<PAGE> 1
As filed with the Securities and Exchange Commission July 21, 1998
Registration No. 333-48279
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
AMENDMENT NO. 3
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
MSX INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 7363 38-3323099
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Classification Identification No.)
incorporation or Code Number)
organization)
</TABLE>
<TABLE>
<S> <C> <C>
MSX International Business Services, Inc............. 7363 38-3323109
MSX International Engineering Services, Inc.......... 8711 38-3323110
MSX International (Holdings), Inc.................... 6719 38-3325699
MSX International (USA), Inc......................... 6719 38-3325698
Geometric Results Incorporated....................... 7363 38-2703800
(Exact name of registrant as specified in its (Primary Standard (I.R.S. Employer
charter) Industrial Classification Identification No.)
Code Number)
</TABLE>
DELAWARE
(State or other jurisdiction of
incorporation or organization)
275 Rex Boulevard
Auburn Hills, Michigan 48236
(248) 299-1000
(Address and telephone number of registrant's principal executive offices)
Carol Creel, Esq.
General Counsel
275 Rex Boulevard
Auburn Hills, Michigan 48236
(248) 299-1000
(Name, address and telephone number of agent for service)
------------------
COPIES TO:
DAVID W. FERGUSON, ESQ.
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
AMOUNT PROPOSED PROPOSED
TITLE OF EACH CLASS OF TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER NOTE(1) OFFERING PRICE(1) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
11 3/8% Senior Subordinated
Notes due 2008................ $100,000,000 100% $100,000,000 $29,500
- -----------------------------------------------------------------------------------------------------------------
Guarantees of 11 3/8% Senior
Subordinated Notes due 2008... (2) (2) (2) (2)
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated pursuant to Rule 457(f) solely for the purposes of calculating the
registration fee.
(2) Pursuant to Rule 457(n) no registration fee is required with respect to the
Guarantees of the Senior Subordinated Notes registered hereby.
------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED JULY 21, 1998
PRELIMINARY PROSPECTUS
OFFER TO EXCHANGE
11 3/8% SENIOR SUBORDINATED NOTES DUE 2008
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933
FOR ANY AND ALL OUTSTANDING
11 3/8% SENIOR SUBORDINATED NOTES DUE 2008
OF
MSX INTERNATIONAL, INC. LOGOMSX INTERNATIONAL, INC.
------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 1998, UNLESS EXTENDED.
MSX International, Inc., a Delaware corporation ("MSXI" or the "Company"),
hereby offers, upon the terms and subject to the conditions set forth in this
Prospectus and the accompanying letter of transmittal (the "Letter of
Transmittal" and, together with this Prospectus, the "Exchange Offer"), to
exchange an aggregate principal amount of up to $100,000,000 of its 11 3/8%
Senior Subordinated Notes due 2008 (the "Exchange Notes") which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to a registration statement of which this Prospectus forms a part, for
an identical principal amount of the issued and outstanding 11 3/8% Senior
Subordinated Notes due 2008 (the "Old Notes" and, together with the Exchange
Notes, the "Notes") of the Company from the Holders (as defined herein) thereof
in integral multiples of $1,000. The Company will keep the Exchange Offer open
only for 30 days (or longer if required by applicable law) after the date notice
thereof is mailed to the Holders, unless extended at the Company's option. As of
the date of this Prospectus, there are $100,000,000 in aggregate principal
amount of the Old Notes outstanding. The terms of the Exchange Notes are
identical in all material respects to the terms of the Old Notes, except that
the offer and sale of the Exchange Notes have been registered under the
Securities Act and therefore the Exchange Notes are not subject to certain
restrictions on transfer applicable to the Old Notes, will not contain legends
relating thereto and will not be entitled to registration rights or other rights
under the Registration Agreement (as defined). The Exchange Notes will be issued
under the same Indenture (as defined herein) as the Old Notes and the Exchange
Notes and the Old Notes will constitute a single series of debt securities under
the Indenture. See "The Exchange Offer."
The Exchange Notes will mature on January 15, 2008. Interest on the Exchange
Notes is payable in cash semi-annually on January 15 and July 15 of each year,
commencing on the first such date following the original issuance of the
Exchange Notes. The Exchange Notes will be redeemable at the option of the
Company, in whole or in part, at any time on or after January 15, 2003 at the
redemption prices set forth herein plus accrued and unpaid interest, if any, to
the date of redemption. In addition, at any time prior to January 15, 2001, the
Company may also redeem up to 35% of the aggregate principal amount of Notes
originally outstanding with the proceeds of one or more Public Equity Offerings
(as defined) following which there is a Public Market (as defined), at a
redemption price equal to 111.375% of the principal amount thereof, plus accrued
and unpaid interest to the date of redemption, provided that at least 65% in
aggregate principal amount of Notes originally issued remains outstanding
immediately after giving effect to such redemption. Upon the occurrence of a
Change of Control (as defined), the Company will be required to make an offer to
each holder of Exchange Notes to purchase such holder's Exchange Notes, at a
purchase price of 101% of the aggregate principal amount thereof, plus accrued
and unpaid interest to the date of purchase. See "Description of Notes -- Change
of Control."
The Exchange Notes will be general unsecured obligations of the Company
subordinated in right of payment to all existing and future Senior Indebtedness
(as defined) of the Company. The Notes will rank pari passu with all existing
and future Senior Subordinated Indebtedness (as defined) of the Company and will
rank senior to all future indebtedness that is expressly subordinated in right
of payment to the Notes. The Company is a holding company that will derive all
of its operating income and cash flow from its subsidiaries. The Exchange Notes
will be fully and unconditionally guaranteed (the "Subsidiary Guarantees") on an
unsecured, senior subordinated basis by each Domestic Restricted Subsidiary (as
defined) (collectively, the "Subsidiary Guarantors") of the Company. See
"Description of Notes -- Subsidiary Guarantees." As of March 29, 1998, (i) the
Company had $61.4 million of outstanding Senior Indebtedness, and (ii) the
Subsidiary Guarantors had $42.3 million of outstanding Senior Indebtedness. See
"Description of Notes -- Subordination."
(Continued on next page)
SEE "RISK FACTORS" BEGINNING ON PAGE 17 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY HOLDERS OF THE OLD NOTES PRIOR TO TENDERING
THEIR OLD NOTES IN THE EXCHANGE OFFER.
------------------
UNTIL , 1998 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
------------------
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1998
<PAGE> 3
(Cover page continued)
The Company is making the Exchange Offer in reliance on the position of the
staff of the Division of Corporation Finance of the Securities and Exchange
Commission (the "Commission") as set forth in certain interpretive letters
addressed to third parties in other transactions. However, the Company has not
sought its own interpretive letter and there can be no assurance that the staff
of the Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such interpretive
letters to third parties. Based on the interpretations by the staff of the
Division of Corporation Finance set forth in Exxon Capital Holdings Corporation
(available May 13, 1988), Morgan Stanley & Co. Incorporated (available June 5,
1991) and Shearman & Sterling (available July 2, 1993), and subject to the two
immediately following sentences, the Company believes that the Exchange Notes
issued pursuant to this Exchange Offer in exchange for Old Notes may be offered
for resale, resold and otherwise transferred by a holder thereof (other than a
holder who is a broker-dealer) without further compliance with the registration
and prospectus delivery requirements of the Securities Act, provided that such
Exchange Notes are acquired in the ordinary course of such holder's business and
that such holder is not participating, and has no arrangement or understanding
with any person to participate, in a distribution (within the meaning of the
Securities Act) of such Exchange Notes. However, any holder of Old Notes who is
an "affiliate" of the Company or who intends to participate in the Exchange
Offer for the purpose of distributing Exchange Notes, or any broker-dealer who
purchased Old Notes from the Company to resell pursuant to Rule 144A under the
Securities Act ("Rule 144A") or any other available exemption under the
Securities Act, (a) will not be able to rely on the interpretations of the staff
of the Division of Corporation Finance of the Commission set forth in the
above-mentioned interpretive letters, (b) will not be permitted or entitled to
tender such Old Notes in the Exchange Offer and (c) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or other transfer of such Old Notes unless such sale is
made pursuant to an exemption from such requirements.
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer during the period
referred to below in connection with resales of Exchange Notes received in
exchange for Old Notes where such Old Notes were acquired by such broker-dealer
for its own account as a result of market-making or other trading activities.
Subject to certain provisions set forth in the Registration Agreement, the
Company has agreed that this Prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer in connection with any such
resales for a period ending 180 days after the Expiration Date referred to below
or, if earlier, when all such Exchange Notes have been disposed of by such
broker-dealer. See "Plan of Distribution."
Each holder of Old Notes who wishes to exchange Old Notes for Exchange
Notes in the Exchange Offer will be required to represent that (i) it is not an
"affiliate" of the Company, (ii) any Exchange Notes to be received by it are
being acquired in the ordinary course of its business, and (iii) it has no
arrangement or understanding with any person to participate in a distribution
(within the meaning of the Securities Act) of such Exchange Notes. Any
broker-dealer who is an "affiliate" of the Company may not rely on such
interpretive letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction. See "The Exchange Offer -- Resales of the Exchange Notes."
In that regard, each broker-dealer who surrenders Old Notes pursuant to the
Exchange Offer will agree, by execution of, or otherwise becoming bound by, the
Letter of Transmittal, that, upon receipt of notice from the Company of the
occurrence of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in this Prospectus untrue in any material
respect or which causes this Prospectus to omit to state a material fact
necessary in order to make the statements contained or incorporated by reference
herein, in the light of the circumstances under which they were made, not
misleading or of the occurrence of certain other events specified in the
Registration Agreement, such broker-dealer will suspend
2
<PAGE> 4
the sale of Exchange Notes pursuant to this Prospectus until the Company has
amended or supplemented this Prospectus to correct such misstatement or omission
and has furnished copies of the amended or supplemented Prospectus to such
broker-dealer or the Company has given notice that the sale of the Exchange
Notes may be resumed, as the case may be. If the Company gives such notice to
suspend the sale of the Exchange Notes, it shall extend the 180-day period
referred to above during which broker-dealers are entitled to use this
Prospectus in connection with the resale of Exchange Notes by the number of days
during the period from and including the date of the giving of such notice to
and including the date when broker-dealers shall have received copies of the
amended or supplemented Prospectus necessary to permit resales of the Exchange
Notes or to and including the date on which the Company has given notice that
the sale of Exchange Notes may be resumed, as the case may be.
The Exchange Notes will be a new issue of securities for which there
currently is no market. Although Salomon Brothers Inc, Lehman Brothers Inc. and
First Chicago Capital Markets, Inc., the initial purchasers of the Old Notes
(the "Initial Purchasers") have informed the Company that they currently intend
to make a market in the Exchange Notes, they are not obligated to do so, and any
such market making may be discontinued at any time without notice. Accordingly,
there can be no assurance as to the development or liquidity of any market for
the Exchange Notes. The Company currently does not intend to apply for listing
of the Exchange Notes on any securities exchange or for quotation through the
National Association of Securities Dealers Automated Quotation System.
Any Old Notes not tendered and accepted in the Exchange Offer will remain
outstanding and will be entitled to all the same rights and will be subject to
the same limitations applicable thereto under the Indenture (as defined) (except
for those rights which terminate upon consummation of the Exchange Offer).
Following consummation of the Exchange Offer, the holders of Old Notes will
continue to be subject to the existing restrictions upon transfer thereof and
the Company will have no further obligation to such holders to provide for
registration under the Securities Act of the Old Notes held by them. To the
extent that Old Notes are tendered and accepted in the Exchange Offer, a
holder's ability to sell untendered Old Notes could be adversely affected. See
"Prospectus Summary -- Certain Consequences of a Failure to Exchange Old Notes."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD NOTES ARE URGED TO READ THIS PROSPECTUS AND THE
RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER THEIR
OLD NOTES PURSUANT TO THE EXCHANGE OFFER.
The Company will not receive any proceeds from the issuance of the Exchange
Notes offered hereby. The Company will pay all expenses of the Exchange Offer.
No dealer-manager is being used in connection with this Exchange Offer. See "Use
of Proceeds" and "Plan of Distribution."
This Prospectus, together with the Letter of Transmittal, is being sent to
all registered holders of Old Notes as of , 1998.
3
<PAGE> 5
AVAILABLE INFORMATION
The Company and the Subsidiary Guarantors have filed with the Securities
and Exchange Commission (the "Commission") a Registration Statement on Form S-4
(the "Exchange Offer Registration Statement," which term shall encompass all
amendments, exhibits, annexes and schedules thereto) pursuant to the Securities
Act, and the rules and regulations promulgated thereunder, covering the Exchange
Notes being offered hereby. This Prospectus does not contain all the information
set forth in the Exchange Offer Registration Statement. For further information
with respect to the Company, the Subsidiary Guarantors and the Exchange Offer,
reference is made to the Exchange Offer Registration Statement. Statements made
in this Prospectus as to the contents of any contract, agreement or other
document referred to are not necessarily complete. With respect to each such
contract, agreement or other document filed as an exhibit to the Exchange Offer
Registration Statement, reference is made to the exhibit for a more complete
description of the document or matter involved, and each such statement shall be
deemed qualified in its entirety by such reference. The Exchange Offer
Registration Statement, including the exhibits thereto, can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Regional
Offices of the Commission at Seven World Trade Center, Suite 1300, New York, New
York 10048 and at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such materials can be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, the Commission maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. The address of such Web site is:
http://www.sec.gov.
As a result of the Exchange Offer, the Company will become subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith will be required to file
periodic reports and other information with the Commission. In the event the
Company ceases to be subject to the informational requirements of the Exchange
Act, the Company will be required under the Indenture to continue to file with
the Commission the annual and quarterly reports, information, documents or other
reports, including, without limitation, reports on Forms 10-K, 10-Q and 8-K,
which would be required pursuant to the informational requirements of the
Exchange Act. The Company will also furnish such other reports as may be
required by law.
4
<PAGE> 6
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information (including the financial statements and the notes thereto) included
elsewhere in this Offering Memorandum. On January 3, 1997, the Company acquired
(the "TSG Acquisition") selected assets and operations of the former engineering
and technical business service units of MascoTech Automotive Systems Group, Inc.
("MASG") and MascoTech, Inc. ("MascoTech"). Through the consummation of the TSG
Acquisition, the Company also acquired (the "APX Acquisition") the net assets of
APX International ("APX") which were previously acquired by MASG as of November
6, 1996. References herein to the TSG Acquisition include the APX Acquisition.
Effective August 31, 1997, the Company acquired (the "GRI Acquisition") all of
the issued and outstanding stock of Geometric Results Incorporated ("GRI").
Unless otherwise indicated, the information in this Offering Memorandum is
presented on a pro forma basis as if the GRI Acquisition had occurred on January
1, 1997. All references herein to the Company or MSXI, unless the context
otherwise requires, shall mean MSX International, Inc., including its
subsidiaries, and its predecessor for accounting purposes, the Technical
Services Group of MascoTech ("TSG"). The Old Notes were issued by the Company on
January 22, 1998 (the "Offering"). Concurrently with the Offering, the Company
entered into the New Credit Facility (as defined) in order the replace the Old
Credit Facility (as defined) (the New Credit Facility, together with the
Offering and the application of the net proceeds therefrom, the "Refinancing").
THE COMPANY
The Company is a leading provider of outside staffing, engineering and
business services, principally to the automotive industry in the United States
and Europe, with the capability of providing services on a worldwide basis.
Through internal growth and acquisitions, the Company has become a single source
provider of a broad range of complementary services, including technical and
professional staffing services, engineering, design and related technical
services and other business and marketing services. In August 1997, the Company
acquired GRI, a wholly-owned subsidiary of Ford Motor Company ("Ford"). In
connection with the GRI Acquisition, the Company entered into two five-year
agreements with Ford to manage certain temporary staffing procurement services
for Ford (the "Ford Master Vendor Agreement") and to provide certain general
business services to Ford (the "Ford Master Supply Agreement"). By adding GRI's
capabilities and services to the Company's historical strength in providing
technical staffing and engineering and design services, the Company is now able
to sell a broad range of complementary services to both existing and new
customers within and outside the automotive industry. The Company believes that
it is the only company currently providing such a broad range of services to the
automotive industry on a worldwide basis. The Company employed or sourced over
12,000 individuals at 53 operating facilities in 23 countries as of December 28,
1997. The Company's principal operations are in North America and Europe. Pro
forma net sales and EBITDA for the fiscal year ended December 28, 1997 were
$985.1 million and $33.2 million, respectively and for the fiscal quarter ended
March 29, 1998 were $255.1 million and $9.7 million, respectively.
Automotive original equipment manufacturers ("OEMs") are increasingly
relying on third parties to provide them with essential services as
globalization and competition lead them to improve efficiency by focusing on
their core competencies of vehicle development, assembly and marketing. OEMs are
also consolidating their supplier base by contracting with larger, global
organizations in order to streamline purchasing, reduce costs and improve
quality. Management expects the Company to continue to benefit from these
trends, both in the automotive and other industries.
The Company provides three strategic service offerings to its customers:
<TABLE>
<CAPTION>
IN-CLIENT SERVICES PRODUCT DEVELOPMENT SERVICES BUSINESS & TECHNOLOGY SERVICES
------------------ ---------------------------- ------------------------------
<S> <C> <C>
- - Contract Staffing - Concept Development - Automotive and Business Process Management
- - Master Vendor Program - Design Engineering - Marketing Services and Document Management
- Manufacturing Engineering - Purchasing Services
- Production Support - Training Services
- Special Vehicles - Image Archiving, Conversion and Warehousing
</TABLE>
5
<PAGE> 7
In-Client Services, Product Development Services and Business and
Technology Services accounted for approximately 46%, 21% and 33%, respectively,
of pro forma net sales for the fiscal year ended December 28, 1997. The Company
provides its services to over 130 customers, including most of the major United
States OEMs and a number of automotive suppliers. The Company's largest
customers are Ford, General Motors Corporation ("GM") and Chrysler Corporation
("Chrysler"), which accounted for 72%, 8% and 7%, respectively, of the Company's
pro forma net sales for the fiscal year ended December 28, 1997. The Company
believes that it has developed strong relationships with its customers and has a
reputation for quality, reliability and service that has been recognized through
Ford's Q1 and Chrysler's Pentastar awards. In addition, most of its operations
are ISO 9001 or 9002 certified. ISO 9001 and 9002 are international quality
standards. An operation receives ISO certification when an independent assessor
determines that the operation is in compliance with a documented quality
management system.
In-Client Services. The Company provides two types of staffing services:
first, as a direct supplier of technical, professional and other temporary
staffing ("Contract Staffing") and second, as the master vendor of staffing
procurement through its master vendor program (the "Master Vendor Program").
Contract Staffing. As of December 28, 1997, Contract Staffing supplied
approximately 1,600 employees that it placed on assignment to approximately
130 customers in 10 countries. The Company classifies over 85% of its
employees on assignment as technical personnel. Through its position as
Ford's master vendor, the Company has also enhanced its opportunities to
provide Contract Staffing directly to Ford.
Master Vendor Program. The Master Vendor Program is an automated process
used to manage the procurement of a broad range of temporary staffing
services, including coordination of staffing from other temporary staffing
suppliers. While the Company intends to expand its Master Vendor Program
services to other customers, the Company currently provides such services
solely to Ford pursuant to the Ford Master Vendor Agreement. As of December
28, 1997, there were approximately 6,500 temporary employees at Ford who
had been procured through the Master Vendor Program.
Product Development Services. The Company offers a broad range of
engineering, design and other related services primarily to the automotive
industry including: concept development, design engineering, manufacturing
engineering, production support and special vehicles services. The Company
provides these services on a discrete basis and can draw on these complementary
capabilities to execute development programs for the body and chassis of new
vehicles, such as a recently introduced Ford minicar. As of December 28, 1997,
Product Development Services had a network of 30 offices and facilities situated
in major markets throughout North America, Europe, South America and Asia. Since
January 1, 1996, the Company has performed projects for OEMs including Ford, GM,
Chrysler, Daewoo, Rover, Volkswagen, Volvo, Mercedes and Mazda, and over 20
automotive suppliers such as Textron and Lear. For the fiscal year ended
December 28, 1997, no single project accounted for more than 1% of the Company's
pro forma net sales.
Business & Technology Services. The Company offers a broad range of
business and technical services, principally to the automotive industry
including: automotive and business process management, marketing services,
document management services and other administrative and customer-related
services. The Company typically assumes responsibility for specific non-core
functions of its customers, frequently on an extended basis. For example, the
Company's automotive and business process management services will typically
re-engineer a customer's existing internal processes, such as technical help
desks and warranty certification programs, to improve them and provide them on a
more efficient basis. Other services offered include marketing research,
customer satisfaction surveys, technical training schools and image archiving,
conversion and warehousing. The Company provides a number of these services
under the Ford Master Supply Agreement, pursuant to which the Company is the
sole or preferred supplier of these services to various business units of Ford
(with the exception of selected marketing and training services). In addition,
the Company believes these services have applications across many industries and
provide opportunities for significant growth both in the automotive and other
industries.
6
<PAGE> 8
COMPETITIVE STRENGTHS
Strong Customer Relationships and Reputation for Quality. The Company
believes that it has developed strong customer relationships with both OEMs and
automotive suppliers. Management believes that the Company's engineering
capabilities, reliable performance, strong customer service and competitive cost
structure enable it to attract new customers and to maintain its reputation with
existing customers for providing high quality services at competitive prices. As
a result of its focus on quality, the Company has received Ford's Q1 and
Chrysler's Pentastar awards, and most of the Company's operations are ISO 9001
or 9002 certified. The Company believes that its relationships and its
reputation for quality, reliability and service often enable the Company to
pursue business opportunities ahead of its competitors.
Global Presence. Management believes the Company's international presence
is a significant competitive advantage in winning and retaining new business and
meeting the global sourcing, quality and engineering requirements of its
customers. For example, when GM consumer-tested its European sedan replacement
last year, the Company built model vehicles using an integrated system that
enabled the Company to do the styling work near GM's designers in Germany and
Brazil and to build the vehicles in the United States where the cost was lower.
Similarly, automotive suppliers require support in locations where their OEM
customers demand their presence. For example, the Company supports two major
United States-based interior systems suppliers in Europe and Brazil. Non-United
States sales of In-Client Services, Product Development Services and Business
and Technology Services accounted for 14% of the Company's pro forma net sales
for the fiscal year ended December 28, 1997.
Broad Range of Services Provided. The Company believes that its broad range
of service offerings provides several advantages by: (i) simplifying the
procurement and monitoring process for its customers who require multiple
services; (ii) facilitating cross-selling of services to existing customers;
(iii) providing multiple opportunities to identify and penetrate new customers;
and (iv) diversifying the Company's revenues and earnings. Additionally, the
Company believes that its global presence and broad range of services enable it
to recruit and retain a talented pool of employees.
Value-Added Provider. The Company believes that it is frequently able to
operate with a lower cost structure and a higher degree of flexibility and
responsiveness relative to the larger in-house operations of its customers. The
Company believes that In-Client Services provides customers with a
cost-effective and flexible way to manage certain of their technical and
professional staffing needs by assuming the responsibility for procuring,
compensating, monitoring and, in some cases, training temporary staff. Product
Development Services enables OEMs and automotive suppliers to manage their
engineering and design services for selected non-core projects on an efficient
basis. Business and Technology Services provides services that are essential to
the Company's customers, but not at the core of their business competencies.
Investment in Technology. The Company offers its customers access to many
sophisticated technologies. These include supercomputing resources, analytical
software and a large network of computer aided design ("CAD") terminals
connected by an international communications infrastructure. The Company has
made substantial investments in state-of-the-art equipment and related training
to maintain its competitive technological position. The Company believes it is
one of the few independent engineering firms that operates all major CAD
platforms used by the major United States OEMs and, as of December 28, 1997, the
Company operated approximately 500 CAD terminals. The Company's communications
infrastructure permits the rapid exchange of data between the Company and its
customers. The Company believes that its Master Vendor Program, which combines
an intranet-based placement system with procedures to support the monitoring and
continuous improvement of a customer's temporary staffing supplier base, is the
most comprehensive system for management of staffing services. Business and
Technology Services uses proprietary software as an integral part of many of the
services that it offers.
7
<PAGE> 9
BUSINESS STRATEGY
The Company's global market position and breadth of services distinguish it
as one of the leading providers of outside staffing, engineering and business
services to the automotive industry and position the Company to take advantage
of positive trends both in the automotive and other industries. The Company's
business strategy is to grow profitably through the following initiatives:
Increase Market Share at Existing Customers. As a result of the APX and GRI
Acquisitions, the Company has expanded its global presence and product
offerings. For example, the GRI Acquisition gave the Company the ability to
provide a broad range of additional services and capabilities that historically
GRI had provided only to Ford. The Company believes that offering three
categories of services that are often complementary creates significant
cross-selling opportunities. For example, customers of Product Development
Services can utilize the Company's image archiving, conversion and warehousing
services for engineering drawings. The Company also can offer its Master Vendor
Program to OEMs other than Ford who are already customers of Contract Staffing.
The Company also believes that it has several opportunities to sell certain
Business and Technology Services that are currently provided only to Ford to
other OEMs and their suppliers. In addition, the Company believes that there are
significant opportunities to sell packages of multiple services, many of which
the Company historically has not attempted to market together, to its existing
customers.
Increase Global Automotive Market Share. Geographic expansion will continue
to be an important element of the Company's business strategy. The Company
intends to expand its existing presence in Germany, the development center for
several important OEMs, and has recently opened new locations in Munich and
Ingolstadt. The Company has established operations in South America and
Australasia to take advantage of global growth opportunities as the Company's
customers expand their operations in these regions. As a result of the Company's
strong customer relationships and worldwide presence, management believes that
the Company is well positioned to expand with OEMs and other suppliers in
established as well as emerging markets.
Expansion into Non-Automotive Markets. The Company's management,
established infrastructure and successful track record of providing staffing,
engineering and business services to several of the world's largest and most
complex organizations position it to expand into new, non-automotive markets.
The Company believes other major corporations are attractive potential customers
for many of the Company's services.
Rationalize Cost Structure. The Company intends to improve its
profitability through the rationalization of its operations, including the
further rationalization of operations acquired in the GRI Acquisition. The
Company expects to realize these cost savings through the consolidation of back
office activities and the ongoing rationalization of duplicative facilities,
management and administrative offices.
Pursue Additional Strategic Acquisitions. The Company plans to continue to
make selective strategic acquisitions to enhance its global market position and
further broaden its service offerings. The Company believes that the
consolidation of the automotive supplier base will present additional
opportunities for acquisitions. The Company seeks acquisitions that will
strengthen MSXI's relationships with existing customers and provide access to
new customers, complement MSXI's existing global capabilities and provide MSXI
with growth opportunities in new markets.
8
<PAGE> 10
COMPANY BACKGROUND
The Company is a holding company formed and owned by Citicorp Venture
Capital, Ltd. ("CVC"), MascoTech and certain members of management. The Company
was formed to consummate the TSG Acquisition, in which it acquired selected
assets and operations of the former engineering and technical business services
units of MASG and MascoTech, including the net assets of APX, a design and
engineering services provider which previously had been acquired by MASG on
November 6, 1996. The TSG Acquisition was effective on January 3, 1997. The
purchase price of the TSG Acquisition was $145.6 million, which was financed
through $3.8 million of common equity, $36.0 million of Redeemable Series A
Preferred Stock (the "Redeemable Series A Preferred Stock"), a $20.0 million
bridge loan provided by CVC (the "CVC Bridge Loan"), a $20.0 million bridge loan
provided by MascoTech (the "MascoTech Bridge Loan"), the issuance of a $30.0
million Senior Subordinated Note to MascoTech (the "Senior Subordinated Note")
and $35.8 million of borrowings under the Old Credit Facility. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources" and "Description of Certain Other
Indebtedness."
Effective August 31, 1997, the Company acquired certain service-providing
operations of Ford through the acquisition of GRI, a wholly-owned subsidiary of
Ford. As part of Ford, GRI acted as administrator of Ford's temporary staffing
services using a predecessor to the Master Vendor Program and also provided
process management, purchasing and printing services to Ford. The purchase price
of $60.0 million was financed with borrowings under the Old Credit Facility,
offset in part by substantial cash balances acquired in the GRI Acquisition.
The Refinancing, including the issuance of the Old Notes, was completed on
January 22, 1998.
USE OF PROCEEDS
The Company will not receive any cash proceeds from the issuance of the
Exchange Notes offered hereby.
9
<PAGE> 11
THE EXCHANGE OFFER
The Exchange Offer............ Up to $100 million aggregate principal amount
of Exchange Notes are being offered in exchange
for a like aggregate principal amount of Old
Notes. The Company is making the Exchange Offer
in order to satisfy its obligations under the
Registration Agreement relating to the Old
Notes. For a description of the procedures for
tendering Old Notes, see "The Exchange Offer --
Procedures for Tendering Old Notes."
Expiration Date............... 5:00 p.m., New York City time, on ,
1998 (such time on such date being hereinafter
called the "Expiration Date") unless the
Exchange Offer is extended by the Company (in
which case the term "Expiration Date" shall
mean the latest date and time to which the
Exchange Offer is extended). Any waiver,
extension or termination of the Exchange Offer
will be publicly announced by the Company
through a release to the Dow Jones News Service
and as otherwise required by applicable law or
regulations. See "The Exchange Offer -- Terms
of the Exchange Offer; Period for Tendering Old
Notes."
Certain Conditions to the
Exchange Offer................ The Exchange Offer is subject to certain
conditions. The Company reserves the right,
subject to applicable law, at any time and from
time to time, (i) to delay the acceptance of
the Old Notes for exchange, (ii) to terminate
the Exchange Offer if certain specified
conditions have not been satisfied, (iii) to
extend the Expiration Date of the Exchange
Offer and retain all Old Notes tendered
pursuant to the Exchange Offer, subject,
however, to the right of holders of Old Notes
to withdraw their tendered Old Notes, or (iv)
to amend the terms of the Exchange Offer in any
respect. See "The Exchange Offer -- Terms of
the Exchange Offer; Period for Tendering Old
Notes" and "-- Certain Conditions to the
Exchange Offer."
Withdrawal Rights............. Tenders of Old Notes may be withdrawn at any
time prior to the Expiration Date by delivering
a written notice of such withdrawal to the
Exchange Agent in conformity with certain
procedures set forth below under "The Exchange
Offer -- Withdrawal Rights."
Procedures for Tendering Old
Notes......................... Tendering holders of Old Notes must complete
and sign a Letter of Transmittal in accordance
with the instructions contained therein and
forward the same by mail, facsimile or hand
delivery, together with any other required
documents, to the Exchange Agent (as defined
below) at the address set forth herein by 5:00
p.m., New York City time on the Expiration
Date, either with the Old Notes to be tendered
or in compliance with the specified procedures
for guaranteed delivery of Old Notes. Certain
brokers, dealers, commercial banks, trust
companies and other nominees may also effect
tenders by book-entry transfer. Holders of Old
Notes registered in the name of a broker,
dealer, commercial bank, trust company or other
nominee are urged to contact such person
promptly if they wish to tender Old Notes
pursuant to the Exchange Offer. See "The
Exchange Offer -- Procedures for Tendering Old
Notes."
10
<PAGE> 12
Letters of Transmittal and certificates
representing Old Notes should not be sent to
the Company. Such documents should only be sent
to the Exchange Agent. Questions regarding how
to tender and requests for information should
be directed to the Exchange Agent. See "The
Exchange Offer -- Exchange Agent."
Guaranteed Delivery
Procedures.................... Holders of Old Notes who wish to tender their
Old Notes and whose Old Notes are not
immediately available or who cannot deliver
their Old Notes, a Letter of Transmittal or any
other document required by the Letter of
Transmittal to the Exchange Agent prior to the
Expiration Date, must tender their Old Notes
according to the guaranteed delivery procedures
set forth in "The Exchange Offer -- Guaranteed
Delivery Procedures."
Resales of Exchange Notes..... The Company is making the Exchange Offer in
reliance on the position of the staff of the
Division of Corporation Finance of the
Commission as set forth in certain interpretive
letters addressed to third parties in other
transactions. However, the Company has not
sought its own interpretive letter and there
can be no assurance that the staff of the
Division of Corporation Finance of the
Commission would make a similar determination
with respect to the Exchange Offer as it has in
such interpretive letters to third parties.
Based on these interpretations by the staff of
the Division of Corporation Finance, and
subject to the two immediately following
sentences, the Company believes that Exchange
Notes issued pursuant to this Exchange Offer in
exchange for Old Notes may be offered for
resale, resold and otherwise transferred by a
holder thereof (other than a holder who is a
broker-dealer) without further compliance with
the registration and prospectus delivery
requirements of the Securities Act, provided
that such Exchange Notes are acquired in the
ordinary course of such holder's business and
that such holder is not participating, and has
no arrangement or understanding with any person
to participate, in a distribution (within the
meaning of the Securities Act) of such Exchange
Notes. However, any holder of Old Notes who is
an "affiliate" of the Company or who intends to
participate in the Exchange Offer for the
purpose of distributing the Exchange Notes, or
any broker-dealer who purchased the Old Notes
from the Company to resell pursuant to Rule
144A or any other available exemption under the
Securities Act, (a) will not be able to rely on
the interpretations of the staff of the
Division of Corporation Finance of the
Commission set forth in the above-mentioned
interpretive letters, (b) will not be permitted
or entitled to tender such Old Notes in the
Exchange Offer and (c) must comply with the
registration and prospectus delivery
requirements of the Securities Act in
connection with any sale or other transfer of
such Old Notes unless such sale is made
pursuant to an exemption from such
requirements.
Each holder of Old Notes who wishes to exchange
Old Notes for Exchange Notes in the Exchange
Offer will be required to represent that (i) it
is not an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act,
(ii) any Exchange Notes to be received by it
are being acquired in the ordinary course of
its business, and (iii) it has no arrangement
or understanding
11
<PAGE> 13
with any person to participate in a
distribution (within the meaning of the
Securities Act) of such Exchange Notes.
Each broker-dealer that receives Exchange Notes
for its own account in exchange for Old Notes,
where such Old Notes were acquired as the
result of market-making activities or other
trading activities, must acknowledge that it
will deliver a prospectus in connection with
any resale of such Exchange Notes. The Letter
of Transmittal states that by so acknowledging
and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an
"underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be
amended or supplemented from time to time, may
be used by a broker-dealer in connection with
resales of Exchange Notes received in exchange
for Old Notes where such Old Notes were
acquired by such broker-dealer for its own
account as a result of market-making or other
trading activities. Subject to certain
provisions set forth in the Registration
Agreement and to the limitations described
below under "The Exchange Offer -- Resale of
Exchange Notes," the Company has agreed that
this Prospectus, as it may be amended or
supplemented from time to time, may be used by
a broker-dealer in connection with any such
resales for a period ending 180 days after the
Expiration Date or, if earlier, when all such
Exchange Notes have been disposed of by such
broker-dealer. See "Plan of Distribution." Any
holder who is an "affiliate" of the Company may
not rely on such interpretive letters and must
comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with any resale transaction. See
"The Exchange Offer -- Resales of Exchange
Notes."
Acceptance of Old Notes and
Offer, Delivery of Exchange
Notes....................... Subject to the terms and conditions of the
Exchange Offer, the Company will accept for
exchange any and all Old Notes which are
properly tendered in the Exchange Offer, and
not withdrawn, prior to 5:00 p.m. New York City
time, on the Expiration Date. Subject to such
terms and conditions, the Exchange Notes issued
pursuant to the Exchange Offer will be
delivered promptly following the Expiration
Date. See "The Exchange Offer -- Acceptance of
Old Notes for Exchange; Delivery of Exchange
Notes."
Exchange Agent................ The exchange agent with respect to the Exchange
Offer is IBJ Schroder Bank & Trust Company (the
"Exchange Agent"). The addresses and telephone
and facsimile numbers of the Exchange Agent are
set forth in "The Exchange Offer -- Exchange
Agent" and in the Letter of Transmittal.
Certain United States Federal
Income Tax Consequences....... Holders of Old Notes should review the
information set forth under "United States
Federal Income Tax Consequences" prior to
tendering Old Notes in the Exchange Offer.
12
<PAGE> 14
THE EXCHANGE NOTES
The following summary description of the Exchange Notes is qualified in its
entirety by the more detailed information set forth under the caption
"Description of Notes" contained elsewhere in this Prospectus.
Exchange Notes................ Up to $100 million aggregate principal amount
of 11 3/8% Senior Subordinated Notes due 2008.
The Exchange Notes will be issued and the Old
Notes were issued under the Indenture. The
terms of the Exchange Notes are identical in
all material respects to the terms of the Old
Notes, except that the offer and sale of the
Exchange Notes have been registered under the
Securities Act and therefore the Exchange Notes
are not subject to certain restrictions on
transfer applicable to the Old Notes, will not
contain legends relating thereto and will not
be entitled to registration rights or other
rights under the Registration Agreement. See
"The Exchange Offer -- Purpose of the Exchange
Offer" and "Description of Notes."
Maturity Date................. January 15, 2008.
Interest Payment Dates........ January 15 and July 15 of each year, commencing
July 15, 1998.
Subsidiary Guarantees......... The Exchange Notes will be guaranteed on a
senior subordinated basis by each Domestic
Restricted Subsidiary.
Subordination................. The Exchange Notes and the Subsidiary
Guarantees will be general unsecured senior
subordinated obligations of the Company and the
Subsidiary Guarantors, as applicable. The
Exchange Notes and the Subsidiary Guarantees
will be subordinated in right of payment to the
prior payment in full of all existing and
future Senior Indebtedness, and will rank pari
passu with all present and future Senior
Subordinated Indebtedness and senior to all
present and future Indebtedness (as defined)
that is by its terms expressly subordinated to
the Notes. As of March 29, 1998, the Company
had $61.4 million of outstanding Senior
Indebtedness and the Subsidiary Guarantors had
$42.3 million of outstanding Senior
Indebtedness. See "Description of Notes --
Subordination."
Sinking Fund.................. None.
Optional Redemption........... The Exchange Notes will be redeemable at the
option of the Company, in whole or in part, at
any time on or after January 15, 2003, at the
redemption prices set forth herein plus accrued
and unpaid interest, if any, to the date of
redemption. See "Description of Notes --
Optional Redemption." In addition, at any time
prior to January 15, 2001, the Company may
redeem, at its option, up to an aggregate
amount of 35% of the original principal amount
of Exchange Notes with the proceeds of one or
more Public Equity Offerings following which
there is a Public Market at a redemption price
of 111.375% of the principal amount thereof
plus accrued and unpaid interest, if any, to
the redemption date, provided that at least 65%
of the original aggregate principal amount of
Exchange Notes remains outstanding immediately
after each such redemption.
13
<PAGE> 15
Change of Control............. Upon the occurrence of a Change of Control,
each holder of Exchange Notes will have the
right to require the Company to repurchase all
or a portion of such holder's Exchange Notes at
a price in cash equal to 101% of the aggregate
principal amount thereof, plus accrued and
unpaid interest, if any, to the date of
repurchase. In the event of a Change in
Control, there can be no assurance that the
Company will have the financial resources or be
permitted under the terms of its other
indebtedness to repurchase or redeem the
Exchange Notes. See "Description of Notes --
Change of Control."
Certain Covenants............. The indenture pursuant to which the Exchange
Notes will be issued contains certain covenants
that, among other things, will limit the
ability of the Company and its Restricted
Subsidiaries (as defined) to: (i) incur
additional Indebtedness (as defined), (ii) make
Restricted Payments (as defined), (iii) sell
assets of the Company and its Restricted
Subsidiaries, (iv) issue or sell Capital Stock
(as defined) of a Restricted Subsidiary, (v)
enter into certain transactions with
affiliates, (vi) create certain liens, (vii)
enter into certain mergers and consolidations
and (viii) incur Indebtedness which is
subordinate to Senior Indebtedness and senior
to the Exchange Notes. The covenants are
subject to a number of significant exceptions
and qualifications. See "Description of Notes
-- Certain Covenants."
Absence of a Public Market for
the Exchange Notes............ The Exchange Notes will be a new issue of
securities for which there currently is no
market. Although the Initial Purchasers have
informed the Company that they currently intend
to make a market in the Exchange Notes, they
are not obligated to do so, and any such market
making may be discontinued at any time without
notice. Accordingly, there can be no assurance
as to the development or liquidity of any
market for the Exchange Notes. The Company
currently does not intend to apply for listing
of the Exchange Notes on any securities
exchange or for quotation through the National
Association of Securities Dealers Automated
Quotation System.
14
<PAGE> 16
CERTAIN CONSEQUENCES OF A FAILURE TO EXCHANGE OLD NOTES
The sale of the Old Notes was not registered under the Securities Act or
any state securities laws and therefore the Old Notes may not be offered, sold
or otherwise transferred except in compliance with the registration requirements
of the Securities Act and any other applicable securities laws, or pursuant to
an exemption therefrom or in a transaction not subject thereto, and in each case
in compliance with certain other conditions and restrictions, including the
Company's and the Trustee's right in certain cases to require the delivery of
opinions of counsel, certifications and other information prior to any such
transfer. Old Notes which remain outstanding after consummation of the Exchange
Offer will continue to bear a legend reflecting such restrictions on transfer.
In addition, upon consummation of the Exchange Offer, holders of Old Notes which
remain outstanding will not be entitled to any rights to have the resale of such
Old Notes registered under the Securities Act or to any similar rights under the
Registration Agreement. The Company currently does not intend to register under
the Securities Act the resale of any Old Notes which remain outstanding after
consummation of the Exchange Offer.
To the extent that Old Notes are tendered and accepted in the Exchange
Offer, a holder's ability to sell untendered Old Notes could be adversely
affected. In addition, although the Old Notes are eligible for trading in the
Private Offerings, Resale and Trading through Automatic Linkages ("PORTAL")
market, to the extent that Old Notes are tendered and accepted in connection
with the Exchange Offer, any trading market for Old Notes which remain
outstanding after the Exchange Offer could be adversely affected.
15
<PAGE> 17
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA
The following summary combined financial data of the Company for the years
ended December 31, 1995 and 1996 have been derived from the audited historical
combined financial statements of TSG, the predecessor to the Company for
accounting purposes, as of and for the periods then ended. The summary
historical consolidated financial data of the Company as of and for the fiscal
year ended December 28, 1997 have been derived from the audited historical
consolidated financial statements of the Company as of and for the fiscal year
then ended. The unaudited pro forma consolidated financial data of the Company
as of and for the fiscal year ended December 28, 1997 have been derived from the
audited historical financial statements of the Company as of and for the fiscal
year ended December 28, 1997 and the audited historical carve-out financial
statements of GRI for the eight-month period ended August 31, 1997. The
historical unaudited consolidated financial data of the Company as of and for
the fiscal quarters ended March 30, 1997 and March 29, 1998 have been derived
from the unaudited historical consolidated financial statements of the Company
as of and for the fiscal quarters then ended. The following data should be read
in conjunction with "Pro Forma Financial Data," "Selected Financial and Other
Data," "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and the financial statements and notes thereto included elsewhere
herein. The summary unaudited pro forma financial data do not purport to
represent what the Company's results of operations or financial position would
actually have been had the Refinancing or the GRI Acquisition occurred at such
times. This data also does not purport to project the Company's results of
operations or financial position for or at any future period or date.
<TABLE>
<CAPTION>
YEAR ENDED FISCAL YEAR ENDED
DECEMBER 31, DECEMBER 28, 1997(C) FISCAL QUARTER ENDED
------------------- ----------------------------- ---------------------------------
HISTORICAL HISTORICAL PRO FORMA
------------------- --------------------- ---------
PRO MARCH 30, MARCH 29, MARCH 29,
1995 1996 HISTORICAL FORMA(A) 1997 1998 1998(B)
---- ---- ---------- -------- --------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales............................... $216,130 $228,260 $564,546 $985,096 $ 82,508 $255,056 $255,056
Cost of sales........................... 178,760 192,510 514,019 914,953 74,256 236,719 236,719
-------- -------- -------- -------- -------- -------- --------
Gross profit............................ 37,370 35,750 50,527 70,143 8,252 18,337 18,337
Selling, general and administrative
expenses.............................. 25,230 26,240 36,007 49,199 6,958 12,504 12,504
Michigan Single Business Tax............ 1,500 1,510 2,868 3,107 700 772 772
Restructuring costs..................... -- -- 2,000 2,000 -- -- --
-------- -------- -------- -------- -------- -------- --------
Operating income........................ 10,640 8,000 9,652 15,837 594 5,061 5,061
Interest expense, net................... 1,470 1,310 12,400 15,413 2,802 4,313 4,500
Other (income) expense, net............. (1,070) 70 -- 30 (220) -- --
-------- -------- -------- -------- -------- -------- --------
Income (loss) before taxes.............. 10,240 6,620 (2,748) 394 (1,988) 748 561
Income tax provision (benefit).......... 3,820 2,800 225 1,564 (480) 370 449
-------- -------- -------- -------- -------- -------- --------
Net income (loss)....................... $ 6,420 $ 3,820 $ (2,973) $ (1,170) $ (1,508) $ 378 $ 112
======== ======== ======== ======== ======== ======== ========
BALANCE SHEET DATA (AT PERIOD END):
Cash and cash equivalents............... $ 1,800 $ 7,070 $ 11,575 $ 11,575 $ 3,687 $ 15,038
Receivables, net........................ 60,190 58,860 178,938 178,938 100,259 177,936
Total assets............................ 87,480 94,150 287,176 291,765 172,818 289,382
Total debt and capital lease
obligations........................... 3,550 4,200 153,246 161,979 122,872 161,403
Redeemable Series A Preferred Stock..... -- -- 36,000 36,000 36,000 36,000
Shareholders' equity (deficit).......... 63,650 69,450 (26,364) (26,364) (24,295) (26,762)
OTHER DATA:
EBITDA(D)............................... $ 16,680 $ 14,480 $ 22,379 $ 33,170 $ 3,010 $ 9,672 $ 9,672
Capital expenditures.................... 8,400 4,840 11,518 15,565 2,646 1,763
Depreciation and amortization........... 4,540 4,970 9,859 14,226 1,716 3,839 3,839
Ratio of EBITDA to interest expense,
net................................... 2.2x 2.1x
</TABLE>
- -------------------------
(A) The summary unaudited pro forma statement of operations data gives effect to
the Refinancing and the GRI Acquisition. The summary unaudited pro forma
balance sheet data gives effect to the Refinancing. See "Pro Forma Financial
Data."
(B) The summary unaudited pro forma information gives effect to the Refinancing.
See "Pro Forma Financial Data".
(C) Beginning in 1997, the Company adopted a fiscal year which ends on the last
Sunday in December.
(D) EBITDA represents income (loss) before income taxes plus interest expense,
net, depreciation and amortization, Michigan Single Business Tax and other
(income) expense, net. EBITDA is presented as additional information because
management believes it to be a useful indicator of a company's ability to
meet debt service and capital expenditure requirements. It is not, however,
intended as an alternative measure of operating results or cash flow from
operations (as determined in accordance with generally accepted accounting
principles).
16
<PAGE> 18
RISK FACTORS
This Prospectus contains statements which constitute forward-looking
statements. These statements appear in a number of places in this Prospectus and
include statements regarding the intent, belief, outlook, estimate or
expectations of the Company, its directors or its officers primarily with
respect to future events and the future financial performance of the Company.
Holders of the Old Notes are cautioned that any such forward-looking statements
are not guarantees of future events or performance and involve risks and
uncertainties, and that actual results may differ materially from those in the
forward-looking statements. In addition to the other matters described in this
Prospectus, holders of the Old Notes offered hereby should consider the specific
factors set forth below before accepting the Exchange Offer.
LEVERAGE; ABILITY TO SERVICE DEBT
The Company is highly leveraged. As of March 29, 1998, the Company's total
debt and capital lease obligations totaled $161.4 million (exclusive of $44.4
million of undrawn capacity under the New Credit Facility) and the Company's
ratio of total debt to total capitalization was 94%. The degree to which the
Company is leveraged could have important consequences to holders of the
Exchange Notes (and to holders of the Old Notes), including the following: (i)
the Company's ability to obtain additional financing in the future for working
capital, capital expenditures, acquisitions, general corporate purposes or other
purposes may be impaired; (ii) a substantial portion of the Company's cash flow
from operations will be dedicated to the payment of principal and interest on
its indebtedness, thereby reducing the funds available to the Company for its
operations and expansion plans; and (iii) the Company may be more vulnerable to
a downturn in general economic conditions or its business. The discretion of the
Company's management with respect to certain business matters will be limited by
covenants contained in the New Credit Facility and the Indenture as well as
future debt instruments. Among other things, the covenants contained in the
Indenture restrict, condition or prohibit the Company from incurring additional
indebtedness, creating liens on its assets, making certain asset dispositions
and entering into certain transactions with affiliates. In addition, the New
Credit Facility contains, financial and operating covenants and prohibitions,
including requirements that the Company maintain certain financial ratios. There
can be no assurance that the Company's leverage and such restrictions will not
materially and adversely affect the Company's ability to finance its future
operations or capital needs or to engage in other business activities. Moreover,
a failure to comply with the obligations contained in the Indenture or any other
agreements with respect to additional financing (including the New Credit
Facility or any replacement facility) could result in an event of default under
such agreements, which could permit acceleration of the related debt and
acceleration of debt under future debt agreements that may contain cross
acceleration or cross default provisions. See "Description of Notes."
The Company had a net loss of approximately $3.0 million in 1997. There can
be no assurance that the Company will become profitable. The Company's ability
to make scheduled payments or to refinance its obligations with respect to its
indebtedness depends on its financial and operating performance, which, in turn,
is subject to prevailing economic conditions and to financial, business and
other factors beyond its control and to the ability of the Company to access
payments and advances from its subsidiaries in amounts and at times sufficient
to fund its debt obligations. There can be no assurance that the Company's
operating results or access to payments and advances from its subsidiaries will
be sufficient for payment of the Company's indebtedness, including the Notes.
See "-- Holding Company Structure; Dependence upon Payments from Subsidiaries;
Effective Subordination."
HOLDING COMPANY STRUCTURE; DEPENDENCE UPON PAYMENTS FROM SUBSIDIARIES; EFFECTIVE
SUBORDINATION
The Company is a holding company and conducts all of its operations through
subsidiaries. Consequently, the ability of the Company to pay its obligations,
including its obligation to pay interest on and principal of the Exchange Notes
(and on any outstanding Old Notes), whether at the maturity thereof or upon an
earlier redemption at the option of the Company or the holders of such Notes,
will be dependent on the ability of the Company to receive dividends and other
payments or advances from its subsidiaries or to obtain additional
17
<PAGE> 19
capital or other payments or advances, in cash or otherwise, from its
subsidiaries (which have no obligation to provide such dividends, payments or
advances, other than pursuant to the Subsidiary Guarantees) or from another
source. All of the Company's Domestic Restricted Subsidiaries are Subsidiary
Guarantors.
The right of the Company to receive assets of any of its subsidiaries upon
liquidation or reorganization (and the consequent right of holders to
participate in those assets) of such subsidiary will be subject to the prior
claims of that subsidiary's creditors (including trade creditors). Accordingly,
the Exchange Notes (as is the case with the Old Notes) effectively will be
subordinated to all liabilities of the Company's subsidiaries, including trade
payables, except to the extent that the Company is itself recognized as a
creditor of such subsidiary, in which case the claims of the Company would still
be subordinated to any security interest in the assets of such subsidiary, and
any indebtedness of such subsidiary senior to that held by the Company. The
aggregate amount of debt and other liabilities of the Company's subsidiaries was
approximately $180.1 million as of March 29, 1998 (excluding debt owed by any
subsidiary to the Company).
RELIANCE ON THE AUTOMOTIVE INDUSTRY
Sales of the Company's services to the automotive market (including OEM
suppliers) accounted for approximately 97% of the Company's pro forma net sales
for the fiscal year ended December 28, 1997. As a result, the Company's
principal operations are directly related to domestic and foreign automotive
vehicle design, planning and production. Automotive sales and production are
highly cyclical, dependent on consumer spending and subject to the impact of
domestic and international economic conditions. In addition, automotive
production and sales can be affected by labor relations issues, regulatory
requirements, trade agreements and other factors. A decline in automotive sales
and design, planning and production could materially adversely affect the
Company's results of operations or financial condition. Because of the Company's
reliance on the automotive industry, which is centered in Southeastern Michigan,
approximately 36% of the Company's facilities were located in Michigan and over
50% of the Company's employees were based in Michigan as of December 28, 1997.
In the future, a majority of the Company's business is likely to remain in
Michigan, and therefore might be affected by any extraordinarily adverse
conditions in Michigan.
RELIANCE ON MAJOR CUSTOMERS
Sales to Ford, the Company's largest customer, accounted for approximately
72% of the Company's pro forma net sales in the fiscal year ended December 28,
1997. All of the Company's sales of In-Client Services and Business and
Technology Services to Ford are governed by the Ford Master Supply Agreement and
the Ford Master Vendor Agreement. Under the Ford Master Supply Agreement, the
Company has been designated as Ford's sole or preferred supplier of business and
technical services. The agreement is scheduled to terminate in August 2002, but
is subject to earlier termination by Ford in the event that the Company fails to
satisfy certain standards of performance and competitiveness. There can be no
assurance that Ford will continue to require all of the services currently
provided or that Ford will not develop alternative sources, including its
in-house operations, for the services currently purchased under the Ford Master
Supply Agreement.
The Ford Master Vendor Agreement designates the Company as the sole "master
vendor" of selected Contract Staffing services to specified Ford business units.
See "Business -- Operations -- In-Client Services." These services consist of
management of the selection, retention and payment of suppliers of personnel to
Ford through the Master Vendor Program. In exchange for such services, Ford pays
certain agreed upon compensation to the Company. In the United States, this
compensation includes payment for the personnel supplied to Ford at prescribed
hourly billing rates, together with certain agreed upon fees. These billing
rates are adjusted to reflect inflation on an annual basis. The Company is not
entitled to compensation from Ford for personnel costs that exceed the
prescribed billing rates. The Ford Master Vendor Agreement contemplates the
reduction of the fee percentage over time. During 1997, the fees were
periodically reduced by approximately 37%. The fees were scheduled to be further
reduced by an additional 20% in July of 1998; however, the Company and Ford have
orally agreed that such reduction will not take place in July. Although the
Company believes that cost reduction measures at GRI, compensation from Ford for
staffing shortfalls and other factors will offset the effect of the fee
reductions, there can be no assurance that the fee reductions will
18
<PAGE> 20
not adversely effect the Company's financial results. In the United Kingdom, the
Company receives compensation in the form of a direct fee and passes through
supplier charges directly to Ford. The Ford Master Vendor Agreement specifies
that certain percentages of Ford's requirements for personnel be filled with the
Company's Contract Staffing employees. The Ford Master Vendor Agreement is
scheduled to terminate in August 2002, although the parties have agreed to
negotiate in good faith to extend the term for an additional five-year period.
The Ford Master Vendor Agreement is also subject to certain termination rights,
including Ford's right to terminate upon MSXI's failure to satisfy certain
standards of performance and competitiveness or upon the occurrence of a change
in Ford's business, brought about by adverse economic conditions, that
eliminates the need for the services. Termination of the Ford Master Vendor or
the Ford Master Supply Agreement by Ford could have a material adverse effect on
the Company's business, operating results or financial condition.
In connection with the Master Vendor Program and with certain services
provided under the Ford Master Supply Agreement, the Company collects
receivables at approximately the same time it makes payment to its suppliers.
However, in connection with its other programs, the Company typically is
reimbursed by its customers within invoicing terms, which is generally a 60 day
period after it pays its employees. If any of the Company's large customers,
including Ford, were to experience a liquidity problem that resulted in such
customer being unable to reimburse the Company, the Company could, in turn,
develop a liquidity problem. Development of such a liquidity problem could have
a material adverse effect on the Company's business, operating results or
financial condition.
IMPACT OF TERMINATION OF CUSTOMER RELATIONSHIPS
As a leading, single source provider of staffing, engineering and business
services, the Company provides its customers with a broad range of complementary
services tailored to suit its customers' needs. Accordingly, as customers' needs
arise, the Company must often make significant financial commitments and incur
overhead expenses in order to complete projects or fulfill purchase orders. In
the event that the Company's customers cancel or cease to maintain their
arrangements with the Company or the Company is unable to procure similar
business from new customers, the Company may not be able to generate sufficient
revenues to offset its financial commitments or overhead expenses. There can be
no assurance that the work flow under its current arrangements will continue or
that such arrangements will be replaced by similar arrangements with the same or
new customers.
CONTROL BY PRINCIPAL SHAREHOLDERS
CVC and MascoTech beneficially own approximately 92% of the Company's
outstanding Common Stock and members of the management of the Company
beneficially own approximately 8% of the Company's outstanding Common Stock. If
these stockholders were to vote all of their shares in a similar manner, they
would effectively control the Company. In addition, they would have sufficient
voting power to elect the entire Board of Directors of the Company and, in
general, to determine the outcome of certain proposed corporate transactions,
including mergers, consolidations and the sale of all or substantially all of
the Company's assets, and to prevent or cause a change in control of the
Company. Further, CVC, MascoTech and certain members of management have entered
into a Stockholders' Agreement (as defined) whereby they have agreed to vote
their shares in such a manner as to elect the entire Board of Directors of the
Company. See "Certain Relationships and Related Transactions -- Stockholders'
Agreement."
COMPETITION
Each industry in which the Company operates is highly competitive. The
Company competes not only with full-service and highly specialized companies in
national, regional and local markets, but also competes with businesses that
have the ability to perform the Company's services in-house. The Company's
competitors may have greater name recognition and greater marketing, financial
and other resources than the Company, and the Company's in-house competitors
often have the capability to offer more highly integrated services at lower
cost. There can be no assurance that the Company will be able to compete
effectively against its competitors in the future or that businesses will
continue to outsource the types of services that the Company offers. Continued
or increased competition could limit the Company's ability to maintain or
increase its
19
<PAGE> 21
market share and margins and could have a material adverse effect on the
Company's business, financial condition or results of operation.
POSSIBLE ADVERSE EFFECTS OF FLUCTUATIONS IN THE GENERAL ECONOMY
Historically, the general level of economic activity has significantly
affected the demand for the Company's services. As economic activity has slowed,
the use of third-party services often has been curtailed before permanent
employees have been laid off. An economic downturn on a national or local basis
may adversely affect the demand for the Company's services and may have a
material adverse effect on the Company's results of operations or financial
condition. As economic activity has increased, the demand for third-party
services has similarly increased. During periods of increased economic activity
and generally higher levels of employment, the Company may face increased
competitive pricing pressures. There can be no assurance that such pricing
pressures will not adversely affect the Company's results of operations.
DEPENDENCE ON AVAILABILITY OF QUALIFIED PERSONNEL
The Company depends upon its ability to attract and retain personnel,
particularly technical personnel, who possess the skills and experience
necessary to meet the needs of its clients. Competition for individuals with
proven technical or professional skills is intense. The Company competes with
other staffing companies as well as the Company's customers and other employers
for qualified personnel. There can be no assurance that qualified personnel will
continue to be available to the Company in sufficient numbers and upon economic
terms acceptable to the Company. If the cost of attracting and retaining such
personnel increases, there can be no assurance that the Company will be able to
pass this increased cost through to its customers, and therefore such increases
may have a significant effect on the Company's results of operations and
financial condition.
FOREIGN EXCHANGE RISK
As a result of the Company's global expansion, non-United States net sales
accounted for approximately 14% of the Company's pro forma net sales for the
fiscal year ended December 28, 1997. A significant percentage of such sales are
denominated in currencies other than U.S. dollars. The Company anticipates that
its percentage of net sales generated outside the U.S. will increase in the
future. Changes in exchange rates therefore may have a significant effect on the
Company's results of operations and financial condition.
RISKS ASSOCIATED WITH RATIONALIZATION OF OPERATIONS
One of the Company's principal strategies is to improve its financial
results through the rationalization of operations. The Company expects to
realize cost savings from the GRI Acquisition through the consolidation of back
office activities and the ongoing rationalization of duplicative facilities,
management and administrative offices. Although the Company believes that its
strategies are reasonable, there can be no assurance that it will be able to
implement its plans without delay or that it will not encounter unanticipated
problems in connection with the rationalization of operations or that, when
implemented, its efforts will result in the cost savings that are currently
anticipated. The Company's plans may require substantial attention from members
of the Company's management, which would limit the amount of time such members
have available to devote to the Company's daily operations.
RISKS ASSOCIATED WITH ACQUISITION STRATEGY
The Company plans to continue to make selective strategic acquisitions to
enhance its global market position and broaden its service offerings. There can
be no assurance, however, that the Company will be able to identify additional
acquisitions or that, if identified, any anticipated benefits will be realized
from such acquisitions. The availability of additional acquisition financing
cannot be assured and, depending on the terms of such additional acquisitions,
could be restricted by the terms of the New Credit Facility and/or the
Indenture. The process of integrating acquired operations into the Company's
existing operations may result in unforeseen operating difficulties and may
require significant financial resources that would otherwise be available for
the ongoing development or expansion of the Company's existing operations. In
addition,
20
<PAGE> 22
successful completion of an acquisition may depend on consents from third
parties, including regulatory authorities and private parties, which consents
are beyond the control of the Company. Possible future acquisitions by the
Company could result in the incurrence of additional debt, contingent
liabilities and amortization expenses related to goodwill and other intangible
assets, all of which could materially adversely affect the Company's results of
operations and financial condition.
POTENTIAL FLUCTUATIONS IN PERIODIC OPERATING RESULTS
Results for any quarter or fiscal year are not necessarily indicative of
the results that the Company may achieve for any subsequent quarter or fiscal
year. The timing or completion of material projects could result in fluctuations
in the Company's results of operations for particular quarterly or annual
periods.
EMPLOYMENT LIABILITY RISK
The Company, in the course of providing services to its customers, places
its employees in the workplaces of other businesses. An attendant risk of such
activity includes possible claims of errors and omissions, misuse of client
proprietary information, discrimination and harassment, theft of client
property, other criminal activity or torts, workers' compensation claims and
other claims. While the Company has not historically experienced any material
claims of these types, there can be no assurance that the Company will not
experience such claims in the future. In some instances, the Company has agreed
to indemnify clients against some of the foregoing matters.
FRAUDULENT CONVEYANCE
Although the Exchange Notes are obligations of the Company, they will be
unconditionally guaranteed on an unsecured senior subordinated basis by the
Subsidiary Guarantors. The Company is a holding company that derives all of its
operating income and cash flow from its subsidiaries. The performance by each
Subsidiary Guarantor of its obligations with respect to its Subsidiary Guarantee
may be subject to review under relevant federal and state fraudulent conveyance
and similar statutes in a bankruptcy or reorganization case or lawsuit by or on
behalf of unpaid creditors of such Subsidiary Guarantor. Under these statutes,
if a court were to find under relevant federal or state fraudulent conveyance
statutes that a Subsidiary Guarantor did not receive fair consideration or
reasonably equivalent value for incurring its Subsidiary Guarantee of the Old
Notes (and the exchange of the New Notes therefor), and that, at the time of
such incurrence, the Subsidiary Guarantor: (i) was insolvent, (ii) was rendered
insolvent by reason of such incurrence or grant, (iii) was engaged in a business
or transaction for which the assets remaining with such Subsidiary Guarantor
constituted unreasonably small capital or (iv) intended to incur, or believed
that it would incur, debts beyond its ability to pay such debts as they matured,
then such court, subject to applicable statutes of limitation, could void such
Subsidiary Guarantor's obligations under its Subsidiary Guarantee, recover
payments made under such Subsidiary Guarantee, subordinate such Subsidiary
Guarantee to other indebtedness of such Subsidiary Guarantor or take other
action detrimental to the Holders of the Notes.
The measure of insolvency for these purposes will depend upon the governing
law of the relevant jurisdiction. Generally, however, a company will be
considered insolvent for these purposes if the sum of that company's debts is
greater than the fair value of all of that company's property or if the present
fair salable value of that company's assets is less than the amount that will be
required to pay its probable liability on its existing debts as they become
absolute and matured or if a company is not able to pay its debts as they become
due. Moreover, regardless of solvency, a court could void an incurrence of
indebtedness, including the Subsidiary Guarantees, if it determined that such
transaction was made with the intent to hinder, delay or defraud creditors. In
addition, a court could subordinate the indebtedness, including the Subsidiary
Guarantees, to the claims of all existing and future creditors on similar
grounds. The Subsidiary Guarantees could also be subject to the claim that,
since the Subsidiary Guarantees were incurred for the benefit of the Company
(and only indirectly for the benefit of the Subsidiary Guarantors), the
obligations of the Subsidiary Guarantors thereunder were incurred for less than
reasonably equivalent value or fair consideration. Neither the Company nor any
Subsidiary Guarantor believes that, after giving effect to the Offering, any of
the Subsidiary Guarantors (i) was insolvent or rendered insolvent by the
incurrence of the Guarantees in
21
<PAGE> 23
connection with the Offering, (ii) was not in possession of sufficient capital
to run their business effectively or (iii) incurred debts beyond its ability to
pay as the same mature or become due.
There can be no assurance as to what standard a court would apply in order
to determine whether a Subsidiary Guarantor was "insolvent" upon the sale of the
Old Notes or that, regardless of the method of valuation, a court would not
determine that such Subsidiary Guarantor was insolvent upon consummation of the
sale of the Old Notes.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each holder of Exchange Notes
or of any outstanding Old Notes will have the right to require the Company to
repurchase all or a portion of such holder's Notes at a price in cash equal to
101% of the aggregate principal amount thereof, plus accrued and unpaid
interest, if any, to the date of repurchase. However, the Company's ability to
repurchase the Notes upon a Change of Control may be limited by the terms of
then existing contractual obligations of the Company and its subsidiaries. In
addition, the occurrence of a Change of Control will constitute an Event of
Default under the New Credit Facility. The New Credit Facility prohibits the
purchase of the Exchange Notes (and any outstanding Old Notes) unless and until
such time as the indebtedness under the New Credit Facility is paid in full.
There can be no assurance that the Company will have the financial resources to
repay amounts due under the New Credit Facility, or to repurchase or redeem the
Exchange Notes (and any outstanding Old Notes). If the Company fails to
repurchase all of such Notes tendered for purchase upon the occurrence of a
Change of Control, such failure will constitute an Event of Default under the
Indenture. See "-- Leverage; Ability to Service Debt" above.
With respect to the sale of assets referred to in the definition of Change
of Control, the phrase "all or substantially all" as used in such definition
varies according to the facts and circumstances of the subject transaction, has
no clearly established meaning under the relevant law and is subject to judicial
interpretation. Accordingly, in certain circumstances there may be a degree of
uncertainty in ascertaining whether a particular transaction would involve a
disposition of "all or substantially all" of the assets of a person and
therefore it maybe unclear whether a Change of Control has occurred and whether
the Notes are subject to an offer to purchase.
The Change of Control provision may not necessarily afford the holders
protection in the event of a highly leveraged transaction, including a
reorganization, restructuring, merger or other similar transaction involving the
Company that may adversely affect the holders, because such transactions may not
involve a shift in voting power or beneficial ownership or, even if they do, may
not involve a shift of the magnitude required under the definition of Change of
Control to trigger such provisions. Except as described under "Description of
Exchange Notes -- Change of Control" the Indenture does not contain provisions
that permit the holders of the Notes to require the Company to repurchase or
redeem the Notes in the event of a takeover, recapitalization or similar
transaction.
LACK OF PUBLIC MARKET; RESTRICTIONS ON TRANSFERABILITY
The Exchange Notes are a new issue of securities for which there is
currently no active trading market. If a trading market develops for the
Exchange Notes, they may trade at a discount from their initial offering price,
depending upon prevailing interest rates, the market for similar securities and
other factors, including general economic conditions and the financial condition
of the Company. The Company does not intend to apply for a listing or quotation
of the Exchange Notes on any securities exchange or stock market. Each of the
Initial Purchasers currently makes a market in the Notes. However, the Initial
Purchasers are not obligated to do so, and any such market making may be
discontinued at any time without notice. There can be no assurance as to the
development or liquidity of any market for the Exchange Notes.
RESTRICTIONS ON TRANSFER
The Old Notes were offered and sold by the Company in a private offering
exempt from registration requirements pursuant to the Securities Act. As a
result, the Old Notes may not be reoffered or resold except
22
<PAGE> 24
pursuant to an effective registration statement under the Securities Act, or
pursuant to an exemption from, or in a transaction not subject to, such
registration requirements. Each Holder (other than any Holder who is an
affiliate of the Company) who duly exchanges Old Notes for Exchange Notes in the
Exchange Offer will receive Exchange Notes that are freely transferable under
the Securities Act. Holders who participate in the Exchange Offer should be
aware, however, that if they accept the Exchange Offer for the purpose of
engaging in a distribution, the Exchange Notes may not be publicly reoffered or
resold without complying with the registration and prospectus delivery
requirements under the Securities Act. As a result, each Holder accepting the
Exchange Offer will be required to represent that (i) it is not an "affiliate"
of the Company, (ii) any Exchange Notes to be received by it are being acquired
in the ordinary course of its business, and (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such Exchange Notes. If existing Commission
interpretations permitting free transferability of the Exchange Notes following
the Exchange Offer are changed prior to consummation of the Exchange Offer, the
Company will use its best efforts to register the Old Notes for resale under the
Securities Act. See "The Exchange Offer."
USE OF PROCEEDS
The Company will not receive any cash proceeds from the issuance of the
Exchange Notes offered hereby. In consideration for issuing the Exchange Notes
in exchange for Old Notes as described in this Prospectus, the Company will
receive Old Notes in like principal amount. The Old Notes surrendered in
exchange for the Exchange Notes will be retired and canceled. Accordingly, the
issuance of the Exchange Notes will not result in any change in the indebtedness
of the Company.
23
<PAGE> 25
CAPITALIZATION
The following table sets forth the unaudited consolidated capitalization of
the Company as of March 29, 1998. This table should be read in conjunction with
the consolidated financial statements, including the notes thereto, and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this Registration Statement.
<TABLE>
<CAPTION>
AS OF
MARCH 29,
1998
-----------
ACTUAL
------
(DOLLARS IN
THOUSANDS)
<S> <C>
Short-term debt:
Notes payable............................................. $ 7,323
--------
Total short-term debt................................ 7,323
--------
Long-term debt:
New Credit Facility(A).................................... 53,825
11 3/8% Senior Subordinated Notes due 2008................ 100,000
--------
Total long-term debt................................. 153,825
--------
Long-term capital lease obligations......................... 255
Redeemable Series A Preferred Stock......................... 36,000
Shareholders' equity (deficit):
Common Stock, $.01 par: authorized, 2,000,000 shares;
issued and outstanding 95,004 shares................... 1
Additional paid-in capital................................ (22,251)
Accumulated other comprehensive income (loss)............. (1,917)
Accumulated deficit....................................... (2,595)
--------
Total shareholders' equity (deficit)................. (26,762)
--------
Total capitalization, including total short-term
debt.............................................. $170,641
========
</TABLE>
- -------------------------
(A) The New Credit Facility provides for borrowings of up to $100 million.
Availability under the New Credit Facility is subject to satisfaction of a
borrowing base requirement and certain other conditions. As of March 29,
1998, the Company has classified amounts due under the New Credit Facility
as long-term debt, as the Company has both the ability and intent to
refinance such amounts. On April 14, 1998, the Company amended and restated
the New Credit Facility to add a $30 million term loan portion. On the same
date, the Company borrowed the full amount available under the term loan and
used the funds to reduce outstanding balances under the revolving loan
portion of the New Credit Facility. See "Description of Certain Other
Indebtedness -- New Credit Facility."
24
<PAGE> 26
PRO FORMA FINANCIAL DATA
The following unaudited pro forma financial data have been derived from the
unaudited historical consolidated financial statements as of and for the fiscal
quarter ended March 29, 1998 for the Company, the audited historical
consolidated financial statements as of and for the fiscal year ended December
28, 1997 for the Company and from the audited historical carve-out financial
statements for the eight-month period ended August 31, 1997 for GRI.
The Company is a holding company formed and owned by CVC, MascoTech and
certain members of management. The Company was formed to consummate the TSG
Acquisition, in which it acquired selected assets and operations of the former
engineering and technical business services units of MASG and MascoTech, as well
as the net assets of APX which previously had been acquired by MASG on November
6, 1996. The TSG Acquisition was effective on January 3, 1997. Effective August
31, 1997, the Company acquired certain service-providing operations of Ford
through the acquisition of GRI, a wholly-owned subsidiary of Ford. The unaudited
pro forma consolidated statement of operations for the fiscal year ended
December 28, 1997 gives effect to (i) the GRI Acquisition and (ii) the
Refinancing, as described in the notes to the unaudited pro forma consolidated
financial data. The unaudited pro forma consolidated statement of operations for
the fiscal quarter ended March 29, 1998 gives effect to the Refinancing, as
described in the notes to the unaudited pro forma consolidated financial data.
The unaudited pro forma consolidated statement of operations for the fiscal
year ended December 28, 1997 gives effect to the GRI Acquisition and to the
Refinancing as if such transactions had occurred on January 1, 1997. The
unaudited pro forma consolidated statement of operations for the fiscal quarter
ended March 29, 1998 gives effect to the Refinancing as if the transaction had
occurred on January 1, 1997. The unaudited pro forma financial data do not
purport to represent what the Company's results of operations would actually
have been had these transactions occurred at such times. This data also does not
purport to project the Company's results of operations for or at any future
period or date.
The unaudited pro forma financial data should be read in conjunction with
"Use of Proceeds," "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the historical financial statements and the notes
thereto included elsewhere in this Offering Memorandum.
25
<PAGE> 27
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FISCAL YEAR ENDED DECEMBER 28, 1997
<TABLE>
<CAPTION>
PRO FORMA
GRI FOR THE ADJUSTMENTS PRO FORMA
EIGHT MONTHS ENDED FOR THE GRI ADJUSTMENTS FOR
MSXI AUGUST 31, 1997 ACQUISITION THE REFINANCING PRO FORMA
---- ------------------ ----------- --------------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Net sales........................... $564,546 $431,134 $(10,584)(A) $985,096
Cost of sales....................... 514,019 411,518 (10,584)(A) 914,953
-------- -------- --------
Gross profit...................... 50,527 19,616 70,143
Selling, general and administrative
expenses.......................... 36,007 13,636
(851)(B)
407(C) 49,199
Michigan Single Business
Tax............................... 2,868 239 3,107
Restructuring costs................. 2,000 2,000
-------- -------- --------
Operating income.................. 9,652 5,741 15,837
Interest expense (income), net...... 12,400 (1,166) $ 14,803(E)
(12,400)(F)
1,166(G)
610(H) 15,413
Other expense (income), net......... -- 30 30
-------- -------- --------
Income (loss) before income
taxes........................... (2,748) 6,877 394
Income tax provision (benefit)...... 225 2,908 186(D) (1,755)(I) 1,564
-------- -------- --------
Net income (loss)................. $ (2,973) $ 3,969 $ (1,170)
======== ======== ========
OTHER DATA
EBITDA(J)........................... $ 22,379 $ 9,940 $ 33,170
Capital expenditures................ 11,518 4,047 15,565
Depreciation and amortization....... 9,859 3,960 14,226
Ratio of EBITDA to interest expense
(income), net..................... 2.2x
Ratio of earnings to fixed
charges(K)........................ 1.0x
</TABLE>
26
<PAGE> 28
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FISCAL QUARTER ENDED MARCH 29, 1998
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS FOR
MSXI THE REFINANCING PRO FORMA
---- --------------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
INCOME STATEMENT DATA
Net sales................................................... $255,056 $255,056
Cost of sales............................................... 236,719 236,719
-------- --------
Gross profit.............................................. 18,337 18,337
Selling, general and administrative expenses................ 12,504 12,504
Michigan Single Business Tax................................ 772 772
-------- --------
Operating income.......................................... 5,061 5,061
Interest expense (income), net.............................. 4,313 $ 4,347(A)
(4,313)(B)
153(C) 4,500
-------- --------
Income before income taxes................................ 748 561
Income tax provision........................................ 370 79(D) 449
-------- --------
Net income................................................ $ 378 $ 112
======== ========
OTHER DATA
EBITDA(E)................................................... $ 9,672 $ 9,672
Depreciation and amortization............................... 3,839 3,839
Ratio of EBITDA to interest expense (income), net........... 2.1x
Ratio of earnings to fixed charges(F)....................... 1.1x
</TABLE>
27
<PAGE> 29
BASIS OF PRESENTATION
The following pro forma adjustments are based on available information and
certain management estimates and assumptions. The Company believes that such
adjustments provide a reasonable basis for presenting all of the significant
effects of the GRI Acquisition and the Refinancing and that the pro forma
adjustments are properly applied in the unaudited pro forma consolidated
financial statements.
The final determination of the purchase price for the APX and GRI
Acquisitions will be completed when certain contractual matters are concluded.
The preliminary allocation of purchase price for the GRI Acquisition will be
completed during 1998. Any adjustments to the purchase price will change
recorded goodwill and will be amortized to expense over the remaining goodwill
period. Management believes the resolution of these matters will not have a
material effect on the results of operations, financial position or cash flows
of the Company.
ADJUSTMENTS TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE FISCAL
YEAR ENDED
DECEMBER 28, 1997
The accompanying unaudited pro forma consolidated statement of operations
for the fiscal year ended December 28, 1997 includes the following adjustments
to present results as if the GRI Acquisition and the Refinancing had been
consummated on January 1, 1996:
GRI Acquisition
(A) Eliminate intercompany sales between the Company and GRI.
(B) Reduce employment expense to reflect contractual agreements with Ford
in connection with the GRI Acquisition.
(C) Record amortization of goodwill resulting from the GRI Acquisition over
an estimated useful life of 20 years.
(D) Record the income tax provision resulting from the pro forma
adjustments related to the GRI Acquisition, at an assumed effective
income tax rate of 42%.
The Refinancing
(E) Record interest expense associated with the Notes at an annual
interest rate of 11.375%, the New Credit Facility at assumed annual
interest rates which ranged from 6.7% to 7.2% on average monthly
borrowings and other debt at assumed annual interest rates which
ranged from 7.0% to 7.39%.
The impact on interest expense of a 1/8 of 1% change in the interest
rate related to average monthly borrowings on the New Credit Facility
and other debt is approximately $53,000 on an annual basis.
(F) Eliminate historical interest expense.
(G) Eliminate GRI interest income related to excess GRI cash used by the
Company to reduce borrowings used to finance the GRI Acquisition.
(H) Record amortization of costs associated with the Refinancing.
(I) Record the income tax benefit resulting from the pro forma adjustments
related to the Refinancing, at an assumed effective income tax rate of
42%.
Other
(J) EBITDA represents income (loss) before income taxes plus interest
expense, net, depreciation, amortization, Michigan Single Business Tax
and other (income) expense, net. EBITDA is presented as additional
information because management believes it to be a useful indicator of
a company's ability to meet debt service and capital expenditure
requirements. It is not, however,
28
<PAGE> 30
intended as an alternative measure of operating results or cash flow from
operations (as determined in accordance with generally accepted accounting
principles).
(K) For purposes of computing the ratio of earnings to fixed charges,
earnings represent net income (loss) before income taxes and fixed
charges. Fixed charges consist of interest expense, the interest
component of operating leases and amortization of deferred financing
costs.
ADJUSTMENTS TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE FISCAL
QUARTER ENDED
MARCH 29, 1998
The accompanying unaudited pro forma consolidated statement of operations
for the fiscal quarter ended March 29, 1998 includes the following adjustments
to present results as if the Refinancing had been consummated on January 1,
1997:
The Refinancing
(A) Record interest expense associated with the Notes at an annual interest
rate of 11.375%, the New Credit Facility at assumed annual interest
rates which ranged from 6.7% to 7.5% on average monthly borrowings and
other debt at assumed annual interest rates which ranged from 6.94% to
8.5%.
The impact on interest expense of a 1/8 of 1% change in the interest
rate related to average monthly borrowings on the New Credit Facility
and other debt is approximately $53,000 on an annual basis.
(B) Eliminate historical interest expense.
(C) Record amortization of costs associated with the Refinancing.
(D) Record the income tax benefit resulting from the pro forma adjustments
related to the Refinancing, at an assumed effective income tax rate of
42%.
Other
(E) EBITDA represents income (loss) before income taxes plus interest
expense, net, depreciation, amortization, Michigan Single Business Tax
and other (income) expense, net. EBITDA is presented as additional
information because management believes it to be a useful indicator of
a company's ability to meet debt service and capital expenditure
requirements. It is not, however, intended as an alternative measure
of operating results or cash flow from operations (as determined in
accordance with generally accepted accounting principles).
(F) For purposes of computing the ratio of earnings to fixed charges,
earnings represent net income (loss) before income taxes and fixed
charges. Fixed charges consist of interest expense, the interest
component of operating leases and amortization of deferred financing
costs.
29
<PAGE> 31
SELECTED FINANCIAL AND OTHER DATA
The following selected historical combined financial data of the Company
for the year ended December 31, 1993 have been derived from the unaudited
historical combined financial statements of TSG, the predecessor to the Company
for accounting purposes as of and for the period then ended. The selected
historical combined statement of operations data of the Company for the year
ended December 31, 1994 have been derived from the audited historical combined
statement of operations of TSG for the year ended December 31, 1994. The
selected historical combined balance sheet data of the Company as of December
31, 1994 have been derived from the unaudited combined balance sheet of TSG as
of December 31, 1994. The selected historical combined financial data of the
Company as of and for the years ended December 31, 1995 and 1996 have been
derived from the audited historical combined financial statements of TSG as of
and for the periods then ended. The selected historical consolidated financial
data of the Company as of and for the fiscal year ended December 28, 1997 have
been derived from the audited historical financial statements of the Company, as
of and for the fiscal year then ended. The selected historical unaudited
consolidated financial data of the Company as of and for the fiscal quarters
ended March 30, 1997 and March 29, 1998 have been derived from the unaudited
historical financial statements of the Company as of and for the fiscal quarters
then ended. The selected financial and other data should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements and notes thereto included
elsewhere herein.
<TABLE>
<CAPTION>
FISCAL FISCAL QUARTER ENDED
YEAR ENDED DECEMBER 31, YEAR ENDED ---------------------
----------------------------------------- DECEMBER 28, MARCH 30, MARCH 29,
1993 1994 1995 1996 1997(A) 1997 1998
---- ---- ---- ---- ------------ --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales....................... $155,259 $184,540 $216,130 $228,260 $564,546 $ 82,508 $255,056
Cost of sales................... 125,855 149,950 178,760 192,510 514,019 74,256 236,719
-------- -------- -------- -------- -------- -------- --------
Gross profit.................... 29,404 34,590 37,370 35,750 50,527 8,252 18,337
Selling, general and
administrative expenses....... 20,586 23,550 25,230 26,240 36,007 6,958 12,504
Michigan Single Business Tax.... 1,340 1,760 1,500 1,510 2,868 700 772
Restructuring costs............. -- -- -- -- 2,000 -- --
-------- -------- -------- -------- -------- -------- --------
Operating income................ 7,478 9,280 10,640 8,000 9,652 594 5,061
Interest expense, net........... 308 920 1,470 1,310 12,400 2,802 4,313
Other (income) expense, net..... 173 (180) (1,070) 70 -- (220) --
-------- -------- -------- -------- -------- -------- --------
Income (loss) before taxes...... 6,997 8,540 10,240 6,620 (2,748) (1,988) 748
Income tax provision
(benefit)..................... 2,939 3,140 3,820 2,800 225 (480) 370
-------- -------- -------- -------- -------- -------- --------
Net income (loss)............... $ 4,058 $ 5,400 $ 6,420 $ 3,820 $ (2,973) $ (1,508) $ 378
======== ======== ======== ======== ======== ======== ========
BALANCE SHEET DATA (AT PERIOD
END):
Cash and cash equivalents....... $ 120 $ 1,540 $ 1,800 $ 7,070 $ 11,575 $ 3,687 $ 15,038
Receivables, net................ 41,400 47,240 60,190 58,860 178,938 100,259 177,936
Total assets.................... 60,442 69,490 87,480 94,150 287,176 172,818 289,382
Total debt and capital lease
obligations................... 201 3,370 3,550 4,200 153,246 122,872 161,403
Redeemable Series A Preferred
Stock......................... -- -- -- -- 36,000 36,000 36,000
Shareholders' equity
(deficit)..................... 35,890 46,430 63,650 69,450 (26,364) (24,295) (26,762)
OTHER DATA:
EBITDA(B)....................... $ 11,684 $ 15,430 $ 16,680 $ 14,480 $ 22,379 $ 3,010 $ 9,672
Capital expenditures............ 5,175 7,030 8,400 4,840 11,518 2,646 1,763
Depreciation and amortization... 2,866 4,390 4,540 4,970 9,859 1,716 3,839
Ratio of earnings to fixed
charges(C).................... 4.0x 4.1x 3.4x 3.1x -- -- 1.1x
</TABLE>
- -------------------------
(A) Beginning in 1997, the Company adopted a fiscal year which ends on the last
Sunday in December.
(B) EBITDA represents income (loss) before income taxes plus interest expense,
net, depreciation, amortization, Michigan Single Business Tax and other
(income) expense, net. EBITDA is presented as additional information because
management believes it to be a useful indicator of a company's ability to
meet debt service and capital expenditure requirements. It is not, however,
intended as an alternative measure of operating results or cash flow from
operations (as determined in accordance with generally accepted accounting
principles).
(C) For purposes of computing the ratio of earnings to fixed charges, earnings
represent net income (loss) before income taxes and fixed charges. Fixed
charges consist of interest expense, the interest component of operating
leases and amortization of deferred financing costs. For the fiscal year
ended December 28, 1997 and for the fiscal quarter ended March 30, 1997
earnings were inadequate to cover fixed charges by approximately $2.7
million and $2.0 million, respectively.
30
<PAGE> 32
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following analysis of financial condition and results of operations
should be read in conjunction with the separate financial statements of the
Company, APX and GRI and the related notes thereto and the unaudited pro forma
financial statements and related notes thereto contained elsewhere in this
Offering Memorandum. The results of operations for the fiscal quarters ended
March 29, 1998 and March 30, 1997 include the consolidated results of operations
of MSXI. The results of operations for the fiscal year ended December 28, 1997
include the results of operations of MSXI, which include the results of
operations of GRI since August 31, 1997, the date of the GRI Acquisition. The
results of operations for the year ended December 31, 1996 include the results
of operations of TSG, the predecessor to the Company for accounting purposes,
but does not include the results of APX, which was acquired by the Company
effective January 3, 1997. Accordingly, the results of operations for the fiscal
year ended December 28, 1997 are not directly comparable to the results of
operations for the year ended December 31, 1996.
GENERAL
The Company is a holding company formed and owned by CVC, MascoTech and
certain members of management. The Company was formed to consummate the TSG
Acquisition, in which it acquired selected assets and operations of the former
engineering and technical business services units of MASG and MascoTech, as well
as the net assets of APX, a design and engineering services provider, which
previously were acquired by MASG on November 6, 1996. The TSG Acquisition was
effective on January 3, 1997. TSG was a provider of product engineering services
and temporary staffing to the automotive industry. The Company acquired GRI on
August 31, 1997 in order to continue its strategy of increasing its global
presence and range of product offerings. GRI provided the Company with the
ability to offer master vendor services and additional Business and Technology
Services. As a result of the APX and GRI Acquisitions, the Company believes that
it is well positioned to increase its market share among existing customers,
increase its market share in the global automotive market and expand into
non-automotive markets. The Company also intends to continue to rationalize its
cost structure through the elimination of redundant back office activities,
facilities, management and administrative offices, as well as to pursue
additional strategic acquisitions that complement or expand the Company's
existing service offerings.
The Company is organized around three strategic service offerings:
In-Client Services, Product Development Services, and Business and Technology
Services.
In-Client Services consists principally of TSG's and APX's former temporary
staffing businesses and GRI's temporary staffing procurement services. Pro forma
net sales of In-Client Services for the fiscal year ended December 28, 1997 were
approximately $450 million. Contract Staffing sales are generated principally
from time and material contracts in which the Company bills customers for
contract labor at an hourly rate. Contract Staffing cost of sales consist
principally of direct labor costs and related benefits which are paid by the
Company. While the Company intends to expand its Master Vendor Program to other
customers, all of the Master Vendor Program sales are currently generated under
the Ford Master Vendor Agreement.
The Company generates a substantial portion of its In-Client Services' net
sales under the Ford Master Vendor Agreement by charging Ford prescribed hourly
billing rates, which adjust annually to reflect inflation. In addition, the
Company charges Ford certain agreed upon fees. The Master Vendor Program's costs
of sales consists principally of direct labor costs billed from suppliers to the
Company. During 1997, the specified fees were periodically reduced by
approximately 37% to reflect changes in service levels and improved operating
efficiencies. Pursuant to the Ford Master Vendor Agreement, the fees will be
further reduced by an additional 20% in July of 1998. In anticipation of these
fee reductions, the Company continued cost reduction measures initiated by GRI
prior to the GRI Acquisition, which were principally completed as of September
28, 1997. These cost reduction measures included the implementation of process
and system efficiencies including the reduction of personnel, the combination of
certain functions and the elimination of certain extraneous services. To further
offset these fee reductions, the Company and Ford have agreed that the Company
will provide an increasing number of contract laborers to Ford or receive
compensation for staffing shortfalls below a specified
31
<PAGE> 33
minimum level. Additionally, the Company expects that Ford will increase its
usage of Master Vendor Program services for its European business units. The
Company also anticipates negotiating with suppliers to lower its aggregate labor
costs, of which Ford is entitled to share in the realized savings up to a set
amount. The Company believes that the effect of the foregoing will offset the
effect of the fee reductions although there can be no assurance that such
benefits will be fully realized.
Product Development Services consists principally of TSG's and APX's
engineering services businesses. Pro forma net sales of Product Development
Services for the fiscal year ended December 28, 1997 were approximately $205
million. Product Development Services sales are generated principally from fixed
price, time and material and price per unit contracts. Contracts are typically
for specific projects and range from several days to several years in duration.
Product Development Services cost of sales consists principally of direct labor
costs and related benefits and facility and technology costs.
Business and Technology Services consists principally of TSG's marketing
and training services and the balance of GRI's services other than temporary
staffing procurement services. Pro forma net sales of Business and Technology
Services for the fiscal year ended December 28, 1997 were approximately $320
million. All sales to Ford of these services are pursuant to the Ford Master
Supply Agreement. The Ford Master Supply Agreement requires that Ford utilize
the Company as the sole or preferred provider of certain of these services.
Sales under the Ford Master Supply Agreement are principally cost plus in which
the Company charges Ford for services which are provided by either the Company
or outside suppliers. Sales outside of the Ford Master Supply Agreement are
generated principally from fixed price, time and material and price per unit
contracts. Outside of the Ford Master Supply Agreement, Business and Technology
Services are typically provided under purchase orders that are renewed annually.
Business and Technology Services cost of sales consists principally of direct
labor costs and related benefits and facility and technology costs.
As part of the GRI Acquisition, Ford retained the former Power Products
division ("PPD") of GRI and the Company agreed to provide certain transitional
administrative functions to PPD for a limited time. Fees for the services that
are currently provided to Ford approximate $0.3 million per month. The Company
anticipates that Ford will discontinue the use of these services during 1998. In
anticipation of the discontinuance of these services, the Company has identified
cost savings in relation to the elimination of redundant facilities and
personnel, including the GRI headquarters, which closed when the building's
lease expired on May 31, 1998. The Company anticipates it will realize these
cost savings during 1998, effectively offsetting the reduction in fees earned
for providing these services to Ford.
32
<PAGE> 34
SUPPLEMENTAL FINANCIAL AND OTHER DATA
The supplemental financial data presented below are included for the
purpose of providing supplemental information in order to assist investors in
understanding the historical financial performance of TSG, APX and GRI. The
financial information for the fiscal years ended 1995 and 1996 for APX includes
the operations of PMC, which were not included in the APX Acquisition. As a
result, the financial statements of APX are not reflective of the assets
acquired in the APX Acquisition. The 1996 fiscal year of APX reflects only
results for the 10 month and 6 day period ending November 6, 1996, the date APX
was acquired by MASG. In addition, the carve-out financial statements for GRI
for 1997 are for the eight-month period ended August 31, 1997. From September 1,
1997 the results of GRI are included in the results of MSXI. The following
supplemental historical data should not be construed to be indicative of the
results that actually would have occurred if the companies had been combined on
the date assumed and do not purport to project the Company's results of
operations at any future date.
<TABLE>
<CAPTION>
HISTORICAL(A)
-----------------------------------------
MSXI/TSG APX(B)(D) GRI(C) TOTAL(E)
-------- --------- ------ --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Year Ending 1997
Net sales.............................................. $ 564.5 -- $ 431.1 $ 995.6
Cost of sales.......................................... (514.0) -- (411.5) (925.5)
------- ------- ------- --------
Gross profit......................................... 50.5 -- 19.6 70.1
Selling, general and administrative expenses........... (36.0) -- (13.6) (49.6)
Michigan Single Business Tax........................... (2.9) -- (0.2) (3.1)
Restructuring costs.................................... (2.0) -- -- (2.0)
------- ------- ------- --------
Operating income..................................... $ 9.7 -- $ 5.7 $ 15.4
======= ======= ======= ========
Other Data:
EBITDA(E)............................................ $ 22.4 -- $ 9.9 $ 32.3
Capital expenditures................................. 11.5 -- 4.0 15.5
Year Ending 1996
Net sales.............................................. $ 228.3 $ 135.1 $ 690.5 $1,053.8
Cost of sales.......................................... (192.5) (127.1) (665.7) (985.3)
------- ------- ------- --------
Gross profit......................................... 35.8 7.9 24.8 68.5
Selling, general and administrative expenses........... (26.2) (7.9) (21.6) (55.7)
Michigan Single Business Tax........................... (1.5) (0.8) (0.3) (2.6)
------- ------- ------- --------
Operating income..................................... $ 8.0 $ (0.8) $ 3.0 $ 10.2
======= ======= ======= ========
Other Data:
EBITDA(E)............................................ $ 14.5 $ 1.9 $ 8.3 $ 24.7
Capital expenditures................................. 4.8 0.6 3.7 9.1
Year Ending 1995
Net sales.............................................. $ 216.1 $ 140.2 $ 550.4 $ 906.8
Cost of sales.......................................... (178.8) (129.7) (531.1) (839.6)
------- ------- ------- --------
Gross profit......................................... 37.4 10.5 19.3 67.2
Selling, general and administrative expenses........... (25.2) (9.3) (23.3) (57.9)
Michigan Single Business Tax........................... (1.5) (1.4) (0.3) (3.2)
------- ------- ------- --------
Operating income..................................... $ 10.6 $ (0.2) $ (4.3) $ 6.1
======= ======= ======= ========
Other Data:
EBITDA(E)............................................ $ 16.7 $ 3.6 $ 0.2 $ 20.5
Capital expenditures................................. 8.4 0.7 6.6 15.7
</TABLE>
- -------------------------
(A) Numbers may not total due to rounding.
(B) The 1996 fiscal year of APX reflects only results for the 10 month and 6 day
period ending November 6, 1996, the date APX was acquired by MASG.
Additionally, the historical financial statements of APX include the results
of operations of the PMC division which was not acquired by MASG. For the
fiscal years ended 1995 and 1996, net sales attributable to PMC were $10.6
million and $8.8 million, respectively, and operating income attributable to
PMC was $(.9) million and $0.1 million, respectively.
Unaudited net sales; gross profit; selling, general and administrative
expenses and the operating loss for the period November 7, 1996 to December
29, 1996 were approximately $16.5 million, $1.4 million, $1.7 million and
$0.4 million, respectively.
(C) Carve-out financial statements for GRI for 1997 are for the eight-month
period ended August 31, 1997. From September 1, 1997 the results of GRI are
included in the results of MSXI.
(D) Michigan Single Business Tax for APX for the fiscal year ended 1995 has been
reclassified from cost of sales in the historical audited statements of
operations. For consistency of presentation, approximately $2.0 million of
divisional administrative expense
33
<PAGE> 35
has been reclassified from cost of sales in the historical audited statement of
operations for APX for the year ended 1995 to selling, general and
administrative expenses.
(E) The total column is a summation of the amounts of the indicated entities and
do not reflect elimination of intracompany sales for the period in 1997 and
for 1996 of $10.6 million and $17.1 million, respectively. Intracompany
sales for the period in 1995 is not readily available. The information
presented is not intended to be a presentation of pro forma information in
accordance with Article 11 of Regulation S-X. Reference is made to the pro
forma financial information included elsewhere herein under the caption "Pro
Forma Financial Data."
(F) EBITDA represents income (loss) before income taxes plus interest expense,
net, depreciation and amortization, Michigan Single Business Tax and other
(income) expense, net. EBITDA is presented as additional information because
management believes it to be a useful indicator of a company's ability to
meet debt service and capital expenditure requirements. It is not, however,
intended as an alternative measure of operating results or cash flow from
operations (as determined in accordance with generally accepted accounting
principles).
RESULTS OF OPERATIONS
FISCAL QUARTER ENDED MARCH 29, 1998 COMPARED WITH THE FISCAL QUARTER ENDED MARCH
30, 1997
Net Sales
MSXI's net sales for the fiscal quarter ended March 29, 1998 increased
$172.6 million (209%) from $82.5 million to $255.1 million, as compared to the
fiscal quarter ended March 30, 1997. This increase resulted principally from the
GRI Acquisition. Sales increases are additionally due to increased Product
Development sales in Europe and contract staffing labor sales in United States.
Gross Profit
MSXI's gross profit for the fiscal quarter ended March 29, 1998, increased
$10.0 million (122%), from $8.3 million to $18.3 million, as compared to the
fiscal quarter ended March 30, 1997. This increase resulted principally from the
GRI Acquisition. Gross profit as a percentage of net sales for the fiscal
quarter ended March 29, 1998 decreased from 10.0% to 7.2%, as compared to the
fiscal quarter ended March 30, 1997, principally due to the inclusion of gross
profits from GRI, which are at a lower margin than the Company's other
businesses.
Selling, General and Administrative Expenses
MSXI's selling, general and administrative expenses for the fiscal quarter
ended March 29, 1998 increased $5.5 million (79.7%), from $7.0 million to $12.5
million, as compared to the fiscal quarter ended March 30, 1997. This increase
resulted principally from the GRI Acquisition. Selling, general and
administrative expenses as a percentage of net sales for the fiscal quarter
ended March 29, 1998 decreased from 8.4% to 4.9%, as compared to the fiscal
quarter ended March 30, 1997, principally as a result of the acquisition of GRI
where the ratio of selling, general and administrative expenses as a percentage
of net sales was lower than that of the Company.
Operating Income
Principally as a result of the foregoing, MSXI's operating income for the
three months ended March 29, 1998 increased $4.5 million (752.0%), from $0.6
million to $5.1 million, as compared to the fiscal quarter ended March 30, 1997,
and operating income as a percentage of sales for the fiscal quarter ended March
29, 1998 increased from 0.7% to 1.9%, as compared to the fiscal quarter ended
March 30, 1997.
FISCAL YEAR ENDED DECEMBER 28, 1997 COMPARED WITH THE YEAR ENDED DECEMBER 31,
1996
Net Sales
MSXI's net sales for the twelve months ended December 28, 1997 increased
$336.2 million (147.3%), from $228.3 million to $564.5 million, as compared to
the twelve months ended December 31, 1996. This increase resulted principally
from the APX and GRI acquisitions. These increases were offset by a decline in
net sales of Product Development Services in the United States due to the
completion of a multi-year project, the early termination of an engineering
project in Europe and the planned elimination of an unprofitable shop facility
in the United States. Combined 1997 sales of MSXI and preacquisition GRI were
lower than the combined 1996 sales of TSG, APX and GRI due to decreases in sales
of Product Development Services,
34
<PAGE> 36
temporary staffing procurement services at GRI and purchasing services. Product
Development Services sales declined due to a reduction in product engineering
sales, primarily in Europe, and the closure of two unprofitable prototype
tooling facilities in the United States. Sales of temporary staffing procurement
services declined due to lower headcount placed at Ford. Sales of Purchasing
services decreased because Ford reduced its usage of training and consultant
procurement services as a result of the effectiveness of the Company's services.
Gross Profit
MSXI's gross profit for the twelve months ended December 28, 1997, which
includes gross profits from GRI for four months, increased $14.8 million
(41.5%), from $35.7 million to $50.5 million, as compared to the twelve months
ended December 31, 1996. This increase resulted principally from the APX and GRI
Acquisitions. Gross profit as a percentage of net sales for the twelve months
ended December 28, 1997 decreased from 15.7% to 9.0% as compared to the twelve
months ended December 31, 1996, principally due to the inclusion of gross
profits from GRI, which is at a lower margin than the Company's other
businesses, and due to lower margins earned on sales of Product Development
Services as a result of underabsorbed fixed costs resulting from the decrease in
sales in Europe and North America. Gross profit as a percentage of net sales
also decreased as a result of a change in the pricing of certain manufacturing
engineering purchase orders from fixed price to time and materials.
Selling, General and Administrative Expenses
MSXI's selling, general and administrative expenses for the twelve months
ended December 28, 1997 increased $9.8 million (37.4%), from $26.2 million to
$36.0 million, as compared to the twelve months ended December 31, 1996. This
increase resulted principally from the APX and GRI acquisitions. In addition,
there was a one time $2.0 million charge in 1997 related to the closure of two
facilities. Selling, general and administrative expenses as a percentage of net
sales for the twelve months ended December 28, 1997 decreased from 11.5% to
6.4%, as compared to the twelve months ended December 31, 1996, principally as a
result of the elimination of redundant personnel and administrative costs and
the increase in sales during the period. Combined 1997 MSXI and preacquisition
GRI selling, general and administrative expenses in 1997 were lower than the
combined TSG, APX and GRI selling, general and administrative expenses for 1996
primarily due to cost reductions realized upon integrating the APX Acquisition.
Operating Income
Principally as a result of the foregoing offset by an increase in Michigan
Single Business Tax of $1.4 million, MSXI's operating income for the twelve
months ended December 28, 1997 increased $1.7 million (21.3%), from $8.0 million
to $9.7 million, as compared to the twelve months ended December 31, 1996, and
operating income as a percentage of sales for the twelve months ended December
28, 1997 decreased from 3.5% to 1.7% as compared to the twelve months ended
December 31, 1996.
YEAR ENDED DECEMBER 31, 1996 COMPARED WITH YEAR ENDED DECEMBER 31, 1995
Net Sales
TSG's net sales for 1996 increased $12.2 million (5.6%), from $216.1
million to $228.3 million, as compared to 1995. This increase resulted
principally from an increase in sales of Product Development Services in Europe
and an increase in sales of Business and Technology Services, particularly
training and marketing services, and the commencement of a new special vehicles
program in the United States. These increases were partially offset by a decline
in sales of Product Development Services in the United States due to the
completion of a multi-year project.
APX's net sales reported in its audited financial statements for fiscal
1996 decreased $5.1 million (3.6%), from $140.2 million to $135.1 million, as
compared to 1995. This decrease resulted principally from fiscal 1996 audited
results reflecting ten months and six days, as compared to 1995 results which
included twelve full months. For the year ended December 31, 1996, APX's
unaudited net sales increased $11.4 million (8.1%),
35
<PAGE> 37
from $140.2 million to $151.6 million, as compared to 1995, principally as a
result of an expansion in sales of Product Development Services and Contract
Staffing services in Europe, as well as increased sales of Contract Staffing to
both new and existing customers in the United States. The increase was partially
offset by a decrease in PMC sales. The Company did not acquire PMC as part of
the APX Acquisition.
GRI's net sales for 1996 increased $140.1 million (25.5%), from $550.4
million to $690.5 million, as compared to 1995. This increase resulted
principally from increased sales of temporary staffing procurement services in
the United States and increased sales of Business and Technology Services,
particularly consultant procurement services and training, development and
imaging services, all of which were provided only to Ford. In addition, GRI
began providing temporary staffing procurement services to Ford in Europe.
Gross Profit
TSG's gross profit for 1996 decreased $1.6 million (4.3%), from $37.4
million to $35.8 million, as compared to 1995, and gross profit as a percentage
of net sales for 1996 decreased from 17.3% to 15.7%, as compared to 1995. These
decreases resulted principally from underabsorbed fixed costs relating to the
decrease in sales of Product Development Services in the United States and an
increase in infrastructure costs necessary to support significantly higher sales
of Product Development Services in Europe.
APX's gross profit reported in APX's historical audited financial
statements for fiscal 1996 increased $0.8 million (11.3%), from $7.1 million to
$7.9 million, as compared to 1995. This increase resulted principally from a
change in the classification of approximately $2.0 million of administrative
expenses. In 1995 these expenses were accounted for in cost of sales whereas in
1996 such expenses were accounted for as selling, general and administrative
expenses. The increase also resulted from a change in classification of Michigan
Single Business Tax, which in 1995 had been included in cost of sales. This
increase was offset by the fact that 1996 results reported in APX's historical
audited financial statements reflect ten months and six days as compared to 1995
results which included twelve full months. After adjusting for the change in
classification of administrative expenses and Michigan Single Business Tax and
to include results for the period from November 7, 1996 to December 29, 1996,
for the year ended December 31, 1996, APX's unaudited gross profit decreased
$1.2 million (11.4%), from $10.5 million to $9.3 million, as compared to 1995,
principally as a result of a decline in the margin in sales of product
engineering services due to completions of higher margin contracts, costs of
transition to new projects and increased price competition. Gross profit as a
percentage of net sales for 1996 decreased from 7.5% to 6.1%.
GRI's gross profit for 1996 increased $5.5 million (28.5%), from $19.3
million to $24.8 million, as compared to 1995. This increase resulted
principally from an increase in sales of its temporary staffing procurement
services. Gross profit as a percentage of net sales for 1996 increased from 3.5%
to 3.6%, as compared to 1995, as a result of increased gross profit margins due
to an increase in sales of higher margin Business and Technology Services in
1996. These increases were partially offset by higher costs as a percentage of
sales relating to temporary staffing procurement services as well as other
business services.
Selling, General and Administrative Expenses
TSG's selling, general and administrative expenses for 1996 increased $1.0
million (4.0%), from $25.2 million to $26.2 million, as compared to 1995. This
increase resulted principally from one-time severance payments to executives who
were released in contemplation of the APX Acquisition. Selling, general and
administrative expenses as a percentage of net sales for 1996 decreased from
11.7% to 11.5%, as compared to 1995 as a result of the increased sales.
APX's selling, general and administrative expenses reported in its
historical audited financial statements for 1996 increased $0.6 million (8.2%),
from $7.3 million to $7.9 million, as compared to 1995. This increase reflects a
change in the classification of approximately $2.0 million of administrative
expenses, which in 1995 were accounted for in cost of sales whereas in 1996 such
expenses were accounted for in selling, general and administrative expenses.
This increase was offset by the fact that 1996 results reported in APX's
historical audited financial statements reflect ten months and six days as
compared to 1995 results which included twelve full months. After adjusting for
the change in classification of administrative expenses and to include
36
<PAGE> 38
results for the period from November 7, 1996 to December 29, 1996, for the year
ended December 31, 1996, APX's unaudited selling, general and administrative
expenses increased $0.2 million (2.2%), from $9.3 million to $9.5 million as
compared to 1995, as adjusted. This increase was principally a result of an
increase in costs associated with the redesign of the Company's medical benefits
program and an increase in corporate administration costs, partially offset by a
decrease in marketing and business development expenses. Selling, general and
administrative expenses as a percentage of net sales for 1996 decreased from
6.6% to 6.3%, as compared to 1995 principally as a result of the increase in net
sales.
GRI's selling, general and administrative expenses decreased $1.7 million
(7.3%), from $23.3 million to $21.6 million, as compared to 1995. This decrease
was due to cost reduction initiatives in the finance and human resources areas,
partially offset by an increase in training and support staff costs which were
incurred to support higher sales volumes. Selling, general and administrative
expenses as a percentage of net sales for 1996 decreased from 4.2% to 3.1%, as
compared to 1995, principally as a result of the increase in net sales.
Operating Income
Principally as a result of the foregoing, TSG's operating income for 1996
decreased $2.6 million (24.5%), from $10.6 million to $8.0 million, as compared
to 1995, and operating income as a percentage of sales for 1996 decreased from
4.9% to 3.5%, as compared to 1995.
Principally as a result of the foregoing and a decrease in Michigan Single
Business Tax of $0.6 million, APX's operating loss reported in APX's historical
audited financial statements for 1996 increased $0.6 million (300%), from ($0.2)
million to ($0.8) million, as compared to 1995, and operating loss as a
percentage of sales for 1996 increased from (0.1%) to (0.6%), as compared to
1995.
Principally as a result of the foregoing, GRI's operating income for 1996
increased $7.3 million, from a loss of $4.3 million to income of $3.0 million,
as compared to 1995, and operating income as a percentage of sales for 1996
increased from (0.8%) to 0.4%, as compared to 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal capital requirements are to service its
indebtedness, to fund capital expenditures and for working capital. The Company
believes that its cash flow from operations, together with its borrowing
capacity under the New Credit Facility, will be sufficient to meet such
requirements.
Through the consummation of the TSG Acquisition, the Company acquired TSG
and the net assets of APX which were previously acquired by MASG on November 6,
1996. The purchase price of the TSG Acquisition was $145.6 million, which was
financed through $3.8 million of common equity, $36.0 million of Redeemable
Series A Preferred Stock, the $20.0 million CVC Bridge Loan, the $20.0 million
MascoTech Bridge Loan, the issuance of a $30.0 million Senior Subordinated Note
and $35.8 million of borrowings under credit facilities between the Company and
NBD as agent and its affiliates (the "Old Credit Facility"). On August 31, 1997,
the Company acquired GRI for $60.0 million which was financed with borrowings
under the Old Credit Facility, offset in part by substantial cash balances
acquired in the GRI Acquisition.
The Company typically pays its employees on a weekly basis and is
reimbursed by its customers within invoicing terms, which is generally a 60 day
period after it makes such payment. However, in connection with the Master
Vendor Program and with certain services provided under the Ford Master Supply
Agreement, the Company collects receivables at approximately the same time it
makes payment to its suppliers.
On a combined basis, capital expenditures for the fiscal quarter ended
March 29, 1998 and fiscal year ended December 28, 1997 were $1.8 million and
$15.6 million, respectively. The majority of these capital expenditures were to
fund the purchase of computer systems and project specific equipment and
improvements on leased facilities. As of the date hereof, the Company expects
that its capital expenditure requirements, which are principally to support the
continued upgrade of systems and technology, will be approximately $13 million
in 1998.
37
<PAGE> 39
During the first quarter of 1998 and the fiscal year ended 1997, the
Company's primary sources of funds to meet working capital needs were from
operations, funds made available through the Old Credit Facility, the NatWest
Facility, and the Ford Facility (as defined). A portion of the Old Credit
Facility was used to finance the GRI Acquisition. Net cash from operating
activities for the fiscal quarter ended March 29, 1998 increased $11.3 million
from $(11.5) million to $(0.2) million, as compared to the fiscal quarter ended
March 30, 1997. This increase was principally due to collections of accounts
receivable. Net cash used for investing activities for the fiscal quarter ended
March 29, 1998 decreased $133.5 million from $135.3 million to $1.8 million, as
compared to the fiscal quarter ended March 30, 1997. This decrease was due to
the purchase on January 3, 1997 of MascoTech, Inc.'s Technical Services Group
and APX International. During the fiscal quarter ended March 29, 1998,
approximately $1.8 million was used for capital expenditures. During the fiscal
quarter ended March 30, 1997, approximately $2.6 million was used for capital
expenditures. Net cash from financing activities for the fiscal quarter
decreased approximately $144.8 million from the comparable prior period.
Financing requirements decreased commensurate with the declines in investing
activities and the improvement in cash flow from operating activities after
initial capitalization of the Company. Net cash from operating activities for
the fiscal year ended December 28, 1997 decreased $6.0 million, from $7.8
million to $1.8 million, as compared to the year ended December 31, 1996. This
decrease was principally due to an increase in accounts receivable. Net cash
used for investing activities for the fiscal year ended December 28, 1997
increased $165.9 million, from $4.8 million to $170.7 million, as compared to
the year ended December 31, 1996. This increase was principally due to the TSG
Acquisition and the GRI Acquisition. Net cash from financing activities for the
fiscal year ended December 28, 1997, increased $177.4 million, from $4.2 million
to $181.6 million, as compared to the fiscal year ended December 31, 1996. This
increase was due to the CVC and MascoTech Bridge Loans, aggregating $40.0
million, the issuance of $3.8 million of Common Stock, $36.0 million of
Redeemable Series A Preferred Stock, a $30.0 million Senior Subordinated Note
and borrowings under the Old Credit Facility.
The Company's total indebtedness consists of the Notes, borrowings under
the New Credit Facility and borrowings under various short-term arrangements. On
April 14, 1998, the Company amended and restated the New Credit Facility to add
a $30 million term loan portion. On the same date, the Company borrowed the full
amount available under the term loan and used the funds to reduce outstanding
balances under the revolving loan portion of the New Credit Facility. The Notes
and the New Credit Facility include certain financial and operating covenants
which, among other things, restrict the ability of the Company to incur
additional indebtedness, make investments and take other actions. As of March
29, 1998, $53.8 million was outstanding under the New Credit Facility and
classified as long-term debt, as the Company has both the ability and intent to
refinance such amounts under the New Credit Facility. See "Description of Notes"
and "Description of Certain Other Indebtedness." The ability of the Company to
meet its debt service obligations will be dependent upon the future performance
of the Company, which will be impacted by general economic conditions and other
factors. See "Risk Factors."
For 1997, approximately 14% of the Company's pro forma net sales were from
foreign markets. The Company anticipates that its percentage of net sales
generated outside the United States will increase over time. The Company's
foreign revenues are usually received in the local currency and are typically
naturally hedged as the corresponding costs are usually in the same currency. To
the extent the Company is not naturally hedged, it intends to actively manage
its exposure to foreign exchange rate fluctuations.
INFLATION AND SEASONALITY
Although the Company cannot anticipate future inflation, it does not
believe that inflation has had, or is likely in the foreseeable future to have,
a material impact on its results of operations. While the Company's contracts
typically do not include automatic adjustments for inflation, the Ford Master
Vendor Agreement does provide for automatic adjustments for inflation for
services provided under the Master Vendor Program. The Company's quarterly
operating results are affected primarily by the number of billing days in the
quarter
38
<PAGE> 40
and the seasonality of its customers' businesses. Demand for services of the
Company have historically been lower during the year-end holidays.
YEAR 2000
The Company recognizes the need to ensure its operations will not be
adversely impacted by Year 2000 software failures. Software failures due to
processing errors potentially arising from calculations using the Year 2000 date
are a known risk. The Company is addressing this risk to the availability and
integrity of financial systems and the reliability of operational systems. The
Company has established processes for evaluating and managing the risks and
costs associated with this problem. The inventory of affected computer hardware
and software is in process. The total cost of compliance and its effect on the
Company's future results of operations is being determined. However, management
believes the ultimate cost of compliance will not have a material effect on its
financial condition, results of operations or its cash flows.
39
<PAGE> 41
BUSINESS
GENERAL
The Company is a leading provider of outside staffing, engineering and
business services, principally to the automotive industry in the United States
and Europe, with the capability of providing services on a worldwide basis.
Through internal growth and acquisitions, the Company has become a single source
provider of a broad range of complementary services, including technical and
professional staffing services, engineering, design and related technical
services and other business and marketing services. In August 1997, the Company
acquired GRI, a wholly-owned subsidiary of Ford. In connection with the GRI
Acquisition, the Company entered into the Ford Master Vendor Agreement to manage
certain temporary staffing procurement services for Ford, and the Ford Master
Supply Agreement to provide certain general business services to Ford. By adding
GRI's capabilities and services to the Company's historical strength in
providing technical staffing and engineering and design services, the Company is
now able to sell a broad range of complementary services to both existing and
new customers within and outside the automotive industry. The Company believes
that it is the only company currently providing such a broad range of services
to the automotive industry on a worldwide basis. The Company employed or sourced
over 12,000 individuals at 53 operating facilities in 23 countries as of
December 28, 1997. The Company's principal operations are in North America and
Europe. Pro forma net sales and EBITDA for the fiscal year ended December 28,
1997 were $985.1 million and $33.2 million, respectively and for the fiscal
quarter ended March 29, 1998 were $255.1 million and $9.7 million, respectively.
OEMs are increasingly relying on third parties to provide them with
essential services as globalization and competition lead them to improve
efficiency by focusing on their core competencies of vehicle development,
assembly and marketing. OEMs are also consolidating their supplier base by
contracting with larger, global organizations in order to streamline purchasing,
reduce costs and improve quality. Management expects the Company to continue to
benefit from these trends, both in the automotive and other industries.
The Company provides three strategic service offerings to its customers:
<TABLE>
<CAPTION>
IN-CLIENT SERVICES PRODUCT DEVELOPMENT SERVICES BUSINESS & TECHNOLOGY SERVICES
------------------ ---------------------------- ------------------------------
<S> <C> <C>
- - Contract Staffing - Concept Development - Automotive and Business Process Management
- - Master Vendor Program - Design Engineering - Marketing Services and Document Management
- Manufacturing Engineering - Purchasing Services
- Production Support - Training Services
- Special Vehicles - Image Archiving, Conversion and Warehousing
</TABLE>
In-Client Services, Product Development Services and Business and
Technology Services accounted for approximately 46%, 21% and 33%, respectively,
of pro forma net sales for the fiscal year ended December 28, 1997. The Company
provides its services to over 130 customers, including most of the major United
States OEMs and a number of automotive suppliers. The Company's largest
customers are Ford, GM and Chrysler, which accounted for 72%, 8% and 7%,
respectively, of the Company's pro forma net sales for the fiscal year ended
December 28, 1997. The Company believes that it has developed strong
relationships with its customers and has a reputation for quality, reliability
and service that has been recognized through Ford's Q1 and Chrysler's Pentastar
awards. In addition, most of its operations are ISO 9001 or 9002 certified.
In-Client Services. The Company provides two types of staffing services:
Contract Staffing, through which the Company acts as a direct supplier of
technical, professional and other temporary staffing, and the Master Vendor
Program, through which the Company acts as the master vendor of staffing
procurement.
Contract Staffing. As of December 28, 1997, Contract Staffing supplied
approximately 1,600 employees that it placed on assignment to approximately
130 customers in 10 countries. The Company classifies over 85% of its
employees on assignment as technical personnel. Through its position as
Ford's master vendor, the Company has also enhanced its opportunities to
provide Contract Staffing directly to Ford.
Master Vendor Program. The Master Vendor Program is an automated process
used to manage the procurement of a broad range of temporary staffing
services, including coordination of staffing from other
40
<PAGE> 42
temporary staffing suppliers. While the Company intends to expand its
Master Vendor Program services to other customers, the Company currently
provides such services solely to Ford pursuant to the Ford Master Vendor
Agreement. As of December 28, 1997, there were approximately 6,500
temporary employees at Ford who had been procured through the Master Vendor
Program.
Product Development Services. The Company offers a broad range of
engineering, design and other related services primarily to the automotive
industry including: concept development, design engineering, manufacturing
engineering, production support and special vehicle services. The Company
provides these services on a discrete basis and can draw on these complementary
capabilities to execute development programs for the body and chassis of new
vehicles, such as a recently introduced Ford minicar. As of December 28, 1997,
Product Development Services had a network of 30 offices and facilities situated
in major markets throughout North America, Europe, South America and Asia. Since
January 1, 1996, the Company has performed projects for OEMs including Ford, GM,
Chrysler, Daewoo, Rover, Volkswagen, Volvo, Mercedes and Mazda, and over 20
automotive suppliers such as Textron and Lear. For the fiscal year ended
December 28, 1997, no single project accounted for more than 1% of the Company's
pro forma net sales.
Business & Technology Services. The Company offers a broad range of
business and technical services, principally to the automotive industry
including: automotive and business process management, marketing services,
document management services and other administrative and customer-related
services. The Company typically assumes responsibility for specific non-core
functions of its customers, frequently on an extended basis. For example, the
Company's automotive and business process management services will typically
re-engineer a customer's existing internal processes, such as technical help
desks and warranty certification programs, to improve them and provide them on a
more efficient basis. Other services offered include marketing research,
customer satisfaction surveys, technical training schools and image archiving,
conversion and warehousing. The Company provides a number of these services
under the Ford Master Supply Agreement, pursuant to which the Company is the
sole or preferred supplier of these services to various business units of Ford.
In addition, the Company believes these services have applications across many
industries and provide opportunities for significant growth both in the
automotive and other industries.
The Company is a Delaware corporation. The principal executive offices of
the Company are located at 275 Rex Boulevard, Auburn Hills, Michigan 48326 and
its telephone number is (248) 299-1000.
COMPETITIVE STRENGTHS
Strong Customer Relationships and Reputation for Quality. The Company
believes that it has developed strong customer relationships with both OEMs and
automotive suppliers. Management believes that the Company's engineering
capabilities, reliable performance, strong customer service and competitive cost
structure enable it to attract new customers and to maintain its reputation with
existing customers for providing high quality services at competitive prices. As
a result of its focus on quality, the Company has received Ford's Q1 and
Chrysler's Pentastar awards, and most of the Company's operations are ISO 9001
or 9002 certified. The Company believes that its relationships and its
reputation for quality, reliability and service often enable the Company to
pursue business opportunities ahead of its competitors.
Global Presence. Management believes the Company's international presence
is a significant competitive advantage in winning and retaining new business and
meeting the global sourcing, quality and engineering requirements of its
customers. For example, when GM consumer-tested its European sedan replacement
last year, the Company built model vehicles using an integrated system that
enabled the Company to do the styling work near GM's designers in Germany and
Brazil and to build the vehicles in the United States where the cost was lower.
Similarly, automotive suppliers require support in locations where their OEM
customers demand their presence. For example, the Company supports two major
United States-based interior systems suppliers in Europe and Brazil. Non-United
States sales of In-Client Services, Product Development Services and Business
and Technology Services accounted for 14% of the Company's pro forma net sales
for the fiscal year ended December 28, 1997.
Broad Range of Services Provided. The Company believes that its broad range
of service offerings provides several advantages by: (i) simplifying the
procurement and monitoring process for its customers who
41
<PAGE> 43
require multiple services; (ii) facilitating cross-selling of services to
existing customers; (iii) providing multiple opportunities to identify and
penetrate new customers; and (iv) diversifying the Company's revenues and
earnings. Additionally, the Company believes that its global presence and broad
range of services enable it to recruit and retain a talented pool of employees.
Value-Added Provider. The Company believes that it is frequently able to
operate with a lower cost structure and a higher degree of flexibility and
responsiveness relative to the larger in-house operations of its customers. The
Company believes that In-Client Services provides customers with a
cost-effective and flexible way to manage certain of their technical and
professional staffing needs by assuming the responsibility for procuring,
compensating, monitoring and, in some cases, training temporary staff. Product
Development Services enables OEMs and automotive suppliers to manage their
engineering and design services for selected non-core projects on an efficient
basis. Business and Technology Services provides services that are essential to
the Company's customers, but not at the core of their business competencies.
Investment in Technology. The Company offers its customers access to many
sophisticated technologies. These include supercomputing resources, analytical
software and a large network of CAD terminals connected by an international
communications infrastructure. The Company has made substantial investments in
state-of-the-art equipment and related training to maintain its competitive
technological position. The Company believes it is one of the few independent
engineering firms that operates all major CAD platforms used by the major United
States OEMs and, as of December 28, 1997, the Company operated approximately 500
CAD terminals. The Company's communications infrastructure permits the rapid
exchange of data between the Company and its customers. The Company believes
that its Master Vendor Program, which combines an intranet-based placement
system with procedures to support the monitoring and continuous improvement of a
customer's temporary staffing supplier base, is the most comprehensive system
for management of staffing services. Business and Technology Services uses
proprietary software as an integral part of many of the services that it offers.
BUSINESS STRATEGY
The Company's global market position and breadth of services distinguish it
as one of the leading providers of outside staffing, engineering and business
services to the automotive industry and position the Company to take advantage
of positive trends both in the automotive and other industries. The Company's
business strategy is to grow profitably through the following initiatives:
Increase Market Share at Existing Customers. As a result of the APX and GRI
Acquisitions, the Company has expanded its global presence and product
offerings. For example, the GRI Acquisition gave the Company the ability to
provide a broad range of additional services and capabilities that historically
GRI had provided only to Ford. The Company believes that offering three
categories of services that are often complementary creates significant
cross-selling opportunities. For example, customers of Product Development
Services can utilize the Company's image archiving, conversion and warehousing
services for engineering drawings. The Company also can offer its Master Vendor
Program to OEMs other than Ford who are already customers of Contract Staffing.
The Company also believes that it has several opportunities to sell certain
Business and Technology Services that are currently provided only to Ford to
other OEMs and their suppliers. In addition, the Company believes that there are
significant opportunities to sell packages of multiple services, many of which
the Company historically has not attempted to market together, to its existing
customers.
Increase Global Automotive Market Share. Geographic expansion will continue
to be an important element of the Company's business strategy. The Company
intends to expand its existing presence in Germany, the development center for
several important OEMs, and has recently opened new locations in Munich and
Ingolstadt. The Company has established operations in South America and
Australasia to take advantage of global growth opportunities as the Company's
customers expand their operations in these regions. As a result of the Company's
strong customer relationships and worldwide presence, management believes that
the Company is well positioned to expand with OEMs and other suppliers in
established as well as emerging markets.
42
<PAGE> 44
Expansion into Non-Automotive Markets. The Company's management,
established infrastructure and successful track record of providing staffing,
engineering and business services to several of the world's largest and most
complex organizations position it to expand into new, non-automotive markets.
The Company believes other major corporations are attractive potential customers
for many of the Company's services.
Rationalize Cost Structure. The Company intends to improve its
profitability through the rationalization of its operations, including the
further rationalization of operations acquired in the GRI Acquisition. The
Company expects to realize these cost savings through the consolidation of back
office activities and the ongoing rationalization of duplicative facilities,
management and administrative offices.
Pursue Additional Strategic Acquisitions. The Company plans to continue to
make selective strategic acquisitions to enhance its global market position and
further broaden its service offerings. The Company believes that the
consolidation of the automotive supplier base will present additional
opportunities for acquisitions. The Company seeks acquisitions that will
strengthen MSXI's relationships with existing customers and provide access to
new customers, complement MSXI's existing global capabilities and provide MSXI
with growth opportunities in new markets.
OPERATIONS
IN-CLIENT SERVICES
The Company provides two types of staffing services: (i) Contract Staffing,
which is the supply of technical, professional and other temporary staffing and
(ii) the management of staffing procurement through its Master Vendor Program.
In-Client Services operates principally in the United States and in the United
Kingdom, and also in continental Europe and Latin and South America. The Company
plans to open additional offices in North America and Europe, in part to meet
Ford's requirements pursuant to the Ford Master Vendor Agreement.
Contract Staffing. The Company offers a full range of Contract Staffing
services including long and short-term temporary staffing, temporary-to-direct
hiring, payroll services and placement services. As of December 28, 1997, the
Company supplied approximately 1,600 temporary employees. The Company classifies
over 85% of its employees on assignment as technical personnel. The Company
supplies these personnel primarily to the automotive industry. The Company also
supplies a small number of office/ professional and light industrial workers.
The temporary staff that the Company supplies to its customers are
employees of the Company. These employees typically are assigned to work on a
full-time basis on a specific project of a customer. The period of an assignment
ranges from one day to ten years. The average length of an assignment is 33
months. Services are typically charged to customers on an hourly basis.
The Company has a dedicated recruiting staff that collects resumes from
trade shows, job fairs, technical schools, open houses, employee and customer
referrals and other sources. The Company has developed a recruiting database of
over 25,000 current resumes. The Company emphasizes to potential employees the
challenging nature of assignments, competitive compensation packages and the
opportunities for global assignments with a variety of customers. The recruiting
staff also recruits for positions elsewhere in the Company. This provides
prospective employees with diverse career opportunities and reduces the
Company's recruiting costs on a Company-wide basis.
Master Vendor Program. The Master Vendor Program permits a customer to
consolidate and streamline the procurement, administration and billing of all of
its temporary staffing. The customer specifies the number of positions, position
requirements and skill sets on a computerized order form that, when completed,
is transmitted through an intranet to the Company. The Master Vendor Program
then procures the contract labor from independent suppliers, as well as the
Company's Contract Staffing services, to fill the positions. Procurement
services provided by the Master Vendor Program may include, but are not limited
to, supplier contract administration, candidate interviewing, selection and
placement, purchase order processing, timesheet (invoice) processing, supplier
payment and customer billing and reporting. The Company processes each
individual contractor's time sheets on a periodic basis and provides a
consolidated, detailed invoice to the customer and a single payment to each
supplier.
43
<PAGE> 45
The following diagram illustrates the difference between the Master Vendor
Program and the typical temporary staffing procurement process:
TYPICAL PROCUREMENT PROCESS FLOW CHARTS
The Master Vendor Program enables customers to continually monitor and
improve their temporary staffing suppliers. The Company has the capability to
collaborate with its customers to select an appropriate pool of suppliers and to
establish individual service objectives. Based on criteria set by the customer,
a supplier's performance can be continuously reviewed and the supplier base can
be modified to remove suppliers who have failed to perform satisfactorily or to
direct additional business to better performing suppliers. Suppliers are
evaluated on a number of factors, including "hit" rate (how many job positions
the supplier fills), response rate (how frequently the supplier submits a resume
for an open position), quality of the resumes submitted, quality of the
contractee, contractee attrition/turnover and the average bill rate for
contractees.
GRI began providing temporary staffing procurement services to Ford in
1994. Currently, the Company provides Master Vendor Program services only to
Ford, although the Company has begun to market the Master Vendor Program to
other intensive users of temporary staffing services. As of December 28, 1997,
there were approximately 6,500 temporary employees at Ford who had been procured
through the Master Vendor Program.
Since the GRI Acquisition, the Company has been providing Master Vendor
Program services to certain Ford business units pursuant to the Ford Master
Vendor Agreement. The Ford Master Vendor Agreement designates the Company as the
sole "master vendor" of selected temporary staffing services to Ford. These
44
<PAGE> 46
services consist of management of the selection, retention and payment of
suppliers of temporary staff to Ford through the Master Vendor Program. In
exchange for such services, Ford pays certain agreed upon compensation to the
Company. In the United States, this compensation includes payment for the
personnel supplied to Ford at prescribed hourly billing rates, together with
certain agreed upon fees. These billing rates are adjusted to reflect inflation
on an annual basis. The Company is not entitled to compensation from Ford for
personnel costs that exceed the prescribed billing rates. The Company can earn
additional margins by negotiating rates with its suppliers that are lower than
the prescribed billing rates. The Ford Master Vendor Agreement contemplates the
reduction of the fee percentage over time, with such reductions being fully
implemented by July 1998. Prior to the GRI Acquisition, GRI implemented a number
of cost-saving measures that will partially offset these fee percentage
reductions. In the United Kingdom, the Company receives compensation in the form
of a direct fee and passes through supplier charges directly to Ford. The Ford
Master Vendor Agreement specifies that certain percentages of Ford's
requirements for personnel be filled with the Company's Contract Staffing
employees. The Ford Master Vendor Agreement also provides that the Company will
pay to Ford a specified percentage of the pre-tax profits earned by the Company
from Master Vendor Program services provided to non-Ford entities for the term
of the agreement. The parties have agreed to maintain an advisory board
comprised of executives from both the Company and Ford to monitor and enhance
the relationship between the parties. The Ford Master Vendor Agreement is
scheduled to terminate in August 2002, although the parties have agreed to
negotiate in good faith to extend the term for an additional five-year period.
The agreement is also subject to certain termination rights, including Ford's
right to terminate upon MSXI's failure to satisfy certain standards of
performance and competitiveness or upon the occurrence of a change in Ford's
business, brought about by adverse economic conditions, that eliminates the need
for the Master Vendor Program services.
Pursuant to the Ford Master Vendor Agreement, candidates are procured in
the United States from 50 to 60 suppliers, with 97% of hired candidates sourced
from 38 preferred suppliers. Most candidates are engineers and other technical
personnel.
Customers. In-Client Services has approximately 130 customers, including
Ford, GM, and Chrysler, who accounted for 80%, 7% and 6%, respectively, of
In-Client Services pro forma net sales for the fiscal year ended December 28,
1997. Currently, the Company provides Master Vendor Program services only to
Ford.
Competition. The temporary staffing industry is highly competitive and
fragmented, with limited barriers to entry. The Company competes in staffing
services based on its ability to provide high quality personnel on an efficient
basis and at a competitive price. The Company believes that its global presence
and its database of prospective employees provide it with a competitive
advantage in its ability to supply labor efficiently on short notice and on a
global basis. The Company also believes that the flexibility, comprehensiveness
and extent of automation of the Master Vendor Program will provide it with a
competitive advantage in supplying Contract Staffing services. The Company's
principal competitors in In-Client Services include CDI, TechAid, Manpower,
Kelly Services Technical, Olsten, Adecco, Randstad (in Europe only) and Volt.
Regulation. In many countries, particularly in continental Europe, entry
into the temporary employment market is restricted by the requirement to
register with, or obtain licenses from, a government agency. In addition, a wide
variety of ministerial requirements may be imposed, such as record keeping,
written contracts and reporting. The United States does not presently have any
form of national registration or licensing requirement.
PRODUCT DEVELOPMENT SERVICES
The Company offers a broad range of Product Development Services. Product
Development Services projects vary widely and may require the Company to provide
only one or more of its services described below or, alternatively, may require
the Company to provide all such services. Product Development Services
45
<PAGE> 47
operates in the United States, the United Kingdom, Germany, France, Brazil,
Mexico, Spain, India and China.
- CONCEPT DEVELOPMENT. The Company provides support capabilities, such as
conceptualization and clay modeling of new car concepts, building
prototypes of concept vehicles and evaluating similar vehicles produced
by competitors. These services assist OEMs in defining and styling
vehicles.
- DESIGN ENGINEERING. The Company designs parts for new cars and redesigns
parts for existing models to differentiate a new model or for a new,
foreign market. Design engineering services also include packaging
studies, simulation studies to evaluate noise, vibration and harshness
characteristics, crash and durability analysis and ergonomic and
visibility studies.
- MANUFACTURING ENGINEERING. The Company provides a range of manufacturing
engineering services required for the assembly of vehicle bodies. These
services involve designing the assembly layout for part or vehicle
production, including workstations, conveyance systems, and related
checking fixtures. The Company manufactures or purchases and then
assembles the components of tools for welding, assembly, conveyance and
testing. The Company uses advanced simulation methods to evaluate cycle
times, capacity and robot programming. The Company's services range from
the design of discrete work stations to the planning of entire assembly
layouts. For example, the Company currently is responsible for the design
and build of all checking fixtures for the entire body of a small GM
sedan to be sold in China.
- PRODUCTION SUPPORT. The Company provides capabilities such as engineering
visualization to assess the feasibility of certain phases of the vehicle
production process.
- SPECIAL VEHICLES. The Company provides assembly, painting and other
detailing services for specialty vehicles, including show cars.
The Company is capable of engineering complete niche vehicles, which
typically are derivatives of existing vehicle platforms. For example, the
Company recently engineered an alternative fuel vehicle for Ford. In addition,
the Company managed the engineering and design program for a new Ford minicar,
which included building the prototype and assisting Ford in the market launch of
the minicar. The Company has also completed similar program management and
prototype builds for rapid-transit vehicles, personal recreation vehicles and
theme park vehicles.
Customers. Since January 1, 1996, Product Development Services has
performed projects for OEMs including Ford, GM, Chrysler, Daewoo, Rover,
Volkswagen, Volvo, Mercedes and Mazda, and over 20 automotive suppliers such as
Textron and Lear. Customers typically invite several companies to bid for
contracts. The Company provides Product Development Services under purchase
orders which may be short or long-term, and may provide for fixed pricing,
pricing based on time and materials or price per unit.
Competition. The industry in which Product Development Services competes is
highly competitive. Competition in Product Development Services is segmented by
the types of services offered and the location of customers. The basis of
competition includes the size of the firms competing, global capability,
relevant experience, prior relationships with customers and price. The Company's
competitors in the United States include Modern Engineering, a subsidiary of
CDI, Defiance, and MegaTech, a subsidiary of Becker Group, and in Europe include
Bertrandt, Hawtal Whiting, Engineering & Design and Rucker.
BUSINESS & TECHNOLOGY SERVICES
The Company provides a broad range of business and technical services,
principally to the automotive industry. Business and Technology Services had 13
locations in North and South America, Europe and Asia and approximately 1,400
employees as of December 28, 1997. Business and Technology Services include: (i)
automotive and business process management; (ii) marketing and document
management services; (iii) purchasing services; (iv) training services; and (v)
image archiving, conversion and warehousing. All of these services seek to add
value through process re-engineering and/or technology application. These
services enable the Company to manage customers' non-core, but essential,
business processes.
46
<PAGE> 48
The Company's automotive and business process management services
re-engineer processes such as warranty administration, dealer technical
hotlines, customer assistance centers and manufacturer and dealer field service
programs, and then manages the re-engineered process for the customer. The
Company further enhances the value of these business services by providing
global service integration, a multi-lingual workforce and technology
applications. While the Company has developed its expertise in providing these
services to the automotive industry, its services can be used by manufacturers
in other industries that distribute their products through dealers and are
concerned with brand equity and customer satisfaction.
The Company provides a variety of marketing and document management
services. For example, the Company conducts marketing research for its customers
by organizing and administering focus groups surveys, such as customer
satisfaction surveys, and organizing and reporting the results. The Company also
sets up and staffs outbound call centers that make customer follow-up calls
after a customer visits a dealership. Document Management services include full
printing and fulfillment services and the management of copy centers linked
together with intranet technology. The Company believes that there is potential
for expansion of its marketing services since these services are needed not just
by automotive companies but by many large companies in other industries.
Purchasing services consists of administering payment for consulting and
training services for Ford. This includes preparation, administration and
payment of vendor invoices related to consulting and training services and
university contracts prepared for Ford. The Company believes that it can expand
this business by offering comparable services to customers other than Ford and
by adding other purchased commodities to the procurement process.
The Company's training services include the design, development and
administration of training programs for plant management, technical training
schools, and more specialized dealer technician training. These services also
encompass CD-ROM interactive training for use on personal computers. Most of the
employees performing these services work on-site at the customer's facilities.
The Company believes that it can successfully cross-sell these services to other
customers as well as pursue partnerships with other training companies.
The Company's image archiving, conversion and warehousing provides an
on-line service to Ford which makes available archived engineering drawings
through an on-line computer network. The Company archives electronic files,
converts paper drawings and aperture cards to electronic images that are then
stored on computer servers and accessed by the user through internet/intranet
technologies. Presently, the Company archives over one million engineering
drawings for Ford which are available to the engineering and manufacturing
departments through Ford's intranet. In addition to engineering drawings, the
group has archived corporate finance manuals, engineering process and standards
manual and human resource records. The Company believes there are significant
opportunities for growth in this business by applying the archiving and
retrieval process to other intensive document users, such as governmental
agencies, the healthcare industry and manufacturing and engineering companies.
Most of the operations included in Business and Technology Services were
acquired by the Company through the GRI Acquisition, and as such Ford is
currently its principal customer for these services. The Company and Ford
entered into the Ford Master Supply Agreement which provides that, for a
five-year term ending in August 2002, the Company shall be the sole or preferred
supplier of these services to various business units of Ford, with the exception
of selected marketing and training services. The Ford Master Supply Agreement
also provides that the Company will continue to administer and perform services
for the Ford Customer Service Division (Europe) ("FCSD"), or will perform
similar services at the same level as those provided to FCSD, for the term of
the Ford Master Supply Agreement. Ford's obligations under the Ford Master
Supply Agreement are subject to the Company remaining competitive as to price,
quality and timeliness of delivery with respect to each of the services
provided.
Customers. During 1997, Business and Technology Services provided services
to 16 customers. Business and Technology Services' customers include Ford,
Chrysler, GM, Jaguar, New Holland, Mazda, Procter & Gamble, Caterpillar,
Brunswick Marine and Lockheed. Ford (including Jaguar and Mazda) accounted for
47
<PAGE> 49
92% of Business and Technology Services' net sales on a pro forma basis for the
fiscal year ended December 28, 1997.
Competition. The industry in which Business and Technology Services
competes is highly competitive, although the degree of competition depends on
the service provided. In many cases, the principal competition is the customer's
in-house operations. For certain of the services such as training, marketing and
imaging services, there are numerous outside competitors, many of whom have
greater name recognition and marketing, financial and other resources than the
Company and some of whom have the capability to provide more highly integrated
services. In other cases where the Company has been an innovator in developing
outsourced services, the competitive market is developing.
SALES AND MARKETING
The Company's marketing efforts take place at several levels. Senior
management is responsible for identifying opportunities to develop new services
and to sell existing services to new or current customers, and for coordinating
marketing initiatives with potential customers. The local managers responsible
for the delivery of the Company's services support these efforts. Senior
management is responsible for monitoring the emerging demand for services so
that efforts can be expanded or redirected to take advantage of potential
business either in established or new marketing areas. Each office is
responsible for determining the potential market for services in its geographic
area and developing that market through personal contact with prospective and
existing customers.
EMPLOYEES
The following table sets forth certain information regarding the Company's
employees as of December 28, 1997.
<TABLE>
<CAPTION>
NUMBER OF
EMPLOYEES
---------
<S> <C>
North America............................................... 4,023
United Kingdom.............................................. 879
Germany..................................................... 273
Rest of Europe.............................................. 322
South America............................................... 37
Australasia................................................. 37
-----
Total..................................................... 5,571
=====
</TABLE>
Of the Company's 5,571 employees, approximately 5,135 were paid on an
hourly basis. Currently, approximately 200 of the Company's employees in the
United States are members of unions. The Company has two collective bargaining
agreements with the International Association of Machinists and Aerospace
Workers (the "IAM"). One of these agreements, which covers 55 employees, expires
in March 2001 and the other agreement, which covers the remainder of unionized
employees, expires in September 1998. The Company is currently negotiating the
terms of a third collective bargaining agreement, which will cover approximately
30 employees, with the International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America (the "UAW"). The majority of the
Company's European employees are members of industrial trade union organizations
and confederations within their respective countries. The majority of these
organizations and confederations operate under national contracts which are not
specific to any one employer. The Company has experienced labor disputes at
certain of its facilities. Negotiations in 1995 over one of the IAM collective
bargaining agreements resulted in a two-day work stoppage. A 1997 dispute with
employees represented by the UAW at an operation employing approximately 100
union personnel accelerated the anticipated closing of the operation due to the
inability of the Company and the employees to renegotiate the collective
bargaining agreement upon its expiration. The Company believes its current
relations with its employees are good.
48
<PAGE> 50
PROPERTIES
The following table sets forth certain information regarding the facilities
operated by the Company as of December 28, 1997.
<TABLE>
<CAPTION>
NUMBER OF
REGION FACILITIES
------ ----------
<S> <C>
North America............................................... 26
United Kingdom.............................................. 9
Germany..................................................... 6
Rest of Europe.............................................. 8
South America............................................... 1
Australasia................................................. 3
--
Total....................................................... 53
==
</TABLE>
Most of the Company's facilities are offices, and all but one of the
Company's facilities are leased. The Company believes that the termination of
any one of its leases would not materially adversely affect the Company. In
addition, the Company leases 5 facilities that were idle as of December 28,
1997.
ENVIRONMENTAL
The Company's operations and properties are subject to foreign, federal,
state and local environmental protection laws and regulations, such as those
governing discharges into air and water, as well as handling and disposal of
solid and hazardous wastes. The requirements of these laws and regulations have
tended to become increasingly stringent, complex and costly to comply with.
Certain environmental laws, such as the Comprehensive Environmental
Response, Compensation & Liability Act ("CERCLA" or "Superfund") provide for
strict, joint and several liability for investigation and remediation of spills
and other releases of hazardous substances. Such laws may apply to conditions at
properties presently or formerly owned or operated by an entity or its
predecessors, as well as to conditions at properties at which wastes or other
contamination attributable to an entity or its predecessors come to be located.
Certain of the Company's properties may require remediation as the result of
activities at such properties occurring prior to the Company's operations at
such locations. With respect to certain properties, the Company believes that
prior owners or operators will be obligated to perform any required remediation,
or to indemnify the Company pursuant to its agreements with such parties, should
remediation be necessary. There can be no guarantee that such third parties will
perform their obligations under such agreements and as a result it is possible
that the Company will be required to make expenditures for environmental
remediation in the future. However, based upon the Company's experience to date,
the Company believes that any costs it may incur relating to environmental laws
will not have a material adverse effect on the Company's business, financial
condition and results of operations. There can be no assurance, however, that
future events, such as changes in existing laws, the development of new facts,
or the failure of prior owners or operators to meet their contractual
obligations to the Company, will not cause the Company to incur additional costs
that could have a material adverse effect on the Company's business, financial
condition and results of operations.
LEGAL PROCEEDINGS
On December 23, 1997, Cambridge Industries, Inc. filed a complaint against
the Company in Michigan State Court. The complaint alleges that the Company, by
retaining approximately $1.1 million of funds paid into a lock-box account
maintained by the Company, has converted such funds. Cambridge Industries is
seeking whatever relief the court deems just, including treble damages. The
Company believes it has meritorious defenses and counterclaims to this action
and intends to defend itself vigorously against all of the allegations contained
in the complaint. The Company does not believe that the ultimate outcome of this
litigation will have a material adverse effect on its consolidated financial
condition or results of operation.
49
<PAGE> 51
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to
directors and executive officers of the Company as of May 28, 1998.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Erwin H. Billig........................... 71 Chief Executive Officer, Chairman of the Board of
Directors
Ralph L. Miller........................... 55 Special Assistant to the Chairman of the Board;
Director
Frederick K. Minturn...................... 41 Executive Vice President; Chief Financial Officer
Roger Fridholm............................ 57 President, Business, Technology and Staffing
Services Division
John Risk................................. 59 President, Product Development Services Division
Richard A. Manoogian...................... 61 Director
Richard M. Cashin, Jr..................... 45 Director
Michael A. Delaney........................ 43 Director
David E. Cole............................. 61 Director
Lee Gardner............................... 51 Director
</TABLE>
Erwin H. Billig has been Chief Executive Officer since April 28, 1998 and
Chairman of the Board of Directors since January 3, 1997. He served as Vice
Chairman of MascoTech from 1994 to 1997 and was President and Chief Operating
Officer of MascoTech from 1986 to 1994. He is also the Chairman of the Board of
Directors of Titan Wheel International, Inc., a director of OEA, Inc. and a
director and Vice Chairman of Delco Remy International, Inc.
Ralph L. Miller has been Special Assistant to the Chairman of the Board
since April 28, 1998. From January 3, 1997 to April 28, 1998, Mr. Miller served
as President and Chief Operating Officer. He was President and Chief Executive
Officer of APX from January 1994 through December 1996, and Executive Vice
President of Aero Detroit, Inc. from 1992 to 1994. From 1985 to 1992, Mr. Miller
served as President of Modern Engineering. He is also a director of Separation
Dynamics International Ltd., Industrial Technology Institute and iX Systems,
Inc.
Frederick K. Minturn has been Executive Vice President and Chief Financial
Officer since January 3, 1997. Mr. Minturn was Group Controller of MascoTech's
Automotive Operations from 1991 through December 1996 and was a Vice President
of such group from 1994 through December 1996.
Roger Fridholm has been President of the Business, Technology and Staffing
Services Division since May 26, 1998. Prior to such date, Mr. Fridholm served as
President of St. Clair Group, Inc., a private investment company, from 1991 to
1998. He also has served as Chairman of Ad Hoc Legal Resources LLC since 1995,
as President of IPG Services Corporation since 1996 and President of Ad Hoc,
Inc. since 1997, all of which are staffing service companies. Mr. Fridholm was
President and Chief Operating Officer of the Stroh Brewery Company, where he
continues to serve as a director, from 1979 to 1991. Mr. Fridholm is also a
director of The Stroh Companies, Inc., MCN Energy Group and Comerica Bank.
John Risk has been President of the Product Development Services Division
since May 11, 1998. Mr. Risk retired from Ford Motor Company in 1997. Mr. Risk
was director of a vehicle line for Ford Motor Company from 1994 to 1997, and
from 1992 to 1994 was director of the small car segment for Ford.
Richard A. Manoogian has been a director since January 3, 1997. Mr.
Manoogian served as Chairman, Chief Executive Officer and a director of
MascoTech from 1984 to 1997 and continues to serve as Chairman and as a
director. Mr. Manoogian is also Chairman of the Board of Masco Corporation and a
director of First Chicago NBD Corporation, Detroit Renaissance and The American
Business Conference.
Richard M. Cashin, Jr. has been a director since January 3, 1997. Mr.
Cashin has been president of CVC since 1994. Prior to being appointed president,
Mr. Cashin served as a Managing Director of CVC for more
50
<PAGE> 52
than four years. Mr. Cashin is also a director of Levitz Furniture Inc., Delco
Remy International, Inc., LifeStyle Furnishings International Ltd., Fairchild
Semiconductor Corporation, FFC Holding, Inc., Cable Systems International,
Euramax International, Plc, Titan Wheel International, Inc., Hoover Group Inc.,
Thermal Engineering, Gerber Childrenswear Inc., JAC Holding Corporation, GVC
Holdings, Ballantrae Corporation and Delta Commodities, Inc.
Michael A. Delaney has been a director since January 3, 1997. Mr. Delaney
has been a Vice President of CVC since 1989. Mr. Delaney is also a director of
GVC Holdings, JAC Holding Corporation, CORT Business Services Corporation, Inc.,
Palomar Technologies Corporation, Enterprise Media Inc., SC Processing, Inc.,
Triumph Group, Inc., CLARK Material Handling Inc., Ballantrae Corporation,
International Knife and Saw, Inc., Aetna Industries, Inc., AmeriSource Health
Corporation and Delco Remy International, Inc.
David E. Cole has been a director since January 3, 1997. Mr. Cole has been
the Director of the Office for the Study of Automotive Transportation (OSAT) at
the University of Michigan's Transportation Research Institute since 1978. Prior
to attaining this position, Mr. Cole was a Professor of Mechanical Engineering
at the University of Michigan since 1967. Mr. Cole is also a director of the
Automotive Hall of Fame and is on the Board of Trustees of Hope College. From
1985 to 1988, Mr. Cole served as a director of the Society of Automotive
Engineers.
Lee M. Gardner has been a director since January 3, 1997. Mr. Gardner
served as President and Chief Operating Officer of MascoTech from 1992 to 1997,
and continues to serve as President and Co-Chief Operating Officer. Prior to
1992, he served as President of MascoTech's Automotive Operations.
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to all
compensation paid or earned for services rendered to the Company and its
subsidiaries in all capacities in 1997 (except for bonus amounts, which are
compensation for services rendered in 1996) by the Company's President and the
three other executive officers whose total annual salary and bonus for the
fiscal year ended December 28, 1997 exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------------
OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
--------------------------- ---- ------ ----- ------------
($) ($) ($)
<S> <C> <C> <C> <C>
Ralph L. Miller.......................................... 1997 325,000 -- --
Special Assistant to the Chairman of the Board
Frederick K. Minturn..................................... 1997 200,000 65,000 92,961(1)
Executive Vice President; Chief Financial Officer
Derek Grills............................................. 1997 165,000 36,000 --
Vice President, In-Client Services
Don Springer(2).......................................... 1997 149,000 212,453 142,730
Vice President, Business and Technology Services
</TABLE>
- -------------------------
(1) Representing the value on the date of a grant of 4,697 shares of common
stock of MascoTech pursuant to MascoTech's 1991 Stock Incentive Plan, which
represented compensation for services in 1996.
(2) The amounts of compensation for Mr. Springer were neither set nor paid by
MSXI, but were determined and paid by GRI, Mr. Springer's employer until
August 1997. Mr. Springer began receiving compensation from MSXI on January
1, 1998.
Pursuant to the Company's Deferred Compensation Plan, certain of the
Company's management employees have the option of deferring salary and bonus
amounts. In addition, deferred discretionary bonuses may be awarded by the
Company to participants in the Deferred Compensation Plan.
51
<PAGE> 53
DIRECTOR COMPENSATION
Outside directors are entitled to receive $10,000 in annual compensation
and $500 per meeting attended. As of the date of this Prospectus, Mr. Cole is
the only outside director.
EMPLOYMENT AGREEMENTS
Ralph L. Miller and Frederick K. Minturn. Effective as of January 3, 1997,
the Company entered into employment agreements with Mr. Miller to serve as
President and Chief Operating Officer (Mr. Miller's position prior to April 28,
1998) and Mr. Minturn to serve as Executive Vice President and Chief Financial
Officer, each for an initial term of two years. The following terms of Mr.
Miller's agreement are still effective although his position has changed. The
agreements will automatically renew for successive one-year terms unless
otherwise terminated in writing by either the Company or Messrs. Miller or
Minturn, as the case may be. Annual base salary for Mr. Miller is $325,000 and
for Mr. Minturn is $200,000, subject, in each case, to increases upon approval
by the Board of Directors. The agreements also provide that the Company will pay
Mr. Miller and Mr. Minturn a discretionary annual performance bonus although
such provision has been superseded by the Performance Incentive Plan described
below. Mr. Miller and Mr. Minturn will also be entitled to all other employee
benefits maintained for officers and employees of the Company. The Company may
terminate employment upon death or disability. Either the Company or Mr. Miller
or Mr. Minturn, as applicable, may terminate the agreement, with or without
cause (as defined therein). If the agreement is terminated without cause by the
Company or with good reason (as defined therein) by Mr. Miller or Mr. Minturn,
as applicable, the Company will pay to Mr. Miller or Mr. Minturn, as applicable,
the full base salary for the remainder of the term then in effect. If, however,
the agreement is terminated without cause by the Company during or upon the
expiration of the initial term, then Mr. Miller or Mr. Minturn, as applicable,
shall receive the full base salary for not less than one year. The agreements
also provide that, during the term of their employment, and thereafter for the
greater of twelve months or the remainder of the then current term, Mr. Miller
and Mr. Minturn will not, directly or indirectly, engage in certain activities
competitive with the business of the Company.
Don Springer. On August 28, 1997, the Company entered into an at-will
employment agreement with Mr. Springer to serve as Vice President, Business and
Technology Services. Annual base salary for Mr. Springer is $195,000. The
agreement also provides that the Company will pay Mr. Springer a discretionary
annual performance bonus although such provision has been superseded by the
Performance Incentive Plan. The Agreement also includes a commitment by the
Company to offer Mr. Springer the opportunity to purchase 1,000 shares of Class
A Common Stock of the Company at $40 per share, subject to certain conditions,
including approval by the Board of Directors and Mr. Springer's continuous
employment until September 1, 1998. Should the Company choose to terminate Mr.
Springer's employment without cause, he will be entitled to a gross amount of
$230,000, subject to a release of all claims against the Company or its
affiliates relating to his termination.
Roger Fridholm. Mr. Fridholm is in the process of negotiating an agreement
and letter of intent with the Company regarding the terms of his provision of
services to the Company. Annual compensation for Mr. Fridholm would be $250,000,
subject to increase upon approval of the Board of Directors. The agreement would
also provide that the Company will pay Mr. Fridholm a discretionary annual
performance bonus. The bonus is guaranteed for the remainder of 1998 at an
amount equal to 50% of Mr. Fridholm's annual compensation, prorated based on
length of service.
In addition, the proposed letter of intent provides that Mr. Fridholm and
the Company may agree to extend Mr. Fridholm's term of service for an additional
three years. If such an extension is agreed upon, the Company has agreed to
purchase from Mr. Fridholm for an amount less than $4.0 million an employee
leasing business owned by Mr. Fridholm.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the compensation committee are Messrs. Billig, Delaney and
Gardner.
52
<PAGE> 54
PERFORMANCE INCENTIVE PLAN
The Company introduced the Performance Incentive Plan ("PIP") in April
1998. All of the Company's salaried employees, including executive officers, are
eligible to receive payments under PIP. PIP offers target awards that are a
percentage of an employee's annual base salary. Actual awards are based on
individual as well as corporate and business unit performance. Under PIP, each
of Mr. Miller and Mr. Minturn will receive a discretionary annual performance
bonus, capped at 87.5% of his annual base salary, if the Company meets or
exceeds its target performance.
53
<PAGE> 55
PRINCIPAL STOCKHOLDERS
The following table provides certain information regarding the beneficial
ownership, as defined in Rule 13d-3 of the Securities Exchange Act of 1934 (the
"Exchange Act"), of the Company's common stock as of May 29, 1998 by (i) each
stockholder known to the Company to be the beneficial owner of 5% or more of any
class of the Company's voting securities, (ii) each of the Company's directors
and executive officers and (iii) all directors and executive officers as a
group. So far as is known to the Company, the persons named in the tables below
as beneficially owning the shares set forth therein have sole voting power and
sole investment power with respect to such shares, unless otherwise indicated.
<TABLE>
<CAPTION>
AMOUNT
BENEFICIALLY OWNED PERCENT OF CLASS
---------------------- ----------------------
SERIES A SERIES A
CLASS A PREFERRED CLASS A PREFERRED
NAME OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK
- ------------------------ ------- --------- ------- ---------
<S> <C> <C> <C> <C>
Citicorp Venture Capital, Ltd.......................... 43,752* 180,000 46.1% 50.0%
399 Park Avenue, 14th Floor
New York, New York 10043
MascoTech, Inc......................................... 43,752* 180,000 46.1% 50.0%
21001 Van Born Road
Taylor, Michigan 48180
Erwin H. Billig........................................ 2,000* -- 2.1% --
Ralph L. Miller(1)..................................... 3,000* -- 3.2% --
Frederick K. Minturn................................... 1,500* -- 1.6% --
All directors and executive officers as a group........ 6,500(2) -- 6.9% --
</TABLE>
- -------------------------
* Consists of an equal number of shares of each of Series A-1 Common Stock,
Series A-2 Common Stock, Series A-3 Common Stock and Series A-4 Common Stock
(collectively, the "Class A Common Stock")
(1) Mr. Miller has agreed in principle with CVC to acquire certain shares of
Class A Common and Series A Preferred Stock currently held by CVC for an
aggregate purchase price of $1,000,000. Mr. Miller intends to borrow
$250,000 of the purchase price from the Company, such loan to mature on
December 31, 1999 and to bear interest at (i) the same rate of interest
borne by the Notes or (ii) the highest rate permitted under applicable law,
if such rate is less than the interest rate borne by the Notes, and to
borrow the remaining $750,000 of the purchase price from a third party. Such
purchase is expected to be completed by August 15, 1998, although there is
no assurance that the transaction will be completed. Upon completion of the
purchase, Mr. Miller would own approximately 5.6% and 2.5% of the Class A
Common and Series A Preferred Stock, respectively, and CVC would own
approximately 43.6% and 47.5% of the Class A Common and Series A Preferred
Stock, respectively.
(2) Roger Fridholm and John Risk have been given the option by the Company,
subject to execution of a management subscription agreement, to purchase
2,000 and 1,000 shares of Class A Common Stock, respectively.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
STOCKHOLDERS' AGREEMENT
On January 3, 1997, in connection with the ownership of certain capital
shares of the Company, the Company entered into a stockholders' agreement (the
"Stockholders' Agreement") with MascoTech, CVC and certain executive officers
and directors of the Company (the "Management Stockholders" and, together with
MascoTech and CVC, the "Stockholders"). The Stockholders' Agreement imposes
certain restrictions on, and rights with respect to, the transfer of shares of
the Company's Common Stock (as defined) and Series A Preferred Stock held by
MascoTech, CVC and the Management Stockholders. The Stockholders Agreement also
entitles the Stockholders to certain rights regarding corporate governance of
the Company and
54
<PAGE> 56
to CVC and MascoTech the right to purchase their pro rata share in connection
with the issuance of any new shares of Common Stock by the Company.
The Stockholders' Agreement sets forth conditions under which the parties
may transfer their shares. The Stockholders' Agreement provides for a right of
first refusal in favor of the Company in the event that any Stockholder (the
"Selling Stockholder") desires to transfer its shares of Common Stock pursuant
to a bona fide third party offer or an involuntary transfer (as defined in the
Stockholders Agreement). To the extent that the Company elects to purchase fewer
than all of the shares proposed to be sold by such Selling Stockholder, the
Stockholders' Agreement provides for rights of first refusal on a pro rata basis
in favor of the other Stockholders. In the case of a bona fide third party
offer, without the consent of the Selling Stockholders, neither the Company nor
the other Stockholders may purchase any of the shares pursuant to the right of
first refusal unless all such shares are purchased. If such Selling Stockholder
is MascoTech or CVC, and such Selling Stockholder proposes to sell shares
representing more than 5% of the outstanding shares of Common Stock on a
fully-diluted basis or if any Selling Stockholder proposes to transfer shares of
Series A Preferred Stock, then such Selling Stockholder must also cause the
buyer to give the other Stockholders an option to sell a pro rata number of
their respective shares of the same class and on the same terms and conditions
as the Selling Stockholder.
In the event that a Management Stockholder's shares of capital stock are
subject to an involuntary transfer (such as a seizure pursuant to a judgment
lien or in connection with any voluntary or involuntary bankruptcy proceeding),
the Stockholders' Agreement grants similar rights to purchase such shares first
to the Company and then to MascoTech and CVC, pro rata.
Subject to certain restrictions, following the fifth anniversary of the
date of the Stockholders' Agreement and for as long as CVC or MascoTech, as the
case may be, or any of their permitted successors and assigns, shall hold more
than 60% of the Common Stock of the Company originally issued to them, the
Stockholders' Agreement grants each of MascoTech and CVC certain "drag-along
rights." The drag-along rights require the other Stockholders to sell all of
their capital stock upon the same terms and conditions as MascoTech and CVC in
connection with the sale of all of the shares of MascoTech or CVC, as the case
may be, to a third party. In addition, if MascoTech or CVC propose the transfer
or sale of all or substantially all of the assets or business of the Company to
any third party, MascoTech or CVC, as the case may be, may require the other
Selling Stockholders to take all action necessary to cause the Company to
approve such transaction.
The Stockholders' Agreement provides that the Board of Directors (the
"Board") of the Company shall consist of seven members consisting of two
nominees of CVC, two nominees of MascoTech, one nominee of the Management
Stockholders and two disinterested directors. Voting on the Board is weighted so
as to provide each MascoTech designate with 17.5%, each CVC designate with
17.5%, the Management designate with 10%, and each disinterested director with
10%, respectively, of the voting power on the Board.
REGISTRATION RIGHTS AGREEMENT
On January 3, 1997, the Company entered into a registration rights
agreement (the "MSXI Registration Rights Agreement") with the CVC, MascoTech and
the Management Stockholders. The MSXI Registration Rights Agreement provides
that CVC and MascoTech shall be entitled, at any time, to request that the
Company effect an underwritten primary or secondary public offering, which
raises aggregate net proceeds to the Company of at least $50,000,000 or, after
June 3, 1998, to request that the Company effect an underwritten primary or
secondary public offering of at least 25% of the Company's Common Stock on a
fully diluted basis; and in connection with any such public offering the Company
is required to use reasonable efforts to include in such offering all other
shares, subject to certain exceptions, that the stockholders request for
inclusion therein. In addition, at any time following an initial public offering
of the Company's shares, the MSXI Registration Rights Agreement provides that,
subject to certain limitations, each of CVC and MascoTech shall be entitled to
request three long-form registrations using SEC Form S-1 or S-2 and request
unlimited short-form registrations using Form S-3 (any registration effected in
accordance with this or the preceding sentence, a "Demand Registration"). If (i)
the Company's Board determines that a Demand Registration must be postponed to
avoid the disclosure of material non-public information or (ii) as a result of a
pending material financing or acquisition, then the Company may require CVC or
MascoTech, as the case may be, to withdraw its Demand Registration and not
submit another Demand Registration for up to sixty
55
<PAGE> 57
days. Whenever the Company decides to register any of its shares (other than on
Forms S-4 and S-8), the CVC, MascoTech and Management Stockholders have the
right to register (or "piggyback") their shares on the same terms as the
Company. The Company is obligated to pay all reasonable fees, costs and expenses
in connection with any initial, demand or piggyback registration.
Notwithstanding such demand registration rights, the Company shall not be
obligated to effect a Demand Registration statement if, within 90 days of such
request, a registration statement in which CVC or MascoTech was entitled to
participate, pursuant to their demand or piggyback registration rights, was
filed. In addition, the Company and each Stockholder shall be precluded from
effecting any public sale or distribution of the shares for a certain period
prior to and following the effective date of any initial public offering or any
demand or piggyback registration. In each demand registration, holders of
registrable securities other than the holders initiating such registration may
include their securities in such registration, subject to certain restrictions.
The MSXI Registration Rights Agreement contains indemnity and contribution
provisions between the Company and any selling stockholders for losses arising
out of any registration effected pursuant to the MSXI Registration Rights
Agreement.
OTHER
Mr. Miller has agreed in principle with CVC to acquire certain shares of
Class A Common and Series A Preferred Stock for an aggregate purchase price of
$1,000,000. Mr. Miller intends to borrow on a secured basis $250,000 of the
purchase price from the Company. See "Principal Stockholders."
56
<PAGE> 58
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
The Company's Certificate of Incorporation ("Certificate of Incorporation")
provides that the Company is authorized to issue 2,000,000 shares of Common
Stock, par value $0.01 per share, divided into two classes: Class A Common Stock
("Class A Stock") and Class B Common Stock ("Class B Stock" and, together with
the Class A Stock, the "Common Stock").
Class A Stock is divided into five series consisting of 125,000 shares each
of Series A-1 Common Stock ("Series A-1"), Series A-2 Common Stock ("Series
A-2"), Series A-3 Common Stock ("Series A-3"), Series A-4 Common Stock ("Series
A-4") and 500,000 Shares of Series I Common Stock ("Series I"). Class B Stock is
divided into five series consisting of 125,000 shares each of Series B-1 Common
Stock ("Series B-1"), Series B-2 Common Stock ("Series B-2"), Series B-3 Common
Stock ("Series B-3"), Series B-4 Common Stock ("Series B-4") and 500,000 Shares
of Series II Common Stock ("Series II").
The holders of Class A Stock are entitled to one vote for each share held
of record on all matters to be voted on by the Company's stockholders. The
holders of Class B Stock have no voting rights except as required by law or in
the Certificate of Incorporation.
The holders of all classes of Common Stock receive dividends ratably. If
dividends are declared in shares of Common Stock, the dividend must be declared
and paid at the same rate per share on each class or series of Common Stock and
unless 95% of the shares of each class or series approves, the dividends payable
in shares of a particular class or series of Common Stock are payable only to
holders of the particular class or series of Common Stock; however, any dividend
payable to one class or series of Common Stock entitles the other class or
series to a dividend in the same form and amount on the same date. If the
dividends consist of voting securities of the Company, at the request of each
holder of Class B Stock, the Company must pay dividends to holders of Class B
Stock in nonvoting securities of the Company which are identical to the voting
securities and convertible into or exchangeable for voting securities on the
same terms as the Class B Stock is convertible to Class A Stock. The holders of
all classes are entitled to share ratably in all distributions resulting from
any liquidation, dissolution or winding up.
The holders of (a) Series A-1 can convert their shares into Series B-1, (b)
Series A-2 can convert their shares into Series B-2, (c) Series A-3 can convert
their shares into B-3, (d) Series A-4 can convert their shares into B-4, and (e)
Series I can convert their shares into Series II, in each case at a one-to-one
conversion rate. Such conversion may occur at any time in the event that the
holder thereof has determined that it might be subject to a Regulatory Problem
(as defined in the Certificate of Incorporation) or an Accounting Determination
(as defined in the Certificate of Incorporation). The holders of each series of
Class B Stock can convert their shares into Class A Stock in the same manner as
described in (a) through (e) above. Upon the occurrence of a Qualifying Offering
(as defined in the Stockholders' Agreement) or a Sale Transaction (as defined in
the Stockholders' Agreement), (a) each share of Series A-1, Series A-2, Series
A-3, and Series A-4 will be automatically converted into one fully paid and
non-assessable share of Series I Stock and (b) each share of Series B-1, Series
B-2, Series B-3, and Series B-4 will be automatically converted into one fully
paid and non-assessable share of Series II Stock.
PREFERRED STOCK
The Company's Certificate of Incorporation provides that the Company is
authorized to issue 1,500,000 shares of preferred stock, divided into two
classes: 500,000 shares of Redeemable Series A Preferred Stock, par value $0.01
and 1,000,000 of New Preferred Stock, par value $0.01 ("New Preferred").
The Redeemable Series A Preferred Stock has a stated value of $100 per
share, and no additional shares may be issued. As long as any shares of the
Redeemable Series A Preferred Stock are outstanding, the Company may not issue
preferred stock that is senior or pari passu with respect to payment of
dividends, other distributions, or preference on redemption or liquidation
without the consent of the holders of 67% of the Redeemable Series A Preferred
Stock. Except as required by law or to validate certain actions of the Company
which adversely affect the rights or powers, ranking, or authorized number of
shares, the holders of
57
<PAGE> 59
Redeemable Series A Preferred Stock have no voting rights. Dividends on the
Redeemable Series A Preferred Stock are payable in cash at a rate per annum
equal to 12% of the sum of $100 plus an amount equal to any accrued and unpaid
dividends. Dividends on the Redeemable Series A Preferred Stock accrue daily and
are cumulative. The Company may not declare or pay any dividend or other
distribution in respect of the Common Stock or other class or series of stock
ranking junior to the Redeemable Series A Preferred Stock (collectively the
"Junior Stock") unless all accrued and unpaid dividends with respect to
Redeemable Series A Preferred Stock have either been paid or contemporaneously
are declared and paid; however, the Company may (a) acquire Junior Stock in an
exchange or conversion, (b) pay dividends in shares of Junior Stock, and (c)
acquire shares of Common Stock pursuant to the Stockholders' Agreement.
The New Preferred shall be authorized in one or more series and shall have
voting powers, preferences, and other rights and qualifications as the Board of
Directors state in a restitution or resolutions provided for an issuance of the
New Preferred.
The Redeemable Series A Preferred Stock is mandatorily redeemable by the
Company at the earlier of (a) June 30, 2007 or (b) the date on which a Sale
Transaction by MascoTech or CVC occurs. However, in conjunction with the
Offering, the Company extended the date on which the Redeemable Series A
Preferred Stock is mandatorily redeemable to December 31, 2008. The Company may
redeem any or all of the Redeemable Series A Preferred Stock at its election
prior to the mandatory redemption date. In both instances, the redemption price
for the Redeemable Series A Preferred Stock shall be the sum of $100 plus an
amount equal to any accrued and unpaid dividends. The Company may also elect to
acquire shares of the Redeemable Series A Preferred Stock from time to time
without redeeming or otherwise acquiring all or any other issued shares of the
Redeemable Series A Preferred Stock (a "Special Redemption") pursuant to the
terms of the Stockholders' Agreement.
The Redeemable Series A Preferred Stock may be exchanged for the Company's
12% Junior Subordinated Debentures ("Junior Debentures") at the election of the
Company. The Company must make its election within 45 days of receipt of notice
from MascoTech or CVC of their offer to exchange and sell their Redeemable
Series A Preferred Stock ("Exchange Notice"). The Junior Debentures will mature
on the mandatory redemption date of the Redeemable Series A Preferred Stock. If
the Company elects to exchange the shares, it must exchange all of the shares
designated to be exchanged in the Exchange Notice and all of the shares
designated by other holders of Redeemable Series A Preferred Stock in an
additional notice. The New Credit Facility and the Indenture restrict the
incurrence of additional Indebtedness, including the exchange of the Redeemable
Series A Preferred Stock.
58
<PAGE> 60
DESCRIPTION OF CERTAIN OTHER INDEBTEDNESS
NEW CREDIT FACILITY
On January 22, 1998 the Company entered into the New Credit Facility with
NBD Bank, on behalf of itself and as agent for a syndicate of other lenders.
Funds under the New Credit Facility are available for acquisitions, working
capital and general corporate purposes. On April 14, 1998, the Company amended
and restated the New Credit Facility to add a $30 million term loan portion.
References to the New Credit Facility herein refer to such facility as so
amended. On the same date, the Company borrowed the full amount available under
the term loan and used the funds to reduce outstanding balances under the
revolving loan portion of the New Credit Facility.
Interest Rate. Interest on the loans under the New Credit Facility are
payable quarterly or, if earlier, at the end of each interest period and will
accrue at an annual rate equal to, at the option of the Company, (a) a floating
rate (the "Floating Rate") which shall be the higher of (i) the prime rate of
NBD Bank or a comparable rate of an affiliate of NBD Bank or (ii) 1.0% over the
Federal Funds rate, or (b) the London Interbank Offered Rate ("LIBOR") plus the
applicable margin, which (I) with respect to revolving loans, is initially 1.40%
and can range from 0.45% to 1.40% and (II) with respect to term loans, is
initially 1.75% and can range from 0.625% to 1.75%, in each case based on the
Company's ratio of total debt to EBITDA (each as defined in and calculated
pursuant to the New Credit Facility).
Borrowing Base. The New Credit Facility provides the Company with available
credit under the revolving loan portion of up to $100 million. If the Company's
ratio of total debt to EBITDA exceeds a specified number, the amount of
revolving and term loans permitted to be outstanding under the New Credit
Facility may be limited to a percentage of eligible accounts receivable of the
Company.
Guarantee and Security Interest. Each significant domestic subsidiary of
the Company has guaranteed all obligations of the Company under the New Credit
Facility. In addition, these obligations are secured by a pledge of the Stock of
such domestic subsidiaries and a first lien on substantially all assets of such
domestic subsidiaries and a pledge of 65% of the stock of the significant
foreign subsidiaries. The obligations of the Company under the New Credit
Facility rank senior to all other indebtedness of the Company, including the
Notes.
Covenants. The New Credit Facility contains certain reporting covenants and
other customary affirmative covenants and various negative covenants including
but not limited to certain limitations on mergers, sales of assets,
acquisitions, liens, investments, indebtedness, contingent obligations,
dividends, subsidiaries' ability to agree to dividend restrictions, affiliate
transactions and changes of business. The New Credit Facility also contains
certain covenants with respect to employee benefit arrangements and
environmental matters. The New Credit Facility also contains certain financial
covenants including but not limited to a ratio of total debt to EBITDA, a fixed
charge coverage ratio, and a minimum net worth requirement (each as defined in
and calculated pursuant to the New Credit Facility).
Events of Default. The New Credit Facility contains customary events of
default including without limitation defaults for nonpayment of principal when
due, nonpayment of interest and fees within five business days when due,
material misrepresentations, default in the performance of most negative
covenants, default in performance of any other term or covenant for thirty days
after notice (five days after notice for information covenants), bankruptcy or
insolvency, ERISA, change of control, unstayed judgments in excess of a certain
amount and cross-defaults to any indebtedness equal to or in excess of a certain
amount in the aggregate for the Company or any subsidiary, which default is a
payment default or would permit the holders of such indebtedness to cause such
indebtedness to become due prior to its stated maturity.
FORD FACILITY
The Fleet Central Billing-Finance Facility (the "Ford Facility") is an
arrangement between the Company and Ford Motor Company Limited ("Ford Limited")
whereby the Company participates in the Fleet Central Billing Program (the
"Program"). Under the Ford Facility, Ford Limited appoints the Company as an
agent to purchase maintenance and service accounts receivable ("Receivables") of
selected
59
<PAGE> 61
Ford Limited dealers in the United Kingdom (the "Dealers"). The Company
purchases the Receivables on behalf of Ford at a discount of 2.75% or such rate
of discount as may be agreed upon from time to time. Ford provides the Company
with funding to purchase Receivables, and such funding currently bears interest
at the one month LIBOR rate plus 1.66% and is subject to adjustment in the
future. As of March 29, 1998, there was approximately $7.3 million of
indebtedness outstanding under the Fleet Central Billing-Finance Facility.
60
<PAGE> 62
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD NOTES
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal (which together constitute the
Exchange Offer), the Company will accept for exchange Old Notes which are
properly tendered on or prior to the Expiration Date and not withdrawn as
permitted below. For each $1,000 principal amount of Old Notes surrendered to
the Company pursuant to the Exchange Offer, the holder of such Old Note will
receive an Exchange Note having a principal amount equal to that of the
surrendered Old Note. The Company will keep the Exchange Offer open for not less
than 30 business days (or longer if required by applicable law) after the date
notice of the Exchange Offer is mailed to the holders of the Old Notes. As used
herein, the term "Expiration Date" means 5:00 p.m., New York City time, on
, 1998; provided, however, that if the Company has extended the
period of time for which the Exchange Offer is open, the term "Expiration Date"
means the latest time and date to which the Exchange Offer is extended.
As of the date of this Prospectus, $100,000,000 in aggregate principal
amount of the Old Notes are outstanding. This Prospectus, together with the
Letter of Transmittal, is first being sent on or about the date set forth on the
cover page to all Holders of Old Notes at the addresses set forth in the
security register with respect to Old Notes maintained by the Trustee. The
Company's obligations to accept Old Notes for exchange pursuant to the Exchange
Offer is subject to certain conditions as set forth under "-- Certain Conditions
to the Exchange Offer" below.
The Company expressly reserves the right, at any time or from time to time,
to extend the period of time during which the Exchange Offer is open, and
thereby delay acceptance for any exchange of any Old Notes, by giving notice of
such extension to the Holders thereof. During any such extension, all Old Notes
previously tendered will remain subject to the Exchange Offer and may be
accepted for exchange by the Company. Any Old Notes not accepted for exchange
for any reason will be returned without expense to the tendering Holder thereof
as promptly as practicable after the expiration or termination of the Exchange
Offer.
The Company expressly reserves the right to amend or terminate the Exchange
Offer, and not to accept for exchange any Old Notes not theretofore accepted for
exchange, upon the occurrence of any of the conditions of the Exchange Offer
specified below under "Certain Conditions to the Exchange Offer." The Company
will give notice of any extension, amendment, non-acceptance or termination to
the Holders of the Old Notes as promptly as practicable, such notice in the case
of any extension to be issued by means of a press release or other public
announcement no later than 9:00 a.m., New York City Time, on the next business
day after the previously scheduled Expiration Date.
PROCEDURES FOR TENDERING OLD NOTES
The tender to the Company of Old Notes by a Holder thereof as set forth
below and the acceptance thereof by the Company will constitute a binding
agreement between the tendering Holder and the Company upon the terms and
subject to the conditions set forth in this Prospectus and in the accompanying
Letter of Transmittal. Except as set forth below, a Holder who wishes to tender
Old Notes for exchange pursuant to the Exchange Offer must transmit a properly
completed and duly executed Letter of Transmittal, including all other documents
required by such Letter of Transmittal, to IBJ Schroder Bank & Trust Company
(the "Exchange Agent") at the address set forth below under "Exchange Agent" on
or prior to the Expiration Date. In addition, (i) certificates for such Old
Notes must be received by the Exchange Agent along with the Letter of
Transmittal, (ii) a timely confirmation of a book-entry transfer (a "Book-Entry
Confirmation") of such Old Notes, if such procedure is available, into the
Exchange Agent's account at DTC (as defined) pursuant to the procedure for
book-entry transfer described below, must be received by the Exchange Agent
prior to the Expiration Date or (iii) the Holder must comply with the guaranteed
delivery procedures described below. THE METHOD OF DELIVERY OF OLD NOTES,
LETTERS OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND
RISK OF THE HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT
REGISTERED
61
<PAGE> 63
MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTERS OF
TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE COMPANY.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the Old Notes surrendered for exchange
pursuant thereto are tendered (i) by a registered Holder of the Old Notes who
has not completed the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution (as defined below). In the event that signatures on a
Letter of Transmittal or a notice of withdrawal, as the case may be, are
required to be guaranteed, such guarantees must be by a firm which is a member
of a registered national securities exchange or a member of the National
Association of Securities Dealers, Inc. or by a commercial bank or trust company
having an office or correspondent in the United States (collectively, "Eligible
Institutions"). If Old Notes are registered in the name of a person other than
the person signing the Letter of Transmittal, the Old Notes surrendered for
exchange must be endorsed by, or be accompanied by a written instrument or
instruments of transfer or exchange, in satisfactory form as determined by the
Company in its sole discretion, duly executed by the registered Holder with the
signature thereon guaranteed by an Eligible Institution.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Old Notes tendered for exchange will be determined by
the Company in its sole discretion, which determination shall be final and
binding. The Company reserves the absolute right to reject any and all tenders
of any particular Old Notes not properly tendered or not to accept any
particular Old Notes the acceptance of which might, in the judgment of the
Company or its counsel, be unlawful. The Company also reserves the absolute
right to waive any defects or irregularities or conditions of the Exchange Offer
as to any particular Old Notes either before or after the Expiration Date
(including the right to waive the ineligibility of any Holder who seeks to
tender Old Notes in the Exchange Offer). The interpretation of the terms and
conditions of the Exchange Offer as to any particular Old Notes either before or
after the Expiration Date (including the Letter of Transmittal and the
instructions thereto) by the Company shall be final and binding on all parties.
Unless waived, any defects or irregularities in connection with the tender of
Old Notes for exchange must be cured within such reasonable period of time as
the Company shall determine. Neither the Company, the Exchange Agent nor any
other person shall be under any duty to give notification of any defect or
irregularity with respect to any tender of Old Notes for exchange, nor shall any
of them incur any liability for failure to give such notification.
If the Letter of Transmittal is signed by a person or persons other than
the registered Holder or Holders of Old Notes, such Old Notes must be endorsed
or accompanied by appropriate powers of attorney, in either case signed exactly
as the name or names of the registered Holder or Holders that appear on the Old
Notes.
If the Letter of Transmittal or any Old Notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers or corporations or others acting in a fiduciary or representative
capacity, such person should so indicate when signing and, unless waived by the
Company, proper evidence satisfactory to the Company of its authority to so act
must be submitted.
By executing, or otherwise becoming bound by, the Letter of Transmittal,
each holder of the Old Notes (other than certain specified holders) will
represent that (i) it is not an affiliate of the Company, (ii) any Exchange
Notes to be received by it were acquired in the ordinary course of its business
and (iii) it has no arrangement or understanding with any person to participate
in the distribution (within the meaning of the Securities Act) of the Exchange
Notes. If the tendering Holder is a broker-dealer that will receive Exchange
Notes for its owns account in exchange for Old Notes that were acquired as a
result of market-making activities or other trading activities, it will be
required to acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Notes. See "-- Resales of the Exchange Notes."
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
the Company will accept, promptly after the Expiration Date, all Old Notes
properly tendered and will issue the Exchange Notes promptly after acceptance of
the Old Notes. See "Certain Conditions to the Exchange Offer" below. For
62
<PAGE> 64
purposes of the Exchange Offer, the Company shall be deemed to have accepted
properly tendered Old Notes for exchange when, as and if the Company has given
oral or written notice thereof to the Exchange Agent.
In all cases, issuance of Exchange Notes for Old Notes that are accepted
for exchange pursuant to the Exchange Offer will be made only after timely
receipt by the Exchange Agent of certificates for such Old Notes or a timely
Book-Entry Confirmation of such Old Notes into the Exchange Agent's account at
DTC pursuant to the book-entry transfer procedures described below, a properly
completed and duly executed Letter of Transmittal and all other required
documents. If any tendered Old Notes are not accepted for any reason set forth
in the terms and conditions of the Exchange Offer or if certificates
representing Old Notes are submitted for a greater principal amount than the
Holder desires to exchange, such unaccepted or non-exchanged Old Notes will be
returned without expense to the tendering Holder thereof (or, in the case of Old
Notes tendered by book-entry transfer into the Exchange Agent's account at DTC
pursuant to the book-entry transfer procedures described below, such
non-exchanged Old Notes will be credited to an account maintained with DTC) as
promptly as practicable after the expiration or termination of the Exchange
Offer.
BOOK-ENTRY TRANSFER
Any financial institution that is a participant in DTC's systems may make
book-entry delivery of Old Notes by causing DTC to transfer such Old Notes into
the Exchange Agent's account in accordance with DTC's procedures for transfer.
However, the exchange for the Old Notes so tendered will only be made after
timely confirmation of such book-entry transfer of Old Notes into the Exchange
Agent's account, and timely receipt by the Exchange Agent of an Agent's Message
(as such term is defined in the next sentence) and any other documents required
by the Letter of Transmittal. The term "Agent's Message" means a message,
transmitted by DTC and received by the Exchange Agent and forming a part of a
Book-Entry Confirmation, which states that DTC has received an express
acknowledgment from a Participant tendering Old Notes that are the subject of
such Book-Entry Confirmation that such Participant has received and agrees to be
bound by the terms of the Letter of Transmittal, and that the Company may
enforce such agreement against such Participant. Although delivery of Old Notes
may be effected through book-entry transfer into the Exchange Agent's account at
DTC, the Letter of Transmittal (or facsimile thereof), properly completed and
duly executed, with any required signature guarantees and any other required
documents, must in any case be delivered to and received by the Exchange Agent
at its address set forth under "-- Exchange Agent" on or prior to the Expiration
Date, or the guaranteed delivery procedure set forth below must be complied
with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH ITS PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
GUARANTEED DELIVERY PROCEDURES
If a registered Holder of the Old Notes desires to tender such Old Notes
and the Old Notes are not immediately available, or time will not permit such
Holder's Old Notes or other required documents to reach the Exchange Agent
before the Expiration Date, or the procedure for book-entry transfer cannot be
completed on a timely basis, a tender may be effected if (i) the tender is made
through an Eligible Institution, (ii) prior to the Expiration Date, the Exchange
Agent receives from such Eligible Institution a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof) and Notice of Guaranteed
Delivery, substantially in the form provided by the Company (by telegram, telex,
facsimile transmission, mail or hand delivery), setting forth the name and
address of the Holder of Old Notes and the amount of Old Notes tendered, stating
that the tender is being made thereby and guaranteeing that within five New York
Stock Exchange ("NYSE") trading days after the date of execution of the Notice
of Guaranteed Delivery, the certificates of all physically tendered Old Notes,
in proper form for transfer, or a Book-Entry Confirmation, as the case may be,
and any other documents required by the Letter of Transmittal will be deposited
by the Eligible Institution with the Exchange Agent, and (iii) the certificates
for all physically tendered Old Notes, in proper form for transfer, or a
Book-Entry Confirmation, as the case may be, and all other documents required by
the Letter of Transmittal, are received by the Exchange Agent within five NYSE
trading days after the date of execution of the Notice of Guaranteed Delivery.
63
<PAGE> 65
WITHDRAWAL RIGHTS
Tenders of Old Notes may be withdrawn at any time prior to the Expiration
Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent at one of the addresses set forth below under
"Exchange Agent." Any such notice of withdrawal must specify the name of the
person having tendered the Old Notes to be withdrawn, identify the Old Notes to
be withdrawn (including the principal amount of such Old Notes), and (where
certificates for Old Notes have been transmitted) specify the name in which such
Old Notes are registered, if different from that of the withdrawing Holder. If
certificates for Old Notes have been delivered or otherwise identified to the
Exchange Agent, then, prior to the release of such certificates, the withdrawing
Holder must also submit the serial numbers of the particular certificates to be
withdrawn and a signed notice of withdrawal with signatures guaranteed by an
Eligible Institution unless such Holder is an Eligible Institution. If Old Notes
have been tendered pursuant to the procedure for book-entry transfer described
above, any notice of withdrawal must specify the name and number of the account
at DTC to be credited with the withdrawn Old Notes and otherwise comply with the
procedures of such facility. All questions as to the validity, form and
eligibility (including time of receipt) of such notices will be determined by
the Company, whose determination shall be final and binding on all parties. Any
Old Notes so withdrawn will be deemed not to have been validly tendered for
exchange for purposes of the Exchange Offer. Any Old Notes which have been
tendered for exchange but which are not exchanged for any reason will be
returned to the Holder thereof without cost to such Holder (or, in the case of
Old Notes tendered by book-entry transfer into the Exchange Agent's account at
DTC pursuant to the book-entry transfer procedures described above, such Old
Notes will be credited to an account maintained with DTC for the Old Notes) as
soon as practicable after withdrawal, rejection of tender or termination of the
Exchange Offer. Properly withdrawn Old Notes may be tendered by following one of
the procedures described under "Procedures for Tendering Old Notes" above at any
time on or prior to the Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, the Company
shall not be required to accept for exchange, or to issue Exchange Notes in
exchange for, any Old Notes and may terminate or amend the Exchange Offer, if at
any time before the Expiration Date, the Company determines that the Exchange
Offer violates applicable law, any interpretation of the staff of the Commission
or any order of any governmental agency or court of competent jurisdiction.
The foregoing condition is for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to such
condition. The failure by the Company at any time to exercise the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.
In addition, the Company will not accept for exchange any Old Notes
tendered, and no Exchange Notes will be issued in exchange for any such Old
Notes, if prior to the Expiration Date any stop order shall be threatened or in
effect with respect to the Registration Statement of which this Prospectus
constitutes a part or the qualification of the Indenture under the Trust
Indenture Act of 1939, as amended (the "TIA").
EXCHANGE AGENT
IBJ Schroder Bank & Trust Company has been appointed as the Exchange Agent
for the Exchange Offer. All executed Letters of Transmittal should be directed
to the Exchange Agent at one of the addresses set forth below. Questions and
requests for assistance, requests for additional copies of this Prospectus or of
64
<PAGE> 66
the Letter of Transmittal and requests for Notices of Guaranteed Delivery should
be directed to the Exchange Agent, addressed as follows:
Deliver To:
IBJ Schroder Bank & Trust Company, Exchange Agent
By Mail or By Hand:
Attn: [ ]
[ ]
[ ]
Attention: [ ]
By Facsimile:
[ ]
Confirm by Telephone:
[ ]
DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
FEES AND EXPENSES
The Company will not make any payments to brokers, dealers, or others
soliciting acceptances of the Exchange Offer. The principal solicitation is
being made by mail; however, additional solicitations may be made by telephone
or in person by officers and employees of the Company.
The expenses to be incurred in connection with the Exchange Offer will be
paid by the Company. Such expenses include fees and expenses of the Exchange
Agent and the Trustee, accounting and legal fees and printing costs among
others.
TRANSFER TAXES
Holders who tender their Old Notes for exchange will not be obligated to
pay any transfer taxes in connection therewith, except that Holders who instruct
the Company to register Exchange Notes in the name of, or request that Old Notes
not tendered or not accepted in the Exchange Offer be returned to, a person
other than the registered tendering Holder will be responsible for the payment
of any applicable transfer tax thereon.
CONSEQUENCES OF FAILURE TO EXCHANGE; RESALE OF THE EXCHANGE NOTES
Holders of Old Notes who do not exchange their Old Notes for Exchange Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Old Notes as set forth in the legend thereon as a
consequence of the issuance of the Old Notes pursuant to exemptions from, or in
transactions not subject to, the registration requirements of, the Securities
Act and applicable state securities law. Old Notes not exchanged pursuant to the
Exchange Offer will continue to accrue interest at 11 3/8% per annum and will
otherwise remain outstanding in accordance with their terms. Holders of Old
Notes do not have any appraisal or dissenters' rights under the Delaware General
Corporation Law in connection with the Exchange Offer. In general, the Old Notes
may not be offered or sold unless registered under the Securities Act, except
pursuant to an exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. The Company does not
currently anticipate that it will register the Old Notes under the Securities
Act. However, (i) if the Initial Purchasers so request with respect to Old Notes
not eligible to be exchanged for Exchange Notes in the Exchange Offer and held
by them following
65
<PAGE> 67
consummation of the Exchange Offer or (ii) if any holder of Old Notes is not
eligible to participate in the Exchange Offer or, in the case of any holder of
Old Notes that participates in the Exchange Offer, does not receive freely
tradable Exchange Notes in exchange for Old Notes, the Company is obligated to
file a registration statement on the appropriate form under the Securities Act
relating to the Old Notes held by such persons.
Based on interpretations by the staff of the Commission set forth in Exxon
Capital Holdings Corporation (available May 13, 1988), Morgan Stanley & Co.
Incorporated (available June 5, 1991) and Shearman & Sterling (available July 2,
1993), the Company is of the view that Exchange Notes issued pursuant to the
Exchange Offer may be offered for resale, resold or otherwise transferred by
holders thereof (other than (i) any such holder which is an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act or (ii) any
broker-dealer that purchases Notes from the Company to resell pursuant to Rule
144A or any other available exemption) without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided that such
Exchange Notes are acquired in the ordinary course of such holders' business and
such holders have no intention, or any arrangement or understanding with any
person, to participate in the distribution of such Exchange Notes. If any holder
has any arrangement or understanding with respect to the distribution of the
Exchange Notes to be acquired pursuant to the Exchange Offer, such holder (i)
could not rely on the applicable interpretations of the staff of the Commission
and (ii) must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with a secondary resale transaction. A
broker-dealer who holds Old Notes that were acquired for its own account as a
result of market-making or other trading activities may be deemed to be an
"underwriter" within the meaning of the Securities Act and must, therefore,
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of Exchange Notes. Each such broker-dealer that
receives Exchange Notes for its own account in exchange for Old Notes, where
such Old Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge in the Letter of
Transmittal that it will deliver a prospectus in connection with any resale of
such Exchange Notes. See "Plan of Distribution."
In addition, to comply with the securities laws of certain jurisdictions,
if applicable, the Exchange Notes may not be offered or sold unless they have
been registered or qualified for sale in such jurisdiction or any exemption from
registration or qualification is available and is complied with. The Company has
agreed, pursuant to the Registration Agreement and subject to certain specified
limitations therein, to register or qualify the Exchange Notes for offer or sale
under the securities or blue sky laws of such jurisdictions as any holder of the
Notes reasonably requests in writing.
66
<PAGE> 68
DESCRIPTION OF NOTES
GENERAL
The form and terms of the Exchange Notes are the same as the form and terms
of the Old Notes except that (i) the Exchange Notes are being registered under
the Securities Act and thus will not bear restrictive legends restricting their
transfer pursuant to the Securities Act and (ii) holders of Exchange Notes will
not be entitled to certain rights of holders of the Old Notes under the
Registration Rights Agreement that will terminate upon the consummation of the
Exchange Offer. The Old Notes were issued and the Exchange Notes will be issued
under the Indenture dated as of January 15, 1998 (the "Indenture"), among the
Company, the Subsidiary Guarantors and IBJ Schroder Bank & Trust Company, as
trustee (the "Trustee"). The Indenture has been filed as an exhibit to the
registration statement (the "Registration Statement") of which this Prospectus
forms a part. The Indenture will be qualified under the Trust Indenture Act of
1939, as amended, upon effectiveness of the Registration Statement.
The following is a summary of certain provisions of the Indenture and the
Notes. The following summary of certain provisions of the Indenture does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of the Indenture, including the definitions of
certain terms therein and those terms made a part thereof by the Trust Indenture
Act of 1939, as amended. Capitalized terms used herein and not otherwise defined
have the meanings set forth in the section "-- Certain Definitions." As used in
this section, the term "Company" refers to MSX International, Inc.
Principal of, premium, if any, and interest on the Notes will be payable,
and the Notes may be exchanged or transferred, at the office or agency of the
Company, which, unless otherwise provided by the Company, will be the offices of
the Trustee. At the option of the Company, payment of interest may be made by
check mailed to the addresses of the Holders as such addresses appear in the
Note register.
The Notes will be issued only in fully registered form, without coupons, in
denominations of $1,000 and any integral multiple of $1,000. No service charge
will be made for any registration of transfer or exchange of Notes, but the
Company may require payment of a sum sufficient to cover any transfer tax or
other similar governmental charge payable in connection therewith.
TERMS OF THE EXCHANGE NOTES
The Notes will be general unsecured senior subordinated obligations of the
Company, limited in aggregate principal amount to $130.0 million, and will
mature on January 15, 2008. The Indenture provides for the issuance of the $100
million aggregate principal amount of Notes offered thereby and an additional
series of Notes in an aggregate principal amount not to exceed $30 million as
provided for in the covenant described below under "Certain Covenants --
Limitation on Incurrence of Indebtedness." The Notes will bear interest at the
rate per annum shown on the cover page hereof from January 16, 1998, or from the
most recent date to which interest has been paid or provided for, payable
semi-annually to Holders of record at the close of business on the January 1 or
July 1 immediately preceding the interest payment date on January 15 and July 15
of each year, commencing July 15, 1998. The Company will pay interest on overdue
principal at 1% per annum in excess of such rate, and it will pay interest on
overdue installments of interest at such higher rate to the extent lawful.
OPTIONAL REDEMPTION
Except as set forth in the following paragraph, the Notes will not be
redeemable at the option of the Company prior to January 15, 2003. Thereafter,
the Notes will be redeemable, at the Company's option, in whole or in part, at
any time or from time to time, upon not less than 30 nor more than 60 days'
prior notice mailed by first-class mail to each Holder's registered address, at
the following redemption prices (expressed in percentages of principal amount),
plus accrued and unpaid interest to the redemption date (subject to the
67
<PAGE> 69
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date), if redeemed during the 12-month period
commencing on January 15 of the years set forth below:
<TABLE>
<CAPTION>
REDEMPTION
PERIOD PRICE
------ ----------
<S> <C>
2003........................................................ 105.6875%
2004........................................................ 103.7917
2005........................................................ 101.8958
2006 and thereafter......................................... 100.0000
</TABLE>
In addition, at any time and from time to time prior to January 15, 2001,
the Company may redeem at its option in the aggregate up to 35% of the original
principal amount of the Notes with the proceeds of one or more Public Equity
Offerings following which there is a Public Market, at a redemption price
(expressed as a percentage of principal amount) of 111.375% plus accrued and
unpaid interest, if any, to the redemption date (subject to the right of Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that at least 65% of the original
aggregate principal amount of the Notes must remain outstanding after each such
redemption.
SELECTION
In the case of any partial redemption, selection of the Notes for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although no Note of $1,000 in original principal amount or less
will be redeemed in part. If any Note is to be redeemed in part only, the notice
of redemption relating to such Note shall state the portion of the principal
amount thereof to be redeemed. A new Note in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note.
SUBSIDIARY GUARANTEES
Each of the Company's Domestic Restricted Subsidiaries will irrevocably and
unconditionally Guarantee on a joint and several basis, as primary obligors and
not merely as sureties, on an unsecured senior subordinated basis the
performance and punctual payment when due, whether at Stated Maturity, by
acceleration or otherwise, of all obligations of the Company under the Indenture
and the Notes, whether for payment of principal of or interest on the Notes,
expenses, indemnification or otherwise (all such obligations Guaranteed by the
Subsidiary Guarantors being herein called the "Guaranteed Obligations"). The
Subsidiary Guarantors will agree to pay, in addition to the amount stated above,
any and all expenses (including reasonable counsel fees and expenses) incurred
by the Trustee or the Holders in enforcing any rights under the Subsidiary
Guarantees. Each Subsidiary Guarantee will be limited in amount to an amount not
to exceed the maximum amount that can be Guaranteed by the applicable Subsidiary
Guarantor without rendering such Subsidiary Guarantee voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
The Company shall cause each Domestic Restricted Subsidiary that at any
time becomes an obligor or Guarantor with respect to any obligations under one
or more Bank Credit Agreements to execute and deliver to the Trustee a
supplemental indenture pursuant to which such Domestic Restricted Subsidiary
will Guarantee payment of the Notes on the same terms and conditions as those
set forth in the Indenture.
Each Subsidiary Guarantee is a continuing Guarantee and shall (a) remain in
full force and effect until payment in full of all the Guaranteed Obligations,
(b) be binding upon each Subsidiary Guarantor and (c) inure to the benefit of
and be enforceable by the Trustee, the Holders and their successors, transferees
and assigns. A Subsidiary Guarantee will be released upon the sale of all the
Capital Stock, or all or substantially all of the assets, of the applicable
Subsidiary Guarantor if such sale is made in compliance with the Indenture.
68
<PAGE> 70
SUBORDINATION
The indebtedness evidenced by the Notes and the Subsidiary Guarantees will
be unsecured senior subordinated obligations of the Company and the Subsidiary
Guarantors, as the case may be. The payment of the principal of, premium (if
any) and interest on the Notes and the payment of any Subsidiary Guarantee is
subordinate in right of payment, as set forth in the Indenture, to the prior
payment in full of all Senior Indebtedness of the Company or the relevant
Subsidiary Guarantor, as the case may be, whether outstanding on the Issue Date
or thereafter incurred, including the obligations of the Company and such
Subsidiary Guarantor under the Senior Credit Facility.
As of March 29, 1998, (i) the Company had approximately $61.4 million of
outstanding Senior Indebtedness (excluding unused commitments under the Senior
Credit Facility) and (ii) Senior Indebtedness of the Subsidiary Guarantors
outstanding of approximately $42.3 million (excluding Guarantees under the
Senior Credit Facility). Although the Indenture contains limitations on the
amount of additional Indebtedness that the Company and its Restricted
Subsidiaries may incur, under certain circumstances the amount of such
Indebtedness could be substantial and, in any case, such Indebtedness may be
Senior Indebtedness. See "Certain Covenants -- Limitation on Incurrence of
Indebtedness."
Only Indebtedness of the Company or a Subsidiary Guarantor that is Senior
Indebtedness will rank senior to the Notes and the relevant Subsidiary Guarantee
in accordance with the provisions of the Indenture. The Notes and each
Subsidiary Guarantee will in all respects rank pari passu with all other Senior
Subordinated Indebtedness of the Company and the relevant Subsidiary Guarantor,
respectively. The Company and each Subsidiary Guarantor has agreed in the
Indenture that it will not Incur, directly or indirectly, any Indebtedness that
is subordinate or junior in ranking in right of payment to its Senior
Indebtedness unless such Indebtedness is pari passu with or is expressly
subordinated in right of payment to the Notes. Unsecured Indebtedness is not
deemed to be subordinated or junior merely because it is unsecured.
The Company may not pay principal of, premium (if any) or interest on, the
Notes or make any deposit pursuant to the provisions described under "--
Defeasance" below and may not repurchase, redeem or otherwise retire any Notes
(collectively, "pay the Subordinated Debt") if (i) any Senior Indebtedness is
not paid when due or (ii) any other default on any such Senior Indebtedness
occurs and the maturity of such Senior Indebtedness is accelerated in accordance
with its terms unless, in either case, the default has been cured or waived and
any such acceleration has been rescinded or such Senior Indebtedness has been
paid in full. However, the Company may pay the Subordinated Debt without regard
to the foregoing if the Company and the Trustee receive written notice approving
such payment from the Representative of the Senior Indebtedness with respect to
which either of the events set forth in clause (i) or (ii) of the immediately
preceding sentence has occurred and is continuing. During the continuance of any
default (other than a default described in clauses (i) and (ii) of the second
preceding sentence) with respect to any Designated Senior Indebtedness pursuant
to which the maturity thereof may be accelerated immediately without further
notice (except such notice as may be required to effect such acceleration) or
upon the expiration of any applicable grace periods, the Company may not pay the
Subordinated Debt for a period (a "Payment Blockage Period") commencing upon the
receipt by the Trustee (with a copy to the Company) of written notice (a
"Blockage Notice") of such default from the Representative of the holders of
such Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage Notice, (ii) because
the default giving rise to such Blockage Notice is no longer continuing or (iii)
because such Designated Senior Indebtedness has been repaid in full).
Notwithstanding the provisions described in the immediately preceding sentence,
unless the holders of such Designated Senior Indebtedness or the Representative
of such holders has accelerated the maturity of such Designated Senior
Indebtedness, the Company may resume payments on the Notes after the end of such
Payment Blockage Period. The Notes shall not be subject to more than one Payment
Blockage Period in any consecutive 360-day period, irrespective of the number of
defaults with respect to Designated Senior Indebtedness during such period.
69
<PAGE> 71
Upon any payment or distribution of the assets of the Company of any kind
or character upon a total or partial liquidation, winding up, assignment for the
benefit of creditors or marshalling of assets or other distribution in a
bankruptcy, insolvency, receivership or dissolution or reorganization of or
similar proceeding relating to the Company or its property, the holders of
Senior Indebtedness will be entitled to receive payment in full of such Senior
Indebtedness before the Noteholders are entitled to receive any payment, and,
until the Senior Indebtedness is paid in full, any payment or distribution to
which Noteholders would be entitled but for the subordination provisions of the
Indenture will be made to holders of such Senior Indebtedness as their interests
may appear. If a payment or distribution is made to Noteholders that, due to the
subordination provisions, should not have been made to them, such Noteholders
are required to hold it in trust for the holders of Senior Indebtedness and pay
it over to them as their interests may appear.
The obligations of a Subsidiary Guarantor under its Subsidiary Guarantee
are unsecured senior subordinated obligations. As such, the rights of
Noteholders to receive payment by a Subsidiary Guarantor pursuant to its
Subsidiary Guarantee will be subordinated in right of payment to the rights of
holders of Senior Indebtedness of such Subsidiary Guarantor. The terms of the
subordination provisions described above with respect to the Company's
obligations under the Notes apply equally to a Subsidiary Guarantor and the
obligations of such Subsidiary Guarantor under its Subsidiary Guarantee.
By reason of the subordination provisions contained in the Indenture, in
the event of insolvency, creditors of the Company or a Subsidiary Guarantor who
are holders of Senior Indebtedness of the Company or a Subsidiary Guarantor, as
the case may be, may recover more, ratably, than the Noteholders, and creditors
of the Company who are not holders of Senior Indebtedness may recover less,
ratably, than holders of Senior Indebtedness and may recover more, ratably, than
the Noteholders.
The terms of the subordination provisions described above will not apply to
payments from money or the proceeds of U.S. Government Obligations held in trust
by the Trustee for the payment of principal of and interest on the Notes
pursuant to the provisions described under "-- Defeasance."
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder shall have the
right to require that the Company repurchase all or a portion of such Holder's
Notes at a purchase price in cash equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of repurchase (subject to
the right of Holders of record on the relevant record date to receive interest
due on the relevant interest payment date), in accordance with the provisions of
the next paragraph.
Within 30 days following any Change of Control, the Company shall mail a
notice to each Holder with a copy to the Trustee stating: (1) that a Change of
Control has occurred and that such Holder has the right to require the Company
to purchase such Holder's Notes at a purchase price in cash equal to 101% of the
principal amount outstanding at the repurchase date plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of Holders of
record on the relevant record date to receive interest on the relevant interest
payment date); (2) the circumstances and relevant facts and relevant financial
information regarding such Change of Control; (3) the repurchase date (which
shall be no earlier than 30 days nor later than 60 days from the date such
notice is mailed); and (4) the instructions determined by the Company,
consistent with the covenant described hereunder, that a Holder must follow in
order to have its Notes repurchased.
The Company shall comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the repurchase of Notes pursuant to the covenant
described hereunder. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of the covenant described hereunder,
the Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under the covenant
described hereunder by virtue thereof.
The occurrence of certain of the events which would constitute a Change of
Control would constitute a default under the Senior Credit Facility. Future
Senior Indebtedness of the Company may contain
70
<PAGE> 72
prohibitions of certain events which would constitute a Change of Control or
require such Senior Indebtedness to be repurchased upon a Change of Control.
Moreover, the exercise by the Holders of their right to require the Company to
repurchase the Notes could cause a default under such Senior Indebtedness, even
if the Change of Control itself does not, due to the financial effect of such
repurchase on the Company. Finally, the Company's ability to pay cash to the
Holders upon a repurchase may be limited by the Company's then existing
financial resources. There can be no assurance that sufficient funds will be
available when necessary to make any repurchases required in connection with a
Change of Control. The Company's failure to purchase the Notes in connection
with a Change in Control would result in a default under the Indenture which
would, in turn, constitute a default under the Senior Credit Facility. In such
circumstances, the subordination provisions in the Indenture would likely
restrict payment to the Holders of the Notes.
BOOK-ENTRY, DELIVERY AND FORM
Exchange Notes will be in registered certificated form ("Certificated
Notes") or registered global form ("Global Notes"). Each Global Note will be
deposited upon issuance with The Depository Trust Company ("DTC") and registered
in the name of a nominee of DTC. Holders may elect to hold their Exchange Notes
directly or, subject to the rules and procedures of DTC described below, in a
Global Note. However, tendering Holders of Old Notes held in global form shall
initially receive an interest held in a Global Note and tendering Holders of Old
Notes held directly in certificated form shall initially receive Exchange Notes
in certificated form, in each case unless otherwise specified in the Letter of
Transmittal.
The Depository has advised the Company as follows: The Depository is a
limited-purpose trust company and organized under the laws of the State of New
York, a member of the Federal Reserve System, a "clearing corporation" within
the meaning of the New York Uniform Commercial Code, and "a clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934 (the "Exchange Act"). The Depository was created to hold securities
of institutions that have accounts with the Depository ("participants") and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. The Depository's participants include securities
brokers and dealers (which may include the Initial Purchasers), banks, trust
companies, clearing corporations and certain other organizations. Access to the
Depository's book-entry system is also available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant, whether directly or indirectly.
Upon the issuance of the Global Note, the Depository will credit, on its
book-entry registration and transfer system, the principal amount of the Notes
represented by such Global Note to the accounts of participants. The accounts to
be credited shall be designated by the Initial Purchasers of such Notes.
Ownership of beneficial interests in the Global Note will be limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests in the Global Note will be shown on, and the transfer of
those ownership interests will be effected only through, records maintained by
the Depository (with respect to participants' interest) and such participants
(with respect to the owners of beneficial interests in the Global Note other
than participants). The laws of some jurisdictions may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and laws may impair the ability to transfer or pledge
beneficial interests in the Global Note.
So long as the Depository, or its nominee, is the registered holder and
owner of the Global Note, the Depository or such nominee, as the case may be,
will be considered the sole legal owner and holder of the related Notes for all
purposes of such Notes and the Indenture. Except as set forth below, owners of
beneficial interests in the Global Note will not be entitled to have the Notes
represented by the Global Note registered in their names, will not receive or be
entitled to receive physical delivery of certificated Notes in definitive form
and will not be considered to be the owners or holders of any Notes under the
Global Note. The Company understands that under existing industry practice, in
the event an owner of a beneficial interest in the Global Note desires to take
any action that the Depository, as the holder of the Global Note, is entitled to
take, the Depository would authorize the participants to take such action, and
that the participants would authorize
71
<PAGE> 73
beneficial owners owning through such participants to take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
Payment of principal of and interest on Notes represented by the Global
Note registered in the name of and held by the Depository or its nominee will be
made to the Depository or its nominee, as the case may be, as the registered
owner and holder of the Global Note.
The Company expects that the Depository or its nominee, upon receipt of any
payment of principal of or interest on the Global Note, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Note as
shown on the records of the Depository or its nominee. The Company also expects
that payments by participants to owners of beneficial interests in the Global
Note held through such participants will be governed by standing instructions
and customary practices and will be the responsibility of such participants. The
Company will not have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in the Global Note for any Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests or for any
other aspect of the relationship between the Depository and its participants or
the relationship between such participants and the owners of beneficial
interests in the Global Note owning through such participants.
Unless and until it is exchanged in whole or in part for certificated Notes
in definitive form, the Global Note may not be transferred except as a whole by
the Depository to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository.
Although the Depository has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Note among participants of the
Depository, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. Neither the
Trustee nor the Company will have any responsibility for the performance by the
Depository or its participants or indirect participants of their respective
obligations under the rules and procedures governing their operations.
CERTIFICATED NOTES
The Notes represented by the Global Note are exchangeable for certificated
Notes in definitive form of like tenor as such Notes in denominations of
U.S.$1,000 and integral multiples thereof if (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for the Global
Note or if at any time the Depository ceases to be a clearing agency registered
under the Exchange Act, (ii) the Company in its discretion at any time
determines not to have all of the Notes represented by the Global Note or (iii)
a default entitling the holders of the Notes to accelerate the maturity thereof
has occurred and is continuing. Any Note that is exchangeable pursuant to the
preceding sentence is exchangeable for certificated Notes issuable in authorized
denominations and registered in such names as the Depository shall direct.
Subject to the foregoing, the Global Note is not exchangeable, except for a
Global Note of the same aggregate denomination to be registered in the name of
the Depository or its nominee.
CERTAIN COVENANTS
The Indenture contains covenants including, among others, the following:
Limitation on Incurrence of Indebtedness. (a) The Company shall not, and
shall not permit any Restricted Subsidiary to, Incur, directly or indirectly,
any Indebtedness provided, however, that the Company and the Restricted
Subsidiaries may Incur Indebtedness if, immediately after giving effect to such
Incurrence, the Consolidated Coverage Ratio exceeds 2.0 to 1 if such
Indebtedness is Incurred prior to January 15, 2001 or 2.25 to 1 if such
Indebtedness is Incurred thereafter.
(b) Notwithstanding the foregoing paragraph (a), the Company and the
Restricted Subsidiaries may Incur any or all of the following Indebtedness: (1)
Indebtedness Incurred pursuant to the Bank Credit Agreements and Guarantees of
Indebtedness Incurred pursuant to the Bank Credit Agreements; provided, however,
that, after giving effect to any such Incurrence, the aggregate principal amount
of such Indebtedness then outstanding does not exceed the greater of (i) $115.0
million less the amount of Net Available Cash from
72
<PAGE> 74
Asset Sales used to permanently reduce indebtedness under the Bank Credit
Agreements and (ii) the sum of (x) 85% of the net book value of the accounts
receivable of the Company and its Restricted Subsidiaries, determined in
accordance with GAAP and (y) 50% of the net book value of the inventory of the
Company and its Restricted Subsidiaries, determined in accordance with GAAP; (2)
Indebtedness represented by (i) the Notes issued in the Offering (and the
Exchange Notes), (ii) up to $30 million aggregate principal amount of Notes
issued subsequent to the Issue Date and (iii) Indebtedness represented by the
Subsidiary Guarantees; (3) Indebtedness outstanding on the Issue Date (other
than Indebtedness described in clause (1) of this paragraph); (4) Indebtedness
of the Company owed to and held by a Wholly-Owned Subsidiary or Indebtedness of
a Wholly-Owned Subsidiary owed to and held by the Company or a Wholly-Owned
Subsidiary; provided, however, that any subsequent issuance or transfer of any
Capital Stock which results in any such Wholly-Owned Subsidiary ceasing to be a
Wholly-Owned Subsidiary or any subsequent transfer of such Indebtedness (other
than to the Company or a Wholly-Owned Subsidiary) shall be deemed, in each case,
to constitute the Incurrence of such Indebtedness by the issuer thereof; (5)
Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to
paragraph (a) or pursuant to clause (2), (3) or this clause (5); (6)
Indebtedness in respect of performance bonds, bankers' acceptances, letters of
credit and surety or appeal bonds entered into by the Company or a Restricted
Subsidiary in the ordinary course of business (in each case other than an
obligation for borrowed money); (7) Hedging Obligations consisting of Interest
Rate Agreements and Currency Agreements entered into in the ordinary course of
business and not for the purpose of speculation; provided, however, that, in the
case of Currency Agreements and Interest Rate Agreements, such Currency
Agreements and Interest Rate Agreements do not increase the Indebtedness of the
Company outstanding at any time other than as a result of fluctuations in
foreign currency exchange rates or interest rates or by reason of fees,
indemnities and compensation payable thereunder; (8) Purchase Money Indebtedness
and Capital Lease Obligations Incurred to finance the acquisition or improvement
by the Company or a Restricted Subsidiary of any assets in the ordinary course
of business and which do not exceed $7.0 million in the aggregate at any time
outstanding; (9) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient funds in
the ordinary course of business, provided that such Indebtedness is extinguished
within five business days of Incurrence; (10) Indebtedness Incurred after the
Issue Date representing interest paid-in-kind; or (11) Indebtedness in an
aggregate principal amount which, together with all other Indebtedness of the
Company and its Restricted Subsidiaries outstanding on the date of such
Incurrence (other than Indebtedness permitted by clauses (1) through (10) above
or paragraph (a)), does not exceed $10.0 million.
(c) Notwithstanding the foregoing, the Company shall not, and shall not
permit any Restricted Subsidiary to, Incur any Indebtedness pursuant to the
foregoing paragraph (b) if the proceeds thereof are used, directly or
indirectly, to Refinance (i) any Subordinated Obligations unless such
Indebtedness shall be subordinated to the Notes and the Subsidiary Guarantees,
as applicable, to at least the same extent as such Subordinated Obligations or
(ii) any Senior Subordinated Indebtedness unless such Indebtedness shall be
Senior Subordinated Indebtedness or shall be subordinated to the Notes and the
Subsidiary Guarantees, as applicable.
(d) For purposes of determining compliance with the foregoing covenant, (i)
in the event that an item of Indebtedness meets the criteria of more than one of
the types of Indebtedness described above, the Company, in its sole discretion,
will classify such item of Indebtedness and only be required to include the
amount and type of such Indebtedness in one of the above clauses and (ii) an
item of Indebtedness may be divided and classified in more than one of the types
of Indebtedness described above.
Limitation on Layered Debt. Notwithstanding paragraphs (a) and (b) of the
covenant described under "-- Limitation on Incurrence of Indebtedness," the
Company shall not, and shall not permit any Subsidiary Guarantor to, Incur any
Indebtedness if such Indebtedness is subordinate or junior in ranking in right
of payment to any Senior Indebtedness of the Company or such Subsidiary
Guarantor, as applicable, unless such Indebtedness is Senior Subordinated
Indebtedness or is expressly subordinated in right of payment to Senior
Subordinated Indebtedness.
73
<PAGE> 75
Limitation on Restricted Payments. (a) The Company shall not, and shall not
permit any Restricted Subsidiary, directly or indirectly, to make a Restricted
Payment if at the time the Company or such Restricted Subsidiary makes such
Restricted Payment: (1) a Default shall have occurred and be continuing (or
would result therefrom); (2) the Company is not able to Incur an additional
$1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under
"-- Limitation on Incurrence of Indebtedness"; or (3) the aggregate amount of
such Restricted Payment together with all other Restricted Payments (the amount
of any payments made in property other than cash to be valued at the fair market
value of such property, as determined in good faith by the Board of Directors)
declared or made since the Issue Date would exceed the sum of: (A) 50% of the
Consolidated Net Income accrued during the period (treated as one accounting
period) from the Issue Date to the end of the most recent fiscal quarter prior
to the date of such Restricted Payment for which financial statements of the
Company are available (or, in case such Consolidated Net Income accrued during
such period (treated as one accounting period) shall be a deficit, minus 100% of
such deficit); (B) the aggregate Net Cash Proceeds received subsequent to the
Issue Date by the Company from the issuance or sale of (i) its Capital Stock
(other than Disqualified Stock or the issuance or sale of Capital Stock to a
Subsidiary of the Company) or (ii) the Capital Stock of a Restricted Subsidiary
pursuant to a Qualified TIPS Transaction (other than any issuance or sale to a
Subsidiary of the Company); (C) the amount by which Indebtedness of the Company
or its Restricted Subsidiaries is reduced on the Company's balance sheet upon
the conversion or exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date, of any Indebtedness of the Company or its
Restricted Subsidiaries convertible or exchangeable for Capital Stock (other
than Disqualified Stock) of the Company (less the amount of any cash, or the
fair market value of any other property, distributed by the Company or any
Restricted Subsidiary upon such conversion or exchange); and (D) an amount equal
to the sum of the net reduction in Investments resulting from repayments of
loans or advances or other transfers of assets subsequent to the Issue Date, in
each case to the Company or any Restricted Subsidiary; provided, however, that
the foregoing amount shall not exceed the amount of Investments previously made
(and treated as a Restricted Payment) by the Company or any Restricted
Subsidiary in such Person.
(b) The provisions of the foregoing paragraph (a) shall not prohibit: (i)
any purchase or redemption of Capital Stock or Subordinated Obligations of the
Company or any Restricted Subsidiary made in exchange for, or out of the
proceeds of the substantially concurrent sale of, Capital Stock of the Company
(other than Disqualified Stock and other than Capital Stock issued or sold to a
Subsidiary of the Company); provided, however, that (A) such purchase or
redemption shall be excluded from the calculation of the amount of Restricted
Payments and (B) the Net Cash Proceeds from such sale shall be excluded from the
calculation of amounts under clause (3)(B) of paragraph (a) above; (ii) any
purchase or redemption of (A) Subordinated Obligations of the Company made in
exchange for, or out of the proceeds of the substantially concurrent sale of,
Subordinated Obligations of the Company which is permitted to be Incurred
pursuant to paragraphs (b) and (c) of the covenant described under "--
Limitation on Incurrence of Indebtedness" or (B) Subordinated Obligations of a
Restricted Subsidiary made in exchange for, or out of the proceeds of the
substantially concurrent sale of, Subordinated Obligations of such Restricted
Subsidiary or the Company which is permitted to be Incurred pursuant to
paragraphs (b) and (c) of the covenant described under "-- Limitation on
Incurrence of Indebtedness"; provided, however, that such purchase or redemption
shall be excluded from the calculation of the amount of Restricted Payments;
(iii) dividends paid within 60 days after the date of declaration thereof if at
such date of declaration such dividend would have complied with this covenant;
provided, however, that at the time of payment of such dividend, no other
Default shall have occurred and be continuing (or would result therefrom);
provided, further, however, that such dividend shall be included in the
calculation of the amount of Restricted Payments; (iv) any purchase or
redemption or other retirement for value of Capital Stock of the Company
required pursuant to any shareholders agreement, management agreement or
employee stock option agreement in accordance with the provisions of any such
arrangement in an amount not to exceed $1.5 million in the aggregate; provided,
however, that at the time of such purchase or redemption, no other Default shall
have occurred and be continuing (or would result therefrom); provided, further,
however, that such purchase or redemption shall be included in the amount of
Restricted Payments; or (v) Guarantees by the Company or any Restricted
Subsidiary of Indebtedness Incurred by the Company or a Restricted Subsidiary,
provided, however, that at the time such Guarantee is Incurred it would be
permitted
74
<PAGE> 76
under the covenant described under "-- Limitation on Incurrence of Indebtedness"
provided, further, however, that such Guarantee shall be excluded from the
amount of Restricted Payments.
Limitation on Restrictions on Distributions from Restricted
Subsidiaries. The Company shall not, and shall not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become effective
any consensual encumbrance or consensual restriction on the ability of any
Restricted Subsidiary (a) to pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) to make any loans or advances to the
Company or (c) to transfer any of its property or assets to the Company, except:
(i) any encumbrance or restriction pursuant to an agreement in effect at or
entered into on the Issue Date; (ii) any encumbrance or restriction with respect
to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness
Incurred by such Restricted Subsidiary which was entered into on or prior to the
date on which such Restricted Subsidiary was acquired by the Company (other than
as consideration in, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company) and outstanding on such date; (iii)
any encumbrance or restriction pursuant to an agreement effecting a Refinancing
of Indebtedness Incurred pursuant to an agreement referred to in clause (i) or
(ii) of this covenant (or effecting a Refinancing of such Refinancing
Indebtedness pursuant to this clause (iii)) or contained in any amendment to an
agreement referred to in clause (i) or (ii) of this covenant or this clause
(iii); provided, however, that the encumbrances and restrictions with respect to
such Restricted Subsidiary contained in any such refinancing agreement or
amendment are no more restrictive in any material respect than the encumbrances
and restrictions with respect to such Restricted Subsidiary contained in such
agreements; (iv) any such encumbrance or restriction consisting of customary
non-assignment provisions in leases governing leasehold interests to the extent
such provisions restrict the transfer of the lease or the property leased
thereunder; (v) in the case of clause (c) above, restrictions contained in
security agreements or mortgages securing Indebtedness of a Restricted
Subsidiary to the extent such restrictions restrict the transfer of the property
subject to such security agreements or mortgages; (vi) any restriction with
respect to (x) a Restricted Subsidiary imposed pursuant to an agreement entered
into for the sale or disposition of all or substantially all the Capital Stock
or assets of such Restricted Subsidiary or (y) an asset of a Restricted
Subsidiary pursuant to an agreement entered into for the sale or disposition of
such asset, in each case pending the closing of such sale or disposition; (vii)
any restriction imposed by applicable law; and (viii) any encumbrance or
restriction with respect to a Foreign Restricted Subsidiary which is contained
in agreements evidencing Indebtedness permitted under the covenant described
under "-- Limitation on Incurrence of Indebtedness" and which encumbrance or
restriction is customary in agreements of such type.
Limitation on Sales of Assets and Subsidiary Stock. The Company shall not,
and shall not permit any Restricted Subsidiary to, consummate any Asset
Disposition unless (i) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to the fair
market value (including as to the value of all non-cash consideration), as
determined in good faith by the Board of Directors, of the shares and assets
subject to such Asset Disposition and (ii) at least 75% of the consideration
therefor received by the Company or such Restricted Subsidiary is in the form of
cash or cash equivalents, provided, however, that this clause (ii) shall not
apply if the Company or a Restricted Subsidiary is disposing of assets in
exchange for Additional Assets. For the purposes of this covenant, the
assumption of Indebtedness of the Company or any Restricted Subsidiary and the
release of the Company or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition is deemed to be cash.
With respect to any Asset Disposition occurring on or after the Issue Date
from which the Company or any Restricted Subsidiary receives Net Available Cash,
the Company or such Restricted Subsidiary shall (i) within 365 days after the
date such Net Available Cash is received and to the extent the Company or such
Restricted Subsidiary elects (or is required by the terms of any Senior
Indebtedness) to (A) apply an amount equal to such Net Available Cash to prepay,
repay, purchase or legally defease Senior Indebtedness of the Company or such
Restricted Subsidiary, in each case owing to a Person other than the Company or
any Affiliate of the Company, or (B) invest an equal amount, or the amount not
so applied pursuant to clause (A), in Additional Assets (including by means of
an Investment in Additional Assets by a Subsidiary Guarantor
75
<PAGE> 77
with Net Available Cash received by the Company or another Subsidiary Guarantor)
and (ii) apply such excess Net Available Cash (to the extent not applied
pursuant to clause (i)) as provided in the following paragraphs of the covenant
described hereunder; provided, however, that in connection with any prepayment,
repayment or purchase of Senior Indebtedness pursuant to clause (A) above (other
than the repayment of Senior Indebtedness Incurred under a Bank Credit Agreement
to fund the purchase of an asset which is sold by the Company within 180 days of
its purchase pursuant to a Sale/Leaseback Transaction), the Company or such
Restricted Subsidiary shall retire such Senior Indebtedness and shall cause the
related loan commitment (if any) to be permanently reduced in an amount equal to
the principal amount so prepaid, repaid or purchased. The amount of Net
Available Cash required to be applied pursuant to clause (ii) above and not
theretofore so applied shall constitute "Excess Proceeds." Pending application
of Net Available Cash pursuant to this provision, such Net Available Cash shall
be invested in Temporary Cash Investments.
If at any time the aggregate amount of Excess Proceeds not theretofore
subject to an Excess Proceeds Offer (as defined below) totals at least $3
million, the Company shall, not later than 30 days after the end of the period
during which the Company is required to apply such Excess Proceeds pursuant to
clause (i) of the immediately preceding paragraph (or, if the Company so elects,
at any time within such period), make an offer (an "Excess Proceeds Offer") to
purchase from the holders of Notes and Other Qualified Notes (determined on a
pro rata basis according to the accreted value or aggregate principal amount, as
the case may be, of the Notes and the Other Qualified Notes) in an amount equal
to the Excess Proceeds (rounded down to the nearest multiple of $1,000) on such
date, at a purchase price equal to 100% of the principal amount of such Notes,
plus, in each case, accrued interest (if any) to the date of purchase (the
"Excess Proceeds Payment"). Upon completion of an Excess Proceeds Offer the
amount of Excess Proceeds remaining after application pursuant to such Excess
Proceeds Offer, (including payment of the purchase price for Notes duly
tendered) may be used by the Company for any corporate purpose (to the extent
not otherwise prohibited by the Indenture).
The Company shall comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act and any other securities laws or
regulations thereunder in the event that such Excess Proceeds are received by
the Company under the covenant described hereunder and the Company is required
to repurchase Notes as described above. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of the covenant
described hereunder, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under the covenant described hereunder by virtue thereof.
Limitation on Affiliate Transactions. (a) The Company shall not, and shall
not permit any Restricted Subsidiary to, enter into or permit to exist any
transaction or series of related transactions (including the purchase, sale,
lease or exchange of any property, employee compensation arrangements or the
rendering of any service) with any Affiliate of the Company (an "Affiliate
Transaction") unless the terms thereof (1) are no less favorable to the Company
or such Restricted Subsidiary than those that could be obtained at the time of
such transaction in arm's-length dealings with a Person who is not such an
Affiliate, (2) if such Affiliate Transaction (or series of related Affiliate
Transactions) involves aggregate payments in an amount in excess of $1.0 million
(i) are set forth in writing and (ii) comply with clause (1), (3) if such
Affiliate Transaction (or series of related Affiliate Transactions) involves
aggregate payments in an amount in excess of $2.5 million in any one year, (i)
are set forth in writing, (ii) comply with clause (2) and (iii) have been
approved by a majority of the disinterested members of the Board of Directors,
and (4) if such Affiliate Transaction (or series of related Affiliate
Transactions) involves aggregate payments in an amount in excess of $10.0
million in any one year, (i) comply with clause (3) and (ii) have been
determined by a nationally recognized investment banking firm to be fair, from a
financial standpoint, to the Company and its Restricted Subsidiaries.
(b) The provisions of the foregoing paragraph (a) shall not prohibit (i)
any Restricted Payment permitted to be paid pursuant to the covenant described
under "-- Limitation on Restricted Payments," (ii) any issuance of securities,
or other payments, awards or grants in cash, securities or otherwise, pursuant
to, or the funding of, employment arrangements, stock options and stock
ownership plans in the ordinary course of business and approved by the Board of
Directors, (iii) the grant of stock options or similar rights to employees and
directors of the Company in the ordinary course of business and pursuant to
plans approved by the Board of Directors, (iv) loans or advances to employees of
the Company or its Subsidiaries, provided, however, the
76
<PAGE> 78
aggregate amount of such loans or advances outstanding at any one time shall not
exceed $1.5 million, (v) fees, compensation or employee benefit arrangements
paid to and indemnity provided for the benefit of directors, officers or
employees of the Company or any Subsidiary in the ordinary course of business,
(vi) any Affiliate Transaction between the Company and a Restricted Subsidiary
or between Restricted Subsidiaries in the ordinary course of business (so long
as the other stockholders of any participating Restricted Subsidiaries which are
not Wholly Owned Subsidiaries are not themselves Affiliates of the Company), or
(vii) Existing Affiliate Agreements, including amendments thereto or
replacements thereof entered into after the Issue Date, provided, however, that
the terms of any such amendment or replacement are at least as favorable to the
Company as those that could be obtained at the time of such amendment or
replacement in arm's-length dealings with a Person which is not an Affiliate. If
the Company or any Restricted Subsidiary has complied with all of the provisions
of the foregoing paragraph (a) other than clause (4)(ii) thereof, such paragraph
shall not prohibit the Company or any Restricted Subsidiary from entering into
Affiliate Transactions pursuant to which the Company or any Restricted
Subsidiary renders services in the ordinary course of business to CVC or
MascoTech or to Affiliates of CVC or MascoTech.
Limitation on the Issuance or Sale of Capital Stock of Restricted
Subsidiaries. The Company shall not (i) sell, pledge, hypothecate or otherwise
dispose of any shares of Capital Stock of a Restricted Subsidiary (other than
pledges of Capital Stock securing Senior Indebtedness) or (ii) permit any
Restricted Subsidiary, directly or indirectly, to issue or sell or otherwise
dispose of any shares of its Capital Stock other than (A) to the Company or a
Restricted Subsidiary, (B) directors' qualifying shares and shares owned by
foreign shareholders, to the extent required by applicable local laws in foreign
countries, (C) pursuant to a Qualified TIPS Transaction or (D) if, immediately
after giving effect to such issuance or sale, such Restricted Subsidiary would
no longer constitute a Subsidiary. The proceeds of any sale of such Capital
Stock permitted hereby will be treated as Net Available Cash from an Asset
Disposition and must be applied in accordance with the terms of the covenant
described under "-- Limitation on Sales of Assets and Subsidiary Stock."
Limitation on Liens. The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, Incur or permit to exist any
Lien (other than Permitted Liens) of any nature whatsoever on any property of
the Company or any Restricted Subsidiary (including Capital Stock of a
Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired,
which secures Indebtedness that ranks pari passu with or is subordinated to the
Notes or the Subsidiary Guarantees unless (i) if such Lien secures Indebtedness
that ranks pari passu with the Notes and the Subsidiary Guarantees, the Notes
and the Subsidiary Guarantees are secured on an equal and ratable basis with the
obligation so secured until such time as such obligation is no longer secured by
a Lien or (ii) if such Lien secures Indebtedness that is subordinated to the
Notes and the Subsidiary Guarantees, such Lien shall be subordinated to a Lien
granted to the Holders on the same collateral as that securing such Lien to the
same extent as such subordinated Indebtedness is subordinated to the Note and
the Subsidiary Guarantees.
Designation of Restricted and Unrestricted Subsidiaries. The Board of
Directors may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary if (a) the
Subsidiary to be so designated (the "Designee") does not own any Capital Stock
or Indebtedness of, or own or hold any Lien on any property of, the Company or
any other Subsidiary (other than a direct or indirect Subsidiary of the
Designee, provided, however, that any such direct or indirect Subsidiary of the
Designee shall otherwise comply with clauses (a) through (f) of this covenant),
(b) the Subsidiary to be so designated is not obligated under any Indebtedness,
Lien or other obligation that, if in default, would result (with the passage of
time or notice or otherwise) in a default on any Indebtedness of the Company or
of any Subsidiary (other than the Designee or a Subsidiary of the Designee that
is an Unrestricted Subsidiary), (c) the Company certifies that such designation
complies with the covenant described under "Certain Covenants -- Limitation on
Restricted Payments," (d) such Subsidiary, either alone or in the aggregate with
all other Unrestricted Subsidiaries, does not operate, directly or indirectly
all or substantially all of the business of the Company and its Subsidiaries;
(e) such Subsidiary does not directly or indirectly, own any Indebtedness of or
Capital Stock in, and has no Investments in, the Company or any Restricted
Subsidiary; and (f) such Subsidiary is a Person with respect to which neither
the Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (i) to subscribe for additional Capital Stock or (ii) to maintain or
preserve such Person's financial condition or to cause such Person to achieve
any specified levels
77
<PAGE> 79
of operating results. If, at any time, any Unrestricted Subsidiary would fail to
meet the foregoing requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture
and any Indebtedness of such Subsidiary shall be deemed to be Incurred as of
such date. For purposes of making any such designation, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary will be deemed to be Restricted Payments at
the time of such designation and will reduce the amount available for Restricted
Payments under clause (3) of the covenant described under "Certain Covenants --
Limitation on Restricted Payments." Such designation shall only be permitted if
such Restricted Payment would be permitted at such time and if such Restricted
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
Any such designation or redesignation by the Board of Directors will be
evidenced to the Trustee by filing with the Trustee a Board Resolution giving
effect to such designation or redesignation and an Officers' Certificate (a)
certifying that such designation or redesignation complies with the foregoing
provisions and (b) giving the effective date of such designation or
redesignation, such filing with the Trustee to occur within 45 days after the
end of the fiscal quarter of the Company in which such designation or
redesignation is made (or, in the case of a designation or redesignation made
during the last fiscal quarter of the Company's fiscal year, within 90 days
after the end of such fiscal year). Unless designated as an Unrestricted
Subsidiary as herein provided, each Subsidiary of the Company shall be a
Restricted Subsidiary. Except as provided herein, no Restricted Subsidiary shall
be redesignated as an Unrestricted Subsidiary.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary, if immediately after giving pro forma effect to such
designation (a) the Company could Incur $1.00 of additional Indebtedness under
paragraph (a) of the covenant described under "Certain Covenants -- Limitation
on Incurrence of Indebtedness" and (b) no Default shall have occurred and be
continuing or would result therefrom.
Merger and Consolidation. The Company shall not consolidate with or merge
with or into, or convey, transfer or lease, in one transaction or a series of
related transactions, all or substantially all its assets to, any Person,
unless: (i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a corporation organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia and the
Successor Company (if not the Company) shall expressly assume, by an indenture
supplemental thereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the Notes
and the Indenture; (ii) immediately after giving effect to such transaction on a
pro forma basis (and treating any Indebtedness which becomes an obligation of
the Successor Company or any Subsidiary as a result of such transaction as
having been Incurred by such Successor Company or such Subsidiary at the time of
such transaction), no Default shall have occurred and be continuing; (iii)
except in the case of a merger the sole purpose of which is to change the
Company's jurisdiction of incorporation, immediately after giving effect to such
transaction on a pro forma basis, the Successor Company would be able to Incur
an additional $1.00 of Indebtedness pursuant to paragraph (a) of the covenant
described under "-- Limitation on Incurrence of Indebtedness"; (iv) immediately
after giving effect to such transaction on a pro forma basis, the Successor
Company shall have Consolidated Net Worth in an amount that is not less than the
Consolidated Net Worth of the Company immediately prior to such transaction; and
(v) the Company shall have delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger or transfer
and such supplemental indenture (if any) comply with the Indenture.
Notwithstanding the foregoing clauses (ii), (iii) and (iv), any Restricted
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to the Company or another Restricted Subsidiary.
The Successor Company shall be the successor to the Company and shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under the Indenture, but the predecessor Company in the case of a
conveyance, transfer or lease shall not be released from the obligation to pay
the principal of and interest on the Notes.
The Company shall not permit any Subsidiary Guarantor to consolidate with
or merge with or into, or convey, transfer or lease, in one transaction or a
series of transactions, all or substantially all its assets to, any
78
<PAGE> 80
Person (other than the Company or a Wholly-Owned Subsidiary), unless: (i) the
resulting, surviving or transferee Person (if not such Subsidiary) shall be a
corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and the Successor Company
(if not such Subsidiary) shall expressly assume, by a Guarantee agreement, in
form satisfactory to the Trustee, all the obligations of such Subsidiary under
its Subsidiary Guarantee; (ii) immediately after giving effect to such
transaction on a pro forma basis (and treating any Indebtedness which becomes an
obligation of the resulting, surviving or transferee Person as a result of such
transaction as having been Incurred by such Person at the time of such
transaction), no Default shall have occurred and be continuing; and (iii) the
Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer and
such Guarantee agreement comply with the Indenture. The provisions of clauses
(i) and (iii) above shall not apply to any transactions which constitute an
Asset Disposition if the Company has complied with the applicable provisions of
the covenant described under "-- Limitation on Sales of Assets and Subsidiary
Stock" above.
SEC Reports. Until such time as the Company shall become subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall provide the Trustee, the Initial Purchasers, the Noteholders and
prospective Noteholders (upon request) with such annual reports and such
information, documents and other reports as are specified in Sections 13 and
15(d) of the Exchange Act and applicable to a U.S. corporation subject to such
Sections, such information, documents and other reports to be so provided at the
times specified for the filing of such information, documents and reports under
such Sections. Thereafter, notwithstanding that the Company may not be required
to remain subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall file with the SEC and provide the Trustee and
Noteholders and prospective Noteholders (upon request) such annual reports and
such information, documents and other reports as are specified in such Sections
and applicable to a U.S. corporation subject to such Sections, such information,
documents and other reports to be so filed and provided at the times specified
for the filing of such information, documents and reports under such Sections;
provided, however, that the Company shall not be required to file any report,
document or other information with the SEC if the SEC does not permit such
filing.
DEFAULTS
An Event of Default is defined in the Indenture as (i) a default in the
payment of interest on the Notes when due (whether or not such payment is
prohibited by the provisions described under "Subordination" above), continued
for 30 days, (ii) a default in the payment of principal of any Note when due at
its Stated Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise (whether or not such payment is prohibited by the
provisions described under "Subordination" above), (iii) the failure by the
Company, to comply for 60 days after notice with any of its obligations under
the covenants described under "-- Limitation on Incurrence of Indebtedness," "--
Limitation on Restricted Payments," "-- Limitation on Sales of Assets and
Subsidiary Stock" and "-- Merger and Consolidation," (iv) the failure by the
Company to comply for 60 days after notice with its other agreements contained
in the Indenture, (v) Indebtedness of the Company or any Restricted Subsidiary
is not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total amount of
such Indebtedness unpaid or accelerated exceeds $5.0 million (the
"cross-acceleration provision"), (vi) certain events of bankruptcy, insolvency
or reorganization of the Company or a Significant Subsidiary (the "bankruptcy
provisions"), (vii) any judgment or decree for the payment of money in excess of
$5 million is rendered against the Company or a Restricted Subsidiary, remains
outstanding following such judgment and is not discharged, waived or stayed
within 60 days after entry of such judgment or decree (the "judgment default
provision"), or (viii) a Subsidiary Guarantee ceases to be in full force and
effect (other than in accordance with the terms of such Subsidiary Guarantee) or
a Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary
Guarantee and such default continues for 10 days. However, a default under
clause (iii) or (iv) will not constitute an Event of Default until the Trustee
or the Holders of 25% in principal amount of the outstanding Notes notify the
Company of the default and the Company does not cure such default within the
time specified in clauses (iii) and (iv) hereof after receipt of such notice.
79
<PAGE> 81
If an Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in principal amount of the outstanding Notes may declare the
principal of and accrued but unpaid interest on all the Notes to be due and
payable. Upon such a declaration, such principal and interest shall be due and
payable immediately. If an Event of Default relating to certain events of
bankruptcy, insolvency or reorganization of the Company occurs and is
continuing, the principal of and interest on all the Notes will ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holders of the Notes. Under certain
circumstances, the Holders of a majority in principal amount of the outstanding
Notes may rescind any such acceleration with respect to the Notes and its
consequences.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default occurs and is continuing, the Trustee will
be under no obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the Holders unless such Holders
have offered to the Trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no Holder may pursue any
remedy with respect to the Indenture or the Notes unless (i) such Holder has
previously given the Trustee notice that an Event of Default is continuing, (ii)
Holders of at least 25% in principal amount of the outstanding Notes have
requested the Trustee to pursue the remedy, (iii) such Holders have offered the
Trustee reasonable security or indemnity against any loss, liability or expense,
(iv) the Trustee has not complied with such request within 60 days after the
receipt thereof and the offer of security or indemnity and (v) the Holders of a
majority in principal amount of the outstanding Notes have not given the Trustee
a direction inconsistent with such request within such 60-day period. Subject to
certain restrictions, the Holders of a majority in principal amount of the
outstanding Notes are given the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. The Trustee, however,
may refuse to follow any direction that conflicts with law or the Indenture or
that the Trustee determines is unduly prejudicial to the rights of any other
Holder or that would involve the Trustee in personal liability.
The Indenture provides that if a Default occurs and is continuing and is
known to the Trustee, the Trustee must mail to each Holder notice of the Default
within 90 days after it occurs. Except in the case of a Default in the payment
of principal of or interest on any Note, the Trustee may withhold notice if and
so long as a committee of its trust officers determines that withholding notice
is not opposed to the interest of the Holders. In addition, the Company is
required to deliver to the Trustee, within 120 days after the end of each fiscal
year, a certificate indicating whether the signers thereof know of any Default
that occurred during the previous year. The Company also is required to deliver
to the Trustee, within 30 days after the occurrence thereof, written notice of
any event which would constitute certain Defaults, their status and what action
the Company is taking or proposes to take in respect thereof.
AMENDMENTS AND WAIVERS
Subject to certain exceptions, the Indenture may be amended with the
consent of the Holders of a majority in principal amount of the Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange for the Notes) and any past default or compliance with any provisions
may also be waived with the consent of the Holders of a majority in principal
amount of the Notes then outstanding. However, without the consent of each
Holder of an outstanding Note affected thereby, no amendment may, among other
things, (i) reduce the amount of Notes whose Holders must consent to an
amendment, (ii) reduce the rate of or extend the time for payment of interest on
any Note, (iii) reduce the principal of or change the Stated Maturity of any
Note, (iv) reduce the premium payable upon the redemption of any Note or change
the time at which any Note may be redeemed as described under "-- Optional
Redemption" above, (v) make any Note payable in money other than that stated in
the Note, (vi) impair the right of any Holder to institute suit for the
enforcement of any payment on or with respect to such Holder's Notes or any
Subsidiary Guarantee, (vii) make any change in the amendment provisions which
require each Holder's consent or in the waiver provisions or (viii) make any
change to the subordination provisions of the Indenture that would adversely
affect the Noteholders.
80
<PAGE> 82
Without the consent of any Holder, the Company and Trustee may amend the
Indenture to cure any ambiguity, omission, defect or inconsistency, to provide
for the assumption by a successor corporation of the obligations of the Company
under the Indenture, to provide for uncertificated Notes in addition to or in
place of certificated Notes (provided that the uncertificated Notes are issued
in registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B) of the
Code), to add Guarantees with respect to the Notes, to release Subsidiary
Guarantors when permitted by the Indenture, to secure the Notes, to add to the
covenants of the Company for the benefit of the Holders or to surrender any
right or power conferred upon the Company, to make any change that does not
adversely affect the rights of any Holder or to comply with any requirement of
the SEC in connection with the qualification of the Indenture under the Trust
Indenture Act. However, no amendment may be made to the subordination provisions
of the Indenture that adversely affects the rights of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
their Representative) consents to such change.
The consent of the Holders is not necessary under the Indenture to approve
the particular form of any proposed amendment. It is sufficient if such consent
approves the substance of the proposed amendment.
After an amendment under the Indenture becomes effective, the Company is
required to mail to Holders a notice briefly describing such amendment. However,
the failure to give such notice to all Holders, or any defect therein, will not
impair or affect the validity of the amendment.
TRANSFER
Certificated Notes will be issued in registered form and will be
transferable only upon the surrender of the Notes being transferred for
registration of transfer. The Company may require payment of a sum sufficient to
cover any tax, assessment or other governmental charge payable in connection
with certain transfers and exchanges.
DEFEASANCE
The Company at any time may terminate all its obligations under the Notes
and the Indenture ("legal defeasance"), except for certain obligations,
including those respecting the defeasance trust and obligations to register the
transfer or exchange of the Notes, to replace mutilated, destroyed, lost or
stolen Notes and to maintain a registrar and paying agent in respect of the
Notes. The Company at any time may terminate its obligations under "-- Change of
Control" and under the covenants described under "-- Certain Covenants" (other
than the covenant described under "-- Merger and Consolidation"), the operation
of the cross-acceleration provision, the bankruptcy provisions with respect to
Significant Subsidiaries and the judgment default provision described under
"-- Defaults" above and the limitations contained in clauses (iii) and (iv)
under "Certain Covenants -- Merger and Consolidation" above ("covenant
defeasance").
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, payment of the Notes may not be accelerated because of
an Event of Default with respect thereto. If the Company exercises its covenant
defeasance option, payment of the Notes may not be accelerated because of an
Event of Default specified in clause (iii), (iv), (v), (vi) (with respect only
to Significant Subsidiaries) or (vii) under "-- Defaults" above or because of
the failure of the Company to comply with clause (iii) or (iv) under "Certain
Covenants -- Merger and Consolidation" above. If the Company exercises its legal
defeasance option or its covenant defeasance option, each Subsidiary Guarantor
will be released from all of its obligations with respect to its Subsidiary
Guarantee.
In order to exercise either defeasance option, the Company must irrevocably
deposit in trust (the "defeasance trust") with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the Notes to
redemption or maturity, as the case may be, and must comply with certain other
conditions, including delivery to the Trustee of an Opinion of Counsel to the
effect that holders of the Notes will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit and defeasance and will
be subject to Federal income tax on the same amount and in the same manner and
at the
81
<PAGE> 83
same times as would have been the case if such deposit and defeasance had not
occurred (and, in the case of legal defeasance only, such Opinion of Counsel
must be based on a ruling of the Internal Revenue Service or other change in
applicable Federal income tax law).
CONCERNING THE TRUSTEE
IBJ Schroder Bank & Trust Company is the Trustee under the Indenture and
has been appointed by the Company as Registrar and Paying Agent with regard to
the Notes.
The Holders of a majority in principal amount of the outstanding Notes will
have the right to direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee, subject to certain
exceptions. The Indenture provides that if an Event of Default occurs (and is
not cured), the Trustee will be required, in the exercise of its power, to use
the degree of care of a prudent man in the conduct of his own affairs. Subject
to such provisions, the Trustee will be under no obligation to exercise any of
its rights or powers under the Indenture at the request of any Holder of Notes,
unless such Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense and then only to the
extent required by the terms of the Indenture.
GOVERNING LAW
The Indenture provides that it and the Notes will be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to applicable principles of conflicts of law to the extent that the
application of the law of another jurisdiction would be required thereby.
CERTAIN DEFINITIONS
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Related Business, including improvements to
existing assets, used by the Company or a Restricted Subsidiary in a Related
Business; (ii) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the Company
or another Restricted Subsidiary; provided, however, that any such Restricted
Subsidiary is primarily engaged in a Related Business; (iii) Capital Stock
constituting an additional equity interest in any Person that at such time is a
Restricted Subsidiary that is not a Wholly-Owned Subsidiary; or (iv) the costs
of improving or developing any property owned by the Company or a Restricted
Subsidiary that is used in a Related Business.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of the provisions described under "Certain Covenants -- Limitation on
Restricted Payments," "Certain Covenants -- Limitation on Affiliate
Transactions" and "Certain Covenants -- Limitations on Sales of Assets and
Subsidiary Stock" only, "Affiliate" shall also mean any beneficial owner of
Capital Stock representing 10% or more of the total voting power of the Voting
Stock (on a fully diluted basis) of the Company or of rights or warrants to
purchase such Capital Stock (whether or not currently exercisable) and any
Person who would be an Affiliate of any such beneficial owner pursuant to the
first sentence hereof.
"Asset Disposition" means any sale, lease, transfer, Sale/Leaseback
Transaction or other disposition (or series of related sales, leases, transfers
or dispositions) by the Company or any Restricted Subsidiary, including any
disposition by means of a merger, consolidation or similar transaction (each
referred to for the purposes of this definition as a "disposition"), of (i) any
shares of Capital Stock of a Restricted Subsidiary (other than directors'
qualifying shares and shares owned by foreign shareholders to the extent
required by applicable local laws in foreign countries), (ii) all or
substantially all the assets of any division, business segment or comparable
line of business of the Company or any Restricted Subsidiary or (iii) any other
assets of the Company or any Restricted Subsidiary outside of the ordinary
course of business of the Company or such Restricted Subsidiary. Notwithstanding
the foregoing, the term "Asset Disposition" shall not include
82
<PAGE> 84
(x) a disposition by a Restricted Subsidiary to the Company or by the Company or
a Restricted Subsidiary to a Subsidiary Guarantor, (y) for purposes of the
covenant described under "Certain Covenants -- Limitation on Sales of Assets and
Subsidiary Stock", a disposition that constitutes a Permitted Investment or a
Restricted Payment permitted by the covenant described under "Certain Covenants
- -- Limitation on Restricted Payments", and (z) a disposition of assets having a
fair market value of less than $1,000,000.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means, as at
the time of determination, the present value (discounted at the interest rate
borne by the Notes, compounded annually) of the total obligations of the lessee
for rental payments during the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which such lease has been
extended).
"Average Life" means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the sum
of the products of the numbers of years from the date of determination to the
dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Bank Credit Agreements" means the Senior Credit Facility and any other
bank credit agreement or similar facility now existing or entered into in the
future by the Company or any Restricted Subsidiary, as any of the same may be
amended, waived, modified, Refinanced or replaced from time to time (except to
the extent that any such amendment, waiver, modification, replacement or
Refinancing would be prohibited by the terms of the Indenture).
"Bank Indebtedness" means any and all present and future amounts payable
under or in respect of the Bank Credit Agreements, including principal, premium
(if any), interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization, whether or not a claim for
post-filing interest is allowed in such proceedings), fees, charges, expenses,
reimbursement obligations, guarantees and all other indebtedness and other
Obligations and liabilities payable thereunder or in respect thereof.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board of Directors.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Change of Control" means the occurrence of any of the following events:
(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 such parent entity);
83
<PAGE> 85
(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; or
(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 Issue 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 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.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consolidated Coverage Ratio" as of any date of determination means the
ratio of (i) the aggregate amount of EBITDA for the period of the most recent
four consecutive fiscal quarters ending at least 45 days (or, if less, the
number of days after the end of such fiscal quarter as the consolidated
financial statements of the Company shall be available) prior to the date of
such determination to (ii) Consolidated Interest Expense for such four fiscal
quarters; provided, however, that (1) if the Company or any Restricted
Subsidiary has Incurred any Indebtedness since the beginning of such period that
remains outstanding on such date of determination or if the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence
of Indebtedness, or both, EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of such
period and the discharge of any other Indebtedness repaid, repurchased, defeased
or otherwise discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first day of such period (except that, in the case
of Indebtedness used to finance working capital needs incurred under a revolving
credit or similar arrangement, the amount thereof shall be deemed to be the
average daily balance of such Indebtedness during such four-fiscal-quarter
period), (2) if since the beginning of such period the Company or any Restricted
Subsidiary shall have made any Asset Disposition, the EBITDA for such period
shall be reduced by an amount equal to the EBITDA (if positive) directly
attributable to the assets which are the subject of such Asset Disposition for
such period, or increased by an amount equal to the EBITDA (if negative)
directly attributable thereto for such period, and Consolidated Interest Expense
for such period shall be reduced by an amount equal to the Consolidated Interest
Expense directly attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased, defeased, assumed by a third person
(to the extent the Company and its Restricted Subsidiaries are no longer liable
for such Indebtedness) or otherwise discharged with respect to the Company and
its continuing Restricted Subsidiaries in connection with such Asset Disposition
for such period (or, if the Capital Stock of any Restricted Subsidiary is sold,
the Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and its
continuing Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale), (3) if since the beginning of such period the Company shall
have consummated a Public Equity Offering following which there is a Public
Market, Consolidated Interest Expense for such period shall be reduced by an
amount equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and its Restricted
Subsidiaries in connection with such Public Equity Offering for such period, (4)
if since the beginning of such period the Company or any Restricted Subsidiary
(by merger or otherwise) shall have made an Investment in any Restricted
Subsidiary (or any Person which becomes a Restricted Subsidiary) or an
acquisition of assets,
84
<PAGE> 86
which acquisition constitutes all or substantially all of an operating unit of a
business, including any such Investment or acquisition occurring in connection
with a transaction requiring a calculation to be made hereunder, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving
pro forma effect thereto (including the Incurrence of any Indebtedness) as if
such Investment or acquisition occurred on the first day of such period and (5)
if since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) shall have made any Asset
Disposition, any Investment or acquisition of assets that would have required an
adjustment pursuant to clause (3) or (4) above if made by the Company or a
Restricted Subsidiary during such period, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto as if such Asset Disposition, Investment or acquisition occurred on the
first day of such period. For purposes of this definition, whenever pro forma
effect is to be given to an acquisition of assets, the amount of income or
earnings relating thereto and the amount of Consolidated Interest Expense
associated with any Indebtedness Incurred in connection therewith, the pro forma
calculations shall be determined in good faith by a responsible financial or
accounting Officer of the Company in accordance with Article 11 of Regulation
S-X. If any Indebtedness bears a floating rate of interest and is being given
pro forma effect, the interest on such Indebtedness shall be calculated as if
the rate in effect on the date of determination had been the applicable rate for
the entire period (taking into account any Interest Rate Agreement applicable to
such Indebtedness if such Interest Rate Agreement has a remaining term in excess
of 12 months).
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Company and its consolidated Restricted Subsidiaries, plus, to
the extent not included in such total interest expense, and to the extent
incurred by the Company or its Restricted Subsidiaries, (i) interest expense
attributable to Capital Lease Obligations, (ii) amortization of debt discount,
(iii) capitalized interest, (iv) non-cash interest expenses, (v) commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, (vi) net costs associated with Hedging
Obligations (including amortization of fees), and (vii) interest actually paid
on any Indebtedness of any other Person that is Guaranteed by the Company or any
Restricted Subsidiary.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Subsidiaries; provided, however, that there shall
not be included in such Consolidated Net Income: (i) any net income (or loss) of
any Person if such Person is not a Restricted Subsidiary, except that subject to
the exclusion contained in clause (iv) below, the Company's equity in the net
income of any such Person for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually distributed by such
Person during such period to the Company or a Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or other
distribution paid to a Restricted Subsidiary, to the limitations contained in
clause (iii) below); (ii) for purposes of subclause (a)(3)(A) of the covenant
described under "Certain Covenants -- Limitation on Restricted Payments" only,
any net income (or loss) of any Person acquired by the Company or a Subsidiary
in a pooling of interests transaction for any period prior to the date of such
acquisition; (iii) any net income of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that (A) subject to
the exclusion contained in clause (iv) below, the Company's equity in the net
income of any such Restricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the aggregate amount of cash that could have
been distributed by such Restricted Subsidiary consistent with such restriction
during such period to the Company or another Restricted Subsidiary as a dividend
or other distribution (subject, in the case of a dividend or other distribution
paid to another Restricted Subsidiary, to the limitation contained in this
clause) and (B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such Consolidated
Net Income; (iv) any gain (or loss) realized upon the sale or other disposition
of any assets of the Company or its consolidated Subsidiaries (including
pursuant to any sale-and-leaseback arrangement) which is not sold or otherwise
disposed of in the ordinary course of business and any gain (or loss) realized
upon the sale or other disposition of any Capital Stock of any Person; (v)
extraordinary gains or losses; and (vi) the cumulative effect of a change in
accounting principles. Notwithstanding the foregoing, for the purposes of the
covenant described under "Certain Covenants -- Limitation on Restricted
85
<PAGE> 87
Payments" only, there shall be excluded from Consolidated Net Income any
dividends, repayments of loans or advances or other transfers of assets from
Unrestricted Subsidiaries to the Company or a Restricted Subsidiary to the
extent such dividends, repayments or transfers increase the amount of Restricted
Payments permitted under such covenant pursuant to clause (a)(3)(D) thereof.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company ending at least 45 days prior to the taking of any
action for the purpose of which the determination is being made, as (i) the par
or stated value of all outstanding Capital Stock of the Company plus (ii)
paid-in capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (A) any accumulated deficit and (B) any
amounts attributable to Disqualified Stock.
"Currency Agreement" means, with respect to any Person, any foreign
exchange contract, currency swap agreement or other similar agreement to which
such Person is a party or a beneficiary.
"CVC" means Citicorp Venture Capital, Ltd., a New York corporation.
"CVC Investor" means (i) CVC or any direct or indirect Wholly-Owned
Subsidiary of CVC, (ii) Citicorp, N.A. and (iii) any officer, employee or
director of CVC so long as such person shall be an employee, officer or director
of CVC or any direct or indirect Wholly-Owned Subsidiary of CVC.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Designated Senior Indebtedness" means (i) the Bank Indebtedness and (ii)
any other Senior Indebtedness of the Company which, at the date of
determination, has an aggregate principal amount outstanding of, or under which,
at the date of determination, the holders thereof are committed to lend up to,
at least $10 million and is specifically designated by the Company in the
instrument evidencing or governing such Senior Indebtedness as "Designated
Senior Indebtedness" for purposes of the Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital Stock
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or upon the happening of any event (i) matures
or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise,
(ii) is convertible or exchangeable, at the option of the holder thereof, for
Indebtedness or Disqualified Stock or (iii) is redeemable at the option of the
holder thereof, in whole or in part, in each case on or prior to the eleven
month anniversary of the Stated Maturity of the Notes. Disqualified Stock shall
not include any Capital Stock that is not otherwise Disqualified Stock if by its
terms the holders have the right to require the issuer to repurchase such stock
(or such stock is mandatorily redeemable) upon a Change of Control (or upon an
event substantially similar to a Change of Control).
"Domestic Restricted Subsidiary" means any Restricted Subsidiary of the
Company other than a Foreign Restricted Subsidiary.
"EBITDA" for any period means the sum of Consolidated Net Income plus,
without duplication, the following to the extent deducted in calculating such
Consolidated Net Income: (i) Consolidated Interest Expense, (ii) income tax
expense (including Michigan Single Business Tax expense), (iii) depreciation
expense, (iv) amortization expense and (v) all other non-cash items reducing
Consolidated Net Income (other than items that will require cash payments and
for which an accrual or reserve is, or is required by GAAP to be, made, other
than accruals for post-retirement benefits other than pensions), less all
non-cash items increasing Consolidated Net Income, in each case for such period.
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization of, a Subsidiary of the
Company shall be added to Consolidated Net Income to compute EBITDA only to the
extent (and in the same proportion) that the net income of such Subsidiary was
included in calculating Consolidated Net Income.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
86
<PAGE> 88
"Existing Affiliate Agreements" means the Stockholders' Agreement, the MSXI
Registration Rights Agreement and any other existing agreement with MascoTech or
any of its Affiliates described on Schedule I to the Indenture.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary of the
Company which is not organized under the laws of the United States of America or
any State thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United States
of America as then in effect, including those set forth in (i) the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants, (ii) statements and pronouncements of the
Financial Accounting Standards Board and (iii) such other statements by such
other entity as approved by a significant segment of the accounting profession.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such Person (whether
arising by virtue of partnership arrangements, or by agreements to keep-well, to
purchase assets, goods, securities or services, to take-or-pay or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, however, that the term
"Guarantee" shall not include (x) endorsements for collection or deposit in the
ordinary course of business or (y) guarantees among Restricted Subsidiaries or
guarantees by the Company of Restricted Subsidiaries; provided that the
Indebtedness being guaranteed is permitted to be Incurred. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
Person Guaranteeing any obligation.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become liable
for; provided, however, that any Indebtedness of a Person existing at the time
such Person becomes a Subsidiary (whether by merger, consolidation, acquisition
or otherwise) shall be deemed to be Incurred by such Subsidiary at the time it
becomes a Subsidiary; provided, further, however, that in the case of a discount
security, neither the accrual of interest nor the accretion of original issue
discount shall be considered an Incurrence of Indebtedness, but the entire face
amount of such security shall be deemed Incurred upon the issuance of such
security. The term "Incurrence" when used as a noun shall have a correlative
meaning.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of (A) indebtedness of such Person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which such Person is responsible or liable; (ii) all Capital
Lease Obligations of such Person and all Attributable Debt in respect of
Sale/Leaseback Transactions entered into by such Person; (iii) all obligations
of such Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations of such Person, all obligations of such Person
under any title retention agreement, and any obligation to pay rent or other
payment amounts of such Person with respect to any Sale/Leaseback Transaction
(but excluding trade accounts payable arising in the ordinary course of
business), which purchase price or obligation is due more than six months after
the date of placing such property in service or taking delivery and title
thereto or the completion of such services (provided that, in the case of
obligations of an acquired Person assumed in connection with an acquisition of
such Person, such obligations would constitute Indebtedness of such Person);
(iv) all obligations of such Person for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in (i) through (iii) above) entered into in the ordinary
course of business of such Person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no
later than the tenth Business Day following receipt by such Person
87
<PAGE> 89
of a demand for reimbursement following payment on the letter of credit); (v)
the amount of all obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock or, with respect to any
Subsidiary of such Person, any Preferred Stock (but excluding, in each case, any
accrued dividends); (vi) all obligations of the type referred to in clauses (i)
through (v) of other Persons and all dividends of other Persons for the payment
of which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee; (vii) all obligations of the type referred to in clauses (i) through
(vi) of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the amount of
such obligation being deemed to be the lesser of the value of such property or
assets or the amount of the obligation so secured; and (viii) to the extent not
otherwise included in this definition, Hedging Obligations of such Person. The
amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations as described above at such date;
provided, however, that the amount outstanding at any time of any Indebtedness
issued with original issue discount shall be deemed to be the face amount of
such Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with
GAAP.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement or other financial agreement or arrangement designed to
protect the Company or any Restricted Subsidiary against fluctuations in
interest rates.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of
"Unrestricted Subsidiary," the definition of "Restricted Payment" and the
covenant described under "Certain Covenants -- Limitation on Restricted
Payments," (i) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of the
net assets of any Subsidiary of the Company at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary equal to an amount (if positive) equal to (x) the Company's
"Investment" in such Subsidiary at the time of such redesignation less (y) the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of such Subsidiary at the time of such
redesignation; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors.
"Issue Date" means the date on which the Notes are originally issued.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Management Investors" means each of the officers, employees and directors
of the Company who own Voting Stock of the Company on the Issue Date, in each
case so long as such person shall remain an officer, employee or director of the
Company.
"MascoTech" means MascoTech, Inc., a Delaware corporation, and its
successors.
"Net Available Cash" from an Asset Disposition means cash payments received
by the Company or any of its Subsidiaries therefrom (including any cash payments
received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when received, but
excluding any other consideration received in the form of assumption by the
acquiring Person of Indebtedness or other
88
<PAGE> 90
obligations relating to such properties or assets or received in any other
noncash form) in each case net of (i) all legal, title and recording tax
expenses, commissions and other fees and expenses incurred, and all Federal,
state, provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP, as a consequence of such Asset Disposition, (ii) all
payments made on any Indebtedness which is secured by any assets subject to such
Asset Disposition, in accordance with the terms of any Lien upon or other
security agreement of any kind with respect to such assets, or which must by its
terms, or in order to obtain a necessary consent to such Asset Disposition, or
by applicable law, be repaid out of the proceeds from such Asset Disposition,
(iii) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of such Asset
Disposition and (iv) the deduction of appropriate amounts provided by the seller
as a reserve, in accordance with GAAP, against any liabilities associated with
the property or other assets disposed in such Asset Disposition and retained by
the Company or any Restricted Subsidiary after such Asset Disposition, including
without limitation liabilities under any indemnification obligations associated
with such Asset Disposition.
"Net Cash Proceeds," with respect to any issuance or sale of Capital Stock,
means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees and expenses actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Obligations" means all present and future obligations for principal,
premium, interest (including, without limitation, any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law), penalties, fees, indemnifications,
reimbursements (including, without limitation, all reimbursement and other
obligation pursuant to any letters of credit, bankers acceptances or similar
instruments or documents), damages and other liabilities payable under the
documentation at any time governing any indebtedness.
"Officer" means the Chief Executive Officer, the President, the Chief
Financial Officer or any Vice President of the Company.
"Officers' Certificate" means a certificate signed by two Officers of the
Company, at least one of whom shall be the principal financial officer of the
Company, and delivered to the Trustee.
"Other Qualified Notes" means any outstanding Senior Subordinated
Indebtedness of the Company issued pursuant to an indenture having a provision
substantially similar to the provision relating to Asset Dispositions contained
in the covenant described under "Certain Covenants -- Limitation on Sales of
Assets and Subsidiary Stock."
"Permitted Holders" means the CVC Investors, MascoTech, the Management
Investors and their respective Permitted Transferees; provided, however, that
any Management Investor and any CVC Investor and any Permitted Transferee of a
Management Investor or CVC Investor (other than CVC or Citicorp, N.A. or any
direct or indirect Subsidiary of CVC or Citicorp, N.A. or any other Person
controlled by CVC or Citicorp, N.A.) shall not be a "Permitted Holder" if such
Person is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of Voting Stock that represents at least
30% of the aggregate voting power of all classes of the Voting Stock of the
Company, voting together as a single class (without giving effect to the
attribution of beneficial ownership as a result of any stockholders' agreement
as in effect on the Issue Date, and any amendment to such agreement that does
not materially change the allocation of voting power provided in such
agreement).
"Permitted Investment" means an Investment by the Company or any Restricted
Subsidiary in (i) the Company; (ii) a Restricted Subsidiary or a Person that
will, upon the making of such Investment, become a Restricted Subsidiary;
provided, however, that the primary business of such Restricted Subsidiary is a
Related Business; (iii) another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related Business;
(iv) Temporary Cash Investments; (v) receivables owing to the Company or any
Restricted Subsidiary if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; provided,
however, that such trade terms may include such concessionary trade terms as the
Company or any
89
<PAGE> 91
such Restricted Subsidiary deems reasonable under the circumstances; (vi)
payroll, travel and similar advances to cover matters that are expected at the
time of such advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business; (vii) loans or
advances to employees of the Company or a Restricted Subsidiary in an aggregate
amount not to exceed $1.5 million; (viii) stock, obligations or securities
received in settlement of debts created in the ordinary course of business and
owing to the Company or any Restricted Subsidiary or in satisfaction of
judgments; (ix) Persons other than Restricted Subsidiaries that are primarily
engaged in a Related Business or property or assets to be used primarily in a
Related Business, in an aggregate amount not to exceed $20.0 million (to the
extent utilized for an Investment, such amount will be reinstated to the extent
that the Company or any Restricted Subsidiary receives dividends, repayments of
loans or other transfers of assets as a return of such Investment); provided,
however, that at the time of any Investment pursuant to this clause (ix), the
Company and its Restricted Subsidiaries would be able to Incur an additional
$1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under
"-- Limitation on Incurrence of Indebtedness"; and (x) any Person to the extent
such Investment represents the non-cash portion of the consideration received
for an Asset Disposition as permitted pursuant to the covenant described under
"Certain Covenants -- Limitation on Sales of Assets and Subsidiary Stock."
"Permitted Investors" means (i) MascoTech and its Permitted Transferees,
(ii) the CVC Investors and (iii) the Management Investors and their 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 provisions in such agreement).
"Permitted Lien" means (a) Liens on property of a Person existing at the
time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary; provided that such Liens were not created in anticipation
of such Person being so merged or consolidated; and (b) Liens to secure any
Refinancing Indebtedness; provided such liens cover only such property which are
the subject of a lien securing the Indebtedness being Refinanced.
"Permitted Transferee" means, (a) with respect to any CVC Investor who is
an employee, officer or director of CVC or any Wholly Owned Subsidiary of CVC,
any spouse or lineal descendant (including by adoption) of such CVC Investor so
long as such CVC Investor shall be an employee, officer or director of CVC; (b)
with respect to MascoTech, any direct or indirect Subsidiary or any other Person
controlled by MascoTech; and (c) with respect to any Management Investor, any
spouse or lineal descendant (including by adoption) of such Management Investor
so long as such Management Investor shall be an employee, officer or director of
the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"Preferred Stock," as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Note means the principal of the Note plus the premium, if
any, payable on the Note which is due or overdue or is to become due at the
relevant time.
"Public Equity Offering" means an underwritten primary public offering of
common stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Public Market" means any time after (i) a Public Equity Offering has been
consummated and (ii) at least 10% of the total issued and outstanding common
stock of the Company has been distributed by means of an effective registration
statement under the Securities Act or sales pursuant to Rule 144 under the
Securities Act.
90
<PAGE> 92
"Purchase Money Indebtedness" mean Indebtedness (i) consisting of the
deferred purchase price of property, conditional sale obligations, obligations
under any title retention agreement, other purchase money obligations and
obligations in respect of industrial revenue bonds or similar Indebtedness, in
each case where the maturity of such Indebtedness does not exceed the
anticipated useful life of the asset being financed, and (ii) Incurred to
finance the acquisition by the Company or a Restricted Subsidiary of such asset,
including additions and improvements; provided, however, that any Lien arising
in connection with any such Indebtedness shall be limited to the specified asset
being financed or, in the case of real property or fixtures, including additions
and improvements, the real property on which such asset is attached; and
provided, further, however, that such Indebtedness is Incurred within 180 days
after such acquisition of such asset by the Company or Restricted Subsidiary.
"Qualified Finance Subsidiary" means a Subsidiary of the Company
constituting a "finance subsidiary" within the meaning of Rule 3a-5 under the
Investment Company Act of 1940, as amended (the "1940 Act"), or an issuer of
asset-backed securities within the meaning of Rule 3a-7 of the 1940 Act or any
other vehicle under a similar exemption, formed for the purpose of engaging in a
Qualified TIPS Transaction and having no assets other than those necessary to
consummate the Qualified TIPS Transaction.
"Qualified TIPS Transaction" means an issuance by a Qualified Finance
Subsidiary of preferred trust securities or similar securities in respect of
which any dividends, liquidation preference or other obligations under such
securities are Guaranteed by the Company to the extent required by the 1940 Act,
as amended, or customary for transactions of such type.
"Refinance" means, in respect of any Indebtedness, to refinance, extend,
renew, refund, repay, prepay, redeem, defease or retire, or to issue other
Indebtedness in exchange or replacement for, such Indebtedness. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with the Indenture; provided, however, that (i)
such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced, (ii) such Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness
being Refinanced and (iii) such Refinancing Indebtedness has an aggregate
principal amount (or if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced; provided further,
however, that Refinancing Indebtedness shall not include Indebtedness of the
Company or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary.
"Related Business" means any business related, ancillary or complementary
(as determined in good faith by the Board of Directors) to the businesses of the
Company and the Restricted Subsidiaries on the Issue Date.
"Representative" means any trustee, agent or representative (if any) for an
issue of Senior Indebtedness of the Company.
"Restricted Payment" means, with respect to any Person, (i) the declaration
or payment of any dividends or any other distributions on or in respect of its
Capital Stock (including any such payment in connection with any merger or
consolidation involving such Person) or similar payment to the holders of its
Capital Stock, except dividends or distributions payable solely in its Capital
Stock (other than Disqualified Stock) and except dividends or distributions
payable solely to the Company or a Restricted Subsidiary (and, if such
Restricted Subsidiary is not wholly owned, to its other shareholders on a pro
rata basis or on a basis that results in the receipt by the Company or a
Restricted Subsidiary of dividends or distributions of greater value than it
would receive on a pro rata basis), (ii) the purchase, redemption or other
acquisition or retirement for value of any Capital Stock of the Company held by
any Person or of any Capital Stock of a Restricted Subsidiary held by any
Affiliate of the Company (other than a Restricted Subsidiary), including the
exercise of any option to exchange any Capital Stock (other than into Capital
Stock of the Company that is not Disqualified Stock), (iii) the purchase,
repurchase, redemption, defeasance or other acquisition or retirement for value,
prior to scheduled maturity, scheduled repayment or scheduled sinking fund
payment of any Subordinated Obligations
91
<PAGE> 93
(other than the purchase, repurchase or other acquisition of Subordinated
Obligations purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year of the
date of acquisition) or (iv) the making of any Investment in any Person (other
than a Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company that is not an
Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Restricted Subsidiary
leases it from such Person and such lease is reflected on such Person's balance
sheet as a Capital Lease Obligation.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured by a
Lien. "Secured Indebtedness" of any Subsidiary Guarantor has a correlative
meaning.
"Senior Credit Facility" means the Credit Agreement dated as of January 22,
1998, in effect on the Issue Date, by and among the Company, as borrower and
guarantor, and certain subsidiaries, as borrowing subsidiaries, the Lenders
referred to therein and NBD Bank, as agent, as the same may be amended,
extended, renewed, restated, supplemented or otherwise modified (in each case,
in whole or in part, and without limitation as to amount, terms, conditions,
covenants and other provisions) from time to time, and any agreement governing
Indebtedness Incurred to refund, replace or refinance any borrowings and
commitments then outstanding or permitted to be outstanding under such Senior
Credit Facility or any such prior agreement as the same may be amended,
extended, renewed, restated, supplemented or otherwise modified (in each case,
in whole or in part, and without limitation as to amount, terms, conditions,
covenants and other provisions). The term "Senior Credit Facility" shall include
all related or ancillary documents executed at any time, including, without
limitation, any instruments, guarantee agreements and security documents.
"Senior Indebtedness" of the Company means (i) Indebtedness of the Company
and all Bank Indebtedness, whether outstanding on the Issue Date or thereafter
Incurred and (ii) accrued and unpaid interest (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization relating to
the Company whether or not a claim for post-filing interest is allowed in such
proceeding) in respect of (A) indebtedness of the Company for money borrowed and
(B) indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which the Company is responsible or liable
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that such obligations are subordinate in
right of payment to the Notes; provided, however, that Senior Indebtedness shall
not include (1) any obligation of the Company to any Subsidiary, (2) any
liability for Federal, state, local or other taxes owed or owing by the Company,
(3) any accounts payable or other liability to trade creditors arising in the
ordinary course of business (including Guarantees thereof or instruments
evidencing such liabilities), (4) any Indebtedness of the Company (and any
accrued and unpaid interest in respect thereof) which is subordinate or junior
in any respect (other than as a result of the Indebtedness being unsecured) to
any other Indebtedness or other obligation of the Company, including any Senior
Subordinated Indebtedness and any Subordinated Obligations, (5) any obligations
with respect to any Capital Stock or (6) that portion of any Indebtedness which
at the time of Incurrence is Incurred in violation of the Indenture. "Senior
Indebtedness" of any Subsidiary Guarantor has a correlative meaning.
"Senior Subordinated Indebtedness" of the Company means the Notes and any
other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Notes in right of payment and is not
subordinated by its terms in right of payment to any Indebtedness or other
obligation of the Company which is not Senior Indebtedness. "Senior Subordinated
Indebtedness" of any Subsidiary Guarantor has a correlative meaning.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the final payment of principal of
such security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred).
92
<PAGE> 94
"Stockholders' Agreement" means the stockholders' agreement dated January
3, 1997 by and between the Company, MascoTech, CVC, and certain executive
officers and directors of the Company, as amended from time to time.
"Subordinated Obligation" means any Indebtedness of the Company (whether
outstanding on the Issue Date or thereafter Incurred) which is subordinate or
junior in right of payment to the Notes pursuant to a written agreement to that
effect. "Subordinated Obligation" of any Subsidiary Guarantor has a correlative
meaning.
"Subsidiary" means, in respect of any Person, any corporation, association,
partnership, business trust or other business entity of which more than 50% of
the total voting power of shares of Capital Stock or other interests (including
partnership interests or trust interests) entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
(i) such Person, (ii) such Person and one or more Subsidiaries of such Person or
(iii) one or more Subsidiaries of such Person.
"Subsidiary Guarantee" means the Guarantee by a Subsidiary Guarantor of the
Company's obligations with respect to the Notes.
"Subsidiary Guarantor" means each Subsidiary designated as such on the
signature pages of the Indenture and any other Subsidiary that has issued a
Subsidiary Guarantee.
"Temporary Cash Investments" means any of the following: (i) any investment
in direct obligations of the United States of America or any agency thereof or
obligations Guaranteed by the United States of America or any agency thereof,
(ii) investments in time deposit accounts, certificates of deposit and money
market deposits maturing within 180 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof or any foreign country recognized by
the United States, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $250,000,000 (or the foreign currency
equivalent thereof) and has outstanding debt which is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by an registered broker dealer or mutual fund
distributor, (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above, (iv)
investments in commercial paper, maturing not more than 90 days after the date
of acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America, any
State thereof or the District of Columbia or any foreign country recognized by
the United States of America with a rating at the time as of which any
investment therein is made of "P-1" (or higher) according to Moody's Investors
Service, Inc. or "A-1" (or higher) according to Standard and Poor's Ratings
Group, and (v) investments in securities with maturities of six months or less
from the date of acquisition issued or fully Guaranteed by any state,
commonwealth or territory of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least "A" by Standard &
Poor's Ratings Group or "A" by Moody's Investors Service, Inc.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided above under "Certain
Covenants -- Designation of Restricted and Unrestricted Subsidiaries" and (ii)
any Subsidiary of an Unrestricted Subsidiary.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
93
<PAGE> 95
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the Capital
Stock of which (other than directors' qualifying shares) is owned by the Company
and/or one or more Wholly Owned Subsidiaries.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
Holders of Exchange Notes are not entitled to any registration rights with
respect to the Exchange Notes. Holders of Old Notes are entitled to certain
registration rights pursuant to the Registration Agreement. Pursuant to the
Registration Agreement, the Company has agreed to file with the SEC and have
declared effective within 180 days after the Issue Date a registration statement
(the "Exchange Offer Registration Statement") under the Securities Act with
respect to the Exchange Offer. The Company also agreed that, after the
effectiveness of the Exchange Offer Registration Statement, it would, subject to
certain conditions, offer to the Holders of Old Notes who are able to make
certain representations the opportunity to exchange their Old Notes for Exchange
Notes. In the event that applicable interpretations of the staff of the SEC do
not permit the Company to effect the Exchange Offer ("SEC Blockage") or do not
permit any Holder of Old Notes, subject to certain limitations, to participate
in such Exchange Offer, the Company has agreed to file with the SEC a shelf
registration statement (the "Shelf Registration Statement") to cover resales of
the applicable Old Notes. The Registration Statement of which this Prospectus is
a part constitutes the Exchange Offer Registration Statement.
The Registration Agreement provides that the Company will use its
reasonable best efforts to have the Exchange Offer Registration Statement
declared effective by the SEC within 180 days after the Issue Date. If the
Exchange Offer has not been consummated within 210 days after the Issue Date
(unless there exists a SEC Blockage) (such event, a "Registration Default"),
during the first 90-day period immediately following the occurrence of such
Registration Default interest will accrue on the Notes at a rate of 0.25% per
annum and shall increase by 0.25% per annum at the end of each subsequent 90-day
period until the Exchange Offer is consummated, but in no event shall such
interest exceed 1.0% per annum.
Holders of Old Notes will be required to make certain representations to
the Company (as described in the Registration Agreement) in order to participate
in the Exchange Offer and will be required to deliver information to be used in
connection with the Shelf Registration Statement and to provide comments on the
Shelf Registration Statement within the time periods set forth in the
Registration Agreement in order to have their Old Notes included in the Shelf
Registration Statement and benefit from the provisions regarding liquidated
damages set forth in the preceding sentence. In addition, for so long as the
Notes are outstanding, the Company will continue to provide to Holders of Notes
and to prospective purchasers of the Notes the information required by Rule
144A(d)(4). The Company will provide a copy of the Registration Agreement to
prospective investors upon request.
94
<PAGE> 96
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes the material United States federal income
tax consequences of the ownership and disposition of the Notes by U.S. Holders
(as defined below) who acquired such securities in the Offering (the "Initial
U.S. Holders"). This summary is based on the Internal Revenue Code of 1986, as
amended to the date hereof (the "Code"), administrative pronouncements, judicial
decisions and existing and proposed Treasury Regulations, changes to any of
which subsequent to the date of this Prospectus may affect the tax consequences
described herein. This summary discusses only Notes held as capital assets
within the meaning of Section 1221 of the Code. It does not discuss all of the
tax consequences that may be relevant to a holder in light of his particular
circumstances or to holders subject to special rules, such as persons who are
not U.S. Holders (as defined below) or Initial U.S. Holders, certain financial
institutions, insurance companies, dealers in securities and holders who hold
the Notes as part of a straddle, hedging, conversion or other integrated
transaction. Holders of Notes should consult their tax advisors with regard to
the application of the United States federal income tax laws to their particular
situations as well as any tax consequences arising under the laws of any state,
local or foreign taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a Note
that, for United States federal income tax purposes, is (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof, or (iii) an estate or trust the income of which
is subject to United States federal income taxation regardless of its source.
The term also includes certain former citizens or residents of the United
States.
PAYMENTS OF INTEREST
Interest paid on a Note will generally be taxable as ordinary income at the
time it accrues or is received in accordance with the U.S. Holder's method of
accounting for federal income tax purposes.
EXCHANGE OFFER
The exchange of Old Notes for Exchange Notes pursuant to the Exchange Offer
will not result in any federal income tax consequences to U.S. Holders. When a
U.S. Holder exchanges an Old Note for an Exchange Note pursuant to the Exchange
Offer, the U.S. Holder will have the same adjusted basis and holding period in
the Exchange Note as in the Old Note immediately before the exchange.
SALE, EXCHANGE OR RETIREMENT
Upon the sale, exchange or retirement of a Note, a U.S. Holder will
recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement (excluding amounts attributable to
accrued and unpaid interest, which amounts will be includible as ordinary
interest income) and such U.S. Holder's tax basis in the Note. Gain or loss
realized on the sale, exchange or retirement of a Note will be capital gain or
loss. Recently enacted legislation includes substantial changes to the federal
taxation of capital gains recognized by individuals, including a 20% maximum tax
rate for certain gains from the sale of capital assets held for more than 18
months. The deduction of capital losses is subject to certain limitations.
Prospective investors should consult their tax advisors regarding the treatment
of capital gains and losses.
95
<PAGE> 97
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Old Notes where such Old Notes were acquired as a result of
market-making activities or other trading activities. Each of the Company and
the Subsidiary Guarantors has agreed that it will make this Prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale for a period of 180 days after the Expiration Date. In
addition, until , 1998 (90 days after the date of this Prospectus),
all dealers effecting transactions in the Exchange Notes may be required to
deliver a prospectus.
Neither the Company nor the Subsidiary Guarantors will receive any proceeds
from any sales of the Exchange Notes by broker-dealers. Exchange Notes received
by brokers-dealers for their own account pursuant to the Exchange Offer may be
sold from time to time in one or more transactions in the over-the-counter
market, in negotiated transactions, through the writing of options on the
Exchange Notes or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer and/or the
purchasers of any such Exchange Notes. Any broker or dealer that resells
Exchange Notes that were received by it for its own account pursuant to the
Exchange Offer or participates in a distribution of such Exchange Notes may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on any such resale of Exchange Notes and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation under
the Securities Act. The Letter of Transmittal states that by acknowledging that
it will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
For a period of 180 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal.
The Company and each of the Subsidiary Guarantors has jointly and severally
agreed to pay all expenses incident to the Exchange Offer (including the
expenses of one counsel for the holders of the Old Notes) other than commissions
or concessions of any brokers or dealers and will indemnify the holders of the
Old Notes (including any broker-dealers) against certain liabilities, including
liabilities under the Securities Act.
LEGAL MATTERS
The validity of the Exchange Notes offered hereby will be passed upon for
the Company by Davis Polk & Wardwell, New York, New York.
96
<PAGE> 98
EXPERTS
The combined balance sheet of TSG as of December 31, 1996 and the related
combined statements of operations and cash flows for each of the two years in
the period ended December 31, 1996 appearing in this Prospectus have been
included herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
The consolidated balance sheet of the Company as of December 28, 1997 and
the related consolidated statement of operations and cash flows for the year
then ended appearing elsewhere in this Prospectus have been included herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in accounting and auditing.
The combined balance sheet of APX as of November 6, 1996 and the related
combined statements of operations, stockholders' deficit and cash flows for the
period December 31, 1995 to November 6, 1996 appearing in this Prospectus have
been included herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
The combined financial statements of APX International at December 30, 1995
and for the year then ended, appearing in this Prospectus and Registration
Statement have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon appearing elsewhere herein, and are included in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The consolidated carve-out balance sheets of GRI as of December 31, 1996
and August 31, 1997 and the related consolidated carve-out statements of
operations, stockholders' equity and cash flows for the two years in the period
ended December 31, 1996 and for the eight-month period ended August 31, 1997
appearing in this Prospectus have been included herein in reliance on the report
of Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.
97
<PAGE> 99
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
MSX INTERNATIONAL, INC. (INCLUDING ITS PREDECESSOR TSG)
Report of Independent Accountants......................... F-2
Combined Balance Sheet as of December 31, 1996 and
Consolidated Balance Sheet as of December 28, 1997 and
March 29, 1998 (Unaudited)............................. F-3
Combined Statements of Operations for the years ended
December 31, 1995 and 1996 and Consolidated Statement
of Operations for the fiscal year ended December 28,
1997 and for the fiscal quarters ended March 30, 1997
(Unaudited) and March 29, 1998 (Unaudited)............. F-4
Combined Statements of Cash Flows for the years ended
December 31, 1995 and 1996 and Consolidated Statement
of Cash Flows for the fiscal year ended December 28,
1997 and for the fiscal quarters ended March 30, 1997
(Unaudited) and March 29, 1998 (Unaudited)............. F-5
Notes to Combined and Consolidated Financial Statements... F-6
APX INTERNATIONAL
Report of Independent Accountants......................... F-36
Combined Balance Sheet as of November 6, 1996............. F-37
Combined Statement of Operations for the period December
31, 1995 to November 6, 1996........................... F-38
Combined Statement of Stockholders' Deficit for the period
December 31, 1995 to November 6, 1996.................. F-39
Combined Statement of Cash Flows for the period December
31, 1995 to November 6, 1996........................... F-40
Notes to Combined Financial Statements.................... F-41
Report of Independent Auditors............................ F-46
Combined Balance Sheet as of December 30, 1995............ F-47
Combined Statement of Income and Stockholders' Deficiency
for the year ended December 30, 1995................... F-48
Combined Statement of Cash Flows for the year ended
December 30, 1995...................................... F-49
Notes to Combined Financial Statements.................... F-50
GEOMETRIC RESULTS INCORPORATED
Report of Independent Accountants......................... F-55
Consolidated Carve-Out Balance Sheets as of December 31,
1996 and August 31, 1997............................... F-56
Consolidated Carve-Out Statements of Operations for the
years ended December 31, 1996 and 1995 and for the
eight-month period ended August 31, 1997............... F-57
Consolidated Carve-Out Statements of Stockholder's Equity
for the years ended December 31, 1996 and 1995 and for
the eight-month period ended August 31, 1997........... F-58
Consolidated Carve-Out Statements of Cash Flows for the
years ended December 31, 1996 and 1995 and for the
eight-month period ended August 31, 1997............... F-59
Notes to Consolidated Carve-Out Financial Statements...... F-60
</TABLE>
F-1
<PAGE> 100
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
MSX International, Inc.:
We have audited the accompanying combined balance sheet of the Technical
Services Group (certain subsidiaries of MascoTech, Inc., as described in the
basis of presentation note) ("TSG"), the predecessor for accounting purposes, as
of December 31, 1996 and the accompanying combined statement of operations and
cash flows for the years ended December 31, 1995 and 1996. In addition, we have
audited the accompanying consolidated balance sheet of MSX International, Inc.
("MSXI") as of December 28, 1997 and the related consolidated statements of
operations and cash flows for the fiscal year then ended. These financial
statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of TSG as of December
31, 1996 and the consolidated financial position of MSXI as of December 28,
1997, and the results of their operations and their cash flows for the periods
indicated above in conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Detroit, Michigan
March 31, 1998
F-2
<PAGE> 101
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
COMBINED BALANCE SHEET
AS OF DECEMBER 31, 1996 AND
CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 28, 1997 AND MARCH 29, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PREDECESSOR
------------
DECEMBER 31, DECEMBER 28, MARCH 29,
1996 1997 1998
------------ ------------ ---------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.............................. $ 7,070 $ 11,575 $ 15,038
Receivables, net....................................... 58,860 178,938 177,936
Inventory.............................................. 930 1,239 1,175
Prepaid expenses and other assets...................... 3,600 5,638 4,760
Deferred income taxes.................................. -- 2,352 2,264
------- -------- --------
Total current assets................................ 70,460 199,742 201,173
Property and equipment, net.............................. 18,140 34,337 32,598
Goodwill, net of accumulated amortization of $892 in 1997
and $1,158 in 1998..................................... -- 31,934 31,668
Other assets............................................. 5,550 8,783 11,563
Deferred income taxes.................................... -- 12,380 12,380
------- -------- --------
Total assets........................................ $94,150 $287,176 $289,382
======= ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Notes payable and current portion of long-term debt.... $ 4,170 $ 87,930 $ 7,323
Bank overdrafts........................................ -- 21,908 23,747
Accounts payable....................................... 5,550 58,458 57,438
Accrued payroll and benefits........................... 2,640 16,984 16,749
Accrued expenses....................................... 8,090 20,907 15,871
Deferred income taxes.................................. -- 984 984
------- -------- --------
Total current liabilities........................... 20,450 207,171 122,112
Long-term debt........................................... 30 65,000 153,825
Long-term capital lease obligations...................... -- 316 255
Long-term deferred compensation liability and other...... 4,220 5,053 3,952
------- -------- --------
Total liabilities................................... 24,700 277,540 280,144
------- -------- --------
Redeemable Series A Preferred Stock, authorized 500,000
shares; issued and outstanding 360,000 shares.......... -- 36,000 36,000
Shareholders' equity (deficit):
Common stock, $.01 par: authorized 2,000,000 shares;
issued
and outstanding 95,004 shares....................... -- 1 1
Additional paid-in capital............................. -- (22,251) (22,251)
Accumulated other comprehensive income (loss).......... (2,790) (1,141) (1,917)
Accumulated deficit.................................... -- (2,973) (2,595)
MascoTech, Inc. net investment and advances............ 72,240 -- --
------- -------- --------
Total shareholders' equity (deficit)................ 69,450 (26,364) (26,762)
------- -------- --------
Total liabilities and shareholders' equity
(deficit)......................................... $94,150 $287,176 $289,382
======= ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements
F-3
<PAGE> 102
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
COMBINED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED DECEMBER 28, 1997
AND MARCH 29, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
PREDECESSOR PREDECESSOR
------------ ------------ FISCAL YEAR FISCAL QUARTER FISCAL QUARTER
YEAR ENDED YEAR ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 28, MARCH 30, MARCH 29,
1995 1996 1997 1997 1998
------------ ------------ ------------ -------------- --------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net sales.............................. $ 216,130 $ 228,260 $ 564,546 $ 82,508 $ 255,056
Cost of sales.......................... (178,760) (192,510) (514,019) (74,256) (236,719)
--------- --------- --------- -------- ---------
Gross profit......................... 37,370 35,750 50,527 8,252 18,337
--------- --------- --------- -------- ---------
Selling, general and administrative
expenses............................. (25,230) (26,240) (36,007) (6,958) (12,504)
Michigan Single Business Tax........... (1,500) (1,510) (2,868) (700) (772)
Restructuring costs.................... -- -- (2,000) --
--------- --------- --------- -------- ---------
Operating income..................... 10,640 8,000 9,652 594 5,061
--------- --------- --------- -------- ---------
Other income (expense), net:
Interest expense, net................ (230) (170) (4,383) (928) (3,273)
Interest expense, related parties.... (1,240) (1,140) (8,017) (1,874) (1,040)
Other income (expense), net.......... 1,070 (70) -- 220 --
--------- --------- --------- -------- ---------
(400) (1,380) (12,400) (2,582) (4,313)
--------- --------- --------- -------- ---------
Income (loss) before income
taxes............................ 10,240 6,620 (2,748) (1,988) 748
Income tax provision (benefit)......... 3,820 2,800 225 (480) 370
--------- --------- --------- -------- ---------
Net income (loss).................. $ 6,420 $ 3,820 $ (2,973) $ (1,508) $ 378
========= ========= ========= ======== =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE> 103
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED DECEMBER 28, 1997
AND THE FISCAL QUARTERS ENDED MARCH 30, 1997 (UNAUDITED) AND MARCH 29, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
PREDECESSOR PREDECESSOR FISCAL YEAR FISCAL QUARTER FISCAL QUARTER
YEAR ENDED YEAR ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 28, MARCH 30, MARCH 29,
1995 1996 1997 1997 1998
------------ ------------ ------------ -------------- --------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Cash from (used for):
Operating activities:
Net income (loss)................ $ 6,420 $ 3,820 $ (2,973) $ (1,508) $ 378
Adjustments to reconcile net
income (loss) to net cash from
(used for) operating
activities:
Depreciation................... 4,540 4,970 8,967 1,373 3,487
Amortization................... -- -- 892 343 352
(Increase) decrease in
receivables, net............. (12,650) 1,380 (36,343) (16,265) 1,002
(Increase) decrease in
inventory.................... (160) 530 (309) 778 64
(Increase) decrease in prepaid
expenses..................... (940) 210 (1,513) 1,222 966
Increase (decrease) in current
liabilities.................. 930 10 30,487 (3,508) (6,292)
Other, net..................... 780 (3,130) 2,576 6,114 (165)
-------- ------- --------- --------- --------
Net cash from (used for)
operating activities........... (1,080) 7,790 1,784 (11,451) (208)
-------- ------- --------- --------- --------
Investing activities:
Capital expenditures............. (8,400) (4,840) (11,518) (2,646) (1,763)
Acquisition of business, net of
cash received.................. -- -- (159,137) (132,361) --
Other, net....................... 110 70 (5) (317) --
-------- ------- --------- --------- --------
Net cash used for investing
activities..................... (8,290) (4,770) (170,660) (135,324) (1,763)
-------- ------- --------- --------- --------
Financing activities:
Proceeds from long-term debt..... 260 650 70,000 70,000 96,778
Payment of long-term debt........ (80) -- -- -- (70,000)
Change in bank borrowings........ -- -- 73,399 45,614 (22,083)
Decrease in cash overdraft....... -- -- (669) (4,024) 1,839
Sale of Redeemable Preferred
Stock.......................... -- -- 36,000 36,000 --
Sale of Common Stock............. -- -- 3,800 3,760 --
Increase in MascoTech, Inc. net
investment and advances........ 11,690 4,110 -- -- --
Other, net....................... (680) (610) (938) (351) (324)
-------- ------- --------- --------- --------
Net cash from financing
activities..................... 11,190 4,150 181,592 150,999 6,210
-------- ------- --------- --------- --------
Effect of foreign exchange rate
changes on cash.................. (1,560) (1,900) (1,141) (537) (776)
-------- ------- --------- --------- --------
Cash:
Increase for the period.......... 260 5,270 11,575 3,687 3,463
Balance, beginning of period..... 1,540 1,800 -- -- 11,575
-------- ------- --------- --------- --------
Balance, end of period........... $ 1,800 $ 7,070 $ 11,575 $ 3,687 $ 15,038
======== ======= ========= ========= ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE> 104
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
1. ORGANIZATION AND BASIS OF PRESENTATION:
The accompanying financial statements represent the consolidated assets and
liabilities and operations of MSX International, Inc. and its subsidiaries
("MSXI" or "the Company") in 1998 and 1997, and in 1996 and 1995, the combined
assets and liabilities and operations of certain subsidiaries and divisions of
subsidiaries of MascoTech, Inc. ("MascoTech") which constituted the Technical
Services Group of MascoTech ("TSG"). MSXI is a holding company formed and owned
by Citicorp Venture Capital, Ltd. ("CVC"), MascoTech and certain members of
management. The Company was formed to consummate the acquisition of TSG ("TSG
Acquisition"), in which it acquired selected assets and operations of TSG owned
by MascoTech and MascoTech Automotive Systems Group ("MASG"), as well as the net
assets of APX International, a design and engineering services provider, which
had been acquired by MASG effective November 6, 1996. The TSG Acquisition was
effective on January 3, 1997. Effective August 31, 1997, the Company acquired
certain service-providing operations of Ford Motor Company ("Ford") through the
acquisition of Geometric Results Incorporated ("GRI"), a wholly-owned subsidiary
of Ford. The results of operations of APX and GRI have been included in the
results of operations of the Company from January 3, 1997 and September 1, 1997,
respectively.
The acquisitions of APX and GRI have been accounted for using the purchase
method of accounting and, accordingly, the purchase price of each acquisition
has been allocated to the acquired assets and assumed liabilities based upon the
estimated fair values as of the closing of the acquisition. These allocations
resulted in an increase in certain accrued liabilities, principally severance
and facility costs. These allocations also resulted in goodwill of approximately
$32.7 million.
The acquisition of TSG (the "Predecessor" for accounting purposes) has been
accounted for, using the purchase method of accounting, at carryover basis as no
change in control resulted from the acquisition. The amount paid in excess of
book value for TSG of approximately $26.1 million has been recorded as a
reduction of additional paid-in capital. In accordance with SFAS 109 "Accounting
for Income Taxes," the Company established deferred taxes related to the TSG
Acquisition by recording an increase in additional paid-in capital in the amount
of $10.4 million.
As a result of the acquisitions and new basis of accounting, the Company's
financial statements for the periods subsequent to the acquisitions are not
comparable to the Predecessor's financial statements for the periods prior to
the acquisitions.
The Company is principally engaged in the business of providing technical
support services, primarily to automobile manufacturers and suppliers in the
United States and Europe.
Until it was sold, TSG paid MascoTech a management fee for various
corporate support staff and administrative services. Such fees approximated one
percent of domestic net sales and amounted to approximately $1.4 million in 1995
and $1.5 million in 1996. Certain of TSG's employee benefit plans and insurance
coverages were administered by MascoTech. These costs as well as other costs
incurred on TSG's behalf were charged directly to TSG. TSG was also charged
interest expense at various rates for TSG's European operations on the average
amounts due MascoTech. This charge aggregated $1.2 million and $1.1 million in
1995 and 1996, respectively. The related advances are included in MascoTech's
net investment and advances in the related accompanying balance sheet.
F-6
<PAGE> 105
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
a. Principles of Consolidation/Combination: The accompanying financial
statements include the accounts of MSXI and TSG, as appropriate. Significant
intercompany transactions have been eliminated. Beginning in 1997, the Company
adopted a fiscal year which ends on the last Sunday in December.
b. Cash and Cash Equivalents: All highly liquid investments with an
original maturity of three months or less are considered to be cash equivalents.
c. Receivables: Receivables are presented net of aggregate allowances for
doubtful accounts of $.3 million at December 31, 1995 and 1996 and $1.2 million
at December 28, 1997.
d. Inventory: Inventory is comprised of raw materials, parts and supplies
which are stated at the lower of cost or net realizable value, with cost
determined using the first-in, first-out method.
e. Property and Equipment: Property and equipment, including significant
betterments to existing facilities, are recorded at cost. Upon retirement or
disposal of properties and equipment, the cost and accumulated depreciation are
removed from the accounts, and any gain or loss is included in income.
Maintenance and repair costs are charged to expense as incurred.
f. Goodwill: The excess of the purchase price over the estimated fair
values of acquired assets and assumed liabilities is being amortized using the
straight-line method over the period estimated to be benefited ranging from 20
to 30 years.
At each balance sheet date, management assesses whether there has been a
permanent impairment of goodwill by comparing anticipated undiscounted future
cash flows from operating activities with the carrying amount of the excess of
cost over net assets of acquired companies. The factors considered by management
in performing this assessment include current operating results, business
prospects, market trends, competitive activities and other economic factors.
Based on this assessment, there was no permanent impairment related to goodwill
at December 28, 1997.
g. Fair Value of Financial Instruments: The carrying value of financial
instruments reported in each balance sheet approximates fair value. The carrying
value of bank debt approximates fair value as the variable rates inherent in the
related financial instrument reflects changes in the overall market interest
rates.
h. Foreign Currency Translation: Net assets of operations outside of the
United States are translated into U.S. dollars using current exchange rates with
the effects of translation adjustments included as a separate component in
Shareholders' equity (deficit). Revenues and expenses are translated at the
average rates of exchange during the period.
i. Revenue Recognition: Revenues from fixed price contracts are recognized
using the percentage of completion method, measured by comparing the percentage
of labor costs incurred to date to estimated total labor costs for each
contract. Time and material contracts are valued at selling price based on
contractual billing rates.
Contract costs include all direct material and labor costs and indirect
costs such as indirect labor, supplies, tools and repairs. Provisions for
estimated losses on uncompleted contracts are made in the period in which such
losses are determined. Changes in fixed price contracts may result in revisions
to estimates of costs and revenue and are recognized in the period in which the
revisions are determined.
F-7
<PAGE> 106
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
j. Depreciation: Depreciation is computed using the straight-line method
over the estimated useful lives of assets as follows:
<TABLE>
<CAPTION>
USEFUL LIVES
IN YEARS
------------
<S> <C>
Buildings and leasehold improvements........................ 10-40
Machinery and equipment..................................... 3- 5
Computer, peripherals and software.......................... 3- 5
Automobiles and trucks...................................... 3- 5
</TABLE>
k. Income Taxes: Deferred income taxes are recorded to reflect the tax
liability/benefit on future years of differences between the tax basis and
financial reporting amounts of assets and liabilities at each fiscal year end.
As of December 31, 1996, the domestic operations of TSG were included in
the consolidated federal income tax return of MascoTech. Accordingly,
substantially all U.S. income tax-related assets and liabilities of TSG related
to TSG's operations were due from or to MascoTech.
For the years ended December 31, 1995 and 1996, income tax expense and
credits were computed on a separate return basis.
l. Reclassification: Certain prior year amounts have been reclassified to
conform with current year presentation.
m. Interim Financial Information: The financial information as of and for
the periods ended March 29, 1998 and March 30, 1997, included herein is
unaudited. In the opinion of management, the March 29, 1998 and March 30, 1997
financial information includes all adjustments which, except for adjustments
related to the acquisitions described elsewhere herein, consists only of normal
recurring accruals necessary for a fair presentation of such financial
information. The operations for the fiscal quarter ended March 29, 1998 are not
necessarily indicative of the results of operations for the entire year.
n. Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements. Such estimates and assumptions also affect the
reported amounts of revenue and expenses during the reporting periods. Actual
results may differ from such estimates and assumptions.
o. Recently Issued Financial Accounting Standards: In June 1997, the FASB
issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information." The Company will adopt the provisions of this statement as
required, for the fiscal year ended December 27, 1998. The Company believes the
adoption of this statement will have no material impact on the Company's
financial statements.
3. ACQUISITIONS OF BUSINESSES:
On January 3, 1997, the Company acquired selected assets and operations of
the former engineering and technical business services units of MASG and
MascoTech, as well as the net assets of APX, a design and
F-8
<PAGE> 107
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
engineering services provider which had been acquired by MASG effective November
6, 1996 ("the TSG Acquisition").
The purchase price of the TSG Acquisition was $145.6 million which was
financed through $3.8 million of common equity, $36.0 million of redeemable
preferred stock, a $20.0 million bridge loan provided by CVC, a $20.0 million
bridge loan provided by MascoTech, the issuance of a $30.0 million Senior
Subordinated Note to MascoTech and $35.8 million of borrowings under the Old
Credit Facility. The excess of purchase price over acquired net assets resulted
in a $26.1 million decrease in Shareholders' equity (deficit), as discussed in
Note 1, and goodwill of $24.6 million relating to the acquisition of APX.
Effective August 31, 1997, the Company acquired certain service-providing
operations of Ford through the acquisition of GRI, a wholly-owned subsidiary of
Ford. As part of Ford, GRI acted as administrator of Ford's temporary staffing
services using a predecessor to the Master Vendor Program and also provided
process management, purchasing and printing services to Ford. The purchase price
of $60.0 million was financed with borrowings under the Old Credit Facility,
offset in part by substantial cash balances acquired. The excess of purchase
price over the acquired net assets of GRI resulted in an increase in Goodwill of
approximately $8.1 million.
The aforementioned transactions are summarized as follows:
<TABLE>
<CAPTION>
TSG APX GRI TOTAL
--- --- --- -----
<S> <C> <C> <C> <C>
Current assets..................................... $ 63,977 $ 28,923 $116,066 $ 208,966
Excess of purchase price over acquired net
assets........................................... 26,050 24,594 8,142 58,786
Other non-current assets........................... 23,984 4,715 11,653 40,352
Liabilities........................................ (11,523) (15,104) (75,861) (102,488)
-------- -------- -------- ---------
Purchase price..................................... $102,488 $ 43,128 $ 60,000 $ 205,616
======== ======== ======== =========
</TABLE>
The final determination of the purchase prices for the APX and GRI
acquisitions will be completed when certain contractual matters are concluded.
The preliminary allocation of purchase price for the GRI acquisition will be
completed during 1998. Any adjustments to purchase prices will change recorded
goodwill and will be amortized to expense over the remaining goodwill period.
Management believes the resolution of these matters will not have a material
effect on the results of operations, financial position or cash flows of the
Company.
The following unaudited pro forma consolidated results of operations for
the year ended December 31, 1996 and for the fiscal year ended December 28, 1997
are presented as if the TSG and GRI acquisitions had been made at the beginning
of each period presented. The unaudited pro forma information does not reflect
the effects of the debt issue and refinancing which took place January 22, 1998,
as described in Note 17. The unaudited pro forma information is not necessarily
indicative of either the results of operations that would have occurred had the
acquisitions been made during the periods presented or the future results of the
combined operations.
<TABLE>
<CAPTION>
YEAR ENDED FISCAL YEAR ENDED
DECEMBER 31, DECEMBER 28,
1996 1997
------------ -----------------
<S> <C> <C>
Net sales................................................... $1,044,379 $985,096
Income before income taxes.................................. 3,956 2,908
Net income.................................................. 2,180 307
</TABLE>
F-9
<PAGE> 108
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
4. ACCOUNTS RECEIVABLE, NET:
Receivables arise from services provided pursuant to contracts or
agreements with customers for such services. The primary users of MSXI's and
TSG's services are manufacturers in the automotive industry. Billed sales to one
customer were $57.5 million and $318.2 million in 1996 and 1997, respectively,
and $164.5 million for the fiscal quarter ended March 29, 1998; billed sales to
a second customer were $49.0 million and $74.8 million in 1996 and 1997,
respectively, and $22.7 million for the fiscal quarter ended March 29, 1998; and
billed sales to a third customer were $44.9 million and $67.4 million in 1996
and 1997, respectively, and $18.1 million for the fiscal quarter ended March 29,
1998. At December 31, 1996, at December 28, 1997, and at March 29, 1998 the
foregoing three customers accounted for approximately 64 percent, 69 percent and
66 percent, respectively, of the accounts receivable balance.
Accounts receivable include both billed and unbilled receivables. Unbilled
receivables amounted to $26.7 million and $61.8 million at December 31, 1996 and
at December 28, 1997, and $48.7 million at March 29, 1998, respectively. All
such billings are expected to be collected within the ensuing year.
5. PROPERTY AND EQUIPMENT, NET:
<TABLE>
<CAPTION>
AT DECEMBER 31, AT DECEMBER 28,
1996 1997
--------------- ---------------
<S> <C> <C>
Cost:
Land and improvements..................................... $ -- $ 163
Buildings and leasehold improvements...................... 4,940 11,930
Machinery and equipment................................... 33,510 52,140
Computer, peripherals and software........................ 8,660 27,188
Automobiles and trucks.................................... 1,040 1,609
-------- --------
48,150 93,030
Less accumulated depreciation............................. (30,010) (58,693)
-------- --------
$ 18,140 $ 34,337
======== ========
</TABLE>
Depreciation expense totaled $4.5 million, $5.0 million and $9.0 million in
1995, 1996 and 1997, respectively.
6. ACCRUED LIABILITIES:
<TABLE>
<CAPTION>
AT DECEMBER 31, AT DECEMBER 28,
1996 1997
--------------- ---------------
<S> <C> <C>
Income and other taxes...................................... $4,100 $ 911
Insurance................................................... 2,110 1,110
Restructuring costs......................................... -- 6,097
Deferred income............................................. -- 4,078
Interest.................................................... -- 4,979
Other....................................................... 1,880 3,732
------ -------
$8,090 $20,907
====== =======
</TABLE>
F-10
<PAGE> 109
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
7. RESTRUCTURING ACTIONS:
During fiscal year 1997, restructuring costs aggregated $6.7 million. These
costs are comprised of $2.7 million of severance pay for certain employees of an
acquired business, facility closure costs of $2.0 million which are primarily
remaining operating lease obligations of acquired facilities closed subsequent
to the acquisition, and $2.0 million of remaining lease obligations and other
costs related to the closure of MSXI facilities. Restructuring costs accounted
for in the purchase of the related businesses and costs charged to operations
were $4.7 million and $2.0 million, respectively. Restructuring charges were
accounted for in accordance with approved management plans and are expected to
be completed in 1998. Remaining accrued restructuring costs totaled $6.1 million
as of December 28, 1997 and $5.4 million as of March 29, 1998, of which
approximately $4.2 million is expected to be paid during the remainder of 1998.
8. DEBT:
MSX International
At December 28, 1997 MSXI had a $20.0 million bridge loan provided by CVC,
a $20.0 million bridge loan provided by MascoTech and a $30.0 million Senior
Subordinated Note issued to MascoTech outstanding. In addition, at December 28,
1997, the Company had available under a short-term credit agreement with NBD
Bank ("NBD Credit Facility") up to $115.0 million of credit, under which $75.4
million was outstanding, a variable amount credit facility available through the
Ford Motor Company Limited, under which $7.5 million was outstanding, and United
Kingdom credit facilities with banks of $3.4 million, under which $0.7 million
was outstanding.
Under a Bridge Credit Agreement, a further $60 million of bridge revolving
loans were available but not drawn as of December 28, 1997. Such loans would
bear interest under the terms, described below, applicable to the bridge loans.
The bridge loans are payable in escalating annual installments and bear
interest at 12%, which will escalate in steps to 13% after December 31, 1997 and
remain as such until maturity at December 31, 2002. At December 28, 1997, bridge
loan principal of $5.0 million is due within one year. The Senior Subordinated
Note is payable in full at December 31, 2006, and bears interest at the rate of
12.5%. Both the bridge loans and the Senior Subordinated Note provide for
semi-annual interest payment.
The short-term credit agreement with NBD provides for borrowings as Prime
Rate loans, Eurodollar Rate loans, Swingline loans and Letters of Credit. This
agreement expires on March 31, 1998. Prime Rate and Swingline loans are payable
on demand. Eurodollar Rate loans are issued in maturities of one to three
months. Borrowings under this agreement bear interest at a variable rate. At
December 28, 1997, the interest rates based on LIBOR on the short-term credit
agreement approximated 7.46% on loans of $40.0 million. Also at December 28,
1997, interest on swingline loans approximated 6.94% on loans of $26.5 million.
Line of Credit borrowings from the Ford Motor Company Limited bear interest at
9.3% and are payable on demand. Borrowings under the United Kingdom credit
facilities bear interest at a rate of 1.25% over the bank's base rate, as
defined or as negotiated, and are payable on demand. Such interest rates ranged
from 8.5% to 9.06% at December 28, 1997.
Debt maturities as of December 28, 1997 were as follows: 1998 - $5.0
million; 1999 - $5.0 million; 2000 - $6.0 million; 2001 - $7.0 million, 2002 -
$8.0 million, and 2003 - $9.0 million.
Interest paid was approximately $7.4 million for the fiscal year ended
December 28, 1997.
F-11
<PAGE> 110
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
On January 22, 1998, the Company issued, in a private placement, $100
million aggregate principal amount of 11 3/8% unsecured Senior Subordinated
Notes maturing January 15, 2008. Interest on the Notes is payable semi-annually
at 11.375% per annum commencing on July 15, 1998. The Notes may be redeemed
subsequent to January 15, 2003 at premiums which begin at 105.6875% and decline
each year to face for redemptions taking place after January 15, 2006. In
addition, at any time prior to January 15, 2001, the Company may redeem up to
35% of the original aggregate principal amount of the Notes with the proceeds of
one or more public equity offerings at a redemption price of 111.375% plus
accrued and unpaid interest, if any. Also, upon the occurrence of a Change of
Control as defined in the indenture (the "Indenture"), the Notes may be redeemed
at the option of the Note holders at a premium of 1%, plus accrued and unpaid
interest, if any. The Notes contain covenants which, among others, limit the
incurrence of additional indebtedness and restrict capital transactions,
distributions and asset dispositions of certain subsidiaries.
Concurrently with the private placement, the Company entered into a new
credit facility with NBD (the "New Credit Facility"), with a borrowing base of
up to $100 million, as defined, to replace the NBD Credit Facility. Interest on
the loans under the New Credit Facility will be payable quarterly or, if
earlier, at the end of each interest period and will accrue at an annual rate
equal to, at the option of the Company, (a) a floating rate, as defined, or (b)
the London Interbank Offered Rate plus an applicable margin, as defined.
Each significant domestic subsidiary of the Company guaranteed all
obligations of the Company under the New Credit Facility. In addition, these
obligations are secured by a pledge of the Stock of such domestic subsidiaries
and a first lien on substantially all assets of such domestic subsidiaries and a
pledge of 65% of the stock of the significant foreign subsidiaries. The
obligations of the Company under the New Credit Facility rank senior to all
other indebtedness of the Company, including the Notes.
The New Credit Facility contains certain reporting covenants and other
customary affirmative covenants and various negative covenants including but not
limited to certain limitations on mergers, sales of assets, acquisitions, liens,
investments, indebtedness, contingent obligations, dividends, subsidiaries
ability to agree to dividend restrictions, affiliate transactions and changes of
business. The New Credit Facility also contains certain covenants with respect
to employee benefit arrangements and environmental matters and certain financial
covenants including but not limited to a ratio of total debt to EBITDA, a fixed
charge coverage ratio and a minimum net worth requirement, each as defined.
The proceeds from the placement and the new credit facility were used to
retire the bridge loans to CVC and MascoTech, the Senior Subordinated Note and
the outstanding amount under the NBD Credit Facility.
Notes payable under the New Credit Facility amounted to $53.8 million at
March 29, 1998 and have been classified as long-term debt as the Company had
both the ability and intent to refinance such amounts under the New Credit
Facility.
On April 14, 1998, the Company amended and restated the New Credit
Facility. See Note 19.
Technical Services Group
TSG had a note payable in the amount of $70 thousand, of which $40 thousand
was classified as a current liability and short-term credit agreements of which
$4.1 million was outstanding at December 31, 1996. The note was payable in
annual installments and bore a variable interest rate. The short-term credit
agreements bore variable interest rates of .75 percent to 2.75 percent over the
bank's base rate, as defined. Such interest rates approximated 7.2 percent at
December 31, 1996. The note and short-term credit agreements matured
F-12
<PAGE> 111
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
as follows: 1997 - $4.2 million; 1998 - $30 thousand. Payment of the note and
short-term credit agreements were guaranteed by MascoTech.
Interest paid was $.3 million and $.5 million in 1995 and 1996,
respectively.
9. LEASE COMMITMENTS:
MSX International
MSXI and its subsidiaries have leases for real estate and equipment
utilized in its business. In most cases, management expects that in the normal
course of business these leases will be renewed or replaced by other leases.
Future minimum rental payments required under leases that have an initial or
remaining non-cancelable lease term in excess of one year are as follows:
<TABLE>
<CAPTION>
OTHER
CAPITAL OPERATING
TOTAL LEASES LEASES
----- ------- ---------
<S> <C> <C> <C>
Fiscal year ended:
1998......................................... $16,653 $182 $16,471
1999......................................... 11,706 69 11,637
2000......................................... 8,857 68 8,789
2001......................................... 6,753 27 6,726
2002......................................... 1,803 -- 1,803
Thereafter................................... 2,455 -- 2,455
------- ---- -------
$48,227 346 $47,881
======= =======
Less amount representing interest.............. 30
----
Present value of minimum payments.............. $316
====
</TABLE>
Rental expense was approximately $17.6 million for the fiscal year ended
December 28, 1997.
Technical Services Group
Rental expense was approximately $8.2 million and $5.4 million in 1995 and
1996, respectively.
10. REDEEMABLE SERIES A PREFERRED STOCK:
In connection with the TSG Acquisition, the Company issued 360,000 shares
of 12% Series A Cumulative Redeemable Preferred Stock ("the Preferred Stock")
with a stated value and redemption value of $100 per share or $36 million.
Dividends on the Preferred Stock are payable in cash at the rate per annum
equal to 12% of the stated value plus an amount equal to any accrued and unpaid
dividends. As of December 28, 1997, the Company has not declared any dividends.
Accordingly, no dividends have been paid or accrued. Dividends accumulated but
not declared aggregate approximately $4.4 million as of December 28, 1997 and
$5.7 million as of March 29, 1998. The Company may not declare or pay any
dividends or other distribution with respect to any common stock or other class
or series of stock ranking junior to the Preferred Stock without first complying
with restrictions specified in the Stockholder's Agreement. The Preferred Stock,
which has no voting rights, is mandatorily redeemable at the earlier of June 30,
2007 or the date on which a sale transaction, as defined,
F-13
<PAGE> 112
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
occurs. The Company may redeem any or all of the Preferred Stock at its election
prior to June 30, 2007. The Company may also elect to acquire shares of the
Preferred Stock from time to time without redeeming or otherwise acquiring all
or any other issued shares of the Preferred Stock pursuant to the terms of the
Stockholder's Agreement. As of December 28, 1997, no Preferred Stock had been
redeemed or acquired by the Company.
11. SHAREHOLDERS' EQUITY (DEFICIT):
<TABLE>
<CAPTION>
SHAREHOLDERS'
EQUITY (DEFICIT)
----------------
<S> <C>
Balance, December 31, 1995.................................. $ 62,760
Net income.................................................. 3,820
MascoTech, Inc. additional net investment and advances...... 4,770
Accumulated other comprehensive income (loss)............... (1,900)
--------
Balance, December 31, 1996.................................. $ 69,450
========
Payment to MascoTech, Inc. for book value of TSG............ (69,450)
Payment to MascoTech, Inc. in excess of book value of TSG... (26,050)
Net loss.................................................... (2,973)
Sale of Common Stock........................................ 1
Additional paid-in capital from sale of Common Stock........ 3,799
Accumulated other comprehensive income (loss)............... (1,141)
--------
Balance, December 28, 1997.................................. $(26,364)
========
Net income.................................................. 378
Accumulated other comprehensive income (loss)............... (776)
--------
Balance, March 29, 1998..................................... $(26,762)
========
</TABLE>
MSX International
The common stock at par value resulted from the initial capitalization of
the Company by MascoTech, CVC and certain members of management. The additional
paid-in capital amount of $(22.3) million represents amounts received from the
issuance of common stock in excess of par value of $3.8 million, reduced by
amounts paid to MascoTech for the acquisition of TSG in excess of book value as
of December 31, 1996 of $(26.1) million. As the acquisition of TSG did not
involve a change in control, the acquisition was recorded at carryover basis. In
accordance with SFAS 109 "Accounting for Income Taxes", the Company established
deferred taxes related to the TSG Acquisition by recording an increase in
additional paid-in capital in the amount of $10.4 million.
Technical Services Group
Investment and advances reflect the accumulation of transactions between
MascoTech and TSG through December 31, 1996. These transactions included
operating results, management fees, advances and intercompany transactions.
F-14
<PAGE> 113
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
12. EMPLOYEE BENEFIT PLANS:
The Company maintains a qualified cash or deferred compensation plan under
Section 401(k) of the Internal Revenue Code. Participation in this plan is
available to substantially all salaried employees and to certain groups of
hourly employees. Under the plan, employees may elect to defer up to 20 percent
of their annual wages, subject to the limitations of the Internal Revenue Code.
Third party administrative costs paid by the plan approximated $21,033 for 1997.
Contributions to union-sponsored, multi-employer pension plans were
approximately $0.6 million and $0.5 million in 1995 and 1996, respectively, $0.7
million for the fiscal year ended December 28, 1997 and $0.2 million for the
fiscal quarter ended March 29, 1998. These plans are not administered by the
Company and contributions are determined in accordance with provisions of
negotiated labor contracts. MSXI has no present intention of withdrawing from
any of these plans, nor has MSXI been informed that there is any intention to
terminate such plans.
MSXI has an unfunded deferred compensation plan for certain salaried
employees. Individual participants make pre-tax contributions to the plan and
MSXI matches up to 5 percent of the individual's annual salary. MSXI
contributions vest over a period of time. Individuals may elect to receive
lump-sum or defined payments of vested balances upon retirement or termination.
The deferred compensation plan liability at December 31, 1996 and December 28,
1997 was $3.7 million and $3.2 million, respectively. This is an unfunded and
unsecured obligation of MSXI. However, MSXI has, through deposits to a grantor
trust, restricted certain corporate assets having a fair value at December 31,
1996 and December 28, 1997 of $2.0 million and $1.6 million, respectively, that
are intended to be used to settle a portion of the obligation.
With the APX Acquisition, the Company acquired certain obligations with
respect to a frozen defined benefit pension plan. The plan was frozen in 1988
and covers certain union and non-union employees who were employed by
Autodynamics Corporation of America, Inc., a company acquired previously by one
of the companies that comprised APX. This plan is not administered by the
Company. Contributions are determined in accordance with provisions of the plan.
The Autodynamics plan status as of June 30, 1997, the date of the most
recent actuarial report, was as follows:
<TABLE>
<S> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation................................. $747
====
Accumulated benefit obligation............................ $747
====
Projected benefit obligation.............................. $747
Plan assets at fair value................................. 842
----
Plan assets in excess of projected benefit obligations.... $ 95
====
</TABLE>
TSG had a liability, subsequently assumed by MSXI, related to a terminated
post-retirement life and health benefit plan for certain currently retired
employees. The accumulated post-retirement obligation was approximately $0.6
million and approximately $0.2 million at December 31, 1996 and December 28,
1997, respectively. The net periodic post-retirement benefit cost was
approximately $40 thousand for the year ended December 31, 1996 and the fiscal
year ended December 28, 1997. The discount rates used in determining the
accumulated post-retirement benefit obligation were 7.5 percent and 7.25 percent
in 1996 and 1997, respectively. The assumed health cost trend rate in 1996 was
12 percent, decreasing to an ultimate rate in the
F-15
<PAGE> 114
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
year 2001 of 7 percent. The assumed health cost trend rate in 1997 was 9
percent, decreasing to an ultimate rate in the year 2006 of 5 percent. If the
assumed medical cost trend rates were increased by 1 percent, the accumulated
post-retirement benefit obligation would have increased by $10 thousand and the
aggregate of the service and interest cost components of the net periodic
post-retirement benefit cost would have increased by $2 thousand.
13. OTHER INCOME (EXPENSE), NET:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------
1995 1996
---- ----
<S> <C> <C>
Other, net:
Realized currency exchange gain (loss).................... $ 630 $(110)
Other, net................................................ 440 40
------ -----
$1,070 $ (70)
====== =====
</TABLE>
14. INCOME TAXES:
<TABLE>
<CAPTION>
YEAR ENDED FISCAL YEAR
DECEMBER 31, ENDED
----------------- DECEMBER 28,
1995 1996 1997
---- ---- ------------
<S> <C> <C> <C>
Income (loss) before income taxes:
Domestic.................................................. $ 6,160 $ 1,700 $ 3,236
Foreign................................................... 4,080 4,920 (5,984)
------- ------- -------
$10,240 $ 6,620 $(2,748)
======= ======= =======
Provision for income taxes (credit):
Currently payable:
Federal................................................ $ 1,410 $ 2,810 $ 1,049
Foreign................................................ 2,030 1,950 (640)
Deferred:
Federal................................................ 770 (2,170) 315
Foreign................................................ (390) 210 (499)
------- ------- -------
$ 3,820 $ 2,800 $ 225
======= ======= =======
Deferred tax assets (liabilities):
Amortizable goodwill...................................... $ -- $ -- $ 9,111
Accrued interest expense.................................. -- -- 2,023
Accrued liabilities and deferred compensation............. 2,170 3,480 863
Net operating loss........................................ -- -- 360
German tax benefit........................................ 620 240 332
Property and equipment.................................... (370) (700) 1,937
Contractual advances...................................... -- 1,300 --
Accounts receivable....................................... (670) (800) (984)
Valuation allowance....................................... -- -- (535)
Other, net................................................ (120) 70 641
------- ------- -------
Net deferred tax asset................................. $ 1,630 $ 3,590 $13,748
======= ======= =======
</TABLE>
F-16
<PAGE> 115
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
The following is a reconciliation of the tax at the U.S. federal statutory
rate to the provision for income taxes allocated to income before income taxes:
<TABLE>
<CAPTION>
YEAR ENDED FISCAL YEAR
DECEMBER 31, ENDED
--------------- DECEMBER 28,
1995 1996 1997
---- ---- ------------
35% 35% 35%
--- --- ---
<S> <C> <C> <C>
Tax at U.S. statutory rate.................................. $3,580 $2,320 $(961)
Valuation allowance......................................... -- -- 535
Higher (lower) effective foreign tax rate................... 210 440 351
Other, net.................................................. 30 40 300
------ ------ -----
$3,820 $2,800 $ 225
====== ====== =====
</TABLE>
As of December 31, 1996 and December 28, 1997, a provision had not been
made for U.S. or additional foreign taxes on approximately $8.7 million and $1.4
million, respectively, of undistributed earnings of foreign subsidiaries, as
those earnings were intended to be permanently reinvested. Generally, such
earnings become taxable upon the remittance of dividends and under certain other
circumstances. It was not practicable to estimate the amount of deferred tax
liability on such undistributed earnings. A $0.3 million German tax benefit had
been recorded on approximately $0.9 million of undistributed earnings of a
German subsidiary to its parent, a subsidiary of MSXI, located in the United
Kingdom. The valuation allowance relates to certain foreign deductions for which
recovery of the related deferred tax asset is not likely.
Income taxes paid were approximately $1.8 million, $3.6 million, and $1.6
million in 1995, 1996 and 1997, respectively.
For the fiscal quarters ended March 29, 1998 and March 30, 1997 the
effective income tax rate was 49.5% and (24.1)%, respectively. The change in the
effective income tax rate was due to the results of operations of the acquired
GRI business which were offset in part by losses from other foreign businesses
and a related valuation allowance.
15. GEOGRAPHIC INFORMATION:
The Company operates in one principal industry segment: providing technical
support services to automobile manufacturers and suppliers.
F-17
<PAGE> 116
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
Geographic financial information is as follows:
<TABLE>
<CAPTION>
YEAR ENDED FISCAL YEAR FISCAL QUARTER FISCAL QUARTER
DECEMBER 31, ENDED ENDED ENDED
-------------------- DECEMBER 28, MARCH 30, MARCH 29,
1995 1996 1997 1997 1998
---- ---- ------------ -------------- --------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales to customers:
United States.................... $143,950 $140,770 $463,141 $ 62,382 $217,996
Europe and rest of world......... 72,180 87,490 101,405 20,126 37,090
-------- -------- -------- -------- --------
Total net sales............... $216,130 $228,260 $564,546 $ 82,508 $255,056
======== ======== ======== ======== ========
Income (loss) before income taxes:
United States.................... $ 6,160 $ 1,700 $ 3,236 $ 286 $ (124)
Europe and rest of world......... 4,080 4,920 (5,984) (2,274) 872
-------- -------- -------- -------- --------
Income (loss) before income
taxes....................... $ 10,240 $ 6,620 $ (2,748) $ (1,988) $ 748
======== ======== ======== ======== ========
Identifiable Assets:
United States.................... $ 53,750 $ 53,610 $208,494 $130,682 $202,584
Europe and rest of world......... 33,730 40,540 78,682 42,136 86,798
-------- -------- -------- -------- --------
Total assets.................. $ 87,480 $ 94,150 $287,176 $172,818 $289,382
======== ======== ======== ======== ========
</TABLE>
16. COMMITMENTS AND CONTINGENCIES:
On December 23, 1997, Cambridge Industries, Inc. filed a complaint against
the Company in Michigan State Court. The complaint alleges that the Company, by
retaining approximately $1.1 million of funds paid into a lock-box account
maintained by the Company, has converted such funds. Cambridge Industries is
seeking whatever relief the court deems just, including treble damages. The
Company believes it has meritorious defenses and counterclaims to this action
and intends to defend itself vigorously against all of the allegations contained
in the complaint. The Company does not believe that the ultimate outcome of this
litigation will have a material effect on its consolidated financial condition,
results of operations or cash flows.
17. ADOPTION OF STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 130 "REPORTING
COMPREHENSIVE INCOME":
Effective December 29, 1997, the Company adopted Statement of Financial
Accounting Standards (FASB) No. 130, "Reporting Comprehensive Income." This
statement requires that all items recognized under accounting standards as
components of comprehensive earnings be reported in an annual financial
statement that is displayed with the same prominence as other annual financial
statements. This Statement also requires that an entity classify items of other
comprehensive earnings by their nature in an annual
F-18
<PAGE> 117
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
financial statement. Annual financial statements for prior periods will be
reclassified, as required. The Company's total comprehensive earnings were as
follows:
<TABLE>
<CAPTION>
FISCAL YEAR FISCAL QUARTER
YEAR ENDED ENDED --------------------------
DECEMBER 31, DECEMBER 28, MARCH 30, MARCH 29,
1996 1997 1997 1998
------------ ------------ --------- ---------
(UNAUDITED) (UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net income (loss)............................ $ 3,820 $(2,973) $(1,508) $ 378
Other comprehensive income (loss)............ (1,900) (1,141) (537) (776)
------- ------- ------- -----
Total comprehensive income (loss)....... $ 1,920 $(4,114) $(2,045) $(398)
======= ======= ======= =====
</TABLE>
Other comprehensive income (loss) is comprised of the change in the
cumulative foreign currency translation adjustment.
18. GUARANTOR SUBSIDIARIES
Issuance of Senior Subordinated Notes and New Credit Facility
In connection with the Notes Offering on January 22, 1998, each of the
Company's domestic restricted subsidiaries, as defined in the Indenture ("the
Guarantor Subsidiaries"), irrevocably and unconditionally guaranteed the
Company's performance under the Notes as primary obligors. The following
consolidating and combining financial data provides information regarding the
financial position, results of operations and cash flows of the Guarantor
Subsidiaries (including Predecessor combining financial data) as set forth.
The Guarantor Subsidiaries account for their investments in the
non-guarantor subsidiaries, if any, on the equity method. The principal
elimination entries are to eliminate the investments in subsidiaries and
intercompany balances and transactions.
GRI is a guarantor subsidiary. The financial statements of GRI as of and
for the two years in the period ended December 31, 1995 and 1996 and as of and
for the eight months in the period ended August 31, 1997 are separately included
on a consolidated basis with its subsidiaries.
The financial statements of APX International are presented on a combined
basis, including its non-guarantor subsidiaries, as of and for the year ended
December 30, 1995 because the non-guarantor subsidiaries were immaterial to the
combined financial statements of APX International for that period.
F-19
<PAGE> 118
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
CONSOLIDATING BALANCE SHEET
AS OF MARCH 29, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR MSXI
SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................... $ 276 $14,762 $ -- $ 15,038
Receivables, net............................ 121,354 56,582 -- 177,936
Inventory................................... 1,139 36 -- 1,175
Prepaid expenses and other assets........... 3,317 1,443 -- 4,760
Deferred income taxes....................... 863 1,401 -- 2,264
-------- ------- -------- --------
Total current assets..................... 126,949 74,224 -- 201,173
Property and equipment, net................... 21,922 10,676 -- 32,598
Goodwill, net................................. 31,668 -- -- 31,668
Investment in subsidiaries.................... 21,335 -- (21,335) --
Other assets.................................. 11,009 554 -- 11,563
Deferred income taxes......................... 11,036 1,344 -- 12,380
-------- ------- -------- --------
Total assets............................. $223,919 $86,798 $(21,335) $289,382
======== ======= ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Notes payable and current portion of
long-term debt........................... $ -- $ 7,323 $ -- $ 7,323
Bank overdrafts............................. 23,747 -- -- 23,747
Accounts payable............................ 43,882 13,556 -- 57,438
Accrued liabilities......................... 25,917 6,735 (32) 32,620
Deferred income tax......................... -- 984 -- 984
-------- ------- -------- --------
Total current liabilities................ 93,546 28,598 (32) 122,112
Long-term debt................................ 142,029 11,796 -- 153,825
Intercompany accounts......................... (32,953) 32,953 -- --
Long-term capital lease obligations........... 255 -- -- 255
Long-term deferred compensation liability and
other....................................... 3,952 -- -- 3,952
-------- ------- -------- --------
Total liabilities........................ 206,829 73,347 (32) 280,144
-------- ------- -------- --------
Redeemable Series A Preferred Stock........... 36,000 32 (32) 36,000
Shareholders' equity (deficit)
Common Stock.................................. 1 2,949 (2,949) 1
Additional paid-in capital.................... (16,263) 19,152 (25,140) (22,251)
Accumulated other comprehensive income
(loss)...................................... (53) (4,287) 2,423 (1,917)
Retained earnings (deficit)................... (2,595) (4,395) 4,395 (2,595)
-------- ------- -------- --------
Total shareholders' equity (deficit)..... (18,910) 13,419 (21,271) (26,762)
-------- ------- -------- --------
Total liabilities and shareholders'
equity (deficit)....................... $223,919 $86,798 $(21,335) $289,382
======== ======= ======== ========
</TABLE>
F-20
<PAGE> 119
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 28, 1997
<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR MSXI
SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................... $ 2,449 $ 9,126 $ -- $ 11,575
Receivables, net............................ 130,404 48,534 -- 178,938
Inventory................................... 1,204 35 -- 1,239
Prepaid expenses and other assets........... 2,106 3,532 -- 5,638
Deferred income taxes....................... 863 1,489 -- 2,352
-------- ------- -------- --------
Total current assets..................... 137,026 62,716 -- 199,742
-------- ------- -------- --------
Property and equipment, net................... 23,208 11,129 -- 34,337
Goodwill, net................................. 31,934 -- -- 31,934
Investment in subsidiaries.................... 20,583 -- (20,583) --
Other assets.................................. 8,294 489 -- 8,783
Deferred income taxes......................... 11,036 1,344 -- 12,380
-------- ------- -------- --------
Total assets............................. $232,081 $75,678 $(20,583) $287,176
======== ======= ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Notes payable and current portion of
long-term debt........................... $ 71,280 $16,650 $ -- $ 87,930
Bank overdrafts............................. 21,908 -- -- 21,908
Accounts payable............................ 51,818 6,640 -- 58,458
Accrued liabilities......................... 31,752 6,171 (32) 37,891
Deferred income tax......................... -- 984 -- 984
-------- ------- -------- --------
Total current liabilities................ 176,758 30,445 (32) 207,171
Long-term debt................................ 65,000 -- -- 65,000
Intercompany accounts......................... (31,389) 31,389 -- --
Long-term capital lease obligations........... 316 -- -- 316
Long-term deferred compensation liability and
other....................................... 4,654 399 -- 5,053
-------- ------- -------- --------
Total liabilities........................ 215,339 62,233 (32) 277,540
-------- ------- -------- --------
Redeemable Series A Preferred Stock........... 36,000 32 (32) 36,000
Shareholders' equity (deficit)
Common Stock.................................. 1 2,702 (2,702) 1
Additional paid-in capital.................... (16,263) 19,154 (25,142) (22,251)
Accumulated other comprehensive income
(loss)...................................... (23) (3,598) 2,480 (1,141)
Retained earnings (deficit)................... (2,973) (4,845) 4,845 (2,973)
-------- ------- -------- --------
Total shareholders' equity (deficit)..... (19,258) 13,413 (20,519) (26,364)
-------- ------- -------- --------
Total liabilities and shareholders'
deficit................................ $232,081 $75,678 $(20,583) $287,176
======== ======= ======== ========
</TABLE>
F-21
<PAGE> 120
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
COMBINING BALANCE SHEET
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR TSG
SUBSIDIARIES SUBSIDIARIES COMBINED
------------ ------------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................ $ 340 $ 6,730 $ 7,070
Receivables, net......................................... 34,274 24,586 58,860
Inventory................................................ 894 36 930
Prepaid expenses and other assets........................ 2,241 1,359 3,600
------- ------- -------
Total current assets.................................. 37,749 32,711 70,460
Property and equipment, net................................ 11,371 6,769 18,140
Other assets............................................... 4,490 1,060 5,550
------- ------- -------
Total assets.......................................... $53,610 $40,540 $94,150
======= ======= =======
LIABILITIES AND MASCOTECH, INC. NET INVESTMENT AND ADVANCES
Current liabilities:
Notes payable and current portion of long-term debt...... $ -- $ 4,170 $ 4,170
Accounts payable......................................... 2,711 2,839 5,550
Accrued liabilities...................................... 6,849 3,881 10,730
------- ------- -------
Total current liabilities............................. 9,560 10,890 20,450
Long-term debt............................................. -- 30 30
Long-term deferred compensation liability and other........ 4,220 -- 4,220
------- ------- -------
Total liabilities..................................... 13,780 10,920 24,700
------- ------- -------
Shareholders' equity (deficit):
Accumulated other comprehensive income (loss).............. -- (2,790) (2,790)
MascoTech, Inc. net investment and advances................ 39,830 32,410 72,240
------- ------- -------
Total shareholders' equity (deficit): ................ 39,830 29,620 69,450
------- ------- -------
Total liabilities and MascoTech, Inc. net investment
and advances........................................ $53,610 $40,540 $94,150
======= ======= =======
</TABLE>
F-22
<PAGE> 121
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE FISCAL QUARTERS ENDED MARCH 29, 1998 AND MARCH 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR MSXI
SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
1997
Net sales................................... $ 62,382 $ 20,126 $ -- $ 82,508
Cost of sales............................... (54,889) (19,367) -- (74,256)
--------- -------- ------ ---------
Gross profit........................... 7,493 759 -- 8,252
Selling, general and administrative
expenses.................................. (4,628) (2,330) -- (6,958)
Michigan Single Business Tax................ (700) -- -- (700)
--------- -------- ------ ---------
Operating income (loss)................ 2,165 (1,571) -- 594
Other expense, net.......................... (1,879) (703) -- (2,582)
Equity in subsidiary earnings (loss)........ (1,674) -- 1,674 --
--------- -------- ------ ---------
Income (loss) before income taxes...... (1,388) (2,274) 1,674 (1,988)
Income tax provision (benefit).............. 120 (600) -- (480)
--------- -------- ------ ---------
Net income (loss)...................... $ (1,508) $ (1,674) $1,674 $ (1,508)
========= ======== ====== =========
1998
Net sales................................... $ 217,966 $ 37,090 $ -- $ 255,056
Cost of sales............................... (205,300) (31,419) -- (236,719)
--------- -------- ------ ---------
Gross profit........................... 12,666 5,671 -- 18,337
Selling, general and administrative
expenses.................................. (8,638) (3,866) -- (12,504)
Michigan Single Business Tax................ (772) -- -- (772)
--------- -------- ------ ---------
Operating income....................... 3,256 1,805 -- 5,061
--------- -------- ------ ---------
Other expense, net.......................... (3,380) (933) -- (4,313)
Equity in subsidiary earnings............... 450 -- (450) --
--------- -------- ------ ---------
Income before income taxes............. 326 872 (450) 748
Income tax provision (benefit).............. (52) 422 -- 370
--------- -------- ------ ---------
Net income............................. $ 378 $ 450 $ (450) $ 378
========= ======== ====== =========
</TABLE>
F-23
<PAGE> 122
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
COMBINING STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996 AND
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED DECEMBER 28, 1997
<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR COMBINED
SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
1995
Net sales................................... $ 143,950 $ 72,180 $ -- $ 216,130
Cost of sales............................... (118,901) (59,859) -- (178,760)
--------- -------- ------ ---------
Gross profit........................... 25,049 12,321 -- 37,370
Selling, general and administrative
expenses.................................. (17,218) (8,012) -- (25,230)
Michigan Single Business Tax................ (1,500) -- -- (1,500)
--------- -------- ------ ---------
Operating income....................... 6,331 4,309 -- 10,640
Other expense, net.......................... (171) (229) -- (400)
--------- -------- ------ ---------
Income before income taxes............. 6,160 4,080 -- 10,240
Income tax provision........................ 2,180 1,640 -- 3,820
--------- -------- ------ ---------
Net income............................. $ 3,980 $ 2,440 $ -- $ 6,420
========= ======== ====== =========
1996
Net sales................................... $ 140,770 $ 87,490 $ -- $ 228,260
Cost of sales............................... (120,614) (71,896) -- (192,510)
--------- -------- ------ ---------
Gross profit........................... 20,156 15,594 -- 35,750
Selling, general and administrative
expenses.................................. (16,775) (9,465) -- (26,240)
Michigan Single Business Tax................ (1,510) -- -- (1,510)
--------- -------- ------ ---------
Operating income....................... 1,871 6,129 -- 8,000
Other expense, net.......................... (171) (1,209) -- (1,380)
--------- -------- ------ ---------
Income before income taxes............. 1,700 4,920 -- 6,620
Income tax provision........................ 640 2,160 -- 2,800
--------- -------- ------ ---------
Net income............................. $ 1,060 $ 2,760 $ -- $ 3,820
========= ======== ====== =========
FISCAL YEAR ENDED DECEMBER 28, 1997
Net sales................................... $ 463,141 $101,405 $ -- $ 564,546
Cost of sales............................... (420,999) (93,020) -- (514,019)
--------- -------- ------ ---------
Gross profit........................... 42,142 8,385 -- 50,527
Selling, general and administrative
expenses.................................. (24,572) (11,435) -- (36,007)
Michigan Single Business Tax................ (2,868) -- -- (2,868)
Restructuring costs......................... (2,000) -- -- (2,000)
--------- -------- ------ ---------
Operating income (loss)................ 12,702 (3,050) -- 9,652
Other expense, net.......................... (9,466) (2,934) -- (12,400)
Equity in subsidiary earnings (loss)........ (4,845) -- 4,845 --
--------- -------- ------ ---------
Loss before income taxes............... (1,609) (5,984) 4,845 (2,748)
Income tax provision (benefit).............. 1,364 (1,139) -- 225
--------- -------- ------ ---------
Net loss............................... $ (2,973) $ (4,845) $4,845 $ (2,973)
========= ======== ====== =========
</TABLE>
F-24
<PAGE> 123
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL QUARTER ENDED MARCH 29, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR MSXI
SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Cash from (used for):
Operating activities:
Net income (loss)............................. $ (72) $ 450 $ -- $ 378
Equity in earnings of subsidiaries............ 450 -- (450) --
Adjustments to reconcile net income (loss) to
net cash from (used for) operating
activities:
Depreciation............................... 2,158 1,329 -- 3,487
Amortization............................... 352 -- -- 352
(Increase) decrease in receivables......... 9,051 (8,049) -- 1,002
(Increase) decrease in inventory........... 64 -- -- 64
(Increase) decrease in prepaid expenses and
other assets............................. (1,210) 2,176 -- 966
Increase (decrease) in current
liabilities.............................. (13,772) 7,480 -- (6,292)
Other, net................................. 199 (315) (49) (165)
-------- ------- ----- --------
Net cash from (used for) operating
activities................................. (2,780) 3,071 (499) (208)
-------- ------- ----- --------
Investing activities:
Capital expenditures.......................... (895) (868) -- (1,763)
Acquisition of business, net.................. -- -- -- --
Investment in foreign subsidiaries............ -- -- -- --
Other, net.................................... -- -- -- --
-------- ------- ----- --------
Net cash used for investing activities........ (895) (868) -- (1,763)
-------- ------- ----- --------
Financing activities:
Intercompany.................................. (1,564) 1,564 -- --
Investment in subsidiaries.................... (210) 101 109 --
Equity in subsidiaries........................ (450) -- 450 --
Proceeds from long-term debt issues........... 96,778 -- -- 96,778
Payment of long-term debt..................... (70,000) -- -- (70,000)
Change in bank borrowings..................... (24,552) 2,469 -- (22,083)
Increase (decrease) in cash overdraft......... 1,839 -- -- 1,839
Sale of redeemable preferred stock............ -- -- -- --
Sale of common stock.......................... -- -- -- --
Other, net.................................... (321) (3) -- (324)
-------- ------- ----- --------
Net cash from financing activities............ 1,520 4,131 559 6,210
-------- ------- ----- --------
Effect of foreign exchange rate changes on
cash.......................................... (18) (698) (60) (776)
-------- ------- ----- --------
Cash:
Increase for the period....................... (2,173) 5,636 -- 3,463
Balance, beginning of period.................. 2,449 9,126 -- 11,575
-------- ------- ----- --------
Balance, end of period........................ $ 276 $14,762 $ -- $ 15,038
======== ======= ===== ========
</TABLE>
F-25
<PAGE> 124
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL QUARTER ENDED MARCH 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR MSXI
SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Cash from (used for):
Operating activities:
Net income (loss).......................... $ 166 $ (1,674) $ -- $ (1,508)
Equity in earnings of subsidiaries......... (1,674) -- 1,674 --
Adjustments to reconcile net income (loss)
to net cash from (used for) operating
activities:
Depreciation............................ 732 641 -- 1,373
Amortization............................ 343 -- -- 343
(Increase) decrease in receivables...... (13,193) (3,072) -- (16,265)
(Increase) decrease in inventory........ 742 36 -- 778
(Increase) decrease in prepaid expenses
and other assets...................... 636 586 -- 1,222
Increase (decrease) in current
liabilities........................... (3,805) 330 (33) (3,508)
Other, net.............................. 6,965 (759) (92) 6,114
--------- -------- ------- ---------
Net cash from (used for) operating
activities.............................. (9,088) (3,912) 1,549 (11,451)
--------- -------- ------- ---------
Investing activities:
Capital expenditures....................... (2,443) (203) -- (2,646)
Acquisition of business, net............... (106,691) (19,666) (6,004) (132,361)
Investment in foreign subsidiaries......... (13,043) -- 13,043 --
Other, net................................. (317) -- -- (317)
--------- -------- ------- ---------
Net cash used for investing
activities............................ (122,494) (19,869) 7,039 (135,324)
--------- -------- ------- ---------
Financing activities:
Intercompany............................... (21,251) 21,251 -- --
Investment in subsidiaries................. -- 7,005 (7,005) --
Equity in subsidiaries..................... 1,674 -- (1,674) --
Proceeds from long-term debt issues........ 70,000 -- -- 70,000
Change in bank borrowings.................. 45,895 (281) -- 45,614
Increase (Decrease) in cash overdraft...... (4,024) -- -- (4,024)
Sale of redeemable preferred stock......... 36,000 -- -- 36,000
Sale of common stock....................... 3,760 -- -- 3,760
Other, net................................. (94) (348) 91 (351)
--------- -------- ------- ---------
Net cash from financing activities...... 131,960 27,627 (8,588) 150,999
--------- -------- ------- ---------
Effect of foreign exchange rate changes on
cash....................................... -- (537) -- (537)
--------- -------- ------- ---------
Cash:
Increase for the period.................... 378 3,309 -- 3,687
Balance, beginning of period............... -- -- -- --
--------- -------- ------- ---------
Balance, end of period..................... $ 378 $ 3,309 $ -- $ 3,687
========= ======== ======= =========
</TABLE>
F-26
<PAGE> 125
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED DECEMBER 28, 1997
<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR MSXI
SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Cash from (used for):
Operating activities:
Net income (loss).......................... $ 1,872 $ (4,845) $ -- $ (2,973)
Equity in earnings of subsidiaries......... (4,845) 4,845 --
Adjustments to reconcile net income (loss)
to net cash from (used for) operating
activities:
Depreciation............................ 5,523 3,444 -- 8,967
Amortization............................ 892 -- 892
(Increase) decrease in receivables...... (28,394) (7,949) -- (36,343)
(Increase) decrease in inventory........ (310) 1 -- (309)
(Increase) decrease in prepaid expenses
and other assets...................... (828) (685) -- (1,513)
Increase (decrease) in current
liabilities........................... 32,558 (2,071) -- 30,487
Other, net.............................. 2,861 (285) -- 2,576
--------- -------- -------- ---------
Net cash from (used for) operating
activities.............................. 9,329 (12,390) 4,845 1,784
--------- -------- -------- ---------
Investing activities:
Capital expenditures....................... (7,433) (4,085) -- (11,518)
Acquisition of business, net............... (122,806) (30,327) (6,004) (159,137)
Investment in foreign subsidiaries......... (24,378) -- 24,378 --
Other, net................................. (8) 3 -- (5)
--------- -------- -------- ---------
Net cash used for investing activities..... (154,625) (34,409) 18,374 (170,660)
--------- -------- -------- ---------
Financing activities:
Intercompany............................... (30,610) 30,610 -- --
Investment in subsidiaries................. 8 19,385 (19,393) --
Equity in subsidiaries..................... 3,794 -- (3,794) --
Proceeds from long-term debt issues........ 70,000 -- -- 70,000
Payment of long-term debt.................. -- -- -- --
Change in bank borrowings.................. 66,275 7,124 -- 73,399
Decrease in cash overdraft................. (669) -- -- (669)
Sale of Redeemable Preferred Stock......... 36,000 -- -- 36,000
Sale of Common Stock....................... 3,800 -- -- 3,800
Other, net................................. (830) (76) (32) (938)
--------- -------- -------- ---------
Net cash from financing activities......... 147,768 57,043 (23,219) 181,592
--------- -------- -------- ---------
Effect of foreign exchange rate on cash...... (23) (1,118) -- (1,141)
--------- -------- -------- ---------
Cash:
Increase during the period................. 2,449 9,126 -- 11,575
Balance, beginning of period............... -- -- -- --
--------- -------- -------- ---------
Balance, end of period..................... $ 2,449 $ 9,126 $ -- $ 11,575
========= ======== ======== =========
</TABLE>
F-27
<PAGE> 126
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
COMBINING STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR TSG
SUBSIDIARIES SUBSIDIARIES COMBINED
------------ ------------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Cash from (used for):
Operating activities:
Net income............................................... $ 1,060 $ 2,760 $ 3,820
Adjustments to reconcile net income to net cash from
(used for) operating activities:
Depreciation and amortization......................... 2,373 2,597 4,970
Decrease in receivables, net.......................... 412 968 1,380
(Increase) decrease in inventory...................... 533 (3) 530
(Increase) decrease in prepaid expenses and other
assets.............................................. 630 (420) 210
Increase (decrease) in current liabilities............ 2,800 (2,790) 10
Other, net............................................ (1,537) (1,593) (3,130)
------- ------- -------
Net cash from (used for) operating activities............ 6,271 1,519 7,790
------- ------- -------
Investing activities:
Capital expenditures, net................................ (2,178) (2,592) (4,770)
------- ------- -------
Net cash used for investing activities................... (2,178) (2,592) (4,770)
Financing activities:
Increase in debt......................................... -- 650 650
Increase (decrease) in MascoTech net investment and
advances.............................................. (3,237) 7,347 4,110
Other, net............................................... (670) 60 (610)
------- ------- -------
Net cash from (used for) financing activities............ (3,907) 8,057 4,150
------- ------- -------
Effect of foreign exchange rate changes on cash............ -0- (1,900) (1,900)
------- ------- -------
Cash:
Increase for the year.................................... 186 5,084 5,270
At January 1............................................. 154 1,646 1,800
------- ------- -------
At December 31........................................... $ 340 $ 6,730 $ 7,070
======= ======= =======
</TABLE>
F-28
<PAGE> 127
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
COMBINING STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR TSG
SUBSIDIARIES SUBSIDIARIES COMBINED
------------ ------------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Cash from (used for):
Operating activities:
Net income.............................................. $ 3,980 $ 2,440 $ 6,420
Adjustments to reconcile net income to net cash from
(used for) operating activities:
Depreciation and amortization........................ 2,202 2,338 4,540
Decrease in receivables, net......................... (674) (11,976) (12,650)
(Increase) decrease in inventory..................... (1,008) 848 (160)
(Increase) decrease in prepaid expenses and other
assets............................................. (406) (534) (940)
Increase (decrease) in current liabilities........... (4,338) 5,268 930
Other, net........................................... 1,579 (799) 780
------- -------- --------
Net cash from (used for) operating activities........... 1,335 (2,415) (1,080)
------- -------- --------
Investing activities:
Capital expenditures.................................... (4,075) (4,325) (8,400)
Other, net.............................................. -- 110 110
------- -------- --------
Net cash used for investing activities.................. (4,075) (4,215) (8,290)
------- -------- --------
Financing activities:
Increase in debt........................................ -- 260 260
Payment of debt......................................... -- (80) (80)
MascoTech net investment and advances................... 3,002 8,688 11,690
Other, net.............................................. (680) -- (680)
------- -------- --------
Net cash from financing activities...................... 2,322 8,868 11,190
------- -------- --------
Effect of foreign exchange rate changes on cash........... -0- (1,560) (1,560)
------- -------- --------
Cash:
Increase (decrease) for the year........................ (418) 678 260
At January 1............................................ 572 968 1,540
------- -------- --------
At December 31.......................................... $ 154 $ 1,646 $ 1,800
======= ======== ========
</TABLE>
F-29
<PAGE> 128
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
GEOMETRIC RESULTS INCORPORATED -- SERVICES
(A FORMER BUSINESS UNIT OF GEOMETRIC RESULTS INCORPORATED AND SUBSIDIARIES)
CONSOLIDATED CARVE-OUT BALANCE SHEETS
AS OF DECEMBER 31, 1995 AND 1996 AND AUGUST 31, 1997
<TABLE>
<CAPTION>
AS OF AS OF AS OF
DECEMBER 31, DECEMBER 31, AUGUST 31,
1995 1996 1997
------------ ------------ ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash investments............................... $ 4,416 $ 3,268 $ 6,334
Cash equivalent -- investment with Ford................. 12,080 14,012 50,044
Receivables............................................. 80,308 95,972 56,109
Prepaid expenses and other assets....................... 2,552 3,286 4,691
-------- -------- --------
Total current assets................................. 99,356 116,538 117,178
Property and equipment, net............................... 13,206 10,972 11,051
Deposits and other assets................................. 56 20 18
-------- -------- --------
Total assets......................................... $112,618 $127,530 $128,247
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft.......................................... $ 9,075 $ 18,348 $ 22,569
Accounts payable........................................ 54,652 46,081 35,331
Accrued payroll and benefits............................ 5,834 7,996 6,033
Accrued expenses........................................ 4,084 6,135 8,080
Line of credit from Ford................................ 5,948 2,717 4,852
-------- -------- --------
Total current liabilities............................ 79,593 81,277 76,865
Deferred income taxes..................................... 250 170 764
-------- -------- --------
Total liabilities.................................... 79,843 81,447 77,629
-------- -------- --------
Shareholders' equity:
Common stock and additional paid-in capital............... 3,780 3,780 3,780
Cumulative foreign currency translation adjustment........ (566) (434) (875)
Retained earnings......................................... 29,561 42,737 47,713
-------- -------- --------
Total shareholders' equity........................... 32,775 46,083 50,618
-------- -------- --------
Total liabilities and shareholders' equity........... $112,618 $127,530 $128,247
======== ======== ========
</TABLE>
F-30
<PAGE> 129
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
GEOMETRIC RESULTS INCORPORATED -- SERVICES
(A FORMER BUSINESS UNIT OF GEOMETRIC RESULTS INCORPORATED AND SUBSIDIARIES)
CONSOLIDATED CARVE-OUT STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996 AND
FOR THE EIGHT-MONTH PERIOD ENDED AUGUST 31, 1997
<TABLE>
<CAPTION>
FOR THE
FOR THE FOR THE EIGHT-MONTH
YEAR ENDED YEAR ENDED PERIOD ENDED
DECEMBER 31, DECEMBER 31, AUGUST 31,
1995 1996 1997
------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Net sales................................................ $550,398 $690,468 $431,134
Cost of sales............................................ 531,118 665,661 411,518
-------- -------- --------
Gross profit........................................ 19,280 24,807 19,616
Selling, general and administrative expenses............. 23,330 21,576 13,636
Michigan single business tax............................. 289 251 239
-------- -------- --------
Operating income (loss)............................. (4,339) 2,980 5,741
Other income, net........................................ 1,947 2,511 1,136
-------- -------- --------
Income (loss) before income taxes................... (2,392) 5,491 6,877
Income tax provision (benefit)........................... (411) 2,530 2,908
-------- -------- --------
Net income (loss)................................... $ (1,981) $ 2,961 $ 3,969
======== ======== ========
</TABLE>
F-31
<PAGE> 130
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
GEOMETRIC RESULTS INCORPORATED -- SERVICES
(A FORMER BUSINESS UNIT OF GEOMETRIC RESULTS INCORPORATED AND SUBSIDIARIES)
CONSOLIDATED CARVE-OUT CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996 AND
FOR THE EIGHT-MONTH PERIOD ENDED AUGUST 31, 1997
<TABLE>
<CAPTION>
FOR THE
FOR THE FOR THE EIGHT-MONTH
YEAR ENDED YEAR ENDED PERIOD ENDED
DECEMBER 31, DECEMBER 31, AUGUST 31,
1995 1996 1997
------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Cash from (used for):
Operating Activities:
Net income............................................ $ (1,981) $ 2,961 $ 3,969
Adjustments to reconcile net income to net cash from
(used for) operating activities:
Depreciation....................................... 3,922 5,111 3,960
(Gain) loss on disposal of assets.................. 74 481 8
Provision for doubtful accounts.................... (88) (62) (2)
Deferred income taxes.............................. (245) (101) 262
(Increase) decrease in receivables................. (43,759) (15,602) 39,865
(Increase) decrease in prepaid expenses and other
assets........................................... 2,472 (2,588) (1,071)
Increase (decrease) in accounts payable............ 37,421 (8,571) (10,750)
Increase (decrease) in accrued payroll and
benefits......................................... 1,445 2,162 (1,962)
Increase (decrease) in income taxes due to
parent........................................... (985) 4,618 2,192
Increase (decrease) in accrued expenses............ 1,301 (656) (248)
-------- -------- --------
Net cash from operating activities............... (423) (12,247) 36,223
-------- -------- --------
Investing activities:
Proceeds from sale of assets.......................... 125 333 --
Capital expenditures.................................. (6,601) (3,676) (4,047)
-------- -------- --------
Net cash used for investing activities........... (6,476) (3,343) (4,047)
-------- -------- --------
Financing activities:
Net borrowings on lines of credit from parent......... 960 (3,231) 2,135
Divisional equity transfer............................ 8,079 10,215 1,007
Increase in cash overdraft............................ 3,116 9,273 4,221
-------- -------- --------
Net cash from (used for) financing activities.... 12,155 16,257 7,363
-------- -------- --------
Effect of exchange rate changes on cash................. (65) 117 (441)
-------- -------- --------
Cash and cash investments:
Increase for the period............................... 5,191 784 39,098
At January 1.......................................... 11,305 16,496 17,280
-------- -------- --------
At August 31.......................................... $ 16,496 $ 17,280 $ 56,378
======== ======== ========
</TABLE>
F-32
<PAGE> 131
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
APX INTERNATIONAL
COMBINED BALANCE SHEET
AS OF DECEMBER 30, 1995 AND
COMBINING BALANCE SHEET
AS OF NOVEMBER 6, 1996
<TABLE>
<CAPTION>
AS OF
DECEMBER 30, AS OF NOVEMBER 6, 1996
1995 -----------------------------------------
------------ GUARANTOR NON-GUARANTOR APX
APX COMBINED SUBSIDIARIES SUBSIDIARIES COMBINED
------------ ------------ ------------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash investments.................. $ 737 $ 39 $ 87 $ 126
Accounts receivable, net................... 36,369 32,555 2,053 34,608
Inventory.................................. 2,696 1,193 -- 1,193
Prepaid expenses and other current
assets.................................. 1,610 2,411 67 2,478
-------- -------- ------- --------
Total current assets.................... 41,412 36,198 2,207 38,405
Equipment, net............................... 5,970 3,451 650 4,101
Other........................................ 1,141 898 41 939
-------- -------- ------- --------
Total assets............................ $ 48,523 $ 40,547 $ 2,898 $ 43,445
======== ======== ======= ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable........................... $ 4,365 $ 6,543 $ 43 $ 6,586
Accrued payroll and benefits............... 2,873 5,664 109 5,773
Accrued expenses........................... 3,571 5,030 298 5,328
-------- -------- ------- --------
Total current liabilities............... 10,809 17,237 450 17,687
Long-term liabilities:
Intercompany accounts...................... -- (3,704) 3,704 --
Capital leases............................. 772 505 -- 505
Due to affiliate........................... 42,171 34,004 -- 34,004
Other...................................... 1,063 234 -- 234
-------- -------- ------- --------
Total long-term liabilities............. 44,006 31,039 3,704 34,743
Stockholders' deficit:
Common stock............................... 371 132 239 371
Additional paid-in capital................. 10,990 10,990 -- 10,990
Cumulative foreign currency translation
adjustment.............................. 3 (2) 7 5
Accumulated deficit........................ (17,656) (18,849) (1,502) (20,351)
-------- -------- ------- --------
Total stockholders' deficit............. (6,292) (7,729) (1,256) (8,985)
-------- -------- ------- --------
Total liabilities and stockholders'
deficit............................... $ 48,523 $ 40,547 $ 2,898 $ 43,445
======== ======== ======= ========
</TABLE>
F-33
<PAGE> 132
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
APX INTERNATIONAL
COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 30, 1995 AND
COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD DECEMBER 31, 1995 TO NOVEMBER 6, 1996
<TABLE>
<CAPTION>
FOR THE
YEAR ENDED FOR THE PERIOD DECEMBER 31, 1995 TO
DECEMBER 30, NOVEMBER 6, 1996
1995 ---------------------------------------
------------ GUARANTOR NON-GUARANTOR APX
APX COMBINED SUBSIDIARIES SUBSIDIARIES COMBINED
------------ ------------ ------------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales.................................... $140,234 $126,853 $8,197 $135,050
Cost of sales 133,116 118,566 8,554 127,120
-------- -------- ------ --------
Gross profit (loss)..................... 7,118 8,287 (357) 7,930
Selling, general and administrative
expenses................................... 7,299 7,357 528 7,885
Michigan Single Business Tax................. -- 806 -- 806
-------- -------- ------ --------
Operating profit (loss)................. (181) 124 (885) (761)
Other expense, net........................... (2,727) (2,126) (3) (2,129)
-------- -------- ------ --------
Loss before income tax benefit.......... (2,908) (2,002) (888) (2,890)
Income tax benefit........................... 114 195 -- 195
-------- -------- ------ --------
Net loss................................ $ (2,794) $ (1,807) $ (888) $ (2,695)
======== ======== ====== ========
</TABLE>
F-34
<PAGE> 133
MSX INTERNATIONAL, INC.
(INCLUDING ITS PREDECESSOR TSG)
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION WITH RESPECT TO MARCH 30, 1997 AND MARCH 29, 1998
AND FOR THE FISCAL QUARTERS THEN ENDED IS UNAUDITED)
(DOLLARS IN THOUSANDS UNLESS STATED OTHERWISE)
APX INTERNATIONAL
COMBINED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 30, 1995 AND
COMBINING STATEMENT OF CASH FLOWS
FOR THE PERIOD DECEMBER 31, 1995 TO NOVEMBER 6, 1996
<TABLE>
<CAPTION>
FOR THE
YEAR ENDED FOR THE PERIOD DECEMBER 31, 1995 TO
DECEMBER 30, NOVEMBER 6, 1996
1995 -----------------------------------------
------------ GUARANTOR NON-GUARANTOR APX
APX COMBINED SUBSIDIARIES SUBSIDIARIES COMBINED
------------ ------------ ------------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Cash from (used for):
Operating Activities:
Net loss.................................... $(2,794) $(1,807) $ (888) $(2,695)
Adjustments to reconcile net income to net
cash from (used for) operating
activities:
Depreciation and amortization............ 2,423 1,745 97 1,842
Loss on disposal of fixed assets......... 497 633 -- 633
Changes in assets and liabilities:
Accounts receivable...................... (1,317) 2,914 (1,153) 1,761
Inventory................................ 129 1,503 -- 1,503
Prepaid expenses and other current
assets................................. (501) (834) 170 (664)
Accounts payable......................... (98) 764 2 766
Accrued expenses......................... 1,267 3,980 (25) 3,955
------- ------- ------- -------
Net cash provided (used) by operating
activities.......................... (394) 8,898 (1,797) 7,101
------- ------- ------- -------
Investing Activities:
Purchases of equipment................... (747) (444) (162) (606)
------- ------- ------- -------
Financing activities:
Advances from affiliates................. 2,682 (9,969) 1,802 (8,167)
Capital lease payments................... (1,018) (394) -- (394)
Cash overdraft........................... -- 1,455 -- 1,455
Other.................................... 168 (164) 164 --
------- ------- ------- -------
Net cash from (used for) financing
activities.......................... 1,832 (9,072) 1,966 (7,106)
------- ------- ------- -------
Net increase (decrease) in cash............... 691 (618) 7 (611)
Cash, beginning of period..................... 46 657 80 737
------- ------- ------- -------
Cash, end of period........................... $ 737 $ 39 $ 87 $ 126
======= ======= ======= =======
</TABLE>
19. SUBSEQUENT EVENT
On April 14, 1998, the Company amended and restated the New Credit Facility
to add a $30 million term loan portion. On the same date, the Company borrowed
the full amount available under the term loan and used the funds to reduce
outstanding balances under the Revolving loan portion of the New Credit Facility
as amended and restated.
F-35
<PAGE> 134
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
MSX International, Inc.:
We have audited the accompanying combined balance sheet of APX
International as of November 6, 1996, and the related combined statements of
operations, stockholders' deficit and cash flows for the period December 31,
1995 to November 6, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
As discussed in Note 8, TAD Resources International, Inc. sold
substantially all of APX International subsequent to the balance sheet date. The
accompanying combined financial statements do not reflect the impact of this
transaction.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of APX International
as of November 6, 1996 and the combined results of their operations and their
cash flows for the period December 31, 1995 to November 6, 1996 in conformity
with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Detroit, Michigan
November 10, 1997
F-36
<PAGE> 135
APX INTERNATIONAL
COMBINED BALANCE SHEET
<TABLE>
<CAPTION>
NOVEMBER 6,
1996
-----------
(IN THOUSANDS)
<S> <C>
ASSETS
Current assets:
Cash................................................... $ 126
Accounts receivable, net of allowance for doubtful
accounts of $1,080.................................... 34,608
Inventory.............................................. 1,193
Prepaid expenses and other current assets.............. 2,478
--------
Total current assets.............................. 38,405
Equipment, net.............................................. 4,101
Other....................................................... 939
--------
Total Assets...................................... $ 43,445
========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities
Current liabilities:
Cash overdraft.................................... $ 2,705
Accounts payable.................................. 3,881
Accrued payroll and benefits...................... 5,773
Accrued expenses.................................. 3,651
Deferred revenue.................................. 858
Deferred taxes.................................... 114
Current portion of capital leases................. 705
--------
Total current liabilities.................... 17,687
Long-term obligations:
Capital leases.................................... 505
Due to affiliate.................................. 34,004
Other............................................. 234
--------
34,743
Stockholders' deficit
Common stock........................................... 371
Additional paid-in capital............................. 10,990
Cumulative foreign currency translation adjustments.... 5
Retained earnings (accumulated deficit)................ (20,351)
--------
Stockholders' deficit............................. (8,985)
--------
Total liabilities and stockholders'
deficit...................................... $ 43,445
========
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
F-37
<PAGE> 136
APX INTERNATIONAL
COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE PERIOD DECEMBER 31, 1995
TO NOVEMBER 6, 1996
--------------------------------
(IN THOUSANDS)
<S> <C>
Net sales................................................... $135,050
Cost of sales............................................... 127,120
--------
Gross profit........................................... 7,930
Selling, general and administration expenses................ 7,885
Michigan Single Business Tax................................ 806
--------
Operating loss......................................... (761)
Interest expense, net....................................... 2,129
--------
Loss before income tax benefit......................... (2,890)
Income tax benefit.......................................... 195
--------
Net loss............................................... $ (2,695)
========
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
F-38
<PAGE> 137
APX INTERNATIONAL
COMBINED STATEMENT OF STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
FOR THE PERIOD DECEMBER 31, 1995 TO NOVEMBER 6, 1996
-----------------------------------------------------------------
RETAINED CUMULATIVE
EARNINGS FOREIGN
COMMON PAID-IN (ACCUMULATED TRANSLATION STOCKHOLDERS'
STOCK CAPITAL DEFICIT) ADJUSTMENTS DEFICIT
------ ------- ------------ ----------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1995............. $371 $10,990 $(17,656) $3 $(6,292)
Net loss............................... (2,695) (2,695)
Translation adjustments, net........... 2 2
---- ------- -------- -- -------
Balance, November 6, 1996.............. $371 $10,990 $(20,351) $5 $(8,985)
==== ======= ======== == =======
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
F-39
<PAGE> 138
APX INTERNATIONAL
COMBINED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE PERIOD
DECEMBER 31, 1995
TO NOVEMBER 6, 1996
-------------------
(IN THOUSANDS)
<S> <C>
Operating activities:
Net loss.................................................. $(2,695)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization.......................... 1,842
Loss on disposal of fixed assets....................... 633
Changes in assets and liabilities:
Accounts receivable.................................. 1,761
Inventory............................................ 1,503
Prepaid expenses and other current assets............ (664)
Accounts payable..................................... 766
Accrued expenses..................................... 4,326
Deferred revenue..................................... 458
Non-current liabilities.............................. (829)
-------
Net cash provided by operating activities............ 7,101
-------
Investing activities, purchases of equipment................ (606)
-------
Financing activities:
Advances from affiliates.................................. (8,167)
Capital lease payments.................................... (394)
Cash overdraft............................................ 1,455
-------
Net cash used in financing activities.................. (7,106)
-------
Net decrease in cash........................................ (611)
Cash, beginning of period................................... 737
-------
Cash, end of period......................................... $ 126
=======
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
F-40
<PAGE> 139
APX INTERNATIONAL
NOTES TO COMBINED FINANCIAL STATEMENTS
1. ORGANIZATION AND OPERATIONS
The business of APX International (the "Company") is to provide drafting,
design and other engineering-based services to primarily the automotive industry
in the United States and Europe. The Company also produces automotive body
parts. The preparation of the combined financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements. Such estimates and assumptions also affect the reported amounts of
revenue and expense during the reporting periods. Actual results may differ from
such estimates and assumptions.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Preparation: The Company is affiliated with TAD Resources
International, Inc. ("TAD") through common stock ownership and management. The
Company is included in the combined financial statements of TAD Resources
International, Inc. and Affiliated Companies. The combined financial statements
of the Company are presented as of and for the period ending November 6, 1996.
Subsequent to November 6, 1996, the Company was sold by TAD to MascoTech
Automotive Systems Group, Inc. ("MASG"). These combined financial statements
include the accounts of the following companies and operations (collectively,
APX), all affiliated through common stock ownership and management that are
engaged in the similar lines of business:
Aero-Detroit, Inc. ("Aero Detroit")
Production Molded Composites Division
Landmark Holdings, Inc. ("Landmark")
Pioneer Acquisition Corporation ("Pioneer")
APX-U. K. (a branch operation of TAD Technical Services, Ltd.)
APX-Germany (a branch operation of TAD Technical Services, Ltd.)
APX International do Brasil Limitada (Brazil)
APX International GmbH (Germany)
Intercompany transactions and accounts have been eliminated.
b. Revenue and Cost Recognition: Revenues from fixed price contracts are
recognized on the percentage of completion method, measured by the percentage of
costs incurred to date to estimated total costs for each contract. Time and
material contracts are based on time incurred at agreed upon billing rates.
Contract costs include all direct material and labor costs and indirect
costs such as indirect labor, supplies, tools and repairs. Provisions for
estimated losses on uncompleted contracts are made in the period in which such
losses are determined. Changes in fixed price contracts may result in revisions
to costs and income and are recognized in the period in which the revisions are
determined.
c. Inventories: Inventories are stated at the lower of cost or market. Cost
is determined using the first-in, first-out ("FIFO") method.
d. Advertising: Advertising costs are expensed as incurred and included in
operating expenses. Advertising expenses amount to $118,000 for 1996.
e. Property, Plant and Equipment: Equipment is stated at cost and is
depreciated on straight-line and accelerated methods over the estimated useful
lives or, in the case of capital leases, over the terms of the leases. Upon
retirement or disposal of property, plant and equipment, the cost and
accumulated depreciation are removed from the accounts and any gain or loss is
included in income. Repair and maintenance costs are charged to expense as
incurred.
F-41
<PAGE> 140
APX INTERNATIONAL
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Equipment as of November 6, 1996 consisted of the following:
<TABLE>
<S> <C>
Machinery and computer equipment............................ $ 3,515,000
Equipment under capital leases.............................. 4,841,000
Furniture and fixtures...................................... 1,111,000
Automobiles and trucks...................................... 41,000
Leasehold improvements...................................... 704,000
-----------
10,212,000
Less accumulated depreciation.......................... 6,111,000
-----------
$ 4,101,000
===========
</TABLE>
f. Other Assets: Excess of cost over value of assets acquired is being
amortized on the straight-line method over periods up to 40 years.
g. Translation of Foreign Currency: The financial statements of the foreign
subsidiaries and affiliates are translated into U. S. dollars using the current
exchange rate with the effects of translation adjustments deferred and included
as a component of stockholders' deficit. Revenues and expenses are translated at
the average rates of exchange during the period. Gains and losses on foreign
currency transactions are not significant.
h. Income Taxes: Pioneer and Landmark have elected Subchapter S Corporation
status of the Internal Revenue Code. Therefore, in lieu of Federal income taxes,
the shareholders are taxed on their proportionate share of the Company's taxable
income. Consequently, no provision or liability for Federal income taxes has
been included for these companies. Income tax expense and credits are computed
on a separate return basis. Deferred income taxes result principally from
temporary differences in the bases of assets and liabilities for tax and
reporting purposes for Pioneer and Landmark.
3. ACCOUNTS RECEIVABLE
Receivables arise from services provided pursuant to contracts or
agreements with customers for such services. The primary users of the Company's
services are manufacturers in the automotive industry. At November 6, 1996 and
for the period then ended, three customers, Ford Motor Company, Chrysler
Corporation and General Motors, accounted for approximately 60 percent of the
Company's accounts receivable balance and 62 percent of total sales for the
year.
Accounts receivable include both billed and unbilled receivables. Unbilled
receivables consist of $4,685,000 as of November 6, 1996 for services rendered
under fixed price contracts and $6,034,000 as of November 6, 1996 for services
rendered under time and materials contracts in excess of amounts already billed.
Billings on fixed price contracts generally can be rendered upon completion of
specified portions of work. All such billings can be rendered and should be
collected within the ensuing year. The Company generally does not bill in
advance of providing services.
F-42
<PAGE> 141
APX INTERNATIONAL
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
4. INCOME TAXES
<TABLE>
<CAPTION>
NOVEMBER 6, 1996
----------------
<S> <C>
Provision for income taxes, deferred........................ $ (195)
======
</TABLE>
<TABLE>
<CAPTION>
NOVEMBER 6, 1996
----------------
<S> <C>
Deferred tax assets (liabilities):
NOL carryforward....................................... $ 4,601
Property and equipment................................. (730)
Accrued liabilities.................................... 81
Accounts receivable.................................... 49
Other.................................................. 45
Deferred state taxes................................... (114)
Valuation allowance.................................... (4,046)
-------
Net deferred tax asset (liability)................... $ (114)
=======
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
DECEMBER 31, 1995
TO NOVEMBER 6, 1996
-------------------
<S> <C>
U. S. federal statutory rate................................ 35.0%
Benefit at U. S. statutory rate............................. $ 474
Other....................................................... 18
Deferred state taxes........................................ (130)
Change in valuation allowance............................... (557)
------
Income tax benefit........................................ $ (195)
======
</TABLE>
Aero Detroit has available federal net operating loss carryforwards to
offset future taxable income, if any, of $13,147,876 expiring in the years 2003
to 2011. Michigan Single Business Tax paid during the period December 31, 1995
to November 6, 1996 was approximately $1,321,000.
5. RETIREMENT PLANS
The Company maintains a qualified cash or deferred compensation plan under
Section 401(k) of the Internal Revenue Code. Participation in this plan is
available to substantially all salaried employees and to certain groups of
hourly employees. Under the plan, employees may elect to defer up to 20 percent
of their annual wages, subject to the limitations of the Internal Revenue Code.
Third party administrative costs paid by the plan approximated $48,000 for 1996.
The Company has three defined contribution pension plans. Participation in
these plans is available to certain union employees. Company contributions to
the plans are based on a specified amount per hour based on the provisions of
the individual union's collective bargaining agreements. Company contributions
to the plans aggregated $506,272 in 1996.
The Company has two frozen defined benefit pension plans. One plan covers
certain IAMAW union employees under a multi-employer plan that was frozen in
1984. The other plan was frozen in 1988 and covers certain union and non-union
employees that were employed by Autodynamics Corporation of America, Inc., a
company acquired previously by Aero-Detroit. These plans are not administered by
the Company. Contributions are determined in accordance with the provisions of
the plans.
F-43
<PAGE> 142
APX INTERNATIONAL
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
The Autodynamics plan status as of the most recently available period is as
of the plan years ended June 30, 1996 and is as follows:
<TABLE>
<S> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation................................. $ 212,000
==========
Accumulated benefit obligation............................ $ 739,000
==========
Projected benefit obligation................................ $1,027,000
Plan assets at fair value................................... 855,000
----------
Projected benefit obligation in excess of plan assets....... $ (172,000)
==========
Net pension cost:
Service cost.............................................. $ 60,000
Actual return on plan assets.............................. (55,000)
----------
Net pension cost..................................... $ 5,000
==========
</TABLE>
6. COMMITMENTS
Lease: Minimum lease commitments in effect at November 6, 1996, under all
noncancellable leases, including capital leases, are as follows:
<TABLE>
<CAPTION>
CAPITAL OPERATING
TOTAL LEASES LEASES
----- ------- ---------
<S> <C> <C> <C>
Year ended December:
1997.................................................. $ 6,750,000 $ 644,000 $ 6,106,000
1998.................................................. 4,525,000 143,000 4,382,000
1999.................................................. 3,253,000 10,000 3,243,000
2000.................................................. 2,948,000 9,000 2,939,000
2001.................................................. 3,678,000 -- 3,678,000
Thereafter............................................ -- -- --
----------- --------- -----------
$21,154,000 806,000 $20,348,000
=========== ===========
Less amount representing interest..................... (120,000)
---------
Present value of minimum payments..................... $ 686,000
=========
</TABLE>
Total rent expense paid under operating lease was $8,118,000 for the period
December 31, 1995 to November 6, 1996.
7. RELATED-PARTY TRANSACTIONS
a. Credit Arrangements: As of November 6, 1996, an affiliated company, TAD
Resources International, Inc. had revolving credit arrangements with certain
banks through June 1997. APX was a party to these agreements. Borrowings were
limited by a collateral formula based upon the level of qualified accounts
receivable. Collateral was provided to the bank by all accounts receivable
including those of APX, and the arrangement was guaranteed by all affiliated
companies, including those that form part of APX.
APX records its borrowings from affiliated companies as intercompany
advances. Total interest charged to APX by these affiliated companies was
$1,975,000 in 1996. The weighted average interest rate approximated 6.2%.
b. Operating Leases: The Company leases office space and equipment from
various affiliated companies. Rent expense disclosed in Note 6. includes
approximately $4,465,000 arising from such leases during 1996.
F-44
<PAGE> 143
APX INTERNATIONAL
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
c. Other: The Company was charged management fees from a related company of
approximately $362,000 in 1996.
8. SUBSEQUENT EVENT:
TAD entered into an agreement dated November 6, 1996, whereby TAD sold
substantially all of the assets and liabilities of Aero-Detroit, Landmark and
Pioneer to MASG. Also included in the sale were the APX-UK and APX-Germany
operations and all of the issued and outstanding shares of stock of APX
International do Brasil Limitada and APX International GmbH.
In early 1997, MASG sold the net assets of APX to MSX International, Inc.,
an affiliate of MascoTech, Inc. The sale price was in excess of book value.
No effect has been given to these transactions in the accompanying
financial statements.
F-45
<PAGE> 144
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
APX International
We have audited the accompanying combined balance sheet of APX
International (the Company) as of December 30, 1995, and the related combined
statements of income and stockholders' deficiency, and cash flows for the year
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of APX International
at December 30, 1995, and the combined results of their operations and their
cash flows for the year then ended in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Boston, Massachusetts
April 12, 1996
F-46
<PAGE> 145
APX INTERNATIONAL
COMBINED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 30, 1995
-----------------
(IN THOUSANDS)
<S> <C>
ASSETS
Current assets:
Cash...................................................... $ 737
Accounts receivable, net of allowance for doubtful
accounts of $171....................................... 36,369
Inventory................................................. 2,696
Prepaid expenses and other current assets................. 1,610
--------
Total current assets........................................ 41,412
Equipment, net.............................................. 5,970
Other....................................................... 1,141
--------
$ 48,523
========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Cash overdraft............................................ $ 1,250
Accounts payable.......................................... 3,115
Accrued payroll and benefits.............................. 2,873
Accrued expenses.......................................... 2,030
Deferred gain............................................. 400
Deferred taxes............................................ 309
Current portion of capital leases......................... 832
--------
Total current liabilities................................... 10,809
Long-term obligations:
Capital leases............................................ 772
Due to affiliate.......................................... 42,171
Other..................................................... 1,063
--------
Total long-term obligations................................. 44,006
Stockholders' deficiency:
Common stock.............................................. 371
Additional paid-in capital................................ 10,990
Foreign currency translation.............................. 3
Retained earnings (deficit)............................... (17,656)
--------
Total stockholders' deficiency.............................. (6,292)
--------
$ 48,523
========
</TABLE>
See accompanying notes to financial statements.
F-47
<PAGE> 146
APX INTERNATIONAL
COMBINED STATEMENT OF INCOME AND STOCKHOLDERS' DEFICIENCY
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 30, 1995
-----------------
(IN THOUSANDS)
<S> <C>
Revenue from services....................................... $140,234
Cost of services............................................ 133,116
--------
7,118
Selling, general, and administrative expenses............... 7,299
--------
Operating loss.............................................. (181)
Interest expense............................................ 2,727
--------
Loss before income tax benefit.............................. (2,908)
Income tax benefit.......................................... (114)
--------
Net loss.................................................... (2,794)
Stockholders' deficiency at beginning of year............... (3,669)
Foreign currency translation adjustment..................... 3
Stockholders' equity of new affiliates...................... 168
--------
Stockholders' deficiency at end of year..................... $ (6,292)
========
</TABLE>
See accompanying notes to financial statements.
F-48
<PAGE> 147
APX INTERNATIONAL
COMBINED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 30, 1995
-----------------
(IN THOUSANDS)
<S> <C>
OPERATING ACTIVITIES
Net loss.................................................... $(2,794)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization............................. 2,423
Loss on disposal of fixed assets.......................... 497
Changes in assets and liabilities:
Accounts receivable.................................... (1,317)
Inventory.............................................. 129
Prepaid expenses and other current assets.............. (501)
Accounts payable....................................... (98)
Accrued payroll and benefits........................... 881
Accrued expenses....................................... 786
Deferred revenue....................................... (400)
-------
Net cash used in operating activities....................... (394)
INVESTING ACTIVITY
Purchases of equipment...................................... (747)
-------
Net cash used in investing activity......................... (747)
FINANCIAL ACTIVITIES
Advances from affiliates.................................... 2,682
Capital lease payments...................................... (1,018)
Proceeds from issuance of stock by new affiliates........... 168
-------
Net cash provided by financial activities................... 1,832
-------
Net increase in cash........................................ 691
Cash at beginning of year................................... 46
-------
Cash at end of year......................................... $ 737
=======
</TABLE>
See accompanying notes to financial statements.
F-49
<PAGE> 148
APX INTERNATIONAL
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 30, 1995
1. ORGANIZATION AND OPERATIONS
The primary business of APX is to provide drafting, design and other
engineering-based services to primarily the automotive industry. The Company is
also in the business of producing automotive body parts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Basis of Preparation
APX is affiliated with TAD Resources International, Inc. through common
stock ownership and management. APX is included in the combined financial
statements of TAD Resources International, Inc. and Affiliated Companies. The
combined financial statements of APX have been prepared in connection with the
pending sale of the businesses of APX to two separate parties. These combined
financial statements include the accounts of the following companies and
operations (collectively, APX), all affiliated through common stock ownership
and management that are engaged in the similar lines of business:
Aero-Detroit, Inc.
Landmark Holdings, Inc.
Pioneer Acquisition Corporation
APX GmbH (Germany)
APX-U.K. (a branch operation of TAD Technical Services, Ltd.)
APX-Germany (a branch operation of TAD Technical Services, Ltd.)
Overseas Resources, Inc.
Wholly-owned subsidiaries of Aero-Detroit, Inc., TAAG, Inc. and C&D, Inc.
have not been consolidated with Aero-Detroit because they are in the same
business as TAD and will remain with the TAD group of companies. Aero-Detroit's
investment in TAAG and C&D are recorded on the cost basis and total $13,198,000.
TAAG and C&D will not be included in any proposed sale transaction, and
therefore, the investment has been excluded from these combined financial
statements. Amount due to affiliate has been reduced by this same amount as the
original investment was funded through borrowings from TAD.
Intercompany transactions and accounts have been eliminated.
The fiscal year end of APX is on the Saturday nearest to December 31.
Use of Estimates
The preparation of the combined financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Revenue and Cost Recognition
Revenues from fixed price contracts are recognized on the percentage of
completion method, measured by the percentage of costs incurred to date to
estimated total costs for each contract. Time and material contracts are valued
at selling price based on billing rates.
Costs include all direct material and labor costs and indirect costs such
as indirect labor, supplies, tools and repairs. Provisions for estimated losses
on uncompleted contracts are made in the period in which such losses are
determined. Changes in fixed price contracts may result in revisions to costs
and income and are recognized in the period in which the revisions are
determined.
F-50
<PAGE> 149
APX INTERNATIONAL
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Inventories
Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out (FIFO) method.
Advertising
Advertising costs are expensed as incurred and included in operating
expenses. Advertising expenses amounted to $209,000 for 1995.
Equipment and Depreciation
Equipment is stated at cost and are depreciated on straight-line and
accelerated methods over the estimated useful lives.
Equipment for 1995 consisted of the following:
<TABLE>
<S> <C>
Machinery and computer equipment............................ $ 3,923,000
Equipment under capitalized leases.......................... 5,474,000
Furniture and fixtures...................................... 1,421,000
Automobiles and trucks...................................... 72,000
Leasehold improvements...................................... 655,000
-----------
11,545,000
Less accumulated depreciation.......................... 5,575,000
-----------
$ 5,970,000
===========
</TABLE>
Other Assets
Excess of cost over value of assets acquired is being amortized on the
straight-line method over periods up to 40 years.
Translation of Foreign Currency
The financial statements of the foreign subsidiaries and affiliates are
translated into U.S. dollars using the exchange rate at each balance sheet date
for assets and liabilities, and a weighted average exchange rate for revenues
and expenses. The related translation adjustments are reported as a component of
stockholders' equity. Gains and losses on foreign currency transactions are not
significant.
Acquisitions
APX made acquisitions of stock and assets of two companies during 1995 and
the results of these acquisitions have been included from their respective dates
of acquisition. The effect of these acquisitions on the Company's results of
operations was not significant.
3. ACCOUNTS RECEIVABLE
Receivables arise from services provided pursuant to contracts or
agreements with customers for such services. Historically, losses due to
customers' inability to comply with the payment terms of their contracts or
agreements with the Company have not been significant. The primary users of the
Company's services are manufacturers in the automotive industry. At December 30,
1995 and for the year then ended, three customers, Ford Motor Company, Chrysler
Corporation and General Motors, accounted for approximately 60% of the Company's
accounts receivable balance and 73% of total revenues for the year.
F-51
<PAGE> 150
APX INTERNATIONAL
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Accounts receivable include both billed and unbilled receivables. Unbilled
receivables consist of $3,780,000 for services rendered under fixed price
contracts and $4,093,000 for services rendered under time and materials
contracts in excess of amounts already billed. Billings on fixed price contracts
generally can be rendered upon completion of specified portions of work. All
such billings can be rendered and should be collected within the ensuing year.
The Company generally does not bill in advance of providing services.
4. DEFERRED GAIN
In 1993, the Company entered into a sale/leaseback arrangement with a
related party. The Company sold fully depreciated machinery and equipment for
$2,000,000 to an affiliate. The proceeds for the sale have been recorded as a
deferred gain which will be amortized over a five-year period concurrent with
the related operating lease, accordingly, there is no impact on the results of
operations for the year ended December 30, 1995.
5. INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The Company's deferred
tax liability of $309,000 is due to deferred income resulting from the use of
the cash method of accounting for tax reporting purposes.
The Company's benefit for income taxes for the year ended December 30, 1995
consists of deferred state taxes of $114,000.
Aero-Detroit files a consolidated tax return with its subsidiaries TAAG and
C&D. 1995 operating losses of Aero will be offset by taxable income of TAAG and
C&D; however, the accompanying financial statements do not reflect that benefit.
Pioneer and Landmark have elected Subchapter S Corporation status of the
Internal Revenue Code. Therefore, in lieu of Federal income taxes, the
shareholders are taxed on their proportionate share of the Company's taxable
income. Consequently, no provision or liability for Federal income taxes has
been included for these companies. Aero Detroit, Inc. has available Federal net
operating loss carryforwards to offset future taxable income, if any, of
$11,584,000 expiring in the years 2003-2010. Deferred tax assets arising from
net operating loss carryovers of Aero-Detroit are fully reserved due to the
uncertainty of future taxable income.
6. RETIREMENT PLANS
The Company maintains a qualified cash or deferred compensation plan under
section 401(k) of the Internal Revenue Code. Participation in this plan is
available to substantially all salaried employees and to certain groups of
hourly employees. Under the plan, employees may elect to defer up to 20% of
their annual wages, subject to the limitations of the Internal Revenue Code.
Third-party administrative plan costs approximated $91,000 for 1995.
The Company has three defined contribution pension plans. Participation in
these plans is available to certain union employees. Company contributions to
the plan are based on a specified amount per hour based on the provisions of the
individual union's collective bargaining agreement. Company contributions to the
plans aggregated $609,400 in 1995.
The Company has two frozen defined benefit pension plans. One plan covers
certain IAMAW union employees under a multi-employer plan that was frozen in
1984. The other plan was frozen in 1988 and covers certain union and non-union
employees that were employed by Autodynamics Corporation of America, Inc., a
company acquired previously by Aero-Detroit. These plans are not administered by
the Company. Contributions are determined in accordance with the provisions of
the plans.
F-52
<PAGE> 151
APX INTERNATIONAL
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
The IAMAW union plan's actuarially computed value of vested benefits were
more than the net assets of the Plan as of August 1995. Therefore, the Company
would have a withdrawal liability of $1,264,000 if the Company were to withdraw
from the Plan. However, the Company has no present intention of withdrawing from
this plan, nor has the Company been informed that there is any intention to
terminate such plan. There were no Company contributions made to the plan in
1995.
The Autodynamics plan status as of the most recently available period is as
of the plan year ended June 30, 1995 and is as follows:
<TABLE>
<S> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation.............................. $ 194,000
=========
Accumulated benefit obligation......................... $ 727,000
=========
Projected benefit obligation................................ 962,000
Plan assets at fair value................................... 861,000
---------
Projected benefit obligation in excess of plan assets....... $(101,000)
=========
Net pension cost:
Service cost........................................... $ 47,000
Actual return on plan assets........................... (67,000)
---------
Net pension cost (credit)................................... $ (20,000)
=========
</TABLE>
7. COMMITMENTS
Lease
Minimum lease commitments in effect at December 30, 1995, under all
noncancellable leases, including capital leases are as follows:
<TABLE>
<CAPTION>
OTHER
CAPITAL OPERATING
TOTAL LEASES LEASES
----- ------- ---------
<S> <C> <C> <C>
Year ended December:
1996................................ $ 7,942,000 $ 918,000 $ 7,024,000
1997................................ 6,750,000 644,000 6,106,000
1998................................ 4,525,000 143,000 4,382,000
1999................................ 3,253,000 10,000 3,243,000
2000................................ 2,948,000 9,000 2,939,000
Thereafter.......................... 3,678,000 -- 3,678,000
----------- ---------- -----------
$29,096,000 1,724,000 $27,372,000
=========== ===========
Less amount representing interest... (120,000)
----------
Present value of minimum payments... $1,604,000
==========
</TABLE>
Total rent expense paid under operating leases was $10,880,000 in 1995.
Deferred Compensation
The Company has deferred compensation agreements with certain present and
past officers and key employees of Pioneer. The principal costs of such plans
has been accrued over the period of active
F-53
<PAGE> 152
APX INTERNATIONAL
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
employment. To fund the majority of these plans, life insurance contracts were
purchased on the related employees. Net present value of future payments under
these agreements are as follows:
<TABLE>
<S> <C>
1996........................................................ $136,000
1997........................................................ 68,000
1998........................................................ 56,000
1999........................................................ 37,000
2000........................................................ 20,000
Thereafter.................................................. 32,000
--------
$349,000
========
</TABLE>
Other
Obligations under noncompetition agreements are $97,000, payable through
the year 2000.
8. RELATED-PARTY TRANSACTIONS
Credit Arrangements
An affiliated company, TAD Resources International, Inc. has revolving
credit arrangements with certain banks through June 1997. APX is a party to
these agreements. Borrowings are limited by a collateral formula based upon the
level of qualified accounts receivable. Security is provided to the bank by all
accounts receivable including those of APX, and the arrangement is guaranteed by
all affiliated companies, including those that form part of APX.
APX records borrowings as intercompany advances. Interest is charged to APX
at the same rate charged by the bank. Total interest charged to APX in 1995 was
$2,279,000.
Operating Leases
The Company leases office space and equipment from various companies
affiliated with APX. Rent expense disclosed in Note 7 includes approximately
$7,152,000 arising from these leases during 1995.
Other
The Company was charged management fees from a related company of $454,000
in 1995.
9. SUBSEQUENT EVENT
As of December 30, 1995, TAD Resources International, Inc. made a decision
to dispose of the businesses of APX. Subsequent to the end of the year, TAD
received offers from separate parties to acquire separately APX's drafting,
design and other engineering-based services business and APX's automotive body
parts production business. TAD is currently in negotiations with the potential
buyers.
F-54
<PAGE> 153
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
MSX International, Inc.
We have audited the accompanying consolidated carve-out balance sheets of
Geometric Results Incorporated -- Service ("GRI-Service"), a business unit of
Geometric Results Incorporated and subsidiaries, as of December 31, 1996 and
August 31, 1997 and the related consolidated carve-out statements of operations,
stockholder's equity and cash flows for each of the two years in the period
ended December 31, 1996 and for the eight-month period ended August 31, 1997.
These financial statements are the responsibility of GRI-Service's management.
Our responsibility is to express an opinion on these consolidated carve-out
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated carve-out financial statements referred to
above present fairly, in all material respects, the financial position of
GRI-Service as of December 31, 1996 and August 31, 1997 and the results of its
operations and its cash flows for the periods indicated above in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Detroit, Michigan
March 4, 1998
F-55
<PAGE> 154
GEOMETRIC RESULTS INCORPORATED -- SERVICE
(A FORMER BUSINESS UNIT OF GEOMETRIC RESULTS INCORPORATED AND SUBSIDIARIES)
CONSOLIDATED CARVE-OUT BALANCE SHEETS
AS OF DECEMBER 31, 1996 AND AUGUST 31, 1997
<TABLE>
<CAPTION>
1996 1997
---- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C>
ASSETS
Current assets:
Cash...................................................... $ 3,268 $ 6,334
Investment with parent.................................... 14,012 50,044
Accounts receivable -- trade:
From parent and other affiliates....................... 95,711 48,693
Other, net of allowance for doubtful accounts.......... 261 7,416
Deferred income taxes..................................... 151 483
Other..................................................... 3,135 4,208
-------- --------
Total current assets................................. 116,538 117,178
Property, plant and equipment, net.......................... 10,972 11,051
Deposits and other assets................................... 20 18
-------- --------
Total assets......................................... $127,530 $128,247
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Cash overdraft............................................ $ 18,348 $ 22,569
Lines of credit from parent............................... 2,717 4,852
Accounts payable -- trade:
To parent and other affiliates......................... 6,644 2,884
Other.................................................. 39,437 32,447
Accrued payroll, vacations, bonuses and incentives........ 7,996 6,033
Accrued income taxes...................................... 2,707 4,900
Other..................................................... 3,428 3,180
-------- --------
Total current liabilities............................ 81,277 76,865
Deferred income taxes....................................... 170 764
-------- --------
Total liabilities.................................... 81,447 77,629
Commitments and contingencies
Stockholder's equity:
Common stock ($1 par value; authorized 10,000 shares; 10
shares issued and outstanding) and paid-in capital..... 3,780 3,780
Foreign currency translation adjustment................... (434) (875)
Retained earnings (Note 2)................................ 42,737 47,713
-------- --------
Total stockholder's equity........................... 46,083 50,618
-------- --------
Total liabilities and stockholder's equity........... $127,530 $128,247
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated carve-out
financial statements.
F-56
<PAGE> 155
GEOMETRIC RESULTS INCORPORATED -- SERVICE
(A FORMER BUSINESS UNIT OF GEOMETRIC RESULTS INCORPORATED AND SUBSIDIARIES)
CONSOLIDATED CARVE-OUT STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995, 1996 AND
FOR THE EIGHT-MONTH PERIOD ENDED AUGUST 31, 1997
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Revenue:
Contract services......................................... $547,333 $689,516 $429,891
Other..................................................... 3,065 952 1,243
-------- -------- --------
550,398 690,468 431,134
-------- -------- --------
Cost of revenue:
Subcontract costs......................................... 455,095 588,198 358,948
Salaries, wages and benefits.............................. 39,514 45,898 32,304
Other direct costs........................................ 36,509 31,565 20,266
-------- -------- --------
531,118 665,661 411,518
-------- -------- --------
Gross profit.............................................. 19,280 24,807 19,616
General and administrative expense.......................... 23,330 21,576 13,636
Michigan Single Business Tax................................ 289 251 239
-------- -------- --------
Income (loss) from operations.......................... (4,339) 2,980 5,741
Interest income, net of expense............................. 675 1,373 1,166
Other income (expense), net................................. (528) 1,138 (30)
Sale of certain contracts................................... 1,800 -- --
-------- -------- --------
Income (loss) from operations before income taxes...... (2,392) 5,491 6,877
Provision (benefit) for income taxes........................ (411) 2,530 2,908
-------- -------- --------
Net income (loss)...................................... $ (1,981) $ 2,961 $ 3,969
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated carve-out
financial statements.
F-57
<PAGE> 156
GEOMETRIC RESULTS INCORPORATED -- SERVICE
(A FORMER BUSINESS UNIT OF GEOMETRIC RESULTS INCORPORATED AND SUBSIDIARIES)
CONSOLIDATED CARVE-OUT STATEMENTS OF STOCKHOLDER'S EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
AND THE EIGHT-MONTH PERIOD ENDED AUGUST 31, 1997
<TABLE>
<CAPTION>
FOREIGN
ADDITIONAL CURRENCY
COMMON PAID-IN TRANSLATION RETAINED
STOCK CAPITAL ADJUSTMENT EARNINGS TOTAL
------ ---------- ----------- -------- -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1994..................... $-- $3,780 $ (508) $23,463 $26,735
Divisional equity transfer from PPD............ -- -- -- 8,079 8,079
Net loss....................................... -- -- -- (1,981) (1,981)
Foreign currency translation adjustment........ -- -- (58) -- (58)
--- ------ ------ ------- -------
Balance, December 31, 1995..................... -- 3,780 (566) 29,561 32,775
Divisional equity transfer from PPD............ -- -- -- 10,215 10,215
Net income..................................... -- -- -- 2,961 2,961
Foreign currency translation adjustment........ -- -- 132 -- 132
--- ------ ------ ------- -------
Balance, December 31, 1996..................... $-- $3,780 $ (434) $42,737 $46,083
Divisional equity transfer from PPD............ -- -- -- 1,007 1,007
Net income..................................... -- -- -- 3,969 3,969
Foreign currency translation adjustment........ -- -- (441) -- (441)
--- ------ ------ ------- -------
Balance, August 31, 1997....................... $-- $3,780 $ (875) $47,713 $50,618
=== ====== ====== ======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated carve-out
financial statements.
F-58
<PAGE> 157
GEOMETRIC RESULTS INCORPORATED -- SERVICE
(A FORMER BUSINESS UNIT OF GEOMETRIC RESULTS INCORPORATED AND SUBSIDIARIES)
CONSOLIDATED CARVE-OUT STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996 AND FOR THE EIGHT-MONTH PERIOD
ENDED AUGUST 31, 1997
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)...................................... $ (1,981) $ 2,961 3,969
Adjustments to reconcile net income (loss) to net cash
used in operations:
Depreciation...................................... 3,922 5,111 3,960
(Gain) loss on disposal of assets................. 74 481 8
Provision for doubtful accounts................... (88) (62) (2)
Deferred income taxes............................. (245) (101) 262
Changes in assets and liabilities:
Accounts receivable............................. (43,759) (15,602) 39,865
Other assets.................................... 2,472 (2,588) (1,071)
Accounts payable -- trade....................... 37,421 (8,571) (10,750)
Accrued payroll, vacation, bonuses and
incentives................................... 1,445 2,162 (1,962)
Income taxes, due to/from parent................ (985) 4,618 2,192
Other current liabilities....................... 1,301 (656) (248)
-------- -------- --------
Net cash provided by (used in) operations......... (423) (12,247) 36,223
-------- -------- --------
Cash flows from investing activities:
Proceeds from sale of assets........................... 125 333 --
Capital expenditures................................... (6,601) (3,676) (4,047)
-------- -------- --------
Net cash used in investing activities............. (6,476) (3,343) (4,047)
-------- -------- --------
Cash flows from financing activities:
Net borrowings on lines of credit from parent.......... 960 (3,231) 2,135
Divisional equity transfer (Note 2).................... 8,079 10,215 1,007
Increase in cash overdraft............................. 3,116 9,273 4,221
-------- -------- --------
Net cash provided by financing activities......... 12,155 16,257 7,363
-------- -------- --------
Effect of exchange rate changes on cash................ (65) 117 (441)
-------- -------- --------
Net increase in cash and equivalents.............. 5,191 784 39,098
-------- -------- --------
Cash and equivalents at beginning of year.............. 11,305 16,496 17,280
-------- -------- --------
Cash and equivalents at end of year............... $ 16,496 $ 17,280 $ 56,378
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated carve-out
financial statements.
F-59
<PAGE> 158
GEOMETRIC RESULTS INCORPORATED -- SERVICE
(A FORMER BUSINESS UNIT OF GEOMETRIC RESULTS INCORPORATED AND SUBSIDIARIES)
NOTES TO CONSOLIDATED CARVE-OUT FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
1. DESCRIPTION OF BUSINESS:
Business
The accompanying consolidated financial statements represent the carve-out
of certain operations of Ford Motor Company ("Ford"). Such carve-out financial
statements comprise the Service Business ("GRI-Service") of Geometric Results
Incorporated and subsidiaries' ("GRI"). GRI was created to provide contract
administrative and professional services that Ford, GRI-Service's former parent,
and its subsidiaries have historically outsourced and to compete for such
contracts on an arm's length basis. GRI also, through its Industrial Power
Products Division ("PPD"), is engaged in the sale, marketing and servicing of
Ford industrial and marine engines, transmissions, parts and components.
GRI-Service consists of five lines:
- Purchasing Services, including PeopleNet (in-client labor process
management) and AdTeam (training and procurement consulting management);
- Automotive Process Management, focusing on warranty, dealer and customer
support services;
- Training Services, emphasizing training, process management,
instructional system design and training delivery;
- Enterprise Imaging, providing electronic imaging of text documents and
engineering drawings via internet/intranet technologies; and
- Diversified Document Services, principally printing and mailroom
operations.
The largest revenue generating GRI-Service line is purchasing services,
which contributed 85%, 87% and 84% of total GRI-Service revenues in 1995 and
1996, and for the eight-month period ended August 31, 1997, respectively.
GRI-Service has established wholly-owned subsidiaries in Spain, Great Britain,
Germany, Mexico, Canada, Australia and New Zealand. The subsidiaries are engaged
in the same activities as GRI-Service. Foreign subsidiary assets accounted for
approximately 18% and 20% of total GRI-Service assets as of December 31, 1996
and August 31, 1997, respectively.
On August 31, 1997, MSX International (Holdings), Inc. a Delaware
corporation ("MSXI"), purchased GRI, pursuant to a Stock Purchase Agreement (the
"Agreement") dated July 25, 1997 by and among Ford and MSXI. GRI's PPD was not a
part of this sale, therefore, the accompanying consolidated financial statements
reflect only the "carve-out" balance sheets, statements of operations,
stockholders' equity and cash flows of GRI-Service for the periods presented.
The consolidated carve-out financial statements have been prepared as if
GRI-Service had operated as a stand-alone entity for all periods presented, and
include those assets, liabilities, revenues and expenses directly attributable
to the GRI-Service operations. Certain corporate, general and administrative
expenses have been allocated to GRI-Service from Ford on various bases which, in
the opinion of management, are reasonable. GRI-Service in turn allocates certain
corporate, general and administrative expenses to PPD on various bases which, in
the opinion of management, are reasonable. The financial statements exclude
certain corporate, general and administrative expenses that have been allocated
by GRI-Service to PPD. Such expenses and allocations are not necessarily
indicative of, and it is not practical for management to estimate, the nature
and level of expenses which might have been incurred had GRI-Service been
operating as a separate company. Under the terms of an interim agreement, GRI-
Service will continue to provide PPD certain services for which it will bill PPD
directly. The sale of GRI-Service will limit and eventually eliminate
GRI-Service's ability to allocate expenses to PPD, which amounts are material to
the results of operations of GRI-Service. For the years ended December 31, 1995
and 1996 and for the eight-month period ended August 31, 1997, these allocated
costs were $4,113, $5,207 and $3,397,
F-60
<PAGE> 159
GEOMETRIC RESULTS INCORPORATED -- SERVICE
(A FORMER BUSINESS UNIT OF GEOMETRIC RESULTS INCORPORATED AND SUBSIDIARIES)
NOTES TO CONSOLIDATED CARVE-OUT FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
respectively. The amounts that will be incurred on a separate company basis
could differ significantly from allocated amounts due to economies of scale,
differences in management and/or operational practices or other factors. The
financial information included herein does not purport to be indicative of the
financial position and results of operation of GRI-Service had it operated as a
stand-alone entity during the periods covered, and may not be indicative of
future operations or financial position.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles of Consolidation and Basis of Presentation
The accompanying financial statements include the accounts of GRI-Service
and its wholly-owned subsidiaries. All significant intercompany balances and
transactions have been eliminated.
Included in the retained earnings of GRI-Service is the divisional equity
transfer from PPD which represents the difference between all expenses paid by
GRI-Service on behalf of PPD or allocated to PPD by GRI-Service and all cash
transferred to GRI-Service by PPD since its acquisition. Expenses paid by GRI-
Service or allocated to PPD are not settled with GRI-Service and become a
permanent component of the divisional equity transfer. Cash generated by PPD is
utilized by GRI-Service on a daily basis. At December 31, 1996 and August 31,
1997, the cumulative divisional equity transfer that is included in GRI-
Service's retained earnings was approximately $26,821 and $27,828, respectively.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Concentration of Credit Risk
As previously stated, GRI-Service's principal customer is Ford. The loss of
this business would have a severe impact on GRI-Service.
Cash Equivalent -- Investment with Parent
Prior to August 31, 1997, GRI-Service invested excess cash with Ford. As
the funds were readily accessible by GRI-Service, the investment with Ford was
considered a cash equivalent. Such balances were approximately $14,012 and $498
at December 31, 1996 and August 31, 1997, respectively. The investment bore
interest at the published floating short-term rate established by Ford which was
5.3% and 5.5% at December 31, 1996 and August 31, 1997, respectively. Accrued
interest receivable at December 31, 1996 and August 31, 1997 was $130 and $146,
respectively.
F-61
<PAGE> 160
GEOMETRIC RESULTS INCORPORATED -- SERVICE
(A FORMER BUSINESS UNIT OF GEOMETRIC RESULTS INCORPORATED AND SUBSIDIARIES)
NOTES TO CONSOLIDATED CARVE-OUT FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
Property, Plant and Equipment
Depreciation of property, plant and equipment is computed using the
straight-line method based upon the following useful lives:
<TABLE>
<S> <C>
Office furniture, fixtures and equipment.................... 1 - 5 years
Computer equipment and purchased software................... 3 - 5 years
Tooling..................................................... 5 years
Automobiles................................................. 3 years
Machinery and equipment..................................... 20 years
Buildings and improvements.................................. 36 years
</TABLE>
Leasehold improvements are amortized on a straight-line basis over their
estimated useful lives or the term of the lease, whichever is less. When
depreciable assets are retired or sold, the cost and related allowance for
depreciation are removed from the accounts and the resulting gain or loss is
reflected in earnings.
Income Taxes
Prior to August 31, 1997, GRI-Service's accounts were included in Ford's
consolidated federal and principal combined state income tax returns. In
connection with this arrangement, GRI-Service had a tax allocation agreement
with Ford whereby they provided for income taxes on a separate return basis and
paid to or received from Ford those amounts which would have otherwise been due
to or from the applicable tax authority. Under this agreement, losses could be
carried forward to offset future taxable income. Income taxes payable to Ford as
of December 31, 1996 and August 31, 1997 were $1.9 million and $3.1 million,
respectively.
Deferred income taxes are recognized for the tax consequences in future
years of differences between the tax bases of assets and liabilities and their
financial reporting amounts at each year end based on enacted tax laws and
statutory tax rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized.
Income tax expense is the tax payable for the period and the change during the
period in deferred tax assets and liabilities.
Foreign earnings are considered permanently invested outside the United
States. Repatriation of these earnings to the United States would result in
additional taxes.
Foreign Currency Translation
All balance sheet accounts of foreign subsidiaries are translated at the
current exchange rate as of the end of the accounting period. Income statement
items are translated at average currency exchange rates. The resulting
translation adjustment is recorded as a separate component of stockholder's
equity. Transaction gains and losses included in income were not significant in
1995, 1996 or for the eight-month period ended August 31, 1997.
Revenue Recognition
GRI-Service recognizes contract services revenue and related direct costs
as the services are provided.
New Accounting Pronouncements
In June 1997, the FASB issued Statement of Financial Accountings Standards
No. 130 "Comprehensive Income" ("SFAS No. 130") and Statement of Financial
Accounting Standards No. 131 "Disclosure about Segments of an Enterprise and
Related Information" ("SFAS No. 131"). SFAS No. 130 establishes
F-62
<PAGE> 161
GEOMETRIC RESULTS INCORPORATED -- SERVICE
(A FORMER BUSINESS UNIT OF GEOMETRIC RESULTS INCORPORATED AND SUBSIDIARIES)
NOTES TO CONSOLIDATED CARVE-OUT FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
standards for reporting and display of comprehensive income and its components
in a full set of general purpose financial statements. Comprehensive income is
defined as the change in equity of a business enterprise during a period from
transactions and other events and circumstances from nonowner sources. SFAS No.
131 requires publicly-held companies to report financial and other information
about key revenue-producing segments of the entity for which such information is
available and is utilized by the chief operating decision maker. Specific
information to be reported for individual segments includes profit or loss,
certain revenue and expense items and total assets. The impact of adopting SFAS
No. 130 and SFAS No. 131, both effective for the GRI-Service in 1998, has not
yet been determined.
Reclassification
Certain prior year amounts have been reclassified to conform with the
current year presentation.
3. RELATED PARTY TRANSACTIONS:
For 1995, 1996 and for the eight-month period ended August 31, 1997,
substantially all contract service revenue and other income were earned from
transactions with Ford. Additionally, substantially all of the interest income
is earned from and expense is paid to Ford.
GRI-Service has historically purchased telephone, insurance, and various
other services from Ford, which amounted to $1,622, $2,780 and $2,053 in 1995,
1996 and for the eight-month period ended August 31, 1997, respectively.
4. PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment is comprised of the following at December 31,
1996 and August 31, 1997:
<TABLE>
<CAPTION>
1996 1997
---- ----
<S> <C> <C>
Land and improvements.................................... $ 163 $ 163
Building and improvements................................ 1,440 1,682
Machinery and equipment.................................. 6,204 6,269
Leasehold improvements................................... 3,794 3,608
Office furniture, fixtures and equipment................. 4,249 4,389
Computer equipment and purchased software................ 12,318 14,919
Tooling.................................................. 433 381
Automobiles.............................................. 215 416
-------- --------
28,816 31,827
Less accumulated depreciation and amortization........... (17,844) (20,776)
-------- --------
$ 10,972 $ 11,051
======== ========
</TABLE>
F-63
<PAGE> 162
GEOMETRIC RESULTS INCORPORATED -- SERVICE
(A FORMER BUSINESS UNIT OF GEOMETRIC RESULTS INCORPORATED AND SUBSIDIARIES)
NOTES TO CONSOLIDATED CARVE-OUT FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
5. COMMITMENTS AND CONTINGENCIES:
GRI-Service leases certain office space, furniture, fixtures and equipment
under operating leases with renewal options of one to three years and rent
escalation clauses generally in accordance with the consumer price index.
Pursuant to the Agreement, GRI-Service will assume certain of the leases. The
related lease expense for 1995 and 1996 and for the eight-month period ended
August 31, 1997 was $3,609 and $3,574 and $2,794, respectively. Minimum future
rental payments under the assumed operating leases are as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, RENTS
- ------------------------ -----
<S> <C> <C>
1997 (four months)................................................ $ 1,960
1998.............................................................. 4,391
1999.............................................................. 2,714
2000.............................................................. 2,124
2001.............................................................. 3,966
-------
$15,155
=======
</TABLE>
Litigation
GRI-Service is subject to legal proceedings, claims and liabilities which
arise in the normal course of business. In the opinion of management, the amount
of ultimate liability with respect to these actions will not have a material
impact on the financial position, results of operations and cash flows of
GRI-Service.
6. SHORT-TERM DEBT:
In April 1996 a line of credit for European operations was established with
an affiliate of GRI-Service for a term of three years. Such agreement provides
for advances against certain dealer maintenance and servicing accounts
receivable, bearing interest at the prevailing European bank rate of 6.25% plus
1.66%. Principal is due when GRI-Service receives payment from its customers and
simple interest is due monthly in arrears. At August 31, 1997, approximately
$4,852 was outstanding under this agreement.
7. EMPLOYEE BENEFIT PLANS:
GRI-Service has various employee benefit plans, including a profit sharing
plan for U.S. employees and various management and executive incentive plans
under which employees meeting certain eligibility tests can earn, at the
discretion of the Board of Directors, additional compensation. Such additional
compensation, if any, is determined on an annual basis.
GRI-Service has an employee savings plan (401(k) plan) for all permanent,
U.S. employees who are at least 21 years of age and have one year of service (as
defined). GRI-Service contributions to the plan are made strictly at the
discretion of the Board of Directors and are allocated to participant accounts
on a pro rata basis based on participant age and salary. Participants may make
voluntary contributions to the plan, subject to federal limitations, up to 15%
of their compensation (as defined).
For the years ended December 31, 1995 and 1996 and for the eight-month
period ended August 31, 1997 GRI-Service provided $2,487, $4,499 and $3,230,
respectively, relating to these plans.
F-64
<PAGE> 163
GEOMETRIC RESULTS INCORPORATED -- SERVICE
(A FORMER BUSINESS UNIT OF GEOMETRIC RESULTS INCORPORATED AND SUBSIDIARIES)
NOTES TO CONSOLIDATED CARVE-OUT FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
8. INCOME TAXES:
The provision (benefit) for income taxes for the years ended December 31,
1995 and 1996 and for the eight-month period ended August 31, 1997 include the
following:
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Federal:
Current............................................ $ (268) $ 1,555 $1,046
Deferred........................................... (201) (93) 241
State and local:
Current............................................ (46) 52 96
Deferred........................................... (44) (8) 20
Foreign, current..................................... 148 1,019 1,505
------ ------- ------
Total......................................... $ (411) $ 2,530 $2,908
====== ======= ======
</TABLE>
The types of temporary differences between the tax bases of assets and
liabilities and their financial reporting amounts that give rise to a
significant portion of the deferred tax liability and deferred tax asset and
their approximate tax effects are as follows:
<TABLE>
<CAPTION>
1996 1997
---------------------------- ----------------------------
NET DEFERRED NET DEFERRED NET DEFERRED NET DEFERRED
TAX ASSET TAX LIABILITY TAX ASSET TAX LIABILITY
CURRENT NON-CURRENT CURRENT NON-CURRENT
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Depreciation.................................. $ -- $(265) $ -- $(859)
Incentives.................................... -- 95 -- 95
Unbilled revenue.............................. (279) -- -- --
Bad debts..................................... 6 -- 18 --
Accrued vacation.............................. 415 -- 446 --
Other, net.................................... 9 -- 19 --
----- ----- ----- -----
Net asset (liability).................... $ 151 $(170) $ 483 $(764)
===== ===== ===== =====
</TABLE>
Management has determined that a valuation allowance for the net deferred
tax asset is not necessary based on GRI-Service's history of increasing earnings
allowing GRI-Service, in the event of future losses, to carry back and recover
the majority of its deferred tax assets from refunds of taxes paid in prior
years.
For the years ended December 31, 1995 and 1996, and for the eight-month
period ended August 31, 1997, GRI-Service has cumulative undistributed foreign
tax-based earnings of approximately $7,541 and $8,051 and $12,207, respectively.
It is the intent of GRI-Service to permanently reinvest these earnings. U.S.
income tax has been provided on approximately $1,891, $3,791 and $4,763 for the
years ended December 31, 1995 and 1996 and for the eight-month period ended
August 31, 1997, respectively, which, under U.S. tax law, represent constructive
dividends. In the event the remaining earnings of approximately $5,650, $4,260
and $7,444 for the years ended December 31, 1995 and 1996 and for the
eight-month period ended August 31, 1997, respectively, are distributed,
GRI-Service will be subject to U.S. income taxes.
9. SALE OF CERTAIN CONTRACTS:
During 1995, GRI-Service sold the assets and certain liabilities of
selected contracts in Great Britain. Accordingly, the net gain of $1,800 has
been included in other income.
F-65
<PAGE> 164
================================================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH
HEREIN OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE AS OF WHICH INFORMATION
IS GIVEN IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR A
SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.................. 4
Prospectus Summary..................... 5
Risk Factors........................... 17
Use of Proceeds........................ 23
Capitalization......................... 24
Pro Forma Financial Data............... 25
Selected Financial and Other Data...... 30
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 31
Business............................... 40
Management............................. 50
Principal Stockholders................. 54
Certain Relationships and Related
Transactions......................... 54
Description of Capital Stock........... 57
Description of Certain Other
Indebtedness......................... 59
The Exchange Offer..................... 61
Description of Notes................... 67
United States Federal Income Tax
Consequences......................... 95
Plan of Distribution................... 96
Legal Matters.......................... 96
Experts................................ 97
Index to Consolidated Financial
Statements........................... F-1
</TABLE>
UNTIL , 1998 (90 DAYS AFTER THE DATE HEREOF), ALL DEALERS EFFECTING
TRANSACTIONS IN THE EXCHANGE NOTES, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO
THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
================================================================================
================================================================================
$100,000,000
MSX INTERNATIONAL, INC.
11 3/8% SENIOR SUBORDINATED NOTES
DUE 2008
[MSX INTERNATIONAL, INC. LOGO]
------------
PROSPECTUS
--, 1998
------------
================================================================================
<PAGE> 165
PART II
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General corporation Law provides, generally,
that a corporation shall have the power to indemnify any person who was or is a
party or is threatened to be made a party to any action, suit or proceeding
(except actions by or in the right of the corporation) by reason of the fact
that such person is or was a director or officer of the corporation against all
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interest of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. A corporation may similarly indemnify such person for expenses
actually and reasonably incurred by him in connection with the defense or
settlement of any action or suit by or in the right of the corporation, provided
such person acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, in the case of
claims, issues and matters as to which such person shall have been adjudged
liable to the corporation, provided that a court shall have determined, upon
application, that, despite the adjudication of liability but in view of all of
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
Section 102(b)(7) of the Delaware General Corporation Law provides,
generally, that the certificate of incorporation may contain a provisions
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provision may not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or knowing violation of law, (iii) under
section 174 of Title 8, or (iv) for any transaction form which the director
derived an improper personal benefit. No such provision may eliminate or limit
the liability of a director for any act or omission occurring prior to the date
which such provision becomes effective.
Article FOUR, Section 1 of the Company's By-laws provides as follows:
"The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was or has agreed to
become a Director or officer of the Corporation, or is or was serving or
has agreed to serve at the request of the Corporation as a Director or
officer of another corporation, partnership, joint venture, trust or other
enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, and may indemnify any person who was or is a
party or is threatened to be made a party to such an action, suit or
proceeding by reason of the fact that he is or was or has agreed to become
an employee or agent of the Corporation, or is or was serving or has agreed
to serve at the request of the Corporation as an employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him or on his behalf
in connection with such action, suit or proceeding and any appeal
therefrom, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful; except that in the case of an action or
suit by or in the right of the Corporation to procure a judgment in its
favor (1) such indemnification shall be limited to expenses (including
attorneys' fees) actually and reasonably incurred by such person in the
defense or settlement of such action or suit, and (2) no indemnification
shall be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the Corporation unless and
only to the extent that the Delaware Court of Chancery or the court in
which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Delaware Court of Chancery or such
other court shall deem proper.
<PAGE> 166
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not apposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful."
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
<TABLE>
<C> <C> <S>
3.1 -- Restated Certificate of Incorporation of the Company.
3.2 -- Amended and Restated By-laws of the Company.
*4.1 -- Indenture dated as of January 15, 1998 by and between the
Company, the Subsidiary Guarantors and IBJ Schroder Bank &
Trust Company, as trustee, in respect of the 11 3/8% Senior
Subordinated Notes due 2008.
*4.2 -- Form of Exchange Notes.
*4.3 -- Registration Agreement dated as of January 16, 1998 by and
among the Company, the Subsidiary Guarantors and Salomon
Brothers Inc, Lehman Brothers Inc. and First Chicago Capital
Markets, Inc.
5.1 -- Opinion of Davis Polk & Wardwell as to the validity of the
Exchange Notes.
10.1 -- Stockholders' Agreement dated as of January 3, 1997 among
the Company, MascoTech, Inc. ("MascoTech"), Citicorp Venture
Capital, Ltd. ("CVC") and certain executive officers and
directors of the Company.
10.2 -- Registration Rights Agreement dated as of January 3, 1997
among the Company, CVC, MascoTech and certain executive
officers and directors of the Company.
10.3 -- Amended and Restated Credit Agreement dated as of April 14,
1998 among the Company, the Subsidiary Guarantors and NBD
Bank as agent to the lenders party thereto.
10.4 -- Master Vendor Agreement dated as of August 31, 1997 between
the Company and Ford Motor Company ("Ford").
10.5 -- Master Supply Agreement dated as of August 31, 1997 between
the Company and Ford.
10.6 -- MascoTech Subscription Agreement dated as of January 3, 1997
between the Company and MascoTech.
10.7 -- CVC Subscription Agreement dated as of January 3, 1997
between the Company and CVC.
10.8 -- Management Subscription Agreement dated as of January 3,
1997 between the Company and certain executive officers of
the Company.
10.9 -- Stock Purchase Agreement dated as of July 25, 1997 between
MSX International (Holdings), Inc. and Ford.
10.10 -- Acquisition Agreement dated as of November 12, 1996 among
the Company, MascoTech and ASG Holdings Inc.
10.11 -- Employment Agreement dated as of January 3, 1997 between the
Company and Ralph L. Miller.
10.12 -- Employment Agreement dated as of January 3, 1997 between the
Company and Frederick K. Minturn.
10.13 -- Employment Agreement dated as of August 28, 1997 between the
Company and Don Springer.
10.14 -- Deferred Compensation Plan.
12.1 -- Statement re: Computation of Ratio of Earnings to Fixed
Charges.
21.1 -- Subsidiaries of the Company.
*23.1 -- Consent of Coopers & Lybrand L.L.P.
*23.2 -- Consent of Coopers & Lybrand L.L.P.
*23.3 -- Consent of Coopers & Lybrand L.L.P.
*23.4 -- Consent of Ernst & Young LLP
23.5 -- Consent of Davis Polk & Wardwell (contained in Exhibit 5.1).
25.1 -- Statement of eligibility of Trustee on Form T-1.
99.1 -- Letter of Transmittal.
99.2 -- Notice of Guaranteed Delivery.
</TABLE>
II-2
<PAGE> 167
<TABLE>
<C> <C> <S>
99.3 -- Instruction to Registered Holder and/or Book-entry transfer
of Participant.
99.4 -- Form of Letter to Clients.
99.5 -- Form of Letter to Registered Holders and Depository Trust
Company Participants.
</TABLE>
- -------------------------
* Previously filed
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(c) To respond to requests for information that is incorporated by
reference into the Prospectus pursuant to Items 4, 10(b), 11 or 13 of Form S-4,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
Registration Statement through the date of responding to the request.
(d) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.
II-3
<PAGE> 168
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment No. 3 to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Auburn Hills, State of Michigan on July
21, 1998.
MSX INTERNATIONAL, INC.
By: /s/ ERWIN H. BILLIG
------------------------------------
Erwin H. Billig
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Ralph L. Miller and Frederick K. Minturn, and
each of them, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and revocation, for him or her and in his or her name,
place and stead, in any and all capacities to sign any and all amendments
(including post-effective amendments to this Registration Statement) and to file
the same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and things requisite and necessary to be done as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 has been signed by the following persons, in the capacities indicated on
July 21, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
* Chief Executive Officer; Chairman of the Board of
- ------------------------------------------ Directors
Erwin H. Billig
* Special Assistant to the Chairman of the Board;
- ------------------------------------------ Director
Ralph L. Miller
/s/ FREDERICK K. MINTURN Executive Vice President; Chief Financial Officer
- ------------------------------------------
Frederick K. Minturn
* Director
- ------------------------------------------
Richard A. Manoogian
* Director
- ------------------------------------------
Richard M. Cashin, Jr.
* Director
- ------------------------------------------
Michael A. Delaney
* Director
- ------------------------------------------
David E. Cole
* Director
- ------------------------------------------
Lee Gardner
</TABLE>
* by power of attorney
II-4
<PAGE> 169
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment No. 3 to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Auburn Hills, State of Michigan on July
21, 1998.
GEOMETRIC RESULTS INCORPORATED
By: /s/ RALPH L. MILLER
------------------------------------
Ralph L. Miller
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Ralph L. Miller and Frederick K. Minturn, and
each of them, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and revocation, for him or her and in his or her name,
place and stead, in any and all capacities to sign any and all amendments
(including post-effective amendments to this Registration Statement) and to file
the same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and things requisite and necessary to be done as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 has been signed by the following persons, in the capacities indicated on
July 21, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
* Chief Executive Officer
- ------------------------------------------
Erwin H. Billig
/s/ RALPH L. MILLER President
- ------------------------------------------
Ralph L. Miller
* Vice President, Treasurer and Secretary
- ------------------------------------------
Frederick K. Minturn
</TABLE>
II-5
<PAGE> 170
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment No. 3 to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Auburn Hills, State of Michigan on July
21, 1998.
MSX INTERNATIONAL BUSINESS SERVICES,
INC.
By: /s/ EDWARD MANNINO
------------------------------------
Edward Mannino
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Ralph L. Miller and Frederick K. Minturn, and
each of them, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and revocation, for him or her and in his or her name,
place and stead, in any and all capacities to sign any and all amendments
(including post-effective amendments to this Registration Statement) and to file
the same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and things requisite and necessary to be done as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 has been signed by the following persons, in the capacities indicated on
July 21, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
* Chief Executive Officer
- ------------------------------------------
Erwin H. Billig
* Director
- ------------------------------------------
Ralph L. Miller
/s/ FREDERICK K. MINTURN Vice President, Treasurer and Assistant Secretary
- ------------------------------------------
Frederick K. Minturn
/s/ EDWARD MANNINO President
- ------------------------------------------
Edward Mannino
</TABLE>
* by power of attorney
II-6
<PAGE> 171
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment No. 3 to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Auburn Hills, State of Michigan on July
21, 1998.
MSX INTERNATIONAL ENGINEERING
SERVICES, INC.
By: /s/ RALPH L. MILLER
------------------------------------
Ralph L. Miller
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Ralph L. Miller and Frederick K. Minturn, and
each of them, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and revocation, for him or her and in his or her name,
place and stead, in any and all capacities to sign any and all amendments
(including post-effective amendments to this Registration Statement) and to file
the same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and things requisite and necessary to be done as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 has been signed by the following persons, in the capacities indicated on
July 21, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
* Chief Executive Officer
- ------------------------------------------
Erwin H. Billig
/s/ RALPH L. MILLER President
- ------------------------------------------
Ralph L. Miller
Vice President, Treasurer and Secretary
- ------------------------------------------
Frederick K. Minturn
</TABLE>
* by power of attorney
II-7
<PAGE> 172
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment No. 3 to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Auburn Hills, State of Michigan on July
21, 1998.
MSX INTERNATIONAL (HOLDINGS), INC.
By: /s/ RALPH L. MILLER
------------------------------------
Ralph L. Miller
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Ralph L. Miller and Frederick K. Minturn, and
each of them, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and revocation, for him or her and in his or her name,
place and stead, in any and all capacities to sign any and all amendments
(including post-effective amendments to this Registration Statement) and to file
the same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and things requisite and necessary to be done as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 has been signed by the following persons, in the capacities indicated on
July 21, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
* Chief Executive Officer
- ------------------------------------------
Erwin H. Billig
/s/ RALPH L. MILLER President
- ------------------------------------------
Ralph L. Miller
* Vice President, Treasurer and Secretary
- ------------------------------------------
Frederick K. Minturn
</TABLE>
* by power of attorney
II-8
<PAGE> 173
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment No. 3 to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Auburn Hills, State of Michigan on July
21, 1998.
MSX INTERNATIONAL (USA), INC.
By: /s/ RALPH L. MILLER
------------------------------------
Ralph L. Miller
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Ralph L. Miller and Frederick K. Minturn, and
each of them, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and revocation, for him or her and in his or her name,
place and stead, in any and all capacities to sign any and all amendments
(including post-effective amendments to this Registration Statement) and to file
the same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and things requisite and necessary to be done as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 has been signed by the following persons, in the capacities indicated on
July 21, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
* Chief Executive Officer
- ------------------------------------------
Erwin H. Billig
/s/ RALPH L. MILLER President
- ------------------------------------------
Ralph L. Miller
* Vice President, Treasurer and Secretary
- ------------------------------------------
Frederick K. Minturn
</TABLE>
* by power of attorney
II-9
<PAGE> 174
EXHIBIT INDEX
<TABLE>
<C> <C> <S>
3.1 -- Restated Certificate of Incorporation of the Company
3.2 -- Amended and Restated By-laws of the Company.
*4.1 -- Indenture dated as of January 15, 1998 by and between the
Company, the Subsidiary Guarantors and IBJ Schroder Bank &
Trust Company, as trustee, in respect of the 11 3/8% Senior
Subordinated Notes due 2008.
*4.2 -- Form of Exchange Notes.
*4.3 -- Registration Agreement dated as of January 16, 1998 by and
among the Company, the Subsidiary Guarantors and Salomon
Brothers Inc, Lehman Brothers Inc. and First Chicago Capital
Markets, Inc.
5.1 -- Opinion of Davis Polk & Wardwell as to the validity of the
Exchange Notes.
10.1 -- Stockholders' Agreement dated as of January 3, 1997 among
the Company, MascoTech, Inc. ("MascoTech"), Citicorp Venture
Capital, Ltd. ("CVC") and certain executive officers and
directors of the Company.
10.2 -- Registration Rights Agreement dated as of January 3, 1997
among the Company, CVC, MascoTech and certain executive
officers and directors of the Company.
10.3 -- Amended and Restated Credit Agreement dated as of April 14,
1998 among the Company, the Subsidiary Guarantors and NBD
Bank as agent to the lenders party thereto.
10.4 -- Master Vendor Agreement dated as of August 31, 1997 between
the Company and Ford Motor Company ("Ford").
10.5 -- Master Supply Agreement dated as of August 31, 1997 between
the Company and Ford.
10.6 -- MascoTech Subscription Agreement dated as of January 3, 1997
between the Company and MascoTech.
10.7 -- CVC Subscription Agreement dated as of January 3, 1997
between the Company and CVC.
10.8 -- Management Subscription Agreement dated as of January 3,
1997 between the Company and certain executive officers of
the Company.
10.9 -- Stock Purchase Agreement dated as of July 25, 1997 between
MSX International (Holdings), Inc. and Ford.
10.10 -- Acquisition Agreement dated as of November 12, 1996 among
the Company, MascoTech and ASG Holdings Inc.
10.11 -- Employment Agreement dated as of January 3, 1997 between the
Company and Ralph L. Miller.
10.12 -- Employment Agreement dated as of January 3, 1997 between the
Company and Frederick K. Minturn.
10.13 -- Employment Agreement dated as of August 28, 1997 between the
Company and Don Springer.
10.14 -- Deferred Compensation Plan.
12.1 -- Statement re: Computation of Ratio of Earnings to Fixed
Charges.
21.1 -- Subsidiaries of the Company.
*23.1 -- Consent of Coopers & Lybrand L.L.P.
*23.2 -- Consent of Coopers & Lybrand L.L.P.
*23.3 -- Consent of Coopers & Lybrand L.L.P.
*23.4 -- Consent of Ernst & Young LLP
23.5 -- Consent of Davis Polk & Wardwell (contained in Exhibit 5.1).
25.1 -- Statement of eligibility of Trustee on Form T-1.
99.1 -- Letter of Transmittal.
99.2 -- Notice of Guaranteed Delivery.
99.3 -- Instruction to Registered Holder and/or Book-entry transfer
of Participant.
99.4 -- Form of Letter to Clients.
99.5 -- Form of Letter to Registered Holders and Depository Trust
Company Participants.
</TABLE>
- -------------------------
* Previously filed
<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
MSX INTERNATIONAL (HOLDINGS), INC.
The undersigned incorporator, for the purpose of incorporating or organizing a
corporation under the Delaware General Corporation Law (the "GCL"), certifies:
FIRST: The name of the corporation is MSX International (Holdings),
Inc. (the "Corporation").
SECOND: The address of the Corporation's registered office in the
State of Delaware is Corporate Trust Center, 1209 Orange Street, City
of Wilmington, County of New Castle. The name of its registered agent
at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the GCL.
FOURTH: The total number of shares of capital stock which the
Corporation shall have authority to issue is One Thousand (1,000)
shares with a par value of $0.01 per share, all such shares shall be
one class and designated "Common Stock".
FIFTH: The name and mailing address of the incorporator are as
follows:
Name Mailing Address
---- ---------------
Katrina M. Kwan Morgan, Lewis & Bockius LLP
101 Park Avenue,
New York, New York 10178
SIXTH: Elections of directors need not be by ballot unless the By-Laws
of the Corporation shall so provide. Meetings of stockholders may be
held within or without the State of Delaware, as the By-Laws may
provide. The books of the Corporation may be kept (subject to any
provision contained in the GCL) outside the State of Delaware at such
place or places as may be designated from time to time by the Board of
Directors (the "Board") or in the By Laws.
SEVENTH: The Board is expressly authorized to adopt, amend or repeal
the By-Laws of the Corporation subject to the reserved power of the
stockholders to amend and repeal any By Laws adopted by the Board.
EIGHTH: No person who is or was a director of the Corporation shall be
liable to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the
<PAGE> 2
Corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the GCL, or (iv) for any
transaction from which the director derived an improper personal
benefit. No amendment to, repeal or adoption of any provision of this
Certificate inconsistent with this article shall apply to or have any
effect on the liability of any director of the Corporation for or with
respect to any acts or omissions of such director occurring prior to
such amendment, repeal, or adoption of an inconsistent provision.
NINTH: Each person who at any time is or shall have been a director,
officer, employee or agent of the Corporation and is threatened to be
or is made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee,
trustee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall be indemnified against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with
any such action, suit or proceeding to the fullest extent authorized
under Section 145 of the GCL. The foregoing right of indemnification
shall in no way be exclusive of any other rights of indemnification to
which such director, officer, employee or agent may be entitled under
any by-law, agreement, vote of stockholders or disinterested
directors, or otherwise.
TENTH: The Corporation expressly elects not to be governed by Section
203 of the GCL.
IN WITNESS WHEREOF, I have signed this Certificate this 18th day of December,
1996.
-------------------------------------
Katrina M. Kwan
Sole Incorporator
<PAGE> 1
EXHIBIT 3.2
Amended and Restated January __, 1997
BY-LAWS
OF
MSX INTERNATIONAL, INC.
ARTICLE I
Stockholders
SECTION 1. Annual Meeting. The annual meeting of the
stockholders of MSX INTERNATIONAL, INC. (the "Corporation") shall be held on
such date, at such time and at such place within or without the State of
Delaware as may be designated by the Board of Directors of the Corporation (the
"Board of Directors") or the Chairman in the absence of a designation by the
Board of Directors, for the purpose of electing Directors and for the
transaction of such other business as may be properly brought before the
meeting.
SECTION 2. Special Meetings. A special meeting of the
stockholders of the Corporation may be called at any time by the Board of
Directors and shall be called by the Chairman, the President or the Secretary at
the request in writing of stockholders holding together at least (i) ten percent
(10%) of the total number of issued and outstanding shares of the Corporation's
Class A Common Stock, par value $.01 per share, (collectively, the "Class A
Common Stock"), or (ii) for so long as any shares of the Company's Series A-1
Preferred Stock, par value $.01 per share (the "Series A-1 Preferred Stock"),
are issued and outstanding, fifty percent (50%) of the total number of shares of
Series A-1 Preferred Stock then issued and outstanding. Any special meeting of
the stockholders shall be held on such date, at such time and at such place
within or without the State of Delaware as the Board of Directors or the officer
calling the meeting may designate. At a special meeting of the stockholders, no
business shall be transacted and no corporate action shall be taken other than
that stated in the notice of the meeting unless all of the stockholders entitled
to notice are present in person or by proxy and consent thereto, in which case
any and all business may be transacted at the meeting even though the meeting is
held without notice.
SECTION 3. Notice of Meetings. Except as otherwise provided in
these By-Laws or by law, a written notice of each meeting of the stockholders
shall be given not less than ten (10) nor more than sixty (60) days before the
date of the meeting to each Stockholder entitled to vote at such meeting. The
notice shall state the place, date and hour of the meeting and, in the case of a
special meeting, the purpose or purposes for which the meeting is called.
SECTION 4. Quorum. At any meeting of the stockholders, the
holders of a majority in number of the total outstanding shares of stock of the
Corporation entitled to vote at such meeting, present in person or represented
by proxy, shall constitute a quorum of the stockholders for all purposes, unless
the representation of a larger number of shares shall be
<PAGE> 2
required by law or by the Certificate of Incorporation in which case the
representation of the number of shares so required shall constitute a quorum;
provided that at any meeting of the stockholders at which the holders of any
class or series of stock (as the case may be) of the Corporation shall be
entitled to vote separately as a class or series, the holders of a majority in
number of the total outstanding shares of such class or series, present in
person or represented by proxy, shall constitute a quorum for purposes of such
class or series vote (as the case may be) unless the representation of a larger
number of shares of such class or series shall be required by law.
SECTION 5. Adjourned Meetings. Whether or not a quorum shall
be present in person or represented at any meeting of the stockholders, the
holders of a majority in number of the shares of stock of the Corporation
present in person or represented by proxy and entitled to vote at such meeting
may adjourn from time to time; provided, however, that if the holders of any
class or series of stock (as the case may be) of the Corporation are entitled to
vote separately as a class or series upon any matter at such meeting, any
adjournment of the meeting in respect of action by such class or series upon
such matter shall be determined by the holders of a majority of the shares of
such class or series present in person or represented by proxy and entitled to
vote at such meeting. When a meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting if the time and place thereof
are announced at the meeting at which the adjournment is taken. At the adjourned
meeting the stockholders, or the holders of any class or series of stock
entitled to vote separately as a class or series, as the case may be, may
transact any business which might have been transacted by them at the original
meeting. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the adjourned meeting.
SECTION 6. Organization. The Chairman or, in his absence, the
President or any Vice President shall call all regular meetings of the
stockholders to order, and shall act as Chairman of such meetings. In the
absence of the Chairman, the President, and all Vice Presidents or in the case
of any special meeting, the holders of a majority in number of votes of all
securities entitled to vote at such meeting present in person or represented by
proxy shall elect a Chairman.
The Secretary of the Corporation shall act as Secretary of all
regular meetings of the stockholders; but in the absence of the Secretary or in
the case of any special meeting, the Chairman may appoint any person to act as
Secretary of the meeting. It shall be the duty of the Secretary of the
Corporation to prepare and make, at least ten days before every meeting of
stockholders, a complete list of stockholders entitled to vote at such meeting,
arranged in alphabetical order by series and class and showing the address of
each stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open, either at a place within the city where
the meeting is to be held, which place shall be specified in the notice of the
meeting or, if not so specified, at the place where the meeting is to be held,
for the ten days next preceding the meeting, to the examination of any
stockholder, for any purpose germane to the
-2-
<PAGE> 3
meeting, during ordinary business hours, and shall be produced and kept at the
time and place of the meeting during the whole time thereof and subject to the
inspection of any stockholder who may be present.
SECTION 7. Voting. Except as otherwise provided in the
Certificate of Incorporation or by law, each stockholder shall be entitled to
one vote for each share of the capital stock of the Corporation registered in
the name of such stockholder upon the books of the Corporation. Subject to the
provisions of the Certificate of Incorporation, each stockholder entitled to
vote at a meeting of stockholders or to express consent or dissent to corporate
action in writing without a meeting may authorize another person or persons to
act for him by proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period. Except as
otherwise provided by law or by the Certificate of Incorporation, each Director
shall be elected by a plurality of the votes cast at a meeting of stockholders
by the stockholders entitled to vote in the election of such Director and,
whenever any corporate action, other than the election of Directors, is to be
taken, it shall be authorized by a majority of the votes cast at a meeting of
stockholders by the stockholders entitled to vote thereon.
Shares of the capital stock of the Corporation belonging to
the Corporation or to another corporation, if a majority of the shares entitled
to vote in the election of directors of such other corporation is held, directly
or indirectly, by the Corporation, shall neither be entitled to vote nor be
counted for quorum purposes.
ARTICLE II
Board of Directors
SECTION 1. Generally, the business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors. The Directors shall, except as hereinafter otherwise provided for
filling vacancies, be elected at the annual meeting of stockholders entitled to
vote for said members of the Board of Directors, and shall hold office until
their respective successors are elected and qualified or until their earlier
resignation or removal. Prior to the occurrence of a Conversion Event (as
defined in the Certificate of Incorporation), it shall be a qualification of
each member of the Board of Directors to be elected by the holders of each
series of the Class A Common Stock that such member shall have been designated
in accordance with the procedures set forth in Section 5.1(a) of the
Stockholders' Agreement (as defined below).
SECTION 2. Removal and Vacancies.
The stockholders may remove, with or without cause,
any Director and fill the vacancy thereby created; provided that whenever any
Director shall have been elected by the
-3-
<PAGE> 4
holders of any class or series of stock of the Corporation voting separately as
a class or series (as the case may be) under the provisions of the Certificate
of Incorporation (i) such Director may be removed without cause and (ii) any
vacancy resulting therefrom may be filled, in the case of both clause (i) and
clause (ii) only by the holders of that class or series voting separately as a
class or series (as the case may be). Prior to the occurrence of a Conversion
Event, the Board of Directors may not fill any vacancies on the Board of
Directors.
SECTION 3. Place of Meeting. The Board of Directors may hold
its meetings in such place or places in the State of Delaware or outside the
State of Delaware as the Board of Directors from time to time shall determine.
SECTION 4. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as the Board of Directors from
time to time by resolution shall determine. No notice shall be required for any
regular meeting of the Board of Directors; but a copy of every resolution fixing
or changing the time or place of regular meetings shall be mailed to every
Director at least five days before the first meeting held in pursuance thereof.
SECTION 5. Special Meetings. Special meetings of the Board of
Directors shall be held whenever called by direction of the Chairman or by any
two of the Directors then in office. Notice of the day, hour and place of
holding of each special meeting shall be given by delivering the same at least
two days before the meeting or by causing the same to be transmitted by telefax,
telegraph, cable or wireless at least one day before the meeting to each
Director. Unless otherwise indicated in the notice thereof, any and all business
other than an amendment of these By-Laws may be transacted at any special
meeting, and an amendment of these By-Laws may be acted upon if the notice of
the meeting shall have stated that the amendment of these By-Laws is one of the
purposes of the meeting. At any meeting at which every Director shall be
present, even though without any notice, any business may be transacted,
including the amendment of these By-Laws.
SECTION 6. Quorum; Majority Board Vote.
(a) Prior to the occurrence of a Conversion Event,
Directors entitled to cast a majority of the 1,000 weighted votes of the Board
of Directors, whether or not there are vacancies on the Board of Directors at
the time of such meeting, shall constitute a quorum for the transaction of
business, if any. Upon and after the occurrence of a Conversion Event a majority
of the Directors in office shall constitute a quorum for the transaction of
business.
(b) If at any meeting of the Board of Directors
there is less than a quorum present, (i) prior to the occurrence of a Conversion
Event, Directors entitled to cast a majority of the weighted votes of the
Directors present may adjourn the meeting from time to time and (ii) upon and
after the occurrence thereof, a majority of the Directors present may adjourn
the meeting from time to time.
-4-
<PAGE> 5
(c) A Majority Board Vote taken at any meeting at
which a quorum is present shall be the act of the Board of Directors, subject to
any additional requirements as may be set forth in the Certificate of
Incorporation. As used in these By-laws, "Majority Board Vote" means (i) prior
to the occurrence of a Conversion Event, the affirmative vote of Directors on
the Board of Directors entitled to cast a majority of the 1,000 weighted votes
of the Board of Directors and (ii) upon and after the occurrence of a Conversion
Event, the affirmative vote of a majority of the Directors on the Board of
Directors then in office.
SECTION 7. Organization. Prior to the occurrence of a
Conversion Event, unless otherwise determined by Directors entitled to cast a
majority of the weighted votes of the members of the Board of Directors present
at a meeting at which a quorum is present, the Chairman shall preside at all
meetings of the Board of Directors and the Secretary shall act as Secretary of
all meetings of the Board of Directors. In the absence of the Secretary, the
Chairman may appoint any person to act as Secretary of the meeting. Upon and
after the occurrence of a Conversion Event, unless otherwise determined by a
majority of the members of the Board of Directors present at a meeting at which
a quorum is present, the Chairman shall preside at all meetings of the board of
Directors and the Secretary shall act as Secretary of all meetings of the Board
of Directors. In the absence of the Secretary, the Chairman may appoint any
person to act as Secretary of the meeting.
SECTION 8. Committees.
(a) Committees Generally. The Board of Directors
may, by Majority Board Vote, designate one or more committees, each of which,
(i) prior to the occurrence of a Conversion Event, shall consist of one (1)
Institutional Director, one (1) MascoTech Director and one (1) Disinterested
Director (as such terms are defined in the Stockholders' Agreement dated as of
January __, 1997 by and among the stockholders of the Corporation and the
Corporation (the "Stockholders' Agreement")), and (ii) from and after the
occurrence of a Conversion Event, one or more of the Directors of the
Corporation.
(b) Quorum. In the absence or disqualification of a
member of a committee, the member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors (so long as the
provisions of Section 8(a) are complied with) to act at the meeting in the place
of any such absent or disqualified member. Any such committee shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and the affairs of the Corporation, to the extent
provided by resolution passed by a Majority Board Vote, to the full extent
permitted by law.
SECTION 9. Conference Telephone Meetings. Unless otherwise
restricted by the Certificate of Incorporation, by these By-Laws or by
law, the members of the Board of Directors or any committee designated by the
Board of Directors, may participate in a meeting of the Board of Directors or
such committee, as the case may be, by means of conference telephone or similar
-5-
<PAGE> 6
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation shall constitute presence in
person at such meeting.
SECTION 10. Consent of Directors or Committee in Lieu of
Meeting. Unless otherwise restricted by the Certificate of Incorporation or by
these By-Laws, any action required or permitted to be taken at any meeting of
the Board of Directors, or of any committee thereof, may be taken without a
meeting if all members of the Board of Directors or committee, as the case may
be, consent thereto in writing and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee, as the case may
be; provided, that prior to occurrence of a Conversion Event, no such action by
the Board of Directors or a committee may be taken without a meeting if there
are one or more vacancies on the Board of Directors or such committee.
ARTICLE III
Officers
SECTION 1. Officers. The officers of the Corporation shall be
a Chairman, a President, one or more Vice Presidents, a Secretary and a
Treasurer, and such additional officers, if any, as shall be elected by the
Board of Directors pursuant to the provisions of Section 7 of this Article III.
Except for the election of officers prior to the first annual meeting of the
stockholders, the Chairman, the President, one or more Vice Presidents, the
Secretary and the Treasurer shall be elected by the Board of Directors at its
first meeting after each annual meeting of the stockholders. The failure to hold
such election shall not of itself terminate the term of office of any officer.
All officers shall hold office at the pleasure of the Board of Directors. Any
officer may resign at any time upon written notice to the Corporation. Officers
may, but need not, be Directors. Any number of offices may be held by the same
person.
All officers, agents and employees shall be subject to
removal, with or without cause, at any time by the Board of Directors. The
removal of an officer without cause shall be without prejudice to his contract
rights, if any. The election or appointment of an officer shall not of itself
create contract rights. All agents and employees other than officers elected by
the Board of Directors shall also be subject to removal, with or without cause,
at any time by the officers appointing them.
Any vacancy caused by the death of any officer, his
resignation, his removal, or otherwise, may be filled by the Board of Directors,
and any officer so elected shall hold office at the pleasure of the Board of
Directors.
In addition to the powers and duties of the officers of the
Corporation as set forth in these By-Laws, the officers shall have such
authority and shall perform such duties as from time to time may be determined
by the Board of Directors.
-6-
<PAGE> 7
SECTION 2. Powers and Duties of the Chairman of the Board. The
Chairman of the Board shall have the responsibility of guiding the Board of
Directors in effectively discharging its responsibilities, including, but not
limited to, providing for the execution of the Corporation's objectives;
safeguarding and furthering shareholders' interests; and appraising the adequacy
of overall results as reported by the President or the Chief Operating Officer.
He shall see that all orders and resolutions of the Board of Directors are
carried into effect and shall from time to time report to the Board of Directors
on matters within his knowledge which the interests of the Corporation may
require to be brought to the attention of the Board of Directors. The Chairman
of the Board shall preside at all meetings of the Board of Directors and the
stockholders at which he is present.
SECTION 3. Powers and Duties of the President. The President
shall be the Chief Executive Officer of the Corporation. The President shall be
responsible for the management of the business, affairs and operations of the
Corporation. He may execute and deliver, in the name of the Corporation, powers
of attorney, contracts, bonds, and other obligations and instruments. The
President shall also perform all duties incident to the office of President and
such other duties as may from time to time be assigned to him by the Board of
Directors.
SECTION 4. Powers and Duties of the Vice Presidents. Each Vice
President shall have all powers and shall perform all duties incident to the
office of Vice President and shall have such other powers and perform such other
duties as may from time to time be assigned to him by these By-Laws or by the
Board of Directors, the Chairman or the President. A Vice President may be
designated by the Board of Directors as the Chief Operating Officer of the
Corporation.
SECTION 5. Powers and Duties of the Secretary. The Secretary
shall keep the minutes of all meetings of the Board of Directors and the minutes
of all meetings of the stockholders in books provided for that purpose; he shall
attend to the giving or serving of all notices of the Corporation; he shall have
custody of the corporate seal of the Corporation and shall affix the same to
such documents and other papers as the Board of Directors, the Chairman of the
Board or the President shall authorize and direct; he shall have charge of the
stock certificate books, transfer books and stock ledgers and such other books
and papers as the Board of Directors, the Chairman or the President shall
direct, all of which shall at all reasonable times be open to the examination of
any Director, upon application, at the office of the Corporation during business
hours; and whenever required by the Board of Directors, the Chairman or the
President shall render statements of such accounts; and he shall have all powers
and shall perform all duties incident to the office of Secretary and shall also
have such other powers and shall perform such other duties as may from time to
time be assigned to him by these By-Laws or by the Board of Directors, the
Chairman or the President.
SECTION 6. Powers and Duties of the Treasurer. The Treasurer
shall have custody of, and when proper shall pay out, disburse or otherwise
dispose of, all funds and securities of the Corporation which may have come into
his hands; he may endorse on behalf of
-7-
<PAGE> 8
the Corporation for collection checks, notes and other obligations and shall
deposit the same to the credit of the Corporation in such bank or banks or
depositary or depositaries as the Board of Directors may designate; he shall
sign all receipts and vouchers for payments made to the Corporation; he shall
enter or cause to be entered regularly in the books of the Corporation kept for
the purpose full and accurate accounts of all moneys received or paid or
otherwise disposed of by him and whenever required by the Board of Directors,
the Chairman, the President or the Chief Operating Officer shall render
statements of such accounts; he shall, at all reasonable times, exhibit his
books and accounts to any Director of the Corporation upon application at the
office of the Corporation during business hours; and he shall have all powers
and he shall perform all duties incident to the office of Treasurer and shall
also have such other powers and shall perform such other duties as may from time
to time be assigned to him by these By-Laws or by the Board of Directors, the
Chairman, the President or the Chief Operating Officer. The Board of Directors
may designate the Treasurer to be the Chief Financial Officer of the
Corporation.
SECTION 7. Additional Officers. The Board of Directors may
from time to time elect such other officers (who may but need not be Directors),
including one or more Controllers, Assistant Treasurers, Assistant Secretaries
and Assistant Controllers, as the Board may deem advisable and such officers
shall have such authority and shall perform such duties as may from time to time
be assigned to them by the Board of Directors, the Chairman or the President.
The Board of Directors may from time to time by resolution delegate to any
Assistant Treasurer or Assistant Treasurers any of the powers or duties herein
assigned to the Treasurer; and may similarly delegate to any Assistant Secretary
or Assistant Secretaries any of the powers or duties herein assigned to the
Secretary.
SECTION 8. Powers with respect to Ownership of Stock. Unless
otherwise ordered by the Board of Directors, the Chairman, the President or any
Vice President shall have full power and authority on behalf of the Corporation
to attend and to act and to vote, or in the name of the Corporation to execute
proxies to vote, at any meeting of stockholders of any corporation in which the
Corporation may hold stock, or to execute any consent in lieu of such a meeting,
and at any such meeting or by any such consent shall possess and may exercise,
in person or by proxy, any and all rights, powers and privileges incident to the
ownership of such stock. The Board of Directors may from time to time, by
resolution, confer like powers upon any other person or persons.
SECTION 9. Compensation of Officers. The officers of
the Corporation shall be entitled to receive such compensation for their
services as shall from time to time be determined by the Board of Directors.
-8-
<PAGE> 9
ARTICLE IV
Indemnification of Directors and Officers
SECTION 1. Nature of Indemnity. The Corporation shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
is or was or has agreed to become a Director or officer of the Corporation, or
is or was serving or has agreed to serve at the request of the Corporation as a
Director or officer of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, and may indemnify any person who was or is a party or
is threatened to be made a party to such an action, suit or proceeding by reason
of the fact that he is or was or has agreed to become an employee or agent of
the Corporation, or is or was serving or has agreed to serve at the request of
the Corporation as an employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or on his behalf in connection with such action, suit or
proceeding and any appeal therefrom, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; except that in the case of
an action or suit by or in the right of the Corporation to procure a judgment in
its favor (1) such indemnification shall be limited to expenses (including
attorneys' fees) actually and reasonably incurred by such person in the defense
or settlement of such action or suit, and (2) no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Corporation unless and only to the extent that the
Delaware Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Delaware Court of
Chancery or such other court shall deem proper.
The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
SECTION 2. Successful Defense. To the extent that a Director,
officer, employee or agent of the Corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in Section
1 of this Article IV or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
SECTION 3. Determination that Indemnification is
Proper. Any indemnification of a Director or officer of the Corporation under
Section 1 of this Article IV (unless ordered by
-9-
<PAGE> 10
a court) shall be made by the Corporation unless a determination is made that
indemnification of the Director or officer is not proper in the circumstances
because he has not met the applicable standard of conduct set forth in Section
1. Any indemnification of an employee or agent of the Corporation under Section
1 (unless ordered by a court) may be made by the Corporation upon a
determination that indemnification of the employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Section 1. Any such determination shall be made (1) by a majority of the
weighted votes (or if there are no weighted votes, the votes) of Directors who
were not parties to such action, suit or proceeding, or (2) or, if such
Directors so direct, by independent legal counsel in a written opinion, or (3)
by the stockholders.
SECTION 4. Advance Payment of Expenses. Unless the Board of
Directors otherwise determines in a specific case, expenses incurred by a
Director or officer in defending a civil or criminal action, suit or proceeding
shall be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
Director or officer to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the Corporation as authorized in
this Article IV. Such expenses incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the Board of Directors deems
appropriate. The Board of Directors may authorize the Corporation's legal
counsel to represent such Director, officer, employee or agent in any action,
suit or proceeding, whether or not the Corporation is a party to such action,
suit or proceeding.
SECTION 5. Survival; Preservation of Other Rights. The
foregoing indemnification provisions shall be deemed to be a contract between
the Corporation and each Director and officer who serves in any such capacity at
any time while these provisions as well as the relevant provisions of the
Delaware General Corporation Law are in effect and any repeal or modification
thereof shall not affect any right or obligation then existing with respect to
any state of facts then or previously existing or any action, suit, or
proceeding previously or thereafter brought or threatened based in whole or in
part upon any such state of facts. Such a contract right may not be modified
retroactively without the consent of such Director, officer, employee or agent.
The indemnification provided by this Article IV shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any by-law, agreement, vote of stockholders or disinterested Directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a Director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person. The
Corporation may enter into an agreement with any of its Directors, officers,
employees or agents providing for indemnification and advancement of expenses,
including attorneys' fees, that may change, enhance, qualify or limit any right
to indemnification or advancement of expenses created by this Article IV.
-10-
<PAGE> 11
SECTION 6. Severability. If this Article IV or any portion
hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Corporation shall nevertheless indemnify each Director or
officer and may indemnify each employee or agent of the Corporation as to costs,
charges and expenses (including attorneys' fees), judgment, fines and amounts
paid in settlement with respect to any action, suit or proceeding, whether
civil, criminal, administrative or investigative, including an action by or in
the right of the Corporation, to the fullest extent permitted by any applicable
portion of this Article IV that shall not have been invalidated and to the
fullest extent permitted by applicable law.
SECTION 7. Subrogation. In the event of payment of
indemnification to a person described in Section 1 of this Article IV, the
Corporation shall be subrogated to the extent of such payment to any right of
recovery such person may have and such person, as a condition of receiving
indemnification from the Corporation, shall execute all documents and do all
things that the Corporation may deem necessary or desirable to perfect such
right of recovery, including the execution of such documents necessary to enable
the Corporation effectively to enforce any such recovery.
SECTION 8. No Duplication of Payments. The Corporation shall
not be liable under this Article IV to make any payment in connection with any
claim made against a person described in Section 1 of this Article IV to the
extent such person has otherwise received payment (under any insurance policy,
by-law or otherwise) of the amounts otherwise payable as indemnity hereunder.
ARTICLE V
Stock-Seal-Fiscal Year
SECTION 1. Certificates For Shares of Stock. The certificates
for shares of stock of the Corporation shall be in such form, not inconsistent
with the Certificate of Incorporation, as shall be approved by the Board of
Directors. All certificates shall be signed by the Chairman or the President or
a Vice President and by the Secretary or an Assistant Secretary or the Treasurer
or an Assistant Treasurer, and shall not be valid unless so signed. Any or all
of such signatures may be by a facsimile signature.
In case any officer or officers who shall have signed any such
certificate or certificates shall cease to be such officer or officers of the
Corporation, whether because of death, resignation or otherwise, before such
certificate or certificates shall have been delivered by the Corporation, such
certificate or certificates may nevertheless be issued and delivered as though
the person or persons who signed such certificate or certificates had not ceased
to be such officer or officers of the Corporation.
-11-
<PAGE> 12
All certificates for shares of stock shall be consecutively
numbered as the same are issued. The name of the person owning the shares
represented thereby with the number of such shares and the date of issue thereof
shall be entered on the books of the Corporation.
Except as hereinafter provided, all certificates surrendered
to the Corporation for transfer shall be canceled, and no new certificates shall
be issued until former certificates for the same number of shares have been
surrendered and canceled.
SECTION 2. Lost, Stolen or Destroyed Certificates. Whenever a
person owning a certificate for shares of stock of the Corporation alleges that
it has been lost, stolen or destroyed, he shall file in the office of the
Corporation an affidavit setting forth, to the best of his knowledge and belief,
the time, place and circumstances of the loss, theft or destruction, and, if
required by the Board of Directors, a bond of indemnity or other indemnification
sufficient in the opinion of the Board of Directors to indemnify the Corporation
and its agents against any claim that may be made against it or them on account
of the alleged loss, theft or destruction of any such certificate or the
issuance of a new certificate in replacement therefor. Thereupon the Corporation
may cause to be issued to such person a new certificate in replacement for the
certificate alleged to have been lost, stolen or destroyed. Upon the stub of
every new certificate so issued shall be noted the fact of such issue and the
number, date and the name of the registered owner of the lost, stolen or
destroyed certificate in lieu of which the new certificate is issued.
SECTION 3. Transfer of Shares. Subject to the provisions of
the Stockholders' Agreement, shares of stock of the Corporation shall be
transferred on the books of the Corporation by the holder thereof, in person or
by his attorney duly authorized in writing, upon surrender and cancellation of
certificates for the number of shares of stock to be transferred, except as
provided in Section 2 of this Article IV.
SECTION 4. Regulations. The Board of Directors shall
have power and authority to make such rules and regulations as it may deem
expedient concerning the issue, transfer and registration of certificates for
shares of stock of the Corporation.
SECTION 5. Record Date. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders, or to receive payment of any dividend or other distribution or
allotment of any rights or to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date on which the resolution fixing the record date is adopted and
which record date shall not be more than sixty (60) nor less than ten (10) days
before the date of any meeting of stockholders, nor more than sixty (60) days
prior to the time for such other action as hereinbefore described; provided,
however, that if no record date is fixed by the Board of Directors, the record
date for determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the day next preceding the
day on which notice is given or, if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held, and, for
-12-
<PAGE> 13
determining stockholders entitled to receive payment of any dividend or other
distribution or allotment of rights or to exercise any rights of change,
conversion or exchange of stock or for any other purpose, the record date shall
be at the close of business on the day on which the Board of Directors adopts a
resolution relating thereto. A determination of stockholders of record entitled
to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the Board
of Directors may fix a record date, which shall not precede the date upon which
the resolution fixing the record date is adopted by the Board of Directors, and
which record date shall be not more than ten (10) days after the date upon which
the resolution fixing the record date is adopted. If no record date has been
fixed by the Board of Directors and no prior action by the Board of Directors is
required by the Delaware General Corporation Law, the record date shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation in the manner prescribed by
Article I. If no record date has been fixed by the Board of Directors and prior
action by the Board of Directors is required by the Delaware General Corporation
Law with respect to the proposed action by written consent of the stockholders,
the record date for determining stockholders entitled to consent to corporate
action in writing shall be at the close of business on the day on which the
Board of Directors adopts the resolution taking such prior action.
SECTION 6. Dividends. Subject to the provisions of the
Certificate of Incorporation, the Board of Directors shall have power to declare
and pay dividends upon shares of stock of the Corporation which dividends may be
paid either in cash, in property or shares of the capital stock of the
Corporation, but only out of funds available for the payment of dividends as
provided by law.
Subject to the provisions of the Certificate of Incorporation,
any dividends declared upon the stock of the Corporation shall be payable on
such date or dates as the Board of Directors shall determine.
SECTION 7. Corporate Seal. The Board of Directors shall
provide a suitable seal, containing the name of the Corporation, which seal
shall be kept in the custody of the Secretary. A duplicate of the seal may be
kept and be used by any officer of the Corporation designated by the Board of
Directors or the Chairman or the President.
SECTION 8. Fiscal Year. The fiscal year of the
Corporation shall be such fiscal year as the Board of Directors from time to
time by resolution shall determine.
-13-
<PAGE> 14
ARTICLE VI
Miscellaneous Provisions
SECTION 1. Checks, Notes, Etc. All checks, drafts, bills of
exchange, acceptances, notes or other obligations or orders for the payment of
money shall be signed and, if so required by the Board of Directors,
countersigned by such officers of the Corporation and/or other persons as the
Board of Directors from time to time shall designate.
Checks, drafts, bills of exchange, acceptances, notes,
obligations and orders for the payment of money made payable to the Corporation
may be endorsed for deposit to the credit of the Corporation with a duly
authorized depository by the Treasurer and/or such other officers or persons as
the Board of Directors from time to time may designate.
SECTION 2. Loans. No loans and no renewals of any loans shall
be contracted on behalf of the Corporation except as authorized by the Board of
Directors. When authorized so to do, any officer or agent of the Corporation may
effect loans and advances for the Corporation from any bank, trust company or
other institution or from any firm, corporation or individual, and for such
loans and advances may make, execute and deliver promissory notes, bonds or
other evidences of indebtedness of the Corporation. When authorized so to do,
any officer or agent of the Corporation may pledge, hypothecate or transfer, as
security for the payment of any and all loans, advances, indebtedness and
liabilities of the Corporation, any and all stocks, securities and other
personal property at any time held by the Corporation, and to that end may
endorse, assign and deliver the same. Such authority may be general or confined
to specific instances.
SECTION 3. Contracts. Except as otherwise provided in these
By-Laws or by law or as otherwise directed by the Board of Directors, each of
the Chairman, the President and the Chief Financial Officer shall be authorized
to execute and deliver, in the name and on behalf of the Corporation, all
agreements, bonds, contracts, deeds, mortgages, and other instruments, either
for the Corporation's own account or in a fiduciary or other capacity, and the
seal of the Corporation, if appropriate, shall be affixed thereto by any of such
officers or the Secretary or an Assistant Secretary. The Board of Directors, the
Chairman, the President or the Chief Financial Officer may authorize any other
officer, employee or agent to execute and deliver, in the name and on behalf of
the Corporation, agreements, bonds, contracts, deeds, mortgages, and other
instruments, either for the Corporation's own account or in a fiduciary or other
capacity, and, if appropriate, to affix the seal of the Corporation thereto. The
grant of such authority by the Board of Directors or any such officer may be
general or confined to specific instances.
SECTION 4. Waivers of Notice. Whenever any notice is required
to be given by law, by the Certificate of Incorporation, or by these By-Laws to
any person or persons, a waiver thereof in writing, signed by the person or
persons entitled to the notice, whether before or after the time stated therein,
shall be deemed equivalent thereto.
-14-
<PAGE> 15
SECTION 5. Offices Outside of Delaware. Except as otherwise
required by the laws of the State of Delaware, the Corporation may have an
office or offices and keep its books, documents and papers outside of the State
of Delaware at such place or places as from time to time may be determined by
the Board of Directors or the Chairman or the President.
ARTICLE VII
Amendments
These By-Laws and any amendment thereof may be altered,
amended or repealed, or new By-Laws may be adopted, by the Board of Directors at
any regular or special meeting at which a quorum is present by Majority Board
Vote, subject to any additional requirements as may be set forth in the
Certificate of Incorporation; provided, that in the case of any special meeting
at which all of the members of the Board of Directors are not present, that the
notice of such meeting shall have stated that the amendment of these By-Laws was
one of the purposes of the meeting. These By-Laws and any amendment thereof may
be altered, amended or repealed or new By-Laws may be adopted by the holders of
seventy-five percent (75%) of the total outstanding capital stock of the
Corporation entitled to vote at any annual meeting or at any special meeting for
the election of directors; provided, in the case of any special meeting, that
notice of such proposed alteration, amendment, repeal or adoption is included in
the notice of the meeting.
[End of By-Laws]
-15-
<PAGE> 1
EXHIBIT 5.1
July 20, 1998
MSX International, Inc.
275 Rex Boulevard
Auburn Hills, Michigan 48326
Ladies and Gentlemen:
We have acted as special counsel to MSX International, Inc. (the "Company")
in connection with the Company's offer (the "Exchange Offer") to exchange its
11 3/8% Senior Subordinated Notes due 2008 (the "New Notes") for any and all of
its outstanding 11 3/8% Senior Subordinated Notes due 2008 (the "Old Notes").
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary or advisable for the
purpose of rendering this opinion.
Upon the basis of the foregoing and, assuming the due execution and
delivery of the New Notes, we are of the opinion that the New Notes, when
executed, authenticated and delivered in exchange for the Old Notes in
accordance with the Exchange Offer, will be valid and binding obligations of the
Company enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
similar laws affecting creditors' rights generally and equitable principles.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the federal laws of
the United States of America.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the Exchange Offer. We also consent to the
reference to us under the caption "Legal Matters" in the Prospectus contained in
such Registration Statement.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied upon
by or furnished to any other person without our prior written consent.
Very truly yours,
Davis Polk & Wardwell
<PAGE> 1
EXHIBIT 10.1
STOCKHOLDERS' AGREEMENT
AMONG
MSX INTERNATIONAL, INC.
AND
ITS STOCKHOLDERS
<PAGE> 2
Stockholders' Agreement
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
RECITALS .........................................................................................................1
ARTICLE I
CERTAIN DEFINITIONS......................................................................................1
1.1 Defined Terms...................................................................................1
ARTICLE II
RESTRICTIONS ON TRANSFERS ..............................................................................15
2.1 Restrictions Generally; Securities Act.........................................................15
2.2 Legend.........................................................................................15
2.3 Limitations on Repurchases, Dividends, Etc.....................................................16
2.4 Transfer Restrictions..........................................................................16
2.5 Right of First Refusal.........................................................................17
2.6 Involuntary Transfers..........................................................................19
2.7 Drag-Along Rights..............................................................................21
2.8 MascoTech Stockholders Special Right of First Offer............................................24
2.9 Institutional Stockholders Special Right of First Offer........................................25
ARTICLE III
RIGHTS OF INCLUSION.....................................................................................27
3.1 Rights of Inclusion............................................................................27
3.2 Article III Sales..............................................................................28
ARTICLE IV
REPURCHASE OF SECURITIES................................................................................30
4.1 Sale Event.....................................................................................30
4.2 Purchase Price.................................................................................31
4.3 Closing........................................................................................31
4.4 Postponement...................................................................................32
ARTICLE V
CORPORATE GOVERNANCE....................................................................................33
5.1 Board of Directors.............................................................................33
5.2 Removal........................................................................................35
5.3 Vacancies......................................................................................35
5.4 Weighted Board Voting..........................................................................36
5.5 Special Approval Rights........................................................................36
5.6 Committees of the Board; Subsidiary Boards.....................................................37
</TABLE>
-i-
<PAGE> 3
Stockholders' Agreement
<TABLE>
<S> <C>
5.7 Observer's Rights..............................................................................37
5.8 Action by Written Consent of Stockholders......................................................38
5.9 Designation of Proxy...........................................................................38
ARTICLE VI
CERTAIN COVENANTS OF THE PARTIES........................................................................39
6.1 Registration...................................................................................39
6.2 Management Stockholders; Additional Stockholders...............................................39
6.3 Stockholder List; Certain Notices..............................................................40
6.4 Regulatory Compliance Cooperation..............................................................40
6.5 Rights Offering................................................................................41
6.6 Purchaser Representatives......................................................................42
6.7 Confidentiality................................................................................42
6.8 Financial Reporting Covenants..................................................................42
ARTICLE VII
MISCELLANEOUS...........................................................................................43
7.1 Governing Law..................................................................................43
7.2 Entire Agreement; Amendments...................................................................43
7.3 Term...........................................................................................43
7.4 Certain Actions................................................................................43
7.5 Inspection.....................................................................................44
7.6 Compliance with Regulations....................................................................44
7.7 Waiver.........................................................................................44
7.8 Successors and Assigns.........................................................................44
7.9 Remedies.......................................................................................46
7.10 Income Tax Withholding.........................................................................46
7.11 Invalid Provisions.............................................................................46
7.12 Headings.......................................................................................47
7.13 Further Assurances; Subsidiaries...............................................................47
7.14 Gender.........................................................................................47
7.15 Counterparts...................................................................................47
7.16 Payment........................................................................................47
7.17 Notices........................................................................................47
7.18 Service of Process.............................................................................50
7.19 Waiver of Jury Trial...........................................................................50
7.20 Waiver of Fiduciary Duties; Corporate Opportunity..............................................51
Exhibit A Form of Joinder Agreement
Exhibit B Legends
Exhibit C Directors
</TABLE>
-ii-
<PAGE> 4
STOCKHOLDERS' AGREEMENT (this "Agreement") dated as of January
__, 1997 by and among MSX INTERNATIONAL, INC., a Delaware corporation (the
"Company"), MascoTech, Inc. a Delaware corporation ("MascoTech"), Citicorp
Venture Capital, Ltd., a New York corporation ("CVC"), and each of the
individuals whose name appears on the signature pages hereto (individually, a
"Management Group Member" and, collectively, the "Management Group").
Capitalized terms are used as defined in Article I hereto.
RECITALS
WHEREAS, the Company, MascoTech and MSX International, Inc., a
Michigan corporation and wholly-owned subsidiary of MascoTech, have entered into
an Acquisition Agreement dated as of November 12, 1996 (as may be amended,
supplemented or modified from time to time, the "Acquisition Agreement"),
pursuant to which the Company, directly or indirectly through one or more of its
Subsidiaries, is acquiring the Business and the APX Continuing Business (each as
defined in the Acquisition Agreement) and the interest of MascoTech in and to
all the issued and outstanding shares of capital stock of MascoTech Limited, a
wholly-owned subsidiary of MascoTech organized under the laws of England;
WHEREAS, at the Closing under the Acquisition Agreement (the
"Closing") and immediately prior to the execution and delivery of this
Agreement, the Company has amended and restated its Certificate of
Incorporation;
WHEREAS, in connection with the consummation of the
transactions contemplated by the Acquisition Agreement and pursuant to the
Subscription Agreements, the Company will issue shares of its capital stock to
CVC, MascoTech and the Management Group all as set forth in Annex I hereto; and
WHEREAS, each of the Stockholders and the Company desire to
enter into this Agreement to regulate certain aspects of their relationship and
to provide for, among other things, restrictions on the transfer or other
disposition of securities of the Company and matters relating to the corporate
governance of the Company and its Subsidiaries.
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 DEFINED TERMS.
(a) The following defined terms, when used in this Agreement,
have the respective meanings set forth below (such definitions to be equally
applicable to both singular and plural forms of the terms defined):
<PAGE> 5
Stockholders' Agreement
"Additional Management Stockholder" means an Additional
Stockholder who is an employee, officer or director of the Company or
any of its Subsidiaries.
"Additional Stockholder" means any Person (other than any
Institutional Stockholder, MascoTech Stockholder or Management
Stockholder), to whom the Company issues Restricted Securities or
Restricted Preferred Securities after the date hereof other than
pursuant to a public offering registered under the Securities Act, in
each case who has executed a Joinder Agreement as an Additional
Stockholder pursuant to Section 6.2, and its direct and indirect
Permitted Transferees, so long as any such Person shall hold Restricted
Securities or Restricted Preferred Securities.
"Affiliate" means, with respect to any Person, any other
Person that controls, is controlled by or is under common control with
such Person. For the purposes of this definition, "control" (including,
with its correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means the
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 securities, by contract or otherwise. For
purposes of this Agreement, employees, officers and directors of CVC
and its Affiliates shall be "Affiliates" of CVC.
"Associate" means, with respect to any Person, (i) any trust
or other estate in which such Person has a substantial beneficial
interest or as to which such Person serves as trustee or in a similar
fiduciary capacity and (ii) any relative or spouse of such Person, or
any relative of such spouse, who has the same home as such Person.
"Bridge Credit Agreement" means that certain Bridge Credit
Agreement dated as of January __, 1997, among the Company and CVC and
MascoTech (each as Bridge Lenders).
"Board" means the Board of Directors of the Company.
"Cause" means, with respect to a Management Stockholder or an
Additional Management Stockholder, (i) a material breach by such
Management Stockholder or Additional Management Stockholder of this
Agreement or any employment, non-compete or confidentiality agreement
with the Company or any of its Subsidiaries to which such person is a
party (including without limitation any Management Subscription
Agreement) or (ii) the commission by such person of a felony, a crime
involving moral turpitude or any other willful act causing material
harm to the business, financial condition, standing or reputation of
the Company or any of its Subsidiaries.
"Certificate of Incorporation" means the Restated Certificate
of Incorporation of the Company, as amended and restated as of the
Closing Date and as the same thereafter may be amended or restated from
time to time.
-2-
<PAGE> 6
Stockholders' Agreement
"Class A Common" means the Company's Class A Common Stock, par
value $.01 per share, consisting of five series of Class A Common
Stock, the Series A-1 Common Stock, the Series A-2 Common Stock, the
Series A-3 Common Stock, the Series A-4 Common Stock and the Series I
Common Stock, and any securities into which such Class A Common shall
have been changed or any securities resulting from any reclassification
or recapitalization of such Class A Common.
"Class B Common" means the Company's Class B Common Stock, par
value $.01 per share, consisting of five series of Class B Common
Stock, the Series B-1 Common Stock, the Series B-2 Common Stock, the
Series B-3 Common Stock, the Series B-4 and the Series II Common Stock,
and any securities into which such Class B Common shall have been
changed or any securities resulting from any reclassification or
recapitalization of such Class B Common.
"Closing Date" has the meaning ascribed thereto in the
Acquisition Agreement.
"Commission" means the Securities and Exchange Commission and
any other similar or successor agency of the federal government
administering the Securities Act or the Exchange Act.
"Common Stock" means the Class A Common, the Class B Common,
any securities into which such Class A Common or Class B Common shall
have been changed, and all other securities of any class or classes
(however designated) of the Company, the holders of which have the
right, without limitation as to amount, after payment on any securities
entitled to a preference on dividends or other distributions upon any
dissolution, liquidation or winding-up, either to all or to a share of
the balance of payments upon such dissolution, liquidation or
winding-up.
"Debentures" means the Company's Junior Subordinated
Debentures issued or issuable in exchange for shares of the Restricted
Preferred Securities or in payment of interest on any such Junior
Subordinated Debentures (including Junior Subordinated Debentures so
issued in payment of interest).
"Equity Equivalents" means securities exercisable, convertible
or exchangeable for or into Common Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations of the
Commission thereunder.
"Fair Market Value" means (i) with respect to each share of
Common Stock as of a particular date, the average of the closing prices
of such Common Stock on the New York Stock Exchange, Inc. on each of
the thirty (30) trading days next preceding such date or, if
-3-
<PAGE> 7
Stockholders' Agreement
such Common Stock is not then listed or admitted to trading on such
exchange, on the principal national securities exchange on which such
Common Stock is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, on the Nasdaq
National Market, or if such Common Stock is not then listed or admitted
to trading on a national securities exchange or quoted on the Nasdaq
National Market, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange
member firm selected by the Company or if no such prices are available,
the fair market value per share as determined in good faith by the
Board acting by an Institutional Affirmative Board Vote and a MascoTech
Affirmative Board Vote (subject, in each case, to the same
qualification applicable to a Significant Transaction under Section
5.5) and (ii) with respect to Restricted Preferred Securities, the fair
market value per share as determined in good faith by the Board acting
by an Institutional Affirmative Board Vote and a MascoTech Affirmative
Board Vote (subject, in each case, to the same qualification applicable
to a Significant Transaction under Section 5.5).
"Fully-Diluted Basis" means, with respect to the calculation
of the number of shares of Common Stock, (i) all shares of Common Stock
outstanding at the time of determination and (ii) all shares of Common
Stock issuable upon the exercise, conversion or exchange of Equity
Equivalents outstanding at the time of determination.
"Funded Debt" means, without duplication, with respect to any
Person (i) all indebtedness for borrowed money or for the deferred
purchase price of property, (ii) the face amount of all letters of
credit, banker's acceptances and other credit facilities issued for the
account of such Person and, without duplication, all drafts drawn
thereunder, (iii) all indebtedness secured by any lien on any property
owned by such Person, to the extent attributable to such Person's
interest in such property, even though such Person has not assumed or
become liable for the payment thereof, (iv) lease obligations of such
Person which, in accordance with generally accepted accounting
principles, should be capitalized, (v) obligations with respect to any
conditional sale agreement or title retention agreement and (vi)
guarantees by such Person of the Funded Debt of another Person; but
excluding in each case trade and other accounts payable in the ordinary
course of business.
"Institutional Affirmative Board Vote" means the affirmative
vote of at least a majority of the weighted votes of the Board, which
majority shall include, unless the Institutional Stockholders have
elected in writing not (or are no longer entitled) to designate the
Institutional Directors, at least one-half of the weighted votes of the
Institutional Directors.
"Institutional Stockholders" means CVC and its direct and
indirect Permitted Transferees, so long as any such Person shall hold
Restricted Securities or Restricted Preferred Securities.
-4-
<PAGE> 8
Stockholders' Agreement
"Institutional Stockholder Subscription Agreement" means the
Institutional Stockholder Subscription Agreement dated as of the date
hereof between the Company and CVC.
"Involuntary Transfer" means, with respect to Restricted
Securities or Restricted Preferred Securities of any Stockholder, any
involuntary Transfer or Transfer by operation of law of such Restricted
Securities or Restricted Preferred Securities (other than to a
Permitted Transferee of such Stockholder) by or in which such
Stockholder shall be deprived or divested of any right, title or
interest in or to Restricted Securities or Restricted Preferred
Securities, including without limitation by seizure under levy of
attachment or execution, by foreclosure upon a pledge, in connection
with any voluntary or involuntary bankruptcy or other court proceeding
to a debtor in possession, trustee in bankruptcy or receiver or other
officer or agency, pursuant to any statute pertaining to escheat or
abandoned property, pursuant to a divorce or separation agreement or a
final decree of a court in a divorce action, upon or occasioned by the
incompetence of any Stockholder and to a legal representative of any
Stockholder; provided that "Involuntary Transfer" shall not include any
Transfer effected pursuant to the exercise by Institutional
Stockholders or the MascoTech Stockholders of Drag-Along Rights under
Section 2.7 hereof, any Transfer effected pursuant to Article IV
hereof, any Transfer to the Company solely resulting from a
reclassification of the capital stock of the Company or a
recapitalization of the Company and any Transfer effected as a result
of a merger of the Company with or into any other Person.
"Joinder Agreement" means a Joinder Agreement substantially in
the form attached hereto as Exhibit A.
"Lien" means any lien, claim, option, charge, encumbrance,
security interest or other adverse claim of any kind.
"Management Note" means a promissory note (i) issued by the
Company pursuant to Section 4.2 in payment of the purchase price for
shares of Management Securities purchased pursuant to Section 4.1, (ii)
bearing interest at the rate of 12% per annum, compounded annually
(subject to reduction as may be required to preserve the deductibility
of interest for tax purposes), (iii) pursuant to which payments of
principal and interest may be made only to the extent permitted from
time to time under any agreement evidencing Funded Debt of the Company
or any of its direct or indirect Subsidiaries, and (iv) subordinated in
right of payment to the Debentures, the Senior Notes and all other
"Senior Indebtedness" as defined in the Debentures.
"Management Securities" means all shares of Restricted
Securities and Restricted Preferred Securities issued to or acquired by
Management Stockholders and Additional Management Stockholders, unless
otherwise agreed between the Company and any Management Stockholder or
Additional Management Stockholder.
-5-
<PAGE> 9
Stockholders' Agreement
"Management Stockholders" means the Management Group and their
respective direct and indirect Permitted Transferees, so long as any
such Person shall hold Restricted Securities or Restricted Preferred
Securities.
"Management Subscription Agreement" means any Management
Subscription Agreement between the Company and either a member of the
Management Group or an Additional Management Stockholder.
"MascoTech Affirmative Board Vote" means the affirmative vote
of at least a majority of the weighted votes of the Board, which
majority shall include, unless the MascoTech Stockholders have elected
in writing not (or are no longer entitled) to designate the MascoTech
Directors, at least one-half of the weighted votes of the MascoTech
Directors.
"MascoTech Stockholders" means MascoTech and its direct and
indirect Permitted Transferees, so long as any such Person shall hold
Restricted Securities, Restricted Preferred Securities or Debentures.
"MascoTech Subscription Agreement" means the MascoTech
Subscription Agreement dated as of the date hereof between the Company
and MascoTech.
"New Common Stock" means any Common Stock or Equity
Equivalent, other than any:
(i) Common Stock and Equity Equivalents issued in
connection with any stock split, stock dividend or
reclassification of any Restricted Securities, Restricted
Preferred Securities or Equity Equivalents;
(ii) Common Stock or Equity Equivalents issuable in a
public offering registered under the Securities Act;
(iii) Common Stock or Equity Equivalents issuable
upon conversion of the Class A Common or the Class B Common;
(iv) issuances of stock options and Common Stock to
Management Stockholders or Additional Management Stockholders
(I) with respect to shares of Common Stock repurchased by the
Company from Management Stockholders or Additional Management
Stockholders under Article IV hereof or (II) pursuant to stock
option plans or similar stock purchase plans provided to
management of the Company and its Subsidiaries which plans
have been approved by the Board;
-6-
<PAGE> 10
Stockholders' Agreement
(v) issuances of Common Stock or Equity Equivalents
to financial institution(s) on arm's-length terms in
connection with (and ancillary to) an extension of credit by
such financial institution; and
(vi) issuances of Common Stock or Equity Equivalents
to an unaffiliated seller or sellers of another company or
business in connection with an arm's-length acquisition by the
Company or one or more of its Subsidiaries of such company or
business.
"Non-Competition Agreement" means the agreements contained in
Section 8.07 of the Acquisition Agreement.
"Original Cost" means, (i) as to each share of Common Stock
issued to Management Stockholders on the Closing Date, $40.00, and (ii)
as to each share of Common Stock purchased or otherwise acquired by
Management Stockholders or Additional Management Stockholders after the
Closing Date, the price paid therefor, in each case appropriately
adjusted to reflect all stock splits, stock dividends, recapitalization
or similar events affecting the Common Stock subsequent to the date of
purchase thereof.
"Original Ownership Level" means, with respect to either the
Institutional Stockholders or the MascoTech Stockholders, as the case
may be, the number of shares of Common Stock, on a Fully Diluted Basis,
subject to any stock splits, stock dividends or reclassifications or
other similar events, acquired by either the Institutional Stockholders
or the MascoTech Stockholders, as the case may be, on or prior to the
Closing Date.
"Permitted Transferee" means:
(i) with respect to any Stockholder who is a natural
person, the spouse or any lineal descendant (including by
adoption and stepchildren) of such Stockholder, or any trust
of which such Stockholder is the trustee and which is
established solely for the benefit of any of the foregoing
individuals and whose terms are not inconsistent with the
terms of this Agreement, or any partnership, all of the
general partner(s) and limited partner(s) (if any) of which
are one or more Persons identified in this clause (i) or any
other trust or partnership established by any such Stockholder
to the extent approved in writing by the Company (acting with
an Institutional Affirmative Board Vote and a MascoTech
Affirmative Board Vote (subject, in each case, to the same
qualification applicable to a Significant Transaction under
Section 5.5));
(ii) with respect to a MascoTech Stockholder, (A) any
direct or indirect Subsidiary of MascoTech; (B) subject to the
prior written consent of the Institutional Stockholders (which
consent shall be in their sole discretion), any corporation
(I) in
-7-
<PAGE> 11
Stockholders' Agreement
which MascoTech owns shares of capital stock representing at
least 19% of the total ordinary voting power of such
corporation and (II) which is "controlled" (within the meaning
under Rule 12b-2 of the regulations under the Exchange Act) by
MascoTech (such corporation, a "Permitted MascoTech
Subsidiary"); and (C) Masco Corporation, a Michigan
corporation; and
(iii) with respect to the Institutional Stockholders,
(A) any Associate or Affiliate of any such Institutional
Stockholder and any officer, director or employee of any
Institutional Stockholders or such Associate or Affiliate, (B)
any spouse or lineal descendant (including by adoption and
stepchildren) of the officers, directors and employees
referred to in clause (A) above, and any trust (where a
majority in interest of the beneficiaries thereof are any of
the persons described in this clause (B) and in clause (A)
above), corporations or partnerships (where a majority in
interest of the stockholders or limited partners, or where the
managing general partner, is one of more of the persons
described in clause (A) above), or (C) subject to the
provisions of Section 2.9 (Institutional Stockholders Special
Right of First Offer) and if, after taking commercially
reasonable steps, with the cooperation of the Company, such
Institutional Stockholder is unable to restructure its
ownership of the Company's securities in a manner which avoids
a Regulatory Problem and which is not materially adverse to
such Institutional Stockholder, upon the giving of notice to
the Company and the MascoTech Stockholders that the
Institutional Stockholders have determined that such
Regulatory Problem may not be avoided, then to any third party
in an amount necessary to avoid such Regulatory Problem.
"Person" or "person" means an individual, partnership,
corporation, trust, unincorporated organization, limited liability
company or partnership, joint venture, government (or agency or
political subdivision thereof) or any other entity of any kind.
"Pro Rata" means, with respect to one or more Stockholders,
(i) as it relates to the Common Stock, Equity Equivalents or New Common
Stock, in proportion to the number of shares of Common Stock on a
Fully-Diluted Basis owned by such Stockholder or Stockholders or which
may be acquired by any Stockholder or Stockholders, and (ii) as it
relates to Series A Preferred, in proportion to the number of shares of
Series A Preferred, owned by such Stockholder or Stockholders.
"Qualifying Offering" means the consummation by the Company of
an underwritten primary public offering or a secondary public offering
(including by spin-off or other transfer) of Common Stock pursuant to
an effective registration statement under the Securities Act, covering
the distribution of the Common Stock (i) which (taken together with all
similar previous public offerings) raises at least $50,000,000 of
aggregate net proceeds to the Company (after underwriters' fees,
commissions and discounts and offering expenses)
-8-
<PAGE> 12
Stockholders' Agreement
or (ii) as a result of which, at that time, at least 25% of the Common
Stock, on a Fully-Diluted Basis, has been sold (including through
dividend or spin-off) to the public.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, among the parties hereto, as
the same may be amended, modified or supplemented from time to time.
"Restricted Preferred Securities" means the Series A
Preferred.
"Restricted Securities" means the Common Stock, the Equity
Equivalents and any securities issued with respect thereto as a result
of any stock dividend, stock split, reclassification, recapitalization,
reorganization, merger, consolidation or similar event or upon the
conversion, exchange or exercise thereof.
"Rule 144 Transaction" means a transfer of Common Stock (A)
complying with Rule 144 under the Securities Act as such Rule is in
effect on the date of such transfer (but not including a sale other
than pursuant to a "brokers transaction" as defined in clauses (1) and
(2) of paragraph (g) of such Rule as in effect on the date hereof) and
(B) occurring at a time when shares of such Common Stock are registered
pursuant to Section 12 of the Exchange Act (or any successor to such
Section).
"Sale Transaction" means any transaction of the type described
in clause (i) or clause (ii) of Section 2.7(a) (whether or not effected
pursuant to an exercise of a Drag-Along Right).
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and the rules and regulations of the Commission
thereunder.
"Senior Subordinated Note" means that certain Senior
Subordinated Note of the Company in the aggregate principal amount of
$30,000,000 issued to MascoTech on the Closing Date pursuant to the
Subordinated Note Purchase Agreement dated as of January __, 1997
between MascoTech and the Company.
"Series A-1 Common Stock" means the Company's Series A-1
Common Stock, par value $.01 per share, and any securities into which
such Series A-1 Common Stock shall have been changed or any securities
resulting from any reclassification or recapitalization of such Series
A-1 Common Stock.
-9-
<PAGE> 13
Stockholders' Agreement
"Series A-2 Common Stock" means the Company's Series A-2
Common Stock, par value $.01 per share, and any securities into which
such Series A-2 Common Stock shall have been changed or any securities
resulting from any reclassification or recapitalization of such Series
A-2 Common Stock.
"Series A-3 Common Stock" means the Company's Series A-3
Common Stock, par value $.01 per share, and any securities into which
such Series A-3 Common Stock shall have been changed or any securities
resulting from any reclassification or recapitalization of such Series
A-3 Common Stock
"Series A-4 Common Stock" means the Company's Series A-4
Common Stock, par value $.01 per share, and any securities into which
such Series A-4 Common Stock shall have been changed or any securities
resulting from any reclassification or recapitalization of such Series
A-4 Common Stock.
"Series A Preferred" means the Company's Series A Preferred
Stock, par value $.01 per share, and any securities (other than the
Debentures) into which such Series A Preferred shall have been changed
or any securities resulting from any reclassification or
recapitalization of such Series A Preferred.
"Series I Common Stock" means the Company's Series I Common
Stock, par value $.01 per share, and any securities into which such
Series I Common Stock shall have been changed or any security resulting
from any reclassification or recapitalization of such Series I Common
Stock.
"Series II Common Stock" means the Company's Series II Common
Stock, par value $.01 per share, and any securities into which such
Series II Common Stock shall have been changed or any securities
resulting from any reclassification or recapitalization of such Series
II Common Stock.
"Significant Subsidiaries" means those Subsidiaries of the
Company which constitute a "Significant Subsidiary" as defined in
Regulation S-X promulgated by the Commission under the Securities Act,
as such Regulation is in effect on the date hereof.
"Significant Transaction" means:
(i) any merger, consolidation or other business
combination of the Company or any of its Significant
Subsidiaries with or into any Person or any formation by the
Company or any of its Significant Subsidiaries of any
subsidiary which would, upon such formation, be a Significant
Subsidiary;
-10-
<PAGE> 14
Stockholders' Agreement
(ii) any sale, lease, exchange or other disposition
by the Company or any of its Subsidiaries of assets having a
book value in excess of $2,500,000.00, in a single transaction
or a series of related transactions, to or with any Person,
other than sales of inventory in the ordinary course of
business;
(iii) any amendment to or modification or repeal of
any provision of the Certificate of Incorporation or the
By-Laws of the Company;
(iv) any acquisition by the Company or any of its
Subsidiaries of securities or assets, in a single transaction
or a series of related transactions for consideration in
excess of $2,500,000.00, other than (A) purchases of inventory
in the ordinary course of business, (B) capital expenditures
made in accordance with an annual budget approved by the
Board, or (C) investments described as "Permitted Investments"
under the Bridge Credit Agreement;
(v) any increase or reduction of the capital of the
Company or any of its Subsidiaries or the creation of any
additional class of capital stock of the Company or any of its
Subsidiaries, or the issuance by the Company or any of its
Subsidiaries of Equity Equivalents on a basis other than pro
rata to the holders of capital stock other than (A) the
issuance of Common Stock upon the exercise or conversion of
Equity Equivalents where the issuance of such securities has
been approved by the Board and (B) the issuance of Common
Stock upon the conversion of any outstanding class of Common
Stock;
(vi) the incurrence or guaranty after the Closing
Date by the Company or any of its Subsidiaries of any material
Funded Debt or any modification or amendment to any agreement
governing the extension or guaranty thereof (including
the issuance of Debentures but excluding any incurrence under
the terms of the Debentures following their issuance or any
agreement or instrument previously approved by the Board,
including, without limitation, drawdowns on any previously
approved revolving credit facility);
(vii) the dissolution of the Company (or any of its
Subsidiaries), the adoption of a plan of liquidation by the
Company (or any of its Subsidiaries), any action by the
Company (or any of its Subsidiaries) to commence any suit,
case, proceeding or other action (A) under any existing or
future law of any jurisdiction relating to bankruptcy,
insolvency, reorganization or relief of debtors seeking to
have an order for relief of debtors entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to it, or (B) seeking appointment of a receiver,
trustee, custodian or other similar official for it
-11-
<PAGE> 15
Stockholders' Agreement
or for all or any substantial part of its assets, or making a
general assignment for the benefit of its creditors;
(viii) any increase, decrease or change in the
compensation or benefits of the senior management of the
Company or any of its Subsidiaries, or the issuance of any
Management Note; and
(ix) any transaction or dealing between the Company
or any of its Subsidiaries, on the one hand, and one or more
of its Stockholders (or any Affiliate of any Stockholder), on
the other hand, not entered into in the ordinary course of
business or on an arm's-length basis or which is material to
the Company or any of its Subsidiaries, other than
transactions undertaken by the Company in compliance with the
provisions of this Agreement and the Registration Rights
Agreement.
"Stockholders" means each of the Institutional Stockholders,
the MascoTech Stockholders, the Management Stockholders and the
Additional Stockholders.
"Subscription Agreements" means, collectively, the following
agreements, each dated as of the date hereof: Institutional
Stockholder's Subscription Agreement, the MascoTech Subscription
Agreement and the Management Stockholders Subscription Agreements.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, association or other business entity of which
(i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at
the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination
thereof, or (ii) if a partnership, association or other business
entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more Subsidiaries of that Person or
a combination thereof. For purposes hereof, a Person or Persons shall
be deemed to have a majority ownership interest in a partnership,
association or other business entity if such Person or Persons shall be
allocated a majority of partnership, association or other business
entity gains or losses or shall be or control the managing director or
general partner of such partnership, association or other business
entity.
"Transfer" means, directly or indirectly, any sale, transfer,
assignment, grant of a participation in, gift, hypothecation, pledge or
other disposition of any securities or any interests therein or, as the
context may require, to sell, transfer, assign, grant a participation
in, give as a gift, hypothecate, pledge or otherwise dispose of any
securities or any interests therein; provided that the exercise of any
conversion or exchange right provided for in the terms of any security
(including without limitation the right of the Company to exchange
shares of Series A Preferred for the Debentures) shall not be deemed a
"Transfer."
-12-
<PAGE> 16
Stockholders' Agreement
"Unvested Shares" shall mean, with respect to each Management
Stockholder or Additional Management Stockholder, all Management
Securities other than Vested Shares.
"Vested Shares" means, unless otherwise provided in a separate
agreement between the Company and a Management Stockholder or
Additional Management Stockholder with respect to each Management
Stockholder or Additional Management Stockholder that portion of
Management Securities held by such person and by such person's
Permitted Transferees who hold such Management Securities which are
attributable to such person which is the product of: (x) the number of
Management Securities acquired by such Management Stockholder or
Additional Management Stockholder on or after the Closing Date, and (y)
the fraction in which the numerator is the number of anniversaries that
have elapsed after the Closing Date and the denominator is five (5)
provided, however, that in the event such fraction is greater than one
it shall be deemed to equal one; and provided, further, that
simultaneously with a Sale Transaction, all Unvested Shares shall
become Vested Shares.
(b) Unless otherwise provided herein, all accounting terms
used in this Agreement shall be interpreted in accordance with generally
accepted accounting principles as in effect from time to time, applied on a
consistent basis.
(c) The following terms, when used in this Agreement, shall
have the meanings defined for such terms in the Section set forth below (such
definitions to be equally applicable to both singular and plural forms of the
terms defined):
Stockholders' Agreement
<TABLE>
<CAPTION>
Term Section
<S> <C> <C>
"Acceptance Date" 6.5(b)
"Accounting Determination" 2.8(a)
"Acquiror" 2.7(a)
"Acquisition Agreement" Recitals
"Agreement" Preamble
"Article III Offer" 3.1(a)
"Buyer" 3.1(a)
"Closing" Recitals
"Company" Preamble
"Company Designee" 4.1(a)
"Company Notice" 2.5(b)
"CVC" Preamble
"Disinterested Director" 5.1(a)
"Drag-Along Right" 2.7(a)
"Drag-Along Sale" 2.7(a)
"Inclusion Notice" 3.1(a)
</TABLE>
-13-
<PAGE> 17
<TABLE>
<S> <C> <C>
"Inclusion Right" 3.1(b)
"Institutional Director" 5.1(a)
"Management Director" 5.1(a)
"Management Group" Preamble
"Management Group Member" Preamble
"Management Representative" 5.9
"MascoTech" Preamble
"MascoTech Director" 5.1(a)
"MascoTech Subsidiary" Def'n of Permitted Transferee
"New Common Stock Notice" 6.5(a)
"New Common Stock Offer" 6.5(a)
"New Common Stock Units" 6.5(a)
"Nominating Committee" 5.1(a)
"Notice of Intention" 2.5(a)
"Observer" 5.7(a)
"Offered Securities" 2.5(a)
"Offerees" 3.1(a)
"Offer Price" 2.5(a)
"Other Businesses" 2.7(d)
"Permitted MascoTech Subsidiary" Def'n of Permitted Transferee
"Prospective Buyer Notice" 2.5(c)
"Prospective Buyers" 2.5(a)
"Purchase Notice" 4.1(a)
"Regulatory Problem" 6.4(c)
"Sale Event" 4.1(a)
"Section 2.9 Emergency Notice" 2.9(c)
"Section 2.8 Notice" 2.8(a)
"Section 2.9 Notice" 2.9(a)
"Section 2.8 Securities" 2.8(a)
"Section 2.9 Securities" 2.9(a)
"Sellers" 4.1(a)
"Selling Stockholder" 2.5(a)
"Subject Securities" 2.6(b)
"Third Party" 2.5(e)
"Transferor" 3.1(a)
"Transferor Shares" 3.1(a)
</TABLE>
-14-
<PAGE> 18
Stockholders' Agreement
ARTICLE II
RESTRICTIONS ON TRANSFERS
2.1 RESTRICTIONS GENERALLY; SECURITIES ACT.
(a) Each Stockholder agrees that it will not, directly or
indirectly, Transfer any Restricted Securities or Restricted Preferred
Securities except in accordance with the terms of this Agreement. Any attempt to
Transfer or any purported Transfer of any Restricted Securities or Restricted
Preferred Securities not in accordance with the terms of this Agreement shall be
null and void and neither the Company nor any transfer agent of such securities
shall give any effect to such attempted Transfer in its stock records.
(b) Each Stockholder agrees that, in addition to the other
requirements set forth herein, the Registration Rights Agreement and in each
Stockholder's respective subscription agreement between such Stockholder and the
Company relating to Transfer, it will not Transfer any Restricted Securities or
Restricted Preferred Securities except (i) pursuant to an effective registration
statement under the Securities Act, or (ii) unless such requirement is waived by
the Company, upon receipt by the Company of an opinion of counsel to the
Stockholder (which opinion and counsel are reasonably satisfactory to the
Company) or of an opinion of counsel to the Company, or of a no-action letter
from the Commission addressed to the Company or such Stockholder, to the effect
that no registration statement is required because of the availability of an
exemption from registration under the Securities Act.
2.2 LEGEND.
(a) Each certificate representing Restricted Securities or
Restricted Preferred Securities shall be endorsed with the legends set forth in
Exhibit B hereto and such other legends as may be required by applicable state
securities laws.
(b) Any certificate issued at any time in exchange or
substitution for any certificate bearing such legends (except a new certificate
issued upon the completion of a Transfer pursuant to a registered public
offering under the Securities Act and made in accordance with the Securities
Act) shall also bear such legends, unless the Restricted Securities or
Restricted Preferred Securities, as the case may be, represented thereby are no
longer subject to the provisions of this Agreement or, in the opinion of the
Company (with advice from counsel to the Company, as the Company may deem
appropriate), the restrictions imposed under the Securities Act or state
securities laws, in which case the applicable legend (or legends) may be
removed.
2.3 LIMITATIONS ON REPURCHASES, DIVIDENDS, ETC. Each Stockholder
understands that the Company is entering or has entered into certain financing
agreements which will or do contain prohibitions, restrictions and limitations,
among other things, on the ability of the Company to purchase any Restricted
Securities and/or Restricted Preferred Securities (whether pursuant to this
-15-
<PAGE> 19
Stockholders' Agreement
Agreement or otherwise), to pay dividends and to waive, modify or discharge any
rights or obligations under this Agreement.
2.4 TRANSFER RESTRICTIONS.
(a) Each of the Management Stockholders and the Additional
Stockholders severally agrees that it will not Transfer any Restricted
Securities, except (i) to a Permitted Transferee who shall have executed
a Joinder Agreement and thereby become a party to this Agreement; (ii) pursuant
to Section 2.6 (Involuntary Transfers); (iii) pursuant to 2.7 (Drag-Along
Rights); (iv) in accordance with Article III (Rights of Inclusion) in the
capacity of an Offeree thereunder; (v) pursuant to Article IV (Repurchase of
Securities); (vi) in a registered public offering or in a Rule 144 Transaction;
or (vii) pursuant to Section 2.5 (Right of First Refusal); provided, however,
that no Management Stockholder shall Transfer any Restricted Securities pursuant
to Section 2.5 for a period of five years following the Closing Date, and
provided, further, that no Management Stockholder or Additional Management
Stockholder shall transfer any Unvested Shares except (x) to a Permitted
Transferee who shall have executed a Joinder Agreement and thereby become a
party to this Agreement or (y) pursuant to Section 2.6 (Involuntary Transfers),
Section 2.7 (Drag-Along Rights) or Article IV (Repurchase of Securities).
(b) Each of the MascoTech Stockholders severally agrees that
it will not Transfer any Restricted Securities, except (i) to a Permitted
Transferee who shall have executed a Joinder Agreement and thereby become a
party to this Agreement; (ii) pursuant to Section 2.8 (Special Right of First
Offer); (iii) pursuant to Section 2.5 (Right of First Refusal); (iv) pursuant to
Section 2.7 (Drag-Along Rights); (v) in accordance with Article III (Rights of
Inclusion) in the capacity of an Offeree thereunder; or (vi) in a registered
public offering or in a Rule 144 Transaction.
(c) Each of the Institutional Stockholders severally agrees
that it will not Transfer any Restricted Securities, except (i) to a Permitted
Transferee, including any Transfer pursuant to Section 2.9 (Institutional
Stockholder Special Right of First Offer), who shall have executed a Joinder
Agreement and thereby become a party to this Agreement; (ii) pursuant to
Section 2.5 (Right of First Refusal); (iii) pursuant to Section 2.7 (Drag-Along
Rights); (iv) in accordance with Article III (Rights of Inclusion) in the
capacity of an Offeree thereunder; or (v) in a registered public offering or in
a Rule 144 Transaction.
(d) Each of the Stockholders severally agrees that it will not
Transfer any Restricted Preferred Securities, except (i) to a Permitted
Transferee who shall have executed a Joinder Agreement and thereby become a
party to this Agreement; (ii) in a transaction which has been effected without
violation of the terms of Article III (Rights of Inclusion) in the capacity of a
Transferor or of an Offeree thereunder; (iii) pursuant to Section 2.6
(Involuntary Transfers); (iv) pursuant to Section 2.7 (Drag-Along Rights); (v)
pursuant to Article IV (Repurchase of Securities); or (vi) to the Company
pursuant to a mandatory redemption of such Restricted Preferred Securities as
may be provided for under the Certificate of Incorporation.
-16-
<PAGE> 20
Stockholders' Agreement
(e) Prior to the consummation of any transaction that would
result in (A) any Permitted Transferee of a MascoTech Stockholder which is a
Subsidiary of MascoTech no longer constituting a MascoTech Subsidiary or (B) any
Permitted Transferee of a MascoTech Stockholder which is a Permitted MascoTech
Subsidiary no longer constituting a Permitted MascoTech Subsidiary, MascoTech
shall cause any Restricted Securities or Restricted Preferred Securities held by
such person to be Transferred to, in the case of clause (A), MascoTech or any
Person which will thereafter qualify as a Subsidiary, and in the case of clause
(B), MascoTech or any Person which will thereafter qualify as either a
Subsidiary of MascoTech or, subject to the consent requirements set forth in
clause (ii) of the definition of "Permitted Transferees," a Permitted MascoTech
Subsidiary.
2.5 RIGHT OF FIRST REFUSAL.
(a) Except for Transfers permitted pursuant to Section 2.4(a),
Section 2.4(b), 2.4(c) or 2.4(d), if pursuant to a bona fide third party offer a
Stockholder desires to Transfer any Restricted Securities (such transferring
Stockholder, a "Selling Stockholder" and such securities proposed to be so
Transferred, the "Offered Securities"), prior to any Transfer it shall give
written notice of the proposed Transfer (the "Notice of Intention") to the
Company, each of the Institutional Stockholders and the MascoTech Stockholders
(such parties other than the Company to whom notice is given, but excluding the
Selling Stockholder, the "Prospective Buyers"), specifying the type and number
of Offered Securities which such Selling Stockholder wishes to Transfer, the
proposed purchase price (the "Offer Price") therefor and all other material
terms and conditions of the proposed Transfer.
(b) For a period of thirty (30) days following its receipt of
the Notice of Intention, the Company shall have the right to purchase all or any
portion of the Offered Securities at the Offer Price and on the other terms
specified in the Notice of Intention, exercisable by delivery of an
irrevocable notice (the "Company Notice") to the Selling Stockholder, with a
copy to each of the Prospective Buyers, specifying the number of Offered
Securities with respect to which the Company is exercising its option.
(c) For a period of thirty (30) days following its receipt of
the Company Notice or, if no Company Notice is so received, for a period of
sixty (60) days following its receipt of the Notice of Intention, each of the
Prospective Buyers shall have the right to purchase at the Offer Price and on
the other terms specified in the Notice of Intention addressed to it, any or all
of the Offered Securities which the Company has elected not to purchase, Pro
Rata among the Prospective Buyers; provided, however, that in the event any
Prospective Buyer does not purchase any or all of its Pro Rata portion of the
Offered Securities, the other Prospective Buyers shall have the right to
purchase such portion, Pro Rata, until all of such Offered Securities are
purchased or until such other Prospective Buyers do not desire to purchase any
more Offered Securities. The right of the Prospective Buyers pursuant to this
Section 2.5(c) shall be exercisable by delivery of a notice (the "Prospective
Buyer Notice") setting forth the maximum number of Offered Securities that such
Prospective Buyer wishes to purchase, to the Selling Stockholder, the Company
and the other
-17-
<PAGE> 21
Stockholders' Agreement
Prospective Buyers and shall expire if unexercised within such 30-day or 60-day
period, as applicable.
(d) Notwithstanding the foregoing provisions of this Section
2.5, unless the Selling Stockholder shall have consented to the purchase of less
than all of the Offered Securities, neither the Company nor any Prospective
Buyer may purchase any Offered Securities unless all of the Offered Securities
are to be purchased (whether by the Company or the Prospective Buyers, or any
combination thereof).
(e) If all notices required to be given pursuant to this
Section 2.5 have been duly given, and the Company and the Prospective Buyers
determine not to exercise their respective options to purchase the Offered
Securities at the Offer Price and on the other terms specified in the Notice of
Intention or determine, with the consent of the Selling Stockholder, to exercise
their options to purchase less than all of the Offered Securities, then the
Selling Stockholder shall have the right, for a period of ninety (90) days from
the earlier of (i) the expiration of the last applicable option period pursuant
to this Section 2.5 or (ii) the date on which such Selling Stockholder receives
notice from the Company and the Prospective Buyers that they will not exercise
in whole or in part the options granted pursuant to this Section 2.5, to sell to
a third party (a "Third Party") the Offered Securities remaining unsold under
this Section 2.5 at a price not less than the Offer Price and on other terms
which shall not be materially more favorable to the Third Party in the aggregate
than those terms set forth in the Notice of Intention; provided that prior to
any such Transfer to a Third Party, such Third Party executes and delivers to
the Company a Joinder Agreement and thereby becomes a party to this Agreement.
(f) The closing of any purchase and sale pursuant to this
Section 2.5 shall take place on such date, not later than fifteen (15) business
days after the later of delivery to the Selling
Stockholder of (i) the Company Notice or (ii) the Prospective Buyer Notice, as
the parties to such purchase and sale shall select. At the closing of such
purchase and sale, the Selling Stockholder shall deliver certificates evidencing
the Offered Securities being sold duly endorsed, or accompanied by written
instruments of Transfer in form satisfactory to the purchasers thereof, duly
executed by the Selling Stockholder, free and clear of any Liens, against
delivery of the Offer Price therefor.
(g) Any Transfer by a MascoTech Stockholder or an
Institutional Stockholder which is subject to the requirements of Section 2.5
(including to the Company, to another Stockholder or to a third party) shall be
subject to each other Stockholder's rights of inclusion under Article III; and
prior to any such Transfer, the Selling Stockholder, if applicable, shall
deliver to the other Stockholders an Inclusion Notice pursuant to Section
3.1(a).
2.6 INVOLUNTARY TRANSFERS.
(a) Upon the occurrence of any event which would cause any
Restricted Securities or Restricted Preferred Securities owned by a Management
Stockholder or an Additional
-18-
<PAGE> 22
Stockholders' Agreement
Management Stockholder to be Transferred by Involuntary Transfer, such
Stockholder (or his or its legal representative or successor) shall give the
Company, the MascoTech Stockholders and the Institutional Stockholders written
notice thereof stating the terms of such Involuntary Transfer, the identity of
the transferee or proposed transferee, the price or other consideration, if
readily determinable, for which the Restricted Securities or Restricted
Preferred Securities are proposed to be or have been Transferred and the number
of Restricted Securities or Restricted Preferred Securities which are the
subject of such Transfer, and the Company shall notify the MascoTech
Stockholders and the Institutional Stockholders of the same. After its receipt
of such notice or, failing such receipt, after the Company otherwise obtains
actual knowledge of such a proposed or completed Involuntary Transfer, the
Company shall have the right and option to purchase (or to have any designee
purchase) all or any portion of such Restricted Securities or Restricted
Preferred Securities, which right shall be exercised by written notice given by
the Company to the transferor (or transferee following the occurrence of any
Involuntary Transfer) and to the MascoTech Stockholders and the Institutional
Stockholders within thirty (30) days following the later of (i) the Company's
receipt of such notice or, failing such receipt, the Company's obtaining actual
knowledge of such proposed or completed Transfer and (ii) the date of such
Involuntary Transfer.
(b) In the event that the Company elects not to purchase all
of such Restricted Securities or Restricted Preferred Securities, then the
Company shall on or prior to the end of such thirty (30) day period, notify the
MascoTech Stockholders and the Institutional Stockholders thereof, such notice
to identify the Securities not purchased by the Company (the "Subject
Securities"). For a period of thirty (30) days after receipt of such notice from
the Company, each of the MascoTech Stockholders and the Institutional
Stockholders shall have the irrevocable right to purchase any or all of the
Subject Securities, Pro Rata (based on the proportion as between the MascoTech
Stockholders and the Institutional Stockholders of the number of shares of
Restricted Securities or Restricted Preferred Securities (as the case may be)
owned by the MascoTech Stockholders or Institutional Stockholders); provided,
however, that in the event any MascoTech Stockholder or Institutional
Stockholder does not purchase any or all of its pro rata portion of the Subject
Securities, the remaining MascoTech Stockholders and Institutional Stockholders
shall have the right to purchase such portion pro rata as among themselves until
all of the Subject Securities are purchased or until such persons do not desire
to purchase any more Subject Securities. The right of the MascoTech Stockholders
and the Institutional Stockholders to purchase Subject Securities pursuant to
this Section 2.6 shall be exercisable by delivery of a notice to the transferor
(or transferee following the occurrence of any Involuntary Transfer) setting
forth the maximum number of Subject Securities that such person wishes to
purchase including any number which would be allocated in the event that any
Masco Stockholder or Institutional Stockholder does not purchase all or any
portion of its pro rata portion.
(c) Any purchase pursuant to this Section 2.6 shall be at the
price and on the terms applicable to such Involuntary Transfer; provided,
however, that if the nature of the event giving rise to such Involuntary
Transfer is such that no readily determinable consideration is to be paid for or
assigned to the Transfer of the Restricted Securities or Restricted Preferred
Securities, the price to be paid by the Company, the MascoTech Stockholders or
the Institutional Stockholders,
-19-
<PAGE> 23
Stockholders' Agreement
as the case may be, and the applicable terms shall be the purchase price and
terms applicable to a Sale Event pursuant to Section 4.2. The closing of the
purchase and sale of such Restricted Securities or Restricted Preferred
Securities pursuant to this Section 2.6 shall be held at the place and on the
date to be established by the Company, the MascoTech Stockholders and/or the
Institutional Stockholders, as the case may be, which in no event shall be less
than ten (10) nor more than forty-five (45) days from the date on which the
Company (or the MascoTech Stockholders and/or the Institutional Stockholders, as
the case may be) gives notice of its election to purchase such Restricted
Securities or Restricted Preferred Securities. At such closing, the Stockholder
(or his or its legal representative or successor) shall deliver the certificates
evidencing the Restricted Securities or Restricted Preferred Securities to be
purchased by the Company (or the MascoTech Stockholders and/or the Institutional
Stockholders, as the case may be), as applicable, accompanied by stock powers,
duly endorsed in blank, or duly executed instruments of Transfer, and any other
documents that are necessary to Transfer to the Company (or the MascoTech
Stockholders and/or the Institutional Stockholders, as the case may be) good
title to such Restricted Securities or Restricted Preferred Securities free and
clear of all Liens and, concurrently with such delivery, the Company (or the
MascoTech Stockholders and/or the Institutional Stockholders, as the case may
be) shall deliver to the transferor thereof the full amount of the purchase
price therefor by certified or bank cashier's check.
(d) Notwithstanding anything to the contrary contained herein,
in the event a purchase (or the payment of the purchase price) by the Company
pursuant to this Section 2.6 would violate or conflict with any statute, rule,
injunction, regulation, order, judgment or decree applicable to the Company or
any of its Subsidiaries or by which any of them or their respective properties
may be bound or affected or would result in any breach of, or constitute a
change of control or a default (or an event which with notice or lapse of time,
or both, would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the property or assets of the Company or any of its
Subsidiaries pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, franchise or other instrument or obligation to which
the Company or any of its Subsidiaries is a party or by which any of their
respective properties is bound or affected, with the prior written consent of
each of the Institutional Stockholders and the MascoTech Stockholders, the
rights of the Company to purchase (or to have any designee purchase) the
Restricted Securities or Restricted Preferred Securities of any Stockholder
shall be suspended until the earlier of (i) the date which falls thirty (30)
days following such time as such prohibition first lapses or is waived and no
such default would be caused or (ii) the date which is one hundred eighty (180)
days after the date of the Involuntary Transfer. For the purposes of this
Section 2.6 only, the date of such lapse or waiver shall be deemed the date of
the Involuntary Transfer for purposes of the purchase and sale of Restricted
Securities or Restricted Preferred Securities pursuant to this Section 2.6. The
Company shall use its reasonable efforts to obtain a waiver of any such
prohibition, but shall not be obligated to incur any additional interest or
other costs or charges or to make any prepayment with respect to any
indebtedness in connection with such efforts.
-20-
<PAGE> 24
Stockholders' Agreement
(e) Notwithstanding anything to the contrary contained in this
Section 2.6, any event giving rise to an Involuntary Transfer which is also
subject to the provisions of Article IV shall be governed by the provisions of
Article IV.
2.7 DRAG-ALONG RIGHTS.
(a) If, following the fifth anniversary of the Closing and
until the time that the Institutional Stockholders and MascoTech Stockholders,
as the case may be, shall have Transferred, in one or more transactions, other
than to such Stockholders' Permitted Transferees (excluding Permitted
Transferees described in clause (iii)(C) of the definition of Permitted
Transferees), forty percent (40%) or more of the shares of Common Stock
comprising such Stockholders' respective Original Ownership Level, either the
Institutional Stockholders or the MascoTech Stockholders may, but only if such
Stockholder has not so Transferred its shares of Common Stock: (i) propose to
Transfer to a third party (which is not an Affiliate of any of such
Institutional Stockholders or MascoTech Stockholder, as the case may be) (the
"Acquiror") all of their Restricted Securities and Restricted Preferred
Securities, the Institutional Stockholders or MascoTech Stockholders, as the
case may be, shall have the right to require the Stockholders to sell or
transfer all of their Restricted Securities and Restricted Preferred Securities
to such Third Party on the same terms; or (ii) propose the Transfer of all or
substantially all of the assets or business (whether by merger, sale or
otherwise) of the Company to any such third party, the Institutional
Stockholders or MascoTech Stockholders, as the case may be, shall have the right
(a "Drag-Along Right") to require (x) the Stockholders (which shall include all
Institutional Stockholders if the MascoTech Stockholders are proposing such
Transfer, and which shall include all MascoTech Stockholders if the
Institutional Stockholders are proposing such Transfer) to take all action
necessary or appropriate (including without limitation replacement of the
director or directors designated by such Stockholders) in order to cause the
Company to take all action necessary or appropriate to give effect to such
transaction and (y) the Stockholders to approve such transaction in their
capacity as stockholders of the Company (a transaction described in clause (i)
or (ii), a "Drag-Along Sale"); provided that upon the consummation of any
transaction resulting in a sale or transfer of all or substantially all of the
assets or business of the Company (whether by merger, sale or otherwise) the
Company will immediately distribute all of the net proceeds of such transaction
to the Stockholders, in accordance with their respective rights and privileges.
(b) Notwithstanding the foregoing, in the event that (A)
pursuant to an exercise of the Drag-Along Rights the Company (or one or more of
its Subsidiaries) proposes to voluntarily sell all or substantially all of the
consolidated assets of the Company to a third party in a transaction and (B) the
Company intends to pay the net proceeds therefrom to its Stockholders in a
distribution which is taxable as a dividend (and not pursuant to a plan of
liquidation) resulting in disparate tax treatment to either the MascoTech
Stockholders or the Institutional Stockholders (in relation to the Institutional
Stockholders or MascoTech Stockholders, as the case may be), then the
Institutional Stockholders or MascoTech Stockholders, as the case may be, shall
only have the right to effect such transaction if the MascoTech Stockholders or
the Institutional Stockholders, as the case may be, have consented thereto
(which consent shall not be unreasonably withheld or delayed). If ten (10) days
-21-
<PAGE> 25
Stockholders' Agreement
after the consent is requested, such consent is withheld (i) it must be on the
basis that the MascoTech Stockholders or the Institutional Stockholders, as the
case may be, are not reasonably satisfied, based upon information that they have
received from the Institutional Stockholders or MascoTech Stockholders, as the
case may be, regarding the transaction, that the MascoTech Stockholders or the
Institutional Stockholders, as the case may be, would receive in such
transaction no less on an after-tax basis than they are likely to receive on an
after-tax basis in an otherwise comparable carry-over basis transaction (taking
into account market conditions and the condition of the business and assets
being sold) and (ii) for a period of ten (10) days thereafter, the MascoTech
Stockholders and the Institutional Stockholders shall undertake good faith
negotiations to determine an appropriate resolution. If, after such ten (10) day
period, the Institutional Stockholders or MascoTech Stockholder, as the case may
be, determine that the MascoTech Stockholders or the Institutional Stockholders,
as the case may be, have unreasonably withheld their consent, the Institutional
Stockholders or MascoTech Stockholders, as the case may be, shall have the right
to require the MascoTech Stockholders or the Institutional Stockholders, as the
case may be, to provide promptly written advice to the Institutional
Stockholders or MascoTech Stockholders, as the case may be, from a disinterested
nationally recognized investment banking firm which sets forth the basis for,
confirms and supports the position taken by the MascoTech Stockholders or the
Institutional Stockholders, as the case may be, in withholding their consent. If
such written advice is so furnished within ten (10) days following the request
for such written advice, the Company shall not effect the transaction.
(c) In order to exercise a Drag-Along Right, the Institutional
Stockholders or the MascoTech Stockholders, as the case may be, shall notify
each Stockholder, such notice to set forth the terms and conditions of such
proposed sale. Subject to Section 2.7(b), each such Stockholder will take all
actions reasonably requested by the Institutional Stockholders or the MascoTech
Stockholders, as the case may be, in connection with the consummation of such
sale, and within ten (10) business days after the receipt of such notice (or
such longer period of time as the Institutional Stockholders or the MascoTech
Stockholders, as the case may be, shall designate in such notice), if such
transaction is structured as a sale of assets or a merger, such Stockholders
shall approve the transaction in their capacities as stockholders of the Company
(subject to Section 2.7(b)), and if such transaction is a sale of Restricted
Securities and Restricted Preferred Securities, such Stockholders shall cause
all of their respective Restricted Securities and Restricted Preferred
Securities to be sold to the designated purchaser on the same terms and
conditions and for the same per share consideration as the Restricted Securities
and Restricted Preferred Securities being sold by the Institutional Stockholders
or the MascoTech Stockholders, as the case may be; provided, however, that if
any of such Restricted Securities are Equity Equivalents, the purchase price of
such Equity Equivalents shall equal the aggregate price that would be paid for
the shares of Common Stock issuable upon the exercise, exchange or conversion
thereof minus the aggregate exercise, exchange or conversion price under such
Equity Equivalents for such shares of Common Stock and if any Stockholders are
given a choice as to the type or amount of consideration to be received in
respect of a specific security of the Company, all Stockholders will be given
the same choice. In furtherance of, and not in limitation of the foregoing, in
connection with a Drag-Along Sale, subject to Section 2.7(b), Section 2.7(d) and
Section 2.7(e) each Stockholder will (i) raise no objections against the
Drag-Along Sale or the process pursuant to which it was arranged, (ii) waive any
appraisal rights
-22-
<PAGE> 26
Stockholders' Agreement
under Section 262 of the Delaware General Corporation Law and other similar
rights, and (iii) execute all documents containing such terms and conditions as
those executed by other Stockholders as reasonably directed by the Institutional
Stockholders or the MascoTech Stockholders, as the case may be.
(d) In a transaction effected pursuant to the exercise of the
Drag-Along Rights pursuant to this Section 2.7 in which either it is
contemplated that, as part of such transaction, the Acquiror shall acquire from
the Institutional Stockholders or the MascoTech Stockholders, as the case may
be, or their respective Affiliates one or more businesses which are not owned or
operated by the Company or any of its Subsidiaries (the "Other Businesses"),
then, the MascoTech Stockholders or the Institutional Stockholders, as the case
may be, may elect, upon notice to the Institutional Stockholders or the
MascoTech Stockholders, as the case may be, and the Company, to require the
Board to provide a written valuation of the Other Businesses addressed to the
Company from a nationally recognized investment banking firm jointly selected by
the Institutional Stockholders and the MascoTech Stockholders, which selection
shall be made promptly and in good faith by such Stockholders. Such notice must
be given within five (5) days after receipt of the notice of exercise of
Drag-Along Rights under Section 2.7(c). If the consideration proposed to be paid
in respect of the Other Businesses (A) does not exceed the valuation established
by such investment banking firm, then the Institutional Stockholders or the
MascoTech Stockholders, as the case may be, shall have the right to proceed with
such Drag-Along Sale in accordance with the provisions of this Section 2.7 or
(B) does exceed such valuation, then the Institutional Stockholders or the
MascoTech Stockholders, as the case may be, shall not have the right to effect
such Drag-Along Sale pursuant to this Section 2.7 without the consent of the
MascoTech Stockholders or the Institutional Stockholders, as the case may be.
The fees and expenses of such investment banking firm shall be treated as a
transaction expense.
(e) Unless otherwise agreed by any Stockholder with respect to
the obligations of such Stockholder, all contractual indemnification and
contribution payments required to be made by any Stockholder in connection with
any Drag-Along Sale shall be limited to payments made from the proceeds of such
Drag-Along Sale set aside in an escrow account or similar arrangement, except
with respect to indemnification or contribution payments which arise from a
misrepresentation or breach by such Stockholder with respect to matters of title
to such Stockholders' securities and valid authorization by such Stockholder
with respect to the Drag-Along Sale. The amount of proceeds payable to each
Stockholder so set aside in respect of any such indemnification or contribution
payments shall be proportionate to the amount of consideration received or to be
received by such Stockholder in relation to all Stockholders. All Stockholders
will bear their pro rata share of the costs and expenses incurred in connection
with a Drag-Along Sale to the extent such costs are incurred for the benefit of
all Stockholders and are not otherwise paid by the Company or the purchaser and
so long as such costs and expenses are reimbursed solely out of the proceeds of
such Drag-Along Sale. Costs incurred by any Stockholder on its own behalf will
not be shared by any other Stockholder.
-23-
<PAGE> 27
Stockholders' Agreement
2.8 MASCOTECH STOCKHOLDERS SPECIAL RIGHT OF FIRST OFFER.
(a) If MascoTech has made a good faith determination following
consultation with its independent accountants that (i) there is a reasonable
likelihood that it will be required to consolidate into the financial statements
of MascoTech and its consolidated Subsidiaries the balance sheet of the Company
and its consolidated Subsidiaries as a result of its holdings (or the holdings
of any other MascoTech Stockholder) of Restricted Securities or Restricted
Preferred Securities and (ii) after taking all commercially reasonable steps,
MascoTech, with the cooperation of the Company, is unable to restructure its
ownership (or the ownership of any other MascoTech Stockholder) of such
securities in a manner which continues to avoid consolidation accounting
treatment and is not materially adverse to MascoTech (such determination, an
"Accounting Determination") then (A) MascoTech may provide a notice to the
Company and the Institutional Stockholders of such determination, such notice to
provide a brief summary setting forth an explanation of the basis for the
determination (except that no summary shall be required if agreed by the
Institutional Stockholders) and to indicate that it is a notice under this
Section 2.8 (a "Section 2.8 Notice") and (B) MascoTech and the MascoTech
Stockholders shall in such Section 2.8 Notice offer to the Institutional
Stockholders the right to purchase that quantity of the securities of the
Company as is reasonably deemed necessary by the MascoTech Stockholders to avoid
such accounting problem (the "Section 2.8 Securities") at a price and upon the
terms set forth in such Section 2.8 Notice.
(b) For a period of 20 days after receipt of such Section 2.8
Notice by each of the Company and the Institutional Stockholders, the
Institutional Stockholders shall have the right to purchase all (but not less
than all) of the Section 2.8 Securities so offered on the terms set forth in the
Section 2.8 Notice (as may be adjusted in such Section 2.8 Notice as provided by
Section 2.8(a)), on a pro rata basis (based upon the relative holdings of
Restricted Securities among the Institutional Stockholders). Acceptance of the
offer set forth in the Section 2.8 Notice may be made at any time during such
20-day period by giving an irrevocable written notice of the acceptance thereof
on or prior to such 20th day to the MascoTech Stockholders.
(c) The closing of any purchase and sale pursuant to this
Section 2.8 shall take place on such date, not later than 30 days after the
expiration of such 20-day period, as the parties to such purchase and sale shall
select. At the closing of such purchase and sale, the MascoTech Stockholders
shall deliver certificates evidencing the Section 2.8 Securities being sold duly
endorsed, or accompanied by written instruments of Transfer in form satisfactory
to the purchasers thereof, duly executed by the MascoTech Stockholders, free and
clear of any Liens, against delivery of the purchase price therefor as set forth
in the Section 2.8 Notice.
(d) If the offers set forth in the Section 2.8 Notice are not
accepted within such period of 20 days, the MascoTech Stockholders may, for a
period of 180 days after the date of such Section 2.8 Notice, sell their
holdings of Section 2.8 Securities as to which such offers have not been
accepted to a third party on terms which are either substantially similar to the
terms offered to the Institutional Stockholders or which are more favorable to
the MascoTech Stockholders; provided that if the Masco Stockholders provide the
Institutional Stockholders and the Company with notice
-24-
<PAGE> 28
Stockholders' Agreement
that (i) a third party has accepted such offer within such 180-day period, (ii)
a definitive agreement has been entered into providing for the sale of the
Section 2.8 Securities to such third party, (iii) the closing of such sale was
scheduled to occur within such 180-day period, (iv) such closing has been
delayed as a result of an assertion by the Federal Trade Commission or United
States Department of Justice or other party that such sale will constitute a
violation of antitrust laws or as a result of the waiting period applicable to
such sale under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, having not expired as of the end of such 180-day period and (v) the
sale is reasonably likely to occur notwithstanding such delay in an additional
period of 60-days from the end of such 180-day period, then such 180-day period
shall be extended (once only) for a period of an additional 60-days to allow for
such sale to be consummated to such third party. Upon the acceptance of any such
offer of the MascoTech Stockholders by a third party, the MascoTech Stockholders
shall notify the Company and the Institutional Stockholders thereof, such notice
to provide details as to the identity of the third party and the terms of such
sale.
2.9 INSTITUTIONAL STOCKHOLDERS SPECIAL RIGHT OF FIRST OFFER.
(a) If any Institutional Stockholder determines that it needs
to Transfer certain of the Company's securities pursuant to (iii)(C) of the
definition of Permitted Transferee then (A) such Institutional Stockholder may
provide a notice to the Company and the MascoTech Stockholders of such
determination, such notice to indicate that it is a notice under this Section
2.9 (a "Section 2.9 Notice") and (B) such Institutional Stockholder shall in
such Section 2.9 Notice offer to the MascoTech Stockholders the right to
purchase that quantity of the securities of the Company as is reasonably deemed
necessary by such Institutional Stockholder to avoid such Regulatory Problem (as
defined herein) (the "Section 2.9 Securities") at a price and upon the terms set
forth in such Section 2.9 Notice.
(b) For a period of 20 days after receipt of such Section 2.9
Notice by the Company and each of the MascoTech Stockholders, the MascoTech
Stockholders shall have the right to purchase all (but not less than all) of the
Section 2.9 Securities so offered on the terms set forth in the Section 2.9
Notice, on a pro rata basis (based upon the relative holdings of Restricted
Securities among the MascoTech Stockholders). Acceptance of the offer set forth
in the Section 2.9 Notice may be made at any time during such 20-day period by
giving an irrevocable written notice of the acceptance thereof on or prior to
such 20th day to such Institutional Stockholder.
(c) The closing of any purchase and sale pursuant to this
Section 2.9 shall take place on such date, not later than 30 days after the
expiration of such 20-day period, as the parties to such purchase and sale shall
select. At the closing of such purchase and sale, such Institutional Stockholder
shall deliver certificates evidencing the Section 2.9 Securities being sold duly
endorsed, or accompanied by written instruments of Transfer in form satisfactory
to the purchasers thereof, duly executed by such Institutional Stockholder, free
and clear of any Liens, against delivery of the purchase price therefor as set
forth in the Section 2.9 Notice; provided, however, that if such Institutional
Stockholder determines that it is necessary in order to avoid a Regulatory
Problem to sell the 2.9 Securities prior to the expiration of either (x) the
20-day period after the delivery of the
-25-
<PAGE> 29
Stockholders' Agreement
Section 2.9 Notice or (y) the date agreed upon for closing pursuant to this
Section (c), such Institutional Stockholder shall provide the MascoTech
Stockholders with a notice (a "Section 2.9 Emergency Notice") setting forth the
purchase price, the amount of Section 2.9 Securities required to be sold, who
the proposed third party buyer of such Section 2.9 Securities is and the time
and place on which the closing of the purchase of the Section 2.9 Securities
will occur (such closing to take place at any time two Business Days after
delivery of the Section 2.9 Emergency Notice); provided, further, that within
two Business Days after receipt of the Section 2.9 Emergency Notice, the
MascoTech Stockholders may agree to buy on the proposed closing date, pro rata
among all MascoTech Stockholders, the Section 2.9 Securities specified in the
Section 2.9 Emergency Notice.
(d) If the offers set forth in the Section 2.9 Notice (other
than an offer pursuant to a Section 2.9 Emergency Notice) are not accepted
within such period of 20 days, the Institutional Stockholder may, for a period
of 180 days after the date of such Section 2.9 Notice, sell its holdings
of Section 2.9 Securities as to which such offers have not been accepted to a
third party on terms which are either substantially similar to the terms offered
to the MascoTech Stockholders or which are more favorable to the Institutional
Stockholder; provided that if the Institutional Stockholder provides the
MascoTech Stockholders and the Company with notice that (i) a third party has
accepted such offer within such 180-day period, (ii) a definitive agreement has
been entered into providing for the sale of the Section 2.9 Securities to such
third party, (iii) the closing of such sale was scheduled to occur within such
180-day period, (iv) such closing has been delayed as a result of an assertion
by the Federal Trade Commission or United States Department of Justice or other
party that such sale will constitute a violation of antitrust laws or as a
result of the waiting period applicable to such sale under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, having not expired as of the end
of such 180-day period and (v) the sale is reasonably likely to occur
notwithstanding such delay in an additional period of 60-days from the end of
such 180-day period, then such 180-day period shall be extended (once only) for
a period of an additional 60-days to allow for such sale to be consummated to
such third party. Upon the acceptance of any such offer of the Institutional
Stockholder by a third party, the Institutional Stockholder shall notify the
Company and the MascoTech Stockholders thereof, such notice to provide details
as to the identity of the third party and the terms of such sale.
ARTICLE III
RIGHTS OF INCLUSION
3.1 RIGHTS OF INCLUSION.
(a) Except for any Transfer of Restricted Securities or
Restricted Preferred Securities pursuant to clauses (i), (ii), (iv), (v) and
(vi) of Section 2.4(b), clauses (i), (iii), (iv) or (v) of Section 2.4(c), or
clauses (i), (ii) (in the capacity of Offeree), (iii), (iv), (v) or (vi) of
Section 2.4(d) (provided, that for purposes of this exception, the term
"Permitted Transferee", with respect to the Institutional Stockholders, includes
only Permitted Transferees of the Institutional Stockholders
-26-
<PAGE> 30
which are persons described in clauses (iii)(A) and (B) of the definition of
Permitted Transferee), if
(I) the Institutional Stockholders propose to
Transfer, in one or more transactions, Restricted Securities
representing more than five percent (5%) of the Restricted Securities
on a Fully-Diluted Basis; provided, that this clause (I) shall apply
only to the extent such Transfers otherwise subject to the Inclusion
Right in the aggregate exceed such five percent (5%) threshold;
(II) the MascoTech Stockholders propose to Transfer,
in one or more transactions, Restricted Securities representing more
than five percent (5%) of the Restricted Securities on a Fully-Diluted
Basis; provided, that this clause (II) shall apply only to the
extent such Transfers otherwise subject to the Inclusion Right in the
aggregate exceed such five percent (5%) threshold; or
(III) the Institutional Stockholders, the MascoTech
Stockholders, the Additional Stockholders or the Management
Stockholders propose to Transfer Restricted Preferred Securities;
in each case to any Person (the "Buyer") (the transferor under clause (I), (II)
or (III), the "Transferor" and the securities proposed to be so transferred, the
"Transferor Shares"), then, as a condition to such Transfer, the Transferor
shall cause the Buyer to include an offer (the "Article III Offer") to each of
the Stockholders holding shares of the same class (and series) as the Transferor
Shares who are not Transferors (collectively, the "Offerees"), to sell to the
Buyer, at the option of each Offeree, that number of shares of the same class
(and series) of Restricted Securities (or Restricted Preferred Securities) as
the Transferor, determined in accordance with Section 3.1(b), on the same terms
and conditions as are applicable to the Transferor Shares. (For purposes of this
Section 3.1, shares of all classes and series of Common Stock together with
Equity Equivalents (on an as-if-converted basis), shall be deemed one and the
same class and series of Common Stock.) The Transferor shall provide a written
notice (the "Inclusion Notice") of the Article III Offer to each Offeree, which
may accept the Article III Offer by providing a written notice of acceptance of
the Article III Offer to the Transferor within thirty (30) days after delivery
of the Inclusion Notice.
(b) Each Offeree shall have the right (an "Inclusion Right")
to sell pursuant to the Article III Offer a Pro Rata number of its shares of
Restricted Securities or Restricted Preferred Securities (as the case may be) as
is sold by the Transferor (to the extent the Transferor's securities are subject
to the Inclusion Right). Any Offeree which owns Equity Equivalents may sell
pursuant to the Article III Offer, in lieu of shares of Common Stock, Equity
Equivalents representing that number of shares of Common Stock which it could
sell pursuant to its Inclusion Right and the purchase price therefor shall equal
the aggregate price that would be paid for the shares of Common Stock issuable
upon the exercise, exchange or conversion thereof minus the aggregate exercise,
exchange or conversion price under such Equity Equivalent for such shares of
Common Stock.
-27-
<PAGE> 31
Stockholders' Agreement
3.2 ARTICLE III SALES.
(a) Upon its exercise of an Inclusion Right, each Offeree
shall, within a reasonable period prior to the closing of such Article III Sale,
deliver to the Transferor a certificate or certificates representing the
Restricted Securities and/or Restricted Preferred Securities to be sold or
otherwise disposed of pursuant to the Article III Offer by such Offeree, free
and clear of all Liens, and a limited power-of-attorney authorizing the
Transferor to sell or otherwise dispose of such Restricted Securities and/or
Restricted Preferred Securities pursuant to the terms of the Article III Offer,
provided, however, that in the event that the purchase and sale of Restricted
Securities or Restricted Preferred Securities contemplated by the Article III
Offer is not completed, such certificate(s) shall be returned to the Offeree in
accordance with Section 3.2(c) promptly upon request by the Offeree.
The Transferor shall have one hundred twenty (120) days,
commencing on the expiration of the 30 day period following delivery of the
Inclusion Notice, in which to sell or otherwise dispose of, on behalf of itself
and the Offerees, up to the number of shares of Restricted Securities and/or
Restricted Preferred Securities covered by the Article III Offer (and the number
of Transferor Shares) to the Buyer. If all such shares are not sold to the
Buyer, the Transferor, at its option, may elect to sell on behalf of itself and
the Offerees such number of shares as the Buyer will purchase, Pro Rata among
the Transferor and the Offerees, as nearly as practicable. The material terms of
such sale, including, without limitation, price and form of consideration, shall
be as set forth in the Inclusion Notice. If at the end of such 120-day period
the Transferor has not completed the sale or other disposition of all the
Transferor Shares and all the Offerees' Restricted Securities and/or Restricted
Preferred Securities (if any) proposed to be sold, the Transferor shall return
to each of the Offerees its respective certificates, if any, representing
Restricted Securities and/or Restricted Preferred Securities which the Offerees
delivered for sale or other disposition pursuant to this Article III and which
were not sold pursuant thereto and the provisions of this Article III shall
continue to be in effect.
(b) Promptly after the consummation of the sale or other
disposition of the Transferor Shares and Restricted Securities and/or Restricted
Preferred Securities of the Offerees to the Buyer pursuant to the Article III
Offer, the Transferor shall notify the Offerees thereof, and the Buyer shall pay
to the Transferor and each of the Offerees their respective portions of the
sales price of the Restricted Securities and/or Restricted Preferred Securities
sold or otherwise disposed of pursuant thereto, and shall furnish such other
evidence of the completion of such sale or other disposition and the terms
thereof as may be reasonably requested by the Offerees.
(c) Notwithstanding anything to the contrary contained in this
Article III, except for the Transferor's obligation to return to each Offeree
any certificates representing the Offerees' Restricted Securities or Restricted
Preferred Securities, there shall be no liability on the part of the Transferor
to any Stockholder in the event that the proposed sale pursuant to this Article
III is not consummated for whatever reason. Whether a sale of Restricted
Securities or Restricted Preferred
-28-
<PAGE> 32
Stockholders' Agreement
Securities is effected pursuant to this Article III by the Transferor is in the
sole and absolute discretion of the Transferor.
ARTICLE IV
REPURCHASE OF SECURITIES
4.1 SALE EVENT.
(a) In the event that any Management Stockholder or any
Additional Management Stockholder shall cease to be employed by (or in the case
of any non-employee ceases to be a director of) the Company or any of its
Subsidiaries for any reason, including death, permanent disability, termination
for cause or without cause, voluntary termination, retirement or otherwise (such
cessation of employment or directorship being referred to herein as a "Sale
Event"), but in each case subject to Section 4.4, such Management Stockholder
(or his personal representative) or such Additional Management Stockholder (or
his personal representative) shall promptly notify the Company, the MascoTech
Stockholders and the Institutional Stockholders of the applicable Sale Event
and, within ninety (90) days after the Company's receipt of such notice, the
Company or, at the option of the Company, any present or future employee or
director of the Company or any of its Subsidiaries who shall have been
designated by the Board acting by an Institutional Affirmative Board Vote and a
MascoTech Affirmative Board Vote (subject, in each case, to the same
qualification applicable to a Significant Transaction under Section 5.5) (a
"Company Designee") may, at its option, elect to purchase the Securities
described in the next sentence of this Section 4.1(a), exercisable by written
notice (a "Purchase Notice") delivered to such Management Stockholder (or his
personal representative) or such Additional Management Stockholder (or his
personal representative) (with copies thereof to the Institutional Stockholders
and the MascoTech Stockholders) and, in each case, his respective Permitted
Transferees who hold Management Securities which Management Securities are
attributable to the Management Stockholder or Additional Management Stockholder
whose employment or directorship has ceased (collectively, the "Sellers") (with
a copy to the Institutional Stockholders and the MascoTech Stockholders). Upon
the giving of such notice, the Sellers shall be obligated to sell to the Company
or the Company Designee those Management Securities (whether Vested Shares or
Unvested Shares) of the Sellers which are designated in the Purchase Notice;
provided, however, that in the event notice of a Sale Event is not given, a
Purchase Notice (or notice from the Institutional Stockholders and/or MascoTech
Stockholders as described in Section 4.1(b)) may in any event be given at any
time following a Sale Event. The time periods set forth herein and in Section
4.1(b) below shall be tolled for the duration of any suspension period under
Section 4.4 hereof and the remaining balance of any such time period shall
re-commence as of the end of any such suspension period.
(b) To the extent the Company or any Company Designee fails to
deliver a Purchase Notice or otherwise does not purchase all of the Management
Securities then owned by the Sellers, the Institutional Stockholders and the
MascoTech Stockholders may, at their option,
-29-
<PAGE> 33
exercisable by written notice delivered to the Sellers within fifteen (15) days
after delivery of the Purchase Notice (or one hundred (100) days after written
notice from the Sellers (or any legal representative) to the Company of the
applicable Sale Event, if no Purchase Notice is given by the Company or any
Company Designee), on a pro rata basis (in proportion to the number of shares of
Common Stock on a Fully-Diluted Basis owned by the Institutional Stockholders as
compared with the number of such shares owned by the MascoTech Stockholders (and
including on such pro rata basis with respect to the number of Vested Shares or
Unvested Shares purchasable by each such Person)) purchase the Management
Securities not so purchased by the Company which are designated in such written
notice from the Institutional Stockholders and/or the MascoTech Stockholders.
4.2 PURCHASE PRICE. The purchase price for each share of Management
Securities to be purchased pursuant to Section 4.1 shall be as set forth below
(and such purchase price may be paid at the election of the Company in cash or
by a Management Note in an aggregate principal amount equal to such purchase
price):
(a) as to each Vested Share (provided that the Sale Event did
not occur as a result of a termination for Cause), the Fair Market Value thereof
as of the date of the Sale Event,
(b) as to each Unvested Share, and each Vested Share (if the
Sale Event occurred as a result of a termination for Cause), the lower of (x)
the Fair Market Value thereof as of the date of the Sale Event or (y) the
Original Cost thereof, and
(c) as to each Restricted Preferred Security, the stated value
thereof together with accrued and unpaid dividends thereon as of the date of the
Sale Event.
Notwithstanding anything to the contrary contained herein, no provision of this
Agreement shall prevent or otherwise restrict the Board acting by an
Institutional Affirmative Board Vote and a MascoTech Affirmative Board Vote
(subject, in each case, to the same qualification applicable to a Significant
Transaction under Section 5.5) from determining (in its discretion) (i) that the
Company will purchase Management Securities from Management Stockholders or
Additional Management Stockholders pursuant to Section 4.1 at a price per share
in excess of the purchase price specified in this Section 4.2., (ii) that in
connection with a retirement of a Management Stockholder or Additional
Management Stockholder at or after normal retirement age all or any part of such
Stockholder's Unvested Shares may be treated as Vested Shares by the Company for
purposes of this Section 4.2 or (iii) that a Management Stockholder's or
Additional Management Stockholder's Management Securities may not be repurchased
pursuant to this Article IV by the Company, the MascoTech Stockholders or the
Institutional Stockholders.
4.3 CLOSING.
-30-
<PAGE> 34
Stockholders' Agreement
(a) Subject to Section 4.4, the closing for all purchases and
sales of Management Securities provided for in this Article IV shall be held at
the principal executive offices of the Company at 10:00 a.m., local time, on the
30th day after the determination of the purchase price in respect thereof
determined in accordance with Section 4.2 or at such other date and time as
shall have been agreed to by the Board (acting by an Institutional Affirmative
Board Vote and a MascoTech Affirmative Board Vote (subject, in each case, to the
same qualification applicable to a Significant Transaction under Section 5.5))
and the Seller; provided, however, that if any Seller who has become obligated
to sell Management Securities is deceased on such 30th day as aforesaid and such
deceased person's personal representative shall not have been appointed and
qualified by such date, then unless otherwise agreed to as provided above, the
closing shall be postponed until the 10th day after the appointment and
qualification of such personal representative.
(b) All Management Securities to be sold pursuant to this
Article IV shall be delivered to the purchaser at the aforesaid closing free and
clear of all Liens. The purchaser will be entitled to receive customary
representations as to title, authority and capacity to sell and to require a
guaranteed signature of the Seller, as applicable. Each Seller hereby appoints
the Company as attorney-in-fact to transfer such Management Securities on the
books of the Company in the event of a sale pursuant to this Article IV. Such
Sellers shall take all such actions as the Company or any other purchaser shall
request as necessary to vest in the Company or any other purchaser at such
closing good title to such Management Securities, free and clear of all Liens.
4.4 POSTPONEMENT. Notwithstanding anything to the contrary
contained herein, in the event a purchase (or the payment of the purchase price)
by the Company pursuant to this Article IV would:
(a) violate or conflict with any statute, rule, injunction,
regulation, order, judgment or decree applicable to the Company or any of its
Subsidiaries or by which any of them or their respective properties may be bound
or affected,
(b) result in a change of control under, any breach of, or a
default (or an event which with notice or lapse of time, or both, would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any of
the property or assets of the Company or any of its Subsidiaries pursuant to any
note, bond, mortgage, indenture, contract, agreement, lease, license, franchise
or other instrument or obligation to which the Company or any of its
Subsidiaries is a party or by which any of their respective properties is bound
or affected or
(c) in the judgment of the Board, jeopardize the financial
condition of the Company or otherwise have a material adverse effect on the
business, condition (financial or otherwise), results of operations or assets or
properties of the Company,
-31-
<PAGE> 35
upon the delivery by the Company of notice of suspension under this Section 4.4
to each of the Sellers, the rights of the Company to purchase the Management
Securities of the Sellers with respect to whom the Sale Event has occurred
pursuant to this Article IV shall be suspended until the earlier of (I), in the
case of clauses (a) or (b) above, the date which falls thirty (30) days
following such time as such prohibition first lapses or is waived and no such
default would be caused, and in the case of clause (c) above, the date which
falls thirty (30) days following such time as the Board determines that such
purchase (or payment of the purchase price) would no longer jeopardize the
financial condition of the Company or otherwise have a material adverse effect
on the business, condition (financial or otherwise), results of operations or
assets or properties of the Company or (II) the date which is three hundred and
sixty (360) days after the date of such notice of suspension. For the purposes
of this Section 4.4 only, the earlier of the dates under the preceding clause
(I) or (II) shall be deemed to be the date of the relevant Sale Event for
purposes of the purchase and sale of Management Securities pursuant to this
Article IV.
ARTICLE V
CORPORATE GOVERNANCE
5.1 BOARD OF DIRECTORS.
(a) From and after the date hereof, each of the Stockholders
shall vote or cause to be voted all of its shares of voting Common Stock (in the
series or class as described below), at any regular or special meeting of
stockholders called for the purpose of filling positions on the Board, or to
execute a written consent in lieu of such a meeting of stockholders for the
purpose of filling positions on the Board, and shall take all actions necessary,
to ensure that the Board consists of seven (7) members as follows:
(i) shares of Series A-1 Common Stock shall be voted so as
to elect two (2) individuals (individually, an "Institutional
Director," and collectively, the "Institutional Directors") to be
designated by the Institutional Stockholders until the time that the
Institutional Stockholders shall have Transferred, in one or more
transactions, other than to Permitted Transferees (excluding Permitted
Transferees described in clause (iii)(C) of the definition of Permitted
Transferees), forty percent (40%) of the shares of Common Stock
comprising the Institutional Stockholders' Original Ownership Level,
and thereafter by the Nominating Committee; provided, that, at any
time, and from time to time, the Institutional Stockholders, in their
sole discretion, may determine not to designate one or both of the
Institutional Directors, in which case such Institutional Directors
shall be designated by the Nominating Committee;
(ii) shares of Series A-2 Common Stock shall be voted so
as to elect two (2) individuals (individually, a "MascoTech Director"
and collectively, the "MascoTech Directors") to be designated by the
MascoTech Stockholders, until the time that the
-32-
<PAGE> 36
Stockholders' Agreement
MascoTech Stockholders shall have Transferred, in one or more
transactions, other than to Permitted Transferees, forty percent (40%)
of the shares of Common Stock comprising the MascoTech Stockholders'
Original Ownership Level, and thereafter by the Nominating Committee;
provided, that, at any time, and from time to time, the MascoTech
Stockholders, in their sole discretion, may determine not to designate
one or both of the MascoTech Directors, in which case such MascoTech
Directors shall be designated by the Nominating Committee;
(iii) shares of Series A-3 Common Stock shall be
voted so as to elect one (1) individual (the "Management Director") to
be designated by the Management Stockholders for so long as they own
Management Securities who shall be the Chief Executive Officer of the
Company or Chief Operating Officer of the Company, as the case may be;
and
(iv) shares of Series A-4 Common Stock shall be voted
so as to elect two (2) individuals (individually, a "Disinterested
Director" and collectively, the "Disinterested Directors"), each of
whom is not (A) an Affiliate of any Institutional Stockholder or
MascoTech Stockholder or an employee, director or agent or either of
them, (B) employed by the Company or any Subsidiary of the Company or
(C) a Stockholder or an Affiliate of any Stockholder; provided,
however, that any of the requirements contained in (A), (B) or (C)
above may be waived with the mutual written consent of the
Institutional Stockholders and the MascoTech Stockholders. Such
Disinterested Directors shall be designated by the Nominating
Committee;
provided, however, that (x) effective at the Closing, the Board shall consist of
the individuals set forth on Exhibit C hereto in the categories shown thereon
and (y) the Stockholders shall cause the Institutional Directors, the MascoTech
Directors and the Management Director named thereon to be designated and elected
as directors. The Nominating Committee shall consist of one (1) MascoTech
Director, one (1) Institutional Director and one (1) Disinterested Director
(collectively, the "Nominating Committee"), and upon the Closing the Nominating
Committee shall consist of the individuals set forth on Exhibit C hereto in the
categories shown thereon. The Nominating Committee shall act by majority vote,
provided that, if for any reason there shall be less than three (3) directors on
the Nominating Committee, it shall act by the unanimous vote of the remaining
director(s) on the Nominating Committee. In the event that the MascoTech
Stockholders do not designate any or either of the MascoTech Directors, the
Nominating Committee will select one (1) additional Disinterested Director who
shall also serve on the Nominating Committee which will then consist of two (2)
Disinterested Directors and one (1) Institutional Director. In the event that
the Institutional Stockholders do not designate any or either of the
Institutional Directors, the Nominating Committee will select one (1) additional
Disinterested Director who shall serve on the Nominating Committee which will
then consist of two (2) Disinterested Directors and one (1) MascoTech Director.
-33-
<PAGE> 37
Stockholders' Agreement
(b) If, prior to his election to the Board pursuant to Section
5.1(a), any person shall be unable or unwilling to serve as a director of the
Company, the group of Stockholders or Nominating Committee who designated such
person shall be entitled to designate a replacement.
(c) If at any time any Person designated as an Institutional
Director, MascoTech Director or any Disinterested Director is not then serving
as a director of the Company, upon the written request of the Institutional
Stockholders or the MascoTech Stockholders, the Stockholders shall promptly take
all action necessary or appropriate to elect individuals designated by the
Institutional Stockholders (in the case of any Institutional Director), by the
MascoTech Stockholders (in the case of any MascoTech Director) and by the
Nominating Committee (in the case of any Disinterested Director) to serve as
directors from and after the time of such request.
5.2 REMOVAL. If (i) the Institutional Stockholders request that an
Institutional Director elected as a director be removed (with or without cause),
by written notice to the other Stockholders;
(ii) the Management Stockholders request that a
Management Director elected as a director be removed (with or without
cause), by written notice to the other Stockholders;
(iii) the MascoTech Stockholders request that a
MascoTech Director elected as a director be removed (with or without
cause) by written notice to the other Stockholders;
(iv) the Nominating Committee requests that a
Disinterested Director (or an Institutional Director or MascoTech
Director, if the Institutional Stockholders or MascoTech Stockholders,
as the case may be, have determined not to designate an Institutional
Director or MascoTech Director, as the case may be, and the Nominating
Committee has designated such Institutional Director or such MascoTech
Director) elected as a director be removed (with or without cause) by
written notice to other Stockholders, or such director ceases to
qualify as a Disinterested Director; or
(v) a Management Director ceases to qualify as a
Management Director;
then in each such case, such director shall be removed and each Stockholder
agrees to vote all shares of Common Stock owned by such Stockholder and other
securities over which such Stockholder has voting control to effect such removal
or to consent in writing to effect such removal upon such request.
5.3 VACANCIES. In the event that a vacancy is created on the Board at
any time by the death, disability, retirement, resignation or removal (with or
without cause) of a director, each Stockholder agrees to vote all shares of
Common Stock owned by such Stockholder and other securities over which such
Stockholder has voting control for the individual designated to fill such
vacancy by whichever of the Stockholders or Nominating Committee designated
and/or approved
-34-
<PAGE> 38
Stockholders' Agreement
(pursuant to Section 5.1 hereof) the director whose death, disability,
retirement, resignation or removal (with or without cause) resulted in such
vacancy on the Board in the manner set forth in Section 5.1 hereof; provided,
however, that such other individual so designated may not previously have been a
director of the Company who was removed for cause from the Board.
5.4 WEIGHTED BOARD VOTING.
(a) The directors on the Board shall have weighted votes which
together total 1,000 votes, with each director having a number of such votes
equal to the percentage set forth below:
(i) the Management Director will have a weighted vote of
10%;
(ii) each MascoTech Director will have a weighted vote
of 17.5%;
(iii) each of the Institutional Directors will have a
weighted vote of 17.5%, except that in the event there are more than 50
stockholders of the Company, such weighting shall, upon notice to the
Company from the Institutional Stockholders, be shifted to a level
between 9.5% and 12.5% each (as such level shall have been adjusted in
such notice to the Company), with a corresponding shift in the
weighting of each of the Disinterested Director's weighted vote from
10% to between 15% and 18%, as appropriate; thereafter the
Institutional Stockholders shall have the right upon notice to the
Company to shift the weighting back to its original position; and
(iv) each Disinterested Director will have a weighted
vote of 10% (subject to shifting as described in clause (iii) above).
(b) All actions taken by the Board shall require the vote of a
majority of the weighted votes of the Board, subject to Section 5.5. The
weighted votes set forth above in Section 5.4(a) shall not be adjusted or
affected by a vacancy in any directorship.
5.5 SPECIAL APPROVAL RIGHTS. In addition to any other action requiring
an Institutional Affirmative Board Vote or a MascoTech Affirmative Board Vote
(i) so long as the Institutional Stockholders have the right to designate
directors under Section 5.1(a), an Institutional Affirmative Board Vote shall be
required prior to the Company or any of its Subsidiaries entering into a
Significant Transaction other than a Significant Transaction which involves the
amendment, modification or negotiation of, or exercise of rights or remedies by
the Company or any of its Subsidiaries against CVC or any of its Affiliates
under either the Bridge Credit Agreement or the CVC Subscription Agreement, and
(ii) so long as the MascoTech Stockholders have the right to designate directors
under Section 5.1(a), a MascoTech Affirmative Board vote shall be required prior
to the Company or any of its Subsidiaries entering into a Significant
Transaction other than a Significant Transaction which involves the amendment,
modification or negotiation of, or exercise
-36-
<PAGE> 39
Stockholders' Agreement
of rights or remedies by the Company or any of its Subsidiaries against
MascoTech or any of its Affiliates under the Acquisition Agreement, the Senior
Subordinated Note, the MascoTech Subscription Agreement or the Bridge Credit
Agreement.
5.6 COMMITTEES OF THE BOARD; SUBSIDIARY BOARDS. For so long as the
Board shall be comprised of the individuals contemplated by Section 5.1, unless
otherwise agreed to in writing by the Institutional Stockholders and the
MascoTech Stockholders, the Stockholders shall take all action necessary or
appropriate to cause the Company to have an audit committee and a compensation
committee of the Board consisting of one (1) Institutional Director, one (1)
MascoTech Director and one (1) Disinterested Director. The Stockholders shall
take all action necessary or appropriate to cause each additional committee of
the Board to have the same number of directors and the same composition as such
audit committee and compensation committee. For so long as the MascoTech
Stockholders and the Institutional Stockholders, respectively, shall have the
right to designate any directors under Section 5.1(a), the Stockholders shall
take all action necessary or appropriate to cause one director designated by
each of the MascoTech Stockholders and the Institutional Stockholders,
respectively, to be elected to the board of directors of each Subsidiary. The
Stockholders agree that they shall take all actions necessary or appropriate to
cause (i) such persons so designated to be directors on each such Subsidiary's
board of directors and (ii) at the direction of the parties so designating each
such director, the removal or replacement of such director from any such board.
The composition of the boards of directors of such Subsidiaries of the Company
shall otherwise be as determined by the Board.
5.7 OBSERVER'S RIGHTS.
(a) In the event (i) the Institutional Stockholders elect not
to exercise, or are prohibited by applicable law from exercising, their rights
to designate either or both of the Institutional Directors, or once appointed,
the Institutional Stockholders desire to remove one or both of the Institutional
Directors, the Institutional Stockholders shall have, and/or (ii) the MascoTech
Stockholders elect not to exercise, or are prohibited by applicable law from
exercising, their rights to designate either or both of the MascoTech Directors,
or once appointed, the MascoTech Stockholders desire to remove one or both of
the MascoTech Directors, the MascoTech Stockholders shall have, the right to
each have one (1) individual (each, an "Observer") attend any meeting of the
Board or any committee thereof. In addition, each of the Institutional
Stockholders and the MascoTech Stockholders shall have, the right to appoint an
Observer to the board of directors of any Subsidiary in lieu of designating a
director thereto as provided by Section 5.6.
(b) An Observer shall not have the right to vote on any matter
presented to the board of directors or any committee thereof. The Company shall
give each Observer written notice of each meeting thereof at the same time and
in the same manner as the members of the relevant board of directors or such
committee receive notice of such meetings, and the Company shall permit each
Observer to attend as an observer at all meetings thereof; provided that in the
case of telephonic
-36-
<PAGE> 40
Stockholders' Agreement
meetings, such Observer need receive only actual notice thereof at the same time
and in the same manner as notice is given to the directors.
(c) Each Observer shall be entitled to receive all written
materials and other information given to the directors in connection with such
meetings at the same time such materials and information are given to the
directors, and each Observer shall keep such materials and information
confidential. If the Company (or any Significant Subsidiary) proposes to take
any action by written consent in lieu of a meeting of its board of directors,
the Company (or such Significant Subsidiary) shall give written notice thereof
to each Observer prior to the effective date of such consent describing the
nature and substance of such action.
5.8 ACTION BY WRITTEN CONSENT OF STOCKHOLDERS. The parties hereto agree
that whenever any action is proposed to be taken by Stockholders without a
meeting, the Stockholders proposing to act by such consent shall, or shall cause
the Company to, give the Institutional Stockholders and the MascoTech
Stockholders at least seven (7) days' prior written notice (or such shorter
notice period as is agreed to in writing) of such proposed action specifying the
action to be taken and the purpose thereof (such notice requirement shall be
deemed satisfied by execution of such consent (i) by Institutional Stockholders
which hold in the aggregate more than fifty percent (50%) of the shares of
Common Stock on a Fully-Diluted Basis held by all Institutional Stockholders and
(ii) by MascoTech Stockholders which hold in the aggregate more than fifty
percent (50%) of the shares of Common Stock on a Fully-Diluted Basis held by all
MascoTech Stockholders;
5.9 DESIGNATION OF PROXY. In order to effectuate the provisions of this
Article V and in addition to and not in lieu of Sections 5.1 through 5.3 hereof,
each of the Management Stockholders and Additional Management Stockholders
hereby grants to the Chief Executive Officer of the Company, the Chief Operating
Officer or the Chief Financial Officer of the Company, as the case may be, or
any successor Chief Executive Officer of the Company, the Chief Operating
Officer or Chief Financial Officer of the Company, as the case may be (the
"Management Representative"), an irrevocable proxy (which proxy is coupled with
an interest) to vote at any annual or special meeting of stockholders, or to
take action by written consent in lieu of such meeting with respect to, all of
the shares of Common Stock owned or held of record by the Management
Stockholders and Additional Management Stockholders solely for (a) the election
of directors designated in accordance with Section 5.1, (b) the removal of
directors in accordance with Section 5.2 and (c) the election of a director to
fill any vacancy on the Board in accordance with Section 5.3. Such proxy shall
be in effect with respect to each share of Common Stock owned or held of record
by a Management Stockholder or Additional Management Stockholder until such time
as such Management Stockholder or Additional Management Stockholder no longer
owns or is the record holder of such share.
-37-
<PAGE> 41
Stockholders' Agreement
ARTICLE VI
CERTAIN COVENANTS OF THE PARTIES
6.1 REGISTRATION. In the event of, and in order to facilitate, a
registration by the Company of Common Stock under the Securities Act which will
constitute a Qualifying Offering, each Stockholder shall, at a meeting convened
for the purpose of amending the Certificate of Incorporation and the By-laws of
the Company, vote (in each case as recommended by the Board):
(i) to increase the authorized shares of any or all
classes or series of the Company's Common Stock and if necessary or
desirable, change the par value of any class or series of Common Stock
or change the number of issued and outstanding shares of any class or
series of Common Stock whether by stock split, stock dividend,
reclassification, combination or the like; and
(ii) to amend, modify or repeal provisions of the
Certificate of Incorporation or By-laws of the Company (subject to the
rights and privileges set forth in the terms of the Series A Preferred)
to the extent such amendments, modifications or repeals are customary
and reasonably necessary in order to facilitate a Qualifying Offering
and would be effective upon the closing of such Qualifying Offering
(except that amendments, modifications and repeals which have the
primary purpose of hindering an unsolicited takeover of the Company
(e.g., fair price provisions, staggered board, poison pills and similar
provisions) are deemed not to be customary or reasonably necessary).
6.2 MANAGEMENT STOCKHOLDERS; ADDITIONAL STOCKHOLDERS. The parties
hereto agree that as a condition precedent to the issuance by the Company of
shares of Common Stock or of securities convertible, exchangeable or exercisable
for or into shares of Common Stock (i) to any employee of the Company or its
Subsidiaries or (ii) to any Person other than any such employee, any
Institutional Stockholder, any MascoTech Stockholder or any Management
Stockholder, the Company shall require such employee or other Person to execute
a Joinder Agreement and thereby enter into and become a party to this Agreement.
From and after such time, the term "Additional Management Stockholder" shall be
deemed to include such employees and the term "Additional Stockholder" shall be
deemed to include such other Person. Nothing contained herein nor the ownership
of any Restricted Securities shall confer upon any Management Stockholder or
Additional Management Stockholder the right to employment or to remain in the
employ of the Company or any of its Subsidiaries. Notwithstanding the foregoing,
to the extent approved by an Institutional Affirmative Board Vote and MascoTech
Affirmative Board Vote and specified in any Joinder Agreement (or amendment
thereto) pursuant to which any Additional Management Stockholder may become a
party hereto, the provisions of this Agreement may be varied to be more or less
restrictive with respect to any Additional Management Stockholder.
6.3 STOCKHOLDER LIST; CERTAIN NOTICES. Upon the request of any
Institutional Stockholder or MascoTech Stockholder, the Company shall deliver
promptly to such Institutional
-38-
<PAGE> 42
Stockholders' Agreement
Stockholder or MascoTech Stockholder a list setting forth the names of all
Stockholders and the number of shares of Common Stock and Equity Equivalents
owned by each Stockholder. In addition, the Company shall give each of the
Institutional Stockholders and the MascoTech Stockholders prior written notice
of (a) the proposed conversion of any shares of any class of Common Stock or
Equity Equivalents and (b) any proposed record transfer of Restricted Securities
or Restricted Preferred Securities, setting forth the name of the transferee and
the number and type of Restricted Securities or Restricted Preferred Securities
being so transferred.
6.4 REGULATORY COMPLIANCE COOPERATION.
(a) Before the Company redeems, purchases or otherwise
acquires, directly or indirectly, or converts or takes any action with respect
to the voting rights of, any shares of any class of its capital stock (excluding
Management Securities) or any securities convertible, exchangeable or
exercisable for or into any shares of any class of its capital stock (excluding
Management Securities), the Company will give written notice of such pending
action to the Institutional Stockholders and to the MascoTech Stockholders. Upon
the written request of any Institutional Stockholder made within seven (7) days
after its receipt of any such notice, stating that after giving effect to such
action such Institutional Stockholder would have a Regulatory Problem (as
defined below), the Company will defer taking such action for such period (not
to extend beyond forty-five (45) days after such Institutional Stockholder's
receipt of the Company's original notice) as such Institutional Stockholder
requests to permit it and its Affiliates to reduce the quantity of securities
owned by them in order to avoid the Regulatory Problem. In the event the Company
or any Institutional Stockholder is precluded from taking any action under this
Agreement within any allotted period of time as a consequence of this Section,
such period of time shall be extended by the number of days during which the
Company or such Institutional Stockholder is precluded from acting.
(b) In the event that any Institutional Stockholder determines
in its good faith reasonable judgment that it has a Regulatory Problem (as
defined below), the Company agrees to take all such actions as are reasonably
requested by such Institutional Stockholder in order to effectuate and
facilitate any Transfer by such Institutional Stockholder of any securities of
the Company then held by such Institutional Stockholder to any Person designated
by such Institutional Stockholder, it being understood that Transfers pursuant
to this subsection shall only be for that quantity of the securities of the
Company as is reasonably deemed necessary by such Institutional Stockholder to
remedy such Regulatory Problem, and that such Transfer is to be at the expense
of such Institutional Stockholder and be subject to all other provisions of the
Stockholders' Agreement.
(c) For purposes of this Agreement, "Regulatory Problem" means
(i) the Institutional Stockholder's investment in the Common Stock exceeds any
limitation to which it is subject, or is otherwise not permitted, under any law,
rule or regulation of any governmental authority (including any position to that
effect taken by such governmental authority), or (ii) restrictions are imposed
on the Institutional Stockholder as a result of any law, regulation, rule or
-39-
<PAGE> 43
Stockholders' Agreement
directive (whether or not having the force of law) of any governmental or
regulatory authority which, in the reasonable judgment of the Institutional
Stockholder, make it illegal or unduly burdensome for the Institutional
Stockholder to continue to hold such Common Stock.
6.5 RIGHTS OFFERING.
(a) Prior to issuing any New Common Stock after the Closing
(x) before the occurrence of an underwritten public offering of Common Stock
registered under the Securities Act, to any person or (y) after such offering,
to any Stockholder, the Company shall offer (the "New Common Stock Offer") each
of the Institutional Stockholders and the MascoTech Stockholders an opportunity
to purchase in cash any or all of its Pro Rata portion of such New Common Stock
on the same terms and conditions as the New Common Stock being offered and, if
such New Common Stock is to be issued as a part of a unit of securities, the
Company shall offer each of the Institutional Stockholders and the MascoTech
Stockholders an opportunity to purchase any or all of its Pro Rata portion of
such unit of securities (together with the New Common Stock, the "New Common
Stock Units") on the same terms and conditions as the New Common Stock Units
being offered. The Company shall make such New Common Stock Offer by providing
each of the Institutional Stockholders and the MascoTech Stockholders with a
notice (the "New Common Stock Notice") setting forth (i) each of the
Institutional Stockholder's and the MascoTech Stockholder's Pro Rata portion of
such New Common Stock or of such New Common Stock Units, as the case may be,
(ii) the cash consideration to be paid for each share of New Common Stock or
each New Common Stock Unit, as the case may be, and (iii) all other material
terms of such New Common Stock Offer.
(b) In order for any of the Institutional Stockholders or
MascoTech Stockholders to accept the New Common Stock Offer, such Institutional
Stockholder or MascoTech Stockholder shall give a notice of acceptance to the
Company on or before twenty (20) days following its receipt of a New Common
Stock Notice (the expiration of such twenty (20) days being referred to herein
as the "Acceptance Date").
(c) Within one hundred twenty (120) days following the
Acceptance Date, the Company (i) shall issue New Common Stock or New Common
Stock Units, as the case may be, to each Institutional Stockholder or MascoTech
Stockholder who timely accepted such New Common Stock Offer upon the terms
specified in such New Common Stock Offer and (ii) may issue New Common Stock or
New Common Stock Units, as the case may be, to any other Person or Persons in an
amount not to exceed the aggregate amount offered pursuant to the New Common
Stock Offer (less the aggregate amount of shares of New Common Stock or units of
New Common Stock Units, as the case may be, issued to each of the Institutional
Stockholders or MascoTech Stockholders pursuant to the foregoing clause (i)) and
for a price which equals or exceeds the price per share of New Common Stock or
per unit of New Common Stock Units, as the case may be, specified in the New
Common Stock Offer.
-40-
<PAGE> 44
Stockholders' Agreement
6.6 PURCHASER REPRESENTATIVES. If the Company enters into any
negotiation or transaction involving the issuance of securities of another
Person to the Stockholders for which Rule 506 (or any similar rule then in
effect) promulgated under the Securities Act by the Commission may be available
with respect to such negotiation or transaction (including a merger,
consolidation or other reorganization) each Management Stockholder and
Additional Management Stockholder (if an individual) will, at the request of the
Company, appoint a purchaser representative (as such term is defined in Rule 501
under the Securities Act) reasonably acceptable to the Company. If any
Management Stockholder or Additional Management Stockholder appoints the
purchaser representative designated by the Company, the Company will pay the
fees of such purchaser representative, but if any such Management Stockholder or
Additional Management Stockholder declines to appoint the purchaser
representative designated by the Company, such Management Stockholder or
Additional Management Stockholder will appoint, at his own expense, another
purchaser representative reasonably acceptable to the Company.
6.7 CONFIDENTIALITY. Each Stockholder agrees to use only in a manner
consistent with its status as a Stockholder and not in furtherance of any other
unrelated business purpose, any information which it may receive from, or at the
direction of, the Company with respect to the financial condition, business or
operations of the Company or any Subsidiary, and to hold such information in
confidence, except for disclosures (a) to its lenders and to its legal counsel,
accountants, and other professional advisors, (b) as required by law, regulation
or legal process or the rules of any stock exchange, (c) in accordance with the
prior written consent of the Company, (d) to its Affiliates and their directors,
officers, employees and professional advisors and (e) to any prospective
purchaser of Restricted Securities, Preferred Restricted Securities and
Debentures which agrees to keep such information confidential. The information
subject to the restrictions set forth in this Section 6.7 shall not include
information which (i) becomes generally available to the public other than as a
result of a disclosure by any Stockholder, or any Affiliate thereof (other than
the Company or its Subsidiaries) or representatives, (ii) was available to a
Stockholder on a non- confidential basis prior to its disclosure by the Company,
a Subsidiary or their representatives or (iii) becomes available to a
Stockholder on a non-confidential basis from a source other than the Company, a
Subsidiary or their representatives provided, that such source is not bound by a
confidentiality agreement with the Company, a Subsidiary or their
representatives.
6.8 FINANCIAL REPORTING COVENANTS. The Company agrees to comply with
the financial reporting requirements of the Company required by the Subscription
Agreements.
-41-
<PAGE> 45
Stockholders' Agreement
ARTICLE VII
MISCELLANEOUS
7.1 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of New York,
except to the extent that the General Corporation Law of the State of Delaware
applies as a result of the Company being incorporated in the State of Delaware,
in which case such General Corporation Law shall apply.
7.2 ENTIRE AGREEMENT; AMENDMENTS. This Agreement (when read in
conjunction with the applicable Stockholder's subscription agreement)
constitutes the entire agreement of the parties with respect to the subject
matter hereof and this Agreement may be amended, modified or supplemented only
by a written instrument duly executed by the Company, the Institutional
Stockholders and the MascoTech Stockholders, except that (a) any amendment,
modification or supplement that materially, adversely and disproportionately
affects the Management Stockholders or the Additional Stockholders, as the case
may be, shall require the consent of the Management Stockholders or the
Additional Stockholders, respectively, and (b) any amendment, modification or
supplement that disproportionately affects less than all of the Management
Stockholders or the Additional Stockholders, as the case may be, shall require
the consent of the Management Stockholders or the Additional Stockholders so
affected. In the event of an amendment, modification or supplement of this
Agreement in accordance with its terms, the Stockholders shall take all action
necessary or appropriate, within thirty (30) calendar days following such
amendment, modification or supplement, or as soon thereafter as is practicable,
to cause the adoption of any amendment to the Certificate of Incorporation and
By-Laws of the Company that may be required as a result of such amendment,
modification or supplement to this Agreement. The Stockholders hereby agree to
vote their shares of Restricted Securities and Restricted Preferred Securities
to approve such amendments to the Certificate of Incorporation and By-Laws of
the Company.
7.3 TERM. Except as provided below in this Section 7.3, this Agreement
shall automatically and without further action terminate upon the earliest to
occur of (i) a Qualifying Offering or (ii) a Sale Transaction; provided that
upon the occurrence of a Qualifying Offering and prior to the occurrence of a
Sale Transaction, the provisions of Article IV, Article VII and the prohibition
on transfer by any Management Stockholder of any Unvested Shares set forth in
the second proviso to Section 2.4(a) shall continue in full force and effect
(together with related definitions).
7.4 CERTAIN ACTIONS. Unless otherwise expressly provided herein,
whenever any action is required under this Agreement by:
(a) the Institutional Stockholders (as a group, as opposed to
the exercise by an Institutional Stockholder of its individual rights
hereunder), it shall be by the affirmative vote of the
-42-
<PAGE> 46
Stockholders' Agreement
holders of Common Stock representing more than fifty percent (50%) of the Common
Stock on a Fully-Diluted Basis then held by the Institutional Stockholders as a
group, or as otherwise agreed in writing by the Institutional Stockholders as a
group (a copy of such writing to be supplied to the MascoTech Stockholders by
the Company or the Institutional Stockholders);
(b) the MascoTech Stockholders (as a group, as opposed to the
exercise by a MascoTech Stockholder of its individual rights hereunder), it
shall be by the affirmative vote of the holders of Common Stock representing
more than fifty percent (50%) of the Common Stock on a Fully-Diluted Basis then
held by the MascoTech Stockholders as a group;
(c) the Management Stockholders (and Additional Management
Stockholders), it shall be by the Management Representative; or
(d) the Additional Stockholders (as a group, as opposed to the
exercise by an Additional Stockholder of its individual rights hereunder), it
shall be by the affirmative vote of the holders of Common Stock representing
more than fifty percent (50%) of the Common Stock on a Fully-Diluted Basis then
held by the Additional Stockholders as a group.
7.5 INSPECTION. For so long as this Agreement shall remain in effect,
this Agreement shall be made available for inspection by any Stockholder at the
principal executive offices of the Company, except that the Company may elect to
maintain confidentiality over any portion of any exhibits, schedules or annexes
which show the stock ownership of any Management Stockholder or Additional
Management Stockholder.
7.6 COMPLIANCE WITH REGULATIONS. Whenever a Stockholder is entitled to
purchase Restricted Securities or Restricted Preferred Securities pursuant to
the provisions of this Agreement, any closing time period specified in such
provision shall be tolled until any necessary governmental approval is received,
including without limitation approval under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, provided that such tolling period shall not exceed
sixty (60) days.
7.7 WAIVER. No waiver by any party of any term or condition of this
Agreement, in one or more instances, shall be valid unless in writing, and no
such waiver shall be deemed to be construed as a waiver of any subsequent breach
or default of the same or similar nature.
7.8 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, personal representatives, successors
and permitted assigns (including without limitation transferees of Restricted
Securities and Restricted Preferred Securities); provided, however, that
(a) nothing contained herein shall be construed as granting
any Stockholder the right to Transfer any of its Restricted Securities or
Restricted Preferred Securities except in accordance with this Agreement,
-43-
<PAGE> 47
Stockholders' Agreement
(b) any Third Party which acquires Restricted Securities or
Restricted Preferred Securities in accordance with Section 2.5 (Right of First
Refusal) and 2.8 (Mascotech Stockholders Special Right of First Offer) shall be
bound by and shall have the benefit of the provisions of Sections 2.1, 2.2, 2.4
(but not 2.4(a)(i), 2.4(a)(v), 2.4(b)(i), 2.4(b)(ii) and 2.4(d)(i)), 2.5, 2.6,
Article III, Section 6.1 and Article VII, and shall be bound by the obligations
under Section 2.7 in connection with the exercise by other Stockholders of the
Drag-Along Right (but shall not have the benefit of such Section 2.7 to exercise
the Drag-Along Right) and Article V to vote securities and take other actions in
order to elect and/or remove directors designated under Article V by the
Institutional Stockholders, the MascoTech Stockholders, the Management
Stockholders and the Nominating Committee (but shall not have the benefit of any
rights to designate or remove any directors under Article V), to the same extent
as the transferor of such Restricted Securities or Restricted Preferred
Securities, but the remaining provisions of this Agreement shall not inure to
the benefit of, and the provisions of Article IV shall not apply to, the
Restricted Securities or Restricted Preferred Securities of, such Third Party,
(c) unless otherwise provided in the terms of the Transfer,
none of the provisions of this Agreement, other than those set forth in Sections
2.1 and 2.2 to the extent those Sections require compliance with the Securities
Act, delivery of opinions of counsel and placement of Securities Act (or state
securities laws) legends, shall apply to any Transfer of Restricted Securities
or Restricted Preferred Securities (or to the transferee thereof) subsequent to
a Transfer of those securities pursuant to Article III,
(d) none of the provisions of this Agreement shall apply to
any Transfer of Restricted Securities or Restricted Preferred Securities
subsequent to a Transfer thereof pursuant to a registered public offering made
in accordance with the Securities Act or pursuant to a Rule 144 Transaction,
(e) notwithstanding any Transfer of Restricted Securities or
Restricted Preferred Securities by any MascoTech Stockholder, Management
Stockholder or Additional Stockholder to an Institutional Stockholder, only the
provisions of this Agreement which are expressly applicable to Institutional
Stockholders shall be applicable to such Institutional Stockholder and to such
Restricted Securities or Restricted Preferred Securities in the hands of such
Institutional Stockholder,
(f) notwithstanding any Transfer of Restricted Securities or
Restricted Preferred Securities by any Institutional Stockholder, Management
Stockholder or Additional Stockholder to a MascoTech Stockholder, only the
provisions of this Agreement which are expressly applicable to such MascoTech
Stockholder shall be applicable to such MascoTech Stockholder and to such
Restricted Securities or Restricted Preferred Securities in the hands of such
MascoTech Stockholder,
(g) notwithstanding any Transfer of Restricted Securities or
Restricted Preferred Securities by any Institutional Stockholder, MascoTech
Stockholder or Additional Stockholder to a Management Stockholder, only the
provisions of this Agreement which are expressly applicable
-44-
<PAGE> 48
Stockholders' Agreement
to such Management Stockholder shall be applicable to such Management
Stockholder and to such Restricted Securities or Restricted Preferred Securities
in the hands of such Management Stockholder,
(h) notwithstanding any Transfer of Restricted Securities or
Restricted Preferred Securities by any Institutional Stockholder, MascoTech
Stockholder or Management Stockholder to an Additional Stockholder, only the
provisions of this Agreement which are expressly applicable to such Additional
Stockholder shall be applicable to such Additional Stockholder and to such
Restricted Securities or Restricted Preferred Securities in the hands of such
Additional Stockholder.
7.9 REMEDIES. In the event of a breach by any party to this Agreement
of its obligations under this Agreement, any party injured by such breach, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages and costs (including reasonable attorneys' fees), will be
entitled to specific performance of its rights under this Agreement. The parties
agree that the provisions of this Agreement shall be specifically enforceable,
it being agreed by the parties that the remedy at law, including monetary
damages, for breach of any such provision will be inadequate compensation for
any loss and that any defense in any action for specific performance that a
remedy at law would be adequate is waived. Such equitable remedies and all other
remedies are cumulative and not exclusive and shall be in addition to any
remedies which any party may have under this Agreement or otherwise.
7.10 INCOME TAX WITHHOLDING. Each Management Stockholder and Additional
Management Stockholder authorizes the Company to make any required withholding
from such Management Stockholder's (or Additional Management Stockholder's, as
the case may be) compensation for the payment of any and all income taxes and
other sums that may be due any governmental authority as a result of the receipt
by the Management Stockholders (or the Additional Management Stockholders, as
the case may be) of compensation income under Section 83 of the Internal Revenue
Code of 1986, as amended, or similar provisions of state or local law, if
required by applicable law, and agrees, if requested by the Company, and in lieu
of all or a portion of such withholding, to pay the Company in a lump sum such
amounts as the Company may be required to remit to any governmental authority on
behalf of the Management Stockholder (or the Additional Management Stockholder,
as the case may be) in respect of any such taxes and other sums.
7.11 INVALID PROVISIONS. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as
-45-
<PAGE> 49
Stockholders' Agreement
may be possible.
7.12 HEADINGS. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.
7.13 FURTHER ASSURANCES; SUBSIDIARIES. Each party hereto shall
cooperate and shall take such further action and shall execute and deliver such
further documents as may be reasonably requested by any other party in order to
carry out the provisions and purposes of this Agreement. Any provision herein
that by its terms requires a Subsidiary of the Company to take any action or
refrain from taking any action shall be interpreted to require the Company to
cause such Subsidiary to take such action or to refrain from taking such action,
respectively, to the fullest extent permitted by law.
7.14 GENDER. Whenever the pronouns "he" or "his" are used herein they
shall also be deemed to mean "she" or "hers" or "it" or "its" whenever
applicable. Words in the singular shall be read and construed as though in the
plural and words in the plural shall be construed as though in the singular in
all cases where they would so apply.
7.15 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
7.16 PAYMENT. All payments hereunder shall be made in cash (or by
Management Note, as provided by Section 4.2 hereof), or by wire transfer of
immediately available funds, except that payments of amounts of less than
$500,000 may be by an official bank check.
7.17 NOTICES. (a) All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally against written receipt or by facsimile transmission or
mailed (by registered or certified mail, postage prepaid, return receipt
requested) or delivered by reputable overnight courier, fee prepaid to the
parties at the following addresses or facsimile numbers:
(i) If to any Institutional Stockholder, to:
Citicorp Venture Capital, Ltd.
399 Park Avenue - 14th Floor
New York, New York 10043
Facsimile No.: 212-888-2940
Attn: Michael A. Delaney
-46-
<PAGE> 50
Stockholders' Agreement
with a copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Facsimile No.: 212-309-6273
Attn: Philip H. Werner
(ii) If to any MascoTech Stockholder, to:
MascoTech, Inc.
21001 Van Born Road
Taylor, Michigan 48180
Facsimile No.: 313-374-6136
Attn: President
with a copies to:
MascoTech, Inc.
21001 Van Born Road
Taylor, Michigan 48180
Facsimile No.: 313-374-6135
Attn: General Counsel
and
MascoTech, Inc.
21001 Van Born Road
Taylor, Michigan 48180
Facsimile No.: 313-374-6136
Attn: Chief Financial Officer
-47-
<PAGE> 51
Stockholders' Agreement
(iii) If to any Management Stockholder, to:
MSX International, Inc.
275 Rex Boulevard
Auburn Hills, MI 48326
Attn: Chief Executive Officer
with a copy to:
MSX International, Inc.
275 Rex Boulevard
Auburn Hills, MI 48326
Attn: Chief Financial Officer
(iv) If to the Company, to:
MSX International, Inc.
275 Rex Boulevard
Auburn Hills, MI 48326
Attn: Chief Executive Officer
with copies to:
Citicorp Venture Capital, Ltd.
399 Park Avenue - 14th Floor
New York, New York 10043
Facsimile No.: 212-888-2940
Attn: Michael A. Delaney
and
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Facsimile No.: 212-309-6273
Attn: Philip H. Werner
-48-
<PAGE> 52
Stockholders' Agreement
(v) If to any Additional Stockholder, to the address
of such Person set forth in the stock records of the Company.
(b) All such notices, requests and other communications will
be deemed delivered upon receipt. Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto
(subject to Section 7.4).
7.18 SERVICE OF PROCESS.
EACH OF THE PARTIES HERETO IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF
BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE PARTY AT THE ADDRESS
SPECIFIED IN THIS AGREEMENT, SUCH SERVICE TO BECOME EFFECTIVE FIFTEEN (15) DAYS
AFTER SUCH MAILING. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE
ABILITY OF ANY PARTY HERETO TO SERVE ANY SUCH LEGAL PROCESS, SUMMONS, NOTICES
AND DOCUMENTS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN
JURISDICTION OVER OR TO BRING ACTIONS, SUITS OR PROCEEDINGS AGAINST ANY OF THE
OTHER PARTIES HERETO IN SUCH OTHER JURISDICTIONS, AND IN SUCH MANNER, AS MAY BE
PERMITTED BY ANY APPLICABLE LAW.
7.19 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT. EACH OF THE PARTIES HERETO ALSO WAIVES ANY BOND OR SURETY OR
SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF SUCH
PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH OF THE PARTIES HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
-49-
<PAGE> 53
Stockholders' Agreement
7.20 WAIVER OF FIDUCIARY DUTIES; CORPORATE OPPORTUNITY.
(a) INSTITUTIONAL STOCKHOLDERS, MASCOTECH STOCKHOLDERS AND
THEIR RESPECTIVE AFFILIATES SHALL HAVE NO DUTIES, COMMITMENTS, OBLIGATIONS OR
COVENANTS, EXPRESSED OR IMPLIED, OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS
AGREEMENT, THE NON-COMPETITION AGREEMENT, THE ACQUISITION AGREEMENT, THE
REGISTRATION RIGHTS AGREEMENT OR THE SUBSCRIPTION AGREEMENTS. EXCEPT AS SO SET
FORTH HEREIN AND THEREIN, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
NEITHER INSTITUTIONAL STOCKHOLDERS NOR MASCOTECH STOCKHOLDERS SHALL HAVE ANY
FIDUCIARY OR SIMILAR DUTY, OR ANY LIABILITY RELATING THERETO, TO THE COMPANY OR
TO ANY OTHER STOCKHOLDERS (OR ANY AFFILIATE OF THE COMPANY OR SUCH OTHER
STOCKHOLDER) IN CONNECTION WITH THE COMPANY OR THE COMPANY'S BUSINESS OR
AFFAIRS, AND THE COMPANY, EACH STOCKHOLDER AND EACH AFFILIATE OF SUCH
STOCKHOLDER HEREBY WAIVES ANY CLAIM FOR BREACH OF FIDUCIARY DUTY AGAINST ANY
MASCOTECH STOCKHOLDER OR INSTITUTIONAL STOCKHOLDER OR ANY AFFILIATE OF ANY
MASCOTECH STOCKHOLDER OR INSTITUTIONAL STOCKHOLDER, AS THE CASE MAY BE, AND EACH
STOCKHOLDER AGREES THAT IT SHALL NOT TAKE ANY ACTION TO CAUSE THE COMPANY TO
BRING ANY CLAIM FOR BREACH OF FIDUCIARY DUTY AGAINST ANY MASCOTECH STOCKHOLDER
OR INSTITUTIONAL STOCKHOLDER OR ANY AFFILIATE OR ANY MASCOTECH STOCKHOLDER OR
INSTITUTIONAL STOCKHOLDER, IN EACH CASE WITH RESPECT TO THE COMPANY OR THE
COMPANY'S BUSINESS OR AFFAIRS.
(b) WITHOUT LIMITING THE GENERALITY OF 7.20(a) ABOVE, TO THE
FULLEST EXTENT PERMITTED BY ANY APPLICABLE LAW, THE DOCTRINE OF CORPORATE
OPPORTUNITY, OR ANY OTHER ANALOGOUS DOCTRINE, SHALL NOT APPLY WITH RESPECT TO
THE INSTITUTIONAL STOCKHOLDERS, MASCOTECH STOCKHOLDERS OR ANY OF RESPECTIVE
AFFILIATES OR TO THE COMPANY. IN PARTICULAR, (I) EACH OF MASCOTECH STOCKHOLDERS
AND INSTITUTIONAL STOCKHOLDERS SHALL HAVE THE RIGHT TO ENGAGE IN BUSINESS
ACTIVITIES, WHETHER OR NOT IN COMPETITION WITH THE COMPANY OR THE COMPANY'S
BUSINESS ACTIVITIES, WITHOUT CONSULTING ANY OTHER STOCKHOLDER AND (II) NO
MASCOTECH STOCKHOLDER OR INSTITUTIONAL STOCKHOLDER OR ANY OF THEIR RESPECTIVE
AFFILIATES SHALL HAVE ANY OBLIGATION TO ANY OTHER STOCKHOLDER WITH RESPECT TO
ANY OPPORTUNITY TO ACQUIRE PROPERTY OR MAKE INVESTMENTS AT ANY TIME; PROVIDED,
HOWEVER, NOTHING HEREIN SHALL CANCEL OR LIMIT ANY DUTIES, COMMITMENTS,
OBLIGATIONS OR COVENANTS EXPRESS OR IMPLIED, OF EITHER THE MASCOTECH
STOCKHOLDERS OR THE INSTITUTIONAL STOCKHOLDERS PURSUANT TO THE NON-COMPETITION
AGREEMENT.
-50-
<PAGE> 54
Stockholders' Agreement
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
MSX INTERNATIONAL, INC.
By: ----------------------------------
Name: Frederick K. Minturn
Title: President
MASCOTECH, INC.
By: ----------------------------------
Name: Timothy Wadhams
Title: Vice President
CITICORP VENTURE CAPITAL, LTD.
By: ----------------------------------
Name: Michael A. Delaney
Title: Vice President
MANAGEMENT STOCKHOLDERS
----------------------------------------
E.H. Billig
----------------------------------------
Frederick K. Minturn
----------------------------------------
Ralph Miller
[Signature Page to Stockholders' Agreement]
<PAGE> 55
Stockholders' Agreement
Exhibit A
Form of Joinder Agreement
MSX INTERNATIONAL, INC.
275 Rex Boulevard
Auburn Hills, MI 48326
Attention: Chief Executive Officer
Ladies & Gentlemen:
In consideration of the [TRANSFER][ISSUANCE] to the
undersigned of [DESCRIBE SECURITY BEING TRANSFERRED/ISSUED] of MSX
INTERNATIONAL, INC., a Delaware corporation (the "Company"), the undersigned
[REPRESENTS THAT IT IS A PERMITTED TRANSFEREE OF [INSERT NAME OF TRANSFEROR]
AND]* agrees that, as of the date written below, [HE] [SHE] [IT] shall become a
party to[, AND A PERMITTED TRANSFEREE AS DEFINED IN,]* that certain
Stockholders' Agreement dated as of ____________, 199__, as such agreement may
have been amended, supplemented or modified from time to time (the "Agreement"),
among the Company and the persons named therein, and [AS A PERMITTED TRANSFEREE
SHALL BE FULLY BOUND BY, AND SUBJECT TO, ALL OF THE COVENANTS, TERMS AND
CONDITIONS OF THE AGREEMENT THAT WERE APPLICABLE TO THE UNDERSIGNED'S
TRANSFEROR,]* [SHALL BE FULLY BOUND BY, AND SUBJECT TO, THE COVENANTS, TERMS AND
CONDITIONS OF THE AGREEMENT AS PROVIDED UNDER SECTION 7.8 OF THE AGREEMENT]**
[SHALL BE FULLY BOUND BY, AND SUBJECT TO, ALL OF THE COVENANTS, TERMS AND
CONDITIONS OF THE AGREEMENT,]*** as though an original party thereto and shall
be deemed a [MANAGEMENT STOCKHOLDER] [MASCOTECH STOCKHOLDER] [ADDITIONAL
STOCKHOLDER] [INSTITUTIONAL STOCKHOLDER]**** for [ALL]* [SOLELY FOR]** [ALL]***
purposes thereof.
Executed as of the day of , .
SIGNATORY:------------------
Address: ------------------
------------------
ACKNOWLEDGED AND ACCEPTED:
MSX INTERNATIONAL, INC.
By: -----------------------
Name:
Title:
<PAGE> 56
Stockholders' Agreement
* Include if signatory is a Permitted Transferee
** Include if signatory is a Third Party
*** Include if signatory is an Additional Stockholder
**** Include if signatory is receiving securities from a Management
Stockholder, a MascoTech Stockholder, an Additional Stockholder or an
Institutional Stockholder; if signatory is an Additional Stockholder
receiving securities issued by the Company insert [Additional
Stockholder]
<PAGE> 57
Stockholders' Agreement
Exhibit B
Legends
Shares of Restricted Securities and shares of Restricted Preferred
Securities shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
STOCKHOLDERS' AGREEMENT DATED AS OF JANUARY __, 1997 AMONG MSX INTERNATIONAL,
INC. (THE "COMPANY") AND ITS STOCKHOLDERS AS MAY BE AMENDED FROM TIME TO TIME,
AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF (A "TRANSFER") EXCEPT IN ACCORDANCE WITH THE PROVISIONS THEREOF AND
ANY TRANSFEREE OF THESE SECURITIES SHALL BE SUBJECT TO THE TERMS OF SUCH
AGREEMENT. COPIES OF THE STOCKHOLDERS' AGREEMENT, AS AMENDED, ARE MAINTAINED
WITH THE CORPORATE RECORDS OF THE COMPANY AND ARE AVAILABLE FOR INSPECTION AT
THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR STATE SECURITIES
LAWS, AND NO TRANSFER OF THESE SECURITIES MAY BE MADE EXCEPT (A) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (B) PURSUANT TO AN EXEMPTION
THEREFROM WITH RESPECT TO WHICH THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL
FOR THE HOLDER THAT SUCH TRANSFER IS EXEMPT FROM THE REQUIREMENTS OF THE ACT, AS
PROVIDED BY THE TERMS OF THE STOCKHOLDERS' AGREEMENT DESCRIBED ABOVE.
THE POWERS, DESIGNATIONS, PREFERENCES, AND RELATIVE PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS, AND THE QUALIFICATIONS, LIMITATIONS, OR
RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS OF EACH CLASS OR SERIES OF
CAPITAL STOCK OF THE COMPANY ARE SET FORTH IN THE CERTIFICATE OF INCORPORATION.
THE CORPORATION WILL FURNISH A COPY OF THE CERTIFICATE OF INCORPORATION TO THE
HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON REQUEST.
<PAGE> 58
Stockholders' Agreement
EXHIBIT C
Board of Directors
Institutional Directors
Richard M. Cashin, Jr.
Michael A. Delaney
MascoTech Directors
Lee Gardner
Richard A. Manoogian
Management Director
Ralph Miller
Disinterested Directors
E.H. Billig
David Cole
Nominating Committee
1. Michael A. Delaney
2. Lee Gardner
3. E.H. Billig
<PAGE> 59
ANNEX I
This Annex I will be provided at or promptly after the Closing by the
Company.
<PAGE> 1
EXHIBIT 10.2
- --------------------------------------------------------------------------------
MSX INTERNATIONAL, INC.
REGISTRATION RIGHTS AGREEMENT
JANUARY 3, 1997
- --------------------------------------------------------------------------------
<PAGE> 2
Registration Rights Agreement
TABLE OF CONTENTS
PAGE
RECITALS ......................................................................1
ARTICLE I
DEFINITIONS...........................................................1
1.1 Defined Terms in Stockholders' Agreement.....................1
1.2 Definitions..................................................2
1.3 Cross-References.............................................3
ARTICLE II
DEMAND REGISTRATIONS..................................................4
2.1 Requests for Registration....................................4
2.2 Long-Form Registrations......................................5
2.3 Short-Form Registrations.....................................5
2.4 Effective Registration Statement.............................5
2.5 Priority on Demand Registrations.............................6
2.6 Selection of Underwriters....................................7
2.7 Black-Out Rights and Postponement............................7
ARTICLE III
PIGGYBACK REGISTRATIONS...............................................8
3.1 Right to Piggyback...........................................8
3.2 Piggyback Expenses...........................................8
3.3 Priority on Primary Registrations............................8
3.4 Priority on Secondary Registrations..........................9
ARTICLE IV
HOLDBACK AGREEMENTS...................................................9
4.1 Holdback.....................................................9
4.2 Company Holdback.............................................9
ARTICLE V
REGISTRATION PROCEDURES..............................................10
ARTICLE VI
REGISTRATION EXPENSES................................................14
6.1 Fees Generally..............................................14
6.2 Counsel Fees................................................14
- i -
<PAGE> 3
Registration Rights Agreement
PAGE
ARTICLE VII
UNDERWRITTEN OFFERINGS..............................................14
7.1 Demand Underwritten Offerings..............................14
7.2 Incidental Underwritten Offerings..........................15
ARTICLE VIII
INDEMNIFICATION.....................................................15
8.1 Indemnification by the Company.............................15
8.2 Indemnification by a Selling Stockholder...................16
8.3 Indemnification Procedure..................................17
8.4 Underwriting Agreement.....................................18
8.5 Contribution...............................................18
8.6 Periodic Payments..........................................19
ARTICLE IX
RULE 144............................................................19
ARTICLE X
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.........................20
ARTICLE XI
MISCELLANEOUS.......................................................20
11.1 No Inconsistent Agreements.................................20
11.2 Adjustments Affecting Registrable Securities...............20
11.3 Specific Performance.......................................20
11.4 Actions Taken; Amendments and Waivers......................21
11.5 Successors and Assigns.....................................21
11.6 Notices....................................................22
11.7 Headings...................................................23
11.8 Gender.....................................................23
11.9 Invalid Provisions.........................................23
11.10 Governing Law..............................................23
11.11 Consent to Jurisdiction and Service of Process.............24
11.12 Waiver of Jury Trial.......................................24
11.13 Counterparts...............................................25
- ii -
<PAGE> 4
Registration Rights Agreement
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of January
__, 1997 by and among MSX International, Inc., a Delaware corporation (the
"Company"), MascoTech, Inc. a Delaware corporation ("MascoTech"), Citicorp
Venture Capital, Ltd., a New York corporation ("CVC"), and each of the
individuals whose name appears on the signature pages hereto (individually, a
"Management Group Member" and collectively, the "Management Group"). Capitalized
terms are used as defined in Article I hereto.
RECITALS
WHEREAS, the Company and MascoTech have entered into that certain
Purchase Agreement dated as of November 12, 1996, (as may be amended,
supplemented or modified from time to time, the "Purchase Agreement"), pursuant
to which, among other things, the Company, directly or indirectly through one or
more of its Subsidiaries, is acquiring the Business and the APX Continuing
Business (each as defined in the Purchase Agreement) and all the issued and
outstanding shares of capital stock of MasoTech Limited, a wholly-owned
subsidiary of MascoTech organized under the laws of England;
WHEREAS, the Purchase Agreement provides for the execution and
delivery of a stockholders agreement and a registration rights agreement at the
closing thereunder; and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Stockholders'
Agreement among the parties hereto and dated the date hereof (as amended,
modified or supplemented from time to time, the "Stockholders' Agreement"), and
in connection therewith, the Company has agreed to provide the other parties
hereto with the registration rights set forth in this Agreement;
NOW THEREFORE, in connection with the Purchase Agreement, the
Stockholders' Agreement and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS IN STOCKHOLDERS' AGREEMENT.
Unless otherwise defined herein, defined terms used in this Agreement
shall have the meanings set forth in the Stockholders' Agreement.
1.2 DEFINITIONS.
The following capitalized terms, when used in this Agreement, have the
respective meanings set forth below (such definitions to be equally applicable
to both singular and plural forms of the terms defined):
-1-
<PAGE> 5
Registration Rights Agreement
"Additional Management Stockholder" means an Additional Stockholder
who is an officer, director or employee of the Company or any of its
Subsidiaries.
"Additional Stockholder" means any person who has executed a Joinder
Agreement as an Additional Stockholder pursuant to Section 6.2 of the
Stockholders' Agreement, and its direct and indirect Permitted Transferees, so
long as any such Person shall hold Registrable Securities, and only to the
extent that (i) the Company has granted such person registration rights as a
Stockholder hereunder and (ii) such Person has executed a Registration Rights
Joinder Agreement.
"Initial Public Offering" means the first time a registration
statement filed under the Securities Act with the Commission respecting an
offering, whether primary or secondary, of Common Stock of the Company (or
securities convertible, exercisable or exchangeable for or into Common Stock of
the Company or rights to acquire Common Stock of the Company or such
securities), which is underwritten on a firmly committed basis, is declared
effective and the securities so registered are issued and sold.
"Institutional Stockholders" means CVC and its direct and indirect
Permitted Transferees, so long as any such Person shall hold Registrable
Securities.
"MascoTech Stockholders" means MascoTech and its direct and indirect
Permitted Transferees, so long as any such Person shall hold Registrable
Securities.
"Qualifying Offering" has the meaning provided in the Stockholders'
Agreement.
"Registrable Securities" means, at any time, the shares of Class A
Common (including all series thereof) and shares of Class B Common (including
all series thereof) then issued and outstanding or which are issuable upon the
conversion, exercise or exchange of Equity Equivalents and any securities into
which such Class A Common or Class B Common shall have been changed or any
securities resulting from any reclassification or recapitalization of such Class
A Common or Class B Common; provided, that "Registrable Securities" shall not
include any shares of Class A Common or Class B Common obtained or transferred
pursuant to an effective registration statement under the Securities Act or in a
Rule 144 Transaction, and provided, further, that "Registrable Securities" shall
not include any shares of Class A Common or Class B Common or other securities
which are held by a Person who is not a Stockholder.
"Registration Rights Joinder Agreement" means a Registration Rights
Joinder Agreement in the form attached hereto as Exhibit A.
-2-
<PAGE> 6
Registration Rights Agreement
"Required Institutional Stockholders" means, as of the date of any
determination thereof, Institutional Stockholders which hold Registrable
Securities representing at such time at least a majority (by number of shares)
of the Registrable Securities, on a Fully Diluted Basis, held by all
Institutional Stockholders.
"Required MascoTech Stockholders" means, as of the date of any
determination thereof, MascoTech Stockholders which hold Registrable Securities
representing at such time at least a majority (by number of shares) of the
Registrable Securities, on a Fully Diluted Basis, held by all MascoTech
Stockholders.
"Stockholders" means the Institutional Stockholders, the MascoTech
Stockholders, the Management Stockholders, the Additional Stockholders and any
transferee of any of the foregoing persons who has acquired Registrable
Securities in accordance with the Stockholders' Agreement and who has executed a
Registration Rights Joinder Agreement.
1.3 CROSS-REFERENCES.
The following defined terms, when used in this Agreement, shall have
the meaning ascribed to them in the corresponding Sections of this Agreement
listed below:
"Black-Out Notice" -- Section 2.7
"Company" -- Preamble
"Demand Registrations" -- Section 2.1
"Long-Form Registrations" -- Section 2.1
"Piggyback Holders" -- Section 3.1
"Piggyback Registration" -- Section 3.1
"Purchase Agreement" -- Recitals
"Registration Expenses" -- Section 6.1
"Requesting Investors" -- Section 2.1
"Short-Form Registrations" -- Section 2.1
"Stockholders' Agreement" -- Recitals
-3-
<PAGE> 7
Registration Rights Agreement
ARTICLE II
DEMAND REGISTRATIONS
2.1 REQUESTS FOR REGISTRATION.
(a) At any time after the date hereof, either the Required
Institutional Stockholders or the Required MascoTech Stockholders (the
"Requesting Investors") may request that the Company effect a Qualifying
Offering, and the Company shall use all reasonable efforts to effect Qualifying
Offering within 90 days after its receipt of such request; provided that, prior
to the date that falls eighteen months after the date hereof, no Requesting
Investor may request a Qualifying Offering, unless that Requesting Investor
intends that such offering would satisfy the criteria set forth in item (i) of
the definition of "Qualifying Offering". Within 10 days after its receipt of
such request, the Company will give written notice of such request to all other
holders of Registrable Securities. The Company will use all reasonable efforts
to include in the Qualifying Offering (i) all Registrable Securities which the
Requesting Investors have requested to be included therein and (ii) all other
Registrable Securities with respect to which the Company has received written
requests for inclusion therein by the Stockholders within thirty (30) days after
the receipt of the Company's notice, subject in each case to the provisions of
Section 2.5. The Company will pay all Registration Expenses in connection with a
Qualifying Offering requested in accordance with Section 2.1(a). All
registrations requested pursuant to this Section 2.1 are referred to herein as
"Demand Registrations."
(b) Subject to Sections 2.2, 2.3 and 2.7, at any time from and after
the date which is 91 days after the closing of an Initial Public Offering, each
of the Required Institutional Stockholders, on the one hand, and the Required
MascoTech Stockholders, on the other hand, may request registration under the
Securities Act of all or part of their Registrable Securities (i) on Form S-1 or
S-2 or any similar long-form registration statement (any such registration, a
"Long-Form Registration"), and (ii) on Form S-3 or any similar short-form
registration statement (any such registration, a "Short-Form Registration"), if
the Company qualifies to use such short form. Within 10 days after its receipt
of any such request, the Company will give written notice of such request to all
other holders of Registrable Securities. Thereafter, the Company will use all
reasonable efforts to effect the registration under the Securities Act on the
form requested by the Requesting Investors, and to include in such registration,
(i) all Registrable Securities which the Requesting Investors have so requested
to be included therein and (ii) all other Registrable Securities with respect to
which the Company has received written requests for inclusion therein by the
Stockholders within thirty (30) days after their receipt of the Company's
notice, subject in each case to the provisions of Section 2.5.
(c) Any Requesting Investor which requests a Demand Registration
under this Article II may, at any time prior to the effective date of the
registration statement relating to such registration, revoke such request by
providing written notice to the Company; provided,
-4-
<PAGE> 8
Registration Rights Agreement
however, that notwithstanding such revocation, such Demand Registration shall be
deemed a request for purposes of Section 2.2 unless, after consultation with the
Company and any proposed underwriter, the Requesting Investor in good faith
determines that the Registrable Securities which it has requested to be
registered would not be sold pursuant to such Demand Registration within a
reasonable amount of time or at a price acceptable to such Requesting Investor.
(d) Any request for a Demand Registration pursuant to this Article II
shall specify the number of shares of Registrable Securities proposed to be sold
by the Requesting Investor and the intended method of disposition thereof.
2.2 LONG-FORM REGISTRATIONS.
The Required Institutional Stockholders will be entitled to request
pursuant to this Article II up to three Long-Form Registrations and the Required
MascoTech Stockholders will be entitled to request pursuant to this Article II
up to three Long-Form Registrations. The Company will pay all Registration
Expenses in connection with any such Long-Form Registrations. All Long-Form
Registrations (unless otherwise requested by the relevant Requesting Investor)
shall be underwritten registrations.
2.3 SHORT-FORM REGISTRATIONS.
In addition to the Long-Form Registrations provided pursuant to
Section 2.2, the Required Institutional Stockholders and Required MascoTech
Stockholders will each be entitled to request an unlimited number of Short-Form
Registrations in which the Company will pay all Registration Expenses. Demand
Registrations will be Short-Form Registrations whenever the Company is qualified
to use any applicable short form. Once the Company has become subject to the
reporting requirements of the Exchange Act, the Company will use its reasonable
best efforts to make Short-Form Registrations available for the sale of
Registrable Securities.
2.4 EFFECTIVE REGISTRATION STATEMENT.
No Demand Registration shall be deemed to have been effected for
purposes of Section 2.2:
(i) unless a registration statement with respect thereto has become
effective;
(ii) if, after it has become effective, any stop order, injunction or
other order or requirement of the Commission or other governmental
agency or court for any reason, affecting any of the securities
covered by such registration statement, is issued or
-5-
<PAGE> 9
Registration Rights Agreement
threatened by the Commission or other governmental agency or court;
(iii) if the Company delivers a Black-Out Notice with respect to such
requested registration;
(iv) if the conditions to closing specified in the purchase agreement
or underwriting agreement entered into in connection with such
registration are not satisfied by reason of a failure by or inability
of the Company to satisfy any of such conditions, or the occurrence of
an event outside the reasonable control of the relevant Requesting
Investor;
(v) the revocation notice described in the proviso to Section 2.1(c)
has been delivered by the Requesting Investor; or
(vi) if the Requesting Investor is not able to register and sell at
least ninety percent (90%) of the amount of Registrable Securities
which were requested to be included in such registration;
provided that the Company will pay all Registration Expenses in connection with
any registration if pursuant to this Section 2.4 the registration is deemed not
to have been effected.
2.5 PRIORITY ON DEMAND REGISTRATIONS.
(a) The Company will not include in any Demand Registration any
securities which are not Registrable Securities without the written consent of
the Required Institutional Stockholders (if the Required Institutional
Stockholders have requested such Demand Registration) or the Required MascoTech
Stockholders (if the Required MascoTech Stockholders have requested such Demand
Registration).
(b) If the Requesting Investors and other holders of Registrable
Securities request Registrable Securities to be included in a Demand
Registration which is an underwritten offering and the managing underwriters
advise the Company in writing that in their opinion the number of Registrable
Securities requested to be included exceeds the number of Registrable Securities
which can be sold in such offering within a price range acceptable to the
Required Institutional Stockholders (if the Required Institutional Stockholders
have requested the Demand Registration) or the Required MascoTech Stockholders
(if the Required MascoTech Stockholders have requested the Demand Registration),
the Company will include any securities to be sold in
-6-
<PAGE> 10
Registration Rights Agreement
such Demand Registration in the following order: (i) first, the Registrable
Securities owned by the Requesting Investors; (ii) second, the Registrable
Securities requested to be included in such registration by other Stockholders,
provided, that if the managing underwriters determine in good faith that a lower
number of Registrable Securities requested to be included by other Stockholders
should be included, then only that lower number of Registrable Securities
requested to be included by other Stockholders shall be included in such
registration, and such other Stockholders shall participate in the registration
pro rata based upon their total ownership, on a Fully Diluted Basis, of
Registrable Securities, provided, further, that if the managing underwriters
determine in good faith that a lower number of Registrable Securities held by
Management Stockholders and/or Additional Management Stockholders than such pro
rata portion should be included, then such lower number shall be included and,
as a result thereof, a greater number of Registrable Securities owned by the
other Stockholders may be sold; (iii) third, the securities the Company proposes
to sell and (iv) fourth, any securities other than Registrable Securities to be
sold by persons other than the Company included pursuant to Section 2.5(a)
hereof. Any Person other than Stockholders including any securities in such
registration pursuant to Article II hereof must pay its share of the
Registration Expenses as provided in Article VI hereof.
2.6 SELECTION OF UNDERWRITERS.
The Requesting Investors will have the right to select the
underwriters and the managing underwriter to administer any Demand Registration
(which underwriters and managing underwriter shall be reasonably acceptable to
the Company).
2.7 BLACK-OUT RIGHTS AND POSTPONEMENT.
(a) The Company shall not be required to provide a Demand
Registration if the Company, within the 90-day period preceding the date of a
request for a Demand Registration, has effected a registration of securities in
which the Requesting Investors were entitled to participate to the fullest
extent pursuant to Demand Registration rights under Article II hereof or
Piggyback Registration rights under Article III hereof.
(b) The Company may, upon written notice (a "Black-Out Notice") to
the Requesting Investor requesting a Demand Registration, require such
Requesting Investor to withdraw such Demand Registration upon the good faith
determination by the Company that such postponement is necessary (i) to avoid
disclosure of material non-public information or (ii) as a result of a pending
material financing or acquisition transaction, and in each case, each of the
Required Institutional Stockholders and the Required MascoTech Stockholders may
not request another Demand Registration for a period of up to sixty (60) days,
as specified by the Company
-7-
<PAGE> 11
Registration Rights Agreement
in such Black-Out Notice. The Company may only give a Black-Out Notice where the
giving of such notice has been specifically approved by the Company's Board of
Directors which for so long as the Institutional Stockholders or the MascoTech
Stockholders shall have the right to designate directors pursuant to Section 5.1
of the Stockholders' Agreement and they are exercising such right to designate,
shall require an Institutional Affirmative Board Vote and the MascoTech
Affirmative Board Vote, as the case may be. Upon receipt of a Black-Out Notice,
the Demand Registration shall be deemed to be rescinded and retracted and shall
not be counted as a Demand Registration for any purpose. The Company may not
deliver more than one Black-Out Notice in any twelve-month period.
ARTICLE III
PIGGYBACK REGISTRATIONS
3.1 RIGHT TO PIGGYBACK.
Whenever the Company proposes (other than pursuant to a Demand
Registration or an Initial Public Offering (unless otherwise agreed by the
Company)) to register any of its equity securities under the Securities Act
(whether for the Company's own account (other than on Forms S-4 or S-8 or any
successor forms), or for the account of any other Person)(a "Piggyback
Registration"), the Company will give prompt written notice to all Institutional
Stockholders, MascoTech Stockholders, Management Stockholders and Additional
Stockholders (the "Piggyback Holders") of its intention to effect such a
registration, and such notice shall offer the Piggyback Holders the opportunity
to register on the same terms and conditions such number of shares of
Registrable Securities as such Piggyback Holder may request. The Company will
include in such registration all Registrable Securities with respect to which
the Company has received written requests for inclusion therein within 30 days
after the receipt by such Piggyback Holder of the Company's notice, subject to
the provisions of Sections 3.3 and 3.4.
3.2 PIGGYBACK EXPENSES.
The Registration Expenses of the holders of Registrable Securities
will be paid by the Company in all Piggyback Registrations.
3.3 PRIORITY ON PRIMARY REGISTRATIONS.
If a Piggyback Registration is an underwritten primary registration on
behalf of the Company, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration are such that the success of the offering would be
materially and adversely affected, the Company will include any securities to be
sold in such registration in the following order: (i) first, the securities the
-8-
<PAGE> 12
Registration Rights Agreement
Company proposes to sell, (ii) second, the Registrable Securities requested to
be included in such registration by the Piggyback Holders, provided that, if the
managing underwriters in good faith determine that a lower number of Registrable
Securities should be included, then the Company shall be required to include in
such registration only that lower number of Registrable Securities, and the
Piggyback Holders shall participate in the registration pro rata based upon
their total ownership, on a Fully Diluted Basis, of Registrable Securities,
provided, further, that if the managing underwriters determine in good faith
that a lower number of Registrable Securities held by Management Stockholders
and/or Additional Management Stockholders than such pro rata portion should be
included, then such lower number shall be included and, as a result thereof, a
greater number of Registrable Securities owned by the other Stockholders shall
be included and (iii) third, other securities requested to be included in such
registration.
3.4 PRIORITY ON SECONDARY REGISTRATIONS.
If a Piggyback Registration is an underwritten secondary registration
on behalf of holders of the Company's securities and the managing underwriters
advise the Company in writing that in their opinion the number of securities
requested to be included in such registration are such that the success of the
offering would be materially and adversely affected, the Company will include
any securities to be sold in such registration in the following order: (i)
first, the securities of such holders, (ii) second, the Registrable Securities
requested to be included in such registration by the Piggyback Holders pursuant
to Section 3.1 hereof, provided that, if the managing underwriters in good faith
determine that a lower number of Registrable Securities should be included, then
the Company shall be required to include in such registration only that lower
number of Registrable Securities, and the Piggyback Holders shall participate in
the registration pro rata based upon their total ownership, on a Fully Diluted
Basis, of Registrable Securities, provided, further, that if the managing
underwriters determine in good faith that a lower number of Registrable
Securities held by Management Stockholders and/or Additional Management
Stockholders than such pro rata portion should be included, then such lower
number shall be included and, as a result thereof, a greater number of
Registrable Securities owned by the other Stockholders may be sold and (iii)
third, other securities requested to be included in such registration.
ARTICLE IV
HOLDBACK AGREEMENTS
4.1 HOLDBACK.
Each holder of Registrable Securities agrees not to effect any public
sale or distribution of Registrable Securities, or any securities convertible,
exchangeable or exercisable for or into such securities, during the seven days
prior to, and the 90-day period beginning on,
-9-
<PAGE> 13
Registration Rights Agreement
the effective date of an Initial Public Offering or any underwritten Demand
Registration or any underwritten Piggyback Registration in which such holder had
an opportunity to participate without cutback under Article III hereof (in each
case except as part of such underwritten registration), unless the managing
underwriters of the registered public offering otherwise agree.
4.2 COMPANY HOLDBACK.
The Company agrees (i) not to effect any public sale or distribution
of its equity securities, or any securities convertible, exchangeable or
exercisable for or into such securities, during the fourteen (14) days prior to,
and during the 90-day period beginning on, the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration in
which holders of Registrable Securities are selling stockholders (except as part
of such underwritten registration or pursuant to registrations on Forms S-4 or
S-8 or any successor form), unless the managing underwriters of such
underwritten Demand Registration or underwritten Piggyback Registration
otherwise agree, and (ii) to use all reasonable efforts to cause each holder of
at least five percent (5%) (on a fully-diluted basis) of its equity securities
or any securities convertible, exchangeable or exercisable for or into such
securities, to agree not to effect any public sale or distribution of any such
securities during such period (except as part of such underwritten registration,
if otherwise permitted), unless the managing underwriters of such underwritten
Demand Registration or underwritten Piggyback Registration otherwise agree.
ARTICLE V
REGISTRATION PROCEDURES
Whenever the Stockholders have requested that any Registrable
Securities be registered pursuant to this Agreement, the Company will use all
reasonable efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof, and
pursuant thereto the Company will as expeditiously as possible (or, in the case
of clause (p) below, will not):
(a) prepare and file with the Commission a registration statement
with respect to such Registrable Securities (such registration statement to
include all information which the holders of the Registrable Securities to be
registered thereby shall reasonably request) and use all reasonable efforts to
cause such registration statement to become effective, provided that as promptly
as practicable before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company will (i) furnish to counsel
selected by the holders of a majority (by number of shares) of the Registrable
Securities covered by such registration statement (and, if the Required
MascoTech Stockholder has requested inclusion of any Registrable Securities
pursuant to Article II or Article III, to counsel for the Required MascoTech
Stockholder) copies of all such documents proposed to be filed, and the Company
shall not file
-10-
<PAGE> 14
Registration Rights Agreement
any such documents to which such counsel shall have reasonably objected on the
grounds that such document does not comply in all material respects with the
requirements of the Securities Act, and (ii) notify each holder of Registrable
Securities covered by such registration statement of (x) any request by the
Commission to amend such registration statement or amend or supplement any
prospectus, or (y) any stop order issued or threatened by the Commission, and
take all reasonable actions required to prevent the entry of such stop order or
to remove it if entered;
(b) (i) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective
until all Registrable Securities covered by such Registration Statement are sold
in accordance with the intended plan of distribution set forth in such
Registration Statement and (ii) comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Securities covered by such
registration statement, without change, such number of conformed copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus
and, in each case, including all exhibits thereto and documents incorporated by
reference therein) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller thereof shall reasonably request, to keep such registration or
qualification in effect for so long as such registration statement remains in
effect and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such seller, provided,
however, that the Company will not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this clause (d), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction;
(e) furnish to each seller of Registrable Securities a signed copy,
addressed to such seller (and the underwriters, if any) of an opinion of counsel
for the Company or special counsel to the selling stockholders, dated the
effective date of such registration statement (and, if such registration
statement includes an underwritten public offering, dated the date of the
closing under the underwriting agreement), reasonably satisfactory in form and
substance to such seller, covering substantially the same matters with respect
to such registration statement (and the
-11-
<PAGE> 15
Registration Rights Agreement
prospectus included therein) as are customarily covered in opinions of issuer's
counsel delivered to the underwriters in underwritten public offerings, and such
other legal matters as the seller (or the underwriters, if any) may reasonably
request;
(f) notify each seller of Registrable Securities, at a time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the occurrence of any event known to the Company as a result of which
the prospectus included in such registration statement, as then in effect,
contains an untrue statement of a material fact or omits to state any fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made, and, at the
request of any such seller, the Company will prepare and furnish such seller a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances under which they were made and in the event the
Company shall give such notice, the Company shall extend the period during which
such registration statement shall be maintained effective by the number of days
during the period from and including the date of the giving of such notice to
such seller to the date when the Company made available to such seller an
appropriately amended or supplemented prospectus;
(g) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and to enter into such customary agreements as may be required in
furtherance thereof, including without limitation listing applications and
indemnification agreements in customary form;
(h) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(i) enter into such customary arrangements and take all such other
actions as the holders of a majority (by number of shares) of the Registrable
Securities being sold or the underwriters, if any, reasonably request in order
to expedite or facilitate the disposition of such Registrable Securities
(including without limitation use its best efforts to effect a stock split or a
combination of shares);
(j) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information
-12-
<PAGE> 16
Registration Rights Agreement
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(k) subject to other provisions hereof, use all reasonable efforts to
cause such Registrable Securities covered by such registration statement to be
registered with or approved by such other governmental agencies or authorities
or self-regulatory organizations as may be necessary to enable the sellers
thereof to consummate the disposition of such Registrable Securities;
(l) use all reasonable efforts to obtain a "comfort" letter, dated
the effective date of such registration statement (and, if such registration
includes an underwritten offering, dated the date of the closing under the
underwriting agreement), signed by the independent public accountants who have
certified the Company's financial statements, addressed to each seller, and to
the underwriters, if any, covering substantially the same matters with respect
to such registration statement (and the prospectus included therein) and with
respect to events subsequent to the date of such financial statements, as are
customarily covered in accountants' letters delivered to the underwriters in
underwritten public offerings of securities and such other financial matters as
such seller (or the underwriters, if any) may reasonably request;
(m) otherwise use all reasonable efforts to comply with all
applicable rules and regulations of the Commission and make available to its
security holders, in each case as soon as practicable, an earnings statement
covering a period of at least twelve months, beginning with the first month
after the effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act;
(n) permit any holder of Registrable Securities, which holder, in the
sole judgment, exercised in good faith, of such holder might be deemed to be a
controlling person of the Company (within the meaning of the Securities Act or
the Exchange Act) to participate in the preparation of any registration
statement covering such holder's Registrable Securities and to include therein
material, furnished to the Company in writing, which in the reasonable judgment
of such holder should be included and which is reasonably acceptable to the
Company;
(o) use all reasonable efforts to obtain the lifting at the earliest
possible time of any stop order suspending the effectiveness of any registration
statement or of any order preventing or suspending the use of any preliminary
prospectus;
(p) at any time file or make any amendment to a registration
statement, or any amendment of or supplement to a prospectus (including
amendments of the documents incorporated by reference into the prospectus), of
which each seller of Registrable Securities or the managing underwriters shall
not have previously been advised and furnished a copy or to
-13-
<PAGE> 17
Registration Rights Agreement
which the sellers of Registrable Securities, the managing underwriters, or
counsel for such sellers or for the underwriters shall reasonably object;
(q) make such representations and warranties (subject to appropriate
disclosure schedule exceptions) to sellers of Registrable Securities and the
underwriters, if any, in form, substance and scope as are customarily made by
issuers to underwriters and selling holders, as the case may be, in underwritten
public offerings of substantially the same type; and
(r) if any proposed registration statement refers to any seller by
name or otherwise as the holder of any securities of the Company then (whether
or not such seller is or might be deemed to be a controlling person of the
Company), (i) the Company shall be required at the request of such seller to
insert therein language, in form and substance reasonably satisfactory to such
seller, the Company and the managing underwriters, to the effect that the
holding by such seller of such securities is not to be construed as a
recommendation by such seller of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such seller
will assist in meeting any future financial requirements of the Company, or (ii)
in the event that such reference to such seller by name or otherwise is not
required by the Securities Act, any similar Federal or state statute, or any
rule or regulation of any other regulatory body having jurisdiction over the
offering, then in force, the Company shall be required at the request of such
seller to delete the reference to such seller.
ARTICLE VI
REGISTRATION EXPENSES
6.1 FEES GENERALLY.
All expenses incident to the Company's performance of or compliance
with this Agreement, including without limitation internal expenses (including
without limitation all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance, the expenses and fees
for listing the securities to be registered on each securities exchange on which
similar securities issued by the Company are then listed, all registration and
filing fees, fees and expenses of compliance with securities or blue sky laws
(including without limitation reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities), printing
expenses, messenger and delivery expenses, and fees and disbursements of counsel
for the Company and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other Persons retained by the Company
(all such expenses being herein called "Registration Expenses") shall be borne
by the Company, except that each Stockholder shall pay any underwriting fees,
discounts or commissions attributable to the sale of its Registrable Securities.
-14-
<PAGE> 18
Registration Rights Agreement
6.2 COUNSEL FEES.
In connection with each Demand Registration, the Company will
reimburse the Requesting Investor for such Demand Registration for the
reasonable fees and disbursements of one counsel chosen by the relevant
Requesting Investor.
ARTICLE VII
UNDERWRITTEN OFFERINGS
7.1 DEMAND UNDERWRITTEN OFFERINGS.
If requested by the underwriters for any underwritten offerings of
Registrable Securities pursuant to a Demand Registration, the Company will enter
into an underwriting agreement with such underwriters for such offering, such
agreement to be satisfactory in substance and form to the Requesting Investor
requesting such Demand Registration and the underwriters, and to contain such
representations and warranties by the Company and such other terms as are
generally included in agreements of this type, including without limitation
indemnities customarily included in such agreements. The holders of the
Registrable Securities will cooperate in good faith with the Company in the
negotiation of the underwriting agreement. The holders of Registrable Securities
to be distributed by such underwriters may be parties to such underwriting
agreement and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. The Company shall cooperate with any such
holder of Registrable Securities in order to limit any representations or
warranties to, or agreements with, the Company or the underwriters to be made by
such holder only to those representations, warranties or agreements regarding
such holder, such holder's Registrable Securities and such holder's intended
method of distribution and any other representation required by applicable law.
7.2 INCIDENTAL UNDERWRITTEN OFFERINGS.
If the Company at any time proposes to register any of its securities
under the Securities Act as contemplated by Article III of this Agreement and
such securities are to be distributed by or through one or more underwriters,
the Company will, if requested by any holder of Registrable Securities as
provided in Article III of this Agreement, arrange for such underwriters to
include all the Registrable Securities to be offered and sold by such holder,
subject to the limitations set forth in Article III hereof, among the securities
to be distributed by such underwriters. The holders of Registrable Securities to
be distributed by such underwriters shall
-15-
<PAGE> 19
Registration Rights Agreement
be parties to the underwriting agreement between the Company and such
underwriters, and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. The Company shall cooperate with any such
holder of Registrable Securities in order to limit any representations or
warranties to, or agreements with, the Company or the underwriters to be made by
such holder only to those representations, warranties or agreements regarding
such holder, such holder's Registrable Securities and such holder's intended
method of distribution and any other representation required by applicable law.
ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNIFICATION BY THE COMPANY.
The Company agrees to indemnify and hold harmless, to the fullest
extent permitted by law, each of the holders of any Registrable Securities
covered by such registration statement, each other Person, if any, who controls
such holder within the meaning of the Securities Act or the Exchange Act, and
each of their respective directors, general partners and officers, as follows:
(i) against any and all loss, liability, claim, damage or expense
arising out of or based upon an untrue statement or alleged untrue
statement of a material fact contained in any registration statement
(or any amendment or supplement thereto), including all documents
incorporated therein by reference, or in any preliminary prospectus or
prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense to
the extent of the aggregate amount paid in settlement of any
litigation, investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission or any such
-16-
<PAGE> 20
Registration Rights Agreement
alleged untrue statement or omission, if such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense incurred by them in connection with
investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under clause
(i) or (ii) above;
provided, that this indemnity does not apply to any loss, liability, claim,
damage or expense to the extent arising out of an untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such holder expressly for use in the preparation of any registration statement
(or any amendment or supplement thereto), including all documents incorporated
therein by reference, or in any preliminary prospectus or prospectus (or any
amendment or supplement thereto); and provided, further, that the Company will
not be liable to any holder under the indemnity agreement in this Section 8.1,
with respect to any preliminary prospectus or the final prospectus or the final
prospectus as amended or supplemented, as the case may be, to the extent that
any such loss, liability, claim, damage or expense of such controlling Person or
holder results from the fact that such holder sold Registrable Securities to a
Person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the final prospectus or of the final
prospectus as then amended or supplemented, whichever is most recent, if the
Company has previously and timely furnished copies thereof to such holder. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such holder or any such director, officer, general
partner, or other controlling person and shall survive the transfer of such
securities by such seller.
8.2 INDEMNIFICATION BY A SELLING STOCKHOLDER.
In connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder agrees to indemnify
and hold harmless (in the same manner and to the same extent as set forth in
Section 8.1 of this Agreement), to the extent permitted by law, the Company and
its directors, officers and controlling Persons, and their respective directors,
officers and general partners, with respect to any statement or alleged
statement in or omission or alleged omission from such registration statement,
any preliminary, final or summary prospectus contained therein, or any amendment
or supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information that relates only to such holder or the plan of distribution that is
expressly furnished to the Company by or on behalf of such holder for use in the
-17-
<PAGE> 21
Registration Rights Agreement
preparation of such registration statement, preliminary, final or summary
prospectus or amendment or supplement. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the Company,
or such holder, as the case may be, or any of their respective directors,
officers, controlling Persons or general partners and shall survive the transfer
of such securities by such holder. With respect to each claim pursuant to this
Section 8.2, each holder's maximum liability under this Section shall be limited
to an amount equal to the net proceeds actually received by such holder (after
deducting any underwriting discount and expenses) from the sale of Registrable
Securities being sold pursuant to such registration statement or prospectus by
such holder.
8.3 INDEMNIFICATION PROCEDURE.
Promptly after receipt by an indemnified party hereunder of written
notice of the commencement of any action or proceeding involving a claim
referred to in Section 8.1 or Section 8.2 of this Agreement, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action;
provided that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under Section
8.1 or Section 8.2 of this Agreement except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any such
action is brought against an indemnified party, the indemnifying party will be
entitled to participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified, to the extent that it may wish,
with counsel reasonably satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal fees and expenses subsequently incurred by the
latter in connection with the defense thereof, unless in such indemnified
party's reasonable judgment an actual or potential conflict of interest between
such indemnified and indemnifying parties may exist in respect of such claim, in
which case the indemnifying party shall not be liable for the fees and expenses
of (i) more than one counsel (in addition to any local counsel) for all holders
of Registrable Securities, selected by a majority (by number of shares) of the
holders of Registrable Securities, or (ii) more than one counsel (in addition to
any local counsel) for the Company in connection with any one action or separate
but similar or related actions. An indemnifying party who is not entitled to
(pursuant to an immediately preceding sentence), or elects not to, assume the
defense of a claim will not be obligated to pay the fees and expenses of more
than one counsel (in addition to any local counsel) for all parties indemnified
by such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party an actual or potential conflict of interest
may exist between such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the indemnifying party shall
be obligated to pay the fees and expenses of such additional counsel or
counsels. The indemnifying party will not, without the prior written consent of
each indemnified party, settle or compromise or consent to the entry of any
judgment in any pending
-18-
<PAGE> 22
Registration Rights Agreement
or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not such indemnified party
or any Person who controls such indemnified party is a party to such claim,
action, suit or proceeding), unless such settlement, compromise or consent
includes an unconditional release of such indemnified party from all liability
arising out of such claim, action, suit or proceeding. Notwithstanding anything
to the contrary set forth herein, and without limiting any of the rights set
forth above, in any event any party will have the right to retain, at its own
expense, counsel with respect to the defense of a claim.
8.4 UNDERWRITING AGREEMENT.
The Company and each holder of Registrable Securities requesting
registration shall provide for the foregoing indemnity (with appropriate
modifications) in any underwriting agreement with respect to any required
registration or other qualification of securities under any Federal or state law
or regulation of any governmental authority.
8.5 CONTRIBUTION.
If the indemnification provided for in Sections 8.1 and 8.2 of this
Agreement is unavailable to hold harmless an indemnified party under such
Sections, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in Section 8.1 or Section 8.2 of this Agreement in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand, and the indemnified party on the other, in connection
with statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations,
including without limitation the relative benefits received by each party from
the offering of the securities covered by such registration statement, the
parties' relative knowledge and access to information concerning the matter with
respect to which the claim was asserted and the opportunity to correct and
prevent any statement or omission. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or the indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statements or omission. The
parties hereto agree that it would not be just and equitable if contributions
pursuant to this Section 8.5 were to be determined by pro rata or per capita
allocation (even if the underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the first and second sentences of this
Section 8.5. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this Section
8.5 shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
action or claim (which shall be limited as provided in Section 8.3 of this
Agreement if the indemnifying party has assumed the
-19-
<PAGE> 23
Registration Rights Agreement
defense of any such action in accordance with the provisions thereof) which is
the subject of this Section 8.5. Promptly after receipt by an indemnified party
under this Section 8.5 of notice of the commencement of any action against such
party in respect of which a claim for contribution may be made against an
indemnifying party under this Section 8.5, such indemnified party shall notify
the indemnifying party in writing of the commencement thereof if the notice
specified in Section 8.3 of this Agreement has not been given with respect to
such action; provided that the omission to so notify the indemnifying party
shall not relieve the indemnifying party from any liability which it may
otherwise have to any indemnified party under this Section 8.5, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. The Company and each holder of Registrable Securities agrees with
each other and the underwriters of the Registrable Securities, if requested by
such underwriters, that (i) the underwriters' portion of such contribution shall
not exceed the underwriting discount and (ii) that the amount of such
contribution shall not exceed an amount equal to the net proceeds actually
received by such indemnifying party from the sale of Registrable Securities in
the offering to which the losses, liabilities, claims, damages or expenses of
the indemnified parties relate. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
8.6 PERIODIC PAYMENTS.
The indemnification required by this Article VIII shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or expense, loss, damage or liability
is incurred.
ARTICLE IX
RULE 144
If the Company shall have filed a registration statement pursuant to
the requirements of Section 12 of the Exchange Act or a registration statement
pursuant to the requirements of the Securities Act, the Company covenants that
it will file the reports required to be filed by it under the Securities Act and
the Exchange Act (or, if the Company is not required to file such reports, it
will, upon the request of any holder of Registrable Securities, make publicly
available other information), and it will take such further action as any holder
of Registrable Securities may reasonably request, all to the extent required
from time to time to enable such holder to sell shares of Registrable Securities
without registration under the Securities Act in compliance with (i) Rule 144
under the Securities Act, as such Rule may be amended from time to time, or (ii)
any similar rule or regulation hereafter adopted by the Commission. Upon the
request of any holder of Registrable Securities, the Company will deliver to
such holder a written statement as to whether it has complied with such
requirements.
-20-
<PAGE> 24
Registration Rights Agreement
ARTICLE X
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Person may participate in any underwritten registration hereunder
unless such Person (i) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Person or Persons
entitled hereunder to approve such arrangements and (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements,
escrow agreements and other documents reasonably required under the terms of
such underwriting arrangements and consistent with the provisions of this
Agreement.
ARTICLE XI
MISCELLANEOUS
11.1 NO INCONSISTENT AGREEMENTS.
The Company will not hereafter enter into any agreement which is
inconsistent with, or would otherwise restrict the performance by the Company
of, its obligations hereunder.
11.2 ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES.
The Company will not take any action, or fail to take any action which
it may properly take, with respect to its securities which would adversely
affect the ability of the holders of Registrable Securities to include
Registrable Securities in a registration undertaken pursuant to this Agreement
or which, to the extent within its control, would adversely affect the
marketability of such Registrable Securities in any such registration (including
without limitation effecting a stock split or a combination of shares).
11.3 SPECIFIC PERFORMANCE.
The parties hereto agree that irreparable damage would occur in the
event any provision of this Agreement was not performed in accordance with the
terms hereof and that the parties shall be entitled to specific performance of
the terms hereof, in addition to any other remedy at law or equity; provided,
however, that each of the parties agrees to provide other parties with written
notice at least two business days prior to filing any motion or other pleading
seeking a temporary restraining order, a temporary or permanent injunction,
specific performance, or any other equitable remedy and to give other parties
and their counsel a reasonable opportunity to attend and participate in any
judicial or administrative hearing or other proceeding held to adjudicate or
rule upon any such motion or pleading.
-21-
<PAGE> 25
Registration Rights Agreement
11.4 ACTIONS TAKEN; AMENDMENTS AND WAIVERS.
(a) Whenever any action is required under this Agreement to be taken
by, or any vote or consent is required of,
(i) the Management Stockholders (and Additional Management
Stockholders) (as a group as opposed to the exercise by a Management
Stockholder or Additional Management Stockholder, as the case may be,
of his individual rights hereunder), unless otherwise agreed by the
Company and the Management Stockholders and/or the Additional
Management Stockholders, such action, vote or consent shall be taken
or in accordance with the affirmative vote of the holders of a
majority (by number of shares) of the Registrable Securities held by
Management Stockholders and Additional Management Stockholders; or
(ii) the Additional Stockholders (as a group as opposed to the
exercise by an Additional Stockholder of his individual rights
hereunder), unless otherwise agreed by the Company and the Additional
Stockholders, such action, vote or consent shall be taken by or in
accordance with the affirmative vote of the holders of a majority (by
number of shares) of the Registrable Securities held by the Additional
Stockholders.
(b) Except as otherwise provided herein, no modification, amendment
or waiver of any provision of this Agreement will be effective against the
Company or any holder of Registrable Securities, unless such modification,
amendment or waiver is approved in writing by the Company, the Required
Institutional Stockholders, the Required MascoTech Stockholders and, in the
event that the rights and obligations of the Management Stockholders and/or the
Additional Stockholders are adversely affected thereby, the approval of the
Management Stockholders and/or the Additional Stockholders, as the case may be.
The failure of any party to enforce any of the provisions of this Agreement will
in no way be construed as a waiver of such provisions and will not affect the
right of such party thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
11.5 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Agreement by or on behalf of any
of the parties hereto will bind and inure to the benefit of the respective
successors and assigns of the parties hereto whether so expressed or not; in
addition, whether or not any express assignment has been made, the provisions of
this Agreement which are for the benefit of purchasers or holders of Registrable
Securities are also for the benefit of, and enforceable by, any subsequent
holder of Registrable Securities, except to the extent reserved to or by the
transferor in connection with any such transfer; provided, that the benefits of
this Agreement shall inure to
-22-
<PAGE> 26
Registration Rights Agreement
and be enforceable by any transferee of Registrable Securities so long as such
transferee shall have acquired such securities in accordance with the terms of
the Stockholders' Agreement and shall have executed a Registration Rights
Joinder Agreement.
11.6 NOTICES.
(a) All notices, requests and other communications hereunder must be
in writing and will be deemed to have been duly given only if delivered
personally against written receipt or by facsimile transmission or mailed (by
registered or certified mail, return receipt requested) or by reputable
overnight courier, fee prepaid to the parties at the following addresses or
facsimile numbers:
(i) If to any Institutional Stockholder, to:
Citicorp Venture Capital, Ltd.
399 Park Avenue
New York, New York 10043
Facsimile No.: 212-888-2940
Attn: Michael A. Delaney
with a copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Facsimile No.: 212-309-6273
Attn: Philip H. Werner
(ii) If to any MascoTech Stockholder, to:
MascoTech, Inc.
21001 Van Born Road
Taylor, Michigan 48180
Facsimile No.: 313-374-6136
Attn: President
-23-
<PAGE> 27
Registration Rights Agreement
with a copy to:
MascoTech, Inc.
21011 Van Born Road
Taylor, Michigan 48180
Facsimile No.: 313-374-6135
Attn: General Counsel
(iii) If to any Management Stockholder, Additional
Management Stockholder or Additional Stockholder, to
the address of such Person set forth in the stock
records of the Company.
(b) All such notices, requests and other communications will be
deemed delivered upon receipt. Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
11.7 HEADINGS.
The headings used in this Agreement have been inserted for convenience
of reference only and do not affect the provisions hereof.
11.8 GENDER.
Whenever the pronouns "he" or "his" are used herein they shall also be
deemed to mean "she" or "hers" or "it" or "its" whenever applicable. Words in
the singular shall be read and construed as though in the plural and words in
the plural shall be construed as though in the singular in all cases where they
would so apply.
11.9 INVALID PROVISIONS.
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future law, and if the rights or obligations
of any party hereto under this Agreement will not be materially and adversely
affected thereby, (i) such provision will be fully severable, (ii) this
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (iii) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom and (iv) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
-24-
<PAGE> 28
Registration Rights Agreement
11.10 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE DOMESTIC LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE
OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
11.11 SERVICE OF PROCESS.
EACH OF THE PARTIES HERETO IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS IN ANY ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE PARTY AT THE ADDRESS
SPECIFIED IN THIS AGREEMENT, SUCH SERVICE TO BECOME EFFECTIVE FIFTEEN (15) DAYS
AFTER SUCH MAILING. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE
ABILITY OF ANY PARTY HERETO TO SERVE ANY SUCH LEGAL PROCESS, SUMMONS, NOTICES
AND DOCUMENTS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN
JURISDICTION OVER OR TO BRING ACTIONS, SUITS OR PROCEEDINGS AGAINST ANY OF THE
OTHER PARTIES HERETO IN SUCH OTHER JURISDICTIONS, AND IN SUCH MANNER, AS MAY BE
PERMITTED BY ANY APPLICABLE LAW.
11.12 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. EACH OF THE PARTIES HERETO ALSO WAIVES ANY BOND OR SURETY OR SECURITY
UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF SUCH PARTY. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF
DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF THE PARTIES
HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT. IN THE EVENT OF LITIGATION,
-25-
<PAGE> 29
Registration Rights Agreement
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
11.13 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-26-
<PAGE> 30
Registration Rights Agreement
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
MSX INTERNATIONAL, INC.
By:
---------------------------------------
Name: Frederick K. Minturn
Title: President
MASCOTECH, INC.
By:
---------------------------------------
Name: Timothy Wadhams
Title: Vice President
CITICORP VENTURE CAPITAL, LTD.
By:
---------------------------------------
Name: Michael A. Delaney
Title: Vice President
MANAGEMENT GROUP
---------------------------------------
Frederick K. Minturn
---------------------------------------
Ralph Miller
---------------------------------------
E. H. Billig
[Signature Page to Registration Rights Agreement]
<PAGE> 31
Registration Rights Agreement
Exhibit A
Form of Registration Rights Joinder Agreement
MSX INTERNATIONAL, INC.
275 Rex Boulevard
Auburn Hills, MI 48326
Attention: Chief Executive Officer
Ladies & Gentlemen:
In consideration of the [TRANSFER][ISSUANCE] to the undersigned of
[DESCRIBE SECURITY BEING TRANSFERRED/ISSUED] of MSX INTERNATIONAL, INC., a
Delaware corporation (the "Company"), the undersigned [REPRESENTS THAT IT IS A
PERMITTED TRANSFEREE OF [INSERT NAME OF TRANSFEROR] AND]* agrees that, as of the
date written below, [HE][SHE][IT] shall become a party to[, AND A PERMITTED
TRANSFEREE AS DEFINED IN,]* that certain Registration Rights Agreement dated as
of January __, 1997, as such agreement may have been amended from time to time
(the "Agreement"), among the Company and the persons named therein, and [AS A
PERMITTED TRANSFEREE SHALL BE FULLY BOUND BY, AND SUBJECT TO, ALL OF THE
COVENANTS, TERMS AND CONDITIONS OF THE AGREEMENT THAT WERE APPLICABLE TO THE
UNDERSIGNED'S TRANSFEROR,]* [SHALL BE FULLY BOUND BY, AND SUBJECT TO, THE
COVENANTS, TERMS AND CONDITIONS OF THE AGREEMENT AS PROVIDED UNDER SECTION 11.5
OF THE AGREEMENT]** [SHALL BE FULLY BOUND BY, AND SUBJECT TO, ALL OF THE
COVENANTS, TERMS AND CONDITIONS OF THE AGREEMENT,]*** as though an original
party thereto and shall be deemed a [MANAGEMENT STOCKHOLDER] [MASCOTECH
STOCKHOLDER] [ADDITIONAL STOCKHOLDER] [INSTITUTIONAL STOCKHOLDER]**** for [ALL]*
[SOLELY FOR]**[ALL]*** purposes thereof.
Executed as of the day of , .
SIGNATORY:
-----------------
Address:
-----------------
-----------------
ACKNOWLEDGED AND ACCEPTED:
MSX INTERNATIONAL, INC.
By:
------------------------------------------
Name:
Title:
<PAGE> 32
Registration Rights Agreement
* Include if signatory is a Permitted Transferee
** Include if signatory is a Third Party
*** Include if signatory is an Additional Stockholder
**** Include if signatory is receiving securities from a Management
Stockholder, a MascoTech Stockholder, an Additional Stockholder or an
Institutional Stockholder; if signatory is an Additional Stockholder
receiving securities issued by the Company insert [Additional
Stockholder]
<PAGE> 1
EXHIBIT 10.3
MSX INTERNATIONAL, INC.
THE BORROWING SUBSIDIARIES PARTY HERETO,
--------------------------------------
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of April 14, 1998
--------------------------------------
THE LENDERS PARTY HERETO
and
NBD BANK, as Agent
<PAGE> 2
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 14, 1998
(this "Agreement"), is by and among MSX INTERNATIONAL, INC., a Delaware
corporation (the "Company"), each of the Borrowing Subsidiaries (as defined
below) of the Company party hereto from time to time (the Company and the
Borrowing Subsidiaries may each be referred to as a "Borrower" and,
collectively, as the "Borrowers"), the lenders party hereto from time to time
(collectively, the "Lenders" and individually, a "Lender"), and NBD BANK, a
Michigan banking corporation, as agent for the Lenders (in such capacity, the
"Agent").
In consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:
RECITALS
A. The Borrowers, the Lenders and NBD Bank, as agent for the Lenders, executed a
Credit Agreement dated as of January 22, 1998 (the "Existing Credit Agreement").
B. The Borrowers have requested that the Lenders, including the Lenders becoming
a Lender on the date hereof, amend and restate the Existing Credit Agreement as
herein provided, and the Lenders are willing to establish such a credit facility
and change the Facility Fees in favor of the Borrowers and amend and restate the
Existing Credit Agreement on the terms and conditions herein set forth.
AGREEMENT
In consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree that the Existing Credit Agreement shall be
amended and restated as follows:
ARTICLE I
DEFINITIONS
1.1. Certain Definitions. As used herein the following terms shall have
the following respective meanings:
"Acquisition" shall mean 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.
"Advance" shall mean any Loan and any Letter of Credit Advance.
"Affiliate", when used with respect to any Person, shall mean 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, shall mean 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
securities (or other ownership interest of any kind) of the controlled Person.
MSX CREDIT AGREEMENT Page 1
<PAGE> 3
"Applicable Lending Installation" shall mean, with respect to any
office(s), branch(es), Subsidiary(ies) or Affiliate(s) of such Lender selected
by such Lender and notified to the Company and the Agent by such Lender from
time to time and, with respect to the Agent, any office(s), branch(es),
Subsidiary(ies) or Affiliate(s) of the Agent selected by the Agent and notified
to the Company and the Lenders.
"Applicable Margin" shall mean, (a) 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
Leverage Ratio, as adjusted on each date a certificate is required to be
delivered pursuant to Section 5.1(d)(ii) or (iii), with the first such change
to Applicable Margin being made based upon the Leverage Ratio for the fiscal
quarter of the Company ending June 30, 1998, and shall remain in effect until
the next change to be effected pursuant to this definition, based upon the
Leverage Ratio as of the last day of the most recently ended fiscal quarter,
provided that (a) if any Event of Default has occurred and is continuing the
Leverage Ratio as of the end of the most recently ended fiscal quarter shall,
for the purposes of this definition, be deemed to be greater than 4.25, and (b)
as of the Effective Date, the Applicable Margin shall be based upon a Leverage
Ratio of greater than 4.25.
<TABLE>
<CAPTION>
======================================================================================================================
APPLICABLE MARGIN
- ---------------- -------------- -------------------- ------------------------------- ------------- -------------------
Eurodollar Revolving Loan, Floating
Floating Rate Eurocurrency Revolving Loan Rate Term Eurodollar Term
Leverage Ratio Facility Fee Revolving Loan and Letter of Credit Fee Loan Loan
- --------------- ------------- -------------------- ------------------------------- ------------- ===================
<S> <C> <C> <C> <C> <C>
<=2.00:1 17.5 bps 0 bps 45 bps 0 bps 62.5 bps
>2.0 but
<=2.75:1 20 bps 0 bps 67.5 bps 0 bps 87.5 bps
>2.75 but
<=3.50:1 25 bps 0 bps 100 bps 0 bps 125 bps
>3.50 but
<=4.25:1 30 bps 0 bps 120 bps 0 bps 150 bps
>4.25 35 bps 0 bps 140 bps 0 bps 175 bps
</TABLE>
"Assignment and Acceptance" is defined in Section 9.6(c).
"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" shall mean the Board of Directors of the Company, or
any authorized committee of the Board of Directors.
"Borrowing" shall mean the aggregation of Advances, including each Letter
of Credit Advance, of the Lenders to be made to a Borrower, or continuations
and conversions of such Loans, made pursuant to Article II on a single date
and, in the case of any Fixed Rate Loans, of a single type and for a single
Interest
Page 2
<PAGE> 4
Period, which Borrowings may be classified for purposes of this Agreement by
reference to the type of Loans or the type of Advances comprising the related
Borrowing, e.g., a "Eurodollar Borrowing" is a Borrowing comprised of Eurodollar
Loans and a "Letter of Credit Borrowing" is an Advance comprised of a single
Letter of Credit.
"Borrowing Base" shall mean, as of any date, an amount equal to the sum
of (a) 85% of the amount of Eligible Accounts Receivable and (b) 65% of the
amount of Eligible Unbilled Receivables; provided, however, that not more than
25% of the amount of the Borrowing Base may be attributable to assets on which
the Agent, for the benefit of the Agent and the Lenders, does not have an
enforceable, perfected and first priority security interest which is not void or
voidable pursuant to a Security Agreement.
"Borrowing Base Certificate" for any date shall mean an appropriately
completed report as of such date and substantially in the form of Exhibit A
hereto, certified as true and correct as of such date by a duly authorized
officer of the Company.
"Borrowing Base Condition" shall be deemed to exist at any time that:
(i) the Leverage Ratio is equal to or in excess of 3.50:1, and
(ii) the Dollar Equivalent of the aggregate principal amount of the
Revolving Credit Advances plus the Term Loan is equal to or in
excess of $35,000,000.
"Borrowing Subsidiary" shall mean each Subsidiary listed as a Subsidiary
Borrower in Schedule 1.1(a) as amended from time to time in accordance with
Section 9.1.
"Business Day" shall mean (a) when such term is used in respect of a day on
which a Loan denominated in an Eligible Currency is to be made, a payment is
to be made in respect of such Loan or any other dealing in such Eligible
Currency is to be carried out pursuant to this Agreement, such term shall mean
a LIBOR Business Day which is also a day on which banks are open for
general banking business in the city which is the principal financial center of
the country of issuance of such Eligible Currency; (b) when such term is used
to describe a day on which a borrowing, payment or interest rate determination
is to be made in respect of a Eurodollar Loan, such day shall be a LIBOR
Business Day; and (c) when such term is used in any context in this Agreement
(including as described in the foregoing clauses (a) and (b)), such term shall
mean a day which, in addition to complying with any applicable requirements set
forth in the foregoing clauses (a) and (b), is a day other than a Saturday,
Sunday or other day on which commercial banks in Chicago, Detroit or New York
are authorized or required by law to close.
"Capital Expenditures" shall mean, for any period, the additions to
property, plant and equipment and other capital expenditures of the Company and
its Subsidiaries for such period, as the same are (or should be) set forth, in
accordance with Generally Accepted Accounting Principles, in consolidated
financial statements of the Company and its Subsidiaries for such period but
excluding any such additions made with insurance or condemnation proceeds.
"Capital Lease" of any Person shall mean any lease which, in accordance
with Generally Accepted Accounting Principles, is or should be capitalized on
the books of such Person.
"Capital Stock" shall mean (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
Page 3
<PAGE> 5
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.
"Cash Equivalent" shall mean (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 government 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 commercial bank or U.S. branch of a foreign bank licensed under the
laws of the United States or a State thereof having capital and surplus in
excess of $250,000,000 and a Keefe Bank Watch Rating of "B" or better, 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 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 (vii) above.
"Change of Control" shall mean 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
Page 4
<PAGE> 6
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 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" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated thereunder.
"Commitments" shall mean, with respect to each Lender, the commitment of
each such Lender to make Revolving Credit Loans, Term Loans and to participate
in Letter of Credit Advances, in amounts not exceeding in the aggregate
principal or face amount outstanding at any time the Commitment amount for such
Lender set forth next to the name of such Lender on the signature pages hereof,
or, as to any Lender becoming a party hereto after the Effective Date, as set
forth in the applicable Assignment and Acceptance, in each case as reduced
pursuant to Section 2.2 or modified pursuant to Section 9.6.
"Consent and Amendment" shall mean the Consent and Amendment of Security
Documents dated as of April 14, 1998 by each of the Borrowers and Guarantors
in favor of the Agent and the Lenders.
"Consolidated" or "consolidated" shall mean, when used with reference to
any financial term in this Agreement, the aggregate for two or more Persons of
the amounts signified by such term for all such Persons determined on a
consolidated basis in accordance with Generally Accepted Accounting Principles.
"Contingent Liabilities" shall mean 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; provided further, that, for
purposes of calculating the financial covenants contained in Sections 5.2(a)
through (c), Contingent Liabilities shall be only those Contingent Liabilities
that are described in clause (iv) of the definition of Total Debt. 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 Obligation" shall mean, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CVC" shall mean Citicorp Venture Capital, Ltd., a New York corporation.
Page 5
<PAGE> 7
"CVC Investor" shall mean (i) CVC, (ii) Citicorp, N.A. and (iii) any
officer, employee, or director of CVC so long as such person shall be an
employee, officer or director of CVC.
"Defaulting Lender" shall mean any Lender that fails to make available to
the Agent such Lender's Loans required to be made hereunder or shall have not
made a payment required to be made to the Agent hereunder. Once a Lender becomes
a Defaulting Lender, such Lender shall continue as a Defaulting Lender until
such time as such Defaulting Lender makes available to the Agent the amount of
such Defaulting Lender's Loans and all other amounts required to be paid to the
Agent pursuant to this Agreement.
"Deutsche Marks" or "DM" means the lawful money of the Republic of Germany.
"Disqualified Stock" shall mean any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part prior to a date one year
after the Termination Date.
"Dollar Equivalent" shall mean 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 Agent to be available to it for the
purchase of such currency with Dollars at approximately 11:00 a.m. local time of
the Applicable Lending Installation on such date as a determination of the
Dollar Equivalent is made.
"Dollars" and "$" shall mean the lawful money of the United States of
America.
"Domestic Subsidiary" shall mean each present and future Subsidiary of the
Company which is not a Foreign Subsidiary.
"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 Michigan Single Business Tax
expense), and (c) depreciation and amortization expense, all as determined for
the Company and its Subsidiaries on a consolidated basis in accordance with
Generally Accepted Accounting Principles.
"Effective Date" shall mean the effective date specified in the final
paragraph of this Agreement.
"Eligible Accounts Receivable" shall mean, as of any date, those accounts
receivable evidenced by an invoice owned by the Company or any Subsidiary which
are payable in Dollars or in any currency that is readily available, freely
traded and convertible into Dollars (valued at the Dollar Equivalent thereof)
valued at the face amount thereof less sales, excise or similar taxes
outstanding and (to the extent not deducted pursuant to clauses (a) through (j)
below) less returns, discounts, credits and allowances of any nature at any
time claimed in writing or issued, owing or granted; but shall not include any
such account receivable (a) that is not a bona fide existing obligation created
by the sale and actual delivery of inventory, goods or other property or the
furnishing of services or other good and sufficient consideration to customers
of the Company or any Subsidiary, as the case may be, in the ordinary course of
business, (b) that is more than 90 days past due or that contains any deferred
payment terms or dating terms outside the ordinary course of business and not
customarily included by the Company or its Subsidiaries or not acceptable to
the Agent (acting in a commercially reasonable manner), (c) that is subject to
any dispute, contra-account, defense, offset or counterclaim or any Lien
(except those in favor of the Agent under the Security Documents), or the
inventory, goods, property, services or other consideration of which such
account receivable constitutes proceeds are subject to any such Lien, but only
to the extent of such dispute, contra-account, defense, offset,
Page 6
<PAGE> 8
counterclaim or Lien, (d) in respect of which the inventory, goods, property,
services or other consideration have been rejected or the amount is in dispute,
but only to the extent of such dispute, (e) that is due from any Affiliate
(other than MascoTech or any of the consolidated Subsidiaries of MascoTech) or
Subsidiary of the Company, (f) that is payable by the United States or any of
its departments, agencies or instrumentalities or by any state or other
governmental entity or by any foreign government unless the Company or such
Subsidiary, as the case may be, if requested by the Agent fully complies with
the Assignment of Claims Act and executes all documents and agreements and
causes all documents and agreements to be executed in connection therewith or
any similar foreign statute in the case of accounts receivable payable by a
foreign government, (g) that is payable by any Person as to which 25% or more of
the aggregate amount of such accounts receivable payable by such Person to the
Company or any Subsidiary, as the case may be, do not otherwise constitute
Eligible Accounts Receivable pursuant to clause (b) of this definition, (h) that
are payable by any Person that is the subject of any proceeding seeking to
adjudicate it a bankrupt or insolvent or seeking liquidation, winding up or
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 appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property, or that is not generally paying its debts as they become due or
has admitted in writing its inability to pay its debts generally or has made a
general assignment for the benefit of creditors, (i) which is evidenced by a
promissory note or other instrument, or (j) that for any other reason is at any
time deemed by the Agent (acting in a commercially reasonable manner) to be
ineligible.
"Eligible Currency" shall mean Francs, Deutsche Marks, Pounds Sterling
and any other currency (other than Dollars) which is approved and designated as
an Eligible Currency by the Agent and the Lenders, 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 Agent, no longer readily available or
freely traded or as to which, in the determination of the Agent, a Dollar
Equivalent is not readily calculable, then the Agent shall promptly notify the
Company and such country's currency shall no longer be an Eligible Currency
until such time as the Agent agrees to reinstate such country's currency as an
Eligible Currency and promptly, but in any event within five (5) Business Days
of receipt of such notice from the Agent, the Borrowers with respect to such
Currency shall repay all Loans in such affected currency or convert such Loans
into Loans in Dollars or an Eligible Currency, as applicable, subject to the
other terms contained in this Agreement.
"Eligible Unbilled Receivables" shall mean, as of any date, those
obligations owing the Company or any Subsidiary which would constitute an
Eligible Account Receivable (valued at the Dollar Equivalent thereof) but for
the fact that an invoice has not been sent by the Company or Subsidiary,
provided that each of the following conditions is satisfied for each such
obligation: (a) such obligation is covered under a written work order or other
agreement between the Company or such Subsidiary and the Person owing such
obligation, including price verification, which is binding and enforceable on
such Person to pay such obligation, (b) such obligation has not been classified
as an Eligible Unbilled Receivable for more than 120 days and (c) such
obligation is not at any time otherwise deemed by the Agent (acting in a
commercially reasonable manner) to be ineligible.
"Environmental Certificate" shall mean an appropriately completed
environmental certificate in the form of Exhibit B attached hereto delivered by
the Borrowers and the Guarantors.
"Environmental Laws" at any date shall mean all provisions of law,
statutes, ordinances, rules, regulations, judgments, writs, injunctions,
decrees, orders, awards and standards promulgated by the
Page 7
<PAGE> 9
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" shall mean 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.
"Eurocurrency Base Rate" shall mean, with respect to each Interest Period
for a Eurocurrency Loan, the rate per annum obtained by dividing (i) the per
annum interest rates at which deposits in the relevant Eligible Currency are
offered to the Applicable Lending Installation of the Agent by other prime banks
in the London interbank market in an amount comparable to the Agent's (or the
Agent's Affiliate's) portion of such Eurocurrency Loan and for a period equal to
such Interest Period at approximately 11:00 a.m. London time two (2) Business
Days prior to the first day of such Interest Period, divided by (ii) an amount
equal to one minus the stated maximum rate (expressed as a decimal) of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) and other fees, charges and other
requirements similar thereto or the functional equivalent thereof which the
Agent determines to be market practice to take into account in determining the
Eurocurrency Base Rate that are specified on the first day of such Interest
Period by the Board of Governors of the Federal Reserve System (or any successor
agency thereto) for determining the maximum reserve requirement with respect to
Eurocurrency funding (currently referred to as "Eurocurrency liabilities" in
Regulation D of such Board) maintained by a member bank of such System or by any
other governmental entity, foreign or domestic, all as conclusively determined
by the Agent (absent manifest error), such sum to be rounded up, if necessary,
to the nearest whole multiple of one sixteenth of one percent (1/16 of 1%);
provided that with respect to any Eurocurrency Loans, an alternative formula
shall apply if (a) the Borrower and the Agent shall have agreed to such
alternative formula, (b) such formula is based on the rate determined pursuant
to clause (i) above and (c) the Agent shall have determined that such
alternative formula more accurately compensates Lenders for the cost of
maintaining reserves and similar requirements in respect of such Eurocurrency
Loans.
"Eurocurrency Loan" shall mean a Loan which bears interest at the
Eurocurrency Rate.
"Eurocurrency Rate" shall mean, with respect to each day during each
Interest Period pertaining to a Eurocurrency Loan, the sum of (a) the Applicable
Margin for such day plus (b) the Eurocurrency Base Rate for such Interest
Period.
"Eurocurrency Revolving Loan" shall mean a Revolving Credit Loan which
bears interest at the Eurocurrency Rate.
"Eurodollar Base Rate" shall mean the rate per annum obtained by dividing
(i) the per annum rate of interest at which deposits in Dollars for such
Interest Period and in an aggregate amount comparable to the amount of such
Eurodollar Loan to be made by the Agent are offered to the Agent (or any
Affiliate of the Agent which is a Lender hereunder) by other prime banks in the
London interbank market at approximately 11:00 a.m. local time in London on the
second LIBOR Business Day prior to the first day of such Interest Period by (ii)
an amount equal to one minus the stated maximum rate (expressed as a decimal) of
all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special
Page 8
<PAGE> 10
or other reserves) that is specified on the first day of such Interest Period by
the Board of Governors of the Federal Reserve System (or any successor agency
thereto) for determining the maximum reserve requirement with respect to
eurocurrency funding (currently referred to as "Eurocurrency liabilities" in
Regulation D of such Board) maintained by a member bank of such System; all as
conclusively determined by the Agent, such sum to be rounded up, if necessary,
to the nearest whole multiple of one one-hundredth of one percent (1/100 of 1%).
"Eurodollar Loan" shall mean a Loan which bears interest at a Eurodollar
Rate.
"Eurodollar Rate" shall mean, with respect to any Eurodollar Loan and for
each day during the related Interest Period, the per annum rate that is equal
to the sum of (a) the Applicable Margin for such day, plus (b) the Eurodollar
Base Rate for such Interest Period.
"Eurodollar Revolving Loan" shall mean a Revolving Credit Loan which bears
interest at a Eurodollar Rate.
"Eurodollar Term Loan" shall mean a Term Loan which bears interest at a
Eurodollar Rate.
"Event of Default" shall mean any of the events or conditions described in
Section 6.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Excluded Collateral" is defined in Section 2.10(a).
"Federal Funds Rate" shall mean, for any day, an interest rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Detroit
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion or, when used in connection with any Advance in any Eligible
Currency, "Federal Funds Rate" shall mean, for any day, an interest rate per
annum equal to the local cost of funds rate for obligations in such currency as
determined by the Agent..
"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.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of any fiscal
quarter of the Company, the ratio of (a) EBITDA plus Rental Charges, minus
Capital Expenditures, to (b) Fixed Charges, in each case as calculated for the
four consecutive fiscal quarters then ending, all as determined in accordance
with Generally Accepted Accounting Principles.
"Fixed Charges" shall mean, for any period, the sum, without duplication,
of (a) Total Interest Expense plus (b) all payments of principal and other
sums scheduled to be paid during such period by the Company or its Subsidiaries
with respect to Indebtedness of the Company or its Subsidiaries, plus (c)
Rental Charges accrued during such period by the Company and its Subsidiaries,
plus (d) all dividends, distributions and other obligations paid (other than
those paid with common stock) with respect to any
Page 9
<PAGE> 11
class of the Company's Capital Stock or any dividend, payment or distribution
paid (other than those paid with common stock) in connection with the
redemption, purchase, retirement or other acquisition, directly or indirectly,
of any shares of the Company's Capital Stock, plus (e) all accrued income taxes
(including Michigan Single Business Tax expense) for such period for the Company
or its Subsidiaries (but excluding all deferred income taxes unless paid or
payable in such period).
"Fixed Rate Loan" shall mean any Eurocurrency Loan or Eurodollar Loan.
"Floating Rate" shall mean the per annum rate equal to the sum of (a) the
Applicable Margin, plus (b) the greater of the Prime Rate or the sum of the
Federal Funds Rate plus 1%, in each case as in effect from time to time, which
Floating Rate shall change simultaneously with any change in such Prime Rate or
Federal Funds Rate, as the case may be.
"Floating Rate Loan" shall mean any Loan which bears interest at the
Floating Rate.
"Floating Rate Revolving Loan" shall mean any Revolving Credit Loan which
bears interest at the Floating Rate.
"Floating Rate Term Loan" shall mean any Term Loan which bears interest
at the Floating Rate.
"Foreign Subsidiary" shall mean any Subsidiary incorporated or formed in
any jurisdiction other than any State of the United States of America.
"Francs" or "FF" shall mean the lawful money of France.
"Generally Accepted Accounting Principles" shall mean 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 Lenders.
"Guaranties" shall mean the guaranties entered into by each of the
Guarantors for the benefit of the Agent and the Lenders pursuant to this
Agreement in substantially the form of Exhibit C hereto, as amended by the
Consent and Amendment and as further amended or modified from time to time.
"Guarantor" shall mean each present and future Domestic Subsidiary of the
Company, which is a Significant Subsidiary, each "Subsidiary Guarantor" as
defined in the Senior Subordinated Debt Documents or any other guarantor with
respect to any Subordinated Debt at any time or any other Person executing a
Guaranty at any time.
"Indebtedness" of any Person shall mean, as of any date, (a) all
obligations of such Person for borrowed money or evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or bankers' acceptances, (b) all obligations of
such Person as lessee which are capitalized in accordance with Generally
Accepted Accounting Principles under any Capital Lease, (c) 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, (d) 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, and (e) 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 (d) of this definition; provided that bank overdrafts in the
United States in the ordinary course of business and which are not
Page 10
<PAGE> 12
material in the aggregate and are outstanding for less than 3 Business Days
shall be excluded from this definition.
"Interest Payment Date" shall mean (a) with respect to any Fixed Rate Loan,
the last day of each Interest Period with respect to such Fixed Rate Loan, and,
in the case of any Interest Period exceeding three months, those days that
occur during such Interest Period at intervals of three months after the first
day of such Interest Period and (b) in all other cases, 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.
"Interest Period" means with respect to any Eurodollar Loan or Eurocurrency
Loan:
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan or Eurocurrency Loan and ending one, two, three, or six months
thereafter, as selected by the relevant Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with
respect thereto, provided that prior to the syndication of this
Agreement as determined by the Agent, the Borrowers shall be permitted
to elect Interest Periods for periods of time between 7 and 14 days and
may not elect any Interest Period in excess of 14 days until the
earlier of completion of the syndication of this Agreement as
determined by the Agent or 90 days after the Effective Date; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan or
Eurocurrency Loan and ending one, two, three or six months thereafter,
as selected by the relevant Borrower by irrevocable notice to the Agent
not less than three Business Days prior to the last day of the then
current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar
Loan or Eurocurrency Loan would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
(ii) any Interest Period applicable to a Eurodollar
Loan or Eurocurrency Loan that would otherwise extend beyond
the Termination Date, shall end on the Termination Date;
(iii) any Interest Period pertaining to a Eurodollar
Loan or Eurocurrency Loan that begins on the last Business Day
of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of
a calendar month; and
(iv) any Interest Period pertaining to a Eurocurrency
Loan denominated in an Eligible Currency being replaced by the
currency of the European Monetary Union that would otherwise
extend beyond the date on which such replacement becomes
effective shall end on such date.
Page 11
<PAGE> 13
"Investment" of a Person shall mean 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; 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 notes, derivative financial
instruments and other similar instruments or contracts owned by such Person.
"Joinder Agreement" shall mean any joinder agreement entered into by a
Borrowing Subsidiary subsequent to the date hereof, which shall be in form and
substance satisfactory to the Agent.
"Lender Indebtedness" shall mean (a) the Advances and all other
indebtedness, obligations and liabilities of each Borrower and of each Guarantor
to the Agent or the Lenders under any Loan Document, and (b) all indebtedness,
obligations and liabilities of each Borrower and of each of their respective
Subsidiaries to any Lender in respect of any Swaps.
"Letter of Credit" shall mean a standby letter of credit having a stated
expiry date or a date upon which the draft must be reimbursed not later than
twelve months after the date of issuance and not later than the fifth Business
Day before the Termination Date, issued by the Agent on behalf of the Lenders
for the account of a Borrower pursuant to Section 2.1(a) under an application
and related documentation acceptable to the Agent requiring, among other
things, reimbursement by the Company or such Subsidiary to the Agent in respect
of all drafts or other demand for payment honored thereunder in accordance with
Section 3.3 and all expenses paid or incurred by the Agent relative thereto.
Additionally, all outstanding letters of credit as of the Effective Date issued
by the Agent for the account of the Company shall for all purposes be deemed
"Letters of Credit" issued hereunder.
"Letter of Credit Advance" shall mean any issuance of a Letter of Credit
under Section 2.4 made pursuant to Section 2.1(a) in which each Lender acquires
a pro rata risk participation.
"Letter of Credit Documents" shall have the meaning ascribed thereto in
Section 3.3(b).
"Leverage Ratio" shall mean, at any time, the ratio of (a) Total Debt at
such time to (b) EBITDA, as calculated as of the four most recently completed
fiscal quarters of the Company, all as determined in accordance with Generally
Accepted Accounting Principles.
"LIBOR Business Day" shall mean a day which is both a Business Day and a
day on which dealings in Dollar and Eligible Currency deposits are carried out
in the London interbank market.
"Lien" shall mean 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" shall mean any Revolving Credit Loan, the Term Loan and any
Swingline Loan. Any such Loan or portion thereof may also be denominated as a
Floating Rate Loan, Eurocurrency Loan or a Eurodollar Loan and such Floating
Rate Loans, Eurocurrency Loans and Eurodollar Loans are referred to herein as
"types" of Loans.
Page 12
<PAGE> 14
"Loan Document" shall mean, collectively, this Agreement, the Notes, the
Letter of Credit Documents, the Security Documents and any other agreement,
instrument or document executed in connection with any of the foregoing at any
time.
"Management Investors" shall mean 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.
"MascoTech" shall mean MascoTech, Inc., a Delaware corporation.
"Material Adverse Effect" shall mean (i) a material adverse effect on the
financial condition, results of operations, properties, assets, business or
prospects of the Company and its Subsidiaries, taken as a whole, (ii) a
material adverse effect on the ability of the Company to perform its
obligations under the Loan Documents or (iii) a material adverse effect on the
rights and remedies of the Agent or the Lenders under any of the Loan
Documents.
"Material Plan" shall mean at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $5,000,000.
"Maturity Date" shall mean the earlier to occur of (a) January 22, 2003 and
(b) the date the Term Loan is accelerated pursuant to Section 6.2.
"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.
"NBD" shall mean NBD Bank, a Michigan banking corporation, including any of
its branches and affiliates.
"Negotiated Rate" shall mean, as to each Swingline Loan, the rate agreed
to by the Borrower of such Swingline Loan and the Agent at the time of such
Swingline Loan. The Negotiated Rate may be a fixed or a floating rate, and more
than one Negotiated Rate may be in effect at any time.
"Net Cash Proceeds" shall mean, (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 Agent for the benefit of the Agent
and the Lenders) and other customary fees actually incurred in connection
therewith and net of taxes 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.
Page 13
<PAGE> 15
"Net Income" shall mean, for any period, the net income (or loss) of the
Company and its Subsidiaries on a consolidated basis for such period taken
as a single accounting period, determined in accordance with Generally Accepted
Accounting Principles; provided that in determining Net Income there shall be
excluded, without duplication: (a) the income (or loss) of any Person (other
than a Subsidiary of the Company) in which any Person other than the Company or
any of its Subsidiaries has a joint interest or partnership interest or other
ownership interest, except to the extent of the amount of dividends or other
distributions actually paid to the Company or any of its Subsidiaries by such
Person during such period, (b) the income of any Person accrued prior to the
date it becomes a Subsidiary of the Company or is merged into or consolidated
with the Company or any of its Subsidiaries or that Person's assets are acquired
by the Company or any of its Subsidiaries, unless such income is calculated on a
pro forma basis acceptable to the Agent in accordance with Section 1.3, in which
case such income shall not be excluded from Net Income, (c) the net proceeds of
any insurance policy, (d) gains (or non cash losses) from the sale, exchange,
transfer or other disposition of property or assets not in the ordinary course
of business of the Company and its Subsidiaries, and related tax effects in
accordance with Generally Accepted Accounting Principles, (e) any other
extraordinary or non-recurring gains (or non cash losses) of the Company or its
Subsidiaries, and related tax effects in accordance with Generally Accepted
Accounting Principles, (f) any income (or non cash losses) of any Unrestricted
Subsidiary, whether or not distributed to the Company or any of its
Subsidiaries, and (g) the income of any Subsidiary of the Company to the extent
that the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the terms
of its charter or of any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary.
"Net Worth" shall mean, as of any date, the amount of any capital stock,
paid in capital and similar equity accounts plus (or minus in the case of
a negative) the amount of any foreign currency translation adjustment account
shown as a capital account of the Company and its Subsidiaries, all on a
consolidated basis in accordance with Generally Accepted Accounting Principles.
"Note" shall mean any Revolving Credit Note, any Term Note or the Swingline
Note.
"Overdue Rate" shall mean (a) in respect of principal of Floating Rate
Loans, a rate per annum that is equal to the sum of two percent (2%) per annum
plus the Floating Rate, (b) in respect of principal of Fixed Rate Loans, a rate
per annum that is equal to the sum of two percent (2%) per annum plus the per
annum rate in effect thereon until the end of the then current Interest Period
for such Loan and, thereafter, a rate per annum that is equal to the sum of two
percent (2%) per annum plus the Floating Rate, and (c) in respect of other
amounts payable by any Borrower hereunder (other than interest), a per annum
rate that is equal to the sum of two percent (2%) per annum plus the Floating
Rate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Business" is defined in Section 5.2(h).
"Permitted Currency" shall mean Dollars or any Eligible Currency.
"Permitted Holders" shall mean the CVC Investors, MascoTech, the Management
Investors and their respective Permitted Transferees; provided, however, that
any Management Investor and any CVC Investor and any Permitted Transferee of a
Management Investor or CVC Investor (other than CVC or Citicorp, N.A. or any
direct or indirect Subsidiary of CVC or Citicorp, N.A. or any other Person
controlled by CVC or Citicorp, N.A.) shall not be a "Permitted Holder" if such
Person is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of Voting Stock that represents at least
30% of the aggregate voting power of all classes of the Voting Stock of the
Company,
Page 14
<PAGE> 16
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" shall mean (i) MascoTech and its Permitted
Transferees, (ii) the CVC Investors and (iii) 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" shall mean Liens permitted by Section 5.2(e) hereof.
"Permitted Transferee" shall mean (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; (b) with respect to MascoTech, any
direct or indirect Subsidiary or any other Person controlled by MascoTech; and
(c) with respect to any Management Investor, any spouse or lineal descendent
(including by adoption) of such Management Investor so long as such Management
Investor shall be an employee, officer or director of the Company.
"Person" shall include 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" shall mean 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" shall mean each Pledge Agreement entered into by the
Company or any of its Subsidiaries for the benefit of the Agent and the Lenders
pursuant to this Agreement substantially in the forms attached hereto as
Exhibits D-1 and D-2, as amended by the Consent and Amendment and as further
amended or modified from time to time.
"Pledged Subsidiaries" shall mean those Foreign Subsidiaries 65% of whose
Capital Stock has been pledged to the Agent pursuant to a Pledge
Agreement.
"Pounds Sterling" means the lawful money of the United Kingdom.
"Preferred Stock" as applied to the Capital Stock of any corporation, shall
mean 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.
"Prime Rate" shall mean the per annum rate announced or established by the
Agent from time to time as its "prime rate" (it being acknowledged that such
announced rate may not necessarily be the lowest
Page 15
<PAGE> 17
rate charged by the Agent to any of its customers) or the corporate base rate of
interest announced or established by any Affiliate of the Agent or, when used in
connection with any Advance denominated in any Eligible Currency, "Prime Rate"
shall mean the correlative floating rate of interest customarily applicable to
similar extensions of credit to corporate borrowers denominated in such currency
in the country of issue, as determined by the Agent, which Prime Rate shall
change simultaneously with any change in such announced or established rates.
"Reimbursement Agreements" shall mean the Standby Letter of Credit
Applications and Reimbursement Agreements executed in connection with the
Letters of Credit, as amended or modified from time to time.
"Rental Charges" shall mean, for any period, the maximum amount of all
rents and other payments (exclusive of property taxes, property and liability
insurance premiums and maintenance costs) accrued by the Company or its
Subsidiaries during such period under any lease of real or personal property in
respect of which the Company or its Subsidiaries are obligated as a lessee or
user, other than any Capital Lease.
"Reportable Event" shall mean 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.
"Required Lenders" shall mean Lenders holding not less than 60% of the
Commitments (or 60% of the Advances if the Commitments have been terminated);
provided that if one Lender holds 60% or more of the Commitments (or 60% or more
of the Advances if the Commitments have been terminated), unless such Lender
holds 100% thereof, Required Lenders shall mean such Lender and one other
Lender.
"Requirement of Law" shall mean 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.
"Revolving Credit Advance" shall mean any Revolving Credit Loan and any
Letter of Credit Advance.
"Revolving Credit Loan" shall mean any borrowing under Section 2.4
evidenced by the Revolving Credit Notes and made pursuant to Section 2.1(a).
"Revolving Credit Notes" shall mean the promissory notes of the
Borrowers evidencing the Revolving Credit Loans, in substantially the form
annexed hereto as Exhibit E, as amended or modified from time to time and
together with any promissory note or notes issued in exchange or replacement
therefor.
"Revolving Credit Commitment" shall mean the Commitment of each Lender
to make Revolving Credit Advances under Section 2.1(a).
"Security Agreements" shall mean each Security Agreement entered into
by the Company or any Guarantor for the benefit of the Agent and the Lenders
pursuant to this Agreement substantially in the forms attached hereto as Exhibit
F-1 and F-2, as amended by the Consent and Amendment and as further amended 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 Agent and the
Lenders in form or substance satisfactory to the Agent, as amended or modified
from time to time.
Page 16
<PAGE> 18
"Security Documents" shall mean the Pledge Agreements, the Security
Agreements, the Guaranties, the Reimbursement Agreements, the Consent and
Amendment and all other agreements and documents delivered pursuant to the
Existing Credit Agreement, this Agreement or otherwise entered into by any
Person to secure or guaranty the obligations of the Borrowers under this
Agreement.
"Senior Subordinated Debt Documents" shall mean 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) hereto.
"Senior Subordinated Notes " shall mean the 11-3/8% Senior Subordinated
Notes issued by the Company in the aggregate principal amount of $100,000,000
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" shall mean the Senior Subordinated
Indenture between the Company, the subsidiary guarantors named therein and IBJ
Schroder Bank & Trust Company, as trustee, dated as of January 15, 1998, as
amended or modified from time to time.
"Significant Subsidiary" shall mean 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" shall mean, 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 up to $130,000,000 in aggregate principal amount 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 the Required Lenders and which is governed by
terms and provisions, including without limitation maturities, covenants,
defaults, rates and fees, acceptable to the Agent and the Required Lenders.
"Subordinated Debt Documents" shall mean 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 shall mean 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.
"Substantial Portion" shall mean, with respect to the property of the
Company and its Subsidiaries, property which (a) represents more than 10% of the
consolidated assets of the Company and its Subsidiaries
Page 17
<PAGE> 19
as would be shown in the consolidated financial statements of the Company and
its Subsidiaries as at the beginning of the twelve-month period ending with the
month in which such determination is made, (b) is responsible for more than 10%
of the consolidated net sales or of the consolidated net income of the Company
and its Subsidiaries as reflected in the financial statements referred to in
clause (a) above, (c) represents more than 25% of the consolidated assets of the
Company and its Subsidiaries as would be shown in the consolidated financial
statements of the Company and its Subsidiaries as of the Effective Date or (d)
is responsible for more than 25% of the consolidated net sales or of the
consolidated net income of the Company and its Subsidiaries as reflected in the
financial statements referred to in clause (c) above.
"Swaps" shall mean any interest rate or currency swaps, rate caps or
similar transactions, provided that such transactions are entered into by the
Company or any of its Subsidiaries to protect against fluctuations in interest
rates on Indebtedness of the Company and its Subsidiaries or in exchange rates,
and not for speculative purposes.
"Swingline Loan" shall mean any loan under Section 2.4 evidenced by the
Swingline Note and made by the Agent to a Borrower pursuant to Section 2.1(b).
"Swingline Note" shall mean any promissory note of the Borrowers evidencing
the Swingline Loans in substantially the form of Exhibit G hereto, as amended
or modified from time to time and together with any promissory note or notes
issued in exchange or replacement therefor.
"Term Loan" shall mean the term loan under Section 2.4 evidenced by the
Term Notes and made pursuant to Section 2.1(c).
"Term Loan Commitment" shall mean the Commitment of each Lender to make the
Term Loan under section 2.1(c).
"Term Loan Date" shall mean the date upon which the proceeds of the Term
Loan are disbursed to Borrowers.
"Term Note" shall mean any promissory note of the Company evidencing the
Term Loan in substantially the form annexed hereto as Exhibit H hereto, as
amended or modified from time to time and together with any promissory note or
notes issued in exchange or replacement therefor.
"Termination Date" shall mean the earlier to occur of (a) January 22, 2003,
and (b) the date on which the Commitments shall be terminated pursuant to
Section 2.2 or 6.2.
"Total Debt" as of any date, shall mean all of the following for the
Company and its Subsidiaries on a consolidated basis and without duplication:
(i) all debt for borrowed money and similar monetary obligations evidenced by
bonds, notes, debentures, Capital Lease obligations or otherwise, including
without limitation obligations in respect of the deferred purchase price of
properties or assets, in each case whether direct or indirect; (ii) all
liabilities secured by any Lien existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have been assumed;
(iii) all reimbursement obligations under outstanding letters of credit in
respect of drafts which (A) may be presented or (B) have been presented and have
not yet been paid and are not included in clause (i) above; and (iv) all
guarantees and other Contingent Liabilities relating to indebtedness,
obligations or liabilities of the type described in the foregoing clauses (i),
(ii) and (iii).
"Total Interest Expense" shall mean, for any period, total interest and
related expense (including, without limitation, that portion of any Capitalized
Lease obligation attributable to interest expense in conformity with Generally
Accepted Accounting Principles, amortization of debt discount, all capitalized
Page 18
<PAGE> 20
interest, the interest portion of any deferred payment obligations, all
commissions, discounts and other fees and charges owed with respect to letter of
credit and bankers acceptance financing, the net costs and net payments under
any interest rate hedging, cap or similar agreement or arrangement, prepayment
charges, agency fees, administrative fees, facility fees and capitalized
transaction costs allocated to interest expense) paid, payable or accrued during
such period, without duplication for any other period, with respect to all
outstanding Indebtedness of the Company and its Subsidiaries, all as determined
for the Company and its Subsidiaries on a consolidated basis for such period in
accordance with Generally Accepted Accounting Principles;
"Unfunded Liabilities" shall mean, 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" shall mean 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" shall mean any Subsidiary designated by the
Company as an Unrestricted Subsidiary and approved by the Agent 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 Agent. Any Unrestricted Subsidiary may be
designated as a Subsidiary by the Company at any time provided that (i) such
designation is approved by the Agent and (ii) no Event of Default or Unmatured
Event exists or would be caused thereby, all on a pro forma basis acceptable to
the Agent.
"Voting Stock" of a Person shall mean all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof.
1.2. Other Definitions; Rules of Construction. As used herein, the terms
"Agent", "Lenders", "Company", "Borrowing Subsidiary", "Borrower", "Borrowers"
and "this Agreement" shall have the respective meanings ascribed thereto in the
introductory paragraph of this Agreement. Such terms, together with the other
terms defined 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.
Page 19
<PAGE> 21
1.3. Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to
the Lenders hereunder shall (unless otherwise disclosed to the Lenders in
writing at the time of delivery thereof in the manner described in subsection
(b) below) be prepared, in accordance with Generally Accepted Accounting
Principles provided that, if the Company notifies the Agent that it wishes to
amend any covenant in Article V to eliminate the effect of any change in
Generally Accepted Accounting Principles (or if the Agent notifies the Company
that the Required Lenders wish to amend Article V for such purpose), then the
Company's compliance with such covenants shall be determined on the basis of
Generally Accepted Accounting Principles in effect immediately before the
relevant change in Generally Accepted Accounting Principles became effective
until either such notice is withdrawn or such covenant or any such defined term
is amended in a manner satisfactory to the Company and the Required Lenders.
Except as otherwise expressly provided herein, all references to a time of day
shall be references to Detroit, Michigan time. Notwithstanding anything herein,
in any financial statements of the Company or in Generally Accepted Accounting
Principles to the contrary, for purposes of calculating and determining
compliance with the financial covenants in Sections 5.2(a), (b) and (c),
including defined terms used therein, (i) no Unrestricted Subsidiary shall be
consolidated with the Company and its other Subsidiaries and each Unrestricted
Subsidiary shall be treated as if it were an equity interest and all income,
(except to the extent received by the Company in cash), liabilities and assets
of each Unrestricted Subsidiary shall be excluded from all such calculations
and determinations thereunder and (ii) any Acquisitions made by the Company or
any of its Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the period for which such
financial covenants were calculated shall be deemed to have occurred on the
first day of the relevant period for which such financial covenants were
calculated on a pro forma basis acceptable to the Agent.
(b) The Company shall deliver to the Lenders at the same time as the
delivery of any annual or monthly financial statement under Section 5.1(d)
hereof (i) a description in reasonable detail of any material variation between
the application or other modification of accounting principles employed in the
preparation of such statement and the application or other modification of
accounting principles employed in the preparation of the immediately prior
annual or quarterly financial statements as to which no objection has been
made in accordance with the last sentence of subsection (a) above and (ii) if
requested by the Agent, reasonable estimates of the difference between such
statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of compliance
with the covenants set forth in Section 5.2 hereof, the Company will not
change the last day of its fiscal year from the date set forth in Schedule 1.3
for each year set forth on such Schedule, or the last days of the first three
fiscal quarters in each of its fiscal years from the thirteenth, twenty-sixth
and thirty-ninth Sunday after the end of the immediately preceding fiscal year.
ARTICLE II
THE COMMITMENTS AND THE ADVANCES
2.1. Commitments of the Lenders.
Page 20
<PAGE> 22
(a) Revolving Credit Advances. Each Lender agrees, for itself only,
subject to the terms and conditions of this Agreement, to make Revolving Credit
Loans to the Borrowers pursuant to Section 2.4 and to participate in Letter of
Credit Advances to the Borrowers pursuant to Section 3.3, from time to time from
and including the Effective Date to but excluding the Termination Date, not to
exceed in aggregate principal amount at any time outstanding the amount
determined pursuant to Section 2.1(d).
(b) Swingline Loans.
(i) Any Borrower may request the Agent to make, and the Agent
may, in its sole discretion, make Swingline Loans to such Borrower from time to
time on any Business Day during the period from the Effective Date until the
Termination Date in an aggregate principal amount not to exceed at any time the
lesser of (A) $25,000,000 or the Dollar Equivalent thereof in Eligible
Currencies (the "Swingline Facility") and (B) the aggregate amount of Revolving
Credit Advances that could be but is not borrowed as of such date. Except for
purposes of clause (B) of the immediately preceding sentence, each Lender's
Commitment shall be deemed utilized by an amount equal to such Lender's pro
rata share (based on such Lender's Commitment) of each Swingline Loan for
purposes of determining the amount of Revolving Credit Advances required to be
made by such Lender. Each Swingline Loan shall bear interest at the Negotiated
Rate and shall mature as agreed by the Agent and such Borrower, not to exceed
30 days after the date thereof. Within the limits of the Swingline Facility, so
long as the Agent, in its sole discretion, elects to make Swingline Loans, the
Borrowers may borrow and reborrow under this Section 2.1(b)(i).
(ii) The Agent may at any time in its sole and absolute
discretion require that any Swingline Loan be refunded by a Revolving Credit
Loan which is in the currency of such Swingline Loan from the Revolving
Lenders, and upon written notice thereof by the Agent to the Lenders and
such Borrower, such Borrower shall be deemed to have requested a Revolving
Credit Loan in an amount equal to the amount of such Swingline Loan, (which
requested Revolving Credit Loan, absent any specification by the Borrower,
shall be a Floating Rate if such Swingline Loan is in Dollars and shall be a
Eurocurrency Loan with an Interest Period of one month if such Swingline Loan
is denominated in an Eligible Currency), and such Floating Rate Borrowing shall
be made to refund such Swingline Loans. Each Lender shall be absolutely and
unconditionally obligated to fund its pro rata share (based on such Lender's
Commitment) of such Floating Rate Borrowing or, if applicable, purchase a
participating interest in the Swingline Loans pursuant to Section 2.1(b)(iii)
and such obligation shall not be affected by any circumstance, including,
without limitation, (A) any set-off, counterclaim, recoupment, defense or other
right which such Lender has or may have against the Agent or any Borrower or
any if its Subsidiaries or anyone else for any reason whatsoever; (B) the
occurrence or continuance of an Unmatured Event or an Event of Default, subject
to Section 2.1(b)(iii); (C) the occurrence of any Material Adverse Effect; (D)
any breach of this Agreement or any other agreement by any other Lender, any
Borrower or any Guarantor; or (E) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing (including without
limitation any Borrower's failure to satisfy any conditions contained in
Article II or any other provision of this Agreement).
(iii) If, due to any Event of Default pursuant to Section 6.1(h)
Loans as described in Section 2.1(b)(ii) may not be made by the Lenders, then
(A) the Borrowers agree that each Swingline Loan not paid pursuant to Section
2.1(b)(ii) shall bear interest, payable on demand by the Agent, at the Overdue
Rate, and (B) effective on the date each such Loan would otherwise have been
made, each Lender severally agrees that it shall unconditionally and
irrevocably, without regard to the occurrence of any Unmatured Event or Event of
Default or any other circumstances, in lieu of deemed disbursement of loans, to
the extent of such Lender's Commitment, purchase a participating interest in the
Swingline Loans by paying its participation percentage thereof. Each Lender will
immediately transfer to the Agent, in same day funds and in the currency in
which such Swingline Loan was made, the amount
Page 21
<PAGE> 23
of its participation. After such payment to the Agent, each Lender shall share
on a pro rata basis in any interest which accrues thereon and in all repayments
thereof (calculated by reference to its Commitment). If and to the extent that
any Lender shall not have so made the amount of such participating interest
available to the Agent, such Lender and the Borrowers severally agree to pay to
the Agent forthwith on demand such amount together with interest thereon, for
each day from the date of demand by the Agent until the date such amount is paid
to the Agent, at (x) in the case of any Borrower, the interest rate specified
above and (y) in the case of such Lender, the Federal Funds Rate for the first
five days after the date of demand by the Agent and thereafter at the interest
rate specified above.
(c) Term Loan. Each Lender further agrees, for itself only, subject
to the terms and conditions of this Agreement, to make its pro rata share,
based on its Term Loan Commitment, of a single five-year term loan to the
Company in an amount not to exceed $30,000,000. Such Term Loan shall be made,
at Company's request in accordance with Section 2.4, in a single draw on or
within three Business Days after the Effective Date of this Agreement
(d) Limitation on Amount of Advances. Notwithstanding anything in this
Agreement to the contrary:
(i) upon the occurrence and during the continuation of a
Borrowing Base Condition, the Dollar Equivalent of the aggregate principal
amount of the Advances outstanding to the Borrowers shall not exceed the amount
of the Borrowing Base;
(ii) the Dollar Equivalent of the aggregate principal amount of
Letters of Credit outstanding at any time shall not exceed $20,000,000;
(iii) the Dollar Equivalent of the aggregate principal amount of
Advances outstanding at any time in currencies other than Dollars shall not
exceed the Dollar Equivalent of $50,000,000;
(iv) the aggregate amount of the Term Loan shall not exceed
$30,000,000, and the pro rata share of any Lender's share of the Term Loan
shall not exceed the amount of such Lender's Term Loan Commitment; and
(v) the aggregate amount of the Revolving Credit Advances shall
not exceed the aggregate amount of the Revolving Credit Commitments, and the pro
rata share of any Lender's share of the Revolving Credit Advances shall not
exceed the amount of such Lender's Revolving Credit Commitment.
Page 22
<PAGE> 24
2.2. Termination and Reduction of Commitments.
(a) The Company shall have the right to terminate or reduce the
Revolving Credit Commitments at any time and from time to time, provided that
(i) the Company shall give not less than three Business Days' notice of such
termination or reduction to the Agent specifying the amount and effective date
thereof, (ii) each partial reduction of the Revolving Credit Commitment shall be
in a minimum amount of $5,000,000 and in an integral multiple of $500,000 and
shall reduce the Revolving Credit Commitments of all of the Lenders
proportionately in accordance with the respective Revolving Credit Commitment
amounts for each such Lender, (iii) no such termination or reduction shall be
permitted with respect to any portion of the Revolving Credit Commitments as to
which a request for a Revolving Credit Advance pursuant to Section 2.4 is then
pending, and (iv) the Revolving Credit Commitments may not be terminated if any
Revolving Credit Advances are then outstanding and may not be reduced below the
principal amount of Revolving Credit Advances then outstanding. The Revolving
Credit Commitments or any portion thereof terminated or reduced pursuant to this
Section 2.2 may not be reinstated.
(b) For purposes of this Agreement, a Letter of Credit Advance (i)
shall be deemed outstanding in an amount equal to the sum of the maximum amount
available to be drawn under the related Letter of Credit on or after the date of
determination and on or before the stated expiry date thereof plus the amount of
any draws under such Letter of Credit that have not been reimbursed as provided
in Section 3.3 and (ii) shall be deemed outstanding at all times on and before
such stated expiry date or such earlier date on which all amounts available to
be drawn under such Letter of Credit have been fully drawn, and thereafter until
all related reimbursement obligations have been paid pursuant to Section 3.3. As
provided in Section 3.3, upon each payment made by the Agent in respect of any
draft or other demand for payment under any Letter of Credit, the amount of any
Letter of Credit outstanding immediately prior to such payment shall be
automatically reduced by the amount of each Revolving Credit Loan deemed
advanced in respect of the related reimbursement obligation of the relevant
Borrower.
2.3. Fees
(a) The Company agrees to pay to the Agent for the account of the
Lenders a facility fee on the Revolving Credit Commitments, whether used or
unused, for each day during the period from the Effective Date to but excluding
the Termination Date, at a rate equal to the Applicable Margin for such day.
Accrued facility fees shall be payable quarterly in arrears on the first
Business Day of each fiscal quarter of the Company commencing on March 29, 1998
and on the Termination Date.
(b) Each Borrower agrees to pay to the Agent (i) with respect to each
Letter of Credit issued for its account, a fee for each day during the period
from and including the date of issuance of such Letter of Credit to and
including the stated expiry of such Letter of Credit computed at the Applicable
Margin for such day calculated on the maximum amount available to be drawn on
such day under such Letter of Credit, which fee shall be paid quarterly in
arrears on the first Business Day of each fiscal quarter of the Company, which
fees shall be for the pro rata benefit of the Lenders and (ii) in addition to
all other fees, with respect to each Letter of Credit issued for its account, a
fee computed at the rate of 0.15% per annum for each day during the period from
and including the date of issuance of such Letter of Credit to and including the
stated expiry of such Letter of Credit calculated on the face amount of each
Letter of Credit, which fee shall be paid quarterly in arrears on the first
Business Day of each fiscal quarter of the Company and shall be solely for the
account of the Agent. Each Borrower further agrees to pay to the Agent, on
demand, such other customary administrative fees, charges and expenses of the
Agent in respect of the issuance, negotiation, acceptance, amendment, transfer
and
Page 23
<PAGE> 25
payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued.
(c) The Company agrees to pay to the Agent agency fees for its services
as Agent under this Agreement and for other services in such amounts as may from
time to time be agreed to in writing between the Company and the Agent.
2.4. Disbursement of Advances.
(a) Each Borrower shall give the Agent notice of its request for each
Advance in substantially the form of Exhibit I hereto not later than 11:00 a.m.
Detroit time (i) three LIBOR Business Days prior to the date such Advance is
requested to be made if such Advance is to be made as a Eurodollar Borrowing,
(ii) five Business Days prior to the date any Letter of Credit Advance is
requested to be made, (iii) five Business days prior to the date such Advance is
requested to be made if such Advance is to be made as a Eurocurrency Borrowing,
(iv) on the Business Day such Advance is requested to be made in the case of any
Swingline Loan denominated in Dollars or such other day prior to the date any
Swingline Loan denominated in any Eligible Currency is requested to be made as
agreed upon between the Agent and such Borrower, (iv) three Business Days prior
to the date the Term Loan is requested to be made, (v) on the Business Day prior
to the date such Advance is requested to be made in all other cases, which
notice shall specify whether a Eurodollar Borrowing, a Floating Rate Borrowing,
a Eurocurrency Borrowing, a Swingline Loan or a Letter of Credit Advance is
requested and, in the case of each requested Fixed Rate Borrowing, the Interest
Period to be initially applicable to such Borrowing and, in the case of each
Letter of Credit Advance, such information as may be necessary for the issuance
thereof by the Agent. The Agent shall promptly provide notice of such requested
Advance (other than Swingline Loans) to each Lender. Subject to the terms and
conditions of this Agreement, the proceeds of each such requested Advance (other
than a Letter of Credit Advance) shall be made available to such Borrower by
depositing the proceeds thereof, in immediately available funds, in an account
maintained and designated by such Borrower at the Applicable Lending
Installation of the Agent or as otherwise agreed to between the Agent and such
Borrower. Subject to the terms and conditions of this Agreement, the Agent
shall, on the date such Letter of Credit Advance is requested to be made, issue
the related Letter of Credit on behalf of the Lenders for the account of such
Borrower. Notwithstanding anything herein to the contrary, (a) the Agent may
decline to issue any requested Letter of Credit on the basis that the
beneficiary, the purpose of issuance or the terms or the conditions of drawing
are contrary to any policy of the Agent applicable to borrowers generally, (b)
Revolving Credit Loans denominated in any Permitted Currency other than Dollars
may only be made as Eurocurrency Loans and (c) the Term Loan may be denominated
only in Dollars.
(b) Each Lender, not later than 2:00 p.m. local time on the date any
Borrowing in the form of a Loan is required to be made, shall make its pro rata
share of such Borrowing available in immediately available funds in the currency
requested at the Applicable Lending Installation of the Agent for disbursement
to such Borrower. Unless the Agent shall have received notice from any Lender
prior to the date such Borrowing is requested to be made under this Section 2.4
that such Lender will not make available to the Agent such Lender's pro rata
portion of such Borrowing, the Agent may assume that such Lender has made such
portion available to the Agent on the date such Borrowing is requested to be
made in accordance with this Section 2.4. If and to the extent such Lender shall
not have so made such pro rata portion available to the Agent, the Agent may
(but shall not be obligated to) make such amount available to the Company, and
such Lender and such Borrower severally agree to pay to the Agent forthwith on
demand such amount together with interest thereon, for each day from the date
such amount is made available to such Borrower by the Agent until the date such
amount is repaid to the Agent, at a rate per annum equal to, in the case of such
Borrower the interest rate applicable to such Borrowing during such period and,
in the case of any Lender, at the Federal Funds Rate for the first five days and
at the interest
Page 24
<PAGE> 26
rate applicable to such borrowing thereafter. If such Lender shall pay such
amount to the Agent together with interest, such amount so paid shall constitute
a Loan by such Lender as a part of such Borrowing for purposes of this
Agreement. The failure of any Lender to make its pro rata portion of any such
Borrowing available to the Agent shall not relieve any other Lender of its
obligations to make available its pro rata portion of such Borrowing on the date
such Borrowing is requested to be made, but no Lender shall be responsible for
failure of any other Lender to make such pro rata portion available to the Agent
on the date of any such Borrowing.
(c) All Revolving Credit Loans shall be evidenced by the Revolving
Credit Notes, the Term Loan shall be evidenced by the Term Notes, and the
Swingline Loans shall be evidenced by the Swingline Note and all such Loans
shall be due and payable and bear interest as provided in Article III. Each
Lender and the Agent is hereby authorized by each Borrower to record on the
schedule attached to the Notes, or in its books and records, the date, and
amount and type of each Loan and the duration of the related Interest Period (if
applicable), the amount of each payment or prepayment of principal thereon, and
the other information provided for on such schedule, which schedule or books and
records, as the case may be, shall constitute prima facie evidence of the
information so recorded, provided, however, that failure of any Lender or the
Agent to record, or any error in recording, any such information shall not
relieve any Borrower of its obligation to repay the outstanding principal amount
of the Loans, all accrued interest thereon and other amounts payable with
respect thereto in accordance with the terms of the Notes and this Agreement.
Subject to the terms and conditions of this Agreement, the Borrowers may borrow
Revolving Credit Advances under this Section 2.4 and under Section 3.3, prepay
Revolving Credit Advances pursuant to Section 3.1 and reborrow Revolving Credit
Advances under this Section 2.4.
(d) Nothing in this Agreement shall be construed to require or
authorize any Lender to issue any Letter of Credit, it being recognized that the
Agent has the sole obligation under this Agreement to issue Letters of Credit
for the risk of the Lenders. Upon issuance of a Letter of Credit by the Agent,
each Lender shall automatically acquire a pro rata risk participation interest
in such Letter of Credit Advance based on its respective Commitment. If the
Agent shall honor a draft or other demand for payment presented or made under
any Letter of Credit, the Agent shall provide notice thereof to each Lender on
the date such draft or demand is honored unless such Borrower or any of its
Subsidiaries shall have satisfied its reimbursement obligation under Section 3.3
by payment to the Agent on such date. Each Lender, on such date, shall make its
pro rata share of the amount paid by the Agent available in immediately
available funds at the principal office of the Agent for the account of the
Agent. If and to the extent such Lender shall not have made any required pro
rata portion available to the Agent, such Lender and the Borrowers,
unconditionally and irrevocably, severally agree to pay to the Agent forthwith
on demand such amount together with interest thereon, for each day from the date
such amount was paid by the Agent until such amount is so made available to the
Agent at a per annum rate equal to the interest rate applicable during such
period to the related Loan disbursed under Section 3.3 in respect of the
reimbursement obligation of the Borrowers and the portion of the Loan deemed to
have been made by such Defaulting Lender shall be deemed not to have been made.
If such Lender shall pay such amount to the Agent together with such interest,
if any, accrued, such amount so paid shall constitute a Revolving Credit Loan by
such Lender as part of the Revolving Credit Borrowing disbursed in respect of
the reimbursement obligation of the Borrowers under Section 3.3 for purposes of
this Agreement. The failure of any Lender to make its pro rata portion of any
such amount paid by the Agent available to the Agent shall not relieve any other
Lender of its obligation to make available its pro rata portion of such amount,
but no Lender shall be responsible for failure of any other Lender to make such
pro rata portion available to the Agent. Notwithstanding anything herein to the
contrary, it is acknowledged and agreed that Letters of Credit hereunder may be
issued for the account of any of the Subsidiaries of the Company, provided that
for all purposes of this Agreement and all other Loan Documents both the Company
and such Subsidiary shall be deemed the account party thereon and shall be
jointly and severally liable for all obligations in connection therewith and the
Company shall have obtained an agreement from such
Page 25
<PAGE> 27
Subsidiary that such Subsidiary shall be bound all of the terms and provisions
of this Agreement with respect to Letters of Credit, such agreement to be in
form of substance satisfactory to the Agent.
2.5. Conditions for First Disbursement. The obligation of the Lenders to
make the first Advance hereunder is subject to receipt by the Agent of the
following documents and completion of the following matters, in form and
substance satisfactory to the Agent:
(a) Charter Documents. Certificates of recent date of the appropriate
authority or official of each Borrower's and each Guarantor's respective
jurisdiction of organization listing all charter documents of each Borrower or
each Guarantor, respectively, on file in that office and certifying as to the
good standing and corporate existence of each Borrower or each Guarantor,
respectively, together with copies of such charter documents of each Borrower 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 by a duly authorized
officer of each Borrower or each Guarantor, respectively;
(b) By-Laws and Corporate Authorizations. Copies of the by-laws of each
Borrower and each Guarantor together with all authorizing resolutions and
evidence of other corporate action taken by each Borrower and each Guarantor to
authorize the execution, delivery and performance by each Borrower and each
Guarantor of this Agreement, the Notes and the Security Documents to which each
Borrower or such Guarantor, respectively, is a party and the consummation by
such Borrower or such Guarantor, respectively, of the transactions contemplated
hereby, certified as true and correct as of the Effective Date by a duly
authorized officer of each Borrower or each Guarantor, respectively;
(c) Incumbency Certificate. Certificates of incumbency of each Borrower
and each Guarantor containing, and attesting to the genuineness of, the
signatures of those officers or members, as the case may be, authorized to act
on behalf of each Borrower or each Guarantor in connection with this Agreement,
the Notes and the Security Documents to which each Borrower and each Guarantor
is a party and the consummation by such Borrower or such Guarantor of the
transactions contemplated hereby, certified as true and correct as of the
Effective Date by a duly authorized officer of each Borrower and each Guarantor;
(d) Notes. The Notes duly executed on behalf of each Borrower for each
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 Lenders
and the Agent the collateral and security intended to be provided pursuant to
Section 2.10, or a confirmation pursuant to the Consent and Amendment of the
existing Security Documents executed and delivered pursuant to the Existing
Credit Agreement, as determined by the Agent, together with:
(i) Recording, Filing, Etc. Delivery of financing statements and
original stock certificates and transfer powers and completion of such other
action (including payment of any applicable taxes or fees) in such jurisdictions
as the Agent may deem necessary or appropriate with respect to the Security
Documents, together with Uniform Commercial Code record searches in such offices
as the Lenders or the Agent may request;
(ii) Casualty and Other Insurance. Evidence that the casualty and
other insurance required pursuant to Section 5.1(c) and the Security Documents
is in full force and effect;
(f) Legal Opinions. The favorable written opinions of counsel for each
Borrower and each Guarantor, substantially in the forms of Exhibits J-1, J-2 and
J-3 attached hereto and as to such other matters as the Agent may reasonably
request;
Page 26
<PAGE> 28
(g) Consents, Approvals, Etc. Copies of all governmental and
nongovernmental consents, approvals, authorizations, declarations, registrations
or filings, if any, required on the part of any Borrower or any Guarantor in
connection with the execution, delivery and performance of 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 by a duly authorized officer of
the Company, or if none are required, a certificate of such officer to that
effect;
(h) Subordinated Debt. Evidence satisfactory to the Agent that the
Company has incurred Subordinated Debt in an amount equal to or greater than
$100,000,000 in accordance with the Senior Subordinated Debt Documents, a copy
of all Senior Subordinated Debt Documents (other than the Senior Subordinated
Notes) shall have been delivered to the Agent, the Senior Subordinated Note
Indenture shall be in substantially the form delivered to the Agent on January
16, 1998, and any other Senior Subordinated Debt Documents shall be reasonably
satisfactory to the Agent, and all transactions contemplated pursuant to the
Senior Subordinated Debt Documents to be completed upon original issuance of the
Senior Subordinated Notes shall have been completed;
(i) Environmental Certificate. An Environmental Certificate duly
executed by the Borrowers and the Guarantors, or a confirmation thereof pursuant
to the Consent and Amendment;
(j) Payments. Evidence satisfactory to the Agent that all transfers of
funds and payments described on Schedule 4.22 are being accomplished
simultaneously with the first Advance hereunder, including without limitation
the payment in full of all indebtedness and other liabilities, and the
termination of all commitments to lend and all Liens relating thereto, as
described on Schedule 4.22;
(k) Due Diligence. The Agent shall have received and be satisfied with
a field asset examination of receivables, all environmental reports and
liabilities, all litigation searches, a review of all Contingent Liabilities,
all fixed asset appraisals and all other due diligence and investigation
required by the Agent;
(l) Certificates. The Agent shall have received, in form and substance
satisfactory to the Agent, a pro forma covenant compliance certificate, as of
the Effective Date and as of the end of the first four quarters after the
Effective Date; and
(m) Other Conditions. Such other documents and completion of such other
matters as the Agent or any Lender may reasonably request, including without
limitation copies of all final projections and financial statements.
2.6. Further Conditions for Disbursement. The obligation of the Lenders to
make any Advance (including the first Advance) is further subject to the
satisfaction of the following conditions precedent:
(a) The representations and warranties contained in Article IV hereof
and in the Security Documents shall be true and correct in all material respects
on and as of the date such Advance is made (both before and after such Advance
is made) as if such representations and warranties were made on and as of such
date;
(b) No Event of Default or Unmatured Event shall exist or shall have
occurred and be continuing on the date such Advance is made and the making of
such Advance shall not cause an Event of Default or Unmatured Event;
Page 27
<PAGE> 29
(c) If a Borrowing Base Condition shall exist, the Agent shall have
received the Borrowing Base Certificate pursuant to Section 5.1(d)(v) as of the
close of business on the last day of the month preceding the date such Advance
is made;
(d) In addition to all other applicable conditions, in the case of any
Letter of Credit Advance, a Borrower shall have delivered to the Agent issuing
the related Letter of Credit an application for such Letter of Credit and other
related documentation requested by and acceptable to the Agent appropriately
completed and duly executed on behalf of such Borrower; and
(e) The Borrowers shall be deemed to have made a representation and
warranty to the Lenders at the time of the making of each Advance to the effects
set forth in clauses (a) and (b) of this Section 2.6. For purposes of this
Section 2.6, the representations and warranties contained in Section 4.6 hereof
shall be deemed made with respect to both the financial statements referred to
therein and the most recent financial statements delivered pursuant to Section
5.1(d)(ii) and (iii).
2.7. Subsequent Elections as to Borrowings. As to Revolving Credit Loans, a
Borrower may elect (a) to continue a Fixed Rate Borrowing, or a portion thereof,
as a Fixed Rate Borrowing or (b) may elect to convert a Eurodollar Rate
Borrowing, or a portion thereof, to a Floating Rate Borrowing and (c) elect to
convert a Floating Rate Borrowing, or a portion thereof, to a Eurodollar Rate
Borrowing, in each case by giving notice thereof to the Agent in substantially
the form of Exhibit K hereto not later than 10:00 a.m. Detroit time three LIBOR
Business Days prior to the date any such continuation of or conversion to a
Eurodollar Borrowing is to be effective, 10:00 a.m. local time five LIBOR
Business Days prior to the date any such continuation of or conversion to a
Eurocurrency Borrowing is to be effective and not later than 10:00 a.m. Detroit
time one Business Day prior to the date such continuation or conversion is to be
effective in all other cases, provided that an outstanding Eurodollar Borrowing
may only be converted on the last day of the then current Interest Period with
respect to such Borrowing, and provided, further, if a continuation of a
Borrowing as, or a conversion of a Borrowing to, a Eurodollar Borrowing is
requested, such notice shall also specify the Interest Period to be applicable
thereto upon such continuation or conversion and no Event of Default or
Unmatured Event shall have occurred and be continuing. The Agent shall promptly
provide notice of such election to the Lenders. If the Company shall not timely
deliver such a notice with respect to any outstanding Eurodollar Borrowing, the
Company shall be deemed to have elected to convert such Eurodollar Borrowing to
an Floating Rate Borrowing on the last day of the then current Interest Period
with respect to such Borrowing. If a Borrowing Subsidiary shall not timely
deliver such notice with respect to any outstanding Eurocurrency Borrowing, such
Borrower shall be deemed to have elected to convert such Eurocurrency Borrowing
to a Eurocurrency Borrowing with an Interest Period of one month on the last day
of the then current Interest Period with respect to such Borrowing.
2.8. Minimum Amounts; Limitation on Number of Borrowings. Except for (a)
Advances and conversions thereof which exhaust the entire remaining amount of
the Commitments and (b) payments required pursuant to Section 3.8, each
Borrowing and each continuation or conversion pursuant to Section 2.7 and each
prepayment thereof shall be in a minimum amount of, in the case of Fixed Rate
Borrowings, $2,000,000 and in integral multiples of $500,000, and in the case of
Floating Rate Borrowings, $500,000 and in integral multiples of $100,000. No
more than six Interest Periods shall be permitted to exist at any one time with
respect to all Revolving Credit Borrowings outstanding hereunder from time to
time.
2.9. Borrowing Base Adjustments. The Borrowers agree that if at any time any
trade account receivable of the Company or any Subsidiary fails to constitute
Eligible Accounts Receivable for any reason, the Agent may, at any time upon
written notice to the Company and notwithstanding any prior
Page 28
<PAGE> 30
classification of eligibility, classify such asset as ineligible and exclude the
same from the computation of the Borrowing Base. Additionally, the Agent may
establish such reserves against the Eligible Accounts Receivables and Eligible
Unbilled Receivables from time to time as determined by the Agent (in a
commercially reasonable manner), in each case without in any way impairing the
rights of the Lenders and the Agent in and to the same under the Security
Agreements.
2.10. Security and Collateral. To secure the payment when due of the Lender
Indebtedness, the Company shall execute and deliver, or cause to be executed and
delivered, to the Lenders and the Agent Security Documents granting the
following:
(a) Security interests in all present and future accounts, inventory,
equipment, fixtures and all other personal property (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 Agent of any such restriction and shall use all reasonable
efforts to obtain any required consent to the extent requested by the Agent;
(b) Pledges of 100% of the Capital Stock of all Significant
Subsidiaries which are Domestic Subsidiaries owned directly by the Company or
any Domestic Subsidiary and not later than 60 days after the Effective Date, 65%
of all Capital Stock of each Foreign Subsidiary which is a Significant
Subsidiary and is directly owned by the Company or by any Domestic Subsidiary;
(c) Guaranties of all Guarantors; and
(d) All other security and collateral described in the Security
Documents.
Upon request of the Agent, (i) the Company and the Guarantors shall execute and
deliver such agreements and documents reasonably requested by the Agent to grant
a first priority lien and security interest on all real property owned by the
Company and the Guarantors and (ii) each Borrowing Subsidiary shall execute and
deliver all agreements and documents reasonably requested by the Agent to grant
a first priority lien and security interest on all assets owned by such
Borrowing Subsidiary, to secure the indebtedness and other obligations of such
Borrowing Subsidiary owing pursuant to the Loan Documents.
ARTICLE III
PAYMENTS AND PREPAYMENTS OF ADVANCES
3.1. Principal Payments.
(a) Unless earlier payment is required under this Agreement, each
Borrower shall pay on the Termination Date the entire outstanding principal
amount of its Revolving Credit Loans outstanding.
(b) Unless earlier payment is required under this Agreement, the
Company shall pay on the Maturity Date the entire outstanding principal amount
of the Term Loan.
Page 29
<PAGE> 31
(c) In addition to any other payment required hereunder, if the
Advances at any time exceed the amount allowed pursuant to Section 2.1(d), the
Borrowers shall prepay the Advances by an amount equal to or greater than such
excess. Any such payments required under this clause (c) shall be applied first
to Revolving Credit Advances until paid in full, and if any additional payments
are required under this clause (c) such payments shall be applied to the Term
Loan if an Event of Default has occurred and is continuing or, if no Event of
Default has occurred and is continuing, at the option of the Company, such
payment shall be applied to the Term Loan or deposited into a special cash
collateral account to be held by the Agent as collateral security for the
payment and performance of the Lender Indebtedness and to be released by the
Agent to the Borrower to the extent the amount therein is greater than the
amount by which the Advances exceed the amount allowed pursuant to Section
2.1(d).
(d) The Borrowers may at any time and from time to time prepay all or a
portion of the Loans, without premium or penalty, provided that (i) the
Borrowers may not prepay any portion of any Loan as to which an election of or a
conversion to a Fixed Rate Loan is pending pursuant to 2.7, (ii) the Borrowers
shall comply with all requirements of Section 3.11 in connection with any
payment of any Fixed Rate Loan and (iii) the Borrowers will provide three
Business Days' prior written notice of any prepayment of a Fixed Rate Loan and
shall provide one Business Day's prior written notice of any prepayment of a
Floating Rate Loan.
3.2. Interest Payments. Each Borrower shall pay interest to the Lenders on
the unpaid principal amount of each of its Loans, for the period commencing on
the date such Loan is made until such Loan is paid in full, on each Interest
Payment Date and at maturity (whether at stated maturity, by acceleration or
otherwise), and thereafter on demand, at the following rates per annum:
(a) During such periods that such Loan is an Floating Rate Loan, the
Floating Rate.
(b) During such periods that such Loan is a Eurodollar Loan, the
Eurodollar Rate applicable to such Loan for each related Interest Period.
(c) During such periods that such Loan is a Eurocurrency Loan, the
Eurocurrency Rate applicable to such Loan for such related Interest Period.
(d) With respect to Swingline Loans, at the Negotiated Rate.
Notwithstanding the foregoing paragraphs (a), (b), (c) and (d), each Borrower
shall pay interest on demand at the Overdue Rate on the outstanding principal
amount of any of its Loans and any other amount payable by it hereunder (other
than interest) which is not paid when due, whether at stated maturity, by
acceleration or otherwise.
3.3. Letter of Credit Reimbursement Payments. (a) (i) Each Borrower agrees
to pay to the Agent, not later than 1:00 p.m. local time on the date on which
the Agent shall honor a draft or other demand for payment presented or made
under a Letter of Credit issued for the account of such Borrower (or on the
Business Day after receipt by such Borrower from the Agent of the notice
referred to in the next sentence, if later), an amount equal to the amount paid
by the Agent in respect of such draft or other demand under such Letter of
Credit and all reasonable expenses paid or incurred by the Agent relative
thereto (the "Reimbursement Amount"). The Agent shall, on the date of each
demand for payment under any Letter of Credit issued by the Agent, give such
Borrower notice thereof and of the amount of such Borrower's reimbursement
obligation and liability for expenses relative thereto. In the case of the
Company, if the Company shall not have made such payment to the Agent on such
day, upon each such payment by the Agent, the Company shall be deemed to have
elected to satisfy its reimbursement
Page 30
<PAGE> 32
obligation by an Floating Rate Borrowing in an amount equal to the amount so
paid by the Agent in respect of such draft or other demand under such Letter of
Credit, and the Agent shall be deemed to have disbursed to the Company, for the
account of the Lenders, the Floating Rate Loans comprising such Floating Rate
Borrowing, and each Lender shall make its share of each such Floating Rate
Borrowing available to the Agent in accordance with this Agreement. Such
Floating Rate Loans shall be deemed disbursed notwithstanding any failure to
satisfy any conditions for disbursement of any Loan and, to the extent of the
Floating Rate Loans so disbursed, the reimbursement obligation of the Company
with respect to such Letter of Credit under this subsection (a)(i) shall be
deemed satisfied.
(ii) If, for any reason (including without limitation as a result
of the occurrence of an Event of Default with respect to any Borrower pursuant
to Section 6.1(h)) Floating Rate Loans may not be made by the Lenders as
described in subsection (a)(i) of this Section 3.3 or in the case of any Letter
of Credit Advance made to any Borrowing Subsidiary, (A) each Borrower agrees
that each Reimbursement Amount not paid pursuant to the first sentence of
subsection (a)(i) of this Section 3.3 shall bear interest, payable on demand by
the Agent, at the interest rate then applicable to Floating Rate Loans in the
case of any Letters of Credit denominated in Dollars and at the correlative
floating rate of interest customarily applicable to similar transactions of
credit to corporate borrowers denominated in such currency in the country of
issue, as determined by the Agent, in the case of any Letter of Credit
denominated in any Eligible Currency, and (B) effective on the date each such
Floating Rate Loan would otherwise have been made with respect to any Letter of
Credit in the case of any Letter of Credit denominated in Dollars or, in the
case of any Letter of Credit denominated in any Eligible Currency, effective on
the date the Reimbursement Amount is due thereunder, each Lender severally
agrees that it shall unconditionally and irrevocably, without regard to the
occurrence of any Event of Default or Unmatured Event or any other event or
condition to the extent of such Lender's pro rata share (based on the percentage
of the aggregate Commitments of all Lenders then constituted by such Lender's
Commitment) purchase a participating interest in each Reimbursement Amount. Each
such Lender will immediately transfer to the Agent, in same day funds, the
amount of its participation. Each such Lender shall share on a pro rata basis in
any interest which accrues thereon and in all repayments thereof. If and to the
extent that any Lender shall not have so made the amount of such participating
interest available to the Agent, such Lender agrees to pay to the Agent
forthwith on demand such amount together with interest thereon, for each day
from the date of demand by the Agent until the date such amount is paid to the
Agent, at the Federal Funds Rate for the first five days after such demand and
at the Overdue Rate thereafter.
(iii) Each Lender shall be obligated, absolutely and
unconditionally, to make Floating Rate Loans pursuant to Section 3.3(a)(i) to
purchase and fund participation interests in Letters of Credit pursuant to
Section 2.4(d) and 3.3(a)(ii) and the obligation shall not be affected by any
circumstance whatsoever, including, without limitation, (i) any set off,
counterclaim, recoupment, defense or other right which such Lender or any
Borrower may have against the Agent, any Borrower or anyone else for any reason
whatsoever, (ii) the occurrence of any Event of Default or Unmatured Event (iii)
the occurrence of any Material Adverse Effect, (iv) any breach of this Agreement
by any Borrower, any of their respective Subsidiaries, the Agent, or any other
Lender, or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing, including without limitation any
termination or other limitation on the Commitments or any failure to satisfy any
conditions precedent to any Advance contained herein or any other provision of
this Agreement.
(b) To the fullest extent permitted by law, the reimbursement
obligation of each Borrower under this Section 3.3 shall be absolute,
unconditional and irrevocable and shall remain in full force and effect until
all obligations of such Borrower to the Lenders hereunder shall have been
satisfied, and such obligations of such Borrower shall not be affected, modified
or impaired upon the happening of any event, including without limitation, any
of the following, whether or not with notice to, or the consent of, such
Borrower:
Page 31
<PAGE> 33
(i) Any lack of validity or enforceability of any Letter of Credit
or any documentation relating to any Letter of Credit or to any transaction
related in any way to such Letter of Credit (the "Letter of Credit Documents");
(ii) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest in
collateral or security, with respect to any of the Letter of Credit Documents;
(iii) The existence of any claim, setoff, defense or other right
which any Borrower may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Persons or entities for whom any such
beneficiary or any such transferee may be acting), the Agent or any Lender or
any other Person or entity, whether in connection with any of the Letter of
Credit Documents, the transactions contemplated herein or therein or any
unrelated transactions;
(iv) Any draft or other statement or document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
(v) Payment by the Agent to the beneficiary under any Letter of
Credit against presentation of documents which do not comply with the terms of
the Letter of Credit, including failure of any documents to bear any reference
or adequate reference to such Letter of Credit;
(vi) Any failure, omission, delay or lack on the part of the Agent
or any Lender or any party to any of the Letter of Credit Documents to enforce,
assert or exercise any right, power or remedy conferred upon the Agent any
Lender or any such party under this Agreement or any of the Letter of Credit
Documents, or any other acts or omissions on the part of the Agent any Lender or
any such party; or
(vii) Any other event or circumstance that would, in the absence of
this clause, result in the release or discharge by operation of law or otherwise
of any Borrower from the performance or observance of any obligation, covenant
or agreement contained in this Section 3.3.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which any Borrower has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to any Borrower
against the Agent or any Lender. Nothing in this Section 3.3 shall limit the
liability, if any, of the Lenders to any Borrower pursuant to Section 3.3(c).
(c) Each Borrower hereby indemnifies and agrees to hold harmless the
Lenders, the Agent and their respective officers, directors, employees and
agents, harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses of any kind or nature whatsoever which the
Lenders, the Agent or any such Person may incur or which may be claimed against
any of them by reason of or in connection with any Letter of Credit issued for
its account, and neither any Lender, the Agent nor any of their respective
officers, directors, employees or agents shall be liable or responsible for: (i)
the use which may be made of any Letter of Credit or for any acts or omissions
of any beneficiary in connection therewith; (ii) the validity, sufficiency or
genuineness of documents or of any endorsement thereon, even if such documents
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (iii) payment by the Agent to the beneficiary under any
Letter of
Page 32
<PAGE> 34
Credit against presentation of documents which do not comply with the terms of
any Letter of Credit, including failure of any documents to bear any reference
or adequate reference to such Letter of Credit; (iv) any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit; or (v)
any other event or circumstance whatsoever arising in connection with any
Letter of Credit; provided, however, that no Borrower shall be required to
indemnify the Lenders, the Agent and such other Persons, and the Lenders shall
be severally liable to such Borrower to the extent, but only to the extent, of
any direct, as opposed to consequential or incidental, damages suffered such
Borrower which were caused by (A) the Agent's wrongful dishonor of any Letter
of Credit after the presentation to it by the beneficiary thereunder of a draft
or other demand for payment and other documentation strictly complying with the
terms and conditions of such Letter of Credit, or (B) the payment by the Agent
to the beneficiary under any Letter of Credit against presentation of documents
which do not comply with the terms of the Letter of Credit to the extent, but
only to the extent, that such payment constitutes gross negligence or wilful
misconduct of the Agent; provided that none of the Agent, any Lender or any
such Person shall have the right to be indemnified hereunder for its own gross
negligence or wilful misconduct as determined by a court of competent
jurisdiction. It is understood that in making any payment under a Letter of
Credit the Agent will rely on documents presented to it under such Letter of
Credit as to any and all matters set forth therein without further
investigation and regardless of any notice or information to the contrary, and
such reliance and payment against documents presented under a Letter of Credit
substantially complying with the terms thereof shall not be deemed gross
negligence or wilful misconduct of the Agent in connection with such payment.
It is further acknowledged and agreed that the Borrowers may have rights
against the beneficiary or others in connection with any Letter of Credit with
respect to which the Lenders or the Agent are alleged to be liable and it shall
be a precondition of the assertion of any liability of the Lenders or the Agent
under this Section that the Borrowers shall first have exhausted all remedies
in respect of the alleged loss against such beneficiary and any other parties
obligated or liable in connection with such Letter of Credit and any related
transactions.
(d) For purposes of this Agreement, the outstanding amount of any
Letter of Credit issued in any currency other than Dollars shall equal the
Dollar Equivalent thereof.
3.4. Payment Method.
(a) All payments to be made by any Borrower hereunder will be made in
Dollars or the Permitted Currency in which the related obligations were incurred
and in immediately available funds to the Agent for the account of the Lenders
at its Applicable Lending Installation not later than 1:00 p.m. local time on
the date on which such payment shall become due. Payments received after 1:00
p.m. local time shall be deemed to be payments made prior to 1:00 p.m. local
time on the next succeeding Business Day. Each Borrower hereby authorizes the
Agent to charge its account with the Agent in order to cause timely payment of
principal, interest and fees due under Section 2.3 (subject to sufficient funds
being available in such account for that purpose).
(b) At the time of making each such payment, the relevant Borrower
shall, subject to the other terms and conditions of this Agreement, specify to
the Agent that Advance or other obligation of such Borrower hereunder to which
such payment is to be applied. In the event that such Borrower fails to so
specify the relevant obligation or if an Event of Default shall have occurred
and be continuing, the Agent may apply such payments as it may determine.
(c) On the day such payments are deemed received, the Agent shall remit
to the Lenders their pro rata shares of such payments in immediately available
funds, (i) in the case of payments of principal and interest on any Borrowing,
determined with respect to each such Lender by the ratio which the outstanding
principal balance of its Loan included in such Borrowing bears to the
outstanding principal balance of the Loans of all the Lenders included in such
Borrowing and (ii) in the case of fees paid pursuant to Section 2.3 and other
amounts payable hereunder (other than the Agent's fees payable pursuant to
Section 2.3(c) and amounts payable to any Lender under Section 2.4, 3.9 or 3.11)
determined with respect to each such Lender by the ratio which the Commitment of
such Lender bears to the Commitments of all the Lenders.
Page 33
<PAGE> 35
3.5. No Setoff or Deduction. All payments of principal and interest on the
Loans and other amounts payable by the Borrowers hereunder shall be made by the
Borrowers without setoff or counterclaim, and free and clear of, and without
deduction or withholding for, or on account of, any present or future taxes,
levies, imposts, duties, fees, assessments, or other charges of whatever nature,
imposed by any governmental authority, or by any department, agency or other
political subdivision or taxing authority. If any such taxes, levies, imposts,
duties, fees, assessments, or other charges are required to be withheld from any
amounts payable hereunder with respect to any Advance in any Eligible Currency,
the amounts so payable shall be increased to the extent necessary to yield to
the payee thereof the interest or any such other amounts payable hereunder at
the rates and in the amounts specified in this Agreement.
3.6. Payment on Non-Business Day; Payment Computations. Except as otherwise
provided in this Agreement to the contrary, whenever any installment of
principal of, or interest on, any Loan or any other amount due hereunder becomes
due and payable on a day which is not a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day and, in the case of any
installment of principal, interest shall be payable thereon at the rate per
annum determined in accordance with this Agreement during such extension.
Computations of interest and other amounts due under this Agreement shall be
made on the basis of a year of 360 days for the actual number of days elapsed,
including the first day but excluding the last day of the relevant period,
provided that the computation of interest at the Floating Rate shall be made on
the basis of a year of 365 days for the actual number of days elapsed, including
the first day but excluding the last day of the relevant period.
3.7. Impossibility; Interest Rate Inadequate or Unfair. If before the
beginning of any Interest Period:
(a) deposits in the relevant Permitted Currency (in the applicable
amounts) are not being offered to the Agent in the relevant market for such
Interest Period, or
(b) the Required Lenders advise the Agent that the Eurodollar Base Rate
or Eurocurrency Base Rate, as the case may be, will not adequately and fairly
reflect the cost to such Lenders of maintaining, making or funding, for such
Interest Period, the Fixed Rate Loans to which such Interest Period applies,
the Agent shall forthwith give notice thereof to the Borrowers and the Lenders,
whereupon until the Agent notifies the Borrowers that the circumstances giving
rise to such suspension no longer exist, the obligations, if any, of the Lenders
to make such Fixed Rate Loans, as the case may be, shall be suspended. In the
case of Eurodollar Loans, unless the relevant Borrower notifies the Agent (i)
not later than 3:00 p.m. (Detroit time) on the Business Day before the beginning
of such Interest Period that such Borrower elects not to borrow on such date,
such Borrowing shall, subject to the provisions of Section 2.6, be an Floating
Rate Borrowing. Promptly after the Agent receives any such notice from a
Borrower under this Section 3.7, the Agent shall notify each Lender of the
contents thereof. Any such notice from any Borrower shall be irrevocable once
the Agent begins notifying any Lender of the contents thereof.
3.8. Illegality. If, after the date of this Agreement, the introduction of,
or any change in, any applicable law, rule or regulation or in the
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof or compliance by any Lender
(or its Applicable Lending Installation) with any request or directive (whether
or not having the force of law) of any such authority shall make it unlawful or
impossible for such Lender (or its Applicable Lending Installation) to honor its
binding legal obligations, if any, hereunder to make, maintain or fund any type
of Fixed Rate Loans, such Lender shall so notify the Agent, and the Agent shall
forthwith give notice
Page 34
<PAGE> 36
thereof to the Borrowers, whereupon until such Lender notifies the Agent that
the circumstances giving rise to such suspension no longer exist, the
obligation, if any, of such Lender to make such type of Fixed Rate Loans shall
be suspended. Before any Lender gives any notice of unlawfulness or
impossibility to the Agent under this Section 3.8, such Lender shall designate a
different Applicable Lending Installation if such designation will avoid the
need for giving such notice and will not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender. Upon receipt of such notice, the
applicable Borrowers shall prepay in full the then outstanding principal amount
of each affected Fixed Rate Loan of such Lender together with accrued interest
thereon (a) on the last day of the then current Interest Period applicable to
such Loan if such Lender may lawfully continue to maintain and fund such Loan to
such day, or (b) immediately if such Lender may not lawfully continue to fund
and maintain such Loan to such day.
3.9. Increased Cost; Yield Protection.
(a) If, after the date hereof, the introduction of, or any change in,
any applicable law, treaty, rule or regulation (whether domestic or foreign and
including, without limitation, the Federal Deposit Insurance Act, as amended,
and Regulation D of the Board of Governors of the Federal Reserve System) or in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Installation) with any request or directive of any such authority, central
Lender or comparable agency (whether or not having the force of law),
(i) shall subject any Lender (or its Applicable Lending
Installation) to any tax, duty or other charge with respect to its obligation to
make any Loans, its Notes, any of its Loans or any of the Letters of Credit or
shall change the basis of taxation of payments to any Lender (or its Applicable
Lending Installation) of the principal of or interest on any of its Fixed Rate
Loans or in respect of its obligation, if any, to make any Loans or to
participate in the risk of Letters of Credit (except for changes in the rate of
tax on the overall net income of such Lender or its Applicable Lending
Installation imposed by the jurisdiction in which such Lender's principal
executive office or Applicable Lending Installation is located), or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System, but excluding with respect to any Fixed Rate Loan any
reserve requirements to the extent included in clause (b) of the definition of
Eurodollar Base Rate or Eurocurrency Base Rate, as the case may be, when
calculating the Eurodollar Base Rate or Eurocurrency Base Rate, as the case may
be, with respect to such Fixed Rate Loan), special deposit or similar
requirement (including, without limitation, any deposit insurance assessment in
respect of deposits held outside the United States, against assets of, deposits
with or for the account of, or credit extended by, any Lender's Applicable
Lending Installation, or shall impose on any Lender (or its Applicable Lending
Installation or the relevant interbank market) any other condition affecting its
obligation, if any, to make Loans or to participate in the risk of Letters of
Credit or affecting its Loans or the Letters of Credit or affecting the
Borrowers' obligations under the Notes in respect of such Loans, and the result
of any of the foregoing is to increase the cost to such Lender (or its
Applicable Lending Installation) of making or maintaining its existing or future
Fixed Rate Loans or of participating in the risk of Letters of Credit, or to
reduce the amount of any sum received or receivable by such Lender (or its
Applicable Lending Installation) under this Agreement or under the Notes (in
respect of Fixed Rate Loans) or Letters of Credit by an amount deemed by such
Lender to be material, then such Lender may notify the Borrowers (with a copy of
any such notice to be provided to the Agent) of any such fact of which it has
knowledge and demand compensation therefor; provided that, if such Lender fails
to demand such compensation (or notify the Borrowers that it will or may demand
such compensation) promptly upon becoming aware of the facts entitling it to do
so or, if such Lender is contesting the cause of such
Page 35
<PAGE> 37
increased cost or reduced sum received or receivable, promptly after the earlier
of (A) the final determination of such contest or (B) an officer of such Lender
who is responsible for the administration of the credit outstanding under this
Agreement from such Lender to the Borrowers becoming aware of such facts, such
Lender shall not be entitled to such compensation for the period before the date
on which it actually demands (or notifies the Borrowers that it will or may
demand) such compensation; provided, further, that if such Lender is contesting
the cause of such increased cost or reduced sum received or receivable, such
Lender shall not in any event be entitled to such compensation for any period
prior to twelve months before it notifies the Borrowers that such Lender may or
will demand such compensation. The Borrowers agree to pay to such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in connection with their respective Loans within 15 days after
demand by such Lender. A certificate of such Lender setting forth the basis for
determining such additional amount or amounts necessary to compensate such
Lender shall be conclusive in the absence of manifest error. Each such Lender
will designate a different Applicable Lending Installation if such designation
would avoid the need for, or reduce the amount of such compensation and would
not, in the judgment of such Lender, be otherwise disadvantageous to such
Lender. In the event that any Borrower is required to compensate any Lender for
any increased cost to such Lender pursuant to this Section 3.9(a), such Borrower
shall have the right, upon at least five Business Days' prior notice to such
Lender through the Agent, to prepay in full any outstanding Fixed Rate Loans
that are related to such increased cost of such Lender, together with accrued
interest thereon to the date of prepayment; provided that prepayment of such
Fixed Rate Loans shall not relieve such Borrower of its obligation to compensate
such Lender in accordance with this Section 3.9(a), the amount of which
compensation shall be due at the time of such prepayment, notwithstanding any
other provision of this Section 3.9(a). Concurrently with prepaying each such
Fixed Rate Loan of such Lender, such Borrower shall borrow a Loan at the
Floating Rate (or, if such Borrower shall so elect in its notice of prepayment,
a Fixed Rate Loan of another type) in an equal principal amount from such Lender
for an Interest Period coinciding with the remaining term of the Interest Period
applicable to such Fixed Rate Loan, and such Lender shall make such a Floating
Rate Loan (or Fixed Rate Loan of the other type), provided that there has been
no acceleration of the amount due under the Notes pursuant to Section 6.2. The
Borrowers shall pay compensation owing to any Lender(s) under this Section
3.9(a) notwithstanding any subsequent replacement of the Lender(s) making demand
for such compensation.
(b) In the event that any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to any Lender or Agent, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Lender or Agent
with any guideline, request or directive of any such authority (whether or not
having the force of law), including any risk-based capital guidelines, affects
or would affect the amount of capital required or expected to be maintained by
such Lender or the Agent (or any corporation controlling such Lender or the
Agent) and such Lender or the Agent, as the case may be, determines that the
amount of such capital is increased by or based upon the existence of such
Lender's or Agent's obligations or Loans hereunder and such increase has the
effect of reducing the rate of return on such Lender's or Agent's (or such
controlling corporation's) capital as a consequence of such obligations or Loans
hereunder to a level below that which such Lender or the Agent (or such
controlling corporation) could have achieved but for such circumstances (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Lender or the Agent to be material, then such Lender or the Agent
may notify the Borrowers of any such fact of which it has knowledge and each
Borrower shall pay to such Lender or the Agent, as the case may be, from time to
time, upon request by such Lender (with a copy of such request to be provided to
the Agent) or the Agent, additional amounts sufficient to compensate such Lender
or Agent (or such controlling corporation) for any increase in the amount of
capital and reduced rate of return which such Lender or the Agent reasonably
determines to be allocable to the existence of such Lender's or Agent's
obligations or Loans to such Borrower hereunder; provided that, if such Lender
or the
Page 36
<PAGE> 38
Agent fails to notify the Borrowers of any such fact promptly upon
becoming aware thereof or, if such Lender or the Agent is contesting the cause
of such increase in the amount of capital or reduced rate of return, promptly
after the earlier of (A) the final determination of such contest or (B) an
officer of such Lender who is responsible for the administration of the credit
outstanding under this Agreement from such Lender to the Borrowers becoming
aware of any such fact, such Lender or the Agent, as the case may be, shall not
be entitled to such compensation for the period before the date on which it
actually notifies the Borrowers of such fact; provided, further, that if such
Lender or the Agent is contesting the cause of such increase in the amount of
capital or reduced rate of return, such Lender or the Agent, as the case may be,
shall not in any event be entitled to such compensation for any period prior to
six months before it notifies the Borrowers that such Lender or the Agent, as
the case may be, may or will demand such compensation. A statement as to the
amount of such compensation, prepared in good faith and in reasonable detail by
such Lender or the Agent, as the case may be, and submitted by such Lender or
Agent to the Borrowers, shall be conclusive in the absence of manifest error in
computation. The Borrowers shall pay such compensation for the periods covered
by such notice notwithstanding any replacement of the Lender(s) making demand
for such compensation.
3.10. Substitute Loans. If (a) the obligation, if any, of any Lender to make
any type of Fixed Rate Loans has been suspended pursuant to Section 3.8 or (b)
any Lender has demanded compensation under Section 3.9(a) and the Borrowers
shall, by at least five Business Days' prior notice to such Lender through the
Agent, have elected that the provisions of this Section 3.10 shall apply to such
Lender, then, unless and until such Lender notifies the Borrowers that the
circumstances giving rise to such suspension or demand for compensation no
longer apply:
(i) all Loans which would otherwise be made by such Lender as the
affected type of Fixed Rate Loans shall be made instead as Loans at the Floating
Rate, for an Interest Period coincident with the related Fixed Rate Borrowing,
and
(ii) after each of its affected Fixed Rate Loans has been repaid,
all payments of principal which would otherwise be applied to repay such Fixed
Rate Loans shall be applied to repay its substitute loans instead.
3.11. Funding Losses. If any Borrower makes any payment of principal with
respect to any Fixed Rate Loan on any other date than the last day of an
Interest Period applicable thereto (whether pursuant to Sections 3.1, 3.7, 3.8,
3.10, 6.2, or otherwise), or if the applicable Borrower fails to borrow any
Fixed Rate Loan after the related notice of Borrowing has been given to the
Agent, or if the applicable Borrower fails to make any payment of principal or
interest in respect of a Fixed Rate Loan when due, the applicable Borrower shall
reimburse each Lender on demand for any resulting loss or expense incurred by
such Lender, including without limitation any loss incurred in obtaining,
liquidating or employing deposits from third parties, whether or not such Lender
shall have funded or committed to fund such Loan but excluding loss of margin
for the period after such payment or failure. A statement as to the amount of
such loss or expense, prepared in good faith and in reasonable detail by such
Lender and submitted by such Lender to the applicable Borrower, shall be
conclusive and binding for all purposes absent manifest error in computation.
Calculation of all amounts payable to each Lender under this Section 3.11 shall
be made as though such Lender shall have actually funded or committed to fund
the relevant Fixed Rate Loan through the purchase of an underlying deposit in an
amount equal to the amount of such Loan and having a maturity comparable to the
related Interest Period; provided, however, that such Lender may fund any Fixed
Rate Loan in any manner it sees fit and the foregoing assumption shall be
utilized only for the purpose of calculation of amounts payable under this
Section 3.11
3.12. Substitution of Lender. If (i) the obligation of any Lender to make or
maintain Eurodollar Loans has been suspended pursuant to Section 3.8 when not
all Lenders' obligations have
Page 37
<PAGE> 39
been suspended (ii) any Lender has demanded compensation under Section 3.9 or
(iii) any Lender is a Defaulting Lender, the Company shall have the right, if no
Unmatured Event or Event of Default then exists, to replace such Lender (a
"Replaced Lender") with one or more other lenders (collectively, the
"Replacement Lender") acceptable to the Agent, provided that (x) at the time of
any replacement pursuant to this Section 3.12, the Replacement Lender shall
enter into one or more Assignment and Acceptances, pursuant to which the
Replacement Lender shall acquire the Commitments and outstanding Advances and
other obligations of the Replaced Lender and, in connection therewith, shall pay
to the Replaced Lender in respect thereof an amount equal to the sum of (A) the
amount of principal of, and all accrued interest on, all outstanding Loans of
the Replaced Lender, (B) the amount of all accrued, but theretofore unpaid, fees
owing to the Replaced Lender under Section 2.3 and (C) the amount which would be
payable by the Borrowers to the Replaced Lender pursuant to Section 3.9 or 3.11
if the Borrowers prepaid at the time of such replacement all of the Loans of
such Replaced Lender outstanding at such time and (y) all obligations of the
Borrowers then owing to the Replaced Lender (other than those specifically
described in clause (x) above in respect of which the assignment purchase price
has been, or is concurrently being, paid) shall be paid in full to such Replaced
Lender concurrently with such replacement. Upon the execution of the respective
Assignment and Acceptances, the payment of amounts referred to in clauses (x)
and (y) above and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate Note or Notes executed by the Borrowers,
the Replacement Lender shall become a Lender hereunder and the Replaced Lender
shall cease to constitute a Lender hereunder. The provisions of this Agreement
(including without limitation Sections 3.9, 3.11 and 9.5) shall continue to
govern the rights and obligations of a Replaced Lender with respect to any Loans
made or any other actions taken by such lender while it was a Lender. Nothing
herein shall release any Defaulting Lender from any obligation it may have to
the Borrowers, the Agent or any other Lender. Each Lender agrees to take such
actions, at the Company's expense, as may be reasonably necessary to effect the
foregoing if it shall become a Replaced Lender.
3.13. Applicable Lending Installation. Each Lender and the Agent may make
and books its Loans and, in the case of the Agent, issue Letters of Credit, at
any Applicable Lending Installation(s) selected by such Lender or the Agent, as
the case may be, and each Lender and the Agent may change its Applicable Lending
Installation(s) from time to time. Each Lender may, by written notice to the
Agent and the applicable Borrower, designate one or more Applicable Lending
Installations which are to make and book Loans and for whose account Loan
payments are to be made. The Agent may, by written notice to the applicable
Borrower, designate one or more Applicable Lending Installations which are to
make and book Swingline Loans and issue and book Letters of Credit and for whose
accounts Loan payments and Letter of Credit reimbursements are to be made and
through which its functions are to be performed. All terms of this Agreement
shall apply to any such Applicable Lending Installation(s) and the Notes shall
be deemed held by each Lender and the Agent, as the case may be, for the benefit
of such Applicable Lending Installation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants that:
4.1. Corporate Existence and Power. Each of the Borrowers and the
Guarantors is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of incorporation or organization,
and is duly qualified to do business, and is in good standing, in all
Page 38
<PAGE> 40
additional jurisdictions where such qualification is necessary under applicable
law, except for those jurisdictions where the failure to so qualify or be in
good standing could not reasonably be expected to result in any Material Adverse
Effect. Each of the Borrowers and the Guarantors has all requisite corporate
power to own or lease the properties used in its business and to carry on its
business substantially as now being conducted and as proposed to be conducted,
and to execute and deliver the Loan Documents to which it is a party and to
engage in the transactions contemplated by the Loan Documents.
4.2. Corporate Authority. The execution, delivery and performance by each of
the Borrowers and the Guarantors of the Loan Documents to which it is a party
have been duly authorized by all necessary corporate action and are not in
contravention of any law, rule or regulation, or any judgment, decree, writ,
injunction, order or award of any arbitrator, court or governmental authority,
or of the terms of any Borrower's or any Guarantor's charter or by-laws, or of
any material contract or undertaking to which any Borrower or any Guarantor is a
party or by which any Borrower or any Guarantor or their respective material
property may be bound or affected or result in the imposition of any Lien except
for Permitted Liens.
4.3. Binding Effect. The Loan Documents to which any Borrower or any
Guarantor is a party are the legal, valid and binding obligations of the
Borrowers and the Guarantors, respectively, enforceable against each Borrower
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.
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 date hereof. Each such Subsidiary and each Person becoming a
Subsidiary of the Company after the date hereof is and 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 any 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. All outstanding shares (other than directors'
qualifying shares) of Capital Stock of each class of each Subsidiary of the
Company have been and will be validly issued and are and will be fully paid and
nonassessable and, except as otherwise indicated in Schedule 4.4 hereto, are and
will be owned, beneficially and of record, by the Company or another Subsidiary
of the Company free and clear of any Liens other than as permitted under this
Agreement.
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.
4.6. Financial Condition. 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 nine
months ended September 28, 1997, copies of which have been furnished to the
Lenders, fairly present, and the financial statements of the Company and its
Subsidiaries delivered
Page 39
<PAGE> 41
pursuant to Section 5.1(d) will fairly present, 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 and the pro forma projections of consolidated financial results of
the Company and its Subsidiaries for each of the fiscal years ending in 1997,
1998, 1999, 2000 and 2001 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 September 28, 1997. 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 Agent.
4.7. Use of Advances. The Borrowers will use the proceeds of the initial
Advances hereunder as described in Section 4.21, and will use all other Advances
for general corporate purposes (including Acquisitions). 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 (within the meaning of Regulation G or U of the
Board of Governors of the Federal Reserve System), and no part of the proceeds
of any Advance 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.
4.8. Consents, Etc. Except for such consents, approvals, authorizations,
declarations, registrations or filings delivered by the Company pursuant to
Section 2.5(g), if any, each of which is in full force and effect, no consent,
approval or authorization of or declaration, registration or filing with any
governmental authority or any nongovernmental 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.
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.
4.10. Title to Properties. Except as otherwise disclosed in the latest
balance sheet delivered pursuant to Section 4.6 or 5.1(d) 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.
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. No member of the
ERISA Group has (i) sought a waiver of the minimum funding standard under
Page 40
<PAGE> 42
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.
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 any Lender or the Agent 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 any Lender or the
Agent 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 Agent 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.
4.13. Environmental and Safety Matters. All representations and warranties
made by the Borrowers and the Guarantors in the Environmental Certificate
delivered pursuant to Section 2.5(i) and Section 5.1(d)(x) are true and correct
in all material respects.
4.14. Borrowing Base. All trade accounts receivable and unbilled receivables
of the Company and each of its Subsidiaries represented or reported by the
Company to be, or are otherwise included in, Eligible Accounts Receivable or
Eligible Unbilled Receivables, as the case may be, comply in all respects with
the requirements therefor set forth in the definitions thereof, and the
computations of the Borrowing Base set forth in each Borrowing Base Certificate
are true and correct.
4.15. 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.
4.16. 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.
Page 41
<PAGE> 43
4.17. Labor Matters. There are no strikes or other labor disputes against
the Company or any Subsidiary pending or, to the knowledge of the Company,
threatened that (individually or in the aggregate) could reasonably be expected
to have a Material Adverse Effect. Hours worked by and payment made to employees
of the Company and its Subsidiaries have not been in violation of the Fair Labor
Standards Act, if applicable, or any other applicable Requirement of Law dealing
with such matters that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect. All payments due from the Company
and each of its Subsidiaries on account of employee health and welfare insurance
that (individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability on
the books of the Company and its Subsidiaries.
4.18. 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, all Advances 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.
4.19. 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.
4.20. 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. The Company has received net proceeds of not
less than $94,000,000 on January 22, 1998 from its issuance of the Senior
Subordinated Notes, and all agreements, instruments and documents executed or
delivered pursuant to the original issuance of the Senior Subordinated Notes are
described on Schedule 1.1(b) hereto. All Lender Indebtedness, including without
limitation all present and future Revolving Credit Advances and the Term Loan
and all other Lender Indebtedness, is "Senior Indebtedness" and "Designated
Senior Indebtedness" as defined in the Senior Subordinated Indenture and is and
will be incurred in compliance with the Senior Subordinated Indenture. This
Agreement and the other Loan Documents are the "Senior Credit Facility" as
defined in the Senior Subordinated Indenture. Other than the Lender
Indebtedness, there is no other "Designated Senior Indebtedness"
Page 42
<PAGE> 44
thereunder. The Term Loan is being incurred pursuant to, and in full compliance
with, Section 4.3(a) of the Senior Subordinated Note Indenture, and the Term
Loan is classified as Indebtedness incurred under Section 4.3(a) of the Senior
Subordinated Note Indenture and is not classified as Indebtedness outstanding or
incurred pursuant to Section 4.3(b)(1) of the Senior Subordinated Note
Indenture. All Revolving Credit Advances, up to the full amount of the aggregate
Revolving Credit Commitments, are incurred pursuant to Section 4.3(b)(i) of the
Senior Subordinated Note Indenture and do not need to meet the requirements of
Section 4.3(a). There is no event of default or event or condition which would
become an event of default with notice or lapse of time or both, under the
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.
4.21 Refinance Indebtedness. All indebtedness listed on Schedule 4.21
has been paid in full, and all commitments to lend and any agreements relating
to any such indebtedness are being terminated simultaneously herewith.
ARTICLE V
COVENANTS
5.1. Affirmative Covenants. Each Borrower covenants and agrees that, until
the Termination Date and thereafter until payment in full of the principal of
and accrued interest on the Notes and the performance of all other obligations
of each Borrower under this Agreement, unless the requisite Lenders pursuant to
Section 9.1 shall otherwise consent in writing, it shall, and, shall cause each
of its Subsidiaries to:
(a) 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 5.2(f) 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 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
Agent or the Lenders; 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.
Page 43
<PAGE> 45
(b) 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.
(c) 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 of 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 Required Lenders for purposes of assuring compliance with this
Section 5.1(c).
(d) Reporting Requirements. Furnish to the Lenders and the Agent the
following:
(i) 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, 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;
(ii) 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 (A) that no Unmatured Event or Event of Default,
has
Page 44
<PAGE> 46
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, and (B) that a computation (which computation shall accompany such
certificate and shall be in detail satisfactory to the Agent) showing compliance
(or non-compliance) with Section 5.2 (a), (b) and (c) hereof is in conformity
with the terms of this Agreement;
(iii) 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 Coopers & Lybrand, or any of the six
largest independent certified public accounting firms in the United States,
without qualifications unacceptable to the Agent, together with, a certificate
of the chief financial officer of the Company stating (A) 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, and (B) that a computation (which
computation shall accompany such certificate and shall be in reasonable detail)
showing compliance (or non-compliance) with Section 5.2 (a), (b), and (c) hereof
is in conformity with the terms of this Agreement;
(iv) 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;
(v) Within 20 days after the end of each month during which a
Borrowing Base Condition existed, a Borrowing Base Certificate prepared as of
the close of business on the last day of each month, certified as true and
correct by the chief financial officer of the Company, together with such
supporting schedules and information as reasonably requested by the Agent;
(vi) As soon as available and in any event within 20 days after the
end of each month, a report containing an aging as of the end of the preceding
month of accounts receivable and accounts payable of the Company, in a form
reasonably satisfactory to the Agent, if requested by the Agent;
(vii) 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;
(viii) 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 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
Page 45
<PAGE> 47
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;
(ix) 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; and
(x) Promptly, such other information respecting the business,
properties, operations or condition, financial or otherwise, of the Company or
any of its Subsidiaries as the Agent may from time to time reasonably request.
(e) 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 such Lender or the Agent, permit any Lender or the Agent, 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 any Lender or the Agent, and (ii) at the expense of the Company, permit the
Agent 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 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 expense of the Company, provided that the
Agent shall give the Company reasonable notice of any of the foregoing.
(f) Additional Security and Collateral. Promptly (i) execute and
deliver and cause each Guarantor to execute and deliver, additional Security
Documents, within 30 days after request therefor by the Agent, sufficient to
grant to the Agent for the benefit of the Lenders and the Agent liens and
security interests in any after acquired collateral of the type described in
Section 2.11, and (ii) cause each Person becoming a Significant Domestic
Subsidiary of the Company from time to time to execute and deliver to the
Lenders and the Agent, within 60 days after such Person becomes a Significant
Domestic Subsidiary, a Guaranty and a Security Agreement, together with other
related documents described in Section 2.5 sufficient to grant to the Agent for
the benefit of the Lenders and the Agent liens and security interests in all
collateral of the type described in Section 2.11. The Company shall notify the
Lenders and the Agent, 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 Significant
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
Lenders and the Agent with respect to such property pursuant to the Security
Documents, including without limitation delivering the originals of all
promissory notes and other instruments payable to the Company or any Guarantors
to the Agent 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.
(g) Further Assurances. Execute and deliver, and cause its Subsidiaries
to execute and deliver, within 30 days after request therefor by the Agent, all
further instruments and documents and
Page 46
<PAGE> 48
take all further action that the Agent may reasonably request, in order to give
effect to the intent of, and to aid in the exercise and enforcement of the
rights and remedies of the Lenders under, this Agreement, the Notes and the
Security Documents. In addition, the Company and each Guarantor agree to deliver
to the Agent 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.
5.2. Negative Covenants. Until the Termination Date and thereafter until
payment in full of the principal of and accrued interest on the Notes and the
performance of all other obligations of the each Borrower under this Agreement,
each Borrower agrees that, unless the requisite Lenders pursuant to Section 9.1
shall otherwise consent in writing, it shall not, and shall not permit any of
its Subsidiaries, to:
(a) Net Worth. Permit or suffer the consolidated Net Worth of the
Company and its Subsidiaries to be less than the sum of (i) (A) $0 at any time
from and including the Effective Date to but excluding the last day of the 1998
fiscal year of the Company, (B) $4,000,000 at any time from and including the
last day of the 1998 fiscal year of the Company to but excluding the last day of
the 1999 fiscal year of the Company, or (C) $10,000,000 at any time thereafter,
(ii) 50% of the net income of the Company and its Subsidiaries, added as of the
end of each fiscal year of the Company, commencing with the 2000 fiscal year of
the Company, provided that if such net income is negative in any fiscal year the
amount added for such fiscal year shall be zero and shall not reduce the amount
added for any other fiscal year, and (iii) 100% of the Net Cash Proceeds
received by the Company from any sale or the transfer of any its Capital Stock.
(b) Leverage Ratio. Permit or suffer the Leverage Ratio to be greater
than (i) 5.0 to 1.0 at any time from and including the Effective Date to but
excluding the last day of the 1998 fiscal year of the Company, (ii) 4.5 to 1.0
at any time from and including the last day of the 1998 fiscal year of the
Company to but excluding the last day of the 1999 fiscal year of the Company,
(iii) 4.0 to 1.0 at any time from and including the last day of the 1999 fiscal
year of the Company to but excluding the last day of the 2000 fiscal year of the
Company, or (iv) 3.75 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) 1.0 to 1.0 as of the end of any fiscal
quarter of the Company before the last day of the 1999 fiscal year of the
Company, (ii) 1.1 to 1.0 as of the end of any fiscal quarter of the Company
ending on or after the last day of the 1999 fiscal year of the Company but
before the last day of the 2000 fiscal year of the Company, (iii) 1.15 to 1.0 as
of the end of any fiscal quarter of the Company ending on or after the last day
of the 2000 fiscal year of the Company but before the last day of the 2001
fiscal year of the Company or (iv) 1.2 to 1.0 as of the end of any fiscal
quarter of the Company thereafter.
(d) Indebtedness. Create, incur, assume or in any manner become liable
in respect of, or suffer to exist, or permit or suffer any Subsidiary to create,
incur, assume or in any manner become liable in respect of, or suffer to exist,
any Indebtedness other than:
(i) The Lender Indebtedness;
(ii) The Indebtedness described in Schedule 5.2(d) hereto and
refinancings thereof, but no increase in the amount thereof (or in the case of a
committed facility or line of credit, in the amount of the commitments or credit
line), as such amount is reduced from time to time, provided that Indebtedness
under the Ford Facility (as defined in Schedule 5.2(d) may be increased to no
more than $10,000,000 (or the Dollar Equivalent thereof);
Page 47
<PAGE> 49
(iii) Indebtedness of any Subsidiary of the Company owing to the
Company or to any other Subsidiary of the Company and Indebtedness of the
Company owing to any Subsidiary of the Company, provided that any such
Indebtedness of the Company owing to any Subsidiary of the Company is
subordinated, on terms acceptable to the Agent, to all Lender Indebtedness;
(iv) Subordinated Debt, including the related subordinated
guarantees, pursuant to the Senior Subordinated Debt Documents, provided that
the aggregate principal amount of such Subordinated Debt shall not exceed
$130,000,000, and other Subordinated Debt incurred in compliance with all terms
and provisions of this Agreement;
(v) Indebtedness of all Foreign Subsidiaries not otherwise
permitted by this Section 5.2(d) in an aggregate amount not to exceed
$10,000,000 at any time outstanding;
(vi) Trade accounts payable and accrued expenses arising in the
ordinary course which are past due in an amount which is not material in the
aggregate for the Company and its Subsidiaries on a consolidated basis or which
are being contested in good faith and for which adequate reserves are maintained
on the books of the Company;
(vii) Surety, customs or appeal bonds to which the Company or any
of its Subsidiaries is a party and letters of credit and reimbursement
agreements issued for the account of such Company or any Subsidiary in the
ordinary course of business which are not material in the aggregate and which
would not have a Material Adverse Effect and which are trade letters of credit
or which secure obligations in respect of (A) worker's compensation laws,
unemployment insurance laws or similar legislation, (B) obligations in
connection with bids, tenders, contracts or leases to which the Company or any
of its Subsidiaries is a party for a purpose other than borrowing money or
obtaining credit or (C) public or statutory obligations of the Company or any of
its Subsidiaries;
(viii) Indebtedness not otherwise permitted by this Section 5.2(d)
incurred or assumed for the purpose of financing all or any part of the cost of
acquiring any fixed asset (including through Capital Leases), in an aggregate
principal amount at any time outstanding not greater than $2,000,000;
(ix) Contingent Liabilities in respect of which the Company or a
Subsidiary is primary obligor otherwise permitted by Section 5.2(j); and
(x) Indebtedness of the Company or any Guarantor other than (i)
through (x) above not exceeding $10,000,000 in aggregate amount at any time
outstanding.
(e) Liens. 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, other than:
(i) Liens for taxes not delinquent or for taxes being contested in
good faith by appropriate proceedings and as to which adequate financial
reserves have been established on its books and records;
(ii) Liens (other than any Lien imposed by ERISA) created and
maintained in the ordinary course of business which are not material in the
aggregate, and which would not have a Material Adverse Effect and which
constitute (A) pledges or deposits under worker's compensation laws,
unemployment insurance laws or similar legislation, (B) good faith deposits in
connection with bids, tenders, contracts or leases to which the Company or any
of its Subsidiaries is a party for a purpose other
Page 48
<PAGE> 50
than borrowing money or obtaining credit, including rent security deposits, (C)
liens imposed by law, such as those of landlords, carriers, warehousemen and
mechanics, if payment of the obligation secured thereby is not yet due or which
are being contested in good faith by appropriate legal proceedings and with
respect to which adequate financial reserves have been established on the books
and records of Company or such Subsidiary, (D) liens securing taxes, assessments
or other governmental charges or levies not yet subject to penalties for
nonpayment, and (E) pledges or deposits to secure public or statutory
obligations of the Company or any of its Subsidiaries, or surety, customs or
appeal bonds to which the Company or any of its Subsidiaries is a party;
(iii) Liens affecting real property which constitute minor survey
exceptions or defects or irregularities in title, minor encumbrances, easements
or reservations of, or rights of others for, rights of way, sewers, electric
lines, telegraph and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of such real property, provided that all of the
foregoing, in the aggregate, do not at any time materially detract from the
value of said properties or materially impair their use in the operation of the
businesses of the Company or any of its Subsidiaries;
(iv) Liens created pursuant to the Security Documents and Liens
expressly permitted by the Security Documents;
(v) Each Lien described in Schedule 5.2(e) hereto may be suffered
to exist, provided that there may be no increase in the amount of indebtedness,
obligations or liabilities secured thereby and it may not secure any other
indebtedness, obligations and liabilities other than those now secured;
(vi) Any Lien created to secure payment of a portion of the
purchase price of, or existing at the time of acquisition of, any tangible fixed
asset acquired by the Company or any of its Subsidiaries may be created or
suffered to exist upon such fixed asset if the outstanding principal amount of
the Indebtedness secured by such Lien does not at any time exceed the purchase
price paid by the Company or such Subsidiary for such fixed asset, provided that
(A) such Lien does not encumber any other asset at any time owned by the Company
or such Subsidiary, (B) not more than one such Lien shall encumber such fixed
asset at any one time and (C) the aggregate amount of Indebtedness secured by
all such Liens does not exceed the amount permitted by Section 5.2(d)(ix);
(vii) Any Lien on any assets of any Subsidiaries of the Company in
favor of the Company securing permitted Indebtedness of such Subsidiary owing to
the Company, provided that such Lien is subordinated to the Liens of the Agent
by written agreements satisfactory to the Agent; and
(viii) Any Lien created to secure Indebtedness of a Foreign
Subsidiary permitted pursuant to Section 5.2(d)(v) to the extent granting such a
Lien is customary for borrowers generally in the country in which such Foreign
Subsidiary is borrowing.
(f) Merger; Acquisitions; Etc. Purchase or otherwise acquire, or permit or
suffer any Subsidiary 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, provided, however, that this Section 5.2(f) shall not
prohibit:
(i) any merger of any Subsidiary with or into another Subsidiary or any
merger of any Subsidiary into the Company, provided that (A) there is no
Unmatured Event or Event of
Page 49
<PAGE> 51
Default either immediately before or immediately after such merger, (B) if any
such merger involves the Company, the Company shall be the surviving corporation
and (C) if any such merger involves the Company or any Guarantor, the
Consolidated Net Worth of the Company or such Guarantor involved in such merger
immediately after the merger would be equal to or greater than its Consolidated
Net Worth immediately preceding such merger, or
(ii) any other Acquisition if (A) 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: (w) no Unmatured Event or
Event of Default shall exist or shall have occurred and be continuing, (x) the
representations and warranties contained in the Loan Documents shall be true and
correct as if made on the date such Acquisition is consummated, (y) the Company
is able to borrow at least $10,000,000 in Revolving Credit Loans after giving
effect to such acquisition and (z) the Leverage Ratio is at least 0.25 below the
level required under this Agreement, (B) prior to the consummation of such
acquisition, the Company shall have provided to the Lenders a certificate of the
chief financial officer of the Company (attaching pro forma financial statements
and computations to demonstrate compliance and projected compliance with all
covenants and conditions hereunder), stating that such Acquisition complies with
this Section 5.2(f), customary legal opinions reasonably acceptable to the Agent
if requested by the Agent, evidence that such Acquisition is in compliance with
all laws and regulations and that any other conditions under this Agreement
relating to such transaction have been satisfied, all in form and substance
reasonably satisfactory to the Agent, (C) the target of such acquisition is
engaged in a Permitted Business, (D) prior to the consummation of such
Acquisition, the Agent shall have completed such due diligence and reviewed such
agreements and documents with respect to such Acquisition as reasonably required
by the Agent, and the Agent shall be reasonably satisfied with such due
diligence and such review, (E) the board of directors or similar governing body
of the target of such Acquisition has recommended such Acquisition and (F) in
the case of all Acquisitions which do not involve the purchase of assets located
in the United States or Canada or the purchase of Capital Stock of any entity
which is not organized under the laws of the United States or Canada, the
aggregate purchase price paid (excluding any payment made in common stock (or
Preferred Stock which is not Disqualified Stock) of the Company) for all such
Acquisitions does not exceed $30,000,000; provided, however, that the
requirements contained in clauses (B) and (D) of this paragraph shall not be
required pursuant to any Acquisitions, which when aggregated with all other
Acquisitions in any fiscal year of the Company, do not involve an aggregate
purchase price paid for all such Acquisitions in any fiscal year in excess of
$15,000,000, or
(iii) the transactions described on Schedule 5.2(f).
(g) Disposition of Assets; Etc. Except for the transactions described
on Schedule 5.2(f), 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 inventory sold in the ordinary course of
business upon customary credit terms and sales of scrap or obsolete material or
equipment which are not material in the aggregate, and shall not permit or
suffer any Subsidiary to do any of the foregoing; provided, however, that this
Section 5.2(g) shall not prohibit (i) any such sale, lease, license, transfer,
assignment or other disposition if the aggregate book value (disregarding any
write-downs of such book value other than ordinary depreciation and
amortization) of all of the business, assets, rights, revenues and property
disposed of after the Effective Date of this Agreement shall not constitute a
Substantial Portion in the aggregate and if, immediately after such transaction,
no Unmatured Event or Event of Default shall exist or shall have occurred and be
continuing, (ii) sales of equipment and fixtures in the ordinary course of
business as to which proceeds are used within 180 days to purchase equipment or
fixtures of at least equivalent value to those sold, (iii) sales as to which
proceeds are used to make optional prepayments on the Revolving Credit Advances,
provided that such prepayments on the Revolving Credit Advances also
Page 50
<PAGE> 52
permanently reduce the Commitments by the amount of such payments, (iv)
transfers of assets, including without limitation Capital Stock, between
Guarantors or between the Company and Guarantors or between Subsidiaries which
are not Guarantors or from a Subsidiary which is not a Guarantor to a Guarantor
or the Company, it being understood that for purposes of this clause (iv) a
Guarantor shall include any Subsidiary which becomes a Guarantor immediately
after such transfer, (v) any investment, loan or advance permitted by Section
5.2(j) or (vi) such transfer of assets as pursuant to a dividend or redemption
permitted by Section 5.2(i); provided, however, in the case of any of the
foregoing permitted sales, leases, licenses, transfers, assignments or other
dispositions (an "Asset Sale") the Company shall not, and shall not permit any
of its Subsidiaries to, consummate an Asset Sale unless (A) except for transfers
under clause (iv), (v) or (vi) above, the Company (or the Subsidiary, as the
case may be) receives consideration at the time of such Asset Sale at least
equal to the fair market value (evidenced by a resolution of the Board of
Directors set forth in an officer's certificate delivered to the Agent) of the
assets and (B) except for transfers under clause (iv), (v) or (vi) above, at
least 80% of the consideration therefor received by the Company or such
Subsidiary is in the form of cash; provided that the amount of (x) any
liabilities (as shown on the Company's or such Subsidiary's' most recent balance
sheet), of the Company or any Subsidiary that are assumed by the transferee of
any such assets such that the Company or such Subsidiary have no further
liability and (y) any securities, notes or other obligations received by the
Company or any such Subsidiary from such transferee that are converted by the
Company or such Subsidiary into cash (to the extent of the cash received), shall
be deemed to be cash for purposes of this provision and the definition of Net
Cash Proceeds, and the Agent promptly shall obtain a first priority security
interest in any non cash consideration for any Asset Sale by the Company or any
Guarantor to the extent such consideration consists of collateral described in
Section 2.11.
(h) Nature of Business. 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").
(i) Dividends and Other Restricted Payments. Make, pay, declare or
authorize any dividend, payment or other distribution in respect of any class of
its Capital Stock or any dividend, payment or distribution in connection with
the redemption, purchase, retirement or other acquisition, directly or
indirectly, of any shares of its Capital Stock other than such dividends,
payments or other distributions (i) to the extent payable solely in shares of
Capital Stock (other than Disqualified Stock) of the Company, (ii) the
repurchase, redemption or other acquisition or retirement for value of any
Capital Stock of the Company held by any employee of the Company upon
termination of employment of such employee, provided that the aggregate price
paid for such repurchased, redeemed, acquired or retired Capital Stock shall not
exceed $1,000,000 in any consecutive twelve month period, no Event of Default or
Unmatured Event shall have occurred and be continuing immediately after such
transaction and the price paid for such Capital Stock shall be made in
accordance with the existing agreements relating thereto, (iii) to the extent
permitted in Section 5.2(g)(iv) and (iv) dividends and distributions by
Subsidiaries of the Company. The Company will not issue any Disqualified Stock.
(j) Investments, Loans and Advances. 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 incur any Contingent Liability except to the extent permitted
under Section 5.2(d) and other Contingent Liabilities in aggregate amount not to
exceed $500,000; nor permit any Subsidiary to do any of the foregoing; other
than (i) extensions of trade credit made in the ordinary course of business on
customary credit terms and commission, travel and similar advances made to
officers and employees in the ordinary course of business, (ii) Cash
Equivalents, (iii) Acquisitions permitted pursuant to Section 5.2(f), (iv)
investments, loans and advances in and to any Guarantor, any person becoming a
Guarantor as a result thereof, or the Company or otherwise pursuant to a
transaction permitted by Section 5.2(g)(iv),
Page 51
<PAGE> 53
(v) investments, loans and advances after the Effective Date of this Agreement
in Unrestricted Subsidiaries in aggregate outstanding amount not exceeding
$5,000,000, (vi) investments, loans and advances after the Effective Date of
this Agreement in Foreign Subsidiaries in an aggregate outstanding amount not
exceeding $20,000,000, provided, however, that such investments, loans and
advances shall not be permitted unless 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: (w) the
terms and conditions thereof shall be reasonably satisfactory to the Agent, (x)
no Unmatured Event or Event of Default shall exist or shall have occurred and be
continuing, (y) 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 and (z) the Company is able to borrow at least $10,000,000
in Revolving Credit Loans after giving effect to such investment, loan or
advance, (vii) extensions of credit to employees and officers of the Company and
its Subsidiaries in the ordinary course of business of the Company not in excess
of $1,500,000 in aggregate amount at any one time outstanding for all employees
and officers, (viii) those investments, loans, advances and other transactions
described in Schedule 5.2(j) hereto, having the same terms as existing on the
date of this Agreement, but no extension or renewal thereof shall be permitted,
(ix) payroll, travel and similar advances to cover matters that are expected at
the time of such advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business, (x) stock,
obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any Subsidiary or in
satisfaction of judgments, (xi) guaranties of Lender Indebtedness, (xii) any
Advances of any of the Loans to any wholly owned Subsidiaries of the Company,
provided that any such Advance is evidenced by an enforceable demand promissory
note and the liabilities thereunder are not waived and (xiii) the transactions
described on Schedule 5.2(f).
(k) Transactions with Affiliates. Except for transactions described on
Schedule 5.2(f), enter into or permit to exist any transaction or series of
related transactions (including the purchase, sale lease or exchange of any
property, employee compensation arrangements or the rendering of any service)
with any Affiliate of the Company (an "Affiliate Transaction") unless the terms
thereof (1) are no less favorable to the Company or such Subsidiary than those
that could be obtained at the time of such transaction in arm's-length dealings
with a Person who is not such an Affiliate, (2) if such Affiliate Transaction
(or series of related Affiliate Transactions) involve aggregate payments in an
amount in excess of $1,000,000 (i) are set forth in writing and (ii) comply with
clause (1), (3) if such Affiliate Transaction (or series of related Affiliate
Transactions) involves aggregate payments in an amount in excess of $2,500,000
in any one year, (i) are set forth in writing, (ii) comply with clause (2) and
(iii) have been approved by a majority of the disinterested members of the Board
of Directors, and (4) if such Affiliate Transaction (or series of related
Affiliate Transactions) involves aggregate payments in an amount in excess of
$10,000,000 in any one year, (i) comply with clause (3) and (ii) have been
determined by a nationally recognized investment banking firm to be fair, from a
financial standpoint, to the Company and its Subsidiaries, provided that (A) (1)
any employment or consulting agreement or arrangement or indemnity agreement
entered into by the Company or any of its Subsidiaries in the ordinary course of
business and consistent with the past practice of the Company or such
Subsidiary, (2) transactions between or among the Company and/or the Guarantors
and (3) dividends, payments, distributions and redemptions pursuant to Section
5.2(i) shall not be subject to clause (4) above and (B) any loan, advance or
investment permitted by Section 5.2 (j) shall not be subject to clause (4) above
and (C) with respect to any transaction between the Company or a Guarantor and
any other Subsidiary, the amount by which the consideration paid by one party
would exceed the amount paid in an arms' length transaction, as determined by an
officer, the board of directors, or an accounting, appraisal or investment
banking firm, as the case may be, shall be treated as an investment for purposes
of Section 5.2(j), and such transaction shall only be permitted to the extent
such investment would be permitted by Section 5.2(j).
Page 52
<PAGE> 54
(l) Inconsistent Agreements. Enter into any material agreement or
permit or suffer any Subsidiary to enter into any such agreement containing any
provision which would be violated or breached by this Agreement or any of the
transactions contemplated hereby or by performance by the Company or any of its
Subsidiaries of its obligations in connection therewith.
(m) Negative Pledge Limitation. Enter into any agreement (other than
the Senior Subordinated Note Indenture), including without limitation any
amendments to existing agreements, with any Person other than the Lenders
pursuant hereto which prohibits or limits the ability of the Company or any
Subsidiary to create, incur, assume or suffer to exist any Lien 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 a Foreign Subsidiary with respect to Indebtedness of a Foreign
Subsidiary permitted pursuant to Section 5.2(d)(v) and which restrictions are
customary in agreements of such type and would not be inconsistent with any of
the terms of this Agreement.
(n) Subsidiary Dividends. Permit any of its Subsidiaries directly or
indirectly to create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction which by its terms materially
restricts the ability of any such Subsidiary to (i) pay dividends or make any
other distributions on such Subsidiary's capital stock, (ii) pay any
Indebtedness owed to the Company or any of its other Subsidiaries, (iii) make
any loans or advances to the Company or any of such other Subsidiaries or (iv)
transfer any material portion of its assets to the Company or any of such other
Subsidiaries, except for (A) such encumbrances or restrictions required by
applicable law; (B) such encumbrances or restrictions consisting of customary
non-assignment provisions in leases governing leasehold interests to the extent
such provisions restrict the transfer of the lease or the property leased
thereunder and (C) such encumbrances or restrictions with respect to
Indebtedness of a Foreign Subsidiary permitted pursuant to Section 5.2(d)(v) and
which encumbrances or restrictions are customary in agreements of such type or
with respect to the Indebtedness owing to National Westminister Bank plc and
described on Schedule 5.2(d) and existing as of the Effective Date.
(o) Payments and Modification of Debt. Make, or permit any Subsidiary
to 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 other Indebtedness or amend or modify,
or consent or agree to any amendment or modification of, any instrument or
agreement under which any of its Subordinated Debt is issued or created or
otherwise related thereto, or 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.
(p) Financial Contracts. Incur or remain liable with respect to any
Financial Contracts except for purposes of hedging and not for speculative
purposes.
5.3. Additional Covenants. If at any time the Company shall enter into or be
a party to any instrument or agreement with respect to any Indebtedness which in
the aggregate, together with any related Indebtedness, exceeds $2,000,000,
including all such instruments or agreements in existence as of the date hereof
(other than the Senior Subordinated Debt Documents and the Lender Indebtedness)
and all such instruments or agreements entered into after the date hereof,
relating to or amending any terms or conditions applicable to any of such
Indebtedness which includes financial covenants or the equivalent thereof not
substantially provided for in this Agreement or more favorable to the lender or
lenders thereunder than those provided for in this Agreement, then the Company
shall promptly so advise the
Page 53
<PAGE> 55
Agent and the Lenders. Thereupon, if the Agent shall request, upon notice to the
Company, the Agent and the Lenders shall enter into an amendment to this
Agreement or an additional agreement (as the Agent may request), providing for
substantially the same financial covenants or the equivalent thereof, as those
provided for in such instrument or agreement to the extent required and as may
be selected by the Agent. In addition to the foregoing, Sections 4.3, 4.5, 4.6,
4.7 and 4.8 of the 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 VI
DEFAULT
6.1. Events of Default. The occurrence of any one of the following events or
conditions shall be deemed an "Event of Default" hereunder unless waived by the
requisite Lenders pursuant to Section 9.1:
(a) Nonpayment. Any Borrower shall fail to pay when due any principal
of the Notes, or any reimbursement obligation under Section 3.3 (whether by
deemed disbursement of a Revolving Credit Loan or otherwise), or, within 5 days
after becoming due, any interest on the Notes or any fees or any other amount
payable hereunder;
(b) 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;
(c) Certain Covenants. Any Borrower or any Guarantor shall fail to
perform or observe any term, covenant or agreement contained in Section 5.2
(other than clauses (k) and (l) thereof);
(d) Other Defaults. Any Borrower or any Guarantor shall fail to perform
or observe any other term, covenant or agreement contained in any Loan Document
(other than those described in Sections 6.1(a) or 6.1(c)), and any such failure
shall remain unremedied for 30 calendar days (or 5 calendar days in the case of
any failure to perform or observe the covenants contained in Section 5.1(d))
after written notice thereof shall have been given to the Borrowers by the Agent
(or such longer or shorter period of time as may be specified in such Loan
Document);
(e) Other Indebtedness. The Company or any of its Subsidiaries shall
fail to pay any part of the principal of, the premium, if any, or the interest
on, or any other payment of money due under any of its Indebtedness (other than
Indebtedness hereunder), beyond any period of grace provided with respect
thereto, which individually or together with other such Indebtedness as to which
any such failure exists has an aggregate outstanding principal amount in excess
of $5,000,000; or the Company or any of its Subsidiaries shall fail to perform
or observe any other term, covenant or agreement contained in any agreement,
document or instrument evidencing or securing any such Indebtedness having such
aggregate outstanding principal amount, or under which any such Indebtedness was
issued or created, beyond any period of grace, if any, provided with respect
thereto if the effect of such failure is either (i) to cause, or permit the
holders of such
Page 54
<PAGE> 56
Indebtedness (or a trustee on behalf of such holders) to elect a majority of
the board of directors of the Company;
(f) 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 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;
(g) 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 Tile 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;
(h) Insolvency, Etc.. Any Borrower or any of their 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(a)), 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 a 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;
(i) Other Documents. Any material provision of any Loan 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, 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
Page 55
<PAGE> 57
(j) Control. Any Change of Control shall occur.
6.2. Remedies.
(a) Upon the occurrence and during the continuance of any Event of
Default, by notice to the Borrowers (i) the Agent may, and upon being directed
to do so by the Required Lenders shall, terminate the Commitments or (ii) the
Agent may, and upon being directed to do so by the Required Lenders, shall
declare the outstanding principal of, and accrued interest on, the Notes, all
unpaid reimbursement obligations in respect of drawings under Letters of Credit
and all other amounts owing under this Agreement to be immediately due and
payable, or (iii) the Agent may, and upon being directed to do so by the
Required Lenders, shall demand immediate delivery of cash collateral, and the
Borrowers agree to deliver such cash collateral upon demand, in an amount equal
to the maximum amount that may be available to be drawn at any time prior to the
stated expiry of all outstanding Letters of Credit, or any one or more of the
foregoing, whereupon the Commitments shall terminate forthwith and all such
amounts, including such cash collateral, shall become immediately due and
payable, as the case may be, provided that in the case of any event or condition
described in Section 6.1(h), the Commitments shall automatically terminate
forthwith and all such amounts, including such cash collateral, shall
automatically become immediately due and payable without notice; in all cases
without demand, presentment, protest, diligence, notice of dishonor or other
formality, all of which are hereby expressly waived. Such cash collateral
delivered in respect of outstanding Letters of Credit shall be deposited in a
special cash collateral account to be held by the Agent as collateral security
for the payment and performance of the Borrowers' obligations under this
Agreement to the Lenders and the Agent.
(b) The Agent may and, upon being directed to do so by the Required
Lenders, shall, in addition to the remedies provided in Section 6.2(a), exercise
and enforce any and all other rights and remedies available to it or the
Lenders, whether arising under this Agreement or any other Loan Document or
under applicable law, in any manner deemed appropriate by the Agent, 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.
(c) Upon the occurrence and during the continuance of any Event of
Default, each Lender may, subject to Section 7.10, at any time and from time to
time, without notice to the any Borrower (any requirement for such notice being
expressly waived by the Borrowers) set off and apply against any and all of the
obligations of the any Borrower now or hereafter existing under this Agreement,
whether owing to such Lender or any other Lender or the Agent, any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender or any Affiliate of
such Lender to or for the credit or the account of any Borrower and any property
of such Borrower from time to time in possession of such Lender or any Affiliate
of such Lender, irrespective of whether or not such Lender shall have made any
demand hereunder and although such obligations may be contingent and unmatured
Each Borrower hereby grants to the Lenders and the Agent a lien on and security
interest in all such deposits, indebtedness and property as collateral security
for the payment and performance of the obligations of such Borrower under this
Agreement. The rights of such Lender under this Section 6.2(c) are in addition
to other rights and remedies (including, without limitation, other rights of
setoff) which such Lender may have.
6.3. Distribution of Proceeds of Collateral. All proceeds of any realization
on the collateral pursuant to the Security Documents and any payments received
by the Agent or any Lender pursuant to the Guaranties subsequent to and during
the continuance of any Event of Default, shall be allocated and distributed by
the Agent as follows:
Page 56
<PAGE> 58
(a) First, to the payment of all reasonable costs and expenses,
including without limitation all reasonable attorneys' fees, of the Agent in
connection with the enforcement of the Security Documents and otherwise
administering this Agreement;
(b) Second, to the payment of all fees required to be paid under any
Loan Document including facility fees, owing to the Lenders and Agent pursuant
to the Lender Indebtedness on a pro rata basis in accordance with the Lender
Indebtedness consisting of fees owing to the Lenders and Agent under the Lender
Indebtedness, for application to payment of such liabilities;
(c) Third, to the Lenders and Agent on a pro rata basis in accordance
with the Lender Indebtedness consisting of interest owing to the Lenders and
Agent under the Lender Indebtedness, for application to payment of such
liabilities;
(d) Fourth, to the Lenders and the Agent on a pro rata basis in
accordance with the Lender Indebtedness consisting of principal (including
without limitation any cash collateral for any outstanding letters of credit)
and obligations and liabilities relating to Swaps owing any Lender or the Agent,
for application to payment of such liabilities;
(e) Fifth, to the payment of any and all other amounts owing to the
Lenders and the Agent on a pro rata basis in accordance with the total amount of
such Indebtedness owing to each of the Lenders and the Agent, for application to
payment of such liabilities; and
(f) Sixth, to the Borrowers, or such other Person as may be legally
entitled thereto.
Notwithstanding the foregoing, no payments of principal, interest or fees
delivered to the Agent for the account of any Defaulting Lender shall be
delivered by the Agent to such Defaulting Lender. Instead, such payments shall,
for so long as such Defaulting Lender shall be a Defaulting Lender, be held by
the Agent, and the Agent is hereby authorized and directed by all parties hereto
to hold such funds in escrow and apply such funds as follows:
(i) First, if applicable to any payments due from such Defaulting
Lender to the Agent, and
(ii) Second, to Loans required to be made by such Defaulting Lender
on any borrowing date to the extent such Defaulting Lender fails to make such
Loans.
Notwithstanding the foregoing, upon the termination of all Commitments and the
payment and performance of all of the Advances and other obligations owing
hereunder (other than those owing to a Defaulting Lender), any funds then held
in escrow by the Agent pursuant to the preceding sentence shall be distributed
to each Defaulting Lender, pro rata in proportion to amounts that would be due
to each Defaulting Lender but for the fact that it is a Defaulting Lender.
6.4. Letter of Credit Liabilities. For the purposes of payments and
distributions under Section 6.3, the full amount of Lender Indebtedness on
account of any letter of credit then outstanding but not drawn upon shall be
deemed to be then due and owing. Amounts distributable to the Lenders or Agent
on account of such Lender Indebtedness under such letters of credit shall be
deposited in a separate collateral account in the name of and under the control
of the Agent and held by the Agent first as security for such letter of credit
Lender Indebtedness and then as security for all other Lender Indebtedness and
the amount so deposited shall be applied to the letter of credit Lender
Indebtedness at such times and to the extent that such letter of credit Lender
Indebtedness become absolute liabilities and
Page 57
<PAGE> 59
if and to the extent that the letter of credit Lender Indebtedness fail to
become absolute Lender Indebtedness because of the expiration or termination of
the underlying letters of credit without being drawn upon then such amounts
shall be applied to the remaining Lender Indebtedness in the order provided in
Section 6.3. Each Borrower hereby grants to the Agent, for the benefit of the
Lenders and Agent, a lien and security interest in all such funds deposited in
such separate collateral account, as security for all the Lender Indebtedness of
such Borrower as set forth above.
ARTICLE VII
THE AGENT AND THE LENDERS
7.1. Appointment; Nature of Relationship. NBD is hereby appointed by the
Lenders as the Agent hereunder and under each other Loan Document, and each of
the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
VII. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the representative of the
Lenders with only those duties as are expressly set forth in this Agreement and
the other Loan Documents. In its capacity as the Lenders' contractual
representative, the Agent (i) does not hereby assume any fiduciary duties to any
of the Lenders, (ii) is a "representative" of the Lenders within the meaning of
Section 9-105 of the Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders hereby agrees to assert no claim against the Agent on any agency theory
or any other theory of liability for breach of fiduciary duty, all of which
claims each Lender hereby waives.
7.2. Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
7.3. General Immunity. Neither the Agent nor any of its directors, officers,
agents or employees shall be liable to the Company or any of its Subsidiaries,
the Lenders or any Lender for any action taken or omitted to be taken by it or
them hereunder or under any other Loan Document or in connection herewith or
therewith except for its or their own gross negligence or willful misconduct.
7.4. No Responsibility for Loans, Recitals, etc. Neither the Agent nor any
of its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (iii) the satisfaction of any condition specified in Article II, except
receipt of items required to be delivered to the Agent; (iv) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; or (v) the
value, sufficiency, creation, perfection or priority of any interest in any
collateral security. The Agent shall have no duty to disclose to the Lenders
information that is not
Page 58
<PAGE> 60
required to be furnished by the Company or any Subsidiary to the Agent at such
time, but is voluntarily furnished by the Company or any Subsidiary to the Agent
(either in its capacity as Agent or in its individual capacity).
7.5. Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and on all holders of
Notes. The Lenders hereby acknowledge that the Agent shall be under no duty to
take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement or any other Loan Document unless it shall be
requested in writing to do so by the Required Lenders. The Agent shall be fully
justified in failing or refusing to take any action hereunder and under any
other Loan Document unless it shall first be indemnified to its satisfaction by
the Lenders pro rata against any and all liability, cost and expense that it may
incur by reason of taking or continuing to take any such action.
7.6. Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
7.7. Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
7.8. Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrowers for which the Agent is entitled to reimbursement by
the a Borrower under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents and
(iii) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby, or
the enforcement of any of the terms thereof or of any such other documents,
provided that no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the Agent. The
obligations of the Lenders under this Section 7.8 shall survive payment of the
Obligations and termination of this Agreement.
7.9. Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Unmatured Event or Event of Default hereunder
unless the Agent has received written notice from a Lender or the Company
referring to this Agreement describing such Default or Unmatured Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give prompt notice thereof to the
Lenders.
7.10. Rights as a Lender. In the event the Agent is a Lender, the Agent
shall have the same rights and powers hereunder and under any other Loan
Document as any Lender and may exercise the
Page 59
<PAGE> 61
same as though it were not the Agent, and the term "Lender" or "Lenders" shall,
at any time when the Agent is a Lender, unless the context otherwise indicates,
include the Agent in its individual capacity. The Agent may accept deposits
from, lend money to, and generally engage in any kind of trust, debt, equity or
other transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with the Company or any of its Subsidiaries in which the
Company or such Subsidiary is not restricted hereby from engaging with any other
Person. The Agent, in its individual capacity, is not, subject to Section 8.6,
obligated to remain a Lender.
7.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Company and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
7.12. Successor Agent. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Company, such resignation to be effective
upon the appointment of a successor Agent or, if no successor Agent has been
appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. Upon any such resignation, the Required Lenders shall have
the right to appoint, on behalf of the Company and the Lenders, a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders within thirty days after the resigning Agent's giving notice of its
intention to resign, then the resigning Agent may appoint, on behalf of the
Company and the Lenders, a successor Agent. If the Agent has resigned and no
successor Agent has been appointed, the Lenders may perform all the duties of
the Agent hereunder and the Borrowers shall make all payments in respect of the
Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained earnings
of at least $50,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning Agent. Upon the effectiveness of the resignation of the Agent, the
resigning Agent shall be discharged from its duties and obligations hereunder
and under the Loan Documents. After the effectiveness of the resignation of an
Agent, the provisions of this Article VII shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents.
7.13. Collateral Management. The Agent is hereby authorized on behalf of all
of the Lenders, without the necessity of any further consent from any Lender,
from time to time prior to an Event of Default, to take any action with respect
to the collateral or the Security Documents which may be necessary (i) to
perfect and maintain perfected the security interest in and liens upon the
collateral granted pursuant to the Security Documents; and (ii) to release
portions of the collateral from the security interests and liens imposed by the
Security Documents in connection with any dispositions of such portions of the
collateral permitted hereby. In the event that the Borrowers or the Guarantors
desire to sell or otherwise dispose of any assets and such sale or disposition
is permitted hereby, the Agent shall, upon timely notice from the Company,
release such portions of the collateral from the security interests and liens
imposed by the Security Documents as may be specified by the Borrowers or the
Guarantors in order for the Borrowers or the Guarantors to consummate such
proposed sale or disposition, provided that at or prior to the time of such
proposed sale or disposition no Unmatured Event or Event of Default shall have
occurred and be continuing, including, without limitation, any Unmatured Event
or Event of Default that would arise upon consummation of such sale or
disposition. For purposes of the preceding
Page 60
<PAGE> 62
sentence, the Company shall give timely notice if, not less than two Business
Days prior to the date of such proposed sale or disposition, it shall furnish to
the Agent an officers' certificate setting forth in reasonable detail the
circumstances of such proposed sale or disposition.
7.14. Right to Indemnity. The Agent shall be fully justified in failing or
refusing to take any action hereunder unless it shall first be indemnified to
its satisfaction by the Lenders pro rata against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.
7.15. Sharing of Payments. The Lenders agree among themselves that, in the
event that any Lender shall obtain payment in respect of any Advance or any
other obligation owing to the Lenders under this Agreement through the exercise
of a right of set-off, banker's lien, counterclaim or otherwise in excess of its
ratable share of payments received by all of the Lenders on account of the
Advances and other obligations (or if no Advances are outstanding, ratably
according to the respective amounts of the Commitments), such Lender shall
promptly purchase from the other Lenders participations in such Advances and
other obligations in such amounts, and make such other adjustments from time to
time, as shall be equitable to the end that all of the Lenders share such
payment in accordance with such ratable shares. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of set-off, banker's lien, counterclaim or otherwise as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of
participations theretofore sold, return its share of that benefit to each Lender
whose payment shall have been rescinded or otherwise restored. The Borrowers
agree that any Lender so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including set-off,
banker's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of such Advance or other obligation in the amount of
such participation. The Lenders further agree among themselves that, in the
event that amounts received by the Lenders and the Agent hereunder are
insufficient to pay all such obligations or insufficient to pay all such
obligations when due, the fees and other amounts owing to the Agent in such
capacity shall be paid therefrom before payment of obligations owing to the
Lenders under this Agreement. Except as otherwise expressly provided in this
Agreement, if any Lender or Agent shall fail to remit to the Agent or any other
Lender an amount payable by such Lender or Agent to the Agent or such other
Lender pursuant to this Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the rate at which borrowings are
available to the payee in its overnight federal funds market. It is further
understood and agreed among the Lenders and the Agent that if the Agent shall
engage in any other transactions with the Company or any of its Subsidiaries and
shall have the benefit of any collateral or security therefor which does not
expressly secure the obligations arising under this Agreement except by virtue
of a so-called dragnet clause or comparable provision, the Agent shall be
entitled to apply any proceeds of such collateral or security first in respect
of the obligations arising in connection with such other transaction before
application to the obligations arising under this Agreement.
7.16. Withholding Tax Exemption. Each Lender that is not organized and
incorporated under the laws of the United States or any State thereof agrees to
file with the Agent and the Company, in duplicate, (a) on or before the later of
(i) the Effective Date and (ii) the date such Lender becomes a Lender under this
Agreement and (b) thereafter, for each taxable year of such Lender (in the case
of a Form 4224) or for each third taxable year of such Lender (in the case of
any other form) during which interest or fees arising under this Agreement and
the Notes are received, unless not legally able to do so as a result of a change
in United States income tax enacted, or treaty promulgated, after the date
specified in the preceding clause (a), on or prior to the immediately following
due date of any payment by the Borrowers hereunder, a properly completed and
executed copy of either Internal Revenue Service Form
Page 61
<PAGE> 63
4224 or Internal Revenue Service Form 1001 and Internal Revenue Service Form W-8
or Internal Revenue Service Form W-9 and any additional form necessary for
claiming complete exemption from United States withholding taxes (or such other
form as is required to claim complete exemption from Unites States withholding
taxes), if and as provided by the Code or other pronouncements of the United
States Internal Revenue Service, and such Lender warrants to the Borrowers that
the form so filed will be true and complete; provided that such Lender's failure
to complete and execute such Form 4224 or Form 1001, or Form W-8 or Form W-9, as
the case may be, and any such additional form (or any successor form or forms)
shall not relieve any Borrower of any of its obligations under this Agreement,
except as otherwise provided in this Section 7.16. Each Lender will promptly
execute such other documents with respect to withholding or similar taxes in any
jurisdiction other than United States or any State thereof if required to do so
to avoid any such withholding tax or similar tax, provided that such Lender is
legally entitled to do so and such Lender would not be materially prejudiced
thereby.
ARTICLE VIII
GUARANTY
As an inducement to the Lenders and the Agent to enter into the
transactions contemplated by this Agreement, the Company agrees with the
Lenders and the Agent as follows:
8.1 Guarantee of Obligations. (a) The Company hereby (i) guarantees, as
principal obligor and not as surety only, to the Lenders the prompt payment of
the principal of and any and all accrued and unpaid interest (including interest
which otherwise may cease to accrue by operation of any insolvency law, rule,
regulation or interpretation thereof) on the Advances and all other obligations
of the Borrowing Subsidiaries to the Lenders and the Agent under this Agreement
when due, whether by scheduled maturity, acceleration or otherwise, all in
accordance with the terms of this Agreement and the Notes, including, without
limitation, fees, reimbursement obligations, default interest, indemnification
payments and all reasonable costs and expenses incurred by the Lenders and the
Agent in connection with enforcing any obligations of the Borrowing Subsidiaries
hereunder, including without limitation the reasonable fees and disbursements of
counsel, (ii) guarantees the prompt and punctual performance and observance of
each and every term, covenant or agreement contained in this Agreement and the
Notes to be performed or observed on the part of the Borrowing Subsidiaries and
(iii) agrees to make prompt payment, on demand, of any and all reasonable costs
and expenses incurred by the Lenders or the Agent in connection with enforcing
the obligations of the Company hereunder, including, without limitation, the
reasonable fees and disbursements of counsel (all of the foregoing being
collectively referred to as the "Guaranteed Obligations").
(b) If for any reason any duty, agreement or obligation of any
Borrowing Subsidiary contained in this Agreement shall not be performed or
observed by any Borrowing Subsidiary as provided therein, or if any amount
payable under or in connection with this Agreement shall not be paid in full
when the same becomes due and payable, the Company undertakes to perform or
cause to be performed promptly each of such duties, agreements and obligations
and to pay forthwith each such amount to the Agent for the account of the
Lenders regardless of any defense or setoff or counterclaim which any Borrowing
Subsidiary may have or assert, and regardless of any other condition or
contingency.
8.2 Nature of Guaranty. The obligations of the Company hereunder constitute
an absolute and unconditional and irrevocable guaranty of payment and not a
guaranty of collection and are wholly independent of and in addition to other
rights and remedies of the Lenders and the Agent and are not
Page 62
<PAGE> 64
contingent upon the pursuit by the Lenders and the Agent of any such rights and
remedies, such pursuit being hereby waived by the Company.
8.3 Waivers and Other Agreements. The Company hereby unconditionally (a)
waives any requirement that the Lenders or the Agent, upon the occurrence of an
Event of Default first make demand upon, or seek to enforce remedies against any
Borrowing Subsidiary before demanding payment under or seeking to enforce the
obligations of the Company hereunder, (b) covenants that the obligations of the
Company hereunder will not be discharged except by complete performance of all
obligations of the Borrowing Subsidiaries contained in this Agreement and the
Notes, (c) agrees that the obligations of the Company hereunder shall remain in
full force and effect without regard to, and shall not be affected or impaired,
without limitation, by any invalidity, irregularity or unenforceability in whole
or in part of this Agreement or the Notes, or any limitation on the liability of
the Borrowing Subsidiaries thereunder, or any limitation on the method or terms
of payment thereunder which may or hereafter be caused or imposed in any manner
whatsoever (including, without limitation, usury laws), (d) waives diligence,
presentment and protest with respect to, and any notice of default or dishonor
in the payment of any amount at any time payable by the Borrowing Subsidiaries
under or in connection with this Agreement or the Notes, and further waives any
requirement of notice of acceptance of, or other formality relating to, the
obligations of the Company hereunder and (e) agrees that the Guaranteed
Obligations shall include any amounts paid by the Borrowing Subsidiaries to the
Lenders or the Agent which may be required to be returned to the Borrowing
Subsidiaries or to their representative or to a trustee, custodian or receiver
for any Borrowing Subsidiary.
8.4 Obligations Absolute. The obligations, covenants, agreements and duties
of the Company under this Agreement shall not be released, affected or impaired
by any of the following whether or not undertaken with notice to or consent of
the Company: (a) an assignment or transfer, in whole or in part, of the Advances
made to any Borrowing Subsidiary or of this Agreement or any Note although made
without notice to or consent of the Company, or (b) any waiver by any Lender or
the Agent or by any other person, of the performance or observance by any
Borrowing Subsidiary of any of the agreements, covenants, terms or conditions
contained in this Agreement or in the other Loan Documents, or (c) any
indulgence in or the extension of the time for payment by any Borrowing
Subsidiary of any amounts payable under or in connection with this Agreement or
any other Loan Document, or of the time for performance by any Borrowing
Subsidiary of any other obligations under or arising out of this Agreement or
any other Loan Document, or the extension or renewal thereof, or (d) the
modification, amendment or waiver (whether material or otherwise) of any duty,
agreement or obligation of any Borrowing Subsidiary set forth in this Agreement
or any other Loan Document (the modification, amendment or waiver from time to
time of this Agreement and the other Loan Documents being expressly authorized
without further notice to or consent of the Company), or (e) the voluntary or
involuntary liquidation, sale or other disposition of all or substantially all
of the assets of any Borrowing Subsidiary or any receivership, insolvency,
bankruptcy, reorganization, or other similar proceedings, affecting any
Borrowing Subsidiary or any of its assets, or (f) the merger or consolidation of
any Borrowing Subsidiary or the Company with any other person, or (g) the
release of discharge of any Borrowing Subsidiary or the Company from the
performance or observance of any agreement, covenant, term or condition
contained in this Agreement or any other Loan Document, by operation of law, or
(h) any other cause whether similar or dissimilar to the foregoing which would
release, affect or impair the obligations, covenants, agreements or duties of
the Company hereunder.
8.5 No Investigation by Lenders or Agent. The Company hereby waives
unconditionally any obligation which, in absence of such provision, the Lenders
or the Agent might otherwise have to investigate or to assure that there has
been compliance with the law of any jurisdiction with respect to the Guaranteed
Obligations recognizing that, to save both time and expense, the Company has
requested that the Lenders and the Agent not undertake such investigation. The
Company hereby expressly confirms that the obligations of the Company hereunder
shall remain in full force and effect
Page 63
<PAGE> 65
without regard to compliance or noncompliance with any such law and irrespective
of any investigation or knowledge of any Lender or the Agent of any such law.
8.6 Indemnity. As a separate, additional and continuing obligation, the
Company unconditionally and irrevocably undertakes and agrees with the Lenders
and the Agent that, should the Guaranteed Obligations not be recoverable from
the Company under Section 8.1 for any reason whatsoever (including, without
limitation, by reason of any provision of this Agreement or the Notes or any
other agreement or instrument executed in connection herewith being or becoming
void, unenforceable, or otherwise invalid under any applicable law) then,
notwithstanding any knowledge thereof by any Lender or the Agent at any time,
the Company as sole, original and independent obligor, upon demand by the Agent,
will make payment to the Agent for the account of the Lenders and the Agent of
the Guaranteed Obligations by way of a full indemnity in such currency and
otherwise in such manner as is provided in this Agreement and the Notes.
8.7 Subordination, Subrogation, Etc. The Company agrees that any present or
future indebtedness, obligations or liabilities of any Borrowing Subsidiary to
Company shall be fully subordinate and junior in right and priority of payment
to any present or future indebtedness, obligations or liabilities of the
Borrowing Subsidiaries to the Lenders and the Agent. The Company waives any
right of subrogation to the rights of any Lender or the Agent against any
Borrowing Subsidiary or any other person obligated for payment of the Guaranteed
Obligations and any right of reimbursement or indemnity whatsoever arising or
accruing out of any payment which the Company may make pursuant to this
Agreement and the Notes, and any right of recourse to security for the debts and
obligations of each Borrowing Subsidiary, unless and until the entire principal
balance of and interest on the Guaranteed Obligations shall have been paid in
full, and to the extent the Company is an "insider" as defined in Section 101(2)
of the United States Bankruptcy Code, such waiver shall be permanent and shall
not be revoked or terminated in any event, including payment in full of the
principal and interest of the Guaranteed Obligations.
Page 64
<PAGE> 66
ARTICLE IX
MISCELLANEOUS
9.1. Amendments, Etc.
(a) No amendment, modification, termination or waiver of any provision
of this Agreement nor any consent to any departure therefrom shall be effective
unless the same shall be in writing and signed by the Required Lenders and, to
the extent any rights, obligations or duties of the Agent may be affected
thereby, the Agent, provided, however, that no such amendment, modification,
termination, waiver or consent shall, without the consent of the Agent and all
of the Lenders, (i) authorize or permit the extension of time for, or any
reduction of the amount or rate of, any payment of the principal of, or interest
on, the Notes or any Letter of Credit reimbursement obligation, or any fees or
other amount payable hereunder, (ii) amend or terminate the respective
Commitments of any Lender set forth on the signature pages hereof or modify the
provisions of this Section regarding the taking of any action under this Section
or the provisions of Section 7.15 or the definition of Required Lenders, or
(iii) release any Guarantor or any of the collateral (excluding releases of
collateral allowed pursuant to Section 5.2(g), Section 7.13 or any other
provision hereof) or release the Company from its guaranty contained in Article
VIII. In addition to amendments effected pursuant to the foregoing, Schedule
1.1(a) may be amended as follows:
(i) Schedule 1.1(a) may be amended to add Subsidiaries of the
Company as additional Borrowing Subsidiaries upon (A) execution and delivery by
the Borrowers, any such Borrowing Subsidiary and the Agent, of a Joinder
Agreement providing for any such Subsidiary to become a Borrowing Subsidiary,
(B) delivery to the Agent of (a) a legal opinion in respect of such additional
Subsidiary Borrower acceptable to the Agent and (b) such other documents with
respect thereto as the Agent shall reasonably request and (c) the written
approval of the Agent in its sole discretion.
(ii) Schedule 1.1(a) will be amended to remove any Subsidiary as a
Borrowing Subsidiary upon (A) written notice by the Company to the Agent to such
effect and (B) repayment in full of all outstanding Loans of such Borrowing
Subsidiary.
(b) Any such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
(c) Notwithstanding anything herein to the contrary, no Defaulting
Lender shall be entitled to vote (whether to consent or to withhold its consent)
with respect to any amendment, modification, termination or waiver of any
provision of this Agreement or any departure therefrom or any direction from the
Lenders to the Agent, and, for purposes of determining the Required Lenders at
any time, the Commitments and the Advances of each Defaulting Lenders shall be
disregarded.
9.2. Notices.
(a) Except as otherwise provided in Section 9.2(c) hereof, all notices
and other communications hereunder shall be in writing and shall be delivered or
sent to the Borrowers, the Agent and the Lenders at the respective addresses and
numbers for notices set forth on the signature pages hereof, or to such other
address as may be designated by any Borrower, the Agent or any Lender by notice
to the other parties hereto. All notices and other communications shall be
deemed to have been
Page 65
<PAGE> 67
given at the time of actual delivery thereof to such address, or if sent by
certified or registered mail, postage prepaid, to such address, on the third day
after the date of mailing, or in the case of telex notice, upon receipt of the
appropriate answerback, or, in the case of facsimile notice, upon receipt of a
confirmation mechanically produced by the facsimile machine, provided, however,
that notices to the Agent shall not be effective until received.
(b) Notices by the Borrowers to the Agent with respect to terminations
or reductions of the Commitments pursuant to Section 2.2, requests for Advances
pursuant to Section 2.4, requests for continuations or conversions of Loans
pursuant to Section 2.7 and notices of prepayment pursuant to Section 3.1 shall
be irrevocable and binding on the Borrowers.
(c) Any notice to be given by the Borrowers to the Agent pursuant to
Sections 2.4, 2.7 or 3.1 and any notice to be given by the Agent or any Lender
hereunder, may be given by telephone, and all such notices given by the
Borrowers must be immediately confirmed in writing in the manner provided in
Section 9.2(a). Any such notice given by telephone shall be deemed effective
upon receipt thereof by the party to whom such notice is to be given.
9.3. No Waiver By Conduct; Remedies Cumulative. No course of dealing on the
part of the Agent or any Lender, nor any delay or failure on the part of the
Agent or any Lender in exercising any right, power or privilege hereunder shall
operate as a waiver of such right, power or privilege or otherwise prejudice the
Agent's or such Lender's rights and remedies hereunder; nor shall any single or
partial exercise thereof preclude any further exercise thereof or the exercise
of any other right, power or privilege. No right or remedy conferred upon or
reserved to the Agent or any Lender under any Loan Document is intended to be
exclusive of any other right or remedy, and every right and remedy shall be
cumulative and in addition to every other right or remedy granted thereunder or
now or hereafter existing under any applicable law. Every right and remedy
granted by any Loan Document or by applicable law to the Agent or any Lender may
be exercised from time to time and as often as may be deemed expedient by the
Agent or any Lender.
9.4. Reliance on and Survival of Various Provisions. All terms, covenants,
agreements, representations and warranties of any Borrower and any Guarantor
made herein or in any other Loan Document or in any certificate, report,
financial statement or other document furnished by or on behalf of any Borrower
and any Guarantor in connection with the negotiation and modification of this
Agreement shall be deemed to have been relied upon by the Lenders,
notwithstanding any investigation heretofore or hereafter made by any Lender or
on such Lender's behalf, and those covenants and agreements of the Borrowers set
forth in Section 3.9, 3.11 and 9.5 hereof shall survive the repayment in full of
the Advances and the termination of the Commitments.
9.5. Expenses; Indemnification.
(a) The Company agrees to pay, or reimburse the Agent or the Lenders,
as the case may be, for the payment of, on demand, (i) the reasonable fees and
expenses of counsel to the Agent, including without limitation the fees and
expenses of Dickinson Wright PLLC and any other counsel retained by the Agent in
connection with the preparation, execution, delivery and administration of the
Loan Documents and the consummation of the transactions contemplated hereby, and
in connection with advising the Agent as to its rights and responsibilities with
respect thereto, and in connection with any amendments, waivers or consents in
connection therewith or in connection with any refinancing or restructuring of
the credit arrangements provided under this Agreement, (ii) 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, (iii)
Page 66
<PAGE> 68
if an Event of Default occurs, all reasonable costs and expenses of the Agent
and each Lender (including reasonable fees and expenses of counsel and whether
incurred through negotiations, legal proceedings or otherwise) in connection
with such Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom and (iv) all reasonable costs and
expenses of the Agent (including reasonable fees and expenses of counsel) in
connection with any action or proceeding relating to a court order, injunction
or other process or decree restraining or seeking to restrain the Agent from
paying any amount under, or otherwise relating in any way to, any Letter of
Credit and any and all costs and expenses which any of them may incur relative
to any payment under any Letter of Credit.
(b) The Company agrees to indemnify each Lender, the Agent and each of
their respective officers, directors, employees and agents (collectively, the
"Indemnified Parties") and hold each Indemnified Party harmless from and against
any and all liabilities, losses, damages, costs and expenses of any kind,
including, without limitation, the reasonable fees and disbursements of counsel,
which may be incurred by any Indemnified Party in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnified Party shall be designated a party thereto) (collectively, the
"Indemnified Liabilities") at any time relating to (whether before or after the
execution of this Agreement) any of the following:
(i) any actual or proposed use of the Advances hereunder by the
Company or any of its Subsidiaries or Unrestricted Subsidiaries or any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of any Advance;
(ii) the entering into and performance of this Agreement and any
other Loan Document by any of the Indemnified Parties (including any action
brought by or on behalf of any Borrower as the result of any determination by
any Lender not to make any Advance unless such Advance was required to be made
under this Agreement);
(iii) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Company or any of its Subsidiaries of
all or any portion of the stock or assets of any Person or to the issuance of,
or any other matter relating to, any Subordinated Debt, whether or not any
Indemnified Party is a party thereto;
(iv) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to any release
by the Company or any of its Subsidiaries of any Hazardous Material or any
violations of Environmental Laws; or
(v) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real property
owned or operated by the Company or any Subsidiary thereof of any Hazardous
Material (including any losses, liabilities, damages, injuries, costs, expenses
or claims asserted or arising under any Environmental Law), regardless of
whether caused by, or within the control of, the Company or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the activities of the Indemnified
Party on the property of the Company or any of its Subsidiaries conducted
subsequent to a foreclosure on such property by any Indemnified Party or by
reason of the relevant Indemnified Party's gross negligence or willful
misconduct or breach of this Agreement, and if and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Company hereby
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law. The
Company shall be obligated to indemnify the Indemnified Parties for all
Indemnified Liabilities subject to and pursuant to the foregoing provisions,
regardless of whether the Company or any of its Subsidiaries had knowledge of
the facts and circumstances giving rise to such Indemnified Liability;
Page 67
<PAGE> 69
provided that no Indemnified Party shall have the right to be indemnified
hereunder for its own gross negligence or willful misconduct as determined by a
court of competent jurisdiction.
9.6. Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, provided that no
Borrower may, without the prior consent of all the Lenders, assign their rights
or obligations under any Loan Document and the Lenders shall not be obligated to
make any Advance hereunder to any entity other than a Borrower.
(b) Any Lender may sell a participation interest to any financial
institution or institutions, and such financial institution or institutions may
further sell, a participation interest (undivided or divided) in, the Advances
and such Lender's rights and benefits under the Loan Documents, and to the
extent of that participation, such participant or participants shall have the
same rights and benefits against the Borrowers under Section 6.2(c) as it or
they would have had if participation of such participant or participants were
the Lender making the Advances to the Borrowers hereunder, provided, however,
that (i) such Lender's obligations under this Agreement shall remain unmodified
and fully effective and enforceable against such Lender, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) such Lender shall remain the holder of its Notes for all
purposes of this Agreement, (iv) the Borrowers, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, (v) such Lender shall
not grant to its participant any rights to consent or withhold consent to any
action taken by such Lender or the Agent under this Agreement other than action
requiring the consent of all of the Lenders hereunder and (iv) such
participation shall in no event be less than $5,000,000. The Agent from time to
time in its sole discretion may appoint agents for the purpose of servicing and
administering this Agreement and the transactions contemplated hereby and
enforcing or exercising any rights or remedies of the Agent provided under the
Loan Documents or otherwise. In furtherance of such agency, the Agent may from
time to time direct that the Borrowers provide notices, reports and other
documents contemplated by this Agreement (or duplicates thereof) to such agent.
The Borrowers hereby consent to the appointment of such agent and agrees to
provide all such notices, reports and other documents and to otherwise deal with
such agent acting on behalf of the Agent in the same manner as would be required
if dealing with the Agent itself.
(c) Each Lender may, 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 a Lender or to another Lender, and the
prior written consent of the Agent, which consent from the Agent shall not be
required if such assignment is to an Affiliate of a Lender or to another Lender,
assign to one or more banks or other entities all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Advances owing to it and the Note or Notes held
by it); provided, however, that (i) each such assignment shall be of a uniform,
and not a varying, percentage of all rights and obligations, (ii) except in the
case of an assignment of all of a Lender's rights and obligations under this
Agreement, (A) other than assignments among the Lenders, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000, and in
integral multiples of $1,000,000 thereafter, or such lesser amount as the
Company and the Agent may consent to and (B) after giving effect to each such
assignment, the amount of the Commitment of the assigning Lender shall in no
event be less than $5,000,000, and (iii) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance in the form of Exhibit L hereto (an
"Assignment and
Page 68
<PAGE> 70
Acceptance"), together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,500. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in such Assignment and Acceptance, (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor thereunder shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(d) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Company
or any of its Subsidiaries or the performance or observance by any Borrower or
Guarantor of any of their obligations under any Loan Document; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 4.6 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance under the Agent, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such assignee
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under this Agreement as are delegated to
the Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of this Agreement are required to be performed by it as a Lender.
(e) The Agent shall maintain at its address designated on the signature
pages hereof a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Advances owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Company. Within five Business Days after its receipt of such
notice, each Borrower, at its own expense, shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes a new Note or Notes to the
order of such assignee in an amount equal to the Commitment assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment hereunder, a new Note to the order of the assigning Lender
in an amount equal to the Commitment retained by it hereunder. Such new Note or
Notes shall be in an aggregate principal amount equal to the aggregate
Page 69
<PAGE> 71
principal amount of such surrendered Note or Notes, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of Exhibit L hereto.
(g) The Lenders may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 9.6, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Company or any of its Subsidiaries, provided that
assignee or participant agrees to the confidentiality provisions contained in
Section 9.19.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in, or assign, all or any
portion of its rights under this Agreement (including, without limitation, the
Loans owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Lender in accordance with Regulation A of the Board of Governors of the
Federal Reserve System; provided that such creation of a security interest or
assignment shall not release such Lender from its obligations under this
Agreement.
9.7. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
9.8. Governing Law. This Agreement is a contract made under, and shall be
governed by and construed in accordance with, the law of the State of Michigan
in the same manner applicable to contracts made and to be performed entirely
within such State and without giving effect to choice of law principles of such
State. Each Borrower further 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 Michigan, or in any court of the United
States of America sitting in Michigan, and each Borrower hereby submits to and
accepts generally and unconditionally the jurisdiction of those courts with
respect to its Person and property and 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 set forth on the signature pages hereof or
as provided pursuant to Section 9.2. Nothing in this paragraph shall affect the
right of the Lenders and the Agent to serve process in any other manner
permitted by law or limit the right of the Lenders or the Agent to bring any
such action or proceeding against any Borrower or property in the courts of any
other jurisdiction. Each Borrower hereby irrevocably waives any objection to the
laying of venue of any such suit or proceeding in the above described courts.
9.9. Table of Contents and Headings. The table of contents and the headings
of the various subdivisions hereof are for the convenience of reference only and
shall in no way modify any of the terms or provisions hereof.
9.10. Construction of Certain Provisions. If any provision of this Agreement
refers to any action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person, whether or not expressly
specified in such provision.
9.11. Integration and Severability. This Agreement embodies the entire
agreement and understanding between the Borrowers and the Agent and the Lenders,
and supersedes all prior agreements and understandings, relating to the subject
matter hereof. In case any one or more of the obligations of any Borrower under
any Loan Document shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
obligations of such Borrower shall not in any way be affected or impaired
thereby, and such invalidity, illegality or unenforceability in one
Page 70
<PAGE> 72
jurisdiction shall not affect the validity, legality or enforceability of the
obligations of any Borrower under any Loan Document in any other jurisdiction.
9.12. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any such covenant, the fact that it would be permitted by an exception to, or
would be otherwise within the limitations of, another covenant shall not avoid
the occurrence of an Unmatured Event or an Event of Default or any event or
condition which with notice or lapse of time, or both, could become such an
Unmatured Event or an Event of Default if such action is taken or such condition
exists.
9.13. Interest Rate Limitation. Notwithstanding any provision of any Loan
Document, in no event shall the amount of interest paid or agreed to be paid by
the Borrowers exceed an amount computed at the highest rate of interest
permissible under applicable law. If, from any circumstances whatsoever,
fulfillment of any provision of any Loan Document at the time performance of
such provision shall be due, shall involve exceeding the interest rate
limitation validly prescribed by law which a court of competent jurisdiction may
deem applicable hereto, then, ipso facto, the obligations to be fulfilled shall
be reduced to an amount computed at the highest rate of interest permissible
under applicable law, and if for any reason whatsoever the Lender shall ever
receive as interest an amount which would be deemed unlawful under such
applicable law such interest shall be automatically applied to the payment of
principal of the Advances outstanding hereunder (whether or not then due and
payable) and not to the payment of interest, or shall be refunded to the
Borrowers if such principal and all other obligations of the Borrowers to the
Lenders have been paid in full.
9.14. Judgment and Payment.
(a) If, for the purpose of obtaining judgment in any court, it is
necessary to convert a sum owing hereunder by any Borrower in one currency into
another currency, each Borrower agrees, to the fullest extent that it may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures in the relevant jurisdiction the
relevant Lender could purchase the first currency with such other currency for
the first currency on the Business Day immediately preceding the day on which
the final judgment is given.
(b) The obligations of any Borrower in respect of any sum due in
Dollars to any party hereto or any holder of the obligations owing hereunder
(the "Applicable Creditor") shall, notwithstanding any payment obligation or
judgment in a currency (the "Payment Currency") other than Dollars, be
discharged only to the extent that, on the Business Day following receipt by the
Applicable Creditor of any sum adjudged to be so due in the Payment Currency,
the Applicable Creditor may in accordance with normal banking procedures in the
relevant jurisdiction purchase Dollars with the Payment Currency; if the amount
of Dollars so purchased is less than the sum originally due to the Applicable
Creditor in Dollars, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Applicable Creditor against
such loss. The obligations of the Borrowers contained in this Section 9.14 shall
survive the termination of this Agreement and the payment of all other amounts
owing hereunder.
9.15. Acknowledgments. Each Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) none of the Agent or any Lender has any fiduciary relationship with
or duty to such Borrower arising out of or in connection with this Agreement or
any of the other Loan Documents,
Page 71
<PAGE> 73
and the relationship between the Agent and the Lenders, on the one hand, and the
Borrowers, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Borrowers and the Lenders.
9.16. Borrowing Subsidiary Payments. Notwithstanding any other provision in
this Agreement to the contrary and without limiting any Borrowing Subsidiary's
obligations under its Guaranty, other Security Documents or otherwise other than
under this Agreement, no Borrowing Subsidiary shall be liable for any payment
obligation hereunder except as such payment obligation arises out of the Loans
and Advances of such Borrowing Subsidiary.
9.17. Unification of Certain Currencies. Notwithstanding the commencement of
the third stage of European Monetary Union ("EMU") (which as of the date of this
Agreement is scheduled to occur on January 1, 1999), all Advances denominated in
any Eligible Currency shall continue to be so denominated, interest rates with
respect to Eurocurrency Loans denominated in any Eligible Currency shall
continue to be determined by reference to such Permitted Currency in accordance
with the procedures specified in the definition of "Eurocurrency Rate", all
calculations with respect to Advances outstanding in any Eligible Currency shall
continue to be made in units of such currency, and the obligations of the
Borrowers with respect to payments of principal and interest on Advances
outstanding in any Eligible Currency shall continue to be payable in such
currency, all without regard to the conversion rates or rounding rules referred
to in European Council Regulation 96/0249 (CNS). Following the commencement of
the third stage of EMU and prior to the first issuance of euro-bank notes by the
European Central Bank pursuant to Article 105A(1) of the Treaty Establishing the
European Community, as amended, (which as of the date of this Agreement is
scheduled to occur on January 1, 2002) each of the Borrowers, the Lenders, and
the Agent agrees to negotiate in good faith an amendment to this Agreement,
satisfactory in form and substance to each of the Borrowers, the Lenders, and
the Agent to modify this Agreement in light of EMU.
9.18. Year 2000 Problem. The Borrowers and their respective Subsidiaries
have reviewed the areas within their business and operations which could be
adversely affected by, and have developed or are developing a program to address
on a timely basis, the "Year 2000 Problem" (that is, the risk that computer
applications used by the Company and its Subsidiaries may be unable to recognize
and perform properly date-sensitive functions involving certain dates prior to
and any date after December 31, 1999). Based on such review and program, the
Borrowers reasonably believe that the "Year 2000 Problem" will not have a
Material Adverse Effect.
9.19. Confidentiality. Each Lender and the Agent agree to keep any
information delivered or made available by the Obligors to it confidential from
anyone other than persons employed or retained by such Lender who are expected
to become engaged in evaluating, approving, structuring or administering the
Loans; provided that nothing herein shall prevent any Lender from disclosing
such information (a) to any other Lender or to the Agent, (b) to any other
person if reasonably incidental to the administration of the Loans, (c) upon the
order of any court or administrative agency or otherwise required by law, (d)
upon the request or demand of any regulatory agency or authority, (e) which had
been publicly disclosed other than as a result of a disclosure by the Agent or
any Lender prohibited by this Agreement, (f) in connection with any litigation
to which the Agent, any Lender or its subsidiaries or Parent may be a party, (g)
to the extent necessary in connection with the exercise of any remedy hereunder,
(h) to such Lender's or Agent's legal counsel and independent auditors and (i)
subject to a confidentiality agreement containing provisions substantially
similar to those contained in this Section made for the benefit of the
Page 72
<PAGE> 74
Borrowers by such actual or proposed participation in or assignee of any lender
Indebtedness, to any actual or proposed participate or assignee of any Lender
Indebtedness.
9.20. WAIVER OF JURY TRIAL. THE LENDERS AND THE AGENTS AND THE BORROWERS,
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT
OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF EITHER OF THEM. NEITHER ANY LENDER, THE AGENT NOR ANY
BORROWER SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH
ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE
DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY ANY PARTY HERETO
EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY SUCH PARTY.
Page 73
<PAGE> 75
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written, which
shall be the Effective Date of this Agreement.
Address for Notices: MSX INTERNATIONAL, INC.
275 Rex Boulevard
Auburn Hills, Michigan 48326
Attention: Chief Financial Officer By:_____________________________
Facsimile No.: (248) 299-1013 Its:_________________________
275 Rex Boulevard GEOMETRIC RESULTS INCORPORATED
Auburn Hills, Michigan 48326
Attention: Chief Financial Officer By:____________________________
Facsimile No.: (248) 299-1013 Its: ______________________
275 Rex Boulevard MSX INTERNATIONAL (USA), INC.
Auburn Hills, Michigan 48326
Attention: Chief Financial Officer By:____________________________
Facsimile No.: (248) 299-1013 Its: ______________________
275 Rex Boulevard MSX INTERNATIONAL BUSINESS
Auburn Hills, Michigan 48326 SERVICES INC.
Attention: Chief Financial Officer By:____________________________
Facsimile No. (248) 299-1013 Its: _______________________
275 Rex Boulevard MSX INTERNATIONAL ENGINEERING
Auburn Hills, Michigan 48326 SERVICES, INC.
Attention: Chief Financial Officer
Facsimile No.: (248) 299-1013 By:____________________________
Its: ______________________
275 Rex Boulevard MSX INTERNATIONAL, LIMITED
Auburn Hills, Michigan 48326
Attention: Chief Financial Officer By:____________________________
Facsimile No.(248) 299-1013 Its: ______________________
Page 74
<PAGE> 76
611 Woodward Avenue NBD BANK, as Agent
Detroit, Michigan 48226
Attention: Michigan Banking Division By:_______________________
Facsimile No.: (313) 225-2290 Its: First Vice President
c/o NBD Bank THE FIRST NATIONAL BANK OF
611 Woodward Avenue CHICAGO
Detroit, Michigan 48226
Attention: Michigan Banking Division By:____________________________
Facsimile No.: (313) 225-2290 Its: _______________________
Revolving Credit Commitment: $100,000,000
Term Loan Commitment: $30,000,000
Page 75
<PAGE> 1
EXHIBIT 10.4
Information has been omitted pursuant to an application for confidential
treatment and the omitted material has been filed separately with the Commission
pursuant to an application for confidential treatment. Omitted material is
indicated with an asterisk (*).
MASTER VENDOR AGREEMENT
This Master Vendor Agreement ("Agreement") is entered into as of the
closing date of the Stock Purchase Agreement (as defined below) (the "Effective
Date"), by and between FORD MOTOR COMPANY ("FORD"), a Delaware corporation, and
MSX INTERNATIONAL (HOLDINGS), INC. ("MSXI"), a Delaware corporation
(individually, "Party" and collectively, "Parties"). The following space is
provided for the Parties to enter the Effective Date: August 31, 1997.
RECITALS
A. Concurrent with the execution and delivery of this Agreement, MSXI
executed a Stock Purchase Agreement dated as of July 25, 1997 (the "Stock
Purchase Agreement") to purchase all of the capital stock of Geometric Results
Incorporated ("GRI") from FORD.
B. One of the important services heretofore provided by GRI to FORD and
Ford affiliates (hereinafter, the term FORD shall include include FORD's
majority owned affiliates) has been the management of the selection, retention
and payment of suppliers, as described under the caption "PeopleNet" on
Exhibit 1.2.1 (left column) ("Supply Management") of on-site contract personnel
services (the "Services") through a process known within FORD and GRI as the
PeopleNet process. FORD and MSXI desire to ensure that MSXI provides or causes
GRI to continue to provide Supply Management to FORD and that FORD continues to
purchase Supply Management from GRI. The FORD business units located in the
United States for which GRI (or MSXI) performs Supply Management are referred to
herein as "FBU Customers". GRI also provides Supply Management to FORD
(including Jaguar Cars Limited) in the United Kingdom. GRI provides a multitude
of other services to FORD which the Parties wish to continue and which are
covered in a separate Supply Agreement of even date.
C. MSXI is in the business of supplying the Services to FORD and
other customers and wishes to expand its business with FORD. The Parties have
agreed that in connection with MSM's purchase of GRL that business relationship
will be expanded as set forth herein.
D. FORD and MSXI desire to avoid or minimize business disruption to
the Parties arising out of the sale of GRI by maintaining for a reasonable
period of time ordering and billing processes (the "Ford Ordering and Billings
Systems") utilized by FORD and GRI as of the date of this Agreement until such
time as new processes and systems are developed and implemented.
E. To carry out the foregoing objectives, FORD and MSXI have agreed
that FORD will appoint MSXI as its "Master Vendor" with the rights and
obligations arising out of that relationship
<PAGE> 2
as defined herein. The Parties intend that this will be a long-term business
relationship where considerations of fairness to each of the Parties, consistent
with this Agreement and other agreements between the Parties, will play a major
role in dealing with issues that may arise during the course of the
relationship. In Article 4.5 of the Stock Purchase Agreement, the Parties have
agreed to establish a group of executives from FORD and MSXI (the "Advisory
Board") to monitor the relationship between FORD and MSXI. The Parties further
agree that the Advisory Board may be called upon to attempt to resolve material
issues of fairness in the administration of this Agreement and other contracts
which exist between MSXI and FORD.
NOW, THEREFORE, for the purpose of inducing MSXI to consummate the
transactions contemplated by the Stock Purchase Agreement and in consideration
of the premises, the Parties agree as follows:
ARTICLE 1. - PURCHASE AND SUPPLY RELATIONSHIP
1.1 During the term of this Agreement (as defined in Article 16.1), FORD, on its
own behalf or on behalf of the FBU Customer identified on the face of a Purchase
Order (as defined below), will purchase and MSXI, on its own behalf or on behalf
of the MSXI company identified on the face of a Purchase Order (e.g., GRI),
will supply certain services as set forth herein. GRI's current FBU Customers
are referred to herein as "Existing FBU Customers." FORD represents that, to the
best of its knowledge, the column labeled Dept Number on Exhibit 1.1 contains an
accurate list of Existing FBU Customers.
1.2 FORD hereby designates MSXI as its "Master Vendor" for the Services, as
more fully described herein, and the Parties intend to extend the designation to
other FORD business units, if both Parties determine doing so would be in their
best interests.
1.2.1 As FORD's designated Master Vendor for the Services, MSXI's role will
include Supply Management, including second tier supplier selection, negotiation
of rates, and increased first tier supplier status for MSXI (i.e., MSXI
employees performing the services for FORD, hereinafter "MSXI First Tier
Services"); provided, however, MSXI shall comply with the reasonable requests of
FORD described in Section 1.4 and Article 9 hereunder. A detailed listing of the
roles and responsibilities of MSXI as the "Master Vendor" for Supply Management
is contained in Exhibit 1.2.1 hereto (right column), as compared to the previous
roles and responsibilities of Ford, GRI and Suppliers (left column). As shown on
Exhibit 1.2.1, FORD will transfer functions previously carried out by FORD to
MSXI and MSXI will perform such functions; the completion of transfer of such
functions is referred to herein as "Full Implementation." During the term of
this Agreement, each Existing FBU Customer and each other FORD business unit
that becomes an FBU Customer will purchase from MSXI Supply Management for the
Services and its requirements for the Services, and MSXI will supply such
Services and Supply Management to such FBU Customers.
1.2.2 The Parties intend and will use good faith efforts to cause Full
Implementation for
2
<PAGE> 3
Existing FBU Customers of the Master Vendor relationship between MSXI and FORD
by July 1, 1998. The Parties recognize that the implementation of MSXI's Master
Vendor status is the responsibility of both Parties. Proactive support from FORD
during the period leading up to Full Implementation, including proactive support
on sourcing strategies, obtaining the support of preferred suppliers and the
support of internal customers, is a key factor in achieving Full Implementation.
If MSXI determines that Full Implementation for Existing FBU Customers is not
likely to be accomplished by July 1, 1998, and MSXI desires to seek a delay in
the effective date of the reduction of the fee prescribed pursuant to Article
3.2.3, MSXI will notify FORD to that effect and the Parties will convene the
Advisory Board to determine a fair and equitable resolution of the matter. The
Advisory Board will take equitable action, taking into account all the relevant
circumstances, consistent with the long-term relationship between FORD and MSXI
and the expectation that, at the time of the reduction of the fee provided for
in article 3.2.3, MSXI's profit margins associated with such fees will be
preserved at a level consistent with that existing prior to such reduction,
Exhibit 1.2.2 provides a sample calculation of such profit margins.
1.2.3 During the term of this Agreement, MSXI will be the only Master
Vendor of the Services for FORD, and there will be no other joint master vendor
relationship for such Services. The Existing FBU Customers have agreed that
MSXI serves as their Master Vendor. Other FORD business units do not have
master vendors for the Services, and if any FORD business unit wishes to appoint
a master vendor for the Services, it shall appoint MSXI. In support of this,
FORD agrees as follows: (a) No FORD business unit will enter into any agreement
or arrangement (other than this Agreement) whereby any supplier provides FORD
with Supply Management for the Services; and (b) FORD agrees that where it comes
to the attention of the Ford Purchasing Department that a business unit is
considering entering into an agreement for another supplier to provide a major
portion of its requirements for on-site contract personnel services (except
insignificant agreements), FORD will notify MSXI and MSXI will be given an
opportunity to bid on that business as a preferred supplier.
1.3 MSXI's performance in the Master Vendor relationship with FORD will be
measured by FORD's Q1 metrics program as established in Article 1.3.1.
Procedures and work instructions for the administration of the Services at FORD
are contained in GRI's quality manual for the Services.
1.3.1 Master Vendor Q1 metrics applicable to MSXI are identified as
quality (customer satisfaction) and deliverable timing. Cost, which is normally
a part of Ql Metrics, is specifically addressed elsewhere in this Agreement.
Metric statements inclusive of definitions and goals for Q1 metrics have been
established by the Parties and are attached as Exhibit 1.3.1 hereto. Timing
measurable goals will be determined by the Parties based upon a 12 month
historical average from the previous 12 months (or annual contract period) as
documented in the metric statement.
1.3.2 The Parties will conduct jointly an annual formal review of the
Q1 metrics for MSXI performance. MSXI will conduct an informal review of such
metrics monthly and provide the results of such review to FORD. If any given
evaluation does not meet the Ql criteria for four consecutive months, a review
may be initiated by FORD to determine whether Ql probation is
3
<PAGE> 4
warranted. If probation is warranted, MSXI will be allowed at least six months
to cure such deficiency. The Parties recognize that the increased use of MSXI
First Tier Services may involve a change in existing relationships between FORD
personnel and existing suppliers as well as other changes at FORD which may
result in initial dissatisfaction until FORD personnel become accustomed to the
Master Vendor relationship with MSXI. In addition, the Parties recogaize that
MSXI will undergo a period of expansion of providing Services to FORD and that
such a period will likely involve potential for performance which will not meet
Q1 criteria. The Parties agree to use good faith efforts to minimize any
failure to achieve Ql criteria. In the event MSXI fails to achieve the Q1
criteria during the period leading up to and 90 days after Full Implementation
for Existing FBU Customers, such failure will not cause MSXI to be placed on
probation or otherwise considered in default of its obligations under this
Agreement. The provisions of this Article 1.3 shall supersede any Q1 probation
and/or revocation policy stated in FORD's quality manual as it pertains to MSXI
as Master Vendor.
1.3.3 MSXI, as the Master Vendor and provider of Supply Management,
will assess the second tier suppliers according to the Q1 metrics which govern
this Agreement and may take probationary or desourcing action, as it deems
necessary, it being understood however, that MSXI has no right to grant,
withdraw or withhold Q1 status on behalf of FORD for second tier suppliers.
1.4 MSXI shall support the achievement of FORD minority sourcing
objectives. FORD agrees that all second tier suppliers having certification in
accordance with FORD's minority recognition program shall qualify toward the
aforementioned minority sourcing objectives. MSXI will administer minority
source contracts, and billing and pricing will be carried out by MSXI in
accordance with the other provisions of this Agreement. However, documentation
will be structured in such a way to assure that FORD receives appropriate
credit under applicable governmental programs. MSXI's compliance with this
provision shall, regardless of legal structure, be considered to satisfy MSXI's
minority sourcing obligations pursuant to FORD policy with respect to providing
the Services. MSXI will use all good faith efforts to assure that a minimum of
$75-million of its revenues for the Services will be minority source revenues
in any year in which MSXI's total revenues for sale of Services to FORD is not
less than $325-million. MSXI shall also use its good faith efforts to assure
that the following percentages of its revenues are minority source revenues in
the years indicated:
YEAR PERCENTAGE
1997* 24%
1998 25
1999 26
2000 27
2001 28
2002* 29
* 1997 and 2002 are partial years
4
<PAGE> 5
The foregoing commitment by MSXI is based on Exhibit 1.4, which states the
status of minority sourcing for December 23, 1996 through July 6, 1997.
1.5 FORD will include MSXI in all requests for quotations, broadcast or
other opportunities to provide the Services to any FORD business unit.
1.6 In further support of FORD's obligations hereunder, FORD agrees that
during the term of this Agreement, FORD will not establish a business unit to
perform Supply Management of Services.
1.7 FORD and MSXI will use good faith efforts to integrate MSXI's activities
hereunder with FORD purchasing operations utilizing where appropriate FORD
Ordering and Billing Systems.
1.8 The Parties shall continue the Supply Management currently provided by
GRI to FORD (including Jaguar Cars Limited) in the United Kingdom pursuant to
P.O. 09405 effective January 3, 1996 and P.O. JR/66/09482 until the Parties
modify such arrangement.
ARTICLE 2. - OFFER, ACCEPTANCE
2.1 Procurement of Services will be accomplished through the utilization of
FORD Ordering and Billing Systems and the issuance of standard FORD Purchase
Orders (collectively "Purchase Order(s)"), which Purchase Order will constitute
an offer to MSXI by FORD to enter into the purchase and supply agreement it
describes. MSXI's commencement of work thereunder will constitute acceptance of
the offer.
2.2 Once accepted, such Purchase Order together with this Agreement will be
the complete and exclusive statement of the purchase agreement. The standard
preprinted terms of the FORD Purchase Order shall not apply to transactions
between FORD and MSXI covered by this Agreement. Any modifications of the terms
set forth herein proposed by either Party (e.g., purchase order, confirmations,
invoices) are not part of the agreement in the absence of the other Party's
express written agreement to the modification.
ARTICLE 3. - PRICE AND ECONOMICS
3.1 The prices for the Services ("Bill Rates") covered by this Agreement
shall be as set forth in this Article 3.1.
3.1.1 The Bill Rates for each Existing FBU Customer, adjusted in
accordance with this Agreement, shall be continued during the term of this
Agreement for the following positions:
(i) all positions filled or in process on or before August 31, 1997
("Existing
5
<PAGE> 6
Arrangements"), as long as the contractee filling the position remains
the same and the responsibilities remain the same; and
(ii) all Backfills of Existing Arrangements completed within 30 calendar
days after a position is vacated, where the term "Backfill" refers to
the replacement of a contractee with a new contractee in the same
position at the same Bill Rate, assuming that MSXI is able to provide
such replacement at a cost no greater than that of the existing
contractee.
3.1.2 The Bill Rates for Existing Arrangements will be revised annually
based on 80% of the U.S. Department of Labor, Bureau of Labor Statistics
Employment Cost Indices (Total compensation, administrative support, including
clerical, occupations- Series ID#: ECU 11122A; and professional, speciality,
and technical occupations- Series ID#: ECU 1142A) (collectively, the
"Indices"), applied as most reasonably applicable to all positions. The base
period for such adjustments shall be the year ended December 31, 1996. Annual
revisions to such Bill Rates will be implemented in the first billing cycle of
May, beginning in May 1998.
3.1.3 The Bill Rates for all Services other than those performed under
Existing Arrangements ("New Arrangements") shall be in accordance with the rates
shown on Exhibit 3.1.3, adjusted in accordance with this Agreement, except that
in the case where the FBU Customer selects a particular individual, or a skill
set which cannot be supplied by a second tier supplier, or MSXI if it elects to
provide such contractee, at a rate that is equal to or less than the rate
specified as "Deviation Threshold" on Exhibit 3.1.3, such Bill Rate shall be
negotiated by MSXI and the FBU Customer. FORD and MSXI agree that, for those
billing classifications appearing on Exhibit 3.1.3 where the Deviation Threshold
is established as $0.00, MSXI will propose firm Bill Rates when 20 or more
occurrences exist on which to base such firm Bill Rates. MSXI shall determine,
in the case of any proposed contractee (other than one covered by a deviation
process), the Bill Rate on Exhibit 3.1.3 identified as FORD Bill Rate A or FORD
Bill Rate B which shall be applicable to such proposed contractee. Purchase
Orders issued by FBU Customers pursuant to this Agreement shall incorporate the
rates provided for in this Article 3.1.3.
3.1.4 The Bill Rates for New Arrangements will be revised annually based
on 80% of the Indices, applied as most ressonably applicable to each billing
class appearing on Exhibit 3.1.3. The base period for such adjustments shall be
the year ended December 31, 1996. Annual revisions to all Bill Rates will be
implemented in the first billing cycle of May, beginning in May 1998.
3.1.5. At either Party's option and in connection with the annual
revision of Bill Rates for Existing Arrangements or New Arrangements, a mutual
benchmarking study of an algorithm may be initiated, individually or in
combination with other algorithms. The Parties intend modifications to the Bill
Rates would be established consistent with the benchmark survey results.
3.1.6. When MSXI expands the Master Vendor program beyond Existing FBU
Customers, Bill Rates will be negotiated and mutually agreed upon by MSXI and
the new FBU Customer, if the
6
<PAGE> 7
Bill Rates for New Arrangements are inappropriate because of differences in the
local job market
3.2 Pursuant to the Master Vendor relationship for the Services, MSXI's fee
structure for Supply Management will be as follows:
3.2.1 In accordance with current practice, from the Effective Date
through August 31, 1997;
3.2.2 2.2% of the total amount payable by FORD for Services performed
during the time period of September 1, 1997 through June 30, 1998, excluding
the fee determined under this Section 3.2 (the "Purchase Amount"); and
3.2.3 1.5% of the FORD Purchase Amount for Services performed during
the time period of July 1, 1998 until the end of this Agreement.
3.2.4 Notwithstanding the other provisions of Article 3.2, either Party
may request a benchmarking survey of the fee structure for Supply Management.
Such benchmarking shall be determined according to mutually acceptable standards
to determine whether there exists cost reduction opportunities that will justify
a lower fee structure for Supply Management while maintaining MSXI's profit
margins reflected in Exhibit 1.2.2. In the event that such savings are
achieved, the fee structure will be adjusted accordingly.
3.3 The fees provided for herein shall be cumulative, and not mutually
exclusive, except as expressly stated otherwise.
3.4 Promptly after the end of the term of this Agreement, MSXI will rebate to
FORD an amount equal to [ ]* per Person Year, to the extent that FORD's
utilization of MSXI First Tier Services exceed the thresholds shown on the
following table:
[
*
]
7
*CONFIDENTIAL TREATMENT REQUESTED
<PAGE> 8
Beginning with the first year for which FORD is entitled to a rebate,
exceedances and subsequent shortfalls will be carried forward to subsequent
years so that FORD shall be entitled to a rebate only to the extent the
aggregate exceedances are greater than the subsequent shortfalls. FORD shall not
receive credit for Person Years carried back pursuant to Article 3.5 to offset a
fee increase.
3.5 The rate reductions contemplated for Supply Management are linked to
increased utilization of MSXI)a First Tier Services and the following provisions
address the circumstances of a shortfall in such utilization. As used herein,
one "Person Year" means 1,968 straight time hours for which a supplier (or MSXI)
is paid for Services and is deemed to equate to one full year of Services by one
person. Examples of Person Year calculations are attached as Exhibit 3.5.1.
"One-half Person Year" means 984 straight time hours for which a supplier (or
MSXI) is paid for Services.
3.5.1 If FORD's utilization of MSXI First Tier Services during the
period July 1 through December 31, 1997 is less than [ ] Persons Years [ , ] the
amount by which such utilization is less, shall be a "shortfall," which shall be
measured in Person Years. FORD will pay MSXI a supplemental fee equal to [ ]
multiplied by the shortfall in Person Years [ ] per One-half Person Year);
provided that if FORD's utilization of MSXI First Tier Services during 1998
exceeds [ ] Persons Years, the supplemental fee payable pursuant to this Article
3.5.1 with respect to 1997 shall be treated as though FORD had utilized MSXI
First Tier Services during 1997 to the extent of one-half of such excess.
3.5.2 If FORD's utilization of MSXI First Tier Services during the
calendar year 1998 is less than [ ]Person Years, the amount by which such
utilization is less shall be considered a "shortfall," which shall be measured
in Person Years. FORD will pay MSXI a supplemental fee equal to[ ] multiplied
by the shortfall in Person Years.
3.5.3 If FORD's utilization of MSXI First Tier Services during the
calendar year 1999 is less than [ ] Person Years, or [ ] of the FBU Customers'
requirements for the Services during such year (expressed in Person Years),
whichever is less, the amount by which such utilization is less shall be
considered a "shortfall," which shall be measured in Person Years. FORD will pay
MSXI a supplemental fee equal to [ ] multiplied by the shortfall in Person
Years; provided that if FORD'S utilization of MSXI First Tier Services during
the Year 2000 exceeds the threshold established in Article 3.5.4, the
supplemental fee payable pursuant to this Article 3.5.3 with respect to 1999
shall be treated as though FORD had utilized MSXI First Tier Services during
1999 to the extent of such excess.
3.5.4 If FORD's utilization of MSXI First Tier Services during the
calendar year 2000 is less than [ ] Person Years or [ ] of the FBU
Customers' requirements for the Services during such year (expressed in Person
Years), whichever is less, the amount by which such utilization is less shall be
considered a "shortfall," which shall be measured in Person Years. FORD will pay
MSXI a supplemental fee equal to [ ] multiplied by the shortfall in Person
Years; provided that if FORD's utilization of MSXI First Tier Services during
2001 exceed the threshold established in Article 3.5.5, the supplemental fee
payable pursuant to this Article 3.5.4 with respect to 2000 shall
8
<PAGE> 9
be treated as though FORD had utilized MSXI First Tier Services during 2000 to
the extent of such excess.
3.5.5 If FORD's utilization of MSXI First Tier Services during the
calendar year 2001 is less than [ ]Person Years or [ ] of the FBU Customers'
requirements for the Services during such year (expressed in Person Years),
whichever is less, the amount by which such utilization is less shall be
considered a "shortfall," which shall be measured in Person Years. FORD will
pay MSXI a supplemental fee equal to [ ] multiplied by the shortfall in Person
Years; provided that if FORD's utilization of MSXI First Tier Services during
the six month period January 1, 2002 through June 30, 2002 exceeds the
thresholds established in Article 3.5.6, the supplemental fee payable pursuant
to this Article 3.5.5 with respect to 2001 shall be treated as though FORD had
utilized MSXI First Tier Services during 2001 to the extent of such excess.
3.5.6 If FORD's utilization of MSXI First Tier Services for the six
month period January 1, 2002 until June 30, 2002 is less than [ ] Person Years
or [ ] of the FBU Customers' requirements for the Services during such period,
whichever is less (expressed in Person Years), FORD will pay to MSXI a
supplemental fee equal to [ ] multiplied by the shortfall in Person Years.
3.5.7 FORD shall not be required to pay a supplemental fee pursuant to
this Article 3.5 to the extent that such failure is the result of "MSXI Fault."
The term "MSXI Fault" shall solely mean MSXI's failure to meet the standards set
forth in Exhibit 3.5.7.
3.5.8 The supplemental fees payable pursuant to this Article 3.5
shall be payable for the years 1997 and 1998 promptly after the end of 1998 upon
invoice by MSXI. The supplemental fees payable with respect to each subsequent
period shall be payable promptly after the end of the next following period upon
invoice by MSXI. The supplemental fee payable with respect to any year shall
bear interest on the unpaid balance thereof from time to time at MSXI's average
borrowing rate commencing with the end of such year until payment in full. If a
supplemental fee would be payable but for excess utilization of MSXI First Tier
Services in a subsequent year, FORD shall pay interest as aforesaid on the
amount which would have been payable but for such excess beginning the end of
the year to which such supplemental fee relates.
3.6 It during any 12 mouth period, FORD's utilization of the Services
falls below [ ] Person Years, and such event is caused by a FORD policy
decision rather than adverse economic conditions to use fewer on-site contract
personnel, the Parties will renegotiate this Agreement in an appropriate manner
so as not to deny MSXI the benefit of this Agreement as originally
contemplated by the Parties, which negotiation may include the following
elements:
(i) Restructuring of the Master Vendor relationship in any
appropriate way to achieve purposes of the agreement; increase the
percentages of Ford requirements available to MSXI; refund a
portion
9
<PAGE> 10
of the purchase price to the extent necessary to reflect
substantive change in the subject matter of the Agreement.
(ii) Use other business tools available including other means of
offsetting lost business with comparable business
3.7 For each of the five 12 month time periods following the Effective
Date, MSXI agrees to pay FORD, as a rebate of fees paid by FORD hereunder, [ ]
MSXI's Profits (as defined in Exhibit 3.7), on a before tax basis, generated
by incremental on-site contract personnel services provided by or through MSX
to non-FORD entities utilizing the PeopleNet process. Exhibit 3.7 hereto
provides the formula, definitions and representative examples of the
calculations to be used to determine the amount, if any, due FORD. Within 30
days of the end of each 12 month time period, MSXI shall utilize the formula
provided in Exhibit 3.7 to determine whether any payment is due FORD for the
preceding 12 month period. Within 45 days after the end of the term of this
Agreement, Seller shall pay to FORD any amounts due FORD under this Article
3.7.
ARTICLE 4. - DELIVERY DATES, RELEASES
If delivery dates are not specified in a Purchase Order, will provide
Services only as authorized by FORD to MSXI.
ARTICLE 5. - INVOICES, PAYMENT
5.1 The Parties agree that, if reasonable and consistent with sound
business practices, all billing, payment and general transaction processes
utilized by the Parties and GRI as of the date of this Agreement shall remain
in place until such time as new processes are developed and implemented.
5.2 Payment for Services and Supply Management will be due in immediately
available funds within one FORD business day after submission and successful
receipt of electronic invoice, subject to subsequent audit and review for
accuracy and completeness.
ARTICLE 6. - DEFENSE AND INDEMNITY
6.1 At FORD's request, MSXI will defend and shall have the right to
defend and settle all claims (including lawsuits, administrative claims,
and other proceedings to recover for personal injury or death, property damage,
or economic losses) that are caused by intentional wrongful acts or the
negligence of MSXI, its suppliers or contractors under a Purchase Order,
including claims arising out of or related to work performed by MSXI, its
employees or subcontractors on FORD's premises and claims for any related
violations of any law, ordinance or regulation. To the full extent
10
<PAGE> 11
permitted by applicable law, MSXI will indemnify FORD, its directors, officers
and employees and authorized dealers for all expenses (including attorney fees,
settlements and judgments) incurred by FORD in connection with such claims, it
being understood, however, that FORD should not incur expenses on any matter
which MSXI has agreed to defend. FORD will give MSXI prompt notice of any claim.
6.2 MSXI, its suppliers and contractees agree not to assert any
intellectual property right against FORD or FORD's Associated Companies, now
or hereafter owned by MSXI, its suppliers and contractees, which would be
infringed by the manufacture, reproduction, sale or use of any deliverable or
Services incorporating a deliverable.
6.3 MSXI will use good faith efforts to cause MSXI's employees,
contractors and agents not to possess, use, sell or transfer illegal drugs,
medically unauthorized drugs or controlled substances, or unauthorized alcohol,
and not to be under the influence of alcohol or drugs on FORD's premises. For
services performed on FORD's premises in Canada, MSXI must furnish, prior to
payment, evidence of compliance with the Worker's Compensation Act.
6.4 At MSXI's request, FORD will defend and shall have the right to
defend and settle all claims (including lawsuits, administrative claims,
and other proceedings to recover for personal injury or death, property damage,
or economic losses) that are caused by intentional wrongful acts or the
negligence of FORD, its suppliers or contractors other than MSXI or by MSXI's
compliance with any provision of this Agreement relative to minority sourcing.
To the full extent permitted by applicable law, FORD will indemnify MSXI, its
directors, officers and employees for all expenses (including attorney fees,
settlements and judgments) incurred by MSXI in connection with such claims, it
being understood, however, that MSXI should not incur expenses on any matter
which FORD has agreed to defend. MSXI will give FORD prompt notice of any
claim. Further, FORD shall indemnify and hold harmless MSXI against any
liability, cost or loss resulting from the termination by FORD of the services
of any supplier or the eligibility of any supplier to supply services to FORD.
ARTICLE 7. - INTELLECTUAL PROPERTY
7.1 All right, title and interest in any invention, discovery,
improvement or other work product ("Invention") independently developed by
MSXI, its suppliers or contractees will belong to such entity. FORD and MSXI
specifically agree that all right, title and interest in the software programs
developed by GRI for PeopleNet reside solely with MSXI, subject only to the
grant to FORD of a nonexclusive, paid-up, worldwide license to reproduce, use,
maintain and modify such software for a period of one year in the event that
FORD terminates this Agreement by reason of the breach hereof by MSXI; provided
that such license shall not be transferable and shall not include the right to
sublicense. MSXI specifically agrees that all data and information (i)
provided by FORD for input into the software used by MSXI in providing the
Services hereunder, and/or (ii) generated by such software for FORD, belongs
solely to FORD.
11
<PAGE> 12
7.2 All right, title and interest in any Invention made, conceived or
first reduced to practice by MSXI's employees, suppliers or contractees by a
person in performing research or development and in the field of use for which
such person is performing services for FORD shall belong to FORD, without
further consideration and shall be reported to FORD promptly. The "field of
use" shall mean a field in which the person is hired for the purpose of
research or development of Inventions and a reasonable extension thereof. Upon
request of FORD, MSXI's employees, suppliers and contractees shall execute all
documents and papers and shall furnish all reasonable assistance required to
(i) establish in FORD title to such Inventions, and (ii) enable FORD to apply
for United States and foreign patents thereon. All other Inventions made,
conceived or reduced to practice by such persons shall belong to MSXI or its
supplier.
7.3 Any work of authorship created by any one or more of MSXI's employees,
suppliers or contractees in performing contract services under a Purchase Order
for use as a contribution to a collective work, as part of a motion picture or
other audio-visual work, as a translation, as a supplementary work, as a
compilation, as an instructional text, as a test, as answer material for a test,
or as an atlas, shall be considered to be a specifically ordered or commissioned
"work made for hire" for FORD and all copyrights for such work of authorship
shall belong to FORD. In the event a portion of any work of authorship created
by MSXI's employees, suppliers or contractees in performing the services under a
Purchase Order does not qualify as "work made for hire", MSXI shall acquire all
right, title and interest to all copyrights for such portion and assign to FORD
all acquired right, title and interest to such copyrights, without further
consideration from FORD. All works of authorship created and distributed under a
Purchase Order will bear a valid copyright notice designating FORD as the
copyright owner.
7.4 All drawings, know-how, and confidential information supplied to
MSXI by FORD and identified as "confidential" in writing and all rights therein
will remain the property of FORD and will be kept confidential by MSXI in
accordance with Article 8.2 hereunder. MSXI is licensed to use FORD's drawings,
know-how, and confidential information only for the purpose of fulfilling its
obligations under a Purchase Order. In addition to the obligations of Article
8.2 and subject to the limitations therein, MSXI will not disclose such
materials and information to third parties unless this is required for MSXI to
fulfill its duties under a Purchase Order. MSXI will ensure that any third
party to whom MSXI subcontracts any of the work hereunder is bound by all the
terms and conditions relating to such work to which MSXI is bound under a
Purchase Order.
7.5 MSXI will neither assert nor transfer to another a right to assert
against FORD and/or any of its Associated Companies, or dealers or customers or
suppliers thereof, any intellectual property right of MSXI that is applicable
to any works of authorship described in Article 7.3 hereof furnished to FORD or
any of FORD's Associated Companies in the course of MSXI's activity hereunder.
Associated Company means Ford Motor Company and (if it is not the Buyer under a
Purchase Order) any company in which Ford Motor Company owns, directly or
indirectly, 25% or more of the capital or voting stock.
7.6 MSXI will use reasonable care not to sell or otherwise dispose of any
product that
12
<PAGE> 13
incorporates any trademark, patentable invention, copyright work, industrial
design or other matter the subject of any intellectual property right of FORD or
any of its Associated Companies to any party other than FORD except where
specifically authorized by FORD in writing.
7.7 MSXI, as well as its suppliers and contractees hereby grant to FORD, a
permanent, nonexclusive, paid-up, worldwide license, with a right to grant
sublicenses, under each copyright MSXI, its suppliers and contractees own or
control or have the right to license, in each work of authorship fixed in any
tangible medium of expression that MSXI, its suppliers and contractees furnish
to FORD or FORD's designee produced pursuant to a Purchase Order to use such
work, reproduce such work in quantities, prepare derivative works, distribute
copies of such work to the public, and perform and display such work publicly,
provided however that computer software shall be excluded from such grant unless
the services are provided for the purpose of creating or modifying, such
software.
ARTICLE 8. - INFORMATION AND DATA
8.1 MSXI will furnish to FORD, or another party designated by FORD,
without restrictions on use or disclosure, all information and data MSXI
acquires or develops in the course of MSXI's activities under a Purchase Order
and only within the scope of work thereof in form and content set forth in
Exhibit 8.1, or as otherwise mutually agreed by the Parties (the "Reports"). In
the event FORD requests information in form or content other than the Reports,
and such request places an undue burden on MSXI (e.g., man-hours, cost), the
Parties will negotiate in good faith to mitigate or remove such burden from
MSXI (e.g., information provided on a cost-plus basis). At FORD's request,
MSXI also will discuss with FORD or another party designated by FORD, without
restrictions on use or disclosure, any potential design, quality or
manufacturing problems with Services MSXI worked on or produced pursuant to a
Purchase Order.
8.2 Unless otherwise indicated in writing by FORD, MSXI will use
reasonable care to prevent disclosing to others and will use only for the
benefit of FORD, (i) information and data identified in writing by FORD as
"confidential" furnished by FORD or developed or acquired by MSXI in its work
under a Purchase Order, development agreement or early sourcing agreement for
Services related to or using such information or data, and (ii) information
identified in writing by FORD as "confidential" relating to any portion of
FORD's business that MSXI may acquire in the course of MSXI's activities under
a Purchase Order, development agreement or early sourcing agreement. MSXI
shall return all copies of such information and data to FORD when requested by
FORD. This obligation shall continue so long as any Purchase Order for Services
related to or using such information or data is in effect and for a period of
two years following compliance with the return requirement. This obligation
will not apply to information that is or becomes publicly known or known to
MSXI through no fault of MSXI. Nevertheless, MSXI may disclose the information
and data of Sections 8.3(i) and (ii) hereof to third parties if this is
required for MSXI to fulfill its duties under a Purchase Order and such third
parties have agreed to conditions at least as stringent as those contained
herein.
13
<PAGE> 14
8.3 Unless otherwise indicated in writing by MSXI, FORD will use
reasonable care to prevent disclosing to others and will not use, except in
connection with Services provided by MSXI (i) the information and data
identified in writing by MSXI as "Confidential" furnished by MSXI relative to
its business systems, software and methods of operation. This obligation shall
continue as long as this Agreement is in effect and for a period of two (2)
years thereafter. This obligation will not apply to information that is or
becomes publicly known through no fault of FORD.
ARTICLE 9. - SUBCONTRACTS
9.1 In each subcontract of MSXI's work performed pursuant to a Purchase
Order, MSXI will obtain for FORD the obligations, rights and licenses granted in
Articles 6, 7 and 8.
9.2 In performing subcontracted services under a Purchase Order, MSXI's
suppliers shall execute and require each of its employees and each approved
third party contractee to execute the FORD "Contractee Personnel
Agreement", a copy of which is attached hereto as Exhibit 9.2 and incorporated
herein, prior to commencing work under a Purchase Order. MSXI's suppliers
shall then retain the original executed Contractee Agreement and deliver a copy
of such contract to FORD upon request. In the event that, for any reason, MSXI
or FORD is not satisfied with the performance of the supplier's employee(s) or
third party contractee under a Purchase Order, MSXI shall cause its suppliers
to replace such person with another qualified employee or third party hire.
ARTICLE 10. - ADVERTISING
No reference to FORD or any of its Associated Companies or use of FORD's trade
marks or logos will be made by MSXI in its advertising or publicity materials
without the prior written permission of FORD except that MSXI will be permitted
to identify FORD as a customer.
ARTICLE 11. - OUTSIDE SUPPLY BASE
FORD shall make good faith efforts to assist MSXI in its efforts to obtain third
party supplier pricing for products currently utilized by GRI, which are
material either individually or in the aggregate to the ongoing operations of
GRI and procured pursuant to existing FORD supplier agreements, under terms and
conditions similar to those enjoyed by FORD for a period of five years after
execution of this Agreement.
ARTICLE 12. - AUDIT RIGHTS
FORD will have the right at any reasonable time to send its authorized
representatives to examine all pertinent documents and materials in the
possession or under the control of MSXI relating to the
14
<PAGE> 15
accuracy of MSXI's charges under any invoice or any payments requested by MSXI
pursuant to a Purchase Order. MSXI shall maintain all pertinent books and
records relating to a Purchase Order for a period of two years after completion
of services or delivery of Services pursuant to that Purchase Order.
ARTICLE 13. - ASSIGNMENT
MSXI will not assign all of its substantive duties under this Agreement (except
to its affiliates) without FORD's written approval, it being understood however
that MSXI may subcontract substantial parts of the work under any Purchase Order
unless otherwise agreed by the Parties. MSXI will provide FORD with reasonable
advance written notice of any assignment of MSXI's right to receive payment
under a Purchase Order. Any such assignment shall not prohibit FORD from
enforcing any of its rights against the assignee.
ARTICLE 14. - EXCUSABLE DELAYS
Neither FORD nor MSXI will be liable for a failure to perform (other than the
obligation to make payment) that arises from causes or events beyond its
reasonable control and without its fault or negligence, including labor
disputes. The Party claiming the excusable delay shall give notice in writing as
soon as practicable after the occurrence of the cause relied on and after
termination of the condition. In the event of an excusable delay in performance,
FORD at its option may (if applicable) acquire possession of all finished goods,
work in process produced under a Purchase Order, and MSXI will deliver such
articles to FORD. FORD may also obtain the Services covered by a Purchase Order
elsewhere for the duration of the impediment and a reasonable period thereafter.
ARTICLE 15. - REMEDIES, WAIVER
The individual remedies reserved herein will be the sole remedies provided. No
waiver of any breach of any provision of this Agreement will constitute a waiver
of any other breach of such or any other provisions.
ARTICLE 16. - TERM; TERMINATION
16.1 The term of this Agreement begins as of the Effective Date and
expires on the fifth anniversary thereof, unless otherwise early
terminated as provided in this Article 16 or extended by the mutual agreement
of the Parties. The Parties will negotiate in good faith to extend the term of
this Agreement for an additional five year period during the year prior to its
expiration.
16.2 If during this Agreement (i) MSXI does not remain competitive in the
key business areas of
15
<PAGE> 16
price, quality, and timeliness of delivery with other Q1 qualified suppliers,
(ii) business changes eliminate the need for the Services provided by MSXI, or
(iii) MSXI substantially breaches this Agreement, FORD may terminate its
purchase obligations hereunder. FORD shall provide written notice to MSXI
which outlines its cause of termination and specifies a termination date at
least nine months after the date of notice. If, within six months after the date
of the notice, MSXI corrects the causes for termination, termination will be
canceled and this Agreement will continue. It is contemplated that termination
for reasons of lack of competitiveness or business changes is extremely
unlikely if MSXI is in compliance with this Agreement since (i) the Parties
have agreed to pricing mechanisms which are expected to deal with any issue of
price competitiveness, (ii) the Parties have agreed that quality and timeliness
will be measured by Q1 Metrics pursuant to Article 1.3, (iii) FORD's
obligations hereunder to purchase the Services is limited to its requirements
for the Services so that the nature of FORD's obligations should limit the
impact of changed business conditions, (iv) the Parties agree that business
changes referred to in Article 3.6 are excluded from the scope of paragraphs
(i) and (ii) of this Article 16.2, and (v) MSXI's willingness to enter into and
consummate the Stock Purchase Agreement is dependent upon the execution and
delivery of this Agreement (and certain other agreements) and a grievous loss
would be suffered by MSXI if this Agreement is terminated. The additional fees
payable pursuant to Article 3.5 shall be payable in the event that FORD
terminates this Agreement for any reason other than the uncured substantial
breach hereof by MSXI. Any dispute relative to FORD's right to terminate shall
be resolved pursuant to Article 18 of this Agreement.
ARTICLE 17. - COMPLIANCE WITH LAW
17.1 FORD ("Ford U.S.") serves from time to time as a contractor for the
United States government. The policy of the United States government expressed
in Pub. L. 95-507, that small business concerns and small disadvantaged
business concerns will have the maximum practicable opportunity to participate
in performing contracts of the United States government, and its clause
entitled "Utilization of Small Business Concerns and Small Business Concerns
Owned and Controlled by Socially and Economically Disadvantaged Individuals,"
apply to Ford U.S. and its U.S. suppliers. A copy of the FORD U.S. policy with
respect thereto has been provided to MSXI by Ford U.S. as Exhibit 17.1.
17.2 If Ford U.S. is the Buyer, and MSXI is the Seller and a U.S. entity,
Seller will comply with federal laws, rules, and regulations applicable to
subcontractors of government contractors, including those relating to
contracting with small and disadvantaged business concerns (Pub. L. 95-507);
equal employment opporunity and affirmative action in the employment of
minorities (Executive Order 1246); women (Executive Order 11375), the
handicapped (29 USC 793), and certain veterans (38 USC 2012); contracting with
business concerns operating in areas of surplus labor (41 CFR 1-1.805); and
contracting with women-owned business concerns (Executive Order 12138).
16
<PAGE> 17
ARTICLE 18. - APPLICABLE LAW AND ARBIRTATION
18.1 This Agreement shall be governed by the law of the State of Michigan
without regard to conflict of laws provisions thereof, and litigation on
contractual causes arising from a Purchase Order shall be brought only in that
jurisdiction.
18.2 If either Party initiates litigation on such contractual causes, the
other Party shall have the right to initiate mediation and binding arbitration
in accordance with the Model Procedure for Mediation of Business Disputes of the
Center for Public Resources and, in the case of arbitration, the CPR Rules for
Non-Administered Arbitration of Business Disputes ("CPR"). Each Party will bear
equally the costs of the mediation and arbitration.
18.2.1 The Parties will jointly appoint a mutually acceptable mediator
or arbitrator, seeking assistance in such regard from CPR if they have been
unable to agree upon such appointment within 20 days.
18.2.2 The Parties agree to participate in good faith in the mediation
and negotiations related thereto for a period of 30 days. If the Parties are not
successful in resolving the dispute through the mediation, then the Parties
agree to submit the matter to binding arbitration by a sole arbitrator in
accordance with the CPR Rules for Non-Administered Arbitration of Business
Disputes.
18.2.3 Unless otherwise agreed by the Parties in writing, mediation or
arbitration shall take place in the City of Dearborn, Michigan. This Article 18
is subject to the Federal Arbitration Act, 9 U.S.C.A. Section 1 et seq. and
judgment upon the award rendered by the Arbitrator, if any, may be entered by
any U.S. court having jurisdiction thereof. Punitive and exemplary damages shall
not be awarded.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
FORD MOTOR COMPANY MSX INTERNATIONAL
(HOLDINGS), INC.
By: /s/ [SIG] By: /s/ [SIG]
------------------------- --------------------------
Title: Title: Vice President
----------------------- -----------------------
17
<PAGE> 18
Master Vendor Agreement
Exhibit 1.1
Current Ford Business Unit Customers
<PAGE> 19
<TABLE>
<CAPTION>
ACCOUNT
DEPT. OPS CHARGE REQUISITIONER REQUISTIONER FINANCE FINANCE
# LOC (AIS) CODE* NAME PROFS ID NAME PROFS ID
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1501 - 1502, 1510,
1515, 1521, 1525,
1527, 1535, 1550- Barbara Higgerson BHIGGERS
1558, 1580 159 TBD Jennifer Smart JSMART1 Jeff Sholdice JSHOLDIC
5154 200 TBD Darin Gillis DGILUS1 Darin Gillis DGILLIS1
7200 200 25A-2744-PNET/TBD Ray Schaffart RSCHAFFA Brice Jorgensen BJORGENS
7209 200 25A-2744-PNET/TBD Michael Roumaya MROUMAYA Brice Jorgensen BJORGENS
7210 200 25A-2744-PNET/TBD Mike Newbury MNEWBURY Brice Jorgensen BJORGENS
7212 200 25A-2744-PNET/TBD Richard Kean RKEAN Brice Jorgensen BJORGENS
7215 200 25A-2744-PNET/TBD Keith Kinyon KKINYON1 Brice Jorgensen BJORGENS
7218 200 25A-2744-PNET/TBD Roger Wade RWADE Brice Jorgensen BJORGENS
7220 200 25A-2744-PNET/TBD TBD TBD Brice Jorgensen BJORGENS
7225 200 25A-2744-PNET/TBD Patricia Dalter PDALTER Brice Jorgensen BJORGENS
7235 200 25A-2744-PNET/TBD Ron Andrade RANDRADE Brice Jorgensen BJORGENS
7240 200 25A-2744-PNET/TBD TBD TBD Brice Jorgensen BJORGENS
Steve Lyons SLYONS2
210 1101 25A-2744-PNET Donna Pritchard DPRITCH1 Toni Murinas TMURINAS
Freda Smart FSMART
213 1101 25A-2744-PNET Marge Bagnell MBAGNELL Toni Murinas TMURINAS
B001 - B060 1182 TBD TBD TBD Jim Theisen JTHEISE1
B030 1182 TBD James Brown JBROWN6 Jim Theisen JTHEISE1
B500 1183 25A-2744-PNET/TBD Ray Schaffart RSCHAFFA Brice Jorgensen BJORGENS
B505 1183 TBD Bill Flatt BFLATT Brice Jorgensen BJORGENS
B509 1183 25A-2744-PNET/TBD Michael Roumaya MROUMAYA Brice Jorgensen BJORGENS
B510 1183 25A-2744-PNET/TBD Mike Newbury MNEWBURY Brice Jorgensen BJORGENS
B512 1183 25A-2744-PNET/TBD Richard Kean RKEAN Brice Jorgensen BJORGENS
B515 1183 25A-2744-PNET/TBD Keith Kinyon KKINYON1 Brice Jorgensen BJORGENS
B518 1183 25A-2744-PNET/TBD Roger Wade RWADE Brice Jorgensen BJORGENS
B520 1183 25A-2744-PNET/TBD TBD TBD Brice Jorgensen BJORGENS
B525 1183 25A-2744-PNET/TBD Patricia Dalter PDALTER Brice Jorgensen BJORGENS
B535,B7XX,B9XX 1183 25A-2744-PNET/TBD Ron Andrade RANDRADE Brice Jorgensen BJORGENS
B540 1183 25A-2744-PNET/TBD TBD TBD Brice Jorgensen BJORGENS
4890 1233 TBD Richard Trebnik RTREBNIK Richard Trebnik RTREBNIK
6802,6810,6811, Dennis Crowe DCROWE Dennis Crowe DCROWE
6831,6862,6863 1324 12-0970-2 Chuck Rivers CRIVERS Chuck Rivers CRIVERS
Wes Pandoff WPANDOFF
7203 1325 12-0970-2 Valerie Blanchett VBLANCHE Wes Pandoff WPANDOFF
ANY EFHD
700-799 1623 12-0970-PNET EMPLOYEE N/A Brian Upbin BUPBIN
ANY EFHD
400-499 1625 12-0970-PNET EMPLOYEE N/A Bill Chapman WCHAPMA1
200,205,209 - 212,
220,240,250 - 252, 1631 12-0970-PNET Refer to Flow "C" John Weirch JWEIRCH
257 - 259 John Alkire JALKIRE
Ron Muir RMUIR
Y8600 1632 12-0970-PNET Terry Dunham TDUNHAM Howard Beht HBEHR
Jim O'Neill JONEILL
0012 1722 12-0970-PNET Don Gelinas DGELINAS Robert Stando RSTANDO
0013 1722 12-0970-PNET Don Gelinas DGELINAS Robert Stando RSTANDO
Chuck Columbus CCOLUMBU
0014,0033 1722 12-0970-PNET Don Gelinas DGELINAS Robert Stando RSTANDO
Doug Kinser DKINSER
0015 1722 12-0970-PNET Don Gelinas DGELINAS Robert Stando RSTANDO
Bryan Capanyola BCAPANYO
0017,0018 1722 12-0970-PNET Don Gelinas DGELINAS Robert Stando RSTANDO
Jerry Blakley JBLAKLEY
0019 1722 12-0970-PNET Don Gelinas DGELINAS Robert Stando RSTANDO
Joe Vigo JVIGO
0030 1722 12-0970-PNET Don Gelinas DGELINAS Robert Stando RSTANDO
Bob Dalter RDALTER
0031 1722 12-097O-PNET Don Gelinas DGELINAS Robert Stando RSTANDO
Jean-Paul Cliquennois JCLIQUEN
0035 1722 12-0970-PNET Don Gelinas DGELINAS Robert Stando RSTANDO
V0001, W0521 1823 TBD BO REINHOLTZ BREINHO1 Mark Fedders MFEDDERS
V0020 1823 TBD TOM PODSIADLIK TPODSIAD Mark Fedders MFEDDERS
<CAPTION>
DEPT. HR HR
# NAME PROFS ID ACTIVITY MAILBOX
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1501 - 1502, 1510,
1515, 1521, 1525, Barbara Higgerson BHIGGERS
1527, 1535, 1550- Jennifer Smart JSMART1
1558, 1580 RSCERPEL Romeo Plant PNETPTO
Kimble Little KLITTLE3
5154 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
7200 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
7209 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
7210 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
7212 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
7215 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
7218 Michael Schulhoff MSCHULHO AP0 - Chassis PNETPTO
7220 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
7225 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
7235 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
7240 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
210 Jim Podgorny JPODGORN Lincoln Mercury PNETSO
Jim Podgorny JPODGORN
213 Trish Harris THARRIS4 Lincoln Mercury PNETSO
B001 - B060 TBD TBD Powertrain Operations PNETPTO
B030 James Brown JBROWN6 Powertrain Operations PNETPTO
B500 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
B505 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
B509 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
B510 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
B512 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
B515 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
B518 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
B520 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
B525 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
B535,B7XX,B9XX Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
B540 Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
4890 John Wallace JWALLACE Vulcan Forge PNETPTO
6802,6810,6811, Dennis Crowe DCROWE
6831,6862,6863 Chuck Rivers CRIVERS Vehicle Ops - Dbn Stamping PNETMFG
7203 Valerie Blanchett VBLANCHE Vehicle Ops - Dbn Tool & Die PNETMFG
700-799 Scott Laing SLAING Electrical & Fuel Handling Division PNETEFHD
400-499 Scott Laing SLAING Electrical & Fuel Handling Division PNETEFHD
200,205,209 - 212,
220,240,250 - 252, Darrell Washington DWASHING
257 - 259 APO (ACD) PNETACD
Y8600 Jerry Pompa JPOMPA Sheldon Road Plant PNETACD
0012 Tom Gualdoni TGUALDON Livonia Plant PNETPTO
0013 Tom Gualdoni TGUALDON Livonia Plant PNETPTO
0014,0033 Tom Gualdoni TGUALDON Livonia Plant PNETPTO
0015 Tom Gualdoni TGUALDON Livonia Plant PNETPTO
0017,0018 Tom Gualdoni TGUALDON Livonia Plant PNETPTO
0019 Tom Gualdoni TGUALDON Livonia Plant PNETPTO
0030 Tom Gualdoni TGUALDON Livonia Plant PNETPTO
0031 Tom Gualdoni TGUALDON Livonia Plant PNETPTO
0035 Tom Gualdoni TGUALDON Livonia Plant PNETPTO
V0001, W0521 Nancy Martin NMARTIN3 Sterling Plant PNETPTO
V0020 Nancy Martin NMARTIN3 Sterling Plant PNETPTO
</TABLE>
1 OF 38
<PAGE> 20
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
ACCOUNT
DEPT. OPS CHARGE REQUISITIONER REQUISITIONER FINANCE FINANCE
# LOC (AIS) CODE* NAME PROFS ID NAME PROFS ID
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RADAMCZY
RAY ADAMMCZYK MALUMACH
V0030 1823 TBD CRAIG BECKER CBECKER2 Mark Fedders MFEDDERS
V0100, V0571 1823 TBD Tim Schilk TSCHILK Mark Fedders MFEDDERS
V0310 1823 TBD Martin Lindsley MLINDSLE Mark Fedders MFEDDERS
V0320, V0350 1823 TBD Chuck Muir CMUIR Mark Fedders MFEDDERS
V0330 1823 TBD Mike Baur MBAUR Mark Fedders MFEDDERS
V0370 1823 TBD Martin Taylor MTAYLO13 Mark Fedders MFEDDERS
V0380 1823 TBD Michael Nowicki MNOWICK2 Mark Fedders MFEDDERS
V0551 1823 TBD Ron Holcomb RHOLCOM1 Mark Fedders MFEDDERS
V0531 1823 TBD Michael Dick MDICK Mark Fedders MFEDDERS
V0551 1823 TBD Ray Adamczyk RADAMCZY Mark Fedders MFEDDERS
V0561 1823 TBD Craig Becker CBECKER2 Mark Fedders MFEDDERS
Mark Blair MBLAIR1
0810-0880 1827 TBD Mike Walker MWALKER Daniel Gardello DGARDETT
1083 - 1090, 6701,
8110 2301 12-0970-PNET Bob Major RMAJOR Polly Schlafhauster PSCHLAFH
370 2450 25A-2744-PNET Dan Rivard JPALAZZ2 Steve Lockwood SLOCKWOO
372 2450 25A-2744-PNET Tim Boyd TBOYD Steve Lockwood SLOCKWOO
400 2450 25A-2744-PNET Phil Nome PNOME Tim Kauper TKAUPER
427 2450 25A-2744-PNET RENAN SANTOS RSANTOS4 Tim Kauper TKAUPER
Jeff Morgan MORGAN6
Kenya Black KBLACK3
Cathy Callan CCALLAN
431 2450 25A-2744-PNET Peg Anthony PANTHONY Tim Kauper TKAUPER
432 2450 25A-2744-PNET Sandra Nicholls SNICHOLL Tim Kauper TKAUPER
570 2450 25A-2744-PNET David Smith DSMITH42 Tlm Kauper TKAUPER
600 2450 25A-2744-PNET David Laberge DLABERGE Tim Kauper TKAUPER
Verna Zahn VZAHN
Peter Gough PGOUGH Brenda Walker BWALKER2
851 2450 25A-2744-PNET Marlene Androff MANDROFF Marlene Androff MANDROFF
856 2450 25A-2744-PNET Ron Thomas RTHOMA19 Alan Bennett ABENNETT
858 2450 25A-2744-PNET SUSAN KLARK SKLARK Tim Kauper TKAUPER
Phil Horlock PHORLOCK
900 2450 25A-2744-PNET Carolyn Alderman CALDERMA Tim Kauper TKAUPER
902 2450 25A-2744-PNET Kay Winsauer KWINSAUl Joel Starr JSTARR1
David Cosper DCOSPER
904 2450 25A-2744-PNET Ted Cannis TCANNIS Tim Kauper TKAUPER
Lloyd Hansen LHANSEN
906 2450 25A-2744-PNET Mary Soranno MSORANNO Tim Kauper TKAUPER
907 2450 25A-2744-PNET E.J. STEDEM, JR ESTEDEM Tim Kauper TKAUPER
Don Cook DCOOK9
911 2450 25A-2744-PNET Debbie Frederick DFREDERI Tim Kauper TKAUPER
Rob Phebus RPHEBUS
912 2450 25A-2744-PNET Mary Guest MGUEST Tim Kauper TKAUPER
915 2450 25A-2744-PNET Jim Gouin JGOUIN Tim Kauper TKAUPER
918 2450 25A-2744-PNET LINDA LEE LLEE2 Tim Kauper TKAUPER
Lisa Marchetti LMARCHET
922 2450 25A-2744-PNET Andy Warner AWARNER1 Tim Kauper TKAUPER
923 2450 25A-2744-PNET Paul Scarcello PSCARCEL Susan Tarpley STARPLEY
Mark Gruskin MGRUSKIN
Bill Flynn WFLYNN
980 2450 25A-2744-PNET Mike Roberts MROBER11 Tim Kauper TKAUPER
RICH VAN HOUSE RVANHOUS
990 2450 25A-2744-PNET D.M. Smith DSMITH35 Diane Jarke DJARKE
991 2450 25A-2744-PNET DAVID THOMAS DTHOMA22 Diane Jarke DJARKE
992 2450 25A-2744-PNET A.J. FLEMING FLEMING Diane Jarke DJARKE
993 2450 25A-2744-PNET JEFFREY BELL JBELL6 Diane Jarke DJARKE
994 2450 25A-2744-PNET ANNE BELEC ABELEC Diane Jarke DJARKE
995 2450 25A-2744-PNET SHERY DUBENIO. SDUBENIO Dlane Jarke DJARKE
996 2450 25A-2744-PNET MARK FIELDS MFIELDS Diane Jarke DJARKE
371 - 375 2450 25A-2744-PNET Steve Lockwood SLOCKWOO Steve Lockwood SLOCKWOO
417 - 421 2450 25A-2744-PNET BEBE CHAPP BCHAPP Tim Kauper TKAUPER
919 - 920 245O 25A-2744-PNET BONNIE ZWONITZER BZWONITZ GGOLLAHE
Paul Hoye PHOYE
110 2560 25A-2744-PNET Diane Powers DPOWERS Juana Wasserman JWASSERM
<CAPTION>
DEPT. HR HR
# NAME PROFS ID ACTIVITY MAILBOX
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
V0030 Nancy Martin NMARTIN3 Sterling Plant PNETPTO
V0100, V0571 Nancy Martin NMARTIN3 Sterling Plant PNETPTO
V0310 Nancy Martin NMARTIN3 Sterling Plant PNETPTO
V0320, V0350 Nancy Martin NMARTIN3 Sterling Plant PNETPTO
V0330 Nancy Martin NMARTIN3 Sterling Plant PNETPTO
V0370 Nancy Martin NMARTIN3 Sterling Plant PNETPTO
V0380 Nancy Martin NMARTIN3 Sterling Plant PNETPTO
V0551 Nancy Martin NMARTIN3 Sterling Plant PNETPTO
V0531 Nancy Martin NMARTIN3 Sterling Plant PNETPTO
V0551 Nancy Martin NMARTIN3 Sterling Plant PNETPTO
V0561 Nancy Martin NMARTIN3 Sterling Plant PNETPTO
0810-0880 Bruce Campbell BCAMPBE3 Van Dyke Plant PNETPTO
1083 - 1090, 6701
8110 Henry Palmer HPALMER VO-T&T'S PNETMFG
370 Sy Cole SCOLE3 SVO PNETSO
372 Sy Cole SCOLE3 SVO PNETSO
400 Sy Cole SCOLE3 Marketing Services PNETSO
427 Mark Dickins MDICKENS E&T PNETSO
431 Sy Cole SCOLE3 Special Vehicle Operations PNETSO
432 Sy Cole SCOLE3 CA&CC PNETSO
570 Mark Dickins MDICKINS PNETSO
600 Mark Dickins MDICKINS Marketing Services PNETSO
851 Linda Cook LCOOK6 Marketing Research Office PNETSO
Leo Seguin LSEGUIN
856 Joan Treves JTREVES Marketing Research Office PNETSO
858 Sy Cole SCOLE3 Marketing Research Office PNETSO
900 Terees McGaughy TMCGAUGH Marketing & Sales Controller's Office PNETSO
902 Paul Scarcello PSCARCEL PNETSO
904 Terees McGaughy TMCGAUGH PNETSO
906 Terees McGaughy TMCGAUGH PNETSO
907 Terees McGaughy TMCGAUGH PNETSO
911 Nerissa Morris NMORRIS Worldwide Mrkt. Plans & Strategy Office PNETSO
912 Terees McGaughy TMCGAUGH PNETSO
915 Terees McGaughy TMCGAUGH Marketing & Sales Controller's Office PNETSO
918 Leo Seguin LSEGUIN Worldwide Mrkt. Plans & Strategy Office PNETSO
922 Terees McGaughy TMCGAUGH AM & WW Export Oper. Controller's Office PNETSO
923 Paul Scarcello PSCARCEL Customer Communications & Sales PNETSO
980 Leo Seguin LSEGUIN Worldwide Mrkt. Plans & Strategy Office PNETSO
990 Leo Seguin LSEGUIN Worldwide Mrkt. Plans & Strategy Office PNETSO
991 Leo Seguin LSEGUIN Worldwide Mrkt. Plans & Strategy Office PNETSO
992 Leo Seguin LSEGUIN Worldwide Mrkt. Plans & Strategy Office PNETSO
993 Leo Seguin LSEGUIN Worldwide Mrkt. Plans & Strategy Office PNETSO
994 Leo Seguin LSEGUIN Worldwide Mrkt. Plans & Strategy Office PNETSO
995 Leo Seguin LSEGUIN Worldwide Mrkt. Plans & Strategy Office PNETSO
996 Leo Seguin LSEGUIN Worldwide Mrkt. Plans & Strategy Office PNETSO
371 - 375 Sy Cole SCOLE3 SVO PNETSO
417 - 421 Leo Seguin LSEGUIN E & T PNETSO
919 - 920 Sy Cole SCOLE3 PNETSO
110 Sandy Krus SKRUS1 DAR PNETSO
</TABLE>
AS OF 7/21/97 2 OF 38
<PAGE> 21
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
ACCOUNT
DEPT. OPS CHARGE REQUISITIONER REQUISITIONER FINANCE FINANCE
# LOC (AIS) CODE* NAME PROFS ID NAME PROFS ID
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kelle Vela KVELA
120 2460 25A-2744-PNET Rick Smith RSMITH3 Bill Kowalski WKOWALSK
121 2460 25A-2744-PNET Allan Bennett ABENNETT Bill Kowalski WKOWALSK
122 2460 25A-2744-PNET David Weir DWEIR2 Bill Kowalski WKOWALSK
122 2460 25A-2744-PNET Leanne Stevens LSTEVEN4 Bill Kowalski WKOWALSK
123 2460 25A-2744-PNET James Norris JNORRIS Bill Kowalski WKOWALSK
Art Fitzgerald AFITZGE1
124 2460 25A-2744-PNET Nick Ayres NAYRES Bill Kowalski WKOWALSK
126 2460 25A-2744-PNET James Suhay JSUHAY Bill Kowalski WKOWALSK
Anthony Kaduk AKADUK
201 2460 25A-2744-PNET Robert Smith RSMITH17 Robert W. Smith RSMITH17
202 2460 25A-2744-PNET Cynthia Mallia CMALLIA Robert W. Smith RSMITH17
204 2460 25A-2744-PNET Anthony Kaduk AKADUK Robert W. Smith RSMITH17
Bill Marlett WMARLETT
25A-2744-PNET Phil Chizek PCHIZEK
25A-220-129 Susan Golinske SGOLINSK
25A-2747-PNET Lee Sanders LSANDERS
205 2460 25A-2200-05 Georqe Lowe GLOWE Robert W. Smith RSMITH17
302 2460 25A-2744-PNET James McDonald JMCDONA4 Luke Anaejionu LANAEJIO
Larry Vernier LVERNIER
316 2460 25A-2744-PNET R. Bonifas RBONIFAS Luke Anaejionu LANAEJIO
25A-2744-PNET
317 2460 25A-2747-PNET J.D. Stewart JSTEWAR1 Tim Rumptz TRUMPTZ
25A-2744-PNET
318 2460 25A-2747-PNET R.A. Benson RBENSON1 Tim Rumptz TRUMPTZ
25A-2744-PNET
319 2460 25A-2747-PNET G.J. Mayo GMAYO Tim Rumptz TRUMPTZ
25A-2744-PNET
327 2460 25A-2747-PNET H. Wright HWRIGHT Tim Rumptz TRUMPTZ
Tom Wenzel TWENZEL
Jane Evans JEVANS9
Steve DeAngelis SDANGEL
Ron Stempowski RSTEMPOW
408 2460 25A-2744-PNET David Peterson DPETERS1 Allen Foos AFOOS
Bob Adams RADAMS3
Scott Higgins SHIGGINS1
Pat Howe PHOWE
Dick Newkirk RNEWKIRK
501 2460 25A-2744-PNET John Zarek JZAREK Dick Newkirk RNEWKIRK
703 2460 25A-2744-PNET Rosemary O'Malley ROMALLET Allen Foos AFOOS
705 2460 25A-2744-PNET Roland Thomas RTHOMAS5 Allen Foos AFOOS
720 2460 25A-2744-PNET Frank Ascione FASCIONE Allen Foos AFOOS
721 2460 25A-2744-PNET Bruce Bang BBANG Allen Foos AFOOS
722 2460 25A-2744-PNET Pat Ward PWARD Allen Foos AFOOS
723 2460 25A-2744-PNET John Quincey JQUINCEY Allen Foos AFOOS
724 2460 25A-2744-PNET Helen Corry HCORRY Allen Foos AFOOS
725 2460 25A-2744-PNET Lynn Merritt LMERRITT Allen Foos AFOOS
726 2460 25A-2744-PNET Robert Bremer RBREMER Allen Foos AFOOS
727 2460 25A-2744-PNET Al Hailey AHAILEY Allen Foos AFOOS
728 2460 25A-2744-PNET Walt McRae WMCRAE Allen Foos AFOOS
729 2460 25A-2144-PNET Jay Klahn JKLAHN Allen Foos AFOOS
73O 2460 25A-2744-PNET Jim Travers JTRAVERS Allen Foos AFOOS
731 2460 25A-2744-PNET Jim McDonald JMCDONA4 Allen Foos AFOOS
732 2460 25A-2744-PNET Trisha Roberts PROBER16 Allen Foos AFOOS
733 2460 25A-2744-PNET Tom Allison TALLISON Allen Foos AFOOS
734 2460 25A-2744-PNET Al White AWHITE2 Allen Foos AFOOS
735 2460 25A-2744-PNET Mike Kross MKROSS Allen Foos AFOOS
736 2460 25A-2744-PNET Al Walls AWALLS Allen Foos AFOOS
737 2460 25A-2744-PNET Jim McPhail JMCPHAIL Allen Foos AFOOS
738 2460 25A-2744-PNET Dave Cook DCOOK Allen Foos AFOOS
112 - 114 2460 25A-2744-PNET Christina Torres CTORRES3 Juana Wasserman JWASSERM
211 - 219 2460 25A-2744-PNET Frank Flesche FFLESCHE Robert W. Smith RSMITH17
303 - 305 2460 25A-2744-PNET Simon Psaila SPSAILA Luke Anaejionu LANAEJIO
306 - 315 2460 25A-2744-PNET Tom Eastman TEASTMAN Luke Anaejionu LANAEJIO
25A-2744-PNET
320 - 323 2460 25A-2747-PNET H.W. FARRINGTON BFARRING Tim Rumptz TRUMPTZ
Tom Wenzel TWENZEL
401 - 407 2460 25A-2744-PNET Jane Evans JEVANS8 Allen Foos AFOOS
<CAPTION>
DEPT. HR HR
# NAME PROFS ID ACTIVITY MAILBOX
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
120 Peter Werthmann PWERTHMA Customer Service Planning & Development PNETSO
121 Peter Warthmann PWERTHMA Customer Service Planning & Development PNETSO
122 Peter Werthmann PWERTHMA Customer Service Planning & Development PNETSO
122 Peter Werthmann PWERTHMA Customer Service Planning & Development PNETSO
123 Peter Werthmann PWERTHMA Customer Service Planning & Development PNETSO
124 Peter Werthmann PWERTHMA Customer Service Planning & Development PNETSO
126 Peter Werthmann PWERTHMA Customer Service Planning & Development PNETSO
201 Peter Warthmann PWERTHMA Vehicle Service & Programs PNETSO
202 Peter Werthmann PWERTHMA Vehicle Service & Programs PNETSO
204 Peter Werthmann PWERTHMA Vehicle Service & Programs PNETSO
205 Peter Werthmann PWERTHMA Vehicle Service & Programs PNETSO
302 Cindy Longacre CLONGACR TSO PNETSO
316 Cindy Longacre CLONGACR TSO PNETSO
317 Don Vincent DVINCENT TSO PNETSO
318 Don Vincent DVINCENT TSO PNETSO
319 Don Vincent DVINCENT TSO PNETSO
327 Don Vincent DVINCENT TSO PNETSO
408 Margaret Kinney PKINNEY1 Commerical Vehicle Operations PNETSO
501 John Harju JHARJU Customer Assistance PNETSO
703 Don Vincent DVINCENT Customer Service Operations PNETSO
705 Don Vincent DVINCENT Customer Service Operations PNETSO
720 Don Vincent DVINCENT Customer Service Operations PNETSO
721 Don Vincent DVINCENT Customer Service Operations PNETSO
722 Don Vincent DVINCENT Customer Service Operations PNETSO
723 Don Vincent DVINCENT Customer Service Operations PNETSO
724 Don Vincent DVINCENT Customer Service Operations PNETSO
725 Don Vincent DVINCENT Customer Service Operations PNETSO
726 Don Vincent DVINCENT Customer Service Operations PNETSO
727 Don Vincent DVINCENT Customer Service Operations PNETSO
728 Don Vincent DVINCENT Customer Service Operations PNETSO
729 Don Vincent DVINCENT Customer Service Operations PNETSO
73O Don Vincent DVINCENT Customer Service Operations PNETSO
731 Don Vincent DVINCENT Customer Service Operations PNETSO
732 Don Vincent DVINCENT Customer Service Operations PNETSO
733 Don Vincent DVINCENT Customer Service Operations PNETSO
734 Don Vincent DVINCENT Customer Service Operations PNETSO
735 Don Vincent DVINCENT Customer Service Operations PNETSO
736 Don Vincent DVINCENT Customer Service Operations PNETSO
737 Don Vincent DVINCENT Customer Service Operations PNETSO
738 Don Vincent DVINCENT Customer Service Operations PNETSO
112 - 114 Sandy Krus SKRUS1 DAR PNETSO
211 - 219 Peter Werthmann PWERTHMA Vehicle Service & Programs PNETSO
303 - 305 Cindy Longacre CLONGACR TSO PNETSO
306 - 315 Cindy Longacre CLONGACR TSO PNETSO
320 - 323 Don Vincent DVINCENT TSO PNETSO
401 - 407 Margaret Kinney PKINNEY1 Commerical Vehicle Operations PNETSO
</TABLE>
3 of 38
<PAGE> 22
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Brad Brownell
Jim DeCarlo
504 -513 2460 25A-2744-PNET Mike Steckler MISTECKL1 Jim Decarlo JDECARLO
700-799 2460 25A-2744-PNET Joe Lafambois JULAFRAM1 Allen Foos AFOOS
701, 702, 740 2460 25A-2744-PNET TBD TBD Allen Foos AFOOS
121 2622 25C-2744-PNET Mike Rickett MIRICKETT Alan Bennett ABENNETT
Gary Long
Kim Irwin
Bob Grimes
Rich Delskas
25C-2744-PNET Eric Nunez ENUNEZ
160 2622 25C-2747-PNET Jerry Lomonaco JLOMONAC Juana Wasserman JWASSERM
25C-2744-PNET Don Morgan DMORGANA
161 2622 25C-2747-PNET Jerry Lomonaco JLOMONAC Juana Wasserman JWASSERM
25C-2744-PNET Don Schwenk DSCHWENK
162 2622 25C-2747-PNET Jerry Lomonaco JLOMONAC Juana Wasserman JWASSERM
25C-2744-PNET John Cooper
163 2622 25C-2747-PNET Jerry Lomonaco JLOMONAC Juana Wasserman JWASSERM
</TABLE>
<PAGE> 23
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
DEPT OPS ACCOUNT REQUISITIONER REQUISITIONER FINANCE FINANCE
# LOC CHARGE NAME PROFS ID NAME PHOTO ID
(AIS) CODE*
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Brad Brownell BBROWNEL
Jim DeCarlo JDECARLO
504-513 2460 25A-2744-PNET Mike Steckler MSTECKL1 Jim DeCarlo JDECARLO
700-799 2460 25A-2744-PNET Joe LaFambois LAFRAM1 Allen Foos AFOOS
701, 702, 740 2460 25A-2744-PNET TBD TBD Allen Foos AFOOS
121 2622 25C-2744-PNET Mike Rickett MRICKETT Alan Bennett ABENNETT
Gary Long GLONG
Kim Irwin KIRWIN
Bob Grimes RGRIMES
Rich Detskas REDTSKAS
25C-2744-PNET Eric Nunez ENUNEZ
160 2622 25C-2747-PNET Jerry Lomonaco JLOMONAC Juana Wasserman JWASSERM
25C-2744-PNET Don Morgan DMORGAN4
161 2622 25C-2747-PNET Jerry Lomonaco JLOMONAC Juana Wasserman JWASSERM
25C-2744-PNET Don Schwenk DSCHWENK
2622 25C-2747-PNET Jetty Lomonaco JLOMONAC Juana Wasserman JWASSERM
162 25C-2744-PNET John Cooper JCOOPE18
163 2622 25C-2747-PNET Jerry Lomonaco JLOMONAC Juana Wasserman JWASSERM
25C-2744-PNET Mike Warwood MWARWOOD
164 2622 25C-2747-PNET Jerry Lomonaco JLOMONAC Juana Wasserman JWASSERM
Ron Turecki RTURECK1
801 2622 25C-2744-PNET John Russ JRUSSI Alan Bennett ABENNETT
Warren Merz WMERZ
Richard Cervi RCERVI
Tony Koterba AKOTERBA
Tony Love TLOVE
841 2622 25C-2744-PNET John McGowan JMCGOWAN Alan Bennett ABENNETT
John Oakland JOAKLAND
845 2622 25C-2744-PNET John McGowan JMCGOWAN Alan Bennett ABENNETT
John Oakland JOAKLAND
848 2622 25C-2744-PNET Tony Koterba AKOTERBA Alan Bennett ABENNETT
John Oakland JOAKLAND
852 2622 25C-2744-PNET Tony Love TLOVE Alan Bennett ASENNETT
880 2622 25C-2744-PNET Garry Frederick GFREDER2 Alan Bennett ABENNETT
890 2622 25C-2744-PNET Garry Frederick GFREDER2 Alan Bennett ABENNETT
Stan Gilchrist SGILCHRI
Dan Prais DPRAIS
Dick Westemeier DWESTEME
891 2622 25C-2744-PNEI Jack Palumbo JPALUMBO Alan Bennett ABENNETT
Don Kaercher DKAERCHE
898 2622 25C-2744-PNET Michael Warrillow MWARRIL2 Alan Bennett ABENNETT
DAN MCLEAN DMCLEAN
899 2622 25C-2744-PNET Warren Merz WMERZ Alan Bennett ABENNETT
Tom Hennessy THENNES1
J.L. Sullivan JSULLIV5
Bud Fisher BFISHER
802-808 2622 25C-2744-PNET Warren Merz WMERZ Alan Bennett ABENNETT
840-851 2622 25C-2744-PNET John Oakland JOAKLAND Alan Bennett ABENNETT
John Oakland JOAKLAND
853-858 2622 25C-2744-PNET Jack Palumbo JPALUMBO Alan Bennett ABENNETT
892-895 2622 25C-2744-PNET Bob Nolan RNOLAN Alan Bennett ABENNETT
13-0933-PNET Robert Jones
25A-2744-PNET Cathy Lynch
100-190 2704 12-0970-PNET Kim Johnson Eileen Moeller EMOELLER
13-0933-PNET
25A-2744-PNET Bill Agne WAGNE
1000-8600 2712 12-0970-PNET Marilyn Bingamen MBINGAME Bill Doherty(B/UP) BDOHERTY
*G1050 - G1059,
G1080 - G1099 5001 13-0970-PNET James Buczkowski JBUCZKOW Mike Renaud MRENAUD1
GLOTZHO Dennis Glotzhober DGLOTZHO
A03 5001 TBD Dennis Glotzhoberd
A06,AO9 5001 25A-2747-PNET Bob Moran RMORAN1 Janet O'Connell JOCONNEL
A1540,AI548 5001 25G-2744-PNET K M. Brown KBROWN14 Carol Sullivan CSULLIV1
A1570-A1579 5001 25G-2744-PNET Tim O'Brien TOBRIEN Carol Sullivan CSULLIV1
A1580 5001 25G-2744-PNET R.H. Munson RMUNSON Carol Sullivan CSULLIV1
</TABLE>
<TABLE>
<CAPTION>
DEPT HR HR ACTIVITY MAILBOX
# NAME PROFS ID
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
504-513 John Harju JHARJU Customer Assistance PNETSO
700-799 Don Vincent DIVINCENT PNETSO
701, 702, 740 Don Vincent DIVINCENT Customer Service Operations PNETSO
121 Bridget Stoller BSTOLLER PS&L PNETSO
160 Peter Werthmann PWERTHMA RPP PNETSO
161 Peter Wefthmann PWERTHMA RPP PNETSO
162 Peter Westhmann PWERTHMA RPP PNETSO
163 Peter Werthmann PWERTHMA RPP PNETSO
164 Peter Wefthmann PWERTHMA RPP PNETSO
Leo Seguin LSEGUIN
801 Joan Treves JTREVES PS&L PNETSO
841 Nerisse Morris NMORRIS PS&L PNETSO
Leo Seguin LSEGUIN
845 Bill Osborne BOSBORNE PS&L PNETSO
Leo Seguin LSEGIJIN
848 Harry Bryant HBRYANT PS&L PNETSO
Leo Seguin LSEGUIN
852 Laurie Phelps LPHELPS, PS&L PNETSO
880 Leo Seguin LSEGIJIN PS&L PNETSO
890 Leo Seguin LSEGUIN PS&L PNETSO
891 Joan Treves JTREVES PS&I PNETSO
898 Gwynne Jennings GJENNING PS&L PNETSO
899 Neisse Morris NMORRIS PS&L PNETSO
Joan Treves JTREVES
802-808 Gwynne Jennings GJENNING PS&L PNETSO
840-851 Leo Seguin LSEGUIN PS&L PNETSO
Leo Seguin LSEGUIN
853-858 Joan Treves JTREVES PNETSO
892-895 Joan Treves JTREVES PS&L PNETSO
100-190 Doug Zahn DZAHN Automotive Component Division PNETACD
1000-8600 Gary Seals GSEALS Utica Plant PNETACD
*G1050 - G1059,
G1080 - G1099 George Valsa GVALSA Quality PNETQUAL
A03 Hal Grimm HGRIMM Employee Relations PNETFAO
A06,AO9 Shirley Gardner SGARDNER HR PNETFAO
Bob Dawson RDAWSON3 (T)
A1540,AI548 Julie Wilkinson JWILKEN3 (C) PNETFAO
Bob Dawson RDAWSON3 (T)
A1570-A1579 Julie Wilkinson JWILKEN3 (C) PNETFAO
Bob Dawson RDAWSON3 (T)
A1580 Julie Wilkinson JWILKEN3 (C) PNETFAO
</TABLE>
4 of 38
<PAGE> 24
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
ACCOUNT
DEPT. OPS CHARGE REQUISITIONER REQUISITIONER FINANCE FINANCE
# LOC (AIS) CODE* NAME PROFS ID NAME PROFS ID
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
A1581, A1591 5001 25G-2744-PNET Mary Combee MCOMBEE Carol Sullivan CSULLIV1
A1593 5001 25G-2744-PNET Mary Combee MCOMBEE Carol Sullivan CSULLIV1
A19 5001 13-0970-PNET TBD TBD Mike Renaud MRENAUD1
A2001 5001 25A-2744-PNET Ross Witschonke RWITSCHO Carol Sullivan CSULLIV1
Gary Sitzman GSITZMAN
Charlene Tennant CTENNAN2
A2003 5001 25A-2744-PNET Bob Dawson RDAWSON3 Mary Jo Brant MBRANT
Paul Weatherill PWEATHER
A23 5001 25A-2744-PNET Julie Wilkinson JWILKIN3 Mary Jo Brant MBRANT
Rolf Woldt RWOLDT
Marcus Clarke MCLARKE1
Harry Jones HJONES
Pam Bolger PBOLGER
A26 - A48 5001 25A-2744-PNET John Turner JTURNER Eric Kramer EKRAMER
Rolf Woldt RWOLDT
A28, A47 5001 25A-2744-PNET Marcus Clarke MCLARKE1 Eric Kramer EKRAMER
Rolf Woldt RWOLDT
Marcus Clarke MCLARKE1
A40 5001 25A-2744-PNET Tom Grant TGRANT Eric Kramer EKRAMER
ALL C'S 5001 25A-2744-PNET Diana M. Greig DGREIG Sue Neubauer SNEUBAUE
ALL C'S 5001 25A-2744-PNET Mary C. Caulfield MCAULFIE Sue Neubauer SNEUBAUE
LINDA SZAAL LSZAAL
PEGGY RATZE PRATZE
MARLENE RAMM MRAMM
BARBARA BAKER BBAKER
PEARLE MATTHEWS PMATTHEW
25G-2744-PNET ROZ JACKSON RJACKS03
ALL H'S 5001 25A-2744-PNET PAT COTHRAN PCOTHRA1 Ron Peters RPETERS2
Elaine Hopkins EHOPKIN
Arlene McLachlan AMCLACHL
C01 5OO1 25A-2744-PNET Lillian Karolyl LKAROLY1 Sue Neubauer SNEUBAUE
C02 5001 25A-2744-PNET Michelle Smart MSMART Sue Neubauer SNEUBAUE
C03 5001 25A-2744-PNET Jerry Anderson JANDER13 Sue Neubauer SNEUBAUE
C05 5001 25A-2744-PNET Diane Martin DMARTIN6 Sue Neubauer SNEUBAUE
C07 5001 25A-2744-PNET Neil Golightly NGOLIGHT Sue Neubauer SNEUBAUE
C08 5001 25A-2744-PNET Jeanette V. Novak JNOVAK3 Sue Neubauer SNEUBAUE
C09 5001 25A-2744-PNET Kristine Blahnik KBLAHNIK Sue Neubauer SNEUBAUE
C1O1, C400 5001 25A-2744-PNET Edda Laframboise ELAFRAMB Sue Neubauer SNEUBAUE
C102 5001 25A-2744-PNET Julie Micik JMICIK Sue Neubauer SNEUBAUE
C117 5001 25A-2744-PNET Cheryl Crawford CCRAWFO3 Sue Neubauer SNEUBAUE
C17 5001 25A-2744-PNET Terry Herron THERRON Sue Neubauer SNEUBAUE
C18, C20, C31 5001 25A-2744-PNET Shirley Hill SHILL2 Sue Neubauer SNEUBAUE
C19 5001 25A-2744-PNET Kristine Blahnik KBLAHNIK Sue Neubauer SNEUBAUE
Shirley Hill SHILL2
C21 5001 25A-2744-PNET Gloria Brewer GBREWER2 Sue Neubauer SNEUBAUE
C313 5001 25A-2744-PNET TBD TBD Sue Neubauer SNEUBAUE
C314, C316 5001 25A-2744-PNET Carol Bonamici CBONAMIC Sue Neubauer SNEUBAUE
C315, C450 5001 25A-2744-PNET Bev Boyer BBOYER Sue Neubauer SNEUBAUE
<CAPTION>
DEPT. HR HR
# NAME PROFS ID ACTIVITY MAILBOX
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bob Dawson RDAWSON3 (T)
A1581, A1591 Julie Wilkinson JWILKIN3(C) PNETFAO
Bob Dawson RDAWSON3 (T)
A1593 Julie Wilkinson JWILKIN3(C) PNETFAO
A19 George Valsa GVALSA Quality PNETQUAL
Bob Dawson RDAWSON3 (T)
A2001 Julie Wilkinson JWILKIN3(C) Technical Affairs PNETFAO
Bob Dawson RDAWSON3 (T)
A2003 Julie Wilkinson JWILKIN3(C) Technical Affairs PNETFAO
Bob Dawson RDAWSON3 (T)
A23 Julie Wilkinson JWILKIN3(C) Technical Affairs PNETFAO
A26 - A48 Chuck Duchene CDUCHENE Employee Relations PNETFAO
A28, A47 Chuck Duchene CDUCHENE PNETFAO
A40 Chuck Duchene CDUCHENE PNETFAO
Bob Dawson RDAWSON3 (T)
ALL C'S Julie Wilkinson JWILKIN3(C) PNETFAO
Bob Dawson RDAWSON3 (T)
ALL C'S Julie Wilkinson JWILKIN3(C) PNETFAO
Bob Dawson RDAWSON3 (T)
Julie Wilkinson JWILKIN3(C) PNETFAO
Bob Dawson RDAWSON3 (T)
C01 Julie Wilkinson JWILKIN3(C) Communications PNETFAO
Bob Dawson RDAWSON3 (T)
C02 Julie Wilkinson JWILKIN3(C) Communications PNETFAO
Bob Dawson RDAWSON3 (T)
C03 Julie Wilkinson JWILKIN3(C) Communications PNETFAO
Bob Dawson RDAWSON3 (T)
C05 Julie Wilkinson JWILKIN3(C) Communications PNETFAO
Bob Dawson RDAWSON3 (T)
C07 Julie Wilkinson JWILKIN3(C) Communications PNETFAO
Bob Dawson RDAWSON3 (T)
C08 Julie Wilkinson JWILKIN3(C) Communications PNETFAO
C09 Bob Dawson RDAWSON3 (T) Communications PNETFAO
Bob Dawson RDAWSON3 (T)
C1O1, C400 Julie Wilkinson JWILKIN3(C) Communications PNETFAO
Bob Dawson RDAWSON3 (T)
C102 Julie Wilkinson JWILKIN3(C) Communications PNETFAO
Bob Dawson RDAWSON3 (T)
C117 Julie Wilkinson JWILKIN3(C) FAO PNETFAO
Bob Dawson RDAWSON3 (T)
C17 Julie Wilkinson JWILKIN3(C) FAO PNETFAO
Bob Dawson RDAWSON3 (T)
C18, C20, C31 Julie Wilkinson JWILKIN3(C) FAO PNETFAO
Bob Dawson RDAWSON3 (T)
C19 Julie Wilkinson JWILKIN3(C) Communications PNETFAO
Bob Dawson RDAWSON3 (T)
C21 Julie Wilkinson JWILKIN3(C) FAO PNETFAO
Bob Dawson RDAWSON3 (T)
C313 Julie Wilkinson JWILKIN3(C) Communications PNETFAO
Bob Dawson RDAWSON3 (T)
C314, C316 Julie Wilkinson JWILKIN3(C) Communications PNETFAO
Bob Dawson RDAWSON3 (T)
C315, C450 Julie Wilkinson JWILKIN3(C) Communications PNETFAO
</TABLE>
5 of 38
<PAGE> 25
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
Dept. Ops Account Requisitioner Requisitioner Finance Finance
# Loc. Charge Name Profs ID Name Profs ID
(AIS) Code*
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
C318 5001 25A-2744-PNET Donna Vinikour DVINIKOU Sue Neubauer SNEUBAUE
C319 5001 25A-2744-PNET Annette Green AGREEN2 Sue Neubauer SNEUBAUE
C41 5001 25A-2744-PNET Joyce Kennedy JKENNEDY5 Sue Neubauer SNEUBAUE
25A-2747-PNET Constance Galloway CGALLOWA
D0101 5001 25A-2744-PNET Kathy Attard KATTARD Lori Malaspina LMALASPI
D08 - D0805 5001 25A-2744-PNET Bob Bonish RBONISH Ron Kollar RKOLLAR
D0806 5001 25A-2744-PNET K. LaLonde KLALONDE Bruce Swancutt BSWANCUT
D0810 - D503,G0525 5001 25A-2744-PNET Bob Vitrone RVITRONE Bruce Swancutt BSWANCUT
D10 5001 25A-2744-PNET Arnold Miller AMILLER3 Ron Kollar RKOLLAR
D1002 - D1008, 25A-2744-PNET
D1030, D1080 5001 25A-2747-PNET Arnold Miller AMILLER3 Ron Kollar RKOLLAR
D11 - D11G 5001 25A-2744-PNET Marty Stacey MSTACEY Ron Kollar RKOLLAR
25A-2744-PNET
D11S, D402 5001 25A-2474-PNET Roger Samonek RSAMONEK Ron Kollar RKOLLAR
D12 - D12D 5001 25A-2744-PNET Peggy Pagliaroni PPAGLIAR Bev Chatman BCHATMAN
25A-2747-PNET
D12B 5001 25A-2744-PNET N. Barry Sloat BSLOAT Bev Chatman BCHATMAN
25A-2747-PNET
D13 - D14F 5001 25A-2744-PNET Patrick Beecher PBEECHER Bev Chatman BCHATMAN
25A-2747-PNET Patrick Beecher PBEECHER
D13A - D14F 5001 25A-2744-PNET Walt Talamont WTALAMON Bev Chatman BCHATMAN
25A-2744-PNET Jay Dull JDULL
D151 - D158 5001 25A-2747-PNET Paulette Moreno (B/UP) PMORENO Lori Malaspina LMALASPI
Dave Morgan DMorgan1
25A-2747-PNET Howard Johnson HJohnso3
D15A 5001 25A-2744-PNET Faye Emerson FEmerson Jim Schmidt JSCHMIDT
25A-2744-PNET Bill Dirksen WDIRKSEN
D15B 5001 25A-2747-PNET Alga Washington AWASHING Jim Schmidt JSCHMIDT
D15C 5001 25A-2744-PNET John Borg JBORG Ron Kollar RKOLLAR
25A-2747-PNET Charvala Adams CADAMS6
D161 - D166, D169 5001 25A-2744-PNET Lisa Scott-Bailey LBAILEY7 Lori Malaspina LMALASPI
25A-2747-PNET
D171 - D175 5001 25A-2744-PNET James Brown JBROWN6 Lori Malaspina LMALASPI
Gloria Martin GMARTIN2
D181 - D186 5001 25A-2744-PNET Sharon Wineka SWINEKA Jim Schmidt JSCHMIDT
Norm Pryor NPRYOR
25A-2744-PNET Bill Quarterman WQUARTER
D19 5001 25A-2747-PNET Glen Anderson GANDERS2 Bev Chatman BCHATMAN
25A-2744-PNET Linda Columbus LCOLUMB2
D191 5001 25A-2747-PNET Don Sicks (B/UP) DSICKS Lori Malaspina LMALASPI
Carolyn Koliba CKOLIBA
D192 5001 25A-2744-PNET Cathy Carpenter CCARPEN2 Jim Schmidt JSCHMIDT
25A-2744-PNET
D193 5001 25A-2747-PNET Bob Dawson RDAWSON3 Jim Schmidt JSCHMIDT
Jim Schmidt JSCHMIDT
Ed Moran EMORAN
D194, J70, J80, J90 5001 25A-2744-PNET Bethany Garman BGARMAN Sam Calchary SCALCHAR
25A-2744-PNET Dave Cooper DCOOPER3
D195 5001 25A-2747-PNET Marisa Hickson MHICKSCN Jim Schmidt JSCHMIDT
25A-2744-PNET
D196 5001 25A-2747-PNET Richard Davies RDAVIES4 Jim Schmidt JSCHMIDT
D20 5001 25A-2744-PNET Frank McNamarr FMCNAMAR Jim Schmidt JSCHMIDT
Jim Suber JSUBER
D23 5001 25A-2744-PNET M. Louis Camardo LCAMARDO Jim Schmidt JSCHMIDT
25A-2744-PNET Deena Royal DROYAL Jim Schmidt JSCHMIDT
D26 5001 25A-2747-PNET Sandy Bogatay SBOGATAY Bev Chatman BCHATMAN
25A-2744-PNET Deena Royal DROYAL
D27 5001 25A-2747-PNET Rich Pakula RPAKULA Bev Chatman BCHATMAN
25A-2744-PNET
D28 5001 25A-2747-PNET Gene Senterfitt JSENTERF Bev Chatman BCHATMAN
25A-2744-PNET
D400 5001 25A-2747-PNET Larry Perczak LPERCZAK Ron Kollar RKOLLAR
25A-2747-PNET Ron Kollar RKOLLAR
D405, D407, D1060 5001 25A-2744-PNET Chuck McCartney CMCCARTN Bruce Swancutt BSWANCUT
</TABLE>
<TABLE>
<CAPTION>
Dept. HR HR Activity Mailbox
# NAME PROFS ID
- -----------------------------------------------------------------------------------------------
<S> <S> <C> <C> <C>
Bob Dawson RDAWSON3(T)
C318 Julie Wilkinson JWILKIN3(C) Communications PNETFAO
Bob Dawson RDAWSON3(T)
C319 Julie Wilkinson JWILKIN3(C) Communications PNETFAO
Bob Dawson RDAWSON3(T)
C41 Juile Wilkinson JWILKIN3(C) Communications PNETFAO
D0101 Tom Stirling TSTIRLIN FAO PNETFAO
D08 - D0805 David Dilaura DDILAURA Employee Relations PNETFAO
D0806 David Dilaura DDILAURA HR PNETFAO
D0810 - D503,G0525 David Dilaura DILAURA HR PNETFAO
D10 David Dilauva DDILAURA FAO PNETFAO
D1002 - D1008,
D1030, D1080 David Dilaura DDILAURA FAO PNETFAO
D11 - D11G David Dilaura DDILAURA FAO PNETFAO
D11S, D402 David Dilaura DDILAURA FAO PNETFAO
D12 - D12D Cindy Walters CWALTERS PNETFAO
D12B Cindy Wallets CWALTERS HR PNETFAO
D13 - D14F Cindy Walters CWALTERS HR PNETFAO
D13A - D14F Cindy Walters CWALTERS Employee Relations PNETFAO
D151 - D158 Laura Compton LCOMPTON HR PNETFAO
D15A Laura Compton LCOMPTON Employee Relations PNETFAO
D15B Laura Compton LCOMPTCN Employee Relations PNETFAO
Susan Sovis SSOVIS
D15C Kim Scholtz KSCHOLTZ HR PNETFAO
D161 - D166, D169 Laura Compton LCOMPTON HR PNETFAO
D171-D175 Laura Compton LCOMPTON HR PNETFAO
D181 - D186 Laura Compton LCOMPTON FAO PNETFAO
D19 Kimberly Scholtz KSCHOLT1 HR PNETFAO
D191 Laura Compton LCOMPTON HR PNETFAO
D192 Laura Compton LCOMPTON Employee Relations PNETFAO
D193 Laura Compton LCOMPTON Employee Relations PNETFAO
D194, J70, J80, J90 Laura Compton LCOMPTCN Employee Relations PNETFAO
D195 Susan Sovis SSOVIS HR PNETFAO
D196 Susan Sovis SSOVIS HR PNETFAO
D20 Lauta Compton LCOMPTON Employee Relations PNETFAO
D23 Susan Sovis SSOVIS HR PNETFAO
D26 Kimberly Scholtz KSCHOLT1 HR PNETFAO
D27 Kimberly Scholtz KSCHOLTI HR PNETFAO
D28 Kimberly Scholtz KSCHOLTI HR PNETFAO
D400 David Dilaura DDILAURA HR PNETFAO
D405, D407, D1060 David Dilaura DDILAURA Employee Relations PNETFAO
</TABLE>
6 of 38
<PAGE> 26
<TABLE>
<CAPTION>
ACCOUNT
DEPT. OPS CHARGE REQUISITIONER REQUISITIONER FINANCE
# LOC [AIS] CODE* NAME PROFS ID NAME
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
D701 5001 25A-2744-PNET Cyndi Selke CSELKEl Bruce Swancutt
0702 5001 25A-2744-PNET Felicia Fields FFIELDS Bruce Swancutt
25A-2744-PNET
D705 5001 25A-2747-PNET Bruce Swancutt BSWANCUT Janet O'Connell!
D90 5001 25A-2744-PNET TBD TBD TBD
Marcus Clarke MCLARKE1
D91 - D99 5001 2SA-2744-PNET Rolf Woldt RWOLDT Eric Kramer
Marcus Clarke MCLARKE1
Rolf Woldt RWOLDT
D92 5001 25A-2744-PNET Harry Jones HJONES Eric Kramer
D936 5001 25A-2744-PNET Mark Leyda MLEYDA Dave Pittman
Rolf Woldt RWOLDT
Marcus Clarke MCLARKE1
Mark Leyda, MLEYDA
D937 - D946 5001 25A-2744-PNET Ruth Gramllch RGRAMUCH Dave Pittman
Rolf Woldt RWOLDT
Marcus Clarke MCLARKE1
D938 - D948 5001 25A-2744-PNET Mark Leyda MLEYDA Dave Pittman
Marcus Clarke MCLARKE1
Rolf Woldt RWOLDT
D94 - D98 5001 25A-2744-PNET Mark Leyda MLEYDA Eric Kramer
Rolf Woldt RWOLDT
D940 - D960 5001 25A-2744-PNET Marcus Clarke MCLARKE1 Dave Pittman
Rolf Woldt RWOLDT
Marcus Clarke MCLARKE1
Mark Leyda MLEYDA
D947 5001 25A-2744-PNET Ruth Gramlich RGRAMLICH Dave Pittman
D948A 5001 25A-2744-PNET Mark Leyda MLEYDA Dave Pittman
Rolf Woldt RWOLDT
Marcus Clarke MCLARKE1
Gary Markwardt GMARKWAR
D949- D952 5001 25A-2744-PNET David Samuels DSAMUELS Dave Pittman
Marcus Clarke MCLARKE1
Rolf Woldt RWOLDT
D96 5001 25A-2744-PNET Larry Seltz LSELTZ Eric Kramer
Rolf Woldt RWOLDT
Marcus Clarke MCLARKE1
D961 5001 25A-2744-PNET Bob Shook RSHOOK Dave Pittman
Rolf Woldt RWOLDT
Marcus Clarke MCLARKE1
D962 5001 25A-2744-PNET Bob Kiger RKIGER Dave Pittman
Rolf Woldt RWOLDT
Marcus Clarke MCLARKE1
D963 5001 25A-2744-PNET Marilynn Youngs MYOUNGS1 Dave Pittman
Rolf Woldt RWOLDT
Marcus Clarke MCLARKE1
D964 5001 25A-2744-PNET Da Shuri Aliko SALIKO Dave Plilman
Rolf Woldt RWOLDT
D966 5001 25A-2744-PNET Marcus Clarke MCLARKE Dave Pittman
Marcus Clarke MCLARKE1
Rolf Woldt RWOLDT
D97 5001 25A-2744-PNET Rick Rothermel RROTHERM Eric Kramer
Rob Porter
F81 5001 25A-2744-PNET Laurie Pecchia LPECCHIA Sheryl Herrick
Doris Pichini DPICHINI Rob Porter
F85 5001 25A-2744-PNET Linda Hurnann LHUMANN Sheryl Herrick
Rob Porter
F86 5001 25A-2744-PNET Denise Rose DROSE2 Sheryl Herrick
Linda Humann LHUMANN
Sue Maynarich SMAYNARI Rob Porter
F87 5001 25A-2744-PNET Doris Pichini DPICHINI Sheryl Herrick
Lee Borycz LBORYCZ
Anne Gebstadt AGEBSTAD
Judy Justice JJUSTICE Rob Porter
Sandy LeBlanc SLEBLANC Sheryl Herrick
F89 5001 25A-2744-PNET Clive Cooper CCOOPER2 Dave Clawson
G09-G0970 5001 13-0970-PNET Bob Kiessel RKIESSEL Mike Renaud
G0975-G0989 5001 13-0970-PNET Pat Jenuwine PJENUWIN Mike Renaud
</TABLE>
<TABLE>
<CAPTION>
DEPT. FINANCE HR HR ACTIVITY MAILBOX
# PROFS ID NAME PROFS ID
- -----------------------------------------------------------------------------------------------------------
<S> <S> <C> <C> <C> <C>
D701 BSWANCUT Tom Vance TVANCE HR PNETFAO
0702 BSWANCUT Kim Scholtz KSCHOLTI FAO PNETIFAO
D705 JOCONNEL Shirley Gardner SGARDNER HR PNETFAO
D90 TBD Kimberly Scholtz KSCHOLT1 Employee Relations PNETFAO
D91 - D99 EKRAMER Chuck Duchene CDUCHENE HR PNETFAO
D92 EKRAMER Chuck Duchene CDUCHENE HR PNETFAO
D936 DPITTMAN Chuck Duchene CDUCHENE HR PNETFAO
D937 - D946 DPITTMAN Chuck Duchene CDUCHENE HR PNETFAO
D938 - D948 DPITTMAN Chuck Duchene CDUCHENE HR PNETFAO
D94 - D98 EKRAMER Chuck Duchene CDUCHENE HR PNETFAO
D940 - D960 DPITTMAN Chuck Duchene CDUCHENE HR PNETFAO
D947 DPITTMAN Chuck Duchene CDUCHENE HR PNETFAO
D948A DPITTMAN Chuck Duchene CDUCHENE HR PNETFAO
D949- D952 DPITTMAN Chuck Duchene CDUCHENE HR PNETFAO
D96 EKRAMER Chuck Duchene CDUCHENE HR PNETFAO
D961 DPITTMAN Chuck Duchene CDUCHENE Human Resources PNETFAO
D962 DPITTMAN Chuck Duchene CDUCHENE Human Resources PNETFAO
D963 DPITTMAN Chuck Duchene CDUCHENE Human Resources PNETFAO
D964 DPITTMAN Chuck Duchene CDUCHENE Human Resources PNETFAO
D966 DPITTMAN Chuck Duchene CDUCHENE HR PNETFAO
D97 EKRAMER Chuck Duchene CDUCHENE HR PNETFAO
RPORTER2
F81 SHERRICK Doris Pichini DPICHINI International Auto Operations PNETFAO
RPORTER2
F85 SHERRICK Doris Pichini DPICHINI International Auto Operations PNETFAO
RPORTER2
F86 SHERRICK Doris Pichini DPICHINI International Auto Operations PNETFAO
RPORTER2
F87 SHERRICK Doris Pichini DPICHINI International Auto Operations PNETFAO
RPORTER2
SHERRICK
F89 DCLAWSO1 Doris Pichini DPICHINI International Auto Operations PNETFAO
G09-G0970 MRENAUD1 George Valsa GVALSA Quality PNETQUAL
G0975-G0989 MRENAUD1 George Valsa GVALSA Quality PNETQUAL
</TABLE>
7 OF 38
<PAGE> 27
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
ACCOUNT
DEPT. OPS CHARGE REQUISITIONER REQUISITIONER FINANCE FINANCE HR HR
# LOC (AIS) CODE* NAME PROFS ID NAME PROFS ID NAME PROFS ID
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
G0990-G0996 5001 13-0970-PNET Deborah Coleman DCOLEMAN Mike Renaud MRENAUD1 George Valsa GVALSA
Peter Urcheck PURCHECK
G0999 5001 13-0970-PNET Deborah Coleman DCOLEMA2 Mike Renaud MRENAUD2 George Valsa GVALSA
G1000 5001 13-0970-PNET Chris Oxley COXLEY Mike Renaud MRENAUD1 George Valsa GVALSA
G1001 5001 13-0970-PNET Mike Hamme MHAMME Mike Renaud MRENAUD1 George Valsa GVALSA
G1010-G1016 5001 13-0970-PNET Dee Kapur DKAPUR Mike Renaud MRENAUD1 George Valsa GVALSA
G1030, G1036,
G1071 5001 13-0970-PNET J. Anderson Mike Renaud MRENAUD1 George Valsa GVALSA
G1032, G1033 5001 13-0970-PNET John Sakioka JSAKIOKA Mike Renaud MRENAUD1 George Valsa GVALSA
G1060-G1073 5001 13-0970-PNET John White JWHITE2 Mike Renaud MRENAUD1 George Valsa GVALSA
Bob Mull RMULL
G1150 5001 13-0970-PNET Kathy McRae KMCRAE Mike Renaud MRENAUD1 George Valsa GVALSA
Bob Mull RMULL
G1151 5001 13-0970-PNET Kathy McRae KMCRAE Mike Renaud MRENAUD1 George Valsa GVALSA
Bob Mull RMULL
G1152 5001 13-0970-PNET Kathy McRae KMCRAE Mike Renaud MRENAUD1 George Valsa GVALSA
25G-2744-PNET Ron Peters RPETERS2 Bob Dawson RDAWSON3(T)
H01 5001 25A-2744-PNET Diana M. Greig DGREIG Ron Peters RPETERS2 Julie Wilkinson JWILKIN3(C)
25G-2744-PNET Bob Dawson RDAWSON3(T)
H03-H09WA 5001 25A-2744-PNET Ron Peters RPETERS2 Ron Peters RPETERS2 Julie Wilkinson JWILKIN3(C)
25G-2744-PNET Bob Dawson RDAWSON3(T)
H04, H09AT 5001 25A-2744-PNET Diana M. Greig DGREIG Ron Peters RPETERS2 Julie Wilkinson JWILKIN3(C)
Bob Dawson RDAWSON3(T)
H09CL, H100 5001 25G-2744-PNET Mary Caulfield MCAULFIE Ron Peters RPETERS2 Julie Wilkinson JWILKIN3(C)
25A-2744-PNET Bob Dawson RDAWSON3(T)
H105 5001 25G-2744-PNET Mary Caulfield GWOLD Ron Peters RPETERS2 Julie Wilkinson JWILKIN3(C)
Ronald Grahlman RGRAHLMA
Robert Volpe RVOLPE
13-0933-PNET(T) J.V. Bacskay JBACSKAY
J0550 5001 13-0970-PNET(C) Wilma Moorhold ESICKAFU Diane Dupuis DDUPUIS Danette Turco DTURCO
13-0970-PNET(C)
J1001, J1002 5001 13-0978-PNET(I.S.) Ken Hagan KHAGAN Ken Hagan KHAGAN Carolyn Koliba CKOLIBA
J1020, J1022-
J1029, 13-0970-PNET(C) Anne Sherman ASHERMAN
J1040-J1048 5001 13-0978-PNET(I.S.) Rick Habash RHABASH Ken Hagan KHAGAN Frank Stobbe FSTOBBE
Anne Sherman ASHERMAN
13-0970-PNET(C) Rick Habash RHABASH
J1021 5001 13-0978-PNET(I.S.) Stevie Cole SCOTE Ken Hagan KHAGAN Frank Stobbe FSTOBBE
Anne Sherman ASHERMAN
Rick Habash RHABASH
13-0970-PNET(C) Dave Cooper DCOOPER2
J1026, J1049 5001 13-0978-PNET(I.S.) Kevin Vasconi JVASCONI Ken Hagan KHAGAN Frank Stobbe FSTOBBE
13-0970-PNET(C)
J1030-J1039 5001 13-0978-PNET(I.S.) TBD TBD Ken Hagan KHAGAN Frank Stobbe FSTOBBE
Carol Watson CWATSON3
H.J. Madsen HMADSEN
C. Hartley CHARTLE1
13-0970-PNET(C) J. Notaro JNOTARO
J1336 5001 13-0978-PNET(I.S.) Tim Cavanaugh TCAVANAU Annette Dapprich ADAPPRIC Harry Breniser HBRENISE
Jim Buck JBUCK1
Darren Shelcusky DSHELCUS
Bob Schira RSCHIRA
Dale Harris DHARRI11
Paul Slatin PSLATIN
Doug Peterson DPETERS2
Mark Geoffrey MGEORFFRE
Dennis Fiscus DFISCUS
Leon Kott LKOTT
13-0970-PNET(C) Joseph Williams JWILLI26
J1350 5001 13-0978-PNET(I.S.) K. Sisolak KSISOLAK Annette Dapprich ADAPPRIC Harry Breniser HBRENISE
Jack Burns JBURNS1
Bob Everhart REVERHAR
Nick Belt NBELL1
J1410 5001 13-0978-PNET Fred Ream FREAM1 Steve Berta SBERTA Bob Frick RFRICK
</TABLE>
<TABLE>
<CAPTION>
DEPT.
# ACTIVITY MAILBOX
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
G0990-G0996 Quality PNETQUAL
G0999 Quality PNETQUAL
G1000 Adv Mfg Qual PNETQUAL
G1001 AVT-Quality PNETQUAL
G1010-G1016 AVT-Quality PNETQUAL
G1032, G1036,
G1071 Quality PNETQUAL
G1032, G1033 Quality PNETQUAL
G1060-G1073 Quality PNETQUAL
G1150 Quality PNETQUAL
G1151 Quality PNETQUAL
G1152 Quality PNETQUAL
H01 Govermental Affairs PNETFAO
H03-H09WA Govermental Affairs PNETFAO
H04, H09AT Govermental Affairs PNETFAO
H09CL, H100 Govermental Affairs PNETFAO
H105 Govermental Affairs PNETFAO
J0550 Corporate Finance PNETFAO
J1001, J1002 V.P. Office PNETLEAD
J1020, J1022-
J1029,
J1040-J1048 Enterprise Integration PNETLEAD
J1021 Enterprise Integration PNETLEAD
J1026, J1049 Enterprise Integration PNETLEAD
J1030-J1039 Process Reengineering PNETLEAD
J1336 Quality & Product Info Systems PNETLEAD
J1350 Quality & Product Info Systems PNETLEAD
J1410 PNETSO
</TABLE>
8 OF 38
<PAGE> 28
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
ACCOUNT
DEPT. OPS CHARGE REQUISITIONER REQUISITIONER FINANCE FINANCE HR HR
# LOC (AIS) CODE* NAME PROFS ID NAME PROFS ID NAME PROFS ID
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joe Parambo JPARAMBO
Doug McGlaun DMCGLAUN
Dirk Heitzman DHEITZMA
Horst Ehlert HEHLERT
Nancy Ausum NAUSUM
Reinhard Bertuleit RBERTULE
Bob Palencik RPALENCI
Leo Cebuta LCEBULA
J1420 5001 13-0978-PNET Doug Bauer DBAUER2 Paul Pietrzak PPIETRZA Bob Frick RFRICK
J1430 5001 13-0978-PNET Bob Everhart REVERHAR Chris Kozakiewicz CKOZAKIE Bob Frick RFRICK
J1435 5001 13-0978-PNET Jack Burns JBURNS1 Steve Berta SBERTA Bob Frick RFRICK
J1440 5001 13-0978-PNET Dirk Heitzman DHEITZMA Chris Kozakiewicz CKOZAKIE Bob Frick RFRICK
J1450, J1451 5001 13-0978-PNET Bipin Patel BPATEL2 Chris Kozakiewicz CKOZAKIE Bob Frick RFRICK
J1455 5001 13-0978-PNET Sergio Ruffolo SRUFFOLO Steve Berta SBERTA Bob Frick RFRICK
13-0970-PNET(C) Robert Dickson RDICKSON
J1510 5001 13-0978-PNET(I.S.) Al Huberty AHUBERTY Gwen Bynum GBYNUM Frank Stobbe FSTOBBE
13-0970-PNET(C) Robert Dickson RDICKSON
J1511 5001 13-0978-PNET(I.S.) Dan Lenardon DLENARDO Gwen Bynum GBYNUM Frank Stobbe FSTOBBE
13-0970-PNET(C) Robert Dickson RDICKSON
J1512 5001 13-0978-PNET(I.S.) Sue Takai STAKAI Gwen Bynum GBYNUM Frank Stobbe FSTOBBE
13-0970-PNET(C) Robert Dickson RDICKSON
J1513 5001 13-0978-PNET(I.S.) Andy Mellon AMELLON Gwen Bynum GBYNUM Frank Stobbe FSTOBBE
13-0970-PNET(C) Robert Dickson RDICKSON
J1514 5001 13-0978-PNET(I.S.) Bert Moberg BMOBERG Gwen Bynum GBYNUM Frank Stobbe FSTOBBE
13-0970-PNET(C)
J1515-J1519 5001 13-0978-PNET(I.S.) Robert Dickson RDICKSON Gwen Bynum GBYNUM Frank Stobbe FSTOBBE
13-0970-PNET(C)
J1531 5001 13-0978-PNET(I.S.) Ken Michel KMICHEL Patty Hanzek PHANZEK F. Stobbe FSTOBBE
13-0970-PNET(C) Paul Friedrich PFRIEDRI
J1533 5001 13-0978-PNET(I.S.) Dennis Brining DBRINING Betty Jane Amman BAMMAN F. Stobbe FSTOBBE
13-0970-PNET(C) Tom Mobley TMOBLEY
J1534 5001 13-0978-PNET(I.S.) Chuck Shumaker CSHUMAKE Betty Jane Amman BAMMAN F. Stobbe FSTOBBE
Bob Sarr BSARR
13-0970-PNET(C) Bob Thomas RTHOMAS1
J1535 5001 13-0978-PNET(I.S.) Paul Stasko PSTASKO Betty Jane Amman BAMMAN F. Stobbe FSTOBBE
13-0970-PNET(C)
J1536 5001 13-0978-PNET(I.S.) Brad Calkins BCALKINS Patty Hanzek PHANZEK F. Stobbe FSTOBBE
Richard Tucker RTUCKER
Larry Acciaioli LACCIAIO
John Abrahamson JABRAHA2
Tim Peters TPETERS
13-0970-PNET(C) Jack Wright JWRIGHT
J1540 5001 13-0978-PNET(I.S.) Hank Krzeiuk KHALIBOZ Tony Ventura TVENTURA F. Stobbe FSTOBBE
Richard Tucker RTUCKER
Larry Acciaoli LACCIAIO
John Abrahamson JABRAHA2
Tim Peters TPETERS
Jack Wright JWRIGHT
13-0970-PNET(C) Hank Krzciuk HKRZEIUK
J1541 5001 13-0978-PNET(I.S.) Ken Halibozek KHALIBOZ Tony Ventura TVENTURA F. Stobbe FSTOBBE
Richard Tucker RTUCKER
13-0970-PNET(C) Dave Biondi DBIONDI
J1542 5001 13-0978-PNET(I.S.) Duane Lawton DLAWTON Tony Ventura TVENTURA F. Stobbe FSTOBBE
13-0970-PNET(C)
J1550 5001 13-0978-PNET(I.S.) TBD TBD Patty Hanzek PHANZEK Frank Stobbe FSTOBBE
13-0970-PNET(C)
J1560 5001 13-0978-PNET(I.S.) Ed Niemyjsid ENIEMYJS Patty Hanzek PHANZEK Frank Stobbe FSTOBBE
13-0970-PNET(C) George Surdu GSURDU
J1561 5001 13-0978-PNET(I.S.) Mark Duhaime MDUHAIME Patty Hanzek PHANZEK Frank Stobbe FSTOBBE
13-0970-PNET(C)
J1562 5001 13-0978-PNET(I.S.) Anne-Marie Krul AKRUL Patty Hanzek PHANZEK Frank Stobbe FSTOBBE
13-0970-PNET(C) Phil Masser PMASSER1
J1570 5001 13-0978-PNET(I.S.) Ron Wong RWONG Gwen Bynum GBYNUM F. Stobbe FSTOBBE
13-0970-PNET(C) Phil Masser PMASSER1
J1571 5001 13-0978-PNET(I.S.) Ron Wong RWONG Gwen Bynum GBYNUM F. Stobbe FSTOBBE
13-0970-PNET(C) Ron Wong RWONG
J1572-J1579 5001 13-0978-PNET(I.S.) Bill Lassila WLASSILA Gwen Bynum GBYNUM F. Stobbe FSTOBBE
</TABLE>
<TABLE>
<CAPTION>
DEPT.
# ACTIVITY MAILBOX
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
J1420 PNETSO
J1430 PNETSO
J1435 PNETSO
J1440 PNETSO
J1450, J1451 PNETSO
J1455 PNETSO
J1510 Technical Services PNETLEAD
J1511 Technical Services PNETLEAD
J1512 Technical Services PNETLEAD
J1513 Technical Services PNETLEAD
J1514 Technical Services PNETLEAD
J1515-J1519 Technical Services PNETLEAD
J1531 Technical Services PNETLEAD
J1533 Technical Services PNETLEAD
J1534 Technical Services PNETLEAD
J1535 Technical Services PNETLEAD
J1536 Technical Services PNETLEAD
J1540 Technical Services PNETLEAD
J1541 Technical Services PNETLEAD
J1542 Technical Services PNETLEAD
J1550 Technical Services PNETLEAD
J1560 Technical Services PNETLEAD
J1561 Technical Services PNETLEAD
J1562 Technical Services PNETLEAD
J1570 Technical Services PNETLEAD
J1571 Technical Services PNETLEAD
J1572-J1579 Technical Services PNETLEAD
</TABLE>
9 OF 38
<PAGE> 29
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
ACCOUNT
DEPT OPS CHARGE REQUISITIONER REQUISITIONER FINANCE FINANCE
# LOC (AIS) CODE* NAME PROFS ID NAME PROFS ID
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
13-0970-PNET(C) Ron Wong RWONG
J1573 5001 13-0978-PNET(I.S.) Donald Wareham DWAREHAM Gwen Bynum GBYNUM
13-0970-PNET(C) Ron Wong RWONG
J1574 5001 13-0978-PNET(I.S.) Bert Entsminger BENTSMIN Gwen Bynum GBYNUM
13-0970-PNET(C) Ron Wong RWONG
J1575-J1590 5001 13-0978-PNET(I.S.) Phil Masser PMASSER1 Gwen Bynum GBYNUM
Ron Wong RWONG
Debbie Wagner DWAGNER1
Ron Carr RCARR
Gene Kotlinski GKOTLINS
Jim Chakel JCHAKEL
George Troell GTROELL
Kevin Timms KTIMMS
13-0970-PNET(C) Pete Tsaprazis PTSAPRAZ
J1576 5001 13-0978-PNET(I.S.) Gary Gates GGATES Gwen Bynum GBYNUM
13-0970-PNET(C)
J1577-J1599 5001 13-0978-PNET(I.S.) Ron Wong RWONG Gwen Bynum GBYNUM
Forrest Mclaughlin FMCLAUG1
Chuck Wilkinson CWILKINS
13-0970-PNET(C) Bill Lassila WLASSILA
J1580 5001 13-0978-PNET(I.S.) Ron Wong RWONG Gwen Bynum GBYNUM
Peter Greene PGREENE
David Kramarczyk DKRAMARC
13-0970-PNET(C) Ron Wong RWONG
J1581 5001 13-0978-PNET(I.S.) Jack Ellis JELLIS Gwen Bynum GBYNUM
Peter Greene PGREENE
13-0970-PNET(C) David Kramarczyk DKRAMARC
J1582-J1585 5001 13-0978-PNET(I.S.) Ron Wong RWONG Gwen Bynum GBYNUM
Cynthia Liss CLISS
Jim Ubl JUBL
Adriana Karaboutis AKARABOU
Valerie Pontious VPONTIOU
Barb Strozynski BSTROZYN
Steve Brown SBROWN
Werner Shuette WSCHUET1
Fred Bosman FBOSMAN
Gary Larson GLARSON
Jim Harvey JHARVEY
13-0970-PNET(C) Joan St. Amand JSTAMAND
J1700 5001 13-0978-PNET(I.S.) Simon Clark SCLARK Jill Tamburro GTAMBURR
Nick Smither NSMITHER
John Ferguson JFERGUSO
Mark Krajewski MKRAJEWS
Richard Thwaite RTHWAITE
Dave Ramsey DRAMSEY1
Joe Hall JHALL5
Denny French DFRENCH
Pearl Lim PLIM
Dean Preston DPRESTON
Connie Widyanto CWIDYANT
Bob Cary RCARY
Jeff Kelly JKELLY1
Ron Bolen RBOLEN
13-0970-PNET(C) Don Beyer DBEYER
J1700 5001 13-0978-PNET(I.S.) Terry Grover TGROVER Jill Tamburro GTAMBURR
13-0970-PNET(C)
J1701 5001 13-0978-PNET(I.S.) Trish Buckley PBUCKLEY Jill Tamburro GTAMBURR
13-0970-PNET(C) Manfred Weck MWECK
J1800, J1801 5001 13-0978-PNET(I.S.) Dick Bryant RBRYANT Jill Tamburro GTAMBURR
Wafa Bunney WBUNNEY
13-0970-PNET(C) John Strasko JSTRASKO
J1900 5001 13-0978-PNET(I.S.) Craig Deuby CDEUBY Paul Towney PTOWMEY
<CAPTION>
DEPT HR HR
# NAME PROFS ID ACTIVITY MAILBOX
<S> <C> <C> <C> <C>
J1573 F. Stobbe FSTOBBE Technical Services PNETLEAD
J1574 F. Stobbe FSTOBBE Technical Services PNETLEAD
J1575-J1590 F. Stobbe FSTOBBE Technical Services PNETLEAD
J1576 F. Stobbe FSTOBBE Technical Services PNETLEAD
J1577-J1599 F. Stobbe FSTOBBE Technical Services PNETLEAD
J1580 F. Stobbe FSTOBBE Technical Services PNETLEAD
J1581 F. Stobbe FSTOBBE Technical Services PNETLEAD
J1582-J1585 F. Stobbe FSTOBBE Technical Services PNETLEAD
J1700 Sarah Orwig SORWIG Financial Systems PNETLEAD
J1700 Sarah Orwig SORWIG Finance Systems PNETLEAD
J1701 Sarah Orwig SORWIG Finance Systems PNETLEAD
J1800, J1801 Sarah Orwig SORWIG ER/OGC Systems PNETLEAD
J1900 Chris Glaser CGLASER Production Purchasing PNETLEAD
</TABLE>
10 OF 38
<PAGE> 30
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
Account
Dept Ops Charge Requisitioner Requisitioner Finance Finance
# Loc (AIS) Code* Name Profs ID Name Profs ID
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jim Hruby JHRUBY
Marty Bobb MBOPP
Norman Thomas NTHOMAS2
Jack Ellis JELLIS
Dave Roman DROMAN
Bob McMahon RMCMAHON
Pete Yuhas PYUHAS
Karen Kish KKISH
Bob Maheru BMAHERU
Ron Moorhead RMOORHEA
Andy Moir AMOIR1
Gary Burdick GBURDICK
13-0970-PNET(C) Rudy Stubler RSTUBLER
J1910 5001 13-0978-PNET(I.S.) Tim McKeague TMCKEAGU Paul Towmey PTWOMEY
Gary Burdick GBURDICK
Ronald Wolok RWOLOK
Ken Cook KCOOK
Jim Fekete JFEKETE
13-0970-PNET(C) Steve Hanson SHANSON
J1920 5001 13-0978-PNET(I.S.) Brian McCormick BMCCORMI Paul Towmey PTWOMEY
Wafa Bunney WBUNNEY
Al Cartier ACARTIER
Kathy Covert KCOVERT
Tom Gould TGOULD
Debie McLeari DMCLEARI
13-0970-PNET(C) Dave Scwann DSCWANN
J1930 5001 13-0978-PNET(I.S.) Sally Tuma STUMA Paul Towmey PTWOMEY
Bob Mittino RMITTINO
13-0970-PNET(C) Wayne Fercho WFERCHO Paul Towmey PTWOMEY
J1940 5001 13-0971-PNET(I.S.) Oskar Scheit OSCHEIT Nick Pagan NPAGAN
25A-2744-PNET Howard Welsh HWELSH1
J3103 5001 25G-2744-PNET K.R. Kent KKENT Ed Moran EMORAN
2SA-2744-PNET Caryn O'Connor COCONNO1
J3311 5001 25G-2744-PNET Linda Wyrobek LWYROBEK Ed Moran EMORAN
25A-2744-PNET Vince Bozich VBOZICH
J3450 5001 25G-2744-PNET Clint Hutto CHUTTO Ed Moran EMORAN
Michelle Caldwell MCALDWE2
25A-2744-PNET Margaret Weinck MWEINCK
J3501 5001 25G-2744-PNET Tom Yatko TYATKO Eric Law ELAW
25A-2744-PNET
J3505 5001 25G-2744-PNET Peter Smith PSMITT9 Peter Smith PSMITH9
25A-2744-PNET Michelle Caldwell MCALDWE2
J3515 5001 25G-2?44-PNET Tom Yatko TYATKO Tom Yatcko TYATCKO
Ted Starosciak TSTAROSC
Wayne McDaniels WMCDANIE
Ben Wold BWOLD
John Mills JMILLS
Marcy Salemi MSAIEMI
25A-2744-PNET Tom Eggan TEGGAN
J3520 5001 25G-2744-PNET Bill Boyd WBOYD1 Dave Clawson DCLAWSO1
Vince Bozich VBOZICH
25A-2744-PNET Clint Hutto CHUTT0
J3540 5001 25G-2744-PNET Tom Yatcko TYATKO Tom Yatcko TYATCKO
25A-2744-PNET Sam McCarter SMCCARTE
J6005 5001 Z5G-2744-PNET Randy Wilds RWILDS Mary Lehman MLEHMAN3
25A-2744-PNET Dennis Tosh DTOSH1
J6006 5001 25G-2744-PNET Jim Keefer JKEEFER1 Sam Calchary SCALHAR
25A-2744-PNET Diane Shimski DSHIMSKY1
J6007 5001 25G-2744-PNET David Rehor DREHOR Sam Calchary SCALCHAR
25A-2744-PNET
J6008 5001 25G-2744-PNET MEL STEPHENS MSTEPHEN Sam Calchary SCALCHAR
2SA-2744-PNET Will Periam WPERIAM
J6009 5001 25G-2744-PNET Mamie Washington MWASHING Sam Calchary SCALCHAR
25A-2744-PNET J.M. Williams JWILLI24
J6010 5001 25G-2744-PNET J.K. Goerke JGOERKE Ed Moran EMORAN
25A-2744-PNET
J6011 5001 25G-2744-PNET Kevin Reynolds KREYNOLD Sam Calchary SCALCHAR
<CAPTION>
Dept HR HR
# Name Profs ID Activity Mailbox
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
J1910 Chris Glaser CGLASER Production Purchasing PNETLEAD
J1920 Chris Glaser CGLASER Production Purchasing PNETLEAD
J1930 Chris Glaser CGLASER Production Purchasing PNETLEAD
J1940 Chris Glaser CGLASER Production Purchasing PNETLEAD
J3103 Bethany Garman BGARMAN Corporate Finance PNETFAO
J3311 Bethany Garman BGARMAN Corporate Finance PNETFAO
J3450 Bethany Garman BGARMAN Corporate Finance PNETFAO
J3501 TBD TBD Corporate Finance PNETFAO
J3505 Bethany Garman BGARMAN Corporate Finance PNETFAO
J3515 TBD TBD Corporate Finance PNETFAO
Linda Freitag LFREITAG
J3520 John Ewald JEWALD Corporate Finance PNETFAO
J3540 Bethany Garman BGARMAN Corporate Finams PNETFAO
J6005 Bethany Garman BGARMAN PNETFAO
J6006 Bethany German BGARMAM PNETFAO
J6007 Bethany Garman BGARMAN PNETFAO
J6008 Bethany Garman BGARMAN PNETFAO
J6009 Bethany Garman BGARMAN PNETFAO
J6010 Bethany Garman BGARMAN Corporate Finance PNETFAO
J6011 Bethany Garman BGARMAN Corporate Finance PNETFAO
</TABLE>
11 OF 38
<PAGE> 31
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
ACCOUNT
DEPT. OPS CHARGE REQUISITIONER REQUISITIONER FINANCE FINANCE HR
# LOC (AIS) CODE* NAME PROFS ID NAME PROFS ID NAME
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
25A-2744-PNET D.S. Sobczynski DSOBCZYN1
J6012 5001 25G-2744-PNET A.J. WELMERS RMUNSON Ed Moran EMORAN Bethany Garman
13-0970-PNET Germaine Fisher GFISHER EMORAN
J6101 5001 25A-2744-PNET Jerry Bolthouse JBOLTHOU Ed Moran CC-DGREENBAU Bethany Garman
25A-2744-PNET N. Barry Sloat BSLOAT
J6201,J6204 5001 25G-2744-PNET Mamie Washington MWASHING Barry Sloat BSLOAT Bethany Garman
25A-2744-PNET
J85 5001 25G-2744-PNET TBD TBD Sam Calchary SCALCHAR Bethany Garman
25A-2744-PNET Malcolm Sutherland MSUTHER4
J91 5001 25G-2744-PNET Greg Wold GWOLD Ed Moran EMORAN Bethany Garman
25A-2744-PNET Lynn Bolouch LBOLUCH
J9201 5001 25G-2744-PNET Melanie Leavy MLEAVY Joanne Weiss JWEISS Joe Stocker
K01 5001 25A-2744-PNET Melanie Leavy MLEAVY Joanne Weiss JWEISS Joe Stocker
K02-K19,
K23, K31- Lynn Bolouch LBOLUCH
K33, K80 5001 25A-2744-PNET Melanie Leavy MLEAVY Joanne Weiss JWEISS Joe Stocker
Lynn Bolouch LBOLUCH
Melanie Leavy MLEAVY
Jo Mahaffey JMAHAFFE
Bonnie Bonner BBONNER1
Cindy Graham CGRAHAM4
K35 5001 25A-2744-PNET Kathi Lopez KLOPEZ1 Joanne Weiss JWEISS Joe Stocker
Dianna Rorabacher DRORABAC
P01,P23 5001 25A-2744-PNET Mary Beth Willde MWILKIE1 Janet O'Connell JOCONNEL Shirley Gardner
P02,P11, Jewell Cooper JCOOPER1
P31-P35 5001 25A-2744-PNET Betty Kowalczyk (BU) EKOWALCZ Janet O'Connell JOCONNEL Shirley Gardner
Dianna Rorabacher DRORABAC
Mary Beth Willde MWILKIE1
P03 5001 25A-2744-PNET Betty Kowalczyk EKOWALCZ Janet O'Connell JOCONNEL Shirley Gardner
P05,P07,
P14,P16 5001 25A-2744-PNET Joann Stocklin JSTOCKLI Janet O'Connell JOCONNEL Shirley Gardner
P08 5001 25A-2744-PNET Reba Williams RWILLIA7 Janet O'Connell JOCONNEL Shirley Gardner
P15,P17 5001 25A-2744-PNET Jewell Cooper JCOOPER1 Janet O'Connell JOCONNEL Shirley Gardner
Joann Stocklin JSTOCKLI
Betty Kowalczyk (BU) EKOWALCZ
P21 5001 25A-2744-PNET Jewell Cooper JCOOPER1 Janet O'Connell JOCONNEL Shirley Gardner
Phil Roberts PROBERT1
W02 5001 25A-2744-PNET Keith Bohn KBOHN Valerie Guibord VGUIBORD Angela Rankin-Yohannes
W05 5001 25A-2744-PNET Phil Roberts RROBERT1 Valerie Guibord VGUIBORD Angela Rankin-Yohanes
Sandy Fatt
A400 5005 25A-2744pPNET CARLOS MAZZZORIN-PSR CMAZZORI Ann Pacitti APACITTI Linda Columbus
ANDY BENEDICT-PSR ABENEDIC
Edward Blanch EBLANCH
George Marsh GMARSH Jane Glotzhober
Curtis Short CSHORT Sandy Fatt
A403 5005 25A-2744-PNET Joseph Smyth JSMYTH Ann Pacitti APACITTI Linda Columbus
Sandy Fatt
A405 5005 25A-2744-PNET STEVE ALDERMAN-PSR SALDERMA Ann Pacitti APACITTI Linda Columbus
Sandy Maczko
MORGAN JACKSON-PSR MJACKS11 Sandy Fatt
A410 5005 25A-2744-PNET Susan DeSandre SDESANDR Ann Pacitti APACITTI Linda Columbus
MANFRED SCHUETT-PSR MSCHUETT Sandy Maczko
Greg Grinnel GGRINNEL Sandy Fatt
Sandy Maczko
Sandy Fatt
A411 5005 25A-2744-PNET Michael O'Sullivan-PSR MOSULLIV Ann Pacitti APACITTI Linda Columbus
A413 5005 25A-2744-PNET Hugh Poore HPOORE Ann Pacitti APACITTI Linda Columbus
Mary Engdahl
Sandy Fatt
A420-A423 5005 25A-2744-PNET Uldis Sipois-PSR USIPOLS Ann Pacitti APACITTI Linda Columbus
Sandy Fatt
A425 5005 25A-2744-PNET Bruce Swift-PSR BSWIFT1 Ann Pacitti APACITTI Linda Columbus
Hank Chawansky
Sandy Fatt
Hank Chawansky
A430,A432, Sandy Fatt
A441 5005 25A-2744-PNET Linda Miller-PSR LMILLER8 Ann Pacitti APACITTI Linda Columbus
Hank Chawansky
Linda Miller-PSR LMILLER8 Sandy Fatt
A431 5005 25A-2744-PNET Ted Betley TBETLEY Ann Pacitti APACITTI Linda Columbus
<CAPTION>
Dept. HR
# Profs ID Activity Mailbox
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
J6012 BGARMAN Corporate Finance PNETFAO
J6101 BGARMAN Corporate Finance PNETFAO
J6201,J6204 BGARMAN Corporate Finance PNETFAO
J85 BGARMAN TBD PNETFAO
J91 BGARMAN TBD PNETFAO
J9201 JSTOCKER Corporate Finance PNETFAO
K01 JSTOCKER FAO PNETFAO
K02-K19,
K23, K31-
K33, K80 JSTOCKER FAO PNETFAO
K35 JSTOCKER Office of General Counsel PNETFAO
PO1,P23 SGARDNER FAO PNETFAO
P02,P11,
P31-P35 SGARDNER FAO PNETFAO
P03 SGARDNER Employee Relations PNETFAO
P05,P07,
P14,P16 SGARDNER Employee Relations PNETFAO
P08 SGARDNER FAO PNETFAO
P15,P17 SGARDNER FAO PNETFAO
P21 SGARDNER HR PNETFAO
W02 ARANKINY Employee Relations PNETFAO
W05 ARANKINY Employee Relations PNETFAO
SFATT(T)
A400 LCOLUMB2 Production Purchasing PNETFMSP
A403 LCOLUMB2 Production Purchasing PNETFMSP
A405 LCOLUMB2 Production Purchasing PNETFMSP
SMACZKO(T)
SFATT(T)
A410 LCOLUMB2 Production Purchasing PNETFMSP
SMACZKO(T)
SFATT(T)
A411 SMACZKO(T)
SFATT(T)
LCOLUMB2 Production Purchasing PNETFMSP
A413 LCOLUMB2 Production Purchasing PNETFMSP
MENGDAHL(T)
SFATT(T)
A420-A423 LCOLUMB2 Production Purchasing PNETFMSP
SFATT(T)
A425 LCOLUMB2 Production Purchasing PNETFMSP
HCHAWANS(T)
SFATT(T)
HCHAWANS(T)
A430,A432, SFATT(T)
A441 LCOLUMB2 Production Purchasing PNETFMSP
HCHAWANS(T)
SFATT(T)
A431 LCOLUMB2 Production Purchasing PNETFMSP
</TABLE>
12 OF 38
<PAGE> 32
ALL APPROVED FOR PEOPLENET
<TABLE>
<CAPTION>
Account
Dept Ops Charge Requisitioner Requisitioner Finance Finance
# Loc (AIS) Code* Name Profs ID Name Profs ID
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Linda Miller - PSR LMILLER8
A433 5005 25A-2744-PNET Bob Dubois RDUBOIS1 Ann Pacitti APACITTI
Linda Miller - PSR LMILLER8
A434 5005 25A-2744-PNET Don Nelson DNELSON2 Ann Pacitti APACITTI
Linda Miller - PSR LMILLER8
A435 5005 25A-2744-PNET Bob Bruce BBRUCE1 Ann Pacitti APACITTI
Linda Miller - PSR LMILLER8
A436 5005 25A-2744-PNET Joe Smyth JSMYTH Ann Pacitti APACITTI
Linda Miller - PSR LMILLER8
A437 5005 25A-2744-PNET John Steele JSTEELE1 Ann Pacitti APACITTI
Linda Miller - PSR LMILLER8
A438 5005 25A-2744-PNET Andy Dave ADAVE Ann Pacitti APACITTI
Linda Miller - PSR LMILLER8
A439 5005 25A-2744-PNET Dan Whelan DWHELAN Ann Pacitti APACITTI
Linda Miller - PSR LMILLER8
A440 5005 25A-2744-PNET Donna Wong DWONG Ann Pacitti APACITTI
A450 5005 25A-2744-PNET Gary Quick - PSR GQUICK Ann Pacitti APACITTI
A460 5005 25A-2744-PNET Doug Halliday - PSR DHALLIDA Ann Pacitti APACITTI
A465 5005 25A-2744-PNET Jeff Collins - PSR JCOLLIN1 Ann Pacitti APACITTI
A470 5005 25A-2744-PNET Dennis Connor - PSR DCONNOR Ann Pacitti APACITTI
A471 5005 25A-2744-PNET Charlie Ross - PSR CROSS1 Ann Pacitti APACITTI
Charlie Ross - PSR CROSS1
Cynthia Jefferson CJEFFERS
A472 5005 25A-2744-PNET Ronald Miller RMILLER7 Ann Pacitti APACITTI
A473 5005 25A-2744-PNET Mark Quay - PSR MQUAYOR Ann Pacitti APACITTI
Malcolm Pollard - PSR MPOLLAR1
A474 5005 25A-2744-PNET Dave Stephens DSTEVEN2 Ann Pacitti APACITTI
A475 5005 25A-2744-PNET Jeff Wellman - PSR JWELLMAN Ann Pacitti APACITTI
A480 5005 25A-2744-PNET Jean Mayer - PSR JMAYER1 Ann Pacitti APACITTI
N3400 5005 25A-2744-PNET Richard Honecker - PSR RHONECKE Ann Pacitti APACITTI
N3410 5005 25A-2744-PNET Larry Toth - PSR LTOTH Ann Pacitti APACITTI
Larry Toth LTOTH
N3410D 5005 25A-2744-PNET Jean Fisher JFISHER2 Ann Pacitti APACITTI
N3430 5005 25A-2744-PNET Ray Jensen - PSR RJENSEN Ann Pacitti APACITTI
N3440 5005 25A-2744-PNET Geoff Stuckey - PSR GSTUCKE1 Ann Pacitti APACITTI
N3450 5005 25A-2744-PNET Sue Kobat - PSR SKOBAT Ann Pacitti APACITTI
N3460-N3462 5005 25A-2744-PNET Dan Fortunato - PSR DFORTUNA Ann Pacitti APACITTI
Dan Fortunato - PSR DFORTUNA
N3460A, N3460B 5005 25A-2744-PNET Tim Carbary TCARBARY Ann Pacitti APACITTI
<CAPTION>
Dept HR HR
# Name Profs ID Activity Mailbox
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hank Chawansky HCHAWANS(T)
Sandy Fatt SFATT(T)
A433 Linda Columbus LCOLUMB2(C) Production Purchasing PNETFMSP
Hank Chawansky HCHAWANS(T)
Sandy Fatt SFATT(T)
A434 Linda Columbus LCOLUMB2(C) Production Purchasing PNETFMSP
Hank Chawansky HCHAWANS(T)
Sandy Fatt SFATT(T)
A435 Linda Columbus LCOLUMB2(C) Production Purchasing PNETFMSP
Hank Chawansky HCHAWANS(T)
Sandy Fatt SFATT(T)
A436 Linda Columbus LCOLUMB2(C) Production Purchasing PNETFMSP
Hank Chawansky HCHAWANS(T)
Sandy Fatt SFATT(T)
A437 Linda Columbus LCOLUMB2(C) Production Purchasing PNETFMSP
Hank Chawansky HCHAWANS(T)
Sandy Fatt SFATT(T)
A438 Linda Columbus LCOLUMB2(C) Production Purchasing PNETFMSP
Hank Chawansky HCHAWANS(T)
Sandy Fatt SFATT(T)
A439 Linda Columbus LCOLUMB2(C) Production Purchasing PNETFMSP
Hank Chawansky HCHAWANS(T)
Sandy Fatt SFATT(T)
A440 Linda Columbus LCOLUMB2(C) Production Purchasing PNETFMSP
Sandy Fatt SFATT(T)
A450 Linda Columbus LCOLUMB2(C) Production Purchasing PNETFMSP
Mary Engdahl MENGDAHL(T)
Sandy Fatt SFATT(T)
A460 Linda Columbus LCOLUMB2 Production Purchasing PNETFMSP
Mary Engdahl MENGDAHL(T)
Sandy Fatt SFATT(T)
A465 Linda Columbus LCOLUMB2 Production Purchasing PNETFMSP
Sandy Fatt SFATT(T)
A470 Linda Columbus LCOLUMB2(C) Production Purchasing PNETFMSP
Sandy Fatt SFATT(T)
A470 Linda Columbus LCOLUMB2(C) Production Purchasing PNETFMSP
Sandy Fatt SFATT(T)
A472 Linda Columbus LCOLUMB2(C) Production Purchasing PNETFMSP
Sandy Fatt SFATT(T)
A473 Linda Columbus LCOLUMB2(C) Production Purchasing PNETFMSP
Sandy Maczko SMACZKO(T)
Sandy Fatt SFATT(T)
A474 Linda Columbus LCOLUMB2(C) Production Purchasing PNETFMSP
Mary Engdahl MENGDAHL(T)
Sandy Fatt SFATT(T)
A475 Linda Columbus LCOLUMB2 Production Purchasing PNETFMSP
Mary Engdahl MENGDAHL(T)
Sandy Fatt SFATT(T)
A480 Linda Columbus LCOLUMB2 Production Purchasing PNETFMSP
Sandy Fatt SFATT(T)
N3400 Linda Columbus LCOLUMB2(C) Facilities, Materials, Services & Purchasing PNETFMSP
Jane Glotzhober JGLOTZHO(T)
Sandy Fatt SFATT(T)
N3410 Linda Columbus LCOLUMB2 Facilities, Materials, Services & Purchasing PNETFMSP
Sandy Fatt SFATT(T)
N3410D Linda Columbus LCOLUMB2(C) Facilities, Materials, Services & Purchasing PNETFMSP
Mary Enghadl MENGDAHL(T)
N3430 Linda Columbus LCOLUMB2(C) Facilities, Materials, Services & Purchasing PNETFMSP
Sandy Fatt SFATT(T)
N3440 Linda Columbus LCOLUMB2(C) Facilities, Materials, Services & Purchasing PNETFMSP
Sandy Fatt SFATT(T)
N3450 Linda Columbus LCOLUMB2(C) Facilities, Materials, Services & Purchasing PNETFMSP
Sandy Fatt SFATT(T)
N3460-N3462 Linda Columbus LCOLUMB2(C) Facilities, Materials, Services & Purchasing PNETFMSP
Sandy Fatt SFATT(T)
N3460A, N3460B Linda Columbus LCOLUMB2(C) Facilities, Materials, Services & Purchasing PNETFMSP
</TABLE>
13 OF 38
<PAGE> 33
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
Account
Dept Ops Charge Requisitioner Requisitioner Finance Finance
# Loc (AIS) Code* Name Profs ID Name Profs ID
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dan Fortunato - PSR DFORTUNA
N3460C 5005 25A-2744-PNET Carol Miller CMILLER2 Ann Pacitti APACITTI
N3470 5005 25A-2744-PNET Helmut Goebel - PSR HGOEBEL2 Ann Pacitti APACITTI
N3480 5005 25A-2744-PNET Mary Foster - PSR MFOSTER Ann Pacitti APACITTI
N3481 5005 25A-2744-PNET Mary Foster - PSR MFOSTER Ann Pacitti APACITTI
4097 5100 13-0970-PNET Nellie Neilans NNEILANS Clyde Ghee CGHEE
B8XX 5100 13-0933-PNET John Mantey JMANTEY Bride Jorgensen BJORGENS
13-0933-PNET(T) ANY EFHD
D400-D593 5100 13-0970-PNET(C) EMPLOYEE N/A Mike Jankowski MJANKOWS
13-0933-PNET(T)
J000,J101 5100 13-0970-PNET(C) Bill Powers WPOWERS Patrick Foley PFOLEY
13-0933-PNET(T)
J005,J050-J057 5100 13-0970-PNET(C) Peter Beardmore PBEARDMO Patrick Foley PFOLEY
13-0933-PNET(T)
J006 5100 13-0970-PNET(C) Pete Havstad PHAVSTAD Patrick Foley PFOLEY
13-0933-PNET(T)
J008 5100 13-0970-PNET(C) Frode Maasekidvaag FMASSEID Patrick Foley PFOLEY
13-0933-PNET(T)
J008 5100 13-0970-PNET(C) Wayne Johnson WJOHNSO7 Patrick Foley PFOLEY
13-0933-PNET(T)
J009-J011 5100 13-0970-PNET(C) Bob Culver RCULVER Patrick Foley PFOLEY
13-0933-PNET(T)
J040 5100 13-0970-PNET(C) Charles Wu CWU2 Rose Gossman MGOSSMAN
13-0933-PNET(T)
J041 5100 13-0970-PNET(C) Paul Killgoar PKILLGOA Rose Gossman MGOSSMAN
13-0933-PNET(T)
J044 5100 13-0970-PNET(C) Ken Heubner KHEUBNER Rose Gossman MGOSSMAN
13-0933-PNET(T)
J046 5100 13-0970-PNET(C) Alan Taub ATAUB Rose Gossman MGOSSMAN
13-0933-PNET(T)
J051 5100 13-0970-PNET(C) Irv Salmeen ISALMEEN Lynda Colovas LCOLOVAS
13-0933-PNET(T)
J058 5100 13-0970-PNET(C) Haren Gandhi HGANDHI Lynda Colovas LCOLOVAS
13-0933-PNET(T) Frode Maasekidvaag FMASSEID
J060 5100 13-0970-PNET(C) Wayne Johnson WJOHNSO7 Tom Hamilton THAMILTO
13-0933-PNET(T)
J066 5100 13-0970-PNET(C) Wayne Johnson WJOHNSO7 Tom Hamilton THAMILTO
13-0933-PNET(T)
J070 5100 13-0970-PNET(C) Rob Tabaczynski RTABACZY Patrick Foley PFOLEY
13-0933-PNET(T)
J071 5100 13-0970-PNET(C) Judy Curran JCURRAN1 Patrick Foley PFOLEY
13-0933-PNET(T)
J073 5100 13-0970-PNET(C) Mike Pulick MPULICK Patrick Foley PFOLEY
13-0933-PNET(T)
J077 5100 13-0970-PNET(C) Gary Vrsek GVRSEK Patrick Foley PFOLEY
13-0933-PNET(T)
J101 5100 13-0970-PNET(C) PAUL WEATHERILL RMUNSON Patrick Foley PFOLEY
J401 5100 13-0970-PNET Andy Acho AACHO Mary Jo Brant MBRANT
J420-J422 5100 13-0970-PNET Tim O'Brien TOBRIEN Mary Jo Brant MBRANT
J432 5100 13-0970-PNET Jim McErlain JMCERLAI Mary Jo Brant MBRANT
J440-J442,
J446-J449 5100 13-0970-PNET Elisa Crosby ECROSBY Mary Jo Brant MBRANT
J443 5100 13-0970-PNET Elisa Crosby ECROSBY Mary Jo Brant MBRANT
J444 5100 13-0970-PNET L.G. Kerrigan LKERRIGA Mary Jo Brant MBRANT
J445,J448,J488 5100 13-0970-PNET L.G. Kerrigan LKERRIGA Mary Jo Brant MBRANT
13-0970-PNET R.H. Munson RMUNSON
J600 5100 25A-2744-PNET Mary Combee MCOMBEE Mary Jo Brant MBRANT
<CAPTION>
Dept HR HR
# Name Profs ID Activity Mailbox
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sandy Fatt SFATT(T)
N3460C Linda Columbus LCOLUMB2(C) Facilities, Materials, Services & Purchasing PNETFMSP
Sandy Fatt SFATT(T)
N3470 Linda Columbus LCOLUMB2(C) Facilities, Materials, Services & Purchasing PNETFMSP
Sandy Fatt SFATT(T)
N3480 Linda Columbus LCOLUMB2(C) Facilities, Materials, Services & Purchasing PNETFMSP
Sandy Fatt SFATT(T)
N3481 Linda Columbus LCOLUMB2(C) Facilities, Materials, Services & Purchasing PNETFMSP
Ingrid Butler IBUTLER
4097 Frank Sudmeier FSUDMEIE ATEO MFG. Engineering PNETPTO
B8XX Michael Schulhoff MSCHULHO APO - Chassis PNETPTO
D400-D593 Scott Laing SLAING Electrical & Feul Handling Division PNETEFHD
Bob Dawson RDAWSON3(T)
J000,J101 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J005,J050-J057 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J006 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J008 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J008 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J009-J011 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J040 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J041 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J044 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J046 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J051 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J058 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J060 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J063 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J066 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J070 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J071 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
Bob Dawson RDAWSON3(T)
J072 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
J073 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J077 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
Bob Dawson RDAWSON3(T)
J101 Julie Wilkinson JWILKIN3(C) Scientific Research Labs PNETFAO
J401 TBD TBD Environmental & Safety Engineering PNETFAO
J420-J422 TBD TBD Environmental & Safety Engineering PNETFAO
Bob Dawson RDAWSON3 Environmental & Safety Engineering - Truck
J432 Julie Wilkinson(B/U)JWILKIN3 & Large/Lux Homologation PNETFAO
J440-J442,
J446-J449 Bob Dawson RDAWSON3 Environmental & Safety Engineering PNETFAO
J443 TBD TBD Environmental & Safety Engineering PNETFAO
J444 TBD TBD Environmental & Safety Engineering PNETFAO
J445,J448,J488 TBD TBD Environmental & Safety Engineering PNETFAO
Bob Dawson RDAWSON3(T)
J600 Julie Wilkinson JWILKIN3(C) Environmental & Safety Engineering PNETFAO
</TABLE>
14 OF 38
<PAGE> 34
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
DEPT. OPS ACCOUNT REQUISITIONER REQUISITIONER FINANCE FINANCE
# LOC CHARGE NAME PROFS ID NAME PROFS ID
[AIS] CODE*
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J601 5100 13-0970-PNET R. H. Munson RMUNSON
25A-2744-PNET Mary Combee MCOMBEE Mary Jo Brant MBRANT
13-0970-PNET R. H. Munson RMUNSON Mary Jo Brant MBRANT
J602 5100 25A-2744-PNET Mary Combee MCOMBEE Mary Jo Brant MBRANT
13-0970-PNET R. H. Munson RMUNSON
J603 5100 25A-2744-PNET Mary Combee MCOMBEE Mary Jo Brant MBRANT
J731 5100 13-0970-PNET Jim Gallas JGALLAS Mary Jo Brant MBRANT
N100 5100 TBD TBD TBD Don Fleeman DFLEEMAN
N111 5100 TBD Jerry Klarr GKLARR Don Fleeman DFLEEMAN
N120 5100 TBD Tom Logar TLOGAR Don Fleeman DFLEEMAN
N131 5100 TBD TBD JJONES1 Don Fleeman DFLEEMAN
James Simpson JSIMPSO3
N132 5100 TBD Harold Lowman HLOWMAN Mark Bugajski MBUGAJSK
N220 5100 TBD Jim Howell JHOWELL2 John Sample JSAMPLE
N250 5100 TBD Tony Ockelford TOCKELFORD Tony Simari ASIMARI
N260 5100 TBD Manfred Koenigs MKOENIGS John Sample JSAMPLE
N270 5100 TBD TBD TBD John Sample JSAMPLE
John Baxter JBAXTER1
N400-N404 5100 TBD Pat Daum PDAUM1 Mukund Acharya MACHARYA
N405 5100 TBD Rom Sriraman RSIRIMA TBD TBD
N406 5100 TBD David Yun DYUN John Sample JSAMPLE
N410 5100 TBD Frank Fsadni FFSADNI John Sample JSAMPLE
N411 5100 TBD Les Ryder LRYDER John Sample JSAMPLE
N412 5100 TBD B. Osborne WOSBORNE John Sample JSAMPLE
N413 5100 TBD J. Allman JALLMAN John Sample JSAMPLE
N414 5100 TBD Ken Klostrmeyer KKLOSTER John Sample JSAMPLE
N415 5100 TBD P. Dowding PDOWDING John Sample JSAMPLE
N416 5100 TBD L.M. Retallack LRETALLA John Sample JSAMPLE
N417 5100 TBD Jack Burnett JBURNET1 John Sample JSAMPLE
N419 5100 TBD TBD TBD TBD TBD
N420 5100 TBD Phil Lake PLAKE1 John Sample JSAMPLE
N430 5100 TBD Mike Suter MSUTER John Sample JSAMPLE
N440 5100 TBD Vince Fyle VFYIE Mukund Acharya MACHARYA
N450 5100 TBD Ed Sventics ESVENTIC James Simpson JSIMPSO3
N460-N463 5100 TBD Ron Denton RDENTON John Sample JSAMPLE
N470 5100 TBD John Lombard JLOMBARD Mike Schmidt MSCHIMD1
N471 5100 TBD Dennis Schuetzler DDSCHUETZ Mike Schmidt MSCHIMD1
N472 5100 TBD Mike Hofman MHOFMAN Mike Schmidt MSCHIMD1
N473 5100 TBD Bill Valade WVALADE James Simpson JSIMPSO3
N474 5100 TBD Dan Kapp DKAPP1 James Simpson JSIMPSO3
N480 5100 TBD Robert Murphy BMURPH13 John Kritzman JKRITZMA
N500 5100 TBD Arland Phelps APHELPS1 John Kritzman JKRITZMA
N510 5100 13-0933-PNET Keith Soubel KSOUBEL John Kritzman JKRITZMA
N511 5100 13-0933-PNET Allen Ackerman AACKERM1 John Kritzman JKRITZMA
N513 5100 13-0933-PNET Bob Fascetti BFASCETT John Kritzman JKRITZMA
N514 5100 TBD TBD TBD TBD TBD
Clyde Ghee CGHEE
N600 5100 13-0933-PNET Gordon Willis GWILLIS1 Larry Cupp LCUPP
Clyde Ghee CGHEE
N601 5100 13-0933-PNET TBD TBD Larry Cupp LCUPP
Clyde Ghee CGHEE
N605 5100 13-0933-PNET Angelo Guido AGUIDO Larry Cupp LCUPP
Clyde Ghee CGHEE
N606 5100 13-0933-PNET Marilyn Stroven MSTROVEN Larry Cupp LCUPP
Clyde Ghee CGHEE
N607 5100 13-0933-PNET TBD TBD Larry Cupp LCUPP
Prasad Ramakrishnan PRAMAKRI Clyde Ghee CGHEE
N608 5100 13-0933-PNET Larry Cupp LCUPP
Clyde Ghee CGHEE
N609 5100 13-0933-PNET Ken Walega KAALEGA Larry Cupp LCUPP
Clyde Ghee CGHEE
N610, N611 5100 13-0933-PNET Karl Borneman KBORNEMA Larry Cupp LCUPP
Clyde Ghee CGHEE
N612 5100 13-0933-PNET TBD TBD Larry Cupp LCUPP
<CAPTION>
DEPT. HR HR ACTIVITY MAILBOX
# NAME PROFS ID
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
J601 Bob Dawson RDAWSON3 (T)
Julie Wilkinson JWILKIN3 (C) Environmental & Safety Engineering PNETFAO
Bob Dawson RDAWSON3 (T)
J602 Julie Wilkinson JWILKIN3 (C) Environmental & Safety Engineering PNETFAO
Bob Dawson RDAWSON3 (T)
J603 Julie Wilkinson JWILKIN3 (C) Environmental & Safety Engineering PNETFAO
J731 Julie Wilkinson JWILKIN3 (C) PNETFAO
N100 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N111 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N120 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N131 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N132 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N220 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N250 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N260 TBD TBD Powertrain Operations PNETPTO
N270 TBD TBD Powertrain Operations PNETPTO
N400-N404 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N405 TBD TBD Powertrain Operations PNETPTO
N406 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N410 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N411 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N412 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N413 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N414 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N415 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N416 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N417 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N418 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N419 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N420 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N430 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N440 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N450 Bud Dengel BDENGEL Powertrain Operations (POEE) PNETPTO
N460-N463 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N470 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N471 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N472 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N473 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N480 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N480 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N510 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N511 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N513 Bud Dengel BDENGEL Powertrain Operations PNETPTO
N514 TBD TBD Powertrain Operations PNETPTO
N600 Melvin Boatner MBOATNER Powertrain Operations PNETPTO
N601 Melvin Boatner MBOATNER Powertrain Operations PNETPTO
N605 Melvin Boatner MBOATNER Powertrain Operations PNETPTO
N606 Melvin Boatner MBOATNER Powertrain Operations PNETPTO
N607 Melvin Boatner MBOATNER Powertrain Operations PNETPTO
N608 Melvin Boatner MBOATNER Powertrain Operations PNETPTO
N609 Melvin Boatner MBOATNER Powertrain Operations PNETPTO
N610, N611 Melvin Boatner MBOATNER Powertrain Operations PNETPTO
N612 Melvin Boatner MBOATNER Powertrain Operations PNETPTO
</TABLE>
15 OF 38
<PAGE> 35
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
ACCOUNT
DEPT. OPS CHARGE REQUISITIONER REQUISITIONER FINANCE FINANCE HR HR
# LOC (AIS) CODE* NAME PROFS ID NAME PROFS ID NAME PROFS ID
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Clyda Ghee CGHEE
N613 5100 13-0933-PNET TBD TBD Larry Cupp LCUPP Melvin Boatner MBOATNER
Clyda Ghee CGHEE
N614 5100 13-0933-PNET TBD TBD Larry Cupp LCUPP Melvin Boatner MBOATNER
Bob Makie RMAKIE Clyda Ghee CGHEE
N615 5100 13-0933-PNET Charlie Casgrain CGASGRAI Larry Cupp LCUPP Melvin Boatner MBOATNER
Clyda Ghee CGHEE
N616 5100 13-0933-PNET Bob Makie RMAKIE Larry Cupp LCUPP Melvin Boatner MBOATNER
Clyda Ghee CGHEE
N618 5100 13-0933-PNET Dennis Manchester DMANCHES Larry Cupp LCUPP Bill Cooley WCOOLEY
Clyda Ghee CGHEE
N619 5100 13-0933-PNET Bruce Mumbrue BMUMBRUE Larry Cupp LCUPP Bill Cooley WCOOLEY
Frank Casimir FCASIMIR Clyda Ghee CGHEE
N620 5100 13-0933-PNET Bob Reynolds RREYNOLD Larry Cupp LCUPP Melvin Boatner MBOATNER
Clyda Ghee CGHEE
N621 5100 13-0933-PNET Bob Reynolds RREYNOLD Larry Cupp LCUPP Melvin Boatner MBOATNER
Clyda Ghee CGHEE
N623 5100 13-0933-PNET Bob Reynolds RREYNOLD Larry Cupp LCUPP Melvin Boatner MBOATNER
Clyda Ghee CGHEE
N625 5100 TBD Bob Reynolds RREYNOLD Larry Cupp LCUPP TBD TBD
Dave Brown DBROWN12 Clyda Ghee CGHEE
N630 5100 13-0933-PNET David Dreyer DDREYER Larry Cupp LCUPP Melvin Boatner MBOATNER
Clyda Ghee CGHEE
N631 5100 13-0933-PNET Dave Brown DBROWN12 Larry Cupp LCUPP Melvin Boatner MBOATNER
Clyda Ghee CGHEE
N635 5100 13-0933-PNET Ernie Devincent EDEVINCE Larry Cupp LCUPP Melvin Boatner MBOATNER
Clyda Ghee CGHEE
N640, N641 5100 13-0933-PNET Paul Troy PTROY Larry Cupp LCUPP Melvin Boatner MBOATNER
Clyda Ghee CGHEE
N645 5100 13-0933-PNET Dan Hiddebrand DHILDEBR Larry Cupp LCUPP Melvin Boatner MBOATNER
Clyda Ghee CGHEE
N647 5100 13-0933-PNET Phil Guys PGUYS Larry Cupp LCUPP Melvin Boatner MBOATNER
Clyda Ghee CGHEE
N650, N652 5100 13-0933-PNET Larry McKinnis LMCKINNIS Larry Cupp LCUPP Melvin Boatner MBOATNER
T100 5100 13-0933-PNET Neil Ressler NRESSLER Bill Keesor WKESSOR Paulette Moreno PMORENO
Neil Ressler NRESSLER
T101 5100 13-0933-PNET Gary Markwardt GMARKWAR Roger Goldbaum RGOLDBAU Paulette Moreno PMORENO
Roscoe Nash RNASH1
T110 5100 13-0933-PNET Neil Ressler NRESSLER Nell Martin NMARTIN2 Paulette Moreno PMORENO
Ron Quaglia RQUAGLIA
T111 5100 13-0933-PNET Neil Ressler NRESSLER Nell Martin NMARTIN2 Paulette Moreno PMORENO
Dan Zablocki DZABLOCK
T112 5100 13-0933-PNET Neil Ressler NRESSLER Nell Martin NMARTIN2 Paulette Moreno PMORENO
Larry Moriarty LMORIART
T113 5100 13-0933-PNET Neil Ressler NRESSLER Nell Martin NMARTIN2 Paulette Moreno PMORENO
Terry Cupp TCUPP
T114 5100 13-0933-PNET Neil Ressler NRESSLER Nell Martin NMARTIN2 Paulette Moreno PMORENO
Neil Ressler NRESSLER
T120 5100 13-0933-PNET John LaFond JLAFOND Roger Goldbaum RGOLDBAU Paulette Moreno PMORENO
John Coletti JCOLETTI
T230 5100 13-0933-PNET Neil Ressler NRESSLER Roger Goldbaum RGOLDBAU Paulette Moreno PMORENO
Phil Brackel PBRACKEL
(Send to)
T300-T312 5100 13-0933-PNET Jerry Haycock GHAYCOCK Dick Flack (Red
From) RFLACK Paulette Moreno PMORENO
William Linstruth
Jerry Haycock GHAYCOCK (Send to) WLINSTRU
T320-T326 5100 13-0933-PNET Jim Auiler JAUILER Dick Flack (Red
From) RFLACK Paulette Moreno PMORENO
Jerry Haycock GHAYCOCK William Linstruth
Jim Auiler JAUILER (Send to) WLINSTRU
T323,T327 5100 13-0933-PNET Tom Greene TGREENE Dick Flack (Red
From) RFLACK Paulette Moreno PMORENO
Jerry Haycock GHAYCOCK Phil Brackel PBRACKEL
(Send to)
T340 5100 13-0933-PNET Dick Tuttle RTUTTLE Dick Flack (Red
Jerry Haycock GHAYCOCK From) RFLACK Paulette Moreno PMORENO
Dick Tuttle RTUTTLE Phil Brackel PBRACKEL
(Send to)
T341 5100 13-0933-PNET Ed Gibbons EBIBBONS Dick Flack (Red
From) RFLACK Paulette Moreno PMORENO
Jerry Haycock GHAYCOCK
Dick Tuttle RTUTTLE Phil Brackel PBRACKEL
(Send to)
T342 5100 13-0933-PNET David Nelson DNELSON1 Dick Flack (Red
From) RFLACK Paulette Moreno PMORENO
</TABLE>
<TABLE>
<CAPTION>
DEPT.
# ACTIVITY MAILBOX
- -----------------------------------------------------------------------------------------
<S> <C> <C>
N613 Powertrain Operations PNETPTO
N614 Powertrain Operations PNETPTO
N615 Powertrain Operations PNETPTO
N616 Powertrain Operations PNETPTO
N618 Powertrain Operations PNETPTO
N619 Powertrain Operations PNETPTO
N620 Powertrain Operations PNETPTO
N621 Powertrain Operations PNETPTO
N623 Powertrain Operations PNETPTO
N625 Powertrain Operations PNETPTO
N630 Powertrain Operations PNETPTO
N631 Powertrain Operations PNETPTO
N635 Powertrain Operations PNETPTO
N640, N641 Powertrain Operations PNETPTO
N645 Powertrain Operations PNETPTO
N647 Powertrain Operations PNETPTO
N650, N652 Powertrain Operations PNETPTO
T100 Advanced Vehicle Tech. PNETAVT
T101 Advanced Vehicle Tech. PNETAVT
T110 Advanced Vehicle Tech. PNETAVT
T111 Advanced Vehicle Tech. PNETAVT
T112 Advanced Vehicle Tech. PNETAVT
T113 Advanced Vehicle Tech. PNETAVT
T114 Advanced Vehicle Tech. PNETAVT
T120 Advanced Vehicle Tech. PNETAVT
T230 Advanced Vehicle Tech. PNETAVT
T300-T312 Advanced Vehicle Tech. PNETAVT
T320-T326 Advanced Vehicle Tech. PNETAVT
T323,T327 Advanced Vehicle Tech. (GTO/Livonia) PNETAVT
T340 Advanced Vehicle Tech. PNETAVT
T341 Advanced Vehicle Tech. PNETAVT
T342 Advanced Vehicle Tech. PNETAVT
</TABLE>
<PAGE> 36
<TABLE>
<CAPTION>
ACCOUNT
DEPT OPS CHARGE REGISTRATIONER REGISTRATIONER FINANCE FINANCE
# LOC (AIS) CODE NAME PROFS ID NAME PROFS ID
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jerry Haycock GHAYCOCK
T350 5100 13-0933-PNET Pat Daum PDAUM Phil Brackel (Send To) PBRACKEL
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
T360 5100 13-0933-PNET Bob Vrooman RVROOMA Phil Brackel (Send To) PBRACKEL
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
Bob Vrooman RVROOMA
Neil Montague NMONTAG1
T361 5100 13-0933-PNET Hunter Tierman HTIERMAN Phil Brackel (Send To) PBRACKEL
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
Bob Vrooman RVROOMAN
T362 5100 13-0933-PNET Mohammed Khan MKHAN Phil Brackel (Send To) PBRACKEL
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
T370 5100 13-0933-PNET Wally Wade WWADE Phil Brackel (Send To) PBRACKEL
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
T380,T385 5100 13-0933-PNET Jim Clarke JCLARKE Phil Brackel (Send To) PBRACKEL
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
Jim Clarke JCLARKE
T381 5100 13-0933-PNET Brian Wolfe BWOLFE Phil Brackel (Send To) PBRACKEL
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
Jim Clarke JCLARKE
Ernie DeVincent EDVINCE
T382 5100 13-0933-PNET Angelo Guido AGUIDO Phil Brackel (Send To) PBRACKEL
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
Jim Clarke JCLARKE
Larry Ward LWARD
T383 5100 13-0933-PNET G. Wright G. WRIGHT Phil Brackel (Send To) PBRACKEL
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
Jim Clarke JCLARKE
T384 5100 13-0933-PNET Fai Yeung FYEUNG Phil Brackel (Send To) PBRACKEL
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
Jim Clarke JCLARKE
T386 5100 13-0933-PNET Bernd Wallbrueck BWALLBR2 Phil Brackel (Send To) PBRACKEL
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
Trevor Rudderham TRUDDERH
T390 5100 13-0933-PNET Doug Szoppo DSZOPO Phil Brackel (Send To) PBRACKEL
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
Trevor Rudderham TRUDDERH
T391 5100 13-0933-PNET Dave Meyers DMEYERS Phil Brackel (Send To) PBRACKEL
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
Trevor Rudderham TRUDDERH
T392 5100 13-0933-PNET D. Nelson D. NELSON Phil Brackel (Send To) PBRACKEL
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
T393-7396 5100 13-0933-PNET Trevor Rudderham TRUDDERH Phil Brackel (Send To) PBRACKEL
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
Trevor Rudderham TRUDDERH
T395 5100 13-0933-PNET Barb Samardzich BSAMARDZ Len Sankjewicz (Send To) LSANKIEW
Jerry Haycock GHAYCOCK Dick Flack (Rec From) RFLACK
Trevor Rudderham TRUDDERH Len Sankjewicz (Send To) LSANKIEW
T397 5100 13-0933-PNET Kenna Kintrea KKINTREA Dick Flack (Rec From) RFLACK
T400 5100 13-0933-PNET Prabhaker Patil PPATIL1 Kathleen Rentz KRENTZ
Sam Cole SCOLE1
T401 5100 13-0933-PNET Prabhaker Patil PPATIL1 Kathleen Rentz KRENTZ
Prabhaker Patil PPATIL1
T401-T407 5100 13-0933-PNET D. Goel D.GOEL Kathleen Rentz KRENTZ
Prabhaker Patil PPATIL1
T403 5100 13-0933-PNET Rick Breitzman RBREITZM Kathleen Rentz KRENTZ
Prabhaker Patil PPATIL1
T404 5100 13-0933-PNET Ken Khangura KKHANGU1 Kathleen Rentz KRENTZ
Prabhaker Patil PPATIL1
T405 5100 13-0933-PNET P. Patil PPATIL1 Kathleen Rentz KRENTZ
Prabhaker Patil PPATIL1
T406 5100 13-0933-PNET H. Ficher HFISCHE2 Kathleen Rentz KRENTZ
Prabhaker Patil PPATIL1
T408 5100 13-0933-PNET Paul Duffy PDUFFY Kathleen Rentz KRENTZ
Prabhaker Patil PPATIL1
T409 5100 13-0933-PNET Dave MacNamara DMCNAMAR Kathleen Rentz KRENTZ
Prabhaker Patil PPATIL1
T410 5100 13-0933-PNET T. Donovan TDONOVAN Kathleen Rentz KRENTZ
<CAPTION>
DEPT HR HR ACTIVITY MAILBOX
# NAME PROFS
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
T350 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T360 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T361 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T362 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T370 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T380,T385 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T381 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T382 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T383 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T384 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T386 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T390 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T391 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T392 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T393-7396 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T395 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T397 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T400 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T401 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T401-T407 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T403 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T404 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T405 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T406 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T408 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T409 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
T410 Paulette Moreno PMORENO* Advanced Vehicle Tech. PNETAVT
</TABLE>
17 OF 38
<PAGE> 37
<TABLE>
<CAPTION>
ACCOUNT
DEPT. OPS CHARGE REQUISITIONER REQUISITIONER FINANCE FINANCE
# LOC (AIS) CODE* NAME PROFS ID NAME PROFS ID
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Prabhakar Patil PPATIL1
T411 5100 13-0933-PNET H. Welfers HWELFER3 Kathleen Rentz KRENTZ
Doug Larabell (Send
To)
David McManamy (Reo DLARABEL
T500 5100 13-0933-PNET Chris Magee CMAGEE From) DMCMANAM
Doug Larabell (Send
To)
Bill Sears David McManamy (Reo DLARABEL
T501 5100 13-0933-PNET Chris Magee BSEARS From) DMCMANAM
Jack Dempsey (Send
To)
David McManamy (Reo JDEMPSEY
T502 5100 13-0933-PNET Wayne Hamann WHAMANN From) DMCMANAM
Jack Dempsey (Send
To)
James Cheng JCHENG David McManamy (Reo JDEMPSEY
T503 5100 13-0933-PNET Wayne Hamann WHAMANN From) DMCMANAM
Jack Dempsey (Send
Joe Dorenbaum JDORENBA To)
Wayne Hamann WHAMANN David McManamy (Reo JDEMPSEY
T504 5100 13-0933-PNET Dave Segal DSEGAL From) DMCMANAM
Jack Dempsey (Send
To)
Wayne Hamann WHAMANN David McManamy (Reo JDEMPSEY
T505 5100 13-0933-PNET Ali Jammoul AJAMMOUL From) DMCMANAM
Jack Dempsey (Send
To)
Dan Arbitter DARBITTE David McManamy (Reo JDEMPSEY
T506 5100 13-0933-PNET Wayne Hamann WHAMANN From) DMCMANAM
Jack Dempsey (Send
To)
Wayne Hamann WHAMANN David McManamy (Reo JDEMPSEY
T507 5100 13-0933-PNET Tom Walsh TWALSH From) DMCMANAM
Jack Dempsey (Send
To)
Mike Rao MRAO David McManamy (Reo JDEMPSEY
T508 5100 13-0933-PNET Wayne Hamann WHAMANN From DMCMANAM
Jack Dempsey (Send
To)
Dave Flanigan DFLANIGA David McManamy (Reo JDEMPSEY
T509 5100 13-0933-PNET Wayne Hamann WHAMANN From DMCMANAM
Jack Dempsey (Send
Wayne Hamann WHAMANN To)
Randy Visintainer RVISINTA David McManamy (Reo JDEMPSEY
T511 5100 13-0933-PNET Dave Rohweder DROHWEDE From DMCMANAM
Doug Larabell (Send
To)
Bill Stuel WSTUEF David McManamy (Reo DLARABEL
T513 5100 13-0933-PNET Cheryl Alman ACALMAN From) DMCMANAM
Doug Larabell (Send
To)
David McManamy (Reo DLARABEL
T515 5100 13-0933-PNET Bob Himes BHIMES From DMCMANAM
Doug Larabell (Send
To)
David McManamy (Reo DLARABEL
T519 5100 13-0933-PNET Wolfgang Kahlmeier WKAHLMEI From DMCMANAM
Doug Larabell (Send
To)
David McManamy (Reo DLARABEL
T520,T529 5100 13-0933-PNET Joe Sparks JSPARKS From DMCMANAM
Doug Larabell (Send
To)
David McManamy (Reo DLARABEL
T521 5100 13-0933-PNET Bill Quinlan WQUINLAN From DMCMANAM
<CAPTION>
DEPT. HR HR
# NAME PROFS ID ACTIVITY MAILBOX
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
T411 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T500 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T501 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T502 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T503 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T504 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T505 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T506 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T507 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T508 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T509 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T511 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T513 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T515 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T519 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T520,T529 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T521 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
</TABLE>
18 of 38
<PAGE> 38
<TABLE>
<CAPTION>
ACCOUNT
DEPT. OPS CHARGE REQUISITIONER REQUISITIONER FINANCE FINANCE
# LOC (ATS) CODE* NAME PROFS ID NAME PROFS ID
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jack Dempsey (Send
To)
David McManamy (Reo JDEMPSEY
T522 5100 13-0933-PNET Tom Smart TSMART From) DMCMANAM
Doug Larabell (Send
To)
David McManamy (Reo JDEMPSEY
T523 5100 13-0933-PNET Tom Sweder TSWEDER From) DMCMANAM
Doug Larabell (Send
To)
David McManamy (Reo DLARABEL
T525 5100 13-0933-PNET Tom Lahvic TLAHVIC From) DMCMANAM
Doug Larabell (Send
To)
David McManamy (Reo DLARABEL
T526 5100 13-0933-PNET Mike Haffey MHAFFEY From) DMCMANAM
Doug Larabell (Send
To)
David McManamy (Reo DLARABEL
T528 5100 13-0933-PNET Gary Boes GBOES From) DMCMANAM
Bob Sneed (Send To)
David McManamy (Reo BSNEED
T540 5100 13-0933-PNET Brian Geraghty BGERAGHT From) DMCMANAM
Jerry Suggs (Send To)
David McManamy (Reo JSUGGS
T550 5100 13-0933-PNET Dennis Sopko DSOPKO From) DMCMANAM
Jerry Suggs (Send To)
Dennis Sopko DSOPKO David McManamy (Reo JSUGGS
T551 5100 13-0933-PNET Jim Boland JBOLAND1 From) DMCMANAM
Jerry Suggs (Send To)
Dennis Sopko DSOPKO David McManamy (Reo JSUGGS
T552 5100 13-0933-PNET Tom Hrynik THRYNIK From) DMCMANAM
Jerry Suggs (Send To)
Dennis Sopko DSOPKO David McManamy (Reo JSUGGS
T553 5100 13-0933-PNET Gary Wight GWIGHT From) DMCMANAM
Jerry Suggs (Send To)
Dennis Sopko DSOPLO David McManamy (Reo JSUGGS
T554 5100 13-0933-PNET Glenn Vengeldren GVANGELD From) DMCMANAM
Jerry Suggs (Send To)
Dennis Sopko DSOPLO David McManamy (Reo JSUGGS
T555 5100 13-0933-PNET Peter Kantz PKANTZ From) DMCMANAM
Jerry Suggs (Send To)
Dennis Sopko DSOPKO David McManamy (Reo JSUGGS
T556 5100 13-0933-PNET Bob Pazdziez RPAZDZIE From) DMCMANAM
Bob Sneed (Send To)
David McManamy (Reo BSNEED
T560 5100 13-0933-PNET Ed Jones BJONES5 From) DMCMANAM
Bob Sneed (Send To)
T561- Ed Jones BJONES5 David McManamy (Reo BSNEED
T562 5100 13-0933-PNET Bruce Lapinski BLAPINSK From) DMCMANAM
Bob Sneed (Send To)
Ed Jones BJONES5 David McManamy (Reo BSNEED
T563 5100 13-0933-PNET Jim Attama JATITTAM From) DMCMANAM
Jerry Suggs (Send To)
David McManamy (Reo JSUGGS
T580 5100 13-0933-PNET Paul Ashburn PASHBURN From) DMCMANAM
Jerry Suggs (Send To)
Paul Ashburn PASHBURN David McManamy (Reo JSUGGS
T581 5100 13-0933-PNET Manfred Rumpel MRUMPEL From) DMCMANAM
Jerry Suggs (Send To)
Paul Ashburn PASHBURN David McManamy (Reo JSUGGS
T582 5100 13-0933-PNET Ulrich Eichhom UEICHHO1 From) DMCMANAM
Jerry Suggs (Send To)
Paul Ashburn PASHBURN David McManamy (Reo JSUGGS
T583 5100 13-0933-PNET Mike Soltis MSOLTIS From) DMCMANAM
Jerry Suggs (Send To)
Paul Ashburn PASHBURN David McManamy (Reo JSUGGS
T584 5100 13-0933-PNET Len Brown LBROWN From) DMCMANAM
<CAPTION>
DEPT. HR HR
# NAME PROFS ID ACTIVITY MAILBOX
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
T522 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T523 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T525 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T526 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T528 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T540 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T550 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T551 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T552 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T553 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T554 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T555 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T556 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T560 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T561-
T562 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T563 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T580 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T581 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T582 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T583 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T584 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
</TABLE>
19 OF 38
<PAGE> 39
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
ACCOUNT
DEPT. OPS CHARGE REQUISITIONER REQUISITIONER FINANCE FINANCE
# LOC (AIS) CODE* NAME PROFS ID NAME PROFS ID
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jerry Suggs (Send To)
Paul Ashburn PASHBURN David McManamy (Reo JSUGGS
T585 5100 13-0933-PNET Steve Marulis SMARULIS From) DMCMANAM
T600's 5100 13-0933-PNET A. Iaconell1 AIACONE1 John Clayton JCLAYTON
T601 5100 13-0933-PNET Paul Brey PBREY John Clayton JCLAYTON
T607 5100 13-0933-PNET Bruce Ferns BFERNS John Clayton JCLAYTON
T610 5100 13-0933-PNET TBD TBD John Clayton JCLAYTON
T620- Greg Specht GSPECHT
T626 5100 13-0933-PNET Vince Fazio VFAZIO John Clayton JCLAYTON
T623-
T649 5100 13-0933-PNET Vince Fazio VFAZIO John Clayton JCLAYTON
Pin-Pin Tseng PTSENG
T630 5100 13-0933-PNET Vince Fazio VFAZIO John Clayton JCLAYTON
P. Tseng PTSENG
T631 5100 13-0933-PNET Vince Fazio VFAZIO John Clayton JCLAYTON
T640- Eugene Marquardt EMARQUAR
T641 5100 13-0933-PNET Vince Fazio VFAZIO John Clayton JCLAYTON
T650 5100 13-0933-PNET R. Case John Clayton JCLAYTON
T651 5100 13-0933-PNET Michael Goemer MGOEMER John Clayton JCLAYTON
T652-
T653 5100 13-0933-PNET B. Ferns BFERNS John Clayton JCLAYTON
T654 5100 13-0933-PNET C. Paterson CPATERSO John Clayton JCLAYTON
T655 5100 13-0933-PNET G. Gaeb GGAEB1 John Clayton JCLAYTON
T656 5100 13-0933-PNET Pete Lawson PLAWSON John Clayton JCLAYTON
T657 5100 13-0933-PNET John Kilsdonk JKILSDONK John Clayton JCLAYTON
T660 5100 13-0933-PNET T. Lewis John Clayton JCLAYTON
T661 5100 13-0933-PNET J. Valentine John Clayton JCLAYTON
T662-
T669 5100 13-0933-PNET TBD TBD John Clayton JCLAYTON
T667 5100 13-0933-PNET R. Campbell John Clayton JCLAYTON
T668 5100 13-0933-PNET J. Blake John Clayton JCLAYTON
T670-
T679 5100 13-0933-PNET Bernie Donkerbrook BDONKERB John Clayton JCLAYTON
Gary Witt GWITT1
T681 5100 13-0933-PNET Ron Bowersock RBOWERSO John Clayton JCLAYTON
Aung Myint AMYINT
T682 5100 13-0933-PNET Ron Bowersock RBOWERSO John Clayton JCLAYTON
Martin Hobart MHOBART
T683 5100 13-0933-PNET Ron Bowersock RBOWERSO John Clayton JCLAYTON
B. Ellison
T684 5100 13-0933-PNET Ron Bowersock RBOWERSO John Clayton JCLAYTON
T685-
T689 5100 13-0933-PNET Ron Bowersock RBOWERSO John Clayton JCLAYTON
Geoff Jones GJONES4
T686 5100 13-0933-PNET Ron Bowersock RBOWERSO John Clayton JCLAYTON
Ken Crosby KCROSBY
T687 5100 13-0933-PNET Ron Bowersock RBOWERSO John Clayton JCLAYTON
T690- Dannell Anderson DANDERSE
T692 5100 13-0933-PNET Daniel Lymburner DLYMBURN John Clayton JCLAYTON
T693 5100 13-0933-PNET C. Bunting CBUNTING John Clayton JCLAYTON
T698 5100 13-0933-PNET J. Klisdork JKILSDON John Clayton JCLAYTON
T700-
T709 5100 13-0933-PNET Barry Wallman BWALLMAN John Clayton JCLAYTON
T800-
T807 5100 13-0933-PNET John Wallace JWALLAC2 Paul Frison PFRISON
John Wallace JWALLAC2
T802 5100 13-0933-PNET Larry Simmering LSIMMERI Paul Frison PFRISON
John Wallace JWALLAC2
T803 5100 13-0933-PNET Marlyn Strover MSTROVEN Paul Frison PFRISON
John Wallace JWALLAC2
T804 5100 13-0933-PNET Bruce Kopf BKOPF Paul Frison PFRISON
John Wallace JWALLAC2
T805 5100 13-0933-PNET Roy Radakovich RRADAKOV Paul Frison PFRISON
John Wallace JWALLAC2
T806 5100 13-0933-PNET Mark Mehall MMEHALL Paul Frison PFRISON
John Wallace JWALLAC2
T808 5100 13-0933-PNET Marty Friedman MFRIEDMA Paul Frison PFRISON
T809 5100 13-0933-PNET Chuck Murdock CMURDOCK Paul Frison PFRISON
T900- Neil Ressler NRESSLER
T904 5100 13-0933-PNET David Ford DFORD4 Neil Martin NMARTIN2
T950-
T999 5100 13-0933-PNET TBD TBD John Clayton JCLAYTON
U110-
U119 5100 13-0933-PNET T. Scott TSCOTT8 M. Brennan MBRENNA2
U120-
U124 5100 13-0933-PNET Gert Hohenester GHOHENES M. Brennan MBRENNA2
U160-
U169 5100 13-0933-PNET F. Mayhew FMAYHEW M. Brennan MBRENNA2
<CAPTION>
DEPT. HR HR
# NAME PROFS ID ACTIVITY MAILBOX
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
T585 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T600's Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T601 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T607 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T610 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T620-
T626 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T623-
T649 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T630 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T631 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T640-
T641 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T650 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T651 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T652-
T653 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T654 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T655 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T656 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T657 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T660 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T661 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T662-
T669 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T667 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T668 Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T670- Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T679
Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T681
Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T682
Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T683
Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T684
T685- Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T689
Paulette Moreno PMORENO Advanced Vehicle Tech. (GTO/Livonia) PNETAVT
T686
Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T687
T690- Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T692
Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T693
Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T698
T700- Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T709
T800- Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T807
Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T802
Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T803
Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T804
Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T805
Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T806
Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T808
Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T809
T900- Paulette Moreno PMORENO Advanced Vehicle Tech. PNETAVT
T904
T950- Paulette Moreno PMORENO Corporate Design PNETAVT
T999
U110- Paulette Moreno PMORENO Corporate Design PNETAVT
U119
U120- Paulette Moreno PMORENO Corporate Design PNETAVT
U124
U160- Paulette Moreno PMORENO Corporate Design PNETAVT
U169
</TABLE>
20 of 38
<PAGE> 40
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
ACCOUNT
DEPT. OPS CHARGE REQUISITIONER REQUISITIONER FINANCE FINANCE
# LOC (ATS) CODE* NAME PROFS ID NAME PROFS ID
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
U170- D. Gaffka DGAFFKA
U179 5100 13-0933-PNET H. Scharader HSCHRAD1 M. Brennan MBRENNA2
U180- G. Haas GHAAS
U189 5100 13-0933-PNET R. Aikins RAIKINS M. Brennan MBRENNA2
U190-
U199 5100 13-0933-PNET M. Finney MFINNEY1 M. Brennan MBRENNA2
U200,
U201 5100 13-0933-PNET M. Vandermolen MVANDERM M. Brennan MBRENNA2
U205-
U209 5100 13-0933-PNET E. Brayboy EBRAYBOY M. Brennan MBRENNA2
U215- J. Cellars JCELLARS
U218 5100 13-0933-PNET D. Emery DEMERY1 M. Brennan MBRENNA2
U260,
U270 5100 13-0933-PNET M. Hornai MHORNAI M. Brennan MBRENNA2
U280 5100 13-0933-PNET D. Webb DWEBB7 M. Brennan MBRENNA2
U290 5100 13-0933-PNET F. Chrzanowski FCHRZAN1 M. Brennan MBRENNA2
1301- 25A-2747-PNET (T) ANY EFHD
1359 0164 25A-2744-PNET (C) EMPLOYEE N/A Mike Jankowski MJANKOWS
O5863 0195 TBD Ray Pittman RPITTMAN Sandy Corcoran SCORCORA
2425 0200 TBD Peter Durden PDURDEN Gary Trudeau GTRUDEA1
Sandy Corcoran SCORCORA
2505 0200 TBD Earl Koops EKOOPS Mick Anderson MANDERS5
2571 0200 TBD Harry Reed HREED James Petch JPETCH
2572 0200 TBD R.D. MacDonald RMACDONA James Petch JPETCH
Richard MacDonald RMACDONA
2573 0200 TBD James Petch JPETCH James Petch JPETCH
2574 0200 TBD D.T. Paviat DPAVIAT James Petch JPETCH
2575 0200 TBD T. Grekowicz TGREKOWICZ James Petch JPETCH
2576 0200 TBD James Petch JPETCH James Petch JPETCH
2577 0200 TBD Harry Reed HREED James Petch JPETCH
Jim Bosink JBOSINK
3100 0200 TBD Hank Lenox HLENOX Richard Gurchak RGURCHAK
Ralph Rappuhn RRAPPUHN Jim Bosink JBOSINK
3121 0200 TBD Hank Lenox HLENOX Richard Gurchak RGURCHAK
Ralph Rappuhn RRAPPUHN Jim Bosink JBOSINK
3122 0200 TBD Hank Lenox HLENOX Richard Gurchak RGURCHAK
Malcolm Pratt MPRATT Jim Bosink JBOSINK
3131 0200 TBD Hank Lenox HLENOX Richard Gurchak RGURCHAK
Steve Weiner SWEINER Jim Bosink JBOSINK
3132 0200 TBD Hank Lenox HLENOX Richard Gurchak RGURCHAK
Tom Helzerman THELZER1 Jim Bosink JBOSINK
3133 0200 TBD Hank Lenox HLENOX Richard Gurchak RGURCHAK
Werner Harbers WHARBERS Jim Bosink JBOSINK
3134 0200 TBD Hank Lenox HLENOX Richard Gurchak RGURCHAK
Dave Wood DWOOD3 Jim Bosink JBOSINK
3135 0200 TBD Hank Lenox HLENOX Richard Gurchak RGURCHAK
Ken Kuna KKUNA Jim Bosink JBOSINK
3139 0200 TBD Hank Lenox HLENOX Richard Gurchak RGURCHAK
Dave Wood DWOOD3 Jim Bosink JBOSINK
3143 0200 TBD Hank Lenox HLENOX Richard Gurchak RGURCHAK
Hank Lenox HLENOX
Joe Pallischeck JPALLISC Richard Gurchak RGURCHAK
3150 0200 TBD Lynne Buchholz LBUCHHOL Jim Bosink JBOSINK
Joe Pallischeck JPALLISC
Lynne Buchholz LBUCHHOL
3159 0200 TBD Hank Lenox HLENOX
Dieter Forberger DFORBERG Jim Bosink JBOSINK
3160 0200 TBD Hank Lenox HLENOX Richard Gurchak RGURCHAK
Richard Pearson RPEARSO2
Dieter Forberger DFORBERG Jim Bosink JBOSINK
3161 0200 TBD Hank Lenox HLENOX Richard Gurchak RGURCHAK
Richard Pearson RPEARSO2
Dieter Forberger DFORBERG Jim Bosink JBOSINK
3162 0200 TBD Hank Lenox HLENOX Richard Gurchak RGURCHAK
Chris Oxley COXLEY Richard Gurchak RGURCHAK
3190 0200 TBD Hank Lenox HLENOX Jim Bosink JBOSINK
3205 0200 25A-2744-PNET Kevin Wall KWALL1 Ray Solomon RSOLOMON
<CAPTION>
DEPT. HR HR
# NAME PROFS ID ACTIVITY MAILBOX
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U170-
U179 Paulette Moreno PMORENO* Corporate Design PNETAVT
U180-
U189 Paulette Moreno PMORENO* Corporate Design PNETAVT
U190-
U199 Paulette Moreno PMORENO* Corporate Design PNETAVT
U200,
U201 Paulette Moreno PMORENO* Corporate Design PNETAVT
U205-
U209 Paulette Moreno PMORENO* Corporate Design PNETAVT
U215-
U218 Paulette Moreno PMORENO* Corporate Design PNETAVT
U260,
U270 Paulette Moreno PMORENO* Corporate Design PNETAVT
U280 Paulette Moreno PMORENO* Corporate Design PNETAVT
U290 Paulette Moreno PMORENO* Corporate Design PNETAVT
1301-
1359 Scott Laing SLAING Electrical & Fuel Handling Division PNETEFHD
Steve Barney SBARNEY
Christian Meisner CMEISNER
O5863 Jill Richards JRICHA30 Mfg PNETMFG
2425 Mark Ankenbauer MANKENBA PNETMFG
2505 Bruce Campbell BCAMPBE3 Powertrain Operations PNETPTO
2571 Bud Dengel BDENGEL Powertrain Operations PNETPTO
2572 Bud Dengel BDENGEL Powertrain Operations PNETPTO
2573 Bud Dengel BDENGEL Powertrain Operations PNETPTO
2574 Bud Dengel BDENGEL Powertrain Operations PNETPTO
2575 Bud Dengel BDENGEL Powertrain Operations PNETPTO
2576 Bud Dengel BDENGEL Powertrain Operations PNETPTO
2577 Bud Dengel BDENGEL Powertrain Operations PNETPTO
3100 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3121 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3122 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3131 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3132 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3133 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3134 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3135 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3139 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3143 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3150 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3159 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3160 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3161 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3162 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3190 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
Steve Barney SBARNEY
Christian Meisner CMEISNER
3206 Jill Richards JRICHA30 Advanced Manufacturing PNETMFG
</TABLE>
21 of 38
<PAGE> 41
<TABLE>
<CAPTION>
DEPT OPS ACCOUNT REQUISTIONER REQUISTIONER FIANACE FINANCE
# LOC CHARGE NAME PROF ID NAME PROF ID
(AIS) CODE*
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
3210 0200 25A-2744-PNET James Firlit JFIRLIT Ray Solomon RSOLOMON
3225 0200 25A-2744-PNET Gary Olson GOLSON1 Ray Solomon RSOLOMON
3230 0200 25A-2744-PNET Roger Wade RWADE Ray Solomon RSOLOMON
3246 0200 25A-2744-PNET Stormy Hicks SHICKS2 Ray Solomon RSOLOMON
Lewis Booth LBOOTH1
3300 0200 TBD Ted Hight THIGHT Gary Trudeau GTRUDEA1
3316 0200 TBD Gerald Moorehead GMOOREHE Gary Trudeau GTRUDEA1
3325 0200 TBD Helio Contador HCONTADO Gary Trudeau GTRUDEA1
3357 TBD Neil Proctor Gary Trudeau GTRUDEA1
3369 0200 TBD Lewis Booth LBOOTH1 Gary Trudeau GTRUDEA1
3371 0200 TBD Dick Roden RRODEN Gary Trudeau GTRUDEA1
3385 0200 TBD Mike Newbury MNEWBURY Gary Trudeau GTRUDEA1
3390 0200 TBD Steve Deneroff SDENEROF Gary Trudeau GTRUDEA1
3416 0200 TBD Jeff Wagoner RTETLER Gary Trudeau GTRUDEA1
3417 0200 TBD Mark Malcolm MMALCOLM Gary Trudeau GTRUDEA1
3418 0200 TBD Bernie Gerber BGERBER Gary Trudeau GTRUDEA1
3419 0200 TBD Peter Hannaway PHANNAW1 Gary Trudeau GTRUDEA1
Ed Nickel ENICKEL
3427 0200 TBD Mike Malloy MMOLLOY Gary Trudeau GTRUDEA1
3428 0200 TBD Matt Tomilo MTOMILO Gary Trudeau GTRUDEA1
3430 0200 TBD Raymond Salomon RSALOMON Gary Trudeau GTRUDEA1
3440 0200 TBD John Lumm JLUMM Gary Trudeau GTRUDEA1
3441 0200 TBD Alan Warner AWARNER Gary Trudeau GTRUDEA1
3442 0200 TBD Rob Chisholm RCHISO1 Gary Trudeau GTRUDEA1
3443 0200 TBD William Estey WESTEY Gary Trudeau GTRUDEA1
3447 0200 TBD Roy Tetler RTETLER Gary Trudeau GTRUDEA1
3451 0200 TBD Val Pontious VPONTIOU Mick Anderson MANDERS5
3455 0200 TBD TBD TBD Gary Trudeau GTRUDEA1
3459 0200 25A-2747-PNET Nancy Melzer NMELZER Mick Anderson MANDERS5
3460 0200 TBD Gale Copple GCOPPLE Gary Trudeau GTRUDEA1
Clyda Ghee CGHEE
4072 0200 13-0970-PNET Bruce Mumbrue BMUMBRUE Larry Cupp LCUPP
Clyda Ghee CGHEE
4074 0200 13-0970-PNET B. SIMMS BSIMMS Larry Cupp LCUPP
Clyda Ghee CGHEE
4076 0200 13-0970-PNET Paul Plaver PPLAVER Larry Cupp LCUPP
Roger Sack RSACK Clyda Ghee CGHEE
4077 0200 13-0970-PNET Dale Immonen Mark Blair DIMMONEN MBLAIR1 Larry Cupp LCUPP
Clyda Ghee CGHEE
4081 0200 13-0970-PNET Harry Lassen HLASSEN Larry Cupp LCUPP
Dale Immonen DIMMONEN Clyda Ghee CGHEE
4083 0200 13-0970-PNET Mark Blair MBLAIR1 Larry Cupp LCUPP
Clyda Ghee CGHEE
4084 0200 13-0970-PNET DOUG TWYNHAM DTWYNHAM Larry Cupp LCUPP
Clyda Ghee CGHEE
4088 0200 25A-2744-PNET JIM MILLER JMILLER8 Larry Cupp LCUPP
Clyda Ghee CGHEE
4096 0200 13-0970-PNET Fabian Gentile FGENTILE Larry Cupp LCUPP
4602 0200 TBD David Yun DYUN MICK ANDERSON MANDERS5
4840 0200 25A-2744-PNET Richard Lipka RLIPKA John Kritzman JKRITZMA
5000 0200 TBD MCKEEHAN, DALE DMCKEEHA Michael Conn MCONN1
D. Thursfield DTHURSFI
5100 0200 TBD Ronald Baker RBAKER4 Michael Conn MCONN1
5110 0200 TBD Chuck Maitland CMAITLAN Michael Conn MCONN1
Lewis Booth LBOOTH1
5120 0200 TBD Dave Stirsman DSTIRSMA Michael Conn MCONN1
<CAPTION>
DEPT HR HR
# NAME PROFS ID ACTIVITY MAILBOX
<S> <C> <C> <C> <C>
Steve Barney SBARNEY
Chrisitan Meisner CMEISNER
3210 Jill Richards JRICHA30 Advanced Manufacturing PNETMFG
Steve Barney SBARNEY
Chrisitan Meisner CMEISNER
3225 Jill Richards JRICHA30 Advanced Manufacturing PNETMFG
Steve Barney SBARNEY
Chrisitan Meisner CMEISNER
3230 Jill Richards JRICHA30 Advanced Manufacturing PNETMFG
Steve Barney SBARNEY
Chrisitan Meisner CMEISNER
3246 Jill Richards JRICHA30 Advanced Manufacturing PNETMFG
3300 Randy Howard RHOWARD PNETMFG
3316 Randy Howard RHOWARD PNETMFG
3325 Randy Howard RHOWARD PNETMFG
3357 Randy Howard RHOWARD PNETMFG
3369 Randy Howard RHOWARD PNETMFG
3371 Randy Howard RHOWARD PNETMFG
3385 Randy Howard RHOWARD PNETMFG
3390 Randy Howard RHOWARD PNETMFG
3416 Mark Ankenbauer MANKENBA PNETMFG
3417 Mark Ankenbauer MANKENBA PNETMFG
3418 Mark Ankenbauer MANKENBA PNETMFG
3419 Mark Ankenbauer MANKENBA PNETMFG
3427 Mark Ankenbauer MANKENBA PNETMFG
3428 Mark Ankenbauer MANKENBA PNETMFG
3430 Mark Ankenbauer MANKENBA PNETMFG
3440 Mark Ankenbauer MANKENBA PNETMFG
3441 Mark Ankenbauer MANKENBA PNETMFG
3442 Mark Ankenbauer MANKENBA PNETMFG
3443 Mark Ankenbauer MANKENBA PNETMFG
3447 Mark Ankenbauer MANKENBA PNETMFG
3451 Mark Ankenbauer MANKENBA PNETMFG
3455 Mark Ankenbauer MANKENBA PNETMFG
3459 Mark Ankenbauer MANKENBA PNETMFG
3460 Mark Ankenbauer MANKENBA PNETMFG
Ingrid Butler IBUTLER
4072 Frank Sudmeier FSUDMEIE ATEO MFG. Engineering PNETPTO
4074 Ingrid Butler IBUTLER ATEO MFG. Engineering PNETPTO
Ingrid Butler IBUTLER
4076 Frank Sudmeier FSUDMEIE ATEO MFG. Engineering PNETPTO
4077 Ingrid Butler IBUTLER ATEO MFG. Engineering PNETPTO
Ingrid Butler IBUTLER
4081 Frank Sudmeier FSUDMEIE ATEO MFG. Engineering PNETPTO
4083 Ingrid Butler IBUTLER ATEO MFG. Engineering PNETPTO
4084 Ingrid Butler IBUTLER ATEO MFG. Engineering PNETPTO
4088 Ingrid Butler IBUTLER ATEO MFG. Engineering PNETPTO
Ingrid Butler IBUTLER
4096 Frank Sudmeier FSUDMEIE ATEO MFG. Engineering PNETPTO
Powertrain Operations
4602 BUD DENGEL BDENGEL (Cleveland/POEE) PNETPTO
4840 Bud Dengel BDENGEL Powertrain Operations(ROB) PNETPTO
Kimble Little KITTLE3
5000 Carol Mitchell CMITCHEL VOT T&T'S PNETMFG
Kimble Little KITTLE3
5100 Carol Mitchell CMITCHEL VOT T&T'S PNETMFG
Kimble Little KITTLE3
5110 Carol Mitchell CMITCHEL VOT T&T'S PNETMFG
Kimble Little KITTLE3
5120 Carol Mitchell CMITCHEL VOT T&T'S PNETMFG
</TABLE>
22 OF 38
<PAGE> 42
<TABLE>
<CAPTION>
DEPT OPS ACCOUNT REQUISTIONER REQUISTIONER FIANACE FINANCE
# LOC CHARGE NAME PROF ID NAME PROF ID
(AIS) CODE*
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jerry Nine JNINE
5130 0200 TBD Ronald Baker RBAKER4 Michael Conn MCONN1
John Decker
5140 0200 TBD William Emerick JDECKER Michael Conn MCONN1
5200 0200 25A-2744-PNET David Thursfield DTHURSFI Mike Cohn MCOHN1
5210 0200 25A-2744-PNET William Asselin WASSELIN Mike Cohn MCOHN1
13-0970-PNET(C) Paul Broadfield PBROADFI Larry Richardson
5300 0200 Various(T) Pat McConville PMCCONVI Active for Tech Only! LRICHARD
13-0970-PNET(C) Larry Richardson
5330 0200 Various(T) Pat McConville PMCCONVI Active for Tech Only! LRICHARD
13-0970-PNET(C) Larry Richardson
5331 0200 Various(T) TBD TBD Active for Tech Only! LRICHARD
13-0970-PNET(C) Larry Richardson
5335 0200 Various(T) Horst Bosbach HBOSBACH Active for Tech Only! LRICHARD
Bernie McAllister BMCALLIS
Ron Stansifer RSTANSIF
13-0970-PNET(C) Matt Chuba MCHUBA
5340 0200 Various(T) Thomas Sosnowski TSOSNOW1 Ron Stansifer RSTANSIF
Mike Gordon MGORDON1
BERNIE McALLISTER BMCALLIS
13-0970-PNET(C) Ron Stansifer RSTANSIF
5341 0200 Various(T) Matt Chuba MCHUBA Ron Stansifer RSTANSIF
John B. Davis JDAVIS2
Bernie McAllister BMCALLIS
13-0970-PNET(C) Ron Stansifer RSTANSIF
5343 0200 Various(T) Matt Chuba MCHUBA Ron Stansifer RSTANSIF
Ron A. Zacharias RZACHARI
Bernie McAllister BMCALLIS
13-0970-PNET(C) Ron Stansifer RSTANSIF
5344 0200 Various(T) Matt Chuba MCHUBA Ron Stansifer RSTANSIF
Thomas L. Trbovich TTRBOVIC
Bernie McAllister BMCALLIS
13-0970-PNET(C) Ron Stansifer RSTANSIF
5345 0200 Various(T) Matt Chuba MCHUBA Ron Stansifer RSTANSIF
Don W. Dopke DDOPKE
Bernie McAllister BMCALLIST
13-0970-PNET(C) Ron Stansifer RSTANSIF
5346 0200 Various(T) Matt Chuba MCHUBA Ron Stansifer RSTANSIF
13-0970-PNET(C) Larry Richardson
5400 0200 Various(T) John Fleming JFLEMIN8 Active for Tech Only! LRICHARD
13-0970-PNET(C) Larry Richardson
5404 0200 Various(T) W. Heuser NO. PROFS ID Active for Tech Only! LRICHARD
13-0970-PNET(C) Larry Richardson
5405 0200 Various(T) P. Weissenberg PWEISSE1 Active for Tech Only! LRICHARD
13-0970-PNET(C) Larry Richardson
5410 0200 Various(T) Bob Fanone RFANONE Active for Tech Only! LRICHARD
13-0970-PNET(C) Larry Richardson
5415 0200 Various(T) Dave Sweet DSWEET Active for Tech Only! LRICHARD
13-0970-PNET(C) Larry Richardson
5420 0200 Various(T) Bob Koehl RKOEHL Active for Tech Only! LRICHARD
5425 0200 TBD Ralph Worley RWORLEY Larry Richardson LRICHARD
13-0970-PNET(C) Larry Richardson
5430 0200 Various(T) A. Hall AHALL2 Active for Tech Only! LRICHARD
13-0970-PNET(C) Larry Richardson
5435 0200 Various(T) W.G. Brazier WBRAZIER Active for Tech Only! LRICHARD
13-0970-PNET(C) Larry Richardson
5440 0200 Various(T) J. Berendt JBERENDT Active for Tech Only! LRICHARD
13-0970-PNET(C) Larry Richardson
5445 0200 Various(T) Paul Weissenberg PWEISSE1 Active for Tech Only! LRICHARD
13-0970-PNET(C) Larry Richardson
5450 0200 Various(T) Jerry Drall JDRALL Active for Tech Only! LRICHARD
5470 0200 TBD R. Parker RPARKER3 Larry Richardson LRICHARD
ENKUECHMA
13-0970-PNET(C) E. KUECHMANN KNEAL Larry Richardson
5550 0200 Various(T) KEN NEAL CC: FWENDEL Active for Tech Only! LRICHARD
<CAPTION>
DEPT HR HR
# NAME PROFS IS ACTIVITY MAILBOX
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kimble Little KLITTLE3
5130 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5140 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5200 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5210 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Rosalind Cox RCOX4
Kimble Little KLITTLE3
5300 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5330 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5331 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5335 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
5340 John Marcus JMARCUS VO T&T'S PNETMFG
5341 John Marcus JMARCUS VO T&T'S PNETMFG
5343 John Marcus JMARCUS VO T&T'S PNETMFG
5344 John Marcus JMARCUS VO T&T'S PNETMFG
5345 John Marcus JMARCUS VO T&T'S PNETMFG
5346 John Marcus JMARCUS VO T&T'S PNETMFG
Kimble Little KLITTLE3
5400 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5404 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5405 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5410 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5415 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5420 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
5425 Rosalind Cox RCOX4 VO t&T'S PNETMFG
Kimble Little KLITTLE3
5130 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5135 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5140 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5145 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5150 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
5470 Rosalind Cox RCOX4 VO t&T'S PNETMFG
Kimble Little KLITTLE3
5550 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
</TABLE>
23 OF 38
<PAGE> 43
<TABLE>
<CAPTION>
DEPT OPS ACCOUNT REQUISTIONER REQUISTIONER FIANACE FINANCE
# LOC CHARGE NAME PROFS ID NAME PROFS ID
(AIS) CODE*
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
JCROW
5505 0200 TBD Joe Crow CC:FWENDEL Larry Richardson LRICHARD
13-0970-PNET(C) Not Given Larry Richardson
5506 0200 Various(T) Ron Webb CC:FWENDEL Active for Tech Only! LRICHARD
13-0970-PNET(C) APHILLI1 Larry Richardson
5507 0200 Various(T) Al Phillips CC:FWENDEL Active for Tech Only! LRICHARD
13-0970-PNET(C) Larry Richardson
5510 0200 Various(T) F. L. Wendel FWENDEL Active for Tech Only! LRICHARD
13-0970-PNET(C) JRICHAR5 Larry Richardson
5515 0200 Various(T) James Richardson CC:FWENDEL Active for Tech Only! LRICHARD
13-0970-PNET(C) RKUNEC Larry Richardson
5520 0200 Various(T) Rich Kunec CC:FWENDEL Active for Tech Only! LRICHARD
MWILSON
5521 0200 TBD Mike Wilson CC:FWENDEL Active for Tech Only! LRICHARD
13-0970-PNET(C) MPERCHAR Larry Richardson
5522 0200 Various(T) Marilyn Perchard CC:FWENDEL Active for Tech Only! LRICHARD
13-0970-PNET(C) CFIKE Larry Richardson
5523 0200 Various(T) Craig Fike CC:FWENDEL Active for Tech Only! LRICHARD
13-0970-PNET(C) JADAMS1 Larry Richardson
5525 0200 Various(T) James Adams CC:FWENDEL Active for Tech Only! LRICHARD
13-0970-PNET(C) BHETTLE Larry Richardson
5530 0200 Various(T) Bruce Hettle CC:FWENDEL Active for Tech Only! LRICHARD
13-0970-PNET(C) CDENCHFI Larry Richardson
5550 0200 Various(T) Collin Denchfield CC:FWENDEL Active for Tech Only! LRICHARD
5953 0200 Varies Rodney Haynes RHAYNES Rodney Haynes RHAYNES
5954 0200 TBD Rodney Haynes RHAYNES Rodney Haynes RHAYNES
Aaron McKey AMCKEY
6605 0200 12-0970-PNET Rom Albu RALBU Charlie Freece CFREECE
6606 0200 12-0970-PNET Tom Hochthanner THOCHTHA Charlie Freece CFREECE
6607 0200 12-0970-PNET Charlie Harris CHARRIS Charlie Freece CFREECE
6608 0200 12-0970-PNET Jeff Broski JBROSKI Charlie Freece CFREECE
6610 0200 12-0970-PNET Charlie Freece CFREECE Charlie Freece CFREECE
Jo Ann Beier JBEIER
6614 0200 12-0970-PNET Mary Sissen MSISSEN Charlie Freece CFREECE
Alex Vigh AVIGH
6668 0200 12-0970-PNET Peggy Paull PPAULL Charlie Freece CFREECE
6669 0200 12-0970-PNET Jim Galleher JGALLEHE Charlie Freece CFREECE
6679 0200 TBD TBD TBD Jo Ann JBEIER
6701 0200 TBD Phil Leinard PLEINARD Phil Leinard PLEINARD
Gene Nelson Jim Bosink JBOSINK
3120-3125 0200 TBD Hank Lenox ENELSON1 HLENOX Richard Gurchak RGURCHAK
Michael Deirala MDEIRALA Jim Bosink JBOSINK
3130,3141 0200 TBD Hank Lenox HLENOX Richard Gurchak RGURCHAK
Reginald Anson
Joe Pallischeck RANSON
Lynee Buchholz JPALLISC Richard Gurchak RGURCHAK
3152-3158 0200 TBD Hank Lenox LBUCHHOL HLENOX Jim Bosink JBOSINK
Michael Otman Richard Gurchak RGURCHAK
3170-3179 0200 TBD Hank Lenox MOTMAN HLENOX Jim Bosink JBOSINK
3200,3202 0200 25A-2744-PNET Ray Pittman RPITTMAN Ray Solomon RSOLOMON
3215,3220 0200 25A-2744-PNET TBD TBD Ray Solomon RSOLOMON
3245,3258 0200 25A-2744-PNET Wade Deal WDEAL Ray Solomon RSOLOMON
3260-3267,
3271 0200 25A-2744-PNET Hans Grothe HGROTHE1 Ray Solomon RSOLOMON
<CAPTION>
DEPT HR HR
# NAME PROFS ID ACTIVITY MAILBOX
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
KLTTLE3
5505 Rosalind Cox CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5506 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5507 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5510 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5515 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5520 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
5521 Rosalind Cox RCOX4
Kimble Little KLITTLE3
5522 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5523 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5525 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5530 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5550 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5953 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Kimble Little KLITTLE3
5954 Carol Mitchell CMITCHEL VO T&T'S PNETMFG
Powertrain Operations
6605 Jo Ann Beier JBEIER (RAEFT) PNETPTO
Powertrain Operations
6606 Jo Ann Beier JBEIER (RAEFT) PNETPTO
Powertrain Operations
6607 Jo Ann Beier JBEIER (RAEFT) PNETPTO
Powertrain Operations
6608 Jo Ann Beier JBEIER (RAEFT) PNETPTO
Powertrain Operations
6610 Jo Ann Beier JBEIER (RAEFT) PNETPTO
Powertrain Operations
6614 Jo Ann Beier JBEIER (RAEFT) PNETPTO
Powertrain Operations
6668 Jo Ann Beier JBEIER (RAEFT) PNETPTO
Powertrain Operations
6669 Jo Ann Beier JBEIER (RAEFT) PNETPTO
6679 Charlie Freece CFREECE PNETPTO
6701 Phil Leinard PLEINARD PNETPTO
3120-3125 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3130-3141 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3152-3158 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
3170-3179 Geary Baroni GBARONI Advanced Manufacturing PNETMFG
Steve Barney SBARNEY
Christian Meisner CMEISNER
3200,3202 Jill Richards JRICHA30 Advanced Manufacturing PNETMFG
Steve Barney SBARNEY
Christian Meisner CMEISNER
3215,3220 Jill Richards JRICHA30 Advanced Manufacturing PNETMFG
Steve Barney SBARNEY
Christian Meisner CMEISNER
3245,3258 Jill Richards JRICHA30 Advanced Manufacturing PNETMFG
Steve Barney SBARNEY
3260-3267, Christian Meisner CMEISNER
3271 Jill Richards JRICHA30 Advanced Manufacturing PNETMFG
</TABLE>
24 OF 38
<PAGE> 44
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
Account
Dept. Ops Charge Requisitioner Requisitioner Finance Finance HR HR
# Loc (AIS) Code* Name Profs ID Name Profs ID Name Profs ID
----- --- ----------- ------------- ------------- ------- -------- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Steve Barney SBARNEY
Christian Meisner CMEISNER
3275-3282 0200 25A-2744-PNET Earl Zellen EZELLEN Ray Solomon RSOLOMON Jill Richards JRICHA30
Steve Barney SBARNEY
Christian Meisner CMEISNER
3285-3294 0200 25A-2744-PNET Gordon Dye GDYE Ray Solomon RSOLOMON Jill Richards JRICHA30
3305-3320 0200 TBD Ken Miller Gary Trudeau GTRUDEA1 Randy Howard RHOWARD
3317-3318 0200 TBD Don Russell DRUSSEL6 Gary Trudeau GTRUDEA1 Randy Howard RHOWARD
3326-3328 0200 TBD Bernard Thornton BTHORNTO Gary Trudeau GTRUDEA1 Randy Howard RHOWARD
3330-3336 0200 TBD Gerry Hodapp GHODAPP Gary Trudeau GTRUDEA1 Randy Howard RHOWARD
3340-3348 0200 TBD Bob Knecht BKNECHT Gary Trudeau GTRUDEA1 Randy Howard RHOWARD
3350-3362 0200 TBD Earl Taliaferro ETALIAFE Gary Trudeau GTRUDEA1 Randy Howard RHOWARD
3370-3379,
3391-3393 0200 TBD Doug Szopo DSZOPO Gary Trudeau GTRUDEA1 Randy Howard RHOWARD
3380-3382 0200 TBD Bob Gibson RGIBSON Gary Trudeau GTRUDEA1 Randy Howard RHOWARD
3386,3387 0200 TBD Rob Phebus RPHEBUS Gary Trudeau GTRUDEA1 Randy Howard RHOWARD
3400,3405,
3456 0200 TBD Michael Malloy MMALLOY Gary Trudeau GTRUDEA1 Mark Ankenbauer MANKENBA
3500-3507 0200 TBD Joesph Sammut JSAMMUT Michael Conn MCONN1 Kevin Ruffer KRUFFER
Michael Conn MCONN1
3540,C140 0200 TBD Charlie Miller CMILLER4 Mark Caldwell MCALDWE3 Kevin Ruffer KRUFFER
Clyde Ghee CGHEE
4071,4085 0200 13-0970-PNET Dennis Gahry DGAHRY Larry Cupp LGUPP Ingid Bulter IBUTLER
Bruce Jorgenson BJORGENS
Ron Andrade RANDRADE Clyde Ghee CGHEE
4091,4094 0200 13-0970-PNET Richard Griside RGRISKIE Larry Cupp LGUPP Ingid Bulter IBUTLER
5160,5161,
13-0970-PNET(C) Larry Richardson Kimble Little KLITTLE3
5332-5339 0200 Various(T) TBD TBD Active for Tech Only! LRICHARD Carol Mitchell CMITCHEL
5401,5161 13-0970-PNET(C) Larry Richardson Kimble Little KLITTLE3
5401,5455 0200 Various(T) Jessie Jou JJOU Active for Tech Only! LRICHARD Carol Mitchell CMITCHEL
13-0970-PNET(C) Larry Richardson Kimble Little KLITTLE3
5332-5339 0200 Various(T) TBD TBD Active for Tech Only! LRICHARD Carol Mitchell CMITCHEL
Bernie McAllister BMCALLIS
13-0970-PNET(C) Ron Stansifer RSTANSIF
5342,
5347-5349 0200 Various(T) Matt Chuba MCHUBA Ron Stansifer RSTANSIF John Marcus JMARCUS
13-0970-PNET(C)
53XX's 0200 Various(T) Paul Broadfield PBROADFI TBD TBD TBD TBD
KOSWANDE
5535,5555 0200 TBD Ken Oswandel CC:FWENDEL Larry Richard LRICHARD Rosalind Cox RCOX4
13-0970-PNET(C) DWAGNER2 Larry Richardson Kimble Little KLITTLE3
5540,5545 0200 Various(T) David Wagner CC:FWENDEL Active for Tech Only! LRICHARD Carl Mitchell CMITCHEL
N700 0200 TBD TBD TBD TBD TBD TBD TBD
SBANSAL
N720 0200 TBD David Dreyer DDREYER Brice Jorgenson BJORGENS Mike Schulhoff MSCHULHO
SBANSAL
N721 0200 TBD David Dreyer DDREYER Brice Jorgenson BJORGENS Mike Schulhoff MSCHULHO
SBANSAL
N725 0200 TBD David Dreyer DDREYER Brice Jorgenson BJORGENS Mike Schulhoff MSCHULHO
N790 0200 TBD TBD TBD TBD TBD TBD TBD
N796 0200 TBD TBD TBD TBD TBD TBD TBD
N797 0200 TBD TBD TBD TBD TBD TBD TBD
5304 0206 TBD Robert Ermak RERMAK Ryan Anderson RANDER28 Robert Ermak RERMAK
5335 0206 TBD Frank Obranovic FOBRANOV Ryan Anderson RANDER28 Robert Ermak RERMAK
5341 0206 TBD Dennis Pheley DPHELEY Ryan Anderson RANDER28 Robert Ermak RERMAK
5357 0206 TBD Jeff Zaleski JZALESKI Ryan Anderson RANDER28 Robert Ermak RERMAK
L0010,L0025,
L0035,L0042,
L0050,L0060,
L0070,L0080,
L0082,L0085,
L0151,L0510 0222 25A-2744-PNET Jay Durling JDURLING Mike Donaldson MDONALDS Jay Durling JDURLING
01C16 0300 25A-2744-PNET Tom Rivers TRIVERS1 Toni Murinas TMURINAS Jim Podgorny JPODGORN
01C651 0300 25A-2744-PNET Pay Wyden PWYDEN Toni Murinas TMURINAS Jim Podgorny JPODGORN
01F40 0300 25A-2744-PNET Marge Bagnell MBAGNELL Toni Murinas TMURINAS Trish Harris THARRIS4
1F01 0300 25A-2744-PNET Sandy McQuade SMCQUADE Toni Murinas TMURINAS Trish Harris THARRIS4
341,3F41 0300 25A-2744-PNET Brain Miller BMILLE11 Toni Murinas TMURINAS Linda Cook LCOOK6
3F04 0300 25A-2744-PNET Glynda Kanis GKANIS Toni Murinas TMURINAS Jim Podgorny JPODGORN
3F16 0300 25A-2744-PNET Tom Rivers TRIVERS1 Toni Murinas TMURINAS Jim Podgorny JPODGORN
3F31 0300 25A-2744-PNET Mae Smith MSMITH26 Toni Murinas TMURINAS Linda Cook LCOOK6
3F317 0300 25A-2744-PNET Jim Gismondi JGISMOND Toni Murinas TMURINAS Linda Cook LCOOK6
3F34 0300 25A-2744-PNET Ann Land ALAND Toni Murinas TMURINAS Linda Cook LCOOK6
3F361 0300 25A-2744-PNET Yolanda Szurek YSUREK Toni Murinas TMURINAS Linda Cook LCOOK6
3F42 0300 25A-2744-PNET Leora Clough LCOUGH1 Toni Murinas TMURINAS Linda Cook LCOOK6
</TABLE>
<TABLE>
<CAPTION>
Dept.
# Activity Mailbox
----- -------- -------
<S> <C> <C>
3275-3282 Advanced Manufacturing PNETMFG
3285-3294 Advanced Manufacturing PNETMFG
3305-3320 PNETMFG
3317-3318 PNETMFG
3326-3328 PNETMFG
3330-3336 PNETMFG
3340-3348 PNETMFG
3350-3362 PNETMFG
3370-3379,
3391-3393 PNETMFG
3380-3382 PNETMFG
3386,3387 PNETMFG
3400,3405,
3456 Advanced Manufacturing PNETMFG
3500-3507 PNETMFG
3540,C140 PNETMFG
4071,4085 ATEO MFG. Engineering PNETPTO
4091,4094 ATEO MFG. Engineering PNETPTO
5160,5161,
5401,5161
5401,5455 VO T&T'S PNETMFG
5332-5339 VO T&T'S PNETMFG
VO T&T'S PNETMFG
5342,
5347-5349 VO T&T'S PNETMFG
53XX's VO T&T'S PNETMFG
5535,5555 VO T&T'S PNETMFG
5540,5545 VO T&T'S PNETMFG
N700 PNETPTO
N720 PNETPTO
N721 PNETPTO
N725 PNETPTO
N790 PNETPTO
N796 PNETPTO
N797 PNETPTO
5304 VO T&T'S PNETMFG
5335 VO T&T'S PNETMFG
5341 VO T&T'S PNETMFG
5357 VO T&T'S PNETMFG
L0010,L0025,
L0035,L0042,
L0050,L0060,
L0070,L0080,
L0082,L0085,
L0151,L0510 Vehicle Ops-Wixom PNETMFG
01C16 Fleet & Leasing Sales PNETSO
01C651 Fleet & Leasing Sales PNETSO
01F40 Fleet & Leasing Sales PNETSO
1F01 Fleet & Leasing Sales PNETSO
341,3F41 Fleet & Leasing Sales PNETSO
3F04 Fleet & Leasing Sales PNETSO
3F16 Fleet & Leasing Sales PNETSO
3F31 Fleet & Leasing Sales PNETSO
3F317 Fleet & Leasing Sales PNETSO
3F34 Fleet & Leasing Sales PNETSO
3F361 Fleet & Leasing Sales PNETSO
3F42 Fleet & Leasing Sales PNETSO
</TABLE>
25 OF 38
<PAGE> 45
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
ACCOUNT
OPS CHARGE REQUISITIONER REQUISITIONER FINANCE FINANCE
DEPT # LOC (ABS) CODE* NAME PROFS ID NAME PROFS ID
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
3F43 0300 25A-2744-PNET Patty Robichaud PROBICHA Toni Murinas TMURINAS
3F44 0300 25A-2744-PNET Sharon Smola SSMOLA Toni Murinas TMURINAS
3F45 0300 25A-2744-PNET Paul Morel PMOREL Toni Murinas TMURINAS
3F63 0300 25A-2744-PNET Alice Mulkey AMULKEY Toni Murinas TMURINAS
3F651 0300 25A-2744-PNET Pat Wyden PWYDEN Toni Murinas TMURINAS
6702 0365 TBD Robert Trebnik RTREBNIK Robert Trebnik RTREBNIK
R100 0400 25A-2744-PNET W. Swift WSWIFT Steve Davis WDAVIS20
R120-R129 0400 25A-2744-PNET D. Carson DCARSON Steve Davis WDAVIS20
R130-R137,R230 0400 25A-2744-PNET D. LeClair DLECLAIR Steve Davis WDAVIS20
R151 0400 25A-2744-PNET M. Best MBEST3 Steve Davis WDAVIS20
R152 0400 25A-2744-PNET M. Best MBEST3 Steve Davis WDAVIS20
R153 0400 25A-2744-PNET K. Costello MBEST3 Steve Davis WDAVIS20
R160-R164 0400 25A-2744-PNET W. Kessor WKEESOR Steve Davis WDAVIS20
R170-R174 0400 25A-2744-PNET K. Costello KCOSTEL2 Steve Davis WDAVIS20
R190-R192 0400 25A-2744-PNET A. Amendt AAMENDT Steve Davis WDAVIS20
R826-P911 0401 25A-2744-PNET Ron Robbins RROBBIN1 Steve Davis WDAVIS20
201 1101 25A-2744-PNET Freda Smart FSMART Toni Murinas TMURINAS
211 1101 25A-2744-PNET Dorthy Wessel DWESSEL Toni Murinas TMURINAS
Ken Hested KHASTED1
220 1101 25A-2744-PNET Lynn Balong LBALOG1 Toni Murinas TMURINAS
241 1101 25A-2744-PNET Joan Nolan JNOLAN1 Toni Murinas TMURINAS
245 1101 25A-2744-PNET Denise Feduruk DFEDURUK Toni Murinas TMURINAS
240,242 1101 25A-2744-PNET James Rogers JROGER19 Toni Murinas TMURINAS
247-249 1101 25A-2744-PNET Heleana Tolbert HTOLBERT Toni Murinas TMURINAS
Stephen Delaney SDELANEY Stephen Delaney SDELANEY
B020 1182 25A-2744-PNET James Brown JBROWN6 Jim Theisen JTHEISE1
Jerry Moorehead GMOOREHE
B050 1182 25A-2744-PNET John Heller JHELLER Jim Theisen JTHEISE1
B040,B514,7214 1183,02 TBD Ed Livorine ELIVORIN Brice Jorgensen BJORGENS
9110,9121,9124,
9150,9185,9780 1401 25A-2744-PNET Tim Sacka TSACKA Tim Sacka TSACKA
9120-9140,9190,
9785,9786 1401 13-0970-PNET Glen Stinson GSTINSON Glen Stinson GSTINSON
9701-9770 1401 25A-2744-PNET Wendy Sheffield WSHEFFIE Wendy Sheffield WSHEFFIE
6401-6460 1422 12-0970-PNET Steve Wright SWRIGHT Steve Wright SWRIGHT
E2101-E2218 1503 25A-2747-PNET Tracy Stuart TSTUART Bill Evans WEVANS
Y8010 1632 12-0970-PNET Bruce Crawford BCRAWFORD Howard Behr HBEHR
Y8030 1632 12-0970-PNET Haney Maklded HMAKLED Howard Behr HBEHR
Y8120 1632 12-0970-PNET Jerry Pompa JPOMPA Howard Behr HBEHR
Y8210 1632 12-0970-PNET Peter Dragich PDRAGICH Howard Behr HBEHR
Y8300,Y8310,Y8350,
Y8360,Y8680 1632 12-0970-PNET Terry Dunham TDUNHAM Howard Behr HBEHR
Steve Thornburg STHORNBU
Y8330,Y8340 1632 12-0970-PNET Terry Dunham TDUNHAM Howard Behr HBEHR
13-0933-PNET
25A-2744-PNET
Y8620,Y8800,Y8810 1632 12-0933-PNET Ron Muir RMUIR1 Howard Behr HBEHR
13-0933-PNET
25A-2744-PNET
Y8670 1632 12-0933-PNET Ron Poland RPOLAND Howard Behr HBEHR
Paula Winkler-Doman PDOMAN
Y8XXX's 1632 12-0970-PNET Maurice Sessel MSESSEL Howard Behr HBEHR
Richard Beattie RBEATTI2
820 2450 25A-2744-PNET Roz Flinders RFLINDER Joe Welch JWELCH
821 2450 25A-2744-PNET Gary Hawthorne GHAWTHOR
<CAPTION>
HR
DEPT # NAME PROFS ID ACTIVITY MAILBOX
------ ---- -------- -------- -------
<S> <C> <C> <C> <C>
3F43 Linda Cook LCOOK6 Fleet & Leasing Sales PNETSO
3F44 Linda Cook LCOOK6 Fleet & Leasing Sales PNETSO
3F45 Linda Cook LCOOK6 Fleet & Leasing Sales PNETSO
3F63 Jim Podgorny JPODGORN Fleet & Leasing Sales PNETSO
3F651 Jim Podgorny JPODGORN Fleet & Leasing Sales PNETSO
6702 John Wallace JWALLACE Woodhaven Forging Plant PNETPTO
R100 Paulette Moreno PMORENO** Finance/P.L & Heavy Truck Marketing PNETDEV
R120-R129 Paulette Moreno PMORENO** Finance/P.L & Heavy Truck Marketing PNETDEV
R130-R137,R230 Paulette Moreno PMORENO** Finance/P.L & Heavy Truck Marketing PNETDEV
R151 Paulette Moreno PMORENO** Finance/P.L & Heavy Truck Marketing PNETDEV
R152 Paulette Moreno PMORENO** Finance/P.L & Heavy Truck Marketing PNETDEV
R153 Paulette Moreno PMORENO** Finance/P.L & Heavy Truck Marketing PNETDEV
R160-R164 Paulette Moreno PMORENO** Finance/P.L & Heavy Truck Marketing PNETDEV
R170-R174 Paulette Moreno PMORENO** Finance/P.L & Heavy Truck Marketing PNETDEV
R190-R192 Paulette Moreno PMORENO** Finance/P.L & Heavy Truck Marketing PNETDEV
R826-P911 Paulette Moreno PMORENO** Finance/P.L & Heavy Truck Marketing PNETDEV
201 Jim Podgorny JPODGORN Lincoln Mercury PNETSO
211 Jim Podgorny JPODGORN Lincoln Mercury PNETSO
Trish Harris THARRIS4
Jim Podgorny JPODGORN
220 Lincoln Mercury PNETSO
241 Jim Podgorny JPODGORN Lincoln Mercury PNETSO
245 Jim Podgorny JPODGORN Lincoln Mercury PNETSO
240,242 Jim Podgorny JPODGORN Lincoln Mercury PNETSO
247-249 Jim Podgorny JPODGORN Lincoln Mercury PNETSO
B020 James Brown JBROWN6 PNETACD
Mark Ankenbauer MANKENBA
B050 Terry Patterson TPATTER4 PNETACD
B040,B514,7214 Michael Schulhoff MSCHULHO APO-Chassis PNETPTO
Susan Gessert SGESSERT
Carlin Sochor CSOCHOR
Donna Brown DBROWN01
9110,9121,9124, Carol Maeder CMAEDER
9150,9185,9780 Michelle Schrader MSCHRAD1 Glass PNETGLAS
Susan Gessert SGESSERT
Carlin Sochor CSOCHOR
Donna Brown DBROWN01
9120-9140,9190, Carol Maeder CMAEDER
9785,9786 Michelle Schrader MSCHRAD1 Glass PNETGLAS
Susan Gessert SGESSERT
Carlin Sochor CSOCHOR
Donna Brown DBROWN01
Carol Maeder CMAEDER
9701-9770 Michelle Schrader MSCHRAD1 Glass PNETGLAS
6401-6460 Chris Hegler CHEGLAR Glass PNETGLAS
E2101-E2218 Tracy Stuart TSTUART Worldwide Export Operations PNETSO
Y8010 Jerry Pompa JPOMPA Sheldon Road Plant PNETACD
Y8030 Jerry Pompa JPOMPA Sheldon Road Plant PNETACD
Y8120 Jerry Pompa JPOMPA Sheldon Road Plant PNETACD
Y8210 Jerry Pompa JPOMPA Sheldon Road Plant PNETACD
Y8300,Y8310,Y8350,
Y8360,Y8680 Jerry Pompa JPOMPA Sheldon Road Plant PNETACD
Y8330,Y8340 Jerry Pompa JPOMPA Sheldon Road Plant PNETACD
Y8620,Y8800,Y8810 Jerry Pompa JPOMPA Sheldon Road Plant PNETACD
Y8670 Jerry Pompa JPOMPA Sheldon Road Plant PNETACD
Y8XXX's Jerry Pompa JPOMPA Sheldon Road Plant PNETACD
820 SY COLE SCOLE3 Rental, Lease & Remarketing PNETSO
821 SY COLE SCOLE3 PNETSO
</TABLE>
26 OF 38
<PAGE> 46
ALL APPROVED OR PEOPLENET
<TABLE>
<CAPTION>
DEPT. OPS ACCOUNT REQUISITIONER REQUISITIONER FINANCE FINANCE
# LOC CHARGE NAME PROFS ID NAME PROFS ID
(AIS) CODE*
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jetty Sullivan JSULLI20
Kenny DeCay KDECAY
Curt Skaluba CSKALUBA
Al Bush ABUSH
823 2450 25A-2744-PNET Judy Godfrey JGODFREY Joe Welch JWELCH
Bob Bates RBATES3
Jerry Homeszn JHOMESZY
Dick Poljan RPOLJAN
Brenda Bushaw BBUSHAW
Karen Breslin KBRESLIN
824 245O 25A-2744-PNET Cathy Parsons CPARSONS Joe Welch JWELCH
828 2450 25A-2744-PNET Roger Olsen ROLSEN Joe Welch JWELCH
829 2450 25A-2744-PNET Andy McKinnon AMCKINNO Joe Welch JWELCH
927 2450 25A-2744-PNET Georgianna Gensman GGENSMAN Toni Murinas TMURINAS
George Lowe GLOWE
253 2460 25A-2744-PNET Fred Scipion FSCIPION Robert W. Smith RSMITH17
Mike Meade MMEADE
280 2460 25A-2744-PNET Bob Sandel RSANDEL Robert W. Smilh RSMITH17
281 2460 25A-2744-PNET Mike Meade MMEADE Robert W. Smith RSMITH17
Mike Meade MMEADE
282 2460 25A-2744-PNET Kathryn White KWHITE1 Robert W. Smith RSMITH17
Mike Meade MMEADE
283 2460 25A-2744-PNET Denise Achram DACHRAM Robert W. Smith RSMITH17
Mike Meade MMEADE
284 2460 25A-2744-PNET Kent Wikarski KWIKARSK Robert W. Smilh RSMITH17
Mike Meade MMEADE
286 2460 25A-2744-PNET Shane Rachedi SRACHEDI Robert W. Smith RSMITH17
Mike Meade MMEADE
287 2460 25A-2744-PNET Joe Crow JCROW Robert W. Smith RSMITH17
Mike Meade MMEADE
288 2460 25A-2744-PNET Peter Salamon PSALAMON Robert W. Smith RSMITH17
25A-2744-PNET
301 2460 25A-2747-PNET Geri Opera GOPERA Tim Rumptz TRUMPTZ
251, 285 2460 25A-2744-PNET George Lowe GLOWE Robert W. Smith RSMITH17
257, 259 2460 25A-2744-PNET Joe Bradley JBRADLEY Robert W. Smith RSMITH17
Michael Warrillow MWARRIL2
Bud Fisher BFISHER
860 2622 25C-2744-PNET Warren Merz WMERZ Alan Bennett ABENNETT
874 2622 25C-2744-PNET Les Ellis LELLIS Alan Bennett ABENNETT
Bob Nolan RNOLAN
Richard Furley RFURLEY
Bud Fisher BFISHER
896 2622 25C-2744-PNET Warren Merz WMERZ Alan Bennett ABENNETT
Bud Fisher BFISHER
812-819,825, 835 2622 25C-2 44-PNET Warren Metz WMERZ Alan Bennett ABENNETT
Bud Fisher BFISHER
Warren Mefz WMERZ
820-837 25C-2744-PNET Michael Warrillow MWARRIL2 Alan Bennett ABENNETT
John Russ JRUSS1
Les Ellis LELLIS
Dick Walker DWALKER1
870-872 2622 25C-2744-PNET Gary Lonne GLONNE Alan Bennett ABENNETT
13-0933-PNET
25A-2744-PNET
C001 2702 12-0970-PNET Frank Macher FMACHER Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C003 2702 12-0970-PNET Jim Wynalek JWYNALEK Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C009, C101 2702 12-0970-PNET Roger Saillant RSAILLAN Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C026 2702 12-0970-PNET Larry Kozanowski LKAZANOW Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET Tom Weaver TWEAVER1
C030 2702 12-0970-PNET Joginder Singh JSINGH5 Terry Bolthouse TBOLTHOU
</TABLE>
<TABLE>
<CAPTION>
DEPT. HR HR ACTIVITY MAILBOX
# NAME PROFS ID
- ---------------------------------------------------------------------------------------------------------
<S> <S> <C> <C> <C>
823 Sy Cole SCOLE3 RL & RO PNETSO
824 Sy Cole SCOLE3 PNETSO
828 Sy Cole SCOLE3 PNETSO
829 Sy Cole SCOLE3 PNETSO
927 Trish Harris THARRIS4 Ford Division PNETSO
253 Peter Werthmann PWERTHMA Vehicle Service & Programs PNETSO
280 Peter Werthmann PWERTHMA Vehicle Service & Programs PNETSO
281 Peter Werthmann PWERTHMA Vehicle Service & Programs PNETSO
282 Peter Werthmann PWERTHMA Vehicle Service & Programs PNETSO
283 Peter Werthmann PWERTHMA Vehicle Service & Programs PNETSO
284 Peter Werthmann PWERTHMA Vehicle Service & Programs PNETSO
286 Peter Werthmann PWERTHMA Vehicle Service & Programs PNETSO
287 Peter Werthmann PWERTHMA Vehicle Service & Programs PNETSO
288 Peter Werthmann PWERTHMA Vehicle Service & Programs PNETSO
301 Don Vincent DVINCIENT TSO PNETSO
251, 285 Peter Werthmann PWERTHMA Vehicle Service & Programs PNETSO
257, 259 Peter Werthmann PWERTHMA Vehicle Service & Programs PNETSO
860 Gwynne Jennings GJENNING PS & L PNETSO
874 Joan Treves JTREVES PS & L PNETSO
Gwynne Jennings GJENNING PS & L PNETSO
896 Joan Treves JTREVES PS & L PNETSO
812-819,825, 835 Gwynne Jennings GJENNING PS & L PNETSO
820-837 Gwynne Jennings GJENNING PS & L PNETSO
870-872 Joan Treves JTREVES PS & L PNETSO
C001 John Tebben JTEBBEN Automotive Component Division PNETACD
C003 Dave Kehlinger DKOHLIN Automotive Component Division PNETACD
C009, C101 TBD TBD Automotive Component Division PNETACD
C026 Lucille Berkowski LEBERKOWS Automotive Component Division PNETACD
C030 John Levens JLEVENS Automotive Component Division PNETACD
</TABLE>
27 OF 38
<PAGE> 47
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
ACCOUNT
DEPT OPS CHARGE REQUISITIONER REQUISITIONER FINANCE FINANCE
# LOC [AIS]CODE* NAME PROFS ID NAME PROFS ID
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
13-0933-PNET
25A-2744-PNET
C40 2702 12-0970-PNET Larry Kazanowski LKAZANOW Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C050 2702 12-0970-PNET Frank Croskey FCROSKEY Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C060 2702 12-0970-PNET Gary Vander Haagen GVANDER1 Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C082 2702 12-0970-PNET Dave Doster DDOSTER Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C083 2702 12-0970-PNET Terry Schaefer TSCHAEFE Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C084 2702 12-0970-PNET Jim Buczkowsld JBUCZKOW Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C085 2702 12-0970-PNET Rohintan Deputy RDEPUTY Terry Bolthouse TBOLTHOU
C110 2702 25A-2744-PNET Joe Sadowski JSADOWSKI Mark Caldwell MCALDWE3
C111 2702 25A-2744-PNET Max Supica MSUPICA Mark Caldwell MCALDWE3
C122 2702 25A-2744-PNET Keith Garvey KGARVEY Mark Caldwell MCALDWE3
C123 2702 25A-2744-PNET Rob Howell RHOWELL Mark Caldwell MCALDWE3
C124 2702 25A-2744-PNET Dave Bent DBENT Mark Caldwell MCALDWE3
C125 2702 25A-2744-PNET Lewis Lyons LLYONS Mark Caldwell MCALDWE3
C130 2702 25A-2744-PNET Dan Beck DBECK Mark Caldwell MCALDWE3
C131 2702 25A-2744-PNET Jeanne Evans JEVANS2 Mark Caldwell MCALDWE3
C132 2702 25A-2744-PNET Dave Lazor DLAZOR Mark Caldwell MCALDWE3
C133 2702 25A-2744-PNET Ted Kucemba TKUCEMBA Mark Caldwell MCALDWE3
C134 2702 25A-2744-PNET Daniel DiSebastian DDISEBAS Mark Caldwell MCALDWE3
C135 2702 25A-2744-PNET John Haldane JHALDANE Mark Caldwell MCALDWE3
C136 2702 25A-2744-PNET Tom Guldberg TGULDBER Mark Caldwell MCALDWE3
Steve Nehez SNEHEZ
C137 2702 25A-2744-PNET Curt Brainar CBRAINAR Mark Caldwell MCALDWE3
C150 2702 25A-2744-PNET Ken Miller KMILLER5 Mark Caldwell MCALDWE3
C151 2702 25A-2744-PNET Bob Russell BRUSSELL Mark Caldwell MCALDWE3
C152 2702 25A-2744-PNET Gerald Hodappp GHODAPP Mark Caldwell MCALDWE3
C153 2702 25A-2744-PNET Jim Corwin JCORWIN Mark Caldwell MCALDWE3
C160 - C170 2702 25A-2744-PNET Michael Trist MTRIST Mark Caldwell MCALDWE3
13-0933-PNET
25A-2744-PNET
C255 2702 12-0970-PNET TBD TBD Terry Bolthouse TBOLTHOU
C080 2702 13-0933-PNET Cliff Dawson CDAWSON1 Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
T1047 2702 12-0970-PNET TBD TBD TBD TBD
13-0933-PNET
25A-2744-PNET
C100 2712 12-0970-PNET Eugene Greenstein EGREENST Terry Bolthouse TBOLTHOU
13-0933-PNET Harry Luscombe HLUSCOMB
25A-2744-PNET Jack Glaser JGLASER Harry Luscombe HLUSCOMB
H0010-H0070 2714 12-0970-PNET Chris King (B/UP) CKING(B/UP) Wade Davis WDAVIS1
C23 5001 25A-2744-PNET Joan Brining JBRINING Toni Murinas TMURINAS
Gary Bell GBELL1
Steve Fairfield SFAIRFIE
Bob Hynous RHYNOUS
13-0970-PNET(C) Joan Curley JCURLEY
J1050 5001 13-0978-PNET(I.S.) Tim Kraftson TKRAFTSO Ken Hagen KHAGEN
13-0970-PNET(C)
J1100 5001 13-0978-PNET(I.S.) Bud Mathaisei BMATHAIS Wayne McLeroy WMCELROY
13-0970-PNET(C)
J1200 5001 13-0978-PNET(I.S.) Pat Valant PVALANT Bob Hynous RHYNOUS
13-0970-PNET(C) Teri Takai TTAKAI
J1210 5001 13-0978-PNET(I.S.) Tom Karks TMARKS Bob Buszka RBUSZKA
13-0970-PNET(C) Lee Hollman LHOLLMAN
J1211 5001 13-0978-PNET(I.S.) Teri Takai TTAKAI Bob Buszka RBUSZKA
<CAPTION>
DEPT HR HR ACTIVITY MAILBOX
# NAME PROFS ID
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
C040 Paul Bartkowisk PBARTKOW Automotive Component Division PNETACD
C050 TBD TBD Automotive Component Division PNETACD
C060 John Tebben JTEBBEN Automotive Component Division PNETACD
C082 Susan Napoleone SNAPOLEO Automotive Component Division PNETACD
C083 Susan Napoleone SNAPOLEO Automotive Component Division PNETACD
C084 Susan Napoleone SNAPOLEO Automotive Component Division PNETACD
C085 Susan Napoleone SNAPOLEO Automotive Component Division PNETACD
C110 David Cook DCOOK11 APO PNETACD
C111 David Cook DCOOK11 APO PNETACD
C122 TBD TBD APO PNETACD
C123 Anne Marie DeGrazia ADEGRAZI ACD Technical Services PNETACD
C124 Anne Marie DeGrazia ADEGRAZI APO PNETACD
C125 TBD TBD APO PNETACD
C130 Malcolm Suber MSUBER APO PNETACD
C131 Malcolm Suber MSUBER APO PNETACD
C132 Malcolm Suber MSUBER APO PNETACD
C133 Malcolm Suber MSUBER APO PNETACD
C134 Malcolm Suber MSUBER APO PNETACD
C135 Malcolm Suber MSUBER APO PNETACD
C136 Malcolm Suber MSUBER APO PNETACD
C137 Malcolm Suber MSUBER APO PNETACD
C150 Terry Patterson TPATTER4 APO PNETACD
C151 Terry Patterson TPATTER4 APO PNETACD
C152 Terry Patterson TPATTER4 APO PNETACD
C153 Terry Patterson TPATTER4 APO PNETACD
C160 - C170 Terry Patterson TPATTER4 APO PNETACD
PNETACD
C255 Diana Skalski DSKALSKI PNETACD
C080 Susan Napoleone SNAPOLEO PNETACD
T1047 Fred Kansier FKANSIER PNETACD
C100 Rose DeFerraris RDEFERRA Utica Plant PNETACD
Judy Crocenzi JCROCENZ
Jean Grande HGRANDE1
H0010-H0070 Paul Nowicki PNOWICKI Chesterfield Plant PNETACD
C23 Mary Caufield MCAUFIE PNETSO
J1050 Kathy Dunn KDUNN Finance PNETLEAD
J1100 Carole Cluney MCLUNEY Process Leadership PNETLEAD
J1200 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1210 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1211 Sarah Owig SORWIG Manufacturing Systems PNETLEAD
</TABLE>
28 OF 38
<PAGE> 48
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
ACCOUNT REQUISITION REQUISITION FINACE
DEPT OPS CHARGE PROFS II PROFS II NAME
# LOC (ATS) CODE*
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
13-0970-PNET(C) Horst Glerlich HGIERLT1
J1212 5001 13-0978-PNET(I.S.) Teri TakaI TTAKAI Bob Buszka
13-0970-PNET(C) Lynn Phillips LPHILLIP
J1213 5001 13-0978-PNET(I.S.) Teri Takai TTAKAI Bob Buszka
13-0970-PNET(C) Dave Filkin DFILIKIN
J1214 5001 13-0978-PNET(I.S.) Teri Takai TTAKAI Bob Buszka
13-0970-PNET(C) Tom Marks TMARKS
J1215 5001 13-0978-PNET(I.S.) Teri Takai TTAKA1 Bob Buszka
13-0970-PNET(C)
J1216, J1219 5OO1 13-0978-PNET(I.S.) Teri Takai TTAKAl Bob Buszka
13-0970-PNET(C)
J1220 - 1229 5001 13-0978-PNET(I.S.) John Saville JSAVILLE Chuck Mitchell
13-0970-PNET(C) Wilfried Peters WPETTERS
J1222 5001 13-0978-PNET(I.S.) John Saville JSAVILLE Chuck Mitchell
13-0970-PNET(C) Bob D'Angelo RDANGELO
J1224 5001 13-0978-PNET(I.S.) John Saville JSAVILLE Chuck Mitchell
13-0970-PNET(C) Werner Schulze WSCHWER1
J1225 5001 13-0978-PNET(I.S.) John Saville JSAVILLE Chuck Mitchell
13-0970-PNET(C)
J1240,J1249 5001 13-0978-PNET(I.S.) Rod Edwards REDWARD1 Cathy Myers
Bill Herbert WHERBERT
13-0970-PNET(C) Jim Cnossen JCNOSSEN
J1241 5001 13-0978-PNET(I.S.) Rod Edwards REDWARD1 Cathy Myers
13-0970-PNET(C) Bill Fairclough WFAIRCLO
J1242 5001 13-0978-PNET(I.S.) Rod Edwards REDWARD1 Cathy Myers
13-0970-PNET(C) Ishmael White IWHITE1
J1243 5001 13-0978-PNET(I.S.) Rod Edwards REDWARD1 Cathy Myers
13-0970-PNET(C) John Woods JWOODS
J1244 5001 13-0973-PNET(I.S.) Rod Edwards REDWARD1 Cathy Myers
13-0970-PNET(C) Tom Pate TPATE
J1245 5001 13-0978-PNET(I.S.) Rod Edwards REDWARD1 Cathy Myers
13-0970-PNET(C) Steve Paschen SPASCHEN
J1246 5001 13-0978-PNET(I.S.) Rod Edwards REDWARD1 Cathy Myers
13-0970-PNET(C) Bob Verbal BVERBAL
J1247 5001 13-0978-PNET(I.S.) Rod Edward REDWARD1 Cathy Myers
Rod Edwards REDWARD1
Lois Jared LJARED Bob Ellison
J1248- 5001 13-0978-PNET Cathy Myers CMYERS4 Bob Hynous
13-0970-PNET(C)
J1250 5001 13-0978-PNET(I.S.) Brian Buersmeyer BBUERSME Chuck Mitchell
13-0970-PNET(C)
J1251-J1259,J1551 5001 13-0978-PNET(I.S.) Ken Szczerba KSZCZERB Chuck Mitchell
Frank Faron FFARON
13-0970-PNET(C) Lew Lyons LLYONS
J1255 5001 13-0978-PNET(I.S.) Ken Szczerba KSZCZERB Chuck Mitchell
13-0970-PNET(C)
J1265 5001 13-0978-PNET(I.S.) Fernando Duran FDURAN Gwen Bynum
13-0970-PNET(C)
J1270 5001 13-0978-PNET(I.S.) Brian Patterson BPATTERS Chuck Mitchell
13-0970-PNET(C)
J1275 5001 13-0978-PNET(I.S.) Pepe Sanchez RSANCHE1 Chuck Mitchell
13-0970-PNET(C)
J1280 5001 13-0978-PNET(I.S.) Dave Essig DESSIG Chuck Mitchell
13-0970-PNET(C)
J1300 5001 13-0978-PNET(I.S.) Dave Alexander DALEXAN3 Dave Alexander
13-0970-PNET(C)
J1310 5001 13-0978-PNET(I.S.) Bronya Lerman BLERMAN Mike Smith
13-0970-PNET(C)
J1314 5001 13-0978-PNET(I.S.) Shelly Patterson SPATTERS Mike Smith
13-0970-PNET(C) William Boger WBOGER
J1320 5001 13-0976-PNET(I.S) Louise Abbott LABBOTT Annette Dapprich
13-0970-PNET(C)
J1321 - J1324 5001 13-0978-PNET(I.S.) William Boger WBOGER Annette Dapprich
13-0970-PNET(C)
J1330 5001 13-0978-PNET(I.S.) J. Mumford JMUMFORD Annette Dapprich
</TABLE>
<TABLE>
<CAPTION>
DEPT FINANCE HR HR ACTIVITY MAILBOX
# PROFS II NAME NAME
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
J1212 RBUSZKA Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1213 RBUSZKA Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1214 RBUSZKA Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1215 RBUSZKA Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1216, J1219 RBUSZKA Sarah Orwig SORWIG Manufacturing Systems PNFTLEAD
J1220 - 1229 CMITCHE1 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1222 CMITCHE1 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1224 CMITCHE1 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1225 CMITCHE1 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1240,J1249 CMYERS4 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1241 CMYERS4 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1242 CMYERS4 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1243 CMYERS4 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1244 CMYERS4 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1245 CMYERS4 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1246 CMYERS4 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1247 CMYERS4 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
RELLISON
J1248 RHYNOUS Sarah Orwig SORW1G Manufacturing Systems PNETLEAD
J1250 CMITCHE1 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1251-J1259,J155 CMITCHE1 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1255 CMITHCE1 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1265 GBYNUM Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1270 CMITCHE1 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1275 CMITCHE1 Sarah Orwig SORW1G Manufacturing Systems PNETLEAD
J1280 CMITCHE1 Sarah Orwig SORWIG Manufacturing Systems PNETLEAD
J1300 DALEXAN3 Harry Breniser HBRENISE Process Leadership PNETLEAD
J1310 MSMITH24 Harry Breniser HBRENISE CAE Systems PNETLEAD
J1314 MSMITH24 Harry Breniser HBRENISE CAE Systems PNETLEAD
J1320 ADAPPRIC Harry Breniser HBRENISE CAE/CAM/PIM PNETLEAD
J1321 - J1324 ADAPPRIC Harry Breniser HBRENISE Quality & Product Info Systems PNETLEAD
J1330 ADAPPRIC Harry Breniser HBRENISE Quality & Product Info Systems PNETLEAD
</TABLE>
29 OF 38
<PAGE> 49
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
ACCOUNT
DEPT. OPS CHARGE REQUISITIONER REQUISITIONER FINANCE FINANCE
# LOC [AIS]CODE* NAME PROFS ID NAME PROFS ID
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Mary Monroe MMONROE
L. Quagliotto LQUAGLIO
J. Cioma JCIOMA
M. Pierson MPIERSON
J. Eliasz JELIASZ
Roger Buss RBUSS
13-0970-PNET(C) Vira Conley VCONLEY
J1331 5001 13-0978-PNET(I.S.) Tim Cavanaugh TCAVANAU Annette Dapprich ADAPPRIC
Nigel Booth NBOOTH1
R. Fernandez RFERNAND
T. Krolikowski TKROLIKO
A. Knaus AKNAUS
G. Price GPRICE
Arun Kumar AKUMAR
Don Warner DWARNER
Roy Rogers RROGERS5
Paula Krause PKRAUSE
13-0970-PNET(C) Tom Vitale TVITALE
J1332 5001 13-0978-PNET(I.S.) Mike Casey MCASEY Annette Dapprich ADAPPRIC
13-0970-PNET(C)
J1333 5001 13-0978-PNET(I.S.) Mary Monroe MMONROE Annette Dapprich ADAPPRIC
13-0970-PNET(C)
J1334 5001 13-0978-PNET(I.S.) R. Derderian RDERDERI Annette Dapprich ADAPPRIC
13-0970-PNET(C)
J1337 5001 13-0978-PNET(I.S.) M. Achorn MACHORN Annette Dapprich ADAPPRIC
13-0970-PNET(C)
J1338 5001 13-0978-PNET(I.S.) B. Ault BAULT Annette Dapprich ADAPPRIC
13-0970-PNET(C)
J1360 5001 13-0978-PNET(I.S.) John Seymour JSEYMOUR Annette Dapprich ADAPPRIC
13-0970-PNET(C)
J1370 5001 13-0978-PNET(I.S.) John Seymour JSEYMOUR Annette Dapprich ADAPPRIC
Bob Berk BBERK
13-0970-PNET(C) Matt Wyman MWYMAN
J1380 5001 13-0978-PNET(I.S.) Richard Riff RRIFF Mike Smith MSMITH24
J1502 5001 13-0978-PNET(I.S.) Bob Seidl RSEIDL Betty Jane Amman BAMMAN
25A-2744-PNET
J3526 5001 25G-2744-PNET Mike Knox MKNOX Judy Gantner JGANTNER
Dale Autio DAUTIO
Casey Haam CHAAM
Jim Smith JSMITH12
J3530 5001 25A-2744-PNET Mike Kanny MKANNY Dan Meyer DMEYER1
13-0933-PNET
25A-2744-PNET
C020 5100 12-0970-PNET Dave Schwab DSCHWAB Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C070 5100 12-0970-PNET Lou Miller LMILLER1 Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C401 5100 12-0970-PNET Dave Cooper DCOOPER4 Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C402 5100 12-0970-PNET Bill Flatt BFLATT Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C403 5100 12-0970-PNET Andy Darmani ADARMANI Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C404 5100 12-0970-PNET Dale Moore DMOORE4 Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C405 5100 12-0970-PNET Dennis Lex DLEX Terry Bolthouse TBOLTHOU
13-9333-PNET
25A-2744-PNET
C406 5100 12-0970-PNET Aaron Wisniewski AWISNIEW Terry Bolthouse TBOLTHOU
13-0933-PNET
25A-2744-PNET
C407 5100 12-0970-PNET Dave Hildreth DHILDRET Terry Bolthouse TBOLTHOU
<CAPTION>
DEPT. HR HR ACTIVITY MAILBOX
# NAME PROFS ID
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
J1331 Harry Breniser HBRENISE Quality & Product Info Systems PNETLEAD
J1332 Harry Breniser HBRENISE Quality & Product Info Systems PNETLEAD
J1333 Harry Breniser HBRENISE Quality & Product Info Systems PNETLEAD
J1334 Harry Breniser HBRENISE Quality & Product Info Systems PNETLEAD
J1337 Harry Breniser HBRENISE Quality & Product Info Systems PNETLEAD
J1338 Harry Breniser HBRENISE Quality & Product Info Systems PNETLEAD
J1360 Harry Breniser HBRENISE Quality & Product Info Systems PNETLEAD
J1370 Harry Breniser HBRENISE VC Systems PNETLEAD
J1380 Harry Breniser HBRENISE VC Systems PNETLEAD
J1502 Frank Stobbe FSTOBBE Technical Services PNETLEAD
J3526 Linda Freitag LFREITA Corporate Finance PNETFAO
J3530 John Ewald JEWALD Corporate Finance PNETFAO
C020 Susan Napoleone SNAPOLEO PNETACD
Anne Marie Degrazia ADEGRAZI
C070 Lucy Berkowski LBERKOWS PNETACD
C401 Anne Marie Degrazia ADEGRAZI PNETACD
C402 Anne Marie Degrazia ADEGRAZI PNETACD
Vern Horstman VHORSTMA
C403 Lucy Berkowski LBERKOWS PNETACD
Vern Horstman VHORSTMA
C404 Lucy Berkowski LBERKOWS PNETACD
Vern Horstman VHORSTMA
C405 Lucy Berkowski LBERKOWS PNETACD
Vern Horstman VHORSTMA
C406 Lucy Berkowski LBERKOWS PNETACD
Vern Horstman VHORSTMA
C407 Lucy Berkowski LBERKOWS PNETACD
</TABLE>
30 OF 38
<PAGE> 50
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
Dept. Ops Account
# Loc Charge Requisitioner Requisitioner Finance Finance HR
(AIS) Code* Name Profs ID Name Profs ID Name
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
13-0933-PNET
25A-2744-PNET
C409 5100 12-0970-PNET Carlos Hernandez CHERNAND Terry Bolthouse TBOLTHOU Anne Marie DeGrazia
13-0933-PNET
25A-2744-PNET
C414 5100 12-0970-PNET Jay Baker JBAKER6 Terry Bolthouse TBOLTHOU Malcom Suber
13-0933-PNET
25A-2744-PNET
C415 5100 12-0970-PNET Bill Mikkelsen WMIKKEL1 Terry Bolthouse TBOLTHOU Anne Marie DeGrazia
13-0933-PNET
25A-2744-PNET
C417 5100 12-0970-PNET Dennis Smith DSMITH25 Terry Bolthouse TBOLTHOU Vern Horstman
13-0933-PNET
25A-2744-PNET
C418 5100 12-0970-PNET TBD TBD TBD TBD Vern Horstman
13-0933-PNET
25A-2744-PNET
C419 5100 12-0970-PNET TBD TBD TBD TBD Vern Horstman
13-0933-PNET
25A-2744-PNET
G003 5100 12-0970-PNET Tim Tiernan TTIERNAN Craig Smith CSMITH10 David Koehlinger
13-0933-PNET
25A-2744-PNET
G004 5100 12-0970-PNET Tom Miree TMIREE Craig Smith CSMITH10 David Koehlinger
13-0933-PNET
25A-2744-PNET
G005, G705 5100 12-0970-PNET Ira Russell IRUSSELL Craig Smith CSMITH10 David Koehlinger
13-0933-PNET
25A-2744-PNET
G006 5100 12-0970-PNET Dennis Henderson DHENDER1 Craig Smith CSMITH10 David Koehlinger
13-0933-PNET
25A-2744-PNET
G007 5100 12-0970-PNET Jim Grzybowski JGRZYBOW Craig Smith CSMITH10 David Koehlinger
13-0933-PNET
25A-2744-PNET
G008 5100 12-0970-PNET Hugh Buchanan HBUCHANA Craig Smith CSMITH10 David Koehlinger
13-0933-PNET
25A-2744-PNET George Johnson
G100 5100 12-0970-PNET Bill Caldwell WCALDWELL Craig Smith CSMITH10 David Cook
13-0933-PNET
25A-2744-PNET George Johnson
G101 5100 12-0970-PNET Mike Sammut MSAMMUT Craig Smith CSMITH10 David Cook
13-0933-PNET
25A-2744-PNET George Johnson
G102 5100 12-0970-PNET Joe Uhl JUHL Craig Smith CSMITH10 David Cook
13-0933-PNET
25A-2744-PNET George Johnson
G103 5100 12-0970-PNET William Schwark WSCHWARK Craig Smith CSMITH10 David Cook
13-0933-PNET
25A-2744-PNET George Johnson
G104 5100 12-0970-PNET Larry Maier LMAIER Craig Smith CSMITH10 David Cook
13-0933-PNET
25A-2744-PNET George Johnson
G105 5100 12-0970-PNET Elaine Haas EHAAS Craig Smith CSMITH10 David Cook
13-0933-PNET
25A-2744-PNET George Johnson
G106 5100 12-0970-PNET Tom Bryans TBRYANS Craig Smith CSMITH10 David Cook
13-0933-PNET
25A-2744-PNET George Johnson
G107 5100 12-0970-PNET Ron Waterloo RWATERLO Craig Smith CSMITH10 David Cook
13-0933-PNET
25A-2744-PNET George Johnson
G111 5100 12-0970-PNET Ralph Youngblood RYOUNGBL Craig Smith CSMITH10 David Cook
13-0933-PNET
25A-2744-PNET George Johnson
G112 5100 12-0970-PNET Debra Yeager DYEAGER1 Craig Smith CSMITH10 David Cook
</TABLE>
<TABLE>
<CAPTION>
Dept. HR
# Profs ID Activity Mailbox
- ------------------------------------------------------------------------
<S> <C> <C> <C>
C409 ADEGRAZI PNETACD
C414 MSUBER PNETACD
C415 ADEGRAZI PNETACD
C417 VHORSTMA PNETACD
C418 VHORSTMA PNETACD
C419 VHORSTMA PNETACD
G003 DKOEHLIN Automotive Component Division PNETACD
G004 DKOEHLIN Automotive Component Division PNETACD
G005, G705 DKOEHLIN Automotive Component Division PNETACD
G006 DKOEHLIN Automotive Component Division PNETACD
G007 DKOEHLIN Automotive Component Division PNETACD
G008 DKOEHLIN Automotive Component Division PNETACD
GJOHNSO2
G100 DCOOK11 Automotive Component Division PNETACD
GJOHNSO2
G101 DCOOK11 Automotive Component Division PNETACD
GJOHNSO2
G102 DCOOK11 Automotive Component Division PNETACD
GJOHNSO2
G103 DCOOK11 Automotive Component Division PNETACD
GJOHNSO2
G104 DCOOK11 Automotive Component Division PNETACD
GJOHNSO2
G105 DCOOK11 Automotive Component Division PNETACD
GJOHNSO2
G106 DCOOK11 Automotive Component Division PNETACD
GJOHNSO2
G107 DCOOK11 Automotive Component Division PNETACD
GJOHNSO2
G111 DCOOK11 Automotive Component Division PNETACD
GJOHNSO2
G112 DCOOK11 Automotive Component Division PNETACD
</TABLE>
31 of 38
<PAGE> 51
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
Dept. Ops Account
# Loc Charge Requisitioner Requisitioner Finance Finance HR
(AIS) Code* Name Profs ID Name Profs ID Name
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
13-0933-PNET
25A-2744-PNET George Johnson
G113 5100 12-0970-PNET Doug Park DPARK1 Craig Smith CSMITH10 David Cook
George Johnson
G116 - G118 5100 13-1050P-G3 Ron Waterloo RWATERLO Craig Smith CSMITH10 David Cook
13-0933-PNET
25A-2744-PNET
G200 5100 12-0970-PNET Bill Mayes WMAYES Craig Smith CSMITH10 David Koehlinger
13-0933-PNET
25A-2744-PNET
G201 5100 12-0970-PNET Bob Carlisle RCARISL Craig Smith CSMITH10 David Koehlinger
13-0933-PNET
25A-2744-PNET
G202 5100 12-0970-PNET Kwang Park KPARK Craig Smith CSMITH10 David Koehlinger
13-0933-PNET
25A-2744-PNET
G204 5100 12-0970-PNET Don Burch DBURCH Craig Smith CSMITH10 David Koehlinger
13-0933-PNET
25A-2744-PNET
G205 5100 12-0970-PNET Ed Trudeau ETRUDEAU Craig Smith CSMITH10 David Koehlinger
13-0933-PNET
25A-2744-PNET
G207 5100 12-0970-PNET Vito Curcuru VCURCURU Craig Smith CSMITH10 David Koehlinger
13-0933-PNET
25A-2744-PNET
G209 5100 12-0970-PNET Jeff Erlon JERION Craig Smith CSMITH10 David Koehlinger
13-0933-PNET
25A-2744-PNET Vern Horstman
G300 5100 12-0970-PNET Steve Davis SDAVIS4 Craig Smith CSMITH10 Tricia Driver
13-0933-PNET
25A-2744-PNET Vern Horstman
G301 5100 12-0970-PNET John Barkley JBARKLE1 Craig Smith CSMITH10 Tricia Driver
13-0933-PNET
25A-2744-PNET Vern Horstman
G306 5100 12-0970-PNET Larry Suchyta LSUCHYTA Craig Smith CSMITH10 Tricia Driver
13-0933-PNET
25A-2744-PNET Vern Horstman
G307 5100 12-0970-PNET Bill Kaiser BKAISER Craig Smith CSMITH10 Tricia Driver
13-0933-PNET
25A-2744-PNET Vern Horstman
G308 5100 12-0970-PNET John Busch JBUSCH Craig Smith CSMITH10 Tricia Driver
13-0933-PNET
25A-2744-PNET Vern Horstman
G309 5100 12-0970-PNET Bill Diedrich WDIEDRIC Craig Smith CSMITH10 Tricia Driver
13-0933-PNET
25A-2744-PNET Vern Horstman
G310 5100 12-0970-PNET Ray Farah RFARAH Craig Smith CSMITH10 Tricia Driver
13-0933-PNET
25A-2744-PNET Vern Horstman
G311 5100 12-0970-PNET Janilla Lee JLEE Craig Smith CSMITH10 Tricia Driver
13-0933-PNET Tom Nation TNATION
25A-2744-PNET Vern Horstman
G401 5100 12-0970-PNET Craig Smith CSMITH10 Tricia Driver
13-0933-PNET
25A-2744-PNET Vern Horstman
G402 5100 12-0970-PNET Ralph Emmons REMMONS Craig Smith CSMITH10 Tricia Driver
13-0933-PNET
25A-2744-PNET Vern Horstman
G403 5100 12-0970-PNET Mark Winters MWINTERS Craig Smith CSMITH10 Tricia Driver
13-0933-PNET
25A-2744-PNET
G601 5100 12-0970-PNET TBD TBD Craig Smith CSMITH10 Pamela Darin Pierce
13-0933-PNET
25A-2744-PNET David Cook
G602 5100 12-0970-PNET Jim Mazurek JMAZURE1 Craig Smith CSMITH10 George Johnson
G647-G469, G656 5100 13-0933-PNET Len Tedesco LTEDESCO Craig Smith CSMITH10 Carl Britsch
</TABLE>
<TABLE>
<CAPTION>
Dept. HR Activity Mailbox
# Profs ID
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
GJOHNSO2
G113 DCOOK11 Automotive Component Division PNETACD
GJOHNSO2
G116 - G118 DCOOK11 Automotive Component Division PNETACD
G200 DKOEHLIN Automotive Component Division PNETACD
G201 DKOEHLIN Automotive Component Division PNETACD
G202 DKOEHLIN Automotive Component Division PNETACD
G204 DKOEHLIN Automotive Component Division PNETACD
G205 DKOEHLIN Automotive Component Division PNETACD
G207 DKOEHLIN Automotive Component Division PNETACD
G209 DKOEHLIN Automotive Component Division PNETACD
VHORSTMA
G300 TDRIVER Automotive Component Division PNETACD
VHORSTMA
G301 TDRIVER Automotive Component Division PNETACD
VHORSTMA
G306 TDRIVER Automotive Component Division PNETACD
VHORSTMA
G307 TDRIVER Automotive Component Division PNETACD
VHORSTMA
G308 TDRIVER Automotive Component Division PNETACD
VHORSTMA
G309 TDRIVER Automotive Component Division PNETACD
VHORSTMA
G310 TDRIVER Automotive Component Division PNETACD
VHORSTMA
G311 TDRIVER Automotive Component Division PNETACD
VHORSTMA
G401 TDRIVER Automotive Component Division PNETACD
VHORSTMA
G402 TDRIVER Automotive Component Division PNETACD
VHORSTMA
G403 TDRIVER Automotive Component Division PNETACD
G601 PPIERCE Automotive Component Division PNETACD
DCOOK11
G602 GJOHNSO2 Automotive Component Division PNETACD
G647-G469, G656 CBRITSCH Automotive Component Division PNETACD
</TABLE>
32 of 38
<PAGE> 52
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
Dept. Ops Account
# Loc Charge Requisitioner Requisitioner Finance Finance HR
(AIS) Code* Name Profs ID Name Profs ID Name
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
13-0933-PNET
25A-2744-PNET
G650 5100 12-0970-PNET Bob Haase BHAASE1 Craig Smith CSMITH10 TBD
13-0933-PNET
25A-2744-PNET
G651 5100 12-0970-PNET Doug Sendelbach DSANDELB Craig Smith CSMITH10 Pamela Darin Pierce
13-0933-PNET
25A-2744-PNET
G652 5100 12-0970-PNET Dana Sims DSIMS Craig Smith CSMITH10 Lori Schmitz
13-0933-PNET
25A-2744-PNET
G653 5100 12-0970-PNET Dennis Rhee DRHEE Craig Smith CSMITH10 Lori Schmitz
13-0933-PNET
25A-2744-PNET
G654 5100 12-0970-PNET Margaret Woodhouse DSIMS Craig Smith CSMITH10 Lori Schmitz
13-0933-PNET
25A-2744-PNET
G655 5100 12-0970-PNET Howard Kell HKELL Craig Smith CSMITH10 Lori Schmitz
13-0933-PNET
25A-2744-PNET
G657 5100 12-0970-PNET Walt Clark WCLARK3 Craig Smith CSMITH10 Carl Britsch
13-0933-PNET
25A-2744-PNET
G658 5100 12-0970-PNET Scott Simpson SSIMPSO3 Craig Smith CSMITH10 Carl Britsch
13-0933-PNET
25A-2744-PNET
G659 5100 12-0970-PNET Bob Morris RMORRIS1 Craig Smith CSMITH10 Carl Britsch
13-0933-PNET
25A-2744-PNET
G660 5100 12-0970-PNET Tom Gioia TGIOIA Craig Smith CSMITH10 Pamela Darin Pierce
13-0933-PNET
25A-2744-PNET
G661 5100 12-0970-PNET Mike Medvec MMEDVEC Craig Smith CSMITH10 Pamela Darin Pierce
13-0933-PNET
25A-2744-PNET
G662 5100 12-0970-PNET Bob Swanston RSWANSTO Craig Smith CSMITH10 TBD
13-0933-PNET
25A-2744-PNET
G663 5100 12-0970-PNET Michael Maloney MMALONEY Craig Smith CSMITH10 Lori Schmitz
13-0933-PNET
25A-2744-PNET
G664 5100 12-0970-PNET Dudley Wass DWASS Craig Smith CSMITH10 Lori Schmitz
13-0933-PNET
25A-2744-PNET
G665 5100 12-0970-PNET TBD TBD Craig Smith CSMITH10 Cyndi Selke
13-0933-PNET
25A-2744-PNET Lori Schmitz
G675 5100 12-0970-PNET Doug Gress DGRESS Craig Smith CSMITH10 David Cook
13-0933-PNET
25A-2744-PNET Lori Schmitz
G676 5100 12-0970-PNET Mark Turner MTURNER4 Craig Smith CSMITH10 David Cook
13-0933-PNET
G702, G703, G736- 25A-2744-PNET
G741 5100 12-0970-PNET Bill Craft WCRAFT Craig Smith CSMITH10 Gina Gaidikas
13-0933-PNET
25A-2744-PNET Mike Bragalone MBRAGALO
G706 5100 12-0970-PNET Roger Saillant RSAILLAN Craig Smith CSMITH10 Anne Marie DeGrazia
13-0933-PNET
25A-2744-PNET
G710, G713, G755 5100 12-0970-PNET Eugene Greenstein EGREENST Craig Smith CSMITH10 Gina Gaidikas
13-0933-PNET
25A-2744-PNET
G711 5100 12-0970-PNET Don Fesko MBARRON Craig Smith CSMITH10 Karen Strong
13-0933-PNET
25A-2744-PNET
G714 5100 12-0970-PNET Roger Saillant RSAILLAN Craig Smith CSMITH10 Karen Strong
</TABLE>
<TABLE>
<CAPTION>
Dept. HR Activity Mailbox
# Profs ID
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
G650 TBD Automotive Component Divisions PNETACD
G651 PPIERCE Automotive Component Divisions PNETACD
G652 LSCHMITZ Automotive Component Divisions PNETACD
G653 LSCHMITZ Automotive Component Divisions PNETACD
G654 LSCHMITZ Automotive Component Divisions PNETACD
G655 LSCHMITZ Automotive Component Divisions PNETACD
G657 CBRITSCH Automotive Component Divisions PNETACD
G658 CBRITSCH Automotive Component Divisions PNETACD
G659 CBRITSCH Automotive Component Divisions PNETACD
G660 PPIERCE Automotive Component Divisions PNETACD
G661 PPIERCE Automotive Component Divisions PNETACD
G662 TBD Automotive Component Divisions PNETACD
G663 LSCHMITZ Automotive Component Divisions PNETACD
G664 LSCHMITZ Automotive Component Divisions PNETACD
G665 DSKALSKI Automotive Component Divisions PNETACD
LSCHMITZ
G675 DCOOK11 Automotive Component Divisions PNETACD
LSCHMITZ
G676 DCOOK11 Automotive Component Divisions PNETACD
G702, G703, G736-
G741 GGALDIKA Automotive Component Divisions PNETACD
G706 ADEGRAZI Automotive Component Divisions PNETACD
G710, G713, G755 GGALDIKA Automotive Component Divisions PNETACD
G711 KSTRONG1 Automotive Component Divisions PNETACD
G714 KSTRONG1 Automotive Component Divisions PNETACD
</TABLE>
33 OF 38
<PAGE> 53
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
Dept. Ops Account Requisitioner Requistioner Finance Finance HR
# Loc Charge Name Profs ID Name Profs ID Name
(AIS) Code*
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
13-0933-PNET
25A-2744-PNET
G742 5100 12-0970-PNET Ken Bloom KBLOOM Craig Smith CSMITH10 Gina Galdikas
13-0933-PNET
25A-2744-PNET Anne Marie DeGrazia
G753, G754 5100 12-0970-PNET Ken Bloom KBLOOM Craig Smith CSMITH10 Gina Galdikas
S100 5100 13-0970-PNET Jim Englehart JENGLEHA Steve Davis WDAVIS20 Paulette Moreno
S200 5100 13-0970-PNET TBD TBD Steve Davis WDAVIS20 Paulette Moreno
S300, S310, S420,
S422 5100 13-0970-PNET D. Velliky DVELLIKY Steve Davis WDAVIS20 Paulette Moreno
S350 - S352 5100 13-0970-PNET R. Pettit RPETTIT1 Steve Davis WDAVIS20 Paulette Moreno
S400 5100 13-0970-PNET M. Inglis MINGLIS2 Steve Davis WDAVIS20 Paulette Moreno
S405 5100 13-0970-PNET R. Belauslegul RBELAUST Steve Davis WDAVIS20 Paulette Moreno
S415 5100 13-0970-PNET R. Ogren ROGREN Steve Davis WDAVIS20 Paulette Moreno
S421 5100 13-0970-PNET V. Arrak VARRAK Steve Davis WDAVIS20 Paulette Moreno
S430, S432 5100 13-0970-PNET R. Westby RWESTBY Steve Davis WDAVIS20 Paulette Moreno
S431 5100 13-0970-PNET T. Brannon TBRANNON Steve Davis WDAVIS20 Paulette Moreno
S433 5100 13-0970-PNET E. Dickinson EDICKENS Steve Davis WDAVIS20 Paulette Moreno
S434 5100 13-0970-PNET S. Hunter SHUNTER1 Steve Davis WDAVIS20 Paulette Moreno
S440 - S456 5100 13-0970-PNET S. Pitts SPITTS2 Steve Davis WDAVIS20 Paulette Moreno
S441 5100 13-0970-PNET S. Goldblum SGOLDBLU Steve Davis WDAVIS20 Paulette Moreno
S442 5100 13-0970-PNET R. Oye ROYE Steve Davis WDAVIS20 Paulette Moreno
S443 5100 13-0970-PNET B. Vought BVOUGHT Steve Davis WDAVIS20 Paulette Moreno
S444 5100 13-0970-PNET R. Stevens RSTEVEN1 Steve Davis WDAVIS20 Paulette Moreno
S446 5100 13-0970-PNET K. Flegenschuh KFIEGENS Steve Davis WDAVIS20 Paulette Moreno
S454 5100 13-0970-PNET B. Gale BGALE1 Steve Davis WDAVIS20 Paulette Moreno
S457 5100 13-0970-PNET V. Zanardelli VZANARDE Steve Davis WDAVIS20 Paulette Moreno
S460, S491 - S496 5100 13-0970-PNET R. Anderson RANDERS7 Steve Davis WDAVIS20 Paulette Moreno
S461 5100 13-0970-PNET C. Kuzlemko CKUZIEMK Steve Davis WDAVIS20 Paulette Moreno
S462 5100 13-0970-PNET R. Billington RBILLING Steve Davis WDAVIS20 Paulette Moreno
S470 5100 13-0970-PNET C. Centivany CCENTIVA Steve Davis WDAVIS20 Paulette Moreno
S471 5100 13-0970-PNET R. Reichart RREICHER Steve Davis WDAVIS20 Paulette Moreno
S480 5100 13-0970-PNET A. Edwards AEDWARD7 Steve Davis WDAVIS20 Paulette Moreno
S481 5100 13-0970-PNET T. Watson TWATSON1 Steve Davis WDAVIS20 Paulette Moreno
S490 5100 13-0970-PNET J. Koszewnik JKOSZEWN Steve Davis WDAVIS20 Paulette Moreno
S494 5100 13-0970-PNET R. Pinnock RPINNOCK Steve Davis WDAVIS20 Paulette Moreno
S495 5100 13-0970-PNET J. Sieg JSIEG Steve Davis WDAVIS20 Paulette Moreno
S500 - S503 5100 13-0970-PNET J. Hinds JHINDS Steve Davis WDAVIS20 Paulette Moreno
S510 - S513 5100 13-0970-PNET D. Hall DHALL1 Steve Davis WDAVIS20 Paulette Moreno
S520 - S523 5100 13-0970-PNET L. Shedden LSHEDDEN Steve Davis WDAVIS20 Paulette Moreno
S700 5100 13-0970-PNET R. Matulka RMATULKA Steve Davis WDAVIS20 Paulette Moreno
S705 5100 13-0970-PNET M. Kilpin MKILPIN1 Steve Davis WDAVIS20 Paulette Moreno
S710 5100 13-0970-PNET J. Kirsch JKIRSCH Steve Davis WDAVIS20 Paulette Moreno
S720 5100 13-0970-PNET K. Dutta KDUTTA Steve Davis WDAVIS20 Paulette Moreno
S730 5100 13-0970-PNET L. Kummer LKUMMER Steve Davis WDAVIS20 Paulette Moreno
S740 5100 13-0970-PNET E. Ostrowski EOSTROW1 Steve Davis WDAVIS20 Paulette Moreno
S750 5100 13-0970-PNET A. Hyde AHYDE Steve Davis WDAVIS20 Paulette Moreno
S755 5100 13-0970-PNET K. Holdcroft KHOLDCRO Steve Davis WDAVIS20 Paulette Moreno
S760 5100 13-0970-PNET D. Leanhart DLEANHAR Steve Davis WDAVIS20 Paulette Moreno
S770 5100 13-0970-PNET S. Dehne SDEHNE Steve Davis WDAVIS20 Paulette Moreno
S780 5100 13-0970-PNET V. Chaudhrl VCHAUDHR Steve Davis WDAVIS20 Paulette Moreno
S790 5100 13-0970-PNET D. Roggenkamp DROGGENK Steve Davis WDAVIS20 Paulette Moreno
S900, S910, S912,
S999 5100 13-0970-PNET Lisa Beaudin LBEAUDO1 Steve Davis WDAVIS20 Paulette Moreno
S911 5100 13-0970-PNET Jay Dull JDULL Steve Davis WDAVIS20 Paulette Moreno
Tom Baughman TBAUGHMA
John Shelton JSHELTON
Matt Demars MDEMARS
Nick Kazan NKAZAN
Eric Daby EDABY Len Speranza* LSPERANZ
W001 - W999 5100 13-0933-PNET Leo Shedden LSHEDDEN Nick Perssson* NPERSSON* Paulette Moreno
Len Speranza* LSPERANZ
W580 5100 13-0933-PNET Paul Lewinski PLEWINSK Nick Perssson* NPERSSON* Paulette Moreno
Rick Soisson* RSOISSON
X001 - X999 5100 13-0933-PNET Ken Kohrs KKOHRS John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS Rick Soisson* RSOISSON
X100 - X109 5100 13-0933-PNET Mike Zevalkink MZEVALKI John Green* JGREEN Paulette Moreno
</TABLE>
<TABLE>
<CAPTION>
Dept. HR Activitiy Mailbox
# Profs ID
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
G742 GGALDIKA Automotive Component Division PNETACD
G753, G754 ADEGRAZI Automotive Component Division PNETACD
S100 GGALDIKA Automotive Component Division PNETDEV
S200 PMORENO** VC PNETDEV
S300, S310, S420,
S422 PMORENO** VC PNETDEV
S350 - S352 PMORENO** VC PNETDEV
S400 PMORENO** VC PNETDEV
S405 PMORENO** Product Strategy PNETDEV
S415 PMORENO** Product Strategy PNETDEV
S421 PMORENO** Product Strategy PNETDEV
S430, S432 PMORENO** Product Strategy PNETDEV
S431 PMORENO** Product Strategy PNETDEV
S433 PMORENO** Product Strategy PNETDEV
S434 PMORENO** Product Strategy PNETDEV
S440 - s456 PMORENO** Product Strategy PNETDEV
S441 PMORENO** Product Strategy PNETDEV
S442 PMORENO** Product Strategy PNETDEV
S443 PMORENO** Product Strategy PNETDEV
S444 PMORENO** Product Strategy PNETDEV
S446 PMORENO** Product Strategy PNETDEV
S454 PMORENO** Product Strategy PNETDEV
S457 PMORENO** Product Strategy PNETDEV
S460, S491 - S496 PMORENO** Product Strategy PNETDEV
S461 PMORENO** Product Strategy PNETDEV
S462 PMORENO** Product Strategy PNETDEV
S470 PMORENO** Product Strategy PNETDEV
S471 PMORENO** Product Strategy PNETDEV
S480 PMORENO** Product Strategy PNETDEV
S481 PMORENO** Product Strategy PNETDEV
S490 PMORENO** Product Strategy PNETDEV
S494 PMORENO** Product Strategy PNETDEV
S495 PMORENO** Product Strategy PNETDEV
S500 - S503 PMORENO** Product Strategy PNETDEV
S510 - S513 PMORENO** Large Front Wheel Drive PNETDEV
S520 - S523 PMORENO** Commercial Truck PNETDEV
S700 PMORENO** VC PNETDEV
S705 PMORENO** VC PNETDEV
S710 PMORENO** VC PNETDEV
S720 PMORENO** Product Strategy PNETDEV
S730 PMORENO** Product Strategy PNETDEV
S740 PMORENO** Product Strategy PNETDEV
v
S750 PMORENO** Product Strategy PNETDEV
S755 PMORENO** Product Strategy PNETDEV
S760 PMORENO** Product Strategy PNETDEV
S770 PMORENO** Product Strategy PNETDEV
S780 PMORENO** VC PNETDEV
S790 PMORENO** VC PNETDEV
S900, S910, S912,
S999 PMORENO** VC PNETDEV
S911 PMORENO** Product Strategy PNETDEV
WD001 - W999 PMORENO** VC PNETDEV
W580 PMORENO** VC PNETDEV
X001 - X999 PMORENO** VC PNETDEV
X100 - X109 PMORENO** VC PNETDEV
</TABLE>
34 of 38
<PAGE> 54
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
Dept. Ops Account
# Loc Charge Requisitioner Requisitioner Finance Finance HR
(AIS) Code* Name Profs ID Name Profs ID Name
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ken Kohrs KKOHRS
Mike Zevalkink MZEVALKI Rick Solsson* RSOLSSON
X110 5100 13-0933-PNET Dave Marinaro DMARINAR John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Mike Zevalkink MZEVALKI Rick Solsson* RSOLSSON
X111 5100 13-0933-PNET Brent Egleston BEGLESTO John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS Rick Solsson* RSOLSSON
X120 5100 13-0933-PNET Phil Martens PMARTENS John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Phil Martens PMARTENS Rick Solsson* RSOLSSON
X121 5100 13-0933-PNET Brent Egleston BEGLESTO John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Phil Martens PMARTENS Rick Solsson* RSOLSSON
X122 5100 13-0933-PNET Don Baker DBAKER4 John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS Rick Solsson* RSOLSSON
X130 5100 13-0933-PNET Jeff Ziegler JZIEGLER John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS Rick Solsson* RSOLSSON
X170 5100 13-0933-PNET Chruck Teske CTESKE John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS Rick Solsson* RSOLSSON
X200 - X269 5100 13-0933-PNET Mary Ellen Hyde MHEYDE John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Mary Ellen Hyde MHEYDE Rick Solsson* RSOLSSON
X210 5100 13-0933-PNET Barry Johnson BJOHNSO9 John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Mary Ellen Hyde MHEYDE
Barry Johnson BJOHNSO9 Rick Solsson* RSOLSSON
X211 5100 13-0933-PNET Dave Honiss DHONISS John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Mary Ellen Hyde MHEYDE Rick Solsson* RSOLSSON
X220 5100 13-0933-PNET Dave Brockman DBROCKM1 John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Mary Ellen Hyde MHEYDE
Dave Brockman DBROCKM1 Rick Solsson* RSOLSSON
X221 5100 13-0933-PNET Jim Croft JCROFT John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Mary Ellen Hyde MHEYDE Rick Solsson* RSOLSSON
X230 5100 13-0933-PNET Andrew Pollitt APOLLITT John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Mary Ellen Hyde MHEYDE Rick Solsson* RSOLSSON
X270 5100 13-0933-PNET Lou Ferraresi LFERRARE John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS Rick Solsson* RSOLSSON
X400 - X469 5100 13-0933-PNET Bob Widmer RWIDMER1 John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Bob Widmer RWIDMER1 Rick Solsson* RSOLSSON
X410 5100 13-0933-PNET Charles Repp CREPP John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Bob Widmer RWIDMER1
Charles Repp CREPP Rick Solsson* RSOLSSON
X411 5100 13-0933-PNET Time Doyle TDOYLE3 John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Bob Widmer RWIDMER1 Rick Solsson* RSOLSSON
X420 5100 13-0933-PNET Janine Bay JBAY John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Bob Widmer RWIDMER1
Janine Bay JBAY Rick Solsson* RSOLSSON
X421 5100 13-0933-PNET Mike Ferrence MFERRENC John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Bob Widmer RWIDMER1 Rick Solsson* RSOLSSON
X430 5100 13-0933-PNET Nancy Giola NGIOIA John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Bob Widmer RWIDMER1 Rick Solsson* RSOLSSON
X440 5100 13-0933-PNET Ian Bradley IBRADLEY John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS
Bob Widmer RWIDMER1 Rick Solsson* RSOLSSON
X470 5100 13-0933-PNET Jan Smith JSMITH17 John Green* JGREEN Paulette Moreno
Ken Kohrs KKOHRS Rick Solsson* RSOLSSON
X500 - X579 5100 13-0933-PNET Jack Paskus JPASKUS John Green* JGREEN Paulette Moreno
<CAPTION>
Dept. HR Activity Mailbox
# Profs ID
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
X110 PMORENO** VC PNETDEV
X111 PMORENO** VC PNETDEV
X120 PMORENO** VC PNETDEV
X121 PMORENO** VC PNETDEV
X122 PMORENO** VC PNETDEV
X130 PMORENO** VC PNETDEV
X170 PMORENO** VC PNETDEV
X200 - X269 PMORENO** VC PNETDEV
X210 PMORENO** VC PNETDEV
X211 PMORENO** VC PNETDEV
X220 PMORENO** VC PNETDEV
X221 PMORENO** VC PNETDEV
X230 PMORENO** VC PNETDEV
X270 PMORENO** VC PNETDEV
X400 - X469 PMORENO** VC PNETDEV
X410 PMORENO** VC PNETDEV
X411 PMORENO** VC PNETDEV
X420 PMORENO** VC PNETDEV
X421 PMORENO** VC PNETDEV
X430 PMORENO** VC PNETDEV
X440 PMORENO** VC PNETDEV
X470 PMORENO** VC PNETDEV
X4500 - X579 PMORENO** VC PNETDEV
</TABLE>
35 of 38
<PAGE> 55
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
DEPT OPS ACCOUNT REQUISTIONER REQUISTIONER FINANCE FINANCE
# LOC CHARGE NAME PROFS ID NAME PROFS ID
(AIS) CODE*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ken Kohrs KKOHRS
Jack Paskus JPASKUS Rick Soisson* RSOISSON
X510 5100 13-0933-PNET Mike Renucci MRENUCCI John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Mike Renucci MRENUCCI Rick Soisson* RSOISSON
X511 5100 13-0933-PNET Kurt Achenba KACHENBA John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Mike Renucci MRENUCCI Rick Soisson* RSOISSON
X512 5100 13-0933-PNET Ed Nalodka ENALODKA John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Mike Renucci MRENUCCI Rick Soisson* RSOISSON
X513 5100 13-0933-PNET John Bergdahl JBERGDAH John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Mike Renucci MRENUCCI Rick Soisson* RSOISSON
X514 5100 13-0933-PNET Larry Lloyd LLLOYD John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Mike Renucci MRENUCCI Rick Soisson* RSOISSON
X515 5100 13-0933-PNET Jim Piontek JPIONTEK John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Mike Renucci MRENUCCI Rick Soisson* RSOISSON
X516 5100 13-0933-PNET Paul Giltinan PGILTINA John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Mike Renucci MRENUCCI Rick Soisson* RSOISSON
X517 5100 13-0933-PNET Bob Sayles RSAYLES John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Mike Renucci MRENUCCI Rick Soisson* RSOISSON
X518 5100 13-0933-PNET Bob Sayles RSAYLES John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS Rick Soisson* RSOISSON
X530 5100 13-0933-PNET Bob Harmer RHARMER1 John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Bob Harmer RHARMER1 Rick Soisson* RSOISSON
X531 5100 13-0933-PNET Steve Kozak SKOZAK John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Bob Harmer RHARMER1 Rick Soisson* RSOISSON
X532 5100 13-0933-PNET James Mikola JMIKOLA John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Bob Harmer RHARMER1 Rick Soisson* RSOISSON
X533 5100 13-0933-PNET Phil Ernzen PERNZEN1 John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Bob Harmer RHARMER1 Rick Soisson* RSOISSON
X534 5100 13-0933-PNET Ric Borsos RBORSOS John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Bob Harmer RHARMER1 Rick Soisson* RSOISSON
X535 5100 13-0933-PNET John Edwards JEDWARD5 John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Bob Harmer RHARMER1 Rick Soisson* RSOISSON
X536 5100 13-0933-PNET Mike Reed MREED1 John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS Rick Soisson* RSOISSON
X540 5100 13-0933-PNET Mike Bullion MBULLION John Green* JGREEN
<CAPTION>
DEPT HR HR
# NAME PROFS IS ACTIVITY MAILBOX
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
X510 Paulette Moreno PMORENO** VC PNETDEV
X511 Paulette Moreno PMORENO** VC PNETDEV
X512 Paulette Moreno PMORENO** VC PNETDEV
X513 Paulette Moreno PMORENO** VC PNETDEV
X514 Paulette Moreno PMORENO** VC PNETDEV
X515 Paulette Moreno PMORENO** VC PNETDEV
X516 Paulette Moreno PMORENO** VC PNETDEV
X517 Paulette Moreno PMORENO** VC PNETDEV
X518 Paulette Moreno PMORENO** VC PNETDEV
X530 Paulette Moreno PMORENO** VC PNETDEV
X531 Paulette Moreno PMORENO** VC PNETDEV
X532 Paulette Moreno PMORENO** VC PNETDEV
X533 Paulette Moreno PMORENO** VC PNETDEV
X534 Paulette Moreno PMORENO** VC PNETDEV
X535 Paulette Moreno PMORENO** VC PNETDEV
X536 Paulette Moreno PMORENO** VC PNETDEV
X540 Paulette Moreno PMORENO** VC PNETDEV
</TABLE>
33 OF 38
<PAGE> 56
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
DEPT OPS ACCOUNT REQUISTIONER REQUISTIONER FIANACE FINANCE
# LOC CHARGE NAME PROFS ID NAME PROFS ID
(AIS) CODE*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Mike Bullion MBULLION Rick Solsson* RSOLSSON
X541 5100 13-0933-PNET Errol Jackson EJACKSON John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Mike Bullion MBULLION Rick Solsson* RSOLSSON
X542 5100 13-0933-PNET Vic DeGrazia VDEGRAZI John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Mike Bullion MBULLION Rick Solsson* RSOLSSON
X543 5100 13-0933-PNET Julie Petrucci JPETRUCC John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Mike Bullion MBULLION Rick Solsson* RSOLSSON
X544 5100 13-0933-PNET Connie Gutowski CGUTOWS John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Mike Bullion MBULLION Rick Solsson* RSOLSSON
X545 5100 13-0933-PNET William Faulk WFAULK John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS
Mike Bullion MBULLION Rick Solsson* RSOLSSON
X546 5100 13-0933-PNET Ron Clayton RCLAYTON John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS Rick Solsson* RSOLSSON
X550 5100 13-0933-PNET Bob Rankin BRANKIN John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS Rick Solsson* RSOLSSON
X551 5100 13-0933-PNET Tim Hoen THOEN John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS Rick Solsson* RSOLSSON
X552 5100 13-0933-PNET Harold Lowman HLOWMAN John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS Rick Solsson* RSOLSSON
X553 5100 13-0933-PNET John Lombardi JLOMBARD John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS Rick Solsson* RSOLSSON
X560 5100 13-0933-PNET Tom Morris TMORRIS John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS Rick Solsson* RSOLSSON
X561 5100 13-0933-PNET Tom Breault TBREAULT John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS Rick Solsson* RSOLSSON
X562 5100 13-0933-PNET Larry Laliberte LLALIBER John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS Rick Solsson* RSOLSSON
X563 5100 13-0933-PNET William Koche BKOCHE John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS Rick Solsson* RSOLSSON
X566 5100 13-0933-PNET John Bicanich JBICANIC John Green* JGREEN
Ken Kohrs KKOHRS
Jack Paskus JPASKUS Rick Solsson* RSOLSSON
X580 5100 13-0933-PNET Shirleen Holland SHOLLAND John Green* JGREEN
Z130,Z131,Z513
Z533,Z543,Z551
Z560,Z561 5100 13-0933-PNET Jeremy Main JMAIN Mark Schroeder* MSCHROED
Z320,Z340,Z516,
Z530,Z540,Z552,
Z562,Z700,Z702,
Z800 5100 13-0933-PNET Kaywin Goodman KGOODMAN Mark Schroeder* MSCHROED
Z330,Z331,Z515,
Z535,Z545 5100 13-0933-PNET Tony Pixton TPIXTON Mark Schroeder* MSCHROED
Z350 5100 13-0933-PNET Richard Folkson RFOLKSON Mark Schroeder* MSCHROED
Z410,Z411,Z538,
Z535,Z564,Z565,
Z701 5100 13-0933-PNET Steven Carl SCARL Mark Schroeder* MSCHROED
Z420,Z421,Z539 5100 13-0933-PNET Martin Lunt MLUNT1 Mark Schroeder* MSCHROED
<CAPTION>
DEPT HR HR
# NAME PROFS ID ACTIVITY MAILBOX
<S> <C> <C> <C> <C>
X541 Paulette Moreno PMORENO** VC PNETDEV
X542 Paulette Moreno PMORENO** VC PNETDEV
X543 Paulette Moreno PMORENO** VC PNETDEV
X544 Paulette Moreno PMORENO** VC PNETDEV
X545 Paulette Moreno PMORENO** VC PNETDEV
X546 Paulette Moreno PMORENO** VC PNETDEV
X550 Paulette Moreno PMORENO** VC PNETDEV
X551 Paulette Moreno PMORENO** VC PNETDEV
X552 Paulette Moreno PMORENO** VC PNETDEV
X553 Paulette Moreno PMORENO** VC PNETDEV
X560 Paulette Moreno PMORENO** VC PNETDEV
X561 Paulette Moreno PMORENO** VC PNETDEV
X562 Paulette Moreno PMORENO** VC PNETDEV
X563 Paulette Moreno PMORENO** VC PNETDEV
X566 Paulette Moreno PMORENO** VC PNETDEV
X580 Paulette Moreno PMORENO** VC PNETDEV
Z130,Z131,Z513
Z533,Z543,Z551
Z560,Z561 Paulette Moreno PMORENO** VC PNETDEV
Z320,Z340,Z516,
Z530,Z540,Z552,
Z562,Z700,Z702,
Z800 Paulette Moreno PMORENO** VC PNETDEV
Z330,Z331,Z515,
Z535,Z545 Paulette Moreno PMORENO** VC PNETDEV
Z350 Paulette Moreno PMORENO** VC PNETDEV
Z410,Z411,Z538,
Z535,Z564,Z565,
Z701 Paulette Moreno PMORENO** VC PNETDEV
Z420,Z421,Z539 Paulette Moreno PMORENO** VC PNETDEV
</TABLE>
37 OF 38
<PAGE> 57
ALL APPROVERS FOR PEOPLENET
<TABLE>
<CAPTION>
DEPT OPS ACCOUNT REQUISTIONER REQUISTIONER FINANCE FINANCE
# LOC CHARGE NAME PROFS ID NAME PROFS ID
(AIS) CODE*
<S> <C> <C> <C> <C> <C> <C>
Z430 5100 13-0933-PNET Paul Mascarenas PMASCARE Mark Schroeder* MSCHROED
Z431,Z517,Z537,
Z547,Z554 5100 13-0933-PNET Paul Mascarenas PMASCARE Mark Schroeder* MSCHROED
Steven Carl SCARL
Z518,Z548 5100 13-0933-PNET Martin Lunt MLUNT1 Mark Schroeder* MSCHROED
4800 All TBD Bob Delosh RDELOSH Mick Anderson MANDERS5
4914 TBD TBD Bob Brown BBROWN6 TBD TBD
5002 TBD TBD P. Edwards PEDWARD2 TBD TBD
8302 TBD TBD John Shaw JSHAW5 TBD TBD
C075,C081,C138,
C139 TBD TBD TBD TBD TBD TBD
C423 TBD TBD TBD TBD TBD TBD
C425 TBD TBD TBD TBD TBD TBD
C427 TBD TBD TBD TBD TBD TBD
C429 TBD TBD TBD TBD TBD TBD
GERMANY TBD TBD Janet Hall JHALL8 John Kritzma JKRITZMA
<CAPTION>
DEPT HR HR
# NAME PROFS ID ACTIVITY MAILBOX
<S> <C> <C> <C> <C>
Z430 Paulette Moreno PMORENO** VC PNETDEV
Z431,Z517,Z537,
Z547,Z554 Paulette Moreno PMORENO** VC PNETDEV
Z518,Z548 Paulette Moreno PMORENO** VC PNETDEV
4800 Bud Dengel BDENGEL PNETPTO
4914 TBD TBD PNETPTO
5002 TBD TBD PNETPTO
8302 TBD TBD PNETPTO
C075,C081,C138,
C139 Malcom Suber MSUBER PNETACD
C423 Anne Marie DeGrazia ADEGRAZI PNETACD
C425 Anne Marie DeGrazia ADEGRAZI PNETACD
C427 Anne Marie DeGrazia ADEGRAZI PNETACD
C429 Anne Marie DeGrazia ADEGRAZI PNETACD
GERMANY Bud Dengel BDENGEL PNETPTO
</TABLE>
38 OF 38
<PAGE> 58
MASTER VENDOR AGREEMENT
EXHIBIT 1.2.1
MASTER VENDOR ROLES AND RESPONSIBILITIES
<PAGE> 59
MSX INTERNATIONAL (MSXI) / FORD MOTOR COMPANY
MASTER VENDOR RELATIONSHIP ROLES AND RESPONSIBILITIES MATRIX
The following attachment outlines the roles and responsibilities of the current
PeopleNet program administered by Geometric Results Inc. (left column) versus
the roles and responsibilities of the parties under the Master Vendor contract
(right column) between Ford Motor Company and MSX International.
All changes of roles and responsibilities associated with the Master Vendor
contract are denoted with italics.
<PAGE> 60
CURRENT MSXI - MASTER VENDOR
FORD PURCHASING FORD PURCHASING
COMMODITY MANAGEMENT
- - Supplier Performance Assessment
- - Minority Sourcing Commitments
- - New Supplier Capability Assessment
- - Desourcing Strategy
- - Subcontracting Review and Approval
CONTRACT ADMINISTRATION CONTRACT ADMINISTRATION
- - Business Rule Determination - Business Rule Determination
- - (overtime, training, holidays, - (overtime, training, holidays,
shift premia) shift premia)
- - Economics Evaluation & Approval - Economics Approval
- - Target Rate Analysis & Approval - Target Rate Approval
- - Performance Criteria - Performance Criteria
- PeopleNet - Master Vendor
- Suppliers
- - Launch Approval - Launch Approval-Ford Only
- - Launch Algorithm Determination
- - PeopleNet Fee Structure - PeopleNet Fee Structure
- - Data Owner/System Co-Owner - Data Owner Only
- - Payment - Payment
- PeopleNet - Master Vendor
- Suppliers
- - Intelligent Property - Intelligent Property
- - Process Agreement/Change (What & How) - Process Agreement/Change (What Only)
PROCESS DEVIATION APPROVALS
- - Rate
- - Non-preferred Supplier
- - 90 Day Rule Violations
- - Launch Disputes w/Suppliers
- T & C Escalation
- Rate
QUALITY OF SERVICE RESOLUTION QUALITY OF SERVICE RESOLUTION
(All areas) (Master Vendor Issues Only)
GRI/PEOPLENET MSXI (AS COMMODITY MANAGER)
COMMODITY MANAGEMENT
- Supplier Performance Assessment
- Minority Sourcing Commitments
- New Supplier Capability Assessment
- Desourcing Strategy
- Subcontracting Review and Approval
CONTRACT ADMINISTRATION
- Performance Criteria
- Suppliers
- Launch Algorithm Criteria
- Economics Evaluation
- Target Rate Analysis
- System Owner
- Supplier Payment
<PAGE> 61
PROCESS DEVIATION APPROVALS
* Rate
* Non-preferred Supplier
* 90 Day Rule Violations
* Launch Disputes w/Suppliers
* T & C Escalation
* Rate
QUALITY OF SERVICE RESOLUTION
(All Issues Other Than Master Vendor)
COMMUNICATIONS COMMUNICATIONS
* Process Related (online) * Process Related (online)
TRAINING TRAINING
* Design & Maintenance of Process * Design & Maintenance of Process
Materials Materials
SUPPLIER RELATIONS SUPPLIER RELATIONS
* Algorithm Database Administration * Algorithm Database Administration
* Supplier Contract Administration * Supplier Contract Administration
* Town Hall Meeting Facilitation * Town Hall Meeting Facilitation
* Supplier Performance Reporting & * Supplier Performance Reporting &
Analysis Analysis
* Supplier Service Center * Supplier Service Center
* SupplierNet Administration * SupplierNet Administration
REPORTS & DATA ANALYSIS REPORTS & DATA ANALYSIS
* PeopleNet Performance Measurables * PeopleNet Performance Measurables
* Production Report Maintenance & * Production Report Maintenance &
Administration Administration
* Ad Hoc Reports * Ad Hoc Reports
* Amendment Administration * Amendment Administration
* Post Placement Survey Administration * Post Placement Survey Administration
* PeopleNet Online Distribution * PeopleNet Online Distribution
Administration Administration
ACCOUNTING ACCOUNTING
* Purchase Order * Purchase Order
* Verify, Create and Issue * Verify, Create and Issue
Supplier POs Supplier POs
* Amendment Processing * Amendment Processing
* Timesheets * Timesheets
* Scanning, Correcting & Processing* Scanning, Correcting & Processing
* Rejection Reporting * Rejection Reporting
* Suspense Resolution * Suspense Resolution
* Supplier Payment * Supplier Payment
* Ford Billing File * Ford Billing File
LAUNCH LAUNCH
* Initiate contracts * Initiate contracts
* Establish Launch Plan * Establish Launch Plan
* Facilitate Transition Data Gathering * Facilitate Transition Data Gathering
* Train Customers * Train Customers
* Input of Transition Data Into System * Input of Transition Data Into System
* Establish "Business Rules" * Establish "Business Rules"
<PAGE> 62
PRODUCTION SYSTEMS PRODUCTION SYSTEMS
* Maintain Production Systems * Maintain Production Systems
* Facilitate Releases of Systems * Facilitate Releases of Systems
Revisions Revisions
* Ad Hoc Reports * Ad Hoc Reports
OPERATIONS OPERATIONS
* CPO Creation * CPO Creation
* Obtain Approvals * Obtain Approvals
* Broadcast Order To Suppliers * Broadcast Order To Suppliers
* Input Bids * Input Bids
* Screen Resumes * Screen Resumes
* Ineligible For Reassignment * Ineligible For Reassignment
* 90 Day Rule Violations * 90 Day Rule Violations
* Target Bid Rate Compliance * Target Bid Rate Compliance
* Schedule Interviews * Schedule Interviews
* Conduct Interviews * Conduct Interviews
* Candidate Selection * Candidate Selection
* Confirmation of Candidate * Confirmation of Candidate
Availability Availability
* Confidentiality Agreements * Confidentiality Agreements
* Security Checks * Security Checks
* Confirmation of Billing Information * Confirmation of Billing Information
Validity Validity
* Rebroadcast (aged orders) * Rebroadcast (aged orders)
* Facilitate Vacation Replacements * Facilitate Vacation Replacements
* Facilitate Exit/Cancel Paperwork * Facilitate Exit/Cancel Paperwork
(Contractee Performance Data) (Contractee Performance Data)
* Facilitate Backfill Placements * Facilitate Backfill Placements
(Maintain or Lower Billing Rate) (Maintain or Lower Billing Rate)
* Quality of Service Issue Resolution * Quality of Service Issue Resolution
* Customer Complaint Resolution * Customer Complaint Resolution
* Consolidation of Job Codes/Skill Sets * Consolidation of Job Codes/Skill Sets
MSXI (AS CONTRACT LABOR SUPPLIER) & ALL
OTHER CONTRACT LABOR SUPPLIERS
CONTRACT LABOR SUPPLIERS (TIER 2 TO FORD MOTOR COMPANY)
* Recruitment * Recruitment
* Employment Issues (Visas, Payroll) * Employment Issues (Visas, Payroll)
* Customer Contract (Direct Interface * Customer Contract (Direct Interface
Orders) Orders)
* Employee (Contractee) Administration * Employee (Contractee) Administration
* Performance Reviews * Performance Reviews
* Merit Increases * Merit Increases
* Status Visits on-site * Status Visits on-site
* Career Pathing * Career Pathing
* PeopleNet Contract Compliance * PeopleNet Contract Compliance
* Security Checks (Obtain * Security Checks (Obtain
Information) Information)
* Drug Screening * Drug Screening
* Confidentiality Agreement * Confidentiality Agreement
Compliance Compliance
* Travel Authorization * Travel Authorization
* Training Authorization * Training Authorization
/Reimbursement /Reimbursement
* PeopleNet Process * PeopleNet Process
* SupplierNet Reports * SupplierNet Reports
* Online Bids * Online Bids
* Online Resumes * Online Resumes
<PAGE> 63
Master Vendor Agreement
Exhibit 1.2.2
PEOPLENET NORTH AMERICAN FINANCIAL PERFORMANCE
<PAGE> 64
MASTER VENDOR AGREEMENT
EXHIBIT 1.2.2
[ _________ __________ _______
___________
*
]
<PAGE> 65
Master Vendor Agreement
Exhibit 1.3.1
Master Vendor Q1 Metric Statements
<PAGE> 66
QOS METRIC STATEMENT
OPERATING COMMITTEE QOS TEAM
QUANTIFIER: TIMELY PLACEMENT:
MEASURABLE: PLACEMENT TIMING
DEFINITIONS:
This metric measures the average time it takes to place contract personnel in
Southeast Michigan for a given calendar month as well as over time, in each of
the following categories: Systems, Technical, Clerical, Professional.
Average = Sum of all Placement Timing NP + SR + TR + BFO
--------------------------- --------------------------
Total Number of Placements Total Number of Placements
NP = New Placement (NP) - New Order
SR = Supplier Replacement (SR) - Different Supplier, same order
TR = Transition (TR) - Backfill of a transition order, incumbent supplier
UPG = Upgrade (UPG) - Change in classification and Ref. Sig.
BFO = Backfill - Same Supplier, same order
Goal lines are established by calculating 85% of the previous 12 months data
(7/1 - 6/30), per category.
SOURCE OF DATA:
PeopleWorx database.
EXCLUSIONS:
Upgrades, and all professional placements made within the CSC (FCSD) or
clerical placements within OGC. Due to Excel limitations, timing is based on a
360 day calendar.
BENEFITS:
Reports placement trends over a period of time.
Metric Reviewed by:
Ford Purchasing
PeopleNet OCM QOS
All Customers via Executive Summary
Denise Murray
<PAGE> 67
QOS METRIC STATEMENT
Operating Committee QOS Team
Quantifier: Customer Satisfaction
Measurable: Post Placement Survey Results
DEFINITIONS:
The Percentage of customers who are either dissatisfied or very dissatisfied
with PeopleNet.
SOURCE OF DATA:
Post Placement Survey, completed by end users seven days after the start of a
contractee.
EXCLUSIONS:
None
BENEFITS:
Shows the current satisfaction with the PeopleNet process, and allows PeopleNet
to address customer concerns in a timely manner.
METRIC REVIEWED BY:
Ford Purchasing (FM&SP)
PeopleNet OCM QOS
All Customers via Executive Summary
<PAGE> 68
Master Vendor Agreement
Exhibit 1.4
STATUS OF MINORITY SOURCING FROM DECEMBER 23, 1996 TO JULY 6, 1997
<PAGE> 69
PEOPLE NET MINORITY SPENDING REPORT
As of:
JUL - 1997 Current quarter: 3rd
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Vendor Code Month to Date Quarter to date Year to Date
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Engineering Technologies Associates A1PBD $ 338,351.24 $ 338,351.24 $ 2,470,899.75
Comprehensive Data Processing, Inc A6WYC $ 288,343.92 $ 288,343.92 $ 2,181,234.91
Autoflex Inc. BY21C $ 206,564.51 $ 206,564.51 $ 1,349,553.62
Engineering Global Solutions d/b/a EGS, Inc. C41DA $ 182,113.40 $ 182,113.40 $ 1,509,814.37
The Bartech Group D9UGF $1,377,126.24 $1,377,126.24 $ 9,177,653.71
Engineering Analysis Services Inc. (EASI) E148C $ 297,192.36 $ 297,192.36 $ 2,371,189.83
Optimal CAE, Inc. E4P9B $ 209,389.83 $ 209,389.83 $ 1,418,625.02
McKenna Industries, Inc. F8AGB $ 0.00 $ 0.00 $ 0.00
Gonzalez Design Engineering G252C $ 296,353.20 $ 296,353.20 $ 1,917,919.34
ASG Renaissance G9A8C $ 746,443.85 $ 746,443.85 $ 5,466,784.04
Acro Service Corporation H0GRB $ 536,387.27 $ 536,387.27 $ 3,811,774.48
Integrated Management Systems, Inc. H7NJC $ 0.00 $ 0.00 $ 9,663.75
Syntel, Inc. J1FZA $ 609,489.42 $ 609,489.42 $ 4,740,200.06
Complete Business Solutions, Inc. J4PAC $ 0.00 $ 0.00 $ 61,092.82
Lexel Engineering M8PBB $ 0.00 $ 0.00 $ 0.00
CAE Technology, Inc. M9NJA $ 349,778.51 $ 349,778.51 $ 2,614,616.33
Azia Systems, Inc. Q06XA $ 0.00 $ 0.00 $ 0.00
Arbor Intelligent Systems, Inc. Q4YMA $ 0.00 $ 0.00 $ 552.00
NETSyS Technology Group, Inc. Q5H4A $ 3,148.00 $ 3,148.00 $ 3,148.00
Inc. R2AHA $ 0.00 $ 0.00 $ 0.00
Star, Inc. R8JWA $ 0.00 $ 0.00 $ 2,806,00
MLLS, International X171C $ 867,302.06 $ 867,302.06 $ 6,099,474.31
- ----------------------------------------------------------------------------------------------------------
TOTALS $6,307,955.81 $6,307,955.81 $45,207,001.34
- ----------------------------------------------------------------------------------------------------------
YTD Ford Total Expenditure YTD Minority Expenditure % of Total
$195,343,737.01 23%
</TABLE>
<PAGE> 70
Master Vendor Agreement
Exhibit 3.1.3
<PAGE> 71
Exhibit 3.1.3
Bill Rates For New Arrangements
[
*
]
<PAGE> 72
Master Vendor Agreement
Exhibit 3.5.7
MSX INTERNATIONAL PERFORMANCE STANDARDS
<PAGE> 73
MASTER VENDOR AGREEMENT
Exhibit 3.5.7
This exhibit presents standards for MSX International's performance to support
Ford's utilization of MSX International's First Tier Services. The standards
established by this exhibit shall be effective from the Effective Date to
December 31, 1999.
ORGANIZATION
The attached organization chart indicates existing staff, new staff and
projected staff to support recruiting requirements.
1. Effective Date to 12/31/97 -
MSXI has budgeted over $1.0 million to support the organization
responsible for providing First Tier Services in 1997. As indicated in
the attached chart, this includes both existing staff and new hires.
Items included in the budget are:
Recruiting - salaries, commissions, and benefit
Job fairs and advertising
Facilities cost, is equipment and miscellaneous Communications
Division and corporate administrative expense including interest
2. 1998-
MSXI has budgeted over $3.0 million to support the organization's
efforts in 1998. This includes new hires in 1998.
3. 1999-
MSX International will continue to maintain staffing and support
resources at 1998 levels, subject to adjustments based on business
conditions and customer demands.
<PAGE> 74
RESPONSE RATE ON RESUME SUBMISSIONS
MSXI will equal or exceed the Response Rate appearing below on prospective
resume submissions during each of the specified periods:
Period Response Rate
------ -------------
Effective Date through December 31, 1997 34%
January 1, 1998 to December 31, 1998 34%
January 1, 1999 to December 31, 1999 34%
MSXI's performance on the Response Rate metric for individual periods is
calculated after the end of the period. For the purpose of calculating MSXI's
performance, Response Rate (expressed as a percentage) is defined as:
For those New Opportunity Position Broadcasts that result in a
successful placement during the period:
1. the aggregate number of resumes bid by MSXI, divided by
2. the aggregate number of New Opportunity Position Broadcasts to
all vendors.
For the period from the effective date through December 31, 1997, New
Opportunity Position Broadcasts only include position broadcasts for the
following PeopleNet skill commodities: Engineering and Information Systems. For
the remaining periods, New Opportunity Position Broadcasts comprise all skill
commodities.
New Opportunity Position Broadcasts expressly exclude "upgrades", "specifieds",
and "incumbent backfill" opportunities, as those terms are presently used by
PeopleNet.
MSXI's failure to achieve the Response Rate metric in any period shall only
mitigate Ford's obligations under Article 3.5 of the Master Vendor Agreement
with respect to such period.
<PAGE> 75
MSX FORD RECRUITING GROUP
1997/1998
<TABLE>
<S><C>
Derek Grills
Vice President
In-Client Services
|
Kathy Mooradian*
Group Manager
|
Suzanne Hicks* |
Project Manager ----------|
| Administrative Assistant
------------ TBD**
Christy PROFESSIONAL CLERICAL CAE TECHNICAL SYSTEMS
Gough** Sherry Schneider* Sherry Schneider Kathy Mooradian, Kathy Mooradian Ann Tambornini*
Core Supervision/ Supervision/ Jeff Stoker, & Jeff Stoker96 Supervision/
Systems Leader Leader Supervision/ Supervision/ Leader
Support Leader J. Leader
Krissy McCall Chudnof Brian Deasley
Floater Floater Floater
Josie Huber* K. McCall*-Recr. P. Ponte*- J. Chudnof*- Brian Deasley*- Nancy Bevak*-
Trainer Recruiter CAE Recruiter Recruiter
\ TBD** Recruiter \ Elleen Donahue*- Chris Nichol*-
Sr. Research \ TBD96 Prospector \ Recruiter D. Weams Recruiter
Assistant \ / \ Nancy Jorrison*- Floater J. Nowatzke*-
TBD96 \ / \ Recruiter Recruiter
\ / \ Mark Nastenak*- D. Weams*-
\ / \ Recruiter Recruiter
\ / \ Chris Verzi*- TBD**-Recruiter
\ / \ Recruiter TBD**-Recruiter
\ / \ TBD**-Recruiter Amy Cotter96-
\ / \ TBD96-Recruiter Prospector
\ / \ TBD96-Prospector |
\ / \ TBD96-Prospector |
\ / \ / |
TBD Dave Schultz / Jack Van Tiem
* In Place Branch Manager Group Manager / Group Manager
** Hire in 90 Days
96 Hire in 1996 TBD** Administrative TBD** Administrative TBD** Account Maintenance
TBD** Account Maintenance TBD** Account Maintenance TBD96 Account Maintenance
TBD96 Account Maintenance TBD96 Account Maintenance
| | | | | |
Corp HR Corp Finance Recruiting Corp Quality Corp IS Support Facilities
</TABLE>
<PAGE> 76
Master Vendor Agreement
Exhibit 3.7
"NON-FORD EARN-OUT"
<PAGE> 77
"Non-FORD Earn-Out"
Purpose:
Pursuant to Section 3.7 of the Master Vendor Agreement, this exhibit provides
the formula, definitions, and representative examples of the calculations to be
used to determine the amount, if any, due to FORD from MSXI.
Definitions:
1. [
*
]Page 1
<PAGE> 78
[
- -
- -
- -
- -
*
- -
- -
- -
2.
]
Page 2
<PAGE> 79
3. [
4.
*
5.
]
Page 3
<PAGE> 80
6. [
*
]
Page 4
<PAGE> 81
MSX INTERNATIONAL
Income Statement-By Division
[
*
]
<PAGE> 82
Attachment B
PEOPLENET PROCESS
STEP 1
1 Customer Initiates Contract Personnel
Order (CPO) via PeopleNet Online form,
CUSTOMER Profs templates are replaced. Various
INITIATES up-front edits (dept/ops/AIS) and other
CPO data fields (level of service, etc) are
required.
STEP 2
CUSTOMER PeopleNet Online automatically forwards
APPROVES CPO CPO to appropriate Customer Finance and
Human Resource Approvers. Data from order
form is automatically fed into
PeopleWorx.
STEP 3
3 Open Position Notification (OPN)
broadcasts to Suppliers once all
conditions for broadcast have been
PEOPLENET met. Algorithm is automatically selected
BROADCASTS OPEN based on classification selected by
POSITION TO SUPPLIERS Customer Requisitioner and location.
Broadcasts will be via SupplierNet;
Non-SupplierNet Suppliers will receive
OPN via fax. LANFAX is eliminated.
4 STEP 4
SUPPLIERS SUBMIT Bids and resumes are submitted via
BIDS AND Supplier Net. Non-Supplier Net Suppliers
RESUMES will submit via fax to PeopleNet. Valid
Social Security # of candidate is
eventually needed. May need to assign a
person to follow through and d/e.
STEP 5
Depending on the level of service
provided, Staffing Specialists or CSR's
5 may assist the Customer in qualifying and
CUSTOMER AND selecting a candidate. Suppliers update
PEOPLENET QUALIFY status of candidates (withdrawls) via
AND SELECT CANDIDATE SupplierNet. Via SupplierNet, Suppliers
are prompted for contract personnel
agreements and security check forms to be
faxed to PeopleNet once candidate is
selected. All conditions must be met
before placement.
A
<PAGE> 83
A
STEP 6
6 When all documents are in, position
automatically becomes Purchase Order
PEOPLENET Intiated (POIN). Contract Personnel
INITIATES CPO Agreement hard copy of bid (if
non-SupplierNet), and/or 90-Day rule
waiver (if required) provided to
Accounting. All Customer approval
information and CPO information maintained
online for life of PO. Allowing an
electronic signature on PO could
eliminate 1) mailer, 2) creater.
7 STEP 7
The contractee starts work at
CONTRACTEE STARTS the site and submits a
AT CUSTOMER SITE PeopleNet time sheet to the
Customer for signature.
8 STEP 8
Time sheets are signed and
CUSTOMER submitted to PeopleNet via
SUPERVISOR SIGNS interoffice mail.
TIME SHEET
9 10 STEPS 9 - 10
PeopleNet pays
PEOPLENET CUSTOMER PAYS Suppliers and invoices
PAYS SUPPLIERS PEOPLENET Customer according to billable hours
recorded on time sheets; Customer pays
PeopleNet.
B
<PAGE> 84
B
STEP 11
11 Reports are available to authorized
Customer users via PeopleNet Online.
REPORTS Either develop a standard selection of
reports and charge for ad-hocs, or
provide a report writer and have the
customer create their own. Cost savings
in paper, travel, supplies.
STEP 12
Amendments to Purchase Orders are
12 submitted via Peoplenet Online and are
automatically routed for the appropriate
AMENDMENTS Customer approvals. Suppliers have the
ability to submit exits via Suppliernet.
Feeds directly to POWorx. Once fully
automated, reduces staff by 3-5 people.
13
BACKFILL YES GOTO
REQUESTS STEP 3
NO
STEP 13
Customer completes PeopleNet Online
template which automatically completes
with current PO information and original
CPO job description for review. Once
completed the Backfill Notification will
END automatically broadcast to the
appropriate suppliers.
<PAGE> 85
Master Vendor Agreement
Exhibit 8.1
-----------
REPORT FORMAT AND CONTENT FOR INFORMATION AND DATA SUPPLIED TO FORD
Following is a list of standard reports, followed by samples for each report
generated by the criteria established for each report.
<PAGE> 86
REPORTS LIST
STANDARD CUSTOMER REPORTS:
- --------------------------
1. Monthly Charge Report (MCR)
2. Department Charge Report (Monthly DCR)
3. Estimated Expenditure Control Report (EECR)
4. Active PO Roster (APOR)
5. Active PO Roster Addendum (APOR+)
6. Department Charge Report by Cycle (DCR)
STANDARD PURCHASING REPORTS:
- ----------------------------
1. PeopleNet Minority Spending Report
2. Dollar Volume Report by Commodity by Supplier
3. Dollar Volume Report by Supplier
4. Supplier Dollar Volume Metrics Report and Data sheet (Quarterly)
5. Supplier Dollar Volume Metrics Report (by current month)
6. Placement Timing for Algorithm Positions (Calendar Days)
7. Executive Summary
8. New Positions Placed Metric
<PAGE> 87
STANDARD CUSTOMER REPORTS:
- --------------------------
1. Monthly Charge Report (MCR)
2. Department Charge Report (Monthly DCR)
3. Estimated Expenditure Control Report (EECR)
4. Active PO Roster (APOR)
5. Active PO Roster Addendum (APOR+)
6. Department Charge Report by Cycle (DCR)
<PAGE> 88
<TABLE>
<CAPTION>
DATE RUN: 7/2 PEOPLENET MONTHLY CHARGE REPORT ---PEOPLENET----
REPORT CRITERIA: ALL MONTHLY AND YEAR-TO-DATE BILLING PERIOD: 5/12/97 THRU 6/8/97 A DIVISION OF GEOMETRIC RESULTS INC.
CHARGES FOR EACH SUPERVISOR BY
DEPT/OPSLOC AND SUPPLIER.
CURRENT PERIOD INCLUDES CYCLES
9711 THRU 9712
***CONFIDENTIAL***
BILLING DEPT: A03
OPSLOC: 5001 DOLLARS BILLED
HOURS WORKED TO FORD
---------------------------------------------- --------------
<S> <C> <C> <C>
SUPERVISOR SUPPLIER LATEST
REF CURRENT PERIOD YEAR-TO-DATE T/S
CONTRACTEE GRD TITLE CPO# FROM TO S.T. O.T./P.R* S.T. O.T./P.R* END DATE AIS ACCT.
ATKINSON DENNIS THE BARTECH GROUP
CORNETT 8 COST ANALYST 00-24976 4/22/97 12/31/97 144.00 0.00 248.00 0.00 6/22/97 25A-2744-PNET
-------------------------------------
SUBTOTAL FOR SUPERVISOR: ATKINSON DENNIS 144.00 0.00 248.00 0.00
GLOTZHOBER DENNIS THE BARTECH GROUP
ALVAROE 7 ACCOUNTANT 00-22080 8/19/96 11/24/96 0.00 0.00 144.00 0.00 11/24/96 25A-2744-PNET
-------------------------------------
SUBTOTAL FOR SUPERVISOR: GLOTZHOBER DENNIS 0.00 0.00 144.00 0.00
LEIB ART NORRELL SERVICES, INC.
DOCHERTY 5 DATA CONTROL COORD 00-19114 1/15/96 12/31/97 151.00 0.00 847.00 46.00 7/6/97 1-0970-PNET
-------------------------------------
SUBTOTAL FOR SUPERVISOR: LEIB ART 151.00 0.00 847.00 46.00
-------------------------------------
TOTAL FOR DEPT: A03 OPNSLOC: 5001 295.00 0.00 1,239.00 46.00
<CAPTION>
DOLLARS BILLED TO FORD
--------------------------------------------------------------
<S> <C> <C> <C> <C>
SUPERVISOR
REF SUPPLIER HOURLY RATE HOURS HOURS EXPENSES EXPENSES
CONTRACTEE GRD TITLE CPO# FROM TO S.T. O.T. BILLED M-T-D BILLED Y-T-D M-T-D Y-T-D
ATKINSON DENNIS THE BARTECH GROUP
CORNETT 8 COST ANALYST 00-24976 4/22/97 12/31/97 $37.26 $37.26 $5,365 $9,240 $0 $0
-------------------------------------------
SUBTOTAL FOR SUPERVISOR: ATKINSON DENNIS $5.365 $9,240 $0 $0
GLOTZHOBER DENNIS THE BARTECH GROUP
ALVAROE 7 ACCOUNTANT 00-22080 8/19/96 11/24/96 $36.50 $36.50 $0 $5,256 $0 $0
-------------------------------------------
SUBTOTAL FOR SUPERVISOR: GLOTZHOBER DENNIS
$0 $ 5,256 $0 $0
LEIB ART NORRELL SERVICES, INC.
DOCHERTY 5 DATA CONTROL COORD 00-19114 1/15/96 12/31/97 $24.02 $29.82 $3,627 $21,797 $0 $0
-------------------------------------------
SUBTOTAL FOR SUPERVISOR: LEIB ART $3,627 $21,797 $0 $0
-------------------------------------------
TOTAL FOR DEPT: A03 OPNSLOO: 5001 $8,992 $36,293 $0 $0
</TABLE>
* "O.T./P.R" =(O)VER (T)IME AND (PR)EMIUM HOURS COMBINED
** "LATEST T/S END DATE" = LATEST TIMESHEET ENDING DATE RECEIVED FOR THE
CONTRACTS
Page 1 OF 2
<PAGE> 89
<TABLE>
<CAPTION>
CRITERIA: DEPARTMENT CHARGE INFORMATION DEPARTMENT CHARGE REPORT --- PEOPLENET---
BASED ON TIMESHEETS RECEIVED IN BILLING PERIOD 5/12/97 TO 6/8/97 A DIVISION OF GEOMETRIC RESULTS INC.
CYCLES 9711 THROUGH 9712 ***CONFIDENTIAL***
DATE RUN: 7/22/97 2:29 PM
- ----------------------------------------------------------------------------------------------------------------------------------
OPNS LOCATION: 5001
DEPARTMENT: A03
CYCLE: 9711
NAME CPO WEEK ENDING REG. HOURS OT. HOURS PR. HOURS RATE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
DOCHERTY, BRENDA 00-19114 5/18/97 40.00 0.00 O.00 $24.02
DOCHERTY, BRENDA 00-19114 5/25/97 40.00 0.00 0.00 $24.02
CORNETT, H. THOMAS 00-24976 5/18/97 40.00 0.00 0.00 $37.26
CORNETT, H. THOMAS 00-24976 5/25/97 40.00 0.00 0.00 $37.26
- ---------------------------------------------------------------------------------------------------------------------
OPNS LOC: 5001 SUBTOTALS FOR DEPT: A03 160.00 0.00 0.00
<CAPTION>
NAME GEN. LEDG. SUB LEDG. SUB DIV. MISC. REF. EXPENSES BILLED TO FORD
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
DOCHERTY, BRENDA 13 0970 PNET $0.00 $960.80
DOCHERTY, BRENDA 13 0970 PNET $0.00 $960.80
CORNETT, H. THOMAS 25A 2744 PNET CIRS $0.00 $1.490.40
CORNETT, H. THOMAS 25A 2744 PNET CIRS $0.00 $1,490.40
- ---------------------------------------------------------------------------------------------------------------------
OPNS LOC: 5001 SUBTOTALS FOR DEPT: A03 $0.00 $4,902.40
</TABLE>
Page 1 of 3
<PAGE> 90
<TABLE>
<CAPTION>
CRITERIA: DEPARTMENT CHARGE INFORMATION BASED ON DEPARTMENT CHARGE REPORT
TIMESHEETS RECEIVED IN CYCLES 9711 THROUGH BILLING PERIOD 5/12/97 TO 6/8/97 --- PEOPLENET---
9712 ***CONFIDENTIAL*** A DIVISION OF GEOMETRIC RESULTS INC.
DATE RUN: 7/22/97 2:29 PM
- -------------------------------------------------------------------------------------------------------------------------------
OPNS LOCATION: 5001
DEPARTMENT: A03
CYCLE: 9712
NAME CPO WEEK ENDING REG. HOURS OT. HOURS PR. HOURS RATE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
DOCHERTY, BRENDA 00-19114 6/1/97 32.00 0.00 0.00 $24.02
DOCHERTY, BRENDA 00-19114 6/8/97 39.00 0.00 0.00 $24.02
CORNETT, H. THOMAS 00-24976 6/1/97 32.00 0.00 0.00 $37.26
CORNETT, H. THOMAS 00-24976 6/8/97 32.00 0.00 O.00 $37.26
- -------------------------------------------------------------------------------------------------------------------------------
OPNS LOC: 5001 SUBTOTALS FOR DEPT: A08 135.00 0.00 $0.00
- -------------------------------------------------------------------------------------------------------------------------------
OPNS LOC: 5001 TOTALS FOR DEPT: 295.00 0.00 0.00
<CAPTION>
NAME GEN. LEDG. SUB. LEDG. SUB. DIV. MISC. REF. EXPENSES BILLED TO FORD
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
DOCHERTY, BRENDA 13 0970 PNET $0.00 $768.64
DOCHERTY, BRENDA 13 0970 PNET $0.00 $936.78
CORNETT, H. THOMAS 25A 2744 PNET CIRS $0.00 $1,192.32
CORNETT, H. THOMAS 25A 2744 PNET CIRS $0.00 $1,192.32
- -------------------------------------------------------------------------------------------------------------------------------
OPNS LOC: 5001 SUBTOTALS FOR DEPT: A03 $0.00 $4,090.06
- -------------------------------------------------------------------------------------------------------------------------------
OPNS LOC: 5001 TOTALS FOR DEPT: A03 $0.00 $8,992.46
</TABLE>
Page 2 of 3
<PAGE> 91
1997 ANNUAL ESTIMATED EXPENDITURE CONTROL REPORT
******* CONFIDENTIAL *******
---PEOPLENET---
A DIVISION OF GEOMETRIC RESULTS INC.
<TABLE>
<S> <C>
RUN DATE: JUNE 19, 1997 ASSUMPTIONS: PAYMENTS MADE REFLECTS ANY EXPENDITURES FOR TIMESHEETS PAID INCLUDING EXPENSES)
WITHIN THE BUDGET YEAR. SUSPENSE EXPENDITURES ARE BASED ON ACTUAL HOURS AND
EXPENSES SUBMITTED, BUT PO IS NOT VALID TO ISSUE PAYMENT.
NOVEMBER 23, 1996, CYCLE 9701 THROUGH RESERVED (ESTIMATED LIABILITY) EXPENDITURES ARE BASED ON 43 STRAIGHT TIME HOURS
PER WEEK (REJECTED OR MISSING) UPTO THE CURRENT BILLING MONTH FOR THE CURRENT
YEAR.
JUNE 08, 1997, CYCLE 9712 YTD ESTIMATED EXPENDITURES IS THE SUM OF PAYMENTS MADE, SUSPENSE AND RESERVED
(ESTIMATED LIABILITY).
OPS. LOC. 5001 DEPT. A03 ANNUAL ESTIMATED PO COST IS CALCULATED BY ADDING THE YTD ESTIMATED EXPENDITURES,
PLUS 43 STRAIGHT TIME HOURS/WEEK FOR THE DURATION OF THE PO DURING THE
CALENDAR YEAR.
</TABLE>
<TABLE>
<CAPTION>
HOURS COMMITTED
-------------------------------------------------------------------
RESERVED YTD ANNUAL
CONTRACTEE PO AIS PO HOURS (ESTIMATED ESTIMATED ESTIMATED
NAME NUMBER CODE START END PAID SUSPENSE LIABILITY) HOURS HOURS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CORNETT H, THOMAS 00-24976 25A-2744-PNET 4/22/97 12/31/97 248 0 0 248 1,513
DOCHERTY, BRENDA 00-19114 13-0970-PNET 1/15/96 12/31/97 893 0 0 893 2,158
ACTIVE POs SUBTOTAL 1,141 0 0 1,141 3,672
ALVAROE, JAMES 00-22080 25A-2744-PNET 8/19/96 11/24/96 144 0 0 144 144
INACTIVE/AMENDED POs SUBTOTAL 144 0 0 144 144
OPS. LOC. 5001, DEPT. A03 TOTALS 1,285 0 0 1,285 3,816
<CAPTION>
DOLLARS COMMITTED
--------------------------------------------------------------------
RESERVED YTD ANNUAL
CONTRACTEE PO AIS PO PAYMENTS ESTIMATED ESTIMATED ESTIMATED
NAME NUMBER CODE START END MADE SUSPENSE LIABILITY) EXPENDITURES PO COST
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CORNETT, H. THOMAS 00-24976 25A-2744-PNET 4/22/97 12/31/97 9,240 0 0 9,240 56,390
DOCHERTY, BRENDA 00-19114 13-0970-PNET 1/15/96 12/31/97 21,797 0 0 21,797 52,193
ACTIVE POs SUBTOTAL 31,037 0 0 31,037 108,583
ALVAROE, JAMES 00-22080 25A-2744-PNET 8/19/96 11/24/96 5,256 0 0 5,256 5,256
INACTIVE/AMENDED POs SUBTOTAL 5,256 0 0 5,256 5,256
OPS. LOC. 5001, DEPT. A03 TOTALS 36,293 0 0 36,293 113,839
</TABLE>
<PAGE> 92
<TABLE>
<CAPTION>
DATE RUN: /9714:31:46
ACTIVE PURCHASE ORDER ROSTER ---PEOPLENET---
REPORT CRITERIA: ALL "ACTIVE PO'S, *** CONFIDENTIAL *** A DIVISION OF GEOMETRIC RESULTS INC.
SORTED BY OPS LOC/DEPT AND SUPERVISOR
AS OF: 6/30197
OPNSLOC : 5001 DEPT : A03
CONTRACTEE NAME REF TITLE SUPERVISOR AIS MISC REQ # START END
GRADE CODE REF DATE DATE
DATE DATE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>> <C> <C>
ALVAROE JAMES 8 Cost Analyst Atkinson Den 25A-2744-PNET CIRS 00-24977 5/19/97 12/31/97
CORNETT H. THOM 8 Cost Analyst Atkinson Den 25A-2744-PNET CIRS 00-24976 4/22/97 12/31/97
DOCHERTY BRENDA 5 Data Control Co Leib Art 13-0970-PNET 00-19114 1/15/96 l2/31/97
<CAPTION>
CONTRACTEE NAME PEOPLENET SUPPLIER RATE OT
RATE
- ------------------------------------------------------------------------
<S> <C>> <C> c
ALVAROE JAMES Manpower Temporary Services (Auto $35.76 $35.76
CORNETT H. THOM The Bartech Group $37.26 $37.26
DOCHERTY BRENDA Norrell Services, Inc. $24.02 $29.82
TOTAL # CONTRACTEES: 3
--------------------------------- -------------------- ----------------------- PAGE 1 OF 1
SIGNATURE PROFS ID DATE
</TABLE>
<PAGE> 93
<TABLE>
<CAPTION>
<S><C>
CRITERIA: ALL ??? IS IN FILLED OR POIN STATUS, ---PEOPLENET---
SORT ???OPS LOC/DEPT CODE ACTIVE PURCHASE ORDER ROSTER ADDENDUM
COMBINATION. A DIVISION OF GEOMETRIC RESULTS
DATE RUN: 7/22/97 14:36:37 *** CONFIDENTIAL***
As Of: 6/30/97
REF OPS BILL
CANDIDATE NAME GRADE TITLE SUPERVISOR NAME LOC DEPT AIS CODE MISC REF POS NUM
SAUNDRA BRUCE 4 COR I, II, III, IV/CAC, BROWNELL, BRAD 2460 504 25A 2200 136 19730
LISA FRENCH 4 COR I, II, III, IV/CAC, BROWNELL, BRAD 2460 504 25A 2200 136 19753
JUNE GREEN 4 COR I, II, III, IV/CAC, BROWNELL, BRAD 2460 504 25A 2200 136 19740
LINDA HALL 4 COR I, II, III, IV/CAC, BROWNELL, BRAD 2460 504 25A 2200 136 19723
JOY TABRON 4 COR I, II, III, IV/CAC, BROWNELL, BRAD 2460 504 25A 2200 136 19728
ESTIMATED POS
START END STRAIGHT CONTRACTEE STATUS
CANDIDATE NAME DATE DATE SUPPLIER TIME COST
SAUNDRA BRUCE 6/2/97 12/31/97 KELLY SERVICES INC. $17.06 $20,764.46 POIN
LISA FRENCH 6/2/97 12/31/97 KELLY SERVICES INC. $17.06 $20,764.46 POIN
JUNE GREEN 6/2/97 12/31/97 KELLY SERVICES INC. $17.06 $20,764.46 POIN
LINDA HALL 6/2/97 12/31/97 KELLY SERVICES INC. $17.06 $20,764.46 POIN
JOY TABRON 6/2/97 12/31/97 KELLY SERVICES INC. $17.06 $20,764.46 POIN
</TABLE>
PAGE 4 OF 9
<PAGE> 94
SUPPLIER'S
BEST PRACTICES APPENDIX
CONTRACT PERSONNEL AGREEMENT
The below-named Supplier is in the business of providing Supplier
employees and/or third party personnel under contract with Supplier to perform
work assignments for Ford Motor Company or Ford Motor Company subsidiaries
(hereinafter collectively referred to as "Ford") for designated periods of
time. (For purposes of this Agreement the undersigned Supplier employee or
third party contracted with Supplier is hereinafter referred to as
"Contractee").
Contractee understands and agrees that the execution of this Agreement
is one of the conditions for Contractee being provided by Supplier to perform
or continuing to perform work as assigned by Ford. For consideration as agreed
to separately between Supplier and contractee and, with respect to any past,
present or future work assignment at Ford, Contractee agrees to the following
terms for the express benefit of Ford as a beneficiary of this Agreement.
The relationship of Contractee to Ford hereunder shall be that of an
independent contractor and not that of employee or agent. Contractee shall not
represent himself/herself as having any relationship with Ford other than that
of an independent contractor. Contractee understands there is no guarantee of
being assigned or continuing to be assigned to a work assignment at Ford.
All information and data acquired from Ford or developed or acquired
for Ford shall be confidential and proprietary to Ford. Such information and
data shall be used by Contractee only in performing services for Ford, and
shall not be disclosed or caused to be disclosed by Contractee to any third
party without written authorization from Ford or unless such information and
data is publicly available through no fault of Contractee.
All information and data developed or acquired in performing services
for Ford by Contractee shall belong to Ford, without further consideration, and
shall be delivered to Ford upon completion of such services or earlier if
requested. Ford shall be free to use and disclose to others such information
and data delivered hereunder.
Any work of authorship created by Contractee in performing services for
Ford shall be considered to be a specially ordered or commissioned "work made
for hire" for Ford and all copyrights for such work of authorship shall belong
to Ford. In the event any portion of such work of authorship does not qualify
as "work made for hire." Contractee hereby agrees to acquire, all right, title
and interest to such copyrights for such portion and assign to Ford all
acquired right, title and interest to such copyrights and, when requested by
Ford, shall execute all documents and papers confirming this assignment
without further consideration from Ford. All such works of authorship shall
bear a valid copyright notice designating Ford as the copyright owner.
Contractee hereby grants to Ford a permanent, non-exclusive, paid-up
worldwide license, under each copyright Contractee owns or controls or has the
right to license in each work of authorship fixed in any tangible medium of
expression furnished to Ford. This license includes the rights to use the
work, reproduce the work in quantities, prepare derivative works, distribute
copies of the work to the public, and perform and display the work publicly.
Contractee hereby assigns to Ford all worldwide rights in every
invention, discovery and improvement made, conceived, or reduced to practice
Contractee in performing services for Ford, without further consideration, and
each shall be reported to Ford promptly. Upon request by Ford, all documents
and papers shall be executed, and all reasonable assistance shall be furnished
(1) to establish in Ford title to such inventions, discoveries and improvements
and (2) to enable Ford to apply for United States and foreign patents thereon.
Contractee hereby agrees and warrants that any deliverable or service
delivered to Ford and Ford's use of such deliverable or service will neither
infringe any copyrights, nor knowingly infringe any other intellectual property
rights of any entry. Contractee agrees not to assert any intellectual property
right now or hereafter owned by Contractee against Ford would be infringed by
the manufacture sale or use of any deliverable or product incorporating a
deliverable.
The intellectual property rights which are the subject of the licenses
and covenant not to sue granted herein shall survive termination or expiration
of this Agreement, shall remain in effect for the life of each respectively
corresponding property rights and shall survive any assignment of such rights
to any third party. The obligations and warranties provided by Contractee in
this Agreement shall survive termination or expiration of any work assignment
at Ford and this Agreement.
This agreement is effective upon the date services are first performed
for Ford by Contractee and it shall be construed and enforced in accordance
with the laws of the State of Michigan.
___________________________________ _____________________________________
Contractee Name (Please Print) Contractee Social Security Number
___________________________________ _____________________________________
Contractee Signature Date
___________________________________
Supplier's Name
___________________________________ _____________________________________
Order/Position Number Start Date
___________________________________
Staffing Specialist (if known)
8/96 RELEASE #2B PAGE 138
PEOPLENET CUSTOMER SERVICE 810/304-7700
U.S. PROCESS ONLY
<PAGE> 95
<TABLE>
<CAPTION>
Criteria: Department Charge Information based on
timesheets received in cycle# 9711 Dartment Charge Report
Date Run: 7/22/97 1:52 pm ***CONFIDENTIAL***
------PEOPLENET------
A Division of Geometric Results Inc.
OPNS Location: 5001
Department: A03
Name CPO Week Ending Reg. Hours OT. Hours Pr. Hours
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DOCHERTY, BRENDA 00-19114 5/18/97 40.00 0.00 0.00
DOCHERTY, BRENDA 00-19114 5/25/97 40.00 0.00 0.00
CORNETT, H. THOMAS 00-24976 5/18/97 40.00 0.00 0.00
CORNETT, H. THOMAS 00-24976 5/25/97 40.00 0.00 O.00
- ------------------------------------------------------------------------------------------------------------
OPNS Loc: 5001 Totals for Dept: A03 160.00 0.00 0.00
Name Rate Gen. Ledg. Sub Ledg. Sub Div. Misc. Ref. Expenses Billed To Ford
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
DOCHERTY, BRENDA $24.02 13 0970 PNET $0.00 $960.80
DOCHERTY, BRENDA $24.02 13 0970 PNET $0.00 $960.80
CORNETT, H. THOMAS $37.26 25A 2744 PNET CIRS $0.00 $1,490.40
CORNETT, H. THOMAS $37.26 25A 2744 PNET CIRS $0.00 $1,490.40
- ------------------------------------------------------------------------------------------------------------
$0.00 $4,902.40
</TABLE>
Page 1 of 1
<PAGE> 96
STANDARD PURCHASING REPORTS:
- ---------------------------
1. PeopleNet Minority Spending Report
2. Dollar Volume Report by Commodity by Supplier
3. Dollar Volume Report by Supplier
4. Supplier Dollar Volume Metrics Report and Data sheet (Quarterly)
5. Supplier Dollar Volume Metrics Report (by current month)
6. Placement Timing for Algorithm Positions (Calendar Days)
7. Executive Summary
8. New Positions Placed Metric
<PAGE> 97
PEOPLE NET MINORITY SPENDING REPORT
As of: 7/22/97
JUL - 1997 Current quarter: 3rd
<TABLE>
<CAPTION>
Vendor Code Month to date Quarter to date Year to Date
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Engineering Technologies Associates A1PBD $336,351.24 $336,361.24 $2,470,899.75
Comprehensive Data Processing, Inc. A6WYC $288,343.92 $288,343.92 $2,181,234.91
Autoflex Inc. BY21C $206,564.51 $206,564.51 $1,349,553.62
Engineering Global Solutions d/b/a EGS, Inc. C41DA $182,113.40 $182,113.40 $1,509,814.37
The Bartech Group D9UGF $1,377,126.24 $1,377,126.24 $9,177,653.71
Engineering Analysis Services Inc.(EASI) E148C $297,192.36 $297,192.36 $2,371,189.83
Optimal CAE, Inc E4P9B $209,389.83 $209,389.83 $1,418,625.02
McKenna Industries, Inc. F8AGB $0.00 $0.00 $0.00
Gonzalez Design Engineering G252C $296,353.20 $296,353.20 $1,917,919.34
ASG Renaissance G9A6C $746,443.85 $746,443.85 $5,466,784.04
Acro Service Corporation HOGRB $536,387.27 $536,387.27 $3,811,744.48
Integrated Management Systems, Inc. H7NJC $0.00 $0.00 $9,663.75
Syntel, Inc. J1FZA $609,489.42 $609,489.42 $4,740,200.06
Complete Business Solutions, Inc. J4PAC $0.00 $0.00 $61,092.82
Lexel Engineering M8PBB $0.00 $0.00 $0.00
CAE Technology, Inc. M9NJA $349,778.51 $349,778.51 $2,614,616.33
Axis Systems, Inc. Q06XA $0.00 $0.00 $0.00
Arbor Intelligent Systems, Inc. Q4YMA $0.00 $0.00 $552.00
NETSys Technology Group, Inc. Q5H4A $3,148.00 $3,148.00 $3,148.00
Compunix, Inc. R2AHA $0.00 $0.00 $0.00
Alpha Star, Inc. R8JWA $0.00 $0.00 $2,805.00
M.L.S. International X171C $867,302.06 $867,302.06 $6,099,474.31
- ----------------------------------------------------------------------------------------------------------------------------
TOTALS $6,307,985.81 $6,307,985.81 $46,207,001.34
</TABLE>
Page 1 of 1
<PAGE> 98
<TABLE>
<CAPTION>
Criteria: Total Dollar Amount paid to all the Dollar Volume Report --PeopleNet--
Suppliers for cycles 9701 thru 9714 by Commodity by Supplier A Division of Geometric Results Inc.
Cycle dates 12/23/96 thru 7/6/97
Date Run: 7/22/97 08:57:18
Commodity Supplier Name Paid to Supplier
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLERICAL
Kelly Services lnc. $5,935,701.93
Manpower Temporary Services (AutoDivision) $1,603,688.11
Norrell Services, Inc. $1,231,094.76
The Bartech Gruop $786,414.49
TAC Automotive Group $460,975.30
ASG Renaissance $259,284.42
Livernois Engineering Company $246,398.60
Cosworth Engineering, INC $181,876.21
MSX International $153,814.83
Gonzalez Design Engineering $149,912.42
G-Tech Services $142,422.56
Contract Professionals $126,907.81
Process Development Corporation $90,222.39
American SCI, INC $75,057.04
AIM Executive Contact Services $69,033.92
Modern Engineering $57,322.84
Aerotek, Inc. $54,706.41
Hickok Electrical Instrument Co. $54,130.33
Renkim Corporation $44,424.22
Ciber Inc. $32,295.34
Optimal CAE, Inc. $22,366.06
Ram Engineering $19,898.20
Carron & Company $17,206.82
National Tech Team, Inc. $16,642.40
Autoflex Inc. $14,364.15
Ajilon Services, Inc. $7,853.07
Hollowell Engineering Inc. $7,063.92
Entech Personnel Servicess, Inc. $6,991.56
Comprehensive Data Processing, Inc. $1,343.30
Acro Service Corporation $1,088.00
Computer Horizons Corporation $568.00
CDI Information Services $363.12
Global Technology Associates, Ltd. $0.00
Special Engineering Service $0.00
Training Group International, Inc. $0.00
Wheel City Graphics d/b/a Printing Services $0.00
Total for CLERICAL Conmodity: $11,871,432.55
- - - - - - - - - - - - - - - - -
ENG
TAC Automotive Group $11,912,445.87
Kelly Services Inc. $7,832,911.77
MSX International $7,451,651.42
Modern Engineering $7,104,276.24
The Bartech Group $5,817,619.31
</TABLE>
PAGE 1 OF 7
<PAGE> 99
<TABLE>
<CAPTION>
Dollar Volume Report --- PeopleNet--
Suppliers for cycles 9701 thru 9714 by Supplier A Division of Geometric Results Inc.
Cycle Dates 12/23/96 thru 7/6/97
Date Run: MOM 14.-W:14
Q1 Status Supplier Name Paid to Supplier
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Y Kelly Services Inc. $23,443,982.67
Y TAC Automotive Group $15,048,260.79
Y The Bartech Group $9,177,910.99
Y MSX International $8,638,176.58
Y Modern Engineering $7,571,237.50
Y Compuware Corporation $7,472,693.30
Y Livernois Engineering Company $6,142,052.55
N M.I.S. International $6,099,474.31
Y CDI Information Services $5,970,114.69
Y Decision Consultants, Inc. $5,521,777.81
Y ASG Renaissance $5,466,784.04
Y American SCI, INC. $5,217,998.31
N Computer Methods Corporation $4,844,983.43
Y Syntel, Inc. $4,740,200.06
N Aerotek, Inc. $4,582,442.89
Y Ciber Inc. $4,187,440.41
Y G-Tech Services $3,984,061.58
Y National Tech Team $3,318,892.00
Y Acro Service Corporation $3,811,774.48
N Contract Professionals Inc. $3,801,972.82
Y Ajjon Services, Inc. $3,771,696.11
Y Computer Horizons Corporation $3,696,548.68
N Cosworth Engineering, INC $2,921,494.26
N Carron & Company $2,917,215.45
Y CAE Technology, Inc. $2,614,616.33
Y Software Services Corporation $2,510,650.52
N Engineering Technologies Associates $2,482,651.15
N Engineering Analysis Services Inc. (EASI) $2,371,189.83
Y Manpower Termporary Services (AutoDivision) $2,356,269.21
Y Interim $2,238,153.18
N Comprehensive Data Processing Inc. $2,181,234.91
Y Altair Engineering, Inc. $2,155,633.54
N Mayflower Vehicle Systems $2,095,953.06
Y Gonzalez Design Engineering $1,917,919.34
N Hickok Electrical Instrument Co. $1,913,006.76
Y Norrell Services, Inc. $1,651,573.22
N Engineering Global Solutions d/b/a EGS, Inc. $1,509,814.37
N Optimal CAE, Inc. $1,418,625.02
N Automated Analysis Corporation $1,387,593.06
N Autoflex Inc. $1,349,553.62
N Roush Industries $833,943.08
N Ram Engineering $710,820.40
N Process Devlopment Corporation $708,896.26
</TABLE>
Page 1 of 3
<PAGE> 100
SUPPLIER DOLLAR VOLUME METRICS
AccuStaff, Inc. d/b/a AccuTech
Dollars
[GRAPH]
AccuStaff, Inc. d/b/a AccuTech
Contractees
[GRAPH]
<PAGE> 101
AccuStaff Inc.
<TABLE>
<S><C>
Engineering $23,433 $18,071 $16,830 $20,257 $19,639 $18,535 $19,244 $11,625
Systems $0 $0 $0 $0 $0 $0 $0 $0
Clerical $0 $0 $0 $0 $0 $0 $0 $0
Total $23,433 $18,071 $16,830 $20,257 $19,639 $18,535 $19,244 $11,625
AccuStaff Inc. d/b/a AccouTech
Jul Aug Sep Oct Nov Dec Jan 97 Feb
Engineering 4 3 4 0 4 4 4 3
Systems 0 0 0 0 0 0 0 0
Clerical 0 0 0 0 0 0 0 0
Total 4 3 4 0 4 4 4 3
Acro Services Corporation
Engineering $390,001 $324,002 $255,882 $307,213 $300,881 $284,556 $305,834 $272,756
Engineering FEA $0 $0 $0 $0 $616 $4,019 $6,417 $2,484
Professional $37,331 $21,000 $10,379 $30,524 $58,719 $34,589 $32,999 $51,748
Systems $103,674 $88,486 $101,951 $143,558 $194,680 $195,655 $175,823 $215,244
Train $0 $0 $0 $0 $4,560 $5,168 $5,263 $5,862
Clerical $1,241 $0 $0 $0 $0 $0 $0 $0
Total $532,247 $443,501 $366,212 $481,295 $559,456 $523,967 $526,336 $548,093
Acro Services Corporation
Jul Aug Sep Oct Nov Dec Jan 97 Feb
Engineering 51 57 55 59 59 52 55 52
Engineering FEA 0 0 0 0 1 1 1 1
Professional 7 6 4 5 9 8 9 10
Systems 15 16 21 27 30 28 36 34
Train 0 0 0 0 1 1 1 1
Clerical 1 1 0 0 0 0 0 0
Total 74 80 80 91 100 90 102 98
Advanced Technical Services
Engineering $77,030 $25,271 $56,618 $0 $0 $0 $0 $0
Engineering FEA $0 $0 $0 $0 $0 $0 $0 $0
Professional $0 $0 $0 $0 $0 $0 $0 $0
Systems $0 $0 $0 $0 $0 $0 $0 $0
Train $0 $0 $0 $0 $0 $0 $0 $0
Clerical $0 $0 $0 $0 $0 $0 $0 $0
Total $77,030 $25,271 $56,618 $0 $0 $0 $0 $0
Advanced Technical Services
Jul Aug Sep Oct Nov Dec Jan 97 Feb
Engineering 7 4 5 0 0 0 0 0
Engineering FEA 0 0 0 0 0 0 0 0
Professional 0 0 0 0 0 0 0 0
Systems 0 0 0 0 0 0 0 0
Train 0 0 0 0 0 0 0 0
Clerical 0 0 0 0 0 0 0 0
Total 7 4 5 0 0 0 0 0
Aerotek, Inc.
Engineering $942,253 $700,520 $562,720 $650,070 $583,586 $571,673 $458,047 $522,576
Engineering FEA $18,316 $36,592 $12,765 $18,570 $15,331 $19,658 $16,929 $16,260
Professional $17,424 $22,216 $16,174 $11,644 $28,020 $25,152 $33,573 $16,790
Systems $166,916 $102,586 $74,444 $108,092 $78,442 $103,176 $91,155 $106,961
Training $11,141 $4,373 $3,392 $3,383 $12,448 $2,856 $7,129 $3,704
Clerical $2,860 $6,313 $2,639 $4,624 $4,092 $5,280 $5,432 $3,659
Total $1,158,909 $872,570 $674,134 $796,383 $721,920 $727,797 $612,264 $689,971
Aerotek, Inc.
Jul Aug Sep Oct Nov Dec Jan 97 Feb
Engineering 140 123 119 124 117 115 105 106
Engineering FEA 3 3 3 3 3 3 3 3
Professional 3 3 4 5 4 5 4 3
Systems 20 17 15 18 15 17 18 19
Training 1 1 1 1 1 1 1 1
Clerical 1 2 1 2 2 2 2 2
<CAPTION>
<S><C>
Engineering $14,683 $13,506 $9,856 $8,940
Systems $0 $0 $0 $0
Clerical $0 $0 $0 $0
Total $14,683 $13,506 $9,856 $8,940
AccuStaff Inc. d/b/a AccouTech
Mar Apr May Jun
Engineering 3 3 3 2
Systems 0 0 0 0
Clerical 0 0 0 0
Total 3 3 3 2
Acro Services Corporation
Engineering $271,350 $243,830 $258,813 $249,487
Engineering FEA $8,280 $4,589 $6,038 $2,484
Professional $32,520 $31,991 $37,190 $25,749
Systems $229,771 $253,747 $264,857 $258,370
Train $5,596 $6,232 $5,938 $3,040
Clerical $1,068 $0 $0 $0
Total $548,604 $540,390 $572,835 $539,130
Acro Services Corporation
Mar Apr May Jun
Engineering 49 49 49 48
Engineering FEA 1 1 1 1
Professional 9 9 8 8
Systems 40 43 46 45
Train 1 1 1 1
Clerical 1 0 0 0
Total 101 103 105 103
Advanced Technical Services
Engineering $0 $0 $0 $0
Engineering FEA $0 $0 $0 $0
Professional $0 $0 $0 $0
Systems $0 $0 $0 $0
Train $0 $0 $0 $0
Clerical $0 $0 $0 $0
Total $0 $0 $0 $0
Advanced Technical Services
Mar Apr May Jun
Engineering 0 0 0 0
Engineering FEA 0 0 0 0
Professional 0 0 0 0
Systems 0 0 0 0
Train 0 0 0 0
Clerical 0 0 0 0
Total 0 0 0 0
Aerotek, Inc.
Engineering $527,781 $471,244 $536,332 $482,692
Engineering FEA $17,031 $14,809 $11,413 $14,901
Professional $36,396 $21,959 $49,424 $24,346
Systems $91,718 $80,115 $87,011 $86,004
Training $17,076 $5,496 $6,566 $4,445
Clerical $7,945 $9,615 $10,244 $7,835
Total $697,946 $603,241 $700,989 $620,221
Aerotek, Inc.
Mar Apr May Jun
Engineering 108 101 111 106
Engineering FEA 3 3 2 3
Professional 5 6 7 6
Systems 20 16 19 17
Training 1 1 1 1
Clerical 3 4 4 4
</TABLE>
Page 1
<PAGE> 102
<TABLE>
<CAPTION>
CRITERIA: DOLLAR AMOUNT PAID FOR ALL ACTIVE SUPPLIERS
FOR CYCLES 9614 THRU 9712 SUPPLIER DOLLAR VOLUME METRICS ---PEOPLENET---
EX: JAN A DIVISION OF GEOMETRIC RESULTS, INC.
4 REPRESENTS # OF CONTRACTEES ASSOCIATED WITH THE SUPPLIER'S DOLLAR VOLUME FOR JANUARY.
$20, 895 REPRESENTS THE DOLLAR VOLUME (PAY TO SUPPLIER) AMOUNT FOR THIS SUPPLIER FOR JANUARY.
DATE RUN: 7/22/97 14:21:18
# OF CONTRACTEES/DOLLAR AMOUNT PAID BY MONTH FOR EACH SUPPLIER
<CAPTION>
SUPPLIER NAME JAN 97 FEB 97 MAR 97 APR 97 MAY 97 JUN 97 JUL 96
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
KELLY SERVICES INC. 1049 1069 1125 1102 1117 1080 1170
$3,677,968 $3,222,050 $3,472,363 $3,352,266 $3,332,318 $3,196,290 $4,846,853
- ------------------------------------------------------------------------------------------------------------------------------------
TAC AUTOMOTIVE GROUP 430 441 442 433 431 429 315
$2,129,841 $2,218,190 $2,290,340 $2,120,496 $2,127,829 $2,086,167 $2,188,525
- ------------------------------------------------------------------------------------------------------------------------------------
THE BARTECH GROUP 280 293 209 290 295 273 347
$1,271,190 $1,331,961 $1,212,809 $1,262,982 $1,481,592 $1,239,962 $2,094,753
- ------------------------------------------------------------------------------------------------------------------------------------
MSX INTERNATIONAL 201 241 250 245 249 240 205
$892,100 $1,290,085 $1,214,128 $1,158,800 $1,399,410 $1,190,945 $1,393,759
- ------------------------------------------------------------------------------------------------------------------------------------
MODERN ENGINEERING 226 222 230 221 239 213 219
$1,170,291 $1,543,989 $704,186 $1,095,738 $991,373 $936,099 $599,702
- ------------------------------------------------------------------------------------------------------------------------------------
COMPUWARE CORPORATION 193 189 192 190 185 184 189
$939,506 $1,168,867 $1,168,867 $1,042,368 $1,113,910 $973,918 $1,338,231
- ------------------------------------------------------------------------------------------------------------------------------------
LIVERNOIS ENGINEERING 200 196 194 208 179 185 213
COMPANY
$982,648 $915,779 $909,572 $765,489 $887,447 $801,691 $1,385,926
- ------------------------------------------------------------------------------------------------------------------------------------
M.I.S. INTERNATIONAL 157 156 155 153 153 150 157
$809,634 $891,975 $910,736 $907,456 $878,633 $833,739 $1,305,351
- ------------------------------------------------------------------------------------------------------------------------------------
CDI INFORMATION SERVICES 152 144 147 144 140 138 140
$886,706 $899,050 $918,323 $779,886 $861,940 $813,635 $1,223,006
- ------------------------------------------------------------------------------------------------------------------------------------
DECISION CONSULTANTS, INC. 153 149 140 141 142 143 187
$866,793 $827,910 $812,515 $717,216 $769,359 $733,107 $1,353,723
- ------------------------------------------------------------------------------------------------------------------------------------
ASG RENAISSANCE 149 142 148 135 136 133 141
$843,642 $864,852 $845,387 $688,628 $764,339 $713,490 $808,871
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SUPPLIER
DOLLAR
AUG 96 SEP 96 OCT 96 NOV 96 DEC 96 TOTAL
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
KELLY SERVICES INC. 1133 1082 1043 1062 1074
$3,724,589 $3,196,552 $3,414,885 $3,361,141 $3,728,630 $42,525,934
- ------------------------------------------------------------------------------------------------------------------------------------
TAC AUTOMOTIVE GROUP 321 321 344 335 343
$1,800,422 $1,551,223 $1,666,697 $1,693,016 $1,744,238 $23,385,996
- ------------------------------------------------------------------------------------------------------------------------------------
THE BARTECH GROUP 346 329 327 316 302
$1,808,353 $1,355,995 $1,550,725 $1,383,891 $1,421,800 $17,216,040
- ------------------------------------------------------------------------------------------------------------------------------------
MSX INTERNATIONAL 197 194 197 191 190
$1,120,177 $947,256 $1,025,216 $1,109,012 $1,104,860 $13,824,758
- ------------------------------------------------------------------------------------------------------------------------------------
MODERN ENGINEERING 216 216 236 209 204
$1,331,498 $1,150,175 $1,112,872 $1,046,640 $1,033,200 $13,705,744
- ------------------------------------------------------------------------------------------------------------------------------------
COMPUWARE CORPORATION 183 187 181 183 189
$1,155,715 $1,061,810 $1,095,815 $1,059,291 $1,332,781 $13,471,072
- ------------------------------------------------------------------------------------------------------------------------------------
LIVERNOIS ENGINEERING 210 209 210 214 205
COMPANY
$1,087,867 $944,051 $1,006,200 $1,029,845 $987,434 $11,703,928
- ------------------------------------------------------------------------------------------------------------------------------------
M.I.S. INTERNATIONAL 154 160 165 164 150
$912,353 $1,038,936 $961,107 $969,587 $1,096,449 $11,555,955
- ------------------------------------------------------------------------------------------------------------------------------------
CDI INFORMATION SERVICES 144 152 158 148 145
$889,303 $896,803 $939,949 $956,474 $824,580 $10,979,635
- ------------------------------------------------------------------------------------------------------------------------------------
DECISION CONSULTANTS, INC. 176 169 160 154 153
$978,048 $849,361 $876,179 $830,416 $935,062 $10,549,689
- ------------------------------------------------------------------------------------------------------------------------------------
ASG RENAISSANCE 154 146 148 148 141
$896,914 $755,542 $888,548 $911,109 $889,167 $9,972,492
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PAGE 1 OF 6
<PAGE> 103
PLACEMENT TIMING FOR ALGORITHM POSITIONS
(Based on a 360 Day Calendar Year)
CLERICAL POSITIONS
[BAR GRAPH]
PROFESSIONAL POSITIONS
[BAR GRAPH]
"NOTE: Effective May, 1997 data excludes Upgrades, OGC clerical placements and
CSC professional placements."
Page 1 of 2
<PAGE> 104
PEOPLENET STATISTICS
EXECUTIVE SUMMARY
Overall Positions Placed
(During Month)
[GRAPH]
Active Contractees
(Month-End)
[GRAPH]
7 Day Post Placement Survey
[GRAPH]
New Positions Placed
(Excludes Upgrades, CSC, and OGC Placements)
[GRAPH]
Active Suppliers
(Month-End)
[GRAPH]
Placement Timing
(Average Number of Calendar Days)
[GRAPH]
Page 1 of 10
<PAGE> 105
NEW POSITIONS PLACED
[GRAPH]
CRITERIA: All PO's issued during the time period.
Upgrades and backfills not included.
<PAGE> 106
Master Vendor Agreement
Exhibit 9.2
Contract Personnel Agreement
<PAGE> 107
Master Vendor Agreement
Exhibit 17.1
Ford U.S. Policies with respect to U.S. Pub. L. 95-507 Clause entitled
"Utilization of Small Business Concerns and Small Business Concerns Owned
and Controlled by Socially and Economically Disadvantaged Individuals"
<PAGE> 108
EXHIBIT 17.1
FEDERAL ACQUISITION REGULATIONS
SUBCONTRACTING PLAN REQUIREMENTS
The following relevant paragraphs and sections are lifted directly from Policy
Letters 95-1 and 94-X issued by the Executive Office of the President, Office of
Management and Budget, Office of Federal Procurement Policy.
Policy Letter 95-1
5. Policy. The following policy applies government wide to contracts and
subcontracts for "commercial items"...
(1) It is a fundamental policy of the Federal government that a fair
proportion of its contracts be placed with small businesses, small businesses
owned and controlled by socially and economically disadvantaged individuals, and
small businesses owned and controlled by woman and that such businesses
participate in subcontracting under government prime contracts.
(2) When the requirements for a subcontracting plan under Section 8(d)
of the Small Business Act apply, annual commercial subcontracting plans that
relate to a company's commercial and noncommercial production are authorized
for:
(a) Prime contracts for commercial items. or
(b) subcontractors that provide commercial items under a prime
contract whether or not the prime contractor is supplying a commercial item.
6. Contracting Officer Responsibilities.
(1) These provisions for subcontracting plans for commercial item
contractors do not in any way relieve contracting officers, prime contractors or
subcontractors of their responsibilities for assuring that small, small
disadvantaged and woman owned small businesses have the maximum practicable
opportunity to participate in contracts awarded by the Federal agencies.
(2) The use of a commercial subcontracting plan does not relieve a
contractor of the requirement to make a good faith effort to comply with the
requirements of the subcontracting plan.
(3) Contracting officers should impose liquidated damages as
applicable when contractor fail to comply with subcontracting plans.
Policy Letter 94-X
4. Definitions.
g. Subcontract. Means any agreement... entered into by a Government
prime contractor or subcontractor calling for suppliers and/or services required
for contract performances, contract modification or subcontract....
j. Commercial Plan. Means a subcontracting plan covering the offeror's
fiscal year and which is applicable to the entire production of commercial items
sold by either the entire company or portion thereof...
k. Failure to make a good faith effort to comply with the
subcontracting plan. Means willful or intentional failure to perform in
accordance with the requirements of the subcontracting plan, or willful or
intentional action to frustrate the plan.
<PAGE> 109
5. Background
b. Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) requires
that before award can be made of a contract that exceeds $500,000 ($1 million in
the case of construction of a public facility) to other than a small business
concern, that apparent successful offeror must negotiate a subcontracting plan
describing how it will provide subcontracting opportunities to small businesses.
This requirement does not apply if the contract offers no subcontracting
opportunities. The subcontracting plan shall become a material part of the
contract.
6. Solicitation and Subcontracting Plan Requirements
a. The FAR (Federal Acquisition Regulations) shall prescribe a clause
entitled "Utilization of Small, Small Disadvantaged and Women-Owned Small
Business Concerns" to be inserted in solicitations and contracts... This clause
shall express the policy of the United States for providing maximum practicable
opportunity to small, small disadvantaged, and woman-owned small business
concerns to participate in the performance of prime contracts let by the Federal
Government and subcontracts.
b. For each subcontract the prime contractor will award to a small
business subcontractor, the prime contract must obtain a written representation
from the subcontractor that it qualifies under the size and ownership standards
applicable for the subcontract.
c. The FAR shall prescribe a clause entitled "Small, Small
Disadvantaged and Women-Owned Small Business Subcontracting Plan" in
solicitations and contracts if the award if the award is expected to exceed
$500,000... The clause shall require that the subcontracting plan include the
following elements:
(1) A statement of total dollars to be subcontracted and statements of
total dollars to be subcontracted to small business, to small disadvantaged
business, and to women-owned businesses.
(2) Separate goals expressed as percentages of total planned
subcontracting dollars for small, small disadvantaged and woman-owned small
business.
(3) A statement as to whether or not the offeror included indirect
costs in establishing subcontracting goals and a description of the methods used
to determine the proportionate share of indirect costs to be incurred with
small, small disadvantaged and women-owned business concerns.
(4) A description of the principal types of suppliers and services to
be subcontracted and an identification of the specific types to be subcontracted
to each small business category.
(5) A description of methods that were used in developing the
subcontracting goals.
(6) The name and a description of the duties of the individual employed
by the offeror who will administer the offeror's subcontracting plan.
(7) A description of the methods used to identify potential sources for
solicitation purposes.
(8) A description of the efforts the offeror will make to assure that
small, small disadvantaged, and women-owned small business concerns have an
equitable opportunity to compete for subcontracts.
(9) Assurances that the offeror will include the Utilization of Small,
Small Disadvantaged and Women-Owned Small Business Concerns clause in all
subcontracts over the simplified opportunities.
(10) Assurances that subcontractors who receive subcontracts in excess
of $500,000 will adopt a plan similar to the plan agreed to by the offeror.
Copies of the subcontractors' subcontracting plans must be retained by the prime
contractor until completion of the subcontract. A "certificate of compliance" or
statement from the subcontractor that it has a subcontracting plan does not
satisfy this requirement.
(11) Assurances that the offeror will participate in any studies or
surveys that my be required; submit periodic reports so that Government can
determine the extent of compliance by the offeror with the subcontracting
plan...
(12) A description of the types of records that will be maintained
concerning procedures that will ensure compliance with the plan and its goals.
(13) A description of the efforts that will be made to locate and award
subcontracts to small, small disadvantaged, and women-owned small business
concerns.
d. A contractor's failure to make a good faith effort to comply with
the subcontracting plan is a material breach of the contract.
<PAGE> 1
EXHIBIT 10.5
Information has been omitted pursuant to an application for confidential
treatment and the omitted material has been filed separately with the Commission
pursuant to an application for confidential treatment. Omitted material is
indicated with an asterisk(*).
MASTER SUPPLY AGREEMENT
This Master Supply Agreement ("this Agreement") is entered into as of
the closing date of the Stock Purchase Agreement (as defined below) (the
"Effective Date"), by and between FORD MOTOR COMPANY ("FORD"), a Delaware
corporation, and MSX INTERNATIONAL (HOLDINGS), INC. ("MSXI"), a Delaware
corporation (individually, "Party" and collectively, "Parties"). The following
space is provided for the Parties to enter the Effective Date: August 31 1997.
RECITALS
A. Concurrent with the execution and delivery of this Agreement, MSXI
executed a Stock Purchase Agreement dated as of July 25, 1997 (the "Stock
Purchase Agreement") to purchase all of the capital stock of Geometric Results
Incorporated ("GRI") from FORD. As used herein, the term "MSXI" includes GRI and
other MSXI majority owned affiliates and the term "FORD" includes FORD's
majority owned affiliates.
B. GRI currently provides many important services to FORD, some of
which are dealt with in the Master Vendor Agreement of even date between FORD
and MSXI (the "Master Vendor Agreement"). FORD has supplied MSXI with the
attached Business Description which describes the most significant services
performed by GRI for FORD other than those addressed in the Master Vendor
Agreement. All services performed by GRI for FORD during the first seven months
of 1997 other than those covered by the Master Vendor Agreement are referred to
herein as the "Services", including, but not limited to, those shown on the
Business Description. One of the FORD functions for which GRI performs Services
is the Ford Customer Service Division (Europe) ("FCSD"), which Services are
referred to herein as "FCSD Services." Other Services are referred to herein as
"Other Services." FORD and MSXI desire to ensure that MSXI a provides or causes
GRI to continue to provide the Services to FORD and that FORD continues to
purchase the Services from GRI.
C. FORD and MSXI a desire to avoid or minimize business disruption to
the Parties by maintaining, for a reasonable period of time, ordering and
billing processes (the "Ford Ordering and Billing Systems") utilized by the
Parties and GRI as of the date of this Agreement until such time as new
processes and systems are developed and implemented.
D. To carry out the foregoing objectives, FORD and MSXI have agreed
that FORD will continue to order the Services and MSXI or GRI will continue to
supply the Services as set forth herein. The Parties intend that this will be a
long-term business relationship where considerations of fairness to each of the
Parties, consistent with this Agreement and other agreements between the
Parties, will play a major role in dealing with issues that may arise during the
course of the relationship. In Article 4.5 of the Stock Purchase Agreement, the
Parties have agreed to establish a group of executives from FORD and MSXI (the
"Advisory Board") to monitor the relationship between FORD and MSXI. The Parties
further agree that the Advisory Board may be called upon
<PAGE> 2
to attempt to resolve material issues of fairness in the administration of this
Agreement and other contracts which exist between MSXI and FORD.
NOW, THEREFORE, for the purpose of inducing MSXI to consummate the
transactions contemplated by the Stock Purchase Agreement and in consideration
of the premises, the Parties agree as follows:
ARTICLE 1. - PURCHASE AND SUPPLY RELATIONSHIP
1.1 The term of this Agreement shall be the five year period commencing with the
Effective Date. During the term of this Agreement, FORD, on its own behalf or on
behalf of the FORD company identified on the face of a Purchase Order (as
defined below), will purchase and MSXI, on its own behalf or on behalf of the
MSXI company identified on the face of a Purchase Order (e.g., GRI), will supply
certain services as set forth herein.
1.2 During the term of this Agreement, FORD will continue to utilize and order
the FCSD Services from MSXI, [ * ] subject to the
conditions hereinafter described in Article 1.4. The Parties recognize that
FORD's business needs may change during the term of this Agreement so that
FORD's need for FCSD Services may change from time to time according to future
events which cannot now be foreseen. It is the Parties' intention that the
orders placed by FORD pursuant to this Agreement will permit MSXI to maintain a
level of revenue from FORD orders for FCSD Services or from orders for services
offered by MSXI placed to replace revenues lost because of reductions in such
FCSD Services ("Replacement Business"), which approximates the Base and FORD
will issue orders for Replacement Business to fulfill that objective.
Replacement Business will be comparable to lost FCSD Services business. FORD's
obligation to supply Replacement Business shall not be deemed satisfied by (i)
the continuation of Other Services business which MSXI is performing at the
time of FORD's decision to discontinue the FCSD Services to be replaced unless
prior to such decision, MSXI had been notified by FORD that such Other Services
were scheduled for termination or (ii) business that at the time of FORD's
decision to discontinue a part of the FCSD Services, FORD had decided, in a
practical sense, to award to MSXI.
1.3 With Respect to Other Services of which GRI is the sole supplier to a FORD
customer, FORD will continue to issue orders to MSXI for such Other Services
and will not issue orders to another supplier, subject to the conditions
described in Article 1.4. With respect to each type of Other Services for
which GRI is not the sole supplier, MSXI shall be a preferred supplier
[ * ]
1.4 FORD'S obligation to issue purchase orders for specific Services is subject
to the conditions that MSXI remain competitive in key business areas including
price, quality, and delivery with other responsible suppliers and FORD shall
not be required to order any service, the need for which has
2
<PAGE> 3
been eliminated by business changes. In assessing whether MSXI is competitive
FORD will give appropriate weight to the long term nature of the relationship
between FORD and MSXI.
1.5 FORD and MSXI will use all reasonable efforts to integrate MSXI's activities
hereunder with FORD purchasing operations utilizing where appropriate FORD
Ordering and Billing Systems.
1.6 FORD represents and warrants to MSXI that to the best of its knowledge, the
Business Description contains accurate information relative to the material
Services provided by GRI to FORD other than those covered by the Master Vendor
Agreement. FORD acknowledges that MSXI is relying upon the descriptive material
in the Business Description and agrees that the Business Description shall be
presumed correct.
1.7 FORD shall make reasonable efforts to include MSXI in requests for
quotations, broadcasts or other opportunities to provide all professional and
business services offered from time to time by MSXI. FORD shall make reasonable
efforts to treat MSXI as a preferred supplier within FORD for all types of
services currently offered by MSXI. FORD will extend its preferred supplier
designation to those services currently offered by MSXI which are combined with
comparable GRI activities.
ARTICLE 2. - OFFER ACCEPTANCE
2.1 Procurement of Services will be accomplished through the utilization of FORD
Ordering and Billing Systems and the issuance of standard FORD Purchase Orders
(collectively "Purchase Order(s)"), which Purchase Order will constitute an
offer to MSXI by FORD to enter into the purchase and supply agreement it
describes. MSXI's commencement of work thereunder will constitute acceptance of
the offer.
2.2 Once accepted, such Purchase Order together with this Agreement will be the
complete and exclusive statement of the purchase agreement. The standard terms
of the Purchase Order shall not apply to transactions between FORD and MSXI
pursuant to this Agreement. Any modifications proposed by either Party (e.g.,
purchase order, confirmations, invoices) are not part of the agreement in the
absence of the other Party's express written agreement to the modification.
ARTICLE 3. - PRICE
3.1 Prices will be as specifically stated in the Purchase Order, which shall be
consistent with this Agreement. All prices are firm and any deviation from such
prices are the sole responsibility of MSXI.
[3.2 * ]
3
<PAGE> 4
ARTICLE 4. - DELIVERY DATES, RELEASES
4.1 If delivery dates are not specified in a Purchase Order, MSXI will provide
Services only as authorized by FORD to MSXI.
ARTICLE 5. - INVOICES, PAYMENT
5.1 The Parties agree that, if reasonable and consistent with sound business
practices, all billing, payment and general transaction processes utilized by
the Parties and GRI as of the date of this Agreement shall remain in place until
such time as new processes are developed and implemented. Without limiting the
generality of the foregoing, the Parties will continue the intercompany
settlement mechanism for Satellite Operations, Mail Services Operations, and
Engineering Records Center pending development of new processes.
5.2 Payment for Services will be due in accordance with the payment practices in
effect on the date of this Agreement, as modified in the Stock Purchase
Agreement. The Business Description shall be presumed to be correct insofar as
it describes payment terms.
5.3 To the extent that prices for Services are based upon, or affected by, third
party supplier pricing discounts currently enjoyed by GRI which are not
continued during the term of this Agreement, the pricing for Services affected
by the discontinuation of such discounts shall be appropriately adjusted in
negotiations conducted pursuant to Article 3.2.
ARTICLE 6. - OTHER TERMS AND CONDITIONS
6.1 There is hereby incorporated by reference the provisions of Article 6
through Article 18, except Article 16, of the Master Vendor Agreement.
6.2 Except as otherwise provided therein, each type of Service provided for
herein shall be considered in all respects as covered by a separate agreement
pursuant to the terms and conditions set forth herein. Without limiting the
generality of the foregoing, a right of FORD to terminate as a result of MSXI's
performance of one type of Service shall not give rise to a right to terminate
with respect to any other Services.
6.3 If MSXI materially breaches this Agreement, FORD may terminate its purchase
obligations. FORD shall provide written notice to MSXI which outlines its cause
of termination and specifies a termination date at least nine months after the
date of notice. If, within six months after the date of the notice, MSXI
corrects the causes for termination, termination will be canceled and this
Agreement will continue. Any dispute relative to FORD's right to terminate
shall be resolved pursuant to Article 18 of the Master Vendor Agreement.
4
<PAGE> 5
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
FORD MOTOR COMPANY MSX INTERNATIONAL
(HOLDINGS), INC__________.
By: ? By: ?
----------------------------- ----------------------------
Title: Title: Vice President
-------------------------- ------------------------
5
<PAGE> 6
MASTER SUPPLY AGREEMENT
BUSINESS DESCRIPTION
1996 Revenue
Publications [ A
Warranty Process B
Customer Assistance Centers C
Rapid Fit D
Service Upgrading Program (DPI) E
Mail Services F
Computer Output to Microfilm (COM) G
Education Training and Development (ET&D) H
Technical Hotline I
Technical Field Engineers * J
Engineering Records Center K
Electronic Data Management L
Extended Service Plan (ESP) M
Jaguar Operations N
Ford Accident Repair Program (Body Shop) 0
Warranty Claims Assessors P
ADTeam Q
Training Schools R
Miscellaneous Contracts S
New Business ] T
TOTAL
<PAGE> 7
PUBLICATIONS - INCLUDING SATELLITE OPS
A-1
<PAGE> 8
GRI Program Description Template
PROGRAM NAME: Publications
CUSTOMER/ORGANIZATION NAME: Various Ford Customers
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: Printing, Copying, Bindery and Graphic Photo Services
management.
[ * ]
QUANTITIES: As required by customer. No minimum or maximum established.
PAYMENT TERMS: Net l5th/30th
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: United States (Michigan area locations)
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
DDS provides printing, copying and bindery services and graphic photo services
without the benefit of a contract. Jobs are billed on a job by job basis. DDS
competes for work without the support of purchasing other than acknowledgement
of the Ford blanket.
REFERENCE DATA
PN# : EXPIRATION DATE: 12/31/97
[ * ]
NEW INITIATIVES: We continue to market our services to the Ford community. Our
services are being enhanced by the addition of Orbitech, the on-line ordering of
digital services.
A-2
<PAGE> 9
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Ford Advanced Engineering Center (AEC)
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: 1) Management of building wide self serve copying machines and
related supplies, 2) Management of select general office supplies.
[ * ]
QUANTITIES: As required by customer. No minimum or maximum established
with the exception of the fixed service management fees.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite
billing system in production to replace manual
production of billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: 11/03/97
[ * ]
NEW INITIATIVES:
A-3
<PAGE> 10
SUPPLY Depot AEC SUPPLIES
<TABLE>
<CAPTION>
Item Description Unit Qty/Unit Misc. Ref Unit Quantity Total
Price Ordered
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Mouse Pad 10.75"x8.5"x.25" Each 1 BO160164 [
Blue
2 3M Disk 3.5" DSHD 2MB Box 10 B0160152
Preformatted (1.44MB after
format)
3 Cleaning Towelettes 40/40 Box 40 B0160080
Wet/Dry Texwipe
4 4mm Data Cartridges 90 Meter Each 1 B0316689
2GB Verbatim MVE88195FD
TEKTRONIX PHASER III SUPPLIES:
5 Color Stix - Black w/fuser wiper Box 8 B0848695
6 Color Stix - Cyan Box 8 B0848698
7 Color Stix - Magenta Box 8 B0848704
8 Color Stix - Yellow Box 8 B0848705
9 Letter Size Transparencies Box 100 B0848741
TEKTRONIX PHASER 11 PXI SUPPLIES:
10 4 Color Roll Each 1 B0512908
11 Letter Size Paper Box 1000 016089100 *
12 Letter Size Transparencies Box 100 B0512910
TEKTRONIX PHASER 11 SD SUPPLIES:
13 4 Color Roll Each 1 016117100
14 Letter Size Paper Box 200 016117300
15 Letter Size Transparencies Box 50 B0848748
TEKTRONIX 200 SUPPLIES:
16 3 Color Roll Each 1 B0848785
17 Thermal Transfer Paper 8.5x11 Box 100 B0848764
18 Letter Size Transparencies Box 50 B0848747
TEKTRONIX 540 SUPPLIES:
19 Black Toner (250 grams) Each 1 016131900
20 Cyan Toner (200 grams) Each 1 016132000
21 Magenta Toner (200 grams) Each 1 016132100
22 Yellow Toner (200 grams) Each 1 016132200
23 Color Imaging Kit Each 1 016131600
24 Corona Kit Each 1 016131700 ]
</TABLE> A-4
<PAGE> 11
<TABLE>
<CAPTION>
Item Description Unit Qty/Unit Misc. Ref Unit Quantity Total
Price Ordered
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
25 Transfer Kit Each 1 016131800 [
26 Fuser (11Ov Phaser540) Each 1 016132300
27 Letter Size Paper Box 500 016136800
28 Letter Size Transparencies Box 50 016132500
HP LASERJET 4,4M,4+,4M+ SUPPLIES:
29 Black Cartridge Each 1 B0681842
HP LASERJET 3SI, 4SI SUPPLIES:
30 Black Cartridge Each 1 B0316695 *
HP LASERJET II, III SUPPLIES:
31 Black Cartridge Each 1 B0160113
HP LASERJET 5M SUPPLIES:
32 Black Cartridge Each 1 B0848673
HP LASER SUPPLIES:
33 8.5 x 11 Box 50 T3MO1866
Transparency/MMMCG 3300
Total Depot Items ]
</TABLE>
A-5
<PAGE> 12
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Ford Body and Assembly General Office (B&AGO)
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE:
[ * ]
QUANTITIES: Fixed service management fee only.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite billing
system in production to replace manual production of
billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: 07/31/97
[ * ]
NEW INITIATIVES:
A-6
<PAGE> 13
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Ford Powertrain Operations Facilities Engineering
(Livonia Campus)
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: 1) Management of building wide self serve copying, plotting
and fax machines and related supplies, 2) Management of select general office
supplies.
[ * ]
QUANTITIES: As required by customer. No minimum or maximum established
with the exception of any fixed service management fees.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite
billing system in production to replace manual
production of billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
EXPIRATION DATE: 12/31/97
PN#: N/A
[ * ]
NEW INITIATIVES:
A-7
<PAGE> 14
LIVONIA CAMPUS ATTACHMENT I
<TABLE>
<CAPTION>
Item DTC SUPPLIES Unit Qty/Unit Misc Ref Unit
# Price
<S> <C> <C> <C> <C> <C>
1 Mouse Pad 10.75" x 8.5" x.25" Blue Each 1 B0160164
2 3M Disk 3.5" DSHD 2MB Preformatted (1.44MB Box 10 B0160152
after format)
3 Cleaning Towelettes 40/40 WetDry Texwipe Box 40 B0160080
4 4mm Data Cartridges 90 Meter 2GB Verbatim Each 1 B0316689
MVE88195FD
5 8mm Data Cartridges 2.2GB Verbatim Each 1 B0160141
MVE87698FD HP
HP DESKJET 1600C SUPPLIES
6 Black Cartridge Each 1 B0511424
7 Cyan Cartridge Each 1 B0511434
8 Magenta Cartridge Each 1 B0511435
9 Yellow Cartridge Each 1 B0511436
10 Glossy Paper 8.5 x 11 Box 50 B0511444
11 Clear Transparencies 1.5 x 11 Box 50 B0511470
HP 1200C SUPPLIES:
12 Black Cartridge Each 1 B0511424
13 Cyan Cartridge Each 1 B0511434
14 Magenta Cartridge Each 1 B0511435 *
15 Yellow Cartridge Each 1 B0511436
TEKTRONIX PHASER III SUPPLIES:
16 Color Stix - Black w/fuser wiper Box 8 B0848695
17 Color Stix - Cyan Box 8 B0848698
18 Color Stix - Magenta Box 8 B0848704
19 Color Stix - Yellow Box 8 B0848705
TEKTRONIX PHASER 11 SUPPLIES:
20 3 Color Roll Each 1 B0512909
21 Black Roll Each 1 016090400
22 Letter Size Transparencies Box 50 B0512910
23 Letter Size Paper Box 1000 016089100
TEKTRONIX 2001/4681 SUPPLIES:
24 Letter Size Paper Box 100 016118300
25 Letter Size Paper Box 100 B0848765
26 Black Roll Each 1 016118800
27 3 Color Roll Each 1 B0848786
28 Transparencies 8.5 x 11 Box 50 B0848746
29 Colorcoat Roll Each 1 016122200
TEKTRONIX 340 SUPPLIES:
30 Color Stix - Black Box 3 B848707
31 Color Stix - Cyan Box 3 B848713
32 Color Stix - Magenta Box 3 B848715
33 Color Stix - Yellow Box 3 B848717
34 Maintenance Tray Each 1 436029MOl
</TABLE>
A-8
<PAGE> 15
<TABLE>
<S> <C> <C> <C> <C> <C>
35 Letter Size Paper Box 500 016136800 [
36 Transparencies 8.5 x 11 Box 50 B0848743
37 Cleaning Kit Each 1 016134100
HP LASERJET 4,4M,4+,4M+ SUPPLIES:
38 Black Cartridge Each 1 B0681842
HP LASERJET 3SI, 4SI SUPPLIES:
39 Black Cartridge Each 1 B0316695
HP LASERJET 11, 111 SUPPLIES:
40 Black Cartridge Each 1 B0160113
HP LASERJET 5M SUPPLIES:
41 Black Cartridge Each 1 B0848673
HP LASERJET 5SI SUPPLIES:
42 Black Cartridge Each 1 B0848670
HP 2000 SUPPLIES:
43 Black Cartridge Each 1 B0160109
HP LASER SUPPLIES:
44 8.5 x 11 Transparency/MMMCG 3300 Box 50 T3MO1866 *
DEC 3500 SUPPLIES:
45 Black Cartridge Each 1 TDELN14XAA
QMS860 SUPPLIES:
46 Black Cartridge Each 1 B0512793
SUNSPARC LASER SUPPLIES:
47 Black Cartridge Each 1 SPRNTONER
SUN NEWSPRINTER LASER SUPPLIES:
48 Black Cartridge Each 1 SPRN20TONERKT
RS7120 SUPPLIES:
49 Cardboard Transparencies Frames Box 20 T3MO7368
COPIER ADMINISTRATION
50 Cost per Copy under 10,000/mo/avg Click 1
51 Cost per Copy 10,000-25,000/mo/avg Click 1
52 Cost per Copy over 25,000/mo/avg Click 1
PLOTTER ADMINISTRATION
53 Roll Each 1
FACSIMILE ADMINISTRATION
54 Facsimile Machines/mo Each 1
PROJECT ADMINISTRATION
55 Administration/mo Each 1 ]
SUPPLIES ADMINISTRATION
* PTO will receive Attachment II listing additional supplies and pricing
upon completion of supplies inventory by DDS/GRI.
</TABLE>
A-9
<PAGE> 16
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Ford CCD
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE:
[ * ]
QUANTITIES: As required by customer. No minimum or maximum established.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing.
(Satellite billing system in production to replace
manual production of billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
[ *
]
A-10
<PAGE> 17
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Ford Commercial Truck Vehicle Center (CTVC)
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: 1) On site full service copy center, 2) Management of
building wide self serve copying machines and related supplies, 3) Management of
select general office supplies.
[ *
]
QUANTITIES: As required by customer. No minimum or maximum established with the
exception of the fixed service management fees.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite
billing system in production to replace manual
production of billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: Valid until replaced
[ *
]
A-11
<PAGE> 18
<TABLE>
<CAPTION>
Item DTC SUPPLIES Description Unit Qty/Unit Misc Ref Unit Quanity Total
# Price Ordered
<S> <C> <C> <C> <C> <C> <C> <C>
1 Mouse Pad 10.75" x 8.5"x.25" Blue Each 1 B0160164 [
2 3M Disk 3.5" DSHD 2MB Preformatted (1.44MB after Box 10 B0160152
format)
3 Cleaning Towelettes; 40/40 Wet/Dry Texwipe Box 40 B0160080
4 4mm Data Cartriges; 90 Meter 2GS Verbatim Each 1 B0316689
MVE88195FD
5 8mm Data Cartriges 2.2GB Verbatim MVE87698FD Each 1 B0160141
HP DESKJET 1600C SUPPLIES:
6 Black Cartridge Each 1 B0511424
7 Cyan Cartridge Each 1 B0511434
8 Magenta Cartridge Each 1 B0511435
9 Yellow Cartridge Each 1 B0511436
10 Glossy Paper 8.5 x 11 Box 50 B0511444
11 Clear Transparencies 1.5 x 11 Box 50 B0511470
HP 1200C SUPPLIES:
12 Black Cartridge Each 1 B0511424
13 Cyan Cartridge Each 1 B0511434
14 Magenta Cartridge Each 1 B0511435
15 Yellow Cartridge Each 1 B0511436
TEKTRONIX PHASER III SUPPLIES:
16 Color Stix - Black w/fuser wiper Box 8 B0848695 *
17 Color Stix - Cyan Box 8 B0848698
18 Color Stix - Magenta Box 8 80848704
19 Color Sbx - Yellow Box 8 B0848705
19.1 Transparencies 8.5 x 11 Box 100 80848741
TEKTRONIX PHASER 11 SUPPLIES:
20 3 Color Roll Each 1 B0512909
21 Black Roll Each 1 016090400
22 Letter Size Transparencies Box 50 B0512910
23 Letter Size Paper Box 1000 016089100
TEKTRONIX 2001/4681 SUPPLIES:
24 Letter Size Paper Box 100 016118300
25 Letter Size Paper Box 100 B0848765
26 Black Roll Each 1 016118800
27 3 Color Roll Each 1 B0848786
28 Transparencies 8.5 x 11 Box 50 B0848746
29 Colorcoat Roll Each 1 016122200
TEKTRONIX 340 SUPPLIES:
30 Color Stix - Black Box 3 B848707
31 Color Stix - Cyan Box 3 B848713
32 Color Stix - Magenta Box 3 B848715
33 Color Stix - Yellow Box 3 B848717
34 Maintenance Tray Each 1 436029M0l
35 Letter Size Paper Box 500 016136800
36 Transparencies 8.5 x 11 Box 50 B0848743 ]
</TABLE>
A-12
<PAGE> 19
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
37 Cleaning Kit Each 1 016134100 [
HP LASERJET 4,4M,4+,4M+ SUPPLIES:
38 Black Cartridge Each 1 B0681842
HP LASERJET 3SI, 4SI SUPPLIES:
39 Black Cartridge Each 1 B0316695
HP LASERJET II, III SUPPLIES:
40 Black Cartridge Each 1 B0160113
HP LASERJET 5M SUPPLIES:
41 Black Cartridge Each 1 B0848673
HP LASERJET 5SI SUPPLIES: *
42 Black Cartridge Each 1 B0848670
HP 2000 SUPPLIES:
43 Black Cartridge Each 1 B0160109
HP LASER SUPPLIES:
44 8.5 x 11 Transparency/MMMCG 3300 Box 50 T3MO1866
DEC 3500 SUPPLIES:
45 Black Cartridge Each 1 TDELN14XAA
QMS860 SUPPLIES:
46 Black Cartridge Each 1 B0512793
SUNSPARC LASER SUPPLIES:
47 Black Cartridge Each 1 SPRNTONER
SUN NEWSPRINTER LASER SUPPLIES:
48 Black Cartridge Each 1 SPRN20TONERK7
RS7120 SUPPLIES:
49 Cardboard Transparencies Frames Box 20 T3M07368 ]
</TABLE>
A-13
<PAGE> 20
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Ford Large Front Wheel Drive Vehicle Center -
Experimental Vehicle Building (EVB)
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: 1) On site full service copy center, 2) Management of building
wide self serve copying machines and related supplies, 3) Management of select
general office supplies.
[ *
]
QUANTITIES: As required by customer. No minimum or maximum established.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite
billing system in production to replace manual
production of billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: 12/31/97
[ *
]
A-14
<PAGE> 21
<TABLE>
<CAPTION>
Item Description Unit Qty/Unit Misc Ref Unit Quantity
# Price Ordered Total
<S> <C> <C> <C> <C> <C> <C> <C>
1 Mouse Pad 10.75" 8.5" x .25" Blue Each 1 B0160164 [
2 3M Disk 3.5" DSHD 2MB Preformatted Box 10 B0160152
(1.44MB after format)
3 Cleaning Towelettes 40/40 Wet/Dry Box 40 B0160080
Texwipe
4 4mm Data Cartriges 90 Meter 2GB Each 1 B0316689
Verbatim MVE88195FD
5 8mm Data Cartriges 2.2GB Verbatim Each 1 B0160141
MVE87698FD
HP DESKJET 1600C SUPPLIES:
6 Black Cartridge Each 1 B0511424
7 Cyan Cartridge Each 1 B0511434
8 Magenta Cartridge Each 1 B0511435
9 Yellow Cartridge Each 1 B0511436 *
10 Glossy Paper 8.5 x 11 Box 50 B0511444
11 Clear Transparencies 1.5 x 11 Box 50 B0511470
HP 1200C SUPPLIES:
12 Black Cartridge Each 1 B0511424
13 Cyan Cartridge Each 1 B0511434
14 Magenta Cartridge Each 1 B0511435
15 Yellow Cartridge Each 1 B0511436
TEKTRONIX PHASER III SUPPLIES:
16 Color Stix - Black w/fuser wiper Box 8 B0848695
17 Color Stix - Cyan Box 8 B0848698
18 Color Stix - Magenta Box 8 B0848704
19 Color Stix - Yellow Box 8 B0848705
TEKTRONIX PHASER II SUPPLIES:
20 3 Color Roll Each 1 B0512909
21 Black Roll Each 1 016090400
22 Letter Size Transparencies Box 50 B0512910
23 Letter Size Paper Box 1000 016089100
TEKTRONIX 2001/4681 SUPPLIES:
24 Letter Size Paper Box 100 016118300
25 Letter Size Paper Box 100 B0848765
26 Black Roll Each 1 016118800
27 3 Color Roll Each 1 B0848786
28 Transparencies 8.5 x 11 Box 50 B0848746
29 Colorcoat Roll Each 1 016122200
TEKTRONIX 340 SUPPLIES:
30 Color Stix - Black Box 3 B848707
31 Color Stix - Cyan Box 3 B848713
32 Color Stix - Magenta Box 3 B848715
33 Color Stix - Yellow Box 3 B848717
34 Maintenance Tray Each 1 436029M0l
35 Letter Size Paper Box 500 016136800
36 Transparencies 8.5 x 11 Box 50 B0848743
37 Cleaning Kit Each 1 016134100
HP LASERJET 4,4M,4+,4M+ SUPPLIES:
38 Black Cartridge Each 1 B0681842 ]
HP LASERJET 3SI, 4SI SUPPLIES:
</TABLE>
A-15
<PAGE> 22
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
39 Black Cartridge Each 1 B0316695 [
HIP LASERJET II, III SUPPLIES:
40 Black Cartridge Each 1 B0160113
HP LASERJET 5M SUPPLIES:
41 Black Cartridge Each I B0848673
HIP LASERJET 5SI SUPPLIES:
42 Black Cartridge Each 1 B0848670
HIP 2000 SUPPLIES: *
43 Black Cartridge Each 1 B0160109
HP LASER SUPPLIES:
44 8.5 x 11 Transparency/MMMCG 3300 Box 50 TDELN14XAA
DEC 3500 SUPPLIES:
45 Black Cartridge Each 1 TDELN14XAA
QMS860 SUPPLIES:
46 Black Cartridge Each 1 B0512793
SUNSPARC LASER SUPPLIES:
47 Black Cartridge Each 1 SPRNTONER
SUN NEWSPRINTER LASER SUPPLIES:
48 Black Cartridge Each 1 SPRN20TONERK7
RS7120 SUPPLIES:
49 Cardboard Transparencies Frames Box 20 T3MO7368 ]
</TABLE>
A-16
<PAGE> 23
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Advanced Vehicle Technology Chassis Operations
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: 1) Management of on site engineering copying machines and
related supplies 2) Drawing file and reproduction support (ERC) 3) PCI
distribution support (ERC)
THIS CONTRACT EXPIRED ON 12/13 AND CUSTOMER HAS NOT SIGNED A
NEW AGREEMENT. SERVICE IS STILL BEING PERFORMED.
[ * ]
QUANTITIES: As required by customer. No minimum or maximum established.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite billing
system in production to replace manual production of
billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: 12/13/96
[ * ]
A-17
<PAGE> 24
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Automotive Components Division Sheldon Road Plant
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: 1) Operation of a full service copy center and related
supplies
THIS CONTRACT EXPIRED ON 12/ 31/96 AND CUSTOMER HAS BEEN ISSUING
A P.N. EACH MONTH IN ARREARS OF THE WORK BEING DONE.
PRICING:
[ *
]
QUANTITIES: As required by customer. No minimum or maximum established.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite billing
system in production to replace manual production of
billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: 12/13/96
[ * ]
A-18
<PAGE> 25
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Ford Motor Credit Company (FMCC)
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: 1) On site full service copy center, 2) Management of building
wide self serve copying machines and related supplies, 3) Management of select
general office supplies.
[ * ]
QUANTITIES: As required by customer. No minimum or maximum established with
the exception of any fixed service management fees.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite billing
system in production to replace manual production of
billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: 01/30/98
[ *
]
NEW INITIATIVES:
A-19
<PAGE> 26
DIVERSIFIED DOCUMENT Solutions
ALL PRODUCTS AND SERVICES ARE BILLED BASED ON USAGE AND IN ACCORDANCE WITH THE
DDS-FORD BLANKET BKBO 106842.
COPY CENTER
Copy centers will be billed according to the menu of services and
prices listed in the DDS blanket BKBO 106842. The configuration
determined for during the review of the facilities determines the price
breaks for B numbers #'s B1018679 to B1018765.
pricing will be:
[
<TABLE>
<CAPTION>
Description Unit
----------- ----
<S> <C>
Copying, Black & White, 8.5 x 11, One (1) Sided Each
Copying, Black & White, 8.5 x 11, 3 Hole, One (1) Sided Each
Copying, Black & White, 8.5 x 14, One (1) Sided Each
Copying, Black & White, 11 x 17, One (1) Sided Each
Copying, Black & White, 8.5 x 11, Two (2) Sided Each
Copying, Black & White, 8.5 x 11, 3 Hole, Two (2) Sided Each
Copying, Black & White, 8.5 x 14, Two (2) Sided Each
Copying, Black & White, 11 x 17, Two (2) Sided Each
Additional Services required outside of Copy Center Hours, weekday Hour
</TABLE>
Additional Services required outside of Copy Center Hours, weekend
Hour and holiday
*
WALK-UP COPIER ADMINISTRATION
All walk-up copiers administered by DDS will be billed on a cost
per copy basis for the actual equipment usage, a per machine
monthly fee, and paper / supplies delivered. The following
billing rates will apply in accordance with the DDS blanket BKBO
106842:
<TABLE>
<CAPTION>
Blanket Item Description Unit
------------ ----------- ----
<S> <C> <C>
B1018652 Copying Service, Black & White Click
B1018657 Administration Monthly Charge (per Machine) Month
B1018676 Supply Administration, Paper Supplies %
</TABLE>
Click counts for the billing will be collected monthly and will be
billed in arrears.
SUPPLY ADMINISTRATION
Supplies ordered for the copiers, printers, computers and general
office will be billed per the DDS blanket BKBO 106842:
<TABLE>
<CAPTION>
Blanket Item Description Unit
------------ ----------- ----
<S> <C> <C>
B1018660 Supply Administration, Fax Supplies %
B1018676 Supply Administration, Other Supplies %
B1018676 Supply Administration, Paper Supplies %
</TABLE>
]
A-20
<PAGE> 27
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Fairlane Program Center (FPC)
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: 1) On site full service copy center, 2) Management of building
wide self serve copying machines and related supplies, 3) Management of select
general office supplies.
[ *
]
QUANTITIES: As required by customer. No minimum or maximum established with
the exception of the fixed service management fees.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite billing
system in production to replace manual production of
billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: 10/13/97
[ *
]
A-21
<PAGE> 28
<TABLE>
<CAPTION>
SUPPLY DEPOT FPC SUPPLIES
ITEM DESCRIPTION UNIT QTY UNIT QUANTITY TOTAL
# UNITS MIS. REF. PRICE ORDERED
<S> <C> <C> <C> <C> <C> <C> <C>
1 Mouse Pad 10.75" x 8.5" x .25" Blue Each 1 B0160164 [
2 3M Disk 3.5" DSHD 2MB Preformatted (1.44MB Box 10 B0160152
after format)
3 Cleaning Towelettes 40/40 Wet/Dry Texwipe Box 40 B0160080
4 4mm Data Cartridges; 90 Meter 2GB Verbatim Each 1 B0316689
MVE88195FD
5 8mm Data Cartridges 2.2GB Verbatim Each 1 B0160141
MVE87698FD
HP DESKJET 1600C SUPPLIES:
6 Black Cartridge Each 1 B0511424
7 Cyan Cartridge Each 1 B0511434
8 Magenta Cartridge Each 1 B0511435
9 Yellow Cartridge Each 1 B0511436
10 Glossy Paper 8.5 x 11 Box 50 B0511444
11 Clear Transparencies 1.5 x 11 Box 50 B0511470
HP 1200C SUPPLIES:
12 Black Cartridge Each 1 B0511424
13 Cyan Cartridge Each 1 B0511434
14 Magenta Cartridge Each 1 B0511435
15 Yellow Cartridge Each 1 B0511436
TEKTRONIX PHASER III SUPPLIES:
16 Color Sbx - Black w/fuser wiper Box 8 B0848695
17 Color Stix - Cyan Box 8 B0848698
18 Color Stix - Magenta Box 8 B0848704
19 Color Stix - Yellow Box 8 B0848705 *
TEKTRONIX PHASER II SUPPLIES:
20 3 Color Roll Each 1 B0512909
21 Black Roll Each 1 016090400
22 Letter Size Transparencies Box 50 B0512910
23 Letter Size Paper Box 1000 016089100
TEKTRONIX 2001/4681 SUPPLIES:
24 Letter Size Paper Box 100 016118300
25 Letter Size Paper Box 100 B0848765
26 Black Roll Each 1 016118800
27 3 Color Roll Each 1 B0848786
28 Transparencies 8.5 x 11 Box 50 B0848746
29 Colorcoat Roll Each 1 016122200
TEKTRONIX 340 SUPPLIES:
30 Color Stix - Black Box 3 B848707
31 Color Stix - Cyan Box 3 B848713
32 Color Stix - Magenta Box 3 B848715
33 Color Stix - Yellow Box 3 B848717
34 Maintenance Tray Each 1 436029M01
35 Letter Size Paper Box 500 016136800
36 Transparencies 8.5 x 11 Box 50 B0848743
37 Cleaning Kit Each 1 016134100
HP LASERJET 4,4M,4+,4M+ SUPPLIES:
38 Black Cartridge Each 1 B0681842
HP LASERJET 3SI, 4SI SUPPLIES:
39 Black Cartridge Each 1 B0316695
HP LASERJET II, III SUPPLIES: ]
</TABLE>
A-22
<PAGE> 29
<TABLE>
<S> <C> <C> <C> <C>
40 Black Cartridge Each 1 B0160113 [
HP LASERJET SM SUPPLIES:
41 Black Cartridge Each 1 B0848673
HP LASERJET 5SI SUPPLIES:
42 Black Cartridge Each 1 B0848670
HP 2000 SUPPLIES:
43 Black Cartridge Each 1 B0160109
HP LASER SUPPLIES:
44 8.5 x 11 Transparency/MMMCG 3300 Box 50 T3M01866
DEC 3500 SUPPLIES:
45 Black Cartridge Each 1 TDELN14XAA *
QMS860 SUPPLIES:
46 Black Cartridge Each 1 B0512793
SUNSPARC LASER SUPPLIES:
47 Black Cartridge Each 1 SPRNTONER
SUN NEWSPRINTER LASER SUPPLIES:
48 Black Cartridge Each 1 SPRN20TONERKT
RS7120 SUPPLIES:
49 Cardboard Transparencies Frames Box 20 T3MO7368 ]
</TABLE>
A-23
<PAGE> 30
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Ford Powertrain Operations Material Control
Department - Livonia and Van Dyke Locations
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: 1) 2 on site full service copy centers, 2) Management of
building wide self serve copying machines and related supplies.
[ *
]
QUANTITIES: As required by customer. No minimum or maximum established with
the exception of the fixed service management fees.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite billing
system in production to replace manual production of
billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: 11/30/97
[ *
]
A-24
<PAGE> 31
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Ford Product Development Center (PDC)
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: 1) On site full service copy center, 2) Management of building
wide self serve copying machines and related supplies, 3) Engineering File
Storage (Aperture Card) and reproduction, 4) Management of select general office
supplies.
[ *
]
QUANTITIES: As required by customer. No minimum or maximum established with
the exception of the fixed service management fees.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite billing
system in production to replace manual production of
billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: 12/13/97
[ *
]
A-25
<PAGE> 32
PDC SUPPLY DEPOT
<TABLE>
<CAPTION>
Item Description Unit Qty/Unit Misc Ref Unit Quanity Total
# Price Ordered
<S> <C> <C> <C> <C> <C> <C> <C>
1 Mouse Pad 10.75" x 8.5" x .25" Each 1 B0160164 [
Blue
2 Mouse Paw Each 1 AVIMOUSEPAW
3 Wrist Rest/Padded Each 1 INTWR1
4 3M Disk 3.5" DSHD 2MB Box 10 B0160152
Preformatted (1.44MB after
format)
5 3M Disk 5.25" DSHD 1.2MB Box 10 B0160151
Preformatted
6 Labels for 3.5" diskettes Box 450 AVE5096
7 Disk Case 3.5" Cap 45 Hingetop Each 1 B0160154
8 Cleaning Towelettes 40/40 Box 40 B0160080
Wet/Dry Texwipe
9 DC6150 Data Cartridge 1/4" Each 1 B0160139
10 4mm Data Cartridges 90 Meter Each 1 B0316689
2GB Verbatim MVE88195FD
11 8mm Date Cartridge 2.2GB Each 1 B0316717
Sony MSOQG112MFD
12 8mm Data Cartridges 2.2GB Each 1 B0160141
Verbatim MVE87698FD
13 AAA Batteries 4Pack 1 MN2400B4
HP DESKJET 1600C SUPPLIES:
14 Black Cartridge Each 1 BO511424 *
15 Cyan Cartridge Each 1 B0511434
16 Magenta Cartridge Each 1 B0511435
17 Yellow Cartridge Each 1 B0511436
18 Glossy Paper 8.5 x 11 Box 50 B0511444
19 Clear Transparencies 1.5 x 11 Box 50 B0511470
HIP 1200C SUPPLIES:
20 Black Cartridge Each 1 B0511424
21 Cyan Cartridge Each 1 BO511434
22 Magenta Cartridge Each 1 B0511435
23 Yellow Cartridge Each 1 B0511436
TEKTRONIX PHASER III SUPPLIES:
24 Color Stix - Black w/fuser wiper Box 8 B0848695
25 Color Stix - Cyan Box 8 B0848698
26 Color Stix - Magenta Box 8 B0848704
27 Color Stix - Yellow Box 8 B0848705
TEKTRONIX PHASER II SUPPLIES:
28 3 Color Roll Each 1 B0512909
29 Black Roll Each 1 016090400
30 Letter Size Transparencies Box 50 B0512910
31 Letter Size Paper Box 1000 016089100
TEKTRONIX 2001/4681 SUPPLIES:
32 Letter Size Paper Box 100 016118300
33 Letter Size Paper Box 100 B0848765
34 Black Roll Each 1 016118800
35 3 Color Roll Each 1 B0848786
36 Transparencies 8.5 x 11 Box 50 B0848746 ]
</TABLE>
A-26
<PAGE> 33
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
37 Colorcoat Roll Each 1 016122200 [
TEKTRONIX 340 SUPPLIES:
38 Color Stix - Black Box 3 B848707
39 Color Stix - Cyan Box 3 B848713
40 Color Stix - Magenta Box 3 B848715
41 Color Stix - Yellow Box 3 B848717
42 Maintenance Tray Each 1 436029M01
43 Letter Size Paper Box 500 016136800
44 Transparencies 8.5 x 11 Box 50 B0848743
45 Cleaning Kit Each 1 016134100
LASERJET SUPPLIES:
46 LaserJet I Toner Each 1 B0160114
47 LaserJet II Toner Each 1 B0160113
48 LaserJet IV Toner Each 1 B0320088
HP LASERJET 4,4M,4+,4M+ SUPPLIES:
49 Black Cartridge Each 1 B0681842
HP LASERJET 3SI, 4SI
SUPPLIES:
50 Black Cartridge Each 1 B0316695
HP LASERJET II, III SUPPLIES:
51 Black Cartridge Each 1 B0160113
HP LASERJET 5M SUPPLIES:
52 Black Cartridge Each 1 B0848673
HP LASERJET 5SI SUPPLIES: *
53 Black Cartridge Each 1 B0848670
HP 2000 SUPPLIES:
54 Black Cartridge Each 1 B0160109
HP LASER SUPPLIES:
55 8.5 x 11 Transparency/MMMCG Box 50 T3M01866
3300
DEC 3500 SUPPLIES:
56 Black Cartridge Each 1 TDELN14XAA
QMS860 SUPPLIES:
57 Black Cartridge Each 1 B0512793
SUNSPARC LASER SUPPLIES:
58 Black Cartridge Each 1 SPRNTONER
SUN NEWSPRINTER LASER
SUPPLIES:
59 Black Cartridge Each 1 SPRN20TONERKT
RS7120 SUPPLIES:
60 Cardboard Transparencies Box 20 T3M07368
Frames
IBM 4029/4039/4079 SUPPLIES:
61 4029 Toner (10M copies) Each 1 B0512782
62 4029 Toner (10M copies) Each 1 B0316698
63 4039 Toner (10M copies) Each 1 B0512786
64 4039 Toner (20M copies) Each 1 B0512788
65 Black Cartridge-4079 Each 1 1380490
66 Cyan Cartridge-4079 Each 1 1380491
67 Magenta Cartridge-4079 Each 1 1380492
68 Yellow Cartridge-4079 Each 1 1380493
69 Coated Paper - Tabloid Box 200 1372079
70 Coated Paper - Letter Box 200 1372078 ]
</TABLE>
A-27
<PAGE> 34
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
71 Transparencies 8.5 x 11 Box 50 1372083 [
COMPAQ PAGEMARC SUPPLIES: *
72 Toner Ct 1 B0511466 ]
</TABLE>
A-28
<PAGE> 35
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Powertrain Operations Engine & Electrical
Engineering (Poee)
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: 1) On site full service copy center, 2) Management of building
wide self serve copying machines and related supplies, 3) Management of select
general office supplies 4) Management of Fax Machines 5) Plotter administration
6) Engineering File Storage (Aperture Card) and reproduction
[
* ]
QUANTITIES: As required by customer. No minimum or maximum established with
the exception of the fixed service management fees.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite
billing system in production to replace manual
production of billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: 4/30/98
[
* ]
A-29
<PAGE> 36
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Ford ROB
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE:
[
* ]
QUANTITIES: As required by customer. No minimum or maximum established.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite
billing system in production to replace manual
production of billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: Until replaced (started Jun,97)
[
* ]
NEW INITIATIVES:
A-30
<PAGE> 37
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Ford Advanced Vehicle Technology - Robalo
Technical Center
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: Management of building wide self serve copying machines
and paper supplies.
[
* ]
QUANTITIES: As required by customer. No minimum or maximum established.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite
billing system in production to replace manual
production of billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN,
ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: 07/21/97
[
* ]
NEW INITIATIVES:
A-31
<PAGE> 38
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Ford Technical Education (Tech-Ed)
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: 1) Management of building wide self serve copying machines
and paper.
[
* ]
Cost plus 12% for copies and supplies.
QUANTITIES: As required by customer. No minimum or maximum established
with the exception of the fixed service management fees.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite
billing system in production to replace manual
production of billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: Valid until replaced
[
* ]
NEW INITIATIVES:
A-32
<PAGE> 39
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Ford Truck Operations Commercial Truck Vehicle
Center (TRMC)
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: 1) Management of building wide self serve copying machines
and related supplies, 2) Engineering File Storage (Aperture Card) and
reproduction.
[
* ]
Cost plus 12% for copies, file services and supplies.
QUANTITIES: As required by customer. No minimum or maximum established
with the exception of the fixed service management fees.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite
billing system in production to replace manual
production of billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: 10/22/97
[
* ]
A-33
<PAGE> 40
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Ford Large Front Wheel Drive Vehicle Center -
VC2 East & West
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: 1) On site full service copy center, 2) Management of building
wide self serve copying machines and related supplies, 3) Management of select
general office supplies.
[
* ]
QUANTITIES: As required by customer. No minimum or maximum established with
the exception of the fixed service management fees.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite
billing system in production to replace manual
production of billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN,
ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: 12/31/97
[
* ]
A-34
<PAGE> 41
<TABLE>
<CAPTION>
SUPPLY DEPOT VC11 SUPPLIES
<S> <C> <C> <C> <C>
1 Mouse Pad 10.75" x 8.5"x .25" Blue Each 1 B0160164
2 3M Disk 3.5" DSHD 2MB Preformatted Box 10 B0160152 [
(1.44MB aftr format)
3 Cleaning Towelettes 40/40 Wet/Dry Texwipe Box 40 B0160080
4 4mm Data Cartriges 90 Meter 2GB Verbatim Each 1 B0316689
MVE88195FD
5 8mm Data Cartriges 2.2GB Verbatim Each 1 B0160141
MVE87698FD
HP DESKJET 1600C SUPPLIES:
6 Black Cartridge Each 1 B0511424
7 Cyan Cartridge Each 1 B0511434
8 Magenta Cartridge Each 1 B0511435
9 Yellow Cartridge Each 1 B0511436
10 Glossy Paper 8.5 x 11 Box 50 B0511444
11 Clear Transparencies 1.5 x 11 Box 50 B0511470
HP 1200C SUPPLIES:
12 Black Cartridge Each 1 B0511424
13 Cyan Cartridge Each 1 B0511434
14 Magenta Cartridge Each 1 B0511435
15 Yellow Cartridge Each 1 B0511436
TEKTRONIX PHASER III SUPPLIES:
16 Color Stix - Black w/fuser wiper Box 8 B0848695
17 Color Stix - Cyan sox 8 B0848698
18 Color Stix - Magenta Box 8 B0848704
19 Color Stix - Yellow Box 8 B0848705
TEKTRONIX PHASER II SUPPLIES: *
20 3 Color Roll Each 1 80512909
21 Black Roll Each 1 016090400
22 Letter Size Transparencies Box 50 B0512910
23 Letter Size Paper Box 1000 016089100
TEKTRONIX 2001/4681 SUPPLIES:
24 Letter Size Paper Box 100 016118300
25 Letter Size Paper Box 100 B0848765
26 Black Roll Each 1 016118800
27 3 Color Roll Each 1 B0848786
28 Transparencies 8.5 x 11 Box 50 B0848748
29 Colorcoat Roll Each 1 016122200
TEKTRONIX 340 SUPPLIES
30 Color Stix- Black Box 3 B848707
31 Color Stix - Cyan Box 3 B848713
32 Color Stix - Magenta Box 3 B848715
33 Color Stix - Yellow Box 3 B848717
34 Maintenance Tray Each 1 436029MO1
35 Letter Size Paper Box 500 016136800
36 Transparencies 8.5 x 11 Box 50 B0848743
37 Cleaning Kit Each 1 016134100
HP LASERJET 4,4M,4+,4M+ SUPPLIES:
38 Black Cartridge Each 1 B0681842
HP LASERJET 3SI, 4SI SUPPLIES:
39 Black Cartridge Each 1 B0316695 ]
</TABLE>
A-35
<PAGE> 42
<TABLE>
<S> <C> <C> <C> <C>
HP LASERJET II, III SUPPLIES:
40 Black Cartridge Each 1 B0160113 [
HP LASERJET 5M SUPPLIES:
41 Black Cartridge Each 1 B0848673
HP LASERJET 5SI SUPPLIES:
42 Black Cartridge Each 1 B0848670
HP 2000 SUPPLIES:
43 Black Cartridge Each 1 80160109
HP LASER SUPPLIES:
44 8.5 x 11 Transparency/MMMCG 3300 Box 50 T3M01866
DEC 3500 SUPPLIES:
45 Black Cartridge Each 1 TDELN14XAA
QMS860 SUPPLIES: *
46 Black Cartridge Each 1 B0512793
SUNSPARC LASER SUPPLIES:
47 Black Cartridge Each 1 SPRNTONER
SUN NEWSPRINTER LASER SUPPLIES:
48 Black Cartridge Each 1 SPRN20TONERKT
RS7120 SUPPLIES:
49 Cardboard Transparencies Frames Box 20 T3M07368
HP LASERJET 4MV Each 1 B0848671
Lexmark 4097, 8.5xl1 coated paper Box 200 IBMI372078 ]
</TABLE>
A-36
<PAGE> 43
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Satellite Operations
CUSTOMER/ORGANIZATION NAME: Ford World Headquarters
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: 1) Management of building wide self serve copying machines and
related supplies
[
* ]
QUANTITIES: As required by customer. No minimum or maximum established.
PAYMENT TERMS: Intercompany Settlement
BILLING SYSTEMS USED: Manual Production, & Avanti Invoicing. (Satellite
billing system in production to replace manual
production of billing).
SPECIAL TERMS:
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: N/A EXPIRATION DATE: 12/31/97
[
* ]
NEW INITIATIVES:
A-37
<PAGE> 44
WARRANTY PROCESS IMPROVEMENT
B-1
<PAGE> 45
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Warranty Specialist Program
CUSTOMER/ORGANIZATION NAME: FCSD - Europe
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): BPO on Ford Germany, Payment:
Britain from Ford Britain, Rest of Europe from Germany
SCOPE OF SERVICE: Field specialists to implement warranty process improvements
in Ford dealerships, train dealers in warranty and policy changes and achieve
warranty cost reductions. In some markets GRI also operates Telephone Prior
Approval.
[
* ]
QUANTITIES: As required by Ford, currently 61 heads in Europe.
PAYMENT TERMS: Monthly
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED:
Britain, Germany, Spain, France, Italy, Austria, Belgium, Denmark, Finland,
Ireland, Netherlands, Norway, Portugal, Sweden, Switzerland
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
REFERENCE DATA I
PN#: 64248 EXPIRATION DATE: Current Releases cover Jan. to
June 1997.
New Releases commencing July are in process.
[
* ]
B-2
<PAGE> 46
NEW INITIATIVES: Upgraded process management, improved reporting and analysis of
results.
B-3
<PAGE> 47
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: WPI (Warranty Process Improvement)
CUSTOMER/ORGANIZATION NAME: FCSD
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): FORD AUSTRALIA
SCOPE OF SERVICE: Field specialists to implement warranty process improvements
in Ford dealerships, train dealers in warranty and policy changes and achieve
warranty cost reductions.
In addition, GRI assists Ford in processing normal dealer warranty prior
approval requests.
Re-write of Warranty & Policy Manual (equivalent to Section F in the European
Manual). Due date November 1997. Timing on schedule. Work undertaken by
dedicated head. This service was covered in the original quotation and is
covered in the PO.
[
* ]
QUANTITIES: A minimum staff level of 1 Project Manager, 4 Field Consultants,
and 2 Telephone Consultants will be maintained by GRI.
PAYMENT TERMS: Net 30 days
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: In addition to the work specified above, GRI will also
undertake a rewrite of Ford of Australia's Warranty & Policy Manual.
COUNTRY(S) ADMINISTERED: Australia
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
REFERENCE DATA
PN#: B 518025 EXPIRATION DATE: 31/3/99
[
* ]
B-4
<PAGE> 48
[ *
]
NEW INITIATIVES: Pilot WPI implementation in New Zealand scheduled for September
1997 with roll-out of full program in January 1998. Note: Management will be by
current WPI Project Manager and implementation by 2 new NZ based field
consultants.
B-5
<PAGE> 49
GRI PROGRAM DESCRIPTION TEMPLATE
WARRANNTY PROCESS IMPROVEMENT - PRICING STRUCTURE
LOCAL CURRENCY
[
Britain
Germany
Spain
France
Italy
Austria
Belgium
Denmark
Finland
Ireland
Netherlands
Norway
Portugal
Sweden
Switzerland
*
Britain
Germany
Spain
France
Italy
Austria
Belgium
Denmark
Finland
Ireland
Netherlands
Norway
Portugal
Sweden
Switzerland
]
B-6
<PAGE> 50
CUSTOMER ASSISTANCE CENTERS
(CAC)
C-1
<PAGE> 51
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Nordic CAC
CUSTOMER/ORGANIZATION NAME: Ford Denmark, Finland, Norway and Sweden
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Sweden
SCOPE OF SERVICE: Customer Assistance Center acts as agent between customers,
dealers/retailers and manufacturer in order to resolve customer concerns, supply
related information or act pro-actively using customer database in marketing
campaigns.
[
*
]
QUANTITIES: Currently 8 heads
PAYMENT TERMS: Monthly in arrears, 30 days credit
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Denmark, Finland, Norway and Sweden.
IDENTIFY ANY CURRENT PRACTICES THAT DO DOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
REFERENCE DATA
PN#: 97000196 EXPIRATION DATE: 31/08/97
[
*
]
NEW INITIATIVES: PN was issued for 11 month (Feb. to Dec. 1997) but
consequently terminated by Ford as per Aug. 31, due to budget restrains. Ford
plan is to reduce work force and to relocate CAC's to the individual Ford
offices. Our initiative is to bid for the relocated operation.
C-2
<PAGE> 52
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Customer Assistance Center
CUSTOMER/ORGANIZATION NAME: FCSD Spain
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford of Spain
SCOPE OF SERVICE: Customer Assistance Center acts as agent between customers,
dealers/retailers and manufacturer in order to resolve customer concerns, supply
related information or act pro-actively using customer database in marketing
campaigns.
[
*
]
QUANTITIES: As required by customer, currently 22 employees.
PAYMENT TERMS: Net 30th.
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Spain
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
REFERENCE DATA
PN#: 438266 // 436853 EXPIRATION DATE: 31/12/97
[
*
]
NEW INITIATIVES:
C-3
<PAGE> 53
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Customer Assistance Center
CUSTOMER/ORGANIZATION NAME: FCSD Italy
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Italy
SCOPE OF SERVICE: Customer Assistance Center acts as agent between customers,
dealers/retailers and manufacturer in order to resolve customer concerns, supply
related information or act pro-actively using customer database in marketing
campaigns.
[
*
]
QUANTITIES: As required by Customer, currently 15 employees.
PAYMENT TERMS: 30 days after invoices presentation
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Italy
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
REFERENCE DATA
PN#: 1380/1376/2079 EXPIRATION DATE: 31/12/97
[
*
]
NEW INITIATIVES:
C-4
<PAGE> 54
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Customer Assistance Center
CUSTOMER/ORGANIZATION NAME: FCSD Germany
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Germany
SCOPE OF SERVICE: Customer Assistance Center acts as agent between customers,
dealers/retailers and manufacturer in order to resolve customer concerns, supply
related information or act pro-actively using customer database in marketing
campaigns. Handling of customer correspondence.
[
*
]
QUANTITIES: Number of telephone agents determined by Ford, currently 16
employees.
PAYMENT TERMS: 30 days net
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Germany
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
REFERENCE DATA
PN# 64376 (+ CHANGE NOTICES) EXPIRATION DATE: 31.10.1998
[
*
]
NEW INITIATIVES: Possible expansion to cover vehicle sales/marketing.
C-5
<PAGE> 55
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Customer Assistance Center
CUSTOMER/ORGANIZATION NAME: FCSD France
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford France
SCOPE OF SERVICE: Customer Assistance Center acts as agent between customers,
dealers/retailers and manufacturer in order to resolve customer concerns, supply
related information or act pro-actively using customer database in marketing
campaigns.
[
*
]
Expense for travel (if required) are charged at costs.
QUANTITIES: As required by customer and depending on volume, currently 30
employees.
PAYMENT TERMS: Net 30th/45th
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: FRANCE
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
REFERENCE DATA
PN#: 75210 EXPIRATION DATE: 31/12/97
[
*
]
NEW INITIATIVES:
C-6
<PAGE> 56
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: CAC (Customer Assistance Centre)
CUSTOMER/ORGANIZATION NAME: FCSD
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Australia
SCOPE OF SERVICE: Customer Assistance Center acts as agent between customers,
dealers/retailers and manufacturer in order to resolve customer concerns,
supply related information or act pro-actively using customer database in
marketing campaigns.
[
*
]
QUANTITIES: Staff level determined by GRI in order to deliver agreed Service
Level. In case of additional heads being necessary as result of volume increases
terms will be renegotiated. A minimum staff level of 1 Project Manager, 1
Supervisor, 3 Team Leaders, 8 CSR's, and 1 Administrative/Clerical will be
maintained by GRI.
PAYMENT TERMS: Net 14 days
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: Staffing levels vary according to call and correspondence
volumes as defined by the contract.
COUNTRY(S) ADMINISTERED: Australia
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
REFERENCE DATA
PN#: NP 546513 EXPIRATION DATE: 9/12/99
[
*
]
NEW INITIATIVES: Negotiations are currently underway for GRI to run Ford of New
Zealand's CAC from the Ford of Australia CAC facility.
C-7
<PAGE> 57
RAPID FIT
D-1
<PAGE> 58
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Quick Lane
CUSTOMER/ORGANIZATION NAME: Ford Customer Service Division
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: Expert industry specialist support for the development
of the Ford US Quick Lane pilot program.
[
*
]
QUANTITIES: Currently one head.
PAYMENT TERMS: Net l5th/30th
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
Two day training of dealer staff at each of four pilot dealers. Cost borne by
GRI.
REFERENCE DATA
PN#: 2460-030929 EXPIRATION DATE: 05/19/98
[
*
]
NEW INITIATIVES: Working toward a national roll-out. Pilot phase will continue
for the remainder of 1997.
D-2
<PAGE> 59
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: RapidFit
CUSTOMER/ORGANIZATION NAME: FCSD Britain
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Britain
SCOPE OF SERVICE: Provision of industry expert specialists to develop dealer
business cases for the implementation of the RapidFit program, assist dealers in
implementing Ford Rapidfit facilities and maintain standards, train dealer
staff, provide guidance in pricing of RapidFit services and
advertising/promotion activities, measure individual dealer and national
results.
[
*
]
QUANTITIES: As determined by customer, currently 14 incl. Project Manager
PAYMENT TERMS: Net 24th
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Britain
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
REFERENCE DATA
PN#: 09028 EXPIRATION DATE: 31/12/97
[
*
]
NEW INITIATIVES:
D-3
<PAGE> 60
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Rapid Fit
CUSTOMER/ORGANIZATION NAME: Ford of Spain
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford of Spain
SCOPE OF SERVICE: Provision of industry expert specialists to develop dealer
business cases for the implementation of the RapidFit program, assist dealers in
implementing Ford Rapidfit facilities and maintain standards, train dealer
staff, provide guidance in pricing of RapidFit services and
advertising/promotion activities, measure individual dealer and national
results.
[
*
]
QUANTITIES: 4 specialists as required by customer.
PAYMENT TERMS: Net 30th
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Spain
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
REFERENCE DATA
PN#: 438288 EXPIRATION DATE: 31/12/97
[
*
]
D4
<PAGE> 61
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: RapidFit
CUSTOMER/ORGANIZATION NAME: FCSD Italy
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Italy
SCOPE OF SERVICE: Provision of industry expert specialists to develop dealer
business cases for the implementation of the RapidFit program, assist dealers in
implementing Ford Rapidfit facilities and maintain standards, train dealer
staff, provide guidance in pricing of RapidFit services and
advertising/promotion activities, measure individual dealer and national
results.
[
*
]
QUANTITIES: As required by Ford, currently 4 specialists.
PAYMENT TERMS: 30 days after invoices presentation
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Italy
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
REFERENCE DATA
PN#: 1923 EXPIRATION DATE: 31/05/98
1996 REVENUE: 1997 REVENUE YTD (3/31/97):
[
*
]
D-5
<PAGE> 62
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: RapidFit Canada
CUSTOMER/ORGANIZATION NAME: FCSD Canada
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford of Canada
SCOPE OF SERVICE: GRI Program Manager to support the development of the "Fast
Lane" concept and the implementation and operation of the program at selected
Pilot Dealers
[
*
]
QUANTITIES: As determined by customer
PAYMENT TERMS: Quarterly
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Canada
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
Provision of additional specialist resources for 3.5 months during April - June
1997.
REFERENCE DATA
PN#: BPO 446052 EXPIRATION DATE: 30 Sept. 1997
[
*
]
NEW INITIATIVES: Possible national program roll-out late 1997
D-6
<PAGE> 63
SERVICE UPGRADING PROGRAM (DPI)
E-1
<PAGE> 64
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Service Upgrading Program (DPI)
CUSTOMER/ORGANIZATION NAME: Ford Sweden and Ford Norway
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Sweden and Ford Norway
SCOPE OF SERVICE: Provision of field based specialists in local markets to
implement the Ford Service Upgrading Program in Ford dealerships.
[
*
]
QUANTITIES: Sweden 1 head / Norway 1 head
PAYMENT TERMS: Monthly in arrears
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Norway, Sweden
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
Services not included in PN's: Consolidation of key measurables from individual
markets and creating European reports. Co-ordination of European and other
markets through dedicated GRI SUP Operations Manager.
REFERENCE DATA
PN#: 97000212,97000526,97000138, 97000139 EXPIRATION DATE: 31/12/97
[
*
]
NEW INITIATIVES:
E-2
<PAGE> 65
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Service Upgrading Program (DPI)
CUSTOMER/ORGANIZATION NAME: Ford of Spain
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford of Spain
SCOPE OF SERVICE: Provision of field based specialists to implement the Ford
Service Upgrading Program in Ford dealerships and provision of a local Project
Manager/Team Leader.
[
*
]
QUANTITIES: As required by Ford, currently 1 Team Leader and 8 Specialists
PAYMENT TERMS: Net 30th.
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Spain
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
Services not included in PN's: Consolidation of key measurables from individual
markets and creating European reports. Co-ordination of European and other
markets through dedicated GRI SUP Operations Manager.
REFERENCE DATA
PN#: 438459 EXPIRATION DATE: 31/12/97
[
*
]
NEW INITIATIVES:
Providing additional consultants for Ford DPI program initially for a limited
period.
E-3
<PAGE> 66
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Service Upgrading (DPI)
CUSTOMER/ORGANIZATION NAME: FCSD Italy
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Italy
SCOPE OF SERVICE: Provision of field based specialists to implement the Ford
Service Upgrading Program in Ford dealerships and provision of a local Project
Manager/Team Leader.
[
*
]
QUANTITIES: As required by Ford, currently 1 Team Leader and 9 Specialists.
PAYMENT TERMS: 30 days after invoices presentation
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Italy
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
Services not included in PN's: Consolidation of key measurables from
individual markets and creating European reports. Co-ordination of European and
other markets through dedicated GRI SUP Operations Manager.
REFERENCE DATA
PN#: 1335 EXPIRATION DATE: 31/01/98
[
*
]
NEW INITIATIVES:
E-4
<PAGE> 67
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Service Upgrading (DPI)
CUSTOMER/ORGANIZATION NAME: FCSD Ireland
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Ireland
SCOPE OF SERVICE: Provision of field based specialists to implement the Ford
Service Upgrading Program in Ford dealerships.
[
*
]
QUANTITIES: As required by Ford, currently 1 Specialist.
PAYMENT TERMS: 30 days after invoice presentation
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Italy
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
Services not included in PN's: Consolidation of key measurables from individual
markets and creating European reports. Co-ordination of European and other
markets through dedicated GRI SUP Operations Manager.
REFERENCE DATA
PN#: EXPIRATION DATE: 31/01/98
[
*
]
NEW INITIATIVES:
E-5
<PAGE> 68
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Service Upgrading (DPI)
CUSTOMER/ORGANIZATION NAME: FCSD-E/NSC's
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Germany, Belgium,
Netherlands
SCOPE OF SERVICE: Provision of field based specialists to implement the Ford
Service Upgrading Program in Ford dealerships and provision of a local Project
Manager/Team Leader.
[
*
]
QUANTITIES: Number of consultants agreed with Ford currently 2 in Belgium and 4
in the Netherlands.
PAYMENT TERMS: 30 days net
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Belgium, Netherlands
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
Services not included in PN's: Consolidation of key measurables from individual
markets and creating European reports. Co-ordination of European and other
markets through dedicated GRI SUP Operations Manager.
REFERENCE DATA
PN# Netherlands 97000281 and 97000773; EXPIRATION DATE: not fixed; 6 months
notice Belgium 97000212
[
*
]
E-6
<PAGE> 69
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Service Upgrading (DPI)
CUSTOMER/ORGANIZATION NAME: FCSD France
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford France
SCOPE OF SERVICE: Provision of field based specialists to implement the Ford
Service Upgrading Program in Ford dealerships and provision of a local Project
Manager/Team Leader.
[
*
]
QUANTITIES: Depending on number of dealers on program.
PAYMENT TERMS: Net 30th / 45th
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: FRANCE
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
Services not included in PN's: Consolidation of key measurables from individual
markets and creating European reports. Co-ordination of European and other
markets through dedicated GRI SUP Operations Manager.
REFERENCE DATA
PN#: 75385 EXPIRATION DATE: 31/12/97
[
*
]
NEW INITIATIVES:
E-7
<PAGE> 70
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Service 2000
CUSTOMER/ORGANIZATION NAME: FCSD
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Australia
SCOPE OF SERVICE: Provision of field based specialists to implement the Ford
Service Upgrading Program in Ford dealerships and provision of a local Project
Manager/Team Leader. Assistance with assessment and selection of suitable
dealers for the program.
[ * ]
QUANTITIES: A minimum staff level of 1 Project Manager, 8 Field Consultants,
and 1 Administrative/Clerical will be maintained by GRI.
PAYMENT TERMS: Net 14 days
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: Start up staffing levels will be dependent on initial
sign-up rate of dealers.
COUNTRY(S) ADMINISTERED: Australia
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
Services not included in PN's: Co-ordination of European and other markets
through dedicated GRI SUP Operations Manager.
REFERENCE DATA
PN#: Purchase Request A42322 EXPIRATION DATE: Proposed as 31/12/00
[ * ]
1997 BUDGETED REVENUE: N.A.
[ * ]
E-8
<PAGE> 71
MAIL SERVICES
F-1
<PAGE> 72
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Mail Services Operations
CUSTOMER/ORGANIZATION NAME: Ford Motor Company
MASTER CONTRACT ORGANIZATION (SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: Collection, sorting, posting, distribution and delivery of
U.S. and interoffice mail for Ford Motor Company in SE Michigan. Preparation of
overseas express carrier packages. Special couriers services for executive staff
throughout SE Michigan.
[
*
]
QUANTITIES: As required by customer. No minimum or maximum established.
PAYMENT TERMS: Intercompany settlements
BILLING SYSTEMS USED: Avanti
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
F-2
<PAGE> 73
REFERENCE DATA
PN#: N/A EXPIRATION DATE: N/A
[
* ]
NEW INITIATIVES: Contacts at individual building locations are pursued that
provide specialized on-site mail services. These revenues are above and beyond
the assessed amounts of the primary services defined above.
F-3
<PAGE> 74
COMPUTER OUTPUT TO MICROFILM (COM)
G-1
<PAGE> 75
EDUCATION TRAINING AND DEVELOPMENT (ET&D)
H-1
<PAGE> 76
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: ET&D (FORD EDUCATION TRAINING AND DEVELOPMENT)
CUSTOMER/ORGANIZATION NAME: ET&D
MASTER CONTRACT ORGANIZATION (SOURCE OF PAYMENT): FORD US
SCOPE OF SERVICE: Turn-key managed training services, providing on-site design
and development, administration, and plant training management. Current (7/l/97)
levels of billed support are as follows: 52 Design and Development
professionals, 4 Financial Analysts, 7 systems and support specialists, 13
clerical personnel, 10 training coordinators, 42 Plant Training Development
Leaders, or TDLs (including 3 regional supervisiors), and 1 Project Manager.
These TDLs are located in every Vehicle Operations Plant in the US and CANADA.
Additional Plants are as follows: Vulcan/Woodhaven Forge (Powertrain Division),
Connersville (Automotive Products Division) and Dearborn Glass (Automotive
Products Division)
[
*
]
QUANTITIES: As required by customer. No minimum or maximum established.
PAYMENT TERMS: Net 15th/30th
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: United States and Canada
[
*
]
H-2
<PAGE> 77
REFERENCE DATA
PN#: 8840-914516 EXPIRATION DATE: 12/31/97
[
*
]
NEW INITIATIVES: We continue to negotiate increasing levels of service that may
include additional products (e.g. instructors, additional management services,
etc.). Ford is considering dividing the current PN into seven (7) separate PNs
aligned with their internal organization.
H-3
<PAGE> 78
TECHNICAL HOTLINE
I-1
<PAGE> 79
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Dealer Technical Helpline (Hotline)
CUSTOMER/ORGANIZATION NAME: FCSD - Europe
MASTER CONTRACT ORGANIZATION (SOURCE OF PAYMENT): Ford of Europe
SCOPE OF SERVICE: The purpose of the Hotline is to provide Ford
Dealers with a telephone service to assist with the
resolution of technical concerns with Ford
vehicles. When a Dealer is unable to resolve a
concern using normal procedures and technical data,
he will contact the Hotline for specialised
assistance. The service is provided from 6 Centers
to 15 WEurope markets and newly 150 other
countries.
PRICING: See attached price list.
QUANTITIES: Agreed headcount by Center / market (presently 52).
PAYMENT TERMS: As Ford of Europe terms (ie 60 days): however,
payment typically received within 30 days.
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Primarily Western Europe (UK, Ireland, Norway,
Sweden, Finland, Denmark, Germany, Austria,
Switzerland, Belgium, Netherlands, France, Spain,
Portugal, Italy) plus nearly 150 other countries
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
Added services not in PN:-
- - Monthly reporting to National Sales Companies, FCSD-Europe and FCSD-US for
Global Hotline
- - Audio and ICE Hotline integrated
- - Radio KeyCode support integrated
- - Campaign, Recall and Field Investigation support
- - Running pan-European Technical Concerns clinics
- - Inward facing (ie Ford) technical support (eg Literature errors, FDS 'bugs')
Services in PN not performed:-
- - Not Applicable
REFERENCE DATA
PN#: 64247 EXPIRATION DATE: 31-March-2000 ('rolling' 3 years)
[
*
]
NEW INITIATIVES:
- - Process Computer Modelling - Computer Predictive Call Modelling
- - Computer Telephony Integration - Real-time high definition video and
stills
- - Call Avoidance Program - Supplier Call Handling
I-2
<PAGE> 80
GRI PROGRAM DESCRIPTION TEMPLATE
TECHNICAL DEALER HOTLINE
Annual Pricing Structure
CENTER [
Location
Service Charge
Reconciliation Charge *
Annual Total
Headcount
]
Notes:
Service charge Britain includes $85,800 for Project Management.
Annual Reconciliation Items
- - Balance of Telephone Calls
- - Non-Commissionable Items
- - Travel
- - Training and Recruitment
- - Stationery
- - Petrol, Oil, Diesel etc
- - Storage
- - Taxes, Duties etc
- - Insurances
- - Post, Freight etc
Telephone Calls include a 'fixed' 3% margin
Non-commissionable items are not permitted a mark-up
I-3
<PAGE> 81
TECHNICAL FIELD ENGINEERS
J-1
<PAGE> 82
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Technical Field Engineers
CUSTOMER/ORGANIZATION NAME: FCSD - Britain
MASTER CONTRACT ORGANIZATION (SOURCE OF PAYMENT): Ford Britain
SCOPE OF SERVICE: The purpose of the service is to provide
regionally-based field team of competent technical
staff to assist Dealers in product concern
diagnosis
PRICING: See attached price list
QUANTITIES: Agreed headcount (presently 10).
PAYMENT TERMS: As Ford of Europe terms (ie 60 days): however,
payment typically received within 30 days.
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: GBritain
Note: France and Italy also administered by
separate contracts
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
Added services not in PN:-
- - Investigation of critical concerns
- - Verification of Service 'Fixes'
- - Submission of Express Service Reports (ESRs), and, weekly concern and quality
reports
- - Special surveys
- - Campaign and Recall investigation and support
- - Liaison with Customer Assistance Center on Commitment and 'high profile'
customer vehicles
- - Support for special events eg Wimbledon, Customer Clinics etc
Services in PN not performed:-
- - Not Applicable
REFERENCE DATA
PN#: 09018 EXPIRATION DATE: 31-March-2000 ('rolling' 3 years)
[
*
]
NEW INITIATIVES:
- - Investigation into digital picture (stills and video) transmission from and
to Dealers
J-2
<PAGE> 83
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Field Technical Engineer
CUSTOMER/ORGANIZATION NAME: FCSD Italy
MASTER CONTRACT ORGANIZATION (SOURCE OF PAYMENT): Ford Italy
Scope of Service: The purpose of the service is to provide regionally-
based field team of competent technical staff to
assist Dealers in product concern diagnosis
[
*
]
QUANTITIES: Agreed headcount (presently 10).
PAYMENT TERMS: 30 days after invoices presentation
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Italy
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
REFERENCE DATA
PN#: 1384 EXPIRATION DATE: 31/12/97
[
*
]
J-3
<PAGE> 84
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: TECHNICAL FIELD ENGINEERS
CUSTOMER/ORGANIZATION NAME: FCSD France
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford France
SCOPE OF SERVICE: The purpose of the service is to provide regionally-
based field team of competent technical staff to
assist Dealers in product concern diagnosis
[
*
]
QUANTITIES: Agreed headcount (presently 10).
PAYMENT TERMS: Net 30th/45th
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: FRANCE
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
REFERENCE DATA
PN#: 75212 EXPIRATION DATE: 31/12/97
[
*
]
J-4
<PAGE> 85
GRI PROGRAM DESCRIPTION TEMPLATE
TECHNICAL FIELD ENGINEERS
Pricing Structure
[
*
]
J-5
<PAGE> 86
ENGINEERING RECORDS CENTER
K-1
<PAGE> 87
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Engineering Records Center
CUSTOMER/ORGANIZATION NAME: Ford US
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: Reproduction, and distribution of Ford Motor Company
engineering drawings. Production and storage of aperture cards and full size
files.
[
*
]
QUANTITIES: As required by customer. No minimum or maximum established.
PAYMENT TERMS: Intercompany settlements
BILLING SYSTEMS USED: Avanti
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
REFERENCE DATA
PN#: FMOFB BKBO 106842 EXPIRATION DATE: 04/03/98
[
*
]
NEW INITIATIVES: Consolidation of 60+ filerooms throughout SE Michigan; value
approximately $1.4 million.
K-2
<PAGE> 88
ENGINEERING RECORDS & MICROFORMS
[
*
]
K-3
<PAGE> 89
[
*
]
K-4
<PAGE> 90
[
*
]
K-5
<PAGE> 91
ELECTRONIC DATA MANAGEMENT
L-1
<PAGE> 92
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: WISE (Worldwide Integrated Standards for Engineering)
CUSTOMER/ORGANIZATION NAME: ESSE (Engineering Standards and System
Engineering), formally ASES
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: Create, maintain, manage, and electronically deploy Ford
worldwide product standards, design and material specifications, and vehicle
requirements to Ford Product Development and suppliers.
[ * ]
QUANTITIES: As required by customer. No minimum or maximum established.
PAYMENT TERMS: Monthly billing
BILLING SYSTEMS USED: Avanti (electronic withdraw)
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: United States and Europe
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
EDM provides a program management infrastructure to support the WISE effort.
This includes systems development, systems administration, project management,
helpdesk support (US and Europe), and production support.
REFERENCE DATA
PN#: Contract Letter of Intent - signed 11 August 94 ($59,000) and 17 February
95 ($17,400), new contract currently in negotiation - 5 years $85,000 per month
+ 7% annual increase.
EXPIRATION DATE: 11 August 97
[ * ]
L-2
<PAGE> 93
NEW INITIATIVES: We continue to negotiate increasing levels of service that may
include additional products and services. This is reflected in the new contract
currently under negotiation.
L-3
<PAGE> 94
GRI PROGRAM DESCRIPTION TEMPLATE
Electronic Data Management - project 2800740
PROGRAM NAME: DocMan
CUSTOMER/ORGANIZATION NAME: Timing, Release & Material Control (TRMC)
MASTER CONTRACT ORGANIZATION (SOURCE OF PAYMENT): Ford US
[ * ]
SCOPE OF SERVICE: aperture card archive loading, storage, Web site hosting, and
remote hardcopy distribution solution
QUANTITIES: No quantities on system accesses. Drawing on Demand (scanned
cards 200/day)
PAYMENT TERMS: Monthly Billing
BILLING SYSTEMS USED: Avanti (Electronic withdraw)
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
The DocMan user group is identified for measurement reporting. The metrics are
established as;
1) system up-time
2) help desk support
3) drawing-on-demand service
4) data loading time
REFERENCE DATA
PN# : Contract Letter of Intent - signed 4/17/97 EXPIRATION DATE: none
[ * ]
L-4
<PAGE> 95
NEW INITIATIVES:
This project has the ability to negotiate remote repositories at a fee of
$250,000 per site. Brazil was the first instance of this and logical candidates
such as Europe, Australia and other Ford locations.
L-5
<PAGE> 96
GRI PROGRAM DESCRIPTION TEMPLATE
Electronic Data Management - project number 2800750
PROGRAM NAME: JVCarr /Purchasing Conversion Services
CUSTOMER/ORGANIZATION NAME: Ford Purchasing
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: remote document disassembly, scanning, and reassemble
[ * ]
QUANTITIES: estimated through put of 245,000 images per month
PAYMENT TERMS: Monthly Billing
BILLING SYSTEMS USED: Avanti (Electronic withdraw)
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: United States
1) IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES
NOT DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE
PN, ETC.:
REFERENCE DATA
PN#: Addendum Contract Letter - signed April 1997
Original Contract Signed July 1996 EXPIRATION DATE: none
First Billing Effective May 1, 1997
[ * ]
NEW INITIATIVES:
[ * ]
The Ford Human Resources pilot PN has been approved. On-going conversion
services to be derived from pilot and production award pending.
L-6
<PAGE> 97
EXTENDED SERVICE PLAN (ESP)
M-1
<PAGE> 98
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: ESP Administration
CUSTOMER/ORGANIZATION NAME: FCSD
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford US
SCOPE OF SERVICE: Administration services in support of the Ford Extended
Service Plan, including File Maintenance, Fileroom, Mailroom, Time Payment,
Direct Mail, Contract Cancellations, Contract Transfers, Claims Handling and
supporting supervisory activities.
[ * ]
QUANTITIES: Variable, as required depending on volume and approved by customer.
PAYMENT TERMS: Net l5th/30th
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: Overtime billed at 1.3 times regular rate
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC:
None
REFERENCE DATA
PN#: FMOFB BKBO 104511 EXPIRATION DATE: 03/31/99
[ * ]
NEW INITIATIVES: Working with customer to take on Mazda contract registrations
in conjunction with American Road Insurance Operations (Ford Credit).
Targeted to launch in July. Possible extension of ESP administration to cover
Canada.
M-2
<PAGE> 99
EXTENDED SERVICE PLAN (ESP) PRICING
PERSONNEL [
Project Manager
Section Secretary
Unit Supervisor
Administrative Assistant
Hotline Group Leader
Service Representative
Systems Analyst
Reporting Analyst
FILE MAINTENANCE
Group Leader
Analyst
Registration/Verification Analyst
FILEROOM
Coordinator
Assistant
*
MAILROOM
Group Leader
Imaging Clerk
Mail Clerk
TIME PAYMENT
Group Leader
Specialist
Assistant
DIRECT MAIL
Group Leader
Specialist
Assistant
CANCELLATIONS
Group Leader
Specialist
Analyst
TRANSFERS
Group Leader
Transfers/Registration Analysts
Assistant
FLEET
Group Leader
Specialist ]
M-3
<PAGE> 100
Assistant [
ESP PRICING (CONTINUED)
CLAIMS
Group Leader
Claims Service Representative
FACILITIES
Monthly cost per Square Foot
Space & Utilities *
Furniture
Telephone System
Supplies
TOTAL
COURIER SERVICES
Vehicle Lease (per month)
Courier (per hour) ]
NOTE:
1) Overtime is calculated at 1.3 times the regular hourly rate.
2) All telephone bills, travel and miscellaneous expenses approved by Ford will
be rebilled at cost.
3) GRI's commitment for space will be for 2 years based upon customer input.
M-4
<PAGE> 101
JAGUAR OPERATIONS
N-1
<PAGE> 102
NEW BUSINESS EDM
Engineering Records Support Ford HR $575,000
Center
T-6
<PAGE> 103
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Jaguar Consolidated
CUSTOMER/ORGANIZATION NAME: Jaguar Cars
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Jaguar US
SCOPE OF SERVICE: Provide staffing within Jaguar US Headquarters' Customer
Assistance Center, Technical Center, and other departments such as Accounting,
Marketing, Public Affairs, etc.
[ * ]
QUANTITIES: As required by customer. No minimum or maximum established.
PAYMENT TERMS: Monthly
BILLING SYSTEMS USED: MICS
SPECIAL TERMS: Each employee may be reimbursed up to $1,800 per year
for training/education costs.
COUNTRY(S) ADMINISTERED: United States
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
REFERENCE DATA
PN#: None (contract only) EXPIRATION DATE: 12/31/98
[ * ]
NEW INITIATIVES:
N-2
<PAGE> 104
GRI PROGRAM DESCRIPTION TEMPLATE
JAGUAR SERVICES - BILL RATES
POSITION [ PROPOSED RATE
Accounting Clerk
Admin Assistant
Admin Assistant
Admin Assistant
Admin Assistant
Senior Admin Assistant
Cust Assist Rep
Cust Assist Center Admin
Consumer Affairs Specialist
Financial Analyst *
Marketing Coord
Media Support Coord
Parts Testing Supervisor
Parts Testing Tech
Program Coord
Public Affairs Assistant
Remarketing Analyst
Secretary
Service Technician
Warranty Specialist ]
N-3
<PAGE> 105
FORD ACCIDENT REPAIR PROGRAM
(BODY SHOP)
O-1
<PAGE> 106
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Bodyshop
CUSTOMER/ORGANIZATION NAME: FCSD Belgium
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Belgium
SCOPE OF SERVICE: Provision of industry expert specialists to assist dealers in
implementing and maintaining Ford Authorized Bodyshop standards, promoting
dealer body and paint repair business, liaising with insurance companies to
secure Ford dealers as a preferred source of repair.
[ * ]
QUANTITIES: Number of specialists as agreed with Ford, presently one.
PAYMENT TERMS: 30 days net
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Belgium
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
================================================================================
REFERENCE DATA
PN#: Belgium 97000211 EXPIRATION DATE: 31.12.1997 with option to prolong
[ * ]
NEW INITIATIVES: None
O-2
<PAGE> 107
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Bodyshop
CUSTOMER/ORGANIZATION NAME: FCSD France
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford France
SCOPE OF SERVICE: Provision of industry expert specialists to assist dealers in
implementing and maintaining Ford Authorized Bodyshop standards, promoting
dealer body and paint repair business, liaising with insurance companies to
secure Ford dealers as a preferred source of repair.
[ * ]
QUANTITIES: As required by Ford, currently 4 employees.
PAYMENT TERMS: Net 30th / 45th
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: FRANCE
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
================================================================================
REFERENCE DATA
PN#: 75083 EXPIRATION DATE: 31/12/97
[ * ]
NEW INITIATIVES:
O-3
<PAGE> 108
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Bodyshop
CUSTOMER/ORGANIZATION NAME: FCSD Germany
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Germany
SCOPE OF SERVICE: Provision of industry expert specialists to assist dealers in
implementing and maintaining Ford Authorized Bodyshop standards, promoting
dealer body and paint repair business, liaising with insurance companies to
secure Ford dealers as a preferred source of repair.
[ *
]
QUANTITIES: Number of specialists agreed with Ford.
PAYMENT TERMS: 30 days net
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Germany
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN,
ETC.: None
================================================================================
REFERENCE DATA
PN#: 972568 EXPIRATION DATE: 31.12.1997 with option to prolong
[ *
]
NEW INITIATIVES:. None
O-4
<PAGE> 109
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Bodyshop
CUSTOMER/ORGANIZATION NAME: FCSD Italy
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Italy
SCOPE OF SERVICE: Provision of industry expert specialists to assist dealers in
implementing and maintaining Ford Authorized Bodyshop standards, promoting
dealer body and paint repair business, liaising with insurance companies to
secure Ford dealers as a preferred source of repair.
[ *
]
QUANTITIES: As required by Customer, currently 5 specialists.
PAYMENT TERMS: 30 days after invoices presentation
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Italy
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
================================================================================
REFERENCE DATA
PN#: 1924 EXPIRATION DATE: 30/06/98
[ *
]
NEW INITIATIVES:
O-5
<PAGE> 110
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Bodyshop
CUSTOMER/ORGANIZATION NAME: FCSD Spain
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford of Spain
SCOPE OF SERVICE: Provision of industry expert specialists to assist dealers in
implementing and maintaining Ford Authorized Bodyshop standards, promoting
dealer body and paint repair business, liaising with insurance companies to
secure Ford dealers as a preferred source of repair.
[ *
]
QUANTITIES: 3 specialists as required by Ford.
PAYMENT TERMS: Net 30 th.
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Spain
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
REFERENCE DATA
================================================================================
PN#: 439291 EXPIRATION DATE: 31/12/97
[ *
]
NEW INITIATIVES:
0-6
<PAGE> 111
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Accident Repair Center Program (Bodyshop)
CUSTOMER/ORGANIZATION NAME: FCSD Britain
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Britain
SCOPE OF SERVICE: Provision of industry expert specialists to assist dealers in
implementing and maintaining Ford Authorized Bodyshop standards, promoting
dealer body and paint repair business, liaising with insurance companies to
secure Ford dealers as a preferred source of repair.
[ *
]
QUANTITIES: 7 employees
PAYMENT TERMS: net 24th
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Britain
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
In previous year employees were paid a year end bonus mutually agreed between
Ford and GRI. 50% of bonus was paid by GRI.
================================================================================
REFERENCE DATA
PN#: 420828 EXPIRATION DATE: 31/12/97
NEW INITIATIVES:
O-7
<PAGE> 112
WARRANTY CLAIMS ASSESSORS
P-1
<PAGE> 113
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Warranty Claims Assessors
CUSTOMER/ORGANIZATION NAME: Ford Germany
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Germany
SCOPE OF SERVICE: Assessing of dealer warranty and policy claims within
delegated authority, handling of telephone inquiries from dealers, policy
telephone prior approval, approval of paint repairs and general administartion
support related to warranty and policy claims.
[ *
]
QUANTITIES: Depending on claims volume.
PAYMENT TERMS: 30 days net
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Germany
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
================================================================================
REFERENCE DATA
PN#:64392 EXPIRATION DATE: 31.12.1999
[ *
]
NEW INITIATIVES:
P-2
<PAGE> 114
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Warranty Administration
CUSTOMER/ORGANIZATION NAME: FCSD - Britain
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Britain
SCOPE OF SERVICE: Assessing of dealer warranty and policy claims within
delegated authority, handling of telephone inquiries from dealers, policy
telephone prior approval, approval of paint repairs and general administartion
support related to warranty and policy claims.
[ *
]
QUANTITIES: As required by Ford, currently 16 employees incl. a Team Leader.
PAYMENT TERMS: Monthly
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: Britain I
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
================================================================================
Reference Data
PN#: 519075 Expiration Date: 31ST DECEMBER 1997
[ *
]
P-3
<PAGE> 115
ADTEAM
Q-1
<PAGE> 116
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: ADTEAM
CUSTOMER/ORGANIZATION NAME: Ford US & UK
MASTER CONTRACT ORGANIZATION(SOURCE OF PAYMENT): Ford Worldwide
(Currently Mexico, Canada,
Germany, UK, & Portugal)
SCOPE OF SERVICE: Sole source process for the negotiation, award,
administration, and payment of consultancy, research, and training services
procured by Facilities, Materials and Services Purchasing for Ford Motor
Company.
[ *
]
QUANTITIES: As required by customer. No minimum or maximum established.
PAYMENT TERMS: Immediate
BILLING SYSTEMS USED: CPARS PN's - Wire Transfer upon electronic payment
approval.
*Currently: Manual & COSMIC PN's - Manually
SPECIAL TERMS: Function as an agent for Ford
COUNTRY(S) ADMINISTERED: United States and United Kingdom
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING GENERAL AGREEMENT AND/OR BLANKET ORDER. EXAMPLES INCLUDE ADDITIONAL
SERVICES NOT DESCRIBED IN THE AGREEMENT OR BLANKET ORDER, SERVICES NOT PERFORMED
THAT ARE IDENTIFIED IN THE AGREEMENT OR BLANKET ORDER, ETC.: ADTEAM represents
Ford Facilities, Materials & Services Purchasing (FM&SP) on various Ford
procurement related committees, as well as at customer and supplier meetings.
Also, ADTEAM serves as liaison between the customer, supplier, and Ford's Office
of General Council (OGC) on terms and conditions issues. Additionally, ADTEAM
monitors orders released against the established blanket order for their service
content as it relates to the scope of our contract Orders received which are not
within our scope are addressed with FM&SP.
Q-2
<PAGE> 117
================================================================================
REFERENCE DATA
MASTER AGREEMENT EXPIRATION DATE: 02/01/98
BLANKET ORDER#: BKBO 103971 EXPIRATION DATE: 02/01/99
[ *
]
NEW INITIATIVES: * ADTEAM is in final testing of an automated/consolidated
billing file feed into Ford's CCAPS system. This will reduce payment timing from
approximately 3-4 weeks to 1-2 days for those invoices associated with manual
and COSMIC PN's.
ADTEAM has also begun our Quality initiative, targeting ISO 9000 certification
in 1997.
Q-3
<PAGE> 118
TRAINING SCHOOLS
R-1
<PAGE> 119
GRI PROGRAM DESCRIPTION TEMPLATE
PROGRAM NAME: Training Schools
CUSTOMER/ORGANIZATION NAME: FCSD
MASTER CONTRACT ORGANIZATIONS (SOURCE OF PAYMENT): Ford France (FOF)
Ford Italy (FOI)
SCOPE OF SERVICE: Turn-key managed training services, providing on-site
instructor services, facilities and equipment (where applicable), and
management.
[ *
]
QUANTITIES: As required by customer. No minimum or maximum established.
PAYMENT TERMS: Net 30th
BILLING SYSTEMS USED: Manual
SPECIAL TERMS: None
COUNTRY(S) ADMINISTERED: France and Italy
IDENTIFY ANY CURRENT PRACTICES THAT DO NOT SPECIFICALLY MATCH THE CURRENT
GOVERNING PURCHASE NOTIFICATION (PN). EXAMPLES INCLUDE ADDITIONAL SERVICES NOT
DESCRIBED IN THE PN, SERVICES NOT PERFORMED THAT ARE IDENTIFIED IN THE PN, ETC.:
None
================================================================================
REFERENCE DATA
PN#: France: 75213, 75214 EXPIRATION DATE: 12/31/97
Italy: 01381, 01382, 01383 EXPIRATION DATE: 12/31/97
[ *
]
NEW INITIATIVES: No significant new business initiatives at this time
R-2
<PAGE> 120
MISCELLANEOUS CONTRACTS
S-1
<PAGE> 121
<TABLE>
<CAPTION>
Country Contracts by Legal Blanket/PN Expiration date
SBU Master Contract Administered Contract Name Customer Entity Number Present New
--- --------------- ------------ ------------- -------- ------ ------ ------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
APM N.A USA FSP FCSD Ford US 2460-802621 2/28/00
APM N.A USA Minority Dealership FCSD Ford US 2450-222276 12/31/96
APM Mexico Mexico Process Improvement FCSD Ford of Mexico N/A 12/31/96
APM UK France ACD Field Engineer FCSD Ford of Britain 555138 2/1/98
APM UK Italy ACD Field Engineer FCSD Ford of Britain 581980 12/31/96
APM UK Germany CDP FCSD Ford of Germany 64248 7/31/99
APM UK UK Dealer Representation FCSD Ford of Britain 669590 12/31/97
APM UK UK DPI FCSD Ford of Britain 230624 7/31/97
APM UK UK EDI FCSD Ford of Britain 177442 7/31/99
APM UK UK Extra Cover Admin. FCSD Ford of Britain 028419 12/31/96
APM UK Germany FastTrack FCSD Ford of Germany 64248 3/31/97
APM UK Sweden Fleet Comm. Centre FCSD Ford of Sweden 95000873 8/20/96
APM UK UK Ford Direct Supp. Ser. FCSD Ford of Britain 15211 1/31/98
APM UK UK National Central Billing FCSD Ford of Britain VARIOUS TBD
APM UK UK National Central Billing FCSD Ford of Britain 35105 TBD
APM UK UK Parts Quality Invest.
(Den) FCSD Ford of Britain 165384 12/31/96
</TABLE>
S-2
<PAGE> 122
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
APM UK UK Parts Quality Invest. (UK) FCSD Ford of Britain 373224 12/31/96
APM UK UK PCB FCSD Ford of Britain 522508 TBD
APM UK Netherlands SVO SVO Ford of Britain 09072 12/31/96
APM UK Sweden Transit Locator FCSD Ford of Sweden 96000451 4/30/97
APM UK Sweden Transit Zone Manager FCSD Ford of Sweden 95001359 11/30/96
APM UK UK Type Central Billing FCSD Ford of Sweden 95001359 11/30/96
APM UK UK VCI Export Market Liaison FCSD Ford of Britain FV174610 6/30/97
APM UK Germany Wiring Call In Program FCSD Ford of Germany 833561 9/30/99
APM UK UK Worldwide Exports FCSD Ford of Britain 520039 9/30/99
APM Spain Spain Accessories Marketing FCSD Ford of Spain 418593 12/31/96
APM Spain Spain Bus. Mgmt. Consultant FCSD Ford of Spain 407392-418237 12/31/96
APM Spain Spain Logistic System FCSD Ford of Spain 400899-412915 12/31/96
APM Spain Spain New Contract Transc. FCSD Ford of Spain 428710 12/31/96
APM Spain Spain Parts Analyst FCSD Ford of Spain 418281-418749- 12/31/96
435876
APM Spain Spain Parts Assistance Center FCSD Ford of Spain 40826-434016 12/31/96
APM Spain Spain Pricing Menu FCSD Ford of Spain 421462 12/31/96
APM Spain Spain Sales Process Improv. FCSD Ford of Spain 413704-419053 12/3/86
APM Spain Spain Suppliers Handling FCSD Ford of Spain Various 12/31/96
APM Spain Spain Warehouse Auditor FCSD Ford or Spain 418961 4/1/97
APM France France Commercial Engineer FCSD Ford of France 74016 12/31/96
</TABLE>
S-3
<PAGE> 123
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
APM France France Dealer Assistance Centre FCSD Ford of France 74057 12/31/96
APM France France Fleet Sales Assistant FCSD Ford of France 74034 12/31/96
APM France France Ford Comm. Network FCSD Ford of France 74504-74260 12/31/96
APM France France Homologation FCSD Ford of France 74051 12/31/96
APM France France Keyboarding FCSD Ford of France 74429-74122- 12/31/96
74447
APM France France Legal Assistance FCSD Ford of France 74506 12/31/96
APM France France Sales Analyst FCSD Ford of France 74342 12/31/96
APM France France Supplier Handling FCSD Ford of France Various 12/31/96
APM France France Warranty Assesor FCSD Ford of France 743368 12/31/96
APM France France Assistance Methode FCSD Ford of France 74343-74347 12131/96
APM France UK SVO SVO Ford Britain TBD TBD
APM Italy Italy Exchange Parts FCSD Ford of Italy 16377-13979 1/30/97
APM Germany Netherlands Core Accessories FoN FCSD Ford Netherland
B.V. 96000040 12/3/96
APM Germany Germany Fast Track FCSD Ford Werke AG N/A TBD
APM Germany Germany Hotline FCSD Ford Werke AG 64376 TBD
APM Germany Germany JAG Dealer Warranty FCSD Jaguar GmbH 04044 TBD
APM Germany Germany Parts Quality Invest G FCSD Ford Werke AG Various 12/31/97
APM Germany Switzerland Sub Dealer Agency FCSD Ford Motor 96000096 11/30/96
Company SWI
APM Germany Germany SVO FCSD Ford Motor BPOO9072 TBD
Company Ltd.
APM Germany Germany Techn Library FCSD Ford Werke AG 64390 5/30/97
</TABLE>
S-4
<PAGE> 124
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
_ APM Australia Australia WARPEC FCSD Ford of Australia TBD
| | TSD France France Ford Marketing Institute FMI Ford of France 74368 12/31/96
* TSD Spain Spain Ford Marketing Institute FMI Ford of France 419052-55&67, 12/31/96
|_| 421307-08
</TABLE>
S-5
<PAGE> 125
New Business
T-1
<PAGE> 126
NEW PROJECT INFORMATION - APM
<TABLE>
<CAPTION>
GRI OPERATION: UNITED STATES
- -----------------------------------------------------------
COUNTRY OF START DATE/ MONTHLY
PROJECT NAME PROJECT DESCRIPTION OPERATION PN/PO NO. STATUS ------------------
- --------------------- ---------------------------------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Fleet Central Billing - Central Billing services for Ford United States 2460-802621 Feb-97 [
US Fleet Program (U.S.)
Fleet Central Billing - 3 month analysis to identify United States G18 P097- Jul-97
Canadian Analysis Canadian business and system 102387
requirements to support Central
Billing in Canada.
Service Upgrading Current State Analysis and Pilot United States tbe Awaiting
program to implement the PN
Service Upgrading Program in
the United States.
NOTES: 1) Months 1-5 of Fleet Central billing - US billed at $29,488/month
2) Service Upgrading is a 6 month pilot, hence the
annual figure.
GRI OPERATION: GERMANY *
- -----------------------------------------------------------
CAC Handling of customer letters Germany 64376 April, 97
CAC Extension of present activity to Germany 64376 3rd quarter
improve accessibility 1997
CAC Direct mailing action for Scorpio Germany 64376 June, 97 ]
</TABLE>
T-2
<PAGE> 127
<TABLE>
<S> <C> <C> <C> <C> <C>
HOTLINE DealerTechnical Hotline for Germany t.b.e. mid Sept [
Mazda Germany, Project scope '97
similar to Ford
HOTLINE 4 ready-to-go work places for Germany 944240 January,
special telephone 97
marketing/service actions
HOTLINE Powertrain Pilot Hotline engineer Germany 521669 April,97
dedicated to a special task
HOTLINE Wiring call in, Hotline engineer Germany GRGB December,
dedicated to a special task contract 97
HOTLINE Extended export activity, Hotline Germany GRGB half
engineer dedicated to a special contract Febr. 97
task
BODY SHOP Extension from 3 to 5 Germany 972568 January, *
employees 97
SERVICE Training and piloting support Germany 944301 tbe
UPGRADING
SERVICE Development and pilot Brazil/ Germany 943863 February
UPGRADING Argentine ,97
SERVICE Menu Pricing Specialist working Netherlands 97000773 April,97
UPGRADING at Ford Netherlands
WPI WPI - New Holland Pilot Germany GRGB March,
contract 97
SERVICE Market Study/Current State Germany Order dated May, 97
UPGRADING Analysis with selected dealers for 25.4.1997
Mazda Germany
GRI OPERATION: BRITAIN
- -----------------------------------------------------------
WDMO Extended To extend the WDMO Hotline Germany 8500-14405 from mid
Service Hours service hours to provide 'real- to Apr '97 ]
time' support until mid-day Far East
Singapore - Service Costs for 6
month pilot
</TABLE>
T-3
<PAGE> 128
<TABLE>
<S> <C> <C> <C> <C> <C>
Powertrain Telephone To review proposed Dealer Germany 521669 1-Apr-97 [
Prior Approval repairs by telephone for
Powertrain, primarily Engine and
Transmission items) - 2 month
pilot
Powertrain Telephone To review proposed Dealer Germany tbe 1-Jun-97
Prior Approval repairs by telephone for
Powertrain, primarily Engine and
Transmission items) - 2 month
pilot extension
European On-Board To provide field data from Dealers Britain VVB 005928 14-Jul-
Diagnostics Program regarding FDS2000 and record Germany 97
findings which will be collated for Spain
design finalisation of EOBD - 5
month pilot
Mazda Technical As Ford Dealer Technical Germany t.b.e. mid Nov-
Hotline Hotline 97
launch
Parts Plus Parts Wholesaling consultancy Britain 493163 1-JUL-97
and management service to
Ford/Ford "Parts Plus" dealers
(to extend trade sales)
GRI OPERATIONS: FRANCE *
- -----------------------------------------------------------
WARRANTY Training on warranty procedures France 75093 Jan-97
TRAINING in the dealership or in a technical
training school
KEYBOARDING Keyboarding of datas for the Marketing 74485 Jan-97
(extension) department in CSD Ford France
DIFFUSION New Mail, printed documents ... 62686 Feb-97
Holland
MENU PRICING Extension at the SUP 75397 Mar-97
programme
FORD MEDIA To follow the costs of awaiting PN Jul-97
advertisements
GRI OPERATION: SPAIN
- -----------------------------------------------------------
DPI Provide Dealer support in Spain 435779 Jun-97
implementing Ford Dealer
standards.
CAC Extension to present CAC Spain 436853 Jan-97 ]
</TABLE>
T-4
<PAGE> 129
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
operation
SUP Extention to present SUP Spain 438459 Jun-97
project
Marketing Substitution of FCSD Marketing Spain 438399 Feb-97
Consultant Manager until December 1997.
OEW Launch,support sale and Argentina TBE Nov-97
administer Optional Extended
Warranty program for Ford
Argentina:
GRI OPERATION: ITALY
- -----------------------------------------------------------
DPI Parts Scope is to optimate processes Italy 1595 Mar-97
Upgrading implemented by SUP with focus
on Parts
Rapid Fit anage Rapid Service in Ford Italy 1923 Jun-97 *
Dealers in a professional way to
increase Customer Loyalty
Sub-Dealers Provide Ford Sub-Dealers field Italy 1952 Jul-97
business specialists to increase
Customer Loyalty and implement
the base of Service Upgrading.
Bodyshop Provide Ford Bodyshop Italy 1924 Jul-97
specialist to Ford dealers.
Menu-Pricing SUP specialist to implement Italy 1592 Mar-97
Menu Pricing System in Ford
dealerships.
Warranty Analyst Support Warranty Specialists Italy 1892 Apr-97
team in the project findings
GRI OPERATION: SWEDEN
- -----------------------------------------------------------
NIL RETURN
GRI OPERATION: AUSTRALIA
- -----------------------------------------------------------
Service Specialist and program Australia t.b.e. awaiting
management support to PN
implement SUP
</TABLE>
T-5
<PAGE> 130
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Powertrain Telephone To review proposed Dealer Germany 521669 1-Apr-97 DM 50,250 29,070
Prior Approval repairs by telephone for
Powertrain, primarily Engine and
Transmission items) - 2 month
pilot
Powertrain Telephone To review proposed Dealer Germany tbe 1-Jun-97 DM 26,900 15,562
Prior Approval repairs by telephone for
Powertrain, primarily Engine and
Transmission items) - 2 month
pilot extension
Pound
Sterling
European On-Board To provide field data from Dealers Britain WB 005928 14-Jul- 8,760 29,220
Diagnostics Program regarding FDS2000 and record Germany 97 DM 16,400
findings which will be collated for Spain Ptas
design finalisation of EOBD - 5 908,560
month pilot
Mazda Technical As Ford Dealer Technical Germany t.b.e. mid Nov- DM 35,000
Hotline Hotline 97 60,500
launch
Pound
Sterling
Parts Plus Parts Wholesaling consultancy Britain 493163 1-Jul-97 22,103 36,692
and management service to
Ford/Ford "Parts Plus" dealers
(to extend trade sales)
GPI OPERATION: FRANCE
- -----------------------------------------------------------
WARRANTY Training on warranty procedures France 75093 Jan-97 FF 68,000 11,664
TRAINING in the dealership or in a technical
training school
KEYBOARDING Keyboarding of datas for the Marketing 74485 Jan-97 FF 52,000 8,919
(extension) department in CSD Ford France
DIFFUSION New Mail, printed documents ....... 62686 Feb-97 FF 81,000 13,894
Holland
MENU PRICING Extension at the SUP 75397 Mar-97 FF 47,200 8,096
programme
FORD MEDIA To follow the costs of awaiting PN Jul-97 FF 60,000 10,292
advertisements
GRI OPERATION: SPAIN
- -----------------------------------------------------------
DPI Provide Dealer support in Spain 435779 Jun-97 FF 16,895
implementing Ford Dealer 2,469,220
standards.
CAC Extension to present CAC Spain 436853 Jan-97 FF 721,000 4,933
</TABLE>
T-4
<PAGE> 131
<TABLE>
<S> <C> <C> <C> <C> <C>
operation
SUP Extention to present SUP Spain 438459 Jun-97
project
Marketing Substitution of FCSD Marketing Spain 438399 Feb-97
Consultant Manager until December 1997.
OEW Launch, support sale and Argentina TBE Nov-97
administer Optional Extended
Warranty program for Ford
Argentina.
GRI OPERATION: ITALY *
- -----------------------------------------------------------
DPI Parts Scope is to optimate processes Italy 1595 Mar-97
Upgrading implemented by SUP with focus
on Parts
Rapid Fit Manage Rapid Service in Ford Italy 1923 Jun-97
Dealers in a professional way to
increase Customer Loyalty
Sub-Dealers Provide Ford Sub-Dealers field Italy 1952 Jul-97
business specialists to increase
Customer Loyalty and implement
the base of Service Upgrading.
Bodyshop Provide Ford Bodyshop Italy 1924 Jul-97
specialist to Ford dealers.
Menu Pricing SUP specialist to implement Italy 1592 Mar-97
Menu Pricing System in Ford
dealerships.
Warranty Analyst Support Warranty Specialists Italy 1892 Apr-97
team in the project findings
GRI OPERATION: SWEDEN
- -----------------------------------------------------------
NIL RETURN
GRI OPERATION: AUSTRALIA
- -----------------------------------------------------------
Service Specialist and program Australia t.b.e. awaiting
management support to PN
implement SUP
</TABLE>
<PAGE> 1
EXHIBIT 10.6
MASCOTECH SUBSCRIPTION AGREEMENT dated as of January __, 1997,
between MSX INTERNATIONAL, INC., a Delaware corporation (the "Company"), and
MASCOTECH, INC., a Delaware corporation (the "Purchaser"). Capitalized terms not
otherwise defined herein are used as defined in the Stockholders' Agreement
(defined below).
RECITALS
WHEREAS, the Company and the Purchaser have entered into that
certain Acquisition Agreement dated as of November 12, 1996 (as may be amended,
supplemented or modified from time to time, the "Acquisition Agreement"),
pursuant to which, among other things, the Company, directly or indirectly
through one or more of its Subsidiaries, is acquiring the Business and the APX
Continuing Business (each as defined in the Acquisition Agreement) and the
interest of the Purchaser in and to all the issued and outstanding shares of
capital stock of MascoTech Limited, a wholly-owned subsidiary of the Purchaser
organized under the laws of England;
WHEREAS, at the Closing (as hereinafter defined), the
Purchaser, the Company and certain other persons will execute and deliver a
Stockholders' Agreement dated as of the date hereof (the "Stockholders'
Agreement") and a Registration Rights Agreement dated as of the date hereof (the
"Registration Rights Agreement"; and together with this Agreement and the
Stockholders' Agreement, the "Operative Agreements"); and
WHEREAS, in connection with the transactions contemplated by
the Acquisition Agreement, the Purchaser desires to subscribe for and acquire
from the Company, and the Company desires to issue and sell to the Purchaser,
the following securities:
(i) 10,938 shares of the Company's Series A-1 Common Stock, par value $.01 per
share (the "Series A-1 Common Stock"),
(ii) 10,938 shares of the Company's Series A-2 Common Stock, par value $.01 per
share (the "Series A-2 Common Stock"),
(iii) 10,938 shares of the Company's Series A-3 Common Stock, par value $.01 per
share (the "Series A-3 Common Stock"),
(iv) 10,938 shares of the Company's Series A-4 Common Stock, par value $.01 per
share (the "Series A-4 Common Stock"; and together with the Series A-1 Common
Stock, the Series A-2 Common Stock and the Series A-3 Common Stock, the "Class A
Common Stock"),
(v) 180,000 shares of the Company's Series A Preferred Stock, par value $.01 per
share (the "Series A Preferred Stock"; and together with the Class A Common
Stock being purchased hereunder, the "Securities"), all on the terms and subject
to the conditions set forth herein.
<PAGE> 2
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements, representations and warranties contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Purchase and Sale of the Securities.
(a) Purchase and Sale. On the terms and subject to
the conditions set forth in this Agreement, at the Closing (as hereinafter
defined), the Purchaser, in reliance upon the representations, warranties and
agreements of the Company contained herein, hereby subscribes for and agrees to
purchase from the Company, and the Company, in reliance on the representations,
warranties and agreements of the Purchaser contained herein, hereby agrees to
issue and sell to the Purchaser, the Securities.
(b) Purchase Price. The purchase price to be paid by
the Purchaser for the Securities being purchased by the Purchaser pursuant to
Section 1(a) shall be (i) $40.00 per share for each share of Series A-1 Common
Stock, Series A-2 Common Stock, Series A-3 Common Stock and Series A-4 Common
and (ii) $100.00 per share for each share of Series A Preferred Stock, for an
aggregate cash purchase price of $19,750,080.00.
2. The Closing.
(a) Closing. The closing of the purchase and sale of
the Securities (the "Closing") will take place at the same time and place, and
concurrently with, the closing under the Acquisition Agreement, or at such other
date and time as the parties hereto mutually agree. The date on which the
Closing occurs is referred to herein as the "Closing Date".
(b) Deliveries by the Company. At the Closing, the
Company shall deliver to the Purchaser stock certificates, registered in the
Purchaser's name, representing the Securities. At the Closing, the Company will
also execute and deliver the Operative AgreementsThe Company will also provide
to the Purchaser true and complete copies of the unaudited pro forma balance
sheet of the Company as of the Closing Date, after giving effect to the
transactions contemplated by the Acquisition Agreement.
(c) Deliveries by the Purchaser. At the Closing, the
Purchaser will deliver to the Company, by wire transfer of immediately available
funds to an account maintained at a commercial bank located in the United States
designated by the Company, or by such other method as the Company and the
Purchaser shall mutually agree, the aggregate cash purchase price required to be
paid by the Purchaser pursuant to Section 1(b). At the Closing, the Purchaser
will also execute and deliver the Operative Agreements.
2
<PAGE> 3
3. Representations and Warranties of the Company. The
Company hereby represents and warrants to the Purchaser as follows:
(a) Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has full corporate power and authority to enter into the
Operative Agreements, to perform its obligations thereunder and to consummate
the transactions contemplated thereby.
(b) Authority. The execution and delivery of the
Operative Agreements by the Company, and the performance by the Company
of its obligations thereunder, have been duly authorized by all necessary
corporate action by the Company. Each of the Operative Agreements has been duly
and validly executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
(c) Securities. The Securities, when issued and delivered
to the Purchaser pursuant to this Agreement, will be duly and validly issued,
fully paid and nonassessable.
4. Representations and Warranties of the Purchaser. The
Purchaser hereby represents and warrants to the Company as follows:
(a) Authority. The Purchaser has the requisite power and
authority to execute and deliver the Operative Agreements, to perform its
obligations thereunder and to consummate the transactions contemplated thereby.
Each of the Operative Agreements has been duly and validly executed and
delivered by the Purchaser and constitutes the legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms.
(b) No Violation, Etc. The execution and delivery by the
Purchaser of each of the Operative Agreements does not, and the performance by
the Purchaser of its obligations under each of the Operative Agreements and the
consummation of the transactions contemplated thereby will not, (i) conflict
with, result in any violation of or default under, or result in any person
having the right to terminate or modify, any note, bond, mortgage, license,
lease, contract, commitment, agreement or arrangement to which the Purchaser is
a party or by which any of its properties or assets are bound or (ii) conflict
with, contravene, or result in any violation of any material judgment, order or
decree, or statute, law, ordinance, rule or regulation, in each case applicable
to the Purchaser or to any of the property or assets of the Purchaser. No
consent, approval, license, permit, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality, domestic or foreign, is
required to be obtained or made by the Purchaser in connection with the
execution and delivery of this Agreement or any or all of the Operative
Agreements or the consummation of the transactions contemplated hereby or
thereby. No commission, fee or other remuneration is to be paid or given,
directly or indirectly, to any Person by the Company or by the Purchaser for
soliciting the Purchaser to purchase the Securities.
(c) Investment Intention; Limited Resales. The
Purchaser is acquiring the Securities for the purpose of investment and not
with a view to, or for resale in connection with, the
3
<PAGE> 4
distribution thereof and not with any present intention of distributing such
Securities; provided that nothing contained herein shall restrict any transfer
of the Securities made in compliance with applicable Federal and state
securities laws.
5. Conditions to the Purchaser's Obligations. The obligation
of the Purchaser to purchase the Securities is subject to the representations
and warranties of the Company contained in Section 3 hereof being true and
correct in all material respects as of the Closing as though made on and as of
the Closing.
6. Conditions to the Company's Obligations. The obligations
of the Company to issue and sell the Securities is subject to (i) the
consummation of the transactions contemplated by the Acquisition Agreement,
(ii) the receipt by the Company of the Purchase Price as contemplated by
Section 2(c), (iii) the execution of the Operative Agreements by the Purchaser,
and (iv) the representations and warranties of the Purchaser contained in
Section 4 hereof being true and correct in all material respects as of the
Closing Date as though made on and as of the Closing Date.
7. Update of Information. The Company hereby agrees that,
for so long as Securities or other securities of the Company held by the
Purchaser are outstanding, the Company will furnish the Purchaser with
the following information certified by the Company's chief executive officer,
president, treasurer or chief financial officer (i) within 120 days (or such
shorter period of time as may reasonably be requested by the Purchaser) after
and as at the close of each fiscal year of the Company and (ii) within 60 days
(or such shorter period of time as may reasonably be requested by the
Purchaser) after and as at the close of each fiscal quarter of the Company a
consolidated balance sheet of the Company and its subsidiaries and the related
statements of operations, stockholders equity and cash flows for such fiscal
year or fiscal quarter, each examined and reported upon by an independent
public accounting firm of recognized standing selected by the Company, and
prepared in accordance with generally accepted accounting principles
consistently applied. The Company will also provide within sixty (60) days of
receipt of such request the Purchaser with copies of such other books, records
and reports of the Company as the Purchaser may reasonably request.
8. Miscellaneous.
(a) Blue Sky. The Company agrees to use its reasonable
efforts to comply with all state securities and "blue sky" laws which might be
applicable to the sale of the Securities to the Purchaser.
(b) Binding Effect. The representations and warranties of
each party to this Agreement shall be binding upon, and any action for a breach
thereof may be brought against, such party and its respective heirs, successors
and assigns.
(c) Severability. The invalidity, illegality or
unenforceability of one or more of the provisions of this Agreement in any
jurisdiction shall not affect the validity, legality or enforceability of the
remainder of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including any such provision, in any other
jurisdiction, it being
4
<PAGE> 5
intended that all rights and obligations of the parties hereunder shall be
enforceable to the fullest extent permitted by law.
(d) Amendment. This Agreement may be amended, modified or
supplemented only by a written instrument executed by or on behalf of each of
the parties hereto.
(e) Entire Agreement. Except as provided in the Operative
Agreements, this Agreement supersedes all prior discussions and agreements
between the parties with respect to the subject matter hereof and contains the
sole and entire agreement between the parties hereto with respect to the subject
matter hereof; provided, that the Securities will be subject to the Operative
Agreements and the restrictions imposed on them therein, including without
limitation, the right of the Company (or a designee thereof) to repurchase the
Securities upon the occurrence of certain events.
(f) Successors and Assigns. This Agreement shall be
assignable by any party hereto, but shall not be assignable by the Purchaser
without the prior written consent of the Company. The rights of the Company
hereunder, including the ability of the Company to rely on the representations
and warranties of the Purchaser contained herein, may be assigned by the Company
to any other person.
(g) No Third Party Beneficiaries. The terms and
provisions of this Agreement are intended solely for the benefit of each party
hereto and their respective successors and assigns, and it is not the intention
of the parties to confer, and no provision hereof shall confer, third-party
beneficiary rights upon any other person.
(h) Headings. The headings used in this Agreement have
been inserted for convenience of reference only and do not define or limit the
provisions hereof.
(i) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule that would
cause the application of the laws of any jurisdiction other than the State of
New York.
(j) Remedies. In the event of a breach by any party to
this Agreement of its obligations under this Agreement, any party injured by
such breach, in addition to being entitled to exercise all rights granted by
law, including recovery of damages and costs (including reasonable attorneys'
fees), will be entitled to specific performance of its rights under this
Agreement. The parties agree that the provisions of this Agreement shall be
specifically enforceable, it being agreed by the parties that the remedy at
law, including monetary damages, for breach of any such provision will be
inadequate compensation for any loss and that any defense in any action for
specific performance that a remedy at law would be adequate is waived. Such
equitable remedies and all other remedies are cumulative and not exclusive and
shall be in addition to any remedies which any party may have under this
Agreement or otherwise.
5
<PAGE> 6
(k) Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
(l) Service of Process. EACH OF THE PARTIES HERETO
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID,
TO THE PARTY AT THE ADDRESS SPECIFIED IN THE STOCK RECORDS OF THE COMPANY, IN
THE CASE OF PURCHASER, OR THE EXECUTIVE OFFICES OF THE COMPANY, IN THE CASE OF
THE COMPANY, SUCH SERVICE TO BECOME EFFECTIVE FIFTEEN (15) DAYS AFTER SUCH
MAILING. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY
PARTY HERETO TO SERVE ANY SUCH LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER OR
TO BRING ACTIONS, SUITS OR PROCEEDINGS AGAINST ANY OF THE OTHER PARTIES HERETO
IN SUCH OTHER JURISDICTIONS, AND IN SUCH MANNER, AS MAY BE PERMITTED BY ANY
APPLICABLE LAW.
(m) Waiver of Jury Trial. EACH OF THE PARTIES HERETO
HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, OR ARISING OUT OF THIS
AGREEMENT. EACH OF THE PARTIES HERETO ALSO WAIVES ANY BOND OR SURETY OR
SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF
SUCH PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH OF THE PARTIES HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(n) Survival. The representations and warranties of the
parties hereto shall survive the Closing.
[Signature Page to Follow]
6
<PAGE> 7
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by a duly authorized officer of the Purchaser and by a duly authorized
officer of the Company as of the date and year first above written.
MSX INTERNATIONAL, INC.,
a Delaware corporation
By:_________________________
Name: Frederick K. Minturn
Title: President
MASCOTECH, INC.
By:_________________________
Name: Timothy Wadhams
Title: Vice President
[Signature Page to MascoTech Subscription]
<PAGE> 1
EXHIBIT 10.7
CVC SUBSCRIPTION AGREEMENT dated as of January __1997, between
MSX INTERNATIONAL, INC., a Delaware corporation (the "Company"), and CITICORP
VENTURE CAPITAL, LTD., a New York corporation (the "Purchaser"). Certain
capitalized terms have the meanings provided in Section 9 hereof. Capitalized
terms not otherwise defined herein are used as defined in the Stockholders'
Agreement (defined below).
RECITALS
WHEREAS, the Company and MascoTech, Inc., a Delaware
corporation ("MascoTech") have entered into that certain Acquisition Agreement
dated as of November 12, 1996 (as may be amended, supplemented or modified from
time to time, the "Acquisition Agreement"), pursuant to which, among other
things, the Company, directly or indirectly through one or more of its
Subsidiaries, is acquiring the Business and the APX Continuing Business (each as
defined in the Acquisition Agreement) and the interest of MascoTech in and to
all the issued and outstanding shares of capital stock of MascoTech Limited, a
wholly-owned subsidiary of MascoTech organized under the laws of England.
WHEREAS, at the Closing (as hereinafter defined), the
Purchaser, the Company and certain other persons will execute and deliver a
Stockholders' Agreement dated as of the date hereof (the "Stockholders'
Agreement") and a Registration Rights Agreement dated as of the date hereof (the
"Registration Rights Agreement"; and together with this Agreement and the
Stockholders' Agreement, the "Operative Agreements"); and
WHEREAS, in connection with the transactions contemplated by
the Acquisition Agreement, the Purchaser desires to subscribe for and acquire
from the Company, and the Company desires to issue and sell to the Purchaser,
the following securities:
(i) 10,938 shares of the Company's Series A-1 Common Stock, par value $.01 per
share (the "Series A-1 Common Stock"),
(ii) 10,938 shares of the Company's Series A-2 Common Stock, par value $.01 per
share (the "Series A-2 Common Stock"),
(iii) 10,938 shares of the Company's Series A-3 Common Stock, par value $.01 per
share (the "Series A-3 Common Stock"),
(iv) 10,938 shares of the Company's Series A-4 Common Stock, par value $.01 per
share (the "Series A-4 Common Stock"; and together with the Series A-1 Common
Stock, the Series A-2 Common Stock and the Series A-3 Common Stock, the "Class A
Common Stock"),
<PAGE> 2
CVC SUBSCRIPTION AGREEMENT
(v) 180,000 shares of the Company's Series A Preferred Stock, par value $.01 per
share (the "Series A Preferred Stock"; and together with the Class A Common
Stock being purchased hereunder, the "Securities"), all on the terms and subject
to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements, representations and warranties contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Purchase and Sale of the Securities.
(a) Purchase and Sale. On the terms and subject to
the conditions set forth in this Agreement, at the Closing (as hereinafter
defined), the Purchaser, in reliance upon the representations, warranties and
agreements of the Company contained herein, hereby subscribes for and agrees to
purchase from the Company, and the Company, in reliance on the representations,
warranties and agreements of the Purchaser contained herein, hereby agrees to
issue and sell to the Purchaser, the Securities.
(b) Purchase Price. The purchase price to be paid by
the Purchaser for the Securities being purchased by the Purchaser pursuant to
Section 1(a) shall be (i) $40.00 per share for each share of Series A-1 Common
Stock, Series A-2 Common Stock, Series A-3 Common Stock and Series A-4 Common
and (ii) $100.00 per share for each share of Series A Preferred Stock, for an
aggregate cash purchase price of $19,750,080.00.
2. The Closing.
(a) Closing. The closing of the purchase and sale of
the Securities (the "Closing") will take place at the same time and place, and
concurrently with, the closing under the Acquisition Agreement, or at such other
date and time as the parties hereto mutually agree. The date on which the
Closing occurs is referred to herein as the "Closing Date".
(b) Deliveries by the Company. At the Closing, the
Company shall deliver to the Purchaser stock certificates, registered in the
Purchaser's name, representing the Securities. At the Closing, the Company will
also execute and deliver the Operative Agreements. the Company will also provide
to the Purchaser true and complete copies of the unaudited pro forma balance
sheet of the Company as of the Closing Date, after giving effect to the
transactions contemplated by the Acquisition Agreement.
(c) Deliveries by the Purchaser. At the Closing, the
Purchaser will deliver to the Company, by wire transfer of immediately available
funds to an account maintained at a commercial bank located in the United States
designated by the Company, or by such other method as the Company and the
Purchaser shall mutually agree, the aggregate cash purchase price required to be
paid by the Purchaser pursuant to Section 1(b). At the Closing, the Purchaser
will also execute and deliver the Operative Agreements.
2
<PAGE> 3
CVC SUBSCRIPTION AGREEMENT
3. Representations and Warranties of the Company. The
Company hereby represents and warrants to the Purchaser as follows:
(a) Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has full corporate power and authority to enter into the
Operative Agreements, to perform its obligations thereunder and to consummate
the transactions contemplated thereby.
(b) Authority. The execution and delivery of the
Operative Agreements by the Company, and the performance by the Company of its
obligations thereunder, have been duly authorized by all necessary corporate
action by the Company. Each of the Operative Agreements has been duly and
validly executed and delivered by the Company and constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
(c) Securities. The Securities, when issued and
delivered to the Purchaser pursuant to this Agreement, will be duly and validly
issued, fully paid and nonassessable.
(d) Small Business Matters. The Company acknowledges
that it is aware that the Purchaser is a Federal licensee under the SBIC Act.
The information regarding the Company and its "affiliates" (within the meaning
ascribed thereto in 13 CFR ss.121.103) to be set forth in SBA Form 652 and SBA
Form 1031 will be accurate and complete in all respects. Copies of such forms
shall be completed by the Company and delivered to the Purchaser at or prior to
the Closing. Neither the Company nor any subsidiary of the Company presently
engages in, or shall hereafter engage in, any activities, nor shall the Company
or any subsidiary of the Company use directly or indirectly the proceeds from
the sale of the Securities hereunder, for any purpose for which an SBIC is
prohibited from providing "Financing" (within the meaning ascribed thereto in
the SBIC Regulations, including, without limitation, 13 CFR ss.107.720). The
Company has not received any "Financing" from any SBIC (other than the
Purchaser).
4. Representations and Warranties of the Purchaser. The
Purchaser hereby represents and warrants to the Company as follows:
(a) Authority. The Purchaser has the requisite power
and authority to execute and deliver the Operative Agreements, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated thereby. Each of the Operative Agreements have been duly and
validly executed and delivered by the Purchaser and constitute the legal, valid
and binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms.
(b) No Violation, Etc. The execution and delivery by
the Purchaser of each of the Operative Agreements does not, and the performance
by the Purchaser of its obligations under each of the Operative Agreements and
the consummation of the transactions contemplated thereby will not, (i) conflict
with, result in any violation of or default under, or result in any person
having the right to terminate or modify, any note, bond, mortgage, license,
lease, contract, commitment, agreement or arrangement to which the Purchaser is
a party or by which any of its properties or assets are bound or
3
<PAGE> 4
CVC SUBSCRIPTION AGREEMENT
(ii) conflict with, contravene, or result in any violation of any material
judgment, order or decree, or statute, law, ordinance, rule or regulation, in
each case applicable to the Purchaser or to any of the property or assets of the
Purchaser. Except for the filing of SBA Forms 652 and 1031 with the SBA, no
consent, approval, license, permit, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality, domestic or foreign, is
required to be obtained or made by the Purchaser in connection with the
execution and delivery of this Agreement or any or all of the Operative
Agreements or the consummation of the transactions contemplated hereby or
thereby. No commission, fee or other remuneration is to be paid or given,
directly or indirectly, to any Person by the Company or by the Purchaser for
soliciting the Purchaser to purchase the Securities.
(c) Investment Intention; Limited Resales. The
Purchaser is acquiring the Securities for the purpose of investment and not
with a view to, or for resale in connection with, the distribution thereof and
not with any present intention of distributing such Securities; provided that
nothing contained herein shall restrict any transfer of the Securities made in
compliance with applicable Federal and state securities laws.
5. Conditions to the Purchaser's Obligations. The obligation
of the Purchaser to purchase the Securities is subject to (i) the
representations and warranties of the Company contained in Section 3 hereof
being true and correct in all material respects as of the Closing as though made
on and as of the Closing, (ii) the Company's submission to the Purchaser of
financial statements, plans of operation (including intended use of financing
proceeds), cash flow analysis, projections and any other data reasonably
requested by the Purchaser to support its investment decision hereunder and
(iii) the receipt by the Purchaser of a certificate of the Company's chief
executive officer, executive vice president, treasurer or chief financial
officer certifying as to the intended use of proceeds from the sale of the
Securities hereunder.
6. Conditions to the Company's Obligations. The obligations
of the Company to issue and sell the Securities is subject to (i) the
consummation of the transactions contemplated by the Acquisition Agreement,
(ii) the receipt by the Company of the Purchase Price as contemplated by
Section 2(c), (iii) the execution of the Operative Agreements by the Purchaser
and (iv) the representations and warranties of the Purchaser contained in
Section 4 hereof being true and correct in all material respects as of the
Closing Date as though made on and as of the Closing Date.
7. Update of Information. The Company hereby agrees that,
for so long as Securities or other securities of the Company held by the
Purchaser are outstanding, the Company will furnish the Purchaser with the
following information certified by the Company's chief executive officer,
president, treasurer or chief financial officer (A) within 60 days (or such
shorter period of time as may reasonably be requested by the Purchaser) after
and as at the close of each fiscal quarter of the Company a consolidated
balance sheet of the Company and its subsidiaries and the related statements of
operations, stockholders equity and cash flows for such fiscal quarter, each
examined and reported upon by an independent public accounting firm of
recognized standing selected by the Company, and prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied, and (B)
within 120 days (or such shorter period of time as may reasonably be requested
by the
4
<PAGE> 5
CVC SUBSCRIPTION AGREEMENT
Purchaser) after and as at the close of each fiscal year of the Company: (i) a
consolidated balance sheet of the Company and its subsidiaries and the related
statements of operations, stockholders equity and cash flows for such fiscal
year, each examined and reported upon by an independent public accounting firm
of recognized standing selected by the Company, and prepared in accordance with
GAAP consistently applied, (ii) a statement that the Company and its
"affiliates" (within the meaning ascribed thereto in 13 CFR ss.121.103) is
eligible for Financing under the SBIC Regulations, (iii) a statement stating the
use of the proceeds received hereunder (including the intended use of any such
unused proceeds as of the date of such certification), until all of the proceeds
received hereunder have been used by the Company and its subsidiaries, and (iv)
copies of such other books, records and reports of the Company and its
subsidiaries as the Purchaser may from time to time reasonably request. The
Company further agrees that, for so long as securities of the Company held by
the Purchaser are outstanding, the Company shall notify the Purchaser (a) at
least 15 days prior to taking any action after which the number of record
holders of the Company's voting stock would be increased from fewer than 50 to
50 or more, and (b) of any other action or occurrence after which the number of
record holders of the Company's voting stock was increased (or would increase)
from fewer than 50 to 50 or more, as soon as practicable after the Company
becomes aware that such other action or occurrence has occurred or is proposed
to occur.
8. Certain Covenants. (a) Prior to the Closing, the Company
shall deliver to the Purchaser any documentation required pursuant to the SBA
Act or the SBA Regulations, including, but not limited to: SBA Forms 652 and
1031 and a list containing (i) the name of each of the directors of the Company
as of the Closing, (ii) the name and title of each of the officers of the
Company as of the Closing and (iii) after giving effect to the transactions
contemplated by this Agreement, the name of each of the stockholders of the
Company setting forth the number and class of shares held. At the request of the
Purchaser, the Company shall permit the Purchaser and/or the SBA and/or any
Person designated by the Purchaser to inspect any of the properties, corporate
books and financial records of the Company and its subsidiaries, to discuss
their respective affairs and finances with the responsible officers of the
Company and its subsidiaries and to make extracts from the copies of such books
and records, all at such time as the Purchaser may reasonably request, for
purposes of verifying information provided to the Purchaser and required by the
SBA.
(b) Promptly after the end of each fiscal year (but in
any event prior to January 31 of each year) the Company shall deliver to the
Purchaser a written assessment of the economic impact of the Purchaser's
investment in the Company, specifying the full-time equivalent jobs created or
retained in connection with the investment, the impact of such investment on the
businesses of the Company in terms of revenue and profits of the Company's
business and on taxes paid by the Company and its employees.
9. Certain Definitions. For purposes of this Agreement the
following terms shall have the meanings indicated below:
"SBA" means the United States Small Business
Administration, and any successor agency performing the functions thereof.
5
<PAGE> 6
CVC SUBSCRIPTION AGREEMENT
"SBIC" means a Small Business Investment Company licensed
by the SBA under the SBIC Act.
"SBIC Act" means the Small Business Investment Act of
1958, as amended.
"SBIC Regulations" means the SBIC Act and the regulations
issued by the SBA thereunder, codified as Title 13 of the Code of Federal
Regulations ("13 CFR"), parts 107 and 121.
10. Miscellaneous.
(a) Blue Sky. The Company agrees to use its reasonable
efforts to comply with all state securities and "blue sky" laws which might be
applicable to the sale of the Securities to the Purchaser.
(b) Binding Effect. The representations and warranties of
each party to this Agreement shall be binding upon, and any action for a breach
thereof may be brought against, such party and its respective heirs, successors
and assigns.
(c) Severability. The invalidity, illegality or
unenforceability of one or more of the provisions of this Agreement in any
jurisdiction shall not affect the validity, legality or enforceability of the
remainder of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including any such provision, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.
(d) Amendment. This Agreement may be amended, modified or
supplemented only by a written instrument executed by or on behalf of each of
the parties hereto.
(e) Entire Agreement. Except as provided in the Operative
Agreements, this Agreement supersedes all prior discussions and agreements
between the parties with respect to the subject matter hereof and contains the
sole and entire agreement between the parties hereto with respect to the subject
matter hereof; provided, that the Securities will be subject to the Operative
Agreements and the restrictions imposed on them therein, including without
limitation, the right of the Company (or a designee thereof) to repurchase the
Securities upon the occurrence of certain events.
(f) Successors and Assigns. This Agreement shall be
assignable by any party hereto, but shall not be assignable by the Purchaser
without the prior written consent of the Company. The rights of the Company
hereunder, including the ability of the Company to rely on the representations
and warranties of the Purchaser contained herein, may be assigned by the Company
to any other person.
(g) No Third Party Beneficiaries. The terms and
provisions of this Agreement are intended solely for the benefit of each party
hereto and their respective successors and
6
<PAGE> 7
CVC SUBSCRIPTION AGREEMENT
assigns, and it is not the intention of the parties to confer, and no provision
hereof shall confer, third-party beneficiary rights upon any other person.
(h) Headings. The headings used in this Agreement have
been inserted for convenience of reference only and do not define or limit the
provisions hereof.
(i) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule that would
cause the application of the laws of any jurisdiction other than the State of
New York.
(j) Remedies. In the event of a breach by any party to
this Agreement of its obligations under this Agreement, any party injured by
such breach, in addition to being entitled to exercise all rights granted by
law, including recovery of damages and costs (including reasonable
attorneys' fees), will be entitled to specific performance of its rights under
this Agreement. The parties agree that the provisions of this Agreement shall
be specifically enforceable, it being agreed by the parties that the remedy at
law, including monetary damages, for breach of any such provision will be
inadequate compensation for any loss and that any defense in any action for
specific performance that a remedy at law would be adequate is waived. Such
equitable remedies and all other remedies are cumulative and not exclusive and
shall be in addition to any remedies which any party may have under this
Agreement or otherwise.
(k) Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
(l) Service of Process. EACH OF THE PARTIES HERETO
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID,
TO THE PARTY AT THE ADDRESS SPECIFIED IN THE STOCK RECORDS OF THE COMPANY, IN
THE CASE OF PURCHASER, OR THE EXECUTIVE OFFICES OF THE COMPANY, IN THE CASE OF
THE COMPANY, SUCH SERVICE TO BECOME EFFECTIVE FIFTEEN (15) DAYS AFTER SUCH
MAILING. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY
PARTY HERETO TO SERVE ANY SUCH LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER OR
TO BRING ACTIONS, SUITS OR PROCEEDINGS AGAINST ANY OF THE OTHER PARTIES HERETO
IN SUCH OTHER JURISDICTIONS, AND IN SUCH MANNER, AS MAY BE PERMITTED BY ANY
APPLICABLE LAW.
(m) Waiver of Jury Trial. EACH OF THE PARTIES HERETO
HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, OR ARISING OUT OF THIS
AGREEMENT. EACH OF THE PARTIES HERETO ALSO WAIVES ANY BOND OR
7
<PAGE> 8
CVC SUBSCRIPTION AGREEMENT
SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED
OF SUCH PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF
ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS. EACH OF THE PARTIES HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
(n) Survival. The representations and warranties of the
parties hereto shall survive the Closing.
[Signature Page to Follow]
8
<PAGE> 9
CVC SUBSCRIPTION AGREEMENT
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by a duly authorized officer of the Purchaser and by a duly authorized
officer of the Company as of the date and year first above written.
MSX INTERNATIONAL, INC.,
a Delaware corporation
By: __________________________
Name: Frederick K. Minturn
Title: President
CITICORP VENTURE CAPITAL, LTD.
By:___________________________
Name: Michael A. Delaney
Title: Vice President
[Signature Page to CVC Subscription]
<PAGE> 1
EXHIBIT 10.8
MANAGEMENT SUBSCRIPTION AGREEMENT
MANAGEMENT SUBSCRIPTION AGREEMENT dated as of January __,
1997, between MSX INTERNATIONAL, INC., a Delaware corporation (the "Company"),
and the Purchaser, whose name appears on the signature page hereof (the
"Purchaser").
RECITALS
WHEREAS, the Company and MascoTech, Inc., a Delaware
corporation ("MascoTech"), have entered into that certain Acquisition Agreement
dated as of November 12, 1996 (as may be amended, supplemented or modified from
time to time, the "Acquisition Agreement"), pursuant to which, among other
things, the Company, directly or indirectly through one or more of its
Subsidiaries, is acquiring the Business and the APX Continuing Business (each as
defined in the Acquisition Agreement) and the interest of MascoTech in and to
all the issued and outstanding shares of capital stock of MascoTech Limited, a
wholly-owned subsidiary of MascoTech organized under the laws of England.
WHEREAS, at the Closing (as hereinafter defined), the
Purchaser, the Company and certain other persons will execute and deliver a
Stockholders' Agreement dated as of the date hereof (the "Stockholders'
Agreement") and a Registration Rights Agreement dated as of the date hereof (the
"Registration Rights Agreement"; and together with this Agreement and the
Stockholders' Agreement, the "Operative Agreements"); and
WHEREAS, in connection with the transactions contemplated by
the Acquisition Agreement, the Purchaser desires to purchase from the Company,
and the Company desires to sell to the Purchaser, the following securities:
(i) 1,500 shares in the aggregate of the Company's Class A Common stock, par
value $.01 per share (the "Class A Common Stock"), to be divided equally among
the four series thereof.
NOW, THEREFORE, in consideration of the agreements,
representations and warranties contained in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Purchase and Sale of the Securities.
(a) Purchase and Sale. On the terms and subject to
the conditions set forth in this Agreement, at the Closing the Purchaser, in
reliance upon the representations, warranties and agreements of the Company
contained herein, hereby subscribes for and agrees to purchase from the Company,
and the Company, in reliance on the representations, warranties and agreements
of the Purchaser contained herein, hereby agrees to sell to the Purchaser, the
Securities.
<PAGE> 2
MANAGEMENT SUBSCRIPTION AGREEMENT
(b) Purchase Price. The purchase price to be paid by
the Purchaser for the Securities being purchased by the Purchaser pursuant to
Section 1(a) shall be $60,000.00 such price to be allocated as follows: $40.00
per share for each share of Class A Common Stock. The total purchase price for
the Securities purchased by the Purchaser hereunder shall be referred to as the
"Purchase Price".
2. The Closing.
(a) Closing. The closing of the purchase and sale of
the Securities (the "Closing") will take place at the same time and place, and
concurrently with, the closing under the Acquisition Agreement, or at such other
date and time as the parties hereto mutually agree. The date on which the
Closing occurs is referred to herein as the "Closing Date".
(b) Deliveries by the Company. At the Closing, the
Company shall deliver to the Purchaser stock certificates, registered in the
name of the Purchaser, representing the Securities being acquired by the
Purchaser.
(c) Deliveries by the Purchasers. At the Closing, the
Purchaser will (i) execute and deliver to the Company the Operative Agreements;
(ii) deliver an executed Consent of Spouse in the form attached hereto, if
applicable, and execute and deliver the 83(b) Election Form (as defined in
Section 9), if applicable; (iii) deliver immediately available funds in an
amount equal to the Purchase Price; and (iv) if requested by the Company, pay
all withholding taxes due in respect of the issuance of the Securities.
3. Representations and Warranties of the Company. The
Company hereby represents and warrants to the Purchaser as follows:
(a) Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has full corporate power and authority to enter into this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.
(b) Authority. The execution and delivery of this
Agreement by the Company, and the performance by the Company of its obligations
hereunder, have been duly authorized by all necessary corporate action by the
Company. This Agreement has been duly and validly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
(c) Securities. The Securities, when issued and
delivered to the Purchaser pursuant to this Agreement, will be duly and validly
issued, fully paid and nonassessable.
2
<PAGE> 3
MANAGEMENT SUBSCRIPTION AGREEMENT
4. Representations and Warranties of the Purchaser. The
Purchaser represents and warrants to the Company as follows:
(a) Authority. The Purchaser has the requisite power,
authority and capacity to execute and deliver the Operative Agreements, to
perform his or her obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby. Each of the Operative
Agreements has been duly and validly executed and delivered by the Purchaser
and constitutes the legal, valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms.
(b) No Violation, Etc. The execution and delivery by the
Purchaser of each of the Operative Agreements does not, and the performance by
the Purchaser of his or her obligations under the Operative Agreements and the
consummation of the transactions contemplated hereby and thereby will not, (i)
conflict with, result in any violation of or default under, or result in any
person having the right to terminate or modify, any note, bond, mortgage,
license, lease, contract, commitment, agreement or arrangement to which the
Purchaser is a party or by which any of his or her properties or assets are
bound or (ii) conflict with, contravene, or result in any violation of any
material judgment, order or decree, or statute, law, ordinance, rule or
regulation, in each case applicable to the Purchaser or to any of the property
or assets of the Purchaser. No consent, approval, license, permit, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, is required to be obtained or made by the
Purchaser in connection with the execution and delivery of any or all of the
Operative Agreements or the consummation of the transactions contemplated hereby
or thereby. No commission, fee or other remuneration is to be paid or given,
directly or indirectly, to any Person for soliciting the Purchaser to acquire
the Securities.
(c) Investment Intention; No Resales. The Purchaser is
acquiring the Securities being purchased by him or her hereunder for the
purpose of investment and not with a view to, or for resale in connection
with, the distribution thereof, and not with any present intention of
distributing such Securities. The Securities were offered and sold to the
undersigned directly and not by any form of general solicitation or general
advertising. The Purchaser acknowledges that any direct or indirect offer,
transfer, sale, assignment, pledge, hypothecation or other disposition of any
Securities shall be subject to the provisions of the Stockholders' Agreement.
(d) Securities Unregistered. The Purchaser has been
advised that (i) the offer and sale of the Securities have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"); (ii) the
Securities being purchased by the Purchaser hereunder must be held
indefinitely, and the Purchaser must continue to bear the economic risk of his
or her investment in such Securities, until and unless the offer and sale of
such Securities is subsequently registered under the Securities Act and all
applicable state securities laws or an exemption from such registration is
available; (iii) there is no established market for the Securities and it is
not anticipated that there will be any such market for the Securities in the
foreseeable future; (iv) Rule 144 promulgated under the Securities Act ("Rule
144") is not currently available with respect to the sale of any Securities,
and the Company has made no covenant to make such Rule available; (v) if and
when the Securities being purchased by the
3
<PAGE> 4
MANAGEMENT SUBSCRIPTION AGREEMENT
Purchaser hereunder may be disposed of without registration in reliance on
Rule 144, such disposition can be made only in limited amounts in accordance
with the terms and conditions of such Rule; (vi) if Rule 144 is not available,
any public offer or sale without registration will require the exemption under
the Securities Act; (vii) restrictive legends will be placed on the certificates
representing the Securities; and (viii) a notation will be made in the
appropriate records of the Company indicating that the Securities are subject to
restrictions on transfer and, if the Company should at some time in the future
engage the services of a securities transfer agent, appropriate stop-transfer
instructions will be issued to such transfer agent with respect to the
Securities.
(e) Additional Investment Representations. (i) The
Purchaser's financial situation is such that the Purchaser can afford to bear
the economic risk of holding the Securities being acquired by the Purchaser
hereunder for an indefinite period of time and that the Purchaser has adequate
means for providing for the Purchaser's current needs and personal
contingencies, and can afford to suffer the complete loss of his or her
investment in such Securities; (ii) the Purchaser's knowledge and experience in
financial and business matters are such that the Purchaser is capable of
evaluating the merits and risks of the Purchaser's investment in such
Securities, or the Purchaser has been advised by a representative possessing
such knowledge and experience; (iii) the Purchaser understands that such
Securities constitute a speculative investment which involves a high degree of
risk of loss of the Purchaser's investment therein, that there are substantial
restrictions on the transferability of such Securities, and that, on the
Closing Date and for an indefinite period following the Closing, there will be
no public market for the Securities and that, accordingly, it may not be
possible to liquidate the Purchaser's investment in the Company in case of
emergency, if at all; (iv) the Purchaser and the Purchaser's representatives,
including the Purchaser's professional, financial, tax and other advisors, if
any, have carefully considered the proposed investment by the Purchaser in the
Securities, and the Purchaser understands and has taken cognizance of (or has
been advised by the Purchaser's representatives as to) the risk factors related
to the acquisition of such Securities, and no representations or warranties
have been made to the Purchaser or his or her representatives concerning the
Securities, the Company or the Company's business, operations, financial
condition or prospects or other matters except as set forth herein; (v) in
making his or her decision to acquire the Securities being acquired by him or
her hereunder, to the extent believed by the Purchaser to be appropriate, the
Purchaser has sought the advice of the Purchaser's representatives, including
the Purchaser's professional, financial, tax and other advisors, if any; (vi)
the Purchaser and the Purchaser's representatives have been given the
opportunity to examine all documents and to ask questions of, and to receive
answers from the Company and its representatives concerning the terms and
conditions of the acquisition of the Securities being acquired by the Purchaser
hereunder and to obtain any additional information which the Purchaser or
the Purchaser's representatives deem necessary; (vii) the Purchaser and his or
her representatives, if any, are familiar with the business, operations and
finances of the Company as they will be in effect following the Closing; (viii)
the Purchaser is aware of and familiar with the restrictions imposed on the
transfer by the Purchaser of any such Securities, including without limitation
the restrictions contained in the Stockholders' Agreement; (ix) the Purchaser
is aware that, except in certain very limited circumstances as expressly
provided in the Registration Rights Agreement, the Purchaser will have no right
to require registration of any such Securities and must bear the economic risk
of his or her investment therein; and (x) the Purchaser acknowledges that the
Company is entering into this
4
<PAGE> 5
MANAGEMENT SUBSCRIPTION AGREEMENT
Agreement and the other Operative Agreements in reliance upon the Purchaser's
representations and warranties in this Agreement, including without limitation
those set forth in this Section 4.
5. Conditions to the Purchaser's Obligations. The
obligations of the Purchaser to purchase the Securities to be purchased by the
Purchaser hereunder is subject to the representations and warranties of
the Company contained in Section 3 hereof being true and correct in all
material respects as of the Closing Date as though made as of the Closing Date.
6. Conditions to the Company's Obligations. The obligation
of the Company to sell the Securities is subject to (i) the consummation of the
transactions contemplated by the Acquisition Agreement, (ii) the receipt by the
Company of the Purchase Price and all applicable documents specified in Section
2(c), (iii) the execution and delivery of the Operative Documents by the
Purchaser and the delivery of a Consent of Spouse, if applicable, and (iv) the
representations and warranties of the Purchaser contained in Section 4 hereof
being true and correct in all respects as of the Closing Date as though made as
of the Closing Date.
7. Confidential Information.
(a) The Purchaser acknowledges that the information,
observations and data obtained by him or her while employed by any company or
other entity comprising the Business, the APX Continuing Business, MascoTech
Limited, the Company or any of their subsidiaries or Affiliates (as defined in
the Stockholders' Agreement) concerning the business or affairs of the Company
or any subsidiary (collectively, "Confidential Information") are the property of
the Company or such subsidiary. Therefore, the Purchaser agrees that he or she
shall not disclose to any unauthorized person or use for his or her own account
any Confidential Information without the prior written consent of the Board of
Directors of the Company, acting by the Institutional Affirmative Board Vote and
the MascoTech Affirmative Board Vote (each as defined in the Stockholders'
Agreement), unless and to the extent that the aforementioned matters become
generally known to and available for use by the public other than as a result of
the Purchaser's acts or omissions to act. The Purchaser shall deliver to the
Company at the termination of the Purchaser's employment, or at any other time
the Company may request, all memoranda, notes, plans, records, reports, computer
tapes and software and other documents and data (and copies thereof) relating to
the Confidential Information and the business of the Company or any subsidiary
which he or she may then possess or have under his or her control.
(b) The covenants set forth in this Section 7
supplement (and are in addition to) any covenants made in any other agreement
between the parties hereto, or between the Purchaser and any of the Company's
direct or indirect subsidiaries, concerning the matters set forth in this
Section 7, and do not limit such other agreements in any way.
8. Non-compete, Non-solicitation.
(a) The Purchaser acknowledges that in the course of
his or her employment with any company or other entity comprising the Business,
the APX Continuing Business, MascoTech Limited, the Company or any of their
subsidiaries or Affiliates (as defined in the Stockholders'
5
<PAGE> 6
MANAGEMENT SUBSCRIPTION AGREEMENT
Agreement) he or she has become familiar, and in the course of his or her
employment with the Company and its subsidiaries he or she will become familiar,
with the Company's and its subsidiaries' trade secrets and with other
Confidential Information and that his or her services have been and will be of
special, unique and extraordinary value to the Company and its subsidiaries.
Therefore, the Purchaser agrees that, during the time he or she is employed by
the Company or its subsidiaries and thereafter until the later of (i) December
31, 1998 or (ii) the date which is one year after the effective date of the
termination of such employment (the "Noncompete Period"), he or she shall not
directly or indirectly own, manage, control, participate in, consult with,
render services for, or in any manner engage in any business (including by
himself or herself or through any other entity) competing with the businesses of
the Company or its subsidiaries as such businesses exist or are in process on
the date of the ter mination of the Purchaser's employment, within any
geographical area in which the Company or its subsidiaries engage or plan to
engage in such businesses; provided, however, that if the Purchaser's
termination of employment by the Company or its subsidiaries (as the case may
be) was initiated by the Company or any such subsidiary and was not for "cause"
(as defined in the Stockholders' Agreement), then the Noncompete Period shall
end on the effective date of such termination, except that at the election of
the Company, made by notice to the Purchaser at or before such effective date,
the Noncompete Period shall continue after such effective date for a period of
consecutive months (which shall be no longer than the period applicable with
respect to a for "cause" termination) as may be elected by the Company in such
notice, so long as the Company pays the Purchaser (in addition to severance
payments otherwise provided or required, if any) an amount equal to 25% of the
Purchaser's monthly salary on a month-by-month basis in arrears through the end
of such Noncompete Period. Nothing herein shall prohibit the Purchaser from
being a passive owner of not more than 2% of the outstanding stock of a
corporation which is publicly traded, so long as the Purchaser has no active
participation in the business of such corporation.
(b) During the Noncompete Period, the Purchaser shall
not directly or indirectly through another entity (i) induce or attempt to
induce any employee of the Company or any subsidiary to leave the employ of the
Company or such subsidiary, or in any way interfere with the relationship
between the Company or any subsidiary and any employee thereof, (ii) hire any
person who was an employee of the Company or any subsidiary at any time during
the Purchaser's employment period, or (iii) induce or attempt to induce any
customer, supplier, licensee or other business relation of the Company or any
subsidiary to cease doing business with the Company or such subsidiary, or in
any way interfere with the relationship between any such customer, supplier,
licensee or business relation and the Company or any subsidiary.
(c) If, at the time of enforcement of this Section 8, a
court shall hold that the duration, scope or area restrictions stated herein
are unreasonable under circumstances then existing, the parties agree that
the maximum duration, scope or area reasonable under such circumstances shall
be substituted for the stated duration, scope or area and that the court shall
be allowed to revise the restrictions contained herein to cover the maximum
period, scope and area permitted by law.
(d) The covenants set forth in this Section 8
supplement (and are in addition to) any covenants made in any other agreement
between the parties hereto, or between the Purchaser
6
<PAGE> 7
MANAGEMENT SUBSCRIPTION AGREEMENT
and any of the Company's direct or indirect subsidiaries, concerning the matters
set forth in this Section 8, and do not limit such other agreements in any way.
9. Section 83(b) Election. If the Purchaser is a United
States citizen, a permanent resident of the United States or a person who is
required to file a United States federal income tax return, within thirty (30)
days after the Closing Date he or she will make an effective election under
Section 83(b) of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder by executing and filing an 83(b) Election
Form in the form set forth on Exhibit A hereto (the "83(b) Election Form") with
the Internal Revenue Service and delivering a copy to the Secretary of the
Company. In such event, the Purchaser agrees to file a copy of such election
with the Purchaser's 1997 Federal income tax return.
10. Miscellaneous.
(a) For Michigan Residents. If the Purchaser is a
resident of the State of Michigan, the Purchaser acknowledges and agrees that
the Securities will not be sold unless registered under the Michigan Uniform
Securities Act or an exemption from such registration is available.
(b) Binding Effect. The representations and warranties
of each party to this Agreement shall be binding upon, and any action for a
breach thereof may be brought against, such party and his or her or its
respective heirs, successors and assigns.
(c) Severability. The invalidity, illegality or
unenforceability of one or more of the provisions of this Agreement in any
jurisdiction shall not affect the validity, legality or enforceability of the
remainder of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including any such provision, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.
(d) Amendment. This Agreement may be amended, modified
or supple mented only by a written instrument executed by the party against
whom enforcement of such provision is sought.
(e) Entire Agreement. Except as otherwise provided by
Section 7(b) and Section 8(d) hereof, and except as provided in the Operative
Agreements, this Agreement supersedes all prior discussions and agreements
between the parties with respect to the subject matter hereof and contains the
sole and entire agreement between the parties hereto with respect to the subject
matter hereof (other than as may be agreed by the Purchaser and the Company in
any written agreement entered into after the date hereof).
(f) No Third Party Beneficiaries. The terms and
provisions of this Agreement are intended solely for the benefit of each party
hereto and their respective successors and assigns,
7
<PAGE> 8
MANAGEMENT SUBSCRIPTION AGREEMENT
and it is not the intention of the parties to confer, and no provision hereof
shall confer, third-party beneficiary rights upon any other person.
(g) Headings. The headings used in this Agreement
have been inserted for convenience of reference only and do not define or limit
the provisions hereof.
(h) Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule that
would cause the application of the laws of any jurisdiction other than the State
of New York.
(i) Remedies. In the event of a breach by any party
to this Agreement of its obligations under this Agreement, any party injured by
such breach, in addition to being entitled to exercise all rights granted by
law, including recovery of damages and costs (including reasonable attorneys'
fees), will be entitled to specific performance of its rights under this
Agreement. The parties agree that the provisions of this Agreement shall be
specifically enforceable, it being agreed by the parties that the remedy at law,
including monetary damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense in any action for specific
performance that a remedy at law would be adequate is waived. Such equitable
remedies and all other remedies are cumulative and not exclusive and shall be in
addition to any remedies which any party may have under this Agreement or
otherwise.
(j) Counterparts. This Agreement may be executed in
any number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
(k) Service of Process. THE PURCHASER IRREVOCABLY CON
SENTS TO THE SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE PARTY AT
THE ADDRESS SPECIFIED IN THE STOCK RECORDS OF THE COMPANY, SUCH SERVICE TO
BECOME EFFECTIVE FIFTEEN (15) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL IN
ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY PARTY HERETO TO SERVE ANY SUCH
LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER OR TO BRING ACTIONS, SUITS OR
PROCEEDINGS AGAINST ANY OF THE OTHER PARTIES HERETO IN SUCH OTHER JURISDICTIONS,
AND IN SUCH MANNER, AS MAY BE PERMITTED BY ANY APPLICABLE LAW.
(l) Waiver of Jury Trial. EACH OF THE PARTIES HERETO
HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. EACH OF THE PARTIES HERETO
ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR
THIS WAIVER, BE REQUIRED OF SUCH PARTY. THE
8
<PAGE> 9
MANAGEMENT SUBSCRIPTION AGREEMENT
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL- ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS AGREEMENT, IN CLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH OF THE PARTIES HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(m) Survival. The representations and warranties of the
parties hereto shall survive the Closing.
[SIGNATURE PAGE TO FOLLOW]
9
<PAGE> 10
MANAGEMENT SUBSCRIPTION AGREEMENT
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by each of the Purchaser and by a duly authorized officer of the
Company as of the date and year first above written.
MSX INTERNATIONAL, INC.
By:____________________________
Name: Frederick K. Minturn
Title: President
_______________________________
Frederick K. Minturn
[Signature Page to Minturn Subscription Agreement]
<PAGE> 11
MANAGEMENT SUBSCRIPTION AGREEMENT
CONSENT OF SPOUSE
The undersigned spouse of the Purchaser named in the attached
Agreement has read and understands the terms of the Agreement, and the
Stockholders' Agreement of even date herewith among the Company and the
Stockholders (the "Stockholders' Agreement") and has had an opportunity to
discuss such agreements with individuals of his or her choice. The undersigned
understands that even if the securities referred to in the Agreement are
considered to be a part of the "marital property" belonging to him or her and
the Purchaser, the Agreement and the Stockholders' Agreement restrict the
transfer or distribution of those securities to anyone other than the Purchaser,
a "Permitted Transferee", the company which issued the securities and certain
other persons. The undersigned agrees to these restrictions and waives any
rights (other than to the economic value of such securities) he or she might
otherwise have in those shares as specifically identifiable property.
_______________________
(Signature)
______________________
(Print Name)
Date:_________________
<PAGE> 12
EXHIBIT A
__________, 1997
ELECTION TO INCLUDE THE FAIR MARKET VALUE
OF TRANSFERRED PROPERTY IN GROSS INCOME
PURSUANT TO SECTION 83(b) OF THE
INTERNAL REVENUE CODE
The undersigned (the "Taxpayer") purchased shares of
Class A Common Stock, par value $.01 per share (the "Securities"), of MSX
INTERNATIONAL, INC., a Delaware corporation (the "Company"), on January __,
1997. Such shares vest in equal annual installments over a five-year period of
continuous employment. In addition, under certain circumstances, the Company or
certain Stockholders of the Company have the right to repurchase certain of the
Securities from the Taxpayer (or from the holder of the Securities, if different
from the undersigned) should the Taxpayer cease to be employed by the Company or
any of its direct or indirect subsidiaries, and in certain other circumstances.
Hence, certain of the Securities are or may be subject to a substantial risk of
forfeiture. The Taxpayer desires to make the election permitted by Section 83(b)
of the Internal Revenue Code of 1986, as amended (the "Code"), to have the
excess, if any, of the fair market value of the Securities over his or her cost
taxed to him or her in the year he or she purchased the Securities.
Therefore, pursuant to Code ss.83(b) and Treasury
Regulation ss.1.83-2 promulgated thereunder, the Taxpayer hereby makes an
election, with respect to all of the Securities, to report as taxable income for
calendar year 1997 the excess of the Securities' fair market value on
__________, 1997 over the price thereof.
The following information is supplied in accordance
with Treasury Regulation Section 1.83-2(e):
1. The name, address and social security number of the Taxpayer:
Name: ___________________________
Address: ___________________________
___________________________
SSN: ___________________________
2. The address of the Internal Revenue Service District
Office where Taxpayer files his or her tax return:
____________________________
____________________________
<PAGE> 13
____________________________
3. A description of the property with respect to which the
election is being made: ______ shares of Class A Common Stock.
4. The date on which the property was transferred: January __,
1997, which is the date as of which the Company and the Taxpayer entered into
the Management Subscription Agreement (the "Agreement"). The taxable year for
which such election is made is calendar year 1997.
5. The restrictions to which the property is subject:
Pursuant to the terms of the Agreement, and that certain
Stockholders' Agreement dated as of January__, 1997, among the Company and the
other parties named therein (as such agreement may be amended from time to time,
the "Stockholders' Agreement"), and subject in various instances to
determinations by the Company, the Securities vest in equal annual installments
over a five-year period of continuous employment. The Securities are subject to
repurchase by the Company (or if the Company fails to act, certain Stockholders
of the Company) in the event that the Taxpayer ceases to be employed by, or
ceases to be a director of, the Company for any reason, (i) with respect to each
vested share of Common Stock, at fair market value at the date of such
termination of employment unless such termination was for cause, (ii) with
respect to each unvested share of Common Stock, and each vested share of Common
Stock (if the termination was for cause), the lower of (x) the fair market value
at the date of such termination or (y) the Taxpayer's original cost of such
Securities, or (iii) with respect to each share of Preferred Stock, the stated
value thereof plus accrued and unpaid dividends thereon as of the date of such
termination. The Securities are not transferable in the hands of the Purchaser
by virtue of the Stockholders' Agreement and the legend, which appears in the
face of the stock certificate representing the Securities.
6. The fair market value on January __, 1997, the time of
transfer of the property with respect to which the election is being made
(determined without regard to any restriction other than a restriction which by
its terms will never lapse), is $40.00 per share of Class A Common Stock.
7. The amount paid for such property: The Taxpayer paid in cash
or by issuance of a note an amount equal to $40.00 for each share of Class A
Common Stock.
8. The Taxpayer has furnished a copy of this Statement to the
Secretary of the Company, as the person for whom the services relating to the
Shares are performed.
Dated: ____________, 1997 _____________________
Name:
<PAGE> 1
EXHIBIT 10.9
STOCK PURCHASE AGREEMENT
BETWEEN
FORD MOTOR COMPANY
(AS SELLER)
AND
MSX INTERNATIONAL (HOLDINGS), INC.
(AS BUYER)
DATED JULY 25, 1997
<PAGE> 2
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into as of
the 25th day of July, 1997, by and between FORD MOTOR COMPANY. a Delaware
corporation ("FORD" or "Seller") and MSX INTERNATIONAL (HOLDINGS), INC., a
Delaware corporation ("MSX" or "Buyer"). Seller and Buyer are referred to
collectively herein as the "Parties."
R E C I T A L S
A. Seller owns all of the outstanding capital stock of Geometric
Results Incorporated, a Delaware corporation ("GRI") and desires to sell such
stock of GRI to Buyer.
B. Buyer desires to purchase all of the outstanding capital
stock of GRI from Seller under terms and conditions mutually agreeable to the
Parties.
C. This Agreement contemplates a transaction in which Buyer,
directly or indirectly or through one of more of its Subsidiaries, will purchase
from Seller, and Seller will transfer to Buyer, all of the outstanding capital
stock of GRI and its Subsidiaries in return for cash and other consideration as
provided hereunder.
D. As a part of the consideration paid by Buyer for GRI. Buyer
and Seller will at the Closing execute a Master Vendor Agreement and Supply
Agreement pursuant to which GRI will continue to provide FORD various services
subsequent to the Closing.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained and contained in the Master Vendor Agreement and
Master Supply Agreement, the Parties agree as follows.
ARTICLE 1 - DEFINITIONS
1.1 "Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act.
1.2 "Agreement" means this Stock Purchase Agreement, the exhibits
hereto and the certificates delivered in connection herewith, as the same shall
be amended, modified or restated from time to time.
1.3 "Ancillary Agreements" means the Transition Services
Agreement, the Master Vendor Agreement, the Master Supply Agreement, the
Sublease, the Side Letter Agreements, the Software License and the
Grantback-License Agreement.
1.4 "Buyer" has the meaning set forth in the preface above.
2
<PAGE> 3
1.5 "Cash" means cash and cash equivalents (including investments
in parent, marketable securities and short term investments) calculated in
accordance with GAAP applied on a basis consistent with the preparation of the
Financial Statements.
1.6 "Closing" has the meaning set forth in Article 2.4 below.
1.7 "Closing Date" has the meaning set forth in Article 2.4
below.
1.8 "Code" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder.
1.9 "Confidentiality Agreement" means the letter agreement
between FORD and MSX entered into February 25, 1997 regarding non-disclosure of
Evaluation Material.
1.10 "Employee Benefit Plan" means any (i) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (ii) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (iii) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), or (iv) Employee Welfare Benefit Plan or
material fringe benefit plan or program.
1.11 "Employee Pension Benefit Plan" has the meaning set forth in
ERISA Section 3 (2).
1.12 "Employee Welfare Benefit Plan" has the meaning set forth in
ERISA Section 3 (1).
1.13 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
1.14 "Evaluation Material" has the meaning given to such term in
the Confidentiality Agreement.
1.15 "FORD" means FORD Motor Company, a Delaware corporation.
1.16 "Financial Statement" has the meaning set forth in Article
3.1.2.6 below.
1.17 "GAAP" means United States generally accepted accounting
principles as in effect from time to time.
1.18 "GRI" means Geometric Results Incorporated, a Delaware
corporation.
3
<PAGE> 4
1.19 "Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
1.20 "Income Tax" means any federal, state, local, or foreign
income or similar tax, including any interest, penalty, or addition thereto,
whether disputed or not.
1.21 "Indemnified Party" has the meaning set forth in Article
6.4(i) below.
1.22 "Indemnifying Party" has the meaning set forth in Article
6.4(i) below.
1.23 "Knowledge" as it relates to Buyer, means actual knowledge
without independent investigation of the officers of Buyer, and as it relates to
Seller, means actual knowledge without independent investigation of the officers
of GRI, its Subsidiaries or Seller.
1.24 "Loss" has the meaning set forth in Article 6.2 below.
1.25 "Most Recent Financial Statements" has the meaning set forth
in Article 3.1.2.6 below.
1.26 "Most Recent Fiscal Month End" has the meaning set forth in
Article 3.1.2.6 below.
1.27 "MSX" means MSX International (Holdings), Inc., a Delaware
corporation.
1.28 "Offered Shares" means all of the issued and outstanding
shares of the common stock, par value $ 1.00 per share, of GRI.
1.29 "Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including with respect to
quantity and frequency).
1.30 "Other Taxes" means any federal, state, local or foreign
employment, value added, sales, real or personal property, franchise or similar
tax, including any interest, penalty or addition thereto, whether disputed or
not.
1.31 "Party" or "Parties" has the meaning set forth in the
preface above.
1.32 "PBGC" means the Pension Benefit Guaranty Corporation.
1.33 "PeopleNet" means the contract or process by which GRI
presently provides on-site contract personnel services to FORD in North America.
4
<PAGE> 5
1.34 "Person" means an individual, a proprietorship, a partnership,
a corporation, an association, a joint stock company, a trust, a joint venture,
an unincorporated organization, other business organization, trust, union, or a
governmental entity (or any department, agency, or political subdivision
thereof).
1.35 "Power Products Division" means the assets, properties and
business of the sale, marketing and servicing of Ford industrial and marine
engines, transmissions, parts and components previously conducted by GRI and its
Subsidiaries.
1.36 "Purchase Price" has the meaning set forth in Article 2.2
below.
1.37 "Securities Act" means the Securities Act of 1933, as
amended.
1.38 "Securities Exchange Act" means the Securities Exchange Act
of 1934, as amended.
1.39 "Security Interest" means any mortgage, pledge, lien,
encumbrance, charge, adverse claim, levy, lease, any conditional sale contract,
or other security interest, other than (i) any statutory lien arising in the
Ordinary Course of Business with respect to a liability that is not yet due or
delinquent, (ii) liens for taxes not yet due and payable or for taxes that the
taxpayer is contesting in good faith through appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, (iii) liens
securing rental payments under capital lease arrangements and listed on Exhibit
1.39, and (iv) other liens arising in the Ordinary Course of Business whether or
not incurred in connection with the borrowing of money, and listed on Exhibit
1.39.
1.40 "Seller" has the meaning set forth in the preface above.
1.41 "Side Letter Agreements" means the letter agreements entered
into at the Closing with respect to (i) employees of the Power Products
Division, (ii) employees of DDS and (iii) postal rates charged to DDS.
1.42 "Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the common stock
or has the power to vote or direct the voting of sufficient securities to elect
a majority of the directors.
1.43 "Tax Return" means any return, declaration. report, claim for
refund, or information return or statement relating to Income Taxes or Other
Taxes, including any schedule or attachment thereto.
1.44 "Third Party Claim" has the meaning set forth in Article 6.4
below.
ARTICLE 2 - PURCHASE AND SALE
5
<PAGE> 6
2.1 Basic Transaction.
On and subject to the terms and conditions of this Agreement, Buyer,
either directly or indirectly through one or more Subsidiaries, agrees to
purchase from Seller, and Seller agrees to sell, transfer and convey to Buyer,
all of the Offered Shares for the consideration specified hereinbelow in this
Article 2. Subject to the prior written consent of Seller, which may not be
unreasonably withheld, Buyer may directly or indirectly, through one or more of
Buyer's Subsidiaries, acquire all of the capital stock of one or more of GRI's
Subsidiaries directly from GRI, or effect a merger of one or more of GRI's
Subsidiaries with and into one or more of Buyer's Subsidiaries, as elected by
Buyer in a writing delivered to Seller within a reasonable period prior to
Closing, and the Parties will execute such documentation as is reasonably
required by Buyer to effectuate such transaction(s).
2.2 Purchase Price.
2.2.1 Purchase Price. Buyer agrees to pay to Seller at
the Closing the amount of $60 million less an amount equal to the amount by
which the Estimated GRI Cash (as hereafter defined in Article 4.1.13) is less
than S27 million (the "Initial Purchase Price") for the Offered Shares, by wire
transfer of the full amount of the Initial Purchase Price in immediately
available funds.
2.2.2 Adjustment. The Initial Purchase Price will be
adjusted by the amount, if any, by which the Cash of GRI as of the Closing Date
is less than the Estimated GRI Cash (the "Adjustment Payment"). Buyer shall make
a determination of the Cash of GRI as promptly as possible following the Closing
Date, but in any event, not later than 10 days following the Closing Date and
shall provide Seller with Buyer's determination of the Cash of GRI as of the
Closing Date. The Adjustment Payment shall be made by Seller to Buyer within
five days after final determination.
2.3 Transaction Fee.
2.3.1 Fee. FORD will pay MSX, at Closing, by wire
transfer in immediately available funds, a fee of $1 million for various
administrative services provided by MSX and arising as a result of the
transactions contemplated herein (the "Transaction Fee").
2.3.2 Recoupment. FORD and MSX shall undertake
reasonable efforts to permit FORD to recoup the Transaction Fee from
revenues realized by GRI from an increase in the fee charged to vendors to
PeopleNet or other price savings from such vendors. In the event of such
revenues from an increased fee or savings, MSX shall pay to FORD one-third of
such increased revenues or savings until the earlier of (i) 100% of the
Transaction Fee is recovered by FORD or (ii) December 31, 1998.
6
<PAGE> 7
2.4 The Closing.
The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Dykema Gossett PLLC in Detroit,
Michigan, commencing at, 10:00 a.m. local time on the second business day
following the satisfaction or waiver of all conditions to the obligations of the
Parties to consummate the transactions contemplated hereby (other than
conditions with respect to actions the respective Parties will take at the
Closing itself) or such other date as Buyer and Seller may mutually determine
(the "Closing Date").
2.5 Deliveries at the Closing.
At the Closing, (i) Seller will deliver to Buyer the various
certificates, instruments, agreements and documents referred to in Article 2.1
above and Article 5.1 below, (ii) Buyer will deliver to Seller the various
certificates, instruments, agreements and documents referred to in Article 2.1
above or Article 5.2 below, (iii) Seller will deliver to Buyer stock
certificates representing all of the Offered Shares, all of the shares of any
GRI Subsidiary, the stock of which is acquired directly by Buyer or one of its
Subsidiaries and all of the shares of any GRI Subsidiary registered in the name
of any party other than GRI (without any restrictive legend thereon), endorsed
in blank or accompanied by duly executed assignment documents, with requisite
stock transfer tax stamps, if any, attached, (iv) Buyer will deliver to Seller
the consideration specified in Article 2.2.1 above, (v) Seller will deliver to
Buyer the consideration specified in Article 2.3.1 above, (vi) Buyer and Seller
will execute and deliver to each other the Ancillary Agreements and (vii) Seller
will remit to a bank account controlled by GRI, in immediately available funds,
GRI's investments in parent.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Seller. Seller
represents and warrants to Buyer that the statements contained in this Article
3.1 are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
Article 3.1).
3.1.1 Representations and Warranties Regarding FORD.
3.1.1.1 Organization of Seller. Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation, has full power and authority to
own its properties and to carry on its business as now conducted.
3.1.1.2 Authorization of Transaction. Seller
has full power and authority (including full corporate power and authority) to
execute and deliver this Agreement and the Ancillary Agreements and to perform
its obligations hereunder and
7
<PAGE> 8
thereunder. This Agreement has been duly executed and delivered by Seller and
the Ancillary Agreements, upon execution by Seller, will have been duly executed
and delivered by Seller, and each such agreement is or upon execution will be a
valid and binding obligation of the Seller, enforceable in accordance with its
terms and conditions, except as enforceability may be limited by the effects of
bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization or
other similar laws and court decisions relating to or affecting the rights of
creditors generally or by general principles of equity (whether considered in
equity or at law).
3.1.1.3 Noncontravention. Neither the execution
and the delivery of this Agreement or the Ancillary Agreements, nor the
consummation of the transactions contemplated hereby or thereby, will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Seller is subject or any provision of its
charter or bylaws or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, covenant, contract, lease, license, instrument, or other obligation
or arrangement to which Seller is a party or by which it is bound or to which
any of its assets is subject.
3.1.1.4 Offered Shares. Seller holds of record
and owns beneficially all of the Offered Shares, free and clear of any
restrictions on transfer (other than restrictions under the Securities Act and
state securities laws), taxes, Security Interests (without regard to any
exceptions included in such defined term), options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands. Seller is not a party to
any option, warrant, purchase right, or other contract or commitment that could
require Seller to sell, transfer or otherwise dispose of any capital stock of
GRI (other than this Agreement). Seller is not a party to any voting trust,
proxy or other agreement or understanding with respect to the voting of any of
the Offered Shares. The Offered Shares represent all of the issued and
outstanding shares of GRI as of the Closing Date. At the Closing, there will be
no restrictions upon the vesting in Buyer of unencumbered marketable title to
the Offered Shares, free and clear of liens, encumbrances and other claims of
any kind whatsoever, and such title shall then vest in Buyer.
3.1.1.5 Approvals. Except for the filing of
premerger notification reports generally required by law with the Federal Trade
Commission and the Department of Justice, and any similar filings in foreign
jurisdictions, no approval of or filing with any foreign, federal, state or
local court, authority or administrative agency is necessary to authorize the
execution and delivery of this Agreement and the Ancillary Agreements by the
Seller or GRI or the consummation of the transactions contemplated herein and
therein by the Seller. Prior to the Closing, such reports by the Seller will
have been prepared in accordance with law and filed in a timely manner so as to
permit the Closing to be consummated by the Seller as herein provided.
8
<PAGE> 9
3.1.2 Representations and Warranties Regarding GRI.
Seller represents and warrants to Buyer that the statements contained in this
Article 3.1.2 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Article 3.1.2). Except as specifically provided in this Article
3, (a) the representations and warranties set forth in this Article 3.1.2 are
not made with respect to the Power Products Division and (b) the term "GRI and
its Subsidiaries" does not include the Power Products Division .
3.1.2.1 Organization, Qualification, and
Corporate Power. Each of GRI and its Subsidiaries is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation, and is duly qualified to conduct business as
a foreign corporation in each of the jurisdictions (which are set forth in
Exhibit 3.1.2.1) in which the ownership, use or leasing of its properties or the
conduct of its business requires such qualification, and has effected all
registrations required by the laws of the jurisdiction concerned. Each of GRI
and its Subsidiaries has full corporate power and authority to carry on the
businesses in which it is engaged and to own, lease and use the properties
owned, leased and used by it. Exhibit 3.1.2.1 identifies the directors and
officers of each of GRI and its Subsidiaries. Seller has provided to Buyer true,
complete and correct copies of the corporate and minute books of each of GRI and
its Subsidiaries.
3.1.2.2 Capitalization. The entire authorized
capital stock of GRI consists of 10,000 shares of common stock, $1.00 par value,
of which 10 shares are issued and outstanding, all of which constitute the
Offered Shares. No other shares of capital stock of GRI are authorized, issued
or outstanding. All of the issued and outstanding Offered Shares have been duly
authorized, are validly issued, fully paid, and nonassessable, and are held of
record by Seller, free and clear of all liens, encumbrances and claims. There
are no outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts or
commitments that could require GRI to issue, sell, or otherwise cause to become
outstanding any of its capital stock. Exhibit 3.1.2.2 lists all outstanding or
authorized stock appreciation, phantom stock, profit participation, or similar
rights with respect to GRI or the Offered Shares, true, complete and accurate
copies of which have been provided to Buyer. All obligations under any such
plans listed on Exhibit 3.1.2.2 have been fully accrued for in the Most Recent
Financial Statements.
3.1.2.3 Noncontravention. Neither the execution
and delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any provision of the charter or bylaws of
any of GRI and its Subsidiaries, or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which any of GRI and its Subsidiaries is a party or by which it is bound or
to which any of its assets is subject or result in
9
<PAGE> 10
the imposition of any Security Interest (without regard to any exceptions
included in such defined term) upon any of its assets.
3.1.2.4 Title to Tangible Assets. Each of GRI and
its Subsidiaries has good and marketable title to, or a valid marketable
leasehold interest in, and has a valid legal right to use all of the tangible
assets used in the conduct of its business, free and clear of all Security
Interests. Exhibit 3.1.2.4 lists all personal property leases under which GRI or
any Subsidiary has an obligation in excess of $100,000 annually. True, complete
and correct copies of all such leases have been provided to Buyer. Exhibit
3.1.2.4 lists or describes all tangible personal property owned by or an
interest in which is claimed by any other person (whether Seller, a customer,
supplier, affiliate or other Person, excepting only a third party lessor of
personal property) which is used by GRI or its Subsidiaries or for which GRI or
any of its Subsidiaries is responsible (true, complete and correct copies of all
agreements relating thereto have been delivered to Buyer). Exhibit 3.1.2.4 also
lists or describes all tangible personal property which is owned or used by the
Power Products Division, the ownership of which will be removed from GRI
pursuant to the transaction contemplated by Article 4.1.7 of this Agreement.
After the Closing, GRI or one of its Subsidiaries will continue to own, lease,
or have a right to use (without any increase in cost to GRI) all intangible and
tangible assets and properties necessary to conduct its respective business as
presently conducted (without additional cost, royalty or other fee to GRI or its
Subsidiaries) including, without limitation, those assets (tangible and
intangible) and properties which have been shared between any of GRI, the Power
Products Division and Seller except as set forth on Exhibit 3.1.2.4. Exhibit
3.1.2.4 describes all services provided by Seller, the Power Products Division
or Seller's Affiliates to GRI or its Subsidiaries and with respect to each such
service, the charges (or allocations) to GRI or its Subsidiaries by Seller
therefor.
3.1.2.5 Subsidiaries. Exhibit 3.1.2.5 sets forth
for each Subsidiary of GRI (i) its name and jurisdiction of incorporation, (ii)
the number of shares of authorized capital stock of each class of its capital
stock, (iii) the number of issued and outstanding shares of each class of its
capital stock, the names of the holders thereof, and the number of shares held
by each such holder, and (iv) the number of shares of its capital stock held in
treasury. All of the issued and outstanding shares of capital stock of each
Subsidiary of GRI have been duly authorized and are validly issued, fully paid,
and nonassessable. Either GRI or one of its Subsidiaries holds of record and
owns beneficially all of the outstanding shares of each Subsidiary of GRI. Other
than as set forth in Exhibit 3.1.2.5, GRI does not own directly or indirectly
any interest or have any investment in any corporation or other business. There
are no outstanding or authorized options, warrants, purchase rights, conversion
rights, exchange rights or other contracts or commitments that could require any
of GRI's Subsidiaries to issue, sell or otherwise cause to become outstanding
any of its capital stock. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to the Subsidiaries of GRI or their shares.
10
<PAGE> 11
3.1.2.6 Financial Statements. Attached hereto as
Exhibit 3.1.2.6 are the following financial statements (collectively the
"Financial Statements"): (i) unaudited consolidated balance sheets and
statements of income, changes in stockholders' equity, and cash flows as of and
for the fiscal year ended 1996 for GRI and its Subsidiaries (which shall also
include the Power Products Division), including the notes thereto and all
additional or supplemental information supplied therewith, (ii) audited
consolidated balance sheets and statements of income, changes in stockholders'
equity, and cash flow as of and for the fiscal years ended 1994, 1995 and 1996
for GRI and its Subsidiaries (which shall also include the Power Products
Division), including the notes thereto, all additional or supplemental
information supplied therewith and the report prepared in connection therewith
by the independent certified public accountants auditing such financial
statements and (iii) unaudited consolidated balance sheets and statements of
income, changes in stockholders' equity, and cash flow (the "Most Recent
Financial Statements" as of and for the six months ended June 30, 1997 (the
"Most Recent Fiscal Month End" for GRI and its Subsidiaries (which shall also
include the Power Products Division) (and as of the corresponding dates and for
the corresponding periods in the preceding fiscal year), including the notes
thereto and all additional or supplemental information supplied therewith. The
Financial Statements (including the notes thereto) (a) have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby and, in the case of the Financial Statements included as part of
(ii) above, have been audited in accordance with generally accepted auditing
standards, and (b) present fairly the properties, assets and financial position
of GRI and its Subsidiaries (including the Power Products Division) as of such
dates and the results of operations of GRI and its Subsidiaries (including the
Power Products Division) for such dates and periods; provided, however, that the
Most Recent Financial Statements are subject to normal year-end adjustments and
lack footnotes and other presentation items. Exhibit 3.1.2.6 sets forth the
year-end adjustments made to the unaudited financial statements in connection
with the preparation of the audited financial statements for the fiscal year
ended 1996. Exhibit 3.1.2.6 also sets forth the accounting methodology for
removal of the assets and liabilities of the Power Products Division from GRI
and any other financial statements to be delivered pursuant to this Agreement
shall be prepared in accordance with such methodology. All of GRI's and its
Subsidiaries' receivables of any nature are collectible in the Ordinary Course
of Business without offset subject to reserves reflected in the Financial
Statements or otherwise recorded in the Ordinary Course of Business and will be
collected by December 31, 1997. As of the Most Recent Fiscal Month End there are
no liabilities or obligations of any kind or nature, contingent or otherwise,
which are not reflected in the Most Recent Financial Statements and since such
date neither GRI nor its Subsidiaries has incurred any such liability or
obligation other than those incurred in the Ordinary Course of Business.
3.1.2.7 Events Subsequent to Most Recent Fiscal
Year End.
(a) Since December 31, 1996, there has not
been any material adverse change, either individually or in the aggregate, in
the business, properties, financial position, results of operations or net worth
of GRI or its Subsidiaries (whether as a result of any casualty or disaster,
accident, labor dispute, attrition of key employees, exercise of
11
<PAGE> 12
the power of eminent domain or other governmental act, or as a result of any
other event or circumstance) and (ii) neither GRI nor its Subsidiaries has
sustained any loss or damage to its properties, whether or not insured, which
affects its ability to conduct its business; except as set forth on Exhibit
3.1.2.7, the business of GRI and its Subsidiaries has since such date been
conducted in the same manner as theretofore conducted and in the Ordinary Course
of Business; after the close of business on such date no transaction has taken
place and no material contract has been entered into by GRI or its Subsidiaries
other than in the Ordinary Course of Business; and specifically, without
limitation of the foregoing, there have been no sales, removals or deliveries of
inventory (other than in the Ordinary Course of Business), machinery, fixtures
or other tangible or intangible assets of any nature since such date. Without
limiting the generality of the foregoing, since that date neither GRI nor any of
its Subsidiaries has engaged in any practice, taken any action, or entered into
any transaction outside the Ordinary Course of Business, other than as
contemplated by this Agreement in connection with this transaction.
(b) Since December 31, 1996, there has been
no material casualty affecting GRI or its Subsidiaries or loss, damage or
destruction to any of their properties, whether or not covered by or
compensated under any insurance policy covering GRI or its Subsidiaries.
(c) Since December 31, 1996, neither GRI nor
its Subsidiaries has:
(i) issued capital stock or declared
or paid any dividend (except for
dividends paid by any Subsidiary of GRI
to GRI) or made any other payment from
capital or surplus or other distribution
of any nature, or directly or indirectly
redeemed, purchased or otherwise acquired
or recapitalized or reclassified any of
its capital stock or liquidated in whole
or in part;
(ii) except as described in Exhibit
3.1.2.7, acquired all or substantially
all of the stock or assets of any other
company (including any such acquisition
structured as a merger or consolidation)
or made any loan of money to or
investment in any other company;
(iii) created, incurred or assumed or
committed to create, incur or assume any
indebtedness or other liability, except
for accounts payable or other current
liabilities which (1) are not for
borrowed money, (2) were incurred in the
12
<PAGE> 13
Ordinary Course of Business, and (3) have
not been materially adverse to the
business, properties, financial position,
results of operations or net worth of GRI
and its Subsidiaries;
(iv) mortgaged, pledged, leased or
otherwise encumbered any asset other than
in the Ordinary Course of Business;
(v) except as described in Exhibit
3.1.2.7, raised salaries, hourly rates or
the rate of bonuses or commissions or
other compensation payable to directors,
officers or other employees of GRI or its
Subsidiaries, except for normal increases
consistent with past practice, or
adopted, entered into, amended, or
terminated any Employee Benefit Plan;
(vi) varied insurance coverage;
(vii) altered or amended its charter or
bylaws;
(viii) entered into, materially amended
or terminated any material contract,
agreement, franchise, permit or license,
except in the Ordinary Course of
Business;
(ix) agreed with Seller or any of
Seller's Affiliates to modify pricing or
terms of any relationship to the
detriment of GRI or any of its
Subsidiaries; or
(x) entered into any agreement,
commitment or understanding to do or
engage in any of the foregoing after the
date hereof.
3.1.2.8 Legal Compliance. Each of GRI and its
Subsidiaries has complied with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, directives,
rulings, and charges thereunder) of federal, state, local, and foreign
governments and supranational authorities (and all agencies thereof). Neither
GRI nor any of its Subsidiaries is subject to any judicial, governmental or
administrative order, judgment or decree. Each of GRI and its Subsidiaries has
obtained all governmental licenses, permits, approvals, authorizations,
exemptions, classifications and certificates material to the conduct of its
business or to the ownership of its properties (collectively referred to herein
13
<PAGE> 14
as "Licenses"). True, complete and accurate copies of all Licenses have been
provided to Buyer. Each License is valid, binding and in full force and effect
and neither Seller nor any of GRI or its Subsidiaries is, or has received any
notice that it is, in default (or with the giving of notice or lapse of time or
both, would be in default) under any License. For purposes of this Article
3.1.2.8, GRI includes the Power Products Division.
3.1.2.9 Tax Matters. Seller has made available to
Buyer true, complete and accurate copies of that portion of Seller's Tax Returns
relating to GRI and its Subsidiaries filed for all tax periods ended on and
after December 31, 1991. Each of GRI and its Subsidiaries has filed all Tax
Returns that it was required to file, and has paid all Income Taxes and Other
Taxes shown thereon as owing. Neither GRI nor any of its Subsidiaries has any
deficiency with respect to any tax period ending on or prior to the Closing Date
on account of Income Taxes or Other Taxes and is not and will not be subject to
any liability or assessment with respect to such Income Taxes or Other Taxes,
whether or not assessed, which are not timely and adequately provided for in the
tax accruals in the Most Recent Financial Statements, other than current and
deferred taxes of GRI or its Subsidiaries for 1997 not yet due which arise
solely from income earned or operations in the Ordinary Course of Business after
the date of the Most Recent Financial Statements and which are consistent in
character and amount with the tax accruals reflected in the Financial
Statements. The federal Income Tax Returns relating to GRI and its Subsidiaries
have been audited by the Internal Revenue Service through December 31, 1989.
Except as set forth on Exhibit 3.1.2.9, none of GRI and its Subsidiaries (i) has
waived any statute of limitations in respect of Income Taxes or Other Taxes or
agreed to any extension of time with respect to an Income Tax or Other Tax
assessment or deficiency or (ii) is a party to any tax allocation or sharing
agreement (except as set forth on Exhibit 3.1.2.9) and none of them has any
liability under Treasury Regulation Section 1.1502-6 or otherwise for the taxes
of any other person. GRI has not filed any consent under Code Section 341(f)
concerning collapsible corporations. GRI has not made any payments, nor is it
obligated to make any payments, that will not be deductible under Code Section
280G. For purposes of this Article 3.1.2.9, GRI includes the Power Products
Division.
3.1.2.10 Real Property.
(a) The sole real property currently or
previously owned by GRI is 12801 Prospect Street, Dearborn, Michigan (the
"Property") as described in Exhibit 3.1.2.10. GRI has good and marketable fee
simple title to the Property, free and clear of all easements, restrictions,
occupancy agreements, assessments, liens, encumbrances, claims or other matters
affecting title, use or occupancy, except for (i) liens for nondelinquent ad
valorem taxes and (ii) such easements, liens and encumbrances as do not detract
from or interfere with the present or planned use of the Property subject
thereto. All of the easements, liens, and encumbrances referred to in clause
(ii) above are set forth in Exhibit 3.1.2.10. Either GRI or its Subsidiaries has
a valid leasehold interest in all the real property leased by it (the "Leased
Properties"). True, complete and accurate copies of all real property leases
with respect to the Leased Properties have been provided to Buyer. A list of all
such leases is also set forth on
14
<PAGE> 15
Exhibit 3.1.2.10. All such Leased Properties in the United States are in
multi-tenant office facilities. The sole property previously leased by GRI
consisted of a multi-tenant office facility. None of Seller nor GRI or its
Subsidiaries has received any notice of, nor has Knowledge (a) of any easements,
restrictions, occupancy agreements, assessments, liens, encumbrances, claims or
other matters affecting GRI's or its Subsidiaries' rights under any leasehold
estate, or (b) that such leasehold estates are subordinate to, or defeasible by,
any lien on the subject real estate, or any prior lease thereon. No governmental
authority having jurisdiction over the Property or the Leased Properties has
given any notice of a possible future imposition of assessments affecting such
property or the exercise of the power of eminent domain.
(b) Seller has provided to Buyer true,
complete and accurate copies of all environmental reports, studies or analyses
in the possession of Seller, GRI or its Subsidiaries which have been conducted
with respect to the Property and the Leased Properties. Neither Seller nor GRI
or its Subsidiaries have received notice from any governmental authority in the
last three years that the Property or the Leased Properties, or the conduct of
the business of GRI and its Subsidiaries thereon, have violated any
environmental law, zoning ordinance, or building code or any other foreign,
federal, state or local law rule, regulation or ordinance of any governmental
authority or the common law. Except as disclosed in Exhibit 3.1.2.10, neither
Seller's records nor those of GRI or its Subsidiaries show the presence of any
underground storage tank on the Property.
3.1.2.11 Intellectual Property. Exhibit 3.1.2.11
identifies each copyright, patent, trade name, trademark, service mark or
registration, whether registered or common law, and all applications therefor
that are pending or in the process of preparation, in the United States and in
foreign countries (the " Intellectual Property Rights") to the extent directly
or indirectly owned, licensed, used, required for use or controlled in whole or
in part by GRI or its Subsidiaries. Exhibit 3.1.2.11 also lists all licenses and
other agreements or arrangements allowing GRI or its Subsidiaries to use
Intellectual Property Rights of third parties, including Seller or its
Affiliates, in the United States or foreign countries. True, complete and
accurate copies of all such licenses or agreements have been provided to Buyer.
Except as set forth in Exhibit 3.1.2.11, GRI or one of its Subsidiaries is the
sole and exclusive owner of the Intellectual Property Rights listed in Exhibit
3.1.2.11, free and clear of any claims, liens, licenses, sublicenses, charges or
encumbrances and no governmental registration of any of the Intellectual
Property Rights has lapsed, expired or been canceled. abandoned, opposed or the
subject of a re-examination request. All Intellectual Property Rights used in or
necessary for the conduct of GRI's and its Subsidiaries' business as now
conducted are licensed to or owned by GRI or its Subsidiaries and there have
been no claims, and except as set forth on Exhibit 3.1.2.11, none of Seller, GRI
or any of its Subsidiaries has any Knowledge of any basis for any claim,
challenging the scope, validity or enforceability of any of the Intellectual
Property Rights. There are no instances where it has been held, claimed, or
alleged (other than the assertion by the Gas Research Institute with respect to
the name "GRI"), whether directly or indirectly, and neither Seller nor GRI or
its Subsidiaries has any Knowledge that any of the Intellectual Property Rights
of GRI or its Subsidiaries infringe the intellectual property rights of any
third party, or that any
15
<PAGE> 16
activity of any third party infringes upon any of the Intellectual Property
Rights. Neither GRI nor its Subsidiaries has been, nor is GRI or its
Subsidiaries now, conducting its business in a manner which has been or is in
violation of any intellectual property rights of another. Except as set forth on
Exhibit 3.1.2.11, none of GRI or its Subsidiaries requires a license or other
proprietary right to so operate its business.
3.1.2.12 Material Contracts. Exhibit 3.1.2.12
lists all of the existing agreements, contracts and other commitments (including
all amendments or modifications to the foregoing) to which any of GRI and its
Subsidiaries is a party, written or unwritten, (including, without limiting the
generality of the foregoing, all supply contracts; guarantee agreements; sales
representation and distribution agreements; purchase orders and commitments;
product warranties; and powers of attorney but excluding any such agreement or
contract which has been provided pursuant to another representation and warranty
in this Agreement). Notwithstanding the foregoing, Exhibit 3.1.2.12 need not
list:
(i) any contract with a customer made
(A) in the Ordinary Course of Business on
or after the date hereof or (B) prior to
the date hereof, in either case whereby
GRI or one of its Subsidiaries is
obligated to deliver less than $1,000,000
in invoice value of services or goods in
each transaction or series of related
transactions; or
(ii) any purchase commitment made (A)
in the Ordinary Course of Business at
prevailing prices on or after the date
hereof or (B) prior to the date hereof,
in either case which is not in excess of
$100,000 in each transaction or series of
related transactions.
The pricing provisions in contracts with FORD and its Affiliates which are not
listed in Exhibit 3.1.2.12 are, in the aggregate, not less favorable than market
prices. Concurrently with the delivery of the aforementioned list, Buyer has
been given true, complete and correct copies of all written instruments
evidencing the items listed in Exhibit 3.1.2.12 and has also been given copies
of the forms of written purchase and sales orders used by GRI and its
Subsidiaries. Purchase orders and purchase commitments may be canceled at any
time without penalty except as will be otherwise described in Exhibit 3.1.2.12.
All of the agreements, contracts and commitments listed in Exhibit
3.1.2.12, all real property leases and all personal property leases and all of
the agreements, contracts and commitments not required to be listed by reason of
clause (i) or (ii) of Section 3.1.2.12 and all other material agreements,
contracts and commitments listed or described in another provision or exhibit to
this Agreement, are valid and binding obligations of the parties thereto in
accordance
16
<PAGE> 17
with their respective terms and there has occurred no event which would
constitute any breach of or default in any provision of any such agreement,
contract or commitment or which would permit the acceleration or termination of
any obligation of any party thereto or the creation of a lien or encumbrance
upon any asset of GRI or its Subsidiaries or which would give rise to any of the
foregoing upon the giving of notice or lapse of time.
3.1.2.13 Litigation. Exhibit 3.1.2.13 sets forth
each instance in which any of GRI or its Subsidiaries or an Employee Benefit
Plan or trust related thereto (i) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (ii) is a party to any action,
suit, proceeding, hearing, or investigation of, in or before any court or quasi-
judicial or administrative agency of any federal, state, local or foreign
jurisdiction. Other than as set forth on Exhibit 3.1.2.13, no litigation of any
kind or nature or governmental or administrative investigation or proceeding to
which any of GRI its Subsidiaries or an Employee Benefit Plan or trust related
thereto may be a party is now pending or threatened, no claim which has not
ripened into litigation or other proceeding has been made or threatened against
it, and Seller has not received notice of, nor does Seller have Knowledge of,
any facts, circumstances or conditions which might reasonably be expected to
give rise to any such claim, investigation, proceeding or litigation, in each
case whether or not covered by insurance. Neither GRI nor any of its
Subsidiaries has any liability, and will not have any liability following the
Closing, on account of (a) defective products or services (including liability
on account of product warranties) manufactured, sold, provided or performed by
or on behalf of GRI or its Subsidiaries prior to the Closing or (b) GRI's or its
Subsidiaries' working conditions (other than workers' compensation claims
contained on the workers' compensation loss run previously provided to Buyer) as
they exist at any time prior to the Closing.
3.1.2.14 Employee Matters.
(a) Except as set forth in Exhibit 3.1.2.14,
no employees of GRI or its Subsidiaries are represented by a union or other
labor organization and there is no organizing drive respecting the employees of
GRI or its Subsidiaries. True and complete copies of any applicable collective
bargaining agreement will be provided to Buyer prior to Closing. Each of GRI and
its Subsidiaries has complied with the terms of any applicable collective
bargaining agreements (or its foreign equivalent) and all applicable laws
affecting employment and employment practices, terms and conditions of
employment and wages and hours. There is no unfair labor practice charge or
complaint (or its foreign equivalent) pending or threatened against GRI or its
Subsidiaries before any government agency (U.S. or foreign) that regulates labor
affairs. There is no actual or threatened labor strike, slowdown, work stoppage
or lockout with respect to represented employees of GRI or its Subsidiaries.
(b) Exhibit 3.1.2.14 lists all Employee
Benefit Plans (whether or not subject to ERISA) maintained by or contributed to
by GRI or its Subsidiaries for its employees in the United States. None of GRI
nor any Subsidiary with respect to its employees in the United States has (a)
ever contributed to any multiemployer plan (as defined in ERISA Section.
17
<PAGE> 18
3137 or 4001(a)(3)), or (b) maintained any defined benefit plan subject to Title
IV of ERISA, nor does GRI or any Subsidiary maintain any retiree medical or
retiree life insurance programs.
(i) Each such Employee Benefit Plan
(and each related trust, insurance
contract, or fund) complies in form and
in operation in all respects with its
governing documents and the applicable
requirements of ERISA and the Code.
(ii) All contributions and premium
payments (including all employer
contributions and employee salary
reduction contributions) which are due
have been paid and will be timely paid
through the date of Closing to each such
Employee Benefit Plan which is an
Employee Pension Benefit Plan or Employee
Welfare Benefit Plan.
(iii) Each such Employee Benefit Plan
which is an Employee Pension Benefit Plan
has received a current determination
letter from the Internal Revenue Service
to the effect that it meets the
requirements of Code ss.401 (a), and
Buyer is unaware of any event that has
occurred, whether by action or failure to
act, which has resulted in or could cause
the loss of such qualification, and each
trust thereunder is exempt from tax
pursuant to Code Section 501(a); true
complete and accurate copies of the
aforementioned determination letters have
been provided to Buyer.
(c) Exhibit 3.1.2.14 lists and describes all
Employee Welfare Benefit Plans and Employee Pension Benefit Plans which have
been terminated since January 1, 1991. The terminations of all such Employee
Pension Benefit Plans have been approved by the Internal Revenue Service and, in
the case of any defined benefit pension plan, by the PBGC.
(d) All of the Employee Benefit Plans,
programs and policies maintained or contributed by GRI or any Subsidiary in
which its employees or former employees are entitled to participate (other than
in the United States) are listed in Exhibit 3.1.2.14 (the "Foreign Plans") and
true, complete and accurate copies of all such plans, programs and policies will
be provided to Buyer prior to Closing. Each Foreign Plan complies in form and in
operation in all respects with all applicable laws and all contributions which
are due to have been paid under any such Foreign Plan prior to the Most Recent
Fiscal Month End will have been
18
<PAGE> 19
paid or fully accrued for on the Most Recent Financial Statements and,
following such date, each of GRI and its Subsidiaries have continued to satisfy
its obligations under such Foreign Plans.
3.1.2.15 Employees. Seller has provided to Buyer a
true, accurate and complete list of the names and annual salaries of all
officers and other non-hourly rated employees of GRI or its Subsidiaries
receiving compensation at an annual rate (including bonuses, commissions and
other compensation) in excess of $100,000 (or the foreign currency equivalent
thereof), together with the amount of bonuses and description of agreements or
arrangements for commissions and other compensation or benefits of any nature,
including, without limitation, tax-non/qualified pension, profit sharing,
welfare and other benefit plans, severance and vacation policies (to the extent
not described in Article 3.1.2.14), to be paid or provided to any person
pursuant to agreement, custom, or present understanding. Except as set forth on
Exhibit 3.1.2.15, (i) neither GRI nor any of its Subsidiaries is a party to any
employment contract, oral or written, with any executive or employee, other than
an employment contract providing for at will termination with respect to United
States employees and (ii) neither GRI nor any of its Subsidiaries is a party to
any employment contract, oral or written, which varies from the standard form
contracts previously provided to Buyer, with respect to foreign employees.
Neither Seller nor GRI or its Subsidiaries has any Knowledge that any officer or
other key employee of GRI or its Subsidiaries identified on the employee list
provided in this Section 3.1.2.15 is actively seeking to leave the employment of
GRI.
3.1.2.16 Insurance. Exhibit 3.1.2.16 lists all
policies of insurance and all self-insurance of Seller or GRI insuring GRI and
its Subsidiaries. True, complete and accurate copies of all such policies have
been provided to Buyer. All of such policies of insurance are in full force and
effect as stated therein and the premiums therefor have been paid as they became
due and payable.
3.2 Representations and Warranties of the Buyer. Buyer represents
and warrants to Seller that the statements contained in this Article 3.2 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Article
3.2).
3.2.1 Organization of Buyer. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation and has full power and authority to own its
properties and to carry on its business as now conducted.
3.2.2 Authorization of Transaction. Buyer has full
power and authority (including full corporate power and authority) to execute
and deliver this Agreement and the Ancillary Agreements and to perform its
obligations hereunder and thereunder. This Agreement has been duly executed and
delivered by Buyer and the Ancillary Agreements, upon execution by Buyer, will
have been duly executed and delivered by Buyer, and each such agreement is or
upon execution will be a valid and binding obligation of the Buyer,
enforceable
19
<PAGE> 20
in accordance with its terms and conditions, except as enforceability may be
limited by the effects of bankruptcy, insolvency, fraudulent conveyance,
moratorium, reorganization or other similar laws and court decisions
relating to or affecting the rights of creditors generally or by general
principles of equity (whether considered in equity or at law).
3.2.3 Noncontravention. Neither the execution and the
delivery of this Agreement or the Ancillary Agreements, nor the consummation of
the transactions contemplated hereby or thereby, will (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which the Buyer is subject or any provision of its charter or bylaws or
(ii) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, covenant,
contract, lease, license, instrument, or other arrangement to which the Buyer is
a party or by which it is bound or to which any of its assets is subject.
3.2.4 Investment. Buyer (i) understands that the Offered
Shares have not been, and will not be, registered under the Securities Act, or
under any state securities laws, and are being offered and sold in reliance upon
federal and state exemptions for transactions not involving any public offering,
and (ii) is acquiring the Offered Shares solely for its own account for
investment purposes, and not with a view to the distribution thereof.
ARTICLE 4 - COVENANTS
4.1 Pre-Closing Covenants. The Parties agree as follows with
respect to the period between the execution of this Agreement and the Closing.
4.1.1 General. Each of the Parties will use its
reasonable best efforts to take all action and to do all things necessary,
proper or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in Article 5 below).
4.1.2 Notices and Consents. Each of the Parties will (and
Seller will cause each of GRI and its Subsidiaries to) give any notices to, make
any filings with, and use its reasonable best efforts to obtain any
authorizations, consents. and approvals of governments and governmental agencies
in connection with the matters referred to in this Agreement. Without limiting
the generality of the foregoing, each of the Parties will file any notification
and report forms and related material that it may be required to file with the
Federal Trade Commission and the Antitrust Division of the United States
Department of Justice under the Hart-Scott-Rodino Act, will use its reasonable
best efforts to obtain a waiver from the applicable waiting period, and will
make any further filings, foreign or domestic, that may be necessary, proper, or
advisable in connection therewith. Notwithstanding the foregoing, however,
whichever entity is required by
20
<PAGE> 21
applicable law to make such filings with foreign agencies, shall take primary
responsibility for making such filings.
4.1.3 Operation of Business. Seller will not cause or
permit any of GRI and its Subsidiaries to engage in any practice, take any
action, or enter into any transaction outside the Ordinary Course of Business or
as described in Article 3.1.2.7. More specifically, but without limiting the
foregoing, Seller:
(i) Shall cause each of GRI and its
Subsidiaries to carry on their business in a
diligent manner consistent with prior practice in
the Ordinary Course of Business, except as
described on Exhibit 4.1.3, not initiate any new
method of management or operation, and Seller will
use its best efforts to preserve each of GRI's and
its Subsidiaries' business organization intact and
conserve the goodwill and relationships of its
customers, suppliers and others having business
relations with it and the services of all officers,
employees, agents and representatives.
(ii) Shall not, without the prior consent of
Buyer, permit any of GRI or its Subsidiaries to (A)
make any capital contribution or investment in any
corporation, business or other entity; (B) declare,
set aside or pay any payment, dividend or other
distribution of any nature in respect of its
capital stock except that Subsidiaries of GRI
located in jurisdictions other than the United
States may pay dividends to GRI to the extent that
GRI will not incur any adverse Income Tax or Other
Tax liabilities in connection therewith; (C)
acquire or dispose of a capital asset having an
initial cost of $100,000 or more; (D) merge or
consolidate with any other corporation, business or
other entity or acquire any assets of any other
corporation, business or other entity (other than
inventory in the Ordinary Course of Business or as
otherwise specifically permitted by this
Agreement); or (E) enter into, materially amend or
terminate any material contract, agreement,
franchise, permit or license.
(iii) Shall cause GRI and its Subsidiaries to
(i) duly and timely file all reports and returns
required to be filed with any governmental agency
and will promptly pay when due all taxes,
assessments and governmental charges including
interest and penalties levied or assessed, unless
diligently contested in good faith by appropriate
proceedings; (ii) maintain and keep in
21
<PAGE> 22
good order all buildings, offices, shops and
other structures, and keep all machinery, tools,
equipment, fixtures and other property used or
useable in its business in good condition, repair
and working order, (iii) maintain in full force and
effect all policies of insurance now in effect; and
(iv) not do any act or omit any act or permit any
omission to act, within its control, which will
cause a breach or default in any material respect
in any of its contracts, commitments or
obligations.
4.1.4 Full Access. Seller will permit, and will cause
each of GRI and its Subsidiaries to permit, representatives of Buyer to have
full access at all reasonable times, and in a manner so as not to interfere with
the normal business operations of GRI and its Subsidiaries, to all premises,
properties, personnel, books, records (including tax records), contracts, and
documents of or pertaining to each of GRI and its Subsidiaries, will permit
Buyer to conduct any environmental inspections, tests, studies or analyses, and
will furnish Buyer with documents and all such other information concerning its
properties and business as Buyer may reasonably request. In accordance with the
Confidentiality Agreement, Buyer will treat and hold confidential any Evaluation
Material it receives from any of Seller, GRI and its Subsidiaries in the course
of the reviews contemplated by this Article 4, will not use any of the
Evaluation Material except in connection with this Agreement, and, if this
Agreement is terminated for any reason whatsoever, will return to Seller, GRI
and its Subsidiaries or destroy all tangible embodiments (and all copies) of the
Evaluation Material which are in its possession.
4.1.5 Further Actions. Neither Seller nor GRI or its
Subsidiaries shall take any action or omit to take any action within the control
of any of them to the extent such action or omission might result in any of the
representations or warranties contained in this Agreement being inaccurate or
incorrect on and as of the date of Closing.
4.1.6 Exclusivity. As long as this Agreement shall remain
effective, neither Seller nor GRI will negotiate with any other person with
respect to the sale or disposition of the Offered Shares or the assets or
business of GRI or its Subsidiaries (other than those assets or that portion of
the business exclusive to the Power Products Division).
4.1.7 Power Products Division. Prior to Closing, Seller
shall dividend or otherwise remove the assets of Power Products Division as
shown on Exhibit 3.1.2.4, offer employment to and employ all employees of the
Power Products Division, and assume all of the liabilities and obligations of
the Power Products Division. Seller shall not, however, remove any tangible or
intangible asset (i) which is also used by GRI or its Subsidiaries in the
conduct of their respective business and (ii) which would prejudice GRI or its
Subsidiaries in the conduct of their respective business.
4.1.8 Notice of Developments.
22
<PAGE> 23
(a) Seller shall notify Buyer of any development
subsequent to the date of execution of this Agreement causing any changed facts,
circumstances or information from the matters described in the representations
and warranties in Article 3 hereof, including the Exhibits thereto and of any
fact, circumstance or information which would render any representation or
warranty of Seller in this Agreement incomplete, untrue or incorrect in any
respect.
(b) Each Party will give prompt written notice to the
other of any development causing a breach of any of its own representations and
warranties in Articles 3.1, 3.1.2 or 3.2 above; provided, however, that except
as hereafter provided in Article VI, no disclosure by Seller or any Party
pursuant to this Article 4.1.8, shall be deemed to amend or supplement any
Exhibit or to prevent or cure any misrepresentation or breach of warranty.
4.1.9 Broker Fees. Each Party, as appropriate, will pay
any fees or commissions to any broker, finder or agent it retained with respect
to the transactions contemplated by this Agreement for which a Party could
become liable or obligated.
4.1.10 Allocation of Purchase Price. Not later than six
months after the Closing, Buyer shall in good faith prepare a schedule (the
"Allocation Schedule") and deliver it to Seller setting forth the allocation of
the consideration to be paid by Buyer pursuant to Buyer's election of tax
treatment under Section 338(h)(10) of the Code (and any corresponding elections
under state, local or foreign tax law (collectively, a "Section 338(h)(10)
Election")). The Allocation Schedule shall be determined in accordance with
Section 338 of the Code. Buyer and Seller shall have 30 days from the date of
such delivery to resolve any disagreements regarding the Allocation Schedule. At
the end of such period, any remaining disagreements shall be resolved pursuant
to the Tax Dispute Resolution Mechanism set forth in Article 4.3.7 below. The
value of the foreign subsidiaries of GRI shall be presumed to be their net worth
(excluding the Power Products Division). If any change in the Allocation
Schedule is made necessary as a result of an adjustment to the Purchase Price,
then Buyer and Seller shall agree on the amount of such increase or decrease and
the allocation thereof among the assets of each of GRI and its Subsidiaries in
accordance with the requirements of the Code. In connection with the preparation
of the Allocation Schedule, the Parties shall cooperate with each other and
provide such information as either of them shall reasonably request.
4.1.11 Collection of Accounts Receivable. Seller shall
institute a permanent payment mechanism for payment of accounts receivable
relating to AdTeam, PeopleNet and Diversified Document Solutions (" DDS") such
that FORD shall pay such accounts receivable, after the Closing, in immediately
available funds within 24 hours (or the next FORD business day) after payment by
Buyer to its suppliers. The Parties will negotiate in good faith to
appropriately assess the external auditing required for monitoring and
verification of this payment mechanism. Expenses paid by FORD on behalf of GRI
will be reimbursed by GRI on a basis consistent with past practice.
23
<PAGE> 24
4.1.12 Consents. To the extent that any contract, lease,
agreement or other arrangement with or benefiting GRI or its Subsidiaries would
be breached or violated by the consummation of this transaction, Seller, at
Seller's cost and expense, will use its reasonable best efforts to obtain any
required consent or waiver of any third party of any such breach or violation.
If any such waiver or consent shall not be obtained, Seller shall cooperate with
Buyer in any reasonable arrangements designed to provide Buyer, at no additional
cost or expense to Buyer, with the benefits intended to be received by GRI or
its Subsidiaries under the relevant contract, lease, agreement or other
arrangement. Seller shall consent to or waive any right it may have to object to
any change of control of GRI or its Subsidiaries under any agreements,
contracts, understandings or commitments between Seller and its Affiliates and
GRI or one of its Subsidiaries.
4.1.13 Estimated Cash of GRI. Seller shall deliver to
Buyer one business day prior to the Closing Date a good faith estimate of the
Cash of GRI on the Closing Date (the "Estimated GRI Cash ").
4.2 Post-Closing Covenants. The Parties agree as follows with
respect to the period following the Closing:
4.2.1 General. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
Party reasonably may request, all at the sole cost and expense of the requesting
Party (unless the requesting Party is entitled to indemnification therefor under
Article 6.2 or 6.3 below).
4.2.2 Litigation Support. In the event and for so long
as any Party actively is, contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand in
connection with (i) any transaction contemplated under this Agreement or (ii)
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving any of GRI and its Subsidiaries, each of the
other Parties shall cooperate with the other or its counsel in the defense or
contest, make available its personnel, and provide such testimony and access to
its books and records as shall be necessary in connection with the defense or
contest, all at the sole cost and expense of the contesting or defending Party,
which shall pay out-of-pocket expenses of the other Party (unless the
contesting or defending Party is entitled to indemnification therefor under
Article 6.2 or 6.3 below or the Parties are otherwise in an adversarial
relationship).
4.2.3 GRI Employee Plans. Buyer shall take no action to
cause GRI to terminate the GRI Employee Benefit Plans or Foreign Plans during
calendar year 1997 (except any plans provided by or through Seller, which may be
discontinued except as set forth below). Buyer shall cause GRI to make any
payments due under the Severance Plan after the Closing
24
<PAGE> 25
Date until such time as the plan is terminated. Seller has provided to Buyer a
true, complete and accurate copy of the GRI Severance Plan. Nothing contained in
this Article 4.2.3 shall be construed to prevent Buyer from terminating or
modifying to any extent or in any respect any Employee Benefit Plan or Foreign
Plan of GRI or its Subsidiaries after December 31, 1997. Effective as of the
Closing Date, Seller shall take such action as is necessary to terminate the
participation of employees of GRI or its Subsidiaries in the employee discount
plans, training programs, and other fringe benefit plans and programs maintained
by Seller, except to the extent that (i) the availability of any such plan or
program is required pursuant to the terms of any applicable collective
bargaining agreement in which employees of GRI participate, in which event such
plan or program shall continue until the effective termination of such
collective bargaining agreement, at the cost at which GRI or its Subsidiaries
currently pays Seller, if any, and/or (ii) termination of any such plan or
program in foreign jurisdictions would cause GRI or one of its Subsidiaries to
have to compensate any employee for the loss of any such plan or program, in
which event any such plan or program shall continue for the shortest period of
time necessary to permit GRI or its Subsidiaries to terminate it without
incurring any such liability; provided, however, FORD's obligation under this
Article 4.2.3 will be subject to renegotiation based on the facts existing at
the time.
4.2.4 Reports; Access to Books and Records; Audited
Financial Statements.
(a) After the Closing, each of Buyer and Seller shall
permit the other Party, its respective officers, counsel and other
representatives to have reasonable access to, and the right to make copies of
such Party's books, records and files as reasonably necessary in connection with
tax return preparation or tax compliance matters. FORD further agrees to make
available to Buyer access to such of FORD's books, records and files and to
otherwise cooperate with Buyer in timely providing such information as is
reasonably necessary in connection with any public offering by Buyer.
(b) Within ninety (90) days following the Closing Date,
Seller shall, at its expense, deliver to Buyer copies of the audited
consolidated balance sheets and statements of income, changes in stockholders'
equity and cash flow as of and for the fiscal year ended 1996 for GRI and its
Subsidiaries (excluding the Power Products Division) prepared in accordance with
the methodology contained in Exhibit 3.1.2.6.
4.2.5 Agreement Not to Compete; Confidential Information.
4.2.5.1 Non-Competition. Seller acknowledges and
recognizes the highly competitive nature of GRI's business and accordingly
agrees as follows:
(a) Seller agrees that during and for the period
commencing with the Closing Date and ending on the date that is seven years
after such date (the "Restricted Period"), neither Seller nor its Affiliates
will directly or indirectly engage in the Business
25
<PAGE> 26
Activities (as hereinafter defined) whether such engagement is as an owner,
partner, investor (other than as a passive investor with less than a controlling
interest in the outstanding capital stock of a publicly traded corporation),
consultant, advisor, agent or other participant, in the Geographic Territory (as
hereinafter defined), whether for a for-profit or not-for-profit entity.
(b) Seller agrees that during the Restricted Period,
neither Seller nor its Affiliates will directly or indirectly engage in any of
the Business Activities as a supplier to any customer with whom GRI or its
Subsidiaries has done business within two years prior to the date hereof,
whether as a partner, investor (other than as a passive investor with less than
a controlling interest in the outstanding capital stock of a publicly traded
corporation), consultant, advisor, agent or other participant, whether for a
for-profit or not-for-profit entity.
(c) Seller agrees that during the Restricted Period,
neither Seller nor its Affiliates will directly or indirectly assist others in
engaging in any of the Business Activities in the manner prohibited to Seller
and its Affiliates under this Agreement.
(d) Seller agrees that during the Restricted Period,
neither Seller nor its Affiliates will directly or indirectly induce employees
of GRI or its Subsidiaries to engage in any activities hereby prohibited to the
Seller or its Affiliates or to terminate their employment.
(e) For purposes of this Article 4.2.5, the term
"Business Activities" shall mean (a) the activities of GRI or its Subsidiaries
as of the Closing Date, (b) the activities of GRI or its Subsidiaries (excluding
the Power Products Division) during the two year period preceding the Closing
Date, and (c) temporary staffing activities with the exception of Ford utilizing
those UAW employees who have protected status under the current Ford/UAW
collective bargaining agreement who are displaced from their permanent positions
with Ford to fill temporary positions ("Displaced Ford Employees"), provided
that FORD shall not utilize or place any Displaced Ford Employee working as
salaried designers or hourly mechanics engaged in prototype build outside FORD.
For purposes of this Article 4.2.5, the term "Geographic Territory" is defined
as North America, Western Europe, Australia, Argentina, Brazil, Korea, Poland
and New Zealand. Nothing contained in this Article 4.2.5 shall prevent FORD from
entering into joint ventures, whether or not located in the Geographic
Territory, provided that such joint ventures do not engage in the Business
Activities in any manner prohibited to Seller and its Affiliates herein.
4.2.5.2 Exclusions. Nothing contained in this
Article 4.2.5 shall deprive Ford of the ability to insource the Business
Activities, subject to the specific restrictions contained in the Master Vendor
Agreement and the Master Supply Agreement, and the general principle that FORD
will not deprive MSXI of the benefits of this Agreement and its related
transactions by FORD insourcing of such Business Activities.
4.2.5.3 Confidential Information. Seller
acknowledges that GRI's and its Subsidiaries' trade secrets, private or secret
processes as they currently exist and
26
<PAGE> 27
information concerning products, development, technical information, procurement
and sales activities and procedures, promotion and pricing techniques and credit
and financial data concerning customers currently possessed or known by FORD are
GRI's valuable, special and unique assets, access to and knowledge of which have
been gained by virtue of the Seller's ownership of GRI. In light of the highly
competitive nature of the industry in which GRI and its Subsidiaries conduct
business, Seller further agrees that all knowledge and information described in
the preceding sentence shall be considered confidential information. In
recognition of this fact, Seller agrees that for a period of two years from the
Closing Date, Seller and its Affiliates will take such steps to protect the
confidential and proprietary nature of such information as it would take with
respect to its own confidential information. The foregoing restrictions shall
not apply to any such information that (i) now or hereafter lawfully becomes a
matter of public record other than as a result of a disclosure in violation of
this Agreement (provided that any such information will be deemed confidential
until such time as it has lawfully become a matter of public record), (ii) is
approved for release by GRI, (iii) is lawfully acquired by Seller from a third
party who is not subject to any confidentiality obligation or (iv) is required
by law to be disclosed.
4.2.5.4 Scope of Restrictions. It is expressly
understood and agreed that although the Buyer and Seller consider the
restrictions contained in this Agreement to be reasonable for the purpose of
preserving for GRI and its Subsidiaries its goodwill, proprietary rights and
going business value, if a final judicial determination is made by a court
having jurisdiction that the time or territory or any other restriction
contained in this Article 4.2.5 is an unenforceable restriction against the
Seller, the provisions of such restriction shall not be rendered void but shall
be deemed amended to apply as to such maximum time and territory and to such
other extent as such court may judicially determine or indicate to be
reasonable. Alternatively, if the court referred to above finds that any
restriction contained in this Agreement is unenforceable, and such restriction
cannot be amended so as to make it enforceable, such finding shall not affect
the enforceability of any of the other restrictions contained herein. The
provisions of this Article 4.2.5.4 shall in no respect limit or otherwise affect
the obligations of Seller under any agreements with GRI or its Subsidiaries.
4.2.5.5 Remedies. Seller acknowledges and agrees
that Buyer's remedy at law for a breach or threatened breach of any of the
provisions of this Article 4.2.5 would be inadequate and, in recognition of this
fact, in the event of a breach or threatened breach by Seller of the provisions
of Article 4.2.5. it is agreed that Buyer, in addition to its remedy at law,
without posting any bond, shall be entitled to, and the Seller agrees not to
oppose Buyer's request for, equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent injunction or
any other equitable remedy which may then be appropriate. Seller acknowledges
that the granting of a temporary injunction, temporary restraining order or
permanent injunction merely prohibiting the use of trade secrets and like
proprietary information would not be an adequate remedy upon breach or
threatened breach hereof, and consequently agrees upon any such breach or
threatened breach to the granting of injunctive relief prohibiting the design,
development, manufacture, sale, marketing or servicing
27
<PAGE> 28
of products of the kind designed, developed, manufactured, sold, marketed or
services by GRI or its subsidiaries. Nothing herein contained shall be construed
as prohibiting Buyer or GRI or its Subsidiaries from pursuing any other remedies
available to it for such breach or threatened breach.
4.3 Section 338(h)(10) Election.
4.3.1 Buyer and Seller shall make a timely, effective and
irrevocable election under Section 338(h)(10) (the "Section 338(h)(10)
Election") with respect to the purchase and sale of the Offered Shares and GRI
Subsidiaries incorporated under the laws of any state in the United States.
Buyer may, at its option, make an election pursuant to Section 338 with respect
to any of GRI's foreign subsidiaries. Buyer may make, cause or permit any of its
Subsidiaries to make any election under Code Section 338 or any similar election
under state, local or foreign tax law with respect to the purchase and sale of
the capital stock of any of GRI and its Subsidiaries.
4.3.2 Each Party agrees to be bound by the allocations
set forth in the Allocation Schedule, to complete Form 8023-A with its federal
income tax return consistent with such allocation for the tax year in which the
Closing occurs, to file, or cause to be filed, all other tax returns in a manner
consistent with such allocation and not to take any actions inconsistent
therewith.
4.3.3 Buyer shall pay to Seller as additional Purchase
Price such amount (the "Tax Election Amount"), if any, (net of Income Tax on
such amount at an assumed rate of 38%) as shall equal the excess of (i) the
amount of taxes due as a result of the deemed sale of the assets of GRI pursuant
to the Section 338(h)(10) Election, taking into account any available losses or
credits resulting from such deemed asset sale. over (ii) the amount of taxes
that would have been incurred by Seller as a result of a sale (without an
Section 338(h)(10) Election) of the Offered Shares for the Purchase Price,
disregarding for this purpose any distribution of GRI's assets pursuant to or as
contemplated by this Agreement. In no event shall Buyer's obligations under the
whole of this Article 4.3 exceed $200,000 in the aggregate. The Seller shall be
liable for and shall pay all taxes of GRI, FORD or FORD's subsidiaries resulting
from the deemed sale of the assets of GRI pursuant to the Section 338(h)(10)
Election in excess of Buyer's obligation hereunder. Any additional Purchase
Price payable by the Buyer pursuant to this Article 4.3.3 shall be disregarded
for purposes of calculating the Tax Election Amount. In the event that a tax
authority asserts that an amount of tax described in clause (i) above is greater
than that originally determined by the Parties, Seller shall give notice to
Buyer of such determination, and shall keep Buyer reasonably informed (including
providing copies of documentation reasonably requested by Buyer) of the progress
of the matter and consult with Buyer relative to its disposition. Seller shall
be entitled to reimbursement pursuant to this Section 4.3.3 on the basis of the
amount eventually determined if Seller has resolved the matter in a manner which
constitutes a payment of a liability which is due or reaches a reasonable
28
<PAGE> 29
compromise of such matter. Any dispute shall be resolved by the Tax Dispute
Resolution Mechanism.
4.3.4 Seller shall deliver to Buyer a computation of the
Tax Election Amount within a reasonable period following a determination of the
allocation pursuant to Article 4.3.2 and Buyer shall have 30 days to review such
computation. Any remaining disagreements pertaining to the computation of the
Tax Election Amount that are not resolved within such 30 day period (hereinafter
the "Buyer Review Period") shall be resolved pursuant to the Tax Dispute
Resolution Mechanism set forth in Article 4.3.7 below. At the close of the Buyer
Review Period, Buyer shall pay to Seller the portion of the Tax Election Amount
that Buyer does not dispute. If it is determined that Buyer owes Seller an
additional amount, Buyer shall pay to Seller such additional amount plus
interest thereon at the " overpayment rate" as defined in section 6621 (a) of
the Code from the close of Buyer Review Period to the date of payment.
4.3.5 Subject to the limitation stated in Article 4.3.3,
Buyer shall indemnify and hold Seller harmless from and against (i) any adverse
tax consequences suffered by Seller as a result of any transaction proposed by
Buyer pursuant to Section 2.1, or (ii) any tax payable by Seller as a result of
any election under Section 338 of the Code (other than the Section 338(h)(10)
Election) with respect to a GRI Subsidiary, including, without limiting the
generality of the foregoing, a tax payable upon the deemed sale of a foreign
subsidiary of GRI which would otherwise have been offset by foreign tax credits
attributable to a foreign subsidiary of GRI. Any disputes concerning the amount
to which Seller is entitled under this Article 4.3.5 shall be resolved pursuant
to the Tax Dispute Resolution Mechanism.
4.3.6 Each Party hereby agrees to provide, and to cause
GRI and its Subsidiaries to provide, the other Party with such cooperation and
information as such other Party may reasonably request in filing a tax return,
amended return or claim for refund, determining its tax liability arising out of
the transactions contemplated by this Agreement or computing the Tax Election
Amount. Such cooperation and information shall include providing copies of
returns and work papers and making employees available on a mutually convenient
basis to answer questions. Any information obtained pursuant to this Section
4.3.6 shall be kept confidential, except to the extent disclosure is necessary
to file a tax return or claim for refund, or to conduct a proceeding.
4.3.7 Where it is provided that a dispute is to be
resolved pursuant to the "Tax Dispute Resolution Mechanism", such dispute shall
be resolved as follows. Buyer and Seller shall submit the dispute to a jointly
selected "Big Six" accounting firm (the "Settlement Firm") for resolution. If
Buyer and Seller cannot jointly agree on an accounting firm to serve as the
Settlement Firm, each Party shall submit the name of an accounting firm (which
firm shall not be Coopers & Lybrand) to Coopers & Lybrand, who shall select one
of such firms by lot. The decision of the Settlement Firm shall be final and
binding on the Parties. Except as otherwise provided in this Agreement, the fees
and expenses of the Settlement Firm shall be borne equally by Buyer and Seller.
29
<PAGE> 30
4.4 Plan of Liquidation. Prior to the Closing, Seller and GRI
shall adopt a plan of complete liquidation (within the meaning of section 332 of
the Code) of GRI.
4.5 Advisory Board. FORD will undertake to participate in a joint
Advisory Board (as described in the Master Vendor Agreement and Master Supply
Agreement) to meet periodically to oversee the relationship between FORD and
Buyer.
4.6 Transition Services. As of the date hereof, Seller provides
to GRI and its Subsidiaries various services and the use of certain tangible and
intangible assets. Moreover, after the Closing, certain employees of Seller (the
"Ford DDS Employees") will continue to work at positions within GRI until such
time as the Ford DDS Employees are reassigned by Seller. Finally, Seller has
requested that GRI continue to provide certain services to the Power Products
Division pending the disposition of such division. While it is contemplated that
at the Closing the Parties will enter into a Transition Services Agreement
governing the delivery of all such services, the Parties also recognize that the
Closing may occur prior to identification of all services and finalization of
the Transition Services Agreement. Accordingly, the Parties agree as follows:
(i) FORD will lease to Buyer the Ford DDS Employees at
the rates contained in Exhibit 4.6 for a period not to exceed one year.
(ii) With respect to the services currently provided by
FORD and its Affiliates to GRI and its Subsidiaries (other than the services
identified on Exhibit 4.6), the status quo will prevail (i.e., FORD and its
Affiliates will continue to provide all other services currently provided by
FORD and its Affiliates to GRI or its Subsidiaries or their employees at the
rate FORD presently charges GRI, or at no charge if no payment is current made
by GRI) until such time as the Parties agree to other terms and conditions.
Promptly after the Closing, the Parties will commence negotiations with respect
to the terms and conditions upon which such services will be continued.
(iii) Except as otherwise specifically provided in this
Agreement, GRI and its Subsidiaries will continue to have the use, at no charge
to GRI or its Subsidiaries. of all tangible and intangible assets owned by
Seller or its Affiliates and currently used by GRI or its Subsidiaries for so
long as such assets are required by GRI or its Subsidiaries to perform any
services for Seller or its Affiliates.
(iv) With respect to the services currently provided by
GRI and its Subsidiaries to the Power Products Division (excluding any services
currently provided by FORD or its Affiliates which are discontinued), the status
quo will prevail (i.e., GRI and its Subsidiaries will continue to provide to the
Power Products Division all services currently provided by GRI and its
Subsidiaries at the rate GRI presently allocates to such services), until such
time as the Parties agree to other terms and conditions. Promptly after the
Closing, the
30
<PAGE> 31
Parties will commence negotiations with respect to the terms and conditions upon
which such services will be continued.
4.7 Workers' Compensation. Seller shall pay, discharge and be
responsible for workers' compensation claims, damages, expenses, liabilities or
administrative responsibilities of any kind whatsoever related to the employment
of the employees of GRI or its Subsidiaries arising out of an occurrence on or
before the Closing, whether reported or unreported as of the Closing. Buyer
shall pay, discharge and be responsible for workers' compensation claims,
damages, expenses, liabilities or administrative responsibilities of any kind
whatsoever related to the employment of the employees of GRI or its
Subsidiaries, arising out of an occurrence after the Closing; provided, however,
that a claim arising out of a cumulative trauma disorder and determined to have
resulted from an employee's working conditions before and after the Closing Date
shall be prorated between Buyer and Seller based upon the employee's years of
service with Buyer and Seller, respectively, for a period of five years after
the Closing, after which time Buyer shall have full responsibility for any such
cumulative trauma disorder claims.
ARTICLE 5 - CONDITIONS TO OBLIGATION TO CLOSE
5.1 Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
5.1.1 The representations and warranties set forth in
Article 3.1 and Article 3.1.2 above shall be true and correct in all material
respects (if not qualified by materiality) and in all respects (if qualified by
materiality) at and as of the Closing Date, and there shall not have been any
material error, misstatement or omission in any Exhibit, Schedule or other
document delivered in connection herewith.
5.1.2 Seller shall have performed and complied with all
of its agreements, covenants and obligations hereunder through the Closing.
5.1.3 There shall not be any injunction, judgment, order,
decree, ruling, or charge in effect preventing or making illegal consummation of
any of the transactions contemplated by this Agreement or the Ancillary
Agreements or which could reasonably be expected to otherwise result in a
material diminution of the benefits of the transactions contemplated by this
Agreement or any Ancillary Agreement. No suit, action or other proceeding shall
be pending or threatened before any court or government agency seeking to
restrain, prohibit or obtain damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated herein and there
shall have been no investigation or inquiry made or commenced by any
governmental agency in connection with this Agreement or the transactions
contemplated herein.
31
<PAGE> 32
5.1.4 Seller shall have delivered to Buyer a certificate,
signed by an officer of Seller, to the effect that each of the conditions
specified above in Articles 5.1.1 - 5.1.3 is satisfied in all respects, and a
certificate from Seller and each officer and director (other than non-employee
directors) of GRI and its Subsidiaries that each either waives or has no claim,
as may be appropriate, against GRI or its Subsidiaries for unpaid dividends,
bonuses, profit sharing or Intellectual Property Rights or other claims of
whatsoever kind, nature or description, except only salaries and fringe benefits
normally accrued and described in such certificate.
5.1.5 All applicable waiting periods (and any extensions
thereof) under the Hart-Scott-Rodino Act shall have expired or otherwise been
terminated and the Parties, GRI and its Subsidiaries shall have received all
other authorizations, consents, and approvals of governments and governmental
agencies, foreign and domestic, required by law or regulation in order to
consummate the transactions contemplated by this Agreement and no such approval
shall be subject to the satisfaction of any condition that has not been
satisfied or waived or otherwise impose any liabilities or restrictions on
Buyer.
5.1.6 The relevant Parties shall have entered into the
Ancillary Agreements in such form and substance as is satisfactory in all
respects to Seller and Buyer, and the same shall be in full force and effect.
5.1.7 Buyer shall have received from Seller, or Seller
shall have transferred to GRI in a manner reasonably satisfactory to Buyer, all
of Seller's right, title and interest to the trademarks and service marks
exclusive to GRI or its Subsidiaries and used in the ongoing operations of GRI.
5.1.8 Buyer shall have received from Seller's counsel an
opinion in form and substance reasonably satisfactory to Buyer, addressed to
Buyer, and dated as of the Closing Date.
5.1.9 All actions to be taken by Seller in connection
with consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to
Buyer.
5.1.10 The consents or waivers referred to in Article
4.1.12 shall have been obtained in form and substance reasonably satisfactory to
Buyer and shall not be subject to the satisfaction of any condition that has not
been satisfied or waived or otherwise impose any limitations or restrictions on
Buyer.
5.1.11 Seller shall have delivered to Buyer duly signed
resignations from office but not from employment, effective at Closing, of such
officers and directors of GRI and its Subsidiaries as have been requested by
Buyer.
32
<PAGE> 33
Buyer may waive any condition specified in this Article 5.1 if it executes a
writing so stating at or prior to the Closing.
5.2 Conditions to Obligation of Seller. The obligation of Seller
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
5.2.1 The representations and warranties set forth in
Article 3.2 above shall be true and correct in all material respects (if not
qualified by materiality) and in all respects (if qualified by materiality) at
and as of the Closing Date.
5.2.2 Buyer shall have performed and complied with all
of its agreements, covenants and obligations hereunder through the Closing.
5.2.3 There shall not be any injunction, judgment, order,
decree, ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement or the Ancillary Agreements or which
could reasonably be expected to otherwise result in a material diminution of the
benefits of the transactions contemplated by this Agreement or any Ancillary
Agreement. No suit, action or other proceeding shall be pending or threatened
before any court or government agency seeking to restrain, prohibit or obtain
damages or other relief in connection with this Agreement or the consummation of
the transactions contemplated herein and there shall have been no investigation
or inquiry made or commenced by any governmental agency in connection with this
Agreement or the transactions contemplated herein.
5.2.4 Buyer shall have delivered to Seller a certificate
signed by an officer of Buyer to the effect that each of the conditions
specified above in Article 5.2.1 - 5.2.3 is satisfied in all respects.
5.2.5 All applicable waiting periods (and any extensions
thereof) under the Hart-Scott-Rodino Act shall have expired or otherwise been
terminated and the Parties, GRI and its Subsidiaries shall have received all
other authorizations, consents, and approvals of governments and governmental
agencies, foreign and domestic, required by law or regulation in order to
consummate the transactions contemplated by this Agreement and no such approval
shall be subject to the satisfaction of any condition that has not been
satisfied or waived or otherwise impose any liabilities or restrictions on
Seller.
5.2.6 Seller shall have received from Buyer's counsel an
opinion in form and substance reasonably satisfactory to Seller, addressed to
Seller, and dated as of the Closing Date.
5.2.7 The relevant Parties shall have entered into the
Ancillary Agreements in such form and substance as is satisfactory in all
respects to Seller and Buyer, and the same shall be in full force and effect.
33
<PAGE> 34
5.2.8 All actions to be taken by Buyer in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to
Seller.
Seller may waive any condition specified in this Article 5.2 if it executes a
writing so stating at or prior to the Closing.
ARTICLE 6 - REMEDIES
6.1 Survival of Representations and Warranties.
6.1.1 Relating to Buyer and Seller. All of the
representations and warranties of the Parties contained in Articles 3.1.1 and
3.2 above shall survive the Closing and continue in full force and effect
forever thereafter (subject to any applicable statutes of limitations).
6.1.2 Relating to GRI. All of the representations and
warranties of Seller contained in Article 3.1.2 above shall survive the Closing
and continue in full force and effect for the following time periods: (i) The
representations and warranties contained in Articles 3.1.2.1, 3.1.2.2, 3.1.2.3,
3.1.2.4 (in the latter case, with respect to title to assets), 3.1.2.5,
3.1.2.10(a) (in the latter case, with respect to title to property) and 3.1.2.11
(with respect to title to intellectual property) shall survive the Closing and
continue in full force and effect forever thereafter (subject to any applicable
statutes of limitations); (ii) the representations and warranties contained in
Articles 3.1.2.9, 3.1.2.11, 3.1.2.12 and 3.1.2.14 shall survive the Closing and
continue in full force and effect until ninety (90) days after the expiration of
the applicable statute of limitations with respect to the matters referred to in
such Articles; (iii) the representation and warranty contained in Article
3.1.2.10(b) shall survive the Closing and continue in full force and effect for
five years thereafter; (iv) the representations and warranties contained in
Articles 3.1.2.6, 3.1.2.8 and 3.1.2.13 shall survive the Closing and continue in
full force and effect for three years thereafter, and (v) all other
representations and warranties shall survive the Closing and continue in full
force and effect for two years thereafter, provided, however, that the
limitations set forth in this Article 6.1.2 shall not apply to a breach of or an
inaccurate or incorrect representation or warranty which was made by a Party
other than with the good faith belief that such representation or warranty was
accurate or correct. Notwithstanding the foregoing, any representation or
warranty shall survive the time at which it would otherwise expire in accordance
with this Article 6.1.2 to the extent that Buyer or Seller, as the case may be,
makes a written claim for indemnification for breach of that representation or
warranty (setting forth in reasonable detail the factual and contractual bases
upon which such Party is entitled to indemnification under this Agreement) prior
to the time at which that representation or warranty would otherwise expire.
Except as set forth in this Article 6.1.2, the provisions of this Agreement
shall survive the Closing and shall continue indefinitely.
34
<PAGE> 35
6.2 Indemnification Provisions for the Benefit of Buyer. Without
limiting any other rights or remedies available to Buyer, Seller shall
indemnify, defend and hold harmless Buyer, GRI and their respective affiliates
and the respective officers, directors, employees and shareholders of the
foregoing from, against and with respect to any claim, liability, obligation,
loss, damage, assessment, judgment, cost and expense (including reasonable
attorney's and accountant's fees and costs and expenses reasonably incurred in
investigating, preparing, defending against or prosecuting any litigation or
claim, action, suit, proceeding or demand), of any kind or character (and
without giving effect to any tax benefit to the indemnified party) (individually
a "Loss" and collectively "Losses"), arising out of or in any manner incident,
relating or attributable to (i) any inaccuracy in any representation or breach
of any warranty of Seller contained in this Agreement or in any certificate,
instrument of transfer or other document or agreement executed by Seller or GRI
in connection with this Agreement or otherwise made or given in connection with
this Agreement, (ii) any failure by GRI or Seller to perform or observe, or to
have performed or observed, in full, any covenant or agreement to be performed
or observed by either of them under this Agreement or under any certificates or
other documents executed by Seller or GRI in connection with this Agreement,
(iii) reliance by Buyer on any books or records of GRI or reliance by Buyer on
any information or certificate furnished to Buyer pursuant to this Agreement by
or on behalf of Seller, GRI or any of GRI's officers, (iv) the Power Products
Division, SNAPP, or any other assets, divisions, subsidiaries, joint ventures,
investments, product lines or business of GRI or its Subsidiaries which has been
sold, discontinued, liquidated or otherwise disposed of prior to the Closing,
including, without limitation, Other Taxes or Income Tax on the actual or
imputed direct earnings of the Power Products Division or any other such assets,
divisions, subsidiaries, joint ventures, investments, product lines or
investments, (v) GRI's handling, storage, use, disposal, delivery for disposal
or generation of hazardous or toxic substances, wastes of any kind or similar
materials at any time prior to the Closing, (vi) the contamination of the
Property by a release, prior to the Closing Date, or the contamination of other
real estate caused by a release at the Property prior to the Closing Date with
or by pollutants, wastes, or any other substances at any time prior to the
Closing, (vii) the contamination of any real property previously or currently
leased or operated by GRI or its Subsidiaries with or by pollutants, wastes or
any other substances from activities conducted by Seller, GRI or its
Subsidiaries, prior to the Closing Date, (viii) any agreements, contracts,
negotiations or other dealings by Seller or GRI with any person concerning the
sale of the capital stock or business of GRI or its Subsidiaries, (ix) any
guaranty to which GRI or its Subsidiaries is a party and which guarantees
amounts payable by, or obligations of, any person or entity other than GRI, or
(x) any of the claims or litigation listed on Exhibit 3.1.2.13.
6.3 Indemnification Provisions for the Benefit of Seller. Buyer
shall indemnify, defend and hold harmless Seller and its affiliates and the
officers, directors, employees and shareholders of Seller from, against and with
respect to any Loss. arising out of or in any manner incident, relating or
attributable to (i) any inaccuracy in any representation or breach of any
warranty of Buyer contained in this Agreement or in any certificate, instrument
of transfer or other document or agreement executed by Buyer in connection with
this Agreement or otherwise made or given in connection with this Agreement,
(ii) any failure by Buyer to perform
35
<PAGE> 36
or observe, or to have performed or observed, in full, any covenant or agreement
to be performed or observed by it under this Agreement or under any certificates
or other documents executed by Buyer in connection with this Agreement.
6.4 Matters Involving Third Parties.
(i) If any third party shall notify any
Party (the "Indemnified Party") with respect to any matter
(a "Third Party Claim") which may give rise to a claim for
indemnification against the other Party (the "Indemnifying
Party") under this Article 6, then the Indemnified Party
shall promptly notify the Indemnifying Party thereof in
writing; provided, however, that failure to give such notice
shall not affect the indemnification provided hereunder
except to the extent the Indemnifying Party shall have been
actually prejudiced as a result of such failure. The
Indemnifying Party shall promptly mitigate any such
prejudice to the extent possible.
(ii) Indemnifying Party will have the right to
assume and thereafter conduct the defense of the Third Party
Claim with counsel of its choice reasonably satisfactory to
the Indemnified Party; provided, however, that the
Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the
Indemnified Party), (not to be withheld unreasonably) unless
the judgment or proposed settlement involves only the payment
of money damages and does not impose an injunction or other
equitable relief upon the Indemnified Party. In any event,
the Indemnified Party shall have the right to employ separate
counsel, at its own expense, to participate and consult with
the counsel of the Indemnifying Party.
(iii) Unless and until an Indemnifying Party
assumes the defense of the Third Party Claim as provided in
Article 6.4(ii) above, the Indemnified Party may defend
against the Third Party Claim in any manner it reasonably may
deem appropriate.
(iv) In no event will the Indemnified Party
consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the
prior written consent of each of the Indemnifying Parties
(not to be withheld unreasonably).
(v) In the event any Indemnified Party
should have a claim under Article 6 against any
Indemnifying Party that does not involve a third party
lawsuit, the Indemnified Party shall deliver an Indemnity
36
<PAGE> 37
Notice with reasonable promptness to the Indemnifying Party.
The failure by any Indemnified Party to give the Indemnity
Notice shall not impair such Party's rights hereunder except
to the extent that an Indemnifying Party demonstrates that it
has been irreparably prejudiced thereby. The Indemnifying
Party shall promptly mitigate any such prejudice to the
extent possible. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim
described in such Indemnity Notice or fails to notify the
Indemnified Party within 30 calendar days after receipt of
the Indemnity Notice (the "Dispute Period") whether the
Indemnifying Party disputes the claim described in such
Indemnity Notice, the amount of the Loss specified in the
Indemnity Notice will be conclusively deemed a liability of
the Indemnifying Party under Article 6 and the Indemnifying
Party shall pay the amount of such Loss to the Indemnified
Party on demand or the third-party claimant, as appropriate.
If the Indemnifying Party has delivered notice disputing its
liability to the Indemnified Party (a "Dispute Notice")
within the Dispute Period, the Indemnifying Party and the
Indemnified Party will proceed in good faith to negotiate a
resolution of such dispute, and if not resolved through
negotiations within a reasonable time, such dispute shall be
resolved through arbitration in accordance with Article 8 of
this Agreement.
6.5 Limitations on Indemnity. Notwithstanding anything to the
contrary in this Agreement:
(a) Seller shall have no liability or
obligation with respect to a claim made pursuant to Article
6.2(i) arising out of any inaccuracy in any representation or
breach of any warranty in any of Article 3.1.2.1, 3.1.2.3,
3.1.2.7, 3.1.2.8, 3.1.2.11 (except to the extent relate to
title), 3.1.2.13, 3.1.2.15 or 3.1.2.16 to the extent that (x)
any individual Loss is less than $20,000 (provided that to
the extent Buyer incurs more than one Loss which arises out
of the same or related underlying facts or circumstances
which individually are less than $20,000 but which in the
aggregate exceed $20,000, this subsection (a) shall not be
applicable); and (y) the aggregate of all such Losses not
limited by subsection (x) is less than or equal to Seven
Hundred Thousand Dollars ($700,000) (the "Basket"). To the
extent that the aggregate of all such Losses exceeds the
Basket, Seller's liability shall remain limited to such
Losses that are in excess of the Basket.
(b) To the extent that (i) prior to the
Closing, as a result of any investigation or information
provided pursuant to Section 4.1.8, Buyer had Knowledge a
representation and warranty was breached in a material
respect by Seller, (ii) Buyer nonetheless consummated the
37
<PAGE> 38
transactions contemplated hereby, and (iii) after the
Closing, Buyer suffers a Loss directly caused by such breach,
then Buyer shall nevertheless be entitled to indemnity under
Article 6.2(i) provided, however, that the amount of Buyer's
Loss shall be subject to the Basket. Nothing in this Article
6.5(b) shall limit any right of Buyer under this Agreement or
at law or equity relative to a representation or warranty
which was made by Seller other than with the good faith
belief that such representation or warranty was accurate or
correct.
(c) To the extent that Buyer may bring a
claim for indemnity pursuant to Section 6.2(i) for a Loss
which would also be the basis for a claim for indemnity
pursuant to Section 6.2(ii)-(x), Seller's liability shall be
determined as if the claim for indemnity were based on
Section 6.2(ii)-(x), as applicable.
(d) Seller's obligation to indemnify Buyer
pursuant to any of Article 6.2(v), (vi) or (vii) shall
terminate on the seventh anniversary of the Closing Date;
provided, however, that such obligation shall continue to the
extent that Buyer makes a written claim for indemnification
pursuant to one of such subsections prior to the seventh
anniversary of the Closing Date.
(e) Buyer shall not be entitled to
indemnification for any Losses to the extent of any reserve
account specifically set up for the matter underlying or
causing said Loss which is set forth on the Most Recent
Financial Statements (excluding any reserve related to the
Power Products Division).
6.6 Control of Environmental Matters. The Seller shall have the
right to conduct all investigations, feasibility studies, remedial actions and
other activities the purpose of which is to assess, evaluate or otherwise comply
with its obligations hereunder with respect to environmental matters specified
in Articles 6.2(v), (vi) and (vii). Seller shall have the right to control the
methodology, extent and implementation of any cleanup, remediation, removal or
response actions for which it shall have responsibility under this Agreement,
provided that Seller shall use reasonable efforts to minimize interference or
other disruption of the operations of Buyer on the Property. Seller shall
promptly provide copies of all reports, studies or analyses in connection with
any cleanup, remediation, removal or response action. Buyer shall cooperate with
Seller in responding to any governmental agency with respect to any assessments.
studies, removal, response or remediation activities, and by providing Seller
(without cost to Seller) access to those areas of the Property that Seller deems
reasonable.
38
<PAGE> 39
ARTICLE 7 - EXAMINATION PERIOD AND TERMINATION
7.1 Delivery of Materials by Seller. Prior to the execution of
this Agreement, Seller will have delivered to Buyer the Financial Statements for
GRI and its subsidiaries as of and for the year ended December 31, 1996, and
Buyer and Seller will have agreed upon the accounting methodology for removing
the assets, liabilities, and transactions for the Power Products Division as set
forth in Exhibit 3.1.2.6. Notwithstanding provisions of this Agreement which
contemplate that other documents will be delivered by Seller prior to execution,
the parties recognize that the goal of such delivery may not be met and that
they need to provide for the contingency that this Agreement will be executed
prior to the completion of delivery of all such documents to Buyer in time for
Buyer to evaluate them before signing this Agreement. In the event that all such
documents have not been delivered by Seller to Buyer prior to execution, Seller
will use its best efforts to cause documents to be delivered to Buyer as soon as
practicable, but in any event, not later than July 25, 1997. Once Seller has
notified Buyer in writing that all documents forming the basis for the
representations and warranties have been delivered, Buyer shall have a period of
ten (10) business days to complete its review of such documents. If the
documents delivered reveal issues or matters indicating that (i) since December
31, 1996, there has been a materially adverse change in the business or
financial condition of GRI and its Subsidiaries from what is shown in the 1996
Financial Statements, or (ii) there has been or will be a material variance from
the cost reduction tasks for 1997 contained in the business plan prepared by GRI
and attached as Exhibit 7.1(ii), Buyer may terminate this Agreement by giving
notice of termination to Seller during such ten day period.
7.2 Termination of Agreement. Either Party may terminate this
Agreement as provided below:
7.2.1 Buyer and Seller may terminate this Agreement by
mutual written consent at any time prior to the Closing.
7.2.2 Buyer may terminate this Agreement by giving written notice
to Seller at any time prior to the Closing (i) in the event Seller has
breached any representation or warranty in any material respect or there is any
material misstatement or material omission with respect to any representation
or warranty or any breach of or failure to perform any covenant contained in
this Agreement in any material respect, Buyer has notified Seller of the
breach, and the breach has continued without cure for a period of 30 days after
the notice of breach or (ii) if the Closing shall not have occurred on or
before August 31, 1997, by reason of the failure of any condition precedent
under Article 5.1 hereof (unless the failure results primarily from Buyer
itself breaching any representation, warranty, or covenant contained in this
Agreement); and
7.2.3 Seller may terminate this Agreement by giving written notice
to Buyer at any time prior to the Closing (i) in the event Buyer has breached
any representation or warranty or there is any material misstatement or
material omission with respect to any representation or warranty or any breach
of or failure to perform any covenants contained in this
39
<PAGE> 40
Agreement in any material respect. Seller has notified Buyer of the breach, and
the breach has continued without cure for a period of 30 days after the notice
of breach or (ii) if the Closing shall not have occurred on or before August 31,
1997, by reason of the failure of any condition precedent under Article 5.2
hereof (unless the failure results primarily from Seller itself breaching any
representation, warranty, or covenant contained in this Agreement).
7.2.4 Such notice shall clearly specify the breach or
failure or the misstatement or omission on the part of the notified Party.
7.2.5 By an instrument in writing delivered to the other
Party, either Buyer or Seller may waive any condition precedent contained
herein for the benefit of the Party delivering such waiver and, upon the
exercise of such right of waiver, the transactions shall be closed in
accordance with the terms contained in this Agreement as modified by said
writing.
7.3 Effect of Termination. If any Party terminates this Agreement
pursuant to Article 7.1 or 7.2 above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to the other Party
(except for any liability of any Party then in breach); provided, however, that
the confidentiality provisions contained in Article 4.1.4 above shall survive
termination.
ARTICLE 8 - ALTERNATE DISPUTE RESOLUTION
8.1 Dispute Resolution. If a dispute arises between the Parties
relating to this Agreement, the following procedure shall be implemented before
either Party pursues other available remedies except that either Party may seek
injunctive relief from a court where appropriate in order to maintain the status
quo while this procedure is being followed:
8.1.1 The Parties shall hold a meeting promptly,
attended by persons with decision-making authority regarding the dispute, to
attempt in good faith to negotiate a resolution of the dispute; provided,
however, that no such meeting shall be deemed to vitiate or reduce the
obligations and liabilities of the Parties or be deemed a waiver by a Party
hereto of any remedies to which such Party would otherwise be entitled.
8.1.2 If, within 30 days after such meeting, the Parties
have not succeeded in negotiating a resolution of the dispute, they agree to
submit the dispute to mediation in accordance with the then-current Model
Procedure for Mediation of Business Disputes of the Center for Public Resources
and to bear equally the costs of the mediation.
8.1.3 The Parties will jointly appoint a mutually
acceptable mediator, seeking assistance in such regard from the Center for
Public Resources if they have been unable to agree upon such appointment within
20 days from the conclusion of the negotiation period.
40
<PAGE> 41
8.1.4 The Parties agree to participate in good faith in
the mediation and negotiations related thereto for a period of 30 days. If the
Parties are not successful in resolving the dispute through the mediation, then
the Parties agree to submit the matter to binding arbitration or a private
adjudicator. The award of the arbitrator may be entered in any court of
competent jurisdiction.
8.2 Mediation or arbitration shall take place in the City of
Detroit, unless otherwise agreed by the Parties. The substantive and procedural
law of the State of Michigan shall apply to the proceedings. Equitable remedies
shall be available in any arbitration. Punitive damages shall not be awarded.
This Article 8 is subject to the Federal Arbitration Act, 9 U.S.C.A. Section. I
et seq.
ARTICLE 9 - MISCELLANEOUS
9.1 Confidentiality of Terms; Press Releases and Public
Announcements. The Parties will use all reasonable efforts to prevent the
disclosure of any of the terms or conditions hereof to any person, other than
counsel. No Party shall issue any press release or make any public announcement
relating to the subject matter of this Agreement prior to the Closing without
the prior written approval of the other Party; provided, however, that any Party
may make any public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will use its
reasonable best efforts to advise the other Party prior to making the
disclosure).
9.2 No Third Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
9.3 Entire Agreement. Except for the Ancillary Agreements, this
Agreement and the Confidentiality Agreement dated February 25, 1997, constitute
the entire agreement among the Parties and supersedes any prior understandings,
agreements, or representations by or among the Parties, written or oral, to the
extent they have related in any way to the subject matter hereof and thereof.
9.4 Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Party; provided, however, that a Party may (i) assign any
or all of its rights and interests hereunder to one or more of its Affiliates
and (ii) designate one or more of its Affiliates to perform its obligations
hereunder (in any or all of which cases the assignor nonetheless shall remain
responsible for the performance of all of its obligations hereunder).
41
<PAGE> 42
9.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
9.6 Titles and Headings. The article and section headings
contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement.
9.7 Notices. All notices, requests, demands, claims, and other
communications hereunder Will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if it is sent by
registered or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
If to Sellers:
Mr. Paul Coffey
Ford Motor Company
The American Road
Dearborn, Michigan 48121
Copy to:
Secretary
Ford Motor Company
The American Road
Dearborn, Michigan 48121
If to the Buyer:
Mr. Frederick Minturn
Executive VP & CFO
MSX International, Inc.
275 Rex Boulevard
Auburn Hills, Michigan 48326
Copy to:
General Counsel
MSX International, Inc.
275 Rex Boulevard
Auburn Hills, MI 48326
42
<PAGE> 43
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, ordinary mail, or electronic mail), but no such notice, request,
demand, claim, or other communication shall be deemed to have been duly given
unless and until it actually is received by the intended recipient. Any Party
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.
9.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Michigan, without
giving effect to any choice or conflict of law provision or rule thereunder.
9.9 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by Buyer
and Seller. No waiver by any Party of any default, misrepresentation, or breach
of warranty or covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
9.10 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
9.11 Expenses. Regardless of whether the transactions
contemplated by this Agreement are consummated, each Party will bear its own
costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby;
provided, however, that (a) the Parties shall equally bear the cost of all
governmental filings required to consummate the transaction contemplated by
this Agreement and (b) Seller agrees that GRI will not bear or pay any of the
fees and expenses related to this transaction in excess of $15,000.
9.12 Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word 'including' shall mean including without limitation. The Parties intend
that each representation, warranty and covenant contained herein shall have
independent significance.
43
<PAGE> 44
9.13 Incorporation of Exhibits and Annexes. The Exhibits and
Annexes identified in this Agreement are incorporated herein by reference and
made a part hereof.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
FORD MOTOR COMPANY MSX INTERNATIONAL (HOLDINGS). INC.
By: By:
------------------------ ------------------------
Title: Title:
--------------------- ---------------------
44
<PAGE> 45
EXHIBITS
1.42 Schedule of Security Interests
3.1.2.1 Jurisdiction of Incorporation and Jurisdictions in which GRI
and its Subsidiaries are qualified to conduct business as
foreign corporations; Directors and Officers of each of GRI
and its Subsidiaries
3.1.2.2 Copies of all outstanding or authorized stock appreciation,
phantom stock, profit participation or similar rights with
respect to GRI or Offered Shares
3.1.2.4 Personal property leases in excess of $100,000 annually; all
tangible personal property owned by or an interest in which is
claimed by others used by GRI or for which GRI is responsible;
all tangible personal property owned or used by PPD,
indicating items also used by GRI, the ownership of which will
be removed from GRI; any of such assets GRI will no longer
have a right to use; services provided by Seller or its
affiliates to GRI
3.1.2.5 Name and jurisdiction of incorporation of each Subsidiary;
number of shares of authorized capital stock; number of issued
and outstanding shares and names of holders thereof; treasury
stock
3.1.2.6 Financial Statements; accounting methodology for removal of PPD
3.1.2.7 Exceptions to Ordinary Course
3.1.2.7(ii) Events Subsequent Business Combinations
3.1.2.7(v) Events Subsequent Change in Compensation
3.1.2.9 Waivers of statutes of limitations relating to taxes; tax
allocation or sharing agreements
3.1.2.10 All easements, liens and encumbrances referred to in 3.1.2.10
(a)(ii)
3.1.2.10(a) Real Property
3.1.2.10(b) Waste haulers, etc.
3.1.2.11 Intellectual Property
3.1.2.12 Material Contracts
45
<PAGE> 46
3.1.2.13 Litigation
3.1.2.14 Employee Matters
3.1.2.15 Employee compensation
3.1.2.16 All policies of insurance insuring GRI and Subsidiaries in
other jurisdictions
4.1.3 Exceptions to Ordinary Course
4.1.7 Liabilities of Power Products Division
4.2.3 GRI Severance Plan.
4.5 Non-Ford earn-out
4.6 Transition Services
5.1.6 Form of Ancillary Agreements
5.1.8 Form of Seller's counsel opinion
5.2.6 Form of Buyer's counsel opinion
7.1(iii) Financial Statements of GRI
7.1(iv) Business Plan
46
<PAGE> 1
EXHIBIT 10.10
================================================================================
ACQUISITION AGREEMENT
by and among
MASCOTECH, INC.
MSX INTERNATIONAL, INC.
and
ASG HOLDINGS INC.
Dated as of November 12, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
THE STOCK PURCHASES...................................................2
1.01 Purchase and Sale............................................2
1.02 Closing......................................................2
1.03 APX Closing..................................................2
ARTICLE II
ASSETS PURCHASED; LIABILITIES ASSUMED.................................3
2.01 Assets.......................................................3
2.02 Liabilities..................................................6
2.03 Third-Party Consents.........................................8
ARTICLE III
PURCHASE PRICE; THE CLOSING...........................................8
3.01 Purchase Price; Adjustment...................................8
3.02 Allocation of Purchase Price................................10
3.03 Time and Place of Closing...................................10
3.04 Deliveries at the Closing...................................11
3.05 Further Assurances; Post-Closing Cooperation................11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
CONCERNING THE TRANSACTIONS..........................................12
4.01 Organization and Qualification..............................12
4.02 Authority Relative to Acquisition Agreement.................12
4.03 No Conflicts................................................13
4.04 Governmental Approvals and Filings..........................13
4.05 Acquisition for Investment..................................13
4.06 Entire Business.............................................13
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS AS TO APX
ACQUISITION..........................................................14
-i-
<PAGE> 3
5.01 Consummation of APX Acquisition.............................14
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLERS
WITH RESPECT TO THE BUSINESS AND LIMITED.............................14
6.01 Organization of Limited.....................................15
6.02 Limited Capital Stock.......................................15
6.03 Financial Statements........................................16
6.04 Absence of Changes..........................................16
6.05 Non-Core Businesses.........................................17
6.06 Legal Proceedings...........................................17
6.07 Compliance with Laws and Orders.............................17
6.08 Taxes.......................................................18
6.09 Benefit Plans; ERISA........................................20
6.10 Real Property...............................................22
6.11 Intellectual Property Rights................................23
6.12 Contracts...................................................24
6.13 Licenses....................................................25
6.14 Insurance...................................................26
6.15 Affiliate Transactions......................................26
6.16 Environmental Matters.......................................26
6.17 Tangible Personal Property..................................27
6.18 Labor and Employment Matters................................28
6.19 No Guarantees...............................................28
6.20 Product Warranties..........................................28
6.21 Brokers.....................................................28
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER..........................29
7.01 Organization................................................29
7.02 Authority...................................................29
7.03 No Conflicts................................................29
7.04 Governmental Approvals and Filings..........................30
7.05 Legal Proceedings...........................................30
7.06 Brokers.....................................................30
ARTICLE VIII
COVENANTS OF SELLERS.................................................30
8.01 Governmental and Other Approvals............................31
-ii-
<PAGE> 4
8.02 Access to Information.......................................31
8.03 No Solicitations............................................31
8.04 Conduct of Business.........................................32
8.05 Certain Restrictions........................................33
8.06 Delivery of Books and Records, Removal of Property, Etc.....34
8.07 Noncompetition..............................................35
8.08 Notice and Cure.............................................36
8.09 FIRPTA Certificate..........................................37
8.10 Tax Covenants with Respect to the Interim Period............37
8.11 Efforts to Consummate Transaction...........................37
8.12 Use of MSX International, Inc. Name.........................37
8.13 Interim Period..............................................37
8.14 Audited Financial Statements................................38
8.15 Rent........................................................38
8.16 APX Purchases...............................................38
ARTICLE IX
COVENANTS OF PURCHASER...............................................38
9.01 Governmental and Other Approvals............................38
9.02 Notice and Cure.............................................39
9.03 Efforts to Consummate Transactions..........................39
ARTICLE X
CONDITIONS TO OBLIGATIONS OF PURCHASER...............................40
10.01 Representations and Warranties..............................40
10.02 Performance.................................................40
10.03 Officers' Certificates......................................40
10.04 Orders and Laws.............................................40
10.05 Governmental Consents and Approvals.........................41
10.06 Third Party Consents........................................41
10.07 Opinion of Counsel..........................................41
10.08 Operative Agreements........................................41
10.09 Resignations................................................41
10.10 Capitalization of Purchaser.................................41
10.11 Financing...................................................41
10.12 Release.....................................................41
10.13 Discharge of Third Party Indebtedness.......................42
10.14 Assumed Indebtedness........................................42
10.15 Proceedings.................................................42
-iii-
<PAGE> 5
ARTICLE XI
CONDITIONS TO OBLIGATIONS OF SELLERS.................................42
11.01 Representations and Warranties..............................42
11.02 Performance.................................................42
11.03 Officers' Certificates......................................42
11.04 Orders and Laws.............................................42
11.05 Governmental Consents and Approvals.........................42
11.06 Opinion of Counsel..........................................43
11.07 Capitalization of Purchaser.................................43
11.08 Operative Agreements........................................43
11.09 Proceedings.................................................43
ARTICLE XII
TAX MATTERS AND POST-CLOSING TAXES...................................43
12.01 Preparation and Filing of Tax Returns.......................43
12.02 Allocation of Tax Liability.................................45
12.03 Indemnity for Loss of Section 197 Deductions...............46
12.04 Tax Contests................................................47
12.05 Cooperation.................................................48
12.06 Payments of Transfer Taxes and Fees.........................48
12.07 Miscellaneous...............................................48
12.08 Conflict....................................................49
12.09 Survival....................................................49
ARTICLE XIII
EMPLOYEE BENEFITS MATTERS............................................49
13.01 Hiring of Employees.........................................49
13.02 Cessation of Participation; Compliance......................50
13.03 401(k) Plans................................................50
13.04 Defined Benefit Plan........................................50
13.05 Multiemployer Plan..........................................51
13.06 Other Benefits..............................................52
13.07 No Employee Rights..........................................53
13.08 Right to Terminate or Modify Plans..........................53
ARTICLE XIV
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS.............................................53
-iv-
<PAGE> 6
14.01 Survival of Representations and Warranties..................53
ARTICLE XV
INDEMNIFICATION......................................................55
15.01 Indemnification Provisions for Benefit of Purchaser.........55
15.02 Method of Asserting Claims..................................56
15.03 Certain Intercompany Relationships..........................58
15.04 Environmental Matters.......................................58
ARTICLE XVI
TERMINATION..........................................................62
16.01 Termination.................................................62
16.02 Effect of Termination.......................................62
ARTICLE XVII
DEFINITIONS..........................................................63
17.01 Definitions.................................................63
ARTICLE XVIII
MISCELLANEOUS........................................................81
18.01 Notices.....................................................81
18.02 Entire Agreement............................................82
18.03 Expenses....................................................82
18.04 Public Announcements........................................83
18.05 Confidentiality.............................................83
18.06 Waiver......................................................84
18.07 Amendment...................................................84
18.08 No Third Party Beneficiary..................................84
18.09 No Assignment; Binding Effect...............................84
18.10 Limited Recourse............................................84
18.11 Construction................................................84
18.12 No Offset...................................................85
18.13 Headings....................................................85
18.14 Invalid Provisions..........................................85
18.15 Governing Law...............................................85
18.16 Counterparts................................................86
18.17 Certain Releases............................................86
18.18 Risk Management and Litigation Support......................86
-v-
<PAGE> 7
18.19 Certain Recoveries..........................................87
18.20 Bulk Sales Compliance.......................................87
18.21 Business Related Confidentiality............................87
-vi-
<PAGE> 8
ACQUISITION AGREEMENT
ACQUISITION AGREEMENT, dated as of November 12, 1996, among MASCOTECH,
INC., a Delaware corporation ("MascoTech"), MSX INTERNATIONAL, INC., a Michigan
corporation and a wholly-owned subsidiary of MascoTech ("MSX"; MSX and
MascoTech, each a "Seller" and collectively, the "Sellers") and ASG HOLDINGS
INC., a Delaware corporation (the "Purchaser"). Capitalized terms not otherwise
defined herein have the meanings set forth in Section 17.01.
WHEREAS, MSX is engaged in the business of providing certain
engineering, design, marketing and training services, primarily to automobile
manufacturers and suppliers in the United States (the "North American
Operations");
WHEREAS, MascoTech Limited, a corporation organized under the laws of
England and a wholly-owned subsidiary of MascoTech ("Limited"), is engaged in,
together with its Subsidiaries, the business of providing certain engineering
services primarily to automobile manufacturers and suppliers in Europe (the
"European Operations"; the European Operations and the North American
Operations, without giving effect to the consummation of the APX Acquisition (as
defined below), being hereinafter collectively referred to as the "Business");
WHEREAS, MSX, pursuant to the terms of the APX Business Purchase
Agreement, dated as of November 6, 1996 (the "APX Purchase Agreement"), among,
inter alia, MSX, the TAD-Sellers, APX International (Europe), Ltd. and TAD
Resources International Inc., acquired substantially all the assets of the
TAD-Sellers (exclusive of those owned by TAD-Ltd.) pertaining to the APX
Business (as defined in the APX Purchase Agreement), and acquired the right to
acquire (i) certain assets of TAD-Ltd. used in the APX Business (the "APX
Limited Assets"), (ii) all the issued and outstanding shares of capital stock of
APX International GmbH, a German Company ("APX-Germany," and its shares of
capital stock being "APX-Germany Stock") and (iii) all the issued and
outstanding quotas of APX International do Brazil, Ltd., a Brazilian limited
company ("APX-Brazil", and its shares of quotas being "APX-Brazil Stock")
(collectively, the "APX Acquisition");
WHEREAS, the Sellers desire to sell, transfer and assign to Purchaser,
and Purchaser desires to purchase and acquire from the Sellers, directly or
indirectly through one or more Subsidiaries, all of the assets of MSX used in
the Business, except for the Excluded Assets, (and to assume certain liabilities
as hereinafter set forth);
WHEREAS, MascoTech desires to sell, transfer and assign to Purchaser,
and Purchaser desires to purchase and acquire from MascoTech, all of the right,
title and interest of MascoTech in and to one hundred (100) Ordinary Shares, par
value (pound)1.0 per share, of Limited
-1-
<PAGE> 9
(the "Limited Stock"), constituting all of the issued and outstanding shares of
capital stock of Limited;
WHEREAS, MSX desires to sell, transfer and assign to Purchaser, and
Purchaser desires to purchase and acquire from MSX, all of the right, title and
interest of MSX in and to the APX Continuing Business and the APX-Brazil Stock;
WHEREAS, the parties hereto desire to make certain representations,
warranties and agreements in connection with the above-described transactions
and to prescribe certain conditions to the consummation thereof.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
THE STOCK PURCHASES
1.01 Purchase and Sale. On the terms and subject to the conditions set
forth in this Agreement, (x) MascoTech shall sell to Purchaser, and Purchaser
shall purchase from MascoTech, either directly or indirectly through one or more
Subsidiaries of Purchaser, all of the right, title and interest of MascoTech in
and to the Limited Stock and (y) MSX shall sell to Purchaser, and Purchaser
shall purchase from MSX, either directly or indirectly through one or more
Subsidiaries of Purchaser, all of the right, title and interest of MSX in and to
the APX-Brazil Stock at the Closing for the consideration specified in Section
3.01.
1.02 Closing. The Closing will take place as provided in Section 3.03.
At the Closing, Purchaser shall pay the consideration specified in Section 3.01
and, simultaneously, MascoTech and MSX, respectively, shall assign and transfer
to Purchaser good and valid title in and to the Limited Stock and the APX-Brazil
Stock.
1.03 APX Closing. The parties hereto acknowledge that, as of the
Effective Date, the Sellers, pursuant to the APX Purchase Agreement, have not
consummated the purchase of the APX Limited Assets, the APX-Germany Stock and
the APX-Brazil Stock. Accordingly, any transfer of any such assets or capital
stock contemplated pursuant to the terms of this Agreement shall be subject to
the consummation of their transfer to the Sellers pursuant to and in accordance
with the terms of the APX Purchase Agreement.
-2-
<PAGE> 10
ARTICLE II
ASSETS PURCHASED; LIABILITIES ASSUMED
2.01 Assets.
(a) MSX Assets Transferred. On the terms and subject to the conditions
set forth in this Agreement, at the Closing MSX shall sell, transfer, convey,
assign and deliver to Purchaser, and Purchaser shall purchase from MSX, either
directly or indirectly through one or more Subsidiaries of Purchaser, all of
MSX's right, title and interest in, to and under all MSX Assets, free and clear
of all Liens other than Permitted Liens, for the consideration specified in
Section 3.01. The term "MSX Assets" means, collectively, all the business,
properties, assets and rights of MSX of whatever kind or nature, real or
personal, tangible or intangible, other than the APX Assets and the Excluded
Assets, owned by MSX on the Closing Date and used in the Business including,
without limitation:
(i) Real Property Leases. Each lease, sublease or license of real
property described in Section 2.01(a)(i) of the Disclosure Schedule as to which
MSX is the lessee, sublessee or sublessor, together with any options to purchase
the underlying property and leasehold improvements thereon, and in each case all
other rights, subleases, licenses, permits, deposits and profits appurtenant to
or related to such lease or sublease (the "Real Property Leases").
(ii) Improvements. To the extent not arising under the Real
Property Leases, all rights of MSX in and to all buildings, structures,
facilities, fixtures and other improvements located on the real property subject
to the Real Property Leases (the "Improvements").
(iii) Inventory. All inventories, notwithstanding how classified
in the financial records of MSX, of raw materials, work-in-process, finished
goods, products under research and development, demonstration equipment, office
and other supplies, parts, packaging materials and other accessories related
thereto which are held at, or are in transit from or to, the locations at which
the Business is conducted, or located at customers' premises on consignment, in
each case, which are used or held for use by MSX in the conduct of the Business,
including, without limitation, any of the foregoing purchased subject to any
conditional sales or title retention agreement in favor of any other Person,
together with all rights of MSX against suppliers of such inventories (the
"Inventory").
(iv) Accounts Receivable. All trade accounts receivable and all
notes, bonds and other evidences of rights to receive payments arising out of
sales occurring in the conduct of the Business, including any rights of MSX with
respect to any third party collection
-3-
<PAGE> 11
procedures or any other Actions or Proceedings which have been commenced in
connection therewith (the "Accounts Receivable").
(v) Tangible Personal Property. All furniture, fixtures,
equipment, machinery and other tangible personal property used or held for use
in the conduct of the Business (other than Inventory and Vehicles) at the
locations at which the Business is conducted or at customers' premises on
consignment, or otherwise used or held for use by MSX in the conduct of the
Business (including but not limited to the items listed in Section 2.01(a)(v) of
the Disclosure Schedule), including any of the foregoing purchased subject to
any conditional sales or title retention agreement in favor of any other Person
(the "Tangible Personal Property").
(vi) Personal Property Leases. (A) Each lease or sublease of
tangible personal property described in Section 2.01(a)(vi)(A) of the Disclosure
Schedule as to which MSX is the lessor or sublessor and (B) each lease or
sublease of tangible personal property described in Section 2.01(a)(vi)(B) of
the Disclosure Schedule as to which MSX is the lessee or sublessee, together
with any options to purchase the underlying property (the leases and subleases
described in subclauses (A) and (B) being hereinafter collectively referred to
as the "Personal Property Leases").
(vii) Business Contracts. All Contracts (other than the Real
Property Leases, the Personal Property Leases and the Accounts Receivable) to
which MSX is a party and which are utilized in the conduct of the Business,
including, without limitation, Contracts relating to suppliers, sales
representatives, distributors, purchase orders, marketing arrangements,
confidentiality agreements and manufacturing arrangements.
(viii) Prepaid Items; Deferred Charges. All prepaid items and
deferred charges relating to the Business.
(ix) Intangible Personal Property. All rights and interests in
and to the name "MSX International, Inc." and all Intellectual Property used or
held for use in the conduct of the Business (including, without limitation,
MSX's goodwill therein) and all rights, privileges, claims, causes of action and
options relating or pertaining to the Business or the MSX Assets, including,
without limitation, the items listed in Section 2.01(a)(ix) of the Disclosure
Schedule.
(x) Licenses. All Licenses utilized in the conduct of the
Business, including, without limitation, the Licenses listed in Section
2.01(a)(x) of the Disclosure Schedule (the "Business Licenses").
(xi) Vehicles. All motor vehicles owned or leased by MSX and used
or held for use in the conduct of the Business, including but not limited to the
vehicles listed in Section 2.01(a)(xi) of the Disclosure Schedule (the
"Vehicles").
-4-
<PAGE> 12
(xii) Books and Records. All Books and Records used or held for
use in the conduct of the Business or otherwise relating to the MSX Assets,
other than the minute books, stock transfer books and corporate seals of MSX
(the "Business Books and Records").
(xiii) Insurance Proceeds. All insurance proceeds or the right to
receive proceeds (in each case net of any applicable deductible) in respect of
any casualty or other loss in respect of the Business or any of the MSX Assets
from (i) either of the Sellers (to the extent not paid as an Intercompany
Credit) or (ii) any third-party insurance policy existing for the benefit of MSX
or the MSX Assets, including, without limitation, those listed in Section
2.01(xiii) of the Disclosure Schedule.
(xiv) Cash and Cash Equivalents. All cash, commercial paper,
certificates of deposit and other bank deposits, treasury bills and other cash
equivalents.
(xv) Other Assets and Properties. All other assets, properties
and rights of MSX used or held for use in connection with the Business, except
for the Excluded Assets.
(b) APX Assets Transferred. On the terms and subject to the conditions
set forth in this Agreement, at the Closing MSX shall sell, transfer, convey,
assign and deliver to Purchaser, and Purchaser shall purchase from MSX, either
directly or indirectly through one or more Subsidiaries of Purchaser, all of
MSX's right, title and interest in, to and under all APX Assets, free and clear
of all Liens, other than Permitted Liens and Pre-Existing APX Liens, for the
consideration specified in Section 3.01. The term "APX Assets" means,
collectively, (i) all the business, properties, assets and rights of whatever
kind or nature, real or personal, tangible or intangible used in the APX
Business prior to the Effective Date and sold, transferred, assigned, conveyed
and delivered to MSX on the Effective Date pursuant to and in accordance with
the APX Purchase Agreement, together with all properties, assets and rights of
whatever kind or nature, real or personal, tangible or intangible, including,
without limitation, cash and cash equivalents acquired by MSX after the
Effective Date with respect to the APX Continuing Business, other than Conveyed
Assets (the "Transferred APX Assets"), and (ii) all rights of MSX created by or
arising under or in connection with the APX Purchase Agreement, or otherwise
relating to the Transferred APX Assets and/or the APX Continuing Business. The
Sellers shall confirm the sale of the MSX Assets and the APX Assets
(collectively, the "Assets") by the execution and delivery to Purchaser or one
or more of its Subsidiaries, on the Closing Date, of the Assignment and
Assumption Agreement in the Form of Exhibit 2.02 hereto.
(c) Excluded Assets. Notwithstanding anything in this Agreement to the
contrary, the following assets, properties and rights of MSX (the "Excluded
Assets") shall be excluded from and shall not constitute Assets, and Purchaser
shall have no rights, title or interest in or to or duties or obligations of any
nature whatsoever with respect thereto by virtue of the consummation of the
transactions contemplated by this Agreement:
-5-
<PAGE> 13
(i) Insurance. All insurance policies relating to the operation
of the Business or the APX Continuing Business (except as otherwise provided in
Section 2.01(a)(xiii) or 2.01(b)).
(ii) Tax Refunds. All refunds or credits, if any, of Taxes due to
or from MSX.
(iii) Corporate Records. The minute books, stock transfer books
and corporate seal of MSX.
(iv) Litigation Claims. Any rights (including indemnification)
and claims and recoveries under litigation of MSX relating solely to the
Retained Liabilities or the Excluded Assets described in clauses (i) through
(iii) and (v) through (x) of this paragraph (c).
(v) Excluded Obligations. The rights of either MSX in, to and
under, and the obligations of either MSX under, all Contracts and Licenses of
any nature which are retained by the Sellers pursuant to Section 2.02.
(vi) Non-Core Assets. All assets, properties and rights owned,
used or previously used by the Sellers in connection with all Non-Core
Businesses listed in Section 6.05 of the Disclosure Schedule other than the
Intellectual Property listed in Section 2.01(a)(ix) of the Disclosure Schedule.
(vii) Bank Accounts. All bank accounts.
(viii) Plan Assets. Except as expressly provided in Article XIII,
any assets (including assets held in trust) of or relating to any Employee
Benefit Plan.
(ix) MSX's interest in DR International, Inc. and the Brighton
Building.
(x) Other. MSX's rights under this Agreement and the Operative
Agreements.
2.02 Liabilities.
(a) Assumed Liabilities. In connection with the sale, transfer,
conveyance, assignment and delivery of Assets pursuant to this Agreement, on the
terms and subject to the conditions set forth in this Agreement, and except as
otherwise provided in Section 2.02(b), at the Closing Purchaser shall assume and
agree to pay, perform and discharge when due (i) all
-6-
<PAGE> 14
obligations, duties and liabilities of MSX of whatever kind or nature (other
than Liabilities which arise as a result of a violation of the covenants of the
Sellers under this Agreement except to the extent of the benefits derived by the
Purchaser with respect thereto), and (ii) those ob1igations, duties and
liabilities of the Sellers of whatever kind or nature relating to the APX Assets
or arising in connection with the operation of the APX Business, which were
assumed by the Sellers in accordance with the terms of the APX Purchase
Agreement or which arise (without violation of the covenants of the Sellers
under this Agreement except to the extent of the benefits derived by the
Purchaser with respect thereto) in connection with events occurring with respect
to the APX Assets or the APX Continuing Business after the Effective Date, as
the same shall exist on the Closing Date (the "Assumed Liabilities"). Purchaser
shall confirm such assumption by the execution and delivery to the Sellers, on
the Closing Date, of the Assignment and Assumption Agreement in the form of
Exhibit 2.02.
(b) Retained Liabilities. Notwithstanding anything to the contrary
contained herein, Purchaser shall not assume by virtue of this Agreement or the
transactions contemplated hereby, and shall have no liability for, any
Liabilities of the Sellers of any kind, character, nature or description
whatsoever (the "Retained Liabilities"), with respect to the following: (i)
Liabilities for Taxes as set forth in Article XII hereof; (ii) any Liabilities
in any way relating to the Business or the APX Continuing Business and owed to
any of the Sellers or any of their Affiliates other than the Liabilities set
forth in Section 15.03 of the Disclosure Schedule and those reflected in the
Effective Date Balance Sheet; (iii) Liabilities relating to the Excluded Assets
and all Liabilities relating to or arising in connection with or as a result of
actions taken or omitted to be taken by the Sellers in connection with the
Non-Core Businesses listed in Section 6.05 of the Disclosure Schedule or the
Non-Core Assets, including, without limitation, all Liabilities arising out of
Body Systems and Assembly Cutlass Convertible Program, including, without
limitation, Liabilities arising out of any warranty obligations with respect
thereto; (iv) any Funded Indebtedness; (v) subject to the provisions of Section
18.18, Liabilities under any self-insurance maintained by the Sellers during the
Interim Period except to the extent of any applicable deductible; (vi) except to
the extent assumed under Article XIII, Liabilities arising in any way from the
employment, compensation, benefits, or coverage under any Employee Benefit Plan
or Employee Benefit Arrangement, of any employee, agent, contractor or
consultant engaged in the Business at any time prior to the Closing Date who is
not an Interim Employee or a Transferred Employee; (vii) except to the extent
assumed under Article XIII, Liabilities arising under any Employee Benefit Plan
or Employee Benefit Arrangement with respect to any Interim Employee or any
Transferred Employee; (viii) Liabilities resulting from or relating to claims
for indemnification by any past or present officers or directors of either
Seller; (ix) Liabilities for Permitted Payments, to the extent such Permitted
Payments are included in the determination of Interim Period Cash Flow; (x)
except to the extent assumed under Article XIII, Liabilities resulting from or
relating to the facts and circumstances giving rise to the case of Corbin v.
Blankenburg, No. 91-CV-72595-DT; (xi) Liabilities resulting from or relating to
any activities of MSX after the Closing; (xii) Liabilities with respect to or
arising out of any claims
-7-
<PAGE> 15
relating to the Cars and Concepts T-Top program, including, without limitation,
Liabilities arising out of Allison Connelly v. ASG, Cars and Concepts and C&C,
Inc.; and (xiii) checks outstanding with respect to the Business or the APX
Continuing Business.
Each Seller shall discharge in a timely manner or shall make adequate provision
for all of the Retained Liabilities, provided that each Seller shall have the
ability to contest, in good faith, any claim of liability asserted in respect
thereof by any Person other than Purchaser and its Affiliates.
2.03 Third-Party Consents. To the extent that any Asset is not
transferable or assignable without the consent of any third party or the
transfer or assignment of which would result in a violation of any Law or Order
(a "Non-Transferable Asset"), this Agreement shall not constitute an assignment
or an attempted assignment thereof. Each Seller shall use its reasonable best
efforts to obtain the required consent of any such third party to the transfer
or assignment of any such Non-Transferable Asset. If any such consent shall not
be obtained, each Seller shall cooperate with Purchaser in any reasonable
arrangement (including reimbursement of monies paid by the Sellers on account of
any such arrangement) designed to provide Purchaser with the benefits intended
to be assigned to it under the relevant Non-Transferable Asset. If and to the
extent that such an arrangement cannot be made, Purchaser shall have no
obligation pursuant to Section 2.02 or otherwise with respect to any such
Non-Transferable Asset.
ARTICLE III
PURCHASE PRICE; THE CLOSING
3.01 Purchase Price; Adjustment.
(a) Purchase Price. The "Purchase Price" shall consist of (i)
$114,628,080 in cash, less the amount of Effective Date Assumed Indebtedness,
(ii) one or more Subordinated Debentures due 2006 (the "Purchaser Notes") of
Purchaser in the aggregate principal amount of $30 million having the terms set
forth in the form of Subordinated Note Purchase Agreement among the Sellers and
Purchaser and dated the Closing Date (the "Purchaser Note Agreement"), in the
form attached as Exhibits 3.01(a)(A) and 3.01(a)(B) hereto, and (iii) the
assumption by Purchaser of the Assumed Liabilities. The cash portion of the
Purchase Price shall be paid by wire transfer of immediately available funds to
MascoTech (for MascoTech's own account or, as appropriate, for the account of
MSX). The Purchase Price shall be subject to certain adjustments described in
Section 3.01(b).
-8-
<PAGE> 16
(b) Adjustments.
(i) Within 60 days after the Closing Date, the Sellers shall
cause to be prepared and delivered to Purchaser (x) the Effective Date Balance
Sheet, audited (unless such audit requirement is waived by the Institutional
Stockholder) by a national independent accounting firm selected by the Sellers
(the "Accounting Firm") (and shall be accompanied by a written report thereon by
the Accounting Firm) and (y) reports setting forth a computation of each of the
Effective Date Net Working Capital, the Interim Period Cash Flow, the Interim
Period Cash Flow Interest, the Interim Period Income Tax Amount and the Interim
Period Income Tax Benefit (collectively, the "Computations"). Each Computation
shall be prepared in accordance with the terms thereof. The Sellers shall, and
shall cause the Accounting Firm to, make available to Purchaser all work papers
and related data used in connection with the preparation and audit of the
Effective Date Balance Sheet and the Computations.
(ii) Except as provided in Section 3.01(b)(iii) below, within 30
days after delivery to Purchaser of the Effective Date Balance Sheet and the
Computations, the Sellers shall pay to Purchaser in immediately available funds
an amount equal to the Adjustment (as defined below), if the Adjustment yields a
positive number, together with interest thereon from the Closing Date to the
date of payment at the rate of 10% per annum . If the Adjustment yields a
negative number, Purchaser shall pay to the Sellers in immediately available
funds an amount equal to the Adjustment, together with interest thereon from the
Closing Date to the date of payment at the rate of 10% per annum. As used
herein, the term "Adjustment" means (I) the sum of (x) the amount, if any, by
which the Required Working Capital exceeds the Effective Date Net Working
Capital and (y) the amount of the Interim Period Cash Flow, if a positive
number, together with a charge on such positive Interim Period Cash Flow
calculated at the rate of 8.5% per annum for a period of one-half of the total
number of days elapsed during the Interim Period, and (z) Interim Period Income
Tax Benefit minus (II) the sum of (x) the amount, if any, by which the Effective
Date Net Working Capital exceeds the Required Working Capital and (y) the
absolute amount of Interim Period Cash Flow, if a negative number, together with
a charge on such negative Interim Period Cash Flow calculated at the rate of
8.5% per annum for a period of one-half of the total number of days elapsed
during the Interim Period, and (z) the Interim Period Income Tax Amount. Any
such payments required by this Section 3.01(b)(ii) (as the same may be adjusted
pursuant to the procedures set forth in Section 3.01(b)(iii)) is herein referred
to as the "Sellers' Net Cash Adjustment," in the case of a payment due to the
Sellers, and the "Purchaser Net Cash Adjustment," in the case of a payment due
to Purchaser.
(iii) In the event that Purchaser has any objection that any of
the Effective Date Balance Sheet or the Computations have not been prepared in
accordance with this Agreement, Purchaser may give the Sellers a written
statement describing its objections in reasonable detail within 30 days
following their receipt of the Effective Date Balance Sheet and the
Computations. The Effective Date Balance Sheet and each of the Computations
shall become final and binding upon the parties hereto unless such statement is
given. Purchaser and
-9-
<PAGE> 17
the Sellers shall use reasonable efforts to resolve any disputes themselves
through the exchange of written proposals setting forth their respective
determinations of any of the disputed items in the Effective Date Balance Sheet
or the Computations. During this period (not to exceed 40 days after the Sellers
have received the statement of objections, such period being the "Discussion
Period") in which the parties are attempting to resolve any such disputes
themselves, no party shall be constrained by any position it has previously
taken with respect to the determination of the items contained in the Effective
Date Balance Sheet or the Computations; provided that no party may take any
position that is inconsistent with the provisions of this Agreement. If the
parties are unable themselves to obtain a final resolution prior to the
termination of the Discussion Period, the parties shall select a nationally
recognized accounting firm (other than Ernst & Young LLP and Coopers & Lybrand
LLP) reasonably acceptable to each of the parties (the "Independent Accounting
Firm") to which to submit the items remaining in dispute (the "Disputed
Matters"). Such selection shall occur no later than the tenth day following the
termination of the Discussion Period. Within 20 days after the selection of the
Independent Accounting Firm, each party shall submit to the Independent
Accounting Firm a written statement describing each Disputed Matter in
reasonable detail. The Independent Accounting Firm shall, within 60 days after
such submission, resolve any remaining disputes. Any such resolution by the
Independent Accounting Firm shall be set forth in writing and shall be
conclusive and binding among the parties and the Effective Date Balance Sheet
and each of the Computations shall be appropriately adjusted to reflect the
final resolution of the Disputed Matters. The payment of any Sellers' Net Cash
Adjustment or Purchaser Net Cash Adjustment, as applicable, shall be made within
5 days after delivery to the Sellers and Purchaser of the decision of the
Independent Accounting Firm.
(iv) All fees and expenses of the Independent Accounting Firm
selected in accordance with Section 3.01(b)(iii) shall be borne equally by
Purchaser and the Sellers.
(v) The Sellers shall be jointly and severally liable for the
payment and performance when due of all obligations of the Sellers under this
Section 3.01(b).
3.02 Allocation of Purchase Price.
(a) The parties hereto acknowledge and agree that the purchase and
sale of the of the Assets, the APX-Brazil Stock and the Limited Stock is an
"applicable asset acquisition" within the meaning of Section 1060(c) of the
Code. Purchaser shall in good faith prepare a schedule (the "Allocation
Schedule"), and deliver it to the Sellers prior to the Closing Date, setting
forth the allocation of the consideration to be paid by Purchaser for the Assets
among the Assets, including the covenant of the Sellers set forth in Section
8.07 of this Agreement, which shall be prepared in accordance with the
methodology contained in Section 1060 of the Code. Such Allocation Schedule
shall reflect an allocation of a portion of the Purchase Price (including for
this purpose the Assumed Liabilities) between the APX Assets and the APX-Brazil
Stock and the MSX Assets and the Limited Stock, such amount being allocated to
the MSX Assets and the
-10-
<PAGE> 18
Limited Stock to be allocated one-third to the Limited Stock and two-thirds
among the MSX Assets as set forth in the Allocation Schedule. In connection with
the preparation of the Allocation Schedule, the parties shall cooperate with
each other and provide such information as any of them shall reasonably request.
(b) The parties agree to modify the Allocation Schedule promptly
following the Closing to reflect modifications in any information used in its
preparation. Each party hereto agrees to be bound by the allocations set forth
in the Allocation Schedule, to complete jointly and to file separately Form 8594
with its federal income tax return consistent with such allocation for the tax
year in which the Closing Date occurs, to file, or cause to be filed, all other
Tax Returns in a manner consistent with such allocation, and not to take any
actions inconsistent therewith.
3.03 Time and Place of Closing. Subject to satisfaction or waiver of
the conditions set forth in Articles X and XI, the closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New York 10178, at
9:00 a.m., New York City time, on January 3, 1997, or at such other time and
date as the parties hereto mutually agree. The date on which the Closing occurs
is referred to herein as the "Closing Date".
3.04 Deliveries at the Closing. Subject to Section 1.03, the Sellers
shall deliver to Purchaser (w) the various certificates, instruments and other
documents referred to in Sections 8.09, 10.03, 10.06, 10.07, 10.08, 10.09,
10.11, 10.12, 10.13 and 10.14, (x) stock certificates representing the
APX-Brazil Stock and the Limited Stock, duly endorsed in blank or accompanied by
duly executed stock powers endorsed in blank with requisite stock transfer tax
stamps, if any, attached, (y) the Assignment and Assumption Agreement and the
Purchaser Note Agreement, duly executed by each Seller and (z) such other
instruments of conveyance, assignments and transfers, in form and substance
reasonably acceptable to Purchaser and duly executed by MSX, as Purchaser shall
reasonably request to vest in Purchaser good title to the Assets, subject to
Permitted Liens and Pre-Existing APX Liens, (the "Other Assignment Instruments")
and Purchaser shall deliver or cause to be delivered to the Sellers (x) the
various certificates, instruments and other documents referred to in Sections
11.03, 11.06, 11.07 and 11.08, (y) the Assignment and Assumption Agreement, the
Purchaser Note Agreement and the Purchaser Notes, duly executed by Purchaser and
(z) the consideration specified in the first sentence of Section 3.01(a).
Immediately following the Closing, Purchaser shall, or shall cause the Limited
Companies to, repay that portion of the Assumed Indebtedness owed to the Sellers
or their Affiliates.
3.05 Further Assurances; Post-Closing Cooperation.
(a) Further Assurances. At any time or from time to time after the
Closing, at Purchaser's request and without further consideration, each Seller
shall execute and deliver to Purchaser such other instruments of sale, transfer,
conveyance, assignment and confirmation,
-11-
<PAGE> 19
provide such materials and information and take such other actions, without
material expense to the Sellers, as Purchaser may deem necessary or desirable,
including, without limitation, the obtaining of all necessary consents of
Governmental Authorities and other third parties, in order to more effectively
transfer, convey and assign to Purchaser and to confirm Purchaser's title to,
the Limited Stock, the APX-Brazil Stock and all of the Assets, and, to the full
extent permitted by Law, to put Purchaser in actual possession and operating
control of the Business, the APX Continuing Business and the Assets and to
assist Purchaser in exercising all rights with respect thereto, and otherwise
fulfill its obligations under this Agreement and the Operative Agreements.
(b) Books and Records. Following the Closing, each Seller shall afford
to Purchaser, its counsel and its accountants, and Purchaser shall afford to
each Seller, its counsel and accountants, during normal business hours,
reasonable access to the books, records and other data relating to the Business,
APX Continuing Business, the Limited Stock, the APX-Brazil Stock and the Assets
in its possession or in the possession of any of its Affiliates with respect to
periods prior to the Closing and the right to make copies and extracts
therefrom, to the extent that such access may be reasonably required by the
requesting party in connection with (i) the preparation of Tax Returns, (ii) the
determination or enforcement of rights and obligations under this Agreement or
the APX Purchase Agreement, (iii) compliance with the requirements of any
Governmental Authority, (iv) the determination or enforcement of the rights and
obligations of any Indemnified Party or (v) in connection with any actual or
threatened Action or Proceeding. Each of the Sellers and Purchaser further
agrees that, for a period extending six years after the Closing Date, it shall
not destroy or otherwise dispose of any such books, records and other data
unless (x) it shall first offer in writing to surrender such books, records and
other data to Purchaser or the Sellers, as the case may be, and (y) Purchaser or
the Sellers, as the case may be, shall not agree in writing to take possession
thereof during the 10-day period after such offer is made.
(c) Limitation on Access. Notwithstanding anything to the contrary
contained in this Section 3.05, if Purchaser and one or both of the Sellers are
in an adversarial relationship in connection with any pending or threatened
litigation or arbitration arising under or related to this Agreement, the APX
Purchase Agreement or any of the Operative Agreements, the furnishing of books,
records and other documents and information in accordance with paragraph (b)
above shall be subject to applicable rules relating to discovery.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
CONCERNING THE TRANSACTIONS
The Sellers hereby jointly and severally represent and warrant to
Purchaser that the statements contained in this Article IV are true and correct
as of the Effective Date, and will be true and correct as of the Closing Date
(as though made then and as though the Closing Date
-12-
<PAGE> 20
were substituted for the date of this Agreement throughout this Article IV,
except to the extent that such statements expressly relate to an earlier time or
date, in which case such statement shall be true and correct as of such earlier
time or date), except as set forth in the Disclosure Schedule, which Disclosure
Schedule shall be construed in accordance with Section 18.11.
4.01 Organization and Qualification. Each of MascoTech and MSX is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of Delaware and Michigan, respectively, and MSX has full corporate
power and authority to conduct its business as and to the extent now conducted
and to own, use and lease its assets and properties. MSX is duly qualified,
licensed or admitted to do business and is in good standing in each jurisdiction
in which the ownership, use or leasing of its assets and properties, or the
conduct or nature of its business, makes such qualification, licensing or
admission necessary, except for such failures to be so qualified, licensed or
admitted and in good standing which, individually or in the aggregate, (i) are
not having and could not be reasonably expected to have a Material Adverse
Effect and (ii) could not be reasonably expected to have a material adverse
effect on the validity or enforceability of this Agreement or the Operative
Agreements or on the ability of MSX to perform its obligations thereunder.
4.02 Authority Relative to Acquisition Agreement. Each Seller has full
corporate power and authority to enter into this Agreement and the Operative
Agreements to which it is a party, to perform its obligations thereunder and to
consummate the transactions contemplated by this Agreement and the Operative
Agreements to which it is a party. The execution, delivery and performance of
this Agreement and the Operative Agreements have been duly authorized by all
requisite corporate action and no other corporate action on the part of either
Seller party thereto or its shareholders is necessary to authorize the
execution, delivery and performance by either Seller of this Agreement or the
Operative Agreements to which it is a party and the consummation by each Seller
of the transactions contemplated thereby. This Agreement and the Operative
Agreements have been duly and validly executed and delivered by each Seller a
party thereto, and constitute the legal, valid and binding obligation of each
Seller a party thereto, enforceable against each Seller a party thereto in
accordance with their respective terms.
4.03 No Conflicts. The execution and delivery by each Seller of this
Agreement and the Operative Agreements to which such Seller is a party do not,
and the performance by each Seller of its obligations under each Acquisition
Agreement and Operative Agreement to which it is a party and the consummation of
the transactions contemplated thereby will not: (i) conflict with or result in a
violation or breach of any of the terms, conditions or provisions of the
Articles of Incorporation or By-laws of either Seller, any Limited Company; (ii)
conflict with or result in a violation or breach of any term or provision of any
Law or Order applicable to either Seller or any Limited Company, or any of their
respective assets or properties; or (iii) (v) conflict with or result in a
violation or breach of, (w) constitute (with or without notice or lapse of time
or both) a default under, (x) result in or give to any Person any
-13-
<PAGE> 21
right of payment or reimbursement (except pursuant to this Agreement),
termination, cancellation, modification or acceleration under, (y) result in the
creation or imposition of any Lien upon any assets or properties of either
Seller or any Limited Company under, or (z) otherwise require either Seller or
any Limited Company to obtain any consent, approval or action of, make any
filing with or give any notice to any Person as a result or under the terms of,
any Contract or License to which either Seller or any Limited Company is a party
or by which any of its assets or properties is bound, excluding from clauses
(ii) and (iii) any conflicts, violations, breaches, defaults, terminations,
cancellations, modifications, accelerations and creations and impositions of
Liens which, individually or in the aggregate, could not be reasonably expected
to have a Material Adverse Effect or a material adverse effect on the ability of
either Seller to consummate the transactions contemplated by this Agreement or
the Operative Agreements.
4.04 Governmental Approvals and Filings. Except as specified in
Section 4.04 of the Disclosure Schedule, no consent, approval or action of,
filing with or notice to any Governmental Authority on the part of either
Seller, or any Limited Company is required in connection with the execution,
delivery and performance of this Agreement or the Operative Agreements or the
consummation of the transactions contemplated by any such agreement.
4.05 Acquisition for Investment. Neither of the Sellers is acquiring
any part of the Purchaser Notes with a view to or for sale in connection with
any distribution thereof within the meaning of the Securities Act; provided that
the disposition of the Purchaser Notes will at all times remain within their
control.
4.06 Entire Business. Subject to Section 1.03, the sale and transfer
of the MSX Assets and the Limited Stock by the Sellers to Purchaser pursuant to
this Agreement will effectively convey to Purchaser, free and clear of all
Liens, other than Permitted Liens, all the assets and properties necessary to
conduct the Business, and the sale of the APX Assets and the APX-Brazil Stock by
MSX to Purchaser pursuant to this Agreement will convey to Purchaser, free and
clear of all Liens, other than Permitted Liens and Pre-Existing APX Liens, all
of the assets, rights and properties acquired by MSX pursuant to the APX
Purchase Agreement and all of the assets, rights and properties acquired by MSX
with respect to the APX Continuing Business after the Effective Date other than
Conveyed Assets and any assets destroyed due to casualty.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS AS TO APX ACQUISITION
The Sellers jointly and severally hereby represent and warrant to
Purchaser with respect to the APX Acquisition that the statements contained in
this Article V are true and correct
-14-
<PAGE> 22
as of the Effective Date, except as set forth in the Disclosure Schedule, which
Disclosure Schedule shall be construed in accordance with Section 18.11.
5.01 Consummation of APX Acquisition.
(a) Subject to Section 1.03, the APX Acquisition has been consummated
on the Effective Date and the Sellers have acquired substantially all the assets
of the TAD-Sellers (exclusive of those owned by TAD-Ltd.) pertaining to the APX
Business in accordance with the terms and conditions of the APX Purchase
Agreement and have acquired the right to acquire (i) the APX Limited Assets and
(ii) the APX-Brazil Stock and the APX-Germany Stock.
(b) None of the terms of the APX Purchase Agreement or any obligation
of the TAD Sellers and the Shareholders (as defined in the APX Purchase
Agreement) thereunder, have been waived, terminated, amended, supplemented or
modified in any respect.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLERS
WITH RESPECT TO THE BUSINESS AND LIMITED
The Sellers jointly and severally represent and warrant to Purchaser
with respect to the Business and Limited and each of the Subsidiaries of Limited
(collectively, the "Limited Companies") that the statements contained in this
Article VI are true and correct as of the Effective Date, except for the
statements set forth in Sections 6.01, 6.02, 6.06(c) and 6.08(p) which shall be
true and correct as of the Effective Date and as of the Closing Date and except
as set forth in the Disclosure Schedule, which Disclosure Schedule shall be
construed in accordance with Section 18.11.
6.01 Organization of Limited. Limited is a corporation duly organized,
validly existing and in good standing under the Laws of England, and has full
corporate power and authority to conduct the Business as and to the extent now
conducted by Limited and to own, use and lease its assets and properties.
Limited is duly qualified, licensed or admitted to do business and is in good
standing in all jurisdictions in which the ownership, use or leasing of its
assets and properties, or the conduct or nature of its business, makes such
qualification, licensing or admission necessary, except for such failures to be
so qualified, licensed or admitted and in good standing which, individually or
in the aggregate, (i) are not having and could not be reasonably expected to
have a Material Adverse Effect and (ii) could not be reasonably expected to have
a material adverse effect on the validity or enforceability of this Agreement or
any of the Operative Agreements. The Sellers have, prior to the execution of
this Agreement, delivered to Purchaser
-15-
<PAGE> 23
true and complete copies of the corporate charter documents of Limited as in
effect on the date hereof.
6.02 Limited Capital Stock. The authorized capital stock of Limited
consists solely of one hundred (100) Ordinary Shares, of which only the Limited
Stock has been issued. The Limited Stock is duly authorized, validly issued and
outstanding, fully paid and nonassessable. MascoTech owns the Limited Stock,
beneficially and of record, free and clear of all Liens. Except for this
Agreement, there are no outstanding Options with respect to the Limited Stock or
rights to require Limited to redeem, repurchase or otherwise acquire any of its
capital stock or any securities convertible, exchangeable or exercisable for or
into its capital stock. None of the issued and outstanding shares of capital
stock of Limited was issued in violation of any preemptive rights. The delivery
of a certificate or certificates at the Closing representing the Limited Stock
in the manner provided in Section 3.04 will transfer to Purchaser good and valid
title to the Limited Stock, free and clear of all Liens. Section 6.02 of the
Disclosure Schedule separately lists the name and jurisdiction of incorporation
of each Subsidiary of Limited. Each Subsidiary of Limited is a corporation duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of incorporation identified in Section 6.02 of the Disclosure
Schedule, and has full corporate power and authority to conduct its business as
and to the extent now conducted and to own, use and lease its assets and
properties. Each such Subsidiary is duly qualified, licensed or admitted to do
business and is in good standing in those jurisdictions specified in Section
6.02 of the Disclosure Schedule, which are the only jurisdictions in which the
ownership, use or leasing of such Subsidiary's assets and properties, or the
conduct or nature of its business, makes such qualification, licensing or
admission necessary, except for those jurisdictions in which the failure by
Limited and its Subsidiaries to be qualified, licensed or admitted and in good
standing could not reasonably be expected to have a Material Adverse Effect.
Section 6.02 of the Disclosure Schedule separately lists for each Subsidiary of
Limited the amount of its authorized, issued and outstanding capital stock and
the record owners of such outstanding capital stock. All of the outstanding
shares of capital stock of each Subsidiary of Limited have been duly authorized
and validly issued, are fully paid and nonassessable, and are owned,
beneficially and of record, by Limited or Subsidiaries wholly owned by Limited,
free and clear of all Liens. There are no outstanding Options with respect to
the capital stock of any Subsidiary of Limited or rights to require any of such
Subsidiaries to redeem, repurchase or otherwise acquire any of its capital stock
or any securities convertible, exchangeable or exercisable for or into any of
its capital stock. None of the issued and outstanding shares of capital stock of
any Subsidiary of Limited was issued in violation of any preemptive rights. The
Sellers have, prior to the execution of this Agreement, delivered to Purchaser
true and complete copies of the certificate or articles of incorporation and
by-laws (or other comparable corporate charter documents) of each of the Limited
Companies as in effect on the date hereof.
6.03 Financial Statements. Section 6.03 of the Disclosure Schedule
contains true and correct copies of each of the unaudited condensed combined
balance sheets of the
-16-
<PAGE> 24
Business for the fiscal years ended December 31, 1995 (the "December 31 Balance
Sheet") and 1994 and for the nine months ended September 30, 1996 and the
related unaudited condensed combined statements of income for the respective
periods then ended and cash flows for the fiscal year ended December 31, 1995
and the nine month period ended September 30, 1996. Except as set forth in
Section 6.03 of the Disclosure Schedule or in the notes thereto, all such
financial statements were prepared in accordance with GAAP and fairly present
(subject, in the case of the unaudited financial statements, to normal year-end
audit adjustments which are not expected to be, individually or in the
aggregate, materially adverse to the Business) the financial condition, results
of operations or cash flow of the Business as of the respective dates thereof
and for the respective periods covered thereby. Except (x) as reflected or
reserved against in the December 31 Balance Sheet (including the notes thereto)
or (y) as reflected or reserved against in the Effective Date Balance Sheet or
(z) as reflected in any subsection of the Disclosure Schedule, there will be no
contingent liabilities against, relating to or affecting the Business, any of
the MSX Assets or the Limited Stock which are required by GAAP (applied on a
consistent basis with the methods, principles, practices and policies used in
preparing the December 31 Balance Sheet) to be reflected or reserved against in
a combined balance sheet of the Business as of that date, other than (i)
Liabilities which arise in the ordinary course of the Business and (ii) other
Liabilities which, individually and in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
6.04 Absence of Changes. Except for the execution and delivery of the
APX Purchase Agreement and the consummation of the transactions contemplated
thereby, since December 31, 1995 no events or circumstances have occurred or
arisen which, taken together, could reasonably be expected to result in a
Material Adverse Effect. Without limiting the foregoing, there has not occurred,
with respect to the Business or any of the Limited Companies, during the period
from and including December 31, 1995 to and including the date hereof:
(a) any adoption, entering into, amendment, modification or
termination (partial or complete) of any Employee Benefit Plan, Employee Benefit
Arrangement or Foreign Benefit Plan or any material increase in compensation or
other material change in employment terms for any officer, director or
employees;
(b) incurrences of Indebtedness in an aggregate principal amount
exceeding $20 million (net of any amounts discharged during such period);
(c) any acquisition, lease or disposition by the Sellers or any of the
Limited Companies of any assets or properties used or held for use in the
conduct of the Business, or any creation or incurrence of a Lien (other than a
Permitted Lien) on any assets or properties used or held for use by any of them
in the conduct of the Business, in each case other than in the ordinary course
of business consistent with past practice;
-17-
<PAGE> 25
(d) any entering into of an agreement, arrangement, commitment or
understanding to do or engage in any of the foregoing after the date hereof; or
(e) any other transaction involving or development affecting the
Business, the Limited Stock or the MSX Assets outside the ordinary course of
business consistent with past practice.
6.05 Non-Core Businesses. Section 6.05 of the Disclosure Schedule
contains a true and correct list of and accurately describes each of the
Non-Core Businesses.
6.06 Legal Proceedings.
(a) There are no Actions or Proceedings pending or, to the knowledge
of either Seller, threatened against, relating to or affecting the Sellers, the
Business, any of the Limited Companies, APX-Brazil, the Limited Stock, the
APX-Brazil Stock or any of the Transferred Assets which (i) could reasonably be
expected to result in the issuance of an Order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or otherwise result in a material
diminution of the benefits contemplated by this Agreement, or any of the
Operative Agreements to Purchaser, or (ii) if determined adversely, would have
(x) a material adverse effect on the ability of any party hereto to consummate
the transactions contemplated hereunder or under the Operative Agreements or (y)
a Material Adverse Effect.
(b) There are no Orders outstanding against the Sellers relating to
the Business or against any of the Limited Companies.
(c) There are no Orders outstanding against the Sellers, any of the
Limited Companies, APX-Brazil, the Limited Stock, the APX-Brazil Stock or any of
the Transferred Assets restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Operative Agreements.
6.07 Compliance with Laws and Orders. None of the Sellers nor any of
the Limited Companies is, or has received any notice that it is, in violation of
or in default under any Law or Order applicable to the Business, the Limited
Stock or the MSX Assets, except for violations and defaults which, individually
or in the aggregate, are not having and could not be reasonably expected to have
a Material Adverse Effect or a material adverse effect on the ability of any
party hereto to consummate the transactions contemplated by this Agreement or
the Operative Agreements.
6.08 Taxes. (a) Except as disclosed in Section 6.08 of the Disclosure
Schedule, all Tax Returns required to have been filed by or with respect to the
Sellers relating to the Business or any of the Limited Companies have been duly
filed, and each such Tax Return
-18-
<PAGE> 26
correctly and completely reflects the income, franchise or other Tax liability
and all other information required to be reported thereon. All Taxes due and
payable by the Sellers relating to the Business or any of the Limited Companies,
whether or not shown on any Tax Return, have been paid.
(b) Except as disclosed in Section 6.08 of the Disclosure Schedule,
the provisions for Taxes due by the Sellers relating to the Business or any of
the Limited Companies (as opposed to any reserve for deferred Taxes established
to reflect timing differences between book and Tax income) in the December 31
Balance Sheet for the period ended December 31, 1995 are sufficient for all
unpaid Taxes, being current Taxes not yet due and payable, of the Sellers
relating to the Business and the Limited Companies.
(c) Neither the Sellers nor or any of the Limited Companies is a party
to any agreement extending the time within which to file any Tax Return. No
claim relating to the Business by any Taxing Authority in a jurisdiction in
which the Sellers and the Limited Companies do not file Tax Returns is currently
pending or, to the knowledge of the Sellers or the Limited Companies, threatened
to the effect that any of them is or may be subject to taxation by that
jurisdiction.
(d) All monies required to be withheld by the Sellers and each of the
Limited Companies from employees, independent contractors, creditors or other
third parties relating to the Business for Taxes (including without limitation
for income, foreign wages, Social Security or unemployment insurance Taxes or
any similar Tax under state, local or foreign law) have been collected or
withheld, and either duly or timely paid to the appropriate Taxing Authority or
set aside in accounts for such purpose.
(e) There is no pending dispute or claim concerning any Tax
Liabilities of the Sellers relating to the Business or of the Limited Companies
either (i) claimed or raised by any Taxing Authority or (ii) otherwise known to
the Sellers or any of the Limited Companies. Section 6.08 of the Disclosure
Schedule indicates those Tax Returns, if any, that have been audited, and
indicates those Tax Returns that currently are the subject of audit. The Sellers
have delivered to Purchaser complete and correct copies of all federal, state,
local and foreign income Tax Returns filed by, and all Tax examination reports
and statements of deficiencies assessed against or agreed to by, the Sellers
relating to the Business or any of the Limited Companies since January 1, 1991.
(f) Neither of the Sellers nor or any of the Limited Companies has
waived any statute of limitations in respect of Taxes or agreed to any extension
of time with respect to any Tax assessment or deficiency.
-19-
<PAGE> 27
(g) Except as disclosed in Section 6.08 of the Disclosure Schedule,
the Sellers and the Limited Companies have not received any written ruling
related to Taxes or entered into any written and legally binding agreement with
a Taxing Authority relating to Taxes.
(h) The Sellers and the Limited Companies have no liability for Taxes
of any Person other than the Subsidiaries of the Sellers listed in Section 6.08
of the Disclosure Schedule (i) under Section 1.1502-6 of the Treasury
regulations (or any similar provision of state, local or foreign law), (ii) as a
transferee or successor, (iii) by Contract or (iv) otherwise.
(i) None of the MSX Assets constitute tax-exempt bond financed
property or tax-exempt use property, within the meaning of Section 168 of the
Code.
(j) None of the Sellers or any of the Limited Companies is a
"consenting corporation" within the meaning of Section 341(f)(1) of the Code, or
comparable provisions of any state statutes, and none of the MSX Assets or the
Limited Stock is subject to an election under Section 341(f) of the Code or
comparable provisions of any state statutes.
(k) None of the Sellers or any of the Limited Companies has
participated in or cooperated with an international boycott within the meaning
of Section 999 of the Code.
(l) None of the Limited Companies is, and at no time has been, a
passive foreign investment company within the meaning of Section 1296 of the
Code.
(m) None of the Limited Companies is, or at any time has been, engaged
in the conduct of a trade or business within the United States within the
meaning of Section 864(b) and Section 882(a) of the Code, or treated as or
considered to be so engaged under Section 882(d) or Section 897 of the Code or
otherwise.
(n) None of the Limited Companies holds, and at no time has held, a
United States real property interest within the meaning of Section 897(c)(1) of
the Code.
(o) Except as disclosed in Section 6.08 of the Disclosure Schedule, no
Taxing Authority has proposed Tax adjustments with respect to the Sellers or any
of the Limited Companies directly or indirectly in respect of an intercompany
transaction or arrangement between or among the Sellers, the Limited Companies
or their Affiliates during any Pre-Closing Period, including, without limitation
(i) any Tax arising from an adjustment in respect of such transaction or
arrangement under Section 482 of the Code, the Treasury Regulations thereunder,
any related provision or any similar provision of state, local or foreign law
and (ii) any Tax arising from a failure to fully comply with applicable
documentation, recordkeeping and filing requirements in respect of such
transaction or arrangement.
-20-
<PAGE> 28
(p) As of the Closing Date, the Limited Companies will have in the
aggregate at least U.S. $7 million of earnings and profits. All such earnings
and profits will, following the sale by the Sellers of the capital stock of the
Limited Companies pursuant to this Agreement, be treated as previously included
in the Sellers' gross income under Section 951(a) of the Code and subject
thereunder to U.S. Federal income tax.
6.09 Benefit Plans; ERISA.
(a) Section 6.09(a) of the Disclosure Schedule lists each Employee
Benefit Plan covered by or subject to ERISA that any of the Sellers or their
respective Affiliates maintains or administers, or to which any of them
contributes, in each such case covering any employee or former employee engaged
in the Business.
(i) Each such Employee Benefit Plan (and each related trust,
VEBA trust, insurance contract, or fund) has at all times complied in form and
in operation in all material respects with the applicable requirements of ERISA,
the Code, and other applicable laws and has been administered in accordance with
its terms.
(ii) All required reports and descriptions (including Form 5500
Annual Reports, Summary Annual Reports, Forms PBGC-1, and Summary Plan
Descriptions) have, where required, been filed or distributed with respect to
each such Employee Benefit Plan and each Employee Benefit Arrangement listed in
Section 6.09(f) of the Disclosure Schedule. The requirements of Part 6 of
Subtitle B of Title I of ERISA and of Code Section 4980B have been met in all
material respects with respect to each such Employee Benefit Plan that is a
group health plan (within the meaning of ERISA Section 601 and Code Section
4980B).
(iii) All contributions (including all employer contributions and
employee salary reduction contributions) which are due and payable to any such
Employee Benefit Plan which is an employee pension benefit plan (as defined in
ERISA) on or prior to the date hereof have been paid to such employee pension
benefit plan. All premiums and other payments due on or before the date hereof
have been paid with respect to each such Employee Benefit Plan which is an
employee welfare benefit plan (as defined in ERISA).
(iv) Each such Employee Benefit Plan which is an employee pension
benefit plan and which is intended to meet the requirements of a qualified plan
under Code Section 401(a) is, and at all times has been, so qualified and has
either (1) received a favorable determination letter from the Internal Revenue
Service covering such Employee Benefit Plan for the Tax Reform Act of 1986, as
amended, the Unemployment Compensation Act of 1992, and the Omnibus Budget
Reconciliation Act of 1993 or (2) timely applied to the Internal Revenue Service
for a favorable determination letter so covering such plan.
-21-
<PAGE> 29
(v) No Employee Benefit Plan other than a Multiemployer Plan is
subject to the minimum funding requirements of Code Section 412 or to Title IV
of ERISA.
(vi) The Sellers have delivered to Purchaser correct and complete
copies of the current plan document and summary plan description, the most
recent favorable determination letter received from the Internal Revenue
Service, the most recent Form 5500 Annual Report filed with the Internal Revenue
Service, and all related trust agreements, insurance contracts and other funding
agreements which implement each such Employee Benefit Plan, in each case as
applicable to such Employee Benefit Plan.
(vii) There have been no Prohibited Transactions with respect to
any such Employee Benefit Plan and, to the knowledge of the Sellers, no plan
fiduciary has any liability for material breach of fiduciary duty or any other
material failure to act or comply in connection with the administration or
investment of the assets of any such Employee Benefit Plan. No action, suit,
proceeding, hearing or investigation with respect to the administration or the
investment of the assets of any such Employee Benefit Plan (other than routine
claims for benefits ) is pending or, to the knowledge of the Sellers,
threatened.
(b) Section 6.09(b) of the Disclosure Schedule lists each Employee
Benefit Plan providing medical, health or life insurance and any other welfare
benefit plan providing significant welfare-type benefits for currently (or
future) retired or terminated United States employees engaged in the Business,
their spouses, or their dependents (other than in accordance with Section 4980B
of the Code).
(c) Section 6.09(c) of the Disclosure Schedule lists all Multiemployer
Plans contributed to by any of the Sellers or their respective Affiliates for
the benefit of any employee or former employee engaged in the Business, or with
respect to which the Sellers have any liability. With respect to each
Multiemployer Plan, to the Sellers' knowledge, (i) no withdrawal liability has
been incurred, and the Sellers have no reason to believe that any such liability
will be incurred prior to the Closing Date, (ii) no such plan is in
"reorganization" (within the meaning of Section 4241 of ERISA), (iii) no notice
has been received that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of an excise tax, or that the plan
is or may become "insolvent" (within the meaning of Section 4241 of ERISA), (iv)
no proceedings have been instituted by the Pension Benefit Guaranty Corporation
against the plan, (v) there is no contingent liability for withdrawal liability
by reason of a sale of assets pursuant to Section 4204 of ERISA, and (vi) except
as disclosed on Section 6.09(c) of the Disclosure Schedule, if the Sellers or
any Affiliate thereof were to have a complete or partial withdrawal as of the
Closing, no obligation to pay withdrawal liability would exist on the part of
the Sellers or any Affiliate thereof.
(d) No significant liability (other than for PBGC premiums) has been
incurred or, to the knowledge of the Sellers, would reasonably be expected to be
incurred with respect to
-22-
<PAGE> 30
the period prior to the Effective Date under Title IV of ERISA (including
withdrawal liability) or under Sections 4971 through 4980B of the Code with
respect to any Employee Benefit Plan (including a Multiemployer Plan) presently,
or since January 1, 1988, maintained or contributed to by the Sellers, their
respective Affiliates or any entity that is, or at any time was, an ERISA
Affiliate.
(e) No benefit under any Employee Benefit Plan listed in Section
6.09(a) of the Disclosure Schedule or under any Employee Benefit Arrangement
listed in Section 6.09(f) of the Disclosure Schedule, including any retention
agreement or severance or parachute payment plan or agreement, will be
established or become accelerated, vested or payable by reason of any
transaction contemplated by this Agreement or any other Operative Agreement.
(f) Section 6.09(f) of the Disclosure Schedule lists each Employee
Benefit Arrangement, other than any Foreign Benefit Plan, that has been entered
into, maintained, or administered, as the case may be, by any of the Sellers or
their respective Affiliates and that currently covers any employee or former
employee engaged in the Business. Each such Employee Benefit Arrangement
complies in all material respects with its terms and with the requirements of
applicable statutes, laws, orders, rules and regulations.
(g) To the knowledge of the Sellers, Section 6.09(g) of the Disclosure
Schedule lists all significant Foreign Benefit Plans that any of the Sellers or
their respective Affiliates maintains or administers, or to which any of them
contributes, in each such case covering any employee or former employee engaged
in the Business (other than plans, programs, arrangements and agreements
required to be sponsored, maintained or contributed to by applicable laws).
Further, and in each case to the knowledge of the Sellers:
(i) Any employer and employee contributions required by law or
required by the terms of any such Foreign Benefit Plan to be made to or provided
for such Foreign Benefit Plan on or before the date hereof have been made, or
provided for in accordance with the past practices of the Sellers or their
respective Affiliates.
(ii) The fair market value of the assets of each such funded
Foreign Benefit Plan equals or exceeds the present value of the benefits accrued
to the Closing Date payable to all current and former participants, determined
on an ongoing basis according to the actuarial assumptions and valuations most
recently used to determine employer contributions to such Foreign Benefit Plan,
and the transactions contemplated by this Agreement and the other Operative
Agreements shall not cause the funded status of any such Foreign Benefit Plan to
be insufficient to procure or provide for the benefits accrued to the Closing
Date on an ongoing basis.
(iii) Each such Foreign Benefit Plan has been maintained and
administered in all material respects in compliance with the requirements of
applicable laws, and
-23-
<PAGE> 31
if required to be registered with applicable regulatory authorities, such
Foreign Benefit Plan has been so registered and has been maintained in good
standing with applicable regulatory authorities and is operated in substantial
compliance with such applicable authority.
6.10 Real Property. Section 6.10 of the Disclosure Schedule lists and
briefly describes all real property leased or subleased to or by MascoTech
(relating to the Business), MSX and any of the Limited Companies. The Sellers
have delivered to Purchaser correct and complete copies of the leases and
subleases listed in Section 6.10 of the Disclosure Schedule (except as
indicated). There are no amendments, consents for alterations, or other
documents recording variations to such leases which materially and adversely
affect the rental payments, the term or the current use of the properties
subject thereto. With respect to each lease and sublease listed in Section 6.10
of the Disclosure Schedule for which the annual rental payments exceed $50,000,
(A) the lease or sublease is legal, valid, binding, enforceable, and in full
force and effect, as to MSX and the Limited Companies, as appropriate, except as
(x) the enforceability may be subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, or other laws relating to creditors'
rights generally, and (y) such property may be subject to prior or superior
leases, mortgages, deeds of trust, or other liens against the lessor's interest
in such property, (B) none of MSX or the Limited Companies is in breach or
default, no event has occurred which, with notice or lapse of time, would
constitute a breach or default by any of MSX or the Limited Companies or permit
termination, modification, or acceleration by any third party thereunder and (C)
to the knowledge of MSX, no third party or landlord is in breach or default
thereunder or has repudiated or has the right to terminate or repudiate (except
for the normal exercise of remedies in connection with a default thereunder) any
provision thereof, except in each such case where the illegality, failure to be
binding, unenforceability, ineffectiveness, breach, default, termination,
modification, acceleration, or repudiation would not have a Material Adverse
Effect.
6.11 Intellectual Property Rights. All Intellectual Property used in
or necessary for the conduct of the Business as now conducted (the "MSX
Intellectual Property") forms a part of the MSX Assets; provided, however, that
no patents or registered trademarks, including without limitation the patents
and trademarks disclosed in Section 2.01(a)(ix) of the Disclosure Schedule, are
necessary for the conduct of the Business as now conducted. Except as disclosed
in Section 6.11 of the Disclosure Schedule, (a) the Sellers and/or the Limited
Companies have all right, title and interests in, or the exclusive right to use,
the MSX Intellectual Property, with the exception of such MSX Intellectual
Property the absence of which is not likely to cause a Material Adverse Effect
(the "Material MSX Intellectual Property"), (b) all registrations with and
applications to Governmental Authorities in respect of such Intellectual
Property are in full force and effect, (c) there are no restrictions on the
direct or indirect transfer of any license, or any interest therein, in respect
of such Material MSX Intellectual Property, (d) the Sellers and/or the Limited
Companies have taken reasonable security measures to protect the secrecy,
confidentiality and value of their respective trade secrets in respect of the
Business, (e) neither the Sellers nor any Limited Company is, or has received
any notice that it is, in default (or with
-24-
<PAGE> 32
the giving of notice or lapse of time or both, would be in default) under any
license to use any such Material MSX Intellectual Property, (f) to the knowledge
of the Sellers, such Material MSX Intellectual Property, with the exception of
patents relating to convertibles and convertible conversion, is not being
infringed by any other Person and (g) neither the Sellers nor any Limited
Company has received notice that it is infringing any Intellectual Property of
any other Person in connection with the conduct of the Business, no claim is
pending or, to the knowledge of either Seller, has been made to such effect that
has not been resolved and, to the knowledge of the Sellers, neither the Sellers
nor any Limited Company is infringing any Intellectual Property Rights of any
other Person in connection with the conduct of the Business.
6.12 Contracts.
(a) Section 6.12(a) of the Disclosure Schedule (with subparagraph
references corresponding to those set forth below) contains a true and correct
list of each of the following Contracts or other arrangements ("Material
Contracts") (true and correct copies or, if no such copies are available,
reasonably complete and accurate written descriptions of which, together with
all amendments, modifications and supplements thereto and all waivers of any
terms thereof, have been delivered to Purchaser prior to the execution of this
Agreement), (x) with respect to the Business, (y) to which any of the Limited
Companies is a party or (z) to which any of the Sellers is a party and by which
any of the Transferred Assets, the Limited Stock or the APX-Brazil Stock is
bound, as applicable:
(i) (x) all Contracts (excluding Employee Benefit Plans)
involving, individually, any payment obligation on the part of any of the
Sellers or the Limited Companies of an amount exceeding $75,000 and providing
for a commitment of employment or consultation services for a specified or
unspecified term to any employee; and (y) any written or unwritten
representations, commitments, promises, communications or courses of conduct
(excluding Employee Benefit Arrangements, Employee Benefit Plans and Foreign
Benefit Plans and not embodied in a Contract) involving an obligation of the
Sellers relating to the Business or any of the Limited Companies to make
payments in any year, other than salary or incentive compensation payments in
the ordinary course of business, to any Employee exceeding $75,000;
(ii) all Contracts with any Person containing any provision or
covenant that directly or indirectly prohibits or limits (x) the ability of the
Sellers or any of the Limited Companies to engage in any business activity the
same as or similar to, or to compete with any Person engaged in any business
activity as are the same as or similar to those of, the Business or the APX
Continuing Business or (y) the ability of any Person to compete with the Sellers
or any of the Limited Companies or to engage in any business activity the same
as or similar to those of the Business or the APX Continuing Business;
(iii) all partnership, joint venture, shareholders' or other
similar Contracts with any Person in connection with the Business or the APX
Business;
-25-
<PAGE> 33
(iv) the form of all Contracts with independent contractors,
distributors, dealers, manufacturer's representatives, sales agencies or
franchisees;
(v) all Contracts relating to (A) the future disposition or
acquisition of any Transferred Assets, the Limited Stock or the APX-Brazil
Stock, other than dispositions or acquisitions in the ordinary course of
business consistent with past practice and in accordance with the terms of this
Agreement, and (B) any Business Combination relating to the Assets, any of the
Limited Companies or APX-Brazil;
(vi) all Contracts relating to Indebtedness in excess of $250,000
or any guarantees of Indebtedness or other Liabilities of MSX or any Limited
Company to any third Person;
(vii) all material Contracts between or among any Limited Company,
on the one hand, and either Seller, any officer, director, Affiliate or
Associate of either Seller or any Associate of any such officer, director or
Affiliate, on the other hand;
(viii) all other Contracts with respect to the Business or the
Assets that involve the payment or potential payment, pursuant to the terms of
any such Contract, of more than $250,000;
(ix) all collective bargaining or similar labor contracts;
(x) a list of the names of all employees, independent
contractors or agents who are parties to MascoTech's Proprietary Confidential
Information and Invention Assignment Agreement with respect to the Business;
(xi) all Contracts relating to Intellectual Property; and
(xii) all Contracts relating to the APX Acquisition, the APX
Business or APX Brazil other than any Contracts or other arrangements assumed by
any of the Sellers pursuant to the APX Purchase Agreement.
(b) Each Contract required to be disclosed in Section 6.12(a) of the
Disclosure Schedule is in full force and effect and constitutes a legal, valid
and binding agreement, enforceable in accordance with its terms of the Sellers
or any of the Limited Companies, as the case may be, and (to the knowledge of
the Sellers) each other party thereto; and none of the Sellers or any of the
Limited Companies, nor, to the knowledge of either Seller, any other party to
such Contract is, or has received notice that it is, in violation or breach of
or default under any such Contract (or with notice or lapse of time or both,
would be in violation or breach of or default under any such Contract).
-26-
<PAGE> 34
6.13 Licenses. Section 2.01(a)(x) of the Disclosure Schedule contains
a true and complete list of all material Licenses used or held for use in the
Business, setting forth the function and the expiration and renewal date of
each. Prior to the execution of this Agreement, the Sellers have delivered to
Purchaser true and complete copies of all such Licenses. Except as disclosed in
Section 6.13 of the Disclosure Schedule:
(i) The Sellers and each of the Limited Companies own or validly
hold all Licenses that are material to the Business;
(ii) each Business License is valid, binding and in full force
and effect; and
(iii) none of the Sellers or any of the Limited Companies is,
or has received any notice that it is, in default (or with the giving of notice
or lapse of time or both, would be in default) under any Business License.
6.14 Insurance. To the knowledge of the Sellers, Section 6.14 of the
Disclosure Schedule lists and describes in reasonable detail the current
insurance policies of the Sellers under which any of MSX with respect to the
Business, the Limited Companies or any of their respective Subsidiaries may make
claims after the Closing Date of the types referred to in Section 18.19;
provided that the Sellers are not representing or warranting the actual
availability or extent of coverage under any such policies listed on Section
6.14 of the Disclosure Schedule. Each such insurance policy is valid and binding
and in full force and effect, no premiums due thereunder have not been paid and
none of the Sellers nor any of the Limited Companies has received any notice of
cancellation or termination in respect of any such policy or is in default
thereunder. None of the Sellers nor any of the Limited Companies has received
notice that any insurer under any insurance policy identified in Section 6.14 of
the Disclosure Schedule is denying liability with respect to a claim thereunder
or defending under a reservation of rights clause.
6.15 Affiliate Transactions. Section 6.15 of the Disclosure Schedule
describes those services provided by the Sellers or their Affiliates to the
Business or any of the Limited Companies.
6.16 Environmental Matters.
(a) Each of the Sellers and the Limited Companies has obtained and
holds all Environmental Permits with respect to the Business and the MSX Assets;
(b) Each of the Sellers and the Limited Companies is in compliance
with all the terms, conditions and provisions of all (i) Environmental Permits
and (ii) applicable Environmental Laws;
-27-
<PAGE> 35
(c) During the past 10 years there have not been any and currently
there are no pending or, to the knowledge of the Seller, threatened
Environmental Claims against or affecting any Limited Company, the Business or
any of the MSX Assets, and none of the Sellers is aware of any facts or
circumstances which could reasonably be expected to form the basis for any
Environmental Claim against or affecting any of the Limited Companies, the
Business or any of the MSX Assets;
(d) Neither the Sellers nor any of the Limited Companies, nor, to the
knowledge of the Sellers, any prior owner or lessee of any Site, has handled any
Hazardous Material on any Site, except in compliance with applicable
Environmental Laws;
(e) No Releases of a Hazardous Material have occurred at, from, to,
in, under or on any Site and there are no Hazardous Materials present in, on,
about, at, under or migrating to any Site;
(f) To the knowledge of the Sellers, there are no (i) underground
storage tanks, active or abandoned, (ii) polychlorinated biphenyl containing
equipment or (iii) asbestos containing material present at any Site;
(g) Neither the Sellers in connection with the Business, nor any of
the Limited Companies has any liability or has transported or arranged for the
treatment, storage, handling, disposal or transportation of any Hazardous
Material to or at any location (other than a Site) so as to give rise to any
liability or Environmental Claim against or affecting Purchaser, the Sellers,
any of the Limited Companies, the Business or any of the MSX Assets;
(h) No Site is listed or proposed for listing on the National
Priorities List promulgated pursuant to CERCLA or on any similar state list of
sites requiring investigation or clean-up;
(i) There are no Liens (other than Permitted Liens) arising under or
pursuant to any Environmental Law on any property owned or leased by any of the
Limited Companies or by either of the Sellers and used or held for use in the
Business, and to the knowledge of the Sellers there are no facts or
circumstances requiring the imposition of any Liens, restrictions or other
special conditions with respect to the ownership, occupancy, development, use or
transferability of any Site under any Environmental Law; and
(j) There have been no environmental investigations, studies, audits,
tests, reviews or other analyses conducted by or on behalf of, which are in the
possession of, either Seller or any of the Limited Companies in relation to any
Site which have not been delivered to Purchaser prior to the execution of this
Agreement.
-28-
<PAGE> 36
6.17 Tangible Personal Property. As of the Effective Date, the Sellers
and the Limited Companies have and as of the Closing Date the Sellers and the
Limited Companies will have good and marketable title to, or have or will have
valid leasehold interests in or valid rights under Contract to use, all Tangible
Personal Property reflected on the December 31 Balance Sheet and, subject to the
last sentence of this Section 6.17, Tangible Personal Property acquired since
December 31, 1995 other than property disposed of since such date in the
ordinary course of business consistent with past practice and in accordance with
the terms of this Agreement. Subject to the last sentence of this Section 6.17,
all the Tangible Personal Property is free and clear of all Liens, other than
Permitted Liens and Pre-Existing APX Liens, and is in good working order and
condition, ordinary wear and tear excepted. The representations and warranties
contained in this Section 6.17 relate solely to Tangible Personal Property
comprising the Transferred Assets.
6.18 Labor and Employment Matters. Except as disclosed in Section 6.18
of the Disclosure Schedule, (i) no employee of the Business is represented by a
labor union or is presently a member of a collective bargaining unit, (ii) no
collective bargaining agreement is applicable to any employee of the Business,
(iii) neither of the Sellers has any obligation to recognize or deal with any
labor union or organization with respect to employees of the Business, (iv)
there are no unresolved, pending or, to the knowledge of Sellers, threatened
labor union grievances, unfair labor practice or change labor proceedings with
respect to the Business (v) there is no action, suit, investigation, proceeding
or claim pending, or to the knowledge of the Sellers, threatened against either
of the Sellers with respect to the Business before any Governmental Authority
relating to employment rights, employee compensation, employee benefits, the
denial or termination of any of the foregoing, employment discrimination, equal
employment opportunity or employee health and safety. There are no
organizational efforts, representation campaigns, elections or proceedings,
demands for recognition or collective bargaining, strikes, lock-outs, work
stoppages or slow downs presently being made, undertaken or, to the knowledge of
the Sellers, threatened involving any employees of the Business.
6.19 No Guarantees. None of the Liabilities of the Business or any of
the Limited Companies incurred in connection with the conduct of the Business is
guaranteed by or subject to a similar contingent obligation of any other Person
(other than MascoTech), nor has either of the Sellers or any of the Limited
Companies guaranteed or become subject to a similar contingent obligation in
respect of the Liabilities of any customer, supplier or other Person to whom any
of them sells goods or provides services in the conduct of the Business or with
whom any of them otherwise has significant business relationships in the conduct
of the Business.
6.20 Product Warranties. Section 6.20 of the Disclosure Schedule sets
forth (i) copies of all written warranties, guarantees and written warranty
policies of the Sellers with respect to the Business or the Limited Companies
which are currently in effect or may hereinafter become effective (the "Warranty
Obligations") and the duration of each such Warranty Obligation, (ii) each of
the Warranty Obligations which is subject to any dispute or, to the best of
-29-
<PAGE> 37
the knowledge of the Sellers, threatened dispute and (iii) the experience of the
Sellers and the Limited Companies during the past five years with respect to
warranties, guarantees and warranty policies of or relating to the Business.
There have not been any material deviations from the Warranty Obligations, and
salesmen, employees and agents of the Sellers and the Limited Companies are not
authorized to undertake obligations to any customer or other third parties in
excess of such Warranty Obligations. Except as set forth on Section 6.20 of the
Disclosure Schedule, to the Knowledge of the Sellers, all products manufactured,
designed, licensed, leased, or sold by the Sellers or the Limited Companies or
any predecessor (i) are and were free from defects in construction and design
and (ii) satisfy any and all contract or other specifications related thereto,
in each case, in all material respects.
6.21 Brokers. Each Seller represents and warrants to Purchaser that
the services of a broker, finder or agent have not been used by it in connection
with any of the transactions contemplated by the APX Purchase Agreement or this
Agreement and that no broker's, finder's or financial advisor's fee will become
payable by Purchaser or the Business or the APX Continuing Business by reason of
acts or omissions of the Sellers as a result of the execution of this Agreement
and the APX Purchase Agreement or the consummation of the transactions
contemplated hereby or thereby. Each Seller, jointly and severally, will hold
harmless and indemnify Purchaser and its Affiliates and the officers, directors,
employees and shareholders of the foregoing, excluding MascoTech and MSX, from
and against any claim for broker's, finder's or financial advisor's fees,
including costs or expenses incurred in connection with the defense of any suit
claiming such fees, or in any other manner pertaining to claims for such fees,
which may become payable by reason of the acts or omissions of either Seller.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to each Seller that the
statements contained in this Article VII are and will be true and correct as of
the Effective Date and will be true and correct as of the Closing Date (as
though made then and as though the closing date were substituted for the date of
this Agreement throughout this Article VII, except to the extent that those
statements expressly relate to an earlier time or date, in which case such
statements shall be true and correct as of such earlier time or date), except as
set forth in the Purchaser Disclosure Schedule, which Purchaser Disclosure
Schedule shall be construed in accordance with Section 18.11.
7.01 Organization. Purchaser is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware. Purchaser
has full corporate power and authority to enter into this Agreement and each of
the Operative Agreements, to
-30-
<PAGE> 38
perform its obligations under each such agreement and to consummate the
transactions contemplated by each such agreement.
7.02 Authority. The execution, delivery and performance by Purchaser
of this Agreement and each of the Operative Agreements have been duly and
validly authorized by the Board of Directors of Purchaser, and no other
corporate action on the part of Purchaser or its stockholders is necessary to
authorize the execution, delivery and performance by Purchaser of this Agreement
and each of the Operative Agreements and the consummation by it of the
transactions contemplated by each such agreement. This Agreement and each of the
Operative Agreements has been duly and validly executed and delivered by
Purchaser and constitutes the legal, valid and binding obligation of Purchaser,
enforceable against it in accordance with its terms.
7.03 No Conflicts. The execution and delivery by Purchaser of this
Agreement and each of the Operative Agreements do not, and the performance by
Purchaser of its obligations under each such agreement and the consummation of
the transactions contemplated by each such agreement will not: (i) conflict with
or result in a violation or breach of any of the terms, conditions or provisions
of the charter documents or by-laws of Purchaser; (ii) conflict with or result
in a violation or breach of any term or provision of any Law or Order applicable
to Purchaser or any of its assets or properties; or (iii) (v) conflict with or
result in a violation or breach of, (w) constitute (with or without notice or
lapse of time or both) a default under, (x) result in or give to any Person any
right of payment or reimbursement (except pursuant to this Agreement),
termination, cancellation, modification or acceleration under, (y) result in the
creation or imposition of any Lien upon any assets or properties of Purchaser
under, or (z) otherwise require Purchaser to obtain any consent, approval or
action of, make any filing with or give any notice to any Person as a result or
under the terms of, any Contract or License to which Purchaser is a party or by
which any of its assets and properties is bound.
7.04 Governmental Approvals and Filings. Except as set forth in
Section 7.04 of the Purchaser Disclosure Schedule, no consent, approval or
action of, filing with or notice to any Governmental Authority on the part of
Purchaser is required in connection with the execution, delivery and performance
of this Agreement or any of the Operative Agreements or the consummation of the
transactions contemplated by each such agreement.
7.05 Legal Proceedings. There are no Actions or Proceedings pending
or, to the knowledge of Purchaser, threatened against, relating to or affecting
Purchaser which could reasonably be expected to result in the issuance of an
Order restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any of
the Operative Agreements.
7.06 Brokers. Purchaser represents and warrants to the Sellers that
the services of a broker, finder or agent have not been used by it in connection
with any of the transactions
-31-
<PAGE> 39
contemplated by the APX Purchase Agreement or this Agreement and that no
broker's, finder's or financial advisor's fee will become payable by the Sellers
by reason of acts or omissions of the Purchaser as a result of the execution of
this Agreement or the APX Purchase Agreement or the consummation of the
transactions contemplated hereby or thereby. Purchaser will hold harmless and
indemnify the Sellers and their Affiliates and the officers, directors,
employees and shareholders of the foregoing from and against any claim for
broker's, finder's or financial advisor's fees, including costs or expenses
incurred in connection with the defense of any suit claiming such fees, or in
any other manner pertaining to claims for such fees, which may become payable by
reason of the acts or omissions of Purchaser.
ARTICLE VIII
COVENANTS OF SELLERS
Each Seller hereby covenants with Purchaser that, at all times from
and after the Effective Date until the Closing Date and, with respect to any
covenant by its terms to be performed in whole or in part after the Closing, for
the period specified herein or, if no period is so specified herein,
indefinitely, each Seller shall comply with all the covenants and provisions of
this Article VIII.
8.01 Governmental and Other Approvals. Each Seller will (a) take all
reasonable steps necessary or desirable, and proceed diligently and in good
faith and use its best efforts, as promptly as practicable to obtain all
consents, approvals or actions of, to make all filings with and to give all
notices to Governmental Authorities or any other Person required on the part of
any Seller to consummate the transactions contemplated hereby and by the
Operative Agreements, including without limitation those described in Sections
4.03 and 4.04 of the Disclosure Schedule, (b) provide such other information and
communications to such Governmental Authorities or other Persons as Purchaser or
such Governmental Authorities or other Persons may reasonably request and (c)
cooperate with Purchaser as promptly as practicable in obtaining all consents,
approvals or actions of, making all filings with and giving all notices to
Governmental Authorities or other Persons required on the part of Purchaser to
consummate the transactions contemplated hereby and by the Operative Agreements.
The Sellers will provide prompt notification to Purchaser when any such consent,
approval, action, filing or notice referred to in clause (a) above is obtained,
taken, made or given, as applicable, and will advise Purchaser of any
communications (and, unless precluded by Law, provide copies of any such
communications that are in writing) with any Governmental Authority or other
Person regarding any of the transactions contemplated by this Agreement or any
of the Operative Agreements.
8.02 Access to Information. Each Seller shall (a) provide Purchaser,
any Person who is considering, at the request of Purchaser, providing financing
to Purchaser to
-32-
<PAGE> 40
finance all or any portion of the Purchase Price or the payments contemplated by
Section 3.01(a) (a "Financing Source"), and their respective Representatives
with full access, upon reasonable prior notice and during normal business hours,
to the Sellers' Representatives and to the assets and properties and Books and
Records of Sellers relating to the Business, the APX Continuing Business and the
Transferred Assets, (b) furnish Purchaser, any Financing Source and their
respective Representatives with all such information and data (including without
limitation copies of Contracts, Licenses, Employee Benefit Plans and Books and
Records) concerning the business and the operations of the Sellers relating to
the Business, the APX Continuing Business and the Transferred Assets as
Purchaser or any such Person or Representative reasonably may request in
connection with such investigation, (c) allow Purchaser to engage an
environmental engineer to conduct an environmental investigation of any property
owned, operated or leased by any Seller relating to the Business or the Limited
Companies, including but not limited to, subsurface soil, groundwater, surface
water or air sampling and analysis.
8.03 No Solicitations. Neither Seller shall take (or authorize or
permit any investment banker, financial advisor, attorney, accountant or other
Person retained by or acting for or on behalf of either Seller to take),
directly or indirectly, any action to initiate, assist, solicit, negotiate,
encourage, accept or respond to (other than to reject any such offer) any offer
or inquiry from any Person (a) to engage in any Business Combination with any
Seller relating to the Business, (b) to reach any agreement or understanding
(whether or not such agreement or understanding is absolute, revocable,
contingent or conditional) for, or otherwise attempt to consummate, any Business
Combination with Purchaser or (c) to furnish or cause to be furnished any
information with respect to either Seller, the Business or the APX Continuing
Business to any Person (other than as contemplated by Section 8.02) who either
Seller (or any such Person acting for or on behalf of any of them) knows or has
reason to believe is in the process of considering any Business Combination with
either Seller, in each case as it relates to the Business or the APX Continuing
Business. If either Seller (or any such Person acting for or on behalf of any of
them) receives from any Person (other than Purchaser or any other Person
referred to in Section 8.02) any offer, inquiry or informational request
referred to above, the Sellers, as the case may be, will promptly advise such
Person, by written notice, of the terms of this Section 8.03 and will promptly,
orally and in writing, advise Purchaser of such offer, inquiry or request and
deliver a copy of such notice to Purchaser.
8.04 Conduct of Business. Each Seller shall, and shall cause each of
the Limited Companies and APX-Brazil (following its acquisition by MSX) to,
conduct its Business (including the APX Continuing Business acquired by MSX
contemporaneously herewith pursuant to the APX Purchase Agreement) only in the
ordinary course consistent with past practice, subject to such consolidations
and combinations between the Business and the APX Continuing Business as the
Sellers shall determine are reasonably necessary, practicable, efficient and
economic. Without limiting the generality of the foregoing, and subject to the
foregoing proviso, each Seller shall:
-33-
<PAGE> 41
(a) use its best efforts (in the ordinary course of business
consistent with past practice) to (i) preserve intact the Business and the APX
Continuing Business and their respective organizations and reputations, (ii)
keep available (subject to dismissals and retirements in the ordinary course of
business consistent with past practice) the services of the present officers,
employees and consultants of the Business and the APX Continuing Business, (iii)
maintain the assets and properties of the Business and the APX Continuing
Business in good working order and condition, ordinary wear and tear excepted,
and (iv) maintain the good will of customers, suppliers, lenders and other
Persons with whom the Sellers or its Subsidiaries have significant business
relationships with respect to the Business and with whom the TAD Sellers had
significant business relationships with respect to the APX Business;
(b) except to the extent required by applicable Law or, with respect
to the APX Continuing Business, such changes as are reasonably necessary and
practicable so as to enable the Sellers to conduct such business in a manner
consistent with the current practices of the Business, (i) cause the Books and
Records of the Sellers relating to the Business and of the Limited Companies and
the Books and Records relating to the APX Continuing Business (including
APX-Brazil) to be maintained in the usual, regular and ordinary manner and (ii)
not permit any material change in (x) any pricing, investment, accounting,
financial reporting, inventory, credit, allowance or Tax practice or policy with
respect to the Business or the APX Continuing Business or (y) any method of
calculating any bad debt, contingency or other reserve of the Sellers, any of
the Limited Companies, APX-Brazil, the Business or APX Continuing Business for
accounting, financial reporting or Tax purposes or (z) the fiscal year of the
Sellers, any of the Limited Companies or APX-Brazil; and
(c) comply, in all material respects, with all Laws and Orders
applicable to the Business and the APX Continuing Business and, promptly
following receipt thereof, furnish Purchaser with copies of any notice received
from any Governmental Authority or other Person alleging any material violation
of any such Law or Order.
8.05 Certain Restrictions. Each Seller, solely with respect to the
Business and the APX Continuing Business, will refrain from, without the consent
of the Institutional Stockholder:
(a) permitting any Limited Company or APX-Brazil to amend, modify or
repeal any provision of its charter, articles of incorporation, by-laws and
similar organizational documents;
(b) authorizing, granting, issuing, selling or otherwise disposing of
any shares of the capital stock of any Limited Company or APX-Brazil or any
Option with respect to their respective capital stock, or modifying or amending
any right of any holder of outstanding shares of their respective capital stock;
-34-
<PAGE> 42
(c) declaring, setting aside or paying any dividend or other
distribution in respect of the Limited Stock or the APX-Brazil Stock, or
directly or indirectly redeeming, purchasing or otherwise acquiring any of the
Limited Stock or the APX-Brazil Stock;
(d) permitting any Limited Company or APX-Brazil to enter into any
transaction of merger or consolidation or any sale of all or substantially all
of the assets of any Limited Company or APX-Brazil or causing or permitting (i)
the liquidation, dissolution or reorganization of MSX, any Limited Company or
APX-Brazil or (ii) the liquidation, dissolution or reorganization of MascoTech
which would affect its ability to consummate the transactions contemplated
hereunder;
(e) conveying, selling, transferring or otherwise disposing of any
assets of the Sellers relating to the Business, any of the assets of the APX
Continuing Business or of any Limited Company or APX-Brazil, in each case having
a book value in excess of $350,000, in a single transaction or in a series of
related transactions, to or with any Person; provided, however, that the
foregoing will not prohibit the sale of inventory in the ordinary course of
business;
(f) pledging, mortgaging or otherwise encumbering any of the APX
Assets, the assets of the Sellers relating to the Business or the APX Continuing
Business or of any Limited Company or APX-Brazil, other than purchase money
liens on items the purchase of which is permitted hereunder;
(g) incurring, issuing, assuming or guarantying, or permitting any of
the Limited Companies or APX-Brazil to incur, issue, assume or guaranty, any
material Funded Indebtedness;
(h) entering into, or terminating, or permitting any of the Limited
Companies or APX-Brazil to enter into or terminate, any Material Contract, or
amending, waiving or terminating, or permitting any of the Limited Companies or
APX-Brazil to amend, waive or terminate, any material provision of any Material
Contract other than any such entering into, amendment, waiver or termination
effected in the ordinary course of business;
(i) any acquisition by a Seller relating to the Business or the APX
Continuing Business or by any Limited Company or APX-Brazil of securities or
assets, in a single transaction or a series of related transactions, for
consideration in excess of $150,000;
(j) waiving, terminating, amending, supplementing or modifying in any
respect any of the terms of the APX Purchase Agreement, or any of the
obligations of any Seller, Shareholder or Guarantor thereunder provided that,
after January 31, 1997, no consent of the Institutional Stockholder shall be
required with respect to, and the Sellers shall be permitted to, negotiate and
finalize, the purchase price adjustment described in Sections 2.3 and 2.4 of the
-35-
<PAGE> 43
APX Purchase Agreement so long as such actions by the Sellers are undertaken in
good faith and after consultation with the Institutional Stockholder;
(k) except to the extent contemplated under, and pursuant to, the
terms of this Agreement, adopting, or permitting any Limited Company or
APX-Brazil to adopt, pension plans, profit sharing plans or other benefit plans
for employees and/or officers of the Sellers, in connection with the Business
and the APX Continuing Business, the Limited Companies or APX-Brazil, other than
the adoption or documentation of such plans as are necessary or desirable (i) to
permit MSX to comply with its covenants made in connection with the APX
Acquisition respecting replacement of Employee Benefit Plans in the APX
Continuing Business and (ii) to permit MSX to document its severance practices
with respect to the Business and the APX Continuing Business;
(l) engaging in any practice, taking any action, or entering into any
transaction outside the ordinary course of business consistent with past
practice that would have a Material Adverse Effect or a material adverse effect
on the ability of the Sellers to consummate the transactions contemplated by
this Agreement and the Operative Agreements; and
(m) entering into any agreement, arrangement, commitment or
understanding to do or engage in any of the foregoing.
8.06 Delivery of Books and Records, Removal of Property, Etc.
(a) On the Closing Date, the Sellers shall deliver or make available
to Purchaser at the locations at which the Business and the APX Continuing
Business are conducted all of the Business Books and Records and such other
Assets as are in the possession of any Seller at other locations, and if at any
time after the Closing any Seller discovers in its possession or under its
control any other Business Books and Records or other Assets, it will forthwith
deliver such Business Books and Records or other Assets to Purchaser.
(b) Within 60 days after the Closing Date, the Sellers shall remove
all assets and properties not being sold to Purchaser hereunder from the real
property purchased by Purchaser or subject to the Real Property Leases and the
Improvements. Such removal shall be at the sole cost and risk of the Sellers,
including risk of loss and damage to such assets and properties. Purchaser shall
have no liability to either Seller with respect to such removal. The Sellers
shall be responsible for all repairs to such real property and Improvements due
to damage caused in connection with the removal of such assets and properties.
8.07 Noncompetition. (a) Each Seller will, for a period of five years
from the Closing Date, refrain from, either alone or in conjunction with any
other Person, or directly or indirectly through its present or future
Subsidiaries:
-36-
<PAGE> 44
(i) employing, engaging or seeking to employ or engage any
Person who within the prior twelve months had been an employee of Purchaser or
any of its Affiliates, unless such employee (A) resigns voluntarily (without any
solicitation from any Seller or any of its Affiliates) or (B) is terminated by
Purchaser or any of its Affiliates after the Closing Date;
(ii) causing or attempting to cause (x) any client, customer or
supplier of the Business or Purchaser to terminate or materially reduce its
business with Purchaser or any of its Affiliates or to resign or sever a
relationship with Purchaser or any of its Affiliates;
(iii) disclosing (unless compelled by judicial or administrative
process) or using any confidential or secret information relating to the
Business or Purchaser or any client, customer or supplier of the Business or
Purchaser; or
(iv) participating or engaging in or otherwise lending assistance
(financial or otherwise) to any Person participating or engaged in, on a
contract services basis to third parties in the ordinary course of business, any
of the lines of business which comprised the Business on the Closing Date
worldwide, except the foregoing shall not prevent Sellers from participating or
engaging or otherwise lending assistance (financial or otherwise) to any Person
participating or engaged in (A) any such activities which are incidental to
Sellers' manufacture of product for its customers, or (B) that portion of the
Business which involves working with OEM or other supplier customers to plan,
design, engineer, procure, manufacture, distribute and/or install accessory
related products (with all of the foregoing collectively referred to as "Full
Service Accessories Supply") so long as Sellers' involvement for nine months
after the Closing Date is as an investor in, or supplier to, other companies
(including Purchaser) who are engaged in Full Service Accessories Supply to OEM
customers, and provided further, that the foregoing restriction shall not
prevent Sellers from acquiring or otherwise investing in a company or companies
in which the gross annual sales of any such company attributable to activities
competitive to the Business does not exceed the lesser of (i) 30% of such
company's gross annual sales, and (ii) $30,000,000. In the event that Sellers or
any of their Subsidiaries acquire a business where such 30% or $30,000,000
threshold is exceeded, not later than one year from the date of acquisition,
such Person shall divest itself of that portion of such acquired business in
excess of such threshold percentage or amount.
(b) The parties hereto recognize that the Laws and public policies of
the various states of the United States may differ as to the validity and
enforceability of covenants similar to those set forth in this Section 8.07. It
is the intention of the parties that the provisions of this Section be enforced
to the fullest extent permissible under the Laws and policies of each
jurisdiction in which enforcement may be sought, and that the unenforceability
(or the modification to conform to such Laws or policies) of any provisions of
this Section 8.07 shall not render unenforceable, or impair, the remainder of
the provisions of this Section. Accordingly, if any provision of this Section
8.07 shall be determined to be invalid or unenforceable, such invalidity or
unenforceability shall be deemed to apply only with respect to the operation of
such
-37-
<PAGE> 45
provision in the particular jurisdiction in which such determination is made and
not with respect to any other provision or jurisdiction.
(c) The parties hereto acknowledge and agree that any remedy at Law
for any breach of the provisions of this Section 8.07 would be inadequate, and
each Seller hereby consents to the granting by any court of an injunction or
other equitable relief, without the necessity of actual monetary loss being
proved, in order that the breach or threatened breach of such provisions may be
effectively restrained.
8.08 Notice and Cure. (a) Each Seller will notify Purchaser promptly
in writing of, and contemporaneously will provide Purchaser with true and
correct copies of any and all information or documents relating to, and will use
all commercially reasonable efforts to cure before the Closing Date, any event,
transaction or circumstance occurring on or after the date of this Agreement
that causes or will cause any covenant or agreement to be breached or that
renders or will render untrue any representation or warranty contained in
Article IV as if the same were made on or as of the date of such event,
transaction or circumstance which such breach of covenant or representation
would have a material adverse effect on (i) the ability of any of the Sellers,
the Limited Companies or Purchaser to consummate the transactions contemplated
by this Agreement or the Operative Agreements or (ii) the ability to conduct the
Business or the APX Continuing Business or would have a Material Adverse Effect.
(b) Notwithstanding the foregoing, each Seller will notify Purchaser promptly in
writing of, and will use all commercially reasonable efforts to cure, before the
Closing Date, any violation or breach of any representation, warranty, covenant
or agreement contained in Sections 4.01, 4.02, 5.01, 6.01 or 6.02, as the case
may be, whether occurring or arising before, on or after the date of this
Agreement. No notice given pursuant to this Section 8.08 shall have any effect
on the representations, warranties, covenants or agreements contained in this
Agreement for purposes of determining satisfaction of any condition contained
herein or shall in any way limit Purchaser's or any Person's rights to
indemnification under Article XV.
8.09 FIRPTA Certificate. MSX shall provide to Purchaser at the Closing
a duly executed certificate substantially in the form and to the effect of
Exhibit 8.09 hereto.
8.10 Tax Covenants with Respect to the Interim Period. During the
Interim Period, each Seller shall (a) prepare and file all Tax Returns including
information returns required to be filed by or with respect to the Limited
Companies, the APX Continuing Business, APX-Brazil and the Business which are
required to be filed during the Interim Period, with the appropriate Taxing
Authority, and will correctly and completely reflect any income, franchise or
other Tax liability and all other information required to be reported thereon
for such period, (b) pay all Taxes including any estimated Taxes and withholding
Taxes owed by the Limited Companies, the APX Continuing Business, APX-Brazil and
the Business during the Interim Period (whether or not shown on any Tax Return)
so that no unpaid Tax liability arises or exists with respect to the Limited
Companies, the APX Continuing Business, APX-Brazil or the
-38-
<PAGE> 46
Business that may become chargeable as a lien upon the Limited Companies, the
APX Continuing Business, APX-Brazil, the Business, the Assets or any of the
assets of any of the Limited Companies, the APX Continuing Business, APX-Brazil
or the Business, (c) comply, in good faith, with all Tax laws applicable to the
Limited Companies, the APX Continuing Business, APX-Brazil and the Business
during the Interim Period, (d) not make any election, accounting method change,
enter into any agreement or settlement, or waive any of its rights with respect
to the Taxes of the Limited Companies, the APX Continuing Business, APX-Brazil
or the Business during the Interim Period without first obtaining the written
the consent of the Institutional Stockholder, (e) not take any position with
respect to the Limited Companies, the APX Continuing Business, APX-Brazil or the
Business during the Interim Period that is not in accordance with the past
custom and practice of the Sellers, the Limited Companies, the APX Continuing
Business, APX-Brazil or the Business, and (f) provide written notice to the
Institutional Stockholder if any Taxing Authority or other person asserts a Tax
Claim against the Limited Companies, the APX Continuing Business, APX-Brazil or
the Business during the Interim Period and shall diligently defend or prosecute
such Tax Claim by all appropriate proceedings while consulting with the
Institutional Stockholder regarding such Tax Claim.
8.11 Efforts to Consummate Transaction. Each Seller shall, and shall
cause each of the Limited Companies and APX-Brazil to take all reasonable
action, and do all things reasonably necessary or advisable in order to
consummate the transactions contemplated by this Agreement, the APX Purchase
Agreement and the Operative Agreements.
8.12 Use of MSX International, Inc. Name. MSX shall cause its name to
be changed effective no later than the first Business Day after the Closing.
8.13 Interim Period. Each Seller shall take all action necessary to
ensure the prompt (i) payment of each Permitted Payment, when due and payable,
(ii) collection and appropriate crediting of each Intercompany Credit and (iii)
processing of any claims, and collection of any proceeds, in respect of any
casualty or other loss of any of the MSX Assets under any third-party insurance
policy existing for the benefit of MSX or the MSX Assets. MSX shall also use its
reasonable best efforts to complete the consummation of the transactions
contemplated pursuant to the APX Purchase Agreement.
8.14 Audited Financial Statements. The Sellers shall use commercially
reasonable efforts to cause to be delivered to Purchaser condensed combined
balance sheets and related combined statements of income and cash flows showing
the combined financial condition of the Business (the "Financial Statements") as
of the close of the fiscal years 1994, 1995 and 1996, all audited by Coopers &
Lybrand or other independent public accountants of recognized national standing
acceptable to Purchaser and accompanied by an opinion of such accountants (which
shall not be qualified in any material respect) to the effect that such
Financial Statements fairly present in all material respects the financial
condition and results of operations of the Business on a combined basis in
accordance with GAAP consistently applied. Sellers shall
-39-
<PAGE> 47
deliver the Financial Statements to Purchaser no later than (i) December 31,
1996, in the case of the Financial Statements for the fiscal years ended
December 31, 1994 and 1995, and (ii) February 28, 1997, in the case of the
Financial Statements for the fiscal year ended December 31, 1996.
8.15 Rent. (a) MSX shall pay to Purchaser a fee with respect to the
property located at 255 Rex Boulevard as follows: (i) for the period from the
Closing Date through December 31, 1997, the sum of $27,083 per month, (ii) for
the period from January 1, 1998 through December 31, 1998, the sum of $22,333
per month and (iii) for the period from January 1, 1999 through July 31, 1999,
the sum of $20,750 per month. Such payments shall be made quarterly in arrears.
(b) Prior to January 1, 1997, MSX shall notify Purchaser of the total
square footage that it wishes to utilize at 275 Rex Boulevard, not to exceed
10,000 square feet, during the calendar year 1997, for which it will pay rent at
the rate of $18.50 per square foot. All such rent payments shall be made monthly
in advance.
8.16 APX Purchases. Sellers covenant that any acquisition of the APX
Limited Assets or of the APX-Germany Stock shall be made by one of the Limited
Companies.
ARTICLE IX
COVENANTS OF PURCHASER
Purchaser hereby covenants with the Sellers that, at all times from
and after the Effective Date until the Closing, Purchaser shall comply with all
covenants and provisions of this Article IX, except to the extent that the
Sellers may otherwise consent in writing.
9.01 Governmental and Other Approvals. Purchaser shall (a) take all
reason able steps necessary or desirable, and proceed diligently and in good
faith, as promptly as practicable to obtain all consents, approvals or actions
of, to make or cause to be made all filings with and to give all notices to
Governmental Authorities or any other Person required on its part to consummate
the transactions contemplated hereby, including without limitation those
described in Section 7.04 the Purchaser Disclosure Schedule, (b) provide such
other information and communications to such Governmental Authorities or other
Persons as the Sellers or such Governmental Authorities or other Persons may
reasonably request and (c) cooperate with the Sellers as promptly as practicable
in obtaining all consents, approvals or actions of, making all filings with and
giving all notices to Governmental Authorities or other Persons required on the
part of Purchaser or the Sellers to consummate the transactions contemplated
hereby. Purchaser will provide prompt notification to the Sellers when any such
consent, approval, action, filing or notice referred to in clause (a) above is
obtained, taken, made or given, as applicable, and will
-40-
<PAGE> 48
advise the Sellers of any communications (and, unless precluded by Law, provide
copies of any such communications that are in writing) with any Governmental
Authority or other Person regarding any of the transactions contemplated by this
Agreement.
9.02 Notice and Cure. (a) Purchaser shall notify the Sellers promptly
in writing of, and contemporaneously shall provide the Sellers with true and
correct copies of any and all information or documents relating to, and shall
use all commercially reasonable efforts to cure before the Closing, any event,
transaction or circumstance occurring on or after the date of this Agreement
that causes or will cause any covenant or agreement of Purchaser under this
Agreement to be breached or that renders or will render untrue any
representation or warranty of Purchaser contained in this Agreement as if the
same were made on or as of the date of such event, transaction or circumstance
which such breach of covenant or representation would have a material adverse
effect on (i) the ability of any of the Sellers, the Limited Companies or
Purchaser to consummate the transactions contemplated by this Agreement or the
Operative Agreements or (ii) the ability to conduct the Business or the APX
Continuing Business or would have a Material Adverse Effect. (b) Notwithstanding
the foregoing, Purchaser also shall notify the Sellers promptly in writing of,
and will use all commercially reasonable efforts to cure, before the Closing,
any violation or breach of any representation, warranty, covenant or agreement
made by Purchaser in Sections 7.01 or 7.02 of this Agreement, whether occurring
or arising before, on or after the date of this Agreement. No notice given
pursuant to this Section 9.02 shall have any effect on the representations,
warranties, covenants or agreements contained in this Agreement for purposes of
determining satisfaction of any condition contained herein or shall in any way
limit the Sellers' or any other Person's right to seek indemnity under Article
XV.
9.03 Efforts to Consummate Transactions. Purchaser shall take all
reasonable action and do all things reasonably necessary or advisable in order
to consummate the transactions contemplated by this Agreement and the Operative
Agreements.
ARTICLE X
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser hereunder are subject to the fulfillment,
at or before the Closing, of each of the following conditions (all or any of
which may be waived in whole or in part by Purchaser in its sole discretion):
10.01 Representations and Warranties. Each of the representations and
warranties made by either Seller in Article IV and Sections 6.01, 6.02, 6.06(c)
and 6.08(p) of this Agreement shall be true and correct in all material respects
(if not qualified by materiality) and in all respects (if qualified by
materiality) on and as of the Closing Date as though such
-41-
<PAGE> 49
representation or warranty was made on and as of the Closing Date, and each
other representation or warranty made as of the Effective Date shall have been
true and correct in all material respects on and as of such Effective Date;
provided, however, that the condition set forth in this Section 10.01 shall be
deemed to be satisfied to the extent that the aggregate amount of all Losses
which could reasonably be expected to result from the failure of all such
representations and warranties to be true and correct in all aspects and the
breach of any agreements, covenants and obligations referred to in Section 10.02
would not exceed $15 million.
10.02 Performance. Each Seller shall have performed and complied with,
in all material respects, each agreement, covenant and obligation required by
this Agreement to be so performed or complied with by such Seller, as the case
may be, at or before the Closing; provided, however, that the condition set
forth in this Section 10.02 shall be deemed to be satisfied to the extent that
the aggregate amount of all Losses which could reasonably be expected to result
from the failure to perform all such agreements, covenants and obligations and
the failure of any representations and warranties to be true and correct as
referred to in Section 10.01 would not exceed $15 million.
10.03 Officers' Certificates. Each Seller shall have delivered to
Purchaser a certificate, dated the Closing Date and executed by the Chairman of
the Board, the President or any Vice President of such Seller, substantially in
the form and to the effect of Exhibit 10.03(A) hereto, and a certificate, dated
the Closing Date and executed by the Secretary or any Assistant Secretary of
such Seller, substantially in the form and to the effect of Exhibit 10.03(B)
hereto.
10.04 Orders and Laws. There shall not be in effect on the Closing
Date any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Operative Agreements or which could reasonably be
expected to otherwise result in a material diminution of the benefits of the
transactions contemplated by this Agreement or any of the Operative Agreements
to Purchaser, and there shall not be pending or threatened on the Closing Date
any Action or Proceeding or any other action in, before or by any Governmental
Authority which could reasonably be expected to result in the issuance of any
such Order.
10.05 Governmental Consents and Approvals. All consents, approvals and
actions of, filings with and notices to any Governmental Authority necessary to
permit the parties hereto to perform their respective obligations under this
Agreement and the Operative Agreements and to consummate the transactions
contemplated hereby and thereby (a) shall have been duly obtained, made or
given, (b) shall be in form and substance reasonably satisfactory to Purchaser,
(c) shall not be subject to the satisfaction of any condition that has not been
satisfied or waived or otherwise impose any liabilities or restrictions on
Purchaser and (d) shall be in full force and effect, and all terminations or
expirations of waiting periods imposed by any Governmental Authority necessary
for the consummation of the transactions contemplated by this Agreement and the
Operative Agreements shall have occurred.
-42-
<PAGE> 50
10.06 Third Party Consents. The consents (or in lieu thereof waivers)
listed in Section 10.06 of the Disclosure Schedule (a) shall have been obtained,
(b) shall be in form and substance reasonably satisfactory to Purchaser, (c)
shall not be subject to the satisfaction of any condition that has not been
satisfied or waived or otherwise impose any limitations or restrictions on
Purchaser and (d) shall be in full force and effect.
10.07 Opinion of Counsel. Purchaser shall have received the opinions
of the General Counsel or Associate Corporate Counsel of the Sellers and the
Limited Companies, dated the Closing Date, substantially in the form and to the
effect of Exhibit 10.07 hereto.
10.08 Operative Agreements. All Operative Agreements shall have been
duly executed and delivered by the respective parties thereto other than
Purchaser and shall be in full force and effect. MascoTech shall have assigned
all of its right, title and interest in and to the contracts described in
Section 6.12(x) of the Disclosure Schedule to Purchaser, such assignment to be
in form reasonably satisfactory to Purchaser.
10.09 Resignations. The Sellers shall have delivered to Purchaser duly
signed resignations, effective at the Closing, of each of the officers and
directors of the Limited Companies and APX-Brazil listed in Section 10.09 of the
Disclosure Schedule.
10.10 Capitalization of Purchaser. MascoTech and certain officers of
Purchaser and its Subsidiaries shall have purchased newly issued capital stock
of Purchaser in the amounts described in Exhibit 10.10 hereto.
10.11 Financing. Each of MascoTech, the Institutional Stockholder and
Purchaser shall have entered into the Bridge Credit Agreement substantially in
the form attached hereto as Exhibit 10.08(A).
10.12 Release. MascoTech shall have executed and delivered a Release
in the form of Exhibit 10.12 hereto.
10.13 Discharge of Third Party Indebtedness. The Sellers shall deliver
to Purchaser evidence, reasonably satisfactory to Purchaser, of the complete and
absolute discharge and extinguishment of all Third Party Indebtedness, exclusive
of Assumed Indebtedness.
10.14 Assumed Indebtedness. The Sellers shall have delivered to
Purchaser, in form reasonably satisfactory to it, evidence of the amount of
Assumed Indebtedness.
10.15 Proceedings. All proceedings to be taken on the part of either
Seller in connection with the transactions contemplated by this Agreement and
the Operative Agreements and all documents incident thereto shall be reasonably
satisfactory in form and substance to Purchaser, and Purchaser shall have
received copies of all such documents and other evidences as
-43-
<PAGE> 51
Purchaser may reasonably request in order to establish the consummation of such
transactions and the taking of all proceedings in connection therewith.
ARTICLE XI
CONDITIONS TO OBLIGATIONS OF SELLERS
The obligations hereunder of the Sellers are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by the Sellers, on the other
hand, in their sole discretion):
11.01 Representations and Warranties. Each of the representations and
warranties made by Purchaser in this Agreement shall be true and correct in all
material respects on and as of the Closing Date as though such representation or
warranty was made on and as of the Closing Date.
11.02 Performance. Purchaser shall have performed and complied with,
in all material respects, each agreement, covenant and obligation required by
this Agreement to be so performed or complied with by it at or before the
Closing.
11.03 Officers' Certificates. Purchaser shall have delivered to each
Seller a certificate, dated the Closing Date and executed by the President or
any Vice President of Purchaser, substantially in the form and to the effect of
Exhibit 11.03(A) hereto, and a certificate, dated the Closing Date and executed
by the Secretary or Assistant Secretary of Purchaser, substantially in the form
and to the effect of Exhibit 11.03(B) hereto.
11.04 Orders and Laws. There shall not be in effect on the Closing
Date any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Operative Agreements.
11.05 Governmental Consents and Approvals. All consents, approvals and
actions of, filings with and notices to any Governmental Authority necessary to
permit the parties hereto to perform their respective obligations under this
Agreement and the Operative Agreements and to consummate the transactions
contemplated hereby and thereby (a) shall have been duly obtained, made or
given, (b) shall not be subject to the satisfaction of any condition that has
not been satisfied or waived and (c) shall be in full force and effect, and all
terminations or expirations of waiting periods imposed by any Governmental
Authority necessary for the consummation of the transactions contemplated by
this Agreement and the Operative Agreements shall have occurred.
-44-
<PAGE> 52
11.06 Opinion of Counsel. The Sellers shall have received the opinion
of Morgan, Lewis & Bockius LLP, counsel to Purchaser, dated the Closing Date,
substantially in the form and to the effect of Exhibit 11.06 hereto.
11.07 Capitalization of Purchaser. The Institutional Stockholder shall
have purchased newly issued capital stock of Purchaser in the amounts described
in Exhibit 10.10 hereto.
11.08 Operative Agreements. All Operative Agreements shall have been
duly executed by their respective parties other than the Sellers and their
Subsidiaries and shall be in full force and effect.
11.09 Proceedings. All proceedings to be taken on the part of
Purchaser in connection with the transactions contemplated by this Agreement and
the Operative Documents and all documents incident thereto shall be reasonably
satisfactory in form and substance to the Sellers, and the Sellers shall have
received copies of all such documents and other evidences as the Sellers may
reasonably request in order to establish the consummation of such transactions
and the taking of all proceedings in connection therewith.
ARTICLE XII
TAX MATTERS AND POST-CLOSING TAXES
12.01 Preparation and Filing of Tax Returns. (a) The Sellers shall
file, or cause to be filed, (i) all Tax Returns that include the Limited
Companies or relate to the Business in the Sellers' or their Affiliates' Tax
Returns for all Pre-Closing Periods, (ii) all consolidated or combined Tax
Returns that include the Limited Companies, APX-Brazil, the APX Continuing
Business and the Business for the Interim Period, and (iii) all Tax Returns that
include the Limited Companies, APX-Brazil, or that relate to the APX Continuing
Business or the Business that are required to be filed before the Closing Date.
Purchaser will furnish Tax information to the Sellers, as necessary, for
inclusion in such Tax Returns in accordance with the past custom and practice of
each of the Seller, the Limited Companies, APX-Brazil and the APX Continuing
Business. The Sellers will allow Purchaser and the Institutional Stockholder an
opportunity to review and comment upon such Tax Returns (including any amended
Tax Returns) to the extent that they relate to any of the Limited Companies,
APX-Brazil, the APX Continuing Business or the Business, but the Sellers shall
have ultimate control with respect to all Tax Returns that they are required to
file. Each of the Limited Companies, APX-Brazil and the APX Continuing Business
shall retain all books and records related to Taxes for the period up to and
including the Closing Date until the expiration of all applicable statutes of
limitations. Prior to discarding any such books and records they shall give the
Sellers the opportunity to obtain such records. Purchaser shall provide the
Sellers with access to all books and records of, the Limited
-45-
<PAGE> 53
Companies, APX-Brazil and the APX Continuing Business as the Sellers may
reasonably request in connection with their filing of any Tax Returns or in
connection with any audit, dispute or controversies with any Taxing Authority.
Purchaser, the Limited Companies, APX-Brazil and the APX Continuing Business
shall furnish such information to the Sellers on a timely basis so as to permit
the Sellers to file such Tax Returns on a timely basis in accordance with the
past custom and practice of the Sellers, each of the Limited Companies,
APX-Brazil and the APX Continuing Business.
(b) Purchaser shall file or cause to be filed all Tax Returns of, or
that include, any of the Limited Companies, APX-Brazil and the APX Continuing
Business for all taxable periods ending after the Effective Date to the extent
that any of the Limited Companies, APX-Brazil or the APX Continuing Business are
not part of a consolidated or combined Tax Return group that are required to be
filed after the Closing Date. Purchaser shall file or cause to be filed all Tax
Returns that include the Business for all taxable periods ending after the
Effective Date that are required to be filed after the Closing Date.
(c) With respect to any Straddle Period Return of any of the Limited
Companies, APX-Brazil, the APX Continuing Business or the Business which is
required to be filed after the Closing Date, Purchaser shall deliver a copy of
such Tax Return to the Sellers at least 45 calendar days prior to the due date
therefor (giving effect to any extension thereof) or within five (5) days after
the Closing Date (if later), accompanied by an allocation between the
Pre-Closing Period and the Post-Closing Period for any Taxes with respect to the
Business, or any of the Limited Companies, APX-Brazil or the APX Continuing
Business shown to be due on such Straddle Period Returns. Such Tax Returns and
allocation shall be final and binding on the Sellers, unless, within 20 calendar
days after the date of receipt by the Sellers of such Tax Return and allocation,
the Sellers delivers to Purchaser a written request for changes to such Tax
Return or allocation.
(d) In the case of each Straddle Period Return, not later than (i)
seven calendar days before the due date (including any extension thereof) for
payment of Taxes with respect to such Tax Return or (ii) in the event of a
dispute, seven calendar days after the resolution thereof either by mutual
agreement of the parties or by a determination of an independent accounting firm
reasonably satisfactory to the Sellers and Purchaser, the Sellers shall pay to
Purchaser the portion of the Taxes set forth on such Tax Return with respect to
the Business, any of the Limited Companies, APX-Brazil and the APX Continuing
Business that are allocable to the Pre-Closing Period, after giving effect to
any agreement of the parties or any determination by an independent accounting
firm, net of any payments of estimated taxes that are due and actually paid
prior to the Effective Date in respect of such Taxes or, with respect to the
Limited Companies, to the extent that it is reflected as an accrual on the
Effective Date Balance Sheet.
12.02 Allocation of Tax Liability. (a) From and after the Closing
Date, the Sellers shall pay or cause to be paid, and shall jointly and severally
indemnify Purchaser, each of
-46-
<PAGE> 54
the Limited Companies, APX-Brazil, the APX Continuing Business and each of their
Affiliates (each a "Tax Indemnitee") and agree to protect, save and hold each
Tax Indemnitee harmless from and against, on a Grossed-Up Basis, the following
liabilities suffered by any of the Tax Indemnitees:
(i) any liability of a Tax Indemnitee for any Tax imposed upon
(1) any Seller Party for any period or (2) any Third Party for any Pre-Closing
Period, in each case for which any of the Tax Indemnitees may be liable, (x)
under Section 1.1502-6 of the Treasury regulations (or any similar provision of
state, local or foreign law), (y) as a transferee or successor or (z) by
contract;
(ii) any Income Tax, Sales Tax or, with respect to the Limited
Companies, Employment Tax of a Tax Indemnitee (other than those Taxes described
in (i) above) imposed upon or relating to the Business, the MSX Assets or any of
the Limited Companies for a Pre-Closing Period;
(iii) any Income Tax or Sales Tax of a Tax Indemnitee imposed upon
or relating to the Business or the APX Continuing Business (other than the
Limited Companies or APX-Brazil) for the Interim Period; and
(iv) any Income Tax, Sales Tax or, with respect to the Limited
Companies, Employment Tax of a Tax Indemnitee arising from a breach of a
representation or warranty set out in Section 6.08 (g), (j), (l), (m), (o) and
(p) of this Agreement or a breach of a covenant set forth in Section 8.10 of
this Agreement regardless of whether a notice disclosing such breach was
delivered pursuant to Section 8.08 or set forth in Section 6.08 of the
Disclosure Schedule except for the disclosures in Sections 6.08(m) and (o) of
the Disclosure Schedule);
Notwithstanding the foregoing, the Sellers shall not be obligated to
indemnify for any Tax (A) imposed on any Third Party unless any of the Limited
Companies is liable for such Tax as a result of its entering into an arrangement
or agreement with the Third Party during any Pre-Closing Period and (B) with
respect to the Limited Companies to the extent that it is reflected as an
accrual on the Effective Date Balance Sheet.
(b) Subject to Section 12.01 above, the income of the Limited
Companies, APX-Brazil, the APX Continuing Business or the Business in a taxable
period of Purchaser will be apportioned (i) between the Pre-Closing Period and
the Post-Closing Period by closing the books as of the Effective Date and (ii)
between the period prior to the Closing Date and the period after the Closing by
closing the books as of the Closing Date.
(c) In the case of (i) franchise Taxes based on capitalization, debt
or shares of stock authorized, issued or outstanding and (ii) ad valorem Taxes,
in either case attributable to any taxable period that includes but does not end
on the Effective Date or the Closing Date, as
-47-
<PAGE> 55
the case may be, the portion of such Taxes attributable to the Pre-Closing
Period or the period ending on or prior to the Closing Date, shall be the amount
of such Taxes for the entire taxable period, multiplied by a fraction the
numerator of which is the number of days in such taxable period ending on and
including the Effective Date or the Closing Date, as the case may be, and
denominator of which is the entire number of days in such taxable period;
provided, however, that if any property, asset or other right of the Sellers,
any of the Limited Companies, APX-Brazil or the APX Continuing Business is sold
or otherwise transferred prior to the Closing Date, then ad valorem Taxes
pertaining to such property, asset or other right shall be attributable entirely
to the Pre-Closing Period; provided, further, that if any property, asset or
other right is acquired by any of the Sellers, any of the Limited Companies,
APX-Brazil or the APX Continuing Business after the Closing, then ad valorem
Taxes pertaining to such property, asset or other right shall be attributable
entirely to the Post-Closing Period.
Except as otherwise provided in Section 12.04 below, payment in full
of any amount due from any party under this Section 12.02 shall be made in
immediately available funds the later of (x) five Business Days before the date
payment of the Taxes to which such payment relates is due or (y) fifteen
Business Days after the date on which demand for payment has been delivered to
the Sellers.
12.03 Indemnity for Loss of Section 197 Deductions. Notwithstanding
anything in this Article XII to the contrary, from and after the Closing Date,
Sellers shall be obligated to make payments to each Tax Indemnitee for any Tax,
including penalties thereon arising as a result of Purchaser's inability to
claim amortization deductions with respect to any or all of the intangible MSX
Assets other than the Limited Stock to be acquired by Purchaser hereunder (the
"Amortization Deductions") in an amount at least equal to the excess of (A)
two-thirds of the Purchase Price allocable to the Business and the Limited
Stock, taking into account any adjustments made pursuant to Section 3.01(b)
which relate to the Business or the Limited Stock over (B) the book value of the
MSX Assets (other than the Limited Companies or any asset classified as an
intangible asset for federal Income Tax purposes) over the Assumed Liabilities
relating to the MSX Assets (other than the Limited Companies). With regard to an
indemnification payment for a Tax resulting from a loss of an Amortization
Deduction where such Amortization Deduction has not resulted in a tax deduction
(regardless of whether such deduction resulted in a tax benefit) to the Tax
Indemnitee (either because such Amortization Deduction has not been claimed for
a past, current or future period or because of the availability of other losses
or deductions for the period in which it was claimed), the amount of any payment
pursuant to this Section 12.03 shall be calculated by (A) multiplying the
Amortization Deduction by the maximum federal and state tax rate net of federal
tax benefit in effect on the Closing Date and (B) taking the present value of
such amount to the Closing Date using a discount rate equal to 9%, and adding to
such product interest at the rate of 9% per annum to the date of payment (such
interest being referred to as "Section 12.03 Interest"). Notwithstanding the
foregoing, Sellers shall not be obligated to indemnify for any Tax, interest,
penalties or Section 12.03 Interest resulting from a loss of Amortization
Deductions as set forth under this Section 12.03
-48-
<PAGE> 56
unless and until Purchaser is not able to or reasonably believes that it is not
able to claim the Amortization Deductions by reason of (x) the promulgation of
Treasury regulations (whether temporary, proposed or final) under Section 197 of
the Code or a published or private ruling or other administrative pronouncement
after the date of this Agreement, (y) the determination, whether proposed or
final, by the Internal Revenue Service that all or a portion of the Amortization
Deductions are disallowed, or (z) a judicial determination that all or a portion
of the Amortization Deductions are disallowed, and provided further that the
amount of such indemnification payment attributable to Taxes (other than
penalties and Section 12.03 Interest) shall not exceed $3,500,000. If a payment
has been made by Sellers to a Tax Indemnitee under this Section 12.03 and the
Tax Indemnitee becomes able to claim all or any portion of such Amortization
Deduction, the Tax Indemnitee shall return the portion of such payment
attributable to such Amortization Deduction, with interest at the rate of 9% per
annum, to Sellers.
12.04 Tax Contests. (a) If any Taxing Authority asserts a Tax Claim
relating to any Pre-Closing Period, then the party (including any Subsidiary of
such party) receiving any notice related to such Tax Claim shall promptly
provide written notice thereof to the other party or parties hereto.
(b) The Sellers shall have the sole right to diligently defend or
prosecute, at their sole expense, such Tax Claim; provided that (i) the Sellers
are obligated (either by the Sellers' written acknowledgment or by determination
as described below) to indemnify Purchaser for such Tax Claim under this Article
XII, (ii) the Sellers shall not, without the prior written consent of Purchaser
(which consent shall not be unreasonably withheld), enter into any compromise or
settlement of such Tax Claim that would result in any Tax detriment to any Tax
Indemnitee for any Post-Closing Period unless such position is consistent with
positions previously taken by the Limited Companies, APX-Brazil or the APX
Continuing Business, and (iii) if a Tax Indemnitee is requested by the Sellers
to pay or cause to be paid the Tax claimed and to sue for a refund, then the
Sellers shall advance to the Tax Indemnitee, on an interest-free basis and a
Grossed-Up Basis, the amount of the Tax claimed. The Sellers shall keep
Purchaser, the Limited Companies, APX-Brazil and the APX Continuing Business
informed of any developments and events relating to such Tax Claim (including
providing Purchaser, the Limited Companies, APX-Brazil and the APX Continuing
Business with copies of all written materials relating to such Tax Claim), and
Purchaser, the Limited Companies, APX-Brazil and the APX Continuing Business
shall be entitled, at its own expense, to attend, but not participate in or
control, all conferences, meetings and proceedings relating to such Tax Claim.
Purchaser, the Limited Companies, APX-Brazil or the APX Continuing Business
agrees that it will cooperate with the Sellers and their counsel in the defense
or prosecution of any such Tax Claim to the extent reasonably requested by the
Sellers in writing. If the Sellers contest their indemnification obligations
with respect to any Tax Claim under this Article XII, the Sellers and Purchaser
shall undertake in good faith to resolve this issue. If the Sellers and
Purchaser are unable to resolve the issue within 10 days, the Sellers and
Purchaser shall engage jointly an independent nationally recognized law firm to
determine whether the Sellers' indemnification obligations under this Article
XII encompass
-49-
<PAGE> 57
such Tax Claim. The determination of such law firm shall be final and binding on
the parties solely for purposes of determining whether the Sellers shall have
the right to defend or prosecute a Tax Claim; provided, however, that if the
party against whom the determination is made does not offer the other party the
opportunity to control the defense or prosecution of such Tax Claim, the
determination shall be final and binding on such party. The fees and other costs
charged by such law firm in making such determination shall be paid by the party
against whom the determination is made.
(c) The Sellers and Purchaser jointly shall defend or prosecute any
Tax Claim relating to any taxable period which includes (but does not end on)
the Effective Date, with control of the defense or prosecution being undertaken
by the party with the greatest amount in interest based upon the amount of Taxes
asserted in such Tax Claim. All costs, fees and expenses paid to Third Parties
in the course of the defense or prosecution of such Tax Claim shall be borne by
the Sellers and Purchaser in the same ratio as the ratio in which, pursuant to
the terms of this Agreement, the Sellers and Purchaser would share the
responsibility for payment of such Taxes.
12.05 Cooperation. Each party hereto shall, and shall cause its
Subsidiaries and Affiliates (determined assuming that the Sellers are not
Affiliates of Purchaser following the Closing) to, provide to each of the other
parties such cooperation and information as any such party reasonably may
request in filing any Tax Return, amended Tax Return or claim for refund,
determining a liability for Taxes or a right to refund of Taxes or conducting
any audit or other proceeding in respect of Taxes. Such cooperation and
information shall include providing copies of all relevant portions of relevant
Tax Returns (together with relevant accompanying schedules and relevant
workpapers, relevant documents relating to rulings or other determinations by
Taxing Authorities and relevant records concerning the ownership and Tax basis
of property, in each case which any such party, Subsidiary or Affiliate may
possess). Each party shall, and shall cause its Subsidiaries and Affiliates
(determined as provided above) to, make its employees reasonably available on a
mutually convenient basis at its cost to provide explanation of any documents or
information so provided. Subject to the preceding sentence, each party required
to file (or cause the filing of) Tax Returns pursuant to this Article XII shall
bear all costs of filing such Tax Returns.
12.06 Payments of Transfer Taxes and Fees. The Sellers shall pay all
Transfer Taxes arising out of or payable in connection with the transactions
contemplated by this Agreement and the APX Acquisition, and shall file all
necessary documentation and Tax Returns with respect to such Transfer Taxes. The
Purchaser shall promptly, upon receipt of written request therefor, reimburse
the Sellers for (a) 50% of all amounts paid pursuant to the preceding sentence
that are attributable to payments under this Agreement with respect to the
transfers relating to the Business contemplated by this Agreement and (b) 100%
of all amounts paid pursuant to the preceding sentence that are attributable to
transfers relating to the APX Continuing Business contemplated by this
Agreement.
-50-
<PAGE> 58
12.07 Miscellaneous. If a party to this Agreement takes any action
which constitutes a breach of this Article XII, such party shall indemnify the
other party, on a Grossed-Up Basis, for any incremental liability for Tax
suffered by such other party (which (i) in the case of the Sellers, shall
include its Affiliates (determined assuming that none of Purchaser, the Limited
Companies, APX-Brazil or the APX Continuing Business is an Affiliate of the
Sellers following the Closing) and (ii) in the case of Purchaser, shall include
Tax Indemnitees) arising from such action.
12.08 Conflict. In the event of a conflict between the provisions of
this Article XII and any other provision of this Agreement, the provisions of
this Article XII shall control. Without limiting the generality of the
foregoing, the indemnification obligations of the parties under this Article XII
shall not be subject to (i) the limitations (including time and amount
limitations) set forth in Section 14.01, Section 15.01 (other than with respect
to an indemnity for Sales Taxes or, with respect to the Limited Companies,
Employment Taxes that are subject to the basket limitation of Section
15.01(a)(i)) and Section 15.02 below or (ii) the procedures relating to Third
Party Claims set forth in Section 15.02 below.
12.09 Survival. All rights, obligations and covenants under this
Article XII, and the representations and warranties contained in Section
6.08(g), (j), (l), (m), (o), and (p) and Section 8.10 above (but in each case
only to the extent such representations and warranties relate to Income Tax,
Sales Tax and, with respect to the Limited Companies, Employment Tax), shall
survive the Closing and continue indefinitely (subject to any applicable
statutes of limitations, but without regard to any extension or waiver if the
applicable statutory period of limitations granted without the consent of the
Sellers, which consent shall not be unreasonably withheld, by Purchaser, any of
the Limited Companies, APX-Brazil or the APX Continuing Business after the
Closing; provided that the Sellers' consent shall not be required for a valid
extension or waiver if the Sellers had an opportunity to contest but did not
contest).
ARTICLE XIII
EMPLOYEE BENEFITS MATTERS
13.01 Hiring of Employees.
(a) Purchaser shall offer employment to United States employees of the
Sellers actively engaged in the Business and the APX Continuing Business as of
the Closing, and, subject to the provisions of this Article XIII, may hire such
employees on such terms and conditions as shall be mutually agreeable to
Purchaser and such employees. All such employees who accept employment with
Purchaser are hereinafter referred to as the "Transferred Employees."
-51-
<PAGE> 59
(b) The Sellers shall comply with the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. Section 2101, et seq., ("WARN") and any applicable
similar plant closing law of any state including the provision of notices
required thereunder, and, jointly and severally, shall indemnify, hold harmless
and, at the option of Purchaser, defend Purchaser from and against any and all
liabilities, obligations and costs, including reasonable attorneys' fees,
arising out of or resulting from any failure by the Sellers to serve notice or
to otherwise comply with WARN or such applicable state law.
13.02 Cessation of Participation; Compliance. Except as otherwise
provided in this Article XIII, effective as of the Closing, the Sellers shall
take all such actions as may be necessary to cause all Transferred Employees to
cease to participate in all Employee Benefit Plans and Employee Benefit
Arrangements maintained or contributed to by the Sellers, and Purchaser shall
have no obligations, and shall be indemnified by Sellers for any liability,
thereunder or with respect thereto. The Sellers shall at all times during the
Interim Period operate and administer each Employee Benefit Plan disclosed on
Section 6.09(a) of the Disclosure Schedule and each Employee Benefit Arrangement
disclosed on Section 6.09(f) of the Disclosure Schedule and each Foreign Benefit
Plan disclosed on Section 6.09(g) of the Disclosure Schedule in compliance with
all its terms all applicable law, including ERISA and the Code.
13.03 401(k) Plans.
(a) Effective as of the Closing Date, the Sellers' Boards of Directors
shall vote to terminate the Sellers' sponsorship of the MSX International, Inc.
401(K) Plan (the "Assumed 401(k) Plan"), and Purchaser's Board of Directors
shall vote to have the Purchaser assume sponsorship of, and all liabilities
pertaining to, the Assumed 401(k) Plan. Effective as of the Closing Date, the
Sellers shall assign to Purchaser their rights under the trust agreement for the
Assumed 401(k) Plan.
(b) The Sellers shall direct the trustee(s) of each of the MascoTech,
Inc. Salaried Savings Plan and the MascoTech, Inc. Hourly Savings Plan (the
"Seller 401(k) Plans") to segregate the portion of each investment fund
thereunder attributable to the aggregate individual account balances (including
outstanding participant loans) of Interim Employees (to the extent not
distributed prior to the Closing) Transferred Employees (whether or not vested),
and to transfer in cash or in kind, as determined by Purchaser, such segregated
portion of each investment fund to the Assumed 401(k) Plan. The transfer shall
be effected as soon as is practicable after the Closing Date, and individual
account balances shall be determined as of the valuation date coincident with
the date of such transfer.
(c) The Sellers shall at all times during the Interim Period operate
and administer the Assumed 401(k) Plan in compliance with all applicable law,
including ERISA and the Code.
-52-
<PAGE> 60
13.04 Defined Benefit Plan. Effective as of the Closing Date, the MSX
Board of Directors shall vote to terminate the Seller's sponsorship of the
Autodynamics Corporation of America Employees' Pension Plan (the "Assumed
Pension Plan"), and Purchaser's Board of Directors shall vote to have the
Purchaser assume sponsorship of, and all liabilities pertaining to, the Assumed
Pension Plan. Effective as of the Closing Date, the Sellers shall assign to
Purchaser their rights under the trust agreement for the Assumed Pension Plan.
The Sellers shall at all times during the Interim Period operate and administer
the Assumed Pension Plan in compliance with all applicable law, including ERISA
and the Code.
13.05 Multiemployer Plan. This Section 13.05 applies to the IAM and
Aerospace Workers, Warren Local Lodge PM 2848 Multiemployer Pension Plan, which
shall be referred to in this Section 13.05 as the "Plan." It is intended that
the purchase of the Business and the APX Continuing Business under this
Agreement will not result in a complete or partial withdrawal from the Plan.
This Section 13.05 is intended to meet the applicable requirements of Section
4204 of ERISA, and shall be construed accordingly. Accordingly, Purchaser and
the Sellers agree as follows:
(a) Purchaser shall assume an obligation to contribute to the Plan
with respect to the Business and the APX Continuing Business for substantially
the same number of contribution base units (as defined by the Plan) for which
the Sellers had an obligation to contribute to the Plan with respect to the
Business and the APX Continuing Business as of the day before the Closing Date.
(b) Prior to the first day of the first Plan year commencing after the
Closing Date, Purchaser and the Sellers shall jointly apply to the Plan for a
variance from the requirement of Section 4204(a)(1)(B) of ERISA, that a bond be
obtained or an amount be held in escrow as provided in said Section. In the
event that the Plan determines that the request does not qualify for such
variance, Sellers shall arrange for, and Purchaser shall pay for and obtain any
required bond or establish any required escrow within 30 days after the date on
which the Sellers or Purchaser receive notice of the Plan's decision, and shall
maintain such bond or escrow through the earliest of:
(i) the date a variance is obtained from the Plan;
(ii) the date a variance or exemption is obtained from the
Pension Benefit Guaranty Corporation; or
(iii) the last day of the fifth Plan year immediately following
the Closing Date;
which bond or escrow shall be paid to the Plan if Purchaser withdraws therefrom
or fails to make a contribution to the Plan when due, at any time during the
first five Plan years immediately
-53-
<PAGE> 61
following the Closing Date. Sellers agree to prepare any required application
for variance and Purchaser agrees to pay the cost of any required bond or escrow
under the foregoing provisions (unless such bond or escrow is required because
of the failure of the Sellers to cooperate with the joint application for a
variance).
(c) If Purchaser withdraws from the Plan in a complete withdrawal, or
a partial withdrawal with respect to the Business or the APX Continuing
Business, on or before the last day of the fifth Plan year immediately following
the Closing Date, the Sellers shall be secondarily liable for any withdrawal
liability they would have had to the Plan with respect to the Business or the
APX Continuing Business (but for the provisions of Section 4204 of ERISA) if the
liability of Purchaser with respect to the Plan is not paid.
(d) In the event of any withdrawal by Purchaser during the five Plan
years immediately following the Closing Date, or in the event of any breach by
Purchaser of its commitments under paragraphs 13.05(a) or (b) above, Purchaser
shall indemnify the Sellers for any withdrawal liability, whether complete or
partial (including all reasonable accounting, actuarial, and legal expenses
incident thereto), assessed against the Sellers on account of the Business or
the APX Continuing Business, including without limitation any withdrawal
liability assessed against the Sellers pursuant to Section 13.05(c) above. The
Sellers shall indemnify Purchaser for any withdrawal liability, whether complete
or partial (including all reasonable accounting, actuarial, and legal expenses
incident thereto), assessed against Purchaser as a result of any failure by the
Sellers to comply with the obligations imposed on the Sellers by Section 4204(a)
of ERISA.
(e) Purchaser shall assume Sellers' obligation, if any, to make any
payment in respect of any liability assessed against Robert Udell in the matter
of Corbin v. Blankenburg, No. 91-CV-72595-DT attributable to his service as a
trustee of the Plan.
(f) Purchaser shall assume Sellers' liability, if any, to make any
unreimbursed or unindemnified payment of withdrawal liability to the Plan
arising out of the APX Acquisition.
13.06 Other Benefits. Purchaser shall assume the Sellers' obligations,
if any, with respect to the following:
(a) claims by Interim Employees (to the extent not reflected as a
Permitted Payment in the determination of Interim Period Cash Flow) and
Transferred Employees that are reported after the Closing Date but incurred
prior to the Closing Date and properly payable under the Sellers' group medical
plans;
(b) the provision of continuation health coverage as required under
Part 6 of Subtitle B of Title I of ERISA or Section 4980B of the Code with
respect to any former employee of the Business or the APX Continuing Business
(or any of their dependents);
-54-
<PAGE> 62
(c) the provision of health benefits to 17 employees (and their
eligible dependents) who retired prior to the Closing Date as described in
Coopers & Lybrand's actuarial report dated June 19, 1996;
(d) to pay or provide accrued but unused vacation to Interim Employees
(to the extent not reflected as a Permitted Payment in the determination of
Interim Period Cash Flow) and Transferred Employees;
(e) the provision of severance benefits to Interim Employees (to the
extent not reflected as a Permitted Payment in the determination of Interim
Period Cash Flow) and Transferred Employees (other than such benefits, if any,
that become payable solely by reason of consummation of the transactions
contemplated by this Agreement); and
(f) the payment of compensation deferred or credited prior to the
Closing Date with respect to Interim Employees (to the extent not reflected as a
Permitted Payment in the determination of Interim Period Cash Flow) and
Transferred Employees pursuant to the First Amended and Restated Creative
Industries Group, Inc. Deferred Compensation Plan, provided, however, that
effective as of the Closing Date, the Sellers shall assign to Purchaser their
rights under the "rabbi" trust agreement for such plan with respect to such
employees.
(g) Service Credit, etc.. Periods of service prior to the Closing
shall be credited for purposes of determining eligibility, vesting and benefit
entitlement under all benefit plans, programs and policies maintained by
Purchaser after the Closing, and amounts credited prior to the Closing under
flexible spending accounts and for purposes of determining health plan
deductibles and copayments under provisions of Sellers' plans, programs and
policies shall be credited after the Closing under corresponding provisions of
the Purchaser's plans, programs and policies.
13.07 No Employee Rights. Nothing in this Article XIII express or
implied shall confer upon any Interim Employee, Transferred Employee, dependent
or beneficiary or other employee or legal representative thereof any rights or
remedies, including any right to employment, continued employment for any
specified period, or compensation or benefits of any nature or kind whatsoever
under or by reason of this Agreement.
13.08 Right to Terminate or Modify Plans. Nothing in this Article XIII
express or implied shall be construed to prevent Purchaser from terminating or
modifying to any extent or in any respect any benefit plan that Purchaser may
assume, establish or maintain pursuant to this Agreement or otherwise.
ARTICLE XIV
-55-
<PAGE> 63
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
14.01 Survival of Representations and Warranties.
All of the representations and warranties of the Sellers contained in
Article IV and Sections 5.01(a), 6.01 and 6.02 and the representations and
warranties contained in Section 6.09 (but only to the extent that they relate to
liabilities due to the PBGC, the U.S. Internal Revenue Service or the U.S.
Department of Labor) shall survive the Closing and continue in full force and
effect forever thereafter (subject to any applicable statutes of limitations).
The representations and warranties of the Sellers contained in Section 6.08 and
Section 6.09 (except to the extent that the survival of such representations and
warranties in Section 6.09 is governed by the first sentence of this Section
14.01) shall survive the Closing and continue in full force and effect until the
third anniversary of the Closing Date. The representations and warranties of the
Sellers contained in Sections 6.05 and 6.16 shall survive the Closing and
continue in full force and effect until the seventh anniversary of the Closing
Date and the sixth anniversary of the Closing Date, respectively. Subject to
Section 12.09, the representations and warranties of the Sellers contained in
Section 6.08, to the extent that such representations and warranties relate to
Income Taxes, Sales Taxes, and, with respect to the Limited Companies,
Employment Taxes, shall not survive the Closing and, from and after the Closing,
shall be of no further force or effect. All of the other representations and
warranties of the Sellers contained in Article VI shall survive the Closing and
continue in full force and effect until the second anniversary of the Closing
Date. Notwithstanding the foregoing, if Purchaser sells a majority of the
capital stock of any of the Limited Companies or APX-Brazil, or if Purchaser or
any of the Limited Companies or APX-Brazil sells substantially all of its assets
during any applicable survival period to any third party (other than any
Affiliate of Purchaser), regardless of how such sale is structured (including
any such sale structured as a merger, consolidation, reorganization, exchange,
or issuance of capital stock), then all of the representations and warranties of
the Sellers contained in Article VI, insofar as such representations and
warranties relate to the entity or assets sold, shall expire on the earlier of
(i) the date such representations and warranties would otherwise expire in
accordance with the preceding sentences of this Section 14.01 or (ii) the third
anniversary of the Closing Date, it being understood that if such sale or
transaction takes place after the third anniversary of the Closing Date, such
representations and warranties which have not theretofore expired shall expire
immediately prior to the consummation of such sale or other transaction;
provided that this sentence shall not apply to any claim (x) resulting from a
breach of the representations and warranties of the Sellers contained in
Sections 6.01, 6.02 and 6.09 (but, in the case of the representations and
warranties contained in Section 6.09, only to the extent that they relate to
liabilities due to the PBGC, the U.S. Internal Revenue Service or the U.S.
Department of Labor) or (y) by a third party (other than a third party
purchasing all or a portion of such stock or assets or any Affiliate of such
third party) against any of the Indemnified Purchaser Parties, except to the
extent such claim relates to or arises from the offering or sale of such stock
or assets.
-56-
<PAGE> 64
All of the representations and warranties of Purchaser contained in
Article VII shall survive the Closing and continue in full force and effect
forever thereafter (subject to any applicable statutes of limitations).
Notwithstanding the foregoing, any representation or warranty shall
survive the time at which it would otherwise expire in accordance with this
Section 14.01 to the extent that Purchaser or the Sellers, as the case may be,
makes a written claim for indemnification for breach of that representation or
warranty (setting forth in reasonable detail the factual and contractual bases
upon which such Party is entitled to indemnification under this Agreement) prior
to the time at which that representation or warranty would otherwise expire.
Except as set forth in this Section 14.01 or in Article XVI, the
provisions of this Agreement shall survive the Closing and shall continue
indefinitely.
ARTICLE XV
INDEMNIFICATION
15.01 Indemnification Provisions for Benefit of Purchaser.
(a) The Sellers jointly and severally shall indemnify and hold
harmless, on a Grossed-up Basis, Purchaser and its Affiliates from and against
any Adverse Consequences that any of Purchaser and its Affiliates (determined,
in each case, assuming that neither of the Sellers is an Affiliate of Purchaser
following the Closing, but including the Limited Companies and APX-Brazil) and
their respective officers, employees, directors, stockholders, agents and
representatives (collectively, the "Indemnified Purchaser Parties") shall suffer
or incur to the extent resulting from, arising out of or relating to: (x) any
breach by the Sellers of any of their representations, warranties or covenants
contained herein, other than any representations and warranties contained in
Section 6.08 to the extent related to Income Taxes, Sales Taxes, and, with
respect to the Limited Companies, Employment Taxes (which are governed by
Article XII) or to the extent any breach thereof results in any liability
related to any other Tax arising in the Post-Closing Period, (y) any Retained
Liability, (z) any of the Non-Core Businesses described in Section 6.05 of the
Disclosure Schedule, and (zz) one-half of the Losses incurred by Purchaser
relating to claims arising out of the facts and circumstances giving rise to the
litigation captioned Auto/Video, Inc. v. Chrysler Motors Corporation and
Creative Industries Group, Inc.; provided, however, that with respect to
breaches of the representations and warranties contained in Article VI or the
indemnification obligations of the Sellers pursuant to Section 12.02 to the
extent such indemnification relates to Sales Taxes and, with respect to the
Limited Companies, Employment Taxes:
-57-
<PAGE> 65
(i) The Sellers shall not be obligated to make payments to the
Indemnified Purchaser Parties for the first $1 million of Adverse Consequences
resulting from such breaches of representations and warranties or from their
obligations to indemnify Purchaser pursuant to Section 12.02 to the extent such
indemnity relates to Sales Taxes and, with respect to the Limited Companies,
Employment Taxes, it being understood that the $1 million limitation will not
apply to breaches of the representations and warranties in Sections 6.01, 6.02,
6.05, 6.09 and 6.21 (but, with respect to Section 6.09, only to the extent that
such breaches relate to the liabilities due to the PBGC, the U.S. Internal
Revenue Service or the U.S. Department of Labor); provided that for purposes of
this paragraph (i) only individual claims (or groups of related claims or claims
of the same Person having substantially similar factual and legal bases)
resulting in Adverse Consequences in excess of $30,000 will be considered in
determining whether the $1 million amount is exceeded; provided further that all
amounts paid by Purchaser pursuant to Section 18.18 shall be considered in
determining whether the $1 million amount is exceeded; and
(ii) The Sellers shall not be obligated to make payments to the
Indemnified Purchaser Parties of more than $20 million (the "Cap") in respect of
Adverse Consequences resulting from such breaches of representations and
warranties, it being understood, however, that (A) the Cap shall not apply to
any Adverse Consequences resulting from breaches of the representations and
warranties contained in Sections 6.01, 6.02, 6.05, 6.08 (but, with respect to
Section 6.08, only to the extent that such breaches relate to Employment Taxes
other than with respect to the Limited Companies), 6.09 and 6.21, and (B) any
payments made by the Sellers in respect of Adverse Consequences for breaches of
the representations and warranties referred to in clause (A) above other than
any payments made by the Sellers in respect of Adverse Consequences resulting
from breaches of representations and warranties contained in Sections 6.02 and
6.09 (but, in the case of Section 6.09, only to the extent that such breaches
relate to the liabilities due to the PBGC, the U.S. Internal Revenue Service or
the U.S. Department of Labor)) shall nonetheless be taken into account in
determining whether the Cap is exceeded.
To the extent necessary in order to avoid double counting, all qualifications in
Article VI (other than the first sentence of Section 6.04 and the last sentence
of 6.03) requiring a Material Adverse Effect in order for a particular
representation or warranty to have been breached shall be disregarded for
purposes of this Article XV.
(b) Indemnification Provisions for Benefit of the Sellers. Purchaser
shall indemnify and hold harmless, on a Grossed-Up Basis, each of the Sellers
and its Affiliates from and against any Adverse Consequences that any of the
Sellers and their respective Affiliates (determined, in each case, assuming that
Purchaser, the Limited Companies, APX-Brazil and their respective Subsidiaries
are not Affiliates of the Sellers) and their respective officers, employees,
directors, agents and representatives (collectively, the "Indemnified Seller
Parties" and, together with the Indemnified Purchaser Parties, the "Indemnified
Parties") shall suffer resulting from, arising out of or relating to: (i) any
breach by Purchaser of any of its representations, warranties or covenants
contained herein or (ii) any Assumed Liabilities, other
-58-
<PAGE> 66
than any Assumed Liabilities to the extent that either Seller has an obligation
to indemnify Purchaser with respect to such Assumed Liabilities pursuant to
Section 15.01(a).
15.02 Method of Asserting Claims. All claims for indemnification by
any Indemnified Party under Section 15.01 will be asserted and resolved as
follows:
(a) In order for an Indemnified Party to be entitled to any
indemnification provided for under Section 15.01 in respect of, arising out of
or involving a claim or demand made by any Person not a party to this Agreement
against the Indemnified Party (a "Third Party Claim"), the Indemnified Party
must deliver a Claim Notice to the Indemnifying Party within 30 Business Days
after receipt by such Indemnified Party of written notice of the Third Party
Claim; provided, however, that failure to give such Claim Notice shall not
affect the indemnification provided hereunder except to the extent the
Indemnifying Party shall have been actually prejudiced as a result of such
failure. The Indemnifying Party shall promptly mitigate any such prejudice to
the extent possible.
(b) If a Third Party Claim is made against an Indemnified Party, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
Indemnifying Party, which counsel must be reasonably satisfactory to the
Indemnified Party. Should the Indemnifying Party so elect to assume the defense
of a Third Party Claim, the Indemnifying Party shall not be liable to the
Indemnified Party for legal expenses subsequently incurred by the Indemnified
Party in connection with the defense thereof, but shall continue to pay for any
expenses of investigation or any Loss suffered. If the Indemnifying Party
assumes such defense, the Indemnified Party shall have the right to participate
in the defense thereof and to employ counsel, at its own expense, separate from
the counsel employed by the Indemnifying Party. If (i) the Indemnifying Party
shall not assume the defense of a Third Party Claim with counsel satisfactory to
the Indemnified Party within five Business Days after delivery of any Claim
Notice, or (ii) legal counsel for the Indemnified Party notifies the
Indemnifying Party that there are or may be legal defenses available to the
Indemnified Party or to other Indemnified Parties which are different from or
additional to those available to the Indemnifying Party, which, if the
Indemnified Party and the Indemnifying Party were to be represented by the same
counsel, would constitute a conflict of interest for such counsel or prejudice
prosecution of the defenses available to such Indemnified Party, or (iii) if the
Indemnifying Party shall assume the defense of a Third Party Claim and fail to
diligently prosecute such defense, then in each such case the Indemnified Party,
by notice to the Indemnifying Party, may employ its own counsel and control the
defense of the Third Party Claim and the Indemnifying Party shall be liable for
the reasonable fees, charges and disbursements of counsel employed by the
Indemnified Party; and the Indemnified Party shall be promptly reimbursed for
any such fees, charges and disbursements, as and when incurred. Whether the
Indemnifying Party or the Indemnified Party controls the defense of any Third
Party Claim, the parties hereto shall cooperate in the defense thereof. Such
cooperation shall include the retention and provision to the counsel of the
controlling party of records and information
-59-
<PAGE> 67
which are reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. The Indemnifying Party shall
have the right to settle, compromise or discharge a Third Party Claim (other
than any such Third Party Claim in which criminal conduct is alleged) without
the Indemnified Party's consent if such settlement, compromise or discharge (i)
constitutes a complete and unconditional discharge and release of the
Indemnified Party, and (ii) provides for no relief other than the payment of
monetary damages and such monetary damages are paid in full by the Indemnifying
Party.
(c) In the event any Indemnified Party should have a claim under
Section 15.01 against any Indemnifying Party that does not involve a Third Party
Claim, the Indemnified Party shall deliver an Indemnity Notice with reasonable
promptness to the Indemnifying Party. The failure by any Indemnified Party to
give the Indemnity Notice shall not impair such party's rights hereunder except
to the extent that an Indemnifying Party demonstrates that it has been
irreparably prejudiced thereby. The Indemnifying Party shall promptly mitigate
any such prejudice to the extent practicable. If the Indemnifying Party notifies
the Indemnified Party that it does not dispute the claim described in such
Indemnity Notice or fails to notify the Indemnified Party within the Dispute
Period whether the Indemnifying Party disputes the claim described in such
Indemnity Notice, the Loss in the amount specified in the Indemnity Notice will
be conclusively deemed a liability of the Indemnifying Party under Section 15.01
and the Indemnifying Party shall pay the amount of such Loss to the Indemnified
Party on demand. If the Indemnifying Party has delivered notice disputing its
liability to the Indemnified Party (a "Dispute Notice") within the Dispute
Period, the Indemnifying Party and the Indemnified Party will proceed in good
faith to negotiate a resolution of such dispute, and if not resolved through
negotiations within the Resolution Period, such dispute shall be resolved by
litigation in a court of competent jurisdiction.
(d) The rights accorded to Indemnified Parties hereunder shall be in
addition to any rights that any Indemnified Party may have at law or in equity,
under federal and state securities laws, by separate agreement (including,
without limitation, under the Operative Agreements) or otherwise.
15.03 Certain Intercompany Relationships. Except for Assumed
Indebtedness, the Liabilities set forth in Section 15.03 of the Disclosure
Schedule and the obligations of Purchaser under this Agreement or the Operative
Agreements, all Contracts, Licenses and other agreements, undertakings,
representations, obligations and transactions to which any of the Limited
Companies and their Subsidiaries on the one hand and any of the Sellers, their
remaining Subsidiaries and Affiliates on the other hand, or to which any of the
Sellers, their remaining Subsidiaries and Affiliates are a party thereto and
which relate to the Business or the APX Continuing Business shall be deemed
terminated as of the Closing, will have no further force or effect and will
result in no further obligations or liabilities.
-60-
<PAGE> 68
15.04 Environmental Matters.
(a) In no event will the provisions of this Section 15.04, or any
exercise by Sellers of their rights under this Section 15.04, increase the
obligations of Sellers with respect to environmental matters involving the
Limited Companies, the Business or any of the MSX Assets beyond what is provided
in Section 15.01.
(b) Reporting, Remediation, and Compliance. After the Closing, and
with respect to any environmental matters involving any Site for which the
Sellers are responsible under Section 15.01(a) above (ignoring, for this
purpose, the limitations in the proviso to Section 15.01(a) above), the Sellers
shall have the exclusive right (provided that the Sellers exercise such right in
a timely and diligent manner) to undertake the following activities, with the
prior written consent of Purchaser, such consent not to be unreasonably
withheld: (i) obtain any tests, reports, and surveys necessary to define and
delineate the extent of any contamination or noncompliance, (ii) contact
Governmental Authorities, make any reports to such Authorities, submit any
remediation or compliance plans to such Authorities, negotiate with such
Authorities, and otherwise deal with such Authorities, (iii) prepare the work
plan for any remediation or correction of noncompliance, and (iv) conduct or
direct any such remediation or correction of noncompliance. Notwithstanding the
foregoing, the Sellers shall provide Purchaser with (i) copies of all workplans
for, and test results, surveys and other data generated by, the investigations
performed by the Sellers or their consultants promptly upon the availability
thereof, (ii) final and any prior drafts of all reports, plans and other
documents to be filed with any Governmental Authority upon the availability
thereof and in any event prior to any such filing being made, (iii) an
opportunity to meet with the Sellers and their representatives prior to and
following any substantive communications with Governmental Authorities, and (iv)
a timely opportunity to discuss and comment upon the foregoing and any other
proposed determinations or actions relating to the investigation, testing and
remediation of any Site and the reporting thereon with Governmental Authorities.
In order to carry out its obligations under this Agreement, the Sellers shall
have continuing reasonable access to the affected Sites; provided, however, that
the Sellers shall provide Purchaser with reasonable notice prior to the Sellers
or any of their agents, representatives, employees, consultants or contractors
entering the relevant Site. The Sellers shall have the right to perform at the
relevant Sites any remediation or actions necessary to achieve compliance by any
commonly accepted or reasonable means, with the prior written consent of
Purchaser (such consent not to be unreasonably withheld), including the right to
construct and maintain wells, dikes, "caps", covers and other impoundments,
barriers, pump and treat systems, soil vapor extraction systems, other testing
and treatment equipment and systems, related buildings and structures, and
supporting utility services on such Sites, the right to perform excavations and
exhumations of soils and subsurface materials and withdrawals and reinjections
of groundwater on such Sites, and the right to impose deed and land use
restrictions and institutional controls on such Sites; provided, however, that
the Sellers will not unreasonably interfere with the normal business operations
of Purchaser or its Subsidiaries at such Sites. Any investigation, remediation,
correction of noncompliance or other activities to be
-61-
<PAGE> 69
conducted, directed or performed by the Sellers pursuant to this Section 15.04
shall be performed by an independent third party environmental professional
mutually agreed (or other Person mutually agreed) upon by Purchaser and the
Sellers (subject to the dispute resolution proceedings set forth in Section
15.04(e) below). Any such remediation or actions necessary to achieve compliance
shall be deemed sufficient to satisfy Sellers' corresponding obligations under
this Agreement so long as the result (x) meets or exceeds the least stringent
standards (including any lesser standards resulting from any site-specific risk
assessment) acceptable under (A) all applicable Environmental Laws as in effect
on the Closing Date based on the use of the property on the Closing Date and (B)
all applicable Environmental Permits and (y) is consistent with any third-party
settlements entered into with the prior written consent of Sellers.
Notwithstanding anything to the contrary in the immediately preceding sentence,
Purchaser may direct Sellers, at Purchaser's sole discretion, to undertake
remedial action or such other action that (1) exceeds the requirements set forth
in clauses (x) and (y) of such sentence, or (2) meets but does not exceed such
requirements; provided, however, that in the event Purchaser so directs Sellers
to undertake any action that exceeds such requirements, Purchaser shall bear the
incremental costs, if any, incurred in implementing the more stringent remedy.
To the extent the Sellers fail to exercise their rights or perform their
obligations under this Section 15.04(a) in a diligent and timely manner,
Purchaser, upon written notice to the Sellers, shall have the right to control,
direct and perform the relevant investigation or remediation or correct the
relevant noncompliance, provided the procedures in this Section 15.04(b) and in
Section 15.04(c) below shall be complied with, substituting in each case
Purchaser for the Sellers and vice versa.
(c) Certain Responsibilities of Purchaser. Purchaser will cooperate
with the Sellers (including by making relevant personnel and records available
to the Sellers at all reasonable times, without charge for any internal costs)
in connection with this Section 15.04. Until Purchaser has suffered $1 million
in Adverse Consequences under clause (i) of the proviso in Section 15.01(a) with
respect to claims under this Section 15.04 and all other matters referred to in
such clause (i), Purchaser shall reimburse the Sellers within 30 days of receipt
of an invoice, for any reasonable out-of-pocket costs, expenses, fees or other
amounts incurred by the Sellers relating to services provided or activities
performed with respect to the matters referred to in this Section 15.04. Once
Purchaser has suffered the applicable amount of Adverse Consequences specified
in the immediately preceding sentence, then the Sellers shall reimburse any
Indemnified Purchaser Party for any reasonable out-of-pocket costs, expenses,
fees or other amounts incurred by such Indemnified Purchaser Party pursuant to
this Section 15.04. Each of Purchaser and the Sellers shall use its reasonable
efforts to minimize the costs associated with Adverse Consequences relating to
environmental matters for which the Sellers are responsible under Section
15.01(a) above (ignoring, for this purpose, the limitations in the proviso to
Section 15.01(a) above). In order to better delineate the respective obligations
of the Sellers and Purchaser with respect to environmental matters at the
relevant properties, Purchaser shall take reasonable steps to conduct its
operations so as not to take affirmative action that unreasonably compounds or
aggravates any environmental condition or noncompliance for which the Sellers
-62-
<PAGE> 70
are responsible (ignoring, for this purpose, the limitations in the proviso to
Section 15.01(a) above) under this Agreement.
(d) Third Party Actions. Neither Purchaser nor Sellers will initiate
or encourage any action by any third party, including any governmental agency or
authority, which could reasonably be expected to lead to a claim by such third
party with respect to any environmental matter of Sellers, the Limited
Companies, the MSX Assets, or the Business for which Sellers are responsible
under Section 15.01 (ignoring, for this purpose, the limitations in the proviso
in Section 15.01(a) above), except to the extent required (i) by Environmental
Law, (ii) by any Environmental Permit, (iii) by any settlement agreement, or
(iv) in the relevant Party's good faith judgment, in order to protect human
health or safety; provided, however, that nothing in this Agreement shall be
construed to limit (i) Purchaser's right to conduct and submit a baseline
environmental assessment to the Michigan Department of Environmental Quality
pursuant to Part 201 of the Michigan Natural Resources and Environmental
Protection Act with respect to any Site, or (ii) Purchaser's right (or the right
of Sellers) to investigate any suspected environmental condition or
noncompliance. If Purchaser or Sellers determine that it is so required to
initiate or encourage any such action, such Party will promptly notify the other
party of such requirement.
(e) Resolution of Certain Disputes.
(i) With respect to any matter which requires action by the Sellers
and the consent of Purchaser or the agreement of the Sellers and Purchaser
pursuant to this Section 15.04, the Sellers shall notify Purchaser in writing of
the action they propose to take, setting forth with particularity the nature of
such action, the identity of the individual or firm proposed to perform such
action (if applicable), the proposed time frame for commencing and completing
such action, and the estimated cost associated with such action (each such
action, a "Recommended Action"). The Sellers shall provide Purchaser with copies
of all sampling data, environmental reports, proposals and correspondence
(drafts and final) relating to the subject matter of the Recommended Action. If
Purchaser disagrees with the Recommended Action, in whole or in part, Purchaser
shall notify the Sellers in writing of its specific disagreement regarding such
Recommended Action (a "Dispute Notification") within 15 days of its receipt of
notice of the Recommended Action in accordance with this paragraph (e)(i) (the
"Dispute Notification Period"). Purchaser and the Sellers shall thereafter
negotiate in good faith in an attempt to reach agreement as to the disputed
Recommended Action. If Purchaser and the Sellers are unable to resolve the
dispute within 10 days after the Sellers' receipt of a Dispute Notification,
either Purchaser or the Sellers may provide written notice to the other of its
intent to submit the matter to arbitration, and such dispute shall be resolved
by arbitration.
(ii) If the Recommended Action (or portion thereof subject to dispute)
is submitted to arbitration, each of Purchaser and the Sellers, collectively,
shall select an arbitrator, and a third arbitrator shall be chosen by the other
two arbitrators, provided that if the two
-63-
<PAGE> 71
arbitrators fail to agree upon the third arbitrator within 30 days after receipt
of notice to submit the matter to arbitration, the additional arbitrator shall
be appointed by the American Arbitration Association, in the state in which the
relevant Site is located. The provisions of the Federal Arbitration Act (9
U.S.C. Section 1-14) and commercial arbitration rules of the American
Arbitration Association shall be followed in any arbitration, unless modified
pursuant to mutual agreement of Purchaser and the Sellers with the concurrence
of the arbitration panel.
(iii) Any arbitration conducted pursuant to this Section 15.04(e)
shall be limited to resolution of the dispute set forth in the Dispute
Notification, and the arbitrators shall have no jurisdiction or authority to
resolve any claims not related to such dispute, whether arising by way of
asserted rights, offsets or otherwise. The arbitrators' decision shall be final
and binding on Purchaser and the Sellers. Any arbitration award shall be
enforceable in any court of competent jurisdiction. Each of Purchaser and the
Sellers hereby consents to such jurisdiction and to entry of judgment thereon.
The costs of arbitration shall be borne by Purchaser.
(f) Certain Recoveries. The Sellers and Purchaser shall cooperate with
each other with respect to making claims under any occurrence-based policies
written by third party insurance companies, to the extent such policies were
applicable to the Sites prior to the Closing Date, under any acquisition
agreements with third parties, to the extent such agreements are in effect as of
the Closing Date and afford indemnification rights for the benefit of such
entities and under any underground storage tank or similar environmental
reimbursement program, to the extent such programs are available to such
entities at any time after the Closing Date, for reimbursement or contribution
in connection with environmental matters for which the Sellers may be
responsible pursuant to Section 15.01(a) above (ignoring, for this purpose, the
limitations in the proviso in Section 15.01(a) above). Such cooperation shall
include making all reasonable claims and demands against such third parties with
respect to such environmental matters and pursuing such claims and demands in a
commercially reasonable manner.
ARTICLE XVI
TERMINATION
16.01 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written agreement of
each of the Sellers and Purchaser;
(b) at any time before the Closing, by Purchaser if (i) it has
received from the Sellers notice of a breach described in Section 8.08(a) or of
a material breach described in Section 8.08(b) and such breach has not been
cured, (ii) it notifies the Sellers of the occurrence of
-64-
<PAGE> 72
any of the events described in Section 8.08 and the Sellers shall not have cured
such breach or (iii) the satisfaction of any of its obligations under this
Agreement becomes impossible with the use of commercially reasonable efforts, if
the failure of such condition to be satisfied is not caused by a breach hereof
by it; provided, however, that Purchaser shall not have any right to terminate
this Agreement pursuant to this Section 16.01(b) unless and until such time as
the aggregate amount of Losses which could reasonably be expected to result from
the breaches referred to in this Section 16.01(b) would exceed $15 million;
(c) at any time before the Closing, by the Sellers if (i) they have
received notice from Purchaser of a breach described in Section 9.02(a) or of a
material breach described in Section 9.02(b) and such breach has not been cured,
(ii) they notify Purchaser of the occurrence of any of the events described in
Section 9.02 and Purchaser shall not have cured such breach or (iii) the
satisfaction of any of the Sellers' obligations under this Agreement becomes
impossible with the use of commercially reasonable efforts, if the failure of
such condition to be satisfied is not caused by a breach hereof by either of the
Sellers;
(d) at any time after February 2, 1997, by Purchaser or the Sellers
upon notification of the non-terminating party by the terminating party if the
Closing shall not have occurred on or before such date and such failure to
consummate is not caused by a breach of this Agreement by the terminating party.
16.02 Effect of Termination. If this Agreement is validly terminated
pursuant to Section 16.01, this Agreement will forthwith become null and void,
and there will be no liability or obligation on the part of any party hereto (or
any of its officers, directors, employees, agents or other Representatives or
Affiliates), except as provided in the next succeeding sentence and except that
the provisions in Sections 18.03, 18.04, 18.05, 18.08, 18.10, 18.12 and 18.15
will continue to apply following any such termination. Notwithstanding any other
provision in this Agreement to the contrary, upon termination of this Agreement
pursuant to Section 16.01(b) or 16.01(c), the Sellers will remain jointly and
severally liable to Purchaser for any misrepresentation or breach of warranty or
nonfulfillment of or failure to perform any covenant or agreement by either
Seller existing at the time of such termination, and Purchaser will remain
liable to the Sellers for any misrepresentation or breach of warranty or
nonfulfillment of or failure to perform any covenant or agreement by Purchaser
existing at the time of such termination, and Purchaser and the Sellers may seek
such remedies, including damages and fees of attorneys, against the other with
respect to any such breach as are provided in this Agreement or as are otherwise
available at Law or in equity.
-65-
<PAGE> 73
ARTICLE XVII
DEFINITIONS
17.01 Definitions. (a) As used in this Agreement, the following
defined terms shall have the meanings indicated below:
"Accounting Firm" has the meaning ascribed to it in Section
3.01(b)(i).
"Accounts Receivable" has the meaning ascribed to it in Section
2.01(a)(iv).
"Actions or Proceedings" means any action, suit, proceeding,
arbitration or Governmental Authority investigation or audit.
"Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, rulings, decrees, damages, dues, Taxes (other than Income
Taxes), penalties, fines, costs, reasonable accounts paid in settlement,
liabilities, obligations, liens, losses, expenses, and fees, including court
costs and reasonable attorneys' fees and expenses; provided, however, that (i)
Adverse Consequences shall not include any lost profits or any exemplary,
punitive, consequential or other similar damages (other than exemplary,
punitive, consequential or other similar damages awarded to any third party);
(ii) Adverse Consequences shall not be determined through any multiple of
earnings approach or variant thereof (except with respect to any breach of the
representations or warranties contained in Section 6.03 and the first sentence
of Section 6.04, in each case to the extent that such breach relates to any
matter that has resulted in a recurring loss of earnings, and then only to the
extent that at the time of assessing the Adverse Consequences caused by that
breach, there are no developments or areas of earnings growth (whether or not
related to the matters giving rise to the breach) not specifically included in
Purchaser's business plan as of the date hereof for the segment exhibiting such
growth which are then reasonably anticipated to offset or compensate, in whole
or in part, for the Adverse Consequences caused by such breach); and (iii) the
Indemnified Purchaser Parties shall not be deemed to have suffered any Adverse
Consequences which result from their continuation after the Closing Date of any
of the practices, policies and procedures of the Sellers and the Limited
Companies, or which result from their institution of new such practices,
policies and procedures, in either case in detrimental reliance upon the
representations and warranties of the Sellers under this Agreement; and provided
further that Adverse Consequences shall not include (i) the loss of any Tax
attribute or (ii) any Tax liability resulting from the receipt of any
indemnification payment made under this Agreement.
"Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly through one of more intermediaries, controls or is
controlled by or is under common control with such Person. For purposes of this
definition, control of a Person means the power,
-66-
<PAGE> 74
direct or indirect, to direct or cause the direction of the management and
policies of such Person whether by Contract or otherwise and, in any event and
without limitation of the previous sentence, any Person owning 10% or more of
the voting securities of a second Person shall be deemed to control that second
Person.
"Agreement" means this Acquisition Agreement, the exhibits hereto, the
Disclosure Schedule, the Purchaser Disclosure Schedule and the certificates
delivered in connection herewith, as the same shall be amended, modified or
restated from time to time.
"Allocation Schedule" has the meaning ascribed to it in Section
3.02(a).
"Amortized Deductions" has the meaning ascribed to it in Section
12.03.
"APX Acquisition" has the meaning ascribed to it in the forepart of
this Agreement.
"APX Assets" has the meaning ascribed to it in Section 2.01(b).
"APX-Brazil" has the meaning ascribed to it in the forepart of this
Agreement.
"APX-Brazil Stock" has the meaning ascribed to it in the forepart of
this Agreement.
"APX Business" has the meaning ascribed to it in the forepart of this
Agreement.
"APX Continuing Business" means that portion of the APX Business and
APX Assets acquired by Sellers on the Effective Date pursuant to the APX
Purchase Agreement together with all operations, properties, assets and rights
of whatever kind or nature acquired after the Effective Date with respect to the
APX Business and APX Assets, other than Conveyed Assets.
"APX-Germany" has the meaning ascribed to it in the forepart of this
Agreement.
"APX-Germany Stock" has the meaning ascribed to it in the forepart of
this Agreement.
"APX Limited Assets" has the meaning ascribed to it in the forepart of
this Agreement.
"APX Purchase Agreement" has the meaning ascribed to it in the
forepart of this Agreement.
-67-
<PAGE> 75
"Assets" has the meaning ascribed thereto in Section 2.01.
"Assignment and Assumption Agreement" means a bill of sale and
assignment and assumption agreement among the Sellers and Purchaser,
substantially in the form of Exhibit 2.02.
"Associate" means, with respect to any Person, any corporation or
other business organization of which such Person is an officer or partner or is
the beneficial owner, directly or indirectly, of 10% or more of any class of
equity securities, any trust or estate in which such Person has a substantial
beneficial interest or as to which such Person serves as a trustee or in a
similar capacity and any relative or spouse of such Person, or any relative of
such spouse, who has the same home as such Person.
"Assumed Indebtedness" means all Funded Indebtedness of the Limited
Companies outstanding on the Closing Date, together with all interest accrued
thereon through the Closing Date.
"Assumed 401(K) Plan" has the meaning ascribed to it in Section
13.03(a).
"Assumed Pension Plan" has the meaning ascribed to it in Section
13.04.
"Assumed Liabilities" has the meaning ascribed to it in Section
2.02(a).
"Body Systems and Assembly" means the businesses originally acquired
and operated in or under the corporation known as Cars and Concepts or which
subsequently have been operated as a division of MSX under the name "Body
Systems and Assembly."
"Books and Records" of any Person means all files, documents,
instruments, papers, books and records relating to the business, operations,
condition of (financial or other), results of operations and assets and
properties of such Person, including without limitation financial statements,
Tax Returns and related work papers and letters from accountants, budgets,
pricing guidelines, ledgers, journals, deeds, title policies, minute books,
stock certificates and books, stock transfer ledgers, Contracts, Licenses,
customer lists, computer files and programs, retrieval programs, operating data
and plans and environmental studies and plans.
"Bridge Credit Agreement" means the Bridge Credit Agreement dated as
of the Closing Date among Purchaser, the Subsidiaries of Purchaser named
therein, MascoTech and the Institutional Stockholder, including all schedules
and exhibits thereto, substantially in the form attached hereto as Exhibit
10.08(A).
"Brighton Building" means a facility formerly used by Body Systems and
Assembly located at 12500 E. Grand River, Brighton, Michigan, including its
contents.
-68-
<PAGE> 76
"Business" has the meaning ascribed to it in the forepart of this
Agreement.
"Business Books and Records" has the meaning ascribed to it in Section
2.01(a)(xii).
"Business Combination" means, with respect to any Person, (i) any
merger, consolidation or combination to which such Person is a party, (ii) any
sale, dividend, split or other disposition of capital stock or other equity
interests of such Person, (iii) any tender offer (including, without limitation,
a self tender), exchange offer, recapitalization, liquidation, dissolution or
similar transaction, (iv) any sale, dividend or other disposition of a
significant portion of the assets and properties of such Person, or (v) the
entering into of any agreement or understanding, or granting of any rights or
options, with respect to any of the foregoing.
"Business Day" means a day other than Saturday, Sunday or any day on
which banks located in the States of Michigan and New York are authorized or
obligated by Law to close.
"Business Licenses" has the meaning ascribed to it in Section
2.01(a)(x).
"Cap" has the meaning ascribed to it in Section 15.01(a)(ii).
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, and the rules and regulations promulgated
thereunder.
"Claim Notice" means written notification pursuant to Section 15.02(a)
of a Third Party Claim as to which indemnity under Section 15.01 is sought by an
Indemnified Party, enclosing a copy of all papers served, if any, on the
Indemnifying Party.
"Closing" has the meaning ascribed to it in Section 3.03.
"Closing Date" has the meaning ascribed to it in Section 3.03.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Computations" has the meaning ascribed to it in Section 3.01(b)(i).
"Confidential Information" has the meaning ascribed to it in Section
18.21.
"Contract" means any agreement, lease, evidence of Indebtedness,
mortgage, indenture, security agreement or other contract (whether written or
oral).
-69-
<PAGE> 77
"Conveyed Assets" means any Assets disposed of by the Sellers after
the Effective Date in the ordinary course of business in accordance with the
terms of this Agreement including, without limitation, Sections 8.04 and 8.05.
"December 31 Balance Sheet" has the meaning ascribed to it in Section
6.03.
"Disclosure Schedule" means the schedules delivered to Purchaser by
the Sellers herewith and dated as of the date hereof, containing all lists,
descriptions, exceptions and other information and materials as are required to
be included therein by the Sellers pursuant to this Agreement.
"Discussion Period" has the meaning ascribed to it in Section
3.01(b)(iii).
"Dispute Notice" has the meaning ascribed to it in Section 15.02(c).
"Dispute Notification" has the meaning ascribed to it in Section
15.04(e)(i).
"Dispute Notification Period" has the meaning ascribed to it in
Section 15.04(e)(i).
"Dispute Period" means the period ending 30 calendar days following
receipt by an Indemnifying Party of an Indemnity Notice.
"Disputed Matters" has the meaning ascribed to it in Section
3.01(b)(iii).
"Effective Date" means November 7, 1996.
"Effective Date Assumed Indebtedness" means all Funded Indebtedness of
the Limited Companies outstanding on the Effective Date, together with all
interest accrued thereon through the Effective Date.
"Effective Date Balance Sheet" means a combined balance sheet of the
Business (excluding the Excluded Assets and the Retained Liabilities) as of the
Effective Date immediately prior to giving effect to the Closing (as defined in
the APX Purchase Agreement), prepared in accordance with GAAP, subject to the
exceptions set forth in Section 6.03 of the Disclosure Schedule, applied
(including with respect to such exceptions) on a basis consistent with the
methods, principles, practices and policies employed in the preparation of the
December 31 Balance Sheet.
"Effective Date Net Working Capital" means the combined current assets
of the Business less the combined current liabilities of the Business, in each
case as set forth on the Effective Date Balance Sheet (adjusted consistently
with the sample reconciliation calculation
-70-
<PAGE> 78
(which assumes an Effective Date of September 30, 1996) set forth in Exhibit
3.01(b) to reflect the exclusion of (i) indebtedness for borrowed money, (ii)
accrued interest, (iii) any asset, deferred credit or liability for deferred
income taxes and (iv) intercompany payables and/or receivables between the
Business and the Sellers or any of their Affiliates.)
"Election Notice" has the meaning ascribed to it in Section 12.03(b).
"Employment Tax" means any payroll or employee Tax (including Taxes of
any kind required to be withheld from payments to employees, independent
contractors or other providers for services).
"Employee Benefit Arrangement" means, with respect to any person, any
employment, consulting, independent contractor, retainer, severance or similar
contract, arrangement or policy (exclusive of any such contract which is
terminable within 30 days without liability), or any plan or arrangement
providing for severance benefits, insurance coverage (including pursuant to any
self-insured plan or arrangement), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, retirement benefits,
deferred compensation, profit-sharing, bonuses, stock options, stock
appreciation rights or other forms of incentive compensation or post-retirement
insurance, compensation, or benefits, in each case for the benefit of any
current or former employee or independent contractor of such Person; provided,
however, that the term "Employee Benefit Arrangement" shall not include any
Employee Benefit Plan covered by or subject to ERISA or any other contract,
arrangement, policy, plan or arrangement required to be sponsored, maintained or
contributed to by applicable law (other than any domestic workers' compensation
statute).
"Employee Benefit Plan" has the meaning set forth in ERISA Section
3(3).
"Environment" means all air, surface water, groundwater, or land,
including land surface or subsurface, including all fish, wildlife, biota and
all other natural resources.
"Environmental Claim" means any and all administrative or judicial
actions, suits, orders, claims, liens, notices, notices of violations,
investigations, complaints, requests for information, proceedings, or other
communication (written or oral), whether criminal or civil, (collectively,
"Claims") pursuant to or relating to any applicable Environmental Law by any
person (including but not limited to any Governmental Authority, private person
and citizens' group) based upon, alleging, asserting, or claiming any actual or
potential (i) violation of or liability under any Environmental Law, (ii)
violation of any Environmental Permit, or (iii) liability for investigatory
costs, cleanup costs, removal costs, remedial costs, response costs, natural
resource damages, property damage, personal injury, fines, or penalties arising
out of, based on, resulting from, or related to the presence, Release, or
threatened Release into the Environment, of any Hazardous Materials at any
location, including but not limited to any off-
-71-
<PAGE> 79
Site location to which Hazardous Materials or materials containing Hazardous
Materials were sent for handling, storage, treatment, or disposal.
"Environmental Law" means any and all federal, state, local,
provincial and foreign, civil and criminal laws, statutes, ordinances, orders,
codes, rules, regulations, Environmental Permits, policies, guidance documents,
judgments, decrees, injunctions, or agreements with any Governmental Authority,
relating to the protection of health and the Environment, worker health and
safety, and/or governing the handling, use, generation, treatment, storage,
transportation, disposal, manufacture, distribution, formulation, packaging,
labeling, or Release of Hazardous Materials, whether now existing or
subsequently amended or enacted (except to the extent that any additional
requirements, financial or other obligations or liabilities of any kind or
character are more burdensome than those that would have been imposed by
Environmental Laws in effect as of the Closing Date), including but not limited
to: the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. Section
1251 et seq.; the Hazardous Material Transportation Act 49 U.S.C. Section 1801
et seq.; the Federal Insecticide, Fungicide and Rodenticide Act 7 U.S.C. Section
136 et seq.; the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42
U.S.C. Section 6901 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq.; the Occupational Safety & Health Act of 1970, 29 U.S.C. Section
651 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; and
the state analogies thereto; and any common law doctrine, including but not
limited to, negligence, nuisance, trespass, personal injury, or property damage
related to or arising out of the presence, Release, or exposure to a Hazardous
Material.
"Environmental Permit" means any federal, state, local, provincial, or
foreign permits, licenses, approvals, consents or authorizations required by any
Governmental Authority under or in connection with any Environmental Law and
includes any and all orders, consent orders or binding agreements issued or
entered into by a Governmental Authority under any applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" means any Person which would be treated as a single
employer together with any of the Sellers and their Subsidiaries under Code
Section 414.
"European Operations" has the meaning ascribed to it in the forepart
of this Agreement.
"Excluded Assets" has the meaning ascribed to it in Section 2.01(c).
"Financial Statements" has the meaning ascribed to it in Section 8.14.
-72-
<PAGE> 80
"Financing Source" has the meaning ascribed to it in Section 8.02.
"Foreign Benefit Plan" means each employee benefit plan, program,
arrangement or agreement sponsored, maintained, or contributed to by any of the
Sellers and their respective Affiliates, that is subject to laws of a country,
state, or sovereignty other than the United States or a state, territory, or
district of the United States.
"Full Service Accessories Supply" has the meaning ascribed to it in
Section 8.07(iv).
"Funded Indebtedness" means, without duplication, with respect to any
Person (i) all indebtedness for borrowed money or for the deferred purchase
price of property, (ii) the face amount of all letters of credit, banker's
acceptances and other credit facilities issued for the account of such Person
and, without duplication, all drafts drawn thereunder, (iii) all indebtedness
secured by any lien on any property owned by such Person, to the extent
attributable to such Person's interest in such property, even though such Person
has not assumed or become liable for the payment thereof, (iv) lease obligations
of such Person which, in accordance with generally accepted accounting
principles, should be capitalized, (v) obligations with respect to any
conditional sale agreement or title retention agreement and (vi) guarantees by
such Person of the Funded Indebtedness of another Person; but excluding in each
case trade and other accounts payable in the ordinary course of business.
"GAAP" means generally accepted accounting principles, consistently
applied throughout the specified period and in the immediately prior comparable
period.
"Governmental Authority" means any court, tribunal, arbitrator,
authority, agency, commission, official or other instrumentality of the United
States, any foreign country or any domestic or foreign state, county, city or
other political subdivision.
"Grossed-Up Basis" means, when used to describe the basis on which the
payment of a specified sum is to be made, a basis such that the amount of such
payment after being reduced by the amount of all Taxes imposed on the recipient
of such payment, will equal the specified sum.
"Guarantee Parties" has the meaning ascribed to it in Section 18.17.
"Guaranteed Obligations" has the meaning ascribed to it in Section
18.17.
"Hazardous Material" means petroleum, petroleum hydrocarbons or
petroleum products, petroleum by-products, radioactive materials, asbestos or
asbestos-containing materials, gasoline, diesel fuel, pesticides, radon, urea
formaldehyde, lead or lead-containing materials, polychlorinated biphenyls; and
any other chemicals, materials, substances or wastes in
-73-
<PAGE> 81
any amount or concentration which are now or hereafter become defined as or
included in the definition of "hazardous substances," "hazardous materials,"
"hazardous wastes," "extremely hazardous wastes," "restricted hazardous wastes,"
"toxic substances," "toxic pollutants," "pollutants," "regulated substances,"
"solid wastes," or "contaminants" or words of similar import, under any
Environmental Law.
"Improvements" has the meaning ascribed to it in Section 2.01(a)(ii).
"Income Taxes" means any tax imposed on a Person (other than tax
imposed as a result of such Person's being a withholding agent under the laws)
by Subtitle A of the Code or any similar tax imposed by any state, local or
foreign jurisdiction, together with any interest, penalties, additions to tax or
additional amounts imposed by the applicable Taxing Authorities with respect
thereto.
"Indebtedness" of any Person means all obligations of such Person (a)
for borrowed money, (b) evidenced by notes, bonds, debentures or similar
instruments, (c) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(d) under capital leases and (e) in the nature of guarantees of the obligations
described in clauses (a) through (d) above of any other Person.
"Indemnified Purchaser Parties" has the meaning ascribed to it in
Section 15.01.
"Indemnified Parties" has the meaning ascribed to it in Section
15.01(b).
"Indemnified Party" has the meaning ascribed to it in Section 15.01.
"Indemnified Seller Parties" has the meaning ascribed to it in Section
15.01.
"Indemnifying Party" means any Person against whom a claim for
indemnification is being asserted under any provision of Article XV.
"Indemnity Notice" means written notification pursuant to Section
15.02(c) of a claim for indemnity under Article XV by an Indemnified Party,
specifying the nature of and basis for such claim, together with the amount or,
if not then reasonably ascertainable, the estimated amount, determined in good
faith, of such claim.
"Independent Accounting Firm" has the meaning ascribed to it in
Section 3.01(b)(iii).
"Institutional Stockholder" means Citicorp Venture Capital, Ltd., a
New York corporation.
-74-
<PAGE> 82
"Intellectual Property" means all patents and patent rights,
trademarks and trademark rights, trade names and trade name rights, service
marks and service mark rights, service names and service name rights, brand
names, inventions, processes, formulae, copyrights and copyright rights, trade
dress, business and product names, logos, slogans, trade secrets, industrial
models, processes, designs, specifications, data, technology, methodologies,
computer programs (including all source codes for computer programs)
confidential and proprietary information, whether or not subject to statutory
registration, and all related documentation, technical information,
manufacturing, engineering and technical drawings, know-how and all pending
applications for and registrations of patents, trademarks, service marks and
copyrights, and the right to sue for past infringement, if any, in connection
with any of the foregoing, and all documents, disks and other media on which any
of the foregoing is stored.
"Intercompany Credits" means payments due and payable during the
Interim Period to the Business or the APX Continuing Business on account of (i)
space occupied by MSX, and not used in the Business, at 275 Rex Boulevard in the
amount of $6,570 per month, or the pro rata portion thereof, if applicable, (ii)
a credit in the amount of $27,083 per month, or the pro rata portion thereof, as
applicable, with respect to the rent subsidy for 255 Rex, (iii) occurrences
described in subsections (iii) and (v) of the definition of "Permitted
Payments", and (iv) a rebate of American Express travel expenses.
"Interim Cash Flow Interest" means a charge equal to (i) the sum of
(a) a charge calculated at a rate of 8.5% per annum for the Interim Period on
the sum of $114,628,000, as decreased or increased, as the case may be, by the
amount by which Effective Date Net Working Capital is less than or greater than
Required Working Capital, plus (b) a charge calculated at the rate of 12.5% per
annum for the Interim Period on the sum of $30 million, less (ii) all interest
accrued during the Interim Period on Funded Indebtedness of the Business or the
APX Continuing Business.
"Interim Employee" means any United States employee actively engaged
in the Business, and, solely for the purposes of Section 13.06, the APX
Continuing Business during the Interim Period, who is not a Transferred
Employee.
"Interim Period" means the period commencing on the Effective Date and
terminating as of the close of business on the Closing Date.
"Interim Period Cash Flow" means (in each case for the Interim
Period): (i) the sum of (x) the aggregate of cash and cash equivalents received
in any manner (excluding the proceeds of any Funded Indebtedness incurred during
the Interim Period) by any of the Sellers or any of their Affiliates relating to
the Business (excluding Excluded Assets and Retained Liabilities) or the APX
Continuing Business, plus (y) the aggregate amount of all Intercompany Credits,
plus (z) the aggregate amount of cash and cash equivalents reflected on the
Effective Date Balance Sheet, plus (zz) the aggregate amount of Assumed
Indebtedness, less (ii) the sum
-75-
<PAGE> 83
of (x) the aggregate amount of all Permitted Payments, plus (y) the Interim Cash
Flow Interest, plus (z) the aggregate amount of cash and cash equivalents either
in the possession of any of the Limited Companies or delivered by MSX to
Purchaser, in each case on the Closing Date, plus (zz) the aggregate amount of
Effective Date Assumed Indebtedness.
"Interim Period Income Tax Amount" means an amount equal to the book
income tax accrual (including deferred taxes and the Michigan Single Business
Tax) of the Business (excluding the Limited Companies) and the APX Continuing
Business (excluding APX-Brazil) for the Interim Period, as determined in
accordance with GAAP in a manner consistent with past practice, except that
Permitted Payments and Interim Cash Flow Interest shall be considered as
expenses in determining book income.
"Interim Period Income Tax Benefit" means an amount equal to the book
loss tax credit (including deferred tax benefit and the Michigan Single Business
Tax) of the Business (excluding the Limited Companies) and the APX Continuing
Business (excluding APX-Brazil) for the Interim Period, as determined in
accordance with GAAP in a manner consistent with past practice, except that
Permitted Payments and Interim Cash Flow Interest shall be considered as
expenses in determining book loss.
"Internal Revenue Service" means the United States Internal Revenue
Service.
"Inventory" has the meaning ascribed to it in Section 2.01(a)(iii).
"Knowledge of the Sellers" means the actual knowledge of any of James
Tompkins, Lee Gardner, Fred Minturn, David Liner, Colin Cushing, Robert
Kirkendall, Robert Simon Wakefield, James Supina, Richard Calmes, Bernie
Macztakowski, Henry M. Hoskins, Michael Hyatt, Ian Everard, Russell Bay, Peter
Marshall, Colin Clifton and Gerry Coyne in each case without the necessity of
any independent investigation.
"Laws" means all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision of any Governmental Authority.
"Liabilities" means all Indebtedness, obligations and other
liabilities (or contingencies that have not yet become liabilities) of a Person
(whether absolute, accrued, contingent, known or unknown, fixed or otherwise, or
whether due or to become due).
"Licenses" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental Authority.
-76-
<PAGE> 84
"Liens" means any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or
any conditional sale Contract, title retention Contract or other Contract to
give any of the foregoing.
"Limited" has the meaning ascribed to it in the forepart of this
Agreement.
"Limited Companies" has the meaning ascribed to it in the introductory
paragraph of Article VI.
"Limited Stock" has the meaning ascribed to it in the forepart of this
Agreement.
"Loss" means any and all damages, fines, fees, penalties,
deficiencies, losses and expenses (including without limitation interest,
reasonable expenses of investigation, court costs, reasonable fees and expenses
of attorneys, accountants and other experts or other expenses of litigation or
other proceedings or of any claim, default or assessment).
"MascoTech" has the meaning ascribed to it in the forepart of this
Agreement.
"Material Adverse Effect" means any circumstance relating to, change
in, or effect on any of MSX, and/or the Limited Companies that, individually or
in the aggregate, is materially adverse to the business, assets, financial
condition or results of operations of the Business (considered on a combined
basis).
"Material Contracts" has the meaning ascribed to it in Section 6.12.
"Material MSX Intellectual Property" has the meaning ascribed to it in
Section 6.11.
"MSX" has the meaning ascribed to it in the forepart of this
Agreement.
"MSX Assets" has the meaning ascribed to it in Section 2.01(a).
"MSX Intellectual Property" has the meaning ascribed to it in Section
6.11.
"Multiemployer Plan" has the meaning set forth in ERISA Section 3(37)
or ERISA Section 4001(a)(3).
"Non-Core Assets" has the meaning ascribed to it in Section 2.01.
"Non-Core Business" means (i) the current business operations or
activities of MSX or the Limited Companies not comprising a part of, or directly
related to, the Business, and (ii) any business operations or activities
previously engaged in by MSX or the Limited
-77-
<PAGE> 85
Companies or any of their predecessors within the 8-year period immediately
prior to the Closing Date which were of a type that would not be directly
related to the business operations or activities of the Business if currently
engaged in on the date hereof.
"Non-Transferable Asset" has the meaning ascribed thereto in Section
2.03.
"North American Operations" has the meaning ascribed to it in the
forepart of this Agreement.
"Operative Agreements" means, collectively, the Assignment and
Assumption Agreement, the Other Assignment Instruments, the Stockholders'
Agreement, the Registration Rights Agreement, the Purchaser Note Agreement, the
Purchaser Notes, the Bridge Credit Agreement and the Subscription Agreements.
"Options" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
gives the right to (i) purchase or otherwise receive or be issued any shares of
capital stock of such Person or any security of any kind convertible into or
exchangeable or exercisable for any shares of capital stock of such Person or
(ii) receive any benefits or rights similar to any rights enjoyed by or accruing
to the holder of shares of capital stock of such Person, including without
limitation any rights to participate in the equity, income or election of
directors or officers of such Person.
"Order" means any writ, judgment, decree, injunction or similar order
of any Governmental Authority (in each such case whether preliminary or final).
"Other Assignment Instruments" has the meaning ascribed to it in
Section 3.04.
"PBGC" means the Pension Benefit Guaranty Corporation established
under ERISA.
"Permitted Lien" means (a) any Lien for Taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, (b) any
statutory Lien arising in the ordinary course of business by operation of Law
with respect to a Liability that is not yet due or delinquent, (c) any minor
imperfection of title or similar Lien which individually or in the aggregate
with other such Liens does not materially impair the value of the property
subject to such Lien or the use of such property in the conduct of the Business
or the business of Purchaser, as the case may be, and which does not secure
obligations for money borrowed and (d) the Liens described in Section 6.17 of
the Disclosure Schedule.
"Permitted Payments" means, without duplication, each of the following
specified expenditures relating to the Business or the APX Continuing Business
which are reflected on the
-78-
<PAGE> 86
Effective Date Balance Sheet or accrue and, in each case, which are paid during
the Interim Period:
(i) a general management fee in the amount of $125,000 per month, or
pro rata portion thereof, as applicable, payable monthly to MascoTech, for
the portion of the salaries, 1996 bonuses and related fringe benefit costs
allocable to the Business for each of Fred Minturn, Mike Muraske, Sheila
McCarrey, Mike Koziol and Gene Stohler;
(ii) a fee in the amount of $32,000 per month, or pro rata portion
thereof, as applicable, payable monthly to MascoTech, for the portion of
the salaries, 1996 bonuses and related fringe benefit costs allocable to
the Business of each of Robert Kirkendall and Tim Herndon;
(iii) a fee in the amount of $30,000 per month, or pro rata portion
thereof, as applicable, payable monthly to MascoTech, for group life and
ordinary and optional long-term disability insurance (it being expressly
understood and agreed that any payments made on account of claims under
such insurance coverage made by employees of the Business shall be the sole
responsibility of MascoTech or its insurers and shall not be deemed
Permitted Payments hereunder);
(iv) payments to MascoTech as reimbursement for monies paid out on
account of group health insurance claims made by employees of the Business,
plus an administrative fee of $46,400 per month, or pro rata portion
thereof, as applicable;
(v) a fee in the amount of $68,700 per month, or pro rata portion
thereof, as applicable, payable monthly to MascoTech, for casualty, general
liability and product liability insurance relating to the Business and the
APX Continuing Business (it being expressly understood and agreed that, if
any claim relating to the Business or the APX Continuing Business and
covered thereunder arises due to an occurrence during the Interim Period,
only the payment of any deductible (not exceeding $100,000) related to such
claim shall be a Permitted Payment hereunder and the payment of the insured
amount with respect to such claim shall be the sole responsibility of
MascoTech or its insurers and shall not be deemed a Permitted Payment
hereunder);
(vi) payments as reimbursement for monies paid out on account of
workers' compensation claims made by employees of the Business or the APX
Continuing Business, plus a fee of $31,000 per month, or pro rata portion
thereof, as applicable;
(vii) reimbursement to MascoTech on account of payments to the 401K
Plan on account of monies withheld during the Interim Period from
participants under such Plan who are employees engaged in either the
Business or the APX Continuing Business;
-79-
<PAGE> 87
(viii) payments to MascoTech or its Affiliates not in excess of $5,000
(except as approved by Ralph Miller or Fred Minturn) for each use in
connection with the Business during the Interim Period of planes and
entertainment facilities owned by such Persons, calculated consistent with
the past practice of the Business;
(ix) payments to MascoTech as reimbursement for monies paid to the
appropriate Taxing Authority after the Effective Date in connection with
employment related taxes accrued and payable during the Interim Period with
respect to employees of the Business or the APX Continuing Business;
(x) payment of Income Taxes which are reflected on the Effective Date
Balance Sheet or accrue with respect to the taxable income of any of the
Limited Companies or APX-Brazil during the Interim Period and which are
paid to the appropriate Taxing Authority by any of such entities during the
Interim Period, respectively;
(xi) payments to Persons (other than the Sellers or any of their
Affiliates) with respect to the operations of the Business or the APX
Continuing Business other than payments with respect to (x) Sales Taxes
arising as a result of a delinquency or error on the part of any Seller to
properly comply with the applicable state or local Sales Tax law, (y)
Income Taxes and (z) Michigan Single Business Tax; and
(xii) payments to Persons (other than the Sellers or any of their
Affiliates) pursuant to, and in accordance with the terms of, the APX
Purchase Agreement;
provided, that notwithstanding anything to the contrary contained herein,
"Permitted Payments" shall not include any repayment of Funded Indebtedness.
"Person" means any natural person, corporation, partnership,
proprietorship, other business organization, trust, union, association or
Governmental Authority.
"Personal Property Leases" has the meaning ascribed to it in Section
2.01(a)(vi).
"Plan" has the meaning ascribed to it in Section 13.05.
"Post-Closing Period" means any taxable period or portion thereof
beginning after the Effective Date. If a taxable period begins on or before the
Effective Date and ends after the Effective Date, then the portion of the
taxable period that begins on the day following the Effective Date shall
constitute a Post-Closing Period.
"Pre-Closing Period" means any taxable period or portion thereof
ending on or before the Effective Date. If a taxable period begins on or before
the Effective Date and ends
-80-
<PAGE> 88
after the Effective Date, then the portion of the taxable period to the end of
the Effective Date shall constitute a Pre-Closing Period.
"Pre-Existing APX Liens" means those Liens existing with respect to
the APX Assets prior to the Effective Date.
"Purchaser" has the meaning ascribed to it in the forepart of this
Agreement.
"Purchaser Disclosure Schedule" means the schedules delivered to the
Sellers by Purchaser herewith and dated the date hereof containing all lists,
descriptions, exceptions and other information and materials as are required to
be included therein by Purchaser pursuant to this Agreement.
"Purchaser Note Agreement" has the meaning ascribed to it in Section
3.01(a).
"Purchase Price" has the meaning ascribed to it in Section 3.01(a).
"Purchaser Notes" has the meaning ascribed to it in Section 3.01(a).
"Real Property Leases" has the meaning ascribed to it in Section
2.01(a)(i).
"Recommended Action" has the meaning ascribed to it in Section
15.04(e)(i).
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Closing Date, among Purchaser, MascoTech, the
Institutional Stockholder, and each of the individuals named therein, including
all schedules and exhibits thereto, substantially in the form attached hereto as
Exhibit 10.08(B).
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing of a
Hazardous Material into the Environment.
"Representatives" means, with respect to a Person, its officers,
directors, employees, agents, counsel, accountants, financial advisors,
consultants and other representatives.
"Required Working Capital" is $50,805,000.
"Resolution Period" means the period ending 30 calendar days following
receipt by an Indemnified Party of a Dispute Notice.
"Retained Liabilities" has the meaning ascribed to it in Section
2.02(b).
-81-
<PAGE> 89
"Sales Taxes" means any sales, use or value added Tax.
"Section 12.03 Interest" has the meaning ascribed to it in Section
12.03.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Seller" or "Sellers" has the meaning ascribed to it in the forepart
of this Agreement.
"Seller 401(K) Plans" has the meaning ascribed to it in Section
13.03(b).
"Seller Party" means MascoTech, MSX and any Subsidiary or Affiliate of
MascoTech and MSX, other than any of the Limited Companies, APX-Brazil, the
Business or the APX Continuing Business.
"Series A Preferred Stock" has the meaning ascribed to it in the
Subscription Agreements.
"Site" means any of the real properties currently or previously owned,
leased or operated by either Seller relating to the Business or the Limited
Companies, or any predecessors of either Seller or the Limited Companies, or any
entities previously owned by either Seller relating to the Business or the
Limited Companies, including all soil, subsoil, surface waters and groundwater
thereat (excluding any real properties owned, leased or operated by any
predecessor of, or any entity previously owned by, the Sellers or any of the
Limited Companies for which neither of the Sellers nor any of the Limited
Companies has any liability under applicable Environmental Laws).
"Stockholders Agreement" means the Stockholders Agreement dated as of
the Closing Date, among Purchaser and its stockholders named therein, including
all schedules and exhibits thereto, substantially in the form attached hereto as
Exhibit 10.08(C).
"Straddle Period Return" means any Tax Return of a Limited Company,
APX-Brazil, the APX Continuing Business or the Business, for a taxable period
that begins on or before and ends after the Effective Date.
"Subscription Agreements" means each of (i) the Management
Subscription Agreements, dated as of the Closing Date, including all schedules
and exhibits thereto, substantially in the form of Exhibit 10.08(D)(1) hereto,
(ii) the MascoTech Subscription Agreement, dated as of the Closing Date,
including all schedules and exhibits thereto, substantially in the form of
Exhibit 10.08(D)(2) hereto, and (iii) the Institutional Stockholder
-82-
<PAGE> 90
Subscription Agreement, dated as of the Closing Date, including all schedules
and exhibits thereto, substantially in the form of Exhibit 10.08(D)(3) hereto.
"Subsidiary" means, with respect to any Person, any other Person in
which such Person, directly or indirectly through Subsidiaries or otherwise,
beneficially owns more than 50% of either the equity interests in, or the voting
control of, such other Person, whether or not existing on the date hereof.
"TAD Seller" means individually or collectively any of Pioneer
Acquisition Corporation, Landmark Holdings, Inc., Aero-Detroit, Inc. and TAD
Technical Services Ltd. ("TAD-Ltd").
"Tangible Personal Property" has the meaning ascribed to it in Section
2.01(a)(v).
"Tax" or "Taxes" means all federal, state, local or foreign net or
gross income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, sales, use,
property, alternative or add-on minimum, environmental or other taxes,
assessments, duties, fees, levies or other governmental charges of any nature
whatever, whether disputed or not, together with any interest, penalties,
additions to tax or additional amounts with respect thereto.
"Tax Claim" means any written claim with respect to Taxes attributable
to a Pre-Closing Period made by any Taxing Authority or other person which, if
pursued successfully, could serve as the basis for a claim for indemnification
of a Tax Indemnitee under this Agreement.
"Tax Indemnitee" has the meaning ascribed to it in Section 12.02(a).
"Taxing Authority" means any governmental agency, board, bureau, body,
department or authority of any United States federal, state or local
jurisdiction, or any foreign jurisdiction, having or purporting to exercise
jurisdiction with respect to any Tax.
"Tax Returns" means any returns, reports or statements (including any
information returns) required to be filed for purposes of a particular Tax.
"Third Party" means any Person other than (i) a Seller Party, (ii)
Purchaser, its Subsidiaries and Affiliates as of the date of this Agreement and
(iii) any of the Limited Companies, APX-Brazil or the APX Continuing Business.
"Third Party Claim" has the meaning ascribed to it in Section
15.02(a).
-83-
<PAGE> 91
"Third Party Indebtedness" means (i) all obligations of any of the
Limited Companies or APX-Brazil or relating to the Business for borrowed money,
(ii) all obligations of any of the Limited Companies or APX-Brazil or relating
to the Business in respect of bankers' acceptances or other similar instruments
or reimbursement obligations with respect thereto, (iii) all obligations of any
of the Limited Companies or APX-Brazil or relating to the Business to pay the
deferred purchase price of property and services (excluding any trade payables
in the ordinary course of business), (iv) all obligations of any of the Limited
Companies or APX-Brazil or relating to the Business under capitalized leases and
(v) all obligations of other Persons of the types described in clauses (i)
through (iv) above guaranteed by any of the Limited Companies or APX-Brazil or
relating to the Business, in each case to any Person (other than the Sellers and
its Affiliates).
"Transferred Assets" means the MSX Assets, the Limited Stock and, from
and after the Effective Date, the APX Assets and the APX-Brazil Stock; provided,
however, that in no event shall "Transferred Assets" be deemed to refer to the
APX Assets or any condition, event or set of circumstances relating thereto
prior to the Effective Date.
"Transferred Employee" has the meaning ascribed to it in Section
13.01.
"Transfer Taxes" means sales, use, transfer, real property transfer,
recording, gains, stock transfer and other similar taxes and fees.
"Vehicles" has the meaning ascribed to it in Section 2.01(a)(xi).
"WARN" has the meaning ascribed to it in Section 13.01(b).
"Warranty Obligations" has the meaning ascribed to it in Section 6.20.
(b) Unless the context of this Agreement otherwise requires, (i) words
of any gender include each other gender; (ii) words using the singular or plural
number also include the plural or singular number, respectively; (iii) the terms
"hereof", "herein", "hereby" and derivative or similar words refer to this
entire Agreement; and (iv) the terms "Article" or "Section" refer to the
specified Article or Section of this Agreement. All accounting terms used herein
and not expressly defined herein shall have the meanings given to them under
GAAP.
ARTICLE XVIII
MISCELLANEOUS
18.01 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally against
-84-
<PAGE> 92
written receipt or by facsimile transmission or mailed by prepaid first class
certified mail, return receipt requested, or mailed by overnight courier
prepaid, to the parties at the following addresses or facsimile numbers:
If to Purchaser:
ASG Holdings Inc.
275 Rex Boulevard
Auburn Hills, Michigan
Facsimile No.: 810-299-1008
Attn: President
with a copy to:
ASG Holdings Inc.
275 Rex Boulevard
Auburn Hills, Michigan
Facsimile No.: 810-299-1008
Attn: General Counsel
with a copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue, New York, New York 10178-0060
Facsimile No.: (212) 309-6273
Attn: Philip H. Werner, Esq.
If to either the Seller, to:
MascoTech, Inc.
21001 Van Born Road
Taylor, MI 48180
Facsimile No.: 313-374-6136
Attn: President
-85-
<PAGE> 93
with a copy to:
MascoTech, Inc.
21001 Van Born Road
Taylor, MI 48180
Facsimile No.: 313-374-6135
Attn: General Counsel
All such notices, requests and other communications will (a) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (b) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, (c) if delivered by mail
in the manner described above to the address as provided in this Section, be
deemed given on the earlier of the third Business Day following mailing, or upon
receipt, and (d) if delivered by overnight courier to the address provided in
this Section, be deemed given on the earlier of the first Business Day following
the date sent by such overnight courier, or upon receipt (in each case
regardless of whether such notice, request or other communication is received by
any other Person to whom a copy of such notice is to be delivered pursuant to
this Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other parties hereto.
18.02 Entire Agreement. This Agreement and the Operative Agreements
supersede all prior discussions and agreements between the parties with respect
to the subject matter hereof and thereof and contain the sole and entire
agreement between the parties hereto with respect to the subject matter hereof
and thereof.
18.03 Expenses. Except as otherwise expressly provided in this
Agreement (including without limitation as provided in Section 16.02), whether
or not the transactions contemplated hereby are consummated, each party will pay
its own costs and expenses incurred in connection with the negotiation and
execution of this Agreement and the Operative Agreements and the transactions
contemplated hereby and thereby. If the Closing occurs, Purchaser shall
reimburse the Sellers for the reasonable fees and disbursements of Davis Polk &
Wardwell incurred in connection with the negotiation and execution of the
Operative Agreements. To the extent not taken into account as a Permitted
Payment, Purchaser shall reimburse the Sellers for the reasonable fees and
disbursements of Pepper, Hamilton & Scheetz incurred in connection with the
negotiation and execution of the APX Purchase Agreement. In addition, all fees
and expenses incurred by Coopers & Lybrand in connection with the preparation of
the Effective Date Balance Sheet, the Computations and the Financial Statements
shall be borne by Purchaser. Any payment due hereunder shall be made within five
(5) Business
-86-
<PAGE> 94
Days after receipt by Purchaser from the Sellers of documentation reasonably
satisfactory to Purchaser specifying the nature of the services rendered and the
total amount due therefor.
18.04 Public Announcements. At all times at or before the Closing,
none of the parties hereto will issue or make any statements or releases to the
public with respect to this Agreement or the transactions contemplated hereby
without the consent of the other parties hereto, which consent in each case
shall not be unreasonably withheld. If any party hereto is unable to obtain the
approval of its public statement or release from the other parties hereto and
such statement or release is, in the opinion of legal counsel to such party,
required by Law in order to discharge such party's disclosure obligations, then
such party may make or issue the legally required statement or release and
promptly furnish the other parties hereto with a copy thereof. Each of the
Sellers and Purchaser will also obtain the other's prior approval of any press
release to be issued immediately following the Closing announcing the
consummation of the transactions contemplated by this Agreement.
18.05 Confidentiality. Each party hereto will hold, and will use its
best efforts to cause its Affiliates and their respective Representatives to
hold, in strict confidence from any Person (other than any such Affiliate or
Representative), unless (a) compelled to disclose by judicial or administrative
process (including without limitation in connection with obtaining the necessary
approvals of this Agreement and the transactions contemplated hereby of
Governmental Authorities) or by other requirements of Law or (b) disclosed in an
Action or Proceeding brought by a party hereto in pursuit of its rights or in
the exercise of its remedies hereunder, all documents and information concerning
any other party or any of its Affiliates furnished to it by such other party or
such other party's Representatives in connection with this Agreement or the
transactions contemplated hereby, except to the extent that such documents or
information can be shown to have been (i) previously known by the party
receiving such documents or information, (ii) in the public domain (either prior
to or after the furnishing of such documents or information hereunder) through
no fault of such receiving party or (iii) later acquired by the receiving party
from another source if the receiving party is not aware that such source is
under an obligation to another party hereto to keep such documents and
information confidential; provided that following the Closing the foregoing
restrictions will not apply to Purchaser's use of documents and information
concerning the Sellers, as relating to the Business, the Business, the APX
Continuing Business, the APX-Brazil Stock, the Limited Stock, the Assets or the
Assumed Liabilities furnished by any party hereto. In the event the transactions
contemplated hereby are not consummated, upon the request of any other party,
each party hereto will, and will cause its Affiliates and their respective
Representatives to, promptly (and in no event later than five days after such
request) redeliver or cause to be redelivered all copies of documents and
information furnished by such other party in connection with this Agreement or
the transactions contemplated hereby and destroy or cause to be destroyed all
notes, memoranda, summaries, analyses, compilations and other writings related
thereto or based thereon prepared by the party furnished such documents and
information or its Representatives.
-87-
<PAGE> 95
18.06 Waiver. Any term or condition of this Agreement may be waived at
any time by any party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party against whom the enforcement of such waiver is
sought. No waiver by any party of any term or condition of this Agreement, in
any one or more instances, shall be deemed to be or construed as a waiver of the
same or any other term or condition of this Agreement by any other party or by
the same party on any future occasion. All remedies, either under this Agreement
or by Law or otherwise afforded, will be cumulative and not alternative.
18.07 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
18.08 No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than the Institutional Stockholder to the extent provided herein and any Person
entitled to indemnity under Article XV.
18.09 No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of each other party hereto and any attempt to
do so will be void, except (a) for assignments and transfers by operation of Law
and (b) that Purchaser may assign any or all of its rights, interests and
obligations hereunder (including without limitation its rights under Article XV)
to (i) any wholly-owned Subsidiary of Purchaser, (ii) any post-Closing purchaser
of the Business or the APX Continuing Business or a substantial part of the
Assets of Purchaser or (iii) any financial institution providing purchase money
or other financing to Purchaser from time to time as collateral security for
such financing, but no such assignment referred to in clause (i) or (ii) above
shall relieve the assigning party of its obligations hereunder. Subject to the
preceding sentence, this Agreement is binding upon, inures to the benefit of and
is enforceable by the parties hereto and their respective successors and
assigns.
18.10 Limited Recourse. Notwithstanding anything in this Agreement to
the contrary, (i) the obligations and liabilities of the parties hereunder shall
be without recourse to any stockholder (other than with respect to MSX or
MascoTech) of such party or any of such stockholder's Affiliates, directors,
employees, officers or agents and shall be limited to the assets of such party
and (ii) the stockholders of Purchaser (other than MascoTech) have made no (and
shall not be deemed to have made any) representations, warranties or covenants
(express or implied) under or in connection with this Agreement.
18.11 Construction. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties, and no
-88-
<PAGE> 96
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement. The word
"including" shall mean "including without limitation". Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to refer
to all rules and regulations promulgated thereunder, unless the context requires
otherwise. The fact that a party has disclosed any particular matter in the
Disclosure Schedule or Purchaser Disclosure Schedule, or in the certificates
referred to in Section 10.03 or Section 11.03 above, shall have no bearing on
the issue of whether the disclosed matter is "material" for any purpose under
this Agreement. Any matter that the Sellers disclose in any section or
subsection of the Disclosure Schedule shall be deemed to have been disclosed by
the Sellers only for the purposes of the corresponding section or subsection of
this Agreement unless this Agreement or the Disclosure Schedule expressly states
otherwise. Any matter that Purchaser discloses in any section or subsection of
the Purchaser Disclosure Schedule shall be deemed to have been disclosed by
Purchaser only for purposes of the corresponding section or subsection of this
Agreement unless this Agreement or the Purchaser Disclosure Schedule expressly
states otherwise.
18.12 No Offset. Notwithstanding anything to the contrary in this
Agreement, the Sellers shall not be entitled to satisfy any of their payment
obligations under this Agreement by means of an offset against the Purchaser
Notes or any security evidencing indebtedness of Purchaser issued in exchange
for shares of Series A Preferred Stock of Purchaser or against the obligations
of the Purchaser or its Subsidiaries arising under the Bridge Credit Agreement.
18.13 Headings. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.
18.14 Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future Law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
18.15 Governing Law. This Agreement shall be governed by and construed
in accordance with the Laws of the State of New York without giving effect to
any conflict of law provision or rule that would cause the application of the
laws of any jurisdiction other than the State of New York.
-89-
<PAGE> 97
18.16 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
18.17 Certain Releases. As soon as practicable after the January 1,
1999, Purchaser shall use its commercially reasonable efforts to obtain the
release of the Sellers and their remaining Subsidiaries, as applicable,
(collectively, the "Guarantee Parties"), from all obligations and liabilities
under all Real Property Leases and Personal Property Leases relating to the
Business guaranteed by any of the Sellers or their remaining Subsidiaries
(collectively, the "Guaranteed Obligations"). Commencing January 1, 1999,
Purchaser shall pay MascoTech a fee equal to the lesser of (i) one-half of one
percent (1/2%) per annum, payable annually in arrears, on the discounted present
value (using a 12% discount rate) of the aggregate amount of Guaranteed
Obligations that remain guaranteed from time to time by the Guarantee Parties
measured as of the first day of July in each such year, and (ii) the sum of
$50,000. In no event, however, will Purchaser and its Subsidiaries expand upon
or prolong any of the Guarantee Parties' obligations and liabilities by
extending, renewing, or failing to exercise early termination rights which are
unilaterally exercisable without the payment of significant penalties, with
respect to any Guaranteed Obligation.
18.18 Risk Management and Litigation Support.
(a) Notwithstanding any other provision of this Agreement to the
contrary, Purchaser shall not have any liability or responsibility for, and
MascoTech shall be solely responsible for, and indemnify and hold harmless
Purchaser from and against, all claims under, and Liabilities and Adverse
Consequences resulting from, all "insurance-type" liabilities covered (whether
collectible or not) under MascoTech's comprehensive general, product and
automobile liability policies (including retrospectively rated insurance
policies and insurance programs that are an economic equivalent of
self-insurance), in each case as in effect as of the date hereof, arising from
any occurrence prior to the Effective Date or during the Interim Period relating
to the Business, the APX Business or involving any of the Limited Companies,
APX-Brazil or any of their Subsidiaries (whether known or unknown at the Closing
Date), in each case net of any applicable deductible; provided, that, with
respect to any such occurrence prior to the Effective Date and subject to the
provisions of Article XV, Purchaser shall be responsible for the amount of any
claim under such Masco Tech policies to the extent of the amount by which (i)
the aggregate amount of claims taken into account in determining the $1 million
limitation under Section 15.01(a)(i), taken together with claims for which
Purchaser shall have responsibility under this proviso, is less than (ii)
$1,000,000. After the Closing Date, Purchaser and its Subsidiaries shall
cooperate as reasonably requested by MascoTech in administering such claims, and
MascoTech shall administer such claims, in a manner consistent with the past
practices of MascoTech. Such cooperation will include (x) assigning to MascoTech
any pertinent contracts and insurance policies, providing claim files,
financial, underwriting and other information and
-90-
<PAGE> 98
assisting MascoTech, all as reasonably requested by MascoTech, and (y) providing
the other support contemplated by clause (ii) below.
(b) If, and for so long as, any party hereto is actively contesting or
defending against any action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand brought by any third party in connection with any
transaction contemplated under this Agreement or any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act or transaction on or prior to the Closing Date
relating to the Business or the APX Continuing Business or involving any of the
Limited Companies or APX-Brazil, the other parties hereto shall (i) cooperate
with the contesting or defending party and its counsel in the contest or
defense, (ii) make available its personnel, and (iii) provide such testimony and
access to its books and records, in each case as the contesting or defending
party may reasonably request, but all at the sole cost and expense of the
contesting or defending party (except to the extent that the contesting or
defending party is entitled to indemnification therefor under Article XV above).
18.19 Certain Recoveries. After the Closing Purchaser shall have the
right to make, and the Sellers and Purchaser shall cooperate with each other
with respect to making claims, under (i) any occurrence-based policies that
provide coverage to the Business or the APX Continuing Business, or under which
any of the Limited Companies or APX-Brazil is insured, as of the Closing Date
and under which coverage may be afforded for occurrences prior to the Closing
Date, and (ii) any acquisition agreements with third parties, to the extent such
agreements are in effect as of the Closing Date and afford indemnification
rights for the benefit of Purchaser and any of its Subsidiaries.
18.20 Bulk Sales Compliance. The Sellers, jointly and severally, shall
indemnify and hold harmless Purchaser and its Subsidiaries from any failure to
comply with applicable Bulk Sales Laws and Orders.
18.21 Business Related Confidentiality. Notwithstanding Section 18.05,
during the three year period immediately following the Closing Date, each of the
Sellers shall, and shall cause each of its Subsidiaries, its Representatives and
the Representatives of its Subsidiaries, to (i) maintain in confidence all
confidential and proprietary information and data of the Business, the APX
Continuing Business, any of the Limited Companies or APX-Brazil known to either
of the Sellers as a result of its acquisition or ownership of the Business, the
APX Continuing Business, any of the Limited Companies or APX-Brazil prior to the
Closing Date except any information currently used by either of the Sellers and
their remaining Subsidiaries in their remaining businesses (the "Confidential
Information") and (ii) disclose the Confidential Information only to its
Subsidiaries, its Representatives and the Representatives of its Subsidiaries,
that need to know such Confidential Information, (iii) use the Confidential
Information only for the purpose of monitoring and evaluating its investment in
Purchaser and determining and performing its obligations and exercising its
rights under this Agreement and the
-91-
<PAGE> 99
other Operative Agreements. The obligation to hold information in confidence
shall be satisfied if the Sellers and their Subsidiaries exercise the same care
with respect to such information as it would take to preserve the
confidentiality of its own similar information. Nothing herein shall prevent
either of the Sellers or its Subsidiaries, its Representatives or the
Representatives of its Subsidiaries from using, disclosing or authorizing the
disclosure of Confidential Information such Person receives which (i) has been
published in the public domain through no fault of either of the Sellers or any
such other Person; (ii) is lawfully received from a third party having rights
therein without notice of any restriction against its further disclosure or its
disclosure to such Person; (iii) is independently developed by either of the
Sellers through parties who have not had, either directly or indirectly, access
to or knowledge of such Confidential Information; (iv) is required to be
produced under Order; provided that such Confidential Information to the extent
covered by a protective Order or its equivalent shall otherwise continue to be
Confidential Information; or (v) is required to be disclosed by applicable Law
or a stock exchange or a securities trading association on which such Person's
securities (or those of its Affiliate) are listed.
-92-
<PAGE> 100
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by a duly authorized officer of each party as of the date first above
written.
MASCOTECH, INC.
By:
-----------------------------------------------
Name: Timothy Wadhams
Title: Vice President, Controller and Treasurer
MSX INTERNATIONAL, INC.
By:
-----------------------------------------------
Name: Timothy Wadhams
Title: Vice President
ASG HOLDINGS INC.
By:
-----------------------------------------------
Name: Frederick K. Minturn
Title: President
-93-
<PAGE> 1
EXHIBIT 10.11
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of November 12, 1996 (this
"Agreement"), by and between ASG Holdings Inc., a Delaware corporation (the
"Company"), and Ralph Miller (the "Executive").
WHEREAS, on the date hereof, the Executive is employed by MSX
International, Inc. ("MSX"); and
WHEREAS, pursuant to an Acquisition Agreement dated as of the date
hereof among the Company, MSX and Mascotech, Inc., the Company has agreed to
acquire substantially all the assets and business of MSX; and
WHEREAS, the Company desires to employ the Executive as President and
Chief Operating Officer, and the Executive desires to be retained in such
capacities on the terms and conditions set forth herein, effective upon the
closing of the transactions contemplated by such Acquisition Agreement, it being
understood that if no such closing shall occur, this Agreement shall have no
force and effect.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements made herein, the Company and the Executive agree as follows:
1. Prior Agreements. The Executive hereby agrees that all
agreements, plans or arrangements covering the Executive which are in effect
prior to the Commencement Date and which are to be assumed by the Company
pursuant to the Acquisition Agreement shall be terminated as of the Commencement
Date, and the Executive hereby releases the Company and its affiliates from all
payments and other obligations thereunder, if any. The foregoing shall not apply
to (i) this Agreement, (ii) any other agreement entered into by the Executive
and the Company on the date hereof, and (iii) obligations with respect to the
Executive to be assumed by the Company under the Acquisition Agreement under the
MSX International 401(k)Plan. Nothing in this Agreement shall affect any rights
the Executive may have to pursue payments from TAD Resources International, Inc.
and its affiliates.
2. Employment; Duties. The Company shall employ the Executive as
President and Chief Operating Officer for the "Employment Period" as defined in
Section 3. The Executive, in his capacity as President and Chief Operating
Officer, shall have such duties, responsibilities and authority normally
incident to such office, subject to the provisions of the Bylaws of the Company.
Subject to the foregoing, the precise duties, responsibilities and authority of
the Executive may be expanded, limited or modified, from time to time, at the
discretion of the
<PAGE> 2
Board of Directors. During the Employment Period, the Executive shall render
his business services solely in the performance of his duties hereunder. The
Executive agrees that during the term of his employment hereunder, he shall
devote his full working time, attention, knowledge and experience and give his
best effort, skill and abilities, exclusively to promote the business and
interests of the Company. The Executive may not serve as an officer or director
of, make investments in, or otherwise participate in, any other entity without
the prior written consent of the Board of Directors; provided, that the
foregoing shall not be deemed to prohibit the Executive from acquiring,
directly or indirectly, solely as an investment, not more than two percent (2%)
of any class of securities of any entity that are registered under Section
12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, including
the regulations issued thereunder; and provided further, that so long as it
does not interfere with the Executive's employment, the Executive may (a) with
the prior written consent of the Board of Directors (which consent will not be
unreasonably withheld), serve as a director in a noncompeting company, (b)
serve as an officer, director or otherwise participate in purely educational,
welfare, social, religious and civic organizations, and (c) manage personal and
family investments.
3. Employment Period. This Agreement shall have a term of two years,
commencing as of the date of the closing of the transactions contemplated by the
Acquisition Agreement, as referenced in the recitals above (the "Commencement
Date") and ending on the second anniversary of the Commencement Date (the
"Initial Period"), unless sooner terminated in accordance with the provisions of
Section 8 or Section 9. On the expiration of the Initial Period and on each
yearly anniversary thereof, this Agreement shall automatically renew for an
additional one-year period (each such one-year period being referred to as a
"Renewal Period"), unless sooner terminated in accordance with the provisions of
Section 8 or Section 9, unless the Company or the Executive notifies the other
in writing of its intention not to renew this Agreement not less than ninety
(90) days prior to such expiration date or anniversary, as the case may be. The
term of this Agreement, as in effect from time to time, is referred to herein as
the "Employment Period".
4. Compensation and Benefits.
(a) Base Compensation. The Executive shall be paid an aggregate
base salary (the "Base Salary") of $325,000 per annum, less statutory deductions
and withholdings. The Base Salary shall be payable in a manner consistent with
the normal payroll practices of the Company in effect from time to time. The
Board of Directors of the Company, in its sole discretion, or at the
recommendation of the Compensation Committee, may increase (but not decrease)
the Base Salary, at any time.
2
<PAGE> 3
(b) Annual Bonus. In addition to the Base Salary, the Executive
may be entitled to receive a discretionary annual bonus for each fiscal year of
the Company that ends during the Employment Period of up to 50% of his annual
Base Salary (the "Bonus Award") based upon the achievement of annual Company and
individual performance goals to be set by the Board of Directors in consultation
with the Executive.
(c) Benefits. The Executive shall also be entitled to participate
in the employee benefit and group insurance programs provided by the Company for
its officers and employees generally and in accordance with the terms of the
applicable plan documents as they may be revised from time to time.
5. Trade Secrets. The Executive recognizes that it is in the
legitimate business interest of the Company to restrict his disclosure or use of
Trade Secrets and Confidential Information relating to the Company and its
direct or indirect subsidiaries for any purpose other than in connection with
his performance of his duties to the Company, and to limit any potential
appropriation of such Trade Secrets and Confidential Information by the
Executive. The Executive therefore agrees that all Trade Secrets and
Confidential Information relating to the Company and its direct or indirect
subsidiaries heretofore or in the future obtained by the Executive shall be
considered confidential and the proprietary information of the Company and its
direct or indirect subsidiaries. During the Employment Period the Executive
shall not use or disclose, or authorize any other person or entity to use or
disclose, any Trade Secrets or other Confidential Information, other than as
necessary to further the business objectives of the Company in accordance with
the terms of his employment hereunder. The term "Trade Secrets or other
Confidential Information" includes, by way of example and without limitation,
matters of a technical nature, such as scientific, trade and engineering
secrets, "know-how", formulas, secret processes, drawings, works of authorship,
machines, inventions, computer programs (including documentation of such
programs), services, materials, patent applications, new product plans, other
plans, technical information, technical improvements, manufacturing techniques,
specifications, manufacturing and test data, progress reports and research
projects, and matters of a business nature, such as business plans, prospects,
financial information, proprietary information about costs, profits, markets,
sales, lists of customers and suppliers of the Company and its direct or
indirect subsidiaries, procurement and promotional information, credit and
financial data concerning customers or suppliers of the Company and its direct
or indirect subsidiaries, information relating to the management, operation and
planning of the Company and its direct and indirect subsidiaries, and other
information of a similar nature to the extent not available to the public, and
plans for
3
<PAGE> 4
future development. After termination of the Executive's employment with the
Company for any reason, the Executive shall not use or disclose Trade Secrets or
other Confidential Information.
6. Return of Documents and Property. Upon the termination of the
Executive's employment with the Company, or at any time upon the request of the
Company, the Executive (or his heirs or personal representatives) shall deliver
to the Company (a) all documents and materials (including, without limitation,
computer files) containing Trade Secrets or other Confidential Information
relating to the business and affairs of the Company and its direct and indirect
subsidiaries, and (b) all documents, materials and other property (including,
without limitation, computer files) belonging to the Company or its direct or
indirect subsidiaries, which in either case are in the possession or under the
control of the Executive (or his heirs or personal representatives).
7. Discoveries and Work. All Discoveries and Works made or conceived
by the Executive during his employment by the Company, whether during the
Employment Period or at any time prior thereto, jointly or with others, that
relate to the present or anticipated activities of the Company or its direct or
indirect subsidiaries, or are used or usable by the Company or its direct or
indirect subsidiaries shall be owned by the Company or its direct or indirect
subsidiaries. The term "Discoveries and Works" includes, by way of example but
without limitation, Trade Secrets and other Confidential Information, patents
and patent applications, trademarks and trademark registrations and
applications, service marks and service mark registrations and applications,
trade names, copyrights and copyright registrations and applications. The
Executive shall (a) promptly notify, make full disclosure to, and execute and
deliver any documents requested by, the Company, as the case may be, to evidence
or better assure title to Discoveries and Works in the Company or its direct or
indirect subsidiaries, as so requested, (b) renounce any and all claims,
including but not limited to claims of ownership and royalty, with respect to
all Discoveries and Works and all other property owned or licensed by the
Company or its direct or indirect subsidiaries, (c) assist the Company or its
direct or indirect subsidiaries in obtaining or maintaining for itself at its
own expense United States and foreign patents, copyrights, trade secret
protection or other protection of any and all Discoveries and Works, and (d)
promptly execute, whether during his employment with the Company or thereafter,
all applications or other endorsements necessary or appropriate to maintain
patents and other rights for the Company or its direct or indirect subsidiaries
and to protect the title of the Company or its direct or indirect subsidiaries
thereto, including but not limited to assignments of such patents and other
rights. Any Discoveries and Works which, within six months after the
4
<PAGE> 5
termination of the Executive's employment with the Company, are made, disclosed,
reduced to a tangible or written form or description, or are reduced to
practice by the Executive and which pertain to the business carried on or
products or services being sold or developed by the Company or its direct or
indirect subsidiaries at the time of such termination shall, as between the
Executive and, the Company, be presumed to have been made during the Executive's
employment by the Company. The Executive acknowledges that all Discoveries and
Works shall be deemed "works made for hire" under the Copyright Act of 1976, as
amended, 17 U.S.C. Section 101.
8. Termination.
(a) The Company or the Executive may terminate this Agreement,
with or without cause, with or without prior notice. Except as provided in
Sections 8(b) and 18, in the event the Company or the Executive terminates this
Agreement, the Executive's rights and the obligations of the Company hereunder
shall cease as of the effective date of the termination, including, without
limitation, the right to receive the Base Salary, any Bonus Award and all other
compensation or benefits provided for in this Agreement.
(b) In the event the Company terminates this Agreement without
"cause" or in the event that the Executive terminates this Agreement upon notice
for "Good Reason", the Executive shall be entitled to continue to receive
payments of his Base Salary for the balance of the then existing Employment
Period, payable at such times and in such amounts as if this Agreement were not
terminated, provided, however, that if such termination occurs during the
Initial Term, or on account of the Company's action pursuant to Section 3 which
prevents the automatic renewal of the Agreement upon (and only upon) expiration
of the Initial Term, then the period during which the Executive shall be
entitled to continue to receive payments of his Base Salary shall be no less
than one year. All other compensation and benefits provided for in Section 4 of
this Agreement shall cease upon such termination.
For purposes of this Agreement, "cause" shall mean (i) the willful
failure of the Executive to follow the directions of the Board of Directors
(other than any such failure resulting from his incapacity due to physical or
mental illness or disability which is subject to the provisions of Section 9),
after written notice of such failure from the Board of Directors and a 10-day
opportunity to cure, (ii) any act of fraud or dishonesty, misappropriation or
embezzlement, wilful misconduct or gross negligence in connection with the
performance of the Executive's duties hereunder, (iii) a breach by the Executive
of any material provision hereof or of any material contractual or material
legal duty to the Company (including, but not limited
5
<PAGE> 6
to, the unauthorized disclosure of Trade Secrets or other Confidential
Information, non-compliance with the written policies, guidelines and procedures
of the Company), after written notice thereof from the Board of Directors and a
30-day opportunity to cure in the event that such breach was not wilful, (iv)
the conviction of the Executive of the commission of a crime or offense
involving moral turpitude (including pleading guilty or no contest to such a
crime or offense or a lesser charge which results from plea bargaining) which
results in the imprisonment of the Executive, whether or not committed in
connection with the business of the Company, (v) alcohol or substance abuse or
(vi) breach by the Executive of the provisions of any stockholders agreement or
other agreement relating to the Executive's acquisition of an equity interest in
the Company to which the Executive may become a party on or after the date
hereof.
For purposes of this Agreement, "Good Reason" shall mean (i) the
Company changes the Executive's status, title or position as an officer of the
Company and such change represents a material reduction in such status, title or
position conferred hereunder, and/or (ii) the Company materially breached this
Agreement, and such change or breach is not cured by the Company within thirty
(30) days from the date the Executive delivers a Notice of Termination for Good
Reason. Such "Notice of Termination for Good Reason" shall include the specific
section of this Agreement which was relied upon and the reason that the Company
act or failure to act has given rise to his termination for Good Reason.
(c) In the event the Company terminates this Agreement for cause
or the Executive terminates this Agreement (other than for Good Reason), the
Executive's rights hereunder shall cease as of the effective date of the
termination, including, without limitation, the right to receive the Base
Salary, any Bonus Award and all other compensation or benefits provided for in
this Agreement.
(d) As a condition to his entitlement, if any, to amounts
provided for under Section 8(b), the Executive shall have executed and delivered
to the Company a release in the form attached hereto as Exhibit A (the
"Release"), as such Release may be modified by the Company from time to time in
good faith, and such Release shall have become irrevocable.
9. Disability; Death.
(a) If, prior to the expiration of the Employment Period or the
termination of this Agreement, the Executive shall be unable to perform his
duties by reason of mental or physical disability for at least one-hundred
eighty (180) consecutive days or any one-hundred eighty (180) days (whether or
not consecutive) in any three-hundred sixty (360) consecutive day period, the
6
<PAGE> 7
Company shall have the right to terminate this Agreement and the remainder of
the Employment Period by giving written notice to the Executive to that effect.
Immediately upon the giving of such notice, the Employment Period shall
terminate.
(b) Upon termination of this Agreement pursuant to Section 9(a),
the Executive shall be paid his Base Salary for the month in which notice is
given. In the event of a dispute as to whether the Executive is disabled within
the meaning of Section 9(a), either party may from time to time request a
medical examination of the Executive by a doctor appointed by the Chief of Staff
of a hospital selected by mutual agreement of the parties, or as the parties may
otherwise agree, and the written medical opinion of such doctor shall be
conclusive and binding upon the parties as to whether the Executive has become
disabled and the date when such disability arose. The cost of any such medical
examination shall be borne by the Company. If, prior to the expiration of the
Employment Period or the termination of this Agreement, the Executive shall die,
the Executive's estate shall be paid his Base Salary through the end of the
month in which the Executive's death has occurred, at which time the Employment
Period shall terminate without further notice and the Company shall have no
further obligations hereunder.
10. No Conflicts. The Executive represents to the Company that the
execution, delivery and performance by the Executive of this Agreement do not
conflict with or result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default under any contract, agreement
or understanding, whether oral or written, to which the Executive is a party or
of which the Executive is or should be aware.
11. Non-Competition. From and after the Commencement Date, the
Executive will not, except pursuant to the terms hereof, directly or indirectly,
own, manage, operate, join, finance control or participate in the ownership,
management, operation or control of, or be employed or be otherwise connected in
any manner with, any business under a name similar to the name of any of the
Company or any direct or indirect subsidiary thereof. Prior to the termination
of the Executive's employment hereunder and for a period after any such
termination or expiration of this Agreement equal to the greater of (i) twelve
(12) months and (ii) the balance of the then existing Employment Period (as if
this Agreement were not terminated), the Executive will not (except as an
officer, director, employee, agent or consultant of the Company) directly or
indirectly, own, manage, operate, join, or have a financial interest in, control
or participate in the ownership, management, operation or control of, or be
employed as an employee, agent or consultant, or in any other individual or
representative capacity whatsoever, or use or permit his name to be used in
connection with, or be otherwise connected in any manner with (i) any business
or enterprise
7
<PAGE> 8
engaged (wherever located) in the design, development, manufacture,
distribution or sale of any products, or the provision of any services, which
the Company or its direct or indirect subsidiaries were designing, developing,
manufacturing, distributing, selling or providing at any time up to an including
the date of termination of this Agreement or (ii) any business which is similar
to or competitive with the business carried on or planned by the Company or its
direct or indirect subsidiaries at any time during the period of the Executive's
employment by the Company, whether during or prior to the Employment Period,
unless the Executive shall have obtained the prior written consent of the Board
of Directors, provided that the foregoing restriction shall not be construed to
prohibit the ownership by the Executive of not more than two percent (2%) of any
class of securities of any corporation which is engaged in any of the foregoing
businesses, having a class of securities registered pursuant to the Securities
Exchange Act of 1934, which securities are publicly owned and regularly traded
on any national exchange or in the over-the-counter market, provided further,
that such ownership represents a passive investment and that neither the
Executive nor any group of persons including the Executive in any way, either
directly or indirectly, manages or exercises control of any such corporation,
guarantees any of its financial obligations, otherwise takes part in its
business other than exercising his rights as a shareholder, or seeks to do any
of the foregoing.
12. Non-Solicitation. Prior to the termination of the Executive's
employment hereunder and for a period after any such termination or expiration
of this Agreement equal to the greater of (i) twelve (12) months and (ii) the
balance of the then existing Employment Period (as if this Agreement were not
terminated), the Executive agrees, directly or indirectly, whether for his own
account or for the account of any other individual or entity, not to solicit or
canvas the trade, business or patronage of, or sell any products or services
which are the same as or similar to those designed, developed, manufactured,
distributed or sold by the Company or its direct or indirect subsidiaries to,
any individuals or entities that were either customers of the Company or any of
its direct or indirect subsidiaries during the time the Executive was employed
by the Company, whether during or prior to the Employment Period, or prospective
customers with respect to whom a sales effort, presentation or proposal was made
by the Company or any of its direct or indirect subsidiaries during the twelve
months preceding the date of termination or expiration, as the case may be. The
Executive further agrees that prior to the termination of the Executive's
employment hereunder and for a period of two years thereafter, he shall not,
directly or indirectly, (i) solicit, induce, enter into any agreement with, or
attempt to influence any individual who was an employee or consultant of the
Company or any of its direct or indirect subsidiaries at any time
8
<PAGE> 9
during the time the Executive was employed by the Company, whether during or
prior to the Employment Period, to terminate his or her employment relationship
with the Company or any of its direct or indirect subsidiaries or to become
employed by the Executive or any individual or entity by which Executive is
employed or (ii) interfere in any other way with the employment, or other
relationship, of any employee or consultant of the Company or any of its
direct or indirect subsidiaries.
13. Enforcement. (a) The Executive agrees that the remedies at law
for any breach or threat of breach by him of any of the provisions of Sections
5, 6, 7, 11 and 12 hereof will be inadequate, and that, in addition to any other
remedy to which the Company may be entitled at law or in equity, the Company
shall be entitled to a temporary or permanent injunction or injunctions or
temporary restraining order or orders to prevent breaches of the provisions of
Sections 5, 6, 7, 11 and 12 hereof and to enforce specifically the terms and
provisions thereof, in each case without the need to post any security or bond.
Nothing herein contained shall be construed as prohibiting the Company from
pursuing, in addition, any other remedies available to the Company for such
breach or threatened breach. A waiver by the Company of any breach of any
provision hereof shall not operate or be construed as a waiver of a breach of
any other provision of this Agreement or of any subsequent breach by the
Executive.
(b) It is expressly understood and agreed that although the
Company and the Executive consider the restrictions contained in Sections 5, 6,
7, 11 and 12 hereof to be reasonable for the purpose of preserving the goodwill,
proprietary rights and going concern value of the Company, if a final judicial
determination is made by a court having jurisdiction that the time or territory
or any other restriction contained in such Sections 5, 6, 7, 11 and 12 is an
unenforceable restriction on the Executive's activities, the provisions of such
Sections 5, 6, 7, 11 and 12 shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such other extent
as such court may judicially determine or indicate to be reasonable.
Alternatively, if the court referred to above finds that any restriction
contained in Sections 5, 6, 7, 11 or 12 or any remedy provided herein is
unenforceable, and such restriction or remedy cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained therein or the availability of any other remedy.
The provisions of Sections 5, 6, 7, 11 and 12 shall in no respect limit or
otherwise affect the Executive's obligations under other agreements with the
Company.
14. Assignment. The rights and obligations of the parties under this
Agreement shall not be assignable by either the Company or the Executive,
provided that this Agreement is assignable by the Company to any affiliate of
the Company, to any
9
<PAGE> 10
successor in interest to any business of the Company, or to a purchaser of all
or substantially all of the assets of any business of the Company.
15. Notices. Any notice required or permitted under this Agreement
shall be deemed to have been effectively made or given if in writing and
personally delivered, mailed properly addressed in a sealed envelope, postage
prepaid by certified or registered mail, delivered by a reputable overnight
delivery service or sent by facsimile. Unless otherwise changed by notice,
notice shall be properly addressed to the Executive if addressed to:
Ralph Miller
603 Pine Valley Way
Bloomfield Hill, MI 48302
with a copy to:
Benesch, Friedlander, Coplan & Aronoff
2300 BP America Building
200 Public Square
Cleveland, Ohio 44114
Attention: Michael Wager, Esq.
and properly addressed to the Company if addressed to:
ASG Holdings, Inc.
275 Rex Boulevard
Auburn Hills, MI 48326
Attention: Fred Minturn
with a copy to:
Morgan Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Attention: Philip Werner, Esq.
16. Severability. Wherever there is any conflict between any
provision of this Agreement and any statute, law, regulation or judicial
precedent, the latter shall prevail, but in such event the provisions of this
Agreement thus affected shall be curtailed and limited only to the extent
necessary to bring them within the requirements of the law. In the event that
any provision of this Agreement shall be held by a court of proper jurisdiction
to be indefinite, invalid, void or voidable or otherwise unenforceable, the
balance of the Agreement shall continue in full force and effect unless such
construction would
10
<PAGE> 11
clearly be contrary to the intentions of the parties or would result in an
unconscionable injustice.
17. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
18. Effect of Termination. Notwithstanding anything to the contrary
contained herein, if this Agreement or the Executive's employment is validly
terminated pursuant to Section 8 or Section 9 or expires by its terms, the
provisions of Sections 5, 6, 7, 11, 12, 13, and 16 shall continue in full force
and effect.
19. Disputes. Any claim or controversy arising out of or
relating to this Agreement, or any breach thereof, or otherwise arising out of
or relating to the Executive's employment, compensation and benefits with the
Company or the termination thereof, shall be settled by arbitration in Detroit,
Michigan in accordance with the rules established by the American Arbitration
Association, provided, however, that the parties agree that (i) the arbitrator
shall be prohibited from disregarding, adding to or modifying the terms of this
Agreement; (ii) the arbitrator shall be required to follow established
principles of substantive law and the law governing burdens of proof; (iii) only
legally protected rights may be enforced in arbitration; (iv) the arbitrator
shall be without authority to award punitive or exemplary damages; (v) the
arbitrator shall be an attorney licensed to practice law in Michigan who has
experience in similar matters; and (vi) any demand for arbitration made by the
Executive must be filed and served, if at all, within 180 days of the occurrence
of the act or omission complained of. Any claim or controversy not submitted to
arbitration in accordance with this Section 19 shall be considered waived and,
thereafter, no arbitration panel or tribunal or court shall have the power to
rule or make any award on any such claim or controversy. The award rendered in
any arbitration proceeding held under this Section 19 shall be final and
binding, and judgment upon the award may be entered in any court having
jurisdiction thereof, provided that the judgment conforms to established
principles of law and is supported by substantial record evidence.
20. Miscellaneous; Choice of Law. This Agreement constitutes the
entire agreement, and supersedes all prior agreements, of the parties hereto
relating to the subject matter hereof, and there are no written or oral terms or
representations made by either party other than those contained herein. This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of Michigan, without giving effect
11
<PAGE> 12
to any choice of law or conflict of law provision or rule (whether of the State
of Michigan or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Michigan.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the day and year first above written.
ASG HOLDINGS INC.
----------------------------------------
By: Frederick K. Minturn
Its: President
----------------------------------------
Ralph Miller
12
<PAGE> 13
EXHIBIT A
Form of Release
I, ______________________, hereby release and discharge
________________ (the "Company"); its present and former subsidiaries and
affiliates; the Company's, any such subsidiaries' and any such affiliates'
present and former partners, officers, directors, stockholders, employees,
representatives and agents; and the successors and assigns of each of the
foregoing persons and entities (collectively, the "Released Persons"), from any
and all actions, causes of action, suits, debts, dues, sums of money, including
without limitation any compensation owed or potentially owed, any accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, executions,
claims, and demands whatsoever (including, without limitation, under the Age
Discrimination in Employment Act, 29 U.S.C. Section 621 et seq. ("ADEA"), or the
Employee Retirement Income Security Act, 29 U.S.C. Section 1001 et seq.), known
or unknown, fixed, conditional or contingent, in law or in equity, which I and
my respective heirs, executors, administrators, legal representatives,
successors and assigns ever had, now have or hereafter can, shall or may have
against the Released Persons, individually or collectively, derivatively or
otherwise, for, upon or by reason of any matter, cause or thing whatsoever from
the beginning of time to the date hereof.
The Company has advised me to consult with an attorney of my choosing
prior to executing this Release regarding this Release and I hereby represent to
the Company that I have in fact consulted with such an attorney prior to the
execution of this Release with respect hereto. I acknowledge that I shall have
up to twenty-one days prior to the execution of this Release to consider the
waiver of my rights under ADEA pursuant to this Release, provided that once I
have executed this Release, I shall have seven days from the date of execution
to revoke my consent to the release of my rights under ADEA. If no such
revocation occurs, my release of rights under ADEA pursuant to this Release
shall become effective seven days from the date I execute this Release. I
acknowledge that any revocation of consent pursuant to this Release must be in
writing and must be hand-delivered or telecopied to ___________________________,
counsel to the Company, at ________________________________________________,
facsimile number ________, within such seven-day period.
13
<PAGE> 14
IN WITNESS WHEREOF, the undersigned has executed this Release as of
_______ of ______________.
____________________________
[Name]
14
<PAGE> 1
EXHIBIT 10.12
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of November 12, 1996 (this
"Agreement"), by and between ASG Holdings Inc., a Delaware corporation (the
"Company"), and Fred Minturn (the "Executive").
WHEREAS, on the date hereof, the Executive is employed by
Mascotech, Inc. ("Mascotech"); and
WHEREAS, pursuant to an Acquisition Agreement dated as of the
date hereof among the Company, Mascotech and MSX International, Inc. ("MSX"),
the Company has agreed to acquire substantially all the assets and business of
MSX; and
WHEREAS, the Company desires to employ the Executive as
Executive Vice President and Chief Financial Officer, and the Executive desires
to be retained in such capacities on the terms and conditions set forth herein,
effective upon the closing of the transactions contemplated by such Acquisition
Agreement, it being understood that if no such closing shall occur, this
Agreement shall have no force and effect.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements made herein, the Company and the Executive agree as follows:
1. Prior Agreements. The Executive hereby agrees that all
agreements, plans or arrangements covering the Executive which are in effect
prior to the Commencement Date and which are to be assumed by the Company
pursuant to the Acquisition Agreement shall be terminated as of the Commencement
Date, and the Executive hereby releases the Company and its affiliates from all
payments and other obligations thereunder, if any. The foregoing shall not apply
to (i) this Agreement, (ii) any other agreement entered into by the Executive
and the Company on the date hereof, and (iii) obligations with respect to the
Executive to be assumed by the Company under the Acquisition Agreement under the
First Amended and Restated Creative Industries Group, Inc. Deferred Compensation
Plan (and related rabbi trust) and the Mascotech, Inc. Salaried Savings Plan.
2. Employment; Duties. The Company shall employ the Executive
as Executive Vice President and Chief Financial Officer for the "Employment
Period" as defined in Section 3. The Executive, in his capacity as Executive
Vice President and Chief Financial Officer, shall have such duties,
responsibilities and authority normally incident to such office, subject to the
provisions of the Bylaws of the Company. Subject to the foregoing, the precise
duties, responsibilities and authority of the Executive may be expanded, limited
or modified, from time to time, at the discretion of the Company. During the
Employment Period, the Executive shall render his business services solely in
the performance of his duties hereunder. The Executive agrees that during the
term of his employment hereunder, he shall devote his full working time,
attention, knowledge and experience and give his best effort, skill and
abilities,
<PAGE> 2
exclusively to promote the business and interests of the Company. The Executive
may not serve as an officer or director of, make investments in, or otherwise
participate in, any other entity without the prior written consent of the Board
of Directors; provided, that the foregoing shall not be deemed to prohibit the
Executive from acquiring, directly or indirectly, solely as an investment, not
more than two percent (2%) of any class of securities of any entity that are
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended, including the regulations issued thereunder; and provided further,
that so long as it does not interfere with the Executive's employment, the
Executive may (a) with the prior written consent of the Board of Directors,
(which consent will not be unreasonably withheld), serve as a director in a
noncompeting company, (b) serve as an officer, director or otherwise participate
in purely educational, welfare, social, religious and civic organizations, and
(c) manage personal and family investments.
3. Employment Period. This Agreement shall have a term of
two years, commencing as of the date of the closing of the transactions
contemplated by the Acquisition Agreement, as reference in the recitals above
(the "Commencement Date") and ending on the second anniversary of the
Commencement Date (the "Initial Period"), unless sooner terminated in
accordance with the provisions of Section 8 or Section 9. On the expiration of
the Initial Period and on each yearly anniversary thereof, this Agreement shall
automatically renew for an additional one-year period (each such one-year
period being referred to as a "Renewal Period"), unless sooner terminated in
accordance with the provisions of Section 8 or Section 9, unless the Company or
the Executive notifies the other in writing of its intention not to renew this
Agreement not less than ninety (90) days prior to such expiration date or
anniversary, as the case may be. The term of this Agreement, as in effect from
time to time, is referred to herein as the "Employment Period".
4. Compensation and Benefits.
(a) Base Compensation. The Executive shall be paid an
aggregate base salary (the "Base Salary") of $200,000 per annum, less statutory
deductions and withholdings. The Base Salary shall be payable in a manner
consistent with the normal payroll practices of the Company in effect from time
to time. The Board of Directors of the Company, in its sole discretion, or at
the recommendation of the Compensation Committee, may increase (but not
decrease) the Base Salary, at any time.
(b) Annual Bonus. In addition to the Base Salary, the
Executive may be entitled to receive a discretionary annual bonus for each
fiscal year of the Company that ends during the Employment Period of up to 40%
of his annual Base Salary (the "Bonus Award") based upon the achievement of
annual Company and individual performance goals to be set by the Company in
consultation with the Executive.
(c) Benefits. The Executive shall also be entitled to
participate in the employee benefit and group insurance programs provided by the
Company for its officers and
2
<PAGE> 3
employees generally and in accordance with the terms of the applicable plan
documents as they may be revised from time to time.
5. Trade Secrets. The Executive recognizes that it is in the
legitimate business interest of the Company to restrict his disclosure or use of
Trade Secrets and Confidential Information relating to the Company and its
direct or indirect subsidiaries for any purpose other than in connection with
his performance of his duties to the Company, and to limit any potential
appropriation of such Trade Secrets and Confidential Information by the
Executive. The Executive therefore agrees that all Trade Secrets and
Confidential Information relating to the Company and its direct or indirect
subsidiaries heretofore or in the future obtained by the Executive shall be
considered confidential and the proprietary information of the Company and its
direct or indirect subsidiaries. During the Employment Period the Executive
shall not use or disclose, or authorize any other person or entity to use or
disclose, any Trade Secrets or other Confidential Information, other than as
necessary to further the business objectives of the Company in accordance with
the terms of his employment hereunder. The term "Trade Secrets or other
Confidential Information" includes, by way of example and without limitation,
matters of a technical nature, such as scientific, trade and engineering
secrets, "know-how", formulas, secret processes, drawings, works of authorship,
machines, inventions, computer programs (including documentation of such
programs), services, materials, patent applications, new product plans, other
plans, technical information, technical improvements, manufacturing techniques,
specifications, manufacturing and test data, progress reports and research
projects, and matters of a business nature, such as business plans, prospects,
financial information, proprietary information about costs, profits, markets,
sales, lists of customers and suppliers of the Company and its direct or
indirect subsidiaries, procurement and promotional information, credit and
financial data concerning customers or suppliers of the Company and its direct
or indirect subsidiaries, information relating to the management, operation and
planning of the Company and its direct and indirect subsidiaries, and other
information of a similar nature to the extent not available to the public, and
plans for future development. After termination of the Executive's employment
with the Company for any reason, the Executive shall not use or disclose Trade
Secrets or other Confidential Information.
6. Return of Documents and Property. Upon the termination of
the Executive's employment with the Company, or at any time upon the request of
the Company, the Executive (or his heirs or personal representatives) shall
deliver to the Company (a) all documents and materials (including, without
limitation, computer files) containing Trade Secrets or other Confidential
Information relating to the business and affairs of the Company and its direct
and indirect subsidiaries, and (b) all documents, materials and other property
(including, without limitation, computer files) belonging to the Company or its
direct or indirect subsidiaries, which in either case are in the possession or
under the control of the Executive (or his heirs or personal representatives).
7. Discoveries and Work. All Discoveries and Works made or
conceived by the Executive during his employment by the Company, whether during
the Employment Period
3
<PAGE> 4
or at any time prior thereto, jointly or with others, that relate to the
present or anticipated activities of the Company or its direct or indirect
subsidiaries, or are used or usable by the Company or its direct or indirect
subsidiaries shall be owned by the Company or its direct or indirect
subsidiaries. The term "Discoveries and Works" includes, by way of example but
without limitation, Trade Secrets and other Confidential Information, patents
and patent applications, trademarks and trademark registrations and
applications, service marks and service mark registrations and applications,
trade names, copyrights and copyright registrations and applications. The
Executive shall (a) promptly notify, make full disclosure to, and execute and
deliver any documents requested by, the Company, as the case may be, to
evidence or better assure title to Discoveries and Works in the Company or its
direct or indirect subsidiaries, as so requested, (b) renounce any and all
claims, including but not limited to claims of ownership and royalty, with
respect to all Discoveries and Works and all other property owned or licensed
by the Company or its direct or indirect subsidiaries, (c) assist the Company
or its direct or indirect subsidiaries in obtaining or maintaining for itself
at its own expense United States and foreign patents, copyrights, trade secret
protection or other protection of any and all Discoveries and Works, and (d)
promptly execute, whether during his employment with the Company or thereafter,
all applications or other endorsements necessary or appropriate to maintain
patents and other rights for the Company or its direct or indirect subsidiaries
and to protect the title of the Company or its direct or indirect subsidiaries
thereto, including but not limited to assignments of such patents and other
rights. Any Discoveries and Works which, within six months after the
termination of the Executive's employment with the Company, are made,
disclosed, reduced to a tangible or written form or description, or are reduced
to practice by the Executive and which pertain to the business carried on or
products or services being sold or developed by the Company or its direct or
indirect subsidiaries at the time of such termination shall, as between the
Executive and, the Company, be presumed to have been made during the
Executive's employment by the Company. The Executive acknowledges that all
Discoveries and Works shall be deemed "works made for hire" under the Copyright
Act of 1976, as amended, 17 U.S.C. ss.101.
8. Termination.
(a) The Company or the Executive may terminate this
Agreement, with or without cause, with or without prior notice. Except as
provided in Sections 8(b) and 18, in the event the Company or the Executive
terminates this Agreement, the Executive's rights and the obligations of the
Company hereunder shall cease as of the effective date of the termination,
including, without limitation, the right to receive the Base Salary, any Bonus
Award and all other compensation or benefits provided for in this Agreement.
(b) In the event the Company terminates this Agreement
without "cause" or in the event that the Executive terminates this Agreement
upon notice for "Good Reason", the Executive shall be entitled to continue to
receive payments of his Base Salary for the balance of the then existing
Employment Period, payable at such times and in such amounts as if this
Agreement were not terminated, provided, however, that if such termination
occurs during the Initial Term, or on account of the Company's action pursuant
to Section 3 which
4
<PAGE> 5
prevents the automatic renewal of the Agreement upon (and only upon) expiration
of the Initial Term, then the period during which the Executive shall be
entitled to continue to receive payments of his Base Salary shall be no less
than one year. All other compensation and benefits provided for in Section 4 of
this Agreement shall cease upon such termination.
For purposes of this Agreement, "cause" shall mean (i) the
willful failure of the Executive to follow the directions of the Company (other
than any such failure resulting from his incapacity due to physical or mental
illness or disability which is subject to the provisions of Section 9), after
written notice of such failure from the Board of Directors and a 10-day
opportunity to cure, (ii) any act of fraud or dishonesty, misappropriation or
embezzlement, wilful misconduct or gross negligence in connection with the
performance of the Executive's duties hereunder, (iii) a breach by the Executive
of any material provision hereof or of any material contractual or material
legal duty to the Company (including, but not limited to, the unauthorized
disclosure of Trade Secrets or other Confidential Information, non-compliance
with the written policies, guidelines and procedures of the Company), after
written notice thereof from the Board of Directors and a 30-day opportunity to
cure in the event that such breach was not wilful, (iv) the conviction of the
Executive of the commission of a crime or offense involving moral turpitude
(including pleading guilty or no contest to such a crime or offense or a lesser
charge which results from plea bargaining) which results in the imprisonment of
the Executive, whether or not committed in connection with the business of the
Company, (v) alcohol or substance abuse or (vi) breach by the Executive of the
provisions of any stockholders agreement or other agreement relating to the
Executive's acquisition of an equity interest in the Company to which the
Executive may become a party on or after the date hereof.
For purposes of this Agreement, "Good Reason" shall mean (i)
the Company changes the Executive's status, title or position as an officer of
the Company and such change represents a material reduction in such status,
title or position conferred hereunder, and/or (ii) the Company materially
breached this Agreement, and such change or breach is not cured by the Company
within thirty (30) days from the date the Executive delivers a Notice of
Termination for Good Reason. Such "Notice of Termination for Good Reason" shall
include the specific section of this Agreement which was relied upon and the
reason that the Company act or failure to act has given rise to his termination
for Good Reason.
(c) In the event the Company terminates this Agreement
for cause or the Executive terminates this Agreement (other than for Good
Reason), the Executive's rights hereunder shall cease as of the effective date
of the termination, including, without limitation, the right to receive the
Base Salary, any Bonus Award and all other compensation or benefits provided for
in this Agreement.
(d) As a condition to his entitlement, if any, to
amounts provided for under Section 8(b), the Executive shall have executed and
delivered to the Company a release in the form attached hereto as Exhibit A (the
"Release"), as such Release may be modified by the Company from time to time in
good faith, and such Release shall have become irrevocable.
5
<PAGE> 6
9. Disability; Death.
(a) If, prior to the expiration of the Employment
Period or the termination of this Agreement, the Executive shall be unable to
perform his duties by reason of mental or physical disability for at least
one-hundred eighty (180) consecutive days or any one-hundred eighty (180) days
(whether or not consecutive) in any three-hundred sixty (360) consecutive day
period, the Company shall have the right to terminate this Agreement and the
remainder of the Employment Period by giving written notice to the Executive to
that effect. Immediately upon the giving of such notice, the Employment Period
shall terminate.
(b) Upon termination of this Agreement pursuant to
Section 9(a), the Executive shall be paid his Base Salary for the month in which
notice is given. In the event of a dispute as to whether the Executive is
disabled within the meaning of Section 9(a), either party may from time to time
request a medical examination of the Executive by a doctor appointed by the
Chief of Staff of a hospital selected by mutual agreement of the parties, or as
the parties may otherwise agree, and the written medical opinion of such doctor
shall be conclusive and binding upon the parties as to whether the Executive has
become disabled and the date when such disability arose. The cost of any such
medical examination shall be borne by the Company. If, prior to the expiration
of the Employment Period or the termination of this Agreement, the Executive
shall die, the Executive's estate shall be paid his Base Salary through the end
of the month in which the Executive's death has occurred, at which time the
Employment Period shall terminate without further notice and the Company shall
have no further obligations hereunder.
10. No Conflicts. The Executive represents to the Company
that the execution, delivery and performance by the Executive of this Agreement
do not conflict with or result in a violation or breach of, or constitute (with
or without notice or lapse of time or both) a default under any contract,
agreement or understanding, whether oral or written, to which the
Executive is a party or of which the Executive is or should be aware.
11. Non-Competition. From and after the Commencement Date,
the Executive will not, except pursuant to the terms hereof, directly or
indirectly, own, manage, operate, join, finance control or participate in the
ownership, management, operation or control of, or be employed or be
otherwise connected in any manner with, any business under a name similar to
the name of any of the Company or any direct or indirect subsidiary thereof.
Prior to the termination of the Executive's employment hereunder and for a
period after any such termination or expiration of this Agreement equal to the
greater of (i) twelve (12) months and (ii) the balance of the then existing
Employment Period (as if this Agreement were not terminated), the Executive
will not (except as an officer, director, employee, agent or consultant of the
Company) directly or indirectly, own, manage, operate, join, or have a
financial interest in, control or participate in the ownership, management,
operation or control of, or be employed as an employee, agent or consultant, or
in any other individual or representative capacity whatsoever, or use or permit
his name to be used in connection with, or be otherwise connected in any manner
with (i) any business or enterprise engaged (wherever located) in the design,
6
<PAGE> 7
development, manufacture, distribution or sale of any products, or the provision
of any services, which the Company or its direct or indirect subsidiaries were
designing, developing, manufacturing, distributing, selling or providing at any
time up to an including the date of termination of this Agreement or (ii) any
business which is similar to or competitive with the business carried on or
planned by the Company or its direct or indirect subsidiaries at any time during
the period of the Executive's employment by the Company, whether during or prior
to the Employment Period, unless the Executive shall have obtained the prior
written consent of the Board of Directors, provided that the foregoing
restriction shall not be construed to prohibit the ownership by the Executive of
not more than two percent (2%) of any class of securities of any corporation
which is engaged in any of the foregoing businesses, having a class of
securities registered pursuant to the Securities Exchange Act of 1934, which
securities are publicly owned and regularly traded on any national exchange or
in the over-the-counter market, provided further, that such ownership represents
a passive investment and that neither the Executive nor any group of persons
including the Executive in any way, either directly or indirectly, manages or
exercises control of any such corporation, guarantees any of its financial
obligations, otherwise takes part in its business other than exercising his
rights as a shareholder, or seeks to do any of the foregoing.
12. Non-Solicitation. Prior to the termination of the
Executive's employment hereunder and for a period after any such termination or
expiration of this Agreement equal to the greater of (i) twelve (12) months and
(ii) the balance of the then existing Employment Period (as if this Agreement
were not terminated), the Executive agrees, directly or indirectly, whether for
his own account or for the account of any other individual or entity, not to
solicit or canvas the trade, business or patronage of, or sell any products or
services which are the same as or similar to those designed, developed,
manufactured, distributed or sold by the Company or its direct or indirect
subsidiaries to, any individuals or entities that were either customers of the
Company or any of its direct or indirect subsidiaries during the time the
Executive was employed by the Company, whether during or prior to the Employment
Period, or prospective customers with respect to whom a sales effort,
presentation or proposal was made by the Company or any of its direct or
indirect subsidiaries during the twelve months preceding the date of termination
or expiration, as the case may be. The Executive further agrees that prior to
the termination of the Executive's employment hereunder and for a period of two
years thereafter, he shall not, directly or indirectly, (i) solicit, induce,
enter into any agreement with, or attempt to influence any individual who was an
employee or consultant of the Company or any of its direct or indirect
subsidiaries at any time during the time the Executive was employed by the
Company, whether during or prior to the Employment Period, to terminate his or
her employment relationship with the Company or any of its direct or indirect
subsidiaries or to become employed by the Executive or any individual or entity
by which Executive is employed or (ii) interfere in any other way with
the employment, or other relationship, of any employee or consultant of the
Company or any of its direct or indirect subsidiaries.
13. Enforcement. (a) The Executive agrees that the remedies
at law for any breach or threat of breach by him of any of the provisions of
Sections 5, 6, 7, 11 and 12 hereof
7
<PAGE> 8
will be inadequate, and that, in addition to any other remedy to which the
Company may be entitled at law or in equity, the Company shall be entitled to a
temporary or permanent injunction or injunctions or temporary restraining order
or orders to prevent breaches of the provisions of Sections 5, 6, 7, 11 and 12
hereof and to enforce specifically the terms and provisions thereof, in each
case without the need to post any security or bond. Nothing herein contained
shall be construed as prohibiting the Company from pursuing, in addition, any
other remedies available to the Company for such breach or threatened breach. A
waiver by the Company of any breach of any provision hereof shall not operate or
be construed as a waiver of a breach of any other provision of this Agreement or
of any subsequent breach by the Executive.
(b) It is expressly understood and agreed that although
the Company and the Executive consider the restrictions contained in Sections
5, 6, 7, 11 and 12 hereof to be reasonable for the purpose of preserving the
goodwill, proprietary rights and going concern value of the Company, if a
final judicial determination is made by a court having jurisdiction that the
time or territory or any other restriction contained in such Sections 5, 6, 7,
11 and 12 is an unenforceable restriction on the Executive's activities, the
provisions of such Sections 5, 6, 7, 11 and 12 shall not be rendered void but
shall be deemed amended to apply as to such maximum time and territory and to
such other extent as such court may judicially determine or indicate to be
reasonable. Alternatively, if the court referred to above finds that any
restriction contained in Sections 5, 6, 7, 11 or 12 or any remedy provided
herein is unenforceable, and such restriction or remedy cannot be amended so as
to make it enforceable, such finding shall not affect the enforceability of any
of the other restrictions contained therein or the availability of any other
remedy. The provisions of Sections 5, 6, 7, 11 and 12 shall in no respect limit
or otherwise affect the Executive's obligations under other agreements with the
Company.
14. Assignment. The rights and obligations of the parties
under this Agreement shall not be assignable by either the Company or the
Executive, provided that this Agreement is assignable by the Company to any
affiliate of the Company, to any successor in interest to any business of the
Company, or to a purchaser of all or substantially all of the assets of any
business of the Company.
15. Notices. Any notice required or permitted under this
Agreement shall be deemed to have been effectively made or given if in writing
and personally delivered, mailed properly addressed in a sealed envelope,
postage prepaid by certified or registered mail, delivered by a reputable
overnight delivery service or sent by facsimile. Unless otherwise changed by
notice, notice shall be properly addressed to the Executive if addressed to:
Fred Minturn
20 N. Duval
Grosse Pointe Shores, MI 48236
and properly addressed to the Company if addressed to:
8
<PAGE> 9
ASG Holdings, Inc.
275 Rex Boulevard
Auburn Hills, MI 48326
Attention: Ralph Miller
with a copy to:
Morgan Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Attention: Philip Werner, Esq.
16. Severability. Wherever there is any conflict between any
provision of this Agreement and any statute, law, regulation or judicial
precedent, the latter shall prevail, but in such event the provisions of this
Agreement thus affected shall be curtailed and limited only to the extent
necessary to bring them within the requirements of the law. In the event that
any provision of this Agreement shall be held by a court of proper jurisdiction
to be indefinite, invalid, void or voidable or otherwise unenforceable, the
balance of the Agreement shall continue in full force and effect unless such
construction would clearly be contrary to the intentions of the parties or would
result in an unconscionable injustice.
17. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
18. Effect of Termination. Notwithstanding anything to the
contrary contained herein, if this Agreement or the Executive's employment is
validly terminated pursuant to Section 8 or Section 9 or expires by its terms,
the provisions of Sections 5, 6, 7, 11, 12, 13, and 16 shall continue in full
force and effect.
19. Disputes. Any claim or controversy arising out of or
relating to this Agreement, or any breach thereof, or otherwise arising out of
or relating to the Executive's employment, compensation and benefits with the
Company or the termination thereof, shall be settled by arbitration in Detroit,
Michigan in accordance with the rules established by the American Arbitration
Association, provided, however, that the parties agree that (i) the arbitrator
shall be prohibited from disregarding, adding to or modifying the terms of this
Agreement; (ii) the arbitrator shall be required to follow established
principles of substantive law and the law governing burdens of proof; (iii) only
legally protected rights may be enforced in arbitration; (iv) the arbitrator
shall be without authority to award punitive or exemplary damages; (v) the
arbitrator shall be an attorney licensed to practice law in Michigan who has
experience in similar matters; and (vi) any demand for arbitration made by the
Executive must be filed and served, if at
9
<PAGE> 10
all, within 180 days of the occurrence of the act or omission complained of. Any
claim or controversy not submitted to arbitration in accordance with this
Section 19 shall be considered waived and, thereafter, no arbitration panel or
tribunal or court shall have the power to rule or make any award on any such
claim or controversy. The award rendered in any arbitration proceeding held
under this Section 19 shall be final and binding, and judgment upon the award
may be entered in any court having jurisdiction thereof, provided that the
judgment conforms to established principles of law and is supported by
substantial record evidence.
20. Miscellaneous; Choice of Law. This Agreement constitutes
the entire agreement, and supersedes all prior agreements, of the parties hereto
relating to the subject matter hereof, and there are no written or oral terms or
representations made by either party other than those contained herein. This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of Michigan, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Michigan or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Michigan.
10
<PAGE> 11
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the day and year first above written.
ASG HOLDINGS INC.
__________________
By: Frederick K. Minturn
Its: President
__________________
Frederick K. Minturn
[Signature Page to Fred Minturn Employment Agreement]
11
<PAGE> 12
EXHIBIT A
Form of Release
I, ______________________, hereby release and discharge
________________ (the "Company"); its present and former subsidiaries and
affiliates; the Company's, any such subsidiaries' and any such affiliates'
present and former partners, officers, directors, stockholders, employees,
representatives and agents; and the successors and assigns of each of the
foregoing persons and entities (collectively, the "Released Persons"), from any
and all actions, causes of action, suits, debts, dues, sums of money, including
without limitation any compensation owed or potentially owed, any accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, executions,
claims, and demands whatsoever (including, without limitation, under the Age
Discrimination in Employment Act, 29 U.S.C. ss. 621 et seq. ("ADEA"), or the
Employee Retirement Income Security Act, 29 U.S.C. ss. 1001 et seq.), known or
unknown, fixed, conditional or contingent, in law or in equity, which I and my
respective heirs, executors, administrators, legal representatives, successors
and assigns ever had, now have or hereafter can, shall or may have against the
Released Persons, individually or collectively, derivatively or otherwise, for,
upon or by reason of any matter, cause or thing whatsoever from the beginning of
time to the date hereof.
The Company has advised me to consult with an attorney of my
choosing prior to executing this Release regarding this Release and I hereby
represent to the Company that I have in fact consulted with such an attorney
prior to the execution of this Release with respect hereto. I acknowledge that I
shall have up to twenty-one days prior to the execution of this Release to
consider the waiver of my rights under ADEA pursuant to this Release, provided
that once I have executed this Release, I shall have seven days from the date of
execution to revoke my consent to the release of my rights under ADEA. If no
such revocation occurs, my release of rights under ADEA pursuant to this Release
shall become effective seven days from the date I execute this Release. I
acknowledge that any revocation of consent pursuant to this Release must be in
writing and must be hand-delivered or telecopied to__________________________
____________, counsel to the Company, at _______________________________________
_____________, facsimile number ________, within such seven-day period.
IN WITNESS WHEREOF, the undersigned has executed this Release
as of _______ of ______________.
__________________
[Name]
12
<PAGE> 1
EXHIBIT 10.13
[MSX INTERNATIONAL LETTERHEAD]
August 28, 1997
Mr. Donald Springer
1692 South Hill Boulevard
Bloomfield, Michigan 48304
Dear Don:
We are extremely pleased to have you join the MSX International executive
management team as Vice President, Business & Technology Services, reporting to
Ralph Miller. The purpose of this letter is to briefly outline your
compensation and benefits as a result of your employment with MSX
International.
You will continue, up through December 31, 1997, to receive the benefits and
compensation extended to you as an executive employee of Geometric Results
Incorporated. On January 1, 1998, you will become eligible for the
compensation and benefit programs in effect for executive employees of MSX
International. As the attached Summary of Company-Sponsored Benefits outline,
you will be offered a comprehensive benefits program, which includes your
choice of coverage for health, dental, vision, life and accidental death
and dismemberment, and flexible spending accounts. Additionally, you will be
eligible to participate in the MSX International holiday, vacation, and tuition
refund benefits programs. Of course, these benefits are subject to change.
As a matter of employment, you are subject to the policies and procedures of the
Company and the verification provisions of the Immigration and Control Act of
1986, as well as the required execution of the MSX International Proprietary
Confidential Information and Invention Assignment Agreement.
This document is not an employment contract for any particular term. Your
employment relationship with MSX International is at-will. However, should the
Company chose to exercise the right to terminate your employment at-will, you
will be entitled to receive the gross amount of $230,000, subject to execution
and delivery of a settlement and release agreement reasonably satisfactory to
MSX International, releasing all claims you may have against MSX International
or its affiliates relating to the termination of your employment. This figure
is all inclusive and no additional payments or benefits will be paid of any
kind. If you are terminated for cause this provision does not apply.
Please let me know if there is any additional questions or information you may
have concerning this subject. I sincerely look forward to working closely with
you as we continue to grow this exciting and dynamic organization.
Sincerely,
Frederick K. Minturn
- ---------------------------------
Frederick K. Minturn
Executive Vice President &
Chief Financial Officer
c: Ralph Miller
<PAGE> 1
EXHIBIT 10.14
MSX INTERNATIONAL, INC.
DEFERRED COMPENSATION PLAN
This MSX International, Inc. Deferred Compensation Plan ("PLAN") is
adopted on this 28th day of February, 1997, and effective on March 1, 1997
("EFFECTIVE DATE"), by MSX International, Inc., a Delaware corporation
(hereinafter referred to as the "EMPLOYER").
W I T N E S S E T H:
WHEREAS, the Employer wishes to adopt, as of the Effective Date, an
unfunded, non-qualified deferred compensation plan for the benefit of a select
group of its management employees; and
WHEREAS, the Plan continues certain deferred compensation opportunities
for employees who have previously been covered with regard to such benefits by
the Creative Industries Group, Inc. Deferred Compensation Plan, originally
adopted on December 2l, 1988, as amended by the first amendment and restatement
thereto dated September 26, 1989, and as partially amended by a second amendment
in 1994, which, among other things, changed the name of the Plan to MascoTech
Automotive Systems Group, Inc. Deferred Compensation Plan (the "PRIOR PLAN");
and
WHEREAS, some employees who participated under the Prior Plan are
referred to as "TRANSFERRED EMPLOYEES" in Section 13.06(f) of that certain Asset
Purchase Agreement by and between this Corporation and MascoTech Automotive
Systems Group, Inc.; and
WHEREAS, this Plan shall, in addition, provide deferred compensation
opportunities to newly eligible participants as that term is utilized in Section
3.01 (a) (2) of Revenue Procedure 92-65, 1992-2 C.B. 428;
NOW, THEREFORE, effective as of the Effective Date, the MSX
International, Inc. Deferred Compensation Plan hereby provides as follows:
SECTION 1. Purpose. The purpose of the Plan is to provide certain
management employees employed by the Employer (i) with the opportunity to defer
bonuses otherwise payable to them by the Employer where the Employee has made an
election, pursuant to Section 4 hereof, to defer all or part of such bonus
(hereinafter referred to as "DEFERRED BONUS AMOUNTS"), (ii) such other amounts
of compensation the Employer, in its sole discretion, decides to award to
participants in the Plan on a deferred basis (hereinafter referred to as
"DEFERRED DISCRETIONARY AMOUNTS") and (hi) with the opportunity to defer such
amounts of
<PAGE> 2
the Employee's salary in accordance with the Employee's election pursuant to
Section 6 hereof (hereinafter referred to as "DEFERRED SALARY AMOUNTS").
SECTION 2. Effective Date. The Plan, as created hereunder, shall be
effective as of March 1, 1997.
SECTION 3. Participants. The Employer, in its sole discretion, shall
select persons who may be participants in the Plan. Participants shall be chosen
by the Employer from a group of select management personnel consisting of
employees of the Employer who are commonly known in the Employer's business by
the following designations: President, Vice Presidents, General Managers and
Managers. Employer shall not be required to provide Plan benefits to all persons
having such designations but, in its sole discretion, may name one or more
persons from such groupings. Notwithstanding anything herein to the contrary, in
no case shall participants include independent contractors or controlling
shareholders.
SECTION 4. Election of Deferral of Deferred Bonus Amounts.
(A) Employer, whose fiscal year is the calendar year, customarily pays
bonuses to certain management employees during the first calendar quarter of the
year immediately following the calendar year in which the services are performed
by the participant for the Employer that apply to such bonus (such immediately
preceding year during which such services are performed shall be hereinafter
referred to as the "AWARD YEAR").
(B) Each Participant shall be entitled to make an irrevocable election
(in the form of Exhibit "A" attached hereto), to defer receipt of any whole
percentage of the bonus that would otherwise be awarded and payable by the
Employer to the participant for any particular Award Year during the existence
of the Plan, as long as the election is made before January 1 of the Award Year.
Each participant shall be entitled to specify on the election form that the
deferral shall be the greater or lesser of such percentage or a stated dollar
amount. Pursuant to the procedure set forth by the Internal Revenue Service in
the above-referenced Revenue Procedure 92-65, in the first year in which a
participant becomes eligible to participate in the Plan, the newly eligible
participant may make an election to defer, under this Section 4(B), with regard
to services to be performed subsequent to the election as long as such election
is made within thirty (30) days after the date the employee first becomes
eligible to be a participant in the Plan.
(C) The Employer will credit to the Deferred Compensation Account of
the participant for such Award Year an amount equal to the percentage elected by
the participant for the Award Year multiplied by the dollar amount that is
declared
2
<PAGE> 3
as a bonus to the employee for such Award Year during December of such Award
Year or, if applicable, the appropriate stated dollar amount.
SECTION 5. Employer Deferred Discretionary Amounts. The Employer, at
any time during the Award Year, may, in its sole discretion, award deferred
compensation to a participant in the Plan through its declaring an award of a
Deferred Discretionary Amount to the participant for such Award Year. The
Employer's right to declare such Deferred Discretionary Amount to the
participant shall not be dependent on whether the participant has elected any
Deferred Bonus Amount for such Award Year. At such times as the Employer decides
to award Deferred Discretionary Amounts, such award will be stated as a dollar
for dollar match of the participant's salary deferral for the fiscal year (under
Section 6(A) hereof)
SECTION 6. Election of Deferral of Deferred Salary Amounts.
(A) Each participant shall be entitled to make an irrevocable election
(in the form of Exhibit "B" attached hereto), to defer any whole percentage up
to ten (10%) percent of his salary for the calendar year subsequent to the
filing of the election by the participant with the Employer. Any election by a
participant with respect to Deferred Salary Amounts for a calendar year shall be
made and filed with the Employer by December 31 of the year immediately
preceding the year for which the election is to take effect. Pursuant to the
procedure set forth by the Internal Revenue Service in the above-referenced
Revenue Procedure 92-65, in the first year in which a participant becomes
eligible to participate in the Plan, the newly eligible participant may make an
election to defer, under this Section 6(A), with regard to services to be
performed subsequent to the election as long as such election is made within
thirty (30) days after the date the employee first becomes eligible to be a
participant in the Plan.
(B) The Employer will credit to the Deferred Compensation Account of
the participant any such Deferred Salary Amounts pursuant to such an election.
SECTION 7. Deferred Compensation Accounts.
(A) For record keeping purposes, the Employer may establish and
maintain for each participant Deferred Compensation Accounts which, in the sole
discretion of the Employer, may be subdivided into accounts for Deferred Bonus
Amounts, Deferred Discretionary Amounts (Employer matching contributions) and
Deferred Salary Amounts.
(B) The establishment of such accounts are for the record keeping
convenience of the Employer. Such accounts shall not result in any amounts being
3
<PAGE> 4
made available to the participant or otherwise set aside for the participant in
a funded plan within the meaning of Section 301 of the Employee Retirement
Income Security Act of 1974, The Employer, in its sole discretion, may establish
a grantor trust or other form of escrow for purposes of setting aside such
amounts; provided, however, such amounts shall continue to represent the general
assets of the Employer and shall be subject to claims of the Employer's general
creditors.
(C) The Deferred Compensation Account of the participant shall be
credited, at year-end, with interest based on the average NBD Bank prime rate,
less one )1%) percent.
(D) As soon as is practical at the end of the calendar year, the
Employer shall report to each participant the financial status of each such
participant's Deferred Compensation Account.
SECTION 8. Method of Distribution of Deferred Compensation.
(A) The distribution of a participant's Deferred Bonus Amounts,
Deferred Discretionary Amounts or Deferred Salary Amounts shall not be
distributable other than pursuant to the terms of this Section 8. Amounts that
are available for distribution to the participant shall be referred to herein as
"DISTRIBUTABLE DEFERRED COMPENSATION".
(B) Such Distributable Deferred Compensation shall consist of (i) any
and all Deferred Bonus Amounts that have been credited to the Deferred
Compensation Account of the participant, (ii) Deferred Discretionary Amounts
that have been credited to the Deferred Compensation Account of the participant
for three (3) full calendar years (a Deferred Discretionary Amount credited to
the participant in June, 1997 would become part of Distributable Deferred
Compensation in June, 2000; similarly a Deferred Discretionary Amount credited
to a participant in December, 1999 would become part of Distributable Deferred
Compensation in December, 2002) and (iii) any and all Deferred Salary Amounts
that have been credited to the Deferred Compensation Account of the participant.
Notwithstanding the foregoing, if a participant is entitled to a distribution
hereunder for the reasons set forth in Section (C) (ii) or (C)(iii) of this
Section 8, then, in such case, all amounts credited to the Deferred Compensation
Account of the participant, including all Deferred Discretionary Amounts, shall
be considered to be part of Distributable Deferred Compensation and subject to
distribution to the participant.
(C) Distributable Deferred Compensation shall be distributed to the
participant in either a Jump sum or in annual payments over a period of years
(as described below in this Section 8(c)) with such lump sum or series of
distributions
4
<PAGE> 5
to begin within thirty (30) days after the occurrence of a "DISTRIBUTION
EVENT". A Distribution Event shall occur upon the earlier of any of the
following,
(i) The termination of employment of a participant.
(ii) The attainment by the participant of normal retirement age,
which, for purposes of this Plan, shall be the later of (i) the
attainment of age 60 or (ii) the actual retirement of the participant.
(iii) The death of the participant. Upon the death of the
participant any distribution of benefits pursuant to this Section
8(C)(iii) shall be paid, except as provided below, to the
participant's surviving spouse or, if the participant has no
surviving spouse, to the participant"s estate. If the deceased
participant has a surviving spouse but such surviving spouse does not
survive the participant for a period of time that would allow such
spouse to receive a distribution pursuant to this Agreement, then, in
such event, any distribution hereunder shall be made to the
participant's estate. Such lump sum payment shall be made to the
spouse or estate within thirty (30) days of the death of the
participant.
The participant shall have the right to make an advance selection as to
the method of distribution desired by the participant upon the occurrence of a
Distribution Event. The participant shall elect a method of payment based on one
of the following; (a) a lump sum distribution, (b) annual distributions over a
five (5) year period, (c) annual distributions over a ten (10) year period, or
(d) annual distributions over a fifteen (15) year period. The participant shall
make such choice by filing with the Plan Committee a "NOTICE OF
ELECTION--DISTRIBUTION" in the form attached hereto as Exhibit "C". The election
set forth on Exhibit "C" shall be filed by the participant with the Plan
Committee at such time as a participant first becomes a participant in the Plan.
At such, time as a participant's Distributable Deferred Compensation is
to be distributed pursuant to this Section 8(C), if the participant chooses a
lump sum, such lump sum distribution shall be made within thirty (30) days of
the occurrence of a Distribution Event. If annual distributions are chosen over
a period of years, the first annual distribution shall be made within thirty
(30) days of the occurrence of a Distribution Event and annual distributions
thereafter shall be made on the yearly anniversary date of the participant's
Distribution Event.
SECTION 9. Other Benefit Plans. The amount of each participant's
Deferred Bonus Amount and Deferred Salary Amount shall be deemed to be
compensation for the purpose of calculating the following:
5
<PAGE> 6
(A) The amount of a participant's benefits or contributions under a
pension plan or retirement plan (qualified under Section 401 (a) of the Internal
Revenue Code);
(B) The amount of any life insurance payable under any life insurance
plan established or maintained by the Employer; or
(C) The amount for any disability benefit payments payable under any
disability plan established or maintained by the Employer, except to the extent
specifically provided in any such plan.
SECTION 10. Participant's Rights. Establishment of the Plan does not
represent an employment contract between the Employer and the participant and
shall not be construed as giving any participant the right to be retained in the
Corporation's service or employ and the right to receive any benefits not
specifically provided by the Plan. A participant shall not have any interest in
his Deferred Bonus Amount, Deferred Discretionary Amount or Deferred Salary
Amount until such Account is distributed in accordance with the Plan. All such
amounts shall be hold for the account of a participant under the Plan and shall
remain the sole property of the Employer, subject to the claim of its general
creditors. With respect to amounts deferred or otherwise held for the account of
a participant, the participant is a general creditor of the Employer; any
obligation of the Employer hereunder is purely contractual and shall not be
secured in any manner.
SECTION 11. Non-Alterability and Non-Transferability. The rights of a
participant to the payment of Deferred Compensation as provided in the Plan
shall not be assigned, transferred, pledged or encumbered or be subject in any
manner to alienation or anticipation. No participant may borrow against his
account. No account shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution
or levy of any kind, whether voluntarily or involuntarily, including but not
limited to any liability which is for alimony or other payments for the support
of a spouse or former spouse, or for any other relative of any participant.
SECTION 12. Administration of Plans; Claims Procedure.
(A) Administration. The Employer shall be the administrator of the
Plan and shall have authority to adopt rules and regulations for carrying out
the Plan and to interpret, construe and implement the provisions hereof. Any
decision or interpretation of any provision of the Plan adopted by the Employer
shall be final and conclusive.
6
<PAGE> 7
(B) Claims Procedure. If, at any time, a participant desires
clarification of his or her benefits described in this Plan, such participant
shall provide, in writing, a request for clarification and, in such written
request, shall set forth any facts which the participant believes should be
considered by the Employer. Any such written request shall be directed to the
chief financial officer of the Employer. The chief financial officer shall
arrange a meeting with the participant and such other officers of the
Corporation as the Employer desires. The Employer's decision, after such
meeting, shall be rendered by the chief financial officer within sixty (60) days
of the meeting. The decision of the Employer shall be final and binding upon the
participant.
SECTION 13. Amendment and Termination. The Plan may, at any time, or
from time to time, be amended, modified or terminated by the Employer. However,
no amendment, modification or termination of the Plan shall, without the consent
of the participant, adversely affect such participant's rights with respect to
amounts then credited to his Deferred Compensation Account. Upon termination of
the Plan, the payment of benefits under the Plan shall either (i) continue to be
paid as such benefits are being paid prior to termination of the Plan or (ii)
will be discontinued if the Employer is not financially able to continue to make
such payments.
SECTION 14. General Provisions.
(A) Controlling Law. Except to the extent superseded by Federal law,
the laws of the State of Michigan shall be controlling in all matters relating
to the Plan, including instruction and performance hereof.
(B) Captions. Captions of sections and paragraphs of this Plan are for
the convenience of reference only and shall not control or affect the meaning or
construction of any of its provisions.
(C) Facility of Payment. Any amounts payable hereunder to any person
who is under legal disability or who, as determined by a court of competent
jurisdiction, is unable to properly manage his financial affairs, may be paid to
the legal representative of such person or may be applied for the benefit of
such person, and any such payment shall be deemed to be payment for such
person's account and shall be a complete discharge of all liability of the
Employer with respect to the amount so paid.
(D) Withholding Payroll Taxes. To the extent required by the laws in
effect at the time compensation or deferred compensation payments are made, the
corporation shall withhold from such compensation, or from deferred
7
<PAGE> 8
compensation payments made hereunder, any taxes required to be withheld for
Federal, State or local government purposes.
(E) Liability. No member of the Board of Directors of the Employer and
no officer, employee or agent of the Employer shall have any liability to any
person, firm or corporation based on or arising out of the Plan except in the
case of gross negligence or fraud.
IN WITNESS WHEREOF, the Employer has caused this MSX International,
Inc. Deferred Compensation Plan to be executed as of the day and year first
above written.
WITNESSES: MSX INTERNATIONAL, INC.
Delaware Corporation
- --------------------- -------------------------
By: FREDERICK K. MINTURN
- --------------------- Its: Chief Financial Officer
8
<PAGE> 1
EXHIBIT 12
MSX INTERNATIONAL, INC. AND CONSOLIDATED SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
--------------------------------------------------------- ----------------------------
FISCAL FISCAL FISCAL YEAR FISCAL QUARTER
YEAR ENDED DECEMBER 31 YEAR ENDED QUARTER ENDED ENDED ENDED
------------------------------ December 28, MARCH 29, DECEMBER 28, MARCH 29,
1993 1994 1995 1996 1997 1998 1997 1998
------ ------ ------ ------ ------------ ------------- ------------ --------------
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings Before Income Taxes and Fixed
Charges:
Income from continuing operations
before income taxes................... $ 6,997 $ 8,540 $10,240 $ 6,620 $(2,748) $ 748 $ 394 $ 561
Add interest on indebtedness, net....... 308 920 1,470 1,310 12,400 4,240 14,803 4,347
Add amortization of debt expense........ - - - - - 73 610 153
Add estimated interest factor for
rentals............................... 2,054 1,800 2,733 1,800 5,867 1,232 5,867 1,232
------- ------- ------- ------- ------- ------- ------- -------
Earnings before income taxes and fixed
charges............................... $ 9,359 $11,260 $14,443 $ 9,730 $15,519 $ 6,293 $21,674 $ 6,293
======= ======= ======= ======= ======= ======= ======= =======
Fixed charges:
Interest on indebtedness................ $ 308 $ 920 $ 1,470 $ 1,310 $12,400 $ 4,240 $14,803 $ 4,347
Amortization of debt expense............ - - - - - 73 610 153
Estimated interest factor for rentals... 2,054 1,800 2,733 1,800 5,867 1,232 5,867 1,232
------- ------- ------- ------- ------- ------- ------- -------
$ 2,362 $ 2,720 $ 4,203 $ 3,110 $18,267 $ 5,545 $21,280 $ 5,732
======= ======= ======= ======= ======= ======= ======= =======
Ratio of earnings to fixed charges......... 4.0 4.1 3.4 3.1 (a) 1.1 1.0 1.1
=== === === === === === === ===
</TABLE>
(a) Earnings were insufficient to cover fixed charges by $2.7 million for the
fiscal year ended December 28, 1997.
<PAGE> 1
EXHIBIT 21.1
Significant Subsidiaries of MSX International, Inc.
MSX International (Holdings), Inc.
MSX International (USA), Inc.
MSX International Business Services, Inc.
MSX International Engineering Services
MSX International Technology Services, Inc.
<PAGE> 1
EXHIBIT 25.1
---------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
--------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
--------
IBJ SCHRODER BANK & TRUST COMPANY
(Exact name of trustee as specified in its charter)
New York 13-6022258
(Jurisdiction of incorporation (I.R.S. employer
or organization if not a U.S. national bank) identification No.)
One State Street, New York, New York 10004
(Address of principal executive offices) (Zip code)
LUIS PEREZ, ASSISTANT VICE PRESIDENT
IBJ SCHRODER BANK & TRUST COMPANY
One State Street
New York, New York 10004
(212) 858-2000
(Name, address and telephone number of agent for service)
MSX INTERNATIONAL, INC.
(Exact names of obligor as specified in its charter)
Delaware 38-3323099
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
275 REX BLVD.
AUBURN HILLS, MI
48326
(Address of principal executive offices) (Zip code)
11 3/8%Senior Subordinated Notes Due 2008
---------
(Title of indenture securities)
<PAGE> 2
Item 1. General information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
New York State Banking Department
Two Rector Street
New York, New York
Federal Deposit Insurance Corporation
Washington, D.C.
Federal Reserve Bank of New York
Second District,
33 Liberty Street
New York, New York
(b) Whether it is authorized to exercise corporate trust
powers.
Yes
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee,
describe each such affiliation.
The obligor is not an affiliate of the trustee.
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with
respect to the securities under this indenture.
Explain the nature of any such default.
None
2
<PAGE> 3
(b) If the trustee is a trustee under another indenture
under which any other securities, or certificates of
interest or participation in any other securities, of
the obligors are outstanding, or is trustee for more
than one outstanding series of securities under the
indenture, state whether there has been a default
under any such indenture or series, identify the
indenture or series affected, and explain the nature
of any such default.
None
Item 16. List of exhibits.
List below all exhibits filed as part of this
statement of eligibility.
*1. A copy of the Charter of IBJ Schroder Bank & Trust
Company as amended to date. (See Exhibit 1A to Form
T-1, Securities and Exchange Commission File No.
22-18460).
*2. A copy of the Certificate of Authority of the
trustee to Commence Business (Included in Exhibit 1
above).
*3. A copy of the Authorization of the trustee to
exercise corporate trust powers, as amended to date
(See Exhibit 4 to Form T-1, Securities and Exchange
Commission File No. 22-19146).
*4. A copy of the existing By-Laws of the trustee, as
amended to date (See Exhibit 4 to Form T-1,
Securities and Exchange Commission File No.
22-19146).
5. Not Applicable
6. The consent of United States institutional trustee
required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the
trustee published pursuant to law or the requirements
of its supervising or examining authority.
* The Exhibits thus designated are incorporated herein by reference as
exhibits hereto. Following the description of such Exhibits is a
reference to the copy of the Exhibit heretofore filed with the
Securities and Exchange Commission, to which there have been no
amendments or changes.
3
<PAGE> 4
NOTE
In answering any item in this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor and its
directors or officers, the trustee has relied upon information
furnished to it by the obligor.
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base responsive answers to Item 2, the
answer to said Item is based on incomplete information.
Item 2, may, however, be considered as correct unless amended by an
amendment to this Form T-1.
Pursuant to General Instruction B, the trustee has responded to Items
1, 2 and 16 of this form since to the best knowledge of the trustee as
indicated in Item 13, the obligor is not in default under any indenture
under which the applicant is trustee.
4
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, the trustee, IBJ Schroder Bank & Trust Company, a corporation organized
and existing under the laws of the State of New York, has duly caused this
statement of eligibility & qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of New York, and State
of New York, on the 28th day of May, 1998.
IBJ SCHRODER BANK & TRUST COMPANY
By:_____________________________
Luis Perez
Assistant Vice President
<PAGE> 6
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, the trustee, IBJ Schroder Bank & Trust Company, a corporation organized
and existing under the laws of the State of New York, has duly caused this
statement of eligibility & qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of New York, and State
of New York, on the 28th day of May, 1998.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/Luis Perez
-------------------------------
Luis Perez
Assistant Vice President
<PAGE> 7
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the issuance by MSX
International, Inc., of its 11 3/8%Senior Subordinated Notes Due 2008, we hereby
consent that reports of examinations by Federal, State, Territorial, or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/Luis Perez
----------------------------
Luis Perez
Assistant Vice President
Dated: May 28, 1998
<PAGE> 8
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the issuance by MSX
International, Inc., of its 11 3/8%Senior Subordinated Notes Due 2008, we hereby
consent that reports we hereby consent that reports of examinations by Federal,
State, Territorial, or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
IBJ SCHRODER BANK & TRUST COMPANY
By:__________________________
Luis Perez
Assistant Vice President
Dated: May 28, 1998
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE
11 3/8% SENIOR NOTES DUE 2008
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
11 3/8% SENIOR NOTES DUE 2008
OF
MSX INTERNATIONAL, INC.
PURSUANT TO THE PROSPECTUS
DATED , 1998
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 1998, UNLESS THE OFFER IS EXTENDED.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
IBJ SCHRODER BANK AND TRUST COMPANY
<TABLE>
<S> <C>
By Registered or Certified Mail: By Overnight Delivery or Hand:
IBJ Schroder Bank & Trust Company IBJ Schroder Bank & Trust Company
P.O. Box 84 One State Street
Bowling Green Station New York, NY 10004
New York, NY 10274-0084 Attention: Securities Processing Window
Attention: Reorganization Operations Subcellar One (SC-1)
Department
To Confirm by Telephone
or for Information: Facsimile Transmissions:
(212) 858-2103 (212) 858-2103
</TABLE>
------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY
BEFORE CHECKING ANY BOX BELOW.
THE INSTRUCTIONS CONTAINED HEREIN MUST BE FOLLOWED. QUESTIONS AND REQUESTS
FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF
TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
The undersigned acknowledges receipt of the Prospectus dated
, 1998 (the "Prospectus") of MSX International, Inc. (the
"Company") which, together with this Letter of Transmittal (the "Letter of
Transmittal") describes the Company's offer (the "Exchange Offer") to exchange
$1,000 in principal amount of its 11 3/8% Senior Subordinated Notes due 2008
(the "Exchange Notes") for each $1,000 in principal amount of outstanding
11 3/8% Senior Notes due 2008 (the "Old Notes"). The terms of the Exchange Notes
are identical in all material respects to the terms of the Old Notes, except
that the offer and sale of the Exchange Notes have been registered under the
Securities Act and therefore the Exchange Notes are not subject to certain
restrictions on transfer applicable to the Old Notes, will not contain legends
relating thereto and will not be entitled to registration rights or other rights
under the Registration Agreement (as defined). The Exchange Notes will be issued
under the same Indenture (as defined herein) as the Old Notes
<PAGE> 2
and the Exchange Notes and the Old Notes will constitute a single series of debt
securities under the Indenture. See "The Exchange Offer."
The undersigned hereby tenders the Old Notes described in the box entitled
"Description of Old Notes" below pursuant to the terms and conditions described
in the Prospectus and this Letter of Transmittal. The undersigned is the
registered owner of all the Old Notes and the undersigned represents that it has
received from each beneficial owner of Old Notes ("Beneficial Owner") a duly
completed and executed form of "Instruction to Registered Holder from Beneficial
Owner" accompanying this Letter of Transmittal, instructing the undersigned to
take the action described in this letter of transmittal.
This Letter of Transmittal is to be completed by holders of Old Notes (as
defined below) either if Old Notes are to be forwarded herewith or if tenders of
Old Notes are to be made by book-entry transfer to an account maintained by IBJ
Schroder Bank & Trust Company (the "Exchange Agent") at The Depository Trust
Company ("DTC") pursuant to the procedures set forth in "The Exchange
Offer -- Procedures for Tendering Old Notes" in the Prospectus.
The undersigned hereby represents and warrants that the information
received from the beneficial owner is accurately reflected in the boxes entitled
"Beneficial Owner(s) -- Purchaser Status" and "Beneficial
Owner(s) -- Residence."
Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder of Old Notes promptly and
instruct such registered holder of Old Notes to tender on behalf of the
beneficial owner. If such beneficial owner wishes to tender on such owner's
behalf, such beneficial owner must, prior to completing and executing this
letter of transmittal and delivering its Old Notes, either make appropriate
arrangements to register ownership of the Old Notes in such beneficial owner's
name or obtain a properly completed power of attorney from the registered holder
of Old Notes. The transfer of record ownership may take considerable time.
In order to properly complete this letter of Transmittal, a holder of Old
Notes must (i) complete the box entitled "Description of Old Notes," (ii)
complete the boxes entitled "Beneficial Owner(s) -- Purchase Status" and
"Beneficial Owner(s) -- Residence," (iii) if appropriate, check and complete the
boxes relating to book entry transfer, guaranteed delivery, Special Issuance
Instructions and Special Delivery Instructions, (iv) sign the Letter of
Transmittal by completing the box entitled "Sign Here" and (v) complete the
Substitute Form W-9. Each holder of Old Notes should carefully read the detailed
instructions below prior to completing the Letter of Transmittal.
Holders of Old Notes whose certificates (the "Certificates") for such Old
Notes are not immediately available or who cannot deliver their Certificates and
all other required documents to the Exchange Agent on or prior to the Expiration
Date (as defined in the Prospectus) or who cannot complete the procedures for
book-entry transfer on a timely basis, must tender their Old Notes according to
the guaranteed delivery procedures set forth in "The Exchange Offer --
Guaranteed Delivery Procedures" in the Prospectus. SEE INSTRUCTION 1.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH ITS PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
2
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
ALL TENDERING HOLDERS COMPLETE THIS BOX:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES TENDERED
- --------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) OLD NOTES TENDERED
(PLEASE FILL IN, IF BLA (ATTACH ADDITIONAL LIST IF NECESSARY)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PRINCIPAL AMOUNT OF
CERTIFICATE PRINCIPAL AMOUNT OLD NOTES TENDERED
NUMBER(S)* OF OLD NOTES* (IF LESS THAN ALL)**
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
TOTAL AMOUNT
TENDERED
- --------------------------------------------------------------------------------------------------------------------
* Need not be completed by book-entry holders.
** Old Notes may be tendered in whole or in part in denominations of $1,000 and integral multiples thereof. All Old
Notes held shall be deemed tendered unless a lesser number is specified in this column.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE
THE FOLLOWING:
Name of Tendering Institution
-----------------------------------------------
DTC Account Number
----------------------------------------------------------
Transaction Code Number
-----------------------------------------------------
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s)
------------------------------------------------
Window Ticket Number (if any)
-----------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
--------------------------
Name of Institution which Guaranteed
----------------------------------------
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution
-----------------------------------------------
DTC Account Number
----------------------------------------------------------
Transaction Code Number
-----------------------------------------------------
3
<PAGE> 4
[ ] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD NOTES
ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE.
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD NOTES FOR ITS OWN
ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES (A
"PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF
THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
-----------------------------------------------------------------------
Address:
--------------------------------------------------------------------
BENEFICIAL OWNER(S) -- RESIDENCE
STATE OF DOMICILE/PRINCIPLE PLACE PRINCIPAL AMOUNT OF OLD
OF BUSINESS OF EACH BENEFICIAL NOTES HELD FOR ACCOUNT OF
OWNER OF OLD NOTES BENEFICIAL OWNER
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
BENEFICIAL OWNER(S) -- PURCHASE STATUS
The beneficial owner of each of the Old Notes described herein is (check the
box that applies):
[ ] A "Qualified Institutional Buyer" (as defined in Rule 144A under the
Securities Act)
[ ] An "Institutional Accredited Investor (as defined in Rule 501(a)(1), (2),
(3) o 7 under the Securities Act)
[ ] A non "U.S. person" (as defined in Regulation S of the Securities Act) that
purchased the Old Notes outside the U.S. in accordance with Rule 904 of the
Securities Act)
[ ] Other (describe):
----------------------------------------------------------------------------
----------------------------------------------------------------------------
4
<PAGE> 5
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the above described principal amount
of Old Notes. Subject to, and effective upon, the acceptance for exchange of the
Old Notes tendered herewith, the undersigned hereby exchanges, assigns and
transfers to, or upon the order of, the Company all right, title and interest in
and to such Old Notes. The undersigned hereby irrevocably constitutes and
appoints the Exchange Agent as the true and lawful agent and attorney-in-fact of
the undersigned (with full knowledge that the Exchange Agent is also acting as
agent of the Company in connection with the Exchange Offer) to cause the Old
Notes to be assigned, transferred and exchanged. The undersigned represents and
warrants that it has full authority to tender, exchange, assign and transfer the
Old Notes and acquire Exchange Notes issuable upon the exchange of such tendered
Old Notes, and that, when the same are accepted for exchange the undersigned
will acquire good and unencumbered title to the tendered Old Notes, free and
clear of all liens, restrictions, charges and encumbrances and not subject to
any adverse claim. The undersigned also warrants that it will, upon request,
execute and deliver any additional documents deemed by the Exchange Agent or the
Company to be necessary or desirable to complete the exchange, assignment and
transfer of tendered Old Notes or transfer ownership of such Old Notes on the
account books maintained by The Depository Trust Company.
The Exchange Offer is subject to certain conditions as set forth in the
Prospectus under the caption "The Exchange Offer." The undersigned recognizes
that as a result of these conditions (which may be waived, in whole or in part,
by the Company), as more particularly set forth in the Prospectus, the Company
may not be required to exchange any of the Old Notes tendered hereby and, in
such event, the Old Notes not exchanged will be returned to the undersigned at
the address shown below the signature of the undersigned.
BY TENDERING OLD NOTES AND EXECUTING, OR OTHERWISE BECOMING BOUND BY, THIS
LETTER OF TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE
EXCHANGE NOTES ACQUIRED PURSUANT TO THE EXCHANGE OFFER ARE BEING ACQUIRED IN THE
ORDINARY COURSE OF BUSINESS OF THE PERSON RECEIVING SUCH EXCHANGE NOTES, WHETHER
OR NOT SUCH PERSON IS THE HOLDER, (II) NEITHER THE HOLDER NOR ANY SUCH OTHER
PERSON HAS AN ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN THE
DISTRIBUTION OF SUCH EXCHANGE NOTES, (III) IF THE HOLDER IS NOT A BROKER-
DEALER, OR IS A BROKER-DEALER BUT WILL NOT RECEIVE EXCHANGE NOTES FOR ITS OWN
ACCOUNT IN EXCHANGE FOR OLD NOTES, NEITHER THE HOLDER NOR ANY SUCH OTHER PERSON
IS ENGAGED IN OR INTENDS TO PARTICIPATE IN THE DISTRIBUTION OF SUCH EXCHANGE
NOTES AND (IV) NEITHER THE HOLDER NOR ANY SUCH OTHER PERSON IS AN "AFFILIATE" OF
THE UNDERSIGNED WITHIN THE MEANING OF RULE 405 OF THE SECURITIES ACT. BY
TENDERING OLD NOTES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING, OR OTHERWISE
BECOMING BOUND BY, THIS LETTER OF TRANSMITTAL, A HOLDER OF OLD NOTES WHICH IS A
BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE
LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE
SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT (A) SUCH OLD NOTES
HELD BY THE BROKER-DEALER ARE HELD ONLY AS A NOMINEE, OR (B) SUCH OLD NOTES WERE
ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING
ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER THE PROSPECTUS (AS
AMENDED OR SUPPLEMENTED FROM TIME TO TIME) MEETING THE REQUIREMENTS OF THE
SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH EXCHANGE NOTES (PROVIDED
THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER
WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF
THE SECURITIES ACT).
5
<PAGE> 6
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death, bankruptcy or incapacity of the undersigned
and any obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives successors and assigns of the undersigned. Tendered Old
Notes may be withdrawn at any time prior to the Expiration Date.
Certificates for all Exchange Notes delivered in exchange for tendered Old
Notes and any Old Notes delivered herewith but not exchanged, in each case
registered in the name of the undersigned, shall be delivered to the undersigned
at the address shown below the signature of the undersigned.
6
<PAGE> 7
- --------------------------------------------------------------------------------
HOLDER(S) SIGN HERE
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 3)
Must be signed by registered holder(s) exactly as name(s) appear(s)
on Certificate(s) for Old Notes hereby tendered or by any person(s)
authorized to become the registered holder(s) by endorsements and
documents transmitted herewith or, if the Old Notes are held of record by
DTC, the person in whose name such Old Notes are registered on the books
of DTC. If signature is by an attorney-in-fact, executor, administrator,
trustee, guardian, officer of a corporation or another acting in a
fiduciary or representative capacity, please set forth the signer's full
title. See Instruction 3.
--------------------------------------------------------------------------
(Signature(s) of Holder(s))
Date 1998
-----------------------------------------------------------------,
Name(s)
-------------------------------------------------------------------
--------------------------------------------------------------------------
(Please Print)
Capacity:
-----------------------------------------------------------------
(Include Full Title)
Address
-------------------------------------------------------------------
--------------------------------------------------------------------------
(Include zip code)
Area Code and Telephone Number
--------------------------------------------
--------------------------------------------------------------------------
(Tax Identification or Social Security Number(s))
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 3)
Authorized Signature
------------------------------------------------------
Name
----------------------------------------------------------------------
--------------------------------------------------------------------------
(Please Print)
Date 1998
-----------------------------------------------------------------,
Capacity or Title
---------------------------------------------------------
Name of Firm
--------------------------------------------------------------
Address
-------------------------------------------------------------------
--------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number
--------------------------------------------
- --------------------------------------------------------------------------------
7
<PAGE> 8
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if the Exchange Notes are to be issued in the name of
someone other than the registered holder of the Old Notes whose name(s)
appear(s) above.
Issue Exchange Notes to:
Name:
--------------------------------------------------
(Please Print)
- -------------------------------------------------------
Address:
-----------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
(Include Zip Code)
- -------------------------------------------------------
(Taxpayer Identification or Social Security Number)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if Exchange Notes are to be sent to someone other than the
registered holder of the Old Notes whose name(s) appear(s) above, or to such
registered holder(s) at an address other than that shown above.
Mail Exchange Notes to:
Name:
--------------------------------------------------
(Please Print)
- -------------------------------------------------------
Address:
-----------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
(Include Zip Code)
- -------------------------------------------------------
(Taxpayer Identification or Social Security Number)
8
<PAGE> 9
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of Letter of Transmittal and Certificates. Certificates for all
physically delivered Old Notes or confirmation of any book-entry transfer to the
Exchange Agent's account at DTC of Old Notes tendered by book-entry transfer, as
well as this Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees or an Agent's Message
in lieu thereof and any other documents required by this Letter of Transmittal,
must be received by the Exchange Agent at one of its addresses set forth herein
on or prior to the Expiration Date.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE OLD NOTES AND ANY
OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING HOLDER
AND, EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY
WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF SUCH DELIVERY IS BY MAIL, IT IS
RECOMMENDED THAT REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, BE USED.
Holders whose Old Notes are not immediately available or who cannot deliver
their Old Notes and all other required documents to the Exchange Agent on or
prior to the Expiration Date or comply with the procedures for delivery by
book-entry transfer on a timely basis may tender their Old Notes by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedures set forth in "The Exchange Offer--Guaranteed
Delivery Procedures" in the Prospectus. Pursuant to such procedures: (i) such
tender must be made by or through an Eligible Institution (as defined therein);
(ii) prior to the Expiration Date the Exchange Agent must have received from
such Eligible Institution a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) and Notice of Guarantee Delivery,
substantially in the form provided by the Company (by telegram, telex, facsimile
transmission, mail or hand delivery), setting forth the name and address of the
Holder of the Old Notes and the amount of Old Notes Tendered, stating that the
tender is being made thereby, and guaranteeing that within five New York Stock
Exchange ("NYSE") trading days after the date of execution of the Notice of
Guarantee Delivery, the certificates of all physically tendered Old Notes, in
proper form for transfer, or a Book-Entry Confirmation, as the case may be, and
any other documents required by the Letter of Transmittal will be deposited by
the Eligible Institution with the Exchange Agent, and, the names in which such
Old Notes are registered, and, if possible, the certificate numbers of the Old
Notes to be tendered; and (iii) the certificates for all physically tendered Old
Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case
may be, and all other documents required by the Letter of Transmittal, are
received by the Exchange Agent within five NYSE trading days after the date of
execution of the Notice of Guaranteed Delivery.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders, by execution of a Letter of Transmittal (or
facsimile thereof), or any Agent's Message in lieu thereof, shall waive any
right to receive any notice of the acceptance of the Old Notes or exchange.
2. Partial Tenders and Withdrawals. Tenders of Old Notes will be accepted
in all denominations of $1,000 and integral multiples thereof. If less than all
the Old Notes evidenced by any Certificate submitted are to be tendered, fill in
the principal amount of Old Notes which are to be tendered in the box entitled
"Principal Amount of Old Notes Tendered (if less than all)." In such case, new
Certificate(s) for the remainder of the Old Notes that were evidenced by your
old Certificate(s) will be sent to the holder of the Old Note, promptly after
the Expiration Date. All Old Notes represented by Certificates delivered to the
Exchange Agent will be deemed to have been tendered unless otherwise indicated.
Tenders of Old Notes pursuant to the Exchange Offer are irrevocable, except
that Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any
time prior to the Expiration Date. In order for a withdrawal to be effective on
or prior to that time, a written notice of withdrawal must be timely received by
the Exchange Agent at one of its addresses set forth above or in the Prospectus
prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Old Notes to be withdrawn, identify the Old
Notes to be withdrawn (including the principal amount of such Old Notes) and
(where Certificates for Old Notes have been transmitted) specify the name in
which such Old Notes are registered, if different from that of the withdrawing
Holder. If certificates for Old Notes have been delivered
9
<PAGE> 10
or otherwise identified to the Exchange Agent, then, prior to the release of
such certificates, the withdrawing holder must also submit the serial numbers of
the particular certificates to be withdrawn and a signed notice of withdrawal
with signatures guaranteed by an Eligible Institution unless such holder is an
Eligible Institution. If Old Notes have been tendered pursuant to the procedures
for book-entry transfer set forth in the Prospectus, any notice of withdrawal
must specify the name and number of the account at DTC to be credited with the
withdrawal of Old Notes or otherwise comply with DTC's procedures. All questions
as to the validity, form and eligibility (including time of receipt) of such
notices will be determined by the Company, whose determination shall be final
and binding on all parties. Any Old Notes so withdrawn will be deemed not to
have been validly tendered for exchange for the purposes of the Exchange Offer.
Any Old Notes which have been tendered for exchange ut which are not exchanged
for any reason will be returned to the Holder thereof without cost to such
Holder (or, in the case of Old Notes tendered by book-entry transfer into the
Exchange Agent's account at DTC pursuant to the book entry transfer procedure
described above, such Old Notes will be credited to an account maintained with
DTC for the Old Notes (as soon as practicable after withdrawal, rejection of
tender or termination of the Exchange Offer. Properly withdrawn Old Notes may be
tendered by following one of the procedures described under "Procedures for
Tendering Old Notes" above at any time on or prior to the Expiration Date.
3. Signatures on Letter of Transmittal, Assignments and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Old
Notes tendered hereby, the signature(s) must correspond exactly with the name(s)
as written on the face of the Certificate(s) without alteration, enlargement or
any change whatsoever.
If any of the Old Notes tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If a number of Old Notes registered in different names are tendered, it
will be necessary to complete, sign and submit as may separate copies of this
Letter of Transmittal as there are different registrations of Old Notes.
When this Letter of Transmittal is signed by the registered holder(s) of
the Old Notes listed and transmitted hereby, no endorsement(s) of Certificate(s)
or written instrument or instruments of transfer or exchange are required unless
Exchange Notes are to be issued in the name of a person other than the
registered holder(s). Signature(s) on such Certificate(s) or written instrument
or instruments of transfer or exchange must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Old Notes listed, the Certificates must be endorsed
or accompanied by a written instrument or instruments of transfer or exchange,
in a form satisfactory to the Company and duly executed by the registered
holder, in either case signed exactly as the name or names of the registered
holder(s) appear(s) on the Certificates.
If this Letter of Transmittal, any Certificates or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless waived by the
Company, proper evidence satisfactory to the Company of such persons' authority
to so act must be submitted.
Endorsements on Certificates or signatures on separate written instruments
of transfer or exchange required by this Instruction 3 must be guaranteed by an
Eligible Institution.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the Old Notes surrendered for exchange
pursuant thereto are tendered (i) by a registered holder of the Old Notes who
has not completed the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution (as defined below). In the event that signatures on a
Letter of Transmittal or a notice of withdrawal, as the case may be, are
required to be guaranteed, such guarantees must be by a firm which is a member
of a registered national securities exchange or a member of the National
Association of Securities Dealers, Inc. or by a commercial bank or trust company
having an office or correspondent in the United States (collectively, "Eligible
Institutions"). If Old Notes are registered in the name of a person other than
the person signing the Letter of Transmittal, the Old Notes surrendered for
exchange must be endorsed by, or be accompanied by a written instrument or
instruments of transfer or exchange, in satisfactory form as determined by the
Company in its sole discretion, duly executed by the registered holder with the
signature thereon guaranteed by an Eligible Institution.
10
<PAGE> 11
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Old Notes tendered for exchange will be determined by
the Company in its sole discretion, which determination shall be final and
binding. The Company reserves the absolute right to reject any and all tenders
of any particular Old Notes not properly tendered or not to accept any
particular Old Notes the acceptance of which might, in the judgment of the
Company or its counsel, be unlawful. The Company also reserves the absolute
right to waive and defects or irregularities or conditions of the Exchange Offer
as to any particular Old Notes either before or after the Expiration Date
(including the right to waive the ineligibility of any Holder who seeks to
tender Old Notes in the Exchange Offer). The interpretation of the terms and
conditions of the Exchange Offer as to any particular Old Notes either before or
after the Expiration Date (including this Letter of Transmittal and the
instructions thereto) by the Company shall be final and binding on all parties.
Unless waived, any defects or irregularities in connection with the tender of
Old Notes for exchange must be cured within such reasonable period of time as
the Company shall determine. Neither the Company, the Exchange Agent nor any
other person shall be under any duty to give notification of any defect or
irregularity with respect to any tender of Old Notes for exchange, nor shall any
of them incur any liability for failure to give such notification.
4. Transfer Taxes. Holders who tender their Old Notes for exchange will not
be obligated to pay any transfer taxes in connection therewith, except that
Holders who instruct the Company to register Exchange Notes in the name of, or
request that Old Notes not tendered or not accepted in the Exchange Offer be
returned to, a person other than the registered tendering Holder will be
responsible for the payment of any applicable transfer tax thereon.
Except as provided in this Instruction 4, it will not be necessary for
transfer tax stamps to be affixed to the Old Notes listed in this Letter of
Transmittal.
5. Waiver of Conditions. The Company reserves the absolute right to waive,
in whole or in part, any of the conditions to the Exchange Offer set forth in
the Prospectus.
6. Mutilated, Lost, Destroyed or Stolen Certificates. Any holder whose Old
Notes have been mutilated, lost, destroyed or stolen should contact the Exchange
Agent at the address indicated below for further instructions.
7. Requests for Assistance and Additional Copies. Questions relating to the
procedure for tendering, as well as requests for additional copies of the
Prospectus and this Letter of Transmittal may be directed to the Exchange Agent
at the address and telephone number set forth below. In addition, all questions
relating to the Exchange Offer, as well as requests for assistance and
additional copies of the Prospectus and this Letter of Transmittal, may be
directed to the Company at 275 Rex Boulevard, Auburn Hills, Michigan 48236.
Attention: Carol Creel, Esq. (248) 299-1000.
8. Irregularities. All questions as to the form, validity, eligibility
(including time of receipt) and acceptance of Letters of Transmittal or Old
Notes will be resolved by the Company, whose determination shall be final and
binding. The Company reserves the absolute right to reject any and all Letters
of Transmittal or tenders that are not in proper form or the acceptance of which
would, in the judgment of the Company or its counsel, be unlawful. The Company
also reserves the right to waive any defects or irregularities or conditions of
the Exchange Offer as to any particular Old Notes covered by any Letter of
Transmittal or tendered pursuant to such letter. None of the Company, the
Exchange Agent or any other person shall be under any duty to give notification
of any defect or irregularity with respect to any tender of Old Notes for
exchange, nor shall any of them incur any liability for failure to give such
notification. The Company's interpretation of the terms and conditions of the
Exchange Offer shall be final and binding.
9. Definitions. Capitalized terms used in this Letter of Transmittal and
not otherwise defined have the meanings given in the Prospectus.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF),
OR AN AGENT'S MESSAGE IN LIEU THEREOF, AND ALL OTHER REQUIRED
DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT
ON OR PRIOR TO THE EXPIRATION DATE.
11
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY EXHIBIT 99.2
OFFER TO EXCHANGE
11 3/8% SENIOR NOTES DUE 2008
(REGISTERED UNDER THE SECURITIES ACT OF 1933)
FOR ANY AND ALL OF ITS OUTSTANDING
11 3/8% SENIOR NOTES DUE 2008
OF
MSX INTERNATIONAL, INC.
This Notice of Guaranteed Delivery or one substantially equivalent hereto
may be used to accept the Exchange Offer (as defined below) if (i) certificates
for the 11 3/8% Senior Notes due 2008 (the "Old Notes") of MSX International,
Inc., a Delaware corporation (the "Company"), are not immediately available,
(ii) time will not permit the holder's Old Notes or other required documents to
reach IBJ Schroder Bank & Trust Company (the "Exchange Agent") before the
Expiration Date (as defined in the Prospectus referred to below) or (iii) the
procedures for book-entry transfer cannot be completed on a timely basis. This
Notice of Guaranteed Delivery may be delivered by hand or sent by facsimile
transmission, overnight courier, telex, telegram or mail to the Exchange Agent.
See "The Exchange Offer -- Guaranteed Delivery Procedures" in the Prospectus
dated , 1998, (which, together with the related Letter of Transmittal,
constitutes the "Exchange Offer") of the Company.
The Exchange Agent for the Exchange Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<S> <C> <C>
By Hand or Overnight Facsimile Transmissions: By Registered Or Certified
Delivery: (Eligible Institutions Only) Mail:
(212) 858-2611
IBJ Schroder Bank & Trust Co. IBJ Schroder Bank & Trust Co.
One State Street To Confirm by Telephone P.O. Box 84
New York, New York 10004 or for Information Call: Bowling Green Station
Attn: Securities Processing (212) 858-2103 New York, New York 10274-0084
Window -- Subcellar One Attn: Reorganization
(SC-1) Operations
Department
</TABLE>
------------------------
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA A
FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED ON THE LETTER
OF TRANSMITTAL.
<PAGE> 2
THE FOLLOWING GUARANTEE MUST BE COMPLETED
GUARANTEE OF DELIVERY
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the United States, hereby guarantees to deliver to the Exchange
Agent, at one of its addresses set forth above, either the certificates for all
physically tendered Old Notes, in proper form for transfer, or confirmation of
the book-entry transfer of such Old Notes to the Exchange Agent's account at The
Depository Trust Company ("DTC"), pursuant to the procedures for book-entry
transfer set forth in the Prospectus, in either case together with one or more
properly completed and duly executed Letter(s) of Transmittal (or facsimile
thereof) or an Agent's Message in lieu thereof and any other documents required
by such Letter of Transmittal, within 5 New York Stock Exchange trading days
after the date of execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal or an Agent's Message in lieu thereof and the Old Notes tendered
hereby to the Exchange Agent within the time period set forth above and that
failure to do so could result in a financial loss to the undersigned.
- ------------------------------------------------------
Name of Firm
- ------------------------------------------------------
Address:
- ------------------------------------------------------
(Zip Code)
- ------------------------------------------------------
Area Code and Telephone Number
- ------------------------------------------------------
Authorized Signature
- ------------------------------------------------------
Title
- ------------------------------------------------------
Name (Please Type or Print)
Dated:
- --------------------------------------- , 1998
NOTE: DO NOT SEND OLD NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. ACTUAL
SURRENDER OF OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A
PROPERLY COMPLETED AND FULLY EXECUTED LETTER OF TRANSMITTAL OR AN AGENT'S
MESSAGE IN LIEU THEREOF AND ANY OTHER REQUIRED DOCUMENTS.
2
<PAGE> 1
EXHIBIT 99.3
INSTRUCTION TO REGISTERED HOLDER AND/OR
BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM OWNER
OF
MSX INTERNATIONAL, INC.
11 3/8% Senior Notes due 2008
TO REGISTERED HOLDER AND/OR PARTICIPANT OF THE BOOK-ENTRY TRANSFER FACILITY:
The undersigned hereby acknowledges receipt of the Prospectus dated
, 1998 (the "Prospectus") of MSX International, Inc., a Delaware
corporation (the "Company"), and the accompanying Letter of Transmittal (the
"Letter of Transmittal"), that together constitute the Company's offer (the
"Exchange Offer"). Capitalized terms used but not defined herein have the
meaning as ascribed to them in the Prospectus.
This will instruct you, the registered holder and/or book-entry transfer
facility participant, as to the action to be taken by you relating to the
Exchange Offer with respect to the Old Notes held by you for the account of the
undersigned.
The aggregate face amount of the Old Notes held by you for the account of
the undersigned is (fill in amount):
$ of the 11 3/8% Senior Notes due 2008.
With respect to the Exchange Offer, the undersigned hereby instructs you
(check appropriate box):
[ ] To TENDER the following Old Notes held by you for the account of the
undersigned (insert principal amount of Old Notes to be tendered, if
any):
$ of the 11 3/8% Senior Notes due 2008.
[ ] NOT to TENDER any Old Notes held by you for the account of the
undersigned.
If the undersigned instructs you to tender the Old Notes held by you for
the account of the undersigned, it is understood that you are authorized to
make, on behalf of the undersigned (and the undersigned, by its signature below,
hereby makes to you), the representations and warranties contained in the Letter
of Transmittal that are to be made with respect to the undersigned as a
beneficial owner, including but not limited to the representations, that (i) it
is not an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act, (ii) any Exchange Notes to be received by it are being acquired
in the ordinary course of business, and (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such Exchange Notes. Each broker-dealer that
receives Exchange Notes for its own account in exchange for Old Note, where such
Old Notes were acquired as the result of market-making activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes. The Letter of Transmittal states that by so acknowledging
and delivering a prospectus, the broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.
<PAGE> 2
- --------------------------------------------------------------------------------
The purchaser status of the undersigned is (check the box that applies):
[ ] A "Qualified Institutional Buyer" (as defined in Rule 144A under the
Securities Act)
[ ] An "Institutional Accredited Investor" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act)
[ ] a non "U.S. person" (as defined in Regulation S of the Securities Act)
that purchased the Old Notes outside the United States in accordance
with Rule 904 of the Securities Act
[ ] Other (describe)
--------------------------------------------------------------------------
SIGN HERE
Name of Beneficial Owner(s):
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Signature(s):
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Name(s) (please print):
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Address:
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Principal place of business (if different from address listed above):
------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Telephone Number(s):
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Taxpayer Identification or Social Security Number(s):
-------------------------------------------------------
--------------------------------------------------------------------------
Date:
--------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2
<PAGE> 3
TO BE COMPLETED BY ALL TENDERING HOLDERS
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: MSX INTERNATIONAL, INC.
- -----------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND
FORM W-9 CERTIFY BY SIGNING AND DATING BELOW. TIN: ----------------------
Social Security Number
DEPARTMENT OF THE TREASURY OR
INTERNAL REVENUE SERVICE
---------------------------
Employer Identification
Number
------------------------------------------------------------------------------------------
PAYER'S REQUEST FOR CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY PART 2--
TAXPAYER IDENTIFICATION THAT
NUMBER ("TIN") AND TIN applied for [ ]
CERTIFICATION (1) the number shown on this form is my correct Taxpayer
Identification Number (or I am waiting for a number to
be issued to me).
(2) I am not subject to backup withholding either because
(a) I am exempt from backup withholding, or (b) I have not
been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a
result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding, and
(3) any other information provided on this form is true
and correct.
SIGNATURE _____________________________ DATE _________________
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
You must cross out item (2) of the above certification if you have been
notified by the IRS that you are subject to backup withholding because of
under reporting of interest or dividends on your tax return and you have not
been notified by the IRS that you are no longer subject to backup withholding.
- --------------------------------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 2 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a Taxpayer Identification Number to the appropriate Internal Revenue
Service Center or Social Security Administrative Office or (b) intend to mail or
deliver an application in the near future. I understand that if I do not provide
a Taxpayer Identification Number by the time of the exchange, 31 percent of all
reportable payments made to me thereafter will be withheld until I provide a
number.
SIGNATURE _______________________________________________________ DATE _______
<PAGE> 1
OFFER TO EXCHANGE EXHIBIT 99.4
11 3/8% SENIOR NOTES DUE 2008
(REGISTERED UNDER THE SECURITIES ACT OF 1933)
FOR ANY AND ALL OF ITS OUTSTANDING
11 3/8% SENIOR NOTES DUE 2008
OF
MSX INTERNATIONAL, INC.
To Our Clients:
We are enclosing herewith a Prospectus dated , 1998 of
MSX International, Inc., a Delaware corporation (the "Company"), and a related
Letter of Transmittal (which together constitute the "Exchange Offer") relating
to the offer by the Company to exchange its 11 3/8% Senior Notes due 2008 (the
"Exchange Notes"), pursuant to an offering registered under the Securities Act
of 1933, as amended (the "Securities Act"), for a like principal amount of its
issued and outstanding 11 3/8% Senior Notes due 2008 (the "Old Notes") upon the
terms and subject to the conditions set forth in the Exchange Offer.
PLEASE NOTE THAT THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON , 1998, UNLESS EXTENDED.
The Exchange Offer is not conditioned upon any minimum number of Old Notes
being tendered.
We are the holder of record and/or participant in the book-entry transfer
facility of Old Notes held by us for your account. A tender of such Old Notes
can be made only by us as the record holder and/or participant in the book-entry
transfer facility and pursuant to your instructions. The Letter of Transmittal
is furnished to you for your information only and cannot be used by you to
tender Old Notes held by us for your account.
We request instructions as to whether you wish to tender any or all of the
Old Notes held by us for your account pursuant to the terms and conditions of
the Exchange Offer. We also request that you confirm that we may on your behalf
make the representations contained in the Letter of Transmittal.
Pursuant to the Letter of Transmittal, each holder of Old Notes will
represent to the Company that (i) it is not an "affiliate" of the Company within
the meaning of Rule 405 under the Securities Act, (ii) any Exchange Notes to be
received by it are being acquired in the ordinary course of business, and (iii)
it has no arrangement or understanding with any person to participate in a
distribution (within the meaning of the Securities Act) of such Exchange Notes.
Each broker-dealer that receives Exchange Notes for its own account in exchange
for Old Note, where such Old Notes were acquired as the result of market-making
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. The Letter of Transmittal states that by
so acknowledging and delivering a prospectus, the broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
Very truly yours,
<PAGE> 1
OFFER TO EXCHANGE EXHIBIT 99.5
FOR ANY AND ALL OUTSTANDING
(REGISTERED UNDER THE SECURITIES ACT OF 1933)
11 3/8% SENIOR NOTES DUE 2008
OF
MSX INTERNATIONAL, INC.
To Registered Holders and The Depository
Trust Company Participants:
We are enclosing herewith the material listed below relating to the offer
by MSX International, Inc., a Delaware corporation (the "Company"), to exchange
its 11 3/8% Senior Notes due 2008 (the "Exchange Notes"), pursuant to an
offering registered under the Securities Act of 1933, as amended (the
"Securities Act"), for a like principal amount of its issued and outstanding
11 3/8% Senior Notes due 2008 (the "Old Notes") upon the terms and subject to
the conditions set forth in the Company's Prospectus, dated ,
1998, and the related Letter of Transmittal (which together constitute the
"Exchange Offer").
Enclosed herewith are copies of the following documents:
1. Prospectus dated , 1998;
2. Letter of Transmittal;
3. Notice of Guaranteed Delivery;
4. Instruction to Registered Holder and/or Book-Entry Transfer Participant
from Owner; and
5. Letter which may be sent to your clients for whose account you hold Old
Notes in your name or in the name of your nominee, to accompany the
instruction form referred to above, for obtaining such client's
instruction with regard to the Exchange Offer.
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE EXCHANGE
OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,
1998 UNLESS EXTENDED.
The Exchange Offer is not conditioned upon any minimum number of Old Notes
being tendered.
Pursuant to the Letter of Transmittal, each holder of Old Notes will
represent to the Company that (i) it is not an "affiliate" of the Company within
the meaning of Rule 405 under the Securities Act, (ii) any Exchange Notes to be
received by it are being acquired in the ordinary course of business, and (iii)
it has no arrangement or understanding with any person to participate in a
distribution (within the meaning of the Securities Act) of such Exchange Notes.
Each broker-dealer that receives Exchange Notes for its own account in exchange
for Old Note, where such Old Notes were acquired as the result of market-making
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. The Letter of Transmittal states that by
so acknowledging and delivering a prospectus, the broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
The enclosed Instruction to Registered Holder and/or Book-Entry Transfer
Participant from Owner contains an authorization by the beneficial owners of the
Old Notes for you to make the foregoing representations.
The Company will not pay any fee or commission to any broker or dealer or
to any other persons (other than the Exchange Agent) in connection with the
solicitation of tenders of Old Notes pursuant to the Exchange Offer. The Company
will pay or cause to be paid any transfer taxes payable on the transfer of Old
Notes to it, except as otherwise provided in Instruction 4 of the enclosed
Letter of Transmittal.
<PAGE> 2
Additional copies of the enclosed material may be obtained from the
undersigned.
Very truly yours,
MSX International, Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF MSX INTERNATIONAL, INC. CORPORATION OR IBJ SCHRODER BANK & TRUST
COMPANY OR AUTHORIZE YOU TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON THEIR
BEHALF IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THE DOCUMENTS ENCLOSED
HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
2
