Document:

exv10w18

 

Exhibit 10.18

Execution Copy

       SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

          THIS
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as
of July 10, 2002
(this “Amendment”), is among MSX INTERNATIONAL, INC., a Delaware corporation (the “Company”), each of the Borrowing Subsidiaries (as defined below) of the Company party hereto (the Company and the Borrowing Subsidiaries may each be referred to as a “Borrower” and, collectively, as the “Borrowers”), the lenders party hereto (collectively, the “Lenders” and individually, a “Lender”), and BANK ONE, NA, a national banking association, as agent for the Lenders (in such capacity, the “Agent”).

RECITALS

          A.    The Borrowers, the Agent and the Lenders are parties to an Amended and Restated Credit Agreement dated as of November 30, 1999, as amended by a First Amendment to Amended and Restated Credit Agreement dated September 30, 2001 (the “Credit Agreement”).

          B.    The Borrowers have requested that the Agent and the Lenders waive compliance with certain provisions of the Credit Agreement and amend the Credit Agreement as set forth herein, and the Agent and the Lenders are willing to do so in accordance with the terms hereof.

TERMS

          In consideration of the premises and of the mutual agreements herein contained, the parties agree as follows:

          ARTICLE I. AMENDMENTS. Upon fulfillment of the conditions set forth in Article III hereof, the Credit Agreement shall be amended as follows:

          1.1    The definition of “Applicable Margin” in Section 1.1 is restated as follows:

          “Applicable Margin” shall mean, with respect to any Floating Rate Loan, Eurodollar Loan, Eurocurrency Loan, Letter of Credit fee under Section 2.3(b)(i) and facility fee under Section 2.3(a), as the case may be, the applicable percentage set forth in the applicable table below based upon the Total Leverage Ratio, as adjusted on each date a certificate is required to be delivered pursuant to Section 5.1(d)(ii) or (iii), and shall remain in effect until the next change to be effected pursuant to this definition, based upon the Total Leverage Ratio as of the last day of the most recently ended fiscal quarter, provided that (a) upon the occurrence and during the continuance of any Event of Default the Applicable Margin will be set at Level V, regardless of the actual Total Leverage Ratio, and (b) as of the Second Amendment Effective Date, the Applicable Margin shall be set at Level V and
may not be less than Level V until the Applicable Margin is adjusted based on the Total Leverage Ratio as of December 31, 2002.

 

	Level	Total	Facility	Floating	Eurodollar	Floating	Eurodollar	Floating	Eurodollar
	 	Leverage	Fee	Rate	Revolving	Rate Term	Term	Rate	Term
	 	Ratio	 	Revolving	Loan,	Loan A	Loan A	Term	Loan B
	 	 	 	Loan	Eurocurrency	 	 	Loan B	 
	 	 	 	 	Revolving	 	 	 	 
	 	 	 	 	Loan and	 	 	 	 
	 	 	 	 	Letter of	 	 	 	 
	 	 	 	 	Credit Fee	 	 	 	 
	I	£2.75:1	50 bps	37.5 bps	175 bps	100 bps	225 bps	275 bps	400 bps
	II	>2.75:1 but	62.5 bps	75 bps	212.5 bps	150 bps	275 bps	275 bps	400 bps
	 	£3.25:1	 	 	 	 	 	 	 
	III	<3.25 but	62.5 bps	125 bps	262.5 bps	200 bps	325 bps	275 bps	400 bps
	 	£3.75:1	 	 	 	 	 	 	 
	IV	>3.75 but	62.5 bps	150 bps	287.5 bps	225 bps	350 bps	300 bps	425 bps
	 	£4.25:1	 	 	 	 	 	 	 
	V	>4.25:1	75 bps	162.5 bps	300 bps	250 bps	375 bps	325 bps	450 bps

          1.2    The definition of “Fixed Charge Coverage Ratio” in Section 1.1 is amended by adding the following to the end thereof: “, provided that (i) for the fiscal quarter ending September 30, 2002, the Fixed Charge Coverage Ratio shall be calculated for the fiscal quarter then ending, (ii) for the fiscal quarter ending December 31, 2002, the Fixed Charge Coverage Ratio shall be calculated for the two consecutive fiscal quarters then ending, and (iii) for the fiscal quarter ending March 31, 2003, the Fixed Charge Coverage Ratio shall be calculated for the three consecutive fiscal quarters then ending, in each case taken as one accounting period.”

          1.3    The definitions of “EBITDA”, “Net Worth” and “Senior Debt” in Section 1.1 is restated as follows:

                    “EBITDA” shall mean, for any period, Net Income for such period, plus all amounts deducted in determining such Net Income on account of (a) Total Interest Expense, (b) income taxes (including the Michigan Single Business tax and the
Imposta Reginole Sulle Attivita Produttive in Italy),
(c) write-offs of goodwill in an aggregate amount not to exceed $35,000,000 to be taken after the Second Amendment Effective Date and relating to the goodwill booked as a result of Acquisitions consummated prior to the Second Amendment Effective Date, and (d) depreciation and amortization expense, all as determined for the Company and its Subsidiaries on a consolidated basis in accordance with generally accepted accounting principles.

                     “Net Worth” shall mean, as of any date, the amount of any capital stock paid in capital and similar equity accounts, including minority interests, but exclusive of any foreign currency translation adjustment account shown as a capital account of the Company and its Subsidiaries and exclusive of
any changes to Net Worth as a result of any write-offs of goodwill or intangible assets recognized solely due to a change Generally Accepted Accounting Principles occurring after the Effective Date or, without duplication, as a result of write-offs of goodwill in an aggregate amount not to exceed $35,000,000 to be taken after the Second Amendment Effective Date and relating to the goodwill

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booked as a result of Acquisitions consummated prior to the Second Amendment Effective Date, and minus, without duplication, the amounts of any promissory notes or other obligations owing by any employee or officer in connection with non-cash amounts advanced to such employees or officers for the purpose of purchasing Capital Stock of the Company as permitted pursuant to Section 5.2(l)(vi) which are shown as an asset of the Company and its Subsidiaries, all on a consolidated basis and in accordance with Generally Accepted Accounting Principles.

                    “Senior Debt” shall mean Total Debt minus any amount of Total Debt which constitutes Subordinated Debt or the Second Secured Term Loan.

          1.4    The definition of “Revolving Credit Commitment” in Section 1.1 is amended by adding the words “or as otherwise modified pursuant to the terms of this Agreement” to the end thereof.       

          1.5    The definition of “Total Interest Expense” in Section 1.1 is amended by adding the words “, 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 until on or after June 7, 2007” to the end of the parenthetical clause in such definition
..

          1.6    The following new definitions are added to Section 1.1 in appropriate alphabetical order:

                    “Earn Out Payments” is defined in Section 6.1(l).

                    “Second Amendment” shall mean the Second Amendment to this Agreement dated July __, 2002.

                    “Second Amendment Effective Date” shall mean the effective date of the Second Amendment.

                    “Second Secured Debt” shall mean the Second Secured Term Loan and all other obligations and liabilities owing pursuant to the Second Secured Term Loan Documents and any extensions, refinancings, renewals or refundings thereof and any increases in the amount thereof.

                    “Second Secured Term Loan” shall mean the term loan in the principal amount of up to $15,450,000 to be made under the Second Secured Term Loan Agreement.

                    “Second Secured Term Loan Agreement” shall mean the Second Secured Term Loan Agreement between the Company and the Second Secured Term Loan Lender dated as of the Second Secured Term Loan Effective Date, as amended or modified from time to time.

                    “Second Secured Term Loan Documents” shall mean the Second Secured Term Loan Agreement and all agreements, instruments and documents executed in connection therewith at any time.

                    “Second Secured Term Loan Effective Date” shall mean the date the Second Secured Term Loan is made.

                    “Second Secured Term Loan Intercreditor Agreement” shall mean the Intercreditor

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Agreement among the Company, the Guarantors, the Agent and the Second Secured Term Loan Lender dated as of the Second Secured Term Loan Effective Date, as amended or modified from time to time.

                    “Second Secured Term Loan Lender” shall mean CVC or an affiliate of CVC.

          1.7    Section 2.1(b)(i) is amended by (a) adding the following after the words “Eligible Currencies” in the fourth line thereof: “or such other currency agreed to by the Agent”, (b) restating the penultimate sentence as follows: “Each Swingline Loan shall bear interest at the Negotiated Rate and shall mature as agreed by the
Agent and such Borrower, any such maturity not to exceed the Termination Date, and may be advanced in any manner agreed to by the Agent and the Borrowers, including without limitation by the Agent crediting global multicurrency accounts of the Borrowers.”, and (c) adding the following to the end thereof: “With respect to any Swingline Loan denominated in any currency other than Dollars or an Eligible Currency, such Swingline Loan shall be redenominated in Dollars or an Eligible
Currency by the Agent prior to such Swingline Loan being refunded with a Revolving Credit Loan or any Revolving Credit Lender purchasing its participation in such Swingline Loan.”

          1.8    The following is added to the end of Section 2.2(a): “On the Second Amendment Effective Date the aggregate Revolving Credit Commitments shall be reduced from $100,000,000 to $85,000,000 and each Revolving Credit Lender’s Revolving Credit Commitment shall be amended on the Second Amendment Effective Date to equal the amount set forth for such
Lender on Schedule 2.2(a).”

          1.9    Reference in Section 3.1(i) to “Sections 3.1(d), (e) and (f)” shall be deleted and “Sections 3.1(d), (e), (f), (l) and (m)” shall be substituted in place thereof.

          1.10    Reference in Section 3.1(k) to “Section 3.1(g)” shall be deleted and “Section 3.1(i)” shall be substituted in place thereof.

          1.11    The following new Sections 3.1(l) and (m) are added:

          (l)  In addition to all payments of the Term Loans required hereunder, the Company shall prepay the Term Loans on the Second Secured Term Loan Effective Date in an amount equal to 100% of the Net Cash Proceeds of the Second Secured Term Loan. Subject to Section 3.1(i), such mandatory prepayment on the Term Loans shall be applied pro rata between the Term Loans and
shall be applied pro rata to all installments thereon. Such mandatory prepayment shall not be less than $15,000,000.

          (m)   In addition to all payments of the Term Loans required hereunder, the Company shall prepay the Term Loans by an amount equal to 100% of the Net Cash Proceeds from the incurrence of any Indebtedness in excess of $5,000,000 in the aggregate incurred pursuant to Section 5.2(f)(xiv), payable on each date such Indebtedness is incurred. Subject to Section 3.1(i), such mandatory
 prepayments on the Term Loans shall be applied pro rata between the Term Loans and shall be applied to installments thereon in the inverse order or maturities until paid in full.

          1.12    The following new Section 4.22 is added:

          4.22    Second Secured Debt Documents. As of the Second Secured Term Loan

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Effective Date, the outstanding principal balance of the Second Secured Debt will be not more
than $15,450,000 (which consists of the principal balance of $15,000,000 received by the Company and used as a prepayment under Section 3.1(l) and a
closing fee of not more than $450,000 added to the balance of the Second Secured Term Loan), and all agreements, instruments and documents executed or
delivered pursuant to or in connection with the Second
Secured Debt will have been delivered to the Agent on or before the Second Secured Term Loan Effective Date. The Second Secured Debt will be incurred in full compliance with the Senior Subordinated Debt Documents and will not cause any default thereunder. There will be 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 the
 obligation to pay principal and interest at final maturity, to pay the closing fee of not more than $450,000 in accordance with the Second Secured Debt Documents by having the fee added to the balance of the Second Secured Term Loan and to accrue (but not pay) interest prior to final maturity under the Second Secured Debt Documents (all of which shall have been delivered to the Agent on or before the Second Secured Term Loan Effective Date), there will be no obligation pursuant to any Second
Secured 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 Second Secured Debt, enforcement of the Second Secured Debt Documents and customary indemnities in loan documents. All representations and warranties of the Company and its Subsidiaries contained in any
 Second Secured Debt Document will be true and correct in all material respects.

          1.13    The following is added to the end of Section 5.1(e): “It is acknowledged and agreed that the Agent or any of its agents or representatives will conduct at least one such comprehensive field audit per fiscal year, and provide a summary of such field audit to the Lenders.”

          1.14    Sections 5.2 (b), (c), (d) and (e) are each restated as follows:

                     (b)   Total Leverage Ratio. Permit or suffer the Total Leverage Ratio to be greater than (i) 5.50 to 1.0 at any time from and including the last day of the second fiscal quarter of the 2002 fiscal year of the Company to but excluding the last day of the third fiscal quarter of the 2002 fiscal year of the Company,
 (ii) 5.75 to 1.0 at any time from and including the last day of the third fiscal quarter of the 2002 fiscal year of the Company to but excluding the last day of the 2002 fiscal year of the Company, (iii) 5.25 to 1.0 at any time from and including the last day of the 2002 fiscal year of the Company to but excluding the last day of the second fiscal quarter of the 2003 fiscal year of the Company, (iv) 4.75 to 1.0 at any time from and including the last day of the second fiscal quarter of the 2003 fiscal year
 of the Company to but excluding the last day of the 2003 fiscal year of the Company, (v) 4.50 to 1.0 at any time from and including the last day of the 2003 fiscal year of the Company to but excluding the last day of the first fiscal quarter of the 2004 fiscal year of the Company, or (vi) 4.00 to 1.0 at any time thereafter.

                     (c)   Fixed Charge Coverage Ratio. Permit or suffer the Fixed Charge Coverage Ratio to be less than (i) 0.925 to 1.0 as of the end of the third fiscal quarter of the 2002 fiscal year of the Company, (ii) 1.0 to 1.0 as of the end of any
fiscal quarter of the Company ending on or after the last day of the 2002 fiscal year of the Company but before the last day of the first fiscal quarter of the 2004 fiscal year of the Company, or (iii) 1.1 to 1.0
as of the end of any fiscal quarter of the Company thereafter.

             
        (d)   Senior Leverage Ratio. Permit or suffer the Senior Leverage Ratio to
be greater than (i) 2.50 to 1.0 at any time from and including the last day of the second fiscal quarter of the 2002 fiscal

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year of the Company to but excluding the last day of the third fiscal quarter of the 2002 fiscal year of the
Company, (ii) 2.75 to 1.0 at any time from and including the last day of the third fiscal quarter of the 2002 fiscal year of the Company to
 but excluding the last day of the 2002 fiscal year of the Company, or (iii) 2.50 to 1.0 at any time thereafter.

              
       (e)   Interest Coverage Ratio. Permit or suffer the Interest Coverage Ratio to be
less than (i) 1.75 to 1.0 as of the end of the second fiscal quarter of the 2002 fiscal year of the Company, (ii) 1.85 to 1.0 as of the end
of the third or fourth fiscal quarters of the 2002 fiscal year of the Company, (iii) 2.00 to
 1.0 as of the end of the first or second fiscal quarters of the 2003 fiscal year of the Company, (iv) 2.15 to 1.0 as of the end of the third
or fourth fiscal quarters of the 2003 fiscal year of the Company, (v) 2.25 as of the end of the first or second fiscal quarters of the 2004
fiscal year of the Company, or (vi) 2.50 to 1.0 as of the end of any fiscal quarter of the Company thereafter.

All financial covenants in Sections 5.2 (a), (b), (c), (d) and (e) shall be calculated on a pro forma basis as if the Second Secured Term Loan was incurred on the last day of the second fiscal quarter of the 2002 fiscal year of the Company and the proceeds thereof had been applied to the prepayment of the Term Loans on the last day of the second fiscal quarter of the 2002 fiscal year of the Company.

          1.15    Sections 5.2(f)(xii) is restated as follows: “[Intentionally deleted].” and Section 5.2(f)(xiii) is restated as follows: “(xiii) the Second Secured Term Loan in an aggregate principal amount not to exceed $15,450,000; and”.

          1.16   
 Section 5.2(g) is amended by re-designating clause 5.2(g)(xi) as 5.2(g)(xii) and adding the following new Section 5.1(g)(xi):

              
       (xi)   Second priority Liens in favor of the Second Secured Term Loan Lender on the assets of the Company and the Guarantors in which the Agent and the Lenders have a first priority Lien securing the Lender Indebtedness, which second priority Liens shall secure only the Second Secured Debt and be subject to the
Second Secured Term Loan Intercreditor Agreement; and

          1.17    Clause (x) of Section 5.2(h)(ii)(F) is restated as follows:

                     (x)   if the Total Leverage Ratio is not at least 0.25 below the level required under the Original 1999 Credit Agreement immediately before and after (on a pro forma basis acceptable to the Agent and supported by such certificates and opinions required by the Agent) such Acquisition,
then such Acquisition shall not be made; or

          1.18    Section 5.2(l)(x), (xi) and (xiii) are each restated as follows:

     (x)  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 other than (A) those investments, loans, advances and other transactions to any Subsidiary which is not a Guarantor described in Schedule 5.2(l)-2 hereto, having the same terms as existing on the date of the Second Amendment Effective Date, but no
 increase in the amount thereof, as reduced from time to time, shall be permitted; and (B) such other investments, loans and advances 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: (v) the terms and conditions thereof shall be reasonably satisfactory to the Agent, (w) no Unmatured Event or Event of Default shall exist or shall have occurred and be continuing,

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(x) 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, (y) after giving effect to such investment, loan or advance, the Company is able to borrow at least $15,000,000 in Revolving Credit Loans, and (z) 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 $15,000,000;

     (xi)  investments, loans and advances after the Effective Date of this Agreement in Unrestricted Subsidiaries in aggregate outstanding amount not exceeding $2,500,000;

     (iii) other investments after the Second Amendment Effective Date in an aggregate amount not exceeding $2,500,000 at any time outstanding.

          1.19    Section 5.2(q) is restated as follows:

          (q)      Payments and Modification of Debt. (i) make any optional payment, defeasance (whether a covenant defeasance, legal defeasance or other defeasance), prepayment or redemption of any of its or any of its Subsidiaries’ Subordinated Debt or Second Secured Debt, (ii) 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 Term Loan Document or any other instrument or agreement under which any of its Second Secured Debt is issued or created or otherwise related thereto or any Senior Subordinated Debt Document or any other instrument or agreement under which any of its Subordinated Debt is issued or created or otherwise related thereto, (iii) enter into any agreement or
 arrangement requiring any defeasance of any kind of any of its
Subordinated Debt or Second Secured Debt, or designate any
Indebtedness (other than the Lender Indebtedness) as “Designated
Senior Indebtedness” under the Senior Subordinated Debt Documents, or issue any security, instrument or other document evidencing any of the Subordinated Debt outstanding pursuant to any of the Senior Subordinated Debt Documents which is not a
“Security”
as defined in the Senior 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 Term Loan Documents delivered to the Lenders and approved by the Required Lenders and the Senior Subordinated Debt Documents) or other supplemental agreement with respect to any Second Secured Debt or Subordinated Debt
shall be deemed an amendment or modification thereof.

          1.20    Section 5.2(s) is restated as follows:

          (s)      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 of the Company, an amount in excess:

   (i)  $17,500,000 for the period of time consisting of the four consecutive fiscal quarters ending with the third fiscal quarter of the 2002 fiscal year of the Company, or

   (ii)  For any fiscal quarter of the Company ending after the third fiscal quarter of the 2002 fiscal year of the Company:

          (A)  if Total Leverage Ratio is greater than or equal to 4.25:1.0 for the immediately

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preceding fiscal quarter, an amount per fiscal quarter equal to the sum of (1) $4,000,000, (2) commencing with the fourth fiscal quarter of the 2002 fiscal year of the Company, the amount of Capital Expenditures allowed for the previous fiscal quarter under the foregoing clause
(1) minus the amount of actual Capital Expenditures for such previous fiscal quarter, and (3) the amount of cash proceeds of common equity or payment in kind junior subordinated, senior unsecured and/or senior junior secured debt (exclusive of the Second Secured Term Loan or any other debt incurred or equity issued if the proceeds thereof are required to be used to prepay the Term Loans) received by the Company during such fiscal quarter, in each case satisfactory in all respects to the Agent and the Required Lenders and only to the extent that the proceeds thereof are not required hereunder to be used to prepay Loans or fund Earn Out Payments; or

          (B)  if Total Leverage Ratio is less than 4.25:1.0 for the immediately preceding fiscal quarter, $25,000,000 for the period of time consisting of the four consecutive fiscal quarters ending with such fiscal quarter.

          1.21    Section 6.1(j) is amended by deleting the period at the end thereof and substituting ”; or “ in place thereof and the following new Sections 6.1(k), (l) and (m) are added thereafter:

          (k)      Second Secured Debt Documents. Any material provision of any Second Secured Debt Document or the Second Secured Term Loan Intercreditor Agreement shall at any time for any reason cease to be valid and binding and enforceable against any obligor thereunder, or the validity, binding effect or enforceability thereof shall be contested by the Second Secured
Term Loan Lender, the Company or any of its Subsidiaries or any other obligor shall deny that it has any or further liability or obligation thereunder, or any Second Secured Debt Document or the Second Secured Term Loan Intercreditor Agreement shall be terminated, invalidated or set aside, or be declared ineffective or inoperative or in any way cease to give or provide to the Lenders and the Agent the benefits purported to be created thereby in any material manner; or

          (l)      Earn Out Payments. The occurrence of any of the following with respect to any payments or transfers of any kind to be made on or after June 30, 2002 in connection with any Acquisition closed prior to June 30, 2002, 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 $15,000,000 in the aggregate,

   (ii)  the Total Leverage Ratio is not at least 0.25 below the level required under this Agreement immediately before and after (on a pro forma basis acceptable to the Agent) any Earn-Out Payment is made,

   (iii)  the Company is not able to borrow at least $20,000,000 of Revolving Credit Loans immediately before and after (on a pro forma basis acceptable to the Agent) any Earn-Out Payment is made, or

   (iv)  to the extent aggregate Earn Out Payments are greater than $10,000,000 (not to exceed $15,000,000) and the Company’s Total Leverage Ratio is greater than 4.25:1.0 before and after giving effect to any Earn Out Payment (on a pro forma basis acceptable to the Agent), at least half of such Earn Out Payment in excess of $10,000,000 is not made with the proceeds of common equity or payment in kind junior subordinated,
 senior unsecured and/or senior junior secured debt (exclusive of the Second Secured Term Loan), in each case satisfactory in all respects to the Agent and the Required Lenders (unless made

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with common equity or to the extent otherwise permitted hereunder) and only to the extent that the proceeds thereof are not required hereunder to be used to prepay Loans or used to increase the amount of allowable Capital Expenditures under Section 5.2(s)(ii)(A); or

          (m)      Second Secured Term Loan. The occurrence of any of the following with respect to the Secured Term Loan:

   (i)  the Second Secured Term Loan in the aggregate principal amount of at least $15,000,000 shall not be made by the Second Secured Term Loan Lender in cash to the Company on or before July 31, 2002, or the prepayment under Section 3.1(l) on the Second Secured Term Loan Effective Date shall be less than $15,000,000,

   (ii)  on or before the Second Secured Term Loan Effective Date, any Borrower, any Guarantor or the Second Secured Term Loan Lender shall not have signed the Second Secured Term Loan Intercreditor Agreement, or such Second Secured Term Loan Intercreditor Agreement shall not be in form and substance acceptable to the Required Lenders,

   (iii) on or before the Second Secured Term Loan Effective Date, all Second Secured Term Loan Documents shall not have been signed and delivered to the Lenders or shall not be in form and substance acceptable to the Required Lenders, provided that it is agreed that all Second Secured Term Loan Documents shall be deemed to be in form and substance acceptable to the Required Lender if they satisfy each of
the following conditions:
(A) the first required principal payment of the Second Secured Term Loan shall be not earlier than June 7, 2007, (B) all interest on the Second Secured Term Loan shall be accrued and not paid until a date not earlier than June 7, 2007,
(C) the Second Secured Term
Loan may be secured by second priority Liens on the assets of the Company and the
Guarantors in which the Agent and the Lenders have first priority Liens securing the
Lender Indebtedness, which second priority Liens shall secure only the Second Secured
Debt and be subject to the Second Secured Term Loan Intercreditor Agreement, (D)
the only defaults with respect to the Second Secured Debt shall be bankruptcy defaults,
non-payment of the Second Secured Term Loan, a cross acceleration to the Senior Subordinated Notes and other defaults acceptable to the Required Lenders and the only covenants with respect to the Second Secured Debt shall be such covenants as are acceptable
to the Required Lenders, and (E) the terms of the Second Secured Term Loan Documents would not otherwise default or breach any terms of this Agreement.

         1.22    Schedules 5.2(f) and 5.2(l) attached hereto are substituted for Schedules 5.2(f) and 5.2(l), respectively, to the Credit Agreement.

         1.23    Schedules 2.2(a) and 5.2(l)-2 attached hereto are added as Schedules 2.2(a) and 5.2(l)-2, respectively, to the Credit Agreement.

ARTICLE II.  DEFAULT WAIVERS

          2.1    The Borrowers have informed the Lenders and the Agent that Events of Default have occurred as of June 30, 2002 under the Credit Agreement due to breaches of Sections 5.2(b), (c), (d) and (e) prior to giving effect to this Amendment (the “Existing Defaults”). Each Borrower acknowledges the occurrence of the Existing Defaults and the
continuation of such Existing Defaults through the date of this Amendment. As a result of the Existing Defaults, each Borrower acknowledges that the Lenders have the right to declare all Lender Indebtedness to be immediately due and payable.

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          2.2    Each Borrower has requested that the Lenders waive the Existing Defaults subject to the terms and conditions set forth herein. Pursuant to such request, the Lenders hereby waive the Existing Defaults that occurred prior to the effectiveness of this Amendment, provided that an Event of Default shall occur if the Borrowers breach
Sections 5.2(b), (d) or (e), as amended by this Amendment, as of June 30, 2002. The Lenders do not waive any other Event of Default
or Unmatured Event, including without limitation any Event of Default or Unmatured
Event caused by any breach of Sections 5.2(b), (c), (d) or (e) after the effectiveness of this Amendment or by any breach of Sections 5.2(b), (d) or (e) as of June 30, 2002 after the effectiveness of this Amendment. Each Borrower acknowledges and agrees that the waiver contained herein is a limited, specific and one-time waiver as described above. Such limited waiver shall not modify or waive any other term, covenant or agreement contained in any of the Loan Documents, and shall not be deemed to have prejudiced any present or future right or rights which the Agent or any Lender now has or may have.

          ARTICLE III. REPRESENTATIONS. Each Borrower represents and warrants to the Agent and the Lenders that:

          3.1    The execution, delivery and performance of this Amendment are within its powers, have been duly authorized and is not in contravention of any statute, law or regulation or of any terms of its Articles of Incorporation, By-laws or other organizational documents, or of any material agreement or undertaking to which it is a party or by which it is bound.

          3.2    This Amendment is the legal, valid and binding obligation of each Borrower, enforceable against each in accordance with the terms hereof.

          3.3    After giving effect to the amendments contained herein, the representations and warranties contained in Article IV of the Credit Agreement are true on and as of the date hereof with the same force and effect as if made on and as of the date hereof.

          3.4    After giving effect to the amendments and waivers contained herein, no Event of Default or Unmatured Event exists or has occurred and is continuing on the date hereof.

          ARTICLE IV.  CONDITIONS OF EFFECTIVENESS.

          4.1    This Amendment shall be effective as of the date hereof when each of the following conditions is satisfied:

          (a)    The Borrowers and the Required Lenders shall have signed this Amendment.

          (b)    The Guarantors shall have signed the consent and agreement to this Amendment.

          (c)    Each Borrower and Guarantor shall provide a certified resolution with respect to this Amendment satisfactory to the Agent.

          (d)    Each Borrower and Guarantor shall provide the written opinion of the Borrowers’ and Guarantors’ counsel in form and substance acceptable to the Agent.

-10-

 

          (e)    The Lenders shall have received a summary of the Agent’s collateral field audit.

          (f)    The Borrowers and the Guarantors shall have delivered to the Agent such other documents and satisfied such other conditions, if any, as reasonably requested by the Agent.

          4.2    If this Amendment is signed by the Required Revolving Credit Lenders, the Required Term Loan A Lenders and the Required Term Loan B Lenders, then the Lenders hereby agree to waive any prepayment required under Section 3.1(f) from the proceeds of common equity or payment in kind junior subordinated, senior unsecured and/or senior junior secured debt (exclusive of the
 Second Secured Term Loan) used to pay Earn Out Payments and avoid an Event of Default under Section 6.1(l), provided that no other Event of Default of Unmatured Event exists.

          ARTICLE V.   MISCELLANEOUS.

          5.1    On the date hereof, the Company shall pay to the Administrative Agent, for the pro rata benefit of each Lender based on such Lender’s Commitments (after giving effect to this Amendment, and each Lender’s Term Loan A Commitment and Term Loan B Commitment shall be deemed equal to the outstanding Term Loan A and Term Loan B, as the case may be,
of such Lender after giving pro forma effect to the payments to be made on the Second Secured Term Loan Effective Date from the proceeds of the Second Secured Term Loan), an amendment fee in an amount equal to 37.5 basis points on the aggregate amount of such Lender’s Commitments, which fees shall be distributed to the Lenders within two Business Days after such date. If the payments to be made on Term Loan A and Term Loan B on the Second Secured Term Loan Effective Date from the proceeds of the Second Secured Term
Loan are not made on or before July 31, 2002, the Company shall pay to the Administrative Agent, for the pro rata benefit of each Term
Loan A Lender and Term Loan B Lender based the amount of each such Lender’s Term Loan A and Term Loan B that should have been paid
on or before July 31, 2002 from the proceeds of the Second Secured Term Loan, an additional amendment fee in an amount equal to $56,250, which fee shall be paid by the Company on July 31, 2002 and distributed to
such Lenders within two Business Days after such date. The payment of such additional fee shall not avoid the occurrence of an Event of Default under Section 6.1(m) or any other Event of Default.

          5.2    References in the Credit Agreement or in any other Loan Document to the Credit Agreement shall be deemed to be references to the Credit Agreement as amended hereby and as further amended from time to time.

          5.3    The Borrower agrees to pay and to save the Agent harmless for the payment of all reasonable documented costs and expenses arising in connection with this Amendment, including the reasonable documented fees of counsel to the Agent in connection with preparing this Amendment and the related documents.

          5.4    The Borrower and each Guarantor acknowledge and agree that, to the best of their knowledge, the Agent and the Lenders have fully performed all of their obligations under all Loan Documents. The Borrower represents and warrants that it is not aware of any claims or causes of action against the Agent or any Lender.

          5.5    Except as expressly amended hereby, the Borrower and each Guarantor agree that the Loan Documents and all other documents and agreements executed by the Borrower in connection with the Credit Agreement in favor of the Agent or any Lender are ratified and confirmed, as amended hereby, and shall remain in full force and effect in accordance with
their terms and that they are not aware of any set

-11-

 

off, counterclaim, defense or other claim or dispute with respect to any of the foregoing. Terms used but not defined herein shall have the respective meanings ascribed thereto in the Credit Agreement. This Amendment may be signed upon any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument, and telecopied signatures shall be effective as originals.

-12-

 

          IN WITNESS WHEREOF, the parties signing this Amendment have caused this Amendment to be executed and delivered as of the day and year first above written.

	 	MSX INTERNATIONAL, INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Assistant Secretary
	 	 	 
	 	MSX INTERNATIONAL TECHNOLOGY
	 	SERVICES, INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MSX INTERNATIONAL SERVICES (HOLDINGS),
	 	INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MSX INTERNATIONAL (HOLDINGS), INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MSX INTERNATIONAL BUSINESS SERVICES,
	 	INC.
	 	 	 
	 	By:	    /s/Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MSX INTERNATIONAL ENGINEERING
	 	SERVICES, INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MSX INTERNATIONAL LIMITED
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Director
	 	 	 
	 	MSX INTERNATIONAL HOLDINGS LIMITED
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

-13-

 

	 	 	 
	 	 	    Carol Creel
	 	 	    Director
	 	 	 
	 	MSX INTERNATIONAL AUSTRALIA PTY LIMITED
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Director
	 	 	 
	 	MSX INTERNATIONAL NETHERLANDS B.V.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Director

-14-

 

	 	 	 
	 	BANK ONE, NA, as Agent and as a Lender
(Main Chicago Office)
	 	 	 
	 	By:	    /s/  Ric Huttenlocher
	 	 	

	 	 	    Ric Huttenlocher
	 	 	    Senior Vice President

-15-

 

	 	 	 
	 	COMERICA BANK
	 	 	 
	 	By:	    /s/  A.J. Anderson
	 	 	

	 	 	    A.J. Anderson
	 	 	    First Vice President

-16-

 

	 	 	 
	 	DRESDNER BANK AG, NEW YORK
AND GRAND CAYMAN BRANCHES
	 	 	 
	 	By:	 
	 	 	

-17-

 

	 	 	 
	 	MIZUHO CORPORATE BANK, L.T.D.
(F/K/A The Fuji Bank, Ltd.)
	 	 	 
	 	By:	    /s/  Nobuoki Koike
	 	 	

	 	 	    Nobuoki Koike
	 	 	    Senior Vice President

-18-

 

	 	 	 
	 	HUNTINGTON NATIONAL BANK
	 	 	 
	 	By:	    /s/  David F. Isler
	 	 	

	 	 	    David F. Isler
	 	 	    Senior Vice President

-19-

 

	 	 	 
	 	PNC BANK, N.A.
	 	 	 
	 	By:	    /s/  John. W. Stanescki
	 	 	

	 	 	    John. W. Stanescki
	 	 	    Vice President

-20-

 

	 	 	 
	 	NATIONAL CITY BANK
	 	 	 
	 	By:	    /s/  Kenneth M. Blackwell
	 	 	

	 	 	    Kenneth M. Blackwell
	 	 	    Assistant Vice President

-21-

 

	 	 	 
	 	STANDARD FEDERAL BANK
	 	 	 
	 	By:	    /s/  Greg Castle
	 	 	

	 	 	    Greg Castle
	 	 	    First Vice President

-22-

 

	 	 	 
	 	EATON VANCE SENIOR INCOME TRUST
By:  Eaton Vance Management as Investment Advisor
	 	 	 
	 	By:	    /s/  Scott H. Page
	 	 	

	 	 	    Scott H. Page
	 	 	    Vice President

-23-

 

	 	 	 
	 	EATON VANCE INSTITUTIONAL SENIOR LOAN FUND
By:  Eaton Vance Management Investment Advisor
	 	 	 
	 	By:	    /s/  Scott H. Page
	 	 	

	 	 	    Scott H. Page
	 	 	    Vice President

-24-

 

	 	 	 
	 	WACHOVIA BANK, N.A., FKA
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
	 	 	 
	 	By:	    /s/  Frederick E. Blumer
	 	 	

	 	 	    Frederick E. Blumer
	 	 	    Vice President

-25-

 

	 	 	 
	 	US BANK, N.A.
	 	 	 
	 	By:	    /s/  Scott A. Dvornik
	 	 	

	 	 	    Scott A. Dvornik
	 	 	    Vice President

-26-

 

	 	 	 
	 	OXFORD STRATEGIC INCOME FUND
By:  Eaton Vance Management as Investment Advisor
	 	 	 
	 	By:	    /s/  Scott H. Page
	 	 	

	 	 	    Scott H. Page
	 	 	    Vice President

-27-

 

	 	 	 
	 	SENIOR DEBT PORTFOLIO
By:  Boston Management and Research as Investment
Advisor
	 	 	 
	 	By:	    /s/  Scott H. Page
	 	 	

	 	 	    Scott H. Page
	 	 	    Vice President

-28-

 

	 	 	 
	 	TRANSAMERICA BUSINESS CREDIT
CORPORATION
(as successor to Transamerica Business
Credit Corporation)
	 	 	 
	 	By:	    /s/  Steve Goctschius
	 	 	

	 	 	    Steve Goctschius
	 	 	    Senior Vice President

-29-

 

	 	 	 
	 	DAVID L. BABSON AS COLLATERAL MANAGER
FOR:
APEX IDM I LTD.
	 	 	 
	 	By:	    /s/  Glenn Duffy
	 	 	

	 	 	    Glenn Duffy
	 	 	    Managing Director

-30-

 

CONSENT AND AGREEMENT

          As of the date and year first above written, each of the undersigned hereby:

          (a)      fully consents to the terms and provisions of the above Amendment and the consummation of the transactions contemplated thereby; and

          (b)      agrees that the Guaranty to which it is a party and each other Loan Document to which it is a party are hereby ratified and confirmed and shall remain in full force and effect, acknowledges and agrees that it has no setoff, counterclaim, defense or other claim or dispute with respect the Guaranty to which it is a party and each other Loan Document to which it is a party.

          (c)      represents and warrants to the Agent and the Lenders that the execution, delivery and performance of this Consent and Agreement, the Guaranty to which it is a party and each other Loan Document to which it is a party are within its powers, have been duly authorized and are not in contravention of any statute, law or regulation or of any terms of its organizational documents or of any material agreement or undertaking to which it is a party or by which it is bound, and this Consent and Agreement, the Guaranty to which it is a party and each other Loan Document to which it is a party are the legal, valid and binding obligations of it, enforceable against it in accordance with the terms hereof and thereof. Terms used but not defined herein shall have the respective meanings ascribed thereto in the Credit Agreement.

	 	MSX INTERNATIONAL TECHNOLOGY SERVICES,
INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MSX INTERNATIONAL SERVICES (HOLDINGS),
INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MSX INTERNATIONAL BUSINESS SERVICES, INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MSX INTERNATIONAL ENGINEERING SERVICES,
INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 

-31-

 

	 	MSX INTERNATIONAL (HOLDINGS), INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MEGATECH ENGINEERING, INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	CREATIVE TECHNOLOGY SERVICES, L.L.C.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	CHELSEA COMPUTER CONSULTANTS, INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MILLENNIUM COMPUTER SYSTEMS, INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MSX INTERNATIONAL, DEALERNET SERVICES,
INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MSX INTERNATIONAL EUROPEAN (HOLDINGS),
LLC
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	INTRANATIONAL COMPUTER CONSULTANTS
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 

-32-

 

	 	PROGRAMMING MANAGEMENT & SYSTEMS, INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MANAGEMENT RESOURCES INTERNATIONAL, INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	PILOT COMPUTER SERVICES, INCORPORATED
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MSX INTERNATIONAL STRATEGIC TECHNOLOGY, INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MSX INTERNATIONAL PLATFORM SERVICES,
LLC
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President
	 	 	 
	 	MEGATECH ACADEMY, INC.
	 	 	 
	 	By:	    /s/  Carol Creel
	 	 	

	 	 	    Carol Creel
	 	 	    Vice President

-33-

 

SCHEDULE 2.2(a)

Revised Revolving Credit Commitments

	Bank One, NA	$	16,999,999.02	20.0000	%
	 	 	 	 	 
	Comerica Bank	$	9,807,692.70	11.5385	%
	 	 	 	 	 
	Dresdner Bank AG, New	$	9,807,692.70	11.5385	%
	York And Grand Cayman	 	 	 	 
	Branches	 	 	 	 
	 	 	 	 	 
	First Union Bank of North	$	9,807,692.31	11.5385	%
	Carolina	 	 	 	 
	 	 	 	 	 
	Firstar Bank	$	8,173,076.92	9.6154	%
	 	 	 	 	 
	Huntington National Bank	$	13,076,922.75	15.3846	%
	 	 	 	 	 
	National City Bank	$	3,269,230.90	3.8462	%
	 	 	 	 	 
	PNC Bank, N.A.	$	4,250,000.00	5.0000	%
	 	 	 	 	 
	Standard Federal Bank	$	9,807,692.70	11.5385	%
	 	 	 	 	 
	                       Total	$	85,000,000.00	100.0000	%

-34-

 

SCHEDULE 5.2(f)
Second Amendment to Amended and Restated Credit Agreement

	I.	INDEBTEDNESS

	 	1.	Deutsche Bank standby letter of credit in an aggregate available amount of DM 300,000 to secure real estate lease commitments which have traditionally been supported by a DM 500,000 unsecured credit facility.

	 	 

	 	2.	See capital leases appearing in UCC search schedule included as an exhibit to the Amended and Restated Credit Agreement dated as of November 30, 1999.

	 	3.	Satiz S.p.A. has a financing agreement with the Fiat group factoring agent, Fidis S.p.A. The agreement provides for borrowings for general corporate purposes, up to 85% of eligible accounts receivable. Receivables from Fiat group companies are transferred from the customer to Fidis. At April 30, 2002, Satiz received advances pursuant to the agreement totaling approximately $3.4 million.

	 	4.	Quandocorre
Interinale S.p.A., (“QI”) has a line of credit for Lit. 2.8
billion (approximately $1.4 million) provided by Banca Commerciale Italiana S.,p.A. (“Comit”). The line of credit is open for indefinite duration, but the bank may terminate it with limited notice. QI also has modest informal overdraft and discounting facilities available to it through San Paolo IMI and Fidis. Total outstanding at April 30, 2002 from these
sources was about $1.2 million.

	 	5.	Effective in 2002, Cadform-MSX Engineering GmbH (“Cadform”) is now a wholly-owned subsidiary of MSX International Engineering GmbH (or “Engineering,” itself a recently-organized subsidiary of MSX International Holdings GmbH). Cadform and Engineering are in the final stages of a German statutory merger which, when completed, will result in Engineering as the surviving legal entity, thereby assuming ownership
of all of Cadform’s assets and obligations. Today, Cadform has a credit facility provided by BHF Bank. The facility allows borrowings up to
euro 4.7 million at fixed and floating rates. The existing facility expires July 31, 2002, and MSX International is in negotiations with BHF Bank to extend it for another year.

 

SCHEDULE 5.2(l)
Second Amendment to Amended and Restated Credit Agreement

	I.	EXISTING INVESTMENTS, LOANS, AND ADVANCES [Other than as listed on Schedule 5.2(l)-2]

	 	1.	Investment in joint ventures and other investments

	 	 	i   	In November 2000, the Company completed a minority investment and
entered into a technical cooperation agreement with Prototipo Holding B.V.
Prototipo has operations in Europe and Brazil and provides testing, prototyping, styling and other development services for transportation and industrial manufacturing customers. The investment totals approximately $1.9 million.

	 	 	 
	 	 	ii   	In March 2001, the Company acquired a 49% partnership interest in M.T.E. Groups, LLC, a minority-certified supplier of tooling, design, and prototype services, among other outsourcing services. The investment, totaling approximately $3.7 million, includes the cost to acquire the interest, related transaction costs, and the extension of trade credit on terms outside the ordinary course of business.

	 	 	 
	 	 	iii   	In
September 2001, the Company completed a strategic investment in Itiliti, Inc., concurrent with entering into a license agreement. Itiliti provides a standardized, web-enabled human capital management solution in a hosted environment. The investment totaled about $1.6 million.

	 	 	 
	 	 	iv   	The Company has modest cash investments totaling less than $200,000 in Home Network Online LLC and TechCentral LLC. The company also supports these strategic alliances with services that are performed in the ordinary course of business.

	 	2.	Non-material amounts held on a short-term basis for operating purposes in countries whose currencies are not otherwise defined as Eligible Currency under the Credit Agreement.

 

	SCHEDULE 5.2(l)-2
	Second Amendment to Amended and Restated Credit Agreement
	 	 	 	 	 	 
	 	 	 	 	 	 
	I.	EXISTING INVESTMENTS, LOANS AND ADVANCES IN AND TO ANY SUBSIDIARY WHICH IS NOT A GUARANTOR
	 	 	 	 	 	 
	 	Balances outstanding as of May 26, 2002, unless otherwise noted:	 	 	 
	 	 	 	 	 	 
	 	 	MSX International do Brasil (Brazil)	$	 3,110,000	(a)
	 	 	MSX International Canada Limited (Canada)	 	480,000	 
	 	 	MSX International SARL (France)	 	699,000	 
	 	 	MSX International GmbH (Germany)	 	5,595,000	 
	 	 	MSX International Holding GmbH (Germany)	 	19,319,000	(b)
	 	 	MSX International Holdings Italia S.r.l. (Italy)	 	21,420,000	 
	 	 	MSX International Korea Ltd. (Korea)	 	68,000	 
	 	 	MSX International de Mexico, S.A. de C.V. (Mexico)	 	3,120,000	 
	 	 	MSX International Dealer Net Services, B.V. (Netherlands)	 	1,560,000	 
	 	 	MSX International Polska Spzoo (Poland)	 	1,000	 
	 	 	MSX International TechServices, S.A. (Spain)	 	1,150,000	 
	 	 	MSX International Sweden AB (Sweden)	 	537,000	(c)
	 	 	 	 	
	 
	 	 	          Total	$	57,059,000	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	(a)Includes $400,000 invested during June 2002.	 	 	 
	 	 	 	 	 	 
	 	 	(b)Includes $139,000 in inter-company charges in June 2002 for expenses incurred related to the consolidation of Cadform-MSX Engineering into GmbH MSX International Engineering GmbH.
	 	 	 	 	 	 
	 	 	(c)Includes costs related to Draupner acquisition that were charged to the subsidiary in June 2002 and which are expected to be capitalized.exv10w19

 

Executive Version

Exhibit 10.19

SECOND SECURED TERM LOAN AGREEMENT

dated as of

July 31, 2002

MSX INTERNATIONAL, INC.

as Borrower

and

COURT SQUARE CAPITAL LIMITED

as Lender

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 	 	 	 	
	 
	ARTICLE 1 DEFINITIONS	 	 	1	 
	SECTION 1.1.	 	
Certain Defined Terms
	 	 	1	 
	SECTION 1.2.	 	
Other Definitions; Rules of Construction
	 	 	14	 
	SECTION 1.3.	 	
Accounting Terms and Determinations
	 	 	14	 
	 
	ARTICLE 2 AMOUNT AND TERMS OF NOTE AND LOAN	 	 	15	 
	SECTION 2.1.	 	
Loan and Note
	 	 	15	 
	SECTION 2.2.	 	
Interest on the Loan
	 	 	15	 
	SECTION 2.3.	 	
Prepayments and Payments
	 	 	16	 
	SECTION 2.4.	 	
Use of Proceeds
	 	 	18	 
	SECTION 2.5.	 	
Fees
	 	 	18	 
	SECTION 2.6.	 	
Guaranties; Security and Collateral
	 	 	19	 
	 
	ARTICLE 3 CONDITIONS TO LOAN	 	 	20	 
	SECTION 3.1.	 	
Conditions to Loan
	 	 	20	 
	 
	ARTICLE 4 REPRESENTATIONS AND WARRANTIES	 	 	23	 
	SECTION 4.1.	 	
Corporate Existence and Power
	 	 	23	 
	SECTION 4.2.	 	
Corporate Authority
	 	 	23	 
	SECTION 4.3.	 	
Binding Effect
	 	 	23	 
	SECTION 4.4.	 	
Subsidiaries
	 	 	23	 
	SECTION 4.5.	 	
Litigation
	 	 	24	 
	SECTION 4.6.	 	
Financial Condition
	 	 	24	 
	SECTION 4.7.	 	
Use of Loan
	 	 	24	 
	SECTION 4.8.	 	
Consents, Etc.
	 	 	25	 
	SECTION 4.9.	 	
Taxes
	 	 	25	 
	SECTION 4.10.	 	
Title to Properties
	 	 	25	 
	SECTION 4.11.	 	
ERISA
	 	 	25	 
	SECTION 4.12.	 	
Disclosure
	 	 	26	 
	SECTION 4.13.	 	
Environmental and Safety Matters
	 	 	26	 
	SECTION 4.14.	 	
No Default
	 	 	26	 
	SECTION 4.15.	 	
Intellectual Property
	 	 	26	 
	SECTION 4.16.	 	
Labor Matters
	 	 	26	 
	SECTION 4.17.	 	
Solvency
	 	 	27	 
	SECTION 4.18.	 	
Not an Investment Company; Other Regulations
	 	 	27	 
	SECTION 4.19.	 	
Senior Subordinated Debt Documents
	 	 	27	 
	SECTION 4.20.	 	
Documents Delivered
	 	 	28	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 	 	 	 	
	 
	ARTICLE 5 AFFIRMATIVE COVENANTS	 	 	28	 
	SECTION 5.1.	 	
Preservation of Corporate Existence, Etc.
	 	 	28	 
	SECTION 5.2.	 	
Compliance with Laws, Etc.
	 	 	29	 
	SECTION 5.3.	 	
Maintenance of Properties; Insurance
	 	 	29	 
	SECTION 5.4.	 	
Reporting Requirements
	 	 	29	 
	SECTION 5.5.	 	
Accounting, Access to Records, Books, Etc.
	 	 	31	 
	SECTION 5.6.	 	
Recording, Filing, Etc.
	 	 	32	 
	SECTION 5.7.	 	
Additional Security and Collateral
	 	 	32	 
	SECTION 5.8.	 	
Further Assurances
	 	 	33	 
	SECTION 5.9.	 	
Additional Covenants
	 	 	33	 
	 
	ARTICLE 6 NEGATIVE COVENANTS	 	 	33	 
	SECTION 6.1.	 	
Indebtedness
	 	 	33	 
	SECTION 6.2.	 	
Liens
	 	 	33	 
	SECTION 6.3.	 	
Mergers; Acquisitions; Etc.
	 	 	33	 
	SECTION 6.4.	 	
Disposition of Assets; Etc.
	 	 	34	 
	SECTION 6.5.	 	
Nature of Business
	 	 	34	 
	SECTION 6.6.	 	
Dividends and Other Restricted Payments
	 	 	34	 
	SECTION 6.7.	 	
Investments, Loans and Advances
	 	 	34	 
	SECTION 6.8.	 	
Transactions with Affiliates
	 	 	34	 
	SECTION 6.9.	 	
Inconsistent Agreements
	 	 	34	 
	SECTION 6.10.	 	
Negative Pledge Limitation
	 	 	35	 
	SECTION 6.11.	 	
Subsidiary Dividends
	 	 	35	 
	SECTION 6.12.	 	
Payments and Modification of Debt
	 	 	35	 
	SECTION 6.13.	 	
Financial Contracts
	 	 	36	 
	 
	ARTICLE 7 EVENTS OF DEFAULT	 	 	36	 
	SECTION 7.1.	 	
Failure To Make Payments When Due
	 	 	36	 
	SECTION 7.2.	 	
Default in Other Agreements
	 	 	36	 
	SECTION 7.3.	 	
Misrepresentation
	 	 	36	 
	SECTION 7.4.	 	
Breach of Certain Covenants and Agreements
	 	 	36	 
	SECTION 7.5.	 	
Judgments
	 	 	36	 
	SECTION 7.6.	 	
ERISA
	 	 	37	 
	SECTION 7.7.	 	
Insolvency, Etc.
	 	 	37	 
	SECTION 7.8.	 	
Other Documents
	 	 	37	 
	SECTION 7.9.	 	
Control
	 	 	38	 
	 
	ARTICLE 8 MISCELLANEOUS	 	 	39	 
	SECTION 8.1.	 	
Participations in Loan and Note
	 	 	39	 
	SECTION 8.2.	 	
Expenses
	 	 	40	 
	SECTION 8.3.	 	
Indemnity
	 	 	40	 
	SECTION 8.4.	 	
Amendments and Waivers
	 	 	41	 
	SECTION 8.5.	 	
Independence of Covenants
	 	 	41	 
	SECTION 8.6.	 	
Notices
	 	 	41	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 	 	 	 	
	 
	SECTION 8.7.	 	
Survival of Warranties and Certain Agreements
	 	 	43	 
	SECTION 8.8.	 	
Failure or Indulgence Not Waiver; Remedies Cumulative
	 	 	43	 
	SECTION 8.9.	 	
Severability
	 	 	44	 
	SECTION 8.10.	 	
Headings
	 	 	44	 
	SECTION 8.11.	 	
Applicable Law
	 	 	44	 
	SECTION 8.12.	 	
Successors and Assigns; Subsequent Holders of Notes
	 	 	44	 
	SECTION 8.13.	 	
Consent to Jurisdiction and Service of Process
	 	 	44	 
	SECTION 8.14.	 	
Waiver of Jury Trial
	 	 	45	 
	SECTION 8.15.	 	
Counterparts; Effectiveness
	 	 	45	 
	SECTION 8.16.	 	
Entirety
	 	 	45	 
	SECTION 8.17.	 	
Confidentiality
	 	 	45	 
	SECTION 8.18.	 	
Acknowledgments
	 	 	46	 

Exhibits and Schedules

	 	 	 	 	 
	Exhibit A	 	
-
	 	Form of Environmental Certificate
	Exhibit B	 	
-
	 	Form of Guaranty
	Exhibit C	 	
-
	 	Form of Note
	Exhibit D-1	 	
-
	 	Form of Company Pledge Agreement
	Exhibit D-2	 	
-
	 	Form of Subsidiary Pledge Agreement
	Exhibit E-1	 	
-
	 	Form of Company Security Agreement
	Exhibit E-2	 	
-
	 	Form of Subsidiary Security Agreement
	Exhibit F-1	 	
-
	 	Form of Company/Domestic Subsidiary Legal Opinion
	Exhibit F-2	 	
-
	 	Form of Company/Domestic Subsidiary Legal Opinion
	Schedule 4.4	 	
-
	 	Subsidiaries
	Schedule 4.5	 	
-
	 	Litigation
	Schedule 5.6	 	
-
	 	Liens

 

 

     SECOND SECURED TERM LOAN AGREEMENT (the “Agreement”), dated as of July 31,
2002, by and between MSX INTERNATIONAL, INC., a Delaware corporation (the
“Company”) and COURT SQUARE CAPITAL LIMITED, a Delaware corporation (the
“Lender”).

     WHEREAS, the Company has requested that the Lender lend to the Company
$15,450,000, to partially prepay the Term Loans (as defined in the Senior
Credit Agreement), and the Lender is willing to agree to lend such amount 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 agree as
follows:

ARTICLE 1 DEFINITIONS

     SECTION 1.1. Certain Defined Terms.

     The following terms used in this Agreement shall have the following
meanings:

     “Acquisition” means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Company or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation, partnership, limited
liability company or other business entity, or division thereof, whether
through purchase of assets, merger or otherwise or (ii) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series of
transactions) at least a majority of the Capital Stock (by percentage or voting
power) of any Person.

     “Affiliate,” when used with respect to any Person, means any other Person
which, directly or indirectly, controls or is controlled by or is under common
control with such Person. For purposes of this definition “control” (including
the correlative meanings of the terms “controlled by” and “under common control
with”), with respect to any Person, means possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or by contract
or otherwise. Without limiting the foregoing definition of Affiliate, any
Person shall be deemed to control another Person if the controlling Person owns
or controls 10% or more of any class of Voting Stock of the controlled Person;
provided, that neither Court Square nor CVC will be deemed to control any
Person as the result of the ownership by Court Square or CVC or one of its
respective Affiliates of 10% or more of any class of Voting Stock of such
Person.

     “Agent” means Bank One, NA, as agent under the Senior Credit Agreement,
and any replacement or substitute agent under the Senior Credit Agreement.

     “Bankruptcy Code” means Title 11 of the United States Code, as now and
hereafter in effect, or any successor statute.

 

 

     “Benefit Arrangement” shall mean at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.

     “Board of Directors” means the Board of Directors of the Company or a
Subsidiary of the Company, as applicable, or any duly authorized committee of
that Board of Directors.

     “Borrowing Subsidiary” has the meaning assigned to such term in the Senior
Credit Agreement.

     “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.

     “Capital Stock” means (i) in the case of any corporation, all capital
stock (whether common, preferred or any other type) 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.

     “Capital Lease” of any Person means any lease which, in accordance with
Generally Accepted Accounting Principles, is or should be capitalized on the
books of such Person.

     “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

- 2 -

 

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, 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, any merger, consolidation,
liquidation or dissolution of the Company, 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, 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 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 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 or (y)
such other person is entitled to elect directors having a majority of the total
voting power of the Board of Directors;

          (iii)  after the first public offering of Voting Stock of the Company,
during any period of not greater than two consecutive years beginning after the
Effective Date, individuals who at the beginning of such period constituted the
Board of Directors (together with any new directors whose election by such
Board of Directors or whose nomination for election by the shareholders of the
Company was approved by a vote of a majority of the directors of the

- 3 -

 

Company then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office; or

          (iv)  any “Change of Control” or similar term, as defined in the Senior
Subordinated Note Indenture.

     “Code” means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder.

     “Commitments” has the meaning assigned to such term in the Senior Credit
Agreement.

     “Company” means MSX International, Inc., a Delaware corporation, together
with its permitted successors and assigns.

     “Contingent Obligation” means as to any Person any obligation of such
Person guaranteeing or intended to guarantee any indebtedness, obligations and
liabilities (“primary obligations”) of any other Person (the “primary obligor”)
in any manner, whether directly or indirectly, including, without limitation,
any obligation of such Person, whether or not contingent, (a) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligator, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof, provided, however,
that the term Contingent Liabilities shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Liability shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which
such Contingent Liability 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 Obligations” means, 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.

     “CVC” means Citicorp Venture Capital, Ltd., a New York corporation,
together with its successors and assigns.

     “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.

- 4 -

 

     “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, on or prior to the
date that is ninety-one (91) days after the latest of (i) the Revolving Loan
Termination Date (as defined in the Senior Credit Agreement), (ii) the Tranche
A Term Loan Termination Date (as defined in the Senior Credit Agreement), (iii)
the Tranche B Term Loan Termination Date (as defined in the Senior Credit
Agreement), and (iv) the Tranche C Term Loan Termination Date (as defined in
the Senior Credit Agreement).

     “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 Subsidiary” means each present and future Subsidiary of the
Company which is not a Foreign Subsidiary.

     “Effective Date” means July 31, 2002.

     “Eligible Currency” means the euro, Francs, Deutsche Marks, Pounds
Sterling, Italian Lire, Australian Dollars (all as defined in the Senior Credit
Agreement) 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 Certificate” means an appropriately completed environmental
certificate in the form of Exhibit A attached hereto delivered by the Company
and the Guarantors.

     “Environmental Laws” at any date means all provisions of law, statutes,
ordinances, rules, regulations, judgments, writs, injunctions, decrees, orders,
awards and standards

- 5 -

 

promulgated by the government of the United States of America or any
foreign government or by any state, province, municipality or other political
subdivision thereof or therein or by any court, agency, instrumentality,
regulatory authority or commission of any of the foregoing concerning the
protection of, or regulating the discharge of hazardous substances into, the
environment.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations thereunder.

     “ERISA Group” means the Company, its Subsidiaries and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Company or any
Subsidiary, are treated as a single employer under Section 414 of the Code.

     “Event of Default” means each of the events set forth in Article 7 hereof.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.

     “Excluded Collateral” is defined in Section 2.6 hereof.

     “Financial Contract” of a Person shall mean (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (ii) any agreements, devices or
arrangements providing for payments related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to, interest rate
exchange agreements, forward currency exchange agreements, interest rate cap or
collar protection agreements, forward rate currency or interest rate options.

     “Foreign Subsidiary” means any Subsidiary incorporated or formed in any
jurisdiction other than any State of the United States of America.

     “Generally Accepted Accounting Principles” means generally accepted
accounting principles as in effect from time to time, applied on a basis
consistent (except for changes concurred in by the Company’s independent public
accountants) with the most recent audited consolidated financial statements of
the Company and its Subsidiaries delivered to the Lender.

     “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 Exhibit B hereto, as amended, supplemented or modified from time to
time.

     “Guarantor” means:

          (i)  each present and future Domestic Subsidiary of the Company required to
execute a Guaranty under Section 2.6;

- 6 -

 

          (ii)  each “Subsidiary Guarantor” as defined in the Senior Subordinated
Debt Documents or any other guarantor with respect to any Subordinated Debt at
any time; and

          (iii)  any other Person executing a Guaranty at any time with respect to
the Obligations of the Company.

     “Indebtedness” of any Person means, as of any date, without duplication,
(a) all obligations of such Person for borrowed money evidenced by bonds,
notes, debentures or similar instruments, (b) all reimbursement and similar
obligations under outstanding letters of credit, banker’s acceptances or
similar instruments in respect of drafts or other claims which may be presented
or have been presented and have not yet been paid, (c) all obligations of such
Person as lessee which are capitalized in accordance with Generally Accepted
Accounting Principles under any Capital Lease, (d) all obligations which are
secured by any Lien existing on any asset or property of such Person whether or
not the obligation secured thereby shall have been assumed by such Person, (e)
the unpaid purchase price for goods, property or services acquired by such
Person, except for trade accounts and accrued expenses payable arising in the
ordinary course of business which are not past due within customary payment
terms, (f) the aggregate outstanding amount of all Factoring, Permitted
Securitization Transactions and Off Balance Sheet Liabilities, based on the
aggregate outstanding amount sold, assigned, discounted or otherwise
transferred or financed, whether or not shown as a liability on a consolidated
balance sheet of the Company and its Subsidiaries, as reasonably satisfactory
to the Agent, (g) all bank overdrafts, other than bank overdrafts in the United
States in the ordinary course of business and which are not material in the
aggregate and are outstanding for less than three Business Days, and (h) all
Contingent Liabilities of such Person with respect to or relating to
Indebtedness of others similar in character to those described in clauses (a)
through (g) of this definition.

     “Intercreditor Agreement” means the Intercreditor Agreement, dated as of
the date hereof, among the Lender and Bank One, NA, individually and as agent
for the lenders party to the Senior Credit Agreement, as amended or modified
from time to time.

     “Interest Payment Date” means the first Business Day of each fiscal
quarter of the Company occurring after the date hereof, commencing with the
first such Business Day occurring after the date of this Agreement.

     “Investment” of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable and/or
accrued expenses arising in the ordinary course of business payable in
accordance with customary practices and loans to employees in the ordinary
course of business) or contribution of capital by such Person (other than
services performed in the ordinary course of business consistent with past
practices); stocks, bonds, mutual funds, partnership interests, notes,
debentures or other securities owned by such Person; any deposit accounts and
certificates of deposit owned by such Person; and structured note, derivative
financial instruments and other similar instruments or contracts owned by such
Person.

- 7 -

 

     “Lender” has the meaning assigned to that term in the introduction to this
Agreement and shall include any assignees of the Loan or Note pursuant to the
terms and conditions of Section 8.1 hereof.

     “Lender Indebtedness” has the meaning assigned to such term in the Senior
Credit Agreement.

     “Lien” means any pledge, assignment, hypothecation, mortgage, security
interest deposit arrangement, conditional sale or title retaining contract,
sale and leaseback transaction, lessor’s or lessee’s interest under any capital
lease, subordination of any claim or right, or any other type of lien, charge
or encumbrance.

     “Loan” means the loan made by the Lender to the Company pursuant to
Section 2.1 hereof.

     “Loan Documents” means this Agreement, the Note, the Security Documents
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.

     “Margin Stock” means “margin stock” as such term is defined in Regulation
T, U or X.

     “Material Adverse Effect” means (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 Company to perform its
obligations under the Loan Documents or (iii) a material adverse effect on the
rights and remedies of the Lender under any of the Loan Documents.

     “Material Plan” means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $5,000,000.

     “Maturity Date” means the earlier of (i) June 7, 2007 and (ii) the earlier
of six months after the latest stated maturity under the Senior Credit
Agreement or the date the loans and advances under the Senior Credit Agreement
become due and payable by acceleration or otherwise or are paid in full.

     “Multiemployer Plan” means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.

- 8 -

 

     “Net Cash Proceeds” means (a) in connection with any sale or other
disposition of any asset or any settlement by, or receipt of payment in respect
of, any property insurance claim or condemnation award, the cash proceeds
(including any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such sale,
settlement or payment, net of reasonable and documented attorneys’ fees,
accountants’ fees, investment banking fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder
on any asset which is the subject of such sale, insurance claim or condemnation
award (other than any Lien in favor of the Lender) and other customary fees
actually incurred in connection therewith and net of taxes and other
liabilities paid or reasonably estimated to be payable as a result thereof and
(b) in connection with any issuance or sale of any equity securities or debt
securities or instruments or the incurrence of loans, the cash proceeds
received from such issuance or incurrence, net of investment banking fees,
reasonable and documented attorneys’ fees, accountants’ fees, underwriting
discounts and commissions and other reasonable and customary fees and expenses
actually incurred in connection therewith.

     “Note” means one or more of the notes of the Company issued pursuant to
the terms and conditions of Sections 2.1, 2.2(b)(ii) or 8.1 hereof,
substantially in the form of Exhibit C hereto.

     “Obligations” means all obligations of every nature of the Company from
time to time owed to the Lender under the Loan Documents.

     “Off-Balance Sheet Liability” of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability of such Person under any
sale and leaseback transactions which is not a Capital Lease, (iii) any
liability under any so-called “synthetic” lease or “tax ownership operating
lease” transaction entered into by such Person, or (iv) any obligation arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing (as reasonably determined by the Lender) but which
does not constitute a liability on the balance sheets of such Person, but
excluding from this clause (iv) operating leases.

     “Officer’s Certificate” means, as applied to any corporation, a
certificate executed on behalf of such corporation by its Chief Executive
Officer, its President or its Chief Financial Officer; provided, that every
Officer’s Certificate with respect to the compliance with a condition precedent
to the making of a Loan hereunder shall include (a) a statement that the
officer or officers making or giving such Officer’s Certificate have read such
condition and any definitions or other provisions contained in this Agreement
relating thereto, (b) a statement of the signers that they have made or have
caused to be made such examination or investigation as they deem necessary to
enable them to certify that such condition has been complied with, and (c) a
statement that such condition has been complied with.

     “PBGC” means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

- 9 -

 

     “Permitted Business” is defined in Section 6.5 hereof.

     “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 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 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” means Liens permitted by Section 6.2 hereof.

     “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 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.

- 10 -

 

     “Person” means an individual, a corporation, an association, a
partnership, a trust or estate, a joint stock company, an unincorporated
organization, a joint venture, a trade or business (whether or not
incorporated), a government (foreign or domestic) and any agency or political
subdivision thereof, or any other entity.

     “Plan” means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees
of any member of the ERISA Group or (ii) has at any time within the preceding
five years been maintained, or contributed to, by any Person which was at such
time a member of the ERISA Group for employees of any Person which was at such
time a member of the ERISA Group.

     “Pledge Agreements” mean each 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 hereto as Exhibits D-1 and D-2,
as amended, supplemented or modified from time to time, and as will be entered
into pursuant to Section 5.6 hereof, as amended, supplemented or modified from
time to time.

     “Pledged Subsidiaries” mean those Foreign Subsidiaries 65% of whose
Capital Stock has been pledged to the Lender pursuant to a Pledge Agreement.

     “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.

     “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 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.

- 11 -

 

     “Reportable Event” means a reportable event as described in Section
4043(b) of ERISA including without limitation those events as to which the
thirty (30) day notice period is waived under Part 2615 of the regulations
promulgated by the PBGC under ERISA.

     “Requirements 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.

     “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 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 hereto as Exhibits E-1 and E-2,
as amended, supplemented or modified from time to time, and any other agreement
executed by 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 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 Company under this Agreement.

     “Senior Credit Agreement” means the Amended and Restated Credit Agreement
dated as of November 19, 1999, as amended, among the Company, each of the
Borrowing Subsidiaries of the Company party thereto, the lenders party thereto
and Bank One, as agent for the lenders, as the same may be further amended,
supplemented, refinanced or replaced in whole or in part, or otherwise modified
from time to time.

     “Senior Debt Documents” means, collectively, the Senior Credit Agreement,
and all “Loan Documents” (as defined in the Senior Credit Agreement).

     “Senior Default” means an “Event of Default” as defined in the Senior
Credit Agreement.

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     “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, including without limitation
those agreements and documents listed on Schedule 1.1(b) to the Senior Credit
Agreement.

     “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 The
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 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.

     “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 Indebtedness by written agreements and
documents in form and substance satisfactory to the Agent and which is governed
by terms and provisions, including without limitation maturities, covenants,
defaults, rates and fees, acceptable to the Agent.

     “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.

     “Subsidiary” of any Person means any other Person (whether now existing or
hereafter organized or acquired) in which (other than directors’ qualifying
shares required by law) at least a majority of the securities or other
ownership interests of each class having ordinary voting power or analogous
right (other than securities or other ownership interests which have such power
or right only by reason of the happening of a contingency), at the time as of
which any determination is being made, are 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.

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Any reference in this Agreement to a Subsidiary shall be deemed reference
to a Subsidiary of the Company unless otherwise indicated.

     “Unfunded Liabilities” means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed
by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.

     “Unmatured Event” means any event or condition which with notice or lapse
of time or both would, unless cured or waived, become an Event of Default.

     “Unrestricted Subsidiary” means any Subsidiary designated by the Company
as an Unrestricted Subsidiary and approved by the Lender in its 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
Event of Default or Unmatured Event exists or would be caused thereby, on a pro
forma basis acceptable to the Lender. Any Unrestricted Subsidiary may be
designated as a Subsidiary by the Company at any time provided that (i) such
designation is approved by the Lender and (ii) no Event of Default or Unmatured
Event exists or would be caused thereby, all on a pro forma basis acceptable to
the Lender.

     “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.

     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.

     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 Generally Accepted Accounting Principles.

- 14 -

 

ARTICLE 2 AMOUNT AND TERMS OF NOTE AND LOAN

     SECTION 2.1. Loan and Note.

          (a)  Loan. 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 hereby agrees to lend to the Company on the Effective Date,
an amount equal to $15,450,000.

          (b)  Payment of Loan. The unpaid principal amount of the Loan 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.

          (c)  Note. On the Effective Date, the Company shall execute and deliver to
the Lender the Note dated as of the Effective Date, to evidence the Loan made
on such date, in the aggregate principal amount of $15,450,000.

     SECTION 2.2. Interest on the Loan.

          (a)  Rate of Interest. Except as provided in Section 2.2(c) below, the
Loan 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.

          (b)  Interest Payments.

               (i)  Interest shall be payable with respect to the Loan, in arrears on and
to each Interest Payment Date, and upon any prepayment of the Loan (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
Indebtedness has not been indefeasibly paid in full and the Commitments have
not been terminated (“PIK Interest Dates”), the Company shall pay the unpaid
accrued interest with respect to the Loan due on any PIK Interest Date by (A)
issuing to the Lender or any other holder of the Note one or more Notes (the
“Interest Notes”) in an aggregate principal amount equal to such unpaid accrued
interest to be paid on such PIK Interest Date, or (B) adding such unpaid
accrued interest to the then outstanding principal amount of the Loan.

               (iii)  All Interest Notes shall have the same terms and conditions as the
Note issued pursuant to Section 2.1.

          (c)  Default Interest. Upon the occurrence and during the continuance of
an Event of Default and, to the extent permitted by applicable law, the Loan
and Interest 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 Loan; provided that if the Lender Indebtedness has not been
indefeasibly paid in full and the Commitments have not been

- 15 -

 

terminated, the Company shall pay such accrued interest by issuing to the
Lender or any other holder of the Note one or more Interest Notes in an
aggregate principal amount equal to such unpaid accrued interest to be paid or
by adding such unpaid accrued interest to the then outstanding principal amount
of the Loan.

          (d)  Computation of Interest. Interest on the Loan 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.

     SECTION 2.3. Prepayments and Payments.

          (a)  Prepayments.

               (i)  Voluntary Prepayments.

                    (A)  So long as all Lender Indebtedness has been indefeasibly paid in full
and the Commitments have been terminated, the Company may prepay the Loan, in
whole or in part, without premium or penalty.

                    (B)  Voluntary prepayments hereunder shall be credited against the Loan
pursuant to the terms and conditions of Section 2.3(a)(iii). Amounts of the
Loan so prepaid may not be reborrowed.

               (ii)  Mandatory Prepayments.

                    (A)  Sale or Disposition of Assets. So long as all Lender Indebtedness has
been indefeasibly paid in full and the Commitments have been terminated, in
addition to all other payments of the Loan required hereunder, the Company
shall prepay the Loan by an amount equal to 100% of all of the Net Cash
Proceeds 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, sales of assets described on Schedule 5.2(i)
of the Senior Credit Agreement and 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) in excess of
$2,000,000 in aggregate amount in any fiscal year (other than such Net Cash
Proceeds 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 Indebtedness has been indefeasibly paid in full and the
Commitments have been terminated, the Company shall provide an Officer’s
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

- 16 -

 

Net Cash Proceeds will be used to purchase assets of a comparable value,
and if such Net Cash Proceeds are 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
such Net Cash Proceeds, the Company will then prepay the Loan with such Net
Cash Proceeds. So long as all Lender Indebtedness has been indefeasibly paid
in full and the Commitments have been terminated, the Company shall apply an
amount equal to 100% of the Net Cash Proceeds that the Company so receives to
the repayment of the Loan, as provided in Section 2.3(a)(iii) below.

                    (B)  Issuance of Capital Stock; Incurrence of Subordinated Debt. So long
as all Lender Indebtedness has been indefeasibly paid in full and the
Commitments have been terminated, in addition to all other payments of the Loan
required hereunder, the Company shall prepay the Loan 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 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 Loan. So long as all Lender Indebtedness has
been indefeasibly paid in full and the Commitments have been terminated, the
Company shall apply an amount equal to 100% of the Net Cash Proceeds that the
Company so receives to the repayment of the Loan, as provided in Section
2.3(a)(iii) below.

                    (C)  Incurrence of Indebtedness. So long as all Lender Indebtedness has
been indefeasibly paid in full and the Commitments have been terminated, in
addition to all other payments of the Loan required hereunder, the Company
shall prepay the Loan by an amount equal to 100% of the Net Cash Proceeds from
the incurrence of any Indebtedness in excess of $5,000,000 in the aggregate
incurred pursuant to Section 5.2(f)(xiv) of the Senior Credit Agreement,
payable on each date such Indebtedness is incurred. So long as all Lender
Indebtedness has been indefeasibly paid in full and the Commitments have been
terminated, the Company shall apply an amount equal to 100% of the Net Cash
Proceeds that the Company so receives to the repayment of the Loan, as provided
in Section 2.3(a)(iii) below.

                    (D) Change of Control. In addition to all other payments of the Loan
required hereunder, simultaneously with the occurrence of a Change of Control
(the “Change of Control Date”), so long as all Lender Indebtedness has been
indefeasibly paid in full and the Commitments have been terminated, the Lender
shall have the right, but not the obligation, to require the prepayment of the
Loan 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 has occurred. The Lender shall, within ten (10) Business Days receipt
of such notice, notify the Company if it will require a prepayment hereunder.

- 17 -

 

                    (E)  Notice. The Company 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 Loan so prepaid and shall be applied to payment of interest and fees before
application to principal.

          (b)  Manner and Time of Payment. All payments by the Company hereunder and
under the Note 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 Company, for the account of the
Lender. Funds received by the Lender after such time shall be deemed to have
been paid by the Company on the next succeeding Business Day.

          (c)  Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Note 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 Note.

          (d)  Notation of Payment. The Lender agrees that before disposing of the
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 Company 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 Company of the name
and address of a transferee shall not limit or otherwise affect the obligation
of the Company hereunder or under such Note with respect to the Loan and
payments of principal or interest on such Note.

     SECTION 2.4. Use of Proceeds.

          (a)  Use. The proceeds of the Loan to be made on the Effective Date shall
be used by the Company to partially prepay the Term Loans (as defined in the
Senior Credit Agreement), to pay fees and expenses in connection herewith and
for general corporate purposes.

          (b)  Margin Regulations. No portion of the proceeds of any borrowing under
this Agreement shall be used by the Company in any manner which might cause the
borrowing or the application of such proceeds to violate Regulations T, U or X
or any other regulation of the Board of Governors of the Federal Reserve
System, or to violate the Exchange Act, in each case as in effect on the date
or dates of such borrowing and such use of proceeds.

     SECTION 2.5. Fees. On the Effective Date, the Company shall pay to the
Lender a nonrefundable closing fee in the amount of $450,000, which amount has
been added to

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the principal balance of the Loan. 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 the Obligations, 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 of the Company and each
Guarantor which is a Domestic Subsidiary, 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 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 Subsidiaries owned directly by the Company or by any Domestic
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 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 Subsidiary and
Guaranties of certain present and future Domestic Subsidiaries such that, at
all times, the Domestic 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

- 19 -

 

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 Subsidiaries
covered by clause (b) above;

          (d)  All other security and collateral described in the Security Documents.

Upon request of the Lender, (i) the Company and the Guarantors which are
Domestic Subsidiaries shall execute and deliver such agreements and documents
reasonably requested by the Lender to grant a second priority lien and security
interest on all real property owned by the Company and the Guarantors, and (ii)
each other Domestic Subsidiary shall execute and deliver all agreements and
documents reasonably requested by the Lender to grant a second 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
Agreement securing the Lender Indebtedness, in whole or in part, all as
described in the Intercreditor Agreement, shall only be second priority liens
and security interests so long as the first priority liens and security
interests in favor of the Agent under the Senior Credit Agreement securing the
Lender Indebtedness have not terminated and the Lender shall not be entitled to
any liens or security interests on any assets of any Foreign Subsidiaries.

ARTICLE 3 CONDITIONS TO LOAN

     SECTION 3.1. Conditions to Loan. The obligation of the Lender to make the
Loan hereunder on the Effective Date is subject to the satisfaction of all of
the following conditions:

          (a)  Charter Documents. Certificates of recent date of the appropriate
authority or official of the Company’s and each Guarantor’s respective
jurisdiction of organization listing all charter documents of the Company or
each Guarantor, respectively, on file in that office and certifying as to the
good standing and corporate existence of the Company or each Guarantor,
respectively, together with copies of such charter documents of the Company or
each Guarantor certified as of a recent date by such authority or official and
certified as true and correct as of the Effective Date in an Officer’s
Certificate of the Company or each Guarantor, respectively;

          (b)  By-Laws and Corporate Authorizations. Copies of the by-laws of the
Company and each Guarantor together with all authorizing resolutions and
evidence of other corporate action taken by the Company and each Guarantor to
authorize the execution, delivery

- 20 -

 

and performance by the Company and each Guarantor of this Agreement, the
Notes and the Security Documents to which the Company or such Guarantor,
respectively, is a party and the consummation by the Company or such Guarantor,
respectively, of the transactions contemplated hereby, certified as true and
correct as of the Effective Date in an Officer’s Certificate of the Company or
each Guarantor, respectively;

          (c)  Incumbency Certificate. Certificates of incumbency of the Company 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 the Company or each Guarantor in connection with this Agreement, the Notes
and the Security Documents to which the Company and each Guarantor is a party
and the consummation by the Company or such Guarantor of the transactions
contemplated hereby, certified as true and correct as of the Effective Date in
an Officer’s Certificate of the Company and each Guarantor;

          (d)  Notes. The Notes duly executed on behalf of the Company for the
Lender;

          (e)  Security Documents. The Security Documents duly executed on behalf of
the Company and the Guarantors, as the case may be, granting to the Lender the
collateral and security intended to be provided pursuant to Section 2.6, as
determined by the Lender, together with:

               (i)  Recording, Filing, Etc. Delivery of financing statements and
completion of such other action (including payment of any applicable taxes or
fees) in such jurisdictions as the Lender may deem necessary or appropriate
with respect to the Security Documents, together with Uniform Commercial Code
record searches in such offices as the Lender may request;

               (ii)  Casualty and Other Insurance. Evidence that the casualty and other
insurance required pursuant to Section 5.3 and the Security Documents is in
full force and effect;

               (iii)  Consents. A consent and acknowledgement in form and substance
satisfactory to the Lender of any owners of any Capital Stock of any Guarantor,
other than the Company or any of its Subsidiaries fully consenting to and
acknowledging the guaranty obligations and grant of security interests pursuant
to the Security Documents and containing such other provisions required by the
Lender;

          (f)  Representations and Warranties. Concurrently with the making of the
Loan, the Company shall have delivered to the Lender an Officer’s Certificate
in form and substance satisfactory to the Lender to the effect that the
representations and warranties in Article 4 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;

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          (g)  Event of Default; Unmatured Event. No Event of Default or Unmatured
Event shall exist or shall have occurred and be continuing on the date the Loan
is made and the making of the Loan shall not cause an Event of Default or
Unmatured Event;

          (h)  No Injunction, etc. No order, judgment, or decree of any court,
arbitrator or governmental authority shall enjoin or restrain the Lender from
making the Loan;

          (i)  No Litigation, etc. There shall not be existing or, to the knowledge
of the Company or any of its Subsidiaries, threatened, any action, suit,
proceeding, governmental investigation or arbitration against or affecting any
such Person or any property of any such Person, which has not been disclosed in
Schedule 4.5 attached hereto, and there shall have occurred no development not
so disclosed in any such action, suit, proceeding, governmental investigation
or arbitration so disclosed, which, in the opinion of the Lender, could
reasonably be expected to have a Material Adverse Effect. No injunction or
other restraining order shall have been issued and no hearing to cause an
injunction or other restraining order to be issued shall be pending or noticed
with respect to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief as a
result of, this Agreement or the making of the Loan;

          (j)  Legal Opinions. The favorable written opinions of counsel for the
Company and each Guarantor, substantially in the forms of Exhibits F-1 and F-2
attached hereto and as to such other matters as the Lender may reasonably
request;

          (k)  Consents, Approvals, Etc. Copies of all governmental and
non-governmental consents, approvals, authorizations, declarations,
registrations or filings, if any, required on the part of the Company or any
Guarantor in connection with the execution, delivery and performance of the
Loan Documents or the transactions contemplated hereby or as a condition to the
legality, validity or enforceability of the Loan Documents, certified as true
and correct and in full force and effect as of the Effective Date in an
Officer’s Certificate of the Company, or if none are required, an Officer’s
Certificate to that effect;

          (l)  Environmental Certificate. An Environmental Certificate duly executed
by the Company and the Guarantors;

          (m)  Regulations T, U or X. The making of the Loan shall not violate
Regulations T, U or X of the Federal Reserve Board;

          (n)  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 and the
closing fee required by Section 2.5;

          (o)  Senior Debt Documents. The Lender shall have received certified
copies of each of the Senior Debt Documents, and all of such Senior Debt
Documents shall be satisfactory, in form and substance, to the Lender; and

- 22 -

 

          (p)  Other Conditions. 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,
the Company represents and warrants to the Lender that:

     SECTION 4.1. Corporate Existence and Power. Each of the Company 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 Company 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.

     SECTION 4.2. Corporate Authority. The execution, delivery and performance
by each of the Company 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 the Company’s or any Guarantor’s charter or by-laws, or of
any material contract or undertaking to which the Company or any Guarantor is a
party or by which the Company 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 Company or
any Guarantor is a party are the legal, valid and binding obligations of the
Company and the Guarantors, respectively, enforceable against the Company and
Guarantor 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. Schedule 4.4 hereto correctly sets forth the
corporate name, jurisdiction of organization and ownership of each Subsidiary
of the Company as of the Effective Date. All outstanding shares of each class
of Capital Stock of such Subsidiaries were duly authorized and validly issued,
and are fully paid and non-assessable. As of the Effective Date, there are no
outstanding securities, rights, or other agreements of any nature that require
any of the Company’s Subsidiaries to issue any of its Capital Stock, except as
set forth on Schedule 4.4 and except for conversion rights contained in their
respective organizational documents. Except as otherwise allowed under this
Agreement, each such Subsidiary and each Person becoming a Subsidiary of the
Company after the date hereof is and

- 23 -

 

will be a corporation or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization and is and will be duly qualified to do business
in each additional jurisdiction where such qualification is or may be 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 a
Material Adverse Effect. Each Subsidiary of the Company has and will have all
corporate or comparable requisite 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, except where the failure to have such power
could not reasonably be expected to result in a Material Adverse Effect.

     SECTION 4.5. Litigation. Except as set forth in Schedule 4.5 hereto,
there is no action, suit or proceeding pending or, to the best of the Company’s
knowledge, threatened against or affecting the Company or any of its
Subsidiaries before or by any court, governmental authority or arbitrator,
which if adversely decided could reasonably be expected to result, either
individually or collectively, in any Material Adverse Effect and, to the best
of the Company’s knowledge, there is no basis for any such action, suit or
proceeding.

     SECTION 4.6. Financial Condition. The audited consolidated balance sheet
of the Company and its Subsidiaries and the audited consolidated statements of
operations and cash flows of the Company and its Subsidiaries for the fiscal
year ending December 30, 2001 and the unaudited consolidated balance sheet of
the Company and its Subsidiaries and the unaudited consolidated statements of
operations and cash flows of the Company and its Subsidiaries for the three
months ended March 31, 2002, copies of which have been furnished to the Lender,
fairly present, and the financial statements of the Company and its
Subsidiaries delivered pursuant to Section 5.4 will fairly present, in all
material respects, the consolidated financial position of the Company and its
Subsidiaries as at the respective dates thereof, and the consolidated results
of operations of the Company and its Subsidiaries for the respective periods
indicated, all in accordance with Generally Accepted Accounting Principles
(subject, in the case of said interim statements, to year-end audit adjustments
and the absence of footnotes). The budgeted consolidated and consolidating
financial statements of the Company and its Subsidiaries have been prepared in
good faith and are based on reasonable assumptions and, to the Company’s
knowledge, the best information available as of the Effective Date. There has
been no Material Adverse Effect since December 30, 2001. There is no material
Contingent Liability of the Company or any of its Subsidiaries that is not
reflected in such financial statements or in the notes thereto and has not
otherwise been described in writing to the Lender.

     SECTION 4.7. Use of Loan. The Company will use the Loan to partially
prepay the Term Loans (as defined in the Senior Credit Agreement), to pay fees
and expenses in connection herewith and for general corporate purposes.
Neither the Company nor any of its Subsidiaries extends or maintains, in the
ordinary course of business, credit for the purpose, whether immediate,
incidental, or ultimate, of buying or carrying Margin Stock, and no part of the
proceeds of the Loan will be used for the purpose, whether immediate,
incidental, or ultimate, of buying or carrying any such Margin Stock or
maintaining or extending credit to others for such purpose.

- 24 -

 

     SECTION 4.8. Consents, Etc. Except for such consents, approvals,
authorizations, declarations, registrations or filings delivered by the Company
pursuant to Section 3.1(l), if any, each of which is in full force and effect,
and filings required pursuant to Section 2.6, no consent, approval or
authorization of or declaration, registration or filing with any governmental
authority or any non-governmental Person or entity, including without
limitation any creditor, lessor or stockholder of the Company or any of its
Subsidiaries, is required on the part of the Company or any of its Subsidiaries
in connection with the execution, delivery and performance of any Loan Document
or the transactions contemplated hereby or as a condition to the legality,
validity or enforceability of any Loan Document.

     SECTION 4.9. Taxes. The Company and its Subsidiaries have filed all U.S.
tax returns (and all material foreign, state and local tax returns) required to
be filed and have paid all taxes shown thereon to be due and required to be
paid including interest and penalties, or have established adequate financial
reserves on their respective books and records for payment thereof. Neither
the Company nor any of its Subsidiaries knows of any material actual or
proposed tax assessment or any basis therefor, and no extension of time for the
assessment of deficiencies in any federal or state tax has been granted by the
Company or any Subsidiary, except for assessments (including extensions of time
for the assessment of deficiencies) that are being contested in good faith by
appropriate proceedings and for which adequate financial reserves have been
established on their respective books and records.

     SECTION 4.10. Title to Properties. Except as otherwise disclosed in the
latest balance sheet delivered pursuant to Sections 4.6 or 5.4 of this
Agreement, the Company or one or more of its Subsidiaries have good and
marketable fee simple title to all of the real property reflected in said
balance sheet, and a valid and indefeasible ownership interest in all of the
other material properties and assets reflected in said balance sheet or
subsequently acquired by the Company or any Subsidiary. All of such properties
and assets are free and clear of any Lien except for Permitted Liens. The
representations and warranties in the Security Documents are true and correct
in all material respects.

     SECTION 4.11. ERISA. Each member of the ERISA Group has fulfilled its
obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan and is in compliance in all material respects with the
presently applicable provisions of ERISA and the Code with respect to each
Plan, except to the extent the aggregate amount of liabilities for all of the
foregoing would not exceed $5,000,000. No member of the ERISA Group has (i)
sought a waiver of the minimum funding standard under Section 412 of the Code
in respect of any Plan, (ii) failed to make any contribution or payment to any
Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made
any amendment to any Plan or Benefit Arrangement, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Code or (iii) incurred any liability under Title IV of ERISA
other than a liability to the PBGC for premiums under Section 4007 of ERISA,
except to the extent the aggregate amount of liabilities for all of the
foregoing would not exceed $5,000,000.

- 25 -

 

     SECTION 4.12. Disclosure. As of the Effective Date, such reports and
other information furnished in writing or on behalf of the Company or any
Subsidiary to the Lender in connection with the negotiation or administration
of this Agreement do not, taken as a whole, to the best of its knowledge,
contain any material misstatement of fact or omit to state any 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 except that they 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. No Loan Document nor any document or certificate furnished to the
Lender by or on behalf of the Company or any Subsidiary in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact in order to make the statements
contained herein and therein not misleading. As of the Effective Date, there
is no fact known to the Company which has had or could reasonably be expected
to have a Material Adverse Effect, which has not been set forth in this
Agreement or in the other documents, certificates, statements, reports and
other information furnished in writing to the Lender by or on behalf of the
Company or any Subsidiary in connection with the transactions contemplated
hereby taken as a whole, including without limitation the offering memorandum
for the Senior Subordinated Notes.

     SECTION 4.13. Environmental and Safety Matters. All representations and
warranties made by the Company and the Guarantors in the Environmental
Certificate delivered pursuant to Section 3.1(l) and Section 5.4(h) are true
and correct in all material respects.

     SECTION 4.14. 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 Event or Event of Default
has occurred and is continuing.

     SECTION 4.15. 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. 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.

     SECTION 4.16. Labor Matters. There are no strikes or other labor disputes
against the Company or any Subsidiary pending or, to the knowledge of the
Company,

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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.

     SECTION 4.17. Solvency.

          (a)  After giving effect to the transactions described herein and to the
incurrence or assumption of any Indebtedness (including without limitation the
Subordinated Debt and all other obligations being incurred or assumed in
connection herewith and therewith) (i) 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; (ii) 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;
(iii) the Company and its Subsidiaries on a consolidated basis will be able to
pay their debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (iv) 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.

     SECTION 4.18. Not an Investment Company; Other Regulations. Neither the
Company nor any of its Subsidiaries is an “investment company” within the
meaning of the Investment Company Act of 1940, as amended. Neither the Company
nor any of its Subsidiaries is subject to any regulation under any federal or
state statute or regulation (except those applicable to corporations generally)
which limits its ability to incur Indebtedness.

     SECTION 4.19. Senior Subordinated Debt Documents. All representations and
warranties of the Company contained in any Senior Subordinated Debt Document
are true and correct in all material respects. As of the Effective Date, the
outstanding principal balance of the Senior Subordinated Notes is $130,000,000,
and all agreements, instruments and documents executed or delivered pursuant to
the original issuance of the Senior Subordinated

- 27 -

 

Notes are described on Schedule 1.1(b) of the Senior Credit Agreement.
All Lender Indebtedness and all Obligations are “Senior Indebtedness” and
“Designated Senior Indebtedness” as defined in the Senior Subordinated
Indenture and are and will be incurred in compliance with the Senior
Subordinated Indenture. Other than the Lender Indebtedness and the
Obligations, there is no other “Designated Senior Indebtedness” thereunder.
This Loan is being incurred pursuant to, and in full compliance with, Section
4.3(b) of the Senior Subordinated Note Indenture, and the Loan is classified as
Indebtedness incurred under Section 4.3(b) of the Senior Subordinated Note
Indenture. 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
Senior Subordinated Debt Documents and each of the Senior Subordinated Debt
Documents is in full force and effect. Other than pursuant to the Senior
Subordinated Debt Documents, there is no obligation pursuant to any Senior
Subordinated Debt Document or other document or agreement evidencing or
relating to any Subordinated Debt outstanding or to be outstanding on the
Effective 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 Senior Subordinated Notes and any other promissory
note or other instrument evidencing any Subordinated Debt issued at any time
pursuant to the Senior Subordinated Debt Documents are and will be “Securities”
as defined in the Senior Subordinated Indenture.

     SECTION 4.20. Documents Delivered. The Company has delivered to the
Lender true and correct copies of the Senior Credit Agreement as in effect on
the date hereof. There exist no Senior Defaults and no events or conditions
which with notice or lapse of time or both would, unless cured or waived,
become Senior Defaults nor any basis for the exercise by any party to the
Senior Credit Agreement of any rights of acceleration, cancellation,
rescission, or any rights of offset, which have not been waived.

ARTICLE 5 AFFIRMATIVE COVENANTS

     The Company covenants and agrees that, until the Loan and the Note and all
other amounts due under this Agreement have been paid in full, unless the
Lender shall otherwise give prior written consent, the Company and its
Subsidiaries shall perform all covenants contained in this Article 5:

     SECTION 5.1. Preservation of Corporate Existence, Etc. Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and its qualification as a foreign corporation or limited
liability company, as the case may be (other than any merger permitted pursuant
to Section 6.3 and other than any dissolution or liquidations of any Subsidiary
if the assets of such Subsidiary are transferred to the Company or any
Guarantor in connection with such dissolution or liquidation), in good standing
in each jurisdiction in which such qualification is necessary under applicable
law, except where the failure to be so qualified or in good standing could not
reasonably be expected to have a Material Adverse Effect and the rights,
licenses, permits (including those required under Environmental Laws),
franchises, patents, copyrights, trademarks and trade names material to the
conduct of its businesses; provided, however, that the Company shall not be
required to preserve any such

- 28 -

 

right, license or franchise, or the corporate, partnership or other
existence of any of its Subsidiaries, if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Lender; and defend
all of the foregoing against all claims, actions, demands, suits or proceedings
at law or in equity or by or before any governmental instrumentality or other
agency or regulatory authority except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

     SECTION 5.2. Compliance with Laws, Etc. Comply in all material respects
with all applicable laws, rules, regulations and orders of any governmental
authority whether federal, state, local or foreign (including without
limitation ERISA, the Code and Environmental Laws), in effect from time to
time, the enforcement of which could have a Material Adverse Effect; and pay
and discharge, before any interest or penalty for nonpayment thereof becomes
payable, all taxes, assessments and governmental charges or levies imposed upon
it or upon its income, revenues or property, before the same shall become
delinquent or in default, as well as all material lawful claims for labor,
materials and supplies or otherwise, which, if unpaid, might give rise to Liens
(other than Permitted Liens) upon such properties or any portion thereof,
except to the extent that payment of any of the foregoing is then being
contested in good faith and with respect to which adequate financial reserves
have been established on the books and records of the Company or such
Subsidiary.

     SECTION 5.3. Maintenance of Properties; Insurance. Maintain, preserve and
protect all property that is material to the conduct of the business of the
Company or any of its Subsidiaries and keep such property in good repair,
working order and condition and from time to time make, or cause to be made all
needful and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection therewith
may be properly conducted at all times in accordance with customary and prudent
business practices for similar businesses; and maintain in full force and
effect insurance with responsible and reputable insurance companies or
associations in such amounts, on such terms and covering such risks, including
fire and other risks insured against by extended coverage, as is usually
carried by companies engaged in similar businesses and owning similar
properties similarly situated and maintain in full force and effect public
liability insurance, insurance against claims for personal injury or death or
property damage occurring in connection with any of its activities or any
properties owned, occupied or controlled by it, in such amount as it shall
reasonably deem necessary, and maintain such other insurance as may be required
by law or as may be reasonably requested by the Lender for purposes of assuring
compliance with this Section 5.3.

     SECTION 5.4. Reporting Requirements. Furnish to the Lender the following:

          (a)  Promptly and in any event within five Business Days after becoming
aware of the occurrence of (A) any Unmatured Event or Event of Default, (B) the
commencement of any litigation against, by or affecting the Company or any of
its Subsidiaries,

- 29 -

 

which could reasonably be expected to have a Material Adverse Effect, and
any material developments therein, or (C) entering into any material contract
or undertaking that is not entered into in the ordinary course of business or
(D) any development in the business or affairs of the Company or any of its
Subsidiaries which has resulted in or which is likely in the reasonable
judgment of the Company, to result in a Material Adverse Effect, a statement of
the chief financial officer of the Company setting forth details of such
Unmatured Event, Event of Default, interest or undertaking, or development, and
the action which the Company or such Subsidiary, as the case may be, has taken
and proposes to take with respect thereto;

          (b)  As soon as available and in any event within 50 days after the end of
each of the first three fiscal quarters of each fiscal year of the Company, the
consolidated and consolidating balance sheet of the Company and its
Subsidiaries and of its Unrestricted Subsidiaries as of the end of such
quarter, and the related consolidated and consolidating statements of income
and cash flows for such quarter and for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, setting forth in
each case in comparative form the corresponding figures for the corresponding
date or period of the preceding fiscal year and duly certified (subject to
year-end audit adjustments and the absence of footnotes) by the chief financial
officer of the Company as having been prepared in accordance with Generally
Accepted Accounting Principles, together with a certificate of the chief
financial officer of the Company stating that no Unmatured Event or Event of
Default, has occurred and is continuing or, if an Unmatured Event or Event of
Default has occurred and is continuing, a statement setting forth the details
thereof and the action which the Company has taken and proposes to take with
respect thereto;

          (c)  As soon as available and in any event within 95 days after the end of
each fiscal year of the Company, a copy of the consolidated balance sheet of
the Company and its Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income and cash flows for such fiscal year,
with a customary audit report of PricewaterhouseCoopers LLP, or any of the four
largest independent certified public accounting firms in the United States,
without qualifications unacceptable to the Lender, together with, a certificate
of the chief financial officer of the Company stating that no Unmatured Event
or Event of Default has occurred and is continuing or, if an Unmatured Event or
Event of Default has occurred and is continuing, a statement setting forth the
details thereof and the action which the Company has taken and proposes to take
with respect thereto;

          (d)  Promptly after the sending or filing thereof, copies of all reports,
proxy statements and financial statements which the Company or any of its
Subsidiaries sends to or files with any of their respective security holders as
required by any securities exchange or the Securities and Exchange Commission
or any successor agency thereof;

          (e)  If and when any member of the ERISA Group (i) gives or is required to
give notice of PBGC of any Reportable Event with respect to any Plan which
might constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such Reportable

- 30 -

 

Event, a copy of the notice of such Reportable Event given or required to
be given to the PBGC; (ii) receives notice of complete or partial withdrawal
liability under Title IV of ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a copy of such notice;
(iii) receives notice from the PBGC under title IV of ERISA of an intent to
terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Code, a copy of such application; (v) gives notice of intent
to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (viii) fails
to make any payment or contribution to any Plan or Multiemployer Plan or in
respect of any Benefit Arrangement or makes any amendment to any Plan or
Benefit Arrangement which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security, a certificate of the chief
financial officer or the chief accounting officer of the Company setting forth
details as to such occurrence and action, if any, which the Company or
applicable member of the ERISA Group is required or proposes to take;

          (f)  As soon as available and in event within 60 days after the Effective
Date, a complete detailed list of all Intellectual Property of the Company and
its Subsidiaries not previously provided by the Company pursuant to the Senior
Credit Agreement;

          (g)  Promptly and in any event within 10 Business Days after receipt, a
copy of any management letter or comparable analysis prepared by the auditors
for the Company or any of its Subsidiaries; and

          (h)  Promptly, such other information respecting the business, properties,
operations or condition, financial or otherwise, of the Company or any of its
Subsidiaries as the Lender may from time to time reasonably request.

     SECTION 5.5. Accounting, Access to Records, Books, Etc. Maintain a system
of accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in accordance with
Generally Accepted Accounting Principles and to comply with the requirements of
this Agreement and, at any reasonable time and from time to time, (i) at the
expense of the Lender, permit the Lender, or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and books
of account of, and visit the properties of, the Company and its Subsidiaries,
and to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with their respective directors, officers, employees and
independent auditors, and by this provision the Company does hereby authorize
such Persons to discuss such affairs, finances and accounts with the Lender,
and (ii) at the expense of the Company, permit the Lender or any of its agents
or representatives to conduct a comprehensive field audit of its books,
records, properties and assets, including without limitation all collateral
subject to the Security Documents and site access, at the Company’s expense,
provided that if no Event of Default has occurred and is continuing no more
than two such comprehensive field audits may be performed in any fiscal year of
the Company at the

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expense of the Company, provided that the Lender shall give the Company
reasonable notice of any of the foregoing; provided, further, that if no Event
of Default has occurred and is continuing and if the Lender shall have received
a copy of any comprehensive field audit of the Company’s books, records,
properties and assets prepared by the Agent or any of its agents or
representatives in any fiscal year, Lender will reduce the number of audits
(from two) it may perform in any fiscal year by the number of audits received
from the Agent or any of its agents or representatives during such fiscal year.

     SECTION 5.6. Recording, Filing, Etc. Within 30 days after the date
hereof, execute and deliver, and cause its Subsidiaries to execute and deliver,
financing statements and, to the extent Pledge Agreements relating to the
pledge of the Capital Stock of the Foreign Subsidiaries have been executed in
favor of holders of the Lender Indebtedness, substantially similar Pledge
Agreements, and complete, and cause its Subsidiaries to complete, such other
action (including payment of any applicable taxes or fees) in such
jurisdictions as the Lender may deem necessary or appropriate with respect to
the Security Documents, together with Uniform Commercial Code record searches
in such offices as the Lender may request. Within 30 days after the date
hereof, the Company shall, and shall cause its Subsidiaries to, remove any
intervening security interest or lien necessary to ensure the second priority
perfected status of the liens and security interests of the Lender with respect
to the collateral pursuant to the Security Documents other than liens as
provided on Schedule 5.6, liens permitted under Section 5.2(g)(i), (ii), (iii),
(vi) and (ix) of the Senior Credit Agreement and liens which the Lender
determines to be immaterial.

     SECTION 5.7. Additional Security and Collateral. Subject to the
Intercreditor Agreement, 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 Subsidiary of the Company from time to time to
execute and deliver to the Lender, within 60 days after such Person becomes a
Domestic 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 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 Lender Indebtedness has
been indefeasibly paid in full and the Commitments have been terminated,
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.

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     SECTION 5.8. Further Assurances. Execute and deliver, and cause its
Subsidiaries to execute and deliver, within 30 days after request therefor by
the Lender, all further instruments and documents and take all further action
that the Lender may reasonably request, to give effect to the intent of, and to
aid in the exercise and enforcement of the rights and remedies of the Lender
under, this Agreement, the Notes and the Security Documents. In addition, the
Company and each Guarantor agree to deliver to the Lender from time to time
upon the acquisition or creation of any Subsidiary not listed in Schedule 4.4
hereto supplements to Schedule 4.4 such that such Schedule, together with such
supplements, shall at all times accurately reflect the information provided for
thereon.

     SECTION 5.9. Additional Covenants. Sections 4.3, 4.5, 4.6, 4.7 and 4.8 of
the Senior Subordinated 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.

ARTICLE 6 NEGATIVE COVENANTS

     The Company covenants and agrees that until the Loans and the Note and all
amounts due under this Agreement at the time of such termination or payment
have been paid in full, unless the Lender shall otherwise give prior written
consent, the Company and its Subsidiaries shall observe and perform all
covenants in this Article 6:

     SECTION 6.1. Indebtedness. The Company shall not, and shall not permit or
suffer any of its Subsidiaries to, directly or indirectly, create, incur,
assume, or in any manner become directly or indirectly liable in respect of, or
suffer to exist, any Indebtedness except for (i) Indebtedness under this
Agreement or (ii) other Indebtedness permitted by the Senior Credit Agreement.

     SECTION 6.2. Liens. The Company shall not, and shall not permit or suffer
any of its Subsidiaries to create, incur, or suffer to exist any Lien on any of
the assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired, of the Company or any of
its Subsidiaries, except for Liens otherwise permitted by the Senior Credit
Agreement.

     SECTION 6.3. Mergers; Acquisitions; Etc. The Company shall not, and shall
not permit or suffer any of its Subsidiaries to, purchase or otherwise acquire,
whether in one or a series of transactions, all or a substantial portion of the
business assets, rights, revenues or property, real, personal or mixed,
tangible or intangible, of any Person or make any other Acquisition, or all or
a substantial portion of the Capital Stock of or other ownership interest in
any other Person; nor merge or consolidate or amalgamate with any other Person
or take any other action having a similar effect, nor enter into any joint
venture or similar arrangement with any other Person, except in each case as
permitted under the Senior Credit Agreement.

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     SECTION 6.4. Disposition of Assets; Etc. The Company shall not, and shall
not permit or suffer any of its Subsidiaries to, sell, lease, license,
transfer, assign or otherwise dispose of all or any material portion of its
business, assets, rights, revenues or property, real, personal or mixed,
tangible or intangible, whether in one or a series of transactions, other than
(i) inventory sold in the ordinary course of business upon customary credit
terms, (ii) sales of scrap or obsolete material or equipment which are not
material in the aggregate, (iii) sales of assets described on Schedule 5.2(i)
of the Senior Credit Agreement, and (iv) as otherwise permitted by the Senior
Credit Agreement. Any securities, notes or other obligations received by the
Company or any such Subsidiary from a transferee as provided under Section
5.2(i)(viii)(B)(y) of the Senior Credit Agreement 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 Lender promptly shall obtain a second priority security
interest in any non cash consideration for any Asset Sale (as defined in
Section 5.2(i) the Senior Credit Agreement) by the Company or any Guarantor to
the extent such consideration consists of collateral described in Section 2.6.

     SECTION 6.5. Nature of Business. The Company shall not, and shall not
permit or suffer any of its Subsidiaries to, engage in any line or lines of
business activity other than those engaged in on the Effective Date and those
substantially similar thereto (a “Permitted Business”).

     SECTION 6.6. Dividends and Other Restricted Payments. The Company shall
not 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 except
for such dividends, payments or distributions otherwise permitted by the Senior
Credit Agreement.

     SECTION 6.7. Investments, Loans and Advances. Other than to the extent
otherwise permitted by the Senior Credit Agreement, the Company shall not, and
shall not permit or suffer any of its Subsidiaries to, purchase or otherwise
acquire any Capital Stock of or other ownership interest in, or debt securities
of or other evidences of Indebtedness of, any other Person; nor make any loan
or advance of any of its funds or property or make any other extension of
credit to, or make any other investment or contribution or acquire any interest
whatsoever in, any other Person nor make any other Investment; nor incur any
Contingent Liability.

     SECTION 6.8. Transactions with Affiliates. The Company shall not 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”) except for such Affiliated
Transactions as are permitted under the Senior Credit Agreement.

     SECTION 6.9. Inconsistent Agreements. The Company shall not, and shall
not permit or suffer any of its Subsidiaries to, enter into any material
agreement containing

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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.

     SECTION 6.10. Negative Pledge Limitation. The Company shall not, and
shall not permit or suffer any of its Subsidiaries to, enter into any
agreement, including without limitation any amendments to existing agreements,
with any Person other than the Lender 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 Lender securing the 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 set forth in the Senior Credit Agreement.

     SECTION 6.11. Subsidiary Dividends. The Company shall 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 such encumbrances or restrictions
permitted under the Senior Credit Agreement.

     SECTION 6.12. Payments and Modification of Debt. The Company shall not,
and shall not permit or suffer any of its Subsidiaries to, (i) make any
optional payment, defeasance (whether a covenant defeasance, legal defeasance
or other defeasance), prepayment or redemption of any of its or any of its
Subsidiaries’ Subordinated Debt, (ii) 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 Senior Subordinated Debt Document or
any instrument or agreement under which any of its Subordinated Debt is issued
or created or otherwise related thereto, or (iii) enter into any agreement or
arrangement requiring any defeasance of any kind of any of its Subordinated
Debt, or designate any Indebtedness (other than the Lender Indebtedness) as
“Designated Senior Indebtedness” under the Senior Subordinated Debt Documents,
or issue any security, instrument or other document evidencing any of the
Subordinated Debt outstanding pursuant to any of the Senior Subordinated Debt
Documents which is not a “Security” as defined in the Senior 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 Company or any of its Subsidiaries (other than payments to
the extent required under the original terms of the Senior Subordinated Debt
Documents) or other supplemental agreement with respect to any Subordinated
Debt shall be deemed an amendment or modification thereof.

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     SECTION 6.13. Financial Contracts. The Company shall not incur or remain
liable with respect to any Financial Contracts except for purposes of hedging
and not for speculative purposes.

ARTICLE 7 EVENTS OF DEFAULT

     If any of the following conditions or events (“Events of Default”) shall
occur and be continuing:

     SECTION 7.1. Failure To Make Payments When Due. (i) Failure to pay
principal of the Loan when due, whether at Stated Maturity, by acceleration, by
notice of prepayment, by operation of Section 2.3 or otherwise; or (ii) failure
to pay any interest on any Loan or any other amount due under this Agreement,
and such default continues for a period of five (5) days; provided, that this
Event of Default shall not limit the Company’s ability to accrue interest on or
pay interest with Interest Notes; or

     SECTION 7.2. Default in Other Agreements. (a) Failure of the Company to
pay when due any principal of or interest on any Indebtedness in excess of
$15,000,000 in principal outstanding and the expiration of any applicable grace
periods or waivers or (b) any breach or default by the Company, including a
Senior Default, and the expiration of any applicable grace periods or waivers
under any evidences of Indebtedness in excess of $15,000,000 in the aggregate;
provided, that as a result of any such failure to pay such Indebtedness under
clause (a) above, or any such breach or default under clause (b) above, the
Indebtedness thereunder shall have become due and payable prior to its stated
maturity; or

     SECTION 7.3. Misrepresentation. Any representation or warranty made by
the Company or any Subsidiary in any Loan Document or any other certificate,
report, financial statement or other document furnished by or on behalf of the
Company or any Subsidiary in connection with this Agreement, shall prove to
have been incorrect in any material respect when made or deemed made; or

     SECTION 7.4. Breach of Certain Covenants and Agreements. Failure of the
Company to perform or comply in any material respect with (a) any term,
covenant or agreement contained in Section 2.3(a), or Article 5 (other than a
failure to purchase the Note when required under Section 2.3(a)(ii)(D)), or (b)
any other term, covenant or agreement contained in this Agreement, and (i) in
the case of clause (a), such failure shall not have been remedied or waived
within thirty (30) days (or 5 days in the case of any failure to perform or
observe the covenants contained in Section 5.4) after receipt of written notice
from the 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); or

     SECTION 7.5. Judgments. One or more judgments or orders for the payment
of money (not fully paid or covered without dispute by insurance) in an
aggregate amount of $5,000,000 in any fiscal year shall be rendered against the
Company or any of its

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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; or

     SECTION 7.6. ERISA. Any member of the ERISA Group shall fail to pay when
due an amount or amounts aggregating in excess of $5,000,000 which it shall
have become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV of ERISA any member of
the ERISA Group, any plan administrator or any combination of the foregoing; or
PBGC shall institute proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer any Material
Plan; or a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be terminated; or
there shall occur a complete or partial withdrawal from, or a default, within
the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA Group to
incur a current payment obligation in excess of $5,000,000; or

     SECTION 7.7. Insolvency, Etc. The Company or any of its Significant
Subsidiaries shall be dissolved or liquidated or any judgment, order or decree
therefor shall be entered (other than dissolutions or liquidations of
Subsidiaries permitted by Section 5.1), or shall generally not pay its debts as
they become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors, or
shall institute, or there shall be instituted against any Borrower or any of
their respective Significant Subsidiaries, any proceeding or case seeking to
adjudicate it as bankrupt or insolvent or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief or protection of debtors or seeking the entry of an
order for relief, or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its assets, rights,
revenues or property, and, if such proceeding is instituted against any
Borrower or such Subsidiary and is being contested by such Borrower or such
Subsidiary, as the case may be, in good faith by appropriate proceedings, such
proceeding shall remain undismissed or unstayed for a period of 60 days; or any
Borrower or such Subsidiary shall take any action (corporate or other) to
authorize or further any of the actions described above in this subsection;

     SECTION 7.8. Other Documents. Any material provision of any Loan
Document, any Senior Debt Document or any Subordinated Debt Document shall at
any time for any reason cease to be valid and binding and enforceable against
any obligor thereunder, or the validity, binding effect or enforceability
thereof shall be contested by any Person, or any obligor

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shall deny that it has any or further liability or obligation thereunder,
or any Loan Document or any Subordinated Debt Document shall be terminated,
invalidated or set aside, or be declared ineffective or inoperative or in any
way cease to give or provide to the Lenders and the Agent the benefits
purported to be created thereby in any material manner; or

     SECTION 7.9. Control. Any Change of Control shall occur.

     THEN, (i) upon the occurrence of any Event of Default described in the
foregoing Section 7.7 (but expressly excluding the other Events of Default in
this Article 7), the unpaid principal amount of and accrued interest on the
Loan 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 Company, and the 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
Loan 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 Indebtedness has not been indefeasibly paid in full and the Commitments
have not been terminated, the Lender will not so declare the Loan to be due and
payable under Sections 7.3, 7.4 (except with respect to any term, covenant or
agreement contained in Sections 5.5, 5.6, 5.7 and 5.8), 7.5, 7.6, 7.8 or 7.9
unless and until the Lender Indebtedness is accelerated under similar
provisions of the Senior Credit Agreement; provided, further that so long as
all Lender Indebtedness has not been indefeasibly paid in full and the
Commitments have not been terminated, 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 5.5, 5.6, 5.7 and 5.8, the Lender may so
declare the Loan to be due and payable only after such failure shall not have
been remedied or waived within forty-five (45) days after receipt of written
notice from the Lender to the Company and the Agent 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;

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     (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 Borrower, or such other Person as may be legally
entitled thereto.

ARTICLE 8 MISCELLANEOUS

     SECTION 8.1. Participations in Loan and Note.

          (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 Loan or Note 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 Loan. In the case of any sale, assignment, transfer, or
negotiation of all or part of the Loan or Note 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 Loan or Note.

          (b)  In connection with any sales, assignments, or transfers of any Loan or
Note referred to in Section 8.1(a), the Lender shall give notice to the Company
and the Agent 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.
The Company 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
Note.

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     SECTION 8.2. Expenses. Whether or not the transactions contemplated
hereby shall be consummated, the Company agrees 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 all the costs of furnishing all opinions by counsel for the Company
(including, without limitation, any opinions requested by the Lender as to any
legal matters arising hereunder), and of the Company’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 consummation of the
transactions contemplated hereby, 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 the Loan Documents, and the Loan hereunder, and any amendments and waivers
hereto or thereto (other than assignments of, or sales of participants 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 Company hereunder or under the Note 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, the Company (the
“Indemnitor”) agrees to indemnify, pay, and hold the Lender and any holder of
the Note, 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 Loan or the use or intended use of the proceeds
of any of the Loan hereunder (the “Indemnified Liabilities”); provided, that
the Indemnitor 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 Indemnitor 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 Indemnitor
unless (and then solely to the extent) the Indemnitor is materially prejudiced.
The Indemnitor 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

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indemnification hereunder (provided that the Indemnitor 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 Indemnitor shall have stated in a
writing delivered to the Indemnitee that, as between the Indemnitor and the
Indemnitee, the Indemnitor is responsible to the Indemnitee with respect to
such claim to the extent and subject to the limitations set forth herein;
provided, that the Indemnitor 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 Indemnitor; provided, further, that with respect
to any claim as to which the Indemnitee is controlling the defense, the
Indemnitor 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 Company 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 Note, or
consent to any departure by the Company therefrom, shall in any event be
effective without the written concurrence of the holders of at least 51% of the
principal amount of the Loan and the Company and an Officer’s Certificate of
the Company to the effect that such amendment, modification, termination, or
waiver does not violate the Senior Credit Agreement; 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
Note 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 Note
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
Company in any case shall entitle the Company 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 Note at the time outstanding and each future
holder of the Note.

     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 Unmatured Event or 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

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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:
	 
	 	 	
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
	 	 	
4000 Bell Atlantic Tower
	 	 	
1717 Arch Street
	 	 	
Philadelphia, Pennsylvania 19103
	 	 	
Attention:
	Craig L. Godshall
	 	 	 	Sarah B. Gelb
	 	 	
Telecopy No.: (215) 994-2222

- 42 -

 

	 	 	 	 
	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
	 	 	
4000 Bell Atlantic Tower
	 	 	
1717 Arch Street
	 	 	
Philadelphia, Pennsylvania 19103
	 	 	
Attention:
	Craig L. Godshall
	 	 	 	Sarah B. Gelb
	 	 	
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 Loan hereunder and
the execution and delivery of the Note and shall continue (but, with respect to
representations and warranties, such representations and warranties are made
only as of the date when made pursuant to Article 4) until repayment of the
Note 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
Company set forth in Sections 8.2 and 8.3 shall survive the payment of the Loan
and the Note 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 Note 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

- 43 -

 

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 8.9. Severability. In case any provision in or obligation under
this Agreement or the Note 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 NOTE SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.

     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 Note 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 Company’s 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 COMPANY
AGREES 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
COMPANY HEREBY SUBMITS TO AND ACCEPTS 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 APPEAL. THE COMPANY FURTHER IRREVOCABLY CONSENTS 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

- 44 -

 

ANY OTHER MANNER PERMITTED BY LAW OR LIMIT THE RIGHT OF THE LENDERS TO
BRING ANY SUCH ACTION OR PROCEEDING AGAINST THE COMPANY OR ITS PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTION. THE COMPANY HEREBY IRREVOCABLY WAIVES 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. THE COMPANY 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
COMPANY 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. THE COMPANY AND EACH LENDER HEREBY WAIVES, RELEASES AND
AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES. THE COMPANY 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 COMPANY ANY
LOAN 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.

     SECTION 8.17. Confidentiality. The Lender shall keep any information
delivered or made available by the Company 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

- 45 -

 

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 Company 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. Acknowledgments. The Company 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 Company
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
Company, 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 Company.

* * * * *

- 46 -

 

     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/ Carol Creel

	 	 	

	 	 	
Name: Carol Creel
	 	 	
Title: Asst. Secretary
	 
	COURT SQUARE CAPITAL LIMITED
	 
	By:	 	/s/ Michael A. Delaney

	 	 	

	 	 	
Name: Michael A. Delaney
	 	 	
Title: Managing Director

- 47 -

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