses of compliance with state securities or Blue Sky laws as provided in Section 5(h) hereof, (ii) printing expenses, including, without limitation, expenses of printing a reasonable number of Prospectuses if the printing of Prospectuses is requested by the managing underwriter or underwriters, if any, or by the Holders of a majority in aggregate principal amount of the Registrable Units included in any Registration Statement or by any Participating Broker-Dealer during the Applicable Period, as the case may be, (iii) messenger, telephone and delivery expenses incurred in connection with the performance of the their obligations hereunder, (iv) fees and disbursements of counsel for the Issuers, (v) fees and disbursements of all independent certified public accountants referred to in Section 5 (including, without limitation, the expenses of any special audit and "cold comfort" letters required by or incident to such performance), (vi) rating agency fees, (vii) Securities Act liability insurance, if the Issuers desires such insurance, (viii) fees and expenses of all other Persons retained by the Issuers, (ix) internal expenses of the Issuers (including, without limitation, all salaries and expenses of officers and employees of the Issuers performing legal or accounting duties), (x) the expense 19 of any annual audit, (xi) the fees and expenses of the Trustee and the Exchange Agent and (xii) the expenses relating to printing, word processing and distributing all Registration Statements, underwriting agreements, securities sales agreements, indentures and any other documents necessary in order to comply with this Agreement (other than underwriting discounts and commissions). (b) The Issuers shall reimburse the Holders for the reasonable fees and disbursements of not more than one counsel chosen by the Holders of a majority in aggregate principal amount of the Registrable Units to be included in any Registration Statement for fees and disbursements incurred in connection with such Registration Statement. The Issuers shall pay all documentary, stamp, transfer or other transactional taxes (other than federal, state or local taxes of the Initial Purchaser) attributable to the issuance or delivery of the Exchange Units in exchange for the Units; provided that the Issuers shall not be required to pay taxes payable in respect of any transfer involved in the issuance or delivery of any Exchange Unit in a name other than that of the Holder of the Unit in respect of which such Exchange Unit is being issued. The Issuers shall reimburse the Holders for reasonable fees and disbursements of not more than one counsel chosen by the Holders of a majority in aggregate principal amount of Registrable Units relating to any enforcement of any rights of the Holders under this Agreement. 7. INDEMNIFICATION (a) Indemnification by the Issuers. The Issuers and the Guarantors jointly and severally agree to indemnify and hold harmless each Holder of Registrable Units, Exchange Units and each Participating Broker-Dealer selling Exchange Units during the Applicable Period, each Person, if any, who controls each such Holder (within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act) and the officers, directors and partners of each such Holder, Participating Broker-Dealer and controlling person from and against any losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and reasonable attorneys' fees as provided in this Section 7) and expenses (including, without limitation, reasonable costs and expenses incurred in connection with investigating, preparing, pursuing or defending against any of the foregoing) (collectively, "Losses"), insofar as such Losses arise out of or are based upon any untrue statement or alleged untrue statement of a material fact in any Registration Statement, Prospectus or form of prospectus, or in any amendment or supplement thereto, or in any preliminary prospectus, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such Losses result primarily from information relating to such Holder or Participating Broker-Dealer and furnished in writing to the Issuers (or reviewed and approved in writing) by such Holder or Participating Broker-Dealer or their counsel expressly for use therein; provided, however, that the Issuers and the Guarantors will not be liable to any Indemnified Party (as defined below) under this Section 7 to the extent 20 Losses resulted primarily from an untrue statement or omission or alleged untrue statement or omission that was contained or made in any preliminary prospectus and corrected in the Prospectus or any amendment or supplement thereto if (i) any such Losses resulted from an action, claim or suit by any Person who purchased Registrable Units or Exchange Units which are the subject thereof from such Indemnified Party and (ii) it is established in the related proceeding that such Indemnified Party failed to deliver or provide a copy of the Prospectus (as amended or supplemented) to such Person with or prior to the confirmation of the sale of such Registrable Units or Exchange Units sold to such Person if required by applicable law, unless such failure to deliver or provide a copy of the Prospectus (as amended or supplemented) was a result of noncompliance by the Issuers with Section 5 of this Agreement. (b) Indemnification by Holder. Each Holder shall indemnify and hold harmless the Issuers, the Guarantors, their respective directors and each Person, if any, who controls the Issuers (within the meaning of Section 15 of the Securities Act and Section 20(a) of the Exchange Act), and the directors, officers and partners of such controlling persons, from and against all Losses insofar as such Losses arise out of or are based upon any untrue statement or alleged untrue statement of a material fact in any Registration Statement, Prospectus or form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading insofar as such Losses are finally judicially determined by a court of competent jurisdiction to have resulted primarily from any untrue statement or alleged untrue statement of any material fact, alleged omission of any material fact contained in or omitted from any information so furnished in writing by such Holder to the Issuers expressly for use in any such Registration Statement, Prospectus or form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus. Notwithstanding the foregoing, in no event shall the liability of any selling Holder be greater in amount than the dollar amount of the proceeds (net of payment of all expenses) received by such Holder upon the sale of the Registrable Units giving rise to such indemnification obligation. (c) Conduct of Indemnification Proceedings. If any proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an "Indemnified Party"), such Indemnified Party shall promptly notify the party or parties from which such indemnity is sought (the "Indemnifying Party" or "Indemnifying Parties", as applicable) in writing; provided, that the failure to so notify the Indemnifying Parties shall not relieve the Indemnifying Parties from any obligation or liability except to the extent (but only to the extent) that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal) that the Indemnifying Parties have been prejudiced materially by such failure. 21 The Indemnifying Party shall have the right, exercisable by giving written notice to an Indemnified Party, within 20 Business Days after receipt of written notice from such Indemnified Party of such proceeding, to assume, at its expense, the defense of any such proceeding, provided, that an Indemnified Party shall have the right to employ separate counsel in any such proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or parties unless: (1) the Indemnifying Party has agreed to pay such fees and expenses; or (2) the Indemnifying Party shall have failed promptly to assume the defense of such proceeding or shall have failed to employ counsel reasonably satisfactory to such Indemnified Party; or (3) the named parties to any such proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party or any of its affiliates or controlling persons, and such Indemnified Party shall have been advised by counsel that there may be one or more defenses available to such Indemnified Party that are in addition to, or in conflict with, those defenses available to the Indemnifying Party or such affiliate or controlling person (in which case, if such Indemnified Party notifies the Indemnifying Parties in writing that it elects to employ separate counsel at the expense of the Indemnifying Parties, the Indemnifying Parties shall not have the right to assume the defense and the reasonable fees and expenses of such counsel shall be at the expense of the Indemnifying Party; it being understood, however, that, the Indemnifying Party shall not, in connection with any one such proceeding or separate but substantially similar or related proceedings in the same jurisdiction, arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for such Indemnified Party). No Indemnifying Party shall be liable for any settlement of any such proceeding effected without its written consent, which shall not be unreasonably withheld, but if settled with its written consent, or if there be a final judgment for the plaintiff in any such proceeding, each Indemnifying Party jointly and severally agrees, subject to the exceptions and limitations set forth above, to indemnify and hold harmless each Indemnified Party from and against any and all Losses by reason of such settlement or judgment. The Indemnifying Party shall not consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to each Indemnified Party of a release, in form and substance reasonably satisfactory to the Indemnified Party, from all liability in respect of such proceeding for which such Indemnified Party would be entitled to indemnification hereunder (whether or not any Indemnified Party is a party thereto). (d) Contribution. If the indemnification provided for in this Section 7 is unavailable to an Indemnified Party or is insufficient to hold such Indemnified Party harmless for any Losses in respect of which this Section 7 would otherwise apply by its terms (other than by reason of exceptions provided in this Section 7), then each applicable Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall have a joint and several obligation to contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and such Indemnified Party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party, on the one hand, and Indemnified Party, on the other hand, shall be determined by 22 reference to, among other things, whether any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent any such statement or omission. The amount paid or payable by an Indemnified Party as a result of any Losses shall be deemed to include any reasonable legal or other fees or expenses incurred by such party in connection with any proceeding, to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in Section 7(a) or 7(b) was available to such party. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 7(d) were determined by pro rata allocation or by other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 7(d), a selling Holder shall not be required to contribute, in the aggregate, any amount in excess of such Holder's Maximum Contribution Amount. A selling Holder's "Maximum Contribution Amount" shall equal the excess of (i) the aggregate proceeds received by such Holder pursuant to the sale of such Registrable Units or Exchange Units over (ii) the aggregate amount of damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The indemnity and contribution agreements contained in this Section 7 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. 8. RULES 144 AND 144A The Issuers covenant that they shall file the reports required to be filed by them (if so required) under the Securities Act and the Exchange Act in a timely manner and, if at any time the Issuers are not required to file such reports, it will, upon the written request of any Holder of Registrable Units, make publicly available other information necessary to permit sales pursuant to Rule 144 and 144A. Upon the request of any Holder, the Issuers shall deliver to such Holder a written statement as to whether they have complied with such information and requirements. 9. UNDERWRITTEN REGISTRATIONS OF REGISTRABLE UNITS If any of the Registrable Units covered by any Shelf Registration is to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will manage the offering will be selected by the Holders of a majority in aggregate principal amount of such Registrable Units included in such offering; provided, however, that such investment banker or investment bankers and manager or managers must be reasonably acceptable to the Issuers and such Holders shall be responsible for all underwriting commissions in connection therewith. 23 No Holder of Registrable Units may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder's Registrable Units on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. 10. SEPARATION EVENT If a Separation Event occurs at any time prior to the consummation of the Exchange Offer of the Units pursuant to this Agreement, all terms and conditions set forth under this Agreement shall apply to each of the U.S. Notes and U.K. Notes (as independent securities) and each of the defined terms "U.S. Notes" and the "U.K. Notes" shall replace "Units" where appropriate and applicable so that the U.S. Notes and U.K. Notes shall have the same rights and obligations under this Agreement as the Units had under this Agreement prior to the occurrence of such Separation Event. 11. MISCELLANEOUS (a) No Inconsistent Agreements. The Issuers have not entered, as of the date hereof, and the Issuers shall not enter, after the date of this Agreement, into any agreement with respect to any of its securities that is inconsistent with the rights granted to the Holders of Securities in this Agreement or otherwise conflicts with the provisions hereof. The Issuers have not entered and will not enter into any agreement with respect to any of their securities that will grant to any Person piggy-back rights with respect to a Registration Statement. (b) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, otherwise than with the prior written consent of the Holders of not less than a majority in aggregate principal amount of the then outstanding Registrable Units in circumstances that would adversely affect any Holders of Registrable Units; provided, however, that Section 7 and this Section 11(b) may not be amended, modified or supplemented without the prior written consent of each Holder. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Units whose securities are being tendered pursuant to the Exchange Offer or sold pursuant to a Units Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Registrable Units may be given by Holders of at least a majority in aggregate principal amount of the Registrable Units being tendered or being sold by such Holders pursuant to such Units Registration Statement. 24 (c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, next-day air courier or telecopier: (i) if to a Holder of Securities or to any Participating Broker-Dealer, at the most current address of such Holder or Participating Broker-Dealer, as the case may be, set forth on the records of the registrar of the Units, with a copy in like manner to the Initial Purchaser as follows: Jefferies & Company, Inc. 520 Madison Avenue, 12th Floor New York, NY 10022 Facsimile No.: (212) 284-2479 Attention: General Counsel with a copy to: Mayer, Brown, Rowe & Maw LLP 1675 Broadway New York, New York 10019 Facsimile No.: (212) 262-1910 Attention: Ronald S. Brody, Esq. (ii) if to the Initial Purchaser, at the address specified in Section 11(c)(i); (iii) if to the Issuers, as follows: MSX International, Inc. 22355 West Eleven Mile Road Southfield, MI 48304-4375 Facsimile No.: (248) 829-6340 Attention: Corporate Legal Department MSX International Limited 22355 West Eleven Mile Road Southfield, MI 48304-4375 Facsimile No.: (248) 829-6340 Attention: Corporate Legal Department with a copy to: Dechert LLP 4000 Bell Atlantic Tower 1717 Arch Street Philadelphia, PA 19103 Facsimile No.: (215) 655-2491 Attention: Craig L. Godshall, Esq. 25 All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; three business days after being deposited in the United States mail, postage prepaid, if mailed; one business day after being timely delivered to a next-day air courier guaranteeing overnight delivery; and when receipt is acknowledged by the addressee, if telecopied. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee under the Indenture at the address specified in such Indenture. (d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto, including, without limitation and without the need for an express assignment, subsequent Holders of Securities. (e) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAW. THE ISSUERS HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPT FOR THEIR AND IN RESPECT OF THEIR PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE ISSUERS IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE ISSUERS IRREVOCABLY CONSENT, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR 26 CERTIFIED MAIL, POSTAGE PREPAID, TO THE ISSUERS AT THEIR SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ISSUERS IN ANY OTHER JURISDICTION. (h) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. (i) Securities Held by the Issuers or Their Affiliates. Whenever the consent or approval of Holders of a specified percentage of Securities is required hereunder, Securities held by the Issuers or their affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. (j) Third Party Beneficiaries. Holders and Participating Broker-Dealers are intended third party beneficiaries of this Agreement and this Agreement may be enforced by such Persons. (k) Entire Agreement. This Agreement, together with the Purchase Agreement, the Indenture and the Collateral Agreements, is intended by the parties as a final and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein and any and all prior oral or written agreements, representations, or warranties, contracts, understanding, correspondence, conversations and memoranda between the Initial Purchaser on the one hand and the Issuers on the other, or between or among any agents, representatives, parents, subsidiaries, affiliates, predecessors in interest or successors in interest with respect to the subject matter hereof and thereof are merged herein and replaced hereby. 27 SIGNATURES IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of the date first written above. MSX INTERNATIONAL, INC. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL LIMITED By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Director MSX INTERNATIONAL (HOLDINGS), INC. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL SERVICES (HOLDINGS), INC. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President REGISTRATION RIGHTS AGREEMENT MSX INTERNATIONAL EUROPEAN (HOLDINGS), L.L.C. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL DEALERNET SERVICES, INC. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL BUSINESS SERVICES, INC. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President CREATIVE TECHNOLOGY SERVICES, L.L.C. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President REGISTRATION RIGHTS AGREEMENT MSX INTERNATIONAL TECHNOLOGY SERVICES, INC. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL ENGINEERING SERVICES, INC. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President INTRANATIONAL COMPUTER CONSULTANTS, INC. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President PROGRAMMING MANAGEMENT & SYSTEMS, INC. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President REGISTRATION RIGHTS AGREEMENT CHELSEA COMPUTER CONSULTANTS, INC. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President MILLENNIUM COMPUTER SYSTEMS, INC. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President MANAGEMENT RESOURCES INTERNATIONAL, INC. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President PILOT COMPUTER SERVICES, INCORPORATED By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President REGISTRATION RIGHTS AGREEMENT MSX INTERNATIONAL PLATFORM SERVICES, LLC By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President MEGATECH ENGINEERING, INC. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL STRATEGIC TECHNOLOGY, INC. By: /s/ Frederick K. Minturn -------------------------------------------- Name: Frederick K. Minturn Title: Vice President REGISTRATION RIGHTS AGREEMENT ACCEPTED AND AGREED TO: JEFFERIES & COMPANY, INC. By: /s/ Douglas R. Speegle --------------------------- Name: Douglas R. Speegle Title: Managing Director REGISTRATION RIGHTS AGREEMENT EX-5.1 8 k79382exv5w1.txt OPINION OF DECHERT LLP, PHILADELPHIA, PENNSYLVANIA EXHIBIT 5.1 [Letterhead of Dechert LLP] September 29, 2003 MSX International, Inc. 22355 West Eleven Mile Road Southfield, MI 48034 MSX International Limited Endeavour Drive Festival Business Park Basildon, Essex SS14 3WF England Subsidiary Guarantors listed on Schedule A c/o MSX International, Inc. 22355 West Eleven Mile Road Southfield, MI 48034 Re: Form S-4 Registration Statement Registration No. 333-_________ Gentlemen and Ladies: We have acted as counsel to MSX International, Inc., a Delaware corporation (the "Company") and the subsidiary guarantors listed on Schedule A attached hereto (each a "Subsidiary Guarantor" and collectively the "Subsidiary Guarantors") and special counsel to MSX International Limited, a company incorporated under the laws of England and Wales ("MSXI Limited" and together with the Company, the "Issuers"), in connection with the preparation and filing by the Issuers and the Subsidiary Guarantors of a Registration Statement on Form S-4 (Registration No. 333- ) (the "Registration Statement"), with the Securities and Exchange Commission for the purpose of registering the issuance of up to 75,500 of the Issuers' 11% Senior Secured Units due 2007 (the "Exchange Units") consisting of $860 Principal Amount of 11% Senior Secured Notes due 2007 of the Company (the "MSXI Notes") and $140 Principal Amount of 11% Senior Secured Notes due 2007 of MSXI Limited (the "MSXI Limited Notes" and together with the MSXI Notes, the "Exchange Notes") and the Subsidiary Guarantors' guarantees thereof (the "Exchange Guarantees") under the Securities Act of 1933, as amended (the "Securities Act"). The Exchange Units and the Exchange Guarantees are to be issued in exchange for an equal aggregate number of the Issuers' outstanding 11% Senior Secured Units due 2007 (the "Existing Units") consisting of $860 Principal Amount of 11% Senior Secured Notes due 2007 of the Company and $140 Principal Amount of 11% Senior Secured Notes due 2007 of MSXI Limited (collectively, the "Existing Notes") and the Subsidiary Guarantors' guarantees thereof pursuant to the Registration Rights Agreement (the "Registration Rights Agreement") among the Issuers, the Subsidiary Guarantors and Jefferies & Company, Inc., which is filed as Exhibit 4.8 to the Registration Statement. The Exchange Units are to be issued pursuant to the terms of the Indenture dated August 1, 2003, by and among the Issuers, the Subsidiary Guarantors and BNY Midwest Trust Company, as trustee (the "Trustee"), which is filed as Exhibit 4.4 to the Registration Statement. The Indenture is to be qualified under the Trust Indenture Act of 1939, as amended (the "TIA"). In connection with the foregoing, we have reviewed such records, documents, agreements and certificates, and examined such questions of law, as we have considered necessary or appropriate for the purpose of this opinion. In making our examination of records, documents, agreements and certificates, we have assumed the authenticity of the same, the correctness of the information contained therein, the genuineness of all signatures, the authority of all persons entering and maintaining records or executing documents, agreements and certificates (other than persons executing documents, agreements and certificates on behalf of the Company and the Subsidiary Guarantors), and the conformity to authentic originals of all items submitted to us as copies (whether certified, conformed, photostatic or by other electronic means) of records, documents, agreements or certificates. In rendering our opinions, we have relied as to factual matters upon certificates of public officials and certificates and representations of officers of the Company and the Subsidiary Guarantors. We have assumed that (i) MSXI Limited is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, (ii) MSXI Limited has all requisite corporate power and authority to execute, deliver and perform its obligations under the Exchange Units and (iii) MSXI Limited's execution and delivery of the Exchange Units has been duly authorized by all necessary corporate action. Further, we have assumed that the Indenture has been duly authorized, executed and delivered by the Trustee and constitutes a legal, valid and binding agreement of the Trustee. In addition, we have assumed that there will be no changes in applicable law between the date of this opinion and the date of issuance and delivery of the Exchange Units and the Exchange Guarantees. Based upon and subject to the foregoing and the limitations, qualifications, exceptions and assumptions set forth herein, and having regard for such legal considerations as we deem relevant, we are of the opinion that: 1. When (a) the Registration Statement has been declared effective, (b) the Indenture has been duly qualified under the TIA, (c) the Exchange Units have been duly executed by the Issuers, and (d) the Exchange Units have been duly authenticated by the Trustee in accordance with the terms of the Indenture and issued and delivered in exchange for the Existing Units in accordance with the Registration Rights Agreement and the terms set forth in the prospectus which is included in the Registration Statement, the Exchange Units will constitute valid and legally binding obligations of each of the Company and MSXI Limited, as an issuer, enforceable against each of the Company and MSXI Limited in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization and other similar laws affecting creditors' rights generally or debtors' obligations generally, general principles of equity (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. 2. When (a) the Registration Statement has been declared effective, (b) the Indenture has been duly qualified under the TIA, (c) the Exchange Units have been duly executed by the Issuers, (d) the Exchange Units have been duly authenticated by the Trustee in accordance with the terms of the Indenture and issued and delivered in exchange for the Existing Units in accordance with the Registration Rights Agreement and the terms set forth in the prospectus which is included in the Registration Statement, and (e) the Exchange Guarantees have been duly executed by the Subsidiary Guarantors, the Exchange Guarantees will constitute valid and legally binding obligations of the applicable Subsidiary Guarantor party thereto enforceable against such Subsidiary Guarantor in accordance with the terms of the applicable Exchange Guarantee, subject to applicable bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization and other similar laws affecting creditors' rights generally or debtors' obligations generally, general principles of equity (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. The opinions expressed herein are limited to the General Corporation Law and the Limited Liability Company Act of the State of Delaware and the laws of the United States of America and the State of New York, and we express no opinion concerning the laws of any other jurisdiction. For the purposes of our opinion with respect to the due authorization of any of the Exchange Guarantees by any Subsidiary Guarantor incorporated or organized in a state other than Delaware, New York or California, we have assumed that the corporate, limited liability company, partnership or limited partnership law of the jurisdiction of incorporation or organization of such entities is identical to that of Delaware. The opinion expressed herein is rendered to the Issuers and the Subsidiary Guarantors in connection with the filing of the Registration Statement and for no other purpose. The opinion expressed herein may not be used or relied on by any other person, nor may this letter or any copies thereof be furnished to a third party, filed with a government agency, quoted, cited or otherwise referred to without our prior written consent, except as noted below. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name in the prospectus contained therein, under the caption "Legal Matters." In giving such consent we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act. Very truly yours, /s/ Dechert LLP SCHEDULE A Subsidiary Guarantors MSX International (Holdings), Inc. MSX International Services (Holdings), Inc. MSX International European (Holdings), L.L.C. MSX International DealerNet Services, Inc. MSX International Business Services, Inc. Creative Technology Services, L.L.C. MSX International Technology Services, Inc. MSX International Engineering Services, Inc. Intranational Computer Consultants Programming Management & Systems, Inc. Chelsea Computer Consultants, Inc. Millennium Computer Systems, Inc. Management Resources International, Inc. Pilot Computer Services, Incorporated MSX International Platform Services, LLC MegaTech Engineering, Inc. MSX International Strategic Technology, Inc. EX-5.2 9 k79382exv5w2.txt OPINION OF DECHERT, LONDON, ENGLAND EXHIBIT 5.2 MSX International Limited OUR REF: Endeavour Drive YOUR REF: Festival Business Park DOC NO: 2567138 Basildon, Essex SS14 3WF England Dechert LLP 1717 Arch Street 4000 Bell Atlantic Tower Philadelphia, PA 19103-2793 29 September 2003 Dear Gentlemen and Ladies REGISTRATION STATEMENT ON FORM S-4 REGISTRATION NO. 333 We have acted as advisers as to English law to MSX International Limited ("MSX UK"), a wholly owned subsidiary of MSX International, Inc. ("MSX US" and together with MSX UK, the "Issuers"), in connection with the preparation and filing of the Registration Statement on Form S-4 (Registration Number 333 ) (the "Registration Statement"), with the Securities and Exchange Commission for the purpose of registering the issuance of up to 75,500 of the Issuers' 11% Senior Secured Units due 2007 (the "Exchange Units") consisting of $860 Principal Amount of 11% Senior Secured Notes due 2007 of MSX US (the "US Notes") and $140 Principal Amount of 11% Senior Secured Notes due 2007 of MSXI UK (the "UK Notes" and together with the US Notes, the "Exchange Notes") and the subsidiary guarantors' (each a "Subsidiary Guarantor" and collectively the "Subsidiary Guarantors") guarantees thereof (the "Exchange Guarantees") under the Securities Act of 1933, as amended (the "Securities Act"). The Exchange Units and the Exchange Guarantees are to be issued in exchange for an equal aggregate number of the Issuers' outstanding 11% Senior Secured Units due 2007 (the "Existing Units") consisting of $860 Principal Amount of 11% Senior Secured Notes due 2007 of MSX US and $140 Principal Amount of 11% Senior Secured Notes due 2007 of MSX UK (collectively, the "Existing Notes") and the Subsidiary Guarantors' guarantees thereof pursuant to the Registration Rights Agreement (the "Registration Rights Agreement") among the Issuers, the Subsidiary Guarantors and Jefferies & Company, Inc., which is filed as Exhibit 4.8 to the Registration Statement. The Exchange Units are to be issued pursuant to the terms of the Indenture dated August 1, 2003, by and among the Issuers, the Subsidiary Guarantors and BNY Midwest Trust Company, as trustee (the "Trustee"), which is filed as Exhibit 4.4 to the Registration Statement. The Indenture is to be qualified under the Trust Indenture Act of 1939, as amended (the "TIA"). In connection with the foregoing, we have reviewed such records, documents, agreements and certificates, and examined such questions of law, as we have considered necessary or appropriate for the purpose of this opinion. In making our examination of records, documents, agreements and certificates, we have assumed the authenticity of the same, the correctness of the information contained therein, the genuineness of all signatures, the authority of all persons entering and maintaining records or executing documents, 29 September 2003 Page 2 agreements and certificates (other than persons executing documents, agreements and certificates on behalf of MSX UK), and the conformity to authentic originals of all items submitted to us as copies (whether certified, conformed, photostatic or by other electronic means) of records, documents, agreements or certificates. We have further assumed that the entry by the MSX UK into the documents described above, is in good faith and for the purpose of carrying on their businesses and for bona fide commercial reasons and for the commercial benefit of and in the interests of MSX UK and its shareholders and that MSX UK derived a direct or indirect benefit from entering into such documents which is commensurate with the risks and obligations incurred by its entering into such documents. In rendering our opinions, we have relied as to factual matters upon certificates of public officials and certificates and representations of officers of MSX UK. Based upon the foregoing and subject to the assumptions, limitations and qualifications stated herein, we are of the opinion that: 1. MSX UK has been incorporated and registered in England and Wales as a limited liability company and has the requisite corporate capacity to execute and deliver the Exchange Units. 2. The execution and delivery of the Exchange Units has been duly authorized by all necessary corporate action of MSX UK. 3. MSX UK has duly executed and delivered the Indenture and the Exchange Units. We hereby consent to the use of this opinion as an exhibit to the Registration Statement and to the use of our name in the prospectus contained therein under the caption "Legal Matters." In giving this consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the rules and regulations promulgated thereunder. The opinion expressed herein is limited to the laws of England and Wales. We do not purport to be qualified to give opinions upon and give no opinions as to the laws of any jurisdiction other than the laws of England and Wales and we assume that no foreign law affects this opinion. This opinion does not relate to facts or laws or to the interpretation of laws after the date of this opinion and we do not assume any obligation to update this opinion or to inform you of any changes to facts or laws. Very truly yours, /s/ Dechert EX-10.13 10 k79382exv10w13.txt AMENDED AND RESTATED CREDIT AGREEMENT EXHIBIT 10.13 AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF AUGUST 1, 2003 AMONG MSX INTERNATIONAL, INC., AS BORROWER, THE LOAN PARTIES PARTY HERETO FROM TIME TO TIME, THE LENDERS PARTY HERETO FROM TIME TO TIME, BANK ONE, NA, AS AGENT AND LC ISSUER AND BANC ONE CAPITAL MARKETS, INC., AS LEAD ARRANGER AND SOLE BOOK RUNNER TABLE OF CONTENTS
Page ---- ARTICLE I. DEFINITIONS..........................................................................................1 ARTICLE II. THE FACILITY.......................................................................................26 2.1. THE FACILITY...........................................................................................26 2.1.1. Revolving Loans...................................................................................27 2.1.2. Facility LCs......................................................................................28 2.1.3. Non-Ratable Loans.................................................................................32 2.1.4. Protective Advances and Overadvances..............................................................32 2.1.5 Swingline Loans...................................................................................33 2.1.6 Limitation on Advances............................................................................34 2.2. RATABLE LOANS; RISK PARTICIPATION......................................................................35 2.3. PAYMENT OF THE OBLIGATIONS.............................................................................35 2.4. MINIMUM AMOUNT OF EACH ADVANCE.........................................................................35 2.5. FUNDING ACCOUNT........................................................................................35 2.6. RELIANCE UPON AUTHORITY; NO LIABILITY..................................................................35 2.7. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES....................................................36 2.8. TELEPHONIC NOTICES.....................................................................................36 2.9. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND COMMITMENT REDUCTIONS........................36 2.10. FEES...................................................................................................36 2.11. INTEREST RATES.........................................................................................37 2.12. EURODOLLAR ADVANCES POST DEFAULT; DEFAULT RATES........................................................37 2.13. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS.........................................................37 2.14. VOLUNTARY PREPAYMENTS..................................................................................38 2.15. MANDATORY PREPAYMENTS..................................................................................38 2.16. TERMINATION OF THE FACILITY............................................................................39 2.17. METHOD OF PAYMENT......................................................................................40 2.18. APPORTIONMENT, APPLICATION, AND REVERSAL OF PAYMENTS...................................................40 2.19. SETTLEMENT.............................................................................................41 2.20. INDEMNITY FOR RETURNED PAYMENTS........................................................................42 2.21. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS...........................................................42 2.22. LENDING INSTALLATIONS..................................................................................43 2.23. NON-RECEIPT OF FUNDS BY THE AGENT......................................................................43 2.24. MARKET DISRUPTION......................................................................................43 2.25. JUDGMENT CURRENCY......................................................................................44 ARTICLE III. YIELD PROTECTION; TAXES...........................................................................44 3.1. YIELD PROTECTION.......................................................................................44 3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS................................................................45 3.3. AVAILABILITY OF TYPES OF ADVANCES......................................................................45 3.4. FUNDING INDEMNIFICATION................................................................................45 3.5. TAXES..................................................................................................46 3.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY...............................................................47 3.7. REPLACEMENT OF LENDER..................................................................................48 3.8. NON-U.S. RESERVE COSTS OR FEES.........................................................................47
ARTICLE IV. CONDITIONS PRECEDENT...............................................................................48 4.1. EFFECTIVENESS..........................................................................................48 4.2. EACH CREDIT EXTENSION..................................................................................51 ARTICLE V. REPRESENTATIONS AND WARRANTIES......................................................................51 5.1. EXISTENCE AND STANDING.................................................................................51 5.2. AUTHORIZATION AND VALIDITY.............................................................................51 5.3. NO CONFLICT; GOVERNMENT CONSENT........................................................................52 5.4. SECURITY INTEREST IN COLLATERAL........................................................................52 5.5. FINANCIAL STATEMENTS...................................................................................52 5.6. MATERIAL ADVERSE CHANGE................................................................................53 5.7. TAXES..................................................................................................53 5.8. LITIGATION AND CONTINGENT OBLIGATIONS..................................................................53 5.9. CAPITALIZATION AND SUBSIDIARIES........................................................................53 5.10. ERISA..................................................................................................53 5.11. ACCURACY OF INFORMATION................................................................................54 5.12. NAMES; PRIOR TRANSACTIONS..............................................................................54 5.13. REGULATION T, U AND X..................................................................................54 5.14. MATERIAL AGREEMENTS....................................................................................54 5.15. COMPLIANCE WITH LAWS...................................................................................54 5.16. OWNERSHIP OF PROPERTIES................................................................................54 5.17. PLAN ASSETS; PROHIBITED TRANSACTIONS...................................................................54 5.18. ENVIRONMENTAL MATTERS..................................................................................55 5.19. INVESTMENT COMPANY ACT.................................................................................55 5.20. PUBLIC UTILITY HOLDING COMPANY ACT.....................................................................55 5.21. BANK ACCOUNTS..........................................................................................55 5.22. INDEBTEDNESS...........................................................................................55 5.23. AFFILIATE TRANSACTIONS.................................................................................55 5.24. SOLVENCY...............................................................................................55 5.25. COMMON ENTERPRISE......................................................................................56 5.26. REPORTABLE TRANSACTION.................................................................................56 5.27. BORROWING BASE.........................................................................................56 5.28. NO DEFAULT.............................................................................................56 5.29. INTELLECTUAL PROPERTY..................................................................................56 5.30. LABOR MATTERS..........................................................................................56 5.31. SUBORDINATED DEBT DOCUMENTS............................................................................57 5.32. FOURTH SECURED TERM LOAN DEBT DOCUMENTS................................................................57 5.33. THIRD SECURED TERM LOAN DEBT DOCUMENTS.................................................................57 5.34. SECOND SECURED DEBT DOCUMENTS..........................................................................58 ARTICLE VI. COVENANTS..........................................................................................59 6.1. FINANCIAL AND COLLATERAL REPORTING.....................................................................59 6.2. USE OF PROCEEDS........................................................................................62 6.3. NOTICES................................................................................................62 6.4. CONDUCT OF BUSINESS....................................................................................63 6.5. TAXES..................................................................................................64 6.6. PAYMENT OF INDEBTEDNESS AND OTHER LIABILITIES..........................................................64 6.7. INSURANCE..............................................................................................64 6.8. COMPLIANCE WITH LAWS...................................................................................66 6.9. MAINTENANCE OF PROPERTIES AND INTELLECTUAL PROPERTY RIGHTS.............................................66 6.10. INSPECTION.............................................................................................66 6.11. NEGATIVE PLEDGE LIMITATION.............................................................................66 6.12. COMMUNICATIONS WITH ACCOUNTANTS........................................................................67 6.13. COLLATERAL ACCESS AGREEMENTS AND REAL ESTATE PURCHASES.................................................67 6.14. DEPOSIT ACCOUNT CONTROL AGREEMENTS.....................................................................67 6.15. ADDITIONAL COLLATERAL; FURTHER ASSURANCES..............................................................67 6.16. DIVIDENDS..............................................................................................69

ii 6.17. INDEBTEDNESS...........................................................................................70 6.18. MERGER.................................................................................................71 6.19. SALE OF ASSETS.........................................................................................71 6.20. INVESTMENTS AND ACQUISITIONS...........................................................................72 6.21. LIENS..................................................................................................73 6.22 CHANGE OF CORPORATE NAME OR LOCATION; CHANGE OF FISCAL YEAR............................................75 6.23. AFFILIATE TRANSACTIONS.................................................................................75 6.24. AMENDMENTS TO AGREEMENTS; ETC..........................................................................76 6.25. SUBSIDIARY DIVIDENDS...................................................................................76 6.26. PAYMENTS AND MODIFICATION OF DEBT......................................................................76 6.27. FINANCIAL CONTRACTS....................................................................................77 6.28. CAPITAL EXPENDITURES...................................................................................77 6.29. MANAGEMENT FEES........................................................................................77 6.30. ADDITIONAL COVENANTS...................................................................................77 6.31. FINANCIAL COVENANTS....................................................................................77 6.31.1. Fixed Charge Coverage Ratio....................................................................77 6.31.2. Minimum Availability...........................................................................78 6.32. LENDERS AS DEPOSITORY BANKS; DOMINION OF FUNDS.........................................................78 ARTICLE VII. DEFAULTS..........................................................................................78 ARTICLE VIII. REMEDIES; WAIVERS AND AMENDMENTS.................................................................81 8.1. REMEDIES...............................................................................................81 8.2. WAIVERS BY LOAN PARTIES................................................................................82 8.3. AMENDMENTS.............................................................................................82 8.4. PRESERVATION OF RIGHTS.................................................................................84 ARTICLE IX. GENERAL PROVISIONS..................................................................................85 9.1. SURVIVAL OF REPRESENTATIONS............................................................................85 9.2. GOVERNMENTAL REGULATION................................................................................85 9.3. HEADINGS...............................................................................................85 9.4. ENTIRE AGREEMENT.......................................................................................85 9.5. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT........................................................85 9.6. EXPENSES; INDEMNIFICATION..............................................................................85 9.7. NUMBERS OF DOCUMENTS...................................................................................87 9.8. ACCOUNTING.............................................................................................87 9.9. SEVERABILITY OF PROVISIONS.............................................................................88 9.10. NONLIABILITY OF LENDERS................................................................................88 9.11. CONFIDENTIALITY........................................................................................88 9.12. NONRELIANCE............................................................................................89 9.13. DISCLOSURE.............................................................................................89 9.14. AMENDMENT AND RESTATEMENT..............................................................................89 ARTICLE X. THE AGENT............................................................................................89 10.1. APPOINTMENT; NATURE OF RELATIONSHIP....................................................................89 10.2. POWERS.................................................................................................90 10.3. GENERAL IMMUNITY.......................................................................................90 10.4. NO RESPONSIBILITY FOR CREDIT EXTENSIONS, RECITALS, ETC.................................................90 10.5. ACTION ON INSTRUCTIONS OF LENDERS......................................................................90 10.6. EMPLOYMENT OF AGENTS AND COUNSEL.......................................................................90 10.7. RELIANCE ON DOCUMENTS; COUNSEL.........................................................................91 10.8. AGENT'S REIMBURSEMENT AND INDEMNIFICATION..............................................................91 10.9. NOTICE OF DEFAULT......................................................................................91 10.10. RIGHTS AS A LENDER.....................................................................................91

iii 10.11. LENDER CREDIT DECISION.................................................................................92 10.12. SUCCESSOR AGENT........................................................................................92 10.13. AGENT AND ARRANGER FEES................................................................................92 10.14. DELEGATION TO AFFILIATES...............................................................................92 10.15. EXECUTION OF LOAN DOCUMENTS............................................................................93 10.16. COLLATERAL MATTERS.....................................................................................93 10.17. CO-AGENTS, DOCUMENTATION AGENT, SYNDICATION AGENT, ETC.................................................95 ARTICLE XI. SETOFF; RATABLE PAYMENTS............................................................................95 11.1. SETOFF.................................................................................................95 11.2. RATABLE PAYMENTS.......................................................................................95 ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.................................................95 12.1. SUCCESSORS AND ASSIGNS.................................................................................95 12.2. PARTICIPATIONS.........................................................................................96 12.3. ASSIGNMENTS............................................................................................97 12.4. DISSEMINATION OF INFORMATION...........................................................................98 12.5. TAX TREATMENT..........................................................................................98 12.6. ASSIGNMENT BY LC ISSUER................................................................................98 ARTICLE XIII. NOTICES..........................................................................................99 13.1. NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION.......................................................99 13.2. CHANGE OF ADDRESS.....................................................................................100 ARTICLE XIV. COUNTERPARTS......................................................................................100 ARTICLE XV. GUARANTY..........................................................................................101 15.1. GUARANTY..............................................................................................101 15.2. GUARANTY OF PAYMENT...................................................................................101 15.3. NO DISCHARGE OR DIMINISHMENT OF GUARANTY..............................................................101 15.4. DEFENSES WAIVED.......................................................................................102 15.5. RIGHTS OF SUBROGATION.................................................................................103 15.6. REINSTATEMENT; STAY OF ACCELERATION...................................................................103 15.7. INFORMATION...........................................................................................103 15.8. TERMINATION...........................................................................................103 15.9. TAXES.................................................................................................103 15.10. SEVERABILITY..........................................................................................103 15.11. CONTRIBUTION..........................................................................................104 15.12. LENDING INSTALLATIONS.................................................................................104 15.13. LIABILITY CUMULATIVE..................................................................................104 ARTICLE XVI. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.....................................105 16.1. CHOICE OF LAW.........................................................................................105 16.2. CONSENT TO JURISDICTION...............................................................................105 16.3. WAIVER OF JURY TRIAL..................................................................................105

iv PRICING SCHEDULE EXHIBIT A BORROWING NOTICE EXHIBIT B CONVERSION/CONTINUATION NOTICE EXHIBIT C REVOLVING NOTE EXHIBIT D FORM OF OPINION EXHIBIT E COMPLIANCE CERTIFICATE EXHIBIT F ASSIGNMENT AND ASSUMPTION AGREEMENT EXHIBIT G BORROWING BASE CERTIFICATE SCHEDULE 1.1 FOREIGN BORROWING SUBSIDIARIES SCHEDULE 5.8 LITIGATION AND CONTINGENT OBLIGATIONS SCHEDULE 5.9 CAPITALIZATION AND SUBSIDIARIES SCHEDULE 5.12 NAMES, PRIOR TRANSACTIONS SCHEDULE 5.16 OWNERSHIP OF PROPERTIES SCHEDULE 5.21 BANK ACCOUNTS SCHEDULE 5.22 INDEBTEDNESS SCHEDULE 5.23 AFFILIATE TRANSACTIONS SCHEDULE 5.31 SUBORDINATED DEBT DOCUMENTS SCHEDULE 5.32 FOURTH SECURED TERM LOAN DOCUMENTS SCHEDULE 5.33 THIRD SECURED TERM LOAN DOCUMENTS SCHEDULE 5.34 SECOND SECURED DEBT DOCUMENTS SCHEDULE 6.20 OTHER INVESTMENTS SCHEDULE 6.21 LIENS v AMENDED AND RESTATED CREDIT AGREEMENT This Agreement, dated as of August 1, 2003, is among MSX International, Inc., a Delaware corporation (with its successors and assigns, the "Company"), the other Loan Parties, the Lenders and Bank One, NA, a national banking association having its principal office in Chicago, Illinois, as LC Issuer and as Agent. RECITALS A. The Company, the other borrowers party thereto, the lenders party thereto and Bank One, NA, as agent for such lenders, executed an Amended and Restated Credit Agreement dated as of November 30, 1999, as amended (the "Existing Credit Agreement"), which amended and restated an Amended and Restated Credit Agreement dated as of April 14, 1998, as amended. B. The Company and the other Loan Parties have requested that the Lenders, including each Lender becoming a Lender on the date hereof, and the Agent amend and restate the Existing Credit Agreement as herein provided, and the Lenders and the Agent are willing to amend and restate the Existing Credit Agreement on the terms and conditions herein set forth. C. The Loan Parties have requested that the Lenders make available to the Borrowers loans and letters of credit in an aggregate amount not to exceed the U.S. dollar equivalent of $45,000,000, which extensions of credit will be used by the Borrowers for the purposes set forth in Section 6.2. D. The Company and the other Loan Parties have agreed to secure all of their obligations under the Loan Documents by granting to the Agent, on behalf of the Lenders, a security interest in and lien upon the Collateral as set forth in the Collateral Documents. E. The Guarantors have agreed to guarantee all of the Obligations of the Company under the Loan Documents to the Agent and the Lenders as set forth in the Guaranty. In consideration of these premises and the terms and conditions set forth in this Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS As used in this Agreement: "Account" shall have the meaning given to such term in the Security Agreement. "Account Debtor" means any Person obligated on an Account. "Acquisition" means any transaction, or any series of related transactions, consummated on or after the Closing Date, by which any Loan Party (a) acquires any going business or all or substantially all of the assets of any Person, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the Capital Stock of a Person which has ordinary voting power for the election of directors or other similar management personnel of a Person (other than Capital Stock having 1 such power only by reason of the happening of a contingency) or a majority of the outstanding Capital Stock of a Person. "Advance" means a borrowing hereunder, (a) made by some or all of the Lenders on the same Borrowing Date, or (b) converted or continued by the Lenders on the same date of conversion or continuation, consisting, in either case, of the aggregate amount of the several Loans of the same Type and, in the case of Eurodollar Loans, for the same Interest Period. The term Advance shall include Non-Ratable Loans, Overadvances, Protective Advances and Swingline Loans unless otherwise expressly provided. "Affected Lender" is defined in Section 3.7. "Affiliate" of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another Person if the controlling Person owns 10% or more of any class of the voting Capital Stock of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of Voting Stock, by contract or otherwise. "Agent" means Bank One in its capacity as contractual representative of the Lenders pursuant to Article X, and not in its individual capacity as a Lender, and any successor Agent appointed pursuant to Article X. "Aggregate Commitment" means the aggregate of the Commitments of all the Lenders, as reduced from time to time pursuant to the terms hereof, which Aggregate Commitment shall initially be in the amount of $45,000,000. "Aggregate Credit Exposure" means, at any time, the aggregate Credit Exposure of all the Lenders. "Agreement" means this Credit Agreement, as it may be amended or modified and in effect from time to time. "Alternate Base Rate" means, for any day, a rate of interest per annum equal to the higher of (a) the Prime Rate for such day and (b) the sum of the Federal Funds Effective Rate for such day plus 1/2% per annum. "Applicable Fee Rate" means, at any time, the percentage rate per annum at which fees accrue on Available Commitment at such time as set forth in the Pricing Schedule. "Applicable Margin" means, with respect to Advances of any Type at any time, the percentage rate per annum which is applicable at such time with respect to Advances of such Type as set forth in the Pricing Schedule. "Approved Fund" means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender. "Arranger" means Banc One Capital Markets, Inc., a Delaware corporation, and its successors, in its capacity as Lead Arranger and Sole Book Runner. "Article" means an article of this Agreement unless another document is specifically referenced. 2 "Assignment Agreement" is defined in Section 12.3(a). "Authorized Officer" means any of the chief executive officer, president, any vice president, the treasurer, assistant treasurer, secretary or assistant secretary of the Company, acting singly. "Availability" means, at any time, an amount equal to the lesser of (a) the Aggregate Commitment and (b) the Borrowing Base, in each case, minus the Aggregate Credit Exposure. "Available Commitment" means, at any time, the Aggregate Commitment then in effect minus the Aggregate Credit Exposure at such time. "Bank One" means Bank One, NA, a national banking association, in its individual capacity, and its successors. "Banking Services" means each and any of the following bank services provided to any Loan Party or any of their Subsidiaries by Bank One or any of its Affiliates: (a) commercial credit cards, (b) stored value cards and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services). "Banking Services Obligations" of the Loan Parties and their Subsidiaries means any and all obligations of the Loan Parties and their Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services. "Banking Services Reserves" means all Reserves which the Agent from time to time establishes in its Permitted Discretion for Banking Services then provided or outstanding. "Bankruptcy Code" means Title 11 of the U.S. Code (11 U.S.C. Section 101 et seq.) as amended, reformed, or otherwise modified from time to time, and any rule or regulation issued thereunder. "Board of Directors" means the Board of Directors of the Company, or any authorized committee of the Board of Directors. "Borrowers" means the Company and the Foreign Borrowing Subsidiaries. "Borrowing Base" means, at any time, the sum of the U.K. Borrowing Base and the U.S. Borrowing Base. "Borrowing Base Availability Deficiency Event" means any date in any month on which the Global Borrowing Base Availability shall fail to be equal to or greater than $25,000,000 and (a) such failure shall remain unremedied for five consecutive Business Days or (b) such date is at least six Business Days after a date in such month on which the Global Borrowing Base Availability was less than $25,000,000 (the "Second Deficiency Date") and such Second Deficiency Date was also at least six Business Days after a date in such month on which the Global Borrowing Base Availability was less than $25,000,000; provided that, if it is determined that such a date exists, the Agent shall re-calculate the Global Borrowing Base Availability using the actual amount of Swingline Loans outstanding in place of the Swingline Reserve, and a Borrowing Base Availability Deficiency Event shall not be deemed to have occurred if the foregoing conditions for a Borrowing Base Availability Deficiency Event would not be satisfied based on such re-calculation. References in this definition to $25,000,000 shall be deemed $20,000,000 for purposes of Section 6.31.1. 3 "Borrowing Base Certificate" means a certificate, signed by an Authorized Officer of the Company, substantially in the form of Exhibit G or another form which is acceptable to the Agent in its sole discretion. "Borrowing Date" means a date on which an Advance or a Loan is made hereunder. "Borrowing Notice" is defined in Section 2.1.1(b). "Business Day" means (a) with respect to any borrowing, payment or rate selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on which banks generally are open in Chicago, Detroit and New York City for the conduct of substantially all of their commercial lending activities, interbank wire transfers can be made on the Fedwire system and dealings in Dollars are carried on in the London interbank market (and, if the Advances which are the subject of such borrowing, payment or rate selection are owing by a Foreign Subsidiary Borrower, a day upon which such clearing system as is determined by the Agent to be suitable for clearing or settlement of the applicable Permitted Currency is open for business), and (b) for all other purposes, a day (other than a Saturday or Sunday) on which banks generally are open in Chicago, Detroit and New York City for the conduct of substantially all of their commercial lending activities and interbank wire transfers can be made on the Fedwire system. "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 Indebtedness) expenditures in respect of the purchase or other acquisition of fixed or capital assets determined in conformity with GAAP. "Capital Stock" means (i) in the case of any corporation, all capital stock and any securities exchangeable for or convertible into capital stock and any warrants, rights or other options to purchase or otherwise acquire capital stock or such securities or any other form of equity securities, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited) and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distribution of assets of, the issuing Person. "Capitalized Lease" of a Person means any lease of Property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP. "Capitalized Lease Obligations" of a Person means the aggregate amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with GAAP. "Cash Equivalent Investments" 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 (a) the U.S. or any agency or instrumentality thereof, (b) the U.K., the Netherlands or Australia or any agency or instrumentality thereof if the Agent determines that such securities are freely tradable in a recognized national market with sufficient liquidity, or (c) any other member state of the European Union or any other sovereign nation or any agency or instrumentality thereof if acceptable to the Agent, in each of the foregoing cases having maturities of not more than six months from the date of acquisition, (iii) marketable direct obligations issued by any state of the U.S. 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 4 Corporation ("S&P") or Moody's 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 Keefe 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. "Change of Control" means the occurrence of any of the following: (i) prior to the first public offering of Voting Stock of the Company or the U.K. Borrower, as applicable, the Permitted Investors 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 the U.K. Borrower, as applicable, any merger, consolidation, liquidation or dissolution of the Company or the U.K. Borrower, as applicable, any direct or indirect transfer of securities by the Permitted Investors or otherwise (for purposes of this clause (i) and clause (ii) below, the Permitted Investors 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 Investors beneficially own (as so defined), directly or indirectly, in the aggregate a majority of the voting power of the Voting Stock of the parent entity); (ii) after the first public offering of Voting Stock of the Company or the U.K. Borrower, as applicable, 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 clause (i) above, except that for purposes of this clause (ii) such person shall be deemed to have "beneficial ownership" of all shares that any such person has the right to acquire, directly or indirectly), of more than 35% of the total voting power of the Voting Stock of the Company or the U.K. Borrower, as applicable, and either (x) the Permitted Holders beneficially own (as defined in clause (i) above) directly or indirectly, in the aggregate a lesser percentage of the total voting power of the Voting Stock of the Company or the U.K. Borrower, 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 the U.K. Borrower, as applicable, or (y) such other person is entitled to elect directors having a majority of the total voting power of the Board of Directors of the Company or the U.K. Borrower, as applicable; (iii) during any period of not greater than two consecutive years beginning after the Closing Date, individuals who at the beginning of such period constituted the Board of Directors of the Company or the U.K. Borrower, as applicable (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company or the U.K. Borrower, as applicable, was approved by a vote of a majority of the directors of the Company or the U.K. Borrower, as applicable, then still in office who were either directors at the beginning of such period or whose 5 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 the U.K. Borrower, as applicable, then in office; (iv) any "Change of Control" or similar term, as defined in the Subordinated Note Indenture; or (v) any "Change of Control" or similar term, as defined in the Second Secured Note Indenture; or (vi) any "Change of Control" or similar term, as defined in the Third Secured Term Loan Agreement; or (vii) any "Change of Control" or similar term, as defined in the Fourth Secured Term Loan Agreement. "Closing Date" means the date of this Agreement. "Code" means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time, and any rule or regulation issued thereunder. "Collateral" means any and all Property covered by the Collateral Documents and any and all other property, real or personal, tangible or intangible of any Loan Party, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of Agent, on behalf of itself and the Lenders, to secure the Secured Obligations. "Collateral Access Agreement" means any agreement, in form and substance satisfactory to the Agent, between the Agent and any third party (including any bailee, consignee, customs broker, or other similar Person) in possession of any Collateral or any landlord of any Loan Party for any real Property where any Collateral is located, as such agreement may be amended, restated, or otherwise modified from time to time. "Collateral Documents" means, collectively, the Security Agreements and any other documents granting a Lien upon the Collateral as security for payment of the Secured Obligations. "Collateral Shortfall Amount" is defined in Section 2.1.2(l). "Commitment" means, for each Lender, the obligation of such Lender to make Revolving Loans to, and participate in Facility LCs, Overadvances, Protective Advances, Non-Ratable Loans and Swingline Loans issued or made upon the application of a Borrower in an aggregate amount not exceeding the amount set forth in the Commitment Schedule or as set forth in any Assignment Agreement that has become effective pursuant to Section 12.3(a), as such amount may be modified from time to time pursuant to the terms hereof. "Commitment Schedule" means the Schedule attached hereto identified as such. "Compliance Certificate" is defined in Section 6.1(e). "Company" is defined in the recitals to this Agreement. "Consolidated Capital Expenditures" means, with reference to any period, the Capital Expenditures of the Company and its Subsidiaries calculated on a consolidated basis for such period. 6 "Consolidated Interest Expense" means, for any period, total interest and related expense (including, without limitation, that portion of any Capitalized Lease Obligation attributable to interest expense in conformity with GAAP, amortization of debt discount, all capitalized interest, the interest portion of any deferred payment obligations, all commissions, discounts and other fees and charges owed with respect to letter of credit and bankers acceptance financing, the net costs and net payments under any interest rate hedging, cap or similar agreement or arrangement, prepayment charges, agency fees, administrative fees, facility fees and capitalized transaction costs allocated to interest expense, but excluding any interest which is accrued or paid in kind with the issuance of additional securities and not paid or required to be paid in cash or cash equivalents) paid, payable or accrued during such period, without duplication for any other period, with respect to all outstanding Indebtedness of the Company and its Subsidiaries, all as determined for the Company and its Subsidiaries on a consolidated basis for such period in accordance with GAAP; provided that interest expense for the Second Secured Notes shall not be counted on a pro forma basis and shall be based on actual interest accrued on and after the Closing Date. "Consolidated Net Income" means, for any period, the net income (or loss) of the Company and its Subsidiaries on a consolidated basis for such period taken as a single accounting period, determined in accordance with GAAP; provided that in determining Net Income there shall be excluded, without duplication: (a) the income (or loss) of any Person (other than a Subsidiary of the Company) in which any Person other than the Company or any of its Subsidiaries has a joint interest or partnership interest or other ownership interest, except to the extent of the amount of dividends or other distributions actually paid to the Company or any of its Subsidiaries by such Person during such period, (b) the income of any Person accrued prior to the date it becomes a Subsidiary of the Company or is merged into or consolidated with the Company or any of its Subsidiaries or that Person's assets are acquired by the Company or any of its Subsidiaries, unless such income is calculated on a pro forma basis acceptable to the Agent in accordance with Section 9.8, in which case such income shall not be excluded from Net Income, (c) the net proceeds of any insurance policy, (d) gains (or non cash losses) from the sale, exchange, transfer or other disposition of property or assets not in the ordinary course of business of the Company and its Subsidiaries, and related tax effects in accordance with GAAP, (e) any other extraordinary or non-recurring gains (or non cash losses) of the Company or its Subsidiaries, and related tax effects in accordance with GAAP, and (f) the income of any Subsidiary of the Company to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or of any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary. "Contingent Obligation" of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay contract or the obligations of any such Person as general partner of a partnership with respect to the liabilities of the partnership. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. "Contractual Obligation" shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. 7 "Controlled Group" means all members of a controlled group of corporations or other business entities and all trades or businesses (whether or not incorporated) under common control which, together with the Company or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code. "Conversion/Continuation Notice" is defined in Section 2.7. "Credit Exposure" means, as to any Lender at any time, the sum of (a) the aggregate principal amount of its Revolving Loans outstanding at such time, plus (b) an amount equal to its Pro Rata Share of any LC Obligations at such time, plus (c) an amount equal to its Pro Rata Share of the aggregate principal amount of Non-Ratable Loans, Overadvances, Protective Advances and Swingline Loans outstanding at such time. "Credit Extension" means the making of an Advance or the issuance of a Facility LC hereunder. "Credit Extension Date" means the Borrowing Date for an Advance or the issuance date for a Facility LC. "CSCL" means Court Square Capital Limited, a Delaware corporation. ---- "CVC" means Citicorp Venture Capital, Ltd., a New York corporation. --- "CVC Investor" means (i) CVC, (ii) 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. "Default" means an event described in Article VII. "Defaulting Lender" means any Lender that fails to make available to the Agent such Lender's Loans required to be made hereunder or shall have not made a payment required to be made to the Agent hereunder. Once a Lender becomes a Defaulting Lender, such Lender shall continue as a Defaulting Lender until such time as such Defaulting Lender makes available to the Agent the amount of such Defaulting Lender's Loans and all other amounts required to be paid to the Agent pursuant to this Agreement. "Deposit Account Control Agreement" means an agreement, in form and substance satisfactory to the Agent, among any Loan Party, a banking institution holding such Loan Party's funds, and the Agent with respect to collection and control of all deposits and balances held in a deposit account maintained by any Loan Party with such banking institution. "Disqualified Stock" means any Capital Stock that, 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, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part prior to a date one year after the Termination Date. "Dollar Amount" of any currency at any date means (i) the amount of such currency if such currency is Dollars or (ii) the equivalent in Dollars of such amount if such currency is any currency other than Dollars, calculated on the basis of the arithmetical mean of the buy and sell spot rates of exchange of the Agent for such currency on the London market at 11:00 a.m., London time, on or as of such date. "Dollars" and "$" means the lawful currency of the United States of America. 8 "Domestic Subsidiary" means any present and future Subsidiary which is organized under the laws of the U.S. or any state or other political subdivision of the U.S. or any such state. "Earn Out Payments" is defined in clause (t) of Article VII. "EBITDA" means, for any period, Consolidated Net Income for such period, plus all amounts deducted in determining such Consolidated Net Income on account of (i) Consolidated Interest Expense, (ii) income taxes (including the Michigan Single Business tax and the Imposta Reginole Sulle Attivita Producttive in Italy), (iii) depreciation and amortization expense, and (iv) any verifiable severance costs incurred during Fiscal Year 2003 in a cumulative aggregate amount not to exceed $2,000,000, all as determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP. "Eligible Accounts" means, as of any date, the Accounts of the Company, the U.K. Borrower and the Guarantors which the Agent determines in its Permitted Discretion are eligible as the basis for Credit Extensions hereunder. Without limiting the Agent's discretion provided herein, Eligible Accounts shall not include any Account: (a) which is not subject to a first priority perfected security interest in favor of the Agent; (b) which is subject to any Lien other than (i) a Lien in favor of the Agent and (ii) a Permitted Lien which is junior to the Lien in favor of the Agent; (c) with respect to which more than 90 days have elapsed since the date of the invoice therefor; (d) which is owing by an Account Debtor for which more than 50% of the Accounts owing from such Account Debtor and its Affiliates are ineligible hereunder; (e) which is owing by an Account Debtor to the extent the aggregate amount of Accounts owing from such Account Debtor and its Affiliates to the Company exceeds 25% (or 55% (or such lesser percentage determined at any time by the Agent in its Permitted Discretion) in the case of Ford Motor Company) of the aggregate Eligible Accounts or Eligible Unbilled Accounts; (f) with respect to which any covenant, representation, or warranty contained in this Agreement or in the Security Agreement has been breached or is not true; (g) which (i) does not arise from the sale of goods or performance of services in the ordinary course of business, (ii) is not evidenced by an invoice or other documentation satisfactory to the Agent as determined in its Permitted Discretion, which has been sent to the Account Debtor, (iii) represents a progress billing, (iv) is contingent upon the Company's completion of any further performance, (v) is a dated Account (meaning any account due on a date more than 30 days after the original issuance of the related invoice or on other customary terms consistent with past practice and approved by the Agent's collateral auditors), or (vi) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any other repurchase or return basis; 9 (h) for which the goods giving rise to such Account have not been shipped to the Account Debtor or for which the services giving rise to such Account have not been performed by the Company or billings in excess of costs; (i) with respect to which any check or other instrument of payment has been returned uncollected for any reason; (j) which is owed by an Account Debtor which has (i) applied for, suffered, or consented to the appointment of any receiver, custodian, trustee, or liquidator of its assets, (ii) has had possession of all or a material part of its property taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had filed against it, any Insolvency Proceeding, (iv) has admitted in writing its inability, or is generally unable to, pay its debts as they become due, (v) become insolvent, or (vi) ceased operation of its business; (k) which is owed by any Account Debtor that the Company or any of its Subsidiaries knows has sold all or a substantially all of its assets; (l) which is owed by an Account Debtor which (i) does not maintain its chief executive office in the U.S. or Canada or (ii) is not organized under applicable law of the U.S. or any state of the U.S. or Canada or any province of Canada unless, in any case, such Account is backed by a Letter of Credit acceptable to the Agent as determined in its Permitted Discretion which is in the possession of the Agent, provided that Accounts of the U.K. Borrower do not need to meet the foregoing requirements of this clause (l), but do need to be owing by an Account Debtor located in a jurisdiction satisfactory to the Agent as determined in its Permitted Discretion; (m) which is owed in any currency other than Dollars, Euro, the Danish krone, the Norwegian krone and the Swedish krona or, if approved by the Agent, as determined in its Permitted Discretion an Eligible Currency; (n) which is owed by (i) the government (or any department, agency, public corporation, or instrumentality thereof) of any country other than the U.S. unless such Account is backed by a Letter of Credit acceptable to the Agent as determined in its Permitted Discretion which is in the possession of the Agent, or (ii) the government of the U.S., or any department, agency, public corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727 et seq. and 41 U.S.C. Section 15 et seq.), and any other steps necessary to perfect the Lien of the Agent in such Account have been complied with to the Agent's satisfaction as determined in its Permitted Discretion; (o) which is owed by any Affiliate, employee, or director of any Loan Party; (p) which, for any Account Debtor, exceeds a credit limit determined by the Agent and for which the Agent has notified the Company, to the extent of such excess; (q) which is owed by an Account Debtor or any Affiliate of such Account Debtor to which any Loan Party is indebted, but only to the extent of such indebtedness; (r) which is subject to any counterclaim, deduction, defense, setoff, dispute, contra-account, chargeback, allowance, credit, discount or similar claim, but only to the extent thereof; (s) which is evidenced by any promissory note, chattel paper, or instrument; (t) which is owed by an Account Debtor located in any jurisdiction which requires filing of a "Notice of Business Activities Report" or other similar report in order to permit the 10 Company to seek judicial enforcement in such jurisdiction of payment of such Account, unless the Company has filed such report or qualified to do business in such jurisdiction; (u) with respect to which the Company has made any agreement with the Account Debtor for any reduction thereof, other than discounts and adjustments given in the ordinary course of business, but only to the extent of such reduction; (v) which represents an account arising from a fixed price contract that is not completed; or (w) which the Agent determines in its Permitted Discretion may not be paid by reason of the Account Debtor's inability to pay or which the Agent otherwise determines in its Permitted Discretion is unacceptable for any reason whatsoever. In the event that an Account which was previously an Eligible Account ceases to be an Eligible Account hereunder and the Borrower has knowledge thereof, the Borrower shall notify the Agent thereof (i) within three (3) Business Days of the date the Borrower has obtained knowledge thereof if any such Account is in excess of $500,000 in the aggregate and (ii) on and at the time of submission to the Agent of the next Borrowing Base Certificate in all other cases. "Eligible Currency" means the Euro, Pounds Sterling, Australian Dollars and any other currency (other than Dollars) which is approved and designated as an Eligible Currency by the Agent, 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 Amount 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 Agent, no longer readily available or freely traded or as to which, in the determination of the Agent, a Dollar Amount is not readily calculable, then the Agent shall promptly notify the Company and such country's currency shall no longer be an Eligible Currency until such time as the Agent agrees to reinstate such country's currency as an Eligible Currency and promptly, but in any event within five (5) Business Days of receipt of such notice from the Agent, the Borrower with respect to such Currency shall repay all Loans in such affected currency or convert such Loans into Loans in Dollars or an Eligible Currency, as applicable, subject to the other terms contained in this Agreement. "Eligible Unbilled Receivables" means, as of any date, those obligations owing the Company, the U.K. Borrower or any Guarantor which would constitute an Eligible Account Receivable (valued at the Dollar Amount thereof) but for the fact that an invoice has not been sent by the Company or such Guarantor, provided that each of the following conditions is satisfied for each such obligation: (a) such obligation is covered under a written work order or other agreement between the Company or such Guarantor and the Person owing such obligation, including price verification, which is binding and enforceable on such Person to pay such obligation, (b) such obligation has not been classified as an Eligible Unbilled Receivable for more than 30 days and (c) such obligation is not at any time otherwise deemed by the Agent (acting in a commercially reasonable manner) to be ineligible. "Environmental Laws" means any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions, permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions relating to (a) the protection of the environment, (b) emissions, discharges or releases of pollutants, contaminants, 11 hazardous substances or wastes into surface water, ground water or land, or (c) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, hazardous substances or wastes or the clean-up or other remediation thereof. "Equipment" has the meaning specified in the Security Agreement. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any rule or regulation issued thereunder. "Euro" and/or "EUR" means the euro referred to in Council Regulation (EC) No. 1103/97 dated June 17, 1997 passed by the Council of the European Union, or, if different, the then lawful currency of the member states of the European Union that participate in the third stage of Economic and Monetary Union. "Eurodollar Advance" means an Advance which, except as otherwise provided in Section 2.12, bears interest at the applicable Eurodollar Rate. "Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the relevant Interest Period, the applicable British Bankers' Association LIBOR rate for deposits in Dollars as reported by any generally recognized financial information service as of 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, and having a maturity equal to such Interest Period, provided that, if no such British Bankers' Association LIBOR rate is available to the Agent, the applicable Eurodollar Base Rate for the relevant Interest Period shall instead be the rate determined by the Agent to be the rate at which Bank One or one of its Affiliate banks offers to place deposits in Dollars with first-class banks in the interbank market at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, in the approximate amount of Bank One's relevant Eurodollar Loan and having a maturity equal to such Interest Period. "Eurodollar Loan" means a Loan which, except as otherwise provided in Section 2.12, bears interest at the applicable Eurodollar Rate. "Eurodollar Rate" means, with respect to a Eurodollar Advance for the relevant Interest Period, the sum of (a) the quotient of (i) the Eurodollar Base Rate applicable to such Interest Period, divided by (ii) one minus the Reserve Requirement (expressed as a decimal) applicable to such Interest Period, plus (b) the Applicable Margin. "Exchange Rate Management Obligations" of a Person means all Rate Management Obligations of such Person with respect to all Exchange Rate Management Transactions of such Person. "Exchange Rate Management Transaction" means any transaction (including an agreement with respect thereto) now existing or hereafter entered by any Loan Party which is a foreign exchange transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, linked to one or more foreign currencies. "Excluded Taxes" means, in the case of each Lender or applicable Lending Installation and the Agent, taxes imposed on its overall revenue or net income, and franchise taxes imposed on it, by (a) the jurisdiction under the laws of which such Lender or the Agent is incorporated or organized or (b) the jurisdiction in which the Agent's or such Lender's principal executive office or such Lender's applicable Lending Installation is located. 12 "Exhibit" refers to an exhibit to this Agreement, unless another document is specifically referenced. "Existing Credit Agreement" is defined in the recitals to this Agreement. "Facility" means the credit facility described in Section 2.1 hereof to be provided to the Company on the terms and conditions set forth in this Agreement. "Facility LC" is defined in Section 2.1.2(a). It is acknowledged and agreed that all Letters of Credit (as defined in the Existing Credit Agreement) outstanding under the Existing Credit Agreement shall be deemed Facility LC's hereunder and outstanding under this Agreement. "Facility LC Application" is defined in Section 2.1.2(c). "Facility LC Collateral Account" is defined in Section 2.1.2(j). "Federal Funds Effective Rate" means, for any day, an interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago time) on such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by the Agent in its sole discretion. "Financial Contract" of a Person means (a) any exchange-traded or over-the-counter futures, forward, swap or option contract or other financial instrument with similar characteristics, or (b) any Rate Management Transaction. "Fiscal Month" means any of the twelve monthly accounting periods of the Company in each Fiscal Year. "Fiscal Quarter" means any of the quarterly accounting periods of the Company, ending on the 13th, 26th and 39th Sunday after the end of the immediately preceding Fiscal Year and on the last day of the Fiscal Year. "Fiscal Year" means any of the annual accounting periods of the Company ending December 28, 2003, January 2, 2005, January 1, 2006, December 31, 2006 or any each fiscal year thereafter. "Fixed Charge Coverage Ratio" means, the ratio, determined as of the end of each Fiscal Quarter of the Company for the then most-recently ended four Fiscal Quarters, of (a) EBITDA minus Consolidated Capital Expenditures to (b) Fixed Charges, all calculated for the Company and its Subsidiaries on a consolidated basis. "Fixed Charges" means, for any period, the sum, without duplication, of (a) Consolidated Interest Expense, excluding (to the extent included in Consolidated Interest Expense) any non-cash amounts attributable to amortization of financing costs paid in previous periods and non-cash amounts attributable to amortization of debt discounts or accrued interest payable in kind (and not payable in cash or cash equivalents), plus (b) all payments of principal and other sums scheduled to be paid during such period by the Company or its Subsidiaries with respect to Indebtedness of the Company or its Subsidiaries, plus (c) all dividends, distributions and other obligations paid (other than those paid with common stock) with 13 respect to any class of the Company's Capital Stock or any dividend, payment or distribution paid (other than those paid with common stock) in connection with the redemption, purchase, retirement or other acquisition, directly or indirectly, of any shares of the Company's Capital Stock, plus (d) all accrued income taxes (including the Michigan Single Business tax and the Imposta Reginole Sulle Attivita Producttive in Italy) for such period for the Company or its Subsidiaries (but excluding all deferred income taxes unless paid or payable in such period). "Fixture" has the meaning specified in the Security Agreement. "Flex-Pricing Provision" means any term or provision of any fee letter, commitment letter or term sheet delivered in connection with the transaction which is the subject of this Agreement which purports to permit the Agent or the Arranger to change any or all of the structure, terms or pricing of the credit facility evidenced by this Agreement either before or after the closing of this Agreement in order to allow the Agent and/or Arranger to successfully syndicate such credit facility either before or after the closing of this Agreement. "Floating Rate" means, for any day, a rate per annum equal to (a) the Alternate Base Rate for such day plus (b) the Applicable Margin, in each case changing when and as the Alternate Base Rate changes. "Floating Rate Advance" means an Advance which, except as otherwise provided in Section 2.12, bears interest at the Floating Rate. "Floating Rate Loan" means a Loan which, except as otherwise provided in Section 2.12, bears interest at the Floating Rate. "Foreign Borrowing Subsidiary" means each Subsidiary listed as a Foreign Borrowing Subsidiary in Schedule 1.1 as amended from time to time in accordance with Section 8.3. "Foreign Subsidiary" means any Subsidiary which is not a Domestic Subsidiary. "Fourth Secured Term Loan Debt" means the Fourth Secured Term Loan and all other current and future obligations and liabilities owing pursuant to the Fourth Secured Term Loan Debt Documents and any extensions, refinancings, renewals or refundings thereof and any increases in the amount thereof. "Fourth Secured Term Loan Agreement" means the Amended and Restated Fourth Secured Term Loan Agreement between the Company, the U.K. Borrower and the Fourth Secured Term Loan Lender dated as of the date hereof, as amended or modified from time to time. "Fourth Secured Term Loan Debt Documents" means the Fourth Secured Term Loan Agreement and all agreements, instruments and documents executed in connection therewith or otherwise in connection with the Fourth Secured Term Loan at any time. "Fourth Secured Term Loan" means the term loan in the principal amount of up to $17,084,162.13 made under the Fourth Secured Term Loan Agreement. "Fourth Secured Term Loan Lender" means CSCL. "Fund" means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business. 14 "Funding Account" is defined in Section 2.5. "GAAP" means generally accepted accounting principles as in effect from time to time in the U.S. and, when used in connection with determining the Fixed Charge Coverage Ratio (including defined terms used therein), applied in a manner consistent with that used in preparing the financial statements referred to in Section 5.5. "Global Borrowing Base Availability" means, at any time, an amount equal to (a) the sum of the U.S. Borrowing Base plus the U.K. Borrowing Base - Unlimited, minus (b) the Aggregate Credit Exposure, excluding all Credit Exposure with respect to Swingline Loans. "Guaranteed Obligations" is defined in Section 15.1. "Guarantor" means (a) with respect to the Secured Obligations of each Foreign Borrowing Subsidiary: (i) the Company, (ii) each present and future Domestic Subsidiary of the Company, (iii) each "Subsidiary Guarantor" as defined in the Subordinated Debt Documents or any other guarantor with respect to any Subordinated Debt at any time, (iv) each "Subsidiary Guarantor" or "Guarantor" as defined in the Second Secured Debt Documents, the Third Secured Term Loan Agreement or the Fourth Secured Term Loan Agreement or any other guarantor with respect to any Second Secured Notes, Third Secured Term Loan Debt or Fourth Secured Term Loan Debt at any time, (v) additionally, in the case of each Foreign Borrowing Subsidiary, each parent corporation of such Foreign Subsidiary Borrower and Subsidiary of such Foreign Subsidiary Borrower or parent in the same jurisdiction of such Foreign Borrowing Subsidiary and, to the extent permitted by applicable law, the U.K. Borrower and the other Guarantors with respect to the U.K. Borrower and any other Foreign Subsidiary requested by the Agent, and (vi) any other Person executing a Guaranty at any time with respect to the Secured Obligations of such Foreign Borrowing Subsidiary. (b) with respect to the Secured Obligations of the Company: (i) each present and future Domestic Subsidiary of the Company, (ii) each "Subsidiary Guarantor" as defined in the Subordinated Debt Documents or any other guarantor with respect to any Subordinated Debt at any time, and (iii) each "Subsidiary Guarantor" as defined in the Second Secured Debt Documents, the Third Secured Term Loan Agreement or the Fourth Secured Term Loan Agreement or any other guarantor with respect to the obligations of the Company under any Second Secured Notes, Third Secured Term Loan Debt or Fourth Secured Term Loan Debt at any time, 15 (iv) any other Person executing a Guaranty at any time with respect to the Secured Obligations of the Company. "Guaranty" means Article XV of this Agreement, as it may be amended or modified and in effect from time to time. "Indebtedness" of a Person means as of any date, without duplication, such Person's (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of Property or services (other than accounts payable arising in the ordinary course of such Person's business payable on terms customary in the trade), (iii) obligations, whether or not assumed, secured by Liens or payable out of the proceeds or production from Property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, acceptances, or other instruments, (v) obligations of such Person to purchase securities or other Property arising out of or in connection with the sale of the same or substantially similar securities or Property, (vi) Capitalized Lease Obligations, and (vii) other obligations for borrowed money or other financial accommodation or similar obligation which in accordance with GAAP would be shown as a liability on the consolidated balance sheet of such Person, (viii) Off Balance Sheet Liabilities, based on the aggregate outstanding amount as if such transaction were structured as an on balance sheet financing, whether or not shown as a liability on a consolidated balance sheet of the Company and its Subsidiaries, (ix) the undrawn amount of any Letter of Credit issued for the account of such person and all amounts drawn under any such Letters of Credit which have not been reimbursed by such Person and (x) any Contingent Obligations of any such Person. The amount of any Contingent Obligation shall be deemed to be an amount equal to the maximum stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder), as determined by such Person in good faith and acceptable to the Agent. "Insolvency Proceeding" means, with respect to any Person, any case or other proceeding of any kind, whether voluntary or involuntary, of with respect to such Person or any material portion of its Property at any time under any bankruptcy, insolvency, reorganization, liquidation, adjustment or composition of it or its debts under any law, rule or regulation relating to bankruptcy, insolvency or reorganization or relief of debtors, or any other similar proceeding relating to any bankruptcy, insolvency or similar actions, in any case whether under any federal or state law, rule or regulation or other law, rule or regulation in the United States (including without limitation the Bankruptcy Code) or any non-United States law, rule or regulation or otherwise, or appointing a receiver, trustee, examiner, liquidator or similar official for such Person or any material portion of any of its Property. "Intercompany Notes" is defined in Section 6.17. "Intercreditor Agreement" means the Intercreditor Agreement among the Company, the Guarantors, the Agent, the trustee for the holders of the Second Secured Debt, the Third Secured Term Loan Lender and the Fourth Secured Term Loan Lender dated as of the date hereof, as amended or modified from time to time. "Interest Period" means, with respect to a Eurodollar Advance, a period of one, two, three or six months commencing on a Business Day selected by the Borrower pursuant to this Agreement; provided, however, notwithstanding anything in this Agreement to the contrary and only at the Agent's sole option, for the period from the date of this Agreement to the earlier of (i) the date that is 120 days after the Closing Date and (ii) the date upon which the Arranger confirms that the loan syndication process has been complete (the "Syndication Period"), "Interest Period" means, with respect to a Eurodollar Loan, a 16 period of time between seven (7) and (14) days as elected by the Borrower, provided that during such period all Interest Periods shall end on the same day. Other than during the Syndication Period, such Interest Period shall end on the day which corresponds numerically to such date one, two, three or six months thereafter, provided, however, that if there is no such numerically corresponding day in such next, second, third or sixth succeeding month, such Interest Period shall end on the last Business Day of such next, second, third or sixth succeeding month. If an Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day, provided, however, that if said next succeeding Business Day falls in a new calendar month, such Interest Period shall end on the immediately preceding Business Day. "Inventory" has the meaning specified in the Security Agreement. "Investment" of a Person means any (a) loan, advance, (b) extension of credit (other than accounts receivable arising in the ordinary course of business on terms customary in the trade), (c) contribution of capital by such Person, (d) stocks, bonds, mutual funds, partnership interests, notes, debentures, securities or other Capital Stock owned by such Person, (e) any deposit accounts and certificate of deposit owned by such Person, and (f) structured notes, derivative financial instruments and other similar instruments or contracts owned by such Person. "Joinder Agreement" means any joinder agreement in form and substance acceptable to the Agent as determined in its Permitted Discretion, signed by the Agent, the Company and a Guarantor or a Foreign Subsidiary Borrower, under which such Guarantor or Foreign Subsidiary Borrower becomes a party to this Agreement. "LC Fee" is defined in Section 2.10(b). "LC Issuer" means Bank One (or any subsidiary or Affiliate of Bank One designated by Bank One) in its capacity as issuer of Facility LCs hereunder. "LC Obligations" means, at any time, the sum, without duplication, of (a) the aggregate undrawn stated amount under all Facility LCs outstanding at such time plus (b) the aggregate unpaid amount at such time of all Reimbursement Obligations. "LC Payment Date" is defined in Section 2.1.2(d). "Lenders" means the lending institutions listed on the signature pages of this Agreement and their respective successors and assigns. "Lending Installation" means, with respect to a Lender, the LC Issuer or the Agent, the office, branch, subsidiary or Affiliate of such Lender, LC Issuer or the Agent listed on the signature pages hereof or on a Schedule or otherwise selected by such Lender, the LC Issuer or the Agent pursuant to Section 2.22. "Letter of Credit" of a Person means a letter of credit or similar instrument which is issued upon the application of such Person or upon which such Person is an account party or for which such Person is in any way liable. "Lien" means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement). 17 "Licenses" shall have the meaning given to such term in the Security Agreement. "Loans" means, with respect to a Lender or the Agent, such Lender's or Agent's loans made pursuant to Article II (or any conversion or continuation thereof), including Revolving Loans, Non-Ratable Loans, Overadvances, Protective Advances and Swingline Loans. "Loan Documents" means this Agreement, any Notes, the Facility LC Applications, the Collateral Documents, the Guaranty, the Intercreditor Agreement, any environmental certificate and all other agreements, instruments, documents and certificates identified in Section 4.1 or otherwise executed and delivered to, or in favor of, Agent or any Lenders and including all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and delivered to Agent or any Lender in connection with the Agreement or the transactions contemplated thereby. Any reference in the Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to the Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative. "Loan Parties" means the Company, the Foreign Borrowing Subsidiaries, the Guarantors and any other Person who becomes a party to this Agreement pursuant to a Joinder Agreement. "Management Investors" means each of the officers, employees and directors of the Company who own Voting Stock in the Company on the Closing Date, in each case so long as such person shall remain an officer, employee or director of the Company. "Margin Stock" means "margin stock" as defined in Regulations U or X or "marginable OTC stock" or "foreign margin stock" within the meaning of Regulation T. "Material Adverse Effect" shall mean (i) a material adverse effect on the financial condition, results of operations, properties, assets, business or prospects of the Company and its Subsidiaries, taken as a whole, (ii) a material adverse effect on the ability of the Borrowers or the Guarantors to perform their obligations under the Loan Documents or (iii) a material adverse effect on the rights and remedies of the Agent or the Lenders under any of the Loan Documents. "Material Indebtedness" means Indebtedness or Rate Management Obligations in an outstanding principal amount of $5,000,000 or more in the aggregate (or the equivalent thereof in any currency other than Dollars). "Material Indebtedness Agreement" means any agreement under which any Material Indebtedness was created or is governed or which provides for the incurrence of Indebtedness in an amount which would constitute Material Indebtedness (whether or not an amount of Indebtedness constituting Material Indebtedness is outstanding thereunder). "Modify" and "Modification" are defined in Section 2.1.2(a). "Moody's" means Moody's Investors Service, Inc. "Multiemployer Plan" means a Plan maintained pursuant to a collective bargaining agreement or any other arrangement to which the Company at any time, or any member of the Controlled Group is a party to which more than one employer is obligated to make contributions. 18 "Net Cash Proceeds" means, if in connection with an asset disposition, cash proceeds net of (i) commissions and other reasonable and customary transaction costs, fees and expenses properly attributable to such transaction and payable by such Loan Party in connection therewith (in each case, paid to non-Affiliates), (ii) transfer taxes, (iii) amounts payable to holders of senior Liens on such asset (to the extent such Liens constitute Permitted Liens hereunder), if any, and (iv) an appropriate reserve for income taxes in accordance with GAAP established in connection therewith or, if in connection with an equity issuance, cash proceeds net of underwriting discounts and commissions and other reasonable costs paid to non-Affiliates in connection therewith. "Netherlands" means the Kingdom of the Netherlands. "Netherlands Borrower" means MSX International Netherlands B.V. "Non-Ratable Loan" and "Non-Ratable Loans" are defined in Section 2.1.3. "Non-U.S. Lender" is defined in Section 3.5(d). "Note" is defined in Section 2.21(d). "Obligations" means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Obligations, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Loan Parties to the Lenders or to any Lender, the Agent, the LC Issuer or any indemnified party arising under the Loan Documents. "Off-Balance Sheet Liability" of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation under any Sale and Leaseback Transaction which is not a Capitalized Lease, (c) any indebtedness, liability or obligation under any so-called "synthetic lease" transaction entered into by such Person, or (d) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheets of such Person, but excluding from this clause (d) Operating Leases. "Offering Circular" means the offering circular of the Company, subject to completion, dated July 25, 2003, prepared in connection with the offering of the Second Secured Notes. "Operating Lease" of a Person means any lease of Property (other than a Capitalized Lease) by such Person as lessee which has an original term (including any required renewals and any renewals effective at the option of the lessor) of one year or more. "Other Taxes" is defined in Section 3.5(b). "Overadvances" has the meaning specified in Section 2.1.4(b). "Participants" is defined in Section 12.2(a). "Payment Date" means (a) with respect to interest payments due on any Floating Rate Loan, the last day of each calendar month and the Termination Date, (b) with respect to interest payments due on any Eurodollar Loan, (i) the last day of the applicable Interest Period and (ii) in the case of any Interest Period in excess of three months, the day which is three months after the first day of such Interest Period, 19 and (iii) the Termination Date, and (c) with respect to any payment of LC Fees or Unused Commitment Fees, the last day of each calendar quarter and the Termination Date. "PBGC" means the Pension Benefit Guaranty Corporation, or any successor thereto. "Permitted Currency" means Dollars or any Eligible Currency. "Permitted Discretion" means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment. "Permitted Holders" means the CVC Investors, the Management Investors and their respective Permitted Transferees; 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 Citicorp, N.A. or any direct or indirect Subsidiary of CVC or Citicorp, N.A. or any other Person controlled by CVC or Citicorp, N.A.) 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 Closing Date, and any amendment to such agreement that does not materially change the allocation of voting power provided in such agreement). "Permitted Investors" means (i) the CVC Investors and (ii) the Management Investors and their respective Permitted Transferees, provided that the Management Investors and their Permitted Transferees do not in the aggregate beneficially own more than 30% of the aggregate voting power of the Voting Stock of the Company (without giving effect to any attribution of beneficial ownership which may result from the Stockholders' Agreement, and any amendment to such agreement that does not materially change the allocation of voting power provided for in such agreement). "Permitted Liens" is defined in Section 6.21. "Permitted Transferee" means (a) with respect to any CVC Investor who is an employee, officer or director of CVC or any Wholly-Owned (other than directors' qualifying shares) Subsidiary of CVC, any spouse or lineal descendent (including by adoption) of such CVC Investor so long as such CVC Investor shall be an employee, officer or director of CVC; and (b) with respect to any Management Investor, any spouse or lineal descendent (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 natural person, corporation, firm, joint venture, partnership, limited liability company, association, enterprise, trust or other entity or organization, or any government or political subdivision or any agency, department or instrumentality thereof. "Plan" means an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code as to which the Company or any member of the Controlled Group may have any liability. "Pledged Subsidiaries" means those Foreign Subsidiaries 65% of whose Capital Stock has been pledged to the Agent pursuant to a Pledge Agreement. "Pounds Sterling" means the lawful money of the U. K. 20 "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. "Prepayment Fee" is defined in Section 2.16(b). "Pricing Schedule" means the Schedule attached hereto identified as such. "Prime Rate" means a rate per annum equal to the prime rate of interest announced from time to time by Bank One or its parent (which is not necessarily the lowest rate charged to any customer), changing when and as said prime rate changes. "Projections" is defined in Section 6.1(d). "Property" of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person. "Pro Rata Share" means, with respect to any Lender, (a) with respect to Revolving Loans, LC Obligations, Non-Ratable Loans, Protective Advances, Swingline Loans or Overadvances, a portion equal to a fraction the numerator of which is such Lender's Commitment and the denominator of which is the aggregate Commitment of all Lenders and (b) with respect to all Credit Extensions in the aggregate after the Termination Date, a portion equal to a fraction the numerator of which is such Lender's Credit Exposure and the denominator of which is the Aggregate Credit Exposure of all Lenders. "Protective Advances" is defined in Section 2.1.4. "Purchasers" is defined in Section 12.3(a). "Rate Management Obligations" of a Person means any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Rate Management Transactions, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Rate Management Transactions. "Rate Management Transaction" means any transaction (including an agreement with respect thereto) now existing or hereafter entered by any Loan Party which is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures. "Regulation D" means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor thereto or other regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System. "Regulation T" means Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of 21 Governors relating to the extension of credit by banks for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System. "Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System. "Regulation X" means Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System. "Reimbursement Obligations" means, at any time, the aggregate of all obligations of the Company then outstanding under Section 2.1.2 to reimburse the LC Issuer for amounts paid by the LC Issuer in respect of any one or more drawings under Facility LCs. "Reportable Event" means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within thirty days of the occurrence of such event, provided however, that a failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code. "Reports" is defined in Section 9.6(a)(ii). "Required Lenders" means Lenders in the aggregate having at least 51% of the Aggregate Commitment or, if the Aggregate Commitment has been terminated, Lenders in the aggregate holding at least 51% of the Aggregate Credit Exposure; provided that, as long as there is more than one Lender and one Lender would constitute the Required Lenders but for this proviso, then Required Lenders will require at least two Lenders. "Requirement of Law" means, as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other governmental authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "Reserves" means any and all reserves which the Agent deems necessary, in its Permitted Discretion, to maintain (including, without limitation, reserves for accrued and unpaid interest on the Secured Obligations, Banking Services Reserves (to be initially set at $5,000,000), a Swingline Loan facility reserve (to be initially set at the Swingline Amount with respect to the U.K. Borrowing Base), a payroll reserve (to be initially set at $4,200,000), reserves for dilution of Accounts and reserves for taxes, fees, assessments, and other governmental charges) with respect to the Collateral or any Loan Party. "Revolving Borrowers" means the Company, the Netherlands Borrower and the U.K. Borrower. "Revolving Loans" is defined in Section 2.1.1(a). 22 "Reserve Requirement" means, with respect to an Interest Period, the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed under Regulation D on Eurocurrency liabilities. "S&P" means Standard and Poor's Ratings Services, a division of The McGraw Hill Companies, Inc. "Sale and Leaseback Transaction" means any sale or other transfer of Property by any Person with the intent to lease such Property as lessee. "Schedule" refers to a specific schedule to this Agreement, unless another document is specifically referenced. "Second Secured Debt" means all current and future Indebtedness and other liabilities owing pursuant to the Second Secured Notes or any other Second Secured Debt Documents and any extensions, refinancings, renewals or refundings thereof and any increases in the amount thereof. "Second Secured Debt Documents" means the Second Secured Note Indenture, the Second Secured Notes and all agreements and documents executed in connection therewith at any time, including without limitation those agreements and documents listed on Schedule 5.34 hereto. "Second Secured Notes" means the 11% Senior Secured Notes issued by the Company in the aggregate principal amount of $75,500,000 (as of the Closing Date) due October 15, 2007 issued pursuant to the Second Secured Note Indenture and any other securities issued pursuant to the Subordinated Note Indenture at any time. "Second Secured Note Indenture" means the Senior Secured Indenture between the Company, the subsidiary guarantors named therein and BNY Midwest Trust Company, as trustee, dated as of August 1, 2003, as amended or modified from time to time. "Section" means a numbered section of this Agreement, unless another document is specifically referenced. "Secured Obligations" means, collectively, (a) the Obligations, (b) all Banking Services Obligations and (c) all Exchange Rate Management Obligations owing to one or more Lenders or any of their Affiliates. "Security Agreement" means that certain Pledge and Security Agreement, dated as of the date hereof, between the Loan Parties and the Agent, for the benefit of Agent and the Lenders, and any other pledge or security agreement entered into, after the Closing Date by any other Loan Party (as required by this Agreement or any other Loan Document), or any other Person, as the same may be amended, restated or otherwise modified from time to time. "Significant Subsidiary" means any one or more Subsidiaries which, if considered in the aggregate as a single Subsidiary would be a "significant subsidiary" as defined in Rule 1-02 of Regulation S-X under the Exchange Act, provided that no Domestic Subsidiary which is not by itself a Significant Subsidiary shall be included in any Significant Subsidiary if all Domestic Subsidiaries which are not by themselves Significant Subsidiaries or Guarantors would not constitute a Significant Subsidiary and no Foreign Subsidiary which is not by itself a Significant Subsidiary shall be included in any Significant Subsidiary if all Foreign Subsidiaries which are not by themselves Significant Subsidiaries or Pledged Subsidiaries would not constitute a Significant Subsidiary. 23 "Single Employer Plan" means a Plan maintained by the Company or any member of the Controlled Group for employees of the Company or any member of the Controlled Group. "Subordinated Debt" means all current and future Indebtedness and other liabilities owing pursuant to the Subordinated Notes and any extensions, refinancings, renewals or refundings thereof and any increases in the amount thereof and, for any Person, any other Indebtedness of such Person which is fully subordinated to all Secured Obligations by written agreements and documents in form and substance satisfactory to the Agent as determined in its Permitted Discretion and which is governed by terms and provisions, including without limitation maturities, covenants, defaults, rates and fees, acceptable to the Agent as determined in its Permitted Discretion. "Subordinated Debt Documents" means the Subordinated Note Indenture, the Subordinated Notes and all agreements and documents executed in connection therewith at any time, including without limitation those agreements and documents listed on Schedule 5.31 hereto. "Subordinated Notes" means the 11-3/8% Senior Subordinated Notes issued by the Company in the aggregate principal amount of $130,000,000 (as of the Closing Date) due 2008 issued pursuant to the Subordinated Note Indenture and any other securities issued pursuant to the Subordinated Note Indenture at any time. "Subordinated Note Indenture" means the Senior Subordinated Indenture between the Company, the subsidiary guarantors named therein and IBJ Schroder Bank & Trust Company, as trustee, dated as of January 15, 1998, as amended or modified from time to time. "Subsidiary" of a Person means, any corporation, partnership, limited liability company, association, joint venture or similar business organization more than 50% of the outstanding Capital Stock having ordinary voting power (other than securities or other ownership interests which have such power or right only by reason of the happening of a contingency) of which shall at the time be owned beneficially and of record, by such Person or by one or more of the other Subsidiaries of such Person or by any combination thereof. Notwithstanding anything herein to the contrary, an Unrestricted Subsidiary shall not be considered a Subsidiary. Any reference in this Agreement to a Subsidiary shall be deemed reference to a Subsidiary of the Company unless otherwise indicated. "Substantial Portion" means, with respect to the property of the Company and its Subsidiaries, property which (a) represents more than 10% of the consolidated assets of the Company and its Subsidiaries as would be shown in the consolidated financial statements of the Company and its Subsidiaries as at the beginning of the twelve-month period ending with the month in which such determination is made, (b) is responsible for more than 10% of the consolidated net sales or of the consolidated net income of the Company and its Subsidiaries as reflected in the financial statements referred to in clause (a) above, (c) represents more than 25% of the consolidated assets of the Company and its Subsidiaries as would be shown in the consolidated financial statements of the Company and its Subsidiaries as of the Closing Date or (d) is responsible for more than 25% of the consolidated net sales or of the consolidated net income of the Company and its Subsidiaries as reflected in the financial statements referred to in clause (c) above. "Supporting Letter of Credit" is defined in Section 2.1.2(l). "Swingline Amount" means $7,000,000, as such amount is modified from time to time as follows: (a) the Borrowers may reduce such amount from time to time in integral multiples of $1,000,000 by written notice to the Agent and (b) the Borrowers may increase such amount from time to time in 24 integral multiples of $1,000,000 by written notice to the Agent, provided that any such increase shall be subject to the written approval of the Agent and the Required Lenders in their sole discretion. "Swingline Loans" is defined in Section 2.1.5(a). "Swingline Reserve" means the Reserves taken by the Agent with respect to the Swingline facility (to be initially set at the Swingline Amount with respect to the U.K. Borrowing Base). "Taxes" means any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings, and any and all liabilities with respect to the foregoing, but excluding Excluded Taxes and Other Taxes. "Termination Date" means August 1, 2006 or any earlier date on which the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof. "Third Secured Term Lender" means Citicorp Mezzanine III, L.P. "Third Secured Term Loan Debt" means the Third Secured Term Loan and all other current and future obligations and liabilities owing pursuant to the Third Secured Term Loan Debt Documents and any extensions, refinancings, renewals or refundings thereof and any increases in the amount thereof. "Third Secured Term Loan Agreement" means the Third Secured Term Loan Agreement between the Company, the U.K. Borrower and the Third Secured Term Lender dated as of the date hereof, as amended or modified from time to time. "Third Secured Term Loan Debt Documents" means the Third Secured Term Loan Agreement and all agreements, instruments and documents executed in connection therewith or otherwise in connection with the Third Secured Term Loan at any time. "Third Secured Term Loan" means the loan in the principal amount of $25,000,000 made under the Third Secured Term Loan Agreement on the date hereof. "Transferee" is defined in Section 12.4. "Type" means, with respect to any Advance, its nature as a Floating Rate Advance or a Eurodollar Advance and with respect to any Loan, its nature as a Floating Rate Loan or a Eurodollar Loan. "UCC" means the Uniform Commercial Code as in effect from time to time in the State of Michigan or any other state the laws of which are required to be applied in connection with the issue of perfection of security interests. "U.K." means the United Kingdom of Great Britain and Northern Ireland. "U.K. Borrower" means MSX International Limited. "U.K. Borrowing Base" means, at any time, the sum of (a) up to 85% of the U.K. Borrower's Eligible Accounts at such time, plus (b) up to 65% of the U.K. Borrower's Eligible Unbilled Accounts at such time, minus (c) Reserves allocated by the Agent to the U.K. Borrowing Base; provided that the aggregate amount included at any time in the U.K. Borrowing Base shall not exceed the outstanding principal amount of Loans owing by the U.K. Borrower. 25 "U.K. Borrowing Base - Unlimited" means, at any time, the U.K. Borrowing Base without any reduction to the U.K. Borrowing Base due to the limitation contained in the proviso of the definition of U.K. Borrowing Base. "Unfunded Liabilities" means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Single Employer Plans exceeds the fair market value of all such Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plans using PBGC actuarial assumptions for single employer plan terminations. "Unmatured Default" means an event which, unless cured or waived, but for the lapse of time or the giving of notice, or both, would constitute a Default. "Unrestricted Subsidiary" shall mean any Subsidiary designated by the Company as an Unrestricted Subsidiary and approved by the Agent in its Permitted Discretion, provided that (a) neither the Company nor any Subsidiary of the Company which is not an Unrestricted Subsidiary shall be liable, directly or indirectly, for any of the indebtedness, obligations or other liabilities of any such Unrestricted Subsidiary or for any Contingent Liabilities with respect to any Unrestricted Subsidiary and (b) after giving effect to such designation, no Default or Unmatured Default exists or would be caused thereby, on a pro forma basis acceptable to the Agent. Any Unrestricted Subsidiary may be designated as a Subsidiary by the Company at any time provided that (i) such designation is approved by the Agent and (ii) no Default or Unmatured Default exists or would be caused thereby, all on a pro forma basis acceptable to the Agent. "Unused Commitment Fee" is defined in Section 2.10(a). "U.S." means the United States of America. "U.S. Borrowing Base" means, at any time, the sum of (a) up to 85% of Company's and each Guarantor's Eligible Accounts at such time, plus (b) up to 65% of Company's and each Guarantor's Eligible Unbilled Accounts at such time, minus (c) Reserves allocated by the Agent to the U.S. Borrowing Base. "Voting Stock" of a Person means all classes of Capital Stock 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. "Wholly-Owned Subsidiary" of a Person means, any Subsidiary all of the outstanding Capital Stock of which shall at the time be owned or controlled, directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of such Person. The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms. 26 ARTICLE II THE FACILITY 2.1. The Facility. Each Lender severally agrees, on the terms and conditions set forth in this Agreement, to (a) make Loans to the Revolving Borrowers set forth below and (b) participate in Facility LCs issued upon the request of the Revolving Borrowers and in Overadvances, Protective Advances, Non-Ratable Loans and Swingline Loans made to the Borrowers, provided that, after giving effect to the making of each such Loan and the issuance of each such Facility LC, (i) such Lender's Credit Exposure shall not exceed its Commitment and (ii) the Aggregate Credit Exposure shall not exceed the Aggregate Commitment or any other limitation on the Aggregate Credit Exposure contained in this Agreement. The LC Issuer will issue Facility LCs hereunder on the terms and conditions set forth in Section 2.1.2. The Facility shall be composed of Revolving Loans, Non-Ratable Loans, Protective Advances, Swingline Loans, Overadvances and Facility LCs as set forth below: 2.1.1. Revolving Loans. (a) Amount. From and including the Closing Date and prior to the Termination Date, each Lender severally agrees, on the terms and conditions set forth in this Agreement, to make revolving loans (the "Revolving Loans") in Dollars and participate in Facility LCs issued in any Permitted Currency as set forth in Section 2.1.2 below, to the Revolving Borrowers, in amounts not to exceed such Lender's Pro Rata Share. If any Advance would exceed Availability, the Lenders will refuse to make or may otherwise restrict the making of Revolving Loans or the issuance of Facility LCs as the Lenders determine until such excess has been eliminated, subject to the Agent's authority, in its sole discretion, to make Protective Advances and Overadvances pursuant to the terms of Section 2.1.4. The Revolving Loans may consist of Floating Rate Advances or Eurodollar Advances, or a combination thereof, selected by the Revolving Borrowers in accordance with Sections 2.1.1(b) and 2.7. Subject to the terms of this Agreement, the Revolving Borrowers may borrow, repay and reborrow Revolving Loans at any time prior to the Termination Date. The Commitments to extend credit hereunder shall expire on the Termination Date. (b) Borrowing Procedures. The Revolving Borrowers shall select the Type of Advance and, in the case of each Eurodollar Advance, the Interest Period applicable thereto, from time to time. A Revolving Borrower shall give the Agent irrevocable notice in the form of Exhibit A (a "Borrowing Notice") not later than 10:00 a.m. (Chicago time) at least one Business Day before the Borrowing Date of each Floating Rate Advance and three Business Days before the Borrowing Date for each Eurodollar Advance, specifying: (1) the Borrowing Date, which shall be a Business Day, of such Advance, (2) the aggregate amount of such Advance, (3) the Type of Advance selected; provided that, if such Revolving Borrower fails to specify the Type of Advance requested, such request shall be deemed a request for a Floating Rate Advance; and (4) the duration of the Interest Period if the Type of Advance requested is a Eurodollar Advance; provided that, if such Revolving Borrower fails to select the duration of the Interest Period for the requested Eurodollar Advance, such Revolving Borrower shall be deemed to have requested that such Eurodollar Advance be made with an Interest Period of one month. (c) The Agent's Election. Promptly after receipt of a Borrowing Notice (or telephonic notice in lieu thereof) of a requested Floating Rate Advance, the Agent shall elect in its Permitted Discretion to have the terms of Section 2.1.1(d) (pro rata advance by all Lenders) or Section 2.1.3 (advance by Agent, in the form of a Non-Ratable Loan, on behalf of the Lenders) apply to such requested Advance. (d) Pro Rata Advance. Unless the Agent elects to have the terms of Section 2.1.3 apply to a requested Floating Rate Advance or if a requested Advance is for a Eurodollar Advance, then promptly after receipt of a Borrowing Notice or telephonic notice in lieu thereof as permitted by Section 2.8, the Agent shall notify the Lenders by telecopy, telephone, or e-mail of 27 the requested Advance. Not later than noon (Chicago time) on each Borrowing Date, each Lender shall make available its Revolving Loan in funds immediately available to the Agent at its Lending Installation and the Agent will make the funds so received from the Lenders available to such Revolving Borrower at such Revolving Borrower's Funding Account as set forth in Section 2.5. 2.1.2. Facility LCs. (a) Issuance. The LC Issuer hereby agrees, on the terms and conditions set forth in this Agreement, to issue standby and commercial Letters of Credit (each, a "Facility LC") and to renew, extend, increase, decrease or otherwise modify each Facility LC ("Modify," and each such action a "Modification"), from time to time from and including the Closing Date of this Agreement and prior to the Termination Date upon the request of a Revolving Borrower; provided that, the maximum face amount of the Facility LC to be issued or Modified, does not exceed the lesser of (i) an amount equal to $10,000,000 minus the sum of (1) the aggregate undrawn amount of all outstanding Facility LCs at such time plus, without duplication, (2) the aggregate unpaid Reimbursement Obligations with respect to all Facility LCs outstanding at such time and (ii) Availability. No Facility LC shall have an expiry date later than the earlier of (x) the fifth Business Day prior to the Termination Date and (y) one year after its issuance. (b) Participations. Upon the issuance or Modification by the LC Issuer of a Facility LC in accordance with this Section 2.1.2, the LC Issuer shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably sold to each Lender, and each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the LC Issuer, a participation in such Facility LC (and each Modification thereof) and the related LC Obligations in proportion to its Pro Rata Share. (c) Notice. Subject to Section 2.1.2(a), a Revolving Borrower shall give the LC Issuer notice prior to 10:00 a.m. (Chicago time) at least five Business Days prior to the proposed date of issuance or Modification of each Facility LC, specifying the beneficiary, the proposed date of issuance (or Modification) and the expiry date of such Facility LC, and describing the proposed terms of such Facility LC and the nature of the transactions proposed to be supported thereby. Upon receipt of such notice, the LC Issuer shall promptly notify the Agent, and the Agent shall promptly notify each Lender, of the contents thereof and of the amount of such Lender's participation in such proposed Facility LC. The issuance or Modification by the LC Issuer of any Facility LC shall, in addition to the conditions precedent set forth in Article IV (the satisfaction of which the LC Issuer shall have no duty to ascertain), be subject to the conditions precedent that such Facility LC shall be reasonably satisfactory to the LC Issuer and that such Revolving Borrower shall have executed and delivered such application agreement and/or such other instruments and agreements relating to such Facility LC as the LC Issuer shall have reasonably requested (each, a "Facility LC Application"). In the event of any conflict between the terms of this Agreement and the terms of any Facility LC Application, the terms of this Agreement shall control. (d) Administration; Reimbursement by Lenders. Upon receipt from the beneficiary of any Facility LC of any demand for payment under such Facility LC, the LC Issuer shall notify the Agent and the Agent shall promptly notify the relevant Revolving Borrower and each other Lender as to the amount to be paid by the LC Issuer as a result of such demand and the proposed payment date (the "LC Payment Date"). The responsibility of the LC Issuer to the Revolving Borrowers and each Lender shall be only to determine that the documents (including each demand for payment) delivered under each Facility LC in connection with such presentment shall 28 be in conformity in all material respects with such Facility LC. The LC Issuer shall endeavor to exercise the same care in the issuance and administration of the Facility LCs as it does with respect to letters of credit in which no participations are granted, it being understood that in the absence of any gross negligence or willful misconduct by the LC Issuer, each Lender shall be unconditionally and irrevocably liable without regard to the occurrence of any Default or any condition precedent whatsoever, to reimburse the LC Issuer on demand for (i) such Lender's Pro Rata Share of the amount of each payment made by the LC Issuer under each Facility LC to the extent such amount is not reimbursed by the relevant Revolving Borrower pursuant to Section 2.1.2(e) below, plus (ii) interest on the foregoing amount to be reimbursed by such Lender, for each day from the date of the LC Issuer's demand for such reimbursement (or, if such demand is made after 11:00 a.m. (Chicago time) on such date, from the next succeeding Business Day) to the date on which such Lender pays the amount to be reimbursed by it, at a rate of interest per annum equal to the Federal Funds Effective Rate for the first three days and, thereafter, at a rate of interest equal to the rate applicable to Floating Rate Advances. (e) Reimbursement by Revolving Borrowers. Each Revolving Borrower shall be irrevocably and unconditionally obligated to reimburse the LC Issuer on or before the applicable LC Payment Date (if it shall have received notice prior to 12:00 noon (Chicago time) on any payment or the next Business Day if it shall receive notice after 12:00 noon (Chicago time)) for any amounts to be paid by the LC Issuer upon any drawing under any Facility LC issued for the account of such Revolving Borrower, without presentment, demand, protest or other formalities of any kind; provided that, neither the Revolving Borrowers nor any Lender shall hereby be precluded from asserting any claim for direct (but not consequential) damages suffered by the Revolving Borrowers or such Lender to the extent, but only to the extent, caused by (i) the willful misconduct or gross negligence of the LC Issuer in determining whether a request presented under any Facility LC issued by it complied with the terms of such Facility LC or (ii) the LC Issuer's failure to pay under any Facility LC issued by it after the presentation to it of a request strictly complying with the terms and conditions of such Facility LC. All such amounts paid by the LC Issuer and remaining unpaid by the Revolving Borrowers shall bear interest, payable on demand, for each day until paid at a rate per annum equal to (x) the rate applicable to Floating Rate Advances for such day if such day falls on or before the applicable LC Payment Date and (y) the sum of 2% plus the rate applicable to Floating Rate Advances for such day if such day falls after such LC Payment Date. The LC Issuer will pay to each Lender ratably in accordance with its Pro Rata Share all amounts received by it from the Revolving Borrowers for application in payment, in whole or in part, of the Reimbursement Obligation in respect of any Facility LC issued by the LC Issuer, but only to the extent such Lender has made payment to the LC Issuer in respect of such Facility LC pursuant to Section 2.1.2(d). Subject to the terms and conditions of this Agreement (including without limitation the submission of a Borrowing Notice in compliance with Section 2.1.1(b) and the satisfaction of the applicable conditions precedent set forth in Article IV), the Revolving Borrowers may request an Advance hereunder for the purpose of satisfying any Reimbursement Obligation. (f) Obligations Absolute. The Revolving Borrowers' obligations under this Section 2.1.2 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Revolving Borrowers may have or have had against the LC Issuer, any Lender or any beneficiary of a Facility LC. The Revolving Borrowers further agree with the LC Issuer and the Lenders that the LC Issuer and the Lenders shall not be responsible for, and the Revolving Borrowers' Reimbursement Obligation in respect of any Facility LC shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, fraudulent or forged, or any dispute between or among the any 29 Revolving Borrower, any of its Affiliates, the beneficiary of any Facility LC or any financing institution or other party to whom any Facility LC may be transferred or any claims or defenses whatsoever of any Revolving Borrower or of any of its Affiliates against the beneficiary of any Facility LC or any such transferee. The LC Issuer shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Facility LC. The Revolving Borrowers agree that any action taken or omitted by the LC Issuer or any Lender under or in connection with each Facility LC and the related drafts and documents, if done without gross negligence or willful misconduct, shall be binding upon the Revolving Borrowers and shall not put the LC Issuer or any Lender under any liability to the Revolving Borrowers. Nothing in this Section 2.1.2(f) is intended to limit the right of the Revolving Borrowers to make a claim against the LC Issuer for damages as contemplated by the proviso to the first sentence of Section 2.1.2(e). (g) Actions of LC Issuer. The LC Issuer shall be entitled to rely, and shall be fully protected in relying, upon any Facility LC, draft, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the LC Issuer. The LC Issuer shall be fully justified in failing or refusing to take any action under this Agreement unless it shall first have received such advice or concurrence of the Required Lenders as it reasonably deems appropriate or it shall first be indemnified to its reasonable satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Notwithstanding any other provision of this Section 2.1.2, the LC Issuer shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon the Lenders and any future holders of a participation in any Facility LC. (h) Indemnification. Each Revolving Borrower hereby agrees to indemnify and hold harmless each Lender, the LC Issuer and the Agent, and their respective directors, officers, agents and employees from and against any and all claims and damages, losses, liabilities, costs or expenses which such Lender, the LC Issuer or the Agent may incur (or which may be claimed against such Lender, the LC Issuer or the Agent by any Person whatsoever) by reason of or in connection with the issuance, execution and delivery or transfer of or payment or failure to pay under any Facility LC issued for such Revolving Borrower's account or any actual or proposed use of any such Facility LC, including, without limitation, any claims, damages, losses, liabilities, costs or expenses which the LC Issuer may incur by reason of or in connection with (i) the failure of any other Lender to fulfill or comply with its obligations to the LC Issuer hereunder (but nothing herein contained shall affect any rights the Revolving Borrowers may have against any defaulting Lender) or (ii) by reason of or on account of the LC Issuer issuing any Facility LC which specifies that the term "Beneficiary" included therein includes any successor by operation of law of the named Beneficiary, but which Facility LC does not require that any drawing by any such successor Beneficiary be accompanied by a copy of a legal document, satisfactory to the LC Issuer, evidencing the appointment of such successor Beneficiary; provided that, the Revolving Borrowers shall not be required to indemnify any Lender, the LC Issuer or the Agent for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (x) the willful misconduct or gross negligence of the LC Issuer in determining whether a request presented under any Facility LC complied with the terms of such Facility LC or (y) the LC Issuer's failure to pay under any Facility LC after the presentation to it of a request strictly complying with the terms and conditions of such Facility LC. Nothing in this Section 2.1.2(h) is 30 intended to limit the obligations of the Revolving Borrowers under any other provision of this Agreement. (i) Lenders' Indemnification. Each Lender shall, ratably in accordance with its Pro Rata Share, indemnify the LC Issuer, its Affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Revolving Borrowers) against any cost, expense (including reasonable counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees' gross negligence or willful misconduct or the LC Issuer's failure to pay under any Facility LC after the presentation to it of a request strictly complying with the terms and conditions of the Facility LC) that such indemnitees may suffer or incur in connection with this Section 2.1.2 or any action taken or omitted by such indemnitees hereunder. (j) Facility LC Collateral Account. Each Revolving Borrower agrees that it will, upon the request of the Agent or the Required Lenders and until the final expiration date of any Facility LC and thereafter as long as any amount is payable to the LC Issuer or the Lenders in respect of any Facility LC, maintain a special collateral account pursuant to arrangements satisfactory to the Agent (the "Facility LC Collateral Account") at the Agent's office at the address specified pursuant to Article XIII, in the name of such Revolving Borrower but under the sole dominion and control of the Agent, for the benefit of the Lenders and in which such Revolving Borrower shall have no interest other than as set forth in Section 8.1. Each Revolving Borrower hereby pledges, assigns and grants to the Agent, on behalf of and for the ratable benefit of the Lenders and the LC Issuer, a security interest in all of the its right, title and interest in and to all funds which may from time to time be on deposit in the Facility LC Collateral Account to secure the prompt and complete payment and performance of the Secured Obligations. The Agent will invest any funds on deposit from time to time in the Facility LC Collateral Account in certificates of deposit of Bank One having a maturity not exceeding thirty days. Nothing in this Section 2.1.2(j) shall either obligate the Agent to require the Revolving Borrowers to deposit any funds in the Facility LC Collateral Account or limit the right of the Agent to release any funds held in the Facility LC Collateral Account in each case other than as required by Section 8.1. (k) Rights as a Lender. In its capacity as a Lender, the LC Issuer shall have the same rights and obligations as any other Lender. (l) Termination of the Facility. If, notwithstanding the provisions of this Section 2.1.2, any Facility LC is outstanding upon the termination of this Agreement, then upon such termination the Revolving Borrowers shall deposit with the Agent, for the benefit of the Agent and the Lenders, with respect to all LC Obligations, as the Agent in its discretion shall specify, either (i) a standby letter of credit (a "Supporting Letter of Credit"), in form and substance satisfactory to the Agent, issued by an issuer reasonably satisfactory to the Agent, in an amount in immediately available funds (which funds shall be held in the Facility LC Collateral Account) equal to 105% of the difference of (x) the amount of LC Obligations at such time, less (y) the amount on deposit in the Facility LC Collateral Account at such time which is free and clear of all rights and claims of third parties and has not been applied against the Obligations (such difference, the "Collateral Shortfall Amount"), under which Supporting Letter of Credit the Agent is entitled to draw amounts necessary to reimburse the Agent, the LC Issuer and the Lenders for payments to be made by the Agent, the LC Issuer and the Lenders under any such Facility LC and any fees and expenses associated with such Facility LC, or (ii) cash in an amount equal to 105% of the Collateral Shortfall Amount. Such Supporting Letter of Credit or deposit of cash shall be held by the Agent, for the benefit of the Agent and the Lenders, as security for, and 31 to provide for the payment of, the aggregate undrawn amount of such Facility LC remaining outstanding. 2.1.3. Non-Ratable Loans. Subject to the restrictions set forth in Section 2.1.1(a), the Agent may elect to have the terms of this Section 2.1.3 apply to any requested Floating Rate Advance and Bank One shall thereafter make an Advance, on behalf of the Lenders and in the amount requested, available to the Revolving Borrowers on the applicable Borrowing Date by transferring same day funds to the Funding Account. Each Advance made solely by the Agent pursuant to this Section 2.1.3 is referred to in this Agreement as a "Non-Ratable Loan," and such Advances are referred to as the "Non-Ratable Loans." Each Non-Ratable Loan shall be subject to all the terms and conditions applicable to other Advances funded by the Lenders, except that all payments thereon shall be payable to Bank One solely for its own account. The aggregate amount of Non-Ratable Loans outstanding at any time shall not exceed 4,000,000. The Agent shall not make any Non-Ratable Loan if the requested Non-Ratable Loan exceeds Availability (before giving effect to such Non-Ratable Loan). Non-Ratable Loans may be made even if a Default or Unmatured Default exists, but may not be made if the conditions precedent set forth in Section 4.2 have not been satisfied. The Non-Ratable Loans shall be secured by the Liens granted to the Agent in and to the Collateral and shall constitute Obligations hereunder. All Non-Ratable Loans shall be Floating Rate Advances and are subject to the settlement provisions set forth in Section 2.19. 2.1.4. Protective Advances and Overadvances. (a) Protective Advances. Subject to the limitations set forth below, the Agent is authorized by the Revolving Borrowers and the Lenders, from time to time in the Agent's sole discretion, to make Advances to the Revolving Borrowers, on behalf of all Lenders, in an aggregate amount outstanding at any time not to exceed $4,000,000, which the Agent, in its reasonable business judgment, deems necessary or desirable (i) to preserve or protect the Collateral, or any portion thereof, (ii) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and other Obligations, or (iii) to pay any other amount chargeable to or required to be paid by the Revolving Borrowers pursuant to the terms of this Agreement, including costs, fees, and expenses as described in Section 9.6 (any of such Advances are herein referred to as "Protective Advances"); provided that, no Protective Advance shall cause any Lender's Credit Exposure to exceed its Commitment or the Aggregate Credit Exposure to exceed the Aggregate Commitment. Protective Advances may be made even if the conditions precedent set forth in Section 4.2 have not been satisfied. The Protective Advances shall be secured by the Liens in favor of the Agent in and to the Collateral and shall constitute Obligations hereunder. All Protective Advances shall be Floating Rate Advances and are subject to the settlement provisions set forth in Section 2.19. (b) Overadvances. Any provision of this Agreement to the contrary notwithstanding, at the request of Revolving Borrowers, the Agent may in its sole discretion (but shall have absolutely no obligation to), make Advances to the Revolving Borrowers, on behalf of the Lenders, in amounts that exceed Availability (any such excess Advances are herein referred to collectively as "Overadvances"); provided that, (i) no such event or occurrence shall cause or constitute a waiver of Agent's or Lenders' right to refuse to make any further Overadvances, Revolving Loans or Non-Ratable Loans, or issue Facility LCs, as the case may be, at any time that an Overadvance exists, and (ii) no Overadvance shall result in a Default or Unmatured Default due to any Revolving Borrower's failure to comply with Section 2.1.1(a) for so long as Agent permits such Overadvance to remain outstanding, but solely with respect to the amount of such Overadvance. In addition, Overadvances may be made even if a Default or Unmatured Default exists, but may not be made if the other conditions precedent set forth in Section 4.2 have not been satisfied (other than the condition regarding Availability). All Overadvances shall 32 constitute Floating Rate Advances, shall bear interest at the default rate set forth in Section 2.12 and shall be payable on the earlier of demand or the Termination Date. In addition, all Overadvances are subject to the settlement provisions set forth in Section 2.19. The authority of the Agent to make Overadvances is limited to an aggregate amount not to exceed $4,000,000 at any time and no Overadvance shall cause any Lender's Revolving Credit Exposure to exceed its Commitment or the Aggregate Credit Exposure to exceed the Aggregate Commitment; provided that, the Required Lenders may at any time revoke the Agent's authorization to make Overadvances. Any such revocation must be in writing and shall become effective prospectively upon the Agent's receipt thereof. 2.1.5 Swingline Loans. (a) Amount of Swingline Loans. Any Borrower (other than the Company) may request the Agent to make, and the Agent may, in its sole discretion, make loans (the "Swingline Loans") in any Permitted Currencies requested by such Borrower from time to time on any Business Day during the period from the Closing Date until the Termination Date in an aggregate principal amount not to exceed at any time the lesser of the Swingline Amount or the Dollar Amount thereof in other Eligible Currencies. Within the limits of this Section 2.1.5, so long as the Agent, in its sole discretion, elects to make, or arrange for Swingline Loans, the Borrowers (other than the Company) may borrow and reborrow under this Section 2.1.5. Each Swingline Loan shall bear interest at such rate and for such period of time offered by the Agent and accepted by such Borrower, and shall mature as agreed to by the Agent and the Borrower, not to exceed one month after the date thereof. All such Swingline Loans shall be subject to such notice requirements, minimum amounts, funding requirements and other terms required by the Agent. The Swingline Loans may be subject to such supplemental and additional agreements among a Borrower and the Agent or an applicable Lending Installation of the Agent for such Swingline Loans, and if there is any direct conflict between the terms of this Agreement and such supplemental and additional agreements the terms of this Agreement shall control. Swingline Loans may be made by the Agent in any manner determined by the Agent, including by means of loans, overdrafts or other advances, and whether hereunder or under any such supplemental or additional agreements designated by the Agent as Swingline Loans from time to time. Without limiting the foregoing, any loans and other advances to MSX International Australia Pty Limited under the letter dated August 28, 2000 and accepted by it on October 25, 2000, as amended, supplemented or replaced from time to time, shall be considered Swingline Loans hereunder. The Loan Parties acknowledge and agree that all existing Swingline Loans under the Existing Credit Agreement shall continue and be Swingline Loans deemed outstanding under and governed by this Agreement. (b) Repayment of the Swingline Loans. Each Swingline Loan shall be paid in full by the applicable Borrower thereof on demand by the Agent or such other date agreed to by the Agent for such Swingline Loan and not later than the Termination Date. The Agent may at any time in its sole and absolute discretion require that its Swingline Loans be refunded by a Revolving Loan from the Lenders, and upon written notice thereof by the Agent, to the Lenders, the Company and the relevant Borrower, the Company shall be deemed to have requested a Revolving Loan in an amount equal to the Dollar Amount of such Swingline Loan and such Revolving Loan shall be made to refund such Swingline Loan. Any Swingline Loan outstanding in an Permitted Currency other than Dollars shall, upon the giving of such notice by the Agent, immediately and automatically be converted to and redenominated in Dollars equal to the Dollar Amount of each such Swingline Loan determined as of the date of such conversion. Each Lender shall be absolutely and unconditionally obligated to fund its Pro Rata Share of such Revolving Loan or, if applicable, to purchase a participation interest in the Swingline Loan and such obligation shall not 33 be affected by any circumstance, including, without limitation, (A) any set-off, counterclaim, recoupment, defense or other right which such Lender has or may have against the Agent, the Agent or any Borrower or anyone else for any reason whatsoever; (B) the occurrence or continuance of a Default or Unmatured Default, (C) the occurrence of any event or condition which could have a Material Adverse Effect; (D) any breach of this Agreement by the Company or any other Borrower or any Lender; or (E) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing (including without limitation the Company's failure to satisfy any conditions contained in Article IV or any other provision of this Agreement). If, for any reason (including without limitation as a result of the occurrence of an Default with respect to the Company pursuant to clause (f) or (g) of Article VII), Revolving Loans may not be made by the Lenders as described in Section 2.1.5(b), then (A) the relevant Borrower agrees that each Swingline Loan not paid pursuant to this Section 2.1.5(b) shall bear interest, payable on demand by the Agent, at the rate per annum equal to the sum of 2% plus the Floating Rate, (B) the Borrowers agree that each Swingline Loan outstanding in a Permitted Currency other than Dollars shall be immediately and automatically converted to and redenominated in U.S. Dollars equal to the U.S. Dollar Amount of each such Swingline Loan determined as of the date of such conversion, and (C) effective on the date each such Revolving Loan would otherwise have been made, each Lender severally agrees that it shall unconditionally and irrevocably, without regard to the occurrence of any Default or Unmatured Default, in lieu of deemed disbursement of loans, to the extent of such Lender's Commitment, purchase a participation interest in the Swingline Loans by paying its Pro Rata Share thereof. Each Lender will immediately transfer to the Swingline Lender, in same day funds, the amount of its participation. Each Lender shall share based on its Pro Rata Share in any interest which accrues thereon and in all repayments thereof. If and to the extent that any Lender shall not have so made the amount of such participating interest available to the Swingline Lender, such Lender and the Company severally agree to pay to the Swingline Lender forthwith on demand such amount together with interest thereon, for each day from the date of demand by the Swingline Lender until the date such amount is paid to the Swingline Lender, at (x) in the case of the Company, at the interest rate specified above and (y) in the case of such Lender, the Federal Funds Effective Rate for the first three days and at the interest rate specified above thereafter. 2.1.6 Limitation on Advances. Notwithstanding anything in this Agreement to the contrary, (a) the Aggregate Credit Exposure (excluding the Credit Exposure of any Lender with respect to Swingline Loans) shall not exceed a Dollar Amount equal to the lesser of (i) the Borrowing Base or (ii) the Aggregate Commitment minus the Swingline Amount, (b) the aggregate of the Credit Exposure of all of the Lenders with respect to Loans will not exceed an aggregate Dollar Amount equal to $40,000,000, (c) the aggregate Credit Exposure of all of the Lenders with respect to Facility L/Cs shall not exceed a Dollar Amount equal to $10,000,000, (d) the aggregate Credit Exposure of all of the Lenders with respect to Revolving Loans and Facility L/Cs to the Netherlands Borrower shall not exceed a Dollar Amount equal to $3,500,000 and (e) the aggregate Credit Exposure of all of the Lenders with respect to Swingline Loans shall not exceed a Dollar Amount equal to the Swingline Amount. The Borrowers shall immediately prepay the Obligations owing by them to the extent they exceed any of the foregoing amounts by the amount of such excess. Notwithstanding this Section 2.16 or anything else in this Agreement to the contrary, if the Credit Exposure of any Lender exceeds the limitations herein due to currency fluctuations, each Lender's obligation to participate in Facility LCs, Protective Advances, Overadvances, Non-Ratable Loans and Swingline Loans and to reimburse, and fulfill their other obligations with respect thereto, to the Agent and the LC Issuer shall not be impaired in any manner. 2.2. Ratable Loans; Risk Participation. Except as otherwise provided below, each Advance made in connection with a Revolving Loan shall consist of Loans made by each Lender in an amount equal to such Lender's Pro Rata Share. Upon the making of an Advance by the Agent in connection with 34 a Non-Ratable Loan or an Overadvance (whether before or after the occurrence of a Default or an Unmatured Default and regardless of whether the Agent has requested a Settlement with respect to such Non-Ratable Loan or Overadvance), the Agent shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably sold to each Lender and each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Agent, without recourse or warranty, an undivided interest and participation in such Non-Ratable Loan or Overadvance in proportion to its Pro Rata Share of the Commitment. Upon the making of an Advance by the Agent in connection with a Protective Advance (whether before or after the occurrence of a Default or an Unmatured Default and regardless of whether the Agent has requested a Settlement with respect to such Protective Advance), the Agent shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably sold to each Lender and each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Agent, without recourse or warranty, an undivided interest and participation in such Protective Advance in proportion to its Pro Rata Share of the Aggregate Commitment. 2.3. Payment of the Obligations. Each Borrower shall repay the outstanding principal balance of the Loans owing by it, together with all other Obligations owing by it, including all accrued and unpaid interest and fees thereon, on the Termination Date. 2.4. Minimum Amount of Each Advance. Each Eurodollar Advance shall be in the minimum amount of $2,000,000 and in multiples of $500,000 if in excess thereof, and, prior to a Borrowing Base Availability Deficiency Event, each Floating Rate Advance shall be in the minimum amount of $500,000 and in multiples of $500,000 if in excess thereof (other than a Floating Rate Advance used to repay Non-Ratable Loans, Overadvances, Swingline Loans or Protective Advances which may be in the amount of the Non-Ratable Loans, Overadvances, Swingline Loans or Protective Advances being repaid), provided however, that any Floating Rate Advance may be in the amount of the unused Commitment. 2.5. Funding Account. The Company shall deliver to the Agent, on the Closing Date, a notice setting forth the deposit account or accounts of the Company and each other Borrower (collectively, the "Funding Account") to which the Agent is authorized by the Company and each other Borrower to transfer the proceeds of any Advances requested pursuant to this Agreement. Each Borrower may designate a replacement Funding Account from time to time by written notice to the Agent. Any designation by any Borrower of the Funding Account must be acceptable to the Agent. 2.6. Reliance Upon Authority; No Liability. The Agent is entitled to rely conclusively on any individual's request for Advances hereunder, so long as the proceeds thereof are to be transferred to the Funding Account. The Agent shall have no duty to verify the identity of any individual representing himself or herself as a person authorized by a Borrower to make such requests on its behalf. The Agent shall not incur any liability to any Borrower as a result of acting upon any notice referred to in Section 2.1 which the Agent reasonably believes to have been given by an officer or other person duly authorized by such Borrower to request Advances on its behalf or for otherwise acting under this Agreement. The crediting of Advances to the Funding Account shall conclusively establish the obligation of the Borrowers to repay such Advances as provided herein. 2.7. Conversion and Continuation of Outstanding Advances. Floating Rate Advances shall continue as Floating Rate Advances unless and until such Floating Rate Advances are converted into Eurodollar Advances pursuant to this Section 2.7 or are repaid in accordance with this Agreement. Each Eurodollar Advance shall continue as a Eurodollar Advance until the end of the then applicable Interest Period therefor, at which time such Eurodollar Advance shall be automatically converted into a Floating Rate Advance unless (x) such Eurodollar Advance is or was repaid in accordance with this Agreement or (y) the relevant Borrower shall have given the Agent a Conversion/Continuation Notice (as defined 35 below) requesting that, at the end of such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance for the same or another Interest Period. Subject to the terms of Section 2.4, a Borrower may elect from time to time to convert all or any part of a Floating Rate Advance into a Eurodollar Advance. A Revolving Borrower shall give the Agent irrevocable notice in the form of Exhibit B (a "Conversion/Continuation Notice") of each conversion of a Floating Rate Advance into a Eurodollar Advance or continuation of a Eurodollar Advance not later than 10:00 a.m. (Chicago time) at least three Business Days prior to the date of the requested conversion or continuation, specifying (i) the requested date, which shall be a Business Day, of such conversion or continuation, (ii) the aggregate amount and Type of the Advance which is to be converted or continued, and (iii) the amount of such Advance which is to be converted into or continued as a Eurodollar Advance and the duration of the Interest Period applicable thereto. 2.8. Telephonic Notices. The Company hereby authorizes the Lenders and the Agent to extend, convert or continue Advances, effect selections of Types of Advances and to transfer funds based on telephonic notices made by any person or persons the Agent or any Lender in good faith believes to be acting on behalf of a Borrower, it being understood that the foregoing authorization is specifically intended to allow Borrowing Notices and Conversion/Continuation Notices to be given telephonically. The Company agrees to deliver promptly to the Agent a written confirmation, if such confirmation is requested by the Agent or any Lender, of each telephonic notice signed by an Authorized Officer. If the written confirmation differs in any material respect from the action taken by the Agent and the Lenders, the records of the Agent and the Lenders shall govern absent manifest error. 2.9. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions. Promptly after receipt thereof, the Agent will notify each Lender of the contents of each Borrowing Notice, Conversion/Continuation Notice, and repayment notice received by it hereunder. Promptly after notice from the LC Issuer, the Agent will notify each Lender of the contents of each request for issuance of a Facility LC hereunder. The Agent will notify each Lender of the interest rate applicable to each Eurodollar Advance promptly upon determination of such interest rate and will give each Lender prompt notice of each change in the Alternate Base Rate. 2.10. Fees. (a) Unused Commitment Fee. The Company agrees to pay to the Agent, for the account of each Lender in accordance with such Lender's Pro Rata Share, an unused commitment fee at a per annum rate equal to the Applicable Fee Rate on the average daily amount of the Aggregate Commitment minus the Aggregate Credit Exposure (other than Swingline Loans) from the date hereof to and including the Termination Date, payable on each Payment Date hereafter and on the Termination Date (the "Unused Commitment Fee"). (b) LC Fees. The Company shall pay to the Agent, for the account of the Lenders ratably in accordance with their respective Pro Rata Shares, a letter of credit fee at a per annum rate equal to the Applicable Margin for Eurodollar Loans in effect from time to time on the average daily undrawn stated amount under such Facility LC, such fee to be payable in arrears on each Payment Date (the "LC Fee"). The Company shall also pay to the LC Issuer for its own account (x) at the time of issuance of each Facility LC, a fronting fee of 0.25% of the face amount of the Facility LC, and (y) documentary and processing charges in connection with the issuance or Modification of and draws under Facility LCs in accordance with the LC Issuer's standard schedule for such charges as in effect from time to time. 36 (c) Agent and Arranger Fees. The Company agrees to pay to the Agent and the Arranger such additional fees as are specified in the fee letter dated as of July 7, 2003, among the Agent, the Arranger and the Company (the "Fee Letter"). 2.11. Interest Rates. Each Floating Rate Advance shall bear interest on the outstanding principal amount thereof, for each day from and including the date such Advance is made or is automatically converted from a Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.7, to but excluding the date it is paid or is converted into a Eurodollar Advance pursuant to Section 2.7 hereof, at a rate per annum equal to the Floating Rate for such day. Changes in the rate of interest on that portion of any Advance maintained as a Floating Rate Advance will take effect simultaneously with each change in the Alternate Base Rate. Each Eurodollar Advance shall bear interest on the outstanding principal amount thereof from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at the interest rate determined by the Agent as applicable to such Eurodollar Advance based upon a Revolving Borrower's selections under Sections 2.1.1 and 2.7 and otherwise in accordance with the terms hereof. No Interest Period may end after the Termination Date. If at any time Loans are outstanding with respect to which a Borrower has not delivered a notice to the Agent specifying the basis for determining the interest rate applicable thereto, those Loans shall bear interest at the Floating Rate. 2.12. Eurodollar Advances Post Default; Default Rates. Notwithstanding anything to the contrary contained hereunder, during the continuance of a Default or Unmatured Default the Agent or the Required Lenders may, at their option, by notice to the Company (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 8.3 requiring unanimous consent of the Lenders to reductions in interest rates), declare that no Advance may be made as, converted into or continued as a Eurodollar Advance. During the continuance of a Default the Agent or the Required Lenders may, at their option, by notice to the Company (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 8.3 requiring unanimous consent of the Lenders to reductions in interest rates), declare that (i) each Eurodollar Advance shall bear interest for the remainder of the applicable Interest Period at the rate otherwise applicable to such Interest Period plus 2% per annum, (ii) each Floating Rate Advance shall bear interest at a rate per annum equal to the Floating Rate in effect from time to time plus 2% per annum and (iii) the LC Fee shall be increased by 2% per annum, provided that, during the continuance of a Default under subsection (g), (h) or (i) of Article VII, the interest rates set forth in clauses (i) and (ii) above and the increase in the LC Fee set forth in clause (iii) above shall be applicable to all Credit Extensions without any election or action on the part of the Agent or any Lender. 2.13. Interest Payment Dates; Interest and Fee Basis. Interest accrued on each Floating Rate Advance shall be payable on each Payment Date, commencing with the first such date to occur after the date hereof and at maturity. Interest accrued on each Eurodollar Advance shall be payable on the last day of its applicable Interest Period, on any date on which the Eurodollar Advance is prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued on each Eurodollar Advance having an Interest Period longer than three months shall also be payable on the last day of each three-month interval during such Interest Period. Interest on all Eurodollar Advances, unused commitment fees and LC Fees shall be calculated for actual days elapsed on the basis of a 360-day year. Interest on Floating Rate Advances shall be calculated for actual days elapsed on the basis of a 365-day year. Interest shall be payable for the day an Advance is made but not for the day of any payment on the amount paid if payment is received prior to noon (local time) at the place of payment. If any payment of principal of or interest on an Advance shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and, in the case of a principal payment, such extension of time shall be included in computing interest in connection with such payment. After giving effect to any Loan, 37 Advance, continuation, or conversion of any Eurodollar Rate Loan, there may not be more than four different Interest Periods in effect hereunder. 2.14. Voluntary Prepayments. The Revolving Borrowers may from time to time prepay, without penalty or premium, all outstanding Floating Rate Advances, or, in a minimum aggregate amount of $500,000 or any integral multiple of $500,000 in excess thereof, any portion of the outstanding Floating Rate Advances upon two Business Days' prior notice to the Agent. The Revolving Borrowers may also from time to time prepay, subject to the payment of any funding indemnification amounts required by Section 3.4 but without penalty or premium, all outstanding Eurodollar Advances, or, in a minimum aggregate amount of $1,000,000 or any integral multiple of $500,000 in excess thereof, any portion of the outstanding Eurodollar Advances upon three Business Days' prior notice to the Agent. All such prepayments shall prepay the Credit Extensions of the Company before prepaying Credit Extensions to the U.K. Borrower. 2.15. Mandatory Prepayments. (a) Borrowing Base Compliance. Except for Overadvances permitted pursuant to Section 2.1.4(b), if at any time the Aggregate Credit Exposure exceeds the amount permitted pursuant to Section 2.1.6, the Borrowers shall immediately repay the Loans and Reimbursement Obligations by at least the amount of such excess. If any such excess remains after repayment in full of all outstanding Loans and Reimbursement Obligations, the Borrowers shall provide cash collateral or a Supporting Letter of Credit for the LC Obligations in the manner set forth in Section 2.1.2(l) to the extent required to eliminate such excess. All such repayments shall repay the Credit Extensions of the Company before prepaying Credit Extensions to the U.K. Borrower. (b) Sale of Assets. Immediately upon receipt by any Loan Party of the Net Cash Proceeds of any asset disposition (other than an asset disposition permitted by Section 6.19), unless the Required Lenders determine not to require such prepayment, the Company shall prepay the Obligations in an amount equal to all such Net Cash Proceeds. Any such prepayment shall be applied first, to pay the principal of the Non-Ratable Loans, Overadvances and Protective Advances, second, to pay the principal of the Revolving Loans and Reimbursement Obligations owing by the Company with a concomitant reduction in the Commitments, third, to pay the principal of the Revolving Loans and Reimbursement Obligations owing by the U.K. Borrower with a concomitant reduction in the Commitments, fourth, to pay the principal of the Swingline Loans with a concomitant reduction in the Commitments, and fifth, to cash collateralize outstanding Facility LCs. (c) Exchange Rates. The Agent may (but is not required), and shall upon the written request of the Required Lenders, determine the Dollar Amount of the Aggregate Credit Exposure at any time to determine if a payment is required under Section 2.15(a). (d) Insurance/Condemnation Proceeds. Any insurance or condemnation proceeds to be applied to the Obligations in accordance with Section 6.7(c) shall be applied as follows: first, to pay the principal of the Non-Ratable Loans, Overadvances and Protective Advances, second, to pay the principal of the Revolving Loans and Reimbursement Obligations owing by the Company, third, to pay the principal of the Revolving Loans and Reimbursement Obligations owing by the U.K. Borrower, fourth, to pay the principal of the Swingline Loans, and fifth, to cash collateralize outstanding Facility LCs. The Commitment shall not be permanently reduced by the amount of any such prepayments. If the precise amount of insurance or condemnation proceeds allocable to Inventory as compared to Equipment, Fixtures and real Property are not 38 otherwise determined, the allocation and application of those proceeds shall be determined by the Agent, subject to the approval of Required Lenders. (e) General. Without in any way limiting the foregoing, immediately upon receipt by any Loan Party of proceeds of any sale of any Collateral, the Company shall cause such Loan Party to deliver such proceeds to the Agent, or deposit such proceeds in a deposit account subject to a Deposit Account Control Agreement. All of such proceeds shall be applied as set forth above or otherwise as provided in Section 2.18. Nothing in this Section 2.15 shall be construed to constitute Agent's or any Lender's consent to any transaction that is not permitted by other provisions of this Agreement or the other Loan Documents. 2.16. Termination of the Facility. (a) Without limiting Section 2.3 or Section 8.1, (a) the Aggregate Commitments shall expire on the Termination Date and (b) the Aggregate Credit Exposure and all other unpaid Obligations shall be paid in full by the Borrower owing such amount on the Termination Date. (b) The Company may terminate this Agreement upon at least 10 Business Days' prior written notice thereof to the Agent and the Lenders, upon (i) the payment in full of all outstanding Loans, together with accrued and unpaid interest thereon, (ii) the cancellation and return of all outstanding Facility LCs (or alternatively, with respect to each such Facility LC, the furnishing to the Agent of a cash deposit or Supporting Letter of Credit as required by Section 2.1.2(l)), (iii) the payment in full of the early termination fee set forth in the following sentence (the "Prepayment Fee"), (iv) the payment in full of all reimbursable expenses and other Obligations together with accrued and unpaid interest thereon, and (v) the payment in full of any amount due under Section 3.4. Subject to Section 2.24, if this Agreement is terminated at any time prior to the Termination Date, whether pursuant to this Section 2.16 or pursuant to Section 8.1, the Company shall pay to the Agent, for the account of the Lenders, an early termination fee determined in accordance with the following table:
===================================================== ==================================== Period during which early termination occurs Prepayment Fee ===================================================== ==================================== On or prior to the first anniversary of the Closing 1.0% of the Aggregate Commitment Date ===================================================== ==================================== After the first anniversary of the Closing Date but 0.5% of the Aggregate Commitment on or prior to the second anniversary of the Closing Date ----------------------------------------------------- ------------------------------------ After the second anniversary of the Closing Date None but on or prior to the third anniversary of the Closing Date ===================================================== ====================================
No such Prepayment Fee shall be payable in the event this Agreement is terminated in connection with refinancing of the Obligations in a transaction in which Bank One or one of its Affiliates that is a banking institution provides or arranges a replacement bank credit facility for the Company. 2.17. Method of Payment. (a) All payments of the Obligations hereunder shall be made, without setoff, deduction, or counterclaim, in immediately available funds to the Agent at the Agent's address specified pursuant to Article XIII, or at any other Lending Installation of the Agent specified in writing by the 39 Agent to the Company, by noon (local time) on the date when due and shall be applied ratably by the Agent among the Lenders. Any payment received by the Agent after such time shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue. Each payment delivered to the Agent for the account of any Lender shall be delivered promptly by the Agent to such Lender in the same type of funds that the Agent received at its address specified pursuant to Article XIII or at any Lending Installation specified in a notice received by the Agent from such Lender. (b) At the election of the Agent, all payments of principal, interest, reimbursement obligations in connection with Facility LCs, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees and expenses pursuant to Section 9.6), and other sums payable under the Loan Documents, may be paid from the proceeds of Advances made hereunder whether made following a request by the Company pursuant to Section 2.1 or a deemed request as provided in this Section 2.17 or may be deducted from the Funding Account or any other deposit account of any Company maintained with the Agent. The Borrowers hereby irrevocably authorize (i) the Agent to make an Advance for the purpose of paying all amounts from time to time due under the Loan Documents and agrees that all such amounts charged shall constitute Loans (including Non-Ratable Loans, Overadvances, Protective Advances and Swingline Loans) and that all such Advances shall be deemed to have been requested pursuant to Section 2.1 and (ii) the Agent to charge the Funding Account or any other deposit account of the Company maintained with Bank One for each payment of principal, interest and fees as it becomes due hereunder. The Agent agrees to give notice to the Company reasonably promptly after the making of any Advance described in the foregoing sentence. 2.18. Apportionment, Application, and Reversal of Payments. (a) Except as otherwise required pursuant to Section 2.19, principal and interest payments shall be apportioned ratably among the Lenders as set forth in this Article II and payments of the fees shall, as applicable, be apportioned ratably among the Lenders, except for fees payable solely to the Agent and the LC Issuer and except as provided in Section 2.10(c). All payments shall be remitted to the Agent and all such payments not relating to principal or interest of specific Loans or not constituting payment of specific fees as specified by the Company, and all proceeds of any Collateral received by the Agent, shall be applied, ratably, subject to the provisions of this Agreement, first, to pay any fees, indemnities, or expense reimbursements including amounts then due to the Agent from the any Borrower (other than in connection with Banking Services or Rate Management Obligations), second, to payment of any amounts owing with respect to Banking Services and any amounts owing to the Agent, any Lender or any of their Affiliates with respect to Exchange Rate Management Obligations, third, to pay any fees or expense reimbursements then due to the Lenders from any Borrower (other than in connection with Banking Services or Exchange Rate Management Obligations), fourth, to pay interest due in respect of the Loans, including Non-Ratable Loans, Overadvances, Protective Advances and Swingline Loans, fifth, to pay or prepay principal of the Non-Ratable Loans, Overadvances and Protective Advances, sixth, to pay or prepay principal of the Revolving Loans (other than Non-Ratable Loans, Overadvances and Protective Advances) and unpaid reimbursement obligations in respect of Facility LCs owing by the Company, seventh, to pay or prepay principal of the Revolving Loans (other than Non-Ratable Loans, Overadvances and Protective Advances) and unpaid reimbursement obligations in respect of Facility LCs owing by the U.K. Borrower, eighth, to pay or prepay principal of the Swingline Loans, ninth, to pay an amount to the Agent equal to one hundred ten percent (110%) of the aggregate undrawn face amount of all outstanding Facility LCs and the aggregate amount of any unpaid reimbursement obligations in respect of Facility LCs, to be held as cash collateral for such Obligations, and tenth, to the payment of any other Secured Obligation due to the Agent or any Lender by the Company. Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Company, or unless a 40 Default is in existence, neither the Agent nor any Lender shall apply any payment which it receives to any Eurodollar Loan, except (a) on the expiration date of the Interest Period applicable to any such Eurodollar Loan or (b) in the event, and only to the extent, that there are no outstanding Floating Rate Loans and, in any event, the Company shall pay the Eurodollar breakage losses in accordance with Section 3.4. The Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such payments described in the foregoing sentence (which excludes payments relating to principal or interest of specific Loans or constituting payment of specific fees as specified by the Company) and proceeds of Collateral to any portion of the Obligations. (b) Notwithstanding the foregoing, no payments of principal, interest, fees or other amounts delivered to the Agent for the account of any Defaulting Lender shall be delivered by the Agent to such Defaulting Lender. Instead, such payments shall, for so long as such Defaulting Lender shall be a Defaulting Lender, be held by the Agent, and the Agent is hereby authorized and directed by all parties hereto to hold such funds in escrow and apply such funds as follows: First, if applicable to any payments due from such Defaulting Lender to the Agent, and Second, to Loans required to be made by such Defaulting Lender on any borrowing date to the extent such Defaulting Lender fails to make such Loans. Notwithstanding the foregoing, upon the termination of all Commitments and the payment and performance of all of the Advances and other obligations owing hereunder (other than those owing to a Defaulting Lender), any funds then held in escrow by the Agent pursuant to the preceding sentence shall be distributed to each Defaulting Lender, pro rata in proportion to amounts that would be due to each Defaulting Lender but for the fact that it is a Defaulting Lender. 2.19. Settlement. Each Lender's funded portion of the Loans is intended by the Lenders to be equal at all times to such Lender's Pro Rata Share of the outstanding Loans. Notwithstanding such agreement, the Agent, Bank One, and the Lenders agree (which agreement shall not be for the benefit of or enforceable by the Loan Parties) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among them as to the Loans, including the Non-Ratable Loans, Overadvances and the Protective Advances shall take place on a periodic basis in accordance with the following provisions: (a) The Agent shall request settlement (a "Settlement") with the Lenders on at least a weekly basis, or on a more frequent basis at the Agent's election, (i) for itself, with respect to each Non-Ratable Loan, Overadvance and Protective Advance, and (ii) with respect to collections received, in each case, by notifying the Lenders of such requested Settlement by telecopy, telephone, or e-mail no later than 12:00 noon (Chicago time) on the date of such requested Settlement (the "Settlement Date"). Each Lender (other than the Agent, in the case of the Non-Ratable Loans, Overadvances, Protective Advances and Swingline Loans) shall transfer the amount of such Lender's Pro Rata Share of the outstanding principal amount of the applicable Loan with respect to which Settlement is requested to the Agent, to such account of the Agent as the Agent may designate, not later than 2:00 p.m. (Chicago time), on the Settlement Date applicable thereto. Settlements may occur during the existence of a Default or an Unmatured Default and whether or not the applicable conditions precedent set forth in Section 4.2 have then been satisfied. Such amounts transferred to the Agent shall be applied against the amounts of the applicable Loan and, together with Bank One's Pro Rata Share of such Non-Ratable Loan, Overadvance or Protective Advance, shall constitute Loans of such Lenders, respectively. If any such amount is not transferred to the Agent by any Lender on the Settlement Date applicable thereto, the Agent shall be entitled to recover such amount on demand from such Lender together with interest thereon as specified in Section 2.23. 41 (b) From and after the date, if any, on which any Lender is required to fund its participation in any Non-Ratable Loan, Overadvance or Protective Advance purchased pursuant to Section 2.2, the Agent shall promptly distribute to such Lender, such Lender's Pro Rata Share of all payments of principal and interest and all proceeds of Collateral received by the Agent in respect of such Loan. 2.20. Indemnity for Returned Payments. If after receipt of any payment which is applied to the payment of all or any part of the Obligations, the Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Agent or such Lender and the Company shall be liable to pay to the Agent and the Lenders, and each Company hereby indemnifies the Agent and the Lenders and holds the Agent and the Lenders harmless for the amount of such payment or proceeds surrendered. The provisions of this Section 2.20 shall be and remain effective notwithstanding any contrary action which may have been taken by the Agent or any Lender in reliance upon such payment or application of proceeds, and any such contrary action so taken shall be without prejudice to the Agent's and the Lenders' rights under this Agreement and shall be deemed to have been conditioned upon such payment or application of proceeds having become final and irrevocable. The provisions of this Section 2.20 shall survive the termination of this Agreement. 2.21. Noteless Agreement; Evidence of Indebtedness. (a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrowers to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder. (b) The Agent shall also maintain accounts in which it will record (a) the amount of each Loan extended hereunder, the Type thereof and the Interest Period with respect thereto, (b) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder, (c) the original stated amount of each Facility LC and the amount of LC Obligations outstanding at any time, and (d) the amount of any sum received by the Agent hereunder from the Borrowers and each Lender's share thereof. (c) The entries maintained in the accounts maintained pursuant to paragraphs (i) and (ii) above shall be prima facie evidence of the existence and amounts of the Obligations therein recorded; provided however, that the failure of the Agent or any Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrowers to repay the Obligations in accordance with their terms. (d) Any Lender may request that its Revolving Loans be evidenced by a promissory note in substantially the form of Exhibit C (a "Note"). In such event, the Borrowers shall prepare, execute and deliver to such Lender such Note payable to the order of such Lender. Thereafter, the Revolving Loans evidenced by such Note and interest thereon shall at all times (prior to any assignment pursuant to Section 12.3) be represented by one or more Notes payable to the order of the payee named therein, except to the extent that any such Lender subsequently returns any such Note for cancellation and requests that such Revolving Loans once again be evidenced as described in paragraphs (a) and (b) above. 42 2.22. Lending Installations. Each Lender and the Agent may book its Loans and its participation in any LC Obligations and the LC Issuer may book the Facility LCs at any Lending Installation selected by such Lender or the LC Issuer, as the case may be, and may change its Lending Installation from time to time. All terms of this Agreement shall apply to any such Lending Installation and the Loans, Facility LCs, participations in LC Obligations and any Notes issued hereunder shall be deemed held by each Lender or the LC Issuer, as the case may be, for the benefit of any such Lending Installation. Each Lender and the LC Issuer may, by written notice to the Agent and the Borrowers in accordance with Article XIII, designate replacement or additional Lending Installations through which Loans will be made by it or Facility LCs will be issued by it and for whose account Loan payments or payments with respect to Facility LCs are to be made. 2.23. Non-Receipt of Funds by the Agent. Unless a Borrower or a Lender, as the case may be, notifies the Agent prior to the date on which it is scheduled to make payment to the Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case of a Borrower, a payment of principal, interest or fees to the Agent for the account of the Lenders, that it does not intend to make such payment, the Agent may assume that such payment has been made. The Agent may, but shall not be obligated to, make the amount of such payment available to the intended recipient in reliance upon such assumption. If such Lender or Borrower, as the case may be, has not in fact made such payment to the Agent, the recipient of such payment shall, on demand by the Agent, repay to the Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Agent until the date the Agent recovers such amount at a rate per annum equal to (x) in the case of payment by a Lender, the Federal Funds Effective Rate for such day for the first three days and, thereafter, the interest rate applicable to the relevant Loan or (y) in the case of payment by a Borrower, the interest rate applicable to the relevant Loan. 2.24. Market Disruption. Notwithstanding the satisfaction of all conditions referred to in Article II and Article IV with respect to any Advance in any Permitted Currency other than Dollars, if there shall occur on or prior to the date of such Advance any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which would in the reasonable opinion of the Agent make it impracticable for the Swingline Loan to be denominated in the Eligible Currency specified by the Borrower, then the Agent shall forthwith give notice thereof to the Borrower, and such Swingline Loan shall not be denominated in such Eligible Currency but shall, be made on such Credit Extension Date in Dollars, in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related notice for the borrowing or continuation of a Swingline Loan made by such Borrower, as the case may be, as Floating Rate Loans, unless such Borrower notifies the Agent at least one Business Day before such date that (i) it elects not to borrow on such date or (ii) it elects to borrow on such date in a different Eligible Currency, as the case may be, in which the denomination of such Loans would in the opinion of the Agent be practicable and in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related notice for the borrowing or continuation of a Swingline Loan made by such Borrower. 2.25. Judgment Currency. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due from a Borrower hereunder in the currency expressed to be payable herein (the "specified currency") into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Agent could purchase the specified currency with such other currency at the Agent's main office on the Business Day preceding that on which final, non-appealable judgment is given. The obligations of the Borrowers in respect of any sum due to any Lender or the Agent hereunder shall, notwithstanding any judgment in a currency other than the specified currency, be discharged only to the extent that on the Business Day following receipt by such Lender or the Agent (as the case may be) of any 43 sum adjudged to be so due in such other currency such Lender or the Agent (as the case may be) may in accordance with normal, reasonable banking procedures purchase the specified currency with such other currency. If the amount of the specified currency so purchased is less than the sum originally due to such Lender or the Agent, as the case may be, in the specified currency, the Borrowers agree, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender or the Agent, as the case may be, against such loss, and if the amount of the specified currency so purchased exceeds (a) the sum originally due to any Lender or the Agent, as the case may be, in the specified currency and (b) any amounts shared with other Lenders as a result of allocations of such excess as a disproportionate payment to such Lender under Section 12.2, such Lender or the Agent, as the case may be, agrees to remit such excess to the Borrowers. ARTICLE III YIELD PROTECTION; TAXES 3.1. Yield Protection. If, on or after the Closing Date, the adoption of any law or any governmental or quasi-governmental rule, regulation, policy, guideline or directive (whether or not having the force of law), or any change in the interpretation or administration thereof by any governmental or quasi-governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender or applicable Lending Installation or the LC Issuer with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency: (a) subjects any Lender or any applicable Lending Installation or the LC Issuer to any Taxes, or changes the basis of taxation of payments (other than with respect to Excluded Taxes) to any Lender or the LC Issuer in respect of its Eurodollar Loans, Facility LCs or participations therein, or (b) imposes or increases or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any applicable Lending Installation or the LC Issuer (other than reserves and assessments taken into account in determining the interest rate applicable to Eurodollar Advances), or (c) imposes any other condition the result of which is to increase the cost to any Lender or any applicable Lending Installation or the LC Issuer of making, funding or maintaining its Loans, or of issuing or participating in Facility LCs, or reduces any amount receivable by any Lender or any applicable Lending Installation or the LC Issuer in connection with its Loans, Facility LCs or participations therein, or requires any Lender or any applicable Lending Installation or the LC Issuer to make any payment calculated by reference to the amount of Loans, Facility LCs or participations therein held or interest or LC Fees received by it, by an amount deemed material by such Lender or the LC Issuer as the case may be, and the result of any of the foregoing is to increase the cost to such Lender or applicable Lending Installation or the LC Issuer, as the case may be, of making or maintaining its Eurodollar Loans or Commitment or of issuing or participating in Facility LCs or to reduce the return received by such Lender or applicable Lending Installation or the LC Issuer, as the case may be, in connection with such 44 Eurodollar Loans, Commitment, Facility LCs or participations therein, then, within fifteen days of demand by such Lender or the LC Issuer, as the case may be, each Borrower, with respect to amounts attributable to such Borrower as determined by the Agent, shall pay such Lender or the LC Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the LC Issuer, as the case may be, for such increased cost or reduction in amount received. 3.2. Changes in Capital Adequacy Regulations. If a Lender or the LC Issuer determines the amount of capital required or expected to be maintained by such Lender or the LC Issuer, any Lending Installation of such Lender or the LC Issuer, or any corporation controlling such Lender or the LC Issuer is increased as a result of a Change, then, within fifteen days of demand by such Lender or the LC Issuer, each Borrower, with respect to amounts attributable to such Borrower as determined by the Agent, shall pay such Lender or the LC Issuer the amount necessary to compensate for any shortfall in the rate of return on the portion of such increased capital which such Lender or the LC Issuer determines is attributable to this Agreement, its Credit Exposure or its Commitment to make Loans and issue or participate in Facility LCs, as the case may be, hereunder (after taking into account such Lender's or the LC Issuer's policies as to capital adequacy). "Change" means (i) any change after the date of this Agreement in the Risk-Based Capital Guidelines (as defined below) or (ii) any adoption of or change in any other law, governmental or quasi-governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not having the force of law) after the date of this Agreement which affects the amount of capital required or expected to be maintained by any Lender or the LC Issuer or any Lending Installation or any corporation controlling any Lender or the LC Issuer. "Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in effect in the U.S. on the date of this Agreement, including transition rules, and (ii) the corresponding capital regulations promulgated by regulatory authorities outside the U.S. implementing the July 1988 report of the Basle Committee on Banking Regulation and Supervisory Practices Entitled "International Convergence of Capital Measurements and Capital Standards," including transition rules, and any amendments to such regulations adopted prior to the date of this Agreement. 3.3. Availability of Types of Advances. If any Lender determines that maintenance of its Eurodollar Loans at a suitable Lending Installation would violate any applicable law, rule, regulation, or directive, whether or not having the force of law, or if the Required Lenders determine that (i) deposits of a type and maturity appropriate to match fund Eurodollar Advances are not available or (ii) the interest rate applicable to Eurodollar Advances does not accurately reflect the cost of making or maintaining Eurodollar Advances, then the Agent shall suspend the availability of Eurodollar Advances and require any affected Eurodollar Advances to be repaid or converted to Floating Rate Advances, subject to the payment of any funding indemnification amounts required by Section 3.4. 3.4. Funding Indemnification. If any payment of a Eurodollar Advance occurs on a date which is not the last day of the applicable Interest Period, whether because of acceleration, prepayment or otherwise, or a Eurodollar Advance is not made on the date specified by a Borrower for any reason other than default by the Lenders, such Borrower will indemnify each Lender for any loss or cost incurred by it resulting therefrom, including, without limitation, any loss or cost in liquidating or employing deposits acquired to fund or maintain such Eurodollar Advance. 3.5. Taxes. (a) All payments by the Borrowers to or for the account of any Lender, the LC Issuer or the Agent hereunder or under any Note or Facility LC Application shall be made free and clear of and without deduction for any and all Taxes. If any Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender, the LC Issuer or the Agent, (a) the sum payable shall be increased as necessary so that after making all required 45 deductions (including deductions applicable to additional sums payable under this Section 3.5) such Lender, the LC Issuer or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (b) such Borrower shall make such deductions, (c) such Borrower shall pay the full amount deducted to the relevant authority in accordance with applicable law and (d) such Borrower shall furnish to the Agent the original copy of a receipt evidencing payment thereof within thirty days after such payment is made. (b) In addition, the Borrowers hereby agree to pay any present or future stamp or documentary taxes and any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or under any Note or Facility LC Application or from the execution or delivery of, or otherwise with respect to, this Agreement or any Note or Facility LC Application ("Other Taxes"). (c) The Borrowers, jointly and severally, hereby agree to indemnify the Agent, the LC Issuer and each Lender for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed on amounts payable under this Section 3.5) paid by the Agent, the LC Issuer or such Lender as a result of its Commitment, any Loans made by it hereunder, any Facility LC issued hereunder or otherwise in connection with its participation in this Agreement and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. Payments due under this indemnification shall be made within thirty days of the date the Agent, the LC Issuer or such Lender makes demand therefor pursuant to Section 3.6. (d) Each Lender that is not incorporated under the laws of the U.S. or a state thereof (each a "Non-U.S. Lender") agrees that it will, not more than ten Business Days after the date of this Agreement, (i) deliver to the Agent two duly completed copies of U.S. Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any U.S. federal income taxes, and (ii) deliver to the Agent a U.S. Internal Revenue Form W-8 or W-9, as the case may be, and certify that it is entitled to an exemption from U.S. backup withholding tax. Each Non-U.S. Lender further undertakes to deliver to each of the Company and the Agent (x) renewals or additional copies of such form (or any successor form) on or before the date that such form expires or becomes obsolete, and (y) after the occurrence of any event requiring a change in the most recent forms so delivered by it, such additional forms or amendments thereto as may be reasonably requested by the Company or the Agent. All forms or amendments described in the preceding sentence shall certify that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any U.S. federal income taxes, unless an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form or amendment with respect to it and such Lender advises the Company and the Agent that it is not capable of receiving payments without any deduction or withholding of U.S. federal income tax. (e) For any period during which a Non-U.S. Lender has failed to provide the Company with an appropriate form pursuant to clause (iv), above (unless such failure is due to a change in treaty, law or regulation, or any change in the interpretation or administration thereof by any governmental authority, occurring subsequent to the date on which a form originally was required to be provided), such Non-U.S. Lender shall not be entitled to indemnification under this Section 3.5 with respect to Taxes imposed by the U.S.; provided that, should a Non-U.S. Lender which is otherwise exempt from or subject to a reduced rate of withholding tax become subject to Taxes because of its failure to deliver a form required under clause (iv), above, the Company 46 shall take such steps as such Non-U.S. Lender shall reasonably request to assist such Non-U.S. Lender to recover such Taxes. (f) Any Lender that is entitled to an exemption from or reduction of withholding tax with respect to payments under this Agreement or any Note pursuant to the law of any relevant jurisdiction or any treaty shall deliver to the Company (with a copy to the Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate. (g) If the U.S. Internal Revenue Service or any other governmental authority of the U.S. or any other country or any political subdivision thereof asserts a claim that the Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered or properly completed, because such Lender failed to notify the Agent of a change in circumstances which rendered its exemption from withholding ineffective, or for any other reason), such Lender shall indemnify the Agent fully for all amounts paid, directly or indirectly, by the Agent as tax, withholding therefor, or otherwise, including penalties and interest, and including taxes imposed by any jurisdiction on amounts payable to the Agent under this subsection, together with all costs and expenses related thereto (including attorneys fees and time charges of attorneys for the Agent, which attorneys may be employees of the Agent). The obligations of the Lenders under this Section 3.5(g) shall survive the payment of the Obligations and termination of this Agreement. 3.6. Lender Statements; Survival of Indemnity. To the extent reasonably possible, each Lender shall designate an alternate Lending Installation with respect to its Eurodollar Loans to reduce any liability of the Borrowers to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar Advances under Section 3.3, so long as such designation is not, in the judgment of such Lender, disadvantageous to such Lender. Each Lender shall deliver a written statement of such Lender to the Borrowers (with a copy to the Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable detail the calculations upon which such Lender determined such amount and shall be final, conclusive and binding on the Borrowers in the absence of manifest error. Determination of amounts payable under such Sections in connection with a Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar Loan through the purchase of a deposit of the type and maturity corresponding to the deposit used as a reference in determining the Eurodollar Rate applicable to such Loan, whether in fact that is the case or not. Unless otherwise provided herein, the amount specified in the written statement of any Lender shall be payable on demand after receipt by the Borrowers of such written statement. The obligations of the Borrowers under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and termination of this Agreement. 3.7. Replacement of Lender. If a Borrower is required pursuant to Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any Lender's obligation to make or continue, or to convert Floating Rate Advances into, Eurodollar Advances shall be suspended pursuant to Section 3.3 (any Lender so affected an "Affected Lender"), the Company may elect, if such amounts continue to be charged or such suspension is still effective, to replace such Affected Lender as a Lender party to this Agreement, provided that, no Default or Unmatured Default shall have occurred and be continuing at the time of such replacement, and provided further that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Company and the Agent shall agree, as of such date, to purchase for cash the Advances and other Obligations due to the Affected Lender pursuant to an Assignment Agreement and to become a Lender for all purposes under this Agreement and to assume all obligations of the Affected Lender to be terminated as of such date and to comply with the requirements of Section 12.3 applicable to assignments, and (ii) the Borrowers shall pay to such Affected Lender in 47 same day funds on the day of such replacement (A) all interest, fees and other amounts then accrued but unpaid to such Affected Lender by the Borrowers hereunder to and including the date of termination, including without limitation payments due to such Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 3.4 had the Loans of such Affected Lender been prepaid on such date rather than sold to the replacement Lender. 3.8 Non-U.S. Reserve Costs or Fees. If any law or any governmental or quasi-governmental rule, regulation, policy, guideline or directive of any jurisdiction outside of the United States of America or any subdivision thereof (whether or not having the force of law), imposes or deems applicable any reserve requirement against or fee with respect to assets of, deposits with or for the account of, or credit extended by, any Lender or any applicable Lending Installation, and the result of the foregoing is to increase the cost to such Lender or applicable Lending Installation of making or maintaining its Loans to any Foreign Borrowing Subsidiary or its Commitment to any Foreign Borrowing Subsidiary or to reduce the return received by such Lender or applicable Lending Installation in connection with such Loans to any Foreign Borrowing Subsidiary or Commitment to any Foreign Borrowing Subsidiary, then, within fifteen days of demand by such Lender, such Foreign Borrowing Subsidiary shall pay such Lender such additional amount or amounts as will compensate such Lender for such increased cost or reduction in amount received, provided that such Foreign Borrowing Subsidiary shall not be required to compensate any Lender for such non-U.S. reserve costs or fees to the extent that an amount equal to such reserve costs or fees is received by such Lender as a result of the calculation of the interest rate applicable to such Loan. ARTICLE IV CONDITIONS PRECEDENT 4.1. Effectiveness. This Agreement will not become effective unless the Loan Parties have satisfied each of the following conditions in a manner satisfactory to the Agent and the Lenders, except such conditions that the Agent has agreed in writing may be satisfied post closing, and with respect to any condition requiring delivery of any agreement, certificate, document, or instrument, the Loan Parties shall have furnished to the Agent sufficient copies of any such agreement, certificate, document, or instrument for distribution to the Lenders. (a) This Agreement or counterparts hereof shall have been duly executed by each Loan Party, the Agent and the Lenders; and the Agent shall have received duly executed copies of the Loan Documents and such other documents, instruments, agreements and legal opinions as the Agent shall reasonably request in connection with the transactions contemplated by this Agreement and the other Loan Documents, each in form and substance reasonably satisfactory to the Agent. (b) Each Loan Party shall have delivered copies of its articles or certificate of incorporation or organization, together with all amendments, and a certificate of good standing, each certified by the appropriate governmental officer in its jurisdiction of incorporation or organization. (c) Each Loan Party shall have delivered copies, certified by its Secretary or Assistant Secretary, of its by-laws or operating or management agreement and of its Board of 48 Directors' resolutions or the resolutions of its members and of resolutions or actions of any other body authorizing the execution of the Loan Documents to which such Loan Party is a party. (d) Each Loan Party shall have delivered an incumbency certificate, executed by its Secretary or Assistant Secretary, which shall identify by name and title and bear the signatures of the Authorized Officers and any other officers such Loan Party authorized to sign the Loan Documents to which such Loan Party is a party, upon which certificate the Agent and the Lenders shall be entitled to rely until informed of any change in writing by such Loan Party. (e) The Company and the Loan Parties shall have delivered a certificate, signed by the chief financial officer of the Company and each other Loan Party, stating that on the initial Credit Extension Date (i) no Default or Unmatured Default has occurred and is continuing, (ii) the representations and warranties contained in Article V are true and correct in all material respects as of such Credit Extension Date, (ii) specifying the deposit account at Bank One which shall be used as the Funding Account and (iii) certifying any other factual matters as may be reasonably requested by the Agent or any Lender. (f) The Loan Parties shall have delivered a written opinion of the Loan Parties' counsel, addressed to the Agent, the LC Issuer and the Lenders in substantially the form of Exhibit D and opinions of counsel to each Foreign Subsidiary Borrower in form and substance acceptable to the Agent as determined in its Permitted Discretion. (g) The Company shall have delivered any Notes requested by a Lender pursuant to Section 2.21 payable to the order of each such requesting Lender. (h) The Company shall have delivered money transfer authorizations as the Agent may have reasonably requested. (i) Each Loan Party shall have delivered duly executed copies of this Agreement and the other Loan Documents to which it is a party. (j) The Agent shall have received a pay-off and assignment letter reasonably satisfactory to the Agent from each Lender exiting the Existing Credit Agreement. (k) The Agent shall have received all Lien and other searches that the Agent deems necessary and Liens creating a first priority security interest in the Collateral in favor of the Agent shall have been perfected. (l) The Company shall have delivered a Borrowing Base Certificate which calculates the Borrowing Base as of the end of the Business Day immediately preceding the Closing Date. (m) The Company shall have delivered to the Agent and the Lenders the unaudited financial statements of the Company and its Subsidiaries for the period ending on June 29, 2003. (n) The Agent shall have completed its business due diligence and the Loan Parties' corporate structure, capital structure, material accounts and governing documents shall be acceptable to the Agent. In addition, the terms and conditions of all Indebtedness of each Loan Party shall be acceptable to Agent. 49 (o) All legal (including tax implications) and regulatory matters, including, but not limited to compliance with applicable requirements of Regulations U, T and X of the Board of Governors of the Federal Reserve System, shall be reasonably satisfactory to the Agent and the Lenders. (p) The Company shall have delivered evidence of insurance coverage in form, scope, and substance reasonably satisfactory to the Agent and otherwise in compliance with the terms of Section 6.7. (q) The Company shall have delivered each Deposit Account Control Agreement required to be provided pursuant to Section 6.14. (r) The Agent shall have determined that (i) since December 29, 2002, there is an absence of any material adverse change or disruption in primary or secondary loan syndication markets, financial markets or in capital markets generally that would likely impair syndication of the Credit Extensions hereunder and (ii) the Loan Parties shall have fully cooperated with the Agent's syndication efforts including, without limitation, by providing the Agent with information regarding the Loan Parties' operations and prospects and such other information as the Agent in its Permitted Discretion deems necessary to successfully syndicate the Credit Extensions hereunder. (s) After giving effect to all Credit Extensions to be made on the Closing Date and payment of all fees and expenses due hereunder, and with all of the Loan Parties' indebtedness, liabilities, and obligations current, the Global Borrowing Base Availability shall not be less than $35,000,000. (t) The Company shall have paid all of the fees and expenses owing to the Agent, the Arranger, the LC Issuer and the Lenders pursuant to Section 2.10, and Section 9.6(a). (u) The Company shall have received proceeds of the Second Secured Notes in an amount equal to at least $72,513,720, upon terms and conditions satisfactory to the Agent and the Lenders. (v) The Company shall have received proceeds of the Third Secured Term Loan in an amount equal to at least $24,250,000. (w) All final Second Secured Debt Documents, Third Secured Term Loan Documents and Fourth Secured Term Loan Documents shall be delivered to the Agent and shall be satisfactory to the Agent. (x) The Loan Parties shall have delivered such other documents as the Agent, the LC Issuer, any Lender or their respective counsel may have reasonably requested. 4.2. Each Credit Extension. Except as otherwise expressly provided herein, the Lenders shall not be required to make any Credit Extension if on the applicable Credit Extension Date: (a) There exists any Default or Unmatured Default or any Default or Unmatured Default shall result from any such Credit Extension and the Agent or the Required Lenders shall have determined not to make any Credit Extension as a result of such Default or Unmatured Default. 50 (b) Any representation or warranty contained in Article V is untrue or incorrect in any material respect as of such Credit Extension Date except to the extent any such representation or warranty is stated to relate solely to an earlier date, and the Agent or the Required Lenders shall have determined not to make any Credit Extension as a result of the fact that such representation or warranty is untrue or incorrect. (c) After giving effect to any Credit Extension, there is no Availability. (d) Any legal matter incident to the making of such Credit Extension shall not be reasonably satisfactory to the Agent, the Lenders and their respective counsel. Each Borrowing Notice or request for issuance of Facility LC with respect to each such Credit Extension shall constitute a representation and warranty by the Company that the conditions contained in Sections 4.2(i) and (ii) have been satisfied. ARTICLE V REPRESENTATIONS AND WARRANTIES Each Loan Party represents and warrants to the Lenders as follows: 5.1. Existence and Standing. Each Loan Party is a corporation, partnership (in the case of Subsidiaries only) or limited liability company duly and properly incorporated or organized, as the case may be, validly existing and (to the extent such concept applies to such entity) in good standing under the laws of its jurisdiction of incorporation or organization and has all requisite corporate, partnership or limited liability company authority, as applicable, to conduct its business in each jurisdiction in which its business is conducted. 5.2. Authorization and Validity. Each Loan Party has the corporate, partnership or limited liability company power, as applicable, and corporate, partnership or limited liability company authority, as applicable, and legal right to execute and deliver the Loan Documents to which it is a party and to perform its obligations thereunder. The execution and delivery by each Loan Party of the Loan Documents to which it is a party and the performance of its obligations thereunder have been duly authorized by proper corporate, partnership or limited liability company proceedings, as applicable, and the Loan Documents to which such Loan Party is a party constitute legal, valid and binding obligations of such Loan Party enforceable against such Loan Party in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium, or similar laws affecting the enforcement of creditors' rights generally and general principles of equity, (whether applied by a court of law or equity) and the discretion of the court before which any proceeding therefore may be brought. 5.3. No Conflict; Government Consent. Neither the execution and delivery by any Loan Party of the Loan Documents to which it is a party, nor the consummation of the transactions therein contemplated, nor compliance with the provisions thereof will violate (i) any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on such Loan Party or (ii) any Loan Party's articles or certificate of incorporation, partnership agreement, certificate of partnership, articles or certificate of organization, by-laws, or operating or other management agreement, as the case may be, or (iii) the provisions of any indenture, instrument or agreement to which any Loan Party is a party or is subject, or by which it, or its Property, is bound, or conflict with or constitute a default thereunder, or result in, or require, the creation or imposition of any Lien in, of or on the Property of such Loan Party pursuant to the terms of any such indenture, instrument or agreement. No order, consent, adjudication, approval, license, 51 authorization, or validation of, or filing, recording or registration with, or exemption by, or other action in respect of any governmental or public body or authority, or any subdivision thereof, which has not been obtained by a Loan Party, is required to be obtained by any Loan Party in connection with the execution and delivery of the Loan Documents, the borrowings under this Agreement, the payment and performance by the Loan Parties of the Obligations or the legality, validity, binding effect or enforceability of any of the Loan Documents, except for such orders, consents, adjudications, etc., which, if not obtained, would not reasonably be expected to have a Material Adverse Effect. 5.4. Security Interest in Collateral. The provisions of this Agreement and the other Loan Documents create legal and valid Liens on all the Collateral in favor of the Agent, for the benefit of the Agent and the Lenders, and such Liens constitute perfected and continuing Liens on the Collateral, securing the Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except in the case of (a) Permitted Liens, to the extent any such Permitted Liens would have priority over the Liens in favor of the Agent pursuant to any applicable law or agreement and (b) Liens perfected only by possession (including possession of any certificate of title) to the extent the Agent has not obtained or does not maintain possession of such Collateral. 5.5 Financial Statements. (a) The audited consolidated financial statements of the Company and its Subsidiaries for the period ending on December 29, 2002 heretofore delivered to the Lenders were prepared in accordance with GAAP (as in effect on the date such statements were prepared) and fairly present in all material respects the consolidated financial condition and operations of the Company and its Subsidiaries at such date and the consolidated results of their operations for the period then ended. The unaudited consolidated financial statements of the Company and its Subsidiaries for the Fiscal Month ended June 29, 2003 heretofore delivered by the Company to the Lenders were prepared in accordance with GAAP (as in effect on the date such statements were prepared except for the presentation of footnotes and for applicable normal year-end audit adjustments) and fairly present in all material respects the consolidated financial condition and operations of the Company and its Subsidiaries at such date and the consolidated results of their operations for the period then ended. (b) The most recent Projections when delivered to the Agent and the Lenders, including Projections delivered pursuant to Section 6.1(d), represent the Company's good faith estimate of the future financial performance of the Company for the period set forth therein and are based on reasonable assumptions, and to the Company's knowledge, the best information available immediately preceding the delivery of such Projections. 5.6. Material Adverse Change. Since December 29, 2002, except as set forth in the Offering Circular, there has been no change in the business, Property, prospects, condition (financial or otherwise) or results of operations of the Loan Parties which could reasonably be expected to have a Material Adverse Effect. 5.7. Taxes. The Loan Parties have filed all U.S. federal tax returns and all other material tax returns which are required to be filed and have paid all taxes due pursuant to said returns or pursuant to any assessment received by any Loan Party, except such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided in accordance with GAAP and as to which no Lien exists. No federal tax liens have been filed and no claims are being asserted with respect to any federal taxes and, as of the Closing Date, no other tax liens have been filed and no claims are being asserted with respect to any such other taxes. The charges, accruals and reserves on the books of the Loan Parties in respect of any taxes or other governmental charges are adequate. 52 5.8. Litigation and Contingent Obligations. Except as set forth on Schedule 5.8, there is no litigation, arbitration, governmental investigation, proceeding or inquiry pending or, to the knowledge of any of their officers, threatened against or affecting any Loan Party which if adversely decided, could reasonably be expected to have a Material Adverse Effect or which seeks to prevent, enjoin or delay the making of any Credit Extensions. Other than any liability incident to any litigation, arbitration or proceeding which (i) if adversely decided, could not reasonably be expected to have a Material Adverse Effect or (ii) is set forth on Schedule 5.8, no Loan Party has any material contingent obligations not provided for or disclosed in the financial statements referred to in Section 5.5. 5.9. Capitalization and Subsidiaries. Schedule 5.9 sets forth (a) a correct and complete list of the name and ownership of each and all of the Company's Subsidiaries as of the Closing Date, (b) the location of the chief executive office of the Company and each of its Subsidiaries and each other location where any of them have maintained their chief executive office in the past five years, (c) a true and complete listing of each class of each of the Company's authorized Capital Stock, of which all of such issued shares are validly issued, outstanding, fully paid and non-assessable, and owned beneficially and of record by the Persons identified on Schedule 5.9, and (d) the type of entity of the Company and each of its Subsidiaries. With respect to each Loan Party, Schedule 5.9 also sets forth as of the Closing Date, the employer or taxpayer identification number of each Loan Party and the organizational identification number issued by each Loan Party's jurisdiction of organization or a statement that no such number has been issued. All of the issued and outstanding Capital Stock owned by any Loan Party has been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and is fully paid and non-assessable. 5.10. ERISA. The Unfunded Liabilities of all Single Employer Plans do not in the aggregate exceed $5,000,000. Neither the Company nor any other member of the Controlled Group has incurred, or is reasonably expected to incur, any withdrawal liability to Multiemployer Plans in excess of $5,000,000 in the aggregate. Each Plan complies in all material respects with all applicable requirements of law and regulations, no Reportable Event has occurred with respect to any Plan which could cause a Material Adverse Effect, neither the Company nor any other member of the Controlled Group has withdrawn from any Plan or initiated steps to do so, and no steps have been taken to reorganize or terminate any Plan which could reasonably be expected to have a Material Adverse Effect. 5.11. Accuracy of Information. The information, exhibits and reports, including without limitation the Offering Circular, furnished by any Loan Party to the Agent or to any Lender in connection with the negotiation of, or compliance with, the Loan Documents do not, taken as a whole, contain any material misstatement of fact or omitted to state a material fact or any fact necessary to make the statements contained therein not misleading. Notwithstanding the foregoing, no representation is made as to any assumptions, estimates, projections or opinions that are, to the Company's knowledge, based on the best information available to the Company as of the date of the relevant disclosure and are reasonable in light of such information. 5.12. Names; Prior Transactions. As of the Closing Date, except as set forth on Schedule 5.12, the Loan Parties have not, during the past five years, been known by or used any other corporate or fictitious name, or been a party to any merger or consolidation, or been a party to any Acquisition. 5.13. Regulation T, U and X. No Loan Party is engaged, nor will it engage, principally or as one of its important activities, in the business of extending credit for the purpose of "purchasing" or "carrying" any Margin Stock. No Loan Party owns any Margin Stock, and none of the proceeds of the Loans or other extensions of credit under this Agreement will be used, directly or indirectly, for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing or retiring any 53 Indebtedness that was originally incurred to purchase or carry any Margin Stock or for any other purpose that might cause any of the Loans or other extensions of credit under this Agreement to be considered a "purpose credit" within the meaning of Regulations T, U or X of the Federal Reserve Board. No Loan Party will take or permit to be taken any action that might cause any Loan Document to violate any regulation of the Federal Reserve Board. 5.14. Material Agreements. No Loan Party is a party to any agreement or instrument or subject to any charter or other corporate restriction which could reasonably be expected to have a Material Adverse Effect. No Loan Party is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement to which it is a party, which default could reasonably be expected to have a Material Adverse Effect. 5.15. Compliance With Laws. The Loan Parties have complied with all applicable statutes, rules, regulations, orders and restrictions of any domestic or foreign government or any instrumentality or agency thereof having jurisdiction over the conduct of their respective businesses or the ownership of their respective Property, except where the failure to comply could not reasonably be expected to have a Material Adverse Effect. 5.16. Ownership of Properties. Except as set forth on Schedule 5.16, on the date of this Agreement, the Loan Parties will have good title, free of all Liens other than those permitted by Section 6.22, to all of the material Property and assets reflected in the Loan Parties' most recent consolidated financial statements provided to the Agent as owned by the Loan Parties. 5.17. Plan Assets; Prohibited Transactions. The Company is not an entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan (within the meaning of Section 4975 of the Code), and neither the execution of this Agreement nor the making of Credit Extensions hereunder gives rise to a prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code. 5.18. Environmental Matters. All representations and warranties made by the Loan Parties in the Environmental Certificate delivered pursuant to this Agreement are true and correct in all material respects. 5.19. Investment Company Act. No Loan Party is an "investment company" or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended. 5.20. Public Utility Holding Company Act. No Loan Party is a "holding company" or a "subsidiary company" of a "holding company", or an "Affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. 5.21. Bank Accounts. As of the Closing Date, Schedule 5.21 contains a complete and accurate list of all bank accounts maintained by each Loan Party with any bank or other financial institution. 5.22. Indebtedness. As of the Closing Date and after giving effect to the Credit Extensions to be made on the Closing Date (if any), the Loan Parties have no Indebtedness, except for (a) the Obligations, and (b) any Indebtedness described on Schedule 5.22. 54 5.23. Affiliate Transactions. Except as set forth on Schedule 5.23, as of the Closing Date, there are no existing or proposed agreements, arrangements, understandings, or transactions between any Loan Party and any of the officers, members, managers, directors, stockholders, parents, other interest holders, employees, or Affiliates (other than Subsidiaries) of any Loan Party or any members of their respective immediate families, and none of the foregoing Persons are directly or indirectly indebted to or have any direct or indirect ownership, partnership, or voting interest in any Affiliate of any Loan Party or any Person with which any Loan Party has a business relationship or which competes with any Loan Party. 5.24. Solvency. (a) Immediately after the consummation of the transactions to occur on the date hereof and immediately following the making of each Credit Extension, if any, made on the date hereof and after giving effect to the application of the proceeds of such Credit Extensions, (a) the fair value of the assets of the Company and its Subsidiaries on a consolidated basis, at a fair valuation, will exceed the debts and liabilities, subordinated, contingent or otherwise, of the Company and its Subsidiaries on a consolidated basis; (b) the present fair saleable value of the Property of the Company and its Subsidiaries on a consolidated basis will be greater than the amount that will be required to pay the probable liability of the Company and its Subsidiaries on a consolidated basis on their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) each the Company and its Subsidiaries on a consolidated basis will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) the Company and its Subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct the businesses in which they are engaged as such businesses are now conducted and are proposed to be conducted after the date hereof. (b) The Company does not intend to, or to permit any of its Subsidiaries to, and does not believe that it or any of its Subsidiaries will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary. 5.25. Common Enterprise. The successful operation and condition of each of the Loan Parties is dependent on the continued successful performance of the functions of the group of the Loan Parties as a whole and the successful operation of each of the Loan Parties is dependent on the successful performance and operation of each other Loan Party. Each Loan Party expects to derive benefit (and its board of directors or other governing body has determined that it may reasonably be expected to derive benefit), directly and indirectly, from (i) successful operations of each of the other Loan Parties and (ii) the credit extended by the Lenders to the Company hereunder, both in their separate capacities and as members of the group of companies. Each Loan Party has determined that execution, delivery, and performance of this Agreement and any other Loan Documents to be executed by such Loan Party is within its purpose, will be of direct and indirect benefit to such Loan Party, and is in its best interest. 5.26. Reportable Transaction. The Company does not intend to treat the Advances and related transactions as being a "reportable transaction" (within the meaning of Treasury Regulation Section 1.6011-4). In the event the Company determines to take any action inconsistent with such intention, it will promptly notify the Agent thereof. 5.27 Borrowing Base. All trade accounts receivable and unbilled receivables of the Company, the U.K. Borrower and Guarantors represented or reported by the Company to be, or are otherwise included in, Eligible Accounts Receivable or Eligible Unbilled Receivables, as the case may be, comply in all respects with the requirements therefor set forth in the definitions thereof, and the computations of 55 the Borrowing Base set forth in each Borrowing Base Certificate are true and correct as of the date of such Borrowing Base Certificate. 5.28 No Default. Neither the Company nor any Subsidiary is in default or has received any written notice of default under or with respect to any of its Contractual Obligations in any respect which is reasonably likely to result in a Material Adverse Effect. No Unmatured Default or Default has occurred and is continuing. 5.29 Intellectual Property. The Company and each of its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, service marks, copyrights, technology, know-how and processes necessary for the conduct of its business as currently conducted (the "Intellectual Property") except for those the failure to own or license which could not reasonably be expected to have a Material Adverse Effect. To the knowledge of the Company, no claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does the Company or any of its Subsidiaries know of any valid basis for any such claim, the use of such Intellectual Property by the Company and each of its Subsidiaries does not infringe on the rights of any Person, and, to the knowledge of the Company, no Intellectual Property has been infringed, misappropriated or diluted by any other Person except for such claims, infringements, misappropriation and dilutions that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 5.30 Labor Matters. There are no strikes or other labor disputes against the Company or any Subsidiary pending or, to the knowledge of the Company, threatened that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect. Hours worked by and payment made to employees of the Company and its Subsidiaries have not been in violation of the Fair Labor Standards Act, if applicable, or any other applicable Requirement of Law dealing with such matters that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect. All payments due from the Company and each of its Subsidiaries on account of employee health and welfare insurance that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect if not paid have been paid or accrued as a liability on the books of the Company and its Subsidiaries. 5.31 Subordinated Debt Documents. All representations and warranties of the Company contained in any Subordinated Debt Document are true and correct in all material respects as of the date such representations and warranties were made. As of the Closing Date, the outstanding principal balance of the Subordinated Notes is $130,000,000, and all agreements, instruments and documents executed or delivered pursuant to the original issuance of the Subordinated Notes are described on Schedule 5.31 hereto. All Secured Obligations are "Senior Indebtedness" and "Designated Senior Indebtedness" as defined in the Subordinated Indenture and are and will be incurred in compliance with the Subordinated Indenture. This Agreement and the other Loan Documents are the "Senior Credit Facility" as defined in the Subordinated Indenture. Other than the Secured Obligations, the Second Secured Debt, the Third Secured Term Loan Debt and the Fourth Secured Term Loan Debt there is no other "Designated Senior Indebtedness" thereunder. All Secured Obligations, up to the full amount of the Aggregate Commitments, are incurred pursuant to Section 4.3(b)(i) of the Subordinated Note Indenture and do not need to meet the requirements of Section 4.3(a). There is no event of default or event or condition which would become an event of default with notice or lapse of time or both, under the Subordinated Debt Documents and each of the Subordinated Debt Documents is in full force and effect. Other than pursuant to the Subordinated Debt Documents, there is no obligation pursuant to any Subordinated Debt Document or other document or agreement evidencing or relating to any Subordinated Debt outstanding or to be outstanding on the Closing Date which obligates the Company or any of its Subsidiaries to pay any principal or interest or redeem any of its Capital Stock or incur any other monetary obligation, and the 56 Subordinated Notes and any other promissory note or other instrument evidencing any Subordinated Debt issued at any time pursuant to the Subordinated Debt Documents are and will be "Securities" as defined in the Subordinated Indenture. 5.32 Fourth Secured Term Loan Debt Documents. As of the Closing Date, the outstanding principal balance of the Fourth Secured Term Loan Debt equals $17,084,162.13, the Fourth Secured Term Loan Debt consists of $14,692,379.43 in principal owing by the Company and $2,391,782.70 owing by the U.K. Borrower, and all agreements, instruments and documents executed or delivered pursuant to or in connection with the Fourth Secured Term Loan Debt are described on Schedule 5.32 hereto. All Fourth Secured Term Loan Debt is incurred in full compliance with the Subordinated Debt Documents and the Fourth Secured Term Loan Debt Documents and does not cause any default thereunder. All Liens securing the Fourth Secured Term Loan Debt are subordinate and junior in priority to all Liens in favor of the Agent securing the Secured Obligations under the Intercreditor Agreement. No Liens securing the Fourth Secured Term Loan Debt exist on any Property of the Company or any its Subsidiaries on which the Agent does not have an enforceable, perfected Lien under the Collateral Documents securing the Secured Obligations. No event of default or event or condition which would become an event of default with notice or lapse of time or both, exists under the Fourth Secured Term Loan Debt Documents and each of the Fourth Secured Term Loan Debt Documents is in full force and effect. Other than the obligation to pay principal and interest at final maturity (whether at stated maturity or upon acceleration) and to accrue (but not pay) interest prior to final maturity under the Fourth Secured Term Loan Debt Documents, there is no obligation pursuant to any Fourth Secured Term Loan Debt Document which obligates the Company or any of its Subsidiaries to pay any principal or interest, redeem any of its Capital Stock, pay any fees or other consideration of any kind or incur any other payment obligation or liability, other than customary expenses in connection with closing and documenting the Fourth Secured Term Loan Debt, enforcement of the Fourth Secured Term Loan Debt Documents and customary indemnities in loan documents. All representations and warranties of the Company and its Subsidiaries contained in any Fourth Secured Term Loan Debt Document are true and correct in all material respects as of the date such representations and warranties were made. 5.33 Third Secured Term Loan Debt Documents. As of the Closing Date, the outstanding principal balance of the Third Secured Term Loan Debt equals $25,000,000, the Third Secured Term Loan Debt consists of $21,500,000 in principal owing by the Company and $3,500,000 owing by the U.K. Borrower, the non-default interest rate applicable to the Third Secured Term Loan Debt will not exceed 11.5% per annum and all agreements, instruments and documents executed or delivered pursuant to or in connection with the Third Secured Term Loan Debt are described on Schedule 5.33 hereto. All Third Secured Term Loan Debt is incurred in full compliance with the Subordinated Debt Documents and the Third Secured Term Loan Debt Documents and does not cause any default thereunder. All Liens securing the Third Secured Term Loan Debt are subordinate and junior in priority to all Liens in favor of the Agent securing the Secured Obligations under the Intercreditor Agreement. No Liens securing the Third Secured Term Loan Debt exist on any Property of the Company or any its Subsidiaries on which the Agent does not have an enforceable, perfected Lien under the Collateral Documents securing the Secured Obligations. No event of default or event or condition which would become an event of default with notice or lapse of time or both, exists under the Third Secured Term Loan Debt Documents and each of the Third Secured Term Loan Debt Documents is in full force and effect. Other than the obligation to pay principal at final maturity (whether at stated maturity or upon acceleration), to pay interest semi-annually prior to final maturity under the Third Secured Term Loan Debt Documents, issue stock purchase warrants for the purchase of its common Capital Stock and to pay a placement fee of $750,000, there is no obligation pursuant to any Third Secured Term Loan Debt Document which obligates the Company or any of its Subsidiaries to pay any principal or interest, redeem any of its Capital Stock, pay any fees or other consideration of any kind or incur any other payment obligation or liability, other than customary expenses in connection with closing and documenting the Third Secured Term Loan Debt, 57 enforcement of the Third Secured Term Loan Debt Documents and customary indemnities in loan documents. All representations and warranties of the Company and its Subsidiaries contained in any Third Secured Term Loan Debt Document are true and correct in all material respects as of the date such representations and warranties were made. 5.34 Second Secured Debt Documents. All representations and warranties of the Company contained in any Second Secured Debt Document are true and correct in all material respects as of the date such representations and warranties were made. As of the Closing Date, the outstanding principal balance of the Second Secured Notes is $75,500,000, the Second Secured Notes consist of $64,930,000 in principal owing by the Company and $10,570,000 owing by the U.K. Borrower, and all agreements, instruments and documents executed or delivered pursuant to the original issuance of the Second Secured Notes are described on Schedule 5.34 hereto. 75,500 units of Second Secured Debt have been issued at a price of $991.44 per unit. All Secured Obligations are and will be incurred in compliance with the Second Secured Indenture. This Agreement and the other Loan Documents are the "Senior Credit Facility" as defined in the Second Secured Indenture. All Secured Obligations, up to the full amount of the Aggregate Commitments, are incurred pursuant to Section 4.3(b)(1) and (9) of the Second Secured Note Indenture and do not need to meet the requirements of Section 4.3(a). All Liens securing the Second Secured Debt are subordinate and junior in priority to all Liens in favor of the Agent securing the Secured Obligations under the Intercreditor Agreement. No Liens securing the Second Secured Debt exist on any Property of the Company or any its Subsidiaries on which the Agent does not have an enforceable, perfected Lien under the Collateral Documents securing the Secured Obligations. There is no event of default or event or condition which would become an event of default with notice or lapse of time or both, under the Second Secured Debt Documents and each of the Second Secured Debt Documents is in full force and effect. Other than pursuant to the Second Secured Debt Documents, there is no obligation pursuant to any Second Secured Debt Document or other document or agreement evidencing or relating to any Second Secured Debt outstanding or to be outstanding on the Closing Date which obligates the Company or any of its Subsidiaries to pay any principal or interest or redeem any of its Capital Stock or incur any other monetary obligation. ARTICLE VI COVENANTS Each Loan Party executing this Agreement jointly and severally agrees as to all Loan Parties that from and after the date hereof and until the Termination Date: 6.1. Financial and Collateral Reporting. Each Loan Party will maintain, for itself and each Subsidiary, a system of accounting established and administered in accordance with GAAP, and will furnish to the Lenders: (a) within ninety five days after the close of each Fiscal Year of the Company and its Subsidiaries, an unqualified audit report certified by independent certified public accountants acceptable to the Lenders, prepared in accordance with GAAP on a consolidated basis, including balance sheets as of the end of such Fiscal Year, related profit and loss and reconciliation of surplus statements, and a statement of cash flows, accompanied by (i) any management letter prepared by said accountants, (ii) a certificate of said accountants that, in the course of their examination necessary for their certification of the foregoing, they have obtained no knowledge of any Default or Unmatured Default, or if, in the opinion of such accountants, any Default or Unmatured Default shall exist, stating the nature and status thereof, and (iii) a letter from said 58 accountants addressed to the Lenders acknowledging that the Lenders are extending credit in primary reliance on such financial statements and authorizing such reliance; (b) within fifty days after the close of the first three Fiscal Quarters of each Fiscal Year of the Company and its Subsidiaries, consolidated unaudited balance sheets of the Company and its Subsidiaries and of its Unrestricted Subsidiaries as at the close of each such Fiscal Quarter and consolidated profit and loss and reconciliation of surplus statements and a statement of cash flows of the Company and its Subsidiaries and of its Unrestricted Subsidiaries for the period from the beginning of the applicable Fiscal Year to the end of such Fiscal Quarter, all certified by its chief financial officer and prepared in accordance with GAAP (except for exclusion of footnotes and subject to normal year-end audit adjustments); (c) within twenty-five days after the close of each Fiscal Month, other than any Fiscal Month which is also the end of one of the first three Fiscal Quarters, of the Company and its Subsidiaries, consolidated unaudited balance sheets as at the close of each such Fiscal Month and consolidated profit and loss and reconciliation of surplus statements and a statement of cash flows for the period from the beginning of the applicable Fiscal Year to the end of such Fiscal Month, all prepared in accordance with GAAP (except for exclusion of footnotes and subject to normal year-end audit adjustments) and certified by its chief financial officer; (d) Prior to the beginning of each Fiscal Year of the Company, but not more than ninety days prior thereto, a copy of the plan and forecast (including a projected consolidated and consolidating balance sheet, income statement and funds flow statement) and budget of the Company for such Fiscal Year (the "Projections") in form reasonably satisfactory to the Agent; (e) together with each of the financial statements required under Sections 6.1(a) and (b), a compliance certificate in substantially the form of Exhibit E (a "Compliance Certificate") signed by the chief financial officer of the Company showing the calculations necessary to determine compliance with this Agreement and stating that no Default or Unmatured Default exists, or if any Default or Unmatured Default exists, stating the nature and status thereof; (f) as soon as available but in any event within twenty five days of the end of each calendar month, and at such other times as may be requested by the Agent, as of the period then ended, a Borrowing Base Certificate and supporting information in connection therewith; (g) as soon as available but in any event within 25 days of the end of each Fiscal Month and at such other times as may be requested by the Agent, as of the period then ended: (i) a detailed aged trial balance of the Company's Accounts (1) specifying the name, address (if requested), and balance due for each Account Debtor and (2) reconciled to the Borrowing Base Certificate delivered as of such date prepared in a manner reasonably acceptable to the Agent; (ii) a worksheet of calculations prepared by the Company to determine Eligible Accounts and Eligible Unbilled Accounts, such worksheets detailing the Accounts excluded from Eligible Accounts and Eligible Unbilled Accounts and the reason for such exclusion; 59 (iii) a reconciliation of the Company's Accounts between the amounts shown in the Company's books and financial statements and the reports delivered pursuant to clauses (i) and (ii) above; and (iv) a schedule and aging of the Company's accounts payable; (h) promptly upon the Agent's request: (i) copies of invoices in connection with the invoices issued by the Company in connection with any Accounts, credit memos, shipping and delivery documents, and other information related thereto; and (ii) a schedule detailing the balance of all intercompany accounts of the Loan Parties; (i) as soon as available but in any event on the third Business Day after the end of each week for the most recently ended week, a summary report indicating collections for such week in a form provided by the Agent at least one week prior to the date such report is required; (j) after a Borrowing Base Availability Deficiency Event, as soon as available but in any event on the third Business Day after the end of each week for the most recently ended week, an update on the amount of all Eligible Accounts and Eligible Unbilled Accounts and such other information with respect thereto as required by the Agent; (k) on the first Business Day of the month of March, a certificate of good standing for the Company and each Domestic Subsidiary from the appropriate governmental officer in its jurisdiction of incorporation, formation, or organization; (l) as soon as possible and in any event within five days after the Company knows that any Reportable Event has occurred with respect to any Plan, a statement, signed by the chief financial officer of the Company, describing said Reportable Event and the action which the Company proposes to take with respect thereto; (m) as soon as possible and in any event within ten days after receipt by any Loan Party, a copy of (i) any notice or claim to the effect that any Loan Party is or may be liable to any Person as a result of the release by any Loan Party, or any other Person of any toxic or hazardous waste or substance into the environment, and (ii) any notice alleging any violation of any federal, state or local environmental, health or safety law or regulation by the any Loan Party which could have a Material Adverse Effect; (n) concurrently with the furnishing thereof to the shareholders of the Company, copies of all financial statements, reports and proxy statements so furnished; (o) promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports which any Loan Party files with the Securities and Exchange Commission; (p) within ninety five days after the close of each Fiscal Year of the Company and its Subsidiaries and within fifty days after the close of the first three Fiscal Quarters of each Fiscal Year of the Company and its Subsidiaries, consolidating financial statements of the Company and its Subsidiaries and of its Unrestricted Subsidiaries consistent with the consolidating financial statements that have been included in the Company's 10-Q and 10-K reports filed with the Securities and Exchange Commission together with such additional detail in connection therewith requested by the Agent, all certified by its chief financial officer and prepared in accordance with 60 GAAP (except for exclusion of footnotes and subject to normal year-end audit adjustment in the case of such quarterly reports); (q) simultaneously with their delivery under the Second Secured Debt Documents, the Third Secured Term Loan Debt Documents or the Fourth Secured Term Loan Debt Documents, any notice or other documentation delivered to the holders of the debt under those agreements pursuant to the Second Secured Debt Documents, the Third Secured Term Loan Debt Documents or the Fourth Secured Term Loan Debt Documents; and (r) such other information (including non-financial information) as the Agent or any Lender may from time to time reasonably request, including without limitation any tax returns, any statements of the Unfunded Liabilities of each Single Employer Plan certified by an actuary enrolled under ERISA and any annual report or other filing with respect to any Plan filed with the PBGC, the U.S. Internal Revenue Service or any other governmental entity. Documents required to be delivered pursuant to Section 6.1(a), (b) or (c) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Company posts such documents, and provides a link thereto on the Company's website on the Internet address www.msxi.com or (ii) on which such documents are posted on the Company's behalf on Intralinks/IntraAgency or another relevant website, if any, to which each Lender and the Agent have access (whether a commercial, third-party website or whether sponsored by the Agent); provided that, (1) the Company shall deliver copies of such documents to the Agent or any Lender that reasonably requests that the Company deliver paper copies of such documents until a written request to cease delivering paper copies is given by the Agent or such Lender and (2) the Company shall notify (which may be by facsimile or electronic mail) the Agent and each Lender of the posting of any such documents and provide to the Agent by electronic mail electronic versions (i.e. soft copies) of such documents. Notwithstanding the foregoing, in every instance, the Company shall be required to provide paper copies of the Compliance Certificates required by Section 6.1(e) to the Agent and each of the Lenders. Except for such Compliance Certificates, the Agent shall have no obligations to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Company with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents. 6.2. Use of Proceeds. (a) The Borrowers will use the proceeds of the Credit Extensions for general corporate purposes (not otherwise prohibited by this Agreement). (b) The Borrowers will not, nor will it permit any Loan Party to, use any of the proceeds of the Credit Extensions to (i) purchase or carry any Margin Stock in violation of Regulation T, U, or X, (ii) repay or refinance any Indebtedness of any Person incurred to buy or carry any Margin Stock, (iii) acquire any security in any transaction that is subject to Section 13 or Section 14 of the Securities Exchange Act of 1934 (and the regulations promulgated thereunder), or (iv) make any Acquisition. 6.3. Notices. Each Loan Party will give prompt notice in writing to the Agent and the Lenders of: (a) the occurrence of any Default or Unmatured Default; 61 (b) any other development, financial or otherwise, which could reasonably be expected to have a Material Adverse Effect; (c) the assertion by the holder of any Capital Stock of any Loan Party or the holder of any Indebtedness of any Loan Party in excess of $5,000,000 that any default exists with respect thereto or that any Loan Party is not in compliance therewith; (d) receipt of any written notice that any Loan Party is subject to any investigation by any governmental entity with respect to any potential or alleged violation of any applicable Environmental Law which could reasonably be expected to have a Material Adverse Effect or of the imposition of any Lien against any Property of any Loan Party that is not a Permitted Lien; (e) receipt of any notice of litigation commenced or threatened against any the Company or any of its Subsidiaries that (i) seeks damages which could reasonably be expected to exceed $1,000,000 if such litigation were adversely decided against the a Loan Party, (ii) seeks injunctive relief which could reasonably be expected to have a Material Adverse Effect, (iii) is asserted or instituted against any ERISA Plan, its fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan Party, or (v) alleges the violation of any law regarding, or seeks remedies in connection with, any Environmental Laws which could reasonably be expected to have a Material Adverse Effect; (f) any Lien (other than Permitted Liens) or claim made or asserted against any of the Collateral; (g) its decision to change, (i) such Loan Party's name or type of entity, (ii) such Loan Party's articles or certificate of incorporation, partnership agreement, certificate of partnership, articles or certificate of organization, by-laws, or operating or other management agreement, and (iii) the location where any Collateral is held or maintained; provided that, in no event shall the Agent receive notice of such change less than thirty days prior thereto; (h) commencement of any proceedings contesting any tax, fee, assessment, or other governmental charge in excess of $1,000,000; (i) the opening of any new deposit account by any Loan Party with any bank or other financial institution other than the Agent; (j) any loss, damage, or destruction to the Collateral in the amount of $1,000,000 or more, whether or not covered by insurance, (k) any and all default notices received under or with respect to any leased location or public warehouse where any record of any material portion of Collateral is located (which shall be delivered within two Business Days after receipt thereof), (l) the fact that such Loan Party has entered into a Rate Management Transaction or an amendment to a Rate Management Transaction, together with copies of all agreements evidencing such Rate Management Transactions or amendments thereto (which shall be delivered within two Business Days); (m) immediately after becoming aware of any pending or threatened strike, work stoppage, unfair labor practice claim, or other labor dispute affecting the Borrower or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect; and 62 (n) any other matter as Agent may reasonably request. 6.4. Conduct of Business. Each Loan Party will, and will cause each of its Subsidiaries to: (a) carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted; (b) do all things necessary to remain duly incorporated or organized, validly existing and (to the extent such concept applies to such entity) in good standing as a domestic corporation, partnership or limited liability company in its jurisdiction of incorporation or organization, as the case may be except as permitted in this Agreement, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted except as permitted in this Agreement; (c) keep adequate books and records with respect to its business activities in which proper entries, reflecting all financial transactions, are made in accordance with GAAP and on a basis consistent with the Financial Statements delivered to the Agent pursuant to Section 4.1(m) (d) at all times maintain, preserve and protect all of its assets and properties used or useful in the conduct of its business, and keep the same in good repair, working order and condition in all material respects (taking into consideration ordinary wear and tear) and from time to time make, or cause to be made, all necessary or appropriate repairs, replacements and improvements thereto consistent with industry practices; and (e) transact business only in such corporate and trade names as are set forth in Schedule 5.12 or as otherwise set forth in a written notice to the Agent in compliance with the terms of this Agreement. 6.5. Taxes. Each Loan Party will, and will cause each of its Subsidiaries to timely file complete and correct U.S. federal and applicable foreign, state and local tax returns required by law and pay when due all taxes, assessments and governmental charges and levies upon it or its income, profits, Property or Collateral, except those which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside in accordance with GAAP. 6.6. Payment of Indebtedness and Other Liabilities. Each Loan Party will, and will cause each of its Subsidiaries to, pay or discharge when due all Indebtedness permitted by Section 6.17 owed by such Loan Party and all other liabilities and obligations due to materialmen, mechanics, carriers, warehousemen, and landlords, except that the Loan Parties and their Subsidiaries may in good faith contest, by appropriate proceedings diligently pursued, any such obligations; provided that, (a) adequate reserves have been set aside for such liabilities in accordance with GAAP, (b) the failure to make payment pending such contest could not reasonably be expected to have a Material Adverse Effect, (c) the amount of such contested obligation, if required to be paid, could not reasonably be expected to have a Material Adverse Effect, (d) no Lien shall be imposed on any Accounts of any Loan Party or Capital Stock of any Subsidiary to secure payment of such liabilities that is superior to the Agent's Liens securing the Secured Obligations on any Accounts of any Loan Party or Capital Stock of any Subsidiary, (e) such contest effectively suspends collection of the contested obligation and the enforcement of any Lien securing such obligation, (f) none of the Collateral becomes subject to forfeiture or loss as a result of the contest and (g) such Loan Party or Subsidiary shall promptly pay or discharge such contested liabilities, if any, and shall deliver to the Agent evidence reasonably acceptable to the Agent of such compliance, 63 payment or discharge, if such contest is terminated or discontinued adversely to such Loan Party or Subsidiary or the conditions set forth in this proviso are no longer met. 6.7. Insurance. (a) Each Loan Party will, and will cause each of its Subsidiaries, at all times maintain, with financially sound and reputable carriers having a Financial Strength rating of at least A+ by A.M. Best Company, insurance against: (i) loss or damage by fire and loss in transit; (ii) theft, burglary, pilferage, larceny, embezzlement, and other criminal activities; (iii) business interruption; (iv) general liability and (v) and such other hazards, as is customary in the business of such Loan Party. All such insurance shall be in amounts and under policies as is customary in the business of such Loan Party and shall be acceptable to the Agent in its Permitted Discretion. In the event any Collateral is located in any area that has been designated by the Federal Emergency Management Agency as a "Special Flood Hazard Area", the applicable Loan Party shall purchase and maintain flood insurance on such Collateral (including any personal Property which is located on any real Property leased by such Loan Party within a "Special Flood Hazard Area"). The amount of all insurance required by this Section shall at a minimum comply with applicable law, including the Flood Disaster Protection Act of 1973, as amended. All premiums on such insurance shall be paid when due by the applicable Loan Party, and copies of the policies delivered to the Agent upon the request of the Agent. If any Loan Party fails to obtain any insurance as required by this Section, the Agent at the direction of the Required Lenders following notice to such Loan Party, may obtain such insurance at the Company' expense. By doing so, the Agent shall not be deemed to have waived any Default or Unmatured Default arising from any Loan Party's failure to maintain such insurance or pay any premiums therefor. No Loan Party will use or permit any Property to be used in violation of applicable law or in any manner which might render inapplicable any insurance coverage. (b) All insurance policies required under Section 6.7(a) shall name the Agent (for the benefit of the Agent and the Lenders) as an additional insured or as a lender loss payee, as applicable, and shall provide that, or contain a lender loss payable clauses or mortgagee clauses, in form and substance satisfactory to the Agent, which provide that: (i) all proceeds thereunder with respect to any Collateral shall be payable to the Agent; (ii) no such insurance shall be affected by any act or neglect of the insured or owner of the Property described in such policy; and (iii) such policy and loss payable clauses may be canceled, amended, or terminated only upon at least thirty days prior written notice given to the Agent. (c) Notwithstanding the foregoing, any insurance or condemnation proceeds received by the Loan Parties shall be immediately forwarded to the Agent and the Agent may, at its option, apply any such proceeds to the reduction of the Obligations in accordance with Section 2.15, provided that in the case of insurance proceeds pertaining to any Loan Party other than the Company, such insurance proceeds shall be applied to the Loans owing by the Company. The Agent may permit or require any Loan Party to use such money, or any part thereof, to replace, repair, restore or rebuild the Collateral in a diligent and expeditious manner with materials and workmanship of substantially the same quality as existed before the loss, damage or destruction. Notwithstanding the foregoing, if the casualty giving rise to such insurance proceeds could not reasonably be expected to have a Material Adverse Effect and such insurance proceeds 64 do not exceed $1,000,000 in the aggregate, upon the applicable Loan Party's request, the Agent shall permit such Loan Party to replace, restore, repair or rebuild the property; provided that, if such Loan Party has not completed or entered into binding agreements to complete such replacement, restoration, repair or rebuilding within 90 days of such casualty, the Agent may apply such insurance proceeds to the Obligations in accordance with Section 2.15. All insurance proceeds that are to be made available to the Company to replace, repair, restore or rebuild the Collateral shall be applied by the Agent to reduce the outstanding principal balance of the Revolving Loans (which application shall not result in a permanent reduction of the Commitment) and upon such application, the Agent shall establish a Reserve against the Borrowing Base in an amount equal to the amount of such proceeds so applied, provided such Reserve shall be removed if the related replacement, restoration, repair or rebuilding is completed or, with the consent of the Agent, the Company determines not to be complete the related replacement, restoration, repair or rebuilding. All insurance proceeds made available to any Loan Party that is not a Company to replace, repair, restore or rebuild Collateral shall be deposited in a cash collateral account. Thereafter, such funds shall be made available to the applicable Loan Party to provide funds to replace, repair, restore or rebuild the Collateral as follows: (i) Company shall request a Revolving Loan or Company shall request a release from the cash collateral account be made to the applicable Loan Party in the amount requested to be released; (ii) so long as the conditions set forth in Section 4.2 have been met, the Lenders shall make such Revolving Loan or Agent shall release funds from the cash collateral account; and (iii) in the case of insurance proceeds applied against the Revolving Loan, the Reserve established with respect to such insurance proceeds shall be reduced by the amount of such Revolving Loan. 6.8. Compliance with Laws. Each Loan Party, and will cause each of its Subsidiaries to comply with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject including, without limitation, all Environmental Laws, except where the failure to comply would not result in a Material Adverse Effect. 6.9. Maintenance of Properties and Intellectual Property Rights. Each Loan Party, and will cause each of its Subsidiaries to do all things necessary to (i) maintain, preserve, protect and keep its Property in good repair, working order and condition, and make all necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times and (ii) obtain and maintain in effect at all times all material franchises, governmental authorizations, Intellectual Property Rights, licenses and permits, which are necessary for it to own its Property or conduct its business as conducted on the Closing Date. 6.10. Inspection. Each Loan Party, and will cause each of its Subsidiaries to permit the Agent and the Lenders, by their respective employees, representatives and agents, from time to time upon two Business Days' prior notice as frequently as Agent reasonably determines to be appropriate, to (a) inspect any of the Property, the Collateral, and the books and financial records of such Loan Party, (b) examine, audit and make extracts or copies of the books of accounts and other financial records of such Loan Party, (c) have access to its properties, facilities, the Collateral and its advisors, officers, directors and employees to discuss the affairs, finances and accounts of such Loan Party and (d) review, evaluate and make test verifications and counts of the Accounts and other Collateral of such Loan Party. If a Default has occurred and is continuing, each Loan Party shall provide such access to the Agent and to each 65 Lender at all times and without advance notice. Furthermore, so long as any Default has occurred and is continuing, each Loan Party shall provide the Agent and each Lender with access to its suppliers and customers. Each Loan Party shall promptly make available to the Agent and its counsel originals or copies of all books and records that the Agent may reasonably request. The Loan Parties acknowledge that from time to time the Agent may prepare and may distribute to the Lenders certain audit reports pertaining to the Loan Parties' assets for internal use by the Agent and the Lenders from information furnished to it by or on behalf of the Loan Parties, after the Agent has exercised its rights of inspection pursuant to this Agreement. 6.11. Negative Pledge Limitation. The Company will not, nor will it permit any Subsidiary to, enter into any agreement, including without limitation any amendments to existing agreements, with any Person other than the Lenders pursuant hereto which prohibits or limits the ability of the Company or any Subsidiary to create, incur, assume or suffer to exist any Lien in favor of the Agent and the Lenders securing the Secured Obligations upon any of its assets, rights, revenues or property, real, personal or mixed, tangible or intangible, whether now owned or hereafter acquired, except for such restrictions on (i) a Foreign Subsidiary with respect to Indebtedness of a Foreign Subsidiary permitted pursuant to Section 6.17(i) and which restrictions are customary in agreements of such type and would not be inconsistent with any of the terms of this Agreement; (ii) relating to Indebtedness of a Subsidiary and existing at the time it became a Subsidiary if such restriction was not created in connection with or in anticipation of the transaction or series of transactions pursuant to which such Subsidiary became a Subsidiary or was acquired by the Company or any Subsidiary, (iii) which result from the refinancing of Indebtedness incurred pursuant to an agreement referred to in the immediately preceding clause (ii) above, provided that such restriction is no less favorable to the Lenders than those under the agreement evidencing the Indebtedness so refinanced, (iv) relating to Indebtedness that is permitted to be incurred and secured pursuant to this Agreement that limit the right of the debtor to dispose of the property or assets securing such Indebtedness, (v) encumbering property or assets at the time such property or assets were acquired by the Company or any Subsidiary, so long as such restriction relates solely to the property or assets so acquired and was not created in connection with or in anticipation of such acquisition, (vi) resulting from customary provisions restricting subletting or assignment of leases or customary provisions in other agreements that restrict assignment of such agreements or rights thereunder or (vii) customary restrictions contained in asset sale agreements limiting the transfer of such property pending the closing of such sale. 6.12. Communications with Accountants. Each Loan Party executing this Agreement authorizes (a) Agent and (b) so long as a Default has occurred and is continuing, each Lender, to communicate directly with its and its Subsidiaries' independent certified public accountants and authorizes and shall instruct those accountants and advisors to communicate to Agent and each Lender information relating to any Loan Party with respect to the business, results of operations and financial condition of any Loan Party. 6.13. Collateral Access Agreements and Real Estate Purchases. Upon the request of the Agent, each Loan Party shall use commercially reasonable efforts to obtain a Collateral Access Agreement from the lessor of each leased property, mortgagee of owned property or bailee with respect to any warehouse or other location where any books and records of a material portion of the Collateral are stored or located, unless the Agent has obtained a Collateral Access Agreement from the lessor of leased property or mortgagee of owned property or bailee where back up books and records exist for such books and records. Each Loan Party shall timely and fully pay and perform its obligations under all leases and other agreements with respect to each leased location or third party warehouse where any Collateral is or may be located except where such obligations are being contested in good faith. To the extent permitted hereunder, if any Loan Party proposes to acquire a fee ownership interest in real Property after the Closing Date and is required to grant a Lien on such real Property under this Agreement, it shall first provide to Agent a mortgage or deed of trust granting Agent a first priority Lien on such real Property, 66 together with environmental audits, mortgage title insurance commitment, real property survey, local counsel opinion(s), and, if required by the Agent, supplemental casualty insurance and flood insurance, and such other documents, instruments or agreements reasonably requested by Agent, in each case, in form and substance reasonably satisfactory to the Agent. 6.14. Deposit Account Control Agreements. The Loan Parties will provide to the Agent upon the Agent's request, a Deposit Account Control Agreement duly executed on behalf of each financial institution holding a deposit account of a Loan Party as set forth in the Security Agreement; provided that, the Agent may, in its discretion, defer delivery of any such Deposit Account Control Agreement, establish a Reserve with respect to any deposit account for which the Agent has not received such Deposit Account Control Agreement, and require the Loan Party to open and maintain a new deposit account with a financial institution subject to a Deposit Account Control Agreement. 6.15. Additional Collateral; Further Assurances. (a) Subject to applicable law, each Loan Party shall, unless the Required Lenders otherwise consent, (i) cause each of its Domestic Subsidiaries to become or remain a Loan Party and a Guarantor and (ii) cause each of its Domestic Subsidiaries formed or acquired after the Closing Date in accordance with the terms of this Agreement to (1) become a party to this Agreement by executing a Joinder Agreement, and (2) guarantee payment and performance of the Guaranteed Obligations pursuant to the Guaranty. Upon execution and delivery of such Loan Documents and other instruments, certificates, and agreements requested by the Agent, each such Domestic Subsidiary shall automatically become a Guarantor and Loan Party hereunder and thereupon shall have all of the rights, benefits, duties, and obligations in such capacity under the Loan Documents. (b) To secure the payment when due of the Secured Obligations, the Borrowers and each Guarantor shall execute and deliver, or cause to be executed and delivered, to the Lenders and the Agent Collateral Documents, including without limitation such documents as the Agent may reasonably deem necessary and deliver such property, documents, and instruments as the Agent may request to perfect the Liens of the Agent in any Property of such Loan Party which constitutes Collateral, including any parcel of real Property located in the U.S. owned by any Loan Party, granting the following: (i) Security interests in all present and future accounts, inventory, equipment, chattel paper, instruments, investment property, documents, general intangibles, fixtures and all other personal property of the Company and each Domestic Subsidiary, excluding the following (the following described assets in this parenthetical are defined as the "Excluded Collateral"), so long as no holder of the Second Secured Debt, the Third Secured Term Loan Debt or the Fourth Secured Term Loan Debt requests or receives liens or security interests on such assets: (A) motor vehicles, instruments and chattel paper with an aggregate fair market value for all of the foregoing less than $1,000,000, (B) real property leases, (C) any other real property with an aggregate fair market value (when combined with all such other real property) less than $1,000,000 (provided that the Company represents that as of the Closing Date all real property owned by the Loan Parties has an aggregate fair market value of less than $1,000,000) and (D) rights arising under any contracts or licenses (other than, in each of the foregoing cases, any right to receive payment) as to which a grant of a security interest would constitute a violation of a valid and enforceable restriction in favor of a third party on such grant, unless and until any required consents shall have been obtained, provided that the 67 Company shall notify the Agent of any such restriction and shall use all reasonable efforts to obtain any required consent to the extent requested by the Agent; and (ii) Upon request of the Agent, (A) the Borrowers and the Guarantors shall execute and deliver such agreements and documents reasonably requested by the Agent to grant a first priority lien and security interest on all real property owned by the Borrowers and the Guarantors (other than Excluded Collateral), (B) each Foreign Borrowing Subsidiary shall execute and deliver all agreements and documents reasonably requested by the Agent to grant a first priority lien and security interest on all assets owned by such Foreign Borrowing Subsidiary, to secure the Secured Obligations of such Foreign Borrowing Subsidiary, unless it is prohibited by applicable law or existing contractual restrictions from doing so or it is reasonably determined by the Agent to be impractical or unreasonably costly, (C) each parent corporation of a Foreign Subsidiary Borrower and Subsidiary of such Foreign Subsidiary Borrower or parent that is organized under the same jurisdiction as such Foreign Subsidiary Borrower or other Foreign Subsidiary requested by the Agent will execute a Guaranty with respect to the Secured Obligations of such Foreign Borrowing Subsidiary and will execute and deliver all agreements and documents reasonably requested by the Agent to grant a first priority lien and security interest on all of its assets to secure such Guaranty, unless it is prohibited by applicable law or existing contractual restrictions from doing so or it is reasonably determined by the Agent to be impractical or unreasonably costly or such Foreign Subsidiary is inactive and does not have any material assets as determined by the Agent, and (D) if requested by the Agent, each Foreign Borrowing Subsidiary and its parent and their Subsidiaries organized under the same jurisdiction as such Foreign Subsidiary Borrower shall execute and deliver, or cause to be executed and delivered, all agreements and documents reasonably requested by the Agent to secure all intercompany loans and advances owing to them by a first priority lien and security interest on all assets owned by the Subsidiary owing such intercompany loans and advances, unless it is prohibited by applicable law or existing contractual restrictions from doing so or it is reasonably determined by the Agent to be impractical or unreasonably costly. (c) The Company and each Domestic Subsidiary will cause (i) 100% of the issued and outstanding Capital Stock of each of its Domestic Subsidiaries and (ii) 65% (or such greater percentage that, due to a change in an applicable law after the date hereof, (1) could not reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for U.S. federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary's U.S. parent and (2) could not reasonably be expected to cause any material adverse tax consequences) of the issued and outstanding Capital Stock entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Capital Stock not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary directly owned by the Company or any Domestic Subsidiary to be subject at all times to a first priority, perfected Lien in favor of the Agent pursuant to the terms and conditions of the Loan Documents or other security documents as the Agent shall reasonably request. (d) Without limiting the foregoing, each Loan Party shall, and shall cause each of the Company's Subsidiaries which is required to become a Loan Party pursuant to the terms of this Agreement to, execute and deliver, or cause to be executed and delivered, to the Agent such documents and agreements, and shall take or cause to be taken such actions as the Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents, including without limitation, if requested by the Agent, one or more 68 opinions of counsel satisfactory to the Agent, corporate documents and resolutions and consents and other documents (further including, without limitation, such consents from any shareholders or other owners of any Subsidiary to the execution and performance of such Loan Documents by such Subsidiary), which in the opinion of the Agent are necessary or advisable in connection therewith. 6.16. Dividends. The Company will not, nor will it permit any Subsidiary to, make, pay, declare or authorize any dividend, payment or other distribution in respect of any class of its Capital Stock or any dividend, payment or distribution in connection with the redemption, purchase, retirement or other acquisition, directly or indirectly, of any shares of its Capital Stock other than: (a) such dividends, payments or other distributions to the extent payable solely in shares of Capital Stock (other than Disqualified Stock) of the Company, (b) the repurchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company held by any employee, director or consultant of the Company upon termination of employment or services of such employee, director or consultant, provided that (i) the aggregate consideration (excluding consideration paid in other Capital Stock of the Company which is not Disqualified Stock) paid for such repurchased, redeemed, acquired or retired Capital Stock after the Closing Date shall not exceed $1,000,000, (ii) no Default or Unmatured Default shall have occurred and be continuing immediately after such transaction on a pro forma basis acceptable to the Agent and (iii) the price paid for such Capital Stock shall be made in accordance with the existing agreements relating thereto, and (c) dividends and distributions by Subsidiaries of the Company. The Company will not issue any Disqualified Stock. 6.17. Indebtedness. The Company will not, nor will it permit any Subsidiary to, create, incur or suffer to exist any Indebtedness, except: (a) the Secured Obligations; (b) The Indebtedness described in Schedule 5.22 hereto and refinancings thereof, but no increase in the amount thereof (or in the case of a committed facility or line of credit, in the amount of the commitments or credit line), as such amount is reduced from time to time; (c) Indebtedness of any Subsidiary of the Company owing to the Company or to any other Subsidiary of the Company and Indebtedness of the Company owing to any Subsidiary of the Company, provided that (i) any such Indebtedness of the Company or of any other Borrower is subordinated, on terms acceptable to the Agent, to all Secured Obligations of the Company or such other Borrower; (ii) upon the request of the Agent and reasonably promptly after such request, the applicable parties shall execute and deliver to the other party a demand note (collectively, the "Intercompany Notes") to evidence any such intercompany Indebtedness, which Intercompany Notes shall be in form and substance reasonably satisfactory to Agent and shall be pledged and delivered to Agent pursuant to the Security Agreement as additional collateral security for the Secured Obligations; (iii) each of the Borrowers and the Guarantors shall record all intercompany loans owing from any Foreign Subsidiary on its books and records in a manner reasonably satisfactory to Agent; 69 (iv) at the time any such intercompany loan or advance is made by the Company and after giving effect thereto, the Company shall be Solvent; (v) no Default or Unmatured Default would occur and be continuing after giving effect to any such proposed intercompany loan. (d) Subordinated Debt, provided that such Subordinated Debt shall be incurred in compliance with all terms and provisions of this Agreement; (e) Trade accounts payable and accrued expenses arising in the ordinary course which are past due in an amount which is not material in the aggregate for the Company and its Subsidiaries on a consolidated basis or which are being contested in good faith and for which adequate reserves are maintained on the books of the Company; (f) Surety, customs or appeal bonds to which the Company or any of its Subsidiaries is a party and letters of credit and reimbursement agreements issued for the account of such Company or any Subsidiary in the ordinary course of business which are not material in the aggregate and which would not have a Material Adverse Effect and which are trade letters of credit or which secure obligations in respect of (i) worker's compensation laws, unemployment insurance laws or similar legislation, (ii) obligations in connection with bids, tenders, contracts or leases to which the Company or any of its Subsidiaries is a party for a purpose other than borrowing money or obtaining credit or (iii) public or statutory obligations of the Company or any of its Subsidiaries; (g) Indebtedness not otherwise permitted by this Section 6.17 incurred or assumed for the purpose of financing all or any part of the cost of acquiring any fixed asset (including without limitation through Capitalized Leases), in an aggregate principal amount at any time outstanding not greater than $2,000,000; (h) Contingent Liabilities in respect of which the Company or a Subsidiary is primary obligor otherwise permitted by Section 6.21; (i) Indebtedness of Foreign Subsidiaries in an aggregate amount not to exceed $5,000,000 at any time outstanding for all Foreign Subsidiaries; (j) the Second Secured Debt in an aggregate principal amount not to exceed $64,930,000 owing by the Company and $10,570,000 owing by the U.K. Borrower; (k) the Third Secured Term Loan Debt in an aggregate principal amount not to exceed $21,500,000 owing by the Company and $3,500,000 owing by the U.K. Borrower; and (l) the Fourth Secured Term Loan Debt in an aggregate principal amount not to exceed $14,692,379.43 owing by the Company and $2,391,782.70 owing by the U.K. Borrower; and (m) Indebtedness of the Company or any Subsidiary other than (a) through (l) above not exceeding $10,000,000 aggregate amount at any time outstanding. 6.18. Merger. The Company will not, nor will it permit any Subsidiary to, merge or consolidate with or into any other Person, except that (a) any Subsidiary of the Company may merge into 70 the Company or a Wholly-Owned Subsidiary of the Company and (b) any Loan Party (other than the Company) may merge with any other Loan Party. 6.19. Sale of Assets. The Company will not, nor will it permit any Subsidiary to, sell, lease, license, transfer, assign or otherwise dispose of any of its Property, whether in one or a series of transactions, other than inventory sold in the ordinary course of business upon customary credit terms, sales of scrap or obsolete material or equipment which are not material in the aggregate; provided, however, that, this Section 6.19 will not prohibit any of the following so long as none of the following would require a prepayment under the Subordinated Debt, the Third Secured Term Loan Debt, the Fourth Secured Term Loan Debt or the Second Secured Debt, (a) any such sale, lease, license, transfer, assignment or other disposition if the aggregate book value (disregarding any write-downs of such book value other than ordinary depreciation and amortization) of all of the business, assets, rights, revenues and property disposed of after the Closing Date of this Agreement shall not constitute a Substantial Portion in the aggregate and if, immediately after such transaction, no Unmatured Default or Default shall exist or shall have occurred and be continuing, (b) sales of assets (other than Accounts) in the ordinary course of business as to which proceeds are used or contractually committed to be used within 180 days to purchase assets of at least equivalent value to those sold, (c) sales as to which proceeds are used to make optional prepayments on the Secured Obligations, provided that such prepayments on the Secured Obligations also permanently reduce the Commitments by the amount of such payments, (d) transfers of assets, including without limitation Capital Stock, between Guarantors or between the Company and Guarantors or between Subsidiaries which are not Guarantors or from a Subsidiary which is not a Guarantor to a Guarantor or the Company, it being understood that for purposes of this clause (d) a Guarantor shall include any Subsidiary which becomes a Guarantor immediately after such transfer, (e) any Investment permitted by Section 6.19, (f) the disposition of Cash Equivalent Investments in the ordinary course of business, or (g) such transfer of assets as pursuant to a dividend or redemption permitted by Section 6.16; provided, however, in the case of any of the foregoing permitted sales, leases, licenses, transfers, assignments or other dispositions (an "Asset Sale") the Company shall not, and shall not permit any of its Subsidiaries to, consummate an Asset Sale unless (A) except for transfers under clause (d), (e) or (f) above, the Company (or the Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value (and if such sale if of a material amount of assets, such fair market value shall be evidenced by a resolution of the Board of Directors set forth in an officer's certificate delivered to the Agent) of the assets and (B) except for transfers under clause (d), (e) or (f) above, at least 80% of the consideration therefor received by the Company or such Subsidiary is in the form of cash or Cash Equivalent Investments; provided that the amount of (x) any liabilities (as shown on the Company's or such Subsidiary's most recent balance sheet) of the Company or any Subsidiary that are assumed by the transferee of any such assets such that the Company or such Subsidiary have no further liability and (y) any securities, notes or other obligations received by the Company or any such Subsidiary from such transferee that are converted by the Company or such Subsidiary into cash (to the extent of the cash received) shall be deemed to be cash for purposes of this provision and the definition of Net Cash Proceeds, and the Agent promptly shall obtain a first priority security interest in any non cash consideration for any Asset Sale by the Company or any Guarantor. 6.20. Investments and Acquisitions. The Company will not, nor will it permit any Subsidiary to, (a) make or suffer to exist any Investments (including without limitation, loans and advances to, and other Investments in, Subsidiaries), or commitments therefor, (b) create any Subsidiary or (c) become or remain a partner in any partnership or joint venture, or (d) make any Acquisition, except: (i) Cash Equivalent Investments, subject to control agreements in favor of the Agent for the benefit of the Lenders or otherwise subject to a perfected security interest in favor of the Agent for the benefit of the Lenders; 71 (ii) extensions of trade credit made in the ordinary course of business on customary credit terms; (iii) investments, loans and advances in and to any Guarantor or the Company or otherwise pursuant to a transaction permitted by Section 6.19(d); (iv) extensions of credit made after the Closing Date to employees and officers of the Company and its Subsidiaries permitted by law, in the ordinary course of business and not in excess of $1,500,000 in cash in aggregate amount outstanding at any one time for all employees and officers plus non-cash amounts advanced to officers and employees solely for the purpose of purchasing Capital Stock of the Company and which do not result in the transfer of any cash or any other assets of the Company or any of its Subsidiaries to any such employees and officers, other than common stock of the Company in exchange for a note payable by such officer or employee to the Company; (v) those Investments described in Schedule 6.20 hereto, having the same terms as existing on the date of this Agreement, provided that, if no Default or Unmatured Default has occurred and is continuing or would be caused thereby, such Investments may be extended, renewed or recharacterized from time to time and interest on intercompany loans owing by the Company or a Subsidiary may be forgiven or deferred, but no increase in the amount of any such Investment shall be permitted; (vi) stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Company or any Subsidiary or in satisfaction of judgments; (vii) investments, loans and advances in and to any Subsidiary which is not a Guarantor or any person becoming a Subsidiary as a result thereof which is not a Guarantor if immediately before and after (on a pro forma basis acceptable to the Agent and supported by such certificates and opinions as requested by the Agent) such investment, loan or advance: (A) the terms and conditions thereof shall be reasonably satisfactory to the Agent, (B) no Unmatured Default or Default shall exist or shall have occurred and be continuing, (C) the representations and warranties contained in the Loan Documents shall be true and correct in all material respects on and as of the date such investment, loan or advance is made as if made on the date thereof and giving effect thereto, (D) after giving effect to such investment, loan or advance, the Availability is at least $15,000,000 in Revolving Loans, and (E) the aggregate amount of all investments, loans and advances in and to any Subsidiary which is not a Guarantor or any person becoming a Subsidiary as a result thereof which is not a Guarantor shall not exceed $5,000,000; (viii) investments, loans and advances after the Closing Date of this Agreement in Unrestricted Subsidiaries in aggregate outstanding amount not exceeding $500,000; (ix) investments in joint ventures not to exceed $2,500,000 in aggregate outstanding amount; and (x) other investments after the Closing Date in an aggregate amount not exceeding $3,000,000 at any time outstanding. 6.21. Liens. The Company will not, nor will it permit any Subsidiary to, will create, incur, or suffer to exist any Lien in, of, or on its Property, except the following (collectively, "Permitted Liens"): 72 (a) Liens for taxes not delinquent or for taxes being contested in good faith by appropriate proceedings and as to which adequate financial reserves have been established on its books and records; (b) Liens (other than any Lien imposed by ERISA) created and maintained in the ordinary course of business which are not material in the aggregate, and which would not have a Material Adverse Effect and which constitute (i) pledges or deposits under worker's compensation laws, unemployment insurance laws or similar legislation, (ii) good faith deposits in connection with bids, tenders, contracts or leases to which the Company or any of its Subsidiaries is a party for a purpose other than borrowing money or obtaining credit, including rent security deposits, (iii) liens imposed by law, such as those of landlords, carriers, warehousemen and mechanics, if payment of the obligation secured thereby is not yet due or which are being contested in good faith by appropriate legal proceedings and with respect to which adequate financial reserves have been established on the books and records of the Company or such Subsidiary, (iv) liens securing taxes, assessments or other governmental charges or levies not yet subject to penalties for nonpayment, and (v) pledges or deposits to secure public or statutory obligations of the Company or any of its Subsidiaries, or surety, customs or appeal bonds to which the Company or any of its Subsidiaries is a party; (c) Liens affecting real property which constitute minor survey exceptions or defects or irregularities in title, minor encumbrances, easements or reservations of, or rights of others for, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of such real property, provided that all of the foregoing, in the aggregate, do not at any time materially detract from the value of said properties or materially impair their use in the operation of the businesses of the Company or any of its Subsidiaries; (d) Liens created pursuant to the Collateral Documents and Liens expressly permitted by the Collateral Documents; (e) Each Lien described in Schedule 6.21 hereto may be suffered to exist, provided that there may be no increase in the amount of indebtedness, obligations or liabilities secured thereby and it may not secure any other indebtedness, obligations and liabilities other than those secured as of the Closing Date; (f) Any Lien created to secure payment of a portion of the purchase price of, or existing at the time of acquisition of, any tangible fixed asset acquired by the Company or any of its Subsidiaries may be created or suffered to exist upon such fixed asset if the outstanding principal amount of the Indebtedness secured by such Lien does not at any time exceed the purchase price paid by the Company or such Subsidiary for such fixed asset, provided that (i) such Lien does not encumber any other asset at any time owned by the Company or such Subsidiary, (ii) not more than one such Lien shall encumber such fixed asset at any one time and (iii) the aggregate amount of Indebtedness secured by all such Liens does not exceed the amount permitted by Section 6.17(g); (g) Any Lien on any assets of any Subsidiaries of the Company in favor of the Company securing permitted Indebtedness of such Subsidiary owing to the Company, provided that such Lien is subordinated to the Liens of the Agent by written agreements satisfactory to the Agent; 73 (h) Any Lien created to secure Indebtedness of a Foreign Subsidiary permitted pursuant to Section 6.17(i) or (m) to the extent granting such a Lien is customary for borrowers generally in the country in which such Foreign Subsidiary is borrowing and provided that the aggregate amount of Indebtedness secured by all such Liens does not exceed $10,000,000 (or the Dollar Amount thereof); (i) Liens securing the Fourth Secured Term Loan Debt on the assets of the Company and the Guarantors and Liens securing not more than $2,391,782.70 in principal amount of the Fourth Secured Term Loan Debt on the accounts receivable of the U.K. Borrower, provided that all of the foregoing Liens shall be (i) be limited to assets on which the Agent and the Lenders have a first priority Lien securing the Secured Obligations and (ii) subordinate and junior in priority to all Liens in favor of the Agent securing the Secured Obligations under the Intercreditor Agreement; (j) Liens securing the Third Secured Term Loan Debt on the assets of the Company and the Guarantors and Liens securing not more than $3,500,000 in principal amount of the Third Secured Term Loan Debt on the accounts receivable of the U.K. Borrower, provided that all of the foregoing Liens shall be (i) be limited to assets on which the Agent and the Lenders have a first priority Lien securing the Secured Obligations and (ii) subordinate and junior in priority to all Liens in favor of the Agent securing the Secured Obligations under the Intercreditor Agreement; and (k) Liens securing the Second Secured Debt on the assets of the Company and the Guarantors and Liens securing not more than $10,570,000 in principal amount of the Second Secured Debt on the accounts receivable of the U.K. Borrower, provided that all of the foregoing Liens shall be (i) limited to assets on which the Agent and the Lenders have a first priority Lien securing the Secured Obligations and (ii) subordinate and junior in priority to all Liens in favor of the Agent securing the Secured Obligations under the Intercreditor Agreement. (l) Other Liens securing Indebtedness not exceeding $2,000,000 in aggregate amount outstanding at any time. 6.22. Change of Corporate Name or Location; Change of Fiscal Year. No Loan Party shall (a) change its name as it appears in official filings in the state of its incorporation or organization, (b) change its chief executive office, principal place of business, mailing address, corporate offices or warehouses or locations at which Collateral is held or stored, or the location of its records concerning the Collateral as set forth in the Security Agreement, (c) change the type of entity that it is, (d) change its organization identification number, if any, issued by its state of incorporation or other organization, or (e) change its state of incorporation or organization, in each case, without at least thirty days prior written notice to the Agent and the Agent shall have either (1) determined that such event or occurrence will not adversely affect the validity, perfection or priority of the Agent's security interest in the Collateral, or (2) after the Agent's written acknowledgment that any reasonable action requested by the Agent in connection therewith, including to continue the perfection of any Liens in favor of the Agent, on behalf of Lenders, in any Collateral, has been completed or taken, and, provided that, any new location shall be in the continental U.S. 6.23. Affiliate Transactions. The Company will not, nor will it permit any Subsidiary to, except for transactions described on Schedule 5.23, 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 74 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) involve aggregate payments in an amount in excess of $1,000,000 (i) are set forth in writing and (ii) comply with clause (1), (3) if such Affiliate Transaction (or series of related Affiliate Transactions) involves aggregate payments in an amount in excess of $2,500,000 in any one year, (i) are set forth in writing, (ii) comply with clause (2) and (iii) have been approved by a majority of the disinterested members of the Board of Directors, and (4) if such Affiliate Transaction (or series of related Affiliate Transactions) involves aggregate payments in an amount in excess of $10,000,000 in any one year, (i) comply with clause (3) and (ii) have been determined by a nationally recognized investment banking firm to be fair, from a financial standpoint, to the Company and its Subsidiaries, provided that transactions between or among the Company and/or the Guarantors shall not be subject to clause (4) above. 6.24. Amendments to Agreements; Etc. The Company will not, and will not permit any Subsidiary to, amend or terminate its organizational documents or by-laws in a manner that would be adverse to the Lenders or enter into any material agreement or permit or suffer any Subsidiary to enter into any such agreement containing any provision which would be violated or breached by this Agreement or any of the transactions contemplated hereby or by performance by the Company or any of its Subsidiaries of its obligations in connection therewith. 6.25. Subsidiary Dividends. The Company will not permit any of its Subsidiaries directly or indirectly to create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction which by its terms materially restricts the ability of any such Subsidiary to (i) pay dividends or make any other distributions on such Subsidiary's Capital Stock, (ii) pay any Indebtedness owed to the Company or any of its other Subsidiaries, (iii) make any loans or advances to the Company or any of such other Subsidiaries or (iv) transfer any material portion of its assets to the Company or any of such other Subsidiaries, except for (A) such encumbrances or restrictions required by applicable law; (B) such encumbrances or restrictions 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 and (C) such encumbrances or restrictions with respect to Indebtedness of a Foreign Subsidiary permitted pursuant to Section 6.17 and which encumbrances or restrictions are customary in agreements of such type or with respect to the Indebtedness of Foreign Subsidiaries described on Schedule 5.22 and existing as of the Closing Date. 6.26 Payments and Modification of Debt. The Company will not, nor will it permit any Subsidiary to, (i) make any optional payment, defeasance (whether a covenant defeasance, legal defeasance or other defeasance), prepayment, repurchase (including without limitation any offer to repurchase or other payment based on excess cash flow or any similar terms, whether optional or mandatory, it being acknowledged and agreed that any such payment based on excess cash flow or any similar terms that is mandatory may be prohibited by the terms of this Agreement and is so prohibited) or other redemption of any of its or any of its Subsidiaries' Subordinated Debt, Second Secured Debt, Third Secured Term Loan Debt, Fourth Secured Term Loan Debt or other Indebtedness, other than (A) the Secured Obligations, (B) in the case of Indebtedness that is not Subordinated Debt, Second Secured Debt, Third Secured Term Loan Debt or Fourth Secured Term Loan Debt and if no Unmatured Default or Default exists or would be caused thereby, payments of revolving credit facilities by Foreign Subsidiaries in the ordinary course of business (provided such payments are from the revenues of such Foreign Subsidiaries and not, directly or indirectly, from proceeds of any Advances) and prepayments of Indebtedness between the Company and its Subsidiaries or between Subsidiaries of the Company and (C) any optional payment or defeasance or open-market purchase of any Subordinated Debt, Second Secured Debt, Third Secured Term Loan Debt, Fourth Secured Term Loan Debt or other Indebtedness solely with the proceeds of common Capital Stock of the Company or with Subordinated Debt of the Company, (ii) 75 amend or modify, or consent or agree to any amendment or modification of (including without limitation any supplemental agreement or other direct of indirect method of providing additional or supplemental terms or consideration), any Second Secured Debt Document, any Third Secured Term Loan Debt Document, any Fourth Secured Term Loan Debt Document or any Subordinated Debt Document, (iii) enter into any agreement or arrangement requiring any defeasance of any kind of any of its Subordinated Debt, Second Secured Debt, Third Secured Term Loan Debt or Fourth Secured Term Loan Debt, or designate any Indebtedness (other than the Secured Obligations) as "Designated Senior Indebtedness" under the Subordinated Debt Documents, or issue any security, instrument or other document evidencing any of the Subordinated Debt outstanding pursuant to any of the Subordinated Debt Documents which is not a "Security" as defined in the Subordinated Note Indenture. It is acknowledged and agreed that the payment of any fees or the transfer of any other asset or other consideration of any kind, directly or indirectly, by the Borrower or any of its Subsidiaries (other than payments to the extent required under the original terms of the Second Secured Debt Documents, the Third Secured Term Loan Debt Documents, Fourth Secured Term Loan Debt Documents and the Subordinated Debt Documents, in all cases in the form delivered to the Lenders without any amendment or other modification) or other supplemental agreement with respect to any Second Secured Debt, the Third Secured Term Loan Debt, the Fourth Secured Term Loan Debt or Subordinated Debt shall be deemed an amendment or modification thereof. 6.27 Financial Contracts. The Company will not, nor will it permit any Subsidiary to, incur or remain liable with respect to any Financial Contracts except for purposes of hedging and not for speculative purposes. 6.28 Capital Expenditures. The Company will not, as calculated for the Company and its Subsidiaries on a consolidated basis, expend, or be committed to expend, for Capital Expenditures for any Fiscal Year in an amount in excess of (a) $15,000,000 plus (b) commencing with the Fiscal Year ending January 2, 2005, up to $5,000,000 of amounts available for Capital Expenditures not used by the Company and its Subsidiaries in the immediately preceding Fiscal Year. 6.29 Management Fees; Etc.. The Company will not, nor will it permit any Subsidiary to, pay, whether directly or indirectly, any management fees, any other fees or any other payments of any kind to CVC, CSCL, the Third Secured Term Lender or any Affiliate thereof, except to the extent required under the Fourth Secured Term Loan Agreement or the Third Secured Term Loan Agreement, a $750,000 placement fee payable to the Third Secured Term Lender, stock purchase warrants for common Capital Stock of the Company and reasonable legal fees of CVC, CSCL and the Third Secured Term Lender in connection with the negotiation, execution, delivery, amendment, administration and enforcement of the agreements and documents governing the Fourth Secured Term Loan or the Third Secured Term Loan. 6.30 Additional Covenants. If at any time the Company shall enter into or be a party to any instrument or agreement with respect to any Indebtedness which in the aggregate, together with any related Indebtedness, exceeds $5,000,000, including all such instruments or agreements in existence as of the date hereof (other than the Subordinated Debt Documents, Second Secured Debt Documents and the Secured Obligations) and all such instruments or agreements entered into after the date hereof, relating to or amending any terms or conditions applicable to any of such Indebtedness which includes financial covenants or the equivalent thereof not substantially provided for in this Agreement or more favorable to the lender or lenders thereunder than those provided for in this Agreement, then the Company shall promptly so advise the Agent and the Lenders. Thereupon, if the Agent shall request, upon notice to the Company, the Agent and the Lenders shall enter into an amendment to this Agreement or an additional agreement (as the Agent may request), providing for substantially the same financial covenants or the equivalent thereof, as those provided for in such instrument or agreement to the extent required and as may be selected by the Agent. In addition to the foregoing, Sections 4.3, 4.5, 4.6, 4.7 and 4.8 of the 76 Subordinated Note Indenture and Sections 4.3, 4.5, 4.6, 4.7, 4.8, 4.9, 4.22 and 5.1 of the Second Secured Note Indenture, together with any related definitions, are hereby incorporated by reference into this Agreement to the same extent as if set forth fully herein, and no subsequent amendment, waiver, termination or modification thereof shall effect any such covenants, terms, conditions or defaults as incorporated herein. 6.31. Financial Covenants. 6.31.1. Fixed Charge Coverage Ratio. After any Borrowing Base Availability Deficiency Event, the Company will not permit the Fixed Charge Coverage Ratio, determined as of the end of each of its Fiscal Quarters for the then most-recently ended four Fiscal Quarters (or, for the Fiscal Quarter ending September 28, 2003, determined as of the end of such Fiscal Quarter for the then most-recently ended three Fiscal Quarters), to be less than 1.0 to 1.0. 6.31.2. Minimum Availability. The Company shall maintain Availability of not less than $10,000,000 at all times. 6.32. Lenders as Depository Banks; Dominion of Funds. Each Loan Party shall maintain one or more of the Lenders as such Loan Party's principal depository bank(s), including for the maintenance of operating, administrative, cash management, collection activity, and other deposit accounts for the conduct of its business. Promptly upon the request of the Agent at any time, the Company shall, and shall cause each Loan Party to, enter into a dominion of funds arrangement with the Agent and/or certain Lenders and shall execute and deliver any and all further documents necessary or desirable to implement such dominion of funds arrangement, including without limitation any lock box agreements and/or blocked account agreements. After a Borrowing Base Availability Deficiency Event, all funds received in any depositary accounts shall be applied daily to the outstanding Loans and used as cash collateral for any outstanding Facility LCs' if all Loans have been paid in full. ARTICLE VII DEFAULTS The occurrence of any one or more of the following events shall constitute a "Default" hereunder: (a) any representation or warranty made or deemed made by or on behalf of any Loan Party or any of their Subsidiaries to the Lenders or the Agent under or in connection with this Agreement, any other Loan Document, any Credit Extension, or any certificate or information delivered in connection with any of the foregoing shall be materially false on the date as of which made; (b) nonpayment, when due (whether upon demand or otherwise), of any principal, interest or commitment fees, or nonpayment, within one Business Day of when due (whether upon demand or otherwise), of any Reimbursement Obligation or nonpayment, within three Business Days of when due (whether upon demand or otherwise), of any other obligation owing under any Loan Document or of any other Secured Obligations; (c) the breach by any Loan Party of any of the terms or provisions of Section 6.1, 6.2, 6.3, 6.16 through 6.22 or 6.23 through 6.32; 77 (d) the default or breach by any Loan Party (other than a default or breach which constitutes a Default under another Section of this Article VII) of any of the terms or provisions of this Agreement or any other Loan Document which is not remedied within fifteen days of such breach after written notice thereof shall have been given to the Borrowers by the Agent; (e) failure of the Company or any of its Subsidiaries to pay when due any Material Indebtedness beyond any period of grace provided with respect thereto or a default, breach or other event occurs under any term, provision or condition contained in any Material Indebtedness Agreement of the Company or any of its Subsidiaries, the effect of which default, event or condition is to cause, or to permit the holder(s) of such Material Indebtedness or the lender(s) under any Material Indebtedness Agreement to cause, such Material Indebtedness to become due prior to its stated maturity or any commitment to lend under any Material Indebtedness Agreement to be terminated prior to its stated expiration date; any Material Indebtedness of the Company or any of its Subsidiaries shall be declared to be due and payable or required to be prepaid or repurchased (other than by a regularly scheduled payment) prior to the stated maturity thereof; or the Company or any of its Subsidiaries shall not pay, or admit in writing its inability to pay, its debts generally as they become due; (f) the Company or any of its Significant Subsidiaries shall (i) have an order for relief entered with respect to it under the Bankruptcy Code as now or hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any Substantial Portion of its Property, (iv) institute any proceeding seeking an order for relief under the Bankruptcy Code as now or hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (v) have any other Insolvency Proceeding commenced by or against it, and, if such Insolvency Proceeding is instituted against any Borrower or such Significant Subsidiary and is being contested by such Borrower or such Significant Subsidiary, as the case may be, in good faith by appropriate proceedings, such Insolvency Proceeding shall remain undismissed or unstayed for a period of sixty days, (vi) take any corporate, company, partnership or other action to authorize or effect any of the foregoing actions set forth in this subsection (f) or (vii) fail to contest in good faith any appointment or proceeding described in subsection (g) below; (g) a receiver, trustee, examiner, liquidator or similar official shall be appointed for Company or any of its Significant Subsidiaries or any Substantial Portion of its Property, or a proceeding described in subsection (f)(iv) of Article VII or other Insolvency Proceeding shall be instituted against Company or any of its Significant Subsidiaries and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of sixty consecutive days; (h) any court, government or governmental agency shall condemn, seize or otherwise appropriate, or take custody or control of, all or any portion of the Property of Company or any of its Subsidiaries which, when taken together with all other Property of Company or any of its Subsidiaries so condemned, seized, appropriated, or taken custody or control of, during the twelve-month period ending with the month in which any such action occurs, constitutes a Substantial Portion; 78 (i) any loss, theft, damage or destruction of any item or items of Collateral or other property of any Loan Party occurs which could reasonably be expected to cause a Material Adverse Effect and is not adequately covered by insurance; (j) One or more judgments or orders for the payment of money (not fully paid or covered without dispute or reservation by insurance) in an aggregate amount of $5,000,000 in any fiscal year shall be rendered against the Company or any of its Significant Subsidiaries, or any other judgment or order (whether or not for the payment of money) shall be rendered against or shall affect the Company or any of its Subsidiaries which causes or could reasonably be expected to cause or could reasonably be expected to have a Material Adverse Effect, and either (i) such judgment or order shall have remained unsatisfied and the Company or such Significant Subsidiary shall not have taken action necessary to stay enforcement thereof by reason of pending appeal or otherwise, prior to the expiration of the applicable period of limitations for taking such action or, if such action shall have been taken, a final order denying such stay shall have been rendered, or (ii) enforcement proceedings shall have been commenced by any creditor upon any such judgment or order; (k) any Change in Control shall occur; (l) the Unfunded Liabilities of all Single Employer Plans shall exceed in the aggregate $5,000,000 or any Reportable Event shall occur in connection with any Plan; (m) the Company or any other member of the Controlled Group shall have been notified by the sponsor of a Multiemployer Plan that it has incurred withdrawal liability to such Multiemployer Plan in an amount which, when aggregated with all other amounts required to be paid to Multiemployer Plans by the Company or any other member of the Controlled Group as withdrawal liability (determined as of the date of such notification), exceeds $5,000,000 or requires payments exceeding $5,000,000 per annum; (n) the Company or any other member of the Controlled Group shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, if as a result of such reorganization or termination the aggregate annual contributions of the Company and the other members of the Controlled Group (taken as a whole) to all Multiemployer Plans which are then in reorganization or being terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the respective plan years of each such Multiemployer Plan immediately preceding the plan year in which the reorganization or termination occurs by an amount exceeding $5,000,000; (o) the Company or any of its Subsidiaries shall (i) be the subject of any proceeding or investigation pertaining to the release by the Company or any of its Subsidiaries or any other Person of any toxic or hazardous waste or substance into the environment, or (ii) violate any Environmental Law, which, in the case of an event described in clause (i) or clause (ii), could reasonably be expected to have a Material Adverse Effect; (p) the occurrence of any "default", as defined in any Loan Document (other than this Agreement) or the breach of any of the terms or provisions of any Loan Document (other than this Agreement), which default or breach continues beyond any period of grace therein provided; 79 (q) any Collateral Document shall for any reason fail to create a valid and perfected first priority security interest in any Collateral purported to be covered thereby, except as permitted by the terms of any Collateral Document, or any Collateral Document shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of any Collateral Document; (r) any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or any party thereto (other than the Agent or any Lender) shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction based on any such assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms); (s) the representations and warranties set forth in Section 5.17 (Plan Assets; Prohibited Transactions) shall at any time not be true and correct; or (t) The occurrence of any of the following with respect to any payments or transfers of any kind to be made on or after the date hereof in connection with any Acquisition closed prior to the date hereof, including without limitation all deferred payments, all earn out payments and other contingent payments and all other payments pursuant to any such Acquisition, excluding any payments that consist solely of interest which is accrued and not paid and excluding customary indemnitees and tax payments (all of the foregoing collectively defined as "Earn Out Payments"): (i) the amount of Earn Out Payments exceeds $20,000,000 in the aggregate, or (ii) immediately before and after (on a pro forma basis acceptable to the Agent, including without limitation on a pro forma basis to eliminate any unusual changes in working capital that increase Availability) any Earn-Out Payment is made, Availability is or would be less than $20,000,000; or (iii) the Company shall fail to give the Agent written notice of the intent to pay any Earn Out Payment at least five days prior to its payment. ARTICLE VIII REMEDIES; WAIVERS AND AMENDMENTS 8.1. Remedies. (a) If any Default occurs and is continuing, the Agent may in its discretion (and at the written request of the Required Lenders, shall) (i) reduce the Aggregate Commitment, the Commitment, the advance rates set forth in the definition of the Borrowing Base or reduce one or more of the other elements used in computing the Borrowing Base, (ii) terminate or suspend the obligations of the Lenders to make Loans hereunder and the obligation and power of the LC Issuer to issue Facility LCs, (iii) declare all or any portion of the Obligations to be due and payable, whereupon the Obligations shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which the Loan Parties hereby expressly waive, (iv) upon notice to the Company and in addition to the continuing right to demand payment of all amounts payable under this Agreement, the Agent may either (1) make demand on the Borrowers to pay, and the each Borrower will, forthwith upon such demand and without any further notice or act, pay to the Agent an amount, in immediately available funds (which 80 funds shall be held in the Facility LC Collateral Account), equal to 105% of the Collateral Shortfall Amount or (2) deliver a Supporting Letter of Credit as required by Section 2.1.2(l), whichever the Agent may specify in its sole discretion, (v) increase the rate of interest applicable to the Loans and the LC Fees as set forth in this Agreement and (vi) exercise any rights and remedies provided to Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC. (b) If any Default described in subsections (f) or (g) of Article VII occurs and is continuing with respect to any Loan Party, the obligations of the Lenders to make Loans hereunder and the obligation and power of the LC Issuer to issue Facility LCs shall automatically terminate and all Obligations shall immediately become due and payable without any election or action on the part of the Agent, the LC Issuer or any Lender and the Loan Parties will be and become thereby unconditionally obligated, without any further notice, act or demand, to pay to the Agent an amount equal to 105% of the Collateral Shortfall Amount, which funds shall be deposited in the Facility LC Collateral Account. (c) If, within thirty days after acceleration of the maturity of the Obligations or termination of the obligations of the Lenders to make Loans and the obligation and power of the LC Issuer to issue Facility LCs hereunder as a result of any Default (other than any Default as described in subsections (f) or (g) of Article VII with respect to any Borrower) and before any judgment or decree for the payment of the Obligations due shall have been obtained or entered, the Required Lenders (in their sole discretion) shall so direct, the Agent shall, by notice to the Company, rescind and annul such acceleration and/or termination. (d) If at any time while any Default is continuing, the Agent determines that the Collateral Shortfall Amount at such time is greater than zero, the Agent may make demand on the Borrowers to pay, and the Borrowers will, forthwith upon such demand and without any further notice or act, pay to the Agent an amount equal to 105% of the Collateral Shortfall Amount, which funds shall be deposited in the Facility LC Collateral Account. The Borrowers hereby pledge, assign, and grant to the Agent, on behalf of and for the benefit of the Agent, the Lenders, and the LC Issuer, a security interest in all of their right, title, and interest in and to all funds which may from time to time be on deposit in the Facility LC Collateral Account to secure the prompt and complete payment and performance of the Obligations. (e) The Agent may at any time or from time to time after funds are deposited in the Facility LC Collateral Account and any Default is continuing, apply such funds to the payment of the Obligations and any other amounts as shall from time to time have become due and payable by the Borrowers to the Lenders or the LC Issuer under the Loan Documents. (f) At any time while any Default is continuing, neither any Borrower nor any Person claiming on behalf of or through any Borrower shall have any right to withdraw any of the funds held in the Facility LC Collateral Account. After all of the Secured Obligations have been indefeasibly paid in full and the Aggregate Commitment has been terminated, any funds remaining in the Facility LC Collateral Account shall be returned by the Agent to the Borrowers or paid to whomever may be legally entitled thereto at such time. 8.2. Waivers by Loan Parties. Except as otherwise provided for in this Agreement or by applicable law, each Loan Party waives: (a) presentment, demand and protest and notice of presentment, dishonor, notice of intent to accelerate, notice of acceleration, protest, default, nonpayment, maturity, release, compromise, settlement, extension or renewal of any or all commercial paper, accounts, contract rights, documents, instruments, chattel paper and guaranties at any time held by the Agent on which any Loan Party may in any way be liable, and hereby ratifies and confirms whatever the Agent may do in this regard, (b) all rights to notice and a hearing prior to the Agent's taking possession or control of, or to the 81 Agent's replevy, attachment or levy upon, the Collateral or any bond or security that might be required by any court prior to allowing the Agent to exercise any of its remedies, and (c) the benefit of all valuation, appraisal, marshaling and exemption laws. 8.3. Amendments. (a) Subject to the provisions of this Section 8.3, no amendment, waiver or modification of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by any Loan Party therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or the Agent with the consent in writing of the Required Lenders) and the Loan Parties and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. (b) Notwithstanding subsection (a) above, no such amendment, waiver or other modification with respect to this Agreement shall, without the consent of all of the Lenders: (i) extend the final maturity of any Loan to a date after the Termination Date; (ii) Forgive all or any portion of the principal amount of any Loan or any Reimbursement Obligation; (iii) reduce the rate or extend the time of payment of interest or fees payable to the Lenders pursuant to any Loan Document; (iv) reduce the percentage or number of Lenders specified in the definition of Required Lenders; (v) extend the Termination Date; (vi) increase the amount of the Aggregate Commitment or the Commitment of any Lender hereunder (other than pursuant to Section 12.3); (vii) increase the advance rates set forth in the definition of Borrowing Base; (viii) permit any Loan Party to assign its rights under this Agreement; (ix) amend this Section 8.3; (x) release any material guarantor of any Credit Extension, except as otherwise permitted herein or in the other Loan Documents; or (xi) except as provided in Section 10.16 or any Collateral Document, release all or substantially all of the Collateral. (c) Notwithstanding subsections (a) or (b) above, in addition to amendments effected pursuant to the foregoing, Schedule 1.1 may be amended as follows: (i) Schedule 1.1 may be amended to add Subsidiaries of the Company as additional Foreign Borrowing Subsidiaries upon (A) execution and delivery by the Company, any such Foreign Borrowing Subsidiary and the Agent, of a Joinder 82 Agreement providing for any such Subsidiary to become a Foreign Borrowing Subsidiary, (B) delivery to the Agent of (x) a legal opinion in respect of such additional Foreign Borrowing Subsidiary acceptable to the Agent and (y) such other documents with respect thereto as the Agent shall reasonably request and (C) the written approval of the Agent in its Permitted Discretion. (ii) Schedule 1.1 will be amended to remove any Subsidiary as a Foreign Borrowing Subsidiary upon (A) written notice by the Company to the Agent to such effect and (B) repayment in full of all outstanding Secured Obligations of such Foreign Borrowing Subsidiary. (d) No amendment of any provision of this Agreement relating to the Agent or to the Non-Ratable Loans, the Swingline Loans, the Overadvances or the Protective Advances shall be effective without the written consent of the Agent. No amendment of any provision relating to the LC Issuer shall be effective without the written consent of the LC Issuer. The Agent may (i) amend the Commitment Schedule to reflect assignments entered into pursuant to Section 12.3, (ii) waive payment of the fee required under Section 12.3(c) and (iii) implement any Flex-Pricing Provisions contained in the fee letter described in Section 10.13 or any commitment letter delivered in connection with the transaction which is the subject of this Agreement without obtaining the consent of any other party to this Agreement so long as, in the case of any implementation of any Flex-Pricing Provisions, the Agent's actions would not require consent of all of the Lenders pursuant to the foregoing provisions of this Section. (e) Notwithstanding anything herein to the contrary, no Defaulting Lender shall be entitled to vote (whether to consent or to withhold its consent) with respect to any amendment, modification, termination or waiver of any provision of this Agreement or any departure therefrom or any direction from the Lenders to the Agent, and, for purposes of determining the Required Lenders at any time, the Commitments and the Credit Exposure of each Defaulting Lenders shall be disregarded. (f) If, in connection with any proposed amendment, waiver or consent (a "Proposed Change") requiring the consent of all Lenders, the consent of the Required Lenders is obtained, but the consent of other Lenders is not obtained (any such Lender whose consent is not obtained being referred to herein as a "Non-Consenting Lender"), then, so long as the Agent is not a Non-Consenting Lender, the Company may elect to replace such Non-Consenting Lender as a Lender party to this Agreement, and each Lender hereby agrees that if it is a Non-Consenting Lender, it shall agree to such replacement and take such actions as are reasonably necessary to cause such replacement, provided that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Company and the Agent shall agree, as of such date, to purchase for cash the Advances and other Obligations due to the Non-Consenting Lender pursuant to an Assignment Agreement and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of Section 12.3 applicable to assignments, and (ii) the Company shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (1) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Company hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 3.1, 3.2 and 3.5, and (2) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 3.4 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender. 83 8.4. Preservation of Rights. No delay or omission of the Lenders, the LC Issuer or the Agent to exercise any right under the Loan Documents shall impair such right or be construed to be a waiver of any Default or an acquiescence therein, and the making of a Credit Extension notwithstanding the existence of a Default or the inability of the Company to satisfy the conditions precedent to such Credit Extension shall not constitute any waiver or acquiescence. Any single or partial exercise of any such right shall not preclude other or further exercise thereof or the exercise of any other right, and no waiver, amendment or other variation of the terms, conditions or provisions of the Loan Documents whatsoever shall be valid unless in writing signed by the Lenders required pursuant to Section 8.3, and then only to the extent in such writing specifically set forth. All remedies contained in the Loan Documents or by law afforded shall be cumulative and all shall be available to the Agent, the LC Issuer and the Lenders until the Obligations have been paid in full. ARTICLE IX GENERAL PROVISIONS 9.1. Survival of Representations. All representations and warranties of the Loan Parties contained in this Agreement and the other Loan Documents shall survive the execution and delivery of the Loan Documents and the making of the Credit Extensions herein contemplated. 9.2. Governmental Regulation. Anything contained in this Agreement to the contrary notwithstanding, neither the LC Issuer nor any Lender shall be obligated to extend credit to any Borrower in violation of any limitation or prohibition provided by any applicable statute or regulation. 9.3. Headings. Section headings in the Loan Documents are for convenience of reference only, and shall not govern the interpretation of any of the provisions of the Loan Documents. 9.4. Entire Agreement. The Loan Documents embody the entire agreement and understanding among the Loan Parties, the Agent, the LC Issuer and the Lenders and supersede all prior agreements and understandings among the Loan Parties, the Agent and the Lenders relating to the subject matter thereof other than those contained in the agreement described in Section 10.13 and any Flex-Pricing Provisions contained in any commitment letter entered into in connection with the transaction which is the subject of this Agreement, all of which shall survive and remain in full force and effect during the term of this Agreement. 9.5. Several Obligations; Benefits of this Agreement. The respective obligations of the Lenders hereunder are several and not joint and no Lender shall be the partner or agent of any other lender (except to the extent to which the Agent is authorized to act as administrative agent for the Lenders hereunder). The failure of any Lender to perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. This Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and assigns, provided however, that the parties hereto expressly agree that the Arranger shall enjoy the benefits of the provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth therein and shall have the right to enforce such provisions on its own behalf and in its own name to the same extent as if it were a party to this Agreement. 84 9.6. Expenses; Indemnification. (a) The Borrowers, jointly and severally, shall reimburse the Agent and the Arranger for any reasonable costs, internal charges and out-of-pocket expenses (including without limitation reasonable attorneys' fees) paid or incurred by the Agent or the Arranger in connection with the preparation, negotiation, execution, delivery, syndication, distribution (including, without limitation, via the internet), review, amendment, modification, and administration of the Loan Documents. The Borrowers, jointly and severally, also agree to reimburse the Agent, the Arranger, the LC Issuer and the Lenders for any reasonable costs, internal charges and out-of-pocket expenses (including without limitation reasonable attorneys' fees) paid or incurred by the Agent, the Arranger, the LC Issuer or any Lender in connection with the collection and enforcement of the Loan Documents. Expenses being reimbursed by the Company under this Section include, without limitation, reasonable costs and expenses incurred in connection with: (i) appraisals of each parcel of real Property or interest in real Property described in any Collateral Document, which appraisals shall be in conformity with the applicable requirements of any law or any governmental rule, regulation, policy, guideline or directive (whether or not having the force of law), or any interpretation thereof, including, without limitation, the provisions of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended, reformed or otherwise modified from time to time, and any rules promulgated to implement such provisions (including travel, lodging, meals and other out of pocket expenses for inspections of the Collateral and the Company's operations by the Agent) plus the Agent's then customary charge for field examinations and audits (provided that, if no Event of Default has occurred and is continuing, the Agent may not charge more than $70,000 per Fiscal Year for such field examinations and audits and no more than four such field examinations and audits may be performed in any Fiscal Year at the expense of the Company), and the preparation of certain audit reports (the "Reports") which the Company acknowledges may be prepared by Bank One from time to time and which the Company agrees may be distributed to the Lenders by Bank One pertaining to the Company's and its Subsidiaries' assets from information furnished to it by or on behalf of the Company, after Bank One has exercised its rights of inspection pursuant to this Agreement; (ii) any amendment, modification, supplement, consent, waiver or other documents prepared with respect to any Loan Document and the transactions contemplated thereby; (iii) lien and title searches and title insurance provided, however, that such searches and title insurance with respect to any particular item of collateral shall not be obtained more than once in any twelve month period; (iv) taxes, fees and other charges for recording the Mortgages, filing financing statements and continuations, and other actions to perfect, protect, and continue the Agent's Liens (including costs and expenses paid or incurred by the Agent in connection with the consummation of the Agreement); (v) sums paid or incurred to take any action required of the Company under the Loan Documents that the Company fails to pay or take; (vi) any litigation, contest, dispute, proceeding or action (whether instituted by Agent, the LC Issuer, any Lender, any Loan Party or any other Person and whether as 85 to party, witness or otherwise) in any way relating to the Collateral, the Loan Documents or the transactions contemplated thereby; and (vii) reasonable costs and expenses of forwarding loan proceeds, collecting checks and other items of payment, and establishing and maintaining the Funding Account and lock boxes, and reasonable costs and expenses of preserving and protecting the Collateral. The foregoing shall not be construed to limit any other provisions of the Loan Documents regarding costs and expenses to be paid by any Loan Party. All of the foregoing reasonable costs and expenses may be charged to the Company's Loan Account as Revolving Loans or to another deposit account, all as described in Section 2.17(b). (b) The Borrowers, jointly and severally, hereby further agree to indemnify the Agent, the Arranger, the LC Issuer each Lender, their respective Affiliates, and each of their directors, officers and employees against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitation, all expenses of litigation or preparation therefor whether or not the Agent, the Arranger, the LC Issuer any Lender or any Affiliate is a party thereto) which any of them may pay or incur arising out of or relating to this Agreement, the other Loan Documents, the transactions contemplated hereby or the direct or indirect application or proposed application of the proceeds of any Credit Extension hereunder except to the extent that they are determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the party seeking indemnification. The obligations of the Borrowers under this Section 9.6 shall survive the termination of this Agreement. 9.7. Numbers of Documents. All statements, notices, closing documents, and requests hereunder shall be furnished to the Agent with sufficient counterparts so that the Agent may furnish one to each of the Lenders. 9.8. Accounting. (a) Except as provided to the contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP in a manner consistent with that used in preparing the financial statements referred to in Section 5.5, except that any calculation or determination which is to be made on a consolidated basis shall be made for the Company and all its Subsidiaries. (b) Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Lenders hereunder shall (unless otherwise disclosed to the Lenders in writing at the time of delivery thereof in the manner described in subsection (b) below) be prepared, in accordance with GAAP provided that, if the Company notifies the Agent that it wishes to amend any covenant in Article VI to eliminate the effect of any change in GAAP (or if the Agent notifies the Company that the Required Lenders wish to amend Article VI for such purpose), then the Company's compliance with such covenants shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective until either such notice is withdrawn or such covenant or any such defined term is amended in a manner satisfactory to the Company and the Required Lenders. Except as otherwise expressly provided herein, all references to a time of day shall be references to Chicago time. Notwithstanding anything herein, in any financial statements of the Company or in GAAP to the contrary, for purposes of calculating and determining compliance with the financial covenants in Article VI, including defined terms used therein, (i) no Unrestricted Subsidiary shall be consolidated with the Company and its other Subsidiaries and each Unrestricted Subsidiary shall be treated as if it were an 86 equity interest and all income (except to the extent received by the Company in cash), liabilities and assets of each Unrestricted Subsidiary shall be excluded from all such calculations and determinations thereunder and (ii) any Acquisitions made by the Company or any of its Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the period for which such financial covenants were calculated shall be deemed to have occurred on the first day of the relevant period for which such financial covenants were calculated on a pro forma basis acceptable to the Agent (including, without limitation, adding back such transaction expenses and other charges in connection with acquisitions acceptable to the Agent and excluding such amounts from such pro forma calculations as required by the Agent). (c) The Company shall deliver to the Lenders at the same time as the delivery of any annual, quarterly or monthly financial statement under Section 6.1 hereof (i) a description in reasonable detail of any material variation between the application or other modification of accounting principles employed in the preparation of such statement and the application or other modification of accounting principles employed in the preparation of the immediately prior annual or quarterly financial statements as to which no objection has been made in accordance with the last sentence of subsection (a) above and (ii) if requested by the Agent, reasonable estimates of the difference between such statements arising as a consequence thereof. (d) To enable the ready and consistent determination of compliance with the covenants set forth in Article VI hereof, no Loan Party will change the last day of its Fiscal Year or the last days of its Fiscal Quarters. 9.9. Severability of Provisions. Any provision in any Loan Document that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable. 9.10. Nonliability of Lenders. The relationship between any Loan Party on the one hand and the Lenders, the LC Issuer and the Agent on the other hand shall be solely that of debtor and creditor. Neither the Agent, the Arranger, the LC Issuer nor any Lender shall have any fiduciary responsibilities to any Loan Party. Neither the Agent, the Arranger, the LC Issuer nor any Lender undertakes any responsibility to any Loan Party to review or inform such Loan Party of any matter in connection with any phase of any Loan Party's business or operations. The Loan Parties agree that neither the Agent, the Arranger, the LC Issuer nor any Lender shall have liability to any Loan Party (whether sounding in tort, contract or otherwise) for losses suffered by any Loan Party in connection with, arising out of, or in any way related to, the transactions contemplated and the relationship established by the Loan Documents, or any act, omission or event occurring in connection therewith, unless it is determined in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted from the gross negligence or willful misconduct of the party from which recovery is sought. Neither the Agent, the Arranger, the LC Issuer nor any Lender shall have any liability with respect to, and each Loan Party hereby waives, releases and agrees not to sue for, any special, indirect, consequential or punitive damages suffered by any Loan Party in connection with, arising out of, or in any way related to the Loan Documents or the transactions contemplated thereby. 9.11. Confidentiality. Each Lender agrees to hold any confidential information which it may receive from any Loan Party in connection with this Agreement in confidence, except for disclosure (a) to its Affiliates and to other Lenders and their respective Affiliates, (b) to legal counsel, accountants, and other professional advisors to such Lender or to a Transferee, (c) to regulatory officials, (d) to any Person as requested pursuant to or as required by law, regulation, or legal process, (e) to any Person in 87 connection with any legal proceeding to which such Lender is a party, (f) to such Lender's direct or indirect contractual counterparties in swap agreements or to legal counsel, accountants and other professional advisors to such counterparties, (g) permitted by Section 12.4 and (h) to rating agencies if requested or required by such agencies in connection with a rating relating to the Credit Extensions hereunder. Notwithstanding anything herein to the contrary, confidential information shall not include, and each Lender (and each employee, representative or other agent of any Lender) may disclose to any and all Persons, without limitation of any kind, the "tax treatment" and "tax structure" (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are or have been provided to such Lender relating to such tax treatment or tax structure; provided that, with respect to any document or similar item that in either case contains information concerning such tax treatment or tax structure of the transactions contemplated hereby as well as other information, this sentence shall only apply to such portions of the document or similar item that relate to such tax treatment or tax structure. 9.12. Nonreliance. Each Lender hereby represents that it is not relying on or looking to any Margin Stock for the repayment of the Credit Extensions provided for herein. 9.13. Disclosure. Each Loan Party and each Lender hereby acknowledges and agrees that Bank One and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with any of the Loan Parties and their respective Affiliates. 9.14. Amendment and Restatement. This Agreement is an amendment and restatement of the Existing Credit Agreement. All loans, letters of credit and other indebtedness, obligations and liabilities under the Existing Credit Agreement and all Liens securing payment thereof under the Existing Credit Agreement shall in all respects be continuing and this Agreement shall not be deemed to evidence or result in a novation or repayment and re-borrowing of such loans, letters of credit and other indebtedness, obligations and liabilities. This Agreement shall supersede the Existing Credit Agreement. From and after the Closing Date, this Agreement shall govern the terms of the loans, letters of credit and other indebtedness, obligations and liabilities under the Existing Credit Agreement. To the extent not replaced by Loan Documents dated as of the Closing Date, any "Loan Documents" (as defined in the Existing Credit Agreement) executed in connection with the Existing Credit Agreement (other than any such Loan Document that is specifically terminated by the parties thereto) shall continue to be effective, and all references in those prior Loan Documents to the Existing Credit Agreement shall be deemed to refer to this Agreement without further amendment thereof. ARTICLE X THE AGENT 10.1. Appointment; Nature of Relationship. Bank One, NA is hereby appointed by each of the Lenders as its contractual representative (herein referred to as the "Agent") hereunder and under each other Loan Document, and each of the Lenders irrevocably authorizes the Agent to act as the contractual representative of such Lender with the rights and duties expressly set forth herein and in the other Loan Documents. The Agent agrees to act as such contractual representative upon the express conditions contained in this Article X. Notwithstanding the use of the defined term "Agent," it is expressly understood and agreed that the Agent shall not have any fiduciary responsibilities to any Lender by reason of this Agreement or any other Loan Document and that the Agent is merely acting as the contractual representative of the Lenders with only those duties as are expressly set forth in this Agreement and the other Loan Documents. In its capacity as the Lenders' contractual representative, the Agent (a) does not 88 hereby assume any fiduciary duties to any of the Lenders, (b) is a "representative" of the Lenders within the meaning of the term "secured party" as defined in the Michigan Uniform Commercial Code and (c) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Loan Documents. Each of the Lenders hereby agrees to assert no claim against the Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender hereby waives. 10.2. Powers. The Agent shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Agent shall have no implied duties to the Lenders, or any obligation to the Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Agent. 10.3. General Immunity. Neither the Agent nor any of its directors, officers, agents or employees shall be liable to any Loan Party, the Lenders or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith except to the extent such action or inaction is determined in a final non-appealable judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of such Person. 10.4. No Responsibility for Credit Extensions, Recitals, etc. Neither the Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (a) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder; (b) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document, including, without limitation, any agreement by an obligor to furnish information directly to each Lender; (c) the satisfaction of any condition specified in Article IV, except receipt of items required to be delivered solely to the Agent; (d) the existence or possible existence of any Default or Unmatured Default; (e) the validity, enforceability, effectiveness, sufficiency or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith; (f) the value, sufficiency, creation, perfection or priority of any Lien in any Collateral; or (g) the financial condition of any Loan Party, any Guarantor or any Affiliate of any Loan Party. The Agent shall have no duty to disclose to the Lenders information that is not required to be furnished by the Loan Parties to the Agent at such time, but is voluntarily furnished by any Loan Party to the Agent (either in its capacity as the Agent or in its individual capacity). 10.5. Action on Instructions of the Lenders. The Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by the Required Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders. The Lenders hereby acknowledge that the Agent shall be under no duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement or any other Loan Document unless it shall be requested in writing to do so by the Required Lenders. The Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action. 10.6. Employment of Agents and Counsel. The Agent may execute any of its duties as Agent hereunder and under any other Loan Document by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Lenders, except as to money or securities received by the Agent or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Agent shall be entitled to advice of counsel concerning the contractual arrangement 89 between the Agent and the Lenders and all matters pertaining to the Agent's duties hereunder and under any other Loan Document. 10.7. Reliance on Documents; Counsel. The Agent shall be entitled to rely upon any Note, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex, electronic mail message, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and, in respect to legal matters, upon the opinion of counsel selected by the Agent, which counsel may be employees of the Agent. For purposes of determining compliance with the conditions specified in Sections 4.1 and 4.2, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Agent shall have received notice from such Lender prior to the applicable date specifying its objection thereto. 10.8. Agent's Reimbursement and Indemnification. The Lenders agree to reimburse and indemnify the Agent ratably in proportion to their respective Commitments (or, if the Commitments have been terminated, in proportion to their Commitments immediately prior to such termination) (a) for any amounts not reimbursed by the Company for which the Agent is entitled to reimbursement by the Company under the Loan Documents, (b) for any other expenses incurred by the Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents (including, without limitation, for any expenses incurred by the Agent in connection with any dispute between the Agent and any Lender or between two or more of the Lenders) and (c) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby (including, without limitation, for any such amounts incurred by or asserted against the Agent in connection with any dispute between the Agent and any Lender or between two or more of the Lenders), or the enforcement of any of the terms of the Loan Documents or of any such other documents, provided that, (i) no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Agent and (ii) any indemnification required pursuant to Section 3.5(g) shall, notwithstanding the provisions of this Section 10.8, be paid by the relevant Lender in accordance with the provisions thereof. The obligations of the Lenders under this Section 10.8 shall survive payment of the Obligations and termination of this Agreement. 10.9. Notice of Default. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Unmatured Default hereunder unless the Agent has received written notice from a Lender or the Company referring to this Agreement describing such Default or Unmatured Default and stating that such notice is a "notice of default." In the event that the Agent receives such a notice, the Agent shall give prompt notice thereof to the Lenders; provided, that, Agent shall not be liable to any Lender for any failure to do so, except to the extent that such failure is attributable to Agent's gross negligence or willful misconduct. 10.10. Rights as a Lender. In the event the Agent is a Lender, the Agent shall have the same rights and powers hereunder and under any other Loan Document with respect to its Commitment and its Credit Extensions as any Lender and may exercise the same as though it were not the Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is a Lender, unless the context otherwise indicates, include the Agent in its individual capacity. The Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Loan Document, with any Loan Party in which such Loan Party is not restricted hereby from engaging with any other Person, all as if Bank One 90 were not Agent and without any duty to account therefor to Lenders. Bank One and its Affiliates may accept fees and other consideration from any Loan Party for services in connection with this Agreement or otherwise without having to account for the same to Lenders. The Agent in its individual capacity, is not obligated to remain a Lender. 10.11. Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Agent, the Arranger or any other Lender and based on the financial statements prepared by the Loan Parties and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Agent, the Arranger or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents. 10.12. Successor Agent. The Agent may resign at any time by giving written notice thereof to the Lenders and the Borrowers, such resignation to be effective upon the appointment of a successor Agent or, if no successor Agent has been appointed, forty-five days after the retiring Agent gives notice of its intention to resign. The Agent may be removed at any time with or without cause by written notice received by the Agent from the Required Lenders, such removal to be effective on the date specified by the Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint, on behalf of the Borrowers and the Lenders, a successor Agent. If no successor Agent shall have been so appointed by the Required Lenders within thirty days after the resigning Agent's giving notice of its intention to resign, then the resigning Agent may appoint, on behalf of the Borrowers and the Lenders, a successor Agent. Notwithstanding the previous sentence, the Agent may at any time without the consent of the Borrowers or any Lender, appoint any of its Affiliates which is a commercial bank as a successor Agent hereunder. If the Agent has resigned or been removed and no successor Agent has been appointed, the Lenders may perform all the duties of the Agent hereunder and the Borrowers shall make all payments in respect of the Obligations to the applicable Lender and for all other purposes shall deal directly with the Lenders. No successor Agent shall be deemed to be appointed hereunder until such successor Agent has accepted the appointment. Any such successor Agent shall be a commercial bank having capital and retained earnings of at least $100,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the resigning or removed Agent. Upon the effectiveness of the resignation or removal of the Agent, the resigning or removed Agent shall be discharged from its duties and obligations hereunder and under the Loan Documents. After the effectiveness of the resignation or removal of an Agent, the provisions of this Article X shall continue in effect for the benefit of such Agent in respect of any actions taken or omitted to be taken by it while it was acting as the Agent hereunder and under the other Loan Documents. In the event that there is a successor to the Agent by merger, or the Agent assigns its duties and obligations to an Affiliate pursuant to this Section 10.12, then the term "Prime Rate" as used in this Agreement means the prime rate, base rate or other analogous rate of the new Agent. 10.13. Agent and Arranger Fees. The Company agrees to pay to the Agent and the Arranger, for their respective accounts, the fees agreed to by the Company, the Agent and the Arranger from time to time. 10.14. Delegation to Affiliates. The Loan Parties and the Lenders agree that the Agent may delegate any of its duties under this Agreement to any of its Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents and employees) which performs duties in connection with this Agreement shall be entitled to the same benefits of the indemnification, waiver and other protective provisions to which the Agent is entitled under Articles IX and X. 91 10.15. Execution of Loan Documents. The Lenders hereby empower and authorize the Agent, on behalf of the Agent and the Lenders, to execute and deliver to the Loan Parties the Loan Documents and all related agreements, certificates, documents, or instruments as shall be necessary or appropriate to effect the purposes of the Loan Documents. Each Lender agrees that any action taken by the Agent or the Required Lenders in accordance with the terms of this Agreement or the other Loan Documents, and the exercise by the Agent or the Required Lenders of their respective powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Lenders. The Lenders acknowledge that all of the Obligations hereunder constitute one debt, secured pari passu by all of the Collateral. 10.16. Collateral Matters. (a) The Lenders hereby irrevocably authorize the Agent, at its option and in its sole discretion, to release or subordinate (as applicable) any Liens granted to the Agent by the Loan Parties on any Collateral (i) upon the termination of the Aggregate Commitment and payment and satisfaction in full in cash of all Obligations, (ii) constituting Property being sold or disposed of if the Loan Party disposing of such Property certifies to the Agent that the sale or disposition is made in compliance with the terms of this Agreement (and the Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting Property in which no Loan Party has at any time during the term of this Agreement owned any interest, (iv) constituting property leased to a Loan Party under a lease which has expired or been terminated in a transaction permitted under this Agreement, (v) owned by or leased to an Loan Party which is subject to a purchase money security interest or which is the subject of a Capitalized Lease, in either case, entered into by such Loan Party pursuant to Section 6.17(g), or (vi) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Agent and the Lenders pursuant to Section 8.1. Upon request by the Agent at any time, the Lenders will confirm in writing the Agent's authority to release any Liens upon particular types or items of Collateral pursuant to this Section 10.16. Except as provided in the preceding sentence, the Agent will not release any Liens on Collateral without the prior written authorization of the Required Lenders; provided that, the Agent may in its discretion, release its Liens on Collateral valued in the aggregate not in excess of $1,000,000 during any calendar year without the prior written authorization of the Lenders. (b) Upon receipt by the Agent of any authorization required pursuant to Section 10.16(a) from the Required Lenders of the Agent's authority to release any Liens upon particular types or items of Collateral, and upon at least five Business Days prior written request by the Loan Parties, the Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of its Liens upon such Collateral; provided that, (i) the Agent shall not be required to execute any such document on terms which, in the Agent's opinion, would expose the Agent to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty and (ii) such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral. (c) The Agent shall have no obligation whatsoever to any of the Lenders to assure that the Collateral exists or is owned by the Loan Parties or is cared for, protected, or insured or has been encumbered, or that the Liens granted to the Agent therein have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular 92 priority, or to exercise at all or in any particular manner or under any duty of care, disclosure, or fidelity, or to continue exercising, any of the rights, authorities, and powers granted or available to the Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, the Agent may act in any manner it may deem appropriate, in its sole discretion given the Agent's own interest in the Collateral in its capacity as one of the Lenders and that the Agent shall have no other duty or liability whatsoever to any Lender as to any of the foregoing. (d) Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Agent and the Lenders, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession. Should any Lender (other than the Agent) obtain possession of any such Collateral, such Lender shall notify the Agent thereof, and, promptly upon the Agent's request therefor shall deliver such Collateral to the Agent or otherwise deal with such Collateral in accordance with the Agent's instructions. (e) Each Lender hereby agrees as follows: (a) such Lender is deemed to have requested that the Agent furnish such Lender, promptly after it becomes available, a copy of each Report prepared by or on behalf of the Agent; (b) such Lender expressly agrees and acknowledges that neither Bank One nor the Agent (i) makes any representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein, or (ii) shall be liable for any information contained in any Report; (c) such Lender expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that the Agent, Bank One, or any other party performing any audit or examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties' books and records, as well as on representations of the Loan Parties' personnel and that Bank One undertakes no obligation to update, correct or supplement the Reports; (d) such Lender agrees to keep all Reports confidential and strictly for its internal use, not share the Report with any Loan Party and not to distribute any Report to any other Person except as otherwise permitted pursuant to this Agreement; and (e) without limiting the generality of any other indemnification provision contained in this Agreement, such Lender agrees (i) that neither Bank One nor the Agent shall be liable to you or any other Person receiving a copy of the Report for any inaccuracy or omission contained in or relating to a Report, (ii) to conduct its own due diligence investigation and make credit decisions with respect to the Loan Parties based on such documents as such Lender deems appropriate without any reliance on the Reports or on the Agent or Bank One, (iii) to hold the Agent and any such other Person preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any Credit Extensions that the indemnifying Lender has made or may make to the Loan Parties, or the indemnifying Lender's participation in, or the indemnifying Lender's purchase of, any Obligations and (iv) to pay and protect, and indemnify, defend, and hold the Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorney fees) incurred by the Agent and any such other Person preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender. 10.17. Co-Agents, Documentation Agent, Syndication Agent, etc. Neither any of the Lenders identified in this Agreement as a "co-agent" nor the Documentation Agent or the Syndication Agent shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender. Each Lender hereby makes the same acknowledgments with respect to such Lenders as it makes with respect to the Agent in Section 10.11. 93 ARTICLE XI SETOFF; RATABLE PAYMENTS 11.1. Setoff. In addition to, and without limitation of, any rights of the Lenders under applicable law, if any Loan Party becomes insolvent, however evidenced, or any Default occurs, any and all deposits (including all account balances, whether provisional or final and whether or not collected or available) and any other Indebtedness at any time held or owing by any Lender or any Affiliate of any Lender to or for the credit or account of any Loan Party may be offset and applied toward the payment of the Secured Obligations owing to such Lender, whether or not the Secured Obligations, or any part thereof, shall then be due. Notwithstanding the foregoing, no Lender shall exercise any right of setoff, banker's lien, or the like against any deposit account or Property of any Loan Party held or maintained by such Lender without the prior written consent of the Required Lenders. 11.2. Ratable Payments. If any Lender, whether by setoff or otherwise, has payment made to it upon its Credit Exposure (other than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any other Lender, such Lender agrees, promptly upon demand, to purchase a portion of the Aggregate Credit Exposure held by the other Lenders so that after such purchase each Lender will hold its Pro Rata Share of the Aggregate Credit Exposure. If any Lender, whether in connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Secured Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon demand, to take such action necessary such that all Lenders share in the benefits of such collateral ratably in proportion to respective Pro Rata Share of the Aggregate Credit Exposure. In case any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be made. ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS 12.1. Successors and Assigns. The terms and provisions of the Loan Documents shall be binding upon and inure to the benefit of the Loan Parties and the Lenders and their respective successors and assigns permitted hereby, except that (a) the Loan Parties shall not have the right to assign its rights or obligations under the Loan Documents without the prior written consent of each Lender, (b) any assignment by any Lender must be made in compliance with Section 12.3, and (c) any transfer by Participation must be made in compliance with Section 12.2. Any attempted assignment or transfer by any party not made in compliance with this Section 12.1 shall be null and void, unless such attempted assignment or transfer is treated as a participation in accordance with Section 12.3. The parties to this Agreement acknowledge that clause (b) of this Section 12.1 relates only to absolute assignments and this Section 12.1 does not prohibit assignments creating security interests, including, without limitation, (x) any pledge or assignment by any Lender of all or any portion of its rights under this Agreement and any Note to a Federal Reserve Bank or (y) in the case of a Lender which is a Fund, any pledge or assignment of all or any portion of its rights under this Agreement and any Note to its trustee in support of its obligations to its trustee; provided however, that no such pledge or assignment creating a security interest shall release the transferor Lender from its obligations hereunder unless and until the parties thereto have 94 complied with the provisions of Section 12.3. The Agent may treat the Person which made any Credit Extension or which holds any Note as the owner thereof for all purposes hereof unless and until such Person complies with Section 12.3; provided however,, that the Agent may in its discretion (but shall not be required to) follow instructions from the Person which made any Credit Extension or which holds any Note to direct payments relating to such Credit Extension or Note to another Person. Any assignee of the rights to any Credit Extension or any Note agrees by acceptance of such assignment to be bound by all the terms and provisions of the Loan Documents. Any request, authority or consent of any Person, who at the time of making such request or giving such authority or consent is the owner of the rights to any Credit Extension (whether or not a Note has been issued in evidence thereof), shall be conclusive and binding on any subsequent holder or assignee of the rights to such Credit Extension. 12.2. Participations. (a) Permitted Participants; Effect. Any Lender may at any time sell to one or more banks or other entities ("Participants") participating interests in any Credit Exposure of such Lender, any Note held by such Lender, any Commitment of such Lender or any other interest of such Lender under the Loan Documents. In the event of any such sale by a Lender of participating interests to a Participant, such Lender's obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, such Lender shall remain the owner of its Credit Exposure and the holder of any Note issued to it in evidence thereof for all purposes under the Loan Documents, all amounts payable by the Loan Parties under this Agreement shall be determined as if such Lender had not sold such participating interests, and the Loan Parties and the Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under the Loan Documents. (b) Voting Rights. Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, modification or waiver of any provision of the Loan Documents other than any amendment, modification or waiver with respect to any Credit Extension or Commitment in which such Participant has an interest which would require consent of all of the Lenders pursuant to the terms of Section 8.3 or of any other Loan Document. (c) Benefit of Certain Provisions. Each Loan Party agrees that each Participant shall be deemed to have the right of setoff provided in Section 11.1 in respect of its participating interest in amounts owing under the Loan Documents to the same extent as if the amount of its participating interest were owing directly to it as a Lender under the Loan Documents, provided that, each Lender shall retain the right of setoff provided in Section 11.1 with respect to the amount of participating interests sold to each Participant. The Lenders agree to share with each Participant, and each Participant, by exercising the right of setoff provided in Section 11.1, agrees to share with each Lender, any amount received pursuant to the exercise of its right of setoff, such amounts to be shared in accordance with Section 11.2 as if each Participant were a Lender. Each Loan Party further agrees that each Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4 and 3.5 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 12.3, provided that, (i) a Participant shall not be entitled to receive any greater payment under Section 3.1, 3.2 or 3.5 than the Lender who sold the participating interest to such Participant would have received had it retained such interest for its own account, unless the sale of such interest to such Participant is made with the prior written consent of the Company, and (ii) any Participant not incorporated under the laws of the U.S. or any state thereof agrees to comply with the provisions of Section 3.5 to the same extent as if it were a Lender. 95 12.3. Assignments. (a) Permitted Assignments. Any Lender may at any time assign to one or more banks or other entities ("Purchasers") all or any part of its rights and obligations under the Loan Documents. Such assignment shall be substantially in the form of Exhibit F (an "Assignment Agreement"). Each such assignment with respect to a Purchaser which is not a Lender or an Affiliate of a Lender or an Approved Fund shall either be in an amount equal to the entire applicable Commitment and Credit Extensions of the assigning Lender or (unless each of the Company and the Agent otherwise consents) be in an aggregate amount not less than $5,000,000. The amount of the assignment shall be based on the Commitment or outstanding Credit Extensions (if the Commitment has been terminated) subject to the assignment, determined as of the date of such assignment or as of the "Trade Date," if the "Trade Date" is specified in the assignment. (b) Consents. The consent of the Company shall be required prior to an assignment becoming effective unless the Purchaser is a Lender, an Affiliate of a Lender or an Approved Fund, provided that, the consent of the Company shall not be required if a Default has occurred and is continuing. The consent of the Agent shall be required prior to an assignment becoming effective unless the Purchaser is a Lender. The consent of the LC Issuer shall be required prior to an assignment of a Commitment becoming effective unless the Purchaser is a Lender with a Commitment. Any consent required under this Section 12.3(b) shall not be unreasonably withheld or delayed. (c) Effect; Closing Date. Upon (i) delivery to the Agent of a duly executed Assignment Agreement, together with any consents required by Sections 12.3(a) and 12.3(b), and (ii) payment of a $3,500 fee to the Agent for processing such assignment (unless such fee is waived by the Agent), such Assignment Agreement shall become effective on the effective date specified by the Agent in such Assignment Agreement. The Assignment Agreement shall contain a representation by the Purchaser to the effect that none of the consideration used to make the purchase of the Commitment and Credit Exposure under the applicable Assignment Agreement constitutes "plan assets" as defined under ERISA and that the rights and interests of the Purchaser in and under the Loan Documents will not be "plan assets" under ERISA. On and after the effective date of such Assignment Agreement, such Purchaser shall for all purposes be a Lender party to this Agreement and any other Loan Document executed by or on behalf of the Lenders and shall have all the rights and obligations of a Lender under the Loan Documents, to the same extent as if it were an original party thereto, and the transferor Lender shall be released with respect to the Commitment and Credit Exposure assigned to such Purchaser without any further consent or action by the Company, the Lenders or the Agent. In the case of an Assignment Agreement covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a Lender hereunder but shall continue to be entitled to the benefits of, and subject to, those provisions of this Agreement and the other Loan Documents which survive payment of the Obligations and termination of the applicable agreement. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 12.3 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 12.2. Upon the consummation of any assignment to a Purchaser pursuant to this Section 12.3(c), the transferor Lender, the Agent and the Company shall, if the transferor Lender or the Purchaser desires that its Loans be evidenced by Notes, make appropriate arrangements so that new Notes or, as appropriate, replacement Notes are issued to such transferor Lender and new Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in each case in principal amounts reflecting their respective Commitments, as adjusted pursuant to such assignment. 96 (d) Register. The Agent, acting solely for this purpose as an agent of the Company, shall maintain at one of its offices in the U.S. a copy of each Assignment Agreement delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Credit Extensions owing to, each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive, and the Company, the Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Company and any Lender, at any reasonable time and from time to time upon reasonable prior notice. 12.4. Dissemination of Information. Each Loan Party authorizes each Lender to disclose to any Participant or Purchaser or any other Person acquiring an interest in the Loan Documents by operation of law (each a "Transferee") and any prospective Transferee any and all information in such Lender's possession concerning the creditworthiness of the Company and its Subsidiaries, including without limitation any information contained in any Reports; provided that, each Transferee and prospective Transferee agrees to be bound by Section 9.11 of this Agreement. 12.5. Tax Treatment. If any interest in any Loan Document is transferred to any Transferee which is not incorporated under the laws of the U.S. or any state thereof, the transferor Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, to comply with the provisions of Section 3.5(d). 12.6. Assignment by LC Issuer. Notwithstanding anything contained herein, if at any time Bank One assigns all of its Commitment and Revolving Loans pursuant to Section 12.3, Bank One may, upon thirty days' notice to the Company and the Lenders, resign as LC Issuer. In the event of any such resignation as LC Issuer, the Company shall be entitled to appoint from among the Lenders a successor LC Issuer hereunder; provided however, that no failure by the Company to appoint any such successor shall affect the resignation of Bank One as LC Issuer. If Bank One resigns as LC Issuer, it shall retain all the rights and obligations of the LC Issuer hereunder with respect to the Facility LCs outstanding as of the effective date of its resignation as LC Issuer and all LC Obligations with respect thereto (including the right to require the Lenders to make Revolving Loans or fund risk participations in outstanding Reimbursement Obligations pursuant to Section 2.1.2(d)). ARTICLE XIII NOTICES 13.1. Notices; Effectiveness; Electronic Communication. (a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows: (i) if to any Loan Party, at its address or telecopier number set forth on the signature page hereof; 97 (ii) if to the Agent, at its address or telecopier number set forth on the signature page hereof; (iii) if to the LC Issuer, at its address or telecopier number set forth on the signature page hereof; (iv) if to a Lender, to it at its address or telecopier number set forth in its Administrative Questionnaire. Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices delivered through electronic communications to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b). (b) Electronic Communications. Notices and other communications to the Lenders and the LC Issuer hereunder may be delivered or furnished by electronic communication (including e-mail and internet or intranet websites) pursuant to procedures approved by the Agent or as otherwise determined by the Agent, provided that, the foregoing shall not apply to notices to any Lender or the LC Issuer pursuant to Article II if such Lender or the LC Issuer, as applicable, has notified the Agent that it is incapable of receiving notices under such Article by electronic communication. The Agent or any Loan Party may, in its respective discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it or as it otherwise determines, provided that such determination or approval may be limited to particular notices or communications. Unless the Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender's receipt of an acknowledgement from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor. 13.2. Change of Address, Etc. Any party hereto may change its address or telecopier number for notices and other communications hereunder by notice to the other parties hereto. ARTICLE XIV COUNTERPARTS This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be effective when it has been executed by the Loan Parties, the Agent, the LC Issuer and the Lenders and each party has notified the Agent by facsimile transmission or telephone that it has taken such action. 98 ARTICLE XV GUARANTY 15.1. Guaranty. Each Guarantor (with respect to the Secured Obligations for which it is a Guarantor as described in the definition of Guarantor in Article I) hereby agrees that it is jointly and severally liable for, and, as primary obligor and not merely as surety, absolutely and unconditionally guarantees to the Lenders the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Secured Obligations and all costs and expenses including, without limitation, all court costs and attorneys' and paralegals' fees (including allocated costs of in-house counsel and paralegals) and expenses paid or incurred by the Agent, the LC Issuer and the Lenders in endeavoring to collect all or any part of the Secured Obligations from, or in prosecuting any action against, any Borrower, any Guarantor or any other guarantor of all or any part of the Obligations (such costs and expenses, together with the Secured Obligations, collectively the "Guaranteed Obligations"). Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. 15.2. Guaranty of Payment. This Guaranty is a guaranty of payment and not of collection. Each Guarantor waives any right to require the Agent, the LC Issuer or any Lender to sue any Borrower, any Guarantor, any other guarantor, or any other person obligated for all or any part of the Guaranteed Obligations, or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations. 15.3. No Discharge or Diminishment of Guaranty. (f) Except as otherwise provided for herein and to the extent provided for herein, the obligations of each Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Guaranteed Obligations), including: (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of any Borrower, any Guarantor or any other guarantor of or other person liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Borrower, any Guarantor, or any other guarantor of or other person liable for any of the Guaranteed Obligations, or their assets or any resulting release or discharge of any obligation of any Borrower, any Guarantor, or any other guarantor of or other person liable for any of the Guaranteed Obligations; or (iv) the existence of any claim, setoff or other rights which any Guarantor may have at any time against any Borrower, any Guarantor, any other guarantor of the Guaranteed Obligations, the Agent, the LC Issuer, any Lender, or any other person, whether in connection herewith or in any unrelated transactions. 99 (g) The obligations of each Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Borrower, any Guarantor or any other guarantor of or other person liable for any of the Guaranteed Obligations, of the Guaranteed Obligations or any part thereof. (h) Further, the obligations of any Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of the Agent, the LC Issuer or any Lender to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection, or invalidity of any indirect or direct security for the obligations of any Borrower or Guarantor for all or any part of the Guaranteed Obligations or any obligations of any other guarantor of or other person liable for any of the Guaranteed Obligations; (iv) any action or failure to act by the Agent, the LC Issuer or any Lender with respect to any collateral securing any part of the Guaranteed Obligations; (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Guarantor or that would otherwise operate as a discharge of any Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of the Guaranteed Obligations). 15.4. Defenses Waived. To the fullest extent permitted by applicable law, each Guarantor hereby waives any defense based on or arising out of any defense of any Borrower or any Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or the cessation from any cause of the liability of any Borrower or any Guarantor, other than the indefeasible payment in full in cash of the Guaranteed Obligations. Without limiting the generality of the foregoing, each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any person against any Borrower, any Guarantor, any other guarantor of any of the Guaranteed Obligations, or any other person. The Agent may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Borrower, any Guarantor, any other guarantor or any other person liable on any part of the Guaranteed Obligations or exercise any other right or remedy available to it against any Borrower, any Guarantor, any other guarantor or any other person liable on any of the Guaranteed Obligations, without affecting or impairing in any way the liability of such Guarantor under this Guaranty except to the extent the Guaranteed Obligations have been fully and indefeasibly paid in cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Guarantor 100 against any Borrower, any other guarantor or any other person liable on any of the Guaranteed Obligations, as the case may be, or any security. 15.5. Rights of Subrogation. No Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification that it has against any Borrower, any Guarantor, any person liable on the Guaranteed Obligations, or any collateral, until the Loan Parties and the Guarantors have fully performed all their obligations to the Agent, the LC Issuer and the Lender. 15.6. Reinstatement; Stay of Acceleration. If at any time any payment of any portion of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, or reorganization of any Borrower or otherwise, each Guarantor's obligations under this Guaranty with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not the Agent, the LC Issuer and the Lenders are in possession of this Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Guarantors forthwith on demand by the Lender. 15.7. Information. Each Guarantor assumes all responsibility for being and keeping itself informed of each Borrower's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Guarantor assumes and incurs under this Guaranty, and agrees that neither the Agent, the LC Issuer nor any Lender shall have any duty to advise any Guarantor of information known to it regarding those circumstances or risks. 15.8. Termination. The Lenders may continue to make loans or extend credit to the Borrowers based on this Guaranty until five days after it receives written notice of termination from any Guarantor. Notwithstanding receipt of any such notice, each Guarantor will continue to be liable to the Lender for any Guaranteed Obligations created, assumed or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals, extensions, modifications and amendments with respect to, or substitutions for, all or any part of that Guaranteed Obligations. 15.9. Taxes. All payments of the Guaranteed Obligations will be made by each Guarantor free and clear of and without deduction for or on account of any and all present or future taxes, levies, imposts, duties, charges, deductions or withholdings of whatever nature imposed by any governmental authority with respect to such payments, and any and all liabilities with respect to the foregoing, but excluding franchise taxes and taxes imposed on overall net income of the Lender by the U.S. or the jurisdiction in which the Lender's applicable Lending Installation is located (collectively, "Taxes"). If any Guarantor is required by law to deduct any Taxes from or in respect of any sum payable to the Lenders under this Guaranty, (a) the sum payable must be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this provision) the Lenders receive an amount equal to the sum it would have received had no such deductions been made, (b) the Guarantors must then make such deductions, and must pay the full amount deducted to the relevant authority in accordance with applicable law, and (c) the Guarantors must furnish to the Lender within forty-five days after their due date certified copies of all official receipts evidencing payment thereof. 15.10. Severability. The provisions of this Guaranty are severable, and in any action or proceeding involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor under this Guaranty would otherwise be held or determined to be avoidable, invalid or unenforceable on 101 account of the amount of such Guarantor's liability under this Guaranty, then, notwithstanding any other provision of this Guaranty to the contrary, the amount of such liability shall, without any further action by the Guarantors or the Lenders, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined hereunder being the relevant Guarantor's "Maximum Liability". This Section with respect to the Maximum Liability of each Guarantor is intended solely to preserve the rights of the Lenders to the maximum extent not subject to avoidance under applicable law, and no Guarantor nor any other person or entity shall have any right or claim under this Section with respect to such Maximum Liability, except to the extent necessary so that the obligations of any Guarantor hereunder shall not be rendered voidable under applicable law. Each Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the Maximum Liability of each Guarantor without impairing this Guaranty or affecting the rights and remedies of the Lenders hereunder, provided that, nothing in this sentence shall be construed to increase any Guarantor's obligations hereunder beyond its Maximum Liability. 15.11. Contribution. In the event any Guarantor (a "Paying Guarantor") shall make any payment or payments under this Guaranty or shall suffer any loss as a result of any realization upon any collateral granted by it to secure its obligations under this Guaranty, each other Guarantor (each a "Non-Paying Guarantor") shall contribute to such Paying Guarantor an amount equal to such Non-Paying Guarantor's "Pro Rata Share" of such payment or payments made, or losses suffered, by such Paying Guarantor. For purposes of this Article XV, each Non-Paying Guarantor's "Pro Rata Share" with respect to any such payment or loss by a Paying Guarantor shall be determined as of the date on which such payment or loss was made by reference to the ratio of (i) such Non-Paying Guarantor's Maximum Liability as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder) or, if such Non-Paying Guarantor's Maximum Liability has not been determined, the aggregate amount of all monies received by such Non-Paying Guarantor from the Borrowers after the date hereof (whether by loan, capital infusion or by other means) to (ii) the aggregate Maximum Liability of all Guarantors hereunder (including such Paying Guarantor) as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder), or to the extent that a Maximum Liability has not been determined for any Guarantor, the aggregate amount of all monies received by such Guarantors from the Borrowers after the date hereof (whether by loan, capital infusion or by other means). Nothing in this provision shall affect any Guarantor's several liability for the entire amount of the Guaranteed Obligations (up to such Guarantor's Maximum Liability). Each of the Guarantors covenants and agrees that its right to receive any contribution under this Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of payment to the payment in full in cash of the Guaranteed Obligations. This provision is for the benefit of both the Agent, the LC Issuer, the Lenders and the Guarantors and may be enforced by any one, or more, or all of them in accordance with the terms hereof. 15.12. Lending Installations. The Guaranteed Obligations may be booked at any Lending Installation. All terms of this Guaranty apply to and may be enforced by or on behalf of any Lending Installation. 15.13 Liability Cumulative. The liability of each Loan Party as a Guarantor under this Article XV is in addition to and shall be cumulative with all liabilities of each Loan Party to the Agent, the LC Issuer and the Lenders under this Agreement and the other Loan Documents to which such Loan Party is a party or in respect of any obligations of liabilities of the other Loan Parties, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary. 102 ARTICLE XVI CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL TRIAL 16.1. CHOICE OF LAW. THE LOAN DOCUMENTS OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF MICHIGAN, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. 16.2. CONSENT TO JURISDICTION. EACH LOAN PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR MICHIGAN STATE COURT SITTING IN DETROIT, MICHIGAN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND EACH LOAN PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY LOAN PARTY AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTION WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN DETROIT, MICHIGAN. 16.3. WAIVER OF JURY TRIAL. EACH LOAN PARTY, THE AGENT, THE LC ISSUER AND EACH LENDER HEREBY WAIVE JURY TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER. [Signature Pages Follow] 103 IN WITNESS WHEREOF, the Loan Parties, the Lenders, the LC Issuer and the Agent have executed this Agreement as of the date first above written. COMPANY: MSX INTERNATIONAL, INC. By: /s/ Frederick Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President FOREIGN SUBSIDIARY BORROWERS: MSX INTERNATIONAL NETHERLANDS B.V. By: /s/ Frederick Minturn Name: Frederick K. Minturn ------------------------------ Title: Director MSX INTERNATIONAL LIMITED By: /s/ Frederick Minturn Name: Frederick K. Minturn ------------------------------ Title: Director MSX INTERNATIONAL AUSTRALIA PTY LIMITED By: /s/ Frederick Minturn Name: Frederick K. Minturn ------------------------------ Title: Director OTHER LOAN PARTIES: MSX INTERNATIONAL HOLDINGS LIMITED By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Director MSX INTERNATIONAL SERVICES (HOLDINGS), INC. By: /s/ Frederick Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President 104 MSX INTERNATIONAL BUSINESS SERVICES, INC. By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President MSX INTERNATIONAL ENGINEERING SERVICES, INC. By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President MEGATECH ENGINEERING, INC. By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President CHELSEA COMPUTER CONSULTANTS, INC. By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President MANAGEMENT RESOURCES INTERNATIONAL, INC. By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President INTRANATIONAL COMPUTER CONSULTANTS By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President MSX INTERNATIONAL STRATEGIC TECHNOLOGY, INC. By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President 105 MSX INTERNATIONAL DEALERNET SERVICES, INC. By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President MSX INTERNATIONAL NETHERLANDS (HOLDINGS), C.V. By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Representative of the Partners MSX INTERNATIONAL EUROPEAN (HOLDINGS), L.L.C. By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President CREATIVE TECHNOLOGY SERVICES, L.L.C. By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President PILOT COMPUTER SERVICES, INCORPORATED By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President MILLENNIUM COMPUTER SYSTEMS, INC. By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President MSX INTERNATIONAL PLATFORM SERVICES, LLC By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Manager 106 MSX INTERNATIONAL (HOLDINGS), INC. By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President MSX INTERNATIONAL TECHNOLOGY SERVICES, INC. By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President PROGRAMMING MANAGEMENT & SYSTEMS, INC. By: /s/ Frederick K. Minturn Name: Frederick K. Minturn ------------------------------ Title: Vice President NOTICE ADDRESS FOR ALL LOAN PARTIES: c/o MSX International, Inc. Address: 22355 West Eleven Mile Road Southfield, MI 48034 Attention: David Crittenden Telephone: (248) 829-6031 Facsimile: (248) 829- 107 LENDERS: BANK ONE, NA, as Agent and LC Issuer and as a Lender By: /s/ Brian A. Banning Name: Brian A. Banning ------------------------------ Title: Vice President Address for notices: Bank One Asset Based Lending 50 South Main Street Mail Code: OH2-5167 Akron, Ohio 44308 Attention: Roger F. Reeder Telephone: (330) 972-1588 Facsimile: (330) 972-1456 108 COMMITMENT SCHEDULE
LENDER COMMITMENT ~~Bank One, NA $45,000,000 TOTAL $45,000,000~~
PRICING SCHEDULE As of the Closing Date and until the Applicable Margin and Applicable Fee Rate are adjusted for the first time based on the Fixed Charge Coverage Ratio for the Fiscal Quarter ending as of June 27, 2004, the Applicable Margin and Applicable Fee Rate shall be set at Level II. Effective as of the date 55 days after the Fiscal Quarter ending as of June 27, 2004, the Applicable Margin and Applicable Fee Rate shall be the applicable percentage set forth in the table below based upon the Fixed Charge Coverage Ratio, as adjusted on the date 55 days after the end of each of the first three Fiscal Quarters of each Fiscal Year and 100 days after the end of each Fiscal Year based on the Fixed Charge Coverage Ratio as of the end of such Fiscal Quarter or Fiscal Year, as the case may be, and shall remain in effect until the next change to be effected pursuant to this definition, provided that upon the occurrence and during the continuance of any Default the Applicable Margin and Applicable Fee Rate will be set at Level I, regardless of the actual Fixed Charge Coverage Ratio.
Level Fixed Charge Applicable Fee Rate Applicable Margin for Applicable Margin for Coverage Ratio Floating Rate Loan Eurodollar Loans and Facility LC Fee I less than or equal to 1.05 .625% .25% 3.25% II greater than 1.05 but less than or equal to 1.25 .625% 0% 3.00% III greater than 1.25 but less than or equal to 1.35 .50% -.25% 2.75% IV greater than 1.35 but less than 1.4 .375% -.50% 2.50% V greater than or equal to 1.4 .375% -.75% 2.25%
EXHIBIT A BORROWING NOTICE Date: ______________________, 20__ To: Bank One, NA, as Agent for the Lenders This Borrowing Notice is furnished pursuant to Section 2.1.1(b)(i) of that certain Credit Agreement dated as of August 1, 2003 (as amended, modified, renewed or extended from time to time, the "Agreement") among MSX International, Inc., a Delaware corporation (the "Company"), the other Loan Parties, the lenders party thereto and Bank One, NA, as Agent for the Lenders and as LC Issuer. Unless otherwise defined herein, capitalized terms used in this Borrowing Notice have the meanings ascribed thereto in the Agreement. The Company hereby notifies the Agent of its request of the following Advance: (1) Borrowing Date of Advance (must be a Business Day): ______________ _____________ (2) Aggregate Amount of Advance: $________________________________ (3) Type of Advance: Eurodollar Advance __________ Floating Rate Advance __________ (4) Duration of Interest Period if a Eurodollar Advance has been selected: One Month __________ Two Months __________ Three Months __________ Six Months __________ The Company hereby represents that, as of the date of this Borrowing Notice: (a) There exists no Default or Unmatured Default and no Default or Unmatured Default shall result from this Credit Extension. (b) The representations and warranties contained in Article V of the Agreement are true and correct, except to the extent any such representation or warranty is stated to relate solely to an earlier date. MSX INTERNATIONAL, INC. By:___________________________________ Name:________________________ Title:_______________________ EXHIBIT B CONVERSION/CONTINUATION NOTICE Date: ______________________, 20__ To: Bank One, NA, as Agent for the Lenders This Conversion/Continuation Notice is furnished pursuant to Section 2.7 of that certain Credit Agreement dated as of August 1, 2003 (as amended, modified, renewed or extended from time to time, the "Agreement") among MSX International, Inc., a Delaware corporation (the "Company"), the other Loan Parties, the lenders party thereto and Bank One, NA, as Agent for the Lenders and as LC Issuer. Unless otherwise defined herein, capitalized terms used in this Borrowing Notice have the meanings ascribed thereto in the Agreement. The Company hereby notifies the Agent of its request to [SELECT ONE]: (1) convert the Floating Rate Advance in the amount of $_________ into a Eurodollar Advance with an Interest Period duration of: ________ month(s) (2) continue the Eurodollar Advance described below: (a) Date of Continuation (must be a Business Day): ___________ ___________ (b) Aggregate Amount of Advance: $___________________________ (c) The duration of the Interest Period applicable thereto: ________ month(s) The Company hereby represents that, as of the date of this Conversion/Continuation Notice: (a) There exists no Default or Unmatured Default and no Default or Unmatured Default shall result from this Credit Extension. (b) The representations and warranties contained in Article V of the Agreement are true and correct, except to the extent any such representation or warranty is stated to relate solely to an earlier date. MSX INTERNATIONAL, INC. By:___________________________________ Name:________________________ Title:_______________________ EXHIBIT C REVOLVING NOTE [Date] MSX International, Inc., a Delaware corporation (the "Company"), promises to pay to the order of ____________________________________ (the "Lender") the aggregate unpaid principal amount of all Revolving Loans made by the Lender to the Company pursuant to Article II of the Agreement (as hereinafter defined), in immediately available funds at the main office of Bank One, NA, as Agent, together with interest on the unpaid principal amount hereof at the rates and on the dates set forth in the Agreement. The Company shall pay the principal of and accrued and unpaid interest on the Revolving Loans and Reimbursement Obligations in full on the Termination Date The Lender shall, and is hereby authorized to, record on the schedule attached hereto, or to otherwise record in accordance with its usual practice, the date and amount of each Loan and the date and amount of each principal payment hereunder. This Note is one of the Notes issued pursuant to, and is entitled to the benefits of, the Credit Agreement dated as of August 1, 2003 (which, as it may be amended or modified and in effect from time to time, is herein called the "Agreement"), among the Company, the other Loan Parties, the lenders party thereto, including the Lender, the LC Issuer and Bank One, NA, as Agent, to which Agreement reference is hereby made for a statement of the terms and conditions governing this Note, including the terms and conditions under which this Note may be prepaid or its maturity date accelerated. This Note is secured pursuant to the Collateral Documents and guaranteed pursuant to the Guaranty, as more specifically described in the Agreement, and reference is made thereto for a statement of the terms and provisions thereof. Capitalized terms used herein and not otherwise defined herein are used with the meanings attributed to them in the Agreement. MSX INTERNATIONAL, INC. By:___________________________________ Print Name:___________________________ Title:________________________________ SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL TO NOTE OF MSX INTERNATIONAL, INC. DATED___________,
Principal Maturity Principal Amount of of Interest Amount Unpaid Date Loan Period Paid Balance - ----------------------------------------------------------------------------------------------------------------
EXHIBIT D FORM OF OPINION ____________, The Agent, the LC Issuer and the Lenders who are parties to the Credit Agreement described below. Gentlemen/Ladies: We are counsel for MSX International, Inc., a Delaware corporation (the "Company") and the Guarantors (the Company and the Guarantors collectively referred to as the "Domestic Loan Parties"), and have represented the Company and the Guarantors in connection with the execution and delivery of (i) a Credit Agreement dated as of August 1, 2003 (the "Agreement") among the Company, the other Domestic Loan Parties, the Lenders named therein, and Bank One, NA, as Agent, and LC Issuer which provides for Credit Extensions in an aggregate principal amount not exceeding $45,000,000 at any one time outstanding and (ii) the other Loan Documents. All capitalized terms used in this opinion and not otherwise defined herein shall have the meanings attributed to them in the Agreement. We have examined the Domestic Loan Parties' *[describe constitutive documents of the Domestic Loan Parties and appropriate evidence of authority to enter into the transaction]*, the Loan Documents and such other matters of fact and law which we deem necessary in order to render this opinion. Based upon the foregoing, it is our opinion that: l. Each Domestic Loan Party is a corporation, partnership or limited liability company duly and properly incorporated or organized, as the case may be, validly existing and (to the extent such concept applies to such entity) in good standing under the laws of its jurisdiction of incorporation or organization and has all requisite authority to conduct its business in each jurisdiction in which its business is conducted. 2. The execution and delivery by each Domestic Loan Party of the Loan Documents to which it is a party and the performance by such Domestic Loan Party of its obligations thereunder have been duly authorized by proper corporate proceedings on the part of such Domestic Loan Party and will not: (a) require any consent of such Domestic Loan Party's shareholders or members (other than any such consent as has already been given and remains in full force and effect); (b) violate (i) any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on such Domestic Loan Party or (ii) the Domestic Loan Party's articles or certificate of incorporation, partnership agreement, certificate of partnership, articles or certificate of organization, by-laws, or operating or other management agreement, as the case may be, or (iii) the provisions of any indenture, instrument or agreement to which such Domestic Loan Party is a party or is subject, or by which it, or its Property, is bound, or conflict with or constitute a default thereunder; or 1-D (c) result in, or require, the creation or imposition of any Lien in, of or on the Property of such Domestic Loan Party pursuant to the terms of any indenture, instrument or agreement binding upon such Domestic Loan Party. 3. The Loan Documents to which each Domestic Loan Party is a party have been duly executed and delivered by such Domestic Loan Party and constitute legal, valid and binding obligations of such Domestic Loan Party enforceable against such Domestic Loan Party in accordance with their terms except to the extent the enforcement thereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally and subject also to the availability of equitable remedies if equitable remedies are sought. 4. There is no litigation, arbitration, governmental investigation, proceeding or inquiry pending or, to the best of our knowledge after due inquiry, threatened against any Domestic Loan Party which, if adversely determined, could reasonably be expected to have a Material Adverse Effect. 5. No order, consent, adjudication, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, or other action in respect of any governmental or public body or authority, or any subdivision thereof, which has not been obtained by any Domestic Loan Party, is required to be obtained by such Domestic Loan Party in connection with the execution and delivery of the Loan Documents, the borrowings under the Agreement, the payment and performance by such Domestic Loan Party of the Obligations, or the legality, validity, binding effect or enforceability of any of the Loan Documents. 6. All Secured Obligations are "Senior Indebtedness" and "Designated Senior Indebtedness" as defined in the Subordinated Indenture. All Secured Obligations are incurred pursuant to Section 4.3(b)(i) of the Subordinated Note Indenture. The Secured Obligations constitute senior indebtedness which is entitled to the benefits of the subordination provisions of all outstanding Subordinated Debt. 7. All Liens securing the Fourth Secured Term Loan Debt are subordinate and junior in priority to all Liens in favor of the Agent securing the Secured Obligations under the Intercreditor Agreement. 8. All Liens securing the Third Secured Term Loan Debt are subordinate and junior in priority to all Liens in favor of the Agent securing the Secured Obligations under the Intercreditor Agreement. 9. All Secured Obligations are incurred pursuant to Section 4.3(b)(1) and (9) of the Second Secured Note Indenture. All Liens securing the Second Secured Debt are subordinate and junior in priority to all Liens in favor of the Agent securing the Secured Obligations under the Intercreditor Agreement. 10. The provisions of the Collateral Documents are sufficient to create in favor of the Lenders a security interest in all right, title and interest of each Domestic Loan Party in those items and types of collateral described in the Collateral Documents in which a security interest may be created under Article 9 of the Uniform Commercial Code as in effect on the date hereof in Michigan. Financing statements on Form UCC-1's have been duly authorized by each Domestic Loan Party and have been duly filed in each filing office indicated in Exhibit A hereto under the Uniform Commercial Code in effect in each state in which said filing offices are located. The description of the collateral set forth in said financing statements is sufficient to perfect a security interest in the items and types of collateral described therein in which a security interest may be perfected by the filing of a financing statement under the Uniform Commercial Code as in effect in such states. Such filings are sufficient to perfect the security interest created by the Collateral Documents in all right, title and interest of the Company in those items and types of collateral described in the Collateral Documents in which a security interest may be perfected by the filing of a financing statement under the Uniform Commercial Code in such states. This opinion may be relied upon by the Agent, the LC Issuer and the Lenders and their participants, assignees and other transferees. Very truly yours, 2-D EXHIBIT E COMPLIANCE CERTIFICATE To: The Lenders parties to the Credit Agreement Described Below This Compliance Certificate is furnished pursuant to that certain Credit Agreement dated as of August 1, 2003 (as amended, modified, renewed or extended from time to time, the "Agreement") among MSX International, Inc., a Delaware corporation (the "Company"), the other Loan Parties, the Lenders party thereto and Bank One, NA, as Agent for the Lenders and as LC Issuer. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement. THE UNDERSIGNED HEREBY CERTIFIES THAT: 1. I am the duly elected _________________ of the Company; 2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Company and its Subsidiaries during the accounting period covered by the attached financial statements; 3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Default or Unmatured Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth below; 4. I hereby certify that since July 15, 2003, no Loan Party has changed (i) its name, (ii) its chief executive office, (iii) principal place of business, (iv) the type of entity it is or (v) its state of incorporation or organization without having given the Agent the notice required by Section 6.22; 5. Schedule I attached hereto sets forth financial data and computations evidencing the Company's compliance with Sections 6.28 and 6.31 of the Agreement, all of which data and computations are true, complete and correct; 6. Schedule II hereto sets forth the determination of the interest rates to be paid for Credit Extensions and the commitment fee rates commencing on the fifth day following the delivery hereof; and 7. Schedule III attached hereto sets forth the various reports and deliveries which are required at this time under the Credit Agreement and the other Loan Documents and the status of compliance. Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Company has taken, is taking, or proposes to take with respect to each such condition or event: _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ The foregoing certifications, together with the computations set forth in Schedule I and Schedule II hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this ___ day of _________, ____. MSX INTERNATIONAL, INC. By:___________________________________ Name:________________________ Title:_______________________ 1- SCHEDULE I TO COMPLIANCE CERTIFICATE Compliance as of _________, ____ with Provisions of _______ and _______ of the Agreement SCHEDULE II TO COMPLIANCE CERTIFICATE Company's Applicable Margin Calculation SCHEDULE III TO COMPLIANCE CERTIFICATE Reports and Deliveries Currently Due EXHIBIT F ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption (the "Assignment and Assumption") is dated as of the Closing Date set forth below and is entered into by and between *[Insert name of Assignor]* (the "Assignor") and *[Insert name of Assignee]* (the "Assignee"). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the "Credit Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee. The Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full. For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Closing Date inserted by the Agent as contemplated below, the interest in and to all of the Assignor's rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto that represents the amount and percentage interest identified below of all of the Assignor's outstanding rights and obligations under the respective facilities identified below (including without limitation any letters of credit, guaranties and swingline loans included in such facilities and, to the extent permitted to be assigned under applicable law, all claims (including without limitation contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity), suits, causes of action and any other right of the Assignor against any Person whether known or unknown arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby) (the "Assigned Interest"). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor. 1. Assignor: ___________________________________________ 2. Assignee: ___________________________________________*[and is an Affiliate/Approved Fund of identify Lender](1)* 3. Company(s): ________________________________________ 4. Agent: Bank One, NA, as the agent under the Credit Agreement. 5. Credit Agreement: The Amended and Restated Credit Agreement dated as of August 1, 2003 among MSX International, Inc., the other Loan Parties, the Lenders party thereto, Bank One, NA, as Agent, and the other agents party thereto. (1)Select as applicable. 1- 6. Assigned Interest:
Aggregate Amount of Amount of Commitment/ Commitment/Credit Credit Exposure Assigned(2) Percentage Assigned of Facility Assigned Exposure for all Lenders(1) Commitment/Credit Exposure(3) ~~[Commitment](4) $ $ _______%~~
7. Trade Date: ____________________________________________(5) Closing Date: ____________________, 20__ [TO BE INSERTED BY AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE AGENT.] The terms set forth in this Assignment and Assumption are hereby agreed to: ASSIGNOR [NAME OF ASSIGNOR] By:_________________________________ Title: ASSIGNEE [NAME OF ASSIGNEE] By:_________________________________ Title: [Consented to and](6) Accepted: Bank One, NA, as Agent and LC Issuer By:__________________________________ Title: [Consented to:](7) [BORROWER] By:__________________________________ Title: ______________________________ (1)AMOUNT TO BE ADJUSTED BY THE COUNTERPARTIES TO TAKE INTO ACCOUNT ANY PAYMENTS OR PREPAYMENTS MADE BETWEEN THE TRADE DATE AND THE CLOSING DATE. (2)AMOUNT TO BE ADJUSTED BY THE COUNTERPARTIES TO TAKE INTO ACCOUNT ANY PAYMENTS OR PREPAYMENTS MADE BETWEEN THE TRADE DATE AND THE CLOSING DATE. (3)SET FORTH, TO AT LEAST 9 DECIMALS, AS A PERCENTAGE OF THE COMMITMENT/LOANS OF ALL LENDERS THEREUNDER. (4)FILL IN THE APPROPRIATE TERMINOLOGY FOR THE TYPES OF FACILITIES UNDER THE CREDIT AGREEMENT THAT ARE BEING ASSIGNED UNDER THIS ASSIGNMENT (E.G. "REVOLVING CREDIT COMMITMENT," "TERM LOAN COMMITMENT,", ETC.) (5)INSERT IF SATISFACTION OF MINIMUM AMOUNTS IS TO BE DETERMINED AS OF THE TRADE DATE. (6)TO BE ADDED ONLY IF THE CONSENT OF THE AGENT IS REQUIRED BY THE TERMS OF THE CREDIT AGREEMENT. (7) TO BE ADDED ONLY IF THE CONSENT OF THE COMPANY AND/OR OTHER PARTIES (E.G. SWINGLINE LENDER, L/C ISSUER) IS REQUIRED BY THE TERMS OF THE CREDIT AGREEMENT. [NAME OF OTHER RELEVANT PARTY] By:__________________________________ Title: 2- ANNEX 1 TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION 1. Representations and Warranties. 1.1 Assignor. The Assignor represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby. Neither the Assignor nor any of its officers, directors, employees, agents or attorneys shall be responsible for (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency, perfection, priority, collectibility, or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Company, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document, (iv) the performance or observance by the Company, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document, (v) inspecting any of the property, books or records of the Company, or any guarantor, or (vi) any mistake, error of judgment, or action taken or omitted to be taken in connection with the Loans or the Loan Documents. 1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) from and after the Closing Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iii) agrees that its payment instructions and notice instructions are as set forth in Schedule 1 to this Assignment and Assumption, (iv) confirms that none of the funds, monies, assets or other consideration being used to make the purchase and assumption hereunder are "plan assets" as defined under ERISA and that its rights, benefits and interests in and under the Loan Documents will not be "plan assets" under ERISA, (v) agrees to indemnify and hold the Assignor harmless against all losses, costs and expenses (including, without limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor in connection with or arising in any manner from the Assignee's non-performance of the obligations assumed under this Assignment and Assumption, (vi) it has received a copy of the Credit Agreement, together with copies of financial statements and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Agent or any other Lender, and (vii) attached as Schedule 1 to this Assignment and Assumption is any documentation required to be delivered by the Assignee with respect to its tax status pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee and (b) agrees that (i) it will, independently and without reliance on the Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender. 2. Payments. The Assignee shall pay the Assignor, on the Closing Date, the amount agreed to by the Assignor and the Assignee. From and after the Closing Date, the Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Closing Date and to the Assignee for amounts which have accrued from and after the Closing Date. 3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of Michigan. 1 ADMINISTRATIVE QUESTIONNAIRE US AND NON-US TAX INFORMATION REPORTING REQUIREMENTS EXHIBIT G BORROWING BASE CERTIFICATE SUCH FORM AS REQUIRED FROM TIME TO TIME BY THE AGENT EX-10.15 11 k79382exv10w15.txt AMENDED AND RESTATED 4TH SECURED TERM LOAN AGRMT. Execution Copy EXHIBIT 10.15 AMENDED AND RESTATED FOURTH SECURED TERM LOAN AGREEMENT DATED AS OF AUGUST 1, 2003 MSX INTERNATIONAL, INC. MSX INTERNATIONAL LIMITED AS BORROWERS AND COURT SQUARE CAPITAL LIMITED AS LENDER TABLE OF CONTENTS
PAGE ARTICLE 1 DEFINITIONS............................................................................................ 2 SECTION 1.1. Certain Defined Terms............................................................. 2 SECTION 1.2. Other Definitions; Rules of Construction.......................................... 30 SECTION 1.3. Accounting Terms and Determinations............................................... 31 ARTICLE 2 AMOUNT AND TERMS OF NOTES AND LOANS; EXCHANGE.......................................................... 31 SECTION 2.1. Loans and Notes................................................................... 31 SECTION 2.2. Interest on the Loan; Tax Amounts................................................. 31 SECTION 2.3. Prepayments and Payments.......................................................... 34 SECTION 2.4. Intentionally Omitted............................................................. 37 SECTION 2.5. Fees.............................................................................. 37 SECTION 2.6. Guaranties; Security and Collateral............................................... 37 ARTICLE 3 CONDITIONS............................................................................................. 39 SECTION 3.1. Conditions to this Agreement...................................................... 39 ARTICLE 4 REPRESENTATIONS AND WARRANTIES......................................................................... 40 SECTION 4.1. Corporate Existence and Power..................................................... 40 SECTION 4.2. Corporate Authority............................................................... 41 SECTION 4.3. Binding Effect.................................................................... 41 SECTION 4.4. Subsidiaries...................................................................... 41 SECTION 4.5. Proceedings....................................................................... 41 SECTION 4.6. Financial Condition............................................................... 41 SECTION 4.7. Consents, Etc..................................................................... 42 SECTION 4.8. Taxes............................................................................. 42 SECTION 4.9. Title to Properties; Applicable Agreements........................................ 43 SECTION 4.10. ERISA............................................................................. 43 SECTION 4.11. Disclosure........................................................................ 43 SECTION 4.12. Environmental and Safety Matters.................................................. 43 SECTION 4.13. No Default........................................................................ 44 SECTION 4.14. Intellectual Property............................................................. 44 SECTION 4.15. Labor Matters..................................................................... 44 SECTION 4.16. Solvency.......................................................................... 45 SECTION 4.17. Not an Investment Company......................................................... 45 SECTION 4.18. Insurance......................................................................... 45 ARTICLE 5 AFFIRMATIVE COVENANTS.................................................................................. 46 SECTION 5.1. SEC Reports....................................................................... 46 SECTION 5.2. Additional Security and Collateral................................................ 46
SECTION 5.3. Real Estate Mortgages and Filings................................................. 47 SECTION 5.4. Designation of Restricted and Unrestricted Subsidiaries........................... 47 SECTION 5.5. Compliance Certificate............................................................ 49 SECTION 5.6. Further Instruments and Acts...................................................... 49 SECTION 5.7. Payment of Taxes and Other Claims................................................. 49 SECTION 5.8. Corporate Existence............................................................... 49 ARTICLE 6 NEGATIVE COVENANTS..................................................................................... 49 SECTION 6.1. Limitation on Incurrence of Indebtedness.......................................... 49 SECTION 6.2. Limitation on Liens............................................................... 51 SECTION 6.3. Limitation on Sale of Assets and Subsidiary Stock................................. 51 SECTION 6.4. Limitation on Restricted Payments................................................. 53 SECTION 6.5. Limitation on Affiliate Transactions.............................................. 55 SECTION 6.6. Impairment of Security Interests.................................................. 56 SECTION 6.7. Limitations on Restrictions on Distributions from Restricted Subsidiaries......... 57 SECTION 6.8. Limitation on Issuance or Sale of Capital Stock of Restricted Subsidiaries........ 58 SECTION 6.9. Merger and Consolidation.......................................................... 58 SECTION 6.10. Waiver of Stay, Extension and Usury Laws.......................................... 61 SECTION 6.11. Limitation on Capital Expenditures................................................ 61 SECTION 6.12. Prohibited Transfers of Accounts Receivable....................................... 61 ARTICLE 7 DEFAULTS AND REMEDIES.................................................................................. 61 SECTION 7.1. Events of Default................................................................. 61 SECTION 7.2. Remedies.......................................................................... 63 ARTICLE 8 MISCELLANEOUS.......................................................................................... 65 SECTION 8.1. Participations in Loans and Notes................................................. 65 SECTION 8.2. Expenses.......................................................................... 65 SECTION 8.3. Indemnity......................................................................... 66 SECTION 8.4. Amendments and Waivers............................................................ 67 SECTION 8.5. Independence of Covenants......................................................... 67 SECTION 8.6. Notices........................................................................... 67 SECTION 8.7. Survival of Warranties and Certain Agreements..................................... 69 SECTION 8.8. Failure or Indulgence Not Waiver; Remedies Cumulative............................. 69 SECTION 8.9. Severability...................................................................... 70 SECTION 8.10. Headings.......................................................................... 70 SECTION 8.11. Applicable Law.................................................................... 70 SECTION 8.12. Successors and Assigns; Subsequent Holders of Notes............................... 70 SECTION 8.13. Consent to Jurisdiction and Service of Process.................................... 70 SECTION 8.13. APPEAL............................................................................ 71 SECTION 8.14. Waiver of Jury Trial.............................................................. 71 SECTION 8.15. Counterparts; Effectiveness....................................................... 71

SECTION 8.16. Entirety.......................................................................... 71 SECTION 8.17. Confidentiality................................................................... 72 SECTION 8.18. Conversion of Currency............................................................ 72 SECTION 8.19. Acknowledgments................................................................... 73 SECTION 8.20. Reaffirmation; Release............................................................ 73

Schedules Schedule 4.4 - Subsidiaries Schedule 4.8 - Taxes Schedule 4.15 - Labor Matters Exhibits Exhibit A-1 - Form of Amended and Restated Company Note Exhibit A-2 - Form of MSX Limited Note Exhibit B-1 - Form of Amended and Restated Guaranty (Subsidiaries) Exhibit B-2 - Form of Guaranty (Company) Exhibit C-1 - Form of Amended and Restated Pledge Agreement (Company) Exhibit C-2 - Form of Amended and Restated Pledge Agreement (Subsidiaries) Exhibit D-1 - Form of Amended and Restated Security Agreement (Company) Exhibit D-2 - Form of Amended and Restated Security Agreement (Subsidiaries) Exhibit D-3 - Form of U.K. Deed AMENDED AND RESTATED FOURTH 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 ("MSX Limited" and together with the Company, each a "Borrower" and collectively the "Borrowers"), and COURT SQUARE CAPITAL LIMITED, a Delaware corporation (the "Lender"). WHEREAS, the Company and Lender are parties to that certain Second Secured Term Loan Agreement, dated as of July 31, 2002, as amended by the First Amendment to Second Secured Term Loan Agreement dated as of February 14, 2003 (the "Original Agreement"), under which (i) the Lender made a loan to the Company in the amount of $15,450,000 and (ii) the Lender may be required to make one or more additional loans to the Company in an aggregate amount of up to $10,769,105.90 (the "Credit Support Loan"), in accordance with the terms of the Funding Agreement (as defined herein). 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"), (ii) that certain Senior Secured Indenture, dated the date hereof, among the Company and MSX 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 Third Lien Loan Agreement (as defined herein). WHEREAS, in conjunction with entering into the Restated Senior Credit Agreement, the Senior Secured Note Indenture and the Third Lien Loan Agreement, the Company and MSX Limited have requested that the Lender consent to the incurrence of the indebtedness contemplated by the Senior Secured Note Indenture and Third Lien Loan Agreement and amend and restate the Original Agreement to, among other things, (i) exchange all promissory notes of the Company outstanding under the Original Agreement for new promissory notes of the Borrowers, (ii) extend the maturity date of the notes and (iii) revise certain covenants and events of default contained herein. The Lender is willing to give its and consent and to amend and restate the Original Agreement provided that the Funding Agreement and Lender's obligation to make any Credit Support Loans are terminated, and on the other terms and conditions of this Agreement. WHEREAS, it is the intent of the parties hereto that this Agreement does not constitute a novation of the rights, obligations and liabilities of the respective parties existing under the Original Agreement, and such rights, obligations and liabilities (except for obligations relating to the Credit Support Loans) shall continue and remain outstanding as modified herein, and that this Agreement amends and restates in its entirety the Original 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, the Original Agreement is hereby amended and restated in its entirety to read 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 Amounts" means such "Additional Amounts" (as defined in the Senior Secured Note Indenture) as may be required to be paid by MSX Limited on the U.K. Senior Secured Notes in accordance with the terms of the Senior Secured Note Indenture. "Additional Tax Amounts" has the meaning set forth 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 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 - 2 - "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 it 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 Senior Secured Notes pursuant to the Collateral Agreements; 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 referred to for the purposes of this definition as a "disposition"), of - 3 - (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 it in Section 8.1(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 it in Section 7.1 of this Agreement. "Board of Directors" means the Board of Directors of the Company or MSX 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 8.1 hereof. - 4 - "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 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 Moody's 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 Keefe 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 - 5 - 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: (1) prior to the first public offering of common stock of the Company or MSX 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 MSX Limited, as applicable, any merger, consolidation, liquidation or dissolution of the Company or MSX 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 MSX 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 MSX 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 MSX 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 MSX Limited, as applicable; (3) during any two year period, individuals who on the Effective Date constituted the Board of Directors of the Company or MSX Limited, as applicable (together with any new directors whose election by such shareholders of the Company or MSX Limited, as - 6 - applicable, or whose nomination for election by the Board of Directors of the Company or MSX Limited, as applicable, was approved by a vote of a majority of the directors of the Company or MSX 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 MSX Limited, as applicable, then in office; (4) the approval by the holders of Capital Stock of the Company or MSX Limited, as applicable, of a plan for the liquidation or dissolution of the Company or MSX Limited, as applicable; or (5) the merger or consolidation of the Company or MSX Limited, as applicable, with or into another Person or the merger of another Person with or into the Company or MSX Limited, as applicable, or the sale of all or substantially all the assets of the Company or MSX 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 MSX 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 MSX Limited, as applicable, and (B) in the case of a sale of 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 MSX 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 means all collateral (other than Excluded Collateral) securing the Obligations as set forth in Section 2.6 hereof, the Charged Assets and any other property, whether now owned or hereafter acquired, upon which a Lien securing the Obligations is granted or purported to be granted under any Security Document. "Collateral Agent" means the collateral agent under the Indenture Security Agreement and each Mortgage, which shall initially be the Trustee. "Collateral Agreements" means, collectively, the Intercreditor Agreement, the Indenture Security Agreement, the Indenture U.K. Deed and each Mortgage, in each case, as the same may be in force from time to time. - 7 - "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 MSX Limited's obligations with respect to the U.K. Senior Secured 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 8.1 hereof, substantially in the form of Exhibit A-1 to 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 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 - 8 - 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). "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' - 9 - 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)(3)(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 - 10 - 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)(3)(D) thereof. "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. "Credit Support Loan" has the meaning assigned to that term in the introduction to this Agreement. "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 it 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 5.4(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 - 11 - 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. "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 - 12 - 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 hereof. "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. "Excluded Collateral" is defined in Section 2.6 hereof. "Existing Affiliate Agreements" means the Stockholders' Agreement, the MSX Registration Rights Agreement and any other existing agreement with CVC or any Affiliates of CVC or the Company listed on Schedule I to the Senior Secured Note Indenture. "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. "Funding Agreement" means the Funding Agreement, dated as of February 14, 2003, by the Lender in favor of the Senior Lenders and the Agent. "GAAP" means generally accepted accounting principles in the United States of America as then in effect on the date hereof, 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 - 13 - 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. "Guaranties" means the guaranties entered into by each of the Guarantors for the benefit of the Lender pursuant to this Agreement in substantially the form of the amended and restated guarantee of the subsidiary Guarantors attached as Exhibit B-1 to this Agreement and the guarantee of the Company of the MSX Limited Notes attached hereto as Exhibit B-2, as amended, supplemented or modified from time to time. "Guarantor" means: (i) each present and future Domestic Restricted Subsidiary of the Company required to execute a Guaranty under Section 2.6(b); (ii) in connection with the guarantee of the MSX Limited Notes, the Company; (iii) each "Subsidiary Guarantor" as defined in the Senior Subordinated Debt Documents, the Senior Secured Debt Documents or any other guarantor with respect to any Subordinated Debt at any time; and (iv) any other Person executing a Guaranty at any time with respect to the Obligations of the Borrowers. "Hedging Obligations" of any Person mean the obligations of such Person pursuant to any Interest Rate Agreement or Currency Agreement. - 14 - "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 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 - 15 - 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. "Indemnitors" has the meaning assigned to it in Section 8.3 of this Agreement. "Indenture Security Agreement" means the security agreement securing the obligations under the Senior Secured Note Indenture, as amended or modified from time to time. "Indenture U.K. Deed" means the debenture, dated as of the date hereof, made by MSX Limited in favor of the Collateral Agent, as amended or supplemented from time to time in accordance with its terms. "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 Lender, the Third Lien Lender, the Agent, the Trustee, the Company, MSX Limited, and the Subsidiary Guarantors (as applicable) as amended, supplemented or modified from time to time. "Interest Payment Date" means the first Business Day of each fiscal quarter of the Company occurring after the Effective Date, commencing with the first such Business Day occurring after the Effective Date. "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 - 16 - 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 8.1 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). "Loans" means the loans made by the Lender to the Company and to MSX Limited pursuant to Section 2.1 hereof. "Loan Documents" means this Agreement, the Original Agreement, the Notes, 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. "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) January 15, 2008 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. - 17 - "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. "MSX 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 from time to time. "MSX Limited" means MSX International Limited, a company incorporated under the laws of England and Wales, together with its permitted successors and assigns. "MSX Limited Notes" means one or more of the notes of MSX Limited issued pursuant to the terms and conditions of Sections 2.1 or 8.1 hereof, substantially in the form of Exhibit A-2 to this Agreement. "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 (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 - 18 - 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. "Notes" mean the Company Notes and the MSX Limited Notes. "Obligations" means all obligations of every nature of the Company and MSX Limited, as applicable, from time to time owed to the Lender under the Loan Documents. "Officer" means the Chief Executive Officer, the President, the Chief Financial Officer or any Vice President of the Company or MSX Limited, as applicable, or any director in the case of MSX Limited. "Officers' Certificate" means a certificate signed by two Officers of the Company, at least one of whom shall be the principal financial officer of the Company. "Original Agreement" has the meaning assigned to that term in the introduction to this Agreement. "Original Effective Date" means July 31, 2002. "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. "Permitted Holders" means the CVC Investors, the Management Investors and their respective Permitted Transferees, and in addition, in the case of MSX Limited, the Company or any of its Subsidiaries; provided, however, that any Management Investor and any CVC Investor - 19 - 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 MSX 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; - 20 - (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; (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); - 21 - (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 (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 Senior Secured Notes, all monetary obligations under the Senior Secured Note Indenture and the Guarantees thereunder; (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; - 22 - (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); and (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). "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 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 Third Lien Lender or any Wholly Owned Subsidiary of CVC or the Third Lien 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 Third Lien 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. "Pledge Agreements" mean each amended and restated Pledge Agreement entered into by the Company or any of its Subsidiaries for the benefit of the Lender pursuant to this Agreement substantially in the forms attached to this Agreement as Exhibits C-1 and C-2, as amended, supplemented or modified from time to time, and as will be entered into pursuant to the terms hereof, as amended, supplemented or modified from time to time. - 23 - "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 5.3 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 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. - 24 - "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. "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, MSX Limited, the Guarantors and Jefferies & 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 dividends or distributions of greater value than it would receive on a pro rata basis), (ii) the purchase, redemption or other - 25 - 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) or (iv) 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 Agreements" mean each amended and restated Security Agreement entered into by the Company or any Guarantor for the benefit of the Lender pursuant to this Agreement substantially in the forms attached to this Agreement as Exhibits D-1 and D-2, and the U.K. Deed, as each are amended, supplemented or modified from time to time, and any other agreement executed by MSX Limited, the Company or any of its Subsidiaries granting a Lien for the benefit of the Lender in form or substance satisfactory to the Lender, as amended, supplemented or modified from time to time. "Security Documents" mean the Pledge Agreements, the Security Agreements, the Guaranties, the Intercreditor Agreement and all other agreements and documents delivered pursuant to this Agreement or the Original Agreement or otherwise entered into by any Person to secure or guaranty the obligations of the Company under this Agreement. - 26 - "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 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 Note Guarantees" means the Subsidiary Guarantees and the Company Guarantee. "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 MSX 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 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 Subordinated Debt Documents" means the Senior Subordinated Note Indenture, the Senior Subordinated Notes and all agreements and documents executed in connection therewith at any time. "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. - 27 - "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 Schroder Bank & Trust Company), as trustee, dated as of January 15, 1998, as amended or modified from time to time. "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 Third Lien 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 Debt" means, in the case of the Company, all Indebtedness owing pursuant to the Senior Subordinated Notes and any extensions, refinancings, renewals or refundings thereof and any increases in the amount thereof and, for any Person, any other Indebtedness of such Person which is fully subordinated to all Lender Obligations, the Senior Secured Notes, the Third Lien Notes and the Notes by written agreements and documents in form and substance satisfactory to the Agent and the Trustee and which is governed by terms and provisions, including without limitation maturities, covenants, defaults, rates and fees, acceptable to the Agent and Trustee. "Subordinated Debt Documents" means the Senior Subordinated Debt Documents and any other agreement or document evidencing or relating to any Subordinated Debt, whether under the Senior Subordinated Notes or any other Subordinated Debt. "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 Lender Obligations, the Senior Secured Notes, the Third Lien Notes and 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, - 28 - 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 MSX Limited's obligations with respect to the Senior Secured Notes. "Successor Company" has the meaning assigned to it in Section 6.9 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 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 Moody's 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 Moody's Investors Service, Inc. "Third Lien Lender" means Citicorp Mezzanine III, L.P. and its assigns under the Third Lien Loan Agreement. "Third Lien Loan Agreement" means the Third Secured Term Loan Agreement of even date herewith by and among the Company, MSX Limited and the Third Lien Lender, as amended or modified from time to time. "Third Lien Notes" means the notes issued by the Company and MSX Limited to the Third Lien Lender, as amended or modified from time to time. - 29 - "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 MSX Limited in favor of the Lender, substantially in the form attached to this Agreement as Exhibit D-3, 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 MSX 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 5.4 (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 set forth in Section 4.15 of this Agreement. "Withholding Taxes" has the meaning set forth in Section 2.2(e) of this Agreement. "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. 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. - 30 - 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 LOANS; EXCHANGE SECTION 2.1. Loans and Notes. (a) Exchange of Loans and Notes. Subject to the terms and conditions of the Original Agreement and in reliance upon the representations and warranties of the Company therein set forth, the Lender has provided a loan to the Company on the Original Effective Date in an amount equal to $15,450,000. On the Original Effective Date, the Company executed and delivered to the Lender the note (the "Original Note") dated as of the Original Effective Date, to evidence the Loan made on such date, in the aggregate principal amount of $15,450,000 (which amount, together with accrued interest through the date hereof, is equal to $17,084,162.13). Lender represents and warrants to the Borrowers that as of the date hereof it owns the Original Note free and clear of all Liens and has not assigned, pledged, transferred or encumbered in any manner its interest in the Original Note. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the Borrowers herein set forth, on the Effective Date Lender (1) consents to the amendment and restatement of the Original Agreement, the issuance of the Third Lien Notes and Senior Secured Notes and the execution, delivery and performance of the Senior Secured Note Indenture and the Third Lien Loan Agreement and (2) tenders and exchanges the Original Note and all accrued interest thereon (including any notes issued in respect of such accrued interest) for (i) an amended and restated Company Note, dated the date hereof, in the aggregate principal amount of $14,692,379.43, evidencing the Loan made by the Lender to the Company and (ii) the MSX Limited Note, dated the date hereof, in the aggregate principal amount of $2,391,782.70, evidencing the Loan made by the Lender to MSX Limited. On the Effective Date and upon completion of the foregoing exchange, the Original Note shall be cancelled. (b) Payment of Loan. 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 10.00% per annum. - 31 - (b) Interest Payments. (i) Interest shall be payable 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 Loan. (ii) On any Interest Payment Date after the Effective Date that the Lender Obligations have not been indefeasibly paid in full, the Commitments have not been terminated or the Senior Secured Notes or Third Lien Notes have not been indefeasibly paid in full ("Accrual Interest Dates"), each of the Company and MSX Limited shall accrue the unpaid accrued interest with respect to its Loan due on any Accrual Interest Date by adding such unpaid accrued interest to the then outstanding principal amount of the Loan. (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 and Notes 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; provided that if the Lender Obligations have not been indefeasibly paid in full, the Commitments have not been terminated and the Senior Secured Notes and the Third Lien Notes have not been indefeasibly paid in full, each Borrower shall pay such accrued interest by adding such unpaid accrued interest to the then outstanding principal amount of its Loan. (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 Loan shall be included and the date of payment shall be excluded. (e) Tax Amounts. All payments by MSX Limited and any Guarantor in respect of the MSX 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 MSX Limited is compelled by law to deduct or withhold such Withholding Taxes. In such event, MSX 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 MSX Limited Notes in the absence of such withholding or deduction. MSX 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. MSX 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 MSX Limited or the Guarantors within 60 days after the date of receipt of such evidence. - 32 - All references herein and in the MSX Limited Notes to the principal of or interest on a MSX Limited Note shall be deemed to include any Additional Tax Amounts payable in connection therewith. MSX 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 MSX Limited Notes or any other document or instrument referred to in this Agreement. MSX Limited Notes may be redeemed, at the option of MSX Limited, as a whole, but not in part (limited to MSX Limited Notes with respect to which an Additional Tax Amount 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 redemption (which notice shall be irrevocable), at a redemption price equal to the principal amount thereof, together with interest accrued to the date fixed for redemption and any Additional Tax Amounts payable with respect thereto, if MSX International Limited determines and certifies to the Lender immediately prior to the giving of such notice that (i) it has or will become obligated to pay Additional Tax Amounts in respect of such MSX 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 MSX Limited Notes and (ii) such obligation cannot be avoided by MSX Limited taking reasonable measures available to it, provided, that no such notice of redemption shall be given earlier than 60 days prior to the earliest date on which MSX Limited would be obligated to pay such Additional Tax Amounts if a payment in respect of such MSX Limited Notes was then due. Prior to the giving of any notice of redemption described in this paragraph, MSX Limited shall deliver to the Lender an Officers' Certificate stating that the obligation to pay Additional Tax Amounts cannot be avoided by MSX Limited taking reasonable measures available to them and (b) a written opinion of independent legal counsel to MSX Limited to the effect that MSX Limited has become obligated to pay Additional Tax Amounts as a result of a change or amendment described above and that MSX Limited cannot avoid payment of such Additional Tax Amounts by taking reasonable measures available to them. The Lender shall reasonably cooperate with MSX 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 MSX 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 MSX 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 MSX Limited. The prior two sentences shall not be construed to require Lender to make available its (or any of its beneficial owners') tax - 33 - returns (or any other information relating to taxes which it deems confidential) to MSX Limited or any other Person or entity. SECTION 2.3. Prepayments and Payments. (a) Prepayments. (i) Voluntary Prepayments. (A) So long as all Lender Obligations have been indefeasibly paid in full, the Commitments have been terminated and the Senior Secured Notes and Third Lien Notes have been indefeasibly paid in full, the Borrowers may prepay the Loans, in whole or in part, without premium or penalty. (B) Voluntary prepayments hereunder shall be credited against the Loans pursuant to the terms and conditions of Section 2.3(a)(iii). Amounts of the Loans so prepaid may not be reborrowed. (ii) Mandatory Prepayments. (A) Sale or Disposition of Assets. So long as all Lender Obligations have been indefeasibly paid in full, the Commitments have been terminated and the Senior Secured Notes and Third Lien Notes have been indefeasibly paid in full, in addition to all other payments of the Loans required hereunder, the Borrowers shall prepay the Loans by an amount equal to 100% of all of the Net Available Cash from any sale or other disposition of any assets (other than the sale of inventory in the ordinary course of business upon customary credit terms, sales of scrap or obsolete material or equipment which are not material in the aggregate, sales of assets pursuant to a Permitted Securitization Transaction, disposition of Cash Equivalents, and transfers of assets, including without limitation Capital Stock, between domestic Guarantors or between the Company and domestic Guarantors or between Subsidiaries (other than MSX Limited) which are not Guarantors or from a Subsidiary which is not a Guarantor to a Guarantor or a Borrower) in excess of $2,000,000 in aggregate amount in any fiscal year (other than such Net Available Cash from the sale of assets which are used or contractually committed to be used within 180 days of the date received to replace the assets so sold or otherwise disposed of with an asset of comparable value or to acquire an asset of comparable value), which payments shall be due twenty (20) days after the end of each month for all such sales and other dispositions during such month. So long as all Lender Obligations have been indefeasibly paid in full, the Commitments have been terminated and the Senior Secured Notes and Third Lien Notes have been indefeasibly paid in full, the Company shall provide an Officers' Certificate to the Lender within twenty (20) days after each sale of assets which, but for the above parenthetical, would cause a prepayment under this Section 2.3(a)(ii)(A), which certificate shall describe such sale of assets and estimate when such Net Available Cash will be used to purchase assets of a comparable value, and if such Net Available Cash is not used or contractually committed to be used within one-hundred eighty (180) days after such sale or such earlier date when the Company has determined not to purchase assets of comparable value with - 34 - such Net Available Cash, the Borrowers will then prepay the Loans with such Net Available Cash. So long as all Lender Obligations have been indefeasibly paid in full, the Commitments have been terminated and the Senior Secured Notes and Third Lien Notes have been indefeasibly paid in full, the Company shall apply an amount equal to 100% of the Net Available Cash that the Company so receives to the repayment of the Loans, as provided in Section 2.3(a)(iii) below. (B) Issuance of Capital Stock; Incurrence of Subordinated Debt. So long as all Lender Obligations have been indefeasibly paid in full, the Commitments have been terminated and the Senior Secured Notes and Third Lien Notes have been indefeasibly paid in full, in addition to all other payments of the Loans required hereunder, the Borrowers shall prepay the Loans by an amount equal to 100% of the Net Cash Proceeds from (i) the issuance or other sale of any Capital Stock of the Company or any of its Subsidiaries (excluding such Net Cash Proceeds from Capital Stock issued to employees, directors or consultants of the Company or its Subsidiaries up to $10,000,000 in any 12 month period) or (ii) the incurrence of any Subordinated Debt by the Company or any of its Subsidiaries on or after the Original Effective Date to the extent the amount of such Subordinated Debt in the aggregate exceeds an amount equal to $150,000,000 minus the aggregate amount of the Loans. So long as all Lender Obligations have been indefeasibly paid in full, the Commitments have been terminated and the Senior Secured Notes and Third Lien Notes have been indefeasibly paid in full, the Company shall apply an amount equal to 100% of the Net Cash Proceeds that the Company so receives to the repayment of the Loans, as provided in Section 2.3(a)(iii) below. (C) Incurrence of Indebtedness. So long as all Lender Obligations have been indefeasibly paid in full, the Commitments have been terminated and the Senior Secured Notes and Third Lien Notes have been indefeasibly paid in full, in addition to all other payments of the Loans required hereunder, the Borrowers shall prepay the Loans by an amount equal to 100% of the Net Cash Proceeds from the incurrence of any Subordinated Indebtedness in excess of $5,000,000, payable on each date such Indebtedness is incurred. So long as all Lender Obligations have been indefeasibly paid in full, the Commitments have been terminated and the Senior Secured Notes and Third Lien Notes have been indefeasibly paid in full, the Company shall apply an amount equal to 100% of the Net Cash Proceeds that the Company so receives to the repayment of the Loans, as provided in Section 2.3(a)(iii) below. (D) Change of Control. (i) In addition to all other payments of the Loans required hereunder, simultaneously with the occurrence of a Change of Control of the Company (the "Change of Control Date"), so long as all Lender Obligations have been indefeasibly paid in full, the Commitments have been terminated and the Senior Secured Notes and Third Lien Notes have been indefeasibly paid in full, the Lender shall have the right, but not the obligation, to require the prepayment of the Loans and Notes in whole. Within thirty (30) days following a Change of Control Date, the Company shall give a written notice to the Lender stating that a Change of Control of the Company has occurred. The Lender shall, within ten (10) Business - 35 - Days receipt of such notice, notify the Company if it will require a prepayment of the Loans and Notes hereunder. (ii) In addition to all other payments of the Loan required hereunder, simultaneously with the occurrence of a Change of Control of MSX Limited (the "Limited Change of Control Date"), so long as all Lender Obligations of MSX Limited and Commitments available to MSX Limited have been terminated and the U.K. Senior Secured Notes and Third Lien Notes issued by MSX Limited have been indefeasibly paid in full, the Lender shall have the right, but not the obligation, to require the prepayment of, and MSX Limited shall have the right to prepay, the MSX Limited Loan and MSX Limited Notes in whole. Within thirty (30) days following a Limited Change of Control Date, the Borrowers shall give a written notice to the Lender stating that a Change of Control of MSX Limited has occurred. If MSX Limited has not prepaid the MSX Limited Loan and MSX Limited Notes by such time, the Lender shall, within ten (10) Business Days receipt of such notice, notify the Borrowers if it will require a prepayment of the MSX Limited Loans and MSX Limited Notes hereunder. (E) Notice. The Borrowers shall notify the Lender of any prepayment to be made pursuant to Sections 2.3(a)(ii)(A), (B) and (C) at least ten (10) Business Days prior to such prepayment date (unless shorter notice is satisfactory to the Lender). (iii) Application of Prepayments. All prepayments (whether voluntary or mandatory) shall include payment of accrued interest on the principal amount of the Loans so prepaid and shall be applied to payment of interest and fees before application to principal. All prepayments (whether voluntary or mandatory) on the Notes, excluding prepayments pursuant to Section 2.2(e) or Section 2.3(a)(ii)(D)(ii), shall be made and applied to the Company Notes and the MSX 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 MSX Limited has occurred. (b) 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 399 Park Avenue, 14th Floor, New York, New York, 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. (c) 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. (d) 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 - 36 - 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 Notes with respect to the Loans and payments of principal or interest on such Notes. SECTION 2.4. Intentionally Omitted. SECTION 2.5. Fees. On the Original Effective Date, the Company paid to the Lender a nonrefundable closing fee in the amount of $450,000, which amount was added to the principal balance of the Notes. Such closing fee shall be nonrefundable under all circumstances. SECTION 2.6. Guaranties; Security and Collateral. To secure and guarantee, as the case may be, the payment when due of (i) the Obligations of the Company arising out of or in connection with the Company Loan and Company Notes and (ii) the Guaranties by the Guarantors of the Obligations of MSX Limited arising out of or in connection with the MSX Limited Loan and MSX Limited Notes, the Company and each Guarantor shall execute and deliver, or cause to be executed and delivered, to the Lender Security Documents granting the following; provided that all of the following shall be subject to the Intercreditor Agreement (and the Company and the Guarantors shall not provide any of the following if any of the following is prohibited by the Intercreditor Agreement and, without limiting the terms of the Intercreditor Agreement, the priority of all Liens in favor of the Lender and all rights of the Lender with respect to any such Liens shall be subject to the Intercreditor Agreement): (a) Security interests in all present and future accounts, inventory, equipment, fixtures and all other personal property and all Investment Property (as defined in the Uniform Commercial Code) of the Company and each Guarantor which is a Domestic Restricted Subsidiary, excluding the Capital Stock excluded pursuant to Section 2.6(b) below and excluding the following (the following described assets in this parenthetical are defined as the "Excluded Collateral"): (i) motor vehicles, instruments and chattel paper with an aggregate fair market value for all of the foregoing less than $1,000,000, (ii) real property leases and (iii) rights arising under any contracts or licenses (other than, in each of the foregoing cases, any right to receive payment) as to which a grant of a security interest would constitute a violation of a valid and enforceable restriction in favor of a third party on such grant, unless and until any required consents shall have been obtained, provided that the Company shall notify the Lender of any such restriction and shall use all reasonable efforts to obtain any required consent to the extent requested by the Lender; (b) Pledges of 100% of the Capital Stock of certain Subsidiaries which are Domestic Restricted Subsidiaries owned directly by the Company or by any Domestic Restricted Subsidiary and 65% of all Capital Stock (or, if such 65% pledge of Capital Stock cannot be obtained or would cause an additional and material tax liability for the Company and its Subsidiaries, a pledge of such other claims and/or rights with respect to such Foreign - 37 - Subsidiaries and such other arrangements and agreements as required by the Lender) of certain Foreign Subsidiaries owned directly by the Company or by any Domestic Restricted Subsidiary and Guaranties of certain present and future Domestic Restricted Subsidiaries such that, at all times, the Domestic Restricted Subsidiaries which are not Guarantors and that do not have 100% of their Capital Stock pledged pursuant to Pledge Agreements and the Foreign Subsidiaries owned directly by the Company that do not have 65% of their Capital Stock (or, if such 65% pledge of Capital Stock cannot be obtained or would cause an additional and material tax liability for the Company and its Subsidiaries, a pledge of such other claims and/or rights with respect to such Foreign Subsidiaries and such other arrangements and agreements as required by the Lender) pledged pursuant to Pledge Agreements do not, if considered in the aggregate as a single Subsidiary, constitute a Significant Subsidiary. In connection with the delivery of any such Guaranties and Pledge Agreements, the Company and the Guarantors shall provide such other documentation to the Lender, including, without limitation, if requested by the Lender, one or more opinions of counsel satisfactory to the Lender, corporate documents and resolutions and consents and other documents (further including, without limitation, such consents from any shareholders or other owners of any Subsidiary to the execution and performance of such Loan Documents by such Subsidiary), which in the opinion of the Lender are necessary or advisable in connection therewith; (c) Guaranties of each other Guarantor, other than Domestic Restricted Subsidiaries covered by clause (b) above; (d) All other security and collateral described in the Security Documents. To secure and guarantee, as the case may be, the payment when due of the Obligations of MSX Limited arising out of or in connection with the MSX Limited Loan and MSX Limited Notes (but excluding the Obligations arising out of the Company Notes), MSX Limited shall execute and deliver, or cause to be executed and delivered, to the Lender the U.K. Deed; provided that all of the following shall be subject to the Intercreditor Agreement and the priority of all Liens in favor of the Lender under the U.K. Deed and all rights of the Lender with respect to any such Liens shall be subject to the Intercreditor Agreement. Upon request of the Lender, (i) the Company and the Guarantors which are Domestic Restricted Subsidiaries shall execute and deliver such agreements and documents reasonably requested by the Lender to grant a fourth priority lien and security interest on all real property owned by the Company and the Guarantors (subject to Section 5.3 hereof), and (ii) each other Domestic Restricted Subsidiary shall execute and deliver all agreements and documents reasonably requested by the Lender to grant a fourth 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. 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, the security interests in favor of the Collateral - 38 - Agent under the Senior Secured Note Indenture, and the security interests in favor of the Third Lien Lender securing the Third Lien Notes, all as described in the Intercreditor Agreement, shall only be fourth priority liens and security interests so long as the first, second and third priority liens and security interests in favor of the Agent securing the Lender Obligations, in favor of the Collateral Agent securing the Senior Secured Notes and in favor of the Third Lien Lender securing the Third Lien 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. To the extent any Security Documents conflict with the terms and conditions of the Intercreditor Agreement, the terms of the Intercreditor Agreement shall control. 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) Corporate Authorizations. Delivery to the Lender of copies of all authorizing resolutions and evidence of other corporate action taken by each Borrower and each Guarantor to authorize the execution, delivery and performance by each Borrower and each Guarantor of this Agreement, the Notes and the other Loan Documents dated the date hereof to which each is a party and the consummation by such Borrower or such Guarantor, respectively, of the transactions contemplated thereby, certified as true and correct as of the Effective Date in an Officers' Certificate of the Company or each Guarantor, respectively; (b) Incumbency Certificate. Delivery to the Lender of Certificates of incumbency of each Borrower and each Guarantor containing, and attesting to the genuineness of, the signatures of those officers or members, as the case may be, authorized to act on behalf of each Borrower or each Guarantor in connection with this Agreement and the Loan Documents dated the date hereof to which the Company and each Guarantor is a party and the consummation by such Borrower or such Guarantor of the transactions contemplated thereby, certified as true and correct as of the Effective Date in an Officers' Certificate of each Borrower and each Guarantor; (c) Loan Documents. Delivery to the Lender of this Agreement, the Company Notes, the MSX Limited Notes, the Guaranties, the Security Agreements, the U.K. Deed, and any other Loan Documents dated the date hereof duly executed on behalf of the Borrowers and the Guarantors, as the case may be; (d) Representations and Warranties. Each of the Borrowers shall have delivered to the Lender an Officers' Certificate in form and substance satisfactory to the Lender to the effect that the representations and warranties in Article 4 of this Agreement are true, correct and complete in all respects on and as of the Effective Date to the same extent as though made on and as of such date; - 39 - (e) Consents, Approvals, Etc. Copies of all governmental and non-governmental consents, approvals, authorizations, declarations, registrations or filings, if any, required on the part of any Borrower or any Guarantor in connection with the execution, delivery and performance of this Agreement and the Loan Documents dated the date hereof or the transactions contemplated thereby or as a condition to the legality, validity or enforceability of the Loan Documents dated the date hereof, certified as true and correct and in full force and effect as of the Effective Date in an Officers' Certificate of each Borrower, or if none are required, an Officers' Certificate to that effect; (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; (g) Other Documents. The Restated Senior Credit Agreement, the Senior Secured Note Indenture and the Third Lien Loan Agreement shall have been duly executed by the parties thereto and shall be in full force and effect; (h) Termination of Funding Agreement. The Lender shall have a received a written agreement from the Agent and the Required Lenders (as defined in the Restated Credit Agreement), in form and substance satisfactory to the Lender, terminating the Funding Agreement, the guarantee letter of Citicorp delivered pursuant to Section 9(d) of the Funding Agreement and all obligations of the Lender and Citicorp thereunder, and such agreement shall be in full force and effect; and (i) Other Conditions. Delivery of such other documents and completion of such other matters as the Lender may reasonably request. 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 Borrowers 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 Loan Documents to which it is a party and to engage in the transactions contemplated by the Loan Documents. - 40 - 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 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 Robert Netolicka 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 - 41 - 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 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. Taxes. 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. - 42 - SECTION 4.9. Title to Properties; Applicable Agreements. 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. SECTION 4.10. ERISA. Each of the Company, its Subsidiaries , and each ERISA Affiliate has fulfilled its obligations, if any, under the minimum funding standards of Section 302 of the United States 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 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 by the Jefferies & 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 - 43 - 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, would (a) 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 this Agreement, the Loan Documents, the Third Lien Loan Agreement, 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). 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 - 44 - 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 Third Lien Notes and the 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 Units 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. 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 - 45 - 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. Additional Security and Collateral. Subject to the Intercreditor Agreement, each Borrower shall promptly (i) execute and deliver and cause each Guarantor to execute and deliver, additional Security Documents, within 30 days after request therefor by the Lender, sufficient to grant to the Lender liens and security interests in any after acquired Collateral of the type described in Section 2.6, and (ii) to the extent required under Section 2.6, cause each Person becoming a Domestic Restricted Subsidiary of the Company from time to time to execute and deliver to the Lender, within 60 days after such Person becomes a Domestic Restricted Subsidiary, a Guaranty and a Security Agreement, together with other related documents described in Section 3.1 sufficient to grant to the Lender liens and security interests in all Collateral of the type described in Section 2.6. The Company shall notify the Lender, within 10 days after the occurrence thereof, of the acquisition of any material property by the Company or any Guarantor that is not subject to the existing Security Documents, any Person becoming a Domestic Restricted Subsidiary and any other event or condition, other than the passage of time, that may require additional action of any nature in order to preserve the effectiveness and perfected status of the liens and security interests of the Lender with respect to such property pursuant to the Security Documents, including without limitation, so long as all - 46 - Lender Obligations have been indefeasibly paid in full, the Commitments have been terminated and the Senior Secured Notes and Third Lien Notes have been indefeasibly paid in full, delivering the originals of all promissory notes and other instruments payable to the Company or any Guarantors to the Lender and delivering the originals of all stock certificates or other certificates evidencing any Capital Stock owned by the Company or any Guarantors at any time. SECTION 5.3. 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 (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 5.4. 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 5.4); (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 - 47 - 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)(3) 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 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. - 48 - SECTION 5.5. Compliance Certificate. The Company shall deliver to the Lender within 120 days after the end of each fiscal year of the Company a certificate signed by 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 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 5.6. 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 5.7. 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 5.8. 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. 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: - 49 - (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 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 the Senior Secured Note Guarantees; (3) Indebtedness pursuant to agreements as in effect on the Effective Date (other than Indebtedness described in clause (1) of this Section 6.1(b)), including without limitation the Third 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 - 50 - 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; or (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) of this Section 6.1(b) or Section 6.1(a)), does not exceed $10.0 million. (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 one of the above clauses 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 Sale of Assets and Subsidiary Stock. - 51 - (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 (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 Guarantor with Net Available Cash received by the Company or another 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 Senior Secured Notes through open market or privately negotiated purchases, and Excess Proceeds at any time will be reduced by the principal amount of Senior - 52 - Secured 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 Senior Secured Notes and 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 Senior Secured 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 Senior Secured Notes, plus, in each case, accrued and unpaid interest and Additional 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 Senior Secured 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 Senior Secured Notes pursuant to an Excess Proceeds Offer shall include both U.S. Senior Secured Notes and U.K. Senior Secured Notes on a pro rata basis based upon the aggregate principal amount of the Senior Secured Notes outstanding at the time of such repurchase, unless a change of Control of MSX 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 the covenant described hereunder, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the covenant described hereunder by virtue thereof. 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: (1) a Default or an Event of Default shall have occurred and be continuing (or would result therefrom); (2) the Company is not able to Incur an additional $1.00 of Indebtedness pursuant to Section 6.1(a); or (3) 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, - 53 - 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 or Subordinated Obligations 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 Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company); provided, however, that (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 Section 6.4(a)(3)(B); (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 - 54 - 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) 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; (iv) 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; (v) 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; (vi) 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 (vii) if no Default or Event of Default will have occurred and be continuing, Restricted Payments (in addition to those permitted by clauses (i) through (vi) 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; - 55 - (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; (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. 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 - 56 - 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; (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; - 57 - (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 Third 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 - 58 - not the Company) shall expressly assume, (a) by an instrument executed and delivered to the Lender, in form satisfactory 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 - 59 - 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 this Agreement 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 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 MSX 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 MSX Limited under the MSX 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 MSX 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. - 60 - 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, 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. Prohibited Transfers of Accounts Receivable. MSX Limited shall not be permitted to transfer its Charged Assets to any Subsidiaries that are not Guarantors. ARTICLE 7 DEFAULTS AND REMEDIES SECTION 7.1. Events of Default. Any of the following events is an "Event of Default": (i) the Borrowers default in the payment of interest on the Loans or any other amount under this Agreement when the same becomes due and payable, and such default continues for a period of 30 days; provided, that this Event of Default shall not limit the Borrowers' ability to accrue interest on the Loans; (ii) the Borrowers default in the payment of principal of the Loans when the same becomes due and payable at their Stated Maturity, by notice of prepayment, upon required repurchase, upon declaration or otherwise; (iii) the Borrowers fail to comply for 60 days after notice with any of their 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; - 61 - (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; (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 Company 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, MSX 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, MSX Limited or any Significant Subsidiary of the Company in an Involuntary Case; (B) appoints a Custodian of the Company, MSX 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, MSX 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; - 62 - (x) the rendering of any judgment or decree for the payment of money in excess of $5 million against the Company or a Restricted Subsidiary if such judgment or decree remains unpaid and outstanding for a period of 60 days following such judgment and is not discharged, waived or stayed within 60 days after such judgment or decree thereof; or (xi) a Guaranty ceases to be in full force and effect (other than in accordance with the terms of such Guaranty) or a Guarantor denies or disaffirms its obligations under its Guaranty 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 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. Remedies. Upon the occurrence of any Event of Default described in Section 7.1(viii) (but expressly excluding the other Events of Default in this Article 7), the unpaid principal amount of and accrued interest on the Loans shall automatically become immediately due and payable, without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by the Borrowers, and any obligations of the Lender hereunder shall thereupon terminate, and (ii) upon the occurrence of any other Event of Default, the Lender may, by written notice to the Company, declare the Loans to be, and the same shall forthwith become, due and payable, as specified below, together with accrued interest thereon; provided, that so long as all Lender Obligations have not been indefeasibly paid in full, the Commitments have not been terminated and the Senior Secured Notes and Third Lien Notes have not been indefeasibly paid in full, the Lender will not so declare the Loans to be due and payable under Section 7.1(iii), Section 7.1(iv) (except with respect to any term, covenant or agreement contained in Sections 5.1, 5.2, 5.5 or 5.6), Section 7.1(ix), or Section 7.1(v) or (vi) unless and until the Lender Obligations, Senior Secured Notes or Third Lien Notes are - 63 - accelerated under similar provisions of the Senior Credit Facility, Senior Secured Notes Indenture or Third Lien Loan Agreement; provided, further, that so long as all Lender Obligations have not been indefeasibly paid in full, the Commitments have not been terminated and the Senior Secured Notes and Third Lien Notes have not been indefeasibly paid in full, with respect to any failure of the Company to perform or comply in any material respect with any term, covenant or agreement contained in Sections 5.1, 5.2, 5.5 or 5.6 the Lender may so declare the Loans to be due and payable only after such failure shall not have been remedied or waived within sixty (60) days after receipt of written notice from the Lender to the Company, the Agent, the Trustee and the Third Lien Lender of such default (other than any occurrence described in the other provisions of this Article 7 for which a different grace or cure period is specified or which constitutes an immediate Event of Default). 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. All proceeds of any realization on the Collateral pursuant to the Security Documents and any payments received by the Lender pursuant to the Guaranties subsequent to and during the continuance of any Event of Default, shall be allocated and distributed by the Lender as follows: (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. - 64 - ARTICLE 8 MISCELLANEOUS SECTION 8.1. 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; provided that Court Square Capital Limited shall at all times retain at least 51% of the aggregate principal amount of the Loans. In the case of any sale, assignment, transfer, or negotiation of all or part of the Loans or Notes as authorized under this Section 8.1(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 MSX 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 Loans or Notes referred to in Section 8.1(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. (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 8.2. 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 the Loan Documents and the Senior Debt 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 each Borrower'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 the Loan Documents and the Senior Debt Documents and the consummation of the transactions contemplated hereby and thereby, and any and all liabilities with respect to or - 65 - 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 the Loan Documents, the Senior Debt 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 8.1) 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 8.3. Indemnity. In addition to the payment of expenses pursuant to the terms and conditions of Section 8.2 hereof, whether or not the transactions contemplated hereby shall be consummated, each Borrower (the "Indemnitors") agree 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 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 - 66 - 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 8.3 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 8.4. 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 8.4. 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 8.4 shall be binding upon each holder of the Notes at the time outstanding and each future holder of the Notes. SECTION 8.5. 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 8.6. Notices. 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. 22355 West Eleven Mile Road Southfield, Michigan 48304-4375 Attention: Chief Financial Officer Telecopy No.: (248) 829-6030 - 67 - and c/o MSX International, Inc. 22355 West Eleven Mile Road Southfield, Michigan 48304-4375 Attention: General Counsel Telecopy No.: (248) 829-6380 with copies (which shall not constitute notice to the Company) to: Court Square Capital Limited 399 Park Avenue 14th Floor, Zone 4 New York, New York 10043 Attention: Michael Delaney Telecopy No.: (212) 888-2940 and Dechert LLP 4000 Bell Atlantic Tower 1717 Arch Street Philadelphia, Pennsylvania 19103 Attention: Craig L. Godshall Telecopy No.: (215) 994-2222 - 68 - To the Lender: c/o Court Square Capital Limited 399 Park Avenue 14th Floor, Zone 4 New York, New York 10043 Attention: Michael Delaney Telecopy No.: (212) 888-2940 with a copy (which shall not constitute notice to the Lender) to: Dechert LLP 4000 Bell Atlantic Tower 1717 Arch Street Philadelphia, Pennsylvania 19103 Attention: Craig L. Godshall Telecopy No.: (215) 994-2222 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. SECTION 8.7. 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 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 8.2 and 8.3 shall survive the payment of the Loans and the Notes and the termination of this Agreement. SECTION 8.8. 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. - 69 - SECTION 8.9. 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 8.10. 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 8.11. 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. MSX LIMITED HAS 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 MSX LIMITED, BY THE PERSON SERVING THE SAME TO MSX INTERNATIONAL, INC., 22355 WEST ELEVEN MILE ROAD SOUTHFIELD, MI 48304-4375, SHALL BE DEEMED IN EVERY RESPECT TO EFFECT SERVICE OF PROCESS UPON MSX LIMITED IN ANY SUCH SUIT OR PROCEEDING. SECTION 8.12. 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 8.1(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 8.13. Consent to Jurisdiction and Service of Process. THE BORROWERS AGREE THAT ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE BROUGHT IN ANY COURT OF THE STATE OF NEW YORK LOCATED IN THE CITY OF NEW YORK, OR IN ANY COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK LOCATED IN THE CITY OF NEW YORK, AND THE BORROWERS HEREBY SUBMIT TO AND ACCEPT GENERALLY AND UNCONDITIONALLY THE JURISDICTION OF THOSE COURTS WITH RESPECT TO ITS PERSON AND PROPERTY AND, TO THE EXTENT PERMITTED BY LAW, IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT SUBJECT, HOWEVER, TO RIGHTS OF - 70 - APPEAL. THE BORROWERS FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING BY PERSONAL DELIVERY TO THE COMPANY OR BY THE MAILING THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID TO THE COMPANY AT ITS ADDRESS AS PROVIDED PURSUANT TO SECTION 8.6. NOTHING IN THIS PARAGRAPH SHALL AFFECT THE RIGHT OF THE LENDERS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR LIMIT THE RIGHT OF THE LENDERS TO BRING ANY SUCH ACTION OR PROCEEDING AGAINST THE BORROWERS OR THEIR PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION. THE BORROWERS HEREBY IRREVOCABLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH SUIT OR PROCEEDING IN THE ABOVE DESCRIBED COURTS. SECTION 8.14. Waiver of Jury Trial. EACH BORROWER AND EACH LENDER HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF. NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, NO CLAIM MAY BE MADE BY THE BORROWERS OR ANY LENDER AGAINST ANY LENDER FOR ANY LOST PROFITS OR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR WRONGFUL CONDUCT (OTHER THAN WILLFUL MISCONDUCT CONSTITUTING ACTUAL FRAUD) IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE TRANSACTIONS CONTEMPLATED HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH. EACH BORROWER AND EACH LENDER HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES. EACH BORROWER AND EACH LENDER AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND ACKNOWLEDGES THAT THE LENDER WOULD NOT EXTEND TO THE BORROWERS ANY LOANS HEREUNDER IF THIS SECTION WERE NOT PART OF THIS AGREEMENT. SECTION 8.15. 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 8.16. 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. - 71 - SECTION 8.17. 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. SECTION 8.18. Conversion of Currency. The Borrowers and the 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 be caused by the Borrowers and the 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) The term "rate(s) of exchange" shall mean the rate at which the Borrowers or their 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 U.S. dollars and payment in New York, New York, is of the essence, and U.S. dollars shall be the currency of account in all events. The obligation of the Borrowers and Guarantors in respect of any sum due from them to the Lender hereunder or under a Note shall, notwithstanding any judgment in a currency other than U.S. dollars, be discharged only to the extent that on the Business Day following receipt by the Lender of any sum adjudged to be so due in such other currency the Lender purchases U.S. dollars with such other currency; if the U.S. dollars so purchased are less than the sum originally due to the Lender in U.S. dollars, the Company and subsidiary Guarantors with respect to the Company Notes, and MSX Limited and the Guarantors with respect to the U.K. Notes, agree, as a separate obligation and notwithstanding any such judgment, to indemnify the Lender against such loss, and if the U.S. - 72 - dollars so purchased exceed the sum originally due to the Lender in U.S. dollars, the Lender agrees to remit to the Borrowers such excess. SECTION 8.19. 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. SECTION 8.20. Reaffirmation; Release. (a) Each of the Borrowers and the Lender hereby ratifies, affirms and reaffirms in all respects its obligations and undertakings under each Loan Document (including without limitation, the Security Documents) to which it is a party, including without limitation, all terms, conditions, representations and covenants in each of the Loan Documents (as applicable) and agrees that all references therein to the Loan Agreement shall be deemed to refer to the Loan Agreement as amended and restated by this Agreement. (b) Each of the Borrowers and the Lender hereby acknowledges (i) the continued existence, validity and enforceability of each Loan Document (including without limitation, the Security Documents) to which it is a party, and agrees that the terms and conditions, representations and covenants of each such Loan Document are binding upon it and (ii) subsequent to, and after taking into account of all the terms and conditions of this Agreement, each Loan Document (including without limitation, the Security Documents) is and shall remain in full force and effect in accordance with the terms thereof. (c) Each Borrower represents and warrants that it is not aware of any claims or causes of action against the Lender or any of its successors or assigns arising from or in any way related to this Agreement, the Original Agreement or any of the other Loan Documents. NOTWITHSTANDING THIS REPRESENTATION AND AS FURTHER CONSIDERATION FOR THE AGREEMENTS AND UNDERSTANDINGS HEREIN, EACH BORROWER, ON BEHALF OF ITSELF AND ITS EMPLOYEES, AGENTS, EXECUTORS, HEIRS, SUCCESSORS AND ASSIGNS, HEREBY RELEASES THE LENDER, ITS PREDECESSORS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, AFFILIATES, SUBSIDIARIES, SUCCESSORS AND ASSIGNS, FROM ANY LIABILITY, CLAIM, RIGHT OR CAUSE OF ACTION WHICH NOW EXISTS OR HEREAFTER ARISES AS A RESULT OF ACTS, OMISSIONS OR EVENTS OCCURRING ON OR PRIOR TO THE - 73 - DATE HEREOF, WHETHER KNOWN OR UNKNOWN, ARISING FROM OR IN ANY WAY RELATED TO THIS AGREEMENT, THE ORIGINAL AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. * * * * * - 74 - IN WITNESS WHEREOF the due execution hereof by the respective duly authorized officers of the undersigned as of the date first written above. MSX INTERNATIONAL, INC. By: /s/ Frederick K. Minturn ------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL LIMITED By: /s/ Frederick K. Minturn ------------------------------- Name: Frederick K. Minturn Title: Director COURT SQUARE CAPITAL LIMITED By: /s/ Michael Delaney ------------------------------- Name: Michael Delaney Title: Vice President - 75 - EX-10.18 12 k79382exv10w18.txt THIRD SECURED TERM LOAN AGREEMENT 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
i 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

ii 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 iii 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 1 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 2 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 Moody's 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 Keefe 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: 4 (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 5 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 Jefferies & 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 Schroder 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 Moody's 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 Moody's 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 399 Park Avenue, 14th Floor, New York, New York, 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 Robert Netolicka 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 Section 302 of the United States 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 Jefferies & 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. 22355 West Eleven Mile Road Southfield, Michigan 48034 Attention: Corporate Legal Department Telecopy No.: (248) 829-6030 and 63 c/o MSX International, Inc. 22355 West Eleven Mile Road Southfield, Michigan 48034 Attention: General Counsel Telecopy No.: (248) 829-6380 with copies (which shall not constitute notice to the Company) to: Court Square Capital Limited 399 Park Avenue 14th Floor, Zone 4 New York, New York 10043 Attention: Michael Delaney Telecopy No.: (212) 888-2940 and Dechert LLP 4000 Bell Atlantic Tower 1717 Arch Street Philadelphia, Pennsylvania 19103 Attention: Craig L. Godshall Telecopy No.: (215) 994-2222 To the Lender: c/o Citicorp Capital Investors, Ltd. 399 Park Avenue 14th Floor, Zone 4 New York, New York 10043 Attention: Byron L. Knief Telecopy No.: (212) 888-2940 with a copy (which shall not constitute notice to the Lender) to: Kirkland & Ellis LLP 153 East 53rd Street New York, NY 10022-4675 Attention: Eunu Chun, Esq. Telecopy No.: (212) 446-4900 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. 22355 WEST ELEVEN MILE ROAD SOUTHFIELD, MI 48304-4375, 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 Manhattan, New York City, New York, United States, 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/ Frederick K. Minturn ----------------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL LIMITED By: /s/ Frederick K. Minturn ----------------------------------------- Name: Frederick K. Minturn Title: Director GUARANTORS: MSX INTERNATIONAL (HOLDINGS), INC. By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL SERVICES (HOLDINGS), INC. By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL EUROPEAN (HOLDINGS), L.L.C. By: /s/ Frederick K. Minturn ----------------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL DEALERNET SERVICES, INC. By: /s/ Frederick K. Minturn ----------------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL BUSINESS SERVICES, INC. By: /s/ Frederick K. Minturn ----------------------------------------- Name: Frederick K. Minturn Title: Vice President CREATIVE TECHNOLOGY SERVICES, L.L.C. By: /s/ Frederick K. Minturn ----------------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL TECHNOLOGY SERVICES, INC. By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL ENGINEERING SERVICES, INC. By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Vice President INTRANATIONAL COMPUTER CONSULTANTS, INC. By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Vice President PROGRAMMING MANAGEMENT & SYSTEMS, INC. By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Vice President CHELSEA COMPUTER CONSULTANTS, INC. By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Vice President MILLENNIUM COMPUTER SYSTEMS, INC. By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Vice President MANAGEMENT RESOURCES INTERNATIONAL, INC. By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Vice President PILOT COMPUTER SERVICES, INCORPORATED By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL PLATFORM SERVICES, LLC By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Vice President MEGATECH ENGINEERING, INC. By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Vice President MSX INTERNATIONAL STRATEGIC TECHNOLOGY, INC. By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Vice President THE LENDER: ---------- CITICORP MEZZANINE III, L.P. By: Citicorp Capital Investors, Ltd. Its: General Partner /s/ Byron L. Knief ------------------------------------ Name: Byron L. Knief Title: President EX-10.19 13 k79382exv10w19.txt WARRANT PURCHASE AGREEMENT EXHIBIT 10.19 EXECUTION WARRANT AGREEMENT WARRANT AGREEMENT, dated as of August 1, 2003, by and between CITICORP MEZZANINE III, L.P., a Delaware limited partnership (the "Purchaser"), and MSX INTERNATIONAL, INC., a Delaware corporation (the "Company"). Capitalized terms used herein shall have the meanings given to such terms in Section V(A) hereof. WHEREAS, pursuant to that certain Third Secured Term Loan Agreement, dated as of the date hereof (as amended, restated or modified from time to time, the "Credit Agreement"), by and between the Purchaser and the Company, the Purchaser is lending to the Company the aggregate sum of $25,000,000 (the "Loan") in accordance with the terms of the Credit Agreement; WHEREAS, the Purchaser is acquiring from the Company a warrant in the form attached as Exhibit A hereto (the "Warrant"), representing the right to purchase from the Company 666,649 Warrant Shares (as adjusted from time to time pursuant to the provisions of the Warrant) on the terms and conditions set forth in the Warrant; and WHEREAS, the Warrant is being issued as an inducement and partial consideration for the Purchaser to enter into the Credit Agreement and to make the Loan to the Company, and without such issuance, the Purchaser will not enter into the Credit Agreement. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: I. Purchase Price and Closing. A. Closing. The closing of the issuance of the Warrant to the Purchaser (the "Closing") shall take place simultaneously with the closing pursuant to the Credit Agreement. The date of such Closing is hereinafter referred to as the "Closing Date." B. Transactions on Closing Date. At the Closing, the Company shall deliver to the Purchaser the duly issued Warrant. II. Representations and Warranties of the Company. The Company represents and warrants to the Purchaser as follows: A. Good Standing. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. B. Authority Relative to this Agreement. The Company has all requisite corporate power and authority to enter into and perform its obligations under this Agreement and to issue and deliver the Warrant to the Purchaser. The execution, delivery, and performance by the Company of its obligations under this Agreement, including the issuance and delivery of the Warrant to the Purchaser, have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company and (assuming due execution and delivery by the Purchaser) is a legal, valid, and binding obligation of the Company and is enforceable against the Company in accordance with its terms. C. No Conflict or Violation. The execution and delivery of this Agreement by the Company, the performance by the Company of its terms and the issuance and delivery of the Warrant to the Purchaser will not on the Closing Date conflict with or result in a violation of (i) the Certificate of Incorporation or By-Laws of the Company as in effect on the Closing Date, or (ii) any agreement, instrument, law, rule, regulation, order, writ, judgment, or decree to which the Company is a party or is subject, except for such conflicts and violations which will not, in the aggregate, have a material adverse effect on the business, prospects, assets, results of operations or condition (financial or otherwise) of the Company and its Subsidiaries (taken as a whole) and will not deprive the Purchaser of any material benefit under this Agreement. D. Validity of Issuance. The Warrant to be issued to the Purchaser pursuant to this Agreement and the Warrant Shares issued upon exercise of the Warrant will, when issued, be duly and validly issued, fully paid and nonassessable (assuming in the case of the Warrant Shares, payment of the exercise price is made in accordance with the terms of the Warrant). E. Ownership. Immediately following the consummation of the transactions contemplated by, referenced in or made in connection with each of the Bank Agreement, the Indenture, the Third Term Loan Agreement, and the Fourth Term Loan Agreement, and each of the documents, instruments and agreements executed or delivered in connection therewith, the Warrant Shares constitute 3.0% of the Common Stock on a Fully Diluted Basis. III. Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company as follows: A. Investment Intention. The Purchaser is acquiring the Warrant, and if any portion of the Warrant is exercised, the Warrant Shares, for investment solely for its own account and not with a view to, or for resale in connection with, the distribution or other disposition thereof. The Purchaser agrees and acknowledges that it will not, directly or indirectly, offer, transfer, or sell the Warrant or any Warrant Shares, or solicit any offers to purchase or acquire the Warrant or any Warrant Shares, unless the transfer or sale is permitted by the terms of the Warrant and such transfer or sale is (i) pursuant to an effective registration statement under the Securities Act of 1933, as amended, and the rules and regulations thereunder (the "Securities Act") and has been registered under any applicable state securities or "blue sky" laws, or (ii) pursuant to an exemption from registration under the Securities Act and applicable state securities or "blue sky" laws. - 2 - B. Legend. The Purchaser has been advised by the Company that certificates representing the Warrant will bear any legend required pursuant to the Stockholders Agreement and will bear the following legend: THIS WARRANT WAS ISSUED AND BECAME EFFECTIVE ON AUGUST 1, 2003, AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT, THE RULES AND REGULATIONS THEREUNDER OR THE PROVISIONS OF THIS WARRANT. THIS WARRANT IS ALSO SUBJECT TO (A) A WARRANT AGREEMENT DATED AS OF AUGUST 1, 2003 BY AND BETWEEN MSX INTERNATIONAL, INC. (THE "COMPANY") AND THE ORIGINAL HOLDER HEREOF, AND (B) AN AMENDED AND RESTATED STOCKHOLDERS AGREEMENT DATED AS OF NOVEMBER 28, 2000, AS AMENDED BY AMENDMENT NO. 1, EFFECTIVE AS OF JANUARY 31, 2003, AND AMENDMENT NO. 2 TO THE STOCKHOLDERS AGREEMENT, DATED AS OF AUGUST 1, 2003, BY AND AMONG THE COMPANY, CERTAIN OTHER STOCKHOLDERS OF THE COMPANY AND THE ORIGINAL HOLDER HEREOF (THE "STOCKHOLDERS AGREEMENT"), IN EACH CASE AS AMENDED FROM TIME TO TIME. A COPY OF THE WARRANT AGREEMENT AND THE STOCKHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON REQUEST. Upon reasonable request of the Company in connection with any permitted transfer of the Warrant or any Warrant Shares (other than a transfer pursuant to a public offering registered under the Securities Act, pursuant to Rule 144 or Rule 144A promulgated under the Securities Act (or any similar rules then in effect), or to an affiliate of the Purchaser), the Purchaser will deliver, if requested by the Company, an opinion of counsel knowledgeable in securities laws reasonably satisfactory to the Company to the effect that such transfer may be effected without registration under the Securities Act. The Company agrees to issue certificates evidencing the Warrant Shares that do not contain such legend upon receipt of an opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Company, to the effect that registration under the Securities Act is not required because of the availability of an exemption from such registration. C. Additional Investment Representations. The Purchaser is an "accredited investor" as such term is defined in Rule 501 promulgated under the Securities Act. - 3 - IV. Inspection Rights. Until the Company is a Public Company, the Company shall permit one representative of any holder of (x) the Warrant or (y) the Warrant Shares (as selected by the holders of the majority of the Warrant Shares) (assuming for purposes of this section that the Warrant has been fully exercised), upon reasonable notice and during normal business hours and such other times as any such holder may reasonably request, to (i) visit and inspect any of the properties of the Company and its subsidiaries, (ii) examine the corporate and financial records of the Company and its subsidiaries and make copies thereof or extracts therefrom, and (iii) discuss the affairs, finances and accounts of any such corporations with the directors, officers, key employees, and independent accountants of the Company and its subsidiaries. V. Miscellaneous A. Definitions. For the purposes of this Agreement, the following terms shall have the following meanings: "Bank Agreement" means the Amended and Restated Credit Agreement, dated as of August 1, 2003, by and among the borrowing subsidiaries of the Company party thereto from time to time, the lenders party thereto from time to time and Bank One, N.A., a national banking association, as agent. "Business Day" means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close. "Class A Common" means, collectively, the Series A-1 Common, the Series A-2 Common, the Series A-3 Common, and the Series A-4 Common, and any securities into which such Series A-1 Common, Series A-2 Common, Series A-3 Common, or Series A-4 Common is hereafter converted or exchanged. "Class B Common" means, collectively, the Series B-1 Common, the Series B-2 Common, the Series B-3 Common, and the Series B-4 Common, and any securities into which such Series B-1 Common, Series B-2 Common, Series B-3 Common, or Series B-4 Common is hereafter converted or exchanged. "Common Stock" means, collectively, (i) the Class A Common, (ii) the Class B Common, (iii) any other class or series of the Company's common stock, and (iv) any other capital stock issuable with respect to the securities referred to in clauses (i), (ii) or (iii) above by way of stock split, stock dividend, or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. "Fourth Term Loan Agreement" means that certain Amended and Restated Fourth Secured Term Loan Agreement, dated as of the date hereof, by and among the Company and MSX International Limited as issuers, the subsidiary guarantors named therein, and Court Square Capital Limited. - 4 - "Fully Diluted Basis" means, at any given time, the number of shares of all classes of Common Stock outstanding at such time, calculated after giving effect to, and including, the exercise, conversion, or exchange, as applicable, of all existing options, warrants or other securities directly or indirectly convertible into or exchangeable for Common Stock, without regard to any contingencies or time periods applicable thereto. "Indenture" means that certain Senior Secured Indenture, dated the date hereof, by and among the Company and MSX International Limited as issuers, the subsidiary guarantors named therein, and BNY Midwest Trust Company, as trustee. "Public Company" means a company (i) which is subject to the reporting requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended from time to time (the "Exchange Act"), or (ii) any of whose equity securities are registered pursuant to Section 12(b) or 12(g) of the Exchange Act. "Registration Rights Agreement" means the Amended and Restated Registration Rights Agreement, dated as of November 28, 2000, by and among the Company and certain of the Company's stockholders party thereto, as amended, restated or modified from time to time. "Series A-1 Common" means the Company's Series A-1 Common Stock, par value $0.01 per share, and any securities into which such Series A-1 Common Stock is hereafter converted or exchanged. "Series A-2 Common" means the Company's Series A-2 Common Stock, par value $0.01 per share, and any securities into which such Series A-2 Common Stock is hereafter converted or exchanged. "Series A-3 Common" means the Company's Series A-3 Common Stock, par value $0.01 per share, and any securities into which such Series A-3 Common Stock is hereafter converted or exchanged. "Series A-4 Common" means the Company's Series A-4 Common Stock, par value $0.01 per share, and any securities into which such Series A-4 Common Stock is hereafter converted or exchanged. "Series B-1 Common" means the Company's Series B-1 Common Stock, par value $0.01 per share, and any securities into which such Series B-1 Common Stock is hereafter converted or exchanged. "Series B-2 Common" means the Company's Series B-2 Common Stock, par value $0.01 per share, and any securities into which such Series B-2 Common Stock is hereafter converted or exchanged. - 5 - "Series B-3 Common" means the Company's Series B-3 Common Stock, par value $0.01 per share, and any securities into which such Series B-3 Common Stock is hereafter converted or exchanged. "Series B-4 Common" means the Company's Series B-4 Common Stock, par value $0.01 per share, and any securities into which such Series B-4 Common Stock is hereafter converted or exchanged. "Stockholders Agreement" means the Amended and Restated Stockholders Agreement, dated as of November 28, 2000, as amended by Amendment No. 1, effective as of January 31, 2003, and Amendment No. 2 to the Stockholders Agreement, dated as of the date hereof, by and among the Company, the Purchaser, and certain other stockholders of the Company party thereto, as amended, restated or modified from time to time. "Subsidiary" means, in respect of any Person, any corporation, association, partnership 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) 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 (a) such Person, (b) such Person and one or more Subsidiaries of such Person or (c) one or more Subsidiaries of such Person. "Third Term Loan Agreement" means that certain Third Term Loan Agreement, dated as of the date hereof, by and among the Company and MSX International Limited as issuers, the subsidiary guarantors named therein, and the Purchaser. "Warrant Shares" means shares of the Company's Class A Common (consisting of an equal number of shares of each of Series A-1 Common, Series A-2 Common, Series A-3 Common, and Series A-4 Common) (unless there are no shares of Class A Common outstanding, then, in such case, Class B Common (consisting of an equal number of shares of each of Series B-1 Common, Series B-2 Common, Series B-3 Common, and Series B-4 Common)) issuable upon exercise of this Warrant; provided, that if the securities issuable upon exercise of the Warrant are issued by an entity other than the Company or there is a change in the class or series of securities so issuable, then the term "Warrant Shares" shall mean shares of the security issuable upon exercise of the Warrant if such security is not issuable in shares, or shall mean the equivalent units in which such security is issuable if such security is not issuable in shares. B. Other Agreements. The parties hereto acknowledge that upon the exercise of the Warrant, the Warrant Shares and the holders thereof shall be subject to the terms and conditions of each of the Stockholders Agreement and the Registration Rights Agreement. C. Notices. 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 - 6 - 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: MSX International, Inc. 22355 West Eleven Mile Road Southfield, Michigan 48034 Attention: Chief Financial Officer Telecopy No.: (248) 829-6030 and MSX International, Inc. 22355 West Eleven Mile Road Southfield, Michigan 48034 Attention: General Counsel Telecopy No.: (248) 829-6380 with copies (which shall not constitute notice to the Company) to: Court Square Capital Limited 399 Park Avenue 14th Floor, Zone 4 New York, New York 10043 Attention: Michael Delaney Telecopy No.: (212) 888-2940 and Dechert LLP 4000 Bell Atlantic Tower 1717 Arch Street Philadelphia, Pennsylvania 19103 Attention: Craig L. Godshall Telecopy No.: (215) 994-2222 To the Purchaser: c/o Citicorp Capital Investors, Ltd. 399 Park Avenue 14th Floor, Zone 4 New York, NY 10043 Attention: Byron L. Knief Telecopy No.: (212) 888-2940 - 7 - with a copy (which shall not constitute notice to the Purchaser) to: Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, NY 10022-4675 Attention: Eunu Chun, Esq. Telecopy No.: (212) 446-4900 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. D. Assignment. This Agreement and all the provisions hereof shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns, except that neither this Agreement nor any rights or obligations hereunder shall be assigned by the Company without the prior written consent of the Purchaser. E. Amendment. This Agreement may be amended only by a written instrument signed by the Company and the Purchaser. F. Waiver. Either party hereto may (a) extend the time for the performance of any of the obligations or other acts of the other party hereto, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto, and (c) waive compliance with any of the agreements or conditions herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid as to such party if set forth in an instrument in writing signed by such party. G. Severability. In the event that any one or more of the provisions hereof, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, it being intended that all rights, powers and privileges of the parties hereto shall be enforceable to the fullest extent permitted by law. H. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS OR CHOICE OF LAWS OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION WHICH WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THOSE OF THE STATE OF DELAWARE. - 8 - I. Expenses. All reasonable fees and expenses incurred by the Purchaser in connection with the preparation of this Agreement and the transactions referred to herein, including the reasonable fees of the Purchaser's counsel, shall be paid by the Company, whether or not the issuance of the Warrant, the execution and delivery of the Credit Agreement or any other transaction contemplated hereby is consummated. J. Counterparts. This Agreement may be executed in two or more counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement. K. Descriptive Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of the terms contained herein. * * * * * - 9 - IN WITNESS WHEREOF, each of the parties hereto have caused this Warrant Agreement to be signed by its duly authorized officer and to be dated as of the date hereof. MSX INTERNATIONAL, INC. By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Vice President CITICORP MEZZANINE III, L.P. By: Citicorp Capital Investors, Ltd. Its: General Partner By: /s/ Byron Knief ---------------------------------------- Name: Byron Knief Title: President EX-10.20 14 k79382exv10w20.txt PURCHASE AGREEMENT DATED JULY 25, 2003 EXECUTION COPY EXHIBIT 10.20 $75,500,000 MSX INTERNATIONAL, INC. AND MSX INTERNATIONAL LIMITED 11% SENIOR SECURED NOTE UNITS DUE 2007 PURCHASE AGREEMENT July 25, 2003 JEFFERIES & COMPANY, INC. 11100 Santa Monica Boulevard 10th Floor Los Angeles, California 90025 Ladies and Gentlemen: MSX International Inc., a Delaware corporation (the "Company"), and its wholly-owned subsidiary, MSX International Limited ("MSXI Limited" and, together with the Company, the "Issuers") hereby agree with you as follows: 1. ISSUANCE OF UNITS. Subject to the terms and conditions herein contained, the Issuers propose to issue and sell to Jefferies & Company, Inc. (the "Initial Purchaser") $75,500,000 aggregate principal amount of 11% Senior Secured Note Units due 2007 (each a "Unit" and, collectively, the "Units"), each Unit consisting of $860 principal amount of 11% Senior Secured Notes due 2007 issued by the Company (the "U.S. Notes") and $140 principal amount of 11% Senior Secured Notes due 2007 issued by MSXI Limited (the "U.K. Notes" and, together with the U.S. Notes, the "Notes"). The Notes, as Units, will be issued pursuant to an indenture (the "Indenture"), to be dated as of August 1, 2003, by and among the Issuers, the Subsidiary Guarantors party thereto (as hereinafter defined), and BNY Midwest Trust Company, as trustee (the "Trustee"). Capitalized terms used but not defined herein shall have the meanings set forth in the Indenture. The Units will be offered and sold to the Initial Purchaser pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended (the "Act"). Upon original issuance thereof, and until such time as the same is no longer required under the applicable requirements of the Act, the Units and Notes shall bear the legends set forth in the final offering circular, dated the date hereof (the "Final Offering Circular"). The Issuers have prepared a preliminary offering circular, dated July 7, 2003 (the "Preliminary Offering Circular"), and the Final Offering Circular relating to the offer and sale of the Units (the "Offering"). "Offering Circular" means, as of any date or time referred to in this Agreement, the most recent offering circular (whether the Preliminary Offering Circular or the Final Offering Circular, and any amendment or supplement to either such document), including exhibits and schedules thereto. In connection with the sale of the Units, the Company is concurrently entering into a new senior secured revolving credit facility among the Company, the guarantors named therein, certain lenders party thereto and Bank One, N.A., as agent for the lenders, which provides for a revolving loan facility in an amount of up to $40 million (as amended, supplemented, modified, extended or restated from time to time, the "Credit Agreement"). 2. TERMS OF OFFERING. The Initial Purchaser has advised the Issuers, and the Issuers understand, that the Initial Purchaser will make offers to sell (the "Exempt Resales") some or all of the Notes purchased by the Initial Purchaser hereunder on the terms set forth in the Final Offering Circular, as amended or supplemented, to persons (the "Subsequent Purchasers") whom the Initial Purchaser (i) reasonably believes to be "qualified institutional buyers" ("QIBs") as defined in Rule 144A under the Act, as such may be amended from time to time, (ii) reasonably believes (based upon written representations made by such persons to the Initial Purchaser) to be institutional "accredited investors" ("Accredited Investors") as defined in Rule 501(a)(1), (2), (3) or (7) under the Act or (iii) reasonably believes to be non-U.S. persons in reliance upon Regulation S under the Act. Pursuant to the Indenture, all Domestic Restricted Subsidiaries (as defined in the Indenture) of the Company, jointly and severally, shall fully and unconditionally guarantee, on a senior secured basis, to each holder of the Notes and the Trustee, the payment and performance of the Company's obligations under the Indenture and the U.S. Notes (each such subsidiary being referred to herein as a "Subsidiary Guarantor"). The Company and the Subsidiary Guarantors, jointly and severally, shall fully and unconditionally guarantee, on a senior secured basis, to each Holder of U.K. Notes and the Trustee, the payment and performance of the MSXI Limited's obligations under the Indenture and the U.K. Notes. Each guarantee under the U.S. Notes and U.K Notes is referred to herein as a "Guarantee". Pursuant to the terms of the Collateral Agreements (as defined in the Indenture), (i) all of the obligations under the U.S. Notes will be secured by the Subsidiary Guarantors and a security interest in substantially all of the assets of the Company and the Subsidiary Guarantors (except for a prior ranking lien by the lenders under the Credit Agreement and other Permitted Liens as such term is defined in the Indenture) and (ii) all of the obligations under the U.K. Notes will be secured by MSXI Limited, the Company and the Subsidiary Guarantors and a security interest in all of the accounts receivable of MSXI Limited and substantially all of the assets of the Company and the Subsidiary Guarantors (except for a prior ranking lien by the lenders under the Credit Agreement and other Permitted Liens as such term is defined in the Indenture). Holders of the Units (including Subsequent Purchasers) will have the registration rights set forth in the registration rights agreement applicable to the Units and Notes (the "Registration Rights Agreement"), to be executed on and dated as of the Closing Date, as such term is defined below. Pursuant to the Registration Rights Agreement, the Issuers will agree, among other things, to file with the Securities and Exchange Commission (the "SEC") (a) a registration statement under the Act relating to Senior Secured Note Units (the "Exchange Units") and the underlying Notes which shall be identical to the Units (except that the Exchange Units shall have been registered pursuant to such registration statement, will not be subject to restrictions on transfer or contain additional interest provisions) to be offered in exchange for the Units (such offer to exchange being referred to as the "Exchange Offer"), and/or (b) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the "Shelf Registration Statement") relating to the resale by certain holders of the Units and the underlying Notes. If the Issuers fail to satisfy their obligations under the Registration Rights Agreement, they will be required to pay additional interest to the holders of the Notes under certain circumstances. This Agreement, the Indenture, the Collateral Agreements, the Registration Rights Agreement, the Units, the Notes, the Guarantees, the Exchange Units and Exchange Notes are referred to herein as the "Documents." As used herein, unless the context otherwise requires, the terms "Units" and "Exchange Units" shall include the underlying Notes. 2 3. PURCHASE, SALE AND DELIVERY. On the basis of the representations, warranties, agreements and covenants herein contained and subject to the terms and conditions herein set forth, the Issuers agree to issue and sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase from the Issuers, the Units at a purchase price of 96.144% of the aggregate principal amount thereof. Delivery to the Initial Purchaser of and payment for the Units shall be made at a Closing (the "Closing") to be held at 10:00 a.m., New York time, on August 1, 2003 (the "Closing Date") at the New York offices of Mayer, Brown, Rowe & Maw LLP. The Issuers shall deliver to the Initial Purchaser one or more certificates representing the Units and underlying Notes in definitive form, registered in such names and denominations as the Initial Purchaser may request, against payment by the Initial Purchaser of the purchase price therefor by immediately available Federal funds bank wire transfer to such bank account or accounts as the Issuers shall designate to the Initial Purchaser at least two business days prior to the Closing. The certificates representing the Units in definitive form shall be made available to the Initial Purchaser for inspection at the New York offices of Mayer, Brown, Rowe & Maw LLP (or such other place as shall be reasonably acceptable to the Initial Purchaser) not later than 10:00 a.m. one business day immediately preceding the Closing Date. Units to be represented by one or more definitive global securities in book-entry form will be deposited on the Closing Date, on behalf of the Issuers, with The Depository Trust Company ("DTC") or its designated custodian, and registered in the name of Cede & Co. 4. REPRESENTATIONS AND WARRANTIES OF THE ISSUERS. Each of the Issuers, on behalf of itself and its Subsidiaries (as defined below), represents and warrants to the Initial Purchaser that, as of the date hereof and as of the Closing Date: (a) 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 Closing Date will 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 Issuers make no representation or warranty as to the information furnished in writing to the Issuers by the Initial Purchaser specifically for use therein. No injunction or order has been issued that either (i) asserts that any of the transactions contemplated by this Agreement or each of the other Documents is subject to the registration requirements of the Act, or (ii) would prevent or suspend the issuance or sale of any of the Units or the use of the Preliminary Offering Circular, the Final Offering Circular or any amendment or supplement thereto, in any jurisdiction. Each of the Preliminary Offering Circular and the Final Offering Circular, as of their respective dates contained, and the Final Offering Circular, as amended or supplemented, as of the Closing Date will contain, all the information specified in, and meet the requirements of Rule 144A(d)(4) under the Act. (b) 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 I attached hereto (the "Subsidiaries"). (c) The Company and its respective Subsidiaries (i) have been duly organized, are validly existing and are in good standing under the laws of their jurisdiction of organization, (ii) have all requisite corporate power and corporate authority to carry on their business and to own, lease and operate their properties and assets, and (iii) are duly qualified or licensed to do business and are in good standing as a foreign corporation, partnership or other entity as the case may be, authorized to do 3 business in each jurisdiction in which the nature of such businesses or the ownership or leasing of such properties requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a material adverse effect on (A) the business, prospects, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole, (B) the ability of the Issuers to perform their obligations in all material respects under any Document or (C) the validity of any of the Documents or the consummation of any of the transactions contemplated therein (each, a "Material Adverse Effect"). (d) All of the issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable, and were not issued in violation of, and are not subject to, any preemptive or similar rights. The column titled "Actual" in the table under the caption "Capitalization" in the Final Offering Circular (including the footnotes thereto) sets forth, as of March 30, 2003, the capitalization of the Company. 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, security interests, mortgages, pledges, charges, equities, claims or restrictions on transferability or encumbrances of any kind (collectively, "Liens), other than Permitted Liens as defined in the Final Offering Circular, 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 Robert Netolicka 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 the Company or any of its Subsidiaries. (e) No holder of securities of the Issuers or any of their Subsidiaries will be entitled to have such securities registered under the registration statements required to be filed by the Issuers and the Subsidiary Guarantors with respect to the Units or Notes pursuant to the Registration Rights Agreement. (f) The Issuers and each of the Subsidiary Guarantors that are corporations have all requisite corporate power and corporate authority, and each of the Subsidiary Guarantors that is a limited partnership or limited liability company has all the requisite partnership or limited liability company power and partnership or limited liability company authority, as applicable, to execute, deliver and perform its obligations under the Documents to which it is a party and to consummate the transactions contemplated thereby. (g) This Agreement has been duly and validly authorized, executed and delivered by the Issuers. Each of the Indenture and the Collateral Agreements have been duly and validly authorized by the Issuers and the Subsidiary Guarantors. Each of the Indenture and the Collateral Agreements, when executed and delivered by the Issuers and the Subsidiary Guarantors, as applicable, will constitute a legal, valid and binding obligation of each of the Issuers and Subsidiary Guarantors, enforceable against each of the Issuers and the Subsidiary Guarantors in accordance with its terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity (whether applied by a court of law or equity) and the discretion of the court before which any proceeding therefor may be brought. (h) The Registration Rights Agreement has been duly and validly authorized by the Issuers. The Registration Rights Agreement, when executed and delivered by the Issuers, will constitute a 4 legal, valid and binding obligation of each of the Issuers, enforceable against each of the Issuers in accordance with its terms, except that (A) the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity (whether applied by a court of law or equity) and the discretion of the court before which any proceeding therefor may be brought and (B) any rights to indemnity or contribution thereunder may be limited by federal and state securities laws and public policy considerations. (i) The Notes, when issued, will be in the form contemplated by the Indenture. The Indenture meets the requirements for qualification under the Trust Indenture Act of 1939, as amended (the "TIA"). The Units, Exchange Units, Notes and Exchange Notes have each been duly and validly authorized by each of the Issuers and, in the case of the Notes and Units, when authenticated, delivered to and paid for by the Initial Purchaser in accordance with the terms of this Agreement and the Indenture, will have been duly executed, issued and delivered and will be legal, valid and binding obligations of each of the Issuers, entitled to the benefit of the Indenture, the Collateral Agreements and the Registration Rights Agreement, and enforceable against each of the Issuers in accordance with their terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect relating to creditors' rights generally and, (ii) general principles of equity (whether applied by a court of law or equity) and the discretion of the court before which any proceeding therefor may be brought. (j) The Guarantees have been duly and validly authorized by the Subsidiary Guarantors and, when executed by the Subsidiary Guarantors, will have been duly executed, issued and delivered and will be legal, valid and binding obligations of the Subsidiary Guarantors, entitled to the benefit of the Indenture, the Collateral Agreements, and the Registration Rights Agreement, and enforceable against the Subsidiary Guarantors in accordance with their terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity (whether applied by a court of law or equity) and the discretion of the court before which any proceeding therefor may be brought. (k) Neither the Company nor any of its Subsidiaries is in violation of its certificate of incorporation, by-laws or, for those Subsidiaries that are limited liability companies, limited liability operating agreements (the "Charter Documents"). Neither the Company nor any of its respective Subsidiaries is (i) in violation of any Federal, state, local or foreign statute, law (including, without limitation, common law) or ordinance, or any judgment, decree, rule, regulation or order (collectively, "Applicable Law") of any federal, state, local and other governmental authority, governmental or regulatory agency or body, court, arbitrator or self-regulatory organization, domestic or foreign having jurisdiction over the Company or any of its Subsidiaries or any of their respective assets, properties or operations, except for such violations that could not result in a Material Adverse Effect (each, a "Governmental Authority"), or (ii) in breach of or default under any bond, debenture, note or other evidence of indebtedness, indenture, mortgage, deed of trust, lease or any other agreement or instrument to which any of them is a party or by which any of them or their respective property is bound (collectively, "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, would constitute (a) a violation of such Charter Documents or Applicable Laws, (b) a breach of or default under any Applicable Agreement or (c) result in the imposition of any penalty or the acceleration of any indebtedness that in (a), (b) or (c) above could result in a Material Adverse Effect. 5 (l) Neither the execution, delivery or performance of the Documents nor the consummation of any transactions contemplated therein will conflict with, violate, constitute a breach of or a default (with the passage of time or otherwise) under, require the consent of any person (other than consents already obtained) under, result in the imposition of a Lien on any assets of the Issuers or any of their respective Subsidiaries (except pursuant to the Documents), or result in an acceleration of indebtedness under or pursuant to (i) the Charter Documents, (ii) any Applicable Agreement, or (iii) any Applicable Law, except for conflicts, violations, breaches, defaults, consent requirements, Lien impositions or the acceleration of indebtedness that could not result in a Material Adverse Effect. Immediately after consummation of the Offering and the transactions contemplated in the Documents, no Default or Event of Default (each, as defined in the Indenture) will exist. (m) No consent, approval, authorization or order of any Governmental Authority, or third party is required for the issuance and sale by the Issuers of the Units to the Initial Purchaser or the consummation by the Issuers of the other transactions contemplated hereby, except such as have been obtained and such as will be obtained under the Act and Trust Indenture Act and such as may be required under foreign securities laws or state securities or "Blue Sky" laws in connection with the purchase and resale of the Units by the Initial Purchaser. (n) 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 Issuers, threatened, that either (i) seeks to restrain, enjoin, prevent the consummation of, or otherwise challenge any of the Documents or any of the transactions contemplated therein, or (ii) would, individually or in the aggregate, have a Material Adverse Effect. The Issuers 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. (o) The Company and its respective Subsidiaries possess all licenses, permits, certificates, consents, orders, approvals and other authorizations from, and have made all declarations and filings with, all Governmental Authorities, presently required or necessary to own or lease, as the case may be, and to operate their respective properties and to carry on their respective businesses as now or proposed to be conducted as set forth in the Final Offering Circular ("Permits"), except where the failure to obtain such Permits would not, individually or in the aggregate, have a Material Adverse Effect; the Company and its Subsidiaries have fulfilled and performed all of their obligations with respect to such Permits and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the holder of any such Permit except where such revocation, termination or material impairment would not, individually or in the aggregate, have a Material Adverse Effect; and neither the Company nor its respective Subsidiaries have received any notice of any proceeding relating to revocation or modification of any such Permit, except as described in the Final Offering Circular or except where such revocation or modification would not, individually or in the aggregate, have a Material Adverse Effect. (p) Each of the Company and its 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 Closing Date, will be free and clear of all Liens (other than Permitted Liens (as defined in the Indenture)). 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. 6 (q) Except as set forth on Schedule II 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 generally accepted accounting principles of the United States, consistently applied ("GAAP"). 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. (r) 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 Closing Date, will be free and clear of all Liens, other than Permitted Liens (as defined in the Indenture). 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). 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. (s) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) material transactions are executed in accordance with management's general or specific authorization, (ii) material transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP, and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any material differences. (t) 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 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. 7 (u) 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"). (v) No "nationally recognized statistical rating organization" (as such term is defined for purposes of Rule 436(g)(2) under the Act) (i) has imposed (or has informed the Company that it is considering imposing) any condition (financial or otherwise) on the Company retaining any rating assigned to the Company or any of its Subsidiaries or to any securities of the Company or any of its Subsidiaries, or (ii) has indicated to the Company that it is considering (A) the downgrading, suspension, or withdrawal of, or any review for a possible change that does not indicate the direction of the possible change in, any rating so assigned, or (B) any change in the outlook for any rating of the Company or any of its Subsidiaries or any securities of the Company or any of its Subsidiaries. (w) All indebtedness represented by the Notes is being incurred for the purposes set forth in the Final Offering Circular under the heading "Use of Proceeds." On the Closing Date, the Issuers 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 the Issuers is not less than the total amount required to pay the probable liabilities of the Issuers on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured, the Issuers 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 the sale of the Units as contemplated by this Agreement and the Final Offering Circular, the Issuers are not incurring debts or liabilities beyond their ability to pay as such debts and liabilities mature, and the Issuers 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 Issuers 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. (x) The Issuers have not and, to their knowledge, no one acting on their behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Units or Notes, (ii) sold, bid for, purchased, or paid anyone any compensation for soliciting purchases of, any of the Units, or (iii) except as disclosed in the Final Offering Circular, paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Issuers. (y) Without limiting any provision herein, no registration under the Act and no qualification of the Indenture under the TIA is required for the sale of the Notes to the Initial Purchaser as contemplated hereby or for the Exempt Resales, assuming (i) that the purchasers in the Exempt Resales are QIBs or Accredited Investors or non-U.S. persons and (ii) the accuracy of the Initial 8 Purchaser's representations contained herein regarding the absence of general solicitation in connection with the sale of the Units to the Initial Purchaser and in the Exempt Resales. (z) The Units and Notes are eligible for resale pursuant to Rule 144A under the Act and no other securities of the Issuers are of the same class (within the meaning of Rule 144A under the Act) as the Units or Notes and listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or quoted in a U.S. automated inter-dealer quotation system. No securities of the Issuers of the same class as the Units or Notes have been offered, issued or sold by the Issuers or any of their respective Affiliates within the six-month period immediately prior to the date hereof. (aa) Neither of the Issuers nor any of their respective affiliates or other person acting on behalf of the Company has offered or sold the Units by means of any general solicitation or general advertising within the meaning of Rule 502(c) under the Act or, with respect to Units sold outside the United States to non-U.S. persons (as defined in Rule 902 under the Act), by means of any directed selling efforts within the meaning of Rule 902 under the Act, and the Company, any affiliate of the Issuers and any person acting on behalf of the Company have complied with and will implement the "offering restrictions" within the meaning of such Rule 902; provided, that no representation is made in this subsection with respect to the actions of the Initial Purchaser. (bb) Each of the Company, its Subsidiaries, and each ERISA Affiliate has fulfilled its obligations, if any, under the minimum funding standards of Section 302 of the United States 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 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. (cc) (i) Other than the collective bargaining agreements listed on Schedule III attached hereto, neither the Company nor any of the Subsidiary 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 Subsidiary 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 Subsidiary 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 Subsidiary Guarantors, or, to the knowledge of the Company, threatened against the Company or the Subsidiary 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 Subsidiary 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 9 inquiry of any kind, pending against the Company or the Subsidiary 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 Subsidiary 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 could 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. (dd) None of the transactions contemplated in the Documents will violate or result in a violation of Section 7 of the Exchange Act, (including, without limitation, Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve System). (ee) Neither of the Issuers is nor, after giving effect to the offering and sale of the Units 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. (ff) The Company has not engaged any broker, finder, commission agent or other person (other than the Initial Purchaser) in connection with the Offering or any of the transactions contemplated in the Documents, and the Issuers are not under any obligation to pay any broker's fee or commission in connection with such transactions (other than commissions or fees to the Initial Purchaser). (gg) 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. (hh) Except as provided by the Company's Credit Agreements or as described in the Final Offering Circular, as of the Closing Date, there will be no encumbrances or restrictions on the ability of any Subsidiary of the Company (x) to pay dividends or make other distributions on such Subsidiary's capital stock or to pay any indebtedness to the Company or any other Subsidiary of the Company, (y) to make loans or advances or pay any indebtedness to, or investments in, the Company or any other Subsidiary of the Company or (z) to transfer any of its property or assets to the Company or any other Subsidiary of the Company. (ii) (a) Upon: (i) execution and delivery of the Collateral Agreements by the Issuers and the Subsidiary Guarantors parties thereto and the Collateral Agent (as defined therein), compliance by the Issuers and the Subsidiary Guarantors with their respective 10 obligations thereunder and execution and delivery of the Intercreditor Agreement by the Administrative Agent, the Collateral Agent and the Term Loan Lender (as defined in the Offering Circular); and (A) in the case of Collateral (as defined in the Security Agreement) comprised of certificated securities or instruments, upon the delivery of such Collateral to the Administrative Agent accompanied by transfer instruments duly endorsed in blank, such security interest will be a valid first priority perfected security interest; provided, however, that the perfection and priority of such security interest is subject to the terms and conditions of the Intercreditor Agreement; (B) in the case of Collateral comprised of uncertificated securities and other investment property (other than certificated securities), upon the Administrative Agent obtaining sole "control" (as defined in Section 8-106 of the U.C.C., as such term relates to investment property (other than certificated securities or commodity contracts), or as used in Section 9-106 of the U.C.C., as such term relates to commodity contracts) of such Collateral and the filing of the Uniform Commercial Code financing statements delivered by the Company and each Subsidiary Guarantor having an interest in such Collateral to the Collateral Agent with respect to such Collateral, such security interest will be a valid first priority perfected security interest; provided, however, that the perfection and priority of such security interest is subject to the terms and conditions of the Intercreditor Agreement; (C) in the case of all other Collateral, in which a security interest can be perfected by filing a Uniform Commercial Code financing statement, upon the filing in the jurisdiction of incorporation or formation of the Company and each Subsidiary Guarantor Uniform Commercial Code financing statements delivered by the Company and each Subsidiary Guarantor to the Collateral Agent with respect to such Collateral, such security interest will be a valid first priority perfected security interest (except to the extent a Uniform Commercial Code financing statement was previously filed in connection with Liens permitted pursuant to Section 4.17 of the Indenture and such financing statement remains effective in respect of such Collateral); provided, however, that the perfection and priority of such security interest is subject to the terms and conditions of the Intercreditor Agreement; (D) in the case of the security interest described in the instrument of charge delivered by MSXI Limited pursuant to the Indenture, registration of the instrument of charge under Section 395 of the Companies Act 1985 (UK) and delivery of notices, in form and substance satisfactory to the Collateral Agent, to all third party obligors in respect of such accounts receivable the subject of the security interest; provided, however, that perfection and priority of such security interest is subject to the terms and conditions of the Intercreditor Agreement, the security interest of the Collateral Agent in the Collateral (as defined in the Collateral Agreements) will be a valid and enforceable perfected security interest, which security 11 interests will be superior to and prior to the rights of all third persons other than holders of Permitted Liens, subject to the terms and conditions of the Intercreditor Agreement. (b) As of the Closing Date, except with respect to Permitted Liens, there will be no currently effective financing statement, security agreement, chattel mortgage, real estate mortgage or other document filed or recorded with any filing records, registry, or other public office, that purports to cover, affect or give notice of any present or possible future Lien on, or security interest in, any assets or property of the Company or any Subsidiary Guarantor or any rights thereunder. (jj) Each certificate signed by any officer of the Company, or any Subsidiary thereof, delivered to the Initial Purchaser in connection with the offering of the Units shall be deemed a representation and warranty by the Company or any such Subsidiary thereof (and not individually by such officer) to the Initial Purchaser with respect to the matters covered thereby. (kk) 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. 5. COVENANTS OF THE COMPANY. The Issuers, on behalf of themselves and their Subsidiaries, hereby agree: (a) To (i) advise the Initial Purchaser promptly after obtaining knowledge (and, if requested by the Initial Purchaser, confirm such advice in writing) of (A) the issuance by any state securities commission of any stop order suspending the qualification or exemption from qualification of any of the Units or Notes for offer or sale in any jurisdiction, or the initiation of any proceeding for such purpose by any state securities commission or other regulatory authority, or (B) the happening of any event during the period referred to in Section 5(d) that makes any statement of a material fact made in the Final Offering Circular untrue or that requires the making of any additions to or changes in the Final Offering Circular in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, (ii) use its commercially reasonable efforts to prevent the issuance of any stop order or order suspending the qualification or exemption from qualification of any of the Units or Notes under any state securities or Blue Sky laws, and (iii) if at any time any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of any of the Units or Notes under any such laws, use its commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest possible time. (b) To (i) furnish the Initial Purchaser, without charge, as many copies of the Final Offering Circular, and any amendments or supplements thereto, as the Initial Purchaser may reasonably request, and (ii) promptly prepare, upon the Initial Purchaser's reasonable request, any amendment or supplement to the Final Offering Circular that the Initial Purchaser, upon advice of legal counsel, 12 determines may be necessary in connection with Exempt Resales (and the Issuers hereby consent to the use of the Preliminary Offering Circular and the Final Offering Circular, and any amendments and supplements thereto, by the Initial Purchaser in connection with Exempt Resales). (c) Not to amend or supplement the Final Offering Circular prior to the Closing Date unless the Initial Purchaser shall previously have been advised thereof and shall have provided its written consent thereto (which consent shall not be unreasonably withheld or delayed). (d) So long as the Initial Purchaser shall hold any of the Units (or underlying Notes) (as determined by the Initial Purchaser), (i) if any event shall occur as a result of which, in the reasonable judgment of the Company, it becomes necessary or advisable to amend or supplement the Final Offering Circular in order to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary to amend or supplement the Final Offering Circular to comply with Applicable Law, to notify the Initial Purchaser of any such event and to prepare, at the expense of the Company, an appropriate amendment or supplement to the Final Offering Circular (in form and substance reasonably satisfactory to the Initial Purchaser) so that (A) as so amended or supplemented, the Final Offering Circular will not include an untrue statement of material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (B) the Final Offering Circular will comply with Applicable Law and (ii) if in the reasonable judgment of the Company it becomes necessary or advisable to amend or supplement the Final Offering Circular so that the Final Offering Circular will contain all of the information specified in, and meet the requirements of, Rule 144A(d)(4) of the Act, to prepare an appropriate amendment or supplement to the Final Offering Circular (in form and substance reasonably satisfactory to the Initial Purchaser) so that the Final Offering Circular, as so amended or supplemented, will contain the information specified in, and meet the requirements of, such Rule. (e) To cooperate with the Initial Purchaser and the Initial Purchaser's counsel in connection with the qualification of the Units and Notes under the securities or Blue Sky laws of such jurisdictions as the Initial Purchaser may request and continue such qualification in effect so long as reasonably required for Exempt Resales; provided that the Issuers shall not be obligated to file any general consent to service of process or to qualify as foreign corporations or as dealers in securities in any jurisdiction in which they are not otherwise so subject. (f) Whether or not any of the Offering or the transactions contemplated under the Documents are consummated or this Agreement is terminated, to pay (i) all costs, expenses, fees and taxes (other than federal, state, or local taxes of the Initial Purchaser) incident to and in connection with: (A) the preparation, printing and distribution of the Preliminary Offering Circular and the Final Offering Circular and all amendments and supplements thereto (including, without limitation, financial statements and exhibits), and all other agreements, memoranda, correspondence and other documents prepared and delivered in connection herewith, (B) the printing, processing and distribution (including, without limitation, word processing and duplication costs) and delivery of, each of the Documents, (C) the preparation, issuance and delivery of the Units, (D) the qualification of the Units for offer and sale under the securities or Blue Sky laws of the several states (including, without limitation, the reasonable fees and disbursements of the Initial Purchaser's counsel relating to such registration or qualification) and (E) furnishing such copies of the Preliminary Offering Circular and the Final Offering Circular, and all amendments and supplements thereto, as may reasonably be requested for use by the Initial Purchaser, (ii) all fees and expenses of the counsel, accountants and any other experts or advisors retained by the Company, (iii) all expenses and listing fees in connection with the application for quotation of the Notes on the Private Offerings, Resales and Trading Automated Linkages ("PORTAL") market, 13 (iv) all fees and expenses (including fees and expenses of counsel) of the Company in connection with approval of the Units and Notes by DTC for "book-entry" transfer, (v) all fees charged by rating agencies in connection with the rating of the Notes, and (vi) all fees and expenses (including reasonable fees and expenses of counsel) of the Trustee and all collateral agents. If the sale of the Units provided for herein is not consummated because any condition to the obligations of the Initial Purchaser set forth in Section 7 hereof is not satisfied, because this Agreement is terminated pursuant to Section 9 hereof or because of any failure, refusal or inability on the part of the Company to perform all obligations and satisfy all conditions on its part to be performed or satisfied hereunder (other than in each such case solely by reason of a default by the Initial Purchaser on its obligations hereunder after all conditions hereunder have been satisfied in accordance herewith), the Company agrees to promptly reimburse the Initial Purchaser in cash upon demand for all fees, disbursements and out-of-pocket expenses. Except as set forth in paragraph (D) above, the Company shall not be responsible for any fees, disbursements or charges of counsel for the Initial Purchaser in connection with the proposed purchase and sale of the Units. (g) To use the proceeds of the Offering in all material respects as described in the Final Offering Circular under the caption "Use of Proceeds." (h) To do and perform all things required to be done and performed by the Company and its Subsidiaries under the Documents prior to and after the Closing Date. (i) Not to, and to ensure that no affiliate (as defined in Rule 501(b) of the Act) of the Issuers will, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any "security" (as defined in the Act) that would be integrated with the sale of the Units or Notes in a manner that would require the registration under the Act of the sale to the Initial Purchaser or to the Subsequent Purchasers of the Units or Notes. (j) For so long as any of the Notes remain outstanding, during any period in which the Issuers are not subject to Section 13 or 15(d) of the Exchange Act, to make available, upon request, to any owner of the Notes in connection with any sale thereof and any prospective Subsequent Purchasers of such Notes from such owner, the information required by Rule 144A(d)(4) under the Act. (k) To comply with the representation letter of the Issuers to DTC relating to the approval of the Units and Notes by DTC for "book entry" transfer. (l) To use their reasonable best efforts to assist the Initial Purchaser in effecting the inclusion of the Units and, if applicable, Notes in PORTAL. (m) For so long as any of the Notes remain outstanding, the Company will furnish to the Initial Purchaser copies of all reports and other communications (financial or otherwise) furnished by the Company to the Trustee or to the holders of the Notes and, as soon as available, copies of any reports or financial statements furnished to or filed by the Company with the SEC or any national securities exchange on which any class of securities of the Company may be listed. (n) Except in connection with the Exchange Offer or the filing of the Shelf Registration Statement, not to, and not to authorize or permit any person acting on their behalf to, (i) distribute any offering material in connection with the offer and sale of the Units other than the Preliminary Offering Circular and the Final Offering Circular and any amendments and supplements to the Final Offering Circular prepared in compliance with this Agreement, or (ii) solicit any offer to buy or offer to sell the Units by means of any form of general solicitation or general advertising 14 (including, without limitation, as such terms are used in Regulation D under the Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Act. (o) During the two year period after the Closing Date (or such shorter period as may be provided for in Rule 144(k) under the Act, as the same may be in effect from time to time), to not, and to not permit any current or future Subsidiaries of either of the Issuers or any other affiliates (as defined in Rule 144A under the Act) controlled by the Company to, resell any of the Units or Notes which constitute "restricted securities" under Rule 144 that have been reacquired by the Company, any current or future Subsidiaries of the Company or any other affiliates (as defined in Rule 144A under the Act) controlled by the Company, except pursuant to an effective registration statement under the Act. (p) The Company shall pay all stamp, documentary and transfer taxes (other than federal, state or local income taxes of the Initial Purchaser) and other duties, if any, which may be imposed by the United States or any political subdivision thereof or taxing authority thereof or therein with respect to the issuance of the Units or Notes or the sale thereof to the Initial Purchaser. 6. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASER. The Initial Purchaser represents and warrants that: (a) It is a QIB as defined in Rule 144A under the Act and it will offer the Units for resale only upon the terms and conditions set forth in this Agreement and in the Final Offering Circular. (b) It is not acquiring the Units with a view to any distribution thereof that would violate the Act or the securities laws of any state of the United States or any other applicable jurisdiction. In connection with the Exempt Resales, it will solicit offers to buy the Units only from, and will offer and sell the Units only to, (A) persons reasonably believed by the Initial Purchaser to be QIBs or (B) persons reasonably believed by the Initial Purchaser to be Accredited Investors or (C) non-U.S. persons reasonably believed by the Initial Purchaser to be a purchaser referred to in Regulation S under the Act; provided, however, that in purchasing such Units, such persons are deemed to have represented and agreed as provided under the caption "Notice to Investors" contained in the Final Offering Circular. (c) No form of general solicitation or general advertising in violation of the Act has been or will be used nor will any offers in any manner involving a public offering within the meaning of Section 4(2) of the Act or, with respect to Units to be sold in reliance on Regulation S, by means of any directed selling efforts be made by such Initial Purchaser or any of its representatives in connection with the offer and sale of any of the Units. (d) The Initial Purchaser will deliver to each Subsequent Purchaser of the Units, in connection with its original distribution of the Units, a copy of the Final Offering Circular, as amended and supplemented at the date of such delivery. 7. CONDITIONS. The obligations of (i) the Initial Purchaser to purchase the Units under this Agreement and (ii) the Issuers to issue and sell the Units under this Agreement are subject to the satisfaction or waiver of the conditions set forth below. The obligations of the Initial Purchaser to purchase the Units under this Agreement are subject to the satisfaction or waiver of each of the following conditions: (a) All the representations and warranties of the Issuers and their Subsidiaries contained in this Agreement and in each of the Documents shall be true and correct as of the date hereof and at the 15 Closing Date. On or prior to the Closing Date, the Issuers and each other party to the Documents (other than the Initial Purchaser) 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 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). (b) No injunction, restraining order or order of any nature by a Governmental Authority shall have been issued as of the Closing Date that would prevent or materially interfere with the consummation of the Offering or any of the transactions contemplated under the Documents; and no stop order suspending the qualification or exemption from qualification of any of the Units in any jurisdiction shall have been issued and no Proceeding for that purpose shall have been commenced or, to the knowledge of the Issuers after reasonable inquiry, be pending or contemplated as of the Closing Date. (c) No action shall have been taken and no Applicable Law shall have been enacted, adopted or issued that would, as of the Closing Date, prevent the consummation of the Offering or any of the transactions contemplated under the Documents. No Proceeding shall be pending or, to the knowledge of the Issuers 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 Units, and (B) would not, individually or in the aggregate, have a Material Adverse Effect. (d) 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. (e) The Units shall have been designated PORTAL securities in accordance with the rules and regulations adopted by the National Association of Securities Dealers, Inc. relating to trading in the PORTAL market. (f) On or after the date hereof, (i) there shall not have occurred any downgrading, suspension or withdrawal of, nor shall any notice have been given of any potential or intended downgrading, suspension or withdrawal of, or of any review (or of any potential or intended review) for a possible change that does not indicate the direction of the possible change in, any rating of the Issuers or any securities of the Issuers (including, without limitation, the placing of any of the foregoing ratings on credit watch with negative or developing implications or under review with an uncertain direction) by any "nationally recognized statistical rating organization" as such term is defined for purposes of Rule 436(g)(2) under the Act, (ii) there shall not have occurred any adverse change, nor shall any notice have been given of any potential or intended adverse change, in the outlook for any rating of the Issuers or any securities of the Issuers by any such rating organization and (iii) no such rating organization shall have given notice that it has assigned (or is considering assigning) a lower rating to the Notes than that on which the Notes were marketed. (g) The Initial Purchaser shall have received on the Closing Date: (i) certificates dated the Closing 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 Issuers, to the effect that (a) the representations and warranties set forth in Section 4 hereof are true and correct in all material respects with the same force and effect as though expressly made at and as of the Closing Date, (b) the Issuers 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 Closing Date, (c) at the Closing Date, since the date hereof or since the date of the most recent financial 16 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 Issuers 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 Units or Notes has not been enjoined (temporarily or permanently) by a Government Authority with applicable jurisdiction; (ii) a certificate, dated the Closing Date, executed by the Secretary or where appropriate, a Director of each of the Issuers and each Subsidiary Guarantor, certifying such matters as the Initial Purchaser may reasonably request; (iii) a certificate of solvency, dated the Closing Date, executed by the principal financial or accounting officer or where appropriate, a Director of each of the Issuers substantially in the form previously approved and reasonably requested by the Initial Purchaser; (iv) The Initial Purchaser shall have received substantially contemporaneously with the Closing 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 Closing Date, in the form of Exhibit A attached hereto; (vi) the opinion of a local counsel to MSXI Limited, dated the closing date, reasonably satisfactory to the Initial Purchaser and counsel to the Initial Purchaser; (vii) the opinion of local counsel to the Company in Michigan and Missouri, reasonably satisfactory to the Initial Purchaser and counsel to the Initial Purchaser; and (viii) an opinion, dated the Closing Date, of Mayer, Brown, Rowe & Maw LLP, counsel to the Initial Purchaser, in form satisfactory to the Initial Purchaser covering such matters as are customarily covered in such opinions. (h) The Initial Purchaser shall have received from PricewaterhouseCoopers LLP, independent auditors, with respect to the Company, (A) a customary comfort letter, dated the date of the Final Offering Circular, in form and substance reasonably satisfactory to the Initial Purchaser, with respect to the financial statements and certain financial information contained in the Final Offering Circular, and (B) a customary comfort letter, dated the Closing Date, in form and substance reasonably satisfactory to the Initial Purchaser, to the effect that PricewaterhouseCoopers LLP reaffirms the statements made in its letter furnished pursuant to clause (A). 17 (i) Each of the Documents shall have been executed and delivered by all parties thereto, and the Initial Purchaser shall have received a fully executed original of each Document. (j) The Initial Purchaser shall have received copies in form and substance reasonably satisfactory to it of all opinions, certificates, letters and other documents delivered or required to be delivered under or in connection with the Offering or any transaction contemplated in the Documents. (k) The terms of each Document shall conform in all material respects to the description thereof in the Final Offering Circular. (l) The Collateral Agent shall have received (with a copy for the Initial Purchaser) on the Closing Date: (i) appropriately completed copies of Uniform Commercial Code financing statements naming the Company and each Subsidiary Guarantor as a debtor and the Collateral Agent as the secured party, or other similar instruments or documents to be filed under the UCC of all jurisdictions as may be necessary or, in the reasonable opinion of the Collateral Agent and its counsel, desirable to perfect the security interests of the Collateral Agent pursuant to the Security Agreement; (ii) 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 Agreement previously granted by any Person; (iii) 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 Collateral Agent, dated a date reasonably near to the Closing 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 Collateral Agreement, other than such financing statements that evidence Permitted Liens); (iv) such other approvals, opinions, or documents as the Collateral Agent may reasonably request in form and substance reasonably satisfactory to the Collateral Agent; and (v) the Collateral Agent and its counsel shall be satisfied that (i) the Lien granted to the Collateral Agent, for the benefit of the Secured Parties in the collateral described above is of the priority described in the Final Offering Circular; and (ii) no Lien exists on any of the collateral described above other than the Lien created in favor of the Collateral Agent, for the benefit of the Secured Parties, pursuant to a Collateral Agreement, in each case subject to the Permitted Liens. (m) All Uniform Commercial Code financing statements or other similar financing statements and Uniform Commercial Code Form UCC-3 termination statements required pursuant to clause (l)(i) and (ii) above (collectively, the "Filing Statements") shall have been delivered to CT Corporation System or another similar filing service company acceptable to the Collateral Agent (the "Filing Agent"). The Filing Agent shall have acknowledged in a writing reasonably satisfactory to the Collateral Agent and its counsel (i) the Filing Agent's receipt of all Filing Statements, (ii) 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 Closing Date and (iii) 18 that the Filing Agent will notify the Collateral Agent and its counsel of the results of such submissions within 30 days following the Closing Date. The obligations of the Issuers to issue and sell the Units under this Agreement are subject to the satisfaction or waiver of the condition that the Company shall have received a fairness opinion from Jefferies & Company, Inc. relating to the issuance and sale of the mezzanine term notes and a warrant for shares of Class A common stock of the Company to Citicorp Mezzanine III, L.P. 8. INDEMNIFICATION AND CONTRIBUTION. (a) The Issuers agree to indemnify and hold harmless the Initial Purchaser, and each person, if any, who controls the Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities of any kind to which the Initial Purchaser or such controlling person may become subject under the Act, the Exchange Act or otherwise, insofar as any such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of any material fact contained in any Offering Circular or any amendment or supplement thereto; or (ii) the omission or alleged omission to state, in any Offering Circular or any amendment or supplement thereto, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and, subject to the provisions hereof, will reimburse promptly upon demand, the Initial Purchaser and each such controlling person for any legal or other expenses reasonably incurred by the Initial Purchaser or such controlling person in connection with investigating, defending against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action in respect thereof; provided, however, the Issuers will not be liable in any such case to the extent (but only to the extent) that any such loss, claim, damage or liability is finally judicially determined by a court of competent jurisdiction in a final, unappealable judgment, to have resulted solely from any untrue statement or alleged untrue statement or omission or alleged omission made in any Offering Circular or any amendment or supplement thereto in reliance upon and in conformity with written information concerning the Initial Purchaser furnished to the Issuers by the Initial Purchaser specifically for use therein. This indemnity agreement will be in addition to any liability that the Issuers may otherwise have to the indemnified parties. The Issuers shall not be liable under this Section 8 for any settlement of any claim or action effected without their prior written consent, which shall not be unreasonably withheld; and provided further, however, that this indemnity, as to the Preliminary Offering Circular, shall not inure to the benefit of the Initial Purchaser (or any person controlling such Initial Purchaser) on account of any loss, claim, damage or liability arising from the sale of Units or Notes to any person by such Initial Purchaser if such Initial Purchaser failed to send or give a copy of the Final Offering Circular (as the same may be supplemented or amended) to such person at or prior to the written confirmation of the sale of the Units or Notes to such person, and the untrue statement or alleged untrue statement or omission or alleged omission of a material fact in such Preliminary Offering Circular was corrected in the Final Offering Circular, unless such failure resulted from noncompliance by the Issuers with Section 5(b). 19 (b) The Initial Purchaser agrees to indemnify and hold harmless each of the Issuers, their directors, officers and each person, if any, who controls the Issuers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities to which the Issuers or any such director, officer or controlling person may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) are finally judicially determined by a court of competent jurisdiction in a final, unappealable judgment, to have resulted solely from (i) any untrue statement or alleged untrue statement of any material fact contained in any Offering Circular or any amendment or supplement thereto or (ii) the omission or the alleged omission to state therein a material fact required to be stated in any Offering Circular or any amendment or supplement thereto or necessary to make the statements therein not misleading, in each case to the extent (but only to the extent) that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information concerning such Initial Purchaser, furnished to the Issuers or their agents by the Initial Purchaser specifically for use therein; and, subject to the limitation set forth immediately preceding this clause, will reimburse, promptly upon demand, any legal or other expenses incurred by the Issuers or any such director, officer or controlling person in connection with any such loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability that the Initial Purchaser may otherwise have to the indemnified parties. (c) As promptly as reasonably practical after receipt by an indemnified party under this Section 8 of notice of the commencement of any action for which such indemnified party is entitled to indemnification under this Section 8, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party of the commencement thereof in writing; but the omission to so notify the indemnifying party (i) will not relieve such indemnifying party from any liability under paragraph (a) or (b) above unless and only to the extent it is materially prejudiced as a result thereof and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraphs (a) and (b) above. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may determine, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; provided, however, that if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest under applicable standards of professional responsibility, (ii) the defendants in any such action include both the indemnified party and the indemnifying party, and the indemnified party shall have been advised by counsel in writing that there may be one or more legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party, or (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after receipt by the indemnifying party of notice of the institution of such action, then, in each such case, the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party or parties and such indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties at the expense of the indemnifying party. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, the indemnifying party will not be liable to such indemnified party under this Section 8 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof, unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the immediately preceding sentence (it being understood, however, that in 20 connection with such action the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) in any one action or separate but substantially similar actions in the same jurisdiction arising out of the same general allegations or circumstances, designated by the Initial Purchaser in the case of paragraph (a) of this Section 8 or the Issuers in the case of paragraph (b) of this Section 8, representing the indemnified parties under such paragraph (a) or paragraph (b), as the case may be, who are parties to such action or actions) or (ii) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying party. After such notice from the indemnifying party to such indemnified party, the indemnifying party will not be liable for the costs and expenses of any settlement of such action effected by such indemnified party without the prior written consent of the indemnifying party (which consent shall not be unreasonably withheld), unless such indemnified party waived in writing its rights under this Section 8, in which case the indemnified party may effect such a settlement without such consent. (d) No indemnifying party shall be liable under this Section 8 for any settlement of any claim or action (or threatened claim or action) effected without its written consent, which shall not be unreasonably withheld, but if a claim or action settled with its written consent, or if there be a final judgment for the plaintiff with respect to any such claim or action, each indemnifying party jointly and severally agrees, subject to the exceptions and limitations set forth above, to indemnify and hold harmless each indemnified party from and against any and all losses, claims, damages or liabilities (and legal and other expenses as set forth above) incurred by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld), effect any settlement or compromise of any pending or threatened proceeding in respect of which the indemnified party is or could have been a party, or indemnity could have been sought hereunder by the indemnified party, unless such settlement (A) includes an unconditional written release of the indemnified party, in form and substance reasonably satisfactory to the indemnified party, from all liability on claims that are the subject matter of such proceeding and (B) does not include any statement as to an admission of fault, culpability or failure to act by or on behalf of the indemnified party. (e) In circumstances in which the indemnity agreement provided for in the preceding paragraphs of this Section 8 is unavailable to, or insufficient to hold harmless, an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof), each indemnifying party, in order to provide for just and equitable contributions, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect (i) the relative benefits received by the indemnifying party or parties, on the one hand, and the indemnified party, on the other, from the Offering or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also the relative fault of the indemnifying party or parties, on the one hand, and the indemnified party, on the other, in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof). The relative benefits received by the Issuers, on the one hand, and the Initial Purchaser, on the other, shall be deemed to be in the same proportion as the total proceeds from the Offering (before deducting expenses) received by the Issuers bear to the total discounts and commissions received by the Initial Purchaser. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuers, on the one hand, or the Initial Purchaser, on the other, the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or alleged statement or omissions, and any other equitable considerations appropriate in the circumstances. 21 (f) The Issuers and the Initial Purchaser agree that it would not be equitable if the amount of such contribution determined pursuant to the immediately preceding paragraph (e) were determined by pro rata or per capita allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the first sentence of the immediately preceding paragraph (e). Notwithstanding any other provision of this Section 8, the Initial Purchaser shall not be obligated to make contributions hereunder that in the aggregate exceed the total discounts, commissions and other compensation received by such Initial Purchaser under this Agreement, less the aggregate amount of any damages that such Initial Purchaser has otherwise been required to pay by reason of the untrue or alleged untrue statements or the omissions or alleged omissions to state a material fact. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of the immediately preceding paragraph (e), each person, if any, who controls the Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Initial Purchaser, and each director of the Issuers, each officer of the Issuers and each person, if any, who controls the Issuers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall have the same rights to contribution as the Issuers. 9. TERMINATION. The Initial Purchaser may terminate this Agreement at any time prior to the Closing Date by written notice to the Issuers if any of the following has occurred: (a) since the date hereof, any Material Adverse Effect or development involving or reasonably expected to result in a prospective Material Adverse Effect that could, in the Initial Purchaser's reasonable judgment, be expected to (i) make it impracticable or inadvisable to proceed with the offering or delivery of the Units on the terms and in the manner contemplated in the Final Offering Circular, or (ii) materially impair the investment quality of any of the Units (or underlying Notes); (b) the failure of the Issuers to satisfy the conditions contained in Section 7(a) hereof on or prior to the Closing Date; (c) any outbreak or escalation of hostilities or other national or international calamity or crisis, including acts of terrorism, or material adverse change or disruption in economic conditions in, or in the financial markets of, the United States (it being understood that any such change or disruption shall be relative to such conditions and markets as in effect on the date hereof), if the effect of such outbreak, escalation, calamity, crisis, act or material adverse change in the economic conditions in, or in the financial markets of, the United States could be reasonably expected to make it, in the Initial Purchaser's judgment, impracticable or inadvisable to market or proceed with the offering or delivery of the Units on the terms and in the manner contemplated in the Final Offering Circular or to enforce contracts for the sale of any of the Units; (d) the suspension or limitation of trading generally in securities on the New York Stock Exchange, the American Stock Exchange or the NASDAQ National Market or any setting of limitations on prices for securities on any such exchange or NASDAQ National Market; (e) the enactment, publication, decree or other promulgation after the date hereof of any Applicable Law that in the Initial Purchaser's counsel's reasonable opinion materially and adversely affects, or could be reasonably expected to materially and adversely affect, the business, prospects, results of operations or financial condition of the Company and its subsidiaries, taken as a whole; 22 (f) any securities of the Issuers shall have been downgraded or placed on any "watch list" for possible downgrading by any "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the Act; or (g) the declaration of a banking moratorium by any Governmental Authority; or the taking of any action by United States Federal or New York State authorities after the date hereof in respect of its monetary or fiscal affairs that in the Initial Purchaser's opinion could reasonably be expected to have a Material Adverse Effect on the financial markets in the United States. 10. SURVIVAL OF REPRESENTATIONS AND INDEMNITIES. The representations and warranties, covenants, indemnities and contribution and expense reimbursement provisions and other agreements, representations and warranties of the Issuers set forth in or made pursuant to this Agreement shall remain operative and in full force and effect, and will survive delivery of and payment for the Units, regardless of (i) any investigation, or statement as to the results thereof, made by or on behalf of the Initial Purchaser, (ii) acceptance of the Units, and payment for them hereunder, and (iii) any termination of this Agreement. 11. DEFAULT BY THE INITIAL PURCHASER. If the Initial Purchaser shall breach its obligations to purchase the Units that it has agreed to purchase hereunder on the Closing Date and arrangements satisfactory to the Issuers for the purchase of such Units are not made within 36 hours after such default, this Agreement shall terminate with respect to such Initial Purchaser without liability on the part of the Issuers. Nothing herein shall relieve the Initial Purchaser from liability for its default. 12. INFORMATION SUPPLIED BY THE INITIAL PURCHASER. The statements set forth on the cover page with respect to price and in the first and second sentences of the third paragraph, the fifth and sixth sentences of the fifth paragraph and the first and second sentences of the sixth paragraph under the heading "Plan of Distribution" in the Offering Circular (to the extent such statements relate to the Initial Purchaser) constitute the only information furnished by the Initial Purchaser to the Issuers or their Subsidiaries for the purposes of Sections 2(a) and 9 hereof. 13. MISCELLANEOUS. (a) Notices given pursuant to any provision of this Agreement shall be addressed as follows: (i) if to the Company, to: MSX International, Inc., 22355 West Eleven Mile Road, Southfield, MI 48034 Attention: Corporate Legal Department with a copy to: Dechert LLP, 4000 Bell Atlantic Tower, 1717 Arch Street, Philadelphia, PA 19103, Attention: Craig L. Godshall, Esq.; (ii) if to MSXI Limited, to: MSX International Limited, 22355 West Eleven Mile Road, Southfield, MI 48034 Attention: Corporate Legal Department with a copy to: Dechert LLP, 4000 Bell Atlantic Tower, 1717 Arch Street, Philadelphia, PA 19103, Attention: Craig L. Godshall, Esq.; and (iii) if to the Initial Purchaser, to: Jefferies & Company, Inc., 11100 Santa Monica Boulevard, 10th Floor, Los Angeles, California 90025, Attention: Lloyd H. Feller, Esq. with a copy to: Mayer, Brown, Rowe & Maw LLP, 1675 Broadway, New York, New York 10019-5820, Attention: Ronald S. Brody, Esq., (or in any case to such other address as the person to be notified may have requested in writing). (b) This Agreement has been and is made solely for the benefit of and shall be binding upon the Issuers, the Initial Purchaser and, to the extent provided in Section 8 hereof, the controlling persons, officers, directors, partners, employees, representatives and agents referred to in Section 8, and their respective heirs, executors, administrators, successors and assigns, all as and to the extent provided in this Agreement, and no other person shall acquire or have any right under or 23 by virtue of this Agreement. The term "successors and assigns" shall not include a purchaser of any of the Units or Notes from the Initial Purchaser merely because of such purchase. (c) THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. (d) This Agreement may be signed in various counterparts which together shall constitute one and the same instrument. (e) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (f) If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. (g) This Agreement may be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may be given, provided that the same are in writing and signed by all of the signatories hereto. 24 Please confirm that the foregoing correctly sets forth the agreement between the Issuers and the Initial Purchaser. Very truly yours, MSX INTERNATIONAL, INC. By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Executive Vice President & Chief Financial Officer MSX INTERNATIONAL LIMITED By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Director Accepted and Agreed to: JEFFERIES & COMPANY, INC. By: /s/ Douglas R. Speegle --------------------------- Name: Douglas R. Speegle Title: Managing Director PURCHASE AGREEMENT SCHEDULE I LIST OF SUBSIDIARIES MSX International (Holdings), Inc. MSX International Services (Holdings), Inc. MSX International European (Holdings), L.L.C. MSX International DealerNet Services, Inc. MSX International Business Services, Inc. Creative Technology Services, L.L.C. MSX International Technology Services, Inc. MSX International Engineering Services, Inc. Intranational Computer Consultants, Inc. Programming Management & Systems, Inc. Chelsea Computer Consultants, Inc. Millennium Computer Systems, Inc. Management Resources International, Inc. Pilot Computer Services, Incorporated MSX International Platform Services, LLC MegaTech Academy, Inc. MegaTech Engineering, Inc. MSX International Strategic Technology, Inc. SCHEDULE II 1. Returns required to be filed by MSX International DealerNet Services B.V. 2. Returns required to be filed by MSX International Holdings Limited. SCHEDULE III 1. Agreement by and between MSX International, Inc. and Local #282 International Union United Automobile, Aerospace and Agricultural Implement Workers of America dated May 1, 2001 to May 12, 2004; 2. Agreement by and between MSX International and the International Association of Machinists and Aerospace Workers, AFL-CIO and its affiliate the Warren Local Lodge PM2848, AFL-CIO dated September 9, 2001 to September 9, 2004; and 3. Agreement by and between MSX International and the International Association of Machinists and Aerospace Workers, AFL-CIO and its affiliated Warren Local Lodge PM2848, AFL-CIO dated March 6, 2002 to March 7, 2005. EXHIBIT A FORM OF OPINIONS OF DECHERT LLP July __, 2003 Jefferies & Company, Inc. 11100 Santa Monica Boulevard 10th Floor Los Angeles, CA 90025 Re: MSX International, Inc. Gentlemen and Ladies: We have acted as counsel to MSX International, Inc., a Delaware corporation (the "Company"), and the subsidiary guarantors listed on Schedule I attached hereto (the "Subsidiary Guarantors"), including the Subsidiary Guarantors incorporated in the States of Delaware, California and New York (the "Corporate Subsidiary Guarantors," and together with the Company, the "Corporate Opinion Parties") and the Subsidiary Guarantors formed as limited liability companies in the State of Delaware (the "LLC Subsidiary Guarantors," and together with the Corporate Opinion Parties, the "Opinion Parties"), in connection with the Purchase Agreement dated July __, 2003 (the "Purchase Agreement"), by and among the Company and Jefferies & Company, Inc. (the "Initial Purchaser") pursuant to which the Company and MSXI Limited have sold to the Initial Purchaser on the date hereof an aggregate of $100,000,000 principal amount of its % Senior Secured Units due 2007 (the "Units"). Capitalized terms used and not otherwise defined herein have the meanings specified in the Purchase Agreement. This letter is delivered to you pursuant to Section 7(g)(v) of the Purchase Agreement. We have examined originals or copies of corporate documents and records of the Opinion Parties, certificates of public officials and other such agreements, instruments and other documents as we have deemed necessary or appropriate for purposes of the opinions expressed below. With respect to certain factual matters material to our opinions, we have, to the extent that such facts were not independently established by us, relied upon representations of the Company in the Purchase Agreement and on certificates or comparable documents of officers and representatives of the Opinion Parties and public officials. We have examined the corporate actions taken by the Opinion Parties in connection with the authorization, execution and delivery of the Purchase Agreement and the other Documents (as defined below), and have made such inquiry of officers and directors of the Company as we have deemed necessary and appropriate. In making such examination and rendering the opinions set forth below, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to authentic original documents of all documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such documents. In rendering the opinions set forth below, we have also assumed that each of the parties to the Purchase Agreement, the registration rights agreement by and among the Company, the Subsidiary Guarantors (together with the Company, the "MSXI Parties") and the Initial Purchaser dated as of the date hereof (the "Registration Rights Agreement"), the indenture for the Units by and among the MSXI Parties and BNY Midwest Trust Company, as trustee (the "Trustee"), dated as of the date hereof (the "Indenture"), and the pledge and security agreement by and among the MSXI Parties and the Trustee dated as of the date hereof (the "Security Agreement" and together with the Purchase Agreement, the Registration Rights Agreement, the Indenture, the Units and the Exchange Units to be issued in exchange for the Units, the "Documents") other than the Opinion Parties is duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its organization and has the requisite power and authority and has taken the action necessary to deliver the Documents and to consummate the transactions contemplated thereby, and has duly authorized, executed and delivered the Documents, as applicable. In addition, we have assumed that each of the Documents constitutes legal, valid and binding obligations of each party thereto (other than the Opinion Parties), enforceable against such other party in accordance with their respective terms. Without limiting the generality of the foregoing, we have assumed that the Trustee is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization; that the Trustee has the requisite organizational and legal power and authority to perform its obligations under the Indenture; that the Trustee is duly qualified to engage in the activities contemplated by the Indenture; that the Indenture has been duly authorized, executed and delivered by the Trustee and constitutes a legal, valid and binding obligation of the Trustee, enforceable against the Trustee in accordance with its terms; and that the Trustee is in compliance, generally and with respect to acting as trustee under the Indenture, with all applicable laws and regulations. Our opinions as set forth herein are based on our consideration of only those statutes, rules, regulations and judicial decisions which, in our experience, are normally relevant in connection with the transactions contemplated by the Documents. Whenever our opinion in this letter with respect to the existence or absence of facts is qualified by the phrase "to our knowledge," "known to us" or "of which we are aware," we are referring to the current actual knowledge or awareness of Dechert LLP attorneys who have rendered substantive legal services to the Company in connection with the transactions contemplated by the Documents which knowledge has been obtained by such attorneys in such capacity. Except to the extent expressly set forth in this letter, we have not undertaken any independent investigation to determine the existence or absence of those facts, and no inference as to the knowledge of the existence or absence of those facts should be drawn from our representation of the Company. Based upon the foregoing and subject to the assumptions and qualifications set forth above and hereinafter, we are of the opinion that: 1. The Corporate Opinion Parties are duly incorporated, validly existing and in good standing under the laws of the State of Delaware, the State of California or the laws of the State of New York, as applicable. 2. The LLC Subsidiary Guarantors are duly formed, validly existing and in good standing under the laws of the State of Delaware. 3. The Corporate Opinion Parties have all requisite corporate power and corporate authority to carry on their businesses and to own, lease and operate their properties and assets as described in the Final Offering Circular and to execute, deliver and perform their obligations under the Documents, as applicable, and to consummate the transactions contemplated thereby. The LLC Subsidiary Guarantors have all requisite limited liability company power and limited liability company authority to carry on their businesses and to own, lease and operate their properties and assets as described in the Final Offering Circular and to execute, deliver and perform their obligations under the Documents, as applicable, and to consummate the transactions contemplated thereby. 4. Based solely on a certification from the Secretary of State or similar government official of the jurisdiction of qualification of each of the MSXI Parties listed on Schedule II attached hereto, such MSXI Parties are duly qualified or licensed to do business and are in good standing as foreign corporations or foreign limited liability companies, as the case may be, authorized to do business in each jurisdiction set forth on Schedule II attached hereto, except where the failure to be so qualified could not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect. 5. Based solely on our review of the stock transfer records and the minute books of the Corporate Subsidiary Guarantors, all of the outstanding shares of capital stock of each Corporate Subsidiary Guarantor have been duly authorized and validly issued, and to our knowledge, were not issued in violation of any preemptive or similar rights. To our knowledge, all of the outstanding shares of capital stock of each Corporate Subsidiary Guarantor are owned of record, directly or indirectly, by the Company and, to our knowledge, are free and clear of all security interests, liens, encumbrances, equities and claims or restrictions on transferability or voting, other than those imposed by the Act and the securities or "Blue Sky" laws of certain domestic or foreign jurisdictions and Permitted Liens as such term is defined in the Indenture. 6. The Units are in the form contemplated by the Indenture. The execution, delivery and performance of the Units have been duly and validly authorized by the Company, and when executed, delivered and paid for in accordance with the terms of the Purchase Agreement and the Indenture (assuming the due authentication and delivery of the Units by the Trustee in accordance with the Indenture), will be the valid and legally binding obligations of the Company, entitled to the benefits of the Indenture, the Security Agreement and the Registration Rights Agreement, and enforceable against the Company in accordance with their terms. 7. The Guarantees are in the form contemplated by the Indenture. The Guarantees have been duly and validly authorized by each of the Corporate Subsidiary Guarantors and the LLC Subsidiary Guarantors (collectively, the "Opinion Party Subsidiary Guarantors") and, when the Units have been duly executed, issued and delivered by the Company in accordance with the terms of the Purchase Agreement and the Indenture, and the Indenture has been duly executed, issued and delivered by each of the MSXI Parties (assuming the due authentication of the Guarantees by the Trustee), will be legal, valid and binding obligations of each of the Opinion Party Subsidiary Guarantors, entitled to the benefits of the Indenture, the Security Agreement and the Registration Rights Agreement, and enforceable against each of the Opinion Party Subsidiary Guarantors in accordance with their terms. 8. The execution, delivery and performance of the Exchange Units have been duly and validly authorized by the Company, and when executed and delivered by the Company in accordance with the terms of the Registration Rights Agreement and the Indenture (assuming the due authentication and delivery of the Exchange Units by the Trustee in accordance with the Indenture), will be the valid and legally binding obligations of the Company, entitled to the benefits of the Indenture, the Security Agreement and the Registration Rights Agreement, and enforceable against the Company in accordance with their terms. 9. The guarantees of the Exchange Units have been duly and validly authorized by the each of the Opinion Party Subsidiary Guarantors, and when the Exchange Units have been duly executed, issued and delivered by the Company in accordance with the terms of the Registration Rights Agreement and the Indenture, and the Indenture has been duly executed, issued and delivered by each of the MSXI Parties (assuming the due authentication and delivery of such guarantees by the Trustee in accordance with the Indenture), will be legal, valid and binding obligations of the Opinion Party Subsidiary Guarantors, entitled to the benefits of the Indenture, the Security Agreement and the Registration Rights Agreement, and enforceable against each of the Opinion Party Subsidiary Guarantors in accordance with their terms. 10. Each of the Corporate Opinion Parties has all requisite corporate power and corporate authority to execute, deliver and perform its obligations under the Registration Rights Agreement. Each of the LLC Subsidiary Guarantors has all requisite limited liability company power and limited liability company authority to execute, deliver and perform its obligations under the Registration Rights Agreement. The execution, delivery and performance of the Registration Rights Agreement has been duly and validly authorized by each of the Opinion Parties. The Registration Rights Agreement, when executed and delivered by each MSXI Party, will constitute a legal, valid and binding obligation of each Opinion Party, enforceable against such Opinion Party in accordance with its terms. 11. Each of the Corporate Opinion Parties has all requisite corporate power and corporate authority to execute, deliver and perform its obligations under the Intercreditor Agreement. Each of the LLC Subsidiary Guarantors has all requisite limited liability company power and limited liability company authority to execute, deliver and perform its obligations under the Intercreditor Agreement. The execution, delivery and performance of the Intercreditor Agreement has been duly and validly authorized by each of the Opinion Parties. The Intercreditor Agreement, when executed and delivered by each MSXI Party, will constitute a legal, valid and binding obligation of each Opinion Party, enforceable against such Opinion Party in accordance with its terms. 12. The Company has all requisite corporate power and corporate authority to execute, deliver and perform its obligations under the Purchase Agreement and to consummate the transactions contemplated thereby. The execution, delivery and performance of the Purchase Agreement and the consummation of the transactions contemplated thereby by the Company has been duly and validly authorized by the Company. The Purchase Agreement has been duly and validly executed and delivered by the Company. 13. The Indenture is in sufficient form for qualification under the TIA. Each of the Indenture and the Security Agreement has been duly and validly authorized by each Opinion Party that is a party thereto. Each of the Indenture and the Security Agreement, when executed and delivered by each MSXI Party that is a party thereto, will constitute a legal, valid and binding obligation of each MSXI Party, enforceable against such MSXI Party in accordance with its terms. 14. When executed and delivered, the Documents will conform in all material respects to the descriptions thereof in the Final Offering Circular. 15. To our knowledge, except as disclosed in the Final Offering Circular, there are no Proceedings pending or threatened, that either (i) seek to restrain, enjoin, prevent the consummation of, or otherwise challenge any of the Documents or any of the transactions contemplated therein, or (ii) could, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect. 16. No consent, approval, authorization or order of any Governmental Authority is required for the issuance and sale by the Company of the Units to the Initial Purchaser, the execution, delivery or performance by any Opinion Party of any Document to which it is a party or the consummation by any Opinion Party of the other transactions contemplated by the Purchase Agreement, except such as have been obtained and such as will be obtained under the Act and the Trust Indenture Act and such as may be required under state securities or "Blue Sky" laws in connection with the purchase and resale of the Units by the Initial Purchaser. 17. Assuming the (a) accuracy of the representations and warranties and the performance of the agreements of the Company and each of the Subsidiary Guarantors and of the Initial Purchaser contained in the Purchase Agreement, (b) compliance by the Initial Purchaser with the offering and transfer procedures and restrictions described in the Documents, and (c) the accuracy of the representations and warranties made in accordance with the Documents by Subsequent Purchasers to whom the Initial Purchaser initially resells the Units, it is not necessary in connection with the offer, sale and delivery of the Units to register the Units under the Act or to qualify the Indenture under the TIA. 18. Neither the execution, delivery or performance by any Opinion Party of the Documents to which it is a party nor the consummation of any transactions contemplated therein will conflict with, violate, constitute a breach of or a default (with the passage of time or otherwise) under, require the consent of any person (other than consents already obtained) under, result in the imposition of a Lien on any assets of any Opinion Party (except pursuant to the Documents, the Security Agreement executed pursuant to the Credit Agreement, or the Third Lien Term Loan (as such term is defined in the Offering Circular)), or result in an acceleration of indebtedness under or pursuant to (i) the Charter Documents of any Opinion Party, (ii) any material agreement set forth on Schedule III attached hereto, other than such breaches, violations or defaults that could not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect, or (iii) any Applicable Law. 19. The Issuers are not and, after giving effect to the offering and sale of the Units and the application of the proceeds therefrom as described in the Final Offering Circular, will not be an "investment company" as defined in the Investment Company Act of 1940. 20. (a) The Security Agreement creates a valid and enforceable security interest in favor of the Collateral Agent (as such term is defined in the Offering Circular) for the benefit of the Secured Parties (as defined in the Security Agreement) in those types of Collateral (as defined in the Security Agreement) in which a security interest may be created under Article 9 of the Uniform Commercial Code as in effect in the State of New York (the "New York UCC") (such Collateral, the "Article 9 Collateral").(b) The Financing Statements naming each MSXI Party as debtor and the Collateral Agent as secured party to be filed in the filing offices in the States of Delaware, California, Michigan, Missouri and New York, as applicable, are in appropriate form for filing and, when duly filed in such filing offices, will result in the perfection of all security interests in all Article 9 Collateral which can be perfected under the Uniform Commercial Code as in effect in such State, by the filing of a financing statement in such State. No further action will be required in order to perfect such security interests and to preserve, protect and continue such perfection, except for the filing of periodic continuation statements with respect to such Financing Statements. To our knowledge, no mortgage, recording, registration, stamp or other similar tax or fee will be due upon the execution, delivery, recordation, filing or performance, as the case may be, of any financing statements referred to in this paragraph (19)(b), except nominal filing fees. The foregoing opinions are subject to the following qualifications: (A) The opinions expressed herein are limited by principles of equity which may limit the availability of certain rights and remedies and do not reflect the effect of bankruptcy, insolvency, fraudulent conveyance, receivership, reorganization, moratorium and other laws or decisions relating to or affecting debtors' obligations or creditors' rights generally. The opinions expressed above also do not reflect the effect of laws and equitable doctrines (including requirements that the parties to agreements act reasonably and in good faith and, with respect to collateral, in a commercially reasonable manner, and give reasonable notice prior to exercising rights and remedies) or the effect of the exercise of discretion of the court before which any proceeding may be brought, which may limit the availability of any particular remedy but which will not, in our judgment, make the remedies available to the Trustee and the Initial Purchaser under the Documents inadequate for the practical realization of the benefits of the security provided for in the Documents, except for the economic consequence of any delay which may be imposed thereby or result therefrom, and except that we express no opinion as to the rights of any of the parties to the Documents to accelerate the due dates of any payment due thereunder or to exercise other remedies available to them on the happening of a non-material breach of any such document or agreement. (B) Without limiting the generality of the foregoing, we express no opinion with respect to: (1) the availability of specific performance or other equitable remedies for noncompliance with any of the provisions contained in the Documents; (2) the enforceability of provisions contained in the Documents relating to the effect of laws which may be enacted in the future; (3) the enforceability of provisions in the Documents purporting to waive the effect of applicable laws; (4) the effectiveness of any power-of-attorney given under the Documents which is intended to bind successors and assigns which have not granted such powers by a power-of-attorney specifically executed by them; (5) provisions that provide for the enforceability of the remaining terms and provisions of the applicable Document in circumstances in which certain other terms and provisions of such Documents are illegal or unenforceable; (6) provisions that provide that certain rights or obligations are absolute or unconditional; (7) provisions related to waivers of remedies (or the delay or omission of enforcement of remedies), disclaimers, liability limitations or limitation on the obligations of the Initial Purchaser, the Unitholders or the Trustee in circumstances in which a failure of condition or default by any Opinion Party is not material; or (8) the indemnification provisions of the Documents if and to the extent that such provisions are limited by federal or state securities laws or contravene public policy or might require indemnification or payments with respect to any litigation against a party to a Document determined adversely to the other party(ies) to such litigation, or any loss, cost or expense arising out of an indemnified party's gross negligence or willful misconduct or any violation by an indemnified party of statutory duties, general principles of equity or public policy. (C) We have made no examination of and express no opinion with respect to: (1) the title to, ownership of or rights in personal property or fixtures; (2) the accuracy or sufficiency of any descriptions of Collateral, or of any financing statements intended to perfect any security interest in Collateral; (3) the validity or ownership of any trademarks, patents or licenses; (4) the existence or absence of any liens, charges or encumbrances on any Collateral; (5) except as expressly set forth in paragraphs 19(a) and 19(b), the perfection of any lien or security interest. (D) In addition, the opinions in paragraphs 19(a) and 19(b) are subject to the following exceptions: (i) to the extent that perfection of a lien or security interest in any Collateral is governed by the law of any jurisdiction other than the States of New York or Delaware, we express no opinion; (ii) that with respect to any Collateral which is or may become fixtures (within the meaning of Section 9-313 of the UCC), we express no opinion; and (iii) that with respect to transactions excluded from Article 9 of the UCC by Section 9-104 thereof, we express no opinion. (E) In addition, the opinions in paragraphs 19(a) and 19(b) are subject to (i) the limitations on perfection of security interests in proceeds resulting from the operation of Section 9-306 of the UCC; (ii) the limitations with respect to buyers in the ordinary course of business imposed by Sections 9-307 and 9-308 of the UCC; (iii) the limitations with respect to documents, instruments and securities imposed by Sections 8-302, 9-304 and 9-309 of the UCC; (iv) the provisions of Section 9-203 of the UCC relating to the time of attachment; and (v) Section 552 of Title 11 of the United States Code (the "Bankruptcy Code") with respect to any Collateral acquired by any Opinion Party subsequent to the commencement of a case against or by such Opinion Party under the Bankruptcy Code. We do not purport to be experts in the Uniform Commercial Codes in effect in the States of Delaware, California, Michigan or Missouri, nor did we review official codifications of the Uniform Commercial Codes in effect in the States of Delaware, California, Michigan or Missouri. We did, however, at your request, review standard compilations of the versions of the Uniform Commercial Code in effect in the States of Delaware, California, Michigan and Missouri and our opinions in paragraphs 19(a) and 19(b) above are based solely on these procedures and not upon any other review of the law of the States of Delaware, California, Michigan and Missouri. The opinions expressed herein are limited to the federal laws of the United States of America, the laws of the State of New York, and, to the extent relevant, the General Corporate Law of Delaware and the California Corporations Code that we have reviewed. We express no opinion concerning the laws of any other jurisdiction. In addition, we express no opinion concerning any state securities or blue sky laws. This opinion speaks only as of the date hereof. We assume no obligation to advise the addressee (or any third party) of any changes in the law, documentation or facts that may occur after the date of this opinion. Our opinions expressed herein are solely for your benefit and, without our express written consent, neither our opinion nor this opinion letter may be assigned, quoted, circulated or be furnished to or relied upon by any other person. July __, 2003 Jefferies & Company, Inc. 11100 Santa Monica Boulevard 10th Floor Los Angeles, CA 90025 Re: MSX International, Inc. Gentlemen and Ladies: We have acted as counsel to MSX International, Inc., a Delaware corporation (the "Company"), in connection with the Purchase Agreement dated July __, 2003 (the "Purchase Agreement"), by and among the Company and Jefferies & Company, Inc. (the "Initial Purchaser") pursuant to which the Company has sold to the Initial Purchaser on the date hereof an aggregate of $100,000,000 principal amount of its % Senior Secured Units due 2007. Capitalized terms used and not otherwise defined herein have the meanings specified in the Purchase Agreement. This letter is delivered to you pursuant to Section 7(g)(v) of the Purchase Agreement. In the course of preparation by the Company of the final offering circular dated as of July __, 2003 (including any and all exhibits thereto and any information incorporated by reference therein, the "Final Offering Circular"), we have participated in conferences with officers and other representatives of the Company, representatives of the independent certified public accountants for the Company, and representatives of the Initial Purchaser and its counsel during which conferences the contents of the Final Offering Circular and related matters were discussed and reviewed and, although we have not independently verified and are not passing upon and assume no responsibility for the accuracy, completeness or fairness of the statements contained in the Final Offering Circular, and noting that we have relied as to materiality to a large extent upon the statements of officers and other representatives of the Company, on the basis of the information that was developed in the course of the services referred to above, considered in light of our understanding of the applicable law, nothing has come to our attention which would lead us to believe that, at the date and time that the Purchase Agreement was executed and delivered by the Company and the Initial Purchaser and on the date of this letter, the Final Offering Circular (other than financial statements and schedules, footnotes thereto, other financial or accounting data and statistical information included or incorporated by reference therein or omitted therefrom, as to which we make no statement) contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. This letter is being delivered solely for the benefit of the Initial Purchaser and, without our express written consent, neither this letter nor the subject matters covered herein may be assigned or provided to or relied upon by any other person. EX-10.21 15 k79382exv10w21.txt AMENDMENT NO. 1 TO PURCHASE AGREEMENT 08/01/2003 EXECUTION COPY EXHIBIT 10.21 AMENDMENT NO. 1 TO PURCHASE AGREEMENT This AMENDMENT NO.1 TO PURCHASE AGREEMENT, is made and entered into as of August 1, 2003 (the "Amendment"), by and among MSX INTERNATIONAL, INC., a Delaware corporation, (the "Company"), MSX INTERNATIONAL LIMITED, a wholly owned subsidiary of MSXI ("MSXI Limited" and together with the Company the "Issuers"), and Jefferies & Company, Inc. a Delaware corporation (the "Initial Purchaser"). RECITALS: WHEREAS, the Issuers and the Initial Purchaser entered into the Purchase Agreement dated as of July 25, 2003 (the "Purchase Agreement") whereby the Issuers proposed and agreed to sell to the Initial Purchaser $75,500,000 aggregate principal amount of 11% Senior Secured Note Units due 2007 (each a "Unit" and, collectively, the "Units"), each Unit consisting of $860 principal amount of 11% Senior Secured Notes due 2007 issued by the Company (the "U.S. Notes") and $140 principal amount of 11% Senior Secured Notes due 2007 issued by MSXI Limited (the "U.K. Notes" and, together with the U.S. Notes, the "Notes"); WHEREAS the Initial Purchaser agreed to purchase from the Issuers, the Units at a purchase price of 96.144% of the aggregate principal amount thereof; WHEREAS the parties hereto wish to amend the Purchase Agreement; NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereto agree as follows: SECTION 1. Definitions. As used herein, capitalized terms which are defined in the preamble hereto shall have the meanings as so defined, and capitalized terms not so defined shall have the meanings set forth in the Purchase Agreement. SECTION 2. Amendment to Section 13(c) of the Purchase Agreement. The following section is hereby amended by deleting the language from 13(c) in its entirety and replacing it with the following: (c) THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Each of the Issuers hereby submits to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. 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. 22355 West Eleven Mile Road, Southfield, MI 48034, shall be deemed in every respect to effect service of process upon MSXI Limited in any such suit or proceeding. MSXI Limited further agrees to take any and all action as may be necessary to maintain such designation and appointment of such agent in full force and effect for a period of seven years from the date of this Agreement. The obligation of MSXI Limited in respect of any sum due Initial Purchaser shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first business day, following receipt by Initial Purchaser of any sum adjudged to be so due in such other currency, on which (and only to the extent that) Initial Purchaser may in accordance with normal banking procedures purchase United States dollars with such other currency; if the United States dollars so purchased are less than the sum originally due to Initial Purchaser hereunder, MSXI Limited agrees, as a separate obligation and notwithstanding any such judgment, to indemnify Initial Purchaser against such loss. If the United States dollars so purchased are greater than the sum originally due to Initial Purchaser hereunder, Initial Purchaser agrees to pay to the MSXI Limited an amount equal to the excess of the dollars so purchased over the sum originally due Initial Purchaser hereunder. SECTION 3. Representations and Warranties. In order to induce the parties hereto to enter into this Amendment, each of the parties hereto represents and warrants unto the other parties hereto as set forth in this Section 3: (a) The execution, delivery and performance by such party of this Amendment are within its powers, have been duly authorized by all necessary action, and do not: (i) contravene its organizational documents; or (ii) contravene any contractual restriction, law or governmental regulation or court decree or order binding on or affecting it; and (b) This Amendment constitutes the legal, valid and binding obligation of such party enforceable against such party in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights and general equitable principles. SECTION 4. Binding Effect; Ratification. (a) This Amendment shall become effective, as of the date first set forth above, when counterparts hereof shall have been executed and delivered by the parties hereto, and thereafter shall be binding on the parties hereto and their respective successors and assigns. (b) On and after the execution and delivery hereof, this Amendment shall be a part of the Purchase Agreement amended hereby and each reference in the Purchase Agreement to "this Agreement" or "hereof", "hereunder" or words of like import, and each reference in any other agreement to the Purchase Agreement shall mean and be a reference to the Purchase Agreement as amended hereby. (c) Except as expressly amended hereby, the Purchase Agreement shall remain in full force and effect and is hereby ratified and confirmed by the parties hereto. 2 SECTION 5. Miscellaneous. (a) Headings used herein are for convenience of reference only and shall not affect the meaning of this Amendment or any provision hereof. (b) This Amendment may be executed in any number of counterparts, and by the parties hereto on separate counterparts, each of which when executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (c) Executed counterparts of this Amendment may be delivered electronically. [SIGNATURES TO FOLLOW] 3 IN WITNESS WHEREOF, the parties have executed this Amendment by their respective officers thereunto duly authorized as of the date first above written. MSX International, Inc. By: /s/ Frederick K. Minturn ---------------------------------------- Name: Frederick K. Minturn Title: Executive Vice President & Chief Financial Officer MSX International Limited By:/s/ Frederick K. Minturn ----------------------------------------- Name: Frederick K. Minturn Title: Director Amendment to Purchase Agreement S-1 JEFFERIES & COMPANY, INC. By: /s/ Douglas R. Speegle ---------------------------------------- Name: Douglas R. Speegle Title: Managing Director Amendment to Purchase Agreement S-2 EX-10.22 16 k79382exv10w22.txt AMEND. NO. 1 TO AMENDED/RESTATED STOCKHOLDERS' AGM EXHIBIT 10.22 AMENDMENT NO. 1 TO AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT This Amendment No. 1 (this "Amendment"), effective as of January 31, 2003, to the Amended and Restated Stockholders' Agreement (the "Agreement") effective as of November 28, 2000 by and among MSX INTERNATIONAL INC., a Delaware corporation (the "Company"), Court Square Capital Limited, a Delaware corporation ("Court Square"), each of the individuals or entities whose name appears on the signature pages hereto under the heading "Management Group" (individually, a "Management Group Member" and, collectively, the "Management Group"), each of the individuals or entities whose name appears on the signature pages hereto under the heading "CVC Group" (individually, a "CVC Stockholder" and, collectively, the "CVC Stockholders") and each of the other individuals whose name appears on the signature pages hereto. Capitalized terms are used as defined in Article I of the Agreement. RECITALS WHEREAS, certain of the Stockholders, certain former stockholders of the Company and the Company entered into a Stockholders' Agreement, dated as of January 3, 1997, as amended (the "Original Agreement"), to regulate certain aspects of their relationship and to provide for, among other things, restrictions on the transfer or other disposition of securities of the Company and matters relating to the corporate governance of the Company and its Subsidiaries; WHEREAS, in connection with the transfer of shares of Common Stock and Series A Preferred by MascoTech, Inc., a Delaware corporation, to Court Square pursuant to a Stock Purchase Agreement, dated as of August 1, 2000, by and between CVC and MascoTech, as amended, and the transfer of shares of Common Stock and Series A Preferred by CVC to Court Square pursuant to a Stock Purchase Agreement, dated as of November 28, 2000, by and between CVC and Court Square, the Stockholders and the Company amended and restated the Original Agreement, all in accordance with Section 7.2 of the Original Agreement; and WHEREAS, in connection with the Transfer of shares of Common Stock and Series A Preferred by one of the Institutional Stockholders, each of the Company and certain of the Institutional Stockholders desire to amend a provision of the Agreement, in accordance with Section 7.2 of the Agreement. NOW, THEREFORE, the parties hereto hereby agree as follows: ARTICLE 1 CERTAIN DEFINITIONS 1.1 Defined Terms. (a) The term "Permitted Transferee" in the Agreement shall be deleted in its entirety and replaced with the following: "Permitted Transferee" means: (i) with respect to any Stockholder who is a natural person, (A) the spouse or any lineal descendant (including by adoption and stepchildren) of such Stockholder, (B) any trust of which such. Stockholder is the trustee and which is established solely for the benefit of any of the foregoing individuals and whose terms are not inconsistent with the terms of this Agreement, (C) the estate of such Stockholder established by reason of such Stockholder's death, (D) any corporation, limited liability company or partnership, all of the interests of which are (or is) owned by one or more of the Persons identified in this subparagraph (i), or (E) upon the termination or liquidation of any trust, corporation. limited liability company or partnership described in this subparagraph (i), to any beneficiary of such trust or stockholder of such corporation or member of such limited liability company or limited partner or managing general partner of such partnership described in this subparagraph (i); (ii) with respect to the estate of any Stockholder, any person having the relationship with respect to such Stockholder described in clause (A) of such subparagraph (i); (iii) with respect to the Institutional Stockholders, (A) any Associate or Affiliate of any such Institutional Stockholder and any officer, director or employee of any Institutional Stockholder or such Associate or Affiliate, (B) any spouse or lineal descendant (including by adoption and stepchildren) of the officers, directors and employees referred to in clause (A) above, any trust (where a majority in interest of the beneficiaries thereof are any of the persons described in this clause (B) and in clause (A) above), corporations or partnerships (where a majority in interest of the stockholders or limited partners, or where the managing general partner, is one of more of the persons described in clause (A) above) and, upon the termination or liquidation of any such trust, corporation or partnership described in this clause (B), to any beneficiary of such trust or stockholder of such corporation or limited partner or managing general partner of such partnership described in this clause (B), (C) subject to the provisions of Section 2.8 (Institutional Stockholders Accounting Determination), and if, after taking commercially reasonable steps, with the cooperation of the Company, such Institutional Stockholder is unable to restructure its ownership of the Company's securities in a manner which avoids an Accounting Determination and which is not materially adverse to such Institutional Stockholders, upon the giving of notice to the Company that the Institutional 2 Stockholders have determined that such Accounting Determination may not be avoided, then to any third party in an amount necessary to avoid such Accounting Determination, or (D) subject to the provisions of Section 2.9 (Institutional Stockholders Regulatory Problem) and if, after taking commercially reasonable steps, with the cooperation of the Company, such Institutional Stockholder is unable to restructure its-ownership of the Company's securities in a manner which avoids a Regulatory Problem and which is not materially adverse to such Institutional Stockholder, upon the giving of notice to the Company that the Institutional Stockholders have determined that such Regulatory Problem may not be avoided then to any third party in an amount necessary to avoid such Regulatory Problem. For purposes of determining a "Permitted Transferee" under Article III of this Agreement, the term "Affiliate" shall include, without limitation, any limited partnership, limited liability company or other investment vehicle that is sponsored or managed (whether through the ownership of securities having a majority of the voting power; as a general partner or through the management of investments) by Citicorp or its Affiliates (defined without giving effect to this sentence) or present or former employees of Citicorp or its Affiliates. ARTICLE 2 MISCELLANEOUS 2.1 Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of New York, except to the extent that the General Corporation Law of the State of Delaware applies as a result of the Company being incorporated in the State of Delaware, in which case such General Corporation Law shall apply. [Signature page to follow] 3 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. MSX INTERNATIONAL, INC. By: /s/ Frederick K. Minturn ------------------------------- Name: Frederick K. Minturn Title: Vice President COURT SQUARE CAPITAL LIMITED By: /s/ Michael A. Delaney ------------------------------- Name: Michael A. Delaney Title: Vice President MANAGEMENT STOCKHOLDERS Billig Family Limited Partnership By: /s/ E.H. Billig ------------------------------- Name: E.H. Billig Title: Trustee /s/ Frederick K. Minturn ---------------------------------------- Frederick K. Minturn /s/ Thomas Stallkamp ---------------------------------------- Thomas Stallkamp ---------------------------------------- John W. Risk [Signature Page to Amendment No. 1 to Stockholders' Agreement] Kyung Ae Bae and Ralph L. Miller, Trustees under Trust Agreement, dated October 16, 1989, between Kyung Ae Bae, Settlor, and Kyung Ae Bae, Trustee By: ------------------------------------------ Name: Title: CVC GROUP CCT Partners IV, L.P. By: /s/ Anthony P. Mirra ----------------------------------- Name: Anthony P. Mirra Title: Secretary, CCT IV Corporation, General Partner of CCT Partners IV, L.P. -------------------------------------------- Richard M. Cashin Natasha Partnership By: ------------------------------------------ Name: Title: 63BR Partnership By: ------------------------------------------ Name: Title: --------------------------------------------------- Noelle Doumar 5 /s/ Michael A. Delaney ------------------------------------------- Michael A. Delaney Alchemy, L.P. By: ---------------------------------- Name: Title: Thomas F. McWilliams Flint Trust By: ---------------------------------- Name: Jeanne Blasberg, Trustee ------------------------------------------- M. Saleem Muqaddam ------------------------------------------- Joseph Silvestri ------------------------------------------- David F. Thomas ------------------------------------------- James A. Urry 6 CITICORP VENTURE CAPITAL EQUITY PARTNERS, L.P. By: CVC PARTNERS LLC, its General Partner By: CITICORP VENTURE CAPITAL GP HOLDINGS, LTD. By: /s/ Michael A. Delaney --------------------------- Name: Michael A. Delaney Title: Vice President CVC EXECUTIVE FUND LLC By: CITICORP VENTURE CAPITAL GP HOLDINGS, LTD. By: /s/ Michael A. Delaney --------------------------- Name: Michael A. Delaney Title: Vice President CVC/SSB EMPLOYEE FUND, L.P. By: CVC PARTNERS LLC, its General Partner By: CITICORP VENTURE CAPITAL GP HOLDINGS, LTD. By: /s/ Michael A. Delaney --------------------------- Name: Michael A. Delaney Title: Vice President 7 ADDITIONAL MANAGEMENT STOCKHOLDERS ---------------------------------------- Roger Fridholm ---------------------------------------- Kenneth Sommer ---------------------------------------- John W. Risk /s/ Thomas Stallkamp ---------------------------------------- Thomas T. Stallkamp ---------------------------------------- Carol Creel ---------------------------------------- David A. Crittenden ---------------------------------------- Cynthia Dauphinais ---------------------------------------- Donald R. Fields ---------------------------------------- Kevin D. Kyles ---------------------------------------- Donald A. Leith 8 ---------------------------------------- Elie Matalon ---------------------------------------- William R. Risk ---------------------------------------- Gary Sands ---------------------------------------- Gary J. Valentz Bruce S. Wagner Revocable Living Trust By: ------------------------------- Name: Bruce S. Wagner ---------------------------------------- Paul J. Wagner Billig Family Limited Partnership By: /s/ E.H. Billig ------------------------------- Name: E. H. Billig L.M. Gardner, L.L.C. By: ------------------------------- Name: ---------------------------------------- Richard M. Cashin /s/ Frederick K. Minturn ---------------------------------------- Frederick K. Minturn 9 EX-10.23 17 k79382exv10w23.txt AMEND. NO. 2 TO AMENDED/RESTATED STOCKHOLDERS' AGM EXHIBIT 10.23 AMENDMENT NO. 2 TO AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT This Amendment No. 2 (this "Amendment"), effective as of August 1, 2003, to the Amended and Restated Stockholders' Agreement (the "Agreement") effective as of November 28, 2000, as amended by Amendment No. 1 dated January 31, 2003, by and among MSX INTERNATIONAL, INC., a Delaware corporation (the "Company"), COURT SQUARE CAPITAL LIMITED, a Delaware corporation ("Court Square"), CITICORP MEZZANINE III, L.P., a Delaware limited partnership ("CMF"), each of the individuals or entities whose name appears on the signature pages hereto under the heading "Management Group" (individually, a "Management Group Member" and, collectively, the "Management Group"), each of the individuals or entities whose name appears on the signature pages hereto under the heading "CVC Group" (individually, a "CVC Stockholder" and, collectively, the "CVC Stockholders") and each of the other individuals whose name appears on the signature pages hereto. Capitalized terms are used as defined in Article I of the Agreement. RECITALS WHEREAS, certain of the Stockholders, certain former stockholders of the Company and the Company entered into a Stockholders' Agreement, dated as of January 3, 1997, as amended (the "Original Agreement"), to regulate certain aspects of their relationship and to provide for, among other things, restrictions on the transfer or other disposition of securities of the Company and matters relating to the corporate governance of the Company and its Subsidiaries; WHEREAS, in connection with the transfer of shares of Common Stock and Series A Preferred by MascoTech, Inc., a Delaware corporation, to Court Square pursuant to a Stock Purchase Agreement, dated as of August 1, 2000, by and between CVC and MascoTech, as amended, and the transfer of shares of Common Stock and Series A Preferred by CVC to Court Square pursuant to a Stock Purchase Agreement, dated as of November 28, 2000, by and between CVC and Court Square, the Stockholders and the Company amended and restated the Original Agreement, all in accordance with Section 7.2 of the Original Agreement; WHEREAS, in connection with the Transfer of shares of Common Stock and Series A Preferred by one of the Institutional Stockholders, the Stockholders and the Company amended the Agreement to replace in its entirety the defined term "Permitted Transferee," in accordance with Section 7.2 of the Agreement; and WHEREAS, in connection with the issuances to CMF by each of the Company and MSX International Limited, an indirect, wholly-owned subsidiary of the Company, of 11.5% senior secured notes in the aggregate principal amount of $25 million, the Company has agreed to issue a stock purchase warrant (together with all warrants issued in substitution or replacement thereof, the "CMF Warrant") to purchase the number of Warrant Shares (as defined in the CMF Warrant) that is specified in the CMF Warrant pursuant to a Warrant Purchase Agreement, dated as of the date hereof, by and between the Company and CMF (as amended, restated or modified from time to time, the "Warrant Agreement"), each of the Company and certain of the Institutional Stockholders desire to amend provisions of the Agreement, in accordance with Section 7.2 of the Agreement. NOW, THEREFORE, the parties hereto hereby agree as follows: ARTICLE 1 AMENDMENT 1.1 Observer's Rights. Section 5.6(a) of the Agreement shall be deleted in its entirety and replaced with the following "(a) In the event the Institutional Stockholders elect not to exercise, or are prohibited by applicable law from exercising, their rights to designate the Institutional Directors, or once appointed, the Institutional Stockholders desire to remove all of the Institutional Directors, the Institutional Stockholders shall have the right to have one (1) individual (each, an "Observer") attend any meeting of the Board or any committee thereof. So long as CMF owns at least 1% of the Common Stock outstanding (on a fully diluted basis) (assuming full exercise of the CMF Warrant), CMF shall have the right to have one (1) Observer attend any meeting of the Board or any committee thereof. In addition, the Institutional Stockholders shall have the right to appoint an Observer to the board of directors of any Subsidiary in lieu of designating a director thereto as provided by Section 5.5." 1.2 Entire Agreement; Amendments. Section 7.2 shall be amended by adding the following clause (c) to the end of the first sentence thereof: "and (c) any amendment, modification or supplement that adversely affects CMF's rights under Section 5.6(a) shall require the consent of CMF." 1.3 Notices. Section 7.17(a) of the Agreement shall be amended by deleting the existing clause (iv) and replacing it with the following clause (iv) and by adding the following clause (v) to the end thereof: "(iv) If to CMF, to: Citicorp Mezzanine III, L.P. 399 Park Avenue - 14th Floor New York, New York 10043 Facsimile No.: 212-888-2940 Attn: Byron Knief with copies to: Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, New York 10022-4611 Facsimile No.: 212-446-4900 Attn: Andrew Lindholm (v) If to any other Additional Shareholder, to the address of such person set forth on the stock records of the Company." ARTICLE 2 MISCELLANEOUS 2.1 Joinder Agreement. In consideration of the issuance of the CMF Warrant by the Company, CMF agrees that: (a) as of the date hereof, in accordance with Section 6.2 of the Agreement, it shall become a party to the Agreement and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the Agreement as though an original party thereto and shall be deemed an "Additional Stockholder" for all purposes thereof, and shall possess and be subject to the rights, duties and obligations of an "Additional Shareholder" pursuant to the terms of the Agreements; and (b) For avoidance of doubt, (i) the Warrant Shares are "Restricted Securities" (as such term is used in the Agreement) and any holder of the CMF Warrant (whether or not the CMF Warrant is exercised) or Warrant Shares is a "Stockholder" (as such term is defined in the Agreement), (ii) the terms "Class A Common," "Class B Common" and "Common Stock" (as such terms are used in the Agreement) include the Warrant Shares and (iii) a "Permitted Transferee" (as such term is used in the Agreement) of the undersigned shall also include its limited partners, general partners and "Affiliates" (as such term is defined in the Agreement). 2.2 Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of New York, except to the extent that the General Corporation Law of the State of Delaware applies as a result of the Company being incorporated in the State of Delaware, in which case such General Corporation Law shall apply. [Signature pages to follow] IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. MSX INTERNATIONAL, INC. By: /s/ Frederick K. Minturn ------------------------------------ Name: Frederick K. Minturn Title: Vice President COURT SQUARE CAPITAL LIMITED By: /s/ Michael A. Delaney ------------------------------------ Name: Michael A. Delaney Title: Vice President CITICORP MEZZANINE III, L.P. By: Citicorp Capital Investors, Ltd. Its:General Partner /s/ Byron L. Knief ------------------------------------ Name: Byron L. Knief Title:President MANAGEMENT STOCKHOLDERS Billig Family Limited Partnership By: /s/ E.H. Billig --------------------------------------- Name: E.H. Billig Title: Trustee /s/ Frederick K. Minturn -------------------------------------------- Frederick K. Minturn /s/ Thomas Stallkamp -------------------------------------------- Thomas Stallkamp -------------------------------------------- John W. Risk Kyung Ae Bae and Ralph L. Miller, Trustees under Trust Agreement, dated October 16, 1989, between Kyung Ae Bae, Settlor, and Kyung Ae Bae, Trustee By: ------------------------------------ Name: Title: CVC GROUP -------------------------------------------- Richard M. Cashin Natasha Partnership By: ------------------------------------ Name: Title: 63BR Partnership By: ------------------------------------ Name: Title: -------------------------------------------- Noelle Doumar -------------------------------------------- William T. Comfort -------------------------------------------- David Y. Howe -------------------------------------------- John D. Weber DFT Family LP 94 By: ----------------------------------- Name: Title: -------------------------------------------- Charles E. Corporening -------------------------------------------- Paul C. Schorr IV /s/ Michael A. Delaney -------------------------------------------- Michael A. Delaney Alchemy, L.P. By: ----------------------------------- Name: Title: Thomas F. McWilliams Flint Trust By: ----------------------------------- Name: Jeanne Blasberg, Trustee -------------------------------------------- M. Saleem Muqaddam -------------------------------------------- Joseph Silvestri -------------------------------------------- David F. Thomas -------------------------------------------- James A. Urry CITICORP VENTURE CAPITAL EQUITY PARTNERS, L.P. By: CVC PARTNERS LLC, its General Partner By: CITICORP VENTURE CAPITAL GP HOLDINGS, LTD. By: /s/ Michael A. Delaney --------------------------- Name: Michael A. Delaney Title: Vice President CVC EXECUTIVE FUND LLC By: CITICORP VENTURE CAPITAL GP HOLDINGS, LTD. By: /s/ Michael A. Delaney --------------------------- Name: Michael A. Delaney Title: Vice President CVC/SSB EMPLOYEE FUND, L.P. By: CVC PARTNERS LLC, its General Partner By: CITICORP VENTURE CAPITAL GP HOLDINGS, LTD. By: /s/ Michael A. Delaney --------------------------- Name: Michael A. Delaney Title: Vice President ADDITIONAL MANAGEMENT STOCKHOLDERS -------------------------------------------- Roger Fridholm -------------------------------------------- Kenneth Sommer -------------------------------------------- John W. Risk -------------------------------------------- Thomas T. Stallkamp -------------------------------------------- Carol Creel -------------------------------------------- David A. Crittenden -------------------------------------------- Cynthia Dauphinais -------------------------------------------- Donald R. Fields -------------------------------------------- Kevin D. Kyles -------------------------------------------- Donald A. Leith -------------------------------------------- Elie Matalon -------------------------------------------- William R. Risk -------------------------------------------- Gary Sands -------------------------------------------- Gary J. Valentz Bruce S. Wagner Revocable Living Trust By: ----------------------------------- Name: Bruce S. Wagner -------------------------------------------- Paul J. Wagner Billig Family Limited Partnership By: ----------------------------------- Name: L.M. Gardner, L.L.C. By: ----------------------------------- Name: -------------------------------------------- Richard M. Cashin /s/ Frederick K. Minturn -------------------------------------------- Frederick K. Minturn EX-10.24 18 k79382exv10w24.txt AMEND. NO. 1 TO AMENDED/RESTATED REGISTRATION EXHIBIT 10.24 AMENDMENT NO. 1 TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT This Amendment No. 1 (this "Amendment"), effective as of August 1st, 2003, to the Amended and Restated Registration Rights Agreement (the "Agreement") effective as of November 28, 2000, by and among MSX INTERNATIONAL, INC., a Delaware corporation (the "Company"), COURT SQUARE CAPITAL LIMITED, a Delaware corporation ("Court Square"), CITICORP MEZZANINE III, L.P., a Delaware limited partnership ("CMF"), each of the individuals or entities whose name appears on the signature pages hereto under the heading "Management Group", each of the individuals or entities whose name appears on the signature pages hereto under the heading "CVC Group". Capitalized terms are used as defined in Article I of the Agreement. RECITALS WHEREAS, certain of the Stockholders, certain former stockholders of the Company and the Company entered into a Registration Rights Agreement, dated as of January 3, 1997, as amended (the "Original Agreement"), to provided certain registration rights to the parties thereto; WHEREAS, in connection with the transfer of shares of Common Stock and Series A Preferred by MascoTech, Inc., a Delaware corporation, to Court Square pursuant to a Stock Purchase Agreement, dated as of August 1, 2000, by and between CVC and MascoTech, as amended, and the transfer of shares of Common Stock and Series A Preferred by CVC to Court Square pursuant to a Stock Purchase Agreement, dated as of November 28, 2000, by and between CVC and Court Square, the Stockholders and the Company amended and restated the Original Agreement, all in accordance with Section 11.4(b) of the Original Agreement; and WHEREAS, in connection with the issuances to CMF by each of the Company and MSX International Limited, an indirect, wholly-owned subsidiary of the Company, of 11.5% senior secured notes in the aggregate principal amount of $25 million, the Company has agreed to issue a stock purchase warrant (together with all warrants issued in substitution or replacement thereof, the "CMF Warrant") to purchase the number of Warrant Shares (as defined in the CMF Warrant) that is specified in the CMF Warrant pursuant to a Warrant Purchase Agreement, dated as of the date hereof, by and between the Company and CMF (as amended, restated or modified from time to time, the "Warrant Agreement"), each of the Company and certain of the Institutional Stockholders desire to amend a provision of the Agreement, in accordance with Section 11.4 of the Agreement. NOW, THEREFORE, the parties hereto hereby agree as follows: ARTICLE I Amendment 1.1. Section 2.1(a) is hereby amended by replacing the first sentence of such section with the following: "At any time (x) after the date hereof, the Required Institutional Stockholders and (y) after January 1, 2010, CMF may request (any Required Institutional Stockholder or CMF making such request being, the "Requesting Investors") that the Company effect a Qualifying Offering within 90 days after the receipt of such request." 1.2. Section 2.1(b) is hereby amended by replacing the first sentence of such section with the following: "Subject to Sections 2.2, 2.3 and 2.7, at any time from and after the date that is 91 days after the closing of an Initial Public Offering, any Requesting Investor (and, in the case of CMF, after January 1, 2010, CMF) may request registration under the Securities Act of all or part of their Registrable Securities (i) on Form S-1 or S-2 or any similar long-form registration statement (any such registration, a "Long-Form Registration", and (ii) on Form S-3 or any similar short-form registration statement (any such registration, a "Short-Form Registration"), if the Company qualifies to use such short form." 1.3. Section 2.2 is hereby amended by adding the following sentence immediately after the first sentence of such section: "CMF will be entitled to request pursuant to this Article II one Long-Form Registration." 1.4. Section 2.3 is hereby amended by adding the following sentence immediately after the first sentence of such section: "In addition to the Long-Form Registration provided pursuant to Section 2.2, CMF will be entitled to request one Short-Form Registration in which the Company will pay all Registration Expenses." 1.5. Section 2.5 of the Agreement shall be deleted in its entirety and replaced with the following: "(a) The Company will not include in any Demand Registration any securities which are not Registrable Securities without the written consent of the Requesting Investor that requested such Demand Registration. (b) If the Requesting Investor that requested such Demand Registration and other holders of Registrable Securities to be included in a Demand Registration which is an underwritten offering and the managing underwriters advise the Company in writing that in their opinion the number of Registrable Securities requested to be included exceeds the number of Registrable Securities which can be sold in such offering within a price range acceptable to the Requesting Investors that requested such Demand Registration, the Company will include any securities to be sold in such Demand Registration in the following order: (i) first, the Registrable Securities owned by the Requesting Investors that requested such Demand Registration; (ii) second, the Registrable Securities requested to be included in such registration by other Stockholders, provided, that, if the managing underwriters determine in good faith that a lower number of Registrable Securities requested to be included by other Stockholders should be included, then only that lower number of Registrable Securities requested to be included by other Stockholders shall be included in such registration, and such other Stockholders shall participate in the registration pro rata based upon their total ownership, on a Fully Diluted Basis, of Registrable Securities, provided, further, that if the managing underwriters determine in good faith that a lower number of Registrable Securities held by Management Stockholders and/or Additional Management Stockholders than such pro rata portion should be included, then such lower number shall be included and, as a result thereof, a greater number of Registrable Securities owned by the other Stockholders may be sold; (iii) third, the securities the Company proposes to sell; and (iv) fourth, any securities other than Registrable Securities to be sold by persons other than the Company included pursuant to Section 2.5(a) hereof. Any Person other than Stockholders including any securities in such registration statement pursuant to Article II hereof must pay its share of the Registration Expenses as provided in Article VI hereof." 1.6. Section 11.4(b) is hereby amended by replacing the first sentence of such section with the following: "Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement will be effective against the Company or any holder of Registrable Securities, unless such modification, amendment or waiver is approved in writing by the Company, the Required Institutional Stockholders, and, in the event that the rights and obligations of the Management Stockholders and/or the Additional Stockholders and/or CMF are adversely affected thereby, the approval of the Management Stockholders and/or the Additional Stockholders and/or CMF, as the case may be." 1.7. Notices. Section 11.6 of the Agreement shall by adding the following clause (iii) immediately at the end of existing clause (ii): "(iv) If to CMF, to: Citicorp Mezzanine III, L.P. 399 Park Avenue - 14th Floor New York, New York 10043 Facsimile No.: 212-888-2940 Attn: Byron Knief with copies to: Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, New York 10022-4611 Facsimile No.: 212-446-4900 Attn: Andrew Lindholm ARTICLE II MISCELLANEOUS 2.1. Joinder Agreement. In consideration of the issuance of the CMF Warrant by the Company, CMF agrees that: 2.1.1. as of the date written above, it shall become a party to the Agreement, and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the Agreement, as though an original party thereto and shall be deemed an Additional Stockholder for all purposes thereof; 2.1.2. for avoidance of doubt, (i) the Warrant Shares are "Registrable Securities" (as such term is used in the Agreement) and any holder of the CMF Warrant (whether or not the CMF Warrant is exercised) or Warrant Shares is a "Stockholder" (as such term is defined in the Agreement) and (ii) the terms "Class A Common," "Class B Common" and "Common Stock" (as such terms are used in the Agreement) include the Warrant Shares. 2.2. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of New York, except to the extent that the General Corporation Law of the State of Delaware applies as a result of the Company being incorporated in the State of Delaware, in which case such General Corporation Law shall apply. [Signature pages to follow] IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. MSX INTERNATIONAL, INC. By: /s/ Frederick K. Minturn ------------------------------------ Name: Frederick K. Minturn Title: Vice President COURT SQUARE CAPITAL LIMITED By: /s/ Michael A. Delaney ------------------------------------ Name: Michael A. Delaney Title: Vice President CITICORP MEZZANINE III, L.P. By: Citicorp Capital Investors, Ltd. Its: General Partner /s/ Byron L. Knief ------------------------------------ Name: Byron L. Knief Title: President MANAGEMENT STOCKHOLDERS Billig Family Limited Partnership By: ------------------------------- Name: E.H. Billig Title: Trustee /s/ Frederick K. Minturn ------------------------------------ Frederick K. Minturn ------------------------------------ Thomas Stallkamp ------------------------------------ John W. Risk Kyung Ae Bae and Ralph L. Miller, Trustees under Trust Agreement, dated October 16, 1989, between Kyung Ae Bae, Settlor, and Kyung Ae Bae, Trustee By: ---------------------------------- Name: Title: CVC GROUP ------------------------------- Richard M. Cashin ------------------------------- Natasha Partnership By: --------------------------- Name: Title: 63BR Partnership By: --------------------------- Name: Title: ------------------------------- Noelle Doumar ------------------------------- William T. Comfort ------------------------------- David Y. Howe ------------------------------- John D. Weber DFT Family LP 94 By: -------------------------------- Name: Title: ----------------------------------- Charles E. Corpening ----------------------------------- Paul C. Schorr IV /s/ Michael A. Delaney ----------------------------------- Michael A. Delaney Alchemy, L.P. By: -------------------------------- Name: Title: Thomas F. McWilliams Flint Trust By: -------------------------------- Name: Jeanne Blasberg, Trustee ----------------------------------- M. Saleem Muqaddam ----------------------------------- Joseph Silvestri ----------------------------------- David F. Thomas ----------------------------------- James A. Urry CITICORP VENTURE CAPITAL EQUITY PARTNERS, L.P. By: CVC PARTNERS LLC, its General Partner By: CITICORP VENTURE CAPITAL GP HOLDINGS, LTD. By: /s/ Michael A. Delaney -------------------------- Name: Michael A. Delaney Title: Vice President CVC EXECUTIVE FUND LLC By: CITICORP VENTURE CAPITAL GP HOLDINGS, LTD. By: /s/ Michael A. Delaney -------------------------- Name: Michael A. Delaney Title: Vice President CVC/SSB EMPLOYEE FUND, L.P. By: CVC PARTNERS LLC, its General Partner By: CITICORP VENTURE CAPITAL GP HOLDINGS, LTD. By: /s/ Michael A. Delaney -------------------------- Name: Michael A. Delaney Title: Vice President ADDITIONAL MANAGEMENT STOCKHOLDERS ----------------------------------- Roger Fridholm ----------------------------------- Kenneth Sommer ----------------------------------- John W. Risk ----------------------------------- Thomas T. Stallkamp ----------------------------------- Carol Creel ----------------------------------- David A. Crittenden ----------------------------------- Cynthia Dauphinais ----------------------------------- Donald R. Fields ----------------------------------- Kevin D. Kyles ----------------------------------- Donald A. Leith ------------------------------------------- Elie Matalon ------------------------------------------- William R. Risk ------------------------------------------- Gary Sands ------------------------------------------- Gary J. Valentz Bruce S. Wagner Revocable Living Trust By: ---------------------------------- Name: Bruce S. Wagner ------------------------------------------- Paul J. Wagner Billig Family Limited Partnership By: ---------------------------------- Name: L.M. Gardner, L.L.C. By: ---------------------------------- Name: ------------------------------------ Richard M. Cashin /s/ Frederick K. Minturn ------------------------------------ Frederick K. Minturn EX-12.1 19 k79382exv12w1.txt COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Exhibit 12.1 MSX INTERNATIONAL, INC. AND CONSOLIDATED SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (dollars in thousands)
FISCAL SIX MONTHS FISCAL YEAR ENDED ENDED ------------------------------------------------------------------- ----------------------------- January 3, January 2, December 31, December 30, December 29, 1999 2000 2000 2001 2002 June 30, 2002 June 29, 2003 ---------- ---------- ---------- ------------ ------------ ------------- ------------- Earnings before equity in affiliates, income taxes and fixed charges: Income from continuing operations before income taxes .............. $ 5,839 $ 17,189 $ 26,997 $ 4,158 ($25,342) $ (287) $ (3,452) Add interest on indebtedness .............. 16,906 20,446 29,040 26,665 24,194 11,801 12,236 Add amortization of debt expense ................... 510 695 1,079 1,216 1,737 766 1,072 Add estimated interest factor for rentals (a)..... 7,442 6,100 7,529 8,041 8,559 5,125 5,751 ---------- ---------- ---------- ---------- -------- --------- ---------- Earnings before equity in affiliates, income taxes and fixed charges.... $ 30,697 $ 44,430 $ 64,645 $ 40,080 $ 9,148 $ 17,405 $ 15,607 ========== ========== ========== ========== ======== ========= ========== Fixed charges: Interest on indebtedness..... $ 16,906 $ 20,446 $ 29,040 $ 26,665 $ 24,194 $ 11,801 $ 12,236 Amortization of debt expense ................... 510 695 1,079 1,216 1,737 766 1,072 Estimated interest factor for rentals (a)............ 7,442 6,100 7,529 8,041 8,559 5,125 5,751 ---------- ---------- ---------- ---------- -------- --------- ---------- $ 24,858 $ 27,241 $ 37,648 $ 35,922 $ 34,490 $ 17,692 $ 19,059 ========== ========== ========== ========== ======== ========= ========== Ratio of earnings to fixed charges ........................ 1.2 1.6 1.7 1.1 (b) (b) (b) PRO FORMA -------------------------------------------------- FISCAL YEAR ENDED FISCAL SIX MONTHS ENDED DECEMBER 29, 2002 JUNE 29, 2003 ----------------------- -------------------------- Earnings before equity in affiliates, income taxes and fixed charges: Income from continuing operations before income taxes .............. $ (32,177) $ (6,558) Add interest on indebtedness .............. 30,148 15,066 Add amortization of debt expense ................... 2,618 1,348 Add estimated interest factor for rentals (a)..... 8,559 5,751 ---------- ---------- Earnings before equity in affiliates, income taxes and fixed charges.... $ 9,148 $ 15,607 ========== ========== Fixed charges: Interest on indebtedness..... $ 30,148 $ 15,066 Amortization of debt expense ................... 2,618 1,348 Estimated interest factor for rentals (a)............ 8,559 5,751 ---------- ---------- $ 41,325 $ 22,165 ========== ========== Ratio of earnings to fixed charges ........................ (c) (c)
(a) One third of all rent expense is deemed representative of the interest factor. (b) Earnings were insufficient to cover fixed charges by $25.3 million for the fiscal year ended December 29, 2002, $0.3 million for the six months ended June 30, 2002 and $3.5 million for the fiscal six months ended June 29, 2003. (c) On a proforma basis, earnings were insufficient to cover fixed charges by $32.2 million for the fiscal year ended December 29, 2002 and by $6.6 million for the fiscal six months ended June 29, 2003. EX-21.1 20 k79382exv21w1.txt SUBSIDIARIES . . . EXHIBIT 21.1 LIST OF ACTIVE SUBSIDIARIES OF MSX INTERNATIONAL, INC. MSX International (Holdings), Inc. (Delaware) MSX International Services (Holdings), Inc. (Delaware) MSX International Canada Limited (Canada) MSX International (Thailand) Co., Ltd. (Thailand) MSX International European (Holdings), L.L.C. (Delaware) MSX International Netherlands (Holdings) C.V. (1) (Netherlands) MSX International Netherlands B.V. (Netherlands) MSX International Polska Sp.zo.o. (Poland) MSX International do Brasil Ltda. (Brazil) MSX International do Mexico, S.A. de C.V. (Mexico) MSX International Australia Pty Limited (Australia) MSX Services (Malaysia) Sdn. Bdh. (Malaysia) MSX International Sweden AB (Sweden) MSX International Holdings Italia S.r.l. (Italy) Satiz S.r.l. (Italy) Satiz do Brasil Ltda (Brazil) Satiz Poland Sp.zo.o. (Poland) MSX International TechServices, S.A. (Spain) MSX International Business Services France (France) MSX International Holdings Limited (UK) MSX Holding GmbH (Germany) MSX International GmbH (Germany) MSX International Engineering GmbH (Germany) CADFORM MSX Engineering GmbH (Germany) MSX International Limited (UK) MSX International Business Services, Inc. (Delaware) Creative Technology Services, L.L.C. (Michigan) MSX International Engineering Services, Inc. (Delaware) Pilot Computer Services, Incorporated (California) MegaTech Engineering, Inc. (Michigan) Chelsea Computer Consultants, Inc. (New York) Millennium Computer Systems, Inc. (New York) Management Resources International, Inc. (Michigan) MSX International Platform Services, LLC (2) (Michigan) Intranational Computer Consultants (California) Programming Management & Systems, Inc. (Missouri) MSX International Strategic Technology, Inc. (Michigan) MSX International Technology Services, Inc. (Delaware) MSX International DealerNet Services, Inc. (Delaware) MSX International DealerNet Services B.V. (Netherlands)

(1) Owned jointly by MSX International (Holdings), Inc., MSX International Services (Holdings), Inc., and MSX International European Holdings LLC. (2) Owned jointly by MSX International Business Services, Inc. (1%) and Management Resources International, Inc. (99%) EX-23.1 21 k79382exv23w1.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the use in this Registration Statement on Form S-4 of MSX International, Inc. of our report dated February 28, 2003, except for Note 19 as to which the date is September 12, 2003, relating to the financial statements of MSX International, Inc. and of our report dated February 28, 2003 relating to the financial statement schedule of MSX International, Inc., which appear in such Registration Statement. We also consent to the reference to us under the heading "Experts" in such Registration Statement. / s / PricewaterhouseCoopers LLP Detroit, Michigan September 26, 2003 EX-25.1 22 k79382exv25w1.txt STATEMENT OF ELIGIBILITY EXHIBIT 25.1 ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| --------------------------- BNY MIDWEST TRUST COMPANY (formerly known as CTC Illinois Trust Company) (Exact name of trustee as specified in its charter) Illinois 36-3800435 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 2 North LaSalle Street Suite 1020 Chicago, Illinois 60602 (Address of principal executive offices) (Zip code) --------------------------- MSX International, Inc. (Exact name of obligor as specified in its charter) Delaware 38-3323099 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 22355 West Eleven Mile Road Southfield, Michigan 48034 (Address of principal executive offices) (Zip code) MSX International Limited (Exact name of obligor as specified in its charter) England and Wales Not Applicable (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Endeavour Drive Festival Business Park Basildon, Essex England SS14 3WF (Address of principal executive offices) (Zip code) MSX International (Holdings), Inc. (Exact name of obligor as specified in its charter) Delaware 38-3325699 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) MSX International Services (Holdings), Inc. (Exact name of obligor as specified in its charter) Delaware 38-3516524 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) MSX International European (Holdings), L.L.C. (Exact name of obligor as specified in its charter) Delaware 38-3569668 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) MSX International DealerNet Services, Inc. (Exact name of obligor as specified in its charter) Delaware 38-3491066 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) MSX International Business Services, Inc. (Exact name of obligor as specified in its charter) Delaware 38-3323109 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Creative Technology Services, L.L.C. (Exact name of obligor as specified in its charter) Michigan 38-3740896 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) -2- MSX International Technology Services, Inc. (Exact name of obligor as specified in its charter) Delaware 38-2703800 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) MSX International Engineering Services, Inc. (Exact name of obligor as specified in its charter) Delaware 38-3323110 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Intranational Computer Consultants (Exact name of obligor as specified in its charter) California 68-0089953 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Programming Management & Systems, Inc. (Exact name of obligor as specified in its charter) Missouri 43-1334777 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Chelsea Computer Consultants, Inc. (Exact name of obligor as specified in its charter) New York 13-3722545 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Millennium Computer Systems, Inc. (Exact name of obligor as specified in its charter) New York 13-3917112 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Management Resources International, Inc. (Exact name of obligor as specified in its charter) Michigan 31-1124522 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) -3- Pilot Computer Services, Incorporated (Exact name of obligor as specified in its charter) California 68-0270013 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) MSX International Platform Services, LLC (Exact name of obligor as specified in its charter) Michigan 38-3629457 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) MegaTech Engineering, Inc. (Exact name of obligor as specified in its charter) Michigan 38-2608104 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) MSX International Strategic Technology, Inc. (Exact name of obligor as specified in its charter) Michigan 38-3625802 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) c/o MSX International, Inc. 22355 West Eleven Mile Road Southfield, Michigan 48034 (Address of principal executive offices) (Zip code) 11% Senior Secured Units due 2007 (Title of the indenture securities) ================================================================================ -4- 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
- ----------------------------------------------------------------------------------------- Name Address - ----------------------------------------------------------------------------------------- Office of Banks & Trust Companies of the State 500 E. Monroe Street of Illinois Springfield, Illinois 62701-1532 Federal Reserve Bank of Chicago 230 S. LaSalle Street Chicago, Illinois 60603
(b) Whether it is authorized to exercise corporate trust powers. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(d). 1. A copy of Articles of Incorporation of BNY Midwest Trust Company (formerly CTC Illinois Trust Company, formerly Continental Trust Company) as now in effect. (Exhibit 1 to Form T-1 filed with the Registration Statement No. 333-47688.) 2,3. A copy of the Certificate of Authority of the Trustee as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 2 to Form T-1 filed with the Registration Statement No. 333-47688.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with the Registration Statement No. 333-47688.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with the Registration Statement No. 333-47688.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. -5- SIGNATURE Pursuant to the requirements of the Act, the Trustee, BNY Midwest Trust Company, a corporation organized and existing under the laws of the State of Illinois, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of Chicago, and State of Illinois, on the 24th day of September, 2003. BNY Midwest Trust Company By: /S/ D. DONOVAN ---------------------------------- Name: D. DONOVAN Title: ASSISTANT VICE PRESIDENT -6- OFFICE OF BANKS AND REAL ESTATE BUREAU OF BANKS AND TRUST COMPANIES CONSOLIDATED REPORT OF CONDITION OF BNY MIDWEST TRUST COMPANY 2 NORTH LASALLE STREET SUITE 1020 CHICAGO, ILLINOIS 60602 Including the institution's domestic and foreign subsidiaries completed as of the close of business on June 30, 2003, submitted in response to the call of the Office of Banks and Real Estate of the State of Illinois.
ASSETS THOUSANDS OF DOLLARS ------ -------------------- 1. Cash and Due from Depository Institutions.............. 28,746 2. U.S. Treasury Securities............................... - 0 - 3. Obligations of States and Political Subdivisions....... - 0 - 4. Other Bonds, Notes and Debentures...................... - 0 - 5. Corporate Stock........................................ - 0 - 6. Trust Company Premises, Furniture, Fixtures and Other Assets Representing Trust Company Premises............. 831 7. Leases and Lease Financing Receivables................. - 0 - 8. Accounts Receivable.................................... 4,538 9. Other Assets........................................... (Itemize amounts greater than 15% of Line 9) 86,881 GOODWILL ...................................... 86,813 10. TOTAL ASSETS........................................... 120,996
Page 1 of 3 OFFICE OF BANKS AND REAL ESTATE BUREAU OF BANKS AND TRUST COMPANIES CONSOLIDATED REPORT OF CONDITION OF BNY MIDWEST TRUST COMPANY 2 NORTH LASALLE STREET SUITE 1020 CHICAGO, ILLINOIS 60602
LIABILITIES THOUSANDS OF DOLLARS ----------- -------------------- 11. Accounts Payable....................................... 14 12. Taxes Payable.......................................... - 0 - 13. Other Liabilities for Borrowed Money................... 25,425 14. Other Liabilities...................................... (Itemize amounts greater than 15% of Line 14) 9,480 Taxes Payable to Parent Company................ 5,181 Reserve for Taxes.............................. 3,991 15. TOTAL LIABILITIES 34,919 EQUITY CAPITAL -------------- 16. Preferred Stock........................................ - 0 - 17. Common Stock........................................... 2,000 18. Surplus................................................ 62,130 19. Reserve for Operating Expenses......................... - 0 - 20. Retained Earnings (Loss)............................... 21,947 21. TOTAL EQUITY CAPITAL................................... 86,077 22. TOTAL LIABILITIES AND EQUITY CAPITAL................... 120,996
Page 2 of 3 I, Keith A. Mica, Vice President --------------------------------------------------------------------------- (Name and Title of Officer Authorized to Sign Report) of BNY Midwest Trust Company certify that the information contained in this statement is accurate to the best of my knowledge and belief. I understand that submission of false information with the intention to deceive the Commissioner or his Administrative officers is a felony. /s/ Keith A. Mica -------------------------------------------------- (Signature of Officer Authorized to Sign Report) Sworn to and subscribed before me this 29th day of July , 2003. My Commission expires May 15, 2007. /s/ Joseph A. Giacobino, Notary Public ------------------------- (Notary Seal) Person to whom Supervisory Staff should direct questions concerning this report. Christine Anderson (212) 437-5984 --------------------------------- ------------------------------------ Name Telephone Number (Extension) Page 3 of 3 EX-99.1 23 k79382exv99w1.htm FORM OF LETTER OF TRANSMITTAL exv99w1

~~THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2003,~~


Delaware	7380	38-3323099
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)


England and Wales	7380	Not Applicable
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)






Title of each Class of	Amount to be	Proposed Maximum	Proposed Maximum	Amount of
Securities to be Registered	Registered	Offering Price Per Unit	Aggregate Offering Price(2)	Registration Fee(3)


11% Senior Secured Units due 2007(1)	75,500	$1,000	$75,500,000	$6,108

11% Senior Secured Notes due 2007 of MSX International, Inc.(3)	N/A	—	—	—

11% Senior Secured Notes due 2007 of MSX International Limited(3)	N/A	—	—	—

Guarantees(3)	N/A	—	—	—


TABLE OF ADDITIONAL REGISTRANTS
PROSPECTUS SUMMARY
The Exchange Offer
Summary of the Exchange Offer
Consequences of Exchanging Old Units Pursuant to the Exchange Offer
The New Units
RISK FACTORS
USE OF PROCEEDS
CAPITALIZATION
SELECTED HISTORICAL FINANCIAL DATA
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS
MANAGEMENT
PRINCIPAL STOCKHOLDERS
DESCRIPTION OF CAPITAL STOCK
RELATED PARTY TRANSACTIONS
DESCRIPTION OF CERTAIN INDEBTEDNESS
THE EXCHANGE OFFER
DESCRIPTION OF THE NEW UNITS
DESCRIPTION OF THE NEW NOTES
CERTAIN TAX CONSIDERATIONS
CERTAIN UNITED KINGDOM TAX CONSEQUENCES
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
WHERE YOU CAN FIND MORE INFORMATION
INCORPORATION OF DOCUMENTS BY REFERENCE
SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES
LISTING AND GENERAL INFORMATION
CONSOLIDATED BALANCE SHEETS as of December 29, 2002 and June 29, 2003
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) for the fiscal quarters and fiscal six months ended June 30, 2002 and June 29, 2003
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) for the fiscal six months ended June 30, 2002 and June 29, 2003
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
CONDENSED CONSOLIDATING BALANCE SHEET as of December 29, 2002
CONDENSED CONSOLIDATING BALANCE SHEET as of June 29, 2003
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS For the fiscal quarters ended June 30, 2002 and June 29, 2003
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS For the fiscal six months ended June 30, 2002 and June 29, 2003
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS for the six months ended June 30, 2002
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS for the six months ended June 29, 2003
CONDENSED CONSOLIDATING BALANCE SHEET as of December 29, 2002
CONDENSED CONSOLIDATING BALANCE SHEET as of June 29, 2003
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS For the fiscal quarters ended June 30, 2002 and June 29, 2003
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS For the fiscal six months ended June 30, 2002 and June 29, 2003
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS for the six months ended June 30, 2002
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS for the six months ended June 29, 2003
CONDENSED CONSOLIDATING BALANCE SHEET as of December 29, 2002
CONDENSED CONSOLIDATING BALANCE SHEET as of June 29, 2003
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS For the fiscal quarters ended June 30, 2002 and June 29, 2003
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS For the fiscal six months ended June 30, 2002 and June 29, 2003
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS for the six months ended June 30, 2002
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS for the six months ended June 29, 2003
REPORT OF INDEPENDENT ACCOUNTANTS
CONSOLIDATED BALANCE SHEETS as of December 30, 2001 and December 29, 2002
CONSOLIDATED STATEMENTS OF OPERATIONS for the three fiscal years ended December 29, 2002
CONSOLIDATED STATEMENTS OF CASH FLOWS for the three fiscal years ended December 29, 2002
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT for the three fiscal years ended December 29, 2002
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS for the three fiscal years ended December 29, 2002
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS for the fiscal year ended December 31, 2000
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS for the three fiscal years ended December 29, 2002
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS for the fiscal year ended December 31, 2000
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS for the three fiscal years ended December 29, 2002
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS for the fiscal year ended December 31, 2000
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS
SIGNATURES
SIGNATURES
SIGNATURES
SIGNATURES
Amended Memorandum of Association of MSX Inter Ltd
Amended Articles of Association of MSX Inter Ltd
Indenture Dated as of August 1, 2003
Form of New Units
Registration Agreement
Opinion of Dechert LLP, Philadelphia, Pennsylvania
Opinion of Dechert, London, England
Amended and Restated Credit Agreement
Amended and Restated 4th Secured Term Loan Agrmt.
Third Secured Term Loan Agreement
Warrant Purchase Agreement
Purchase Agreement Dated July 25, 2003
Amendment No. 1 to Purchase Agreement 08/01/2003
Amend. No. 1 to Amended/Restated Stockholders' Agm
Amend. No. 2 to Amended/Restated Stockholders' Agm
Amend. No. 1 to Amended/Restated Registration
Computation of Ratio of Earnings to Fixed Charges
Subsidiaries
Consent of PricewaterhouseCoopers LLP
Statement of Eligibility
Form of Letter of Transmittal
Form of Notice of Guaranteed Delivery
Letter to Holders of 11% Senior Secured Units
Letter to Brokers, Dealers, Commercial Banks
Letter to Clients-Offer for all Outstanding Units
Guidelines for Certification of Taxpayers ID


	Page

PROSPECTUS SUMMARY		1
RISK FACTORS		17
USE OF PROCEEDS		29
CAPITALIZATION		30
SELECTED HISTORICAL FINANCIAL DATA		31
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS		34
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		39
BUSINESS		52
MANAGEMENT		62
PRINCIPAL STOCKHOLDERS		67
DESCRIPTION OF CAPITAL STOCK		68
RELATED PARTY TRANSACTIONS		70
DESCRIPTION OF CERTAIN INDEBTEDNESS		73
THE EXCHANGE OFFER		75
DESCRIPTION OF THE NEW UNITS		85
DESCRIPTION OF THE NEW NOTES		85
CERTAIN TAX CONSIDERATIONS		132
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS		132
CERTAIN UNITED KINGDOM TAX CONSEQUENCES		135
PLAN OF DISTRIBUTION		137
LEGAL MATTERS		139
EXPERTS		139
WHERE YOU CAN FIND MORE INFORMATION		139
INCORPORATION OF DOCUMENTS BY REFERENCE		139
SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES		140
LISTING AND GENERAL INFORMATION		140
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		F-1


					Primary
	Jurisdiction of				Industrial
	Incorporation or		IRS Employer		Classification
Exact Name of Additional Registrants	Organization		Identification Number		Number

MSX International (Holdings), Inc.		Delaware		38-3325699		7380
MSX International Services (Holdings), Inc.		Delaware		38-3516524		7380
MSX International European (Holdings), L.L.C.		Delaware		38-3569668		7380
MSX International DealerNet Services, Inc.		Delaware		38-3491066		7380
MSX International Business Services, Inc.		Delaware		38-3323109		7380
Creative Technology Services, L.L.C.		Michigan		38-3740896		7380
MSX International Technology Services, Inc.		Delaware		38-2703800		7380
MSX International Engineering Services, Inc.		Delaware		38-3323110		7380
Intranational Computer Consultants		California		68-0089953		7380
Programming Management & Systems, Inc.		Missouri		43-1334777		7380
Chelsea Computer Consultants, Inc.		New York		13-3722545		7380
Millennium Computer Systems, Inc.		New York		13-3917112		7380
Management Resources International, Inc.		Michigan		31-1124522		7380
Pilot Computer Services, Incorporated		California		68-0270013		7380
MSX International Platform Services, LLC		Michigan		38-3629457		7380
MegaTech Engineering, Inc.		Michigan		38-2608104		7380
MSX International Strategic Technology, Inc.		Michigan		38-3625802		7380


New Units Offered		75,500 new units, each unit consisting of:

		$860 principal amount of 11% Senior Secured Notes due 2007 of MSXI, referred to as the new US notes; and

		$140 principal amount of 11% Senior Secured Notes due 2007 of MSXI Limited, referred to as the new UK notes.

		The issuance of the new units will be registered under the Securities Act. The terms of the new units and old units are identical in all material respects, except for transfer restrictions, registration rights relating to the old units and certain provisions relating to increased interest rates in connection with the old units under circumstances relating to the timing of the exchange offer. You are urged to read the discussions under the heading “The New Units” in this summary for further information regarding the new units.

The Exchange Offer		We are offering the new units to you in exchange for a like number of old units. The old units may be exchanged only in integral multiples of 1,000. We intend by the issuance of the new units to satisfy our obligations contained in the registration rights agreement. After the exchange offer is complete, you will no longer be entitled to any exchange or registration with respect to your old units. In this prospectus, the term “exchange offer” means this offer to exchange new units for old units in accordance with the terms set forth in this prospectus and the accompanying letter of transmittal.

Expiration Date; Withdrawal of Tender		The exchange offer will expire at 5:00 p.m., New York City time, on , 2003, or such later date and time to which it may be extended by us. The tender of old units pursuant to the exchange offer may be withdrawn at any time prior to the expiration date of the exchange offer. Any old units not accepted for exchange for any reason will be returned without expense to the tendering holder thereof promptly after the expiration or termination of the exchange offer.

Conditions to the Exchange Offer		Our obligation to accept for exchange, or to issue new units in exchange for, any old units is subject to customary conditions relating to compliance with any applicable law or any applicable interpretation by the staff of the Securities and Exchange Commission, the receipt of any applicable governmental


Issuers		MSX International, Inc. and MSX International Limited.

Securities Offered		75,500 units, each new unit consisting of $860 principal amount of 11% senior secured notes due 2007 of MSX International, Inc. and $140 principal amount of 11% senior secured notes due 2007 of MSX International Limited.

Maturity		October 15, 2007.

Interest Rate and Payment Dates		Each issuer will pay interest on its new notes at an annual rate of 11%. Each issuer will make interest payments semi-annually on each February 1 and August 1, beginning on February 1, 2004.

Use of Proceeds		The new units issued in connection with the exchange offer are only being issued in exchange for your old units. We will not receive any cash proceeds from the issuance of the new units pursuant to the exchange offer. All old units accepted by us in this exchange offer will be cancelled.

Separation Events		The new notes of each issuer will not trade separately unless an event of default on the new notes has occurred, a tax redemption of the new notes issued by MSX International Limited related to certain changes affecting withholding taxes has occurred, or a change of control of MSX International Limited has occurred.

Ranking		The new notes of each issuer will be senior secured obligations of the issuer and will rank equal in right of payment with any of the other senior indebtedness of that issuer, including indebtedness under our senior credit facility. The guarantees of the new notes issued by MSXI by its domestic restricted subsidiaries will be senior secured obligations and will rank equal in right of payment with all of their respective existing and future senior indebtedness. The guarantees of the new notes issued by MSXI Limited by MSXI and its domestic restricted subsidiaries will be senior secured obligations and will rank equal in right of payment with all of their respective existing and future senior indebtedness.

Guarantees		All of the existing and future domestic restricted subsidiaries of MSXI will guarantee the new notes of MSXI on a senior secured basis. The new notes issued by MSXI Limited will be guaranteed by MSXI and its existing and future domestic restricted subsidiaries. If either issuer is unable to make payments on the new notes when they are due, the subsidiary guarantors of MSXI will be obligated to make them instead. If MSXI Limited is unable to make payments on its new notes when they are due, MSXI will be obligated to make them instead.


Security Interest		The new notes of MSXI and related guarantees will be secured by substantially all of the assets of MSXI and the assets of its domestic restricted subsidiaries. The new notes of MSXI Limited and related guarantees will be secured by the accounts receivable of MSXI Limited and substantially all of the assets of MSXI and the assets of its domestic restricted subsidiaries. Pursuant to the terms of an intercreditor agreement, the security interests securing each of the new notes issued by MSXI and MSXI Limited and the guarantees made by MSXI and its domestic restricted subsidiaries will be subject to liens securing our senior credit facility under which we have up to $40.0 million of availability, plus an additional $5.0 million for letters of credit.

Optional Make-Whole Redemption		The issuers may, at their option, redeem some or all of their new notes at any time prior to August 1, 2005 by paying the greater of (i) 100% of the aggregate principal amount of their new notes and (ii) the sum of the present values of 105.5% of the aggregate principal amount of their new notes plus scheduled interest payments on the new notes through and including August 1, 2005, discounted to the redemption date on a semi-annual basis at the adjusted treasury rate plus 50 basis points, plus accrued and unpaid interest and all additional amounts on the new notes issued by MSXI Limited which will become due as a result of redemption or otherwise in the event of certain changes affecting U.K. withholding taxes, to the redemption date. The foregoing optional redemption of the new notes shall include both new US notes and new UK notes on a pro rata basis based upon the aggregate principal amount of new notes outstanding at the time of redemption, unless a change of control of MSXI Limited has occurred. In the event of a change of control of MSXI Limited, the foregoing optional redemption of the new notes shall include only the new US notes.

Optional Redemption		On or after August 1, 2005, the issuers may, at their option, redeem all or a portion of their new notes at a redemption price (expressed in percentages of the principal amount), plus accrued and unpaid interest and all additional amounts on the new notes issued by MSXI Limited which will become due as a result of redemption or otherwise in the event of certain changes affecting U.K. withholding taxes, if any, to the redemption date:


For the Period Below	Percentage

On or after August 1, 2005		105.500%
On or after February 1, 2006		102.750%
On or after August 1, 2006 and thereafter		100.000%


Equity Offering Optional Redemption		Prior to August 1, 2005, the issuers may redeem on one or more occasions up to 35% in the aggregate of the principal amount of their new notes originally issued at 111.0% of the aggregate principal amount of the new notes being redeemed, plus accrued and unpaid interest and all additional amounts on the new notes issued by MSXI Limited which will become due as a result of redemption or otherwise in the event of certain changes affecting U.K. withholding taxes, if any, to the redemption date with the net cash proceeds realized from certain equity offerings by MSXI, provided at least 65% of the aggregate principal amount of the amount of their new notes originally issued in the offering remains outstanding after giving effect to each such redemption. The foregoing optional redemption of the new notes shall include both new US notes and new UK notes on a pro rata basis based upon the aggregate principal amount of new notes outstanding at the time of redemption, unless a change of control of MSXI Limited has occurred. In the event of a change of control of MSXI Limited, the foregoing optional redemption of the new notes shall include only the new US notes.

Tax Redemption		MSXI Limited may also redeem its new notes in whole, and not in part, at 100% of their principal amount plus accrued and unpaid interest if any, to the redemption date, in the event of changes affecting the withholding taxes described below in “Description of the New Notes.”

Change of Control		If MSXI experiences a change of control, the issuers must give holders of the new notes the opportunity to sell to them all or a portion of their new notes at 101% of the aggregate principal amount thereof, plus accrued and unpaid interest and all additional amounts on the new notes issued by MSXI Limited which will become due as a result of redemption or otherwise in the event of certain changes affecting U.K. withholding taxes, if any, to the date of purchase. Any such repurchase of the new notes shall include both new US notes and new UK notes on a pro rata basis based upon the aggregate principal amount of the new notes outstanding at the time of such repurchase, unless a change of control of MSXI Limited has occurred. If MSXI Limited experiences a change in control, it may, at its option at any time, redeem its new notes in whole, and not in part, at the optional redemption prices otherwise applicable on the redemption date. If MSXI Limited has not delivered a notice of redemption within 30 days following a change in control, it shall be required to commence an offer to purchase its new notes on the same terms and conditions that apply to it in the event of a change in control of MSXI; provided, that at any time prior to the consummation of the offer to purchase its new notes, MSXI Limited may deliver an optional redemption notice to redeem all of its notes in lieu of completing the offer to purchase.

Asset Sale Offers		If MSXI and its restricted subsidiaries sell assets and do not reinvest the proceeds from the sale of assets in their business, the issuers may have to offer to use the proceeds to repurchase new notes at 100% of their aggregate principal amount, plus



		Fiscal Year							Fiscal Six Months Ended

		2000		2001		2002			June 30, 2002			June 29, 2003


		(dollars in thousands)
Results of Operations Data:
	Net sales	$	1,035,223	$	929,257	$	807,433		$	417,614		$	369,086
	Gross profit		145,937		120,469		100,107			53,254			43,278
	Operating income		57,116		32,039		589			12,280			9,856
	Income (loss) before cumulative effect of accounting change		14,891		503		(24,492	)		(2,570	)		(3,450	)

Other Financial Data:
	EBITDA, as defined(1)		85,293		59,944		35,770			23,196			21,077
	Depreciation and amortization		22,508		23,210		18,355			9,123			9,445
	Capital expenditures		18,168		19,243		9,003			6,723			3,754


		As of June 29, 2003

		(dollars in thousands)
Balance Sheet Data:
	Cash and cash equivalents	$	4,434
	Accounts receivable, net		215,151
	Total assets		430,516
	Total senior debt		103,880
	Total debt		233,880
	Mandatorily redeemable preferred stock		77,084
	Shareholders’ deficit		(111,523	)


	*If you fail to exchange your old units for new units, your old units will continue to be subject to restrictions on transfer.*


	*If an active trading market for the new units does not develop, the liquidity and value of the new units could be harmed.*


	*The issuance of the new units may adversely affect the market for the old units.*


	*You must comply with the exchange offer procedures in order to receive the new units.*


	*Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under the units and the note guarantees.*


	Restrictive covenants in the new senior credit facility, the indenture governing the new notes, the loan agreement governing the mezzanine term notes, the loan agreement governing the fourth lien term notes and our other current and future indebtedness could adversely restrict our operating flexibility.


	*MSXI’s holding company structure may impair the ability of holders to receive payment on the new notes.*


	*Despite current indebtedness levels and restrictive covenants, we may still be able to incur substantial additional debt, which could exacerbate the risks described above.*


	The value of the collateral securing the new notes may not be sufficient to satisfy our and our subsidiaries’ obligations under the new notes and the collateral securing the new notes may be reduced or diluted under certain circumstances.


	*Rights of holders of the new notes in the collateral may be adversely affected by the failure to perfect security interests in certain collateral acquired in the future.*


	The capital stock securing the new notes (other than the capital stock of MSX International (Holdings), Inc.) will automatically be released and no longer be deemed to be collateral to the extent the pledge of such capital stock would require the filing of separate financial statements for any of our subsidiaries with the SEC.


	The obligations of the new senior credit facility and any other obligations we may have to the lenders thereunder have a first priority security interest on the collateral used to secure the new notes, in addition to first priority security interest on collateral not used to secure the new notes, which may impair the ability of the noteholders to receive payments under the new notes.


	*Insolvency and administrative laws could adversely affect your ability to enforce your rights under the new notes, the new note guarantees and the security documents.*


	The new notes and the new note guarantees and the granting of the collateral securing the new note guarantees may be voidable, subordinated or limited in scope under laws governing fraudulent transfers and insolvency.


	*Our ability to purchase the new notes upon a change in control may be limited.*


	*Certain provisions of U.K. insolvency law may affect the priority of your right to receive payment on the new notes.*


	*The new UK notes are potentially subject to certain tax consequences under the laws of the United Kingdom.*


	*As a result of the new UK notes being issued, we may be subject to additional currency exchange risks.*


	*Our cost reduction efforts may be unsuccessful and we may incur unanticipated expenses that could have an adverse effect on our results of operations and financial condition.*


	*Termination of customer relationships may cause us to have uncovered financial commitments.*


	*The revenues and stability of our customer contracts fluctuates, which may adversely affect our operating results.*


	*Our principal shareholder may exercise control over our operations.*