Exhibit 10.31
$220,000,000 REVOLVING CREDIT FACILITY
CREDIT AGREEMENT
by and among
KPMG CONSULTING, INC., As Borrower,
And
KPMG CONSULTING, LLC, As a Guarantor
And
THE OTHER GUARANTORS PARTY HERETO
And
THE BANKS PARTY HERETO
And
JPMORGAN CHASE BANK, As the Administrative Agent
And
X.X. XXXXXX SECURITIES, INC., As the Sole Arranger and Bookrunner
Dated as of August 21, 2002
LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
SCHEDULE 1.1(A) - PRICING GRID
SCHEDULE 1.1(B) - COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
SCHEDULE 1.1(E) EQUITY INVESTMENT WRITEDOWNS
SCHEDULE 1.1(P) - PERMITTED LIENS
SCHEDULE 5.1.2 - CAPITALIZATION
SCHEDULE 5.1.3 - SUBSIDIARIES
SCHEDULE 5.1.13 - CONSENTS AND APPROVALS
SCHEDULE 7.2.1 - PERMITTED INDEBTEDNESS
SCHEDULE 7.2.4 - INVESTMENTS EXISTING AS OF THE CLOSING DATE
SCHEDULE 7.2.6 - EXCEPTIONS AND ADJUSTMENTS TO EBITDA FOR XXXXXXXX
ACQUISITION
EXHIBITS
EXHIBIT 1.1(A) - ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(G)(1) - GUARANTOR JOINDER
EXHIBIT 1.1(G)(2) - GUARANTY AGREEMENT
EXHIBIT 1.1 (I) - INTERCOMPANY SUBORDINATION AGREEMENT
EXHIBIT 1.1(R) - REVOLVING CREDIT NOTE
EXHIBIT 2.4.1 - REVOLVING LOAN REQUEST
EXHIBIT 6.1.5 - OPINION OF COUNSEL
EXHIBIT 7.2.6 - ACQUISITION COMPLIANCE CERTIFICATE
EXHIBIT 7.3.3 - QUARTERLY COMPLIANCE CERTIFICATE
-i-
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of August 21, 2002 and is made by
and among KPMG Consulting, Inc., a Delaware corporation (the "Borrower"), each
of the Guarantors (as hereinafter defined), the BANKS (as hereinafter defined),
and JPMORGAN CHASE BANK, in its capacity as the administrative agent for the
Banks under this Agreement (hereinafter referred to in such capacity as the
"Administrative Agent").
WITNESSETH:
WHEREAS, the Borrower has requested the Banks to provide a revolving credit
facility to the Borrower in an aggregate principal amount not to exceed
$220,000,000; and
WHEREAS, the revolving credit loan facility shall be used for general
corporate purposes, including acquisitions; and
WHEREAS, the Banks are willing to provide such credit upon the terms and
conditions hereinafter set forth; and
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:
1. CERTAIN DEFINITIONS
1.1 Certain Definitions.
In addition to words and terms defined elsewhere in this Agreement, the
following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:
Administrative Agent shall mean JPMorgan Chase Bank, and its permitted
successors and assigns.
Affiliate as to any Person shall mean any other Person (i) which
directly or indirectly controls, is controlled by, or is under common control
with such Person, (ii) which beneficially owns or holds 10% or more of any class
of the voting or other equity interests of such Person, or (iii) 10% or more of
any class of voting interests or other equity interests of which is beneficially
owned or held, directly or indirectly, by such Person. Control, as used in this
definition, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, including
the power to elect a majority of the directors or trustees of a corporation or
trust, as the case may be.
Agreement shall mean this Credit Agreement, as the same may be
supplemented or amended from time to time, including all schedules and exhibits.
Annual Statements shall have the meaning assigned to that term in
Section 5.1.9(i).
Applicable Commitment Fee Rate shall mean the percentage rate per annum
at the indicated level of Leverage Ratio which shall be used to determine the
Commitment Fee as set forth in the pricing grid in Schedule 1.1(A) under the
heading "Revolving Credit Commitment Fee." The Applicable Commitment Fee Rate
shall be computed in accordance with Schedule 1.1(A).
Applicable Margin shall mean, as applicable:
(A) the percentage spread to be added to Euro-Rate under the Euro-Rate
Option at the indicated level of Leverage Ratio in the pricing grid on Schedule
1.1(A) below the heading "Revolving Credit Euro-Rate Spread;" or
(B) the percentage spread to be added to Base Rate under the Base Rate
Option at the indicated level of Leverage Ratio in the pricing grid on Schedule
1.1(A) below the heading "Revolving Credit Base Rate Spread".
The Applicable Margin shall be computed in accordance with the parameters set
forth on Schedule 1.1(A).
Assignment and Assumption Agreement shall mean an Assignment and
Assumption Agreement by and among a Purchasing Bank, a Transferor Bank and the
Administrative Agent, as Administrative Agent and on behalf of the remaining
Banks, substantially in the form of Exhibit 1.1(A).
Authorized Officer shall mean those individuals, designated by written
notice to the Administrative Agent from the Borrower, authorized to execute
notices, reports and other documents on behalf of the Loan Parties required
hereunder. The Borrower may amend such list of individuals from time to time by
giving written notice of such amendment to the Administrative Agent.
Banks shall mean the financial institutions named on Schedule 1.1(B)
and their respective successors and assigns as permitted hereunder, each of
which is referred to herein as a Bank.
Base Net Worth shall mean the sum of
(A) $451,960,000,
plus
(B) 50% of consolidated net income if positive of the Borrower and its
Subsidiaries for each fiscal quarter in which net income was earned plus 90% of
the net increase in Consolidated Net Worth resulting from the issuance of any
equity securities by the Borrower, in each instance for the period from December
31, 2001 through the date of determination.
-2-
Base Rate shall mean the greater of (i) the interest rate per annum
announced from time to time by the Administrative Agent at its Principal Office
as its then prime rate, which rate may not be the lowest rate then being charged
commercial borrowers by the Administrative Agent, or (ii) the Federal Funds
Effective Rate plus 1/2% per annum.
Base Rate Option shall mean the option of the Borrower to have
Revolving Credit Loans bear interest at the rate and under the terms and
conditions set forth in Section 3.1.1.
Benefit Arrangement shall mean at any time an "employee benefit plan,"
within the meaning of Section 3(3) of ERISA, which is neither a Plan nor a
Multiemployer Plan and which is maintained, sponsored or otherwise contributed
to by any member of the ERISA Group.
Borrower shall mean KPMG Consulting, Inc., a corporation organized and
existing under the laws of the State of Delaware.
Borrowing Date shall mean, with respect to any Revolving Credit Loan,
the date for the making thereof or the renewal or conversion thereof at or to
the same or a different Interest Rate Option, which shall be a Business Day.
Borrowing Tranche shall mean specified portions of Revolving Credit
Loans outstanding as follows: (i) any Revolving Credit Loans to which a
Euro-Rate Option applies which become subject to the same Interest Rate Option
under the same Revolving Credit Loan Request by the Borrower and which have the
same Euro-Rate Loan Interest Period shall constitute one Borrowing Tranche, (ii)
any Revolving Credit Loans to which a Money Market Option applies which become
subject to the same Interest Rate Option under the same Revolving Credit Loan
Request by the Borrower and which have the same Money Market Loan Interest
Period shall constitute one Borrowing Tranche, and (iii) all Revolving Credit
Loans to which a Base Rate Option applies shall constitute one Borrowing
Tranche.
Business Day shall mean any day other than a Saturday or Sunday or a
legal holiday on which commercial banks are authorized or required to be closed
for business in New York, New York and if the applicable Business Day relates to
any Revolving Credit Loan to which the Euro-Rate Option applies, such day must
also be a day on which dealings are carried on in the London interbank market.
Cisco shall mean Cisco Systems, Inc., its successors and assigns.
Cisco Agreements shall mean collectively the Alliance Agreement dated
December 29, 1999, between Cisco and the Borrower and all ancillary agreements
contemplated therein, including without limitation the Stock Purchase Agreement
and Investor Rights Agreement of the same date between the same parties, and all
other agreements and documents governing or relating to Cisco's investment in
Borrower.
Closing Date shall mean the date when all conditions under Article 6
are either satisfied or waived.
Commitment Fee shall mean the percentage rate per annum at the
indicated level of Leverage Ratio as set forth in the Pricing Grid in Schedule
1.1(A) below the heading
-3-
"Revolving Credit Commitment Fees" shall be computed in accordance with the
parameters set forth in Schedule 1.1(A).
Compliance Certificate shall have the meaning assigned to such term in
Section 7.3.3.
Consideration shall mean with respect to any Permitted Acquisition, the
aggregate of (i) the cash paid by any of the Loan Parties, directly or
indirectly, to the seller in connection therewith, (ii) the Indebtedness
incurred or assumed by any of the Loan Parties, whether in favor of the seller
or otherwise and whether fixed or contingent, (iii) any Guaranty given or
incurred by any Loan Party in connection therewith, and (iv) any other
consideration given or obligation incurred by any of the Loan Parties in
connection therewith.
Consolidated EBITDA for any period of determination shall mean the
consolidated EBITDA of the Borrower and its Subsidiaries for such period
determined and consolidated in accordance with GAAP.
Consolidated Net Worth shall mean, as of any date of determination,
total stockholders' equity of the Borrower and its Subsidiaries as of such date
determined and consolidated in accordance with GAAP.
Debt Rating shall mean the rating of the Borrower's senior unsecured
long-term debt by each of Standard & Poor's or Moody's.
Dividend Limitation shall be computed following December 31, 2001 and
shall mean as of any date of determination the difference between (i) 50% of the
cumulative consolidated net income (net of losses) of the Borrower and its
Subsidiaries for quarters beginning on or after December 31, 2001 and ending on
or before such date of determination, less (ii) the amount of dividends or other
distributions paid on and after December 31, 2001.
Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful money
of the United States of America.
EBITDA for any Person during any period of determination shall mean the
sum of net income, depreciation, amortization, interest expense and income tax
expense of such Person, plus (i) FAS 142 charges incurred on or before March 31,
2002 and deducted in arriving at such net income, and (ii) writedowns of the net
book value of equity investments listed on Schedule 1.1(E) in an amount not to
exceed $16,000,000 in the aggregate to the extent that such writedowns are
deducted in arriving at such net income.
Environmental Complaint shall mean any written complaint by any Person
or Official Body setting forth a cause of action for personal injury or property
damage, natural resource damage, contribution or indemnity for response costs,
civil or administrative penalties, criminal fines or penalties, or declaratory
or equitable relief arising under any environmental laws or any order, notice of
violation, citation, subpoena, request for information or other written notice
or demand of any type issued by an Official Body pursuant to any environmental
laws.
-4-
ERISA shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended or supplemented from time to time, and any successor
statute of similar import, and the rules and regulations thereunder, as from
time to time in effect.
ERISA Group shall mean, at any time, the Borrower and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
the Borrower, are treated as a single employer under Section 414 of the Internal
Revenue Code.
Euro-Rate shall mean, with respect to the Revolving Credit Loans
comprising any Borrowing Tranche to which the Euro-Rate Option applies for any
Euro-Rate Loan Interest Period, the interest rate per annum determined by the
Administrative Agent by dividing (the resulting quotient rounded upwards, if
necessary, to the nearest 1/100th of 1% per annum) (i) the rate of interest
determined by the Administrative Agent in accordance with its usual procedures
(which determination shall be conclusive absent manifest error) to be the
average of the London interbank offered rates for U.S. Dollars quoted by the
British Bankers' Association as set forth on Dow Xxxxx Markets Service (formerly
known as Telerate) (or appropriate successor or, if the British Bankers'
Association or its successor ceases to provide such quotes, a comparable
replacement determined by the Administrative Agent) display page 3750 (or such
other display page on the Dow Xxxxx Markets Service system as may replace
display page 3750) two (2) Business Days prior to the first day of such
Euro-Rate Loan Interest Period for an amount comparable to such Borrowing
Tranche and having a borrowing date and a maturity comparable to such Euro-Rate
Loan Interest Period by (ii) a number equal to 1.00 minus the Euro-Rate Reserve
Percentage. The Euro-Rate may also be expressed by the following formula:
Euro-Rate= Average of London interbank offered rates quoted by BBA
or appropriate successor as shown on Dow Xxxxx Markets
Service display page 3750
---------------------------------------------------------
1.00 minus Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Revolving Credit Loan to
which the Euro-Rate Option applies that is outstanding on the effective date of
any change in the Euro-Rate Reserve Percentage as of such effective date. The
Administrative Agent shall give prompt notice to the Borrower of the Euro-Rate
as determined or adjusted in accordance herewith, which determination shall be
conclusive absent manifest error.
Euro-Rate Loan shall mean any Revolving Credit Loan made by any of the
Banks to the Borrower under a Euro-Rate Option.
Euro-Rate Loan Interest Period shall mean the period of time selected
by the Borrower in connection with (and to apply to) any election permitted
hereunder by the Borrower to have Revolving Credit Loans bear interest under the
Euro-Rate Option. Subject to the last sentence of this definition, such period
shall be one, two or three Months. Such Euro-Rate Loan Interest Period shall
commence on the effective date of such Interest Rate Option, which shall be (i)
the Borrowing Date if the Borrower is requesting new Revolving Credit Loans, or
(ii) the date of renewal of or conversion to the Euro-Rate Option if the
Borrower is renewing or converting to the Euro-Rate Option applicable to
outstanding Revolving Credit Loans. Notwithstanding the
-5-
second sentence hereof: (A) any Euro-Rate Loan Interest Period which would
otherwise end on a date which is not a Business Day shall be extended to the
next succeeding Business Day unless such Business Day falls in the next calendar
month, in which case such Euro-Rate Loan Interest Period shall end on the next
preceding Business Day, and (B) the Borrower shall not select, convert to or
renew a Euro-Rate Loan Interest Period for any portion of the Revolving Credit
Loans that would end after the Expiration Date.
Euro-Rate Option shall mean the option of the Borrower to have
Revolving Credit Loans bear interest at the rate and under the terms and
conditions set forth in Section 3.1.1(b).
Euro-Rate Reserve Percentage shall mean as of any day the maximum
percentage in effect on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the reserve
requirements (including supplemental, marginal and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
"Eurocurrency Liabilities") or a member bank in such System.
Event of Default shall mean any of the events described in Section 8.1
and referred to therein as an "Event of Default."
Expiration Date shall mean, with respect to the Revolving Credit
Commitments, the earlier of (a) December 15, 2002 and (b) the date of the
termination in whole of the Revolving Credit Commitments pursuant to the terms
hereof.
Federal Funds Effective Rate for any day shall mean the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding 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 for the day of such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
Financial Projections shall have the meaning assigned to that term in
Section 5.1.9(ii).
Foreign Subsidiary shall mean any Subsidiary of the Borrower which is
organized under the laws of a country other than the United States.
GAAP shall mean generally accepted accounting principles as are in
effect from time to time, subject to the provisions of Section 1.3, and applied
on a consistent basis both as to classification of items and amounts.
Guarantor shall mean KPMG Consulting, LLC and each of the other
Subsidiaries of the Borrower (excluding Education Information Management Systems
LLC, KCI Funding Corporation and any Foreign Subsidiary which does not join this
Agreement as a Guarantor) which is designated as a "Guarantor" on the signature
page hereof and each other Person which joins this Agreement as a Guarantor
after the date hereof pursuant to Section 10.18.
-6-
Guarantor Joinder shall mean a joinder by a Person as a Guarantor under
this Agreement, the Guaranty Agreement and the other Loan Documents in the form
of Exhibit 1.1(G)(1).
Guaranty of any Person shall mean any obligation of such Person
guaranteeing or in effect guaranteeing any liability or obligation of any other
Person in any manner, whether directly or indirectly, including any agreement to
indemnify or hold harmless any other Person, any performance bond or other
suretyship arrangement and any other form of assurance against loss, except
endorsement of negotiable or other instruments for deposit or collection in the
ordinary course of business.
Guaranty Agreement shall mean a Guaranty and Suretyship Agreement to be
dated as of the Closing Date in substantially the form of Exhibit 1.1(G)(2)
executed and delivered by each of the Guarantors to the Administrative Agent for
the benefit of the Banks, as thereafter amended or replaced.
Historical Statements shall have the meaning assigned to that term in
Section 6.1.9.
Indebtedness shall mean, as to any Person at any time and without
duplication, any and all indebtedness, obligations or liabilities (whether
matured or unmatured, liquidated or unliquidated, direct or indirect, absolute
or contingent, or joint or several) of such Person for or in respect of: (i)
borrowed money , (ii) amounts raised under or liabilities in respect of any note
purchase or acceptance credit facility, (iii) reimbursement obligations
(contingent or otherwise) under any letter of credit, (iv) net liability arising
from exposure under any currency swap agreement, interest rate swap, cap, collar
or floor agreement or other hedging device unless such net liability results
from a hedge which qualifies under GAAP (including all applicable rules
promulgated by the Financial Accounting Standards Board), as amended, as a hedge
of foreign currency exposure or interest rate exposure, as calculated in
accordance with GAAP, (v) any other transaction (including forward sale or
purchase agreements, capitalized leases, conditional sales agreements and
amounts outstanding under the PNC Receivables Purchase Facility or under any
other asset securitization) having the commercial effect of a borrowing of money
entered into by such Person to finance its operations or capital requirements
(but not including trade payables and accrued expenses incurred in the ordinary
course of business which are not represented by a promissory note or other
evidence of indebtedness and which are not more than sixty (60) days past due),
unless being reasonably contested by the Borrower or its Subsidiaries, or (vi)
any Guaranty of Indebtedness for borrowed money.
Ineligible Security shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.
Insolvency Proceeding shall mean, with respect to any Person, (a) a
case, action or proceeding with respect to such Person (i) before any court or
any other Official Body under any bankruptcy, insolvency, reorganization or
other similar Law now or hereafter in effect, or (ii) for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of any Loan Party or otherwise relating to the
liquidation,
-7-
dissolution, winding-up or relief of such Person, or (b) any general assignment
for the benefit of creditors, composition, marshaling of assets for creditors,
or other, similar arrangement in respect of such Person's creditors generally or
any substantial portion of its creditors; undertaken under any Law.
Intercompany Subordination Agreement shall mean a Subordination
Agreement to be dated as of the Closing Date among the Loan Parties in the form
attached hereto as Exhibit 1.1(I), as thereafter amended or replaced.
Interest Period shall mean either a Euro Rate Loan Interest Period or a
Money Market Loan Interest Period.
Interest Rate Option shall mean the Euro-Rate Option, the Base Rate
Option or the Money Market Option.
Interim Statements shall have the meaning assigned to that term in
Section 5.1.9 (i).
Internal Revenue Code shall mean the Internal Revenue Code of 1986, as
the same may be amended or supplemented from time to time, and any successor
statute of similar import, and the rules and regulations thereunder, as from
time to time in effect.
Investment in Foreign Subsidiary shall mean: (i) loans made, either
directly or indirectly, by the Loan Parties to Foreign Subsidiaries, (ii) equity
investments made, either directly or indirectly, by the Loan Parties in Foreign
Subsidiaries or (iii) other Investments made, either directly or indirectly, by
the Loan Parties in the Foreign Subsidiaries.
Investment shall have the meaning assigned to such term in Section
7.2.4.
Investment Amount shall mean the total amount of any Investment made by
the Loan Parties in Persons other than the Loan Parties and shall mean all of
the following with respect to any such Person: (i) investments or contributions
by any of the Loan Parties directly or indirectly in or to the capital of or
other payments to or for the benefit of such Person, each such investments or
contributions to be valued at cost on the date on which such investment is made,
(ii) loans by any of the Loan Parties directly or indirectly to such Person,
(iii) guaranties by any of the Loan Parties directly or indirectly of the
obligations of such Person, or (iv) other obligations, contingent or otherwise,
of any of the Loan Parties to or for the benefit of such Person.
IPO shall mean the initial public offering of the common stock of the
Borrower registered under the Securities Act of 1933, as amended, which was
completed on February 13, 2001.
JPMorgan shall mean JPMorgan Chase Bank, its successors and assigns.
KCA shall mean KPMG Consulting Aktiengesellschaft.
-8-
KCA Acquisition shall mean the acquisition of KCA and its Subsidiaries
pursuant to the terms of the KCA Acquisition Agreement.
KCA Acquisition Agreement shall mean the Share Purchase Agreement dated
as of June 10, 2002 among the Borrower and KPMG Deutsche Treuhand-Gesellschaft
Aktiengesellschaft, Wirtschaftsprufungsgesellschaft and the other Sellers listed
in Annex 1 thereto.
KCA Acquisition Effective Time shall mean the time on the Closing Date
immediately after the KCA Acquisition shall have become effective.
Labor Contracts shall mean all employment agreements, employment
contracts, collective bargaining agreements and other agreements among any Loan
Party or Subsidiary of a Loan Party and its employees governing the terms of
their employment.
Law shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree, bond, judgment, authorization or approval, lien or
award of or settlement agreement with any Official Body.
Leverage Ratio shall mean as of any date of determination, the ratio of
consolidated Indebtedness of the Borrower and its Subsidiaries existing as of
such date to their Consolidated EBITDA for the most recent four consecutive
quarters ended on or prior to such date of determination.
Lien shall mean any mortgage, deed of trust, pledge, lien, security
interest, charge or other encumbrance or security arrangement of any nature
whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security and any
filed financing statement or other notice of any of the foregoing (whether or
not a lien or other encumbrance is created or exists at the time of the filing).
LLC Interests shall have the meaning given to such term in Section
5.1.3.
Loan Documents shall mean this Agreement, the Guaranty Agreement, the
Intercompany Subordination Agreement, the Revolving Credit Notes and any other
instruments, certificates or documents delivered or contemplated to be delivered
hereunder or thereunder or in connection herewith or therewith, as the same may
be supplemented or amended from time to time in accordance herewith or
therewith, and Loan Document shall mean any of the Loan Documents.
Loan Parties shall mean the Borrower and the Guarantors and each
domestic Subsidiary acquired pursuant to a Permitted Acquisition which will be
required to join this Credit Agreement as a Guarantor within 30 days or less of
such Permitted Acquisition and the due date for such delivery has not yet
occurred.
Material Adverse Change shall mean any set of circumstances or events
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the
-9-
validity or enforceability of this Agreement or any other Loan Document, (b) is
or could reasonably be expected to be material and adverse to the business,
properties, assets, financial condition, or results of operations of the Loan
Parties taken as a whole, (c) impairs materially or could reasonably be expected
to impair materially the ability of the Loan Parties taken as a whole to duly
and punctually pay or perform its Indebtedness, or (d) impairs materially or
could reasonably be expected to impair materially the ability of the
Administrative Agent or any of the Banks, to the extent permitted, to enforce
their legal remedies pursuant to this Agreement or any other Loan Document.
Material Aggregate of Non-Material Subsidiaries shall mean as of any
date of determination any group of Subsidiaries of the Borrower if either (i)
during the four (4) fiscal quarters ending on or immediately preceding the date
of determination (the "Preceding Four Quarters") the gross revenues of such
Subsidiaries collectively equaled or exceeded 10% of the consolidated gross
revenues of the Borrower and its Subsidiaries, or (ii) as of any quarter ending
during the Preceding Four Quarters the total assets of such Subsidiaries equaled
or exceeded 10% of the total consolidated assets of the Borrower and its
Subsidiaries.
Material Subsidiary shall mean as of any date of determination any
Subsidiary of the Borrower if either (i) during the Preceding Four Quarters the
gross revenues of such Subsidiary equaled or exceeded 5% of the consolidated
gross revenues of the Borrower and its Subsidiaries, or (ii) as of any quarter
ending during the Preceding Four Quarters the total assets of such Subsidiary
equaled or exceeded 5% of the total consolidated assets of the Borrower and its
Subsidiaries.
Money Market Loan Interest Period shall mean the period of time
selected by the Borrower in connection with (and to apply to) any election
hereunder by the Borrower to have Revolving Credit Loans bear interest under the
Money Market Option. Such period shall (i) be no less than one (1) and no more
than fourteen (14) days, (ii) shall end on a Business Day, and (iii) shall end
on or before the Expiration Date.
Money Market Option shall mean the rate of interest quoted from time to
time by JPMorgan to the Borrower and accepted by the Borrower.
Month, with respect to a Euro-Rate Loan Interest Period under the
Euro-Rate Option, shall mean the interval between the days in consecutive
calendar months numerically corresponding to the first day of such Euro-Rate
Loan Interest Period. If any Euro-Rate Loan Interest Period begins on a day of a
calendar month for which there is no numerically corresponding day in the month
in which such Euro-Rate Loan Interest Period is to end, the final month of such
Euro-Rate Loan Interest Period shall be deemed to end on the last Business Day
of such final month.
Moody's shall mean Xxxxx'x Investors Service, Inc. and its successors.
Multiemployer Plan shall mean any employee benefit plan which is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower or any member of the ERISA Group is then making or accruing
an obligation to make
-10-
contributions or, within the preceding five Plan years, has made or had an
obligation to make such contributions.
Multiple Employer Plan shall mean a Plan which has two or more
contributing sponsors (including the Borrower or any member of the ERISA Group)
at least two of whom are not under common control, as such a plan is described
in Sections 4063 and 4064 of ERISA.
notices shall have the meaning assigned to that term in Section 10.6.
Obligation shall mean any obligation or liability of any of the Loan
Parties to the Administrative Agent or any of the Banks, howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent, now or
hereafter existing, or due or to become due, under or in connection with this
Agreement, the Revolving Credit Notes or any other Loan Document.
Official Body shall mean any national, federal, state, local or other
government or political subdivision or any agency, authority, board, bureau,
central bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
Partnership Interests shall have the meaning given to such term in
Section 5.1.3.
PBGC shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor.
Permitted Acquisitions shall have the meaning assigned to such term in
Section 7.2.6.1(2).
Permitted Investments shall mean:
(i) direct obligations of the United States of America or any agency
or instrumentality thereof or obligations backed by the full faith and credit of
the United States of America maturing in twelve (12) months or less from the
date of acquisition;
(ii) commercial paper maturing in 180 days or less rated not lower
than A-1, by Standard & Poor's or P-1 by Xxxxx'x Investors Service, Inc. on the
date of acquisition;
(iii) demand deposits, time deposits or certificates of deposit
maturing within one year in commercial banks whose obligations are rated A-1, A
or the equivalent or better by Standard & Poor's on the date of acquisition;
(iv) up to $25,000,000 in aggregate at any point in time of demand
deposits, time deposits or certificates of deposit maturing within one year in
commercial banks whose obligations are rated below A-1, A or the equivalent or
better by Standard & Poor's on the date of acquisition; and
(v) mutual funds that invest substantially all of their assets in
investments described in clauses (i) through (iii) above.
-11-
Permitted Liens shall mean:
(i) Liens for taxes, assessments, or similar charges, incurred in
the ordinary course of business and which are not yet due and payable;
(ii) Pledges or deposits made in the ordinary course of business to
secure payment of workmen's compensation, or to participate in any fund in
connection with workmen's compensation, unemployment insurance, old-age pensions
or other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen, carriers, or
other like Liens, securing obligations incurred in the ordinary course of
business that are not yet due and payable and Liens of landlords securing
obligations to pay lease payments that are not yet due and payable or in
default;
(iv) Good-faith pledges or deposits made in the ordinary course of
business to secure performance of bids, tenders, contracts (other than for the
repayment of borrowed money) or leases, not in excess of the aggregate amount
due thereunder, or to secure statutory obligations, or surety, appeal,
indemnity, performance or other similar bonds required in the ordinary course of
business;
(v) Encumbrances consisting of zoning restrictions, easements or
other restrictions on the use of real property, none of which materially impairs
the use of such property or the value thereof, and none of which is violated in
any material respect by existing or proposed structures or land use;
(vi) Liens, security interests and mortgages in favor of the
Administrative Agent for the benefit of the Banks;
(vii) Liens on property leased by any Loan Party or Subsidiary of a
Loan Party under capital leases and under operating leases (and securing
obligations of such Loan Party or Subsidiary to the lessor under such leases);
(viii) Liens on receivables and other assets, or sales of such assets,
incurred, granted or made pursuant to the PNC Receivables Purchase Facility and
Liens on stock or other ownership interests of any Foreign Subsidiaries
incurred, granted or made pursuant to the PNC Credit Agreement;
(ix) Any Lien existing on the date of this Agreement and described on
Schedule 1.1(P), provided that the principal amount secured thereby is not
hereafter increased, and no additional assets become subject to such Lien;
(x) Purchase Money Security Interests, provided that the aggregate
amount of loans and deferred payments secured by such Purchase Money Security
Interests shall not exceed $25,000,000 (excluding for the purpose of this
computation any loans or deferred payments secured by Liens described on
Schedule 1.1(P));
(xi) The following, (A) if the validity or amount thereof is being
contested in good faith by appropriate and lawful proceedings diligently
conducted so long as levy and
-12-
execution thereon have been stayed and continue to be stayed or (B) if a final
judgment is entered and such judgment is discharged, bonded or stayed from
execution within thirty (30) days of entry, and in either case they do not in
the aggregate, materially impair the ability of any Loan Party to perform its
Obligations hereunder or under the other Loan Documents:
(1) Claims or Liens for taxes, assessments or charges due and
payable and subject to interest or penalty, provided that the
applicable Loan Party maintains such reserves or other appropriate
provisions as shall be required by GAAP and pays all such taxes,
assessments or charges forthwith upon the commencement of proceedings
to foreclose any such Lien;
(2) Claims, Liens or encumbrances upon, and defects of title to,
real or personal property, including any attachment of personal or
real property or other legal process prior to adjudication of a
dispute on the merits;
(3) Claims or Liens of mechanics, materialmen, warehousemen,
carriers, or other statutory nonconsensual Liens; or
(4) Liens resulting from final judgments or orders except to the
extent constituting an Event of Default under Section 8.1.6; and
(xii) Liens on assets of businesses acquired pursuant to Permitted
Acquisitions, provided that the Indebtedness secured by such Liens is permitted
hereunder and does not exceed $40,000,000 in the aggregate, the amount thereof
is not increased and the Liens securing such Indebtedness are not extended to
other assets after the date of such Permitted Acquisition.
Person shall mean any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust, unincorporated
organization, joint venture, government or political subdivision or agency
thereof, or any other entity.
Plan shall mean at any time an employee pension benefit plan (including
a Multiple Employer Plan, but not a Multiemployer Plan) which is covered by
Title IV of ERISA or is subject to the minimum funding standards under Section
412 of the Internal Revenue Code and either (i) is maintained 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 by any entity which was
at such time a member of the ERISA Group for employees of any entity which was
at such time a member of the ERISA Group.
PNC Credit Agreement shall mean that certain $250,000,000 Revolving
Credit Facility Credit Agreement dated as of May 29, 2002, among the Borrower,
Guarantors, PNC Bank, as Administrative Agent and the other banks and other
parties thereto.
PNC Receivables Purchase Facility shall mean that certain $153,000,000
receivables Purchase facility dated May 22, 2000 among the Borrower, as
servicer, KPMG Consulting, LLC, as originator, KCI Funding Corporation, as the
seller, Market Street Funding Corporation as the purchaser and PNC Bank as the
program administrator and liquidity agent and the other parties thereto, as
previously and hereafter amended.
-13-
Potential Default shall mean any event or condition which with notice
or passage of time would constitute an Event of Default.
Principal Office shall mean the main banking office of the
Administrative Agent in New York, New York.
Prohibited Transaction shall mean any prohibited transaction as defined
in Section 4975 of the Internal Revenue Code or Section 406 of ERISA that is not
exempt under Section 408 of ERISA.
Property shall mean all real property, both owned and leased, of any
Loan Party or Subsidiary of a Loan Party.
Purchase Money Security Interest shall mean Liens upon tangible
personal property securing loans to any Loan Party or Subsidiary of a Loan Party
or deferred payments by such Loan Party or Subsidiary for the purchase of such
tangible personal property.
Purchasing Bank shall mean a Bank which becomes a party to this
Agreement by executing an Assignment and Assumption Agreement.
Ratable Share shall mean the proportion that a Bank's Revolving Credit
Commitment bears to the Revolving Credit Commitments of all of the Banks.
Regulation U shall mean Regulation U, T or X as promulgated by the
Board of Governors of the Federal Reserve System, as amended from time to time.
Reportable Event shall mean a reportable event described in Section
4043 of ERISA and regulations thereunder with respect to a Plan or Multiemployer
Plan for which the 30 day reporting requirement is not waived by regulation.
Required Banks shall mean
(A) if there are no Revolving Credit Loans outstanding, Required Banks
shall mean Banks whose Revolving Credit Commitments aggregate at least 51% of
the Revolving Credit Commitments of all of the Banks, or
(B) if there are Revolving Credit Loans outstanding, Required Banks
shall mean any Bank or group of Banks if the sum of the Revolving Credit Loans
of such Banks then outstanding aggregates at least 51% of the total principal
amount of all of the Revolving Credit Loans then outstanding.
Revolving Credit Commitment shall mean, as to any Bank at any time, the
amount initially set forth opposite its name on Schedule 1.1(B) in the column
labeled "Amount of Commitment for Revolving Credit Loans," and thereafter on
Schedule I to the most recent Assignment and Assumption Agreement, and Revolving
Credit Commitments shall mean the aggregate Revolving Credit Commitments of all
of the Banks.
-14-
Revolving Credit Loan Request shall have the meaning given to such term
in Section 2.4. A Revolving Credit Loan Request shall be used to select, convert
to or renew a Base Rate Option or Euro-Rate Option with respect to any new or
outstanding Revolving Credit Loan.
Revolving Credit Loans shall mean collectively and Revolving Credit
Loan shall mean separately all Revolving Credit Loans or any Revolving Credit
Loan made by the Banks or one of the Banks to the Borrower pursuant to Section
2.1.
Revolving Credit Notes shall mean collectively and Revolving Credit
Note shall mean separately all the Revolving Credit Notes of the Borrower in the
form of Exhibit 1.1(R) evidencing the Revolving Credit Loans together with all
amendments, extensions, renewals, replacements, refinancings or refundings
thereof in whole or in part.
Separation Agreements shall mean collectively the Separation Agreement
dated December 29, 1999, the Transition Services Agreement dated as of February
13, 2001, and the Non-Competition Agreement dated as of February 13, 2001,
between Borrower and KPMG LLP.
Shares shall have the meaning assigned to that term in Section 5.1.2.
Solvent shall mean, with respect to any Person on a particular date,
that on such date (i) the fair value of the property of such Person on a going
concern basis is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (ii) the present
fair saleable value of the assets on a going concern basis of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (iii) such Person is
able to realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course
of business, (iv) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature, and (v) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged. In computing the amount of contingent liabilities at any
time, it is intended that such liabilities will be computed at the amount which,
in light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.
Standard & Poor's shall mean Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., and its successors.
Subsidiary of any Person at any time shall mean (i) any corporation or
trust of which 50% or more (by number of votes) of the outstanding capital stock
or shares of beneficial interest normally entitled to vote for the election of
more directors or trustees (regardless of any contingency which does or may
suspend or dilute the voting rights) is at such time owned directly or
indirectly by such Person or one or more of such Person's Subsidiaries, (ii) any
partnership of which such Person is a general partner or of which 50% or more of
the partnership interests is at the time directly or indirectly owned by such
Person or one or more of such
-15-
Person's Subsidiaries, (iii) any limited liability company of which such Person
is a member or of which 50% or more of the limited liability company interests
is at the time directly or indirectly owned by such Person or one or more of
such Person's Subsidiaries or (iv) any corporation, trust, partnership, limited
liability company or other entity which is controlled by such Person or one or
more of such Person's Subsidiaries.
Subsidiary Shares shall have the meaning assigned to that term in
Section 5.1.3.
Supermajority of the Banks shall mean:
(A) if there are no Revolving Credit Loans outstanding, Required
Banks shall mean Banks whose Revolving Credit Commitments aggregate at least
66-2/3% of the Revolving Credit Commitments of all of the Banks, or
(B) if there are Revolving Credit Loans outstanding, Required Banks
shall mean any Bank or group of Banks if the sum of the Revolving Credit Loans
of such Banks then outstanding aggregates at least 66-2/3% of the total
principal amount of all of the Revolving Credit Loans then outstanding.
Transferor Bank shall mean the selling Bank pursuant to an Assignment
and Assumption Agreement.
1.2 Construction.
Unless the context of this Agreement otherwise clearly requires, the
following rules of construction shall apply to this Agreement and each of the
other Loan Documents:
1.2.1. Number; Inclusion.
references to the plural include the singular, the plural, the
part and the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase "including
without limitation";
1.2.2. Determination.
references to "determination" of or by the Administrative Agent
or the Banks shall be deemed to include good-faith estimates by the
Administrative Agent or the Banks (in the case of quantitative determinations)
and good-faith beliefs by the Administrative Agent or the Banks (in the case of
qualitative determinations) and such determination shall be conclusive absent
manifest error;
1.2.3. Administrative Agent's Discretion and Consent.
whenever the Administrative Agent or the Banks are granted the
right herein to act in its or their sole discretion or to grant or withhold
consent such right shall be exercised in good faith;
-16-
1.2.4. Documents Taken as a Whole.
the words "hereof," "herein," "hereunder," "hereto" and similar
terms in this Agreement or any other Loan Document refer to this Agreement or
such other Loan Document as a whole and not to any particular provision of this
Agreement or such other Loan Document;
1.2.5. Headings.
the section and other headings contained in this Agreement or
such other Loan Document and the Table of Contents (if any), preceding this
Agreement or such other Loan Document are for reference purposes only and shall
not control or affect the construction of this Agreement or such other Loan
Document or the interpretation thereof in any respect;
1.2.6. Implied References to this Agreement.
article, section, subsection, clause, schedule and exhibit
references are to this Agreement or other Loan Document, as the case may be,
unless otherwise specified;
1.2.7. Persons.
reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted by
this Agreement or such other Loan Document, as the case may be, and reference to
a Person in a particular capacity excludes such Person in any other capacity;
1.2.8. Modifications to Documents.
reference to any agreement (including this Agreement and any
other Loan Document together with the schedules and exhibits hereto or thereto),
document or instrument means such agreement, document or instrument as amended,
modified, replaced, substituted for, superseded or restated;
1.2.9. From, To and Through.
relative to the determination of any period of time, "from"
means "from and including," "to" means "to but excluding," and "through" means
"through and including"; and
1.2.10. Shall; Will.
references to "shall" and "will" are intended to have the same
meaning.
1.3 Accounting Principles.
Except as otherwise provided in this Agreement, all computations and
determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and prepared
in accordance with GAAP (including
-17-
principles of consolidation where appropriate), and all accounting or financial
terms shall have the meanings ascribed to such terms by GAAP; provided, however,
that all accounting terms used in Section 7.2 [Negative Covenants] (and all
defined terms used in the definition of any accounting term used in Section 7.2)
shall have the meaning given to such terms (and defined terms) under GAAP as in
effect on the date hereof applied on a basis consistent with those used in
preparing the Annual Statements referred to in Section 5.1.9(i) [Historical
Statements]. In the event of any change after the date hereof in GAAP, and if
such change would result in the inability to determine compliance with the
financial covenants set forth in Section 7.2 based upon the Borrower's regularly
prepared financial statements by reason of the preceding sentence, then the
parties hereto agree to endeavor, in good faith, to agree upon an amendment to
this Agreement that would adjust such financial covenants in a manner that would
not affect the substance thereof, but would allow compliance therewith to be
determined in accordance with the Borrower's financial statements at that time.
2. REVOLVING CREDIT FACILITIES
2.1 Revolving Credit Commitments.
Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, each Bank severally agrees to
make Revolving Credit Loans to the Borrower at any time or from time to time on
or after the Closing Date to the Expiration Date provided that after giving
effect to any such Revolving Credit Loan the aggregate amount of Revolving
Credit Loans from such Bank shall not exceed such Bank's Revolving Credit
Commitment. Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrower may borrow, repay and reborrow
pursuant to this Section 2.1.
2.2 Nature of Banks' Obligations with Respect to Revolving Credit Loans.
Each Bank shall be obligated to fund a portion of each Revolving Credit
Loan pursuant to Section 2.4 [Making Revolving Credit Loans] in an amount equal
to its Ratable Share of such Revolving Credit Loan. The aggregate of each Bank's
Revolving Credit Loans outstanding hereunder to the Borrower at any time shall
never exceed its Revolving Credit Commitment. The obligations of each Bank
hereunder are several. The failure of any Bank to perform its obligations
hereunder shall not affect any other Bank's commitment or the Obligations of the
Borrower to any other party nor shall any other party be liable for the failure
of such Bank to perform its obligations hereunder. The Banks shall have no
obligation to make Revolving Credit Loans hereunder on or after the Expiration
Date.
2.3 Commitment Fees.
Accruing from the date hereof until the Expiration Date, the Borrower
agrees to pay to the Administrative Agent for the account of each Bank, as
consideration for such Bank's Revolving Credit Commitment hereunder, a
nonrefundable commitment fee equal to the Applicable Commitment Fee Rate
(computed on the basis of a year of 360 days and actual days elapsed) on the
average daily difference between the amount of (i) such Bank's Revolving Credit
Commitment as the same may be constituted from time to time and (ii) such Bank's
Revolving Credit Loans outstanding. All Commitment Fees shall be payable in
arrears on the first Business
-18-
Day of each July, October, January and April after the date hereof and on the
Expiration Date or upon acceleration of the Revolving Credit Notes.
2.4 Making Revolving Credit Loans.
Except as otherwise provided herein, the Borrower may from time to
time on or after the Closing Date and prior to the Expiration Date request the
Banks to make Revolving Credit Loans, or renew or convert the Interest Rate
Option applicable to existing Revolving Credit Loans pursuant to Section 3.2
[Interest Periods], by delivering to the Administrative Agent, not later than
(i) 12:00 Noon, New York time, three (3) Business Days prior to the proposed
Borrowing Date with respect to the making of Revolving Credit Loans to which the
Euro-Rate Option or the Money Market Option applies or the conversion to or the
renewal of the Euro-Rate Option or the Money Market Option for any Revolving
Credit Loans; and (ii) 2:00 p.m., New York time one (1) Business Day prior to
either the proposed Borrowing Date with respect to the making of a Revolving
Credit Loan to which the Base Rate Option applies or the last day of the
preceding Interest Period with respect to the conversion to the Base Rate Option
for any Revolving Credit Loan, of a duly completed request therefor
substantially in the form of Exhibit 2.4 or a request by telephone immediately
confirmed in writing by letter, facsimile or telex in such form (each, a
"Revolving Credit Loan Request"), it being understood that the Administrative
Agent may rely on the authority of any individual making such a telephonic
request without the necessity of receipt of such written confirmation. Each
Revolving Credit Loan Request shall be irrevocable and shall specify (i) the
proposed Borrowing Date; (ii) the aggregate amount of the proposed Revolving
Credit Loans comprising each Borrowing Tranche, which shall be in integral
multiples of $1,000,000 and not less than $5,000,000 for each Borrowing Tranche
to which the Euro-Rate Option applies and not less than the lesser of $1,000,000
or the maximum amount available for Borrowing Tranches to which the Base Rate
Option applies; (iii) whether the Euro-Rate Option, the Base Rate Option or the
Money Market Option shall apply to the proposed Revolving Credit Loans
comprising the applicable Borrowing Tranche; and (iv) in the case of a Borrowing
Tranche to which the Euro-Rate Option or the Money Market Option applies, an
appropriate Interest Period for the Revolving Credit Loans comprising such
Borrowing Tranche.
The Administrative Agent shall, promptly after receipt by it of a
Revolving Credit Loan Request pursuant to this Section 2.4, notify the Banks of
its receipt of such Revolving Credit Loan Request specifying: (i) the proposed
Borrowing Date and the time and method of disbursement of the Revolving Credit
Loans requested thereby; (ii) the amount and type of each such Revolving Credit
Loan and the applicable Interest Period (if any); and (iii) the apportionment
among the Banks of such Revolving Credit Loans as determined by the
Administrative Agent in accordance with Section 2.2 [Nature of Banks'
Obligations]. Each Bank shall remit the principal amount of each Revolving
Credit Loan to the Administrative Agent such that the Administrative Agent is
able to, and the Administrative Agent shall, to the extent the Banks have made
funds available to it for such purpose and subject to Section 6.2 [Each
Additional Loan], fund such Revolving Credit Loans to the Borrower in U.S.
Dollars and immediately available funds at the Principal Office prior to 2:00
p.m., New York time, on the applicable Borrowing Date, provided that if any Bank
fails to remit such funds to the Administrative Agent in a timely manner, the
Administrative Agent may elect in its sole discretion to fund with its own funds
the Revolving Credit Loans of such Bank on such
-19-
Borrowing Date, and such Bank shall be subject to the repayment obligation in
Section 9.15 [Availability of Funds].
2.5 Revolving Credit Notes.
The Obligation of the Borrower to repay the aggregate unpaid principal
amount of the Revolving Credit Loans made to it by each Bank, together with
interest thereon, shall be evidenced by a Revolving Credit Note dated the
Closing Date payable to the order of such Bank in a face amount equal to the
Revolving Credit Commitment of such Bank.
2.6 Use of Proceeds.
The proceeds of the Revolving Credit Loans shall be used for general
corporate purposes, including Permitted Acquisitions and in accordance with
Section 7.1.10 [Use of Proceeds].
2.7 Reduction of Commitments.
2.7.1. Optional Reduction.
The Borrower shall have the right at any time and from time to
time upon five (5) Business Days' prior written notice to the Administrative
Agent to permanently reduce, in whole multiples of $5,000,000 of principal, or
terminate the Revolving Credit Commitment without penalty or premium, except as
hereinafter set forth.
2.7.2. Mandatory Reduction.
Immediately upon the receipt of any proceeds by any Loan Party
or any Subsidiary of any Loan Party from (a) any sale or other disposition of
assets to the extent required under clause (vii) of Section 7.2.7 or (b) any
issuance of equity or debt securities by the Borrower or, to the extent
guaranteed by the Borrower, by any other Loan Party, the Revolving Credit
Commitments shall, in each instance, by automatically permanently reduced by an
amount equal to the amount of such proceeds received. The Borrower shall provide
at least five (5) Business Days prior written notice of any transaction
mandating a reduction of Revolving Credit Commitments under this Section 2.7.2.
2.7.3. Repayment upon Reduction.
Any such reduction or termination under this Section 2.7 shall be
accompanied by (a) the payment in full of any Commitment Fee then accrued on the
amount of such reduction or termination and (b) prepayment of the Revolving
Credit Notes, together with the full amount of interest accrued on the principal
sum to be prepaid (and all amounts referred to in Section 4.5.2(i) hereof), to
the extent that the amount of Revolving Credit Loans then outstanding exceeds
the Revolving Credit Commitments as so reduced or terminated. From the effective
date of any such reduction or termination the obligations of Borrower to pay the
Commitment Fee pursuant to Section 2.3 shall correspondingly be reduced or
cease. The Administrative Agent shall promptly notify the Banks of all notices
delivered to the Administrative Agent pursuant to this Section 2.7.
-20-
3. INTEREST RATES
3.1 Interest Rate Options.
The Borrower shall pay interest in respect of the outstanding unpaid
principal amount of the Revolving Credit Loans as selected by it from the Base
Rate Option, the Euro-Rate Option or the Money Market Option set forth below
applicable to the Revolving Credit Loans, it being understood that, subject to
the provisions of this Agreement, the Borrower may select different Interest
Rate Options and different Interest Periods to apply simultaneously to the
Revolving Credit Loans comprising different Borrowing Tranches and may convert
to or renew one or more Interest Rate Options with respect to all or any portion
of the Revolving Credit Loans comprising any Borrowing Tranche, provided that
there shall not be at any one time outstanding more than five (5) Borrowing
Tranches applicable to each of the Revolving Credit Loans. If at any time the
designated rate applicable to any Revolving Credit Loan made by any Bank exceeds
such Bank's highest lawful rate, the rate of interest on such Bank's Loan shall
be limited to such Bank's highest lawful rate.
3.1.1. Interest Rate Options.
The Borrower shall have the right to select from the following
Interest Rate Options applicable to the Revolving Credit Loans:
(a) Revolving Credit Base Rate Option: A fluctuating rate per
annum (computed on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed) equal to the Base Rate, such interest rate to change
automatically from time to time effective as of the effective date of each
change in the Base Rate;
(b) Revolving Credit Euro-Rate Option: A rate per annum
(computed on the basis of a year of 360 days and actual days elapsed) equal to
the Euro-Rate plus the Applicable Margin; or
(c) Money Market Option: So long as no Potential Default or
Event of Default exists, a rate per annum equal to the Money Market Option.
3.1.2. Rate Quotations.
The Borrower may call the Administrative Agent on or before
the date on which a Revolving Credit Loan Request is to be delivered to receive
an indication of the rates then in effect, but it is acknowledged that such
projection shall not be binding (except with respect to Revolving Credit Loan
under a Money Market Option) on the Administrative Agent or the Banks nor affect
the rate of interest which thereafter is actually in effect when the election is
made.
3.2 Interest Periods.
At any time when the Borrower shall select, convert to or renew a
Euro-Rate Option or a Money Market Option, the Borrower shall notify the
Administrative Agent thereof (who shall promptly give notice thereof to the
Banks) at least three (3) Business Days prior to the
-21-
effective date of such Interest Rate Option by delivering a Revolving Credit
Loan Request. The notice shall specify an Interest Period during which such
Interest Rate Option shall apply. Notwithstanding the preceding sentence, the
following provisions shall apply to any selection of, renewal of, or conversion
to a Euro-Rate Option or a Money Market Option:
3.2.1. Amount of Borrowing Tranche.
each Borrowing Tranche of Loans under the Euro-Rate Option or
the Money Market Option shall be in integral multiples of $1,000,000 and not
less than $5,000,000.
3.2.2. Renewals.
in the case of the renewal of a Euro-Rate Option or a Money
Market Option at the end of an Interest Period, the first day of the new
Interest Period shall be the last day of the preceding Interest Period, without
duplication in payment of interest for such day.
3.3 Interest After Default.
To the extent permitted by Law, upon the occurrence of an Event of
Default and until such time such Event of Default shall have been cured or
waived:
3.3.1. Interest Rate.
the rate of interest for each Revolving Credit Loan otherwise
applicable pursuant to Section 3.1 [Interest Rate Options] shall be increased by
2.0% per annum; and
3.3.2. Other Obligations.
each other Obligation hereunder (excluding interest if such
interest is not yet due and payable) if not paid when due shall bear interest at
a rate per annum equal to the sum of the rate of interest applicable under the
Base Rate Option plus an additional 2.0% per annum from the time such Obligation
becomes due and payable and until it is paid in full.
3.3.3. Acknowledgment.
The Borrower acknowledges that the increase in rates referred
to in this Section 3.3 reflects, among other things, the fact that such
Revolving Credit Loans or other amounts have become a substantially greater risk
given their default status and that the Banks are entitled to additional
compensation for such risk; and all such interest shall be payable by Borrower
upon demand by Administrative Agent.
3.4 Interest Rate Unascertainable; Illegality; Increased Costs; Deposits
Not Available.
3.4.1. Unascertainable.
If on any date on which a Euro-Rate would otherwise be
determined, the Administrative Agent shall have determined that:
-22-
(i) adequate and reasonable means do not exist for
ascertaining such Euro-Rate, or
(ii) a contingency has occurred which in the reasonable
opinion of the Administrative Agent materially and adversely affects the
secondary market for negotiable certificates of deposit maintained by dealers of
recognized standing relating to the London interbank eurodollar market relating
to the Euro-Rate, the Administrative Agent shall have the rights specified in
Section 3.4.3.
3.4.2. Illegality; Increased Costs; Deposits Not Available.
If at any time any Bank shall have determined that:
(i) the making, maintenance or funding of any Revolving
Credit Loan to which a Euro-Rate Option applies has been made impracticable or
unlawful by compliance by such Bank in good faith with any Law or any
interpretation or application thereof by any Official Body or with any request
or directive of any such Official Body (whether or not having the force of Law),
or
(ii) such Euro-Rate Option will not adequately and fairly
reflect the cost to such Bank of the establishment or maintenance of any such
Revolving Credit Loan, or
(iii) after making all reasonable efforts, deposits of the
relevant amount in Dollars for the relevant Euro-Rate Loan Interest Period for a
Revolving Credit Loan, or to banks generally, to which a Euro-Rate Option
applies, respectively, are not available to such Bank with respect to such
Revolving Credit Loan, or to banks generally, in the interbank eurodollar
market,
then such Bank shall have the rights specified in Section 3.4.3.
3.4.3. Administrative Agent's and Bank's Rights.
In the case of any event specified in Section 3.4.1 above, the
Administrative Agent shall promptly so notify the Banks and the Borrower
thereof, and in the case of an event specified in Section 3.4.2 above, such Bank
shall promptly so notify the Administrative Agent and endorse a certificate to
such notice as to the specific circumstances of such notice, and the
Administrative Agent shall promptly send copies of such notice and certificate
to the other Banks and the Borrower. Upon such date as shall be specified in
such notice (which shall not be earlier than the date such notice is given), the
obligation of (A) the Banks, in the case of such notice given by the
Administrative Agent, or (B) such Bank, in the case of such notice given by such
Bank, to allow the Borrower to select, convert to or renew a Euro-Rate Option
shall be suspended until the Administrative Agent shall have later notified the
Borrower, or such Bank shall have later notified the Administrative Agent, of
the Administrative Agent's or such Bank's, as the case may be, determination
that the circumstances giving rise to such previous determination no longer
exist. If at any time the Administrative Agent makes a determination under
Section 3.4.1 and the Borrower has previously notified the Administrative Agent
of its selection of, conversion to or renewal of a Euro-Rate Option and such
Interest Rate Option has not yet gone into effect, such notification shall be
deemed to provide for the selection
-23-
of, conversion to or renewal of the Base Rate Option otherwise available with
respect to such Revolving Credit Loans if the Borrower has requested the
Euro-Rate Option. If any Bank notifies the Administrative Agent of a
determination under Section 3.4.2, the Borrower shall, subject to the Borrower's
indemnification Obligations under Section 4.5.2 [Indemnity], as to any Revolving
Credit Loan of the Bank to which a Euro-Rate Option applies, on the date
specified in such notice either convert such Revolving Credit Loan to the Base
Rate Option otherwise available with respect to such Revolving Credit Loan or
(except in the case of events described in clauses (ii) and (iii) of Section
3.4.2) prepay such Revolving Credit Loan in accordance with Section 4.4
[Voluntary Prepayments]. Absent due notice from the Borrower of conversion or
prepayment, such Revolving Credit Loan shall automatically be converted to the
Base Rate Option otherwise available with respect to such Loan upon such
specified date.
3.5 Selection of Interest Rate Options.
If the Borrower fails to select a new Interest Period to apply to any
Borrowing Tranche of Revolving Credit Loans under the Euro-Rate Option or the
Money Market Option at the expiration of an existing Interest Period applicable
to such Borrowing Tranche in accordance with the provisions of Section 3.2
[Interest Periods], the Borrower shall be deemed to have converted such
Borrowing Tranche to the Base Rate Option, commencing upon the last day of the
existing Interest Period.
4. PAYMENTS
4.1 Payments.
All payments and prepayments to be made in respect of principal,
interest, Commitment Fees or other fees or amounts due from the Borrower
hereunder shall be payable prior to 11:00 a.m., New York time, on the date when
due without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived by the Borrower, and without set-off, counterclaim or
other deduction of any nature, and an action therefor shall immediately accrue.
Such payments shall be made to the Administrative Agent at the Principal Office
for the ratable accounts of the Banks with respect to the Revolving Credit Loans
in U.S. Dollars and in immediately available funds, and the Administrative Agent
shall promptly distribute such amounts to the Banks in immediately available
funds, provided that in the event payments are received by 11:00 a.m., New York
time, by the Administrative Agent with respect to the Revolving Credit Loans and
such payments are not distributed to the Banks on the same day received by the
Administrative Agent, the Administrative Agent shall pay the Banks the Federal
Funds Effective Rate with respect to the amount of such payments for each day
held by the Administrative Agent and not distributed to the Banks. The
Administrative Agent's and each Bank's statement of account, ledger or other
relevant record shall, in the absence of manifest error, be conclusive as the
statement of the amount of principal of and interest on the Revolving Credit
Loans and other amounts owing under this Agreement and shall be deemed an
"account stated."
-24-
4.2 Pro Rata Treatment of Banks.
Each borrowing of Revolving Credit Loans shall be allocated to each
Bank according to its Ratable Share, and each selection of, conversion to or
renewal of any Interest Rate Option applicable to Revolving Credit Loans, each
Revolving Credit Commitment reduction and each payment or prepayment by the
Borrower with respect to principal or interest on the Revolving Credit Loans,
Commitment Fees or other fees or amounts due from the Borrower hereunder to the
Banks with respect to Revolving Credit Loans, shall (except as provided in
Section 3.4.3 [Administrative Agent's and Bank's Rights] in the case of an event
specified in Section 3.4 [Interest Rate Unascertainable; Etc.], 4.4.2
[Replacement of a Bank] or 4.5 [Additional Compensation in Certain
Circumstances]) be made in proportion to the applicable Revolving Credit Loans
outstanding from each Bank and, if no such Revolving Credit Loans are then
outstanding, in proportion to the Ratable Share of each Bank.
4.3 Interest Payment Dates.
Interest on Revolving Credit Loans to which the Base Rate Option
applies shall be due and payable in arrears on the first Business Day of each
July, October, January and April after the date hereof and on the applicable
Expiration Date or upon acceleration of the applicable Revolving Credit Notes.
Interest on Revolving Credit Loans to which the Euro-Rate Option applies shall
be due and payable on the last day of each Euro-Rate Loan Interest Period for
those Revolving Credit Loans. Interest on Revolving Credit Loans to which the
Money Market Option applies shall be due and payable on the last day of each
Money Market Loan Interest Period for those Revolving Credit Loans. Interest on
the principal amount of each Revolving Credit Loan or other monetary Obligation
shall be due and payable on demand after such principal amount or other monetary
Obligation becomes due and payable (whether on the stated maturity date, upon
acceleration or otherwise).
4.4 Voluntary and Mandatory Prepayments.
4.4.1. Right to Prepay.
The Borrower shall have the right at its option from time to
time to prepay the Revolving Credit Loans in whole or part without premium or
penalty (except as provided in Section 4.4.2 below or in Section 4.5 [Additional
Compensation in Certain Circumstances]):
(i) at any time with respect to any Revolving Credit Loan to
which the Base Rate Option applies,
(ii) on the last day of the applicable Interest Period with
respect to Revolving Credit Loans to which a Euro-Rate or a Money Market Option
applies, provided that the Borrower may pay such Revolving Credit Loans prior to
the last day of such Interest Period so long as the Borrower indemnifies the
Banks pursuant to Section 4.5.2, or
(iii) on the date specified in a notice by any Bank pursuant to
Section 3.4 [Interest Rate Unascertainable, Etc.] with respect to any Revolving
Credit Loan to which a Euro-Rate Option applies.
-25-
Whenever the Borrower desires to prepay any part of the
Revolving Credit Loans, it shall provide a prepayment notice to the
Administrative Agent by 1:00 p.m., New York time, at least one (1) Business Day
prior to the date of prepayment of the Revolving Credit Loans, setting forth the
following information:
(x) the date, which shall be a Business Day, on which the
proposed prepayment is to be made; and
(y) the total principal amount of such prepayment, which shall
not be less than $1,000,000.
All prepayment notices shall be irrevocable. The principal
amount of the Revolving Credit Loans for which a prepayment notice is given,
together with interest on such principal amount except with respect to Revolving
Credit Loans to which the Base Rate Option applies, shall be due and payable on
the date specified in such prepayment notice as the date on which the proposed
prepayment is to be made. Except as provided in Section 3.4.3 [Administrative
Agent's and Bank's rights], if the Borrower prepays a Revolving Credit Loan but
fails to specify the applicable Borrowing Tranche which the Borrower is
prepaying, the prepayment shall be applied, first, to Revolving Credit Loans to
which the Base Rate Option applies, then to Revolving Credit Loans to which the
Euro-Rate Option or the Money Market Option applies. Any prepayment hereunder
shall be subject to the Borrower's Obligation to indemnify the Banks under
Section 4.5.2 [Indemnity].
4.4.2. Replacement of a Bank.
In the event any Bank (i) gives notice under Section 3.4
[Interest Rate Unascertainable, Etc.] or Section 4.5.1 [Increased Costs, Etc.],
(ii) does not fund Revolving Credit Loans because the making of such Loans would
contravene any Law applicable to such Bank, (iii) becomes subject to the control
of an Official Body (other than normal and customary supervision), or (iv) seeks
indemnification for Taxes under Section 11.3, then the Borrower shall have the
right, at its option, with the consent of the Administrative Agent, which shall
not be unreasonably withheld, to prepay the Revolving Credit Loans of such Bank
in whole , together with all interest accrued thereon and any fees or other
amounts due in connection therewith, and terminate such Bank's Commitment, or to
replace such Bank with another Bank which purchases and assumes the Revolving
Credit Loans of the Bank to be replaced in either such case within sixty (60)
days after (x) receipt of such Bank's notice under Section 3.4 [Interest Rate
Unascertainable, Etc.] or 4.5.1 [Increased Costs, Etc.], (y) the date such Bank
has failed to fund Revolving Credit Loans because the making of such Revolving
Credit Loans would contravene Law applicable to such Bank, or (z) the date such
Bank became subject to the control of an Official Body, as applicable; provided
that the Borrower shall also pay to such Bank at the time of such prepayment or
replacement any amounts required under Section 4.5 [Additional Compensation in
Certain Circumstances] and any accrued interest due on such amount and any
related fees; provided further , however, that if the Borrower has elected to
prepay the Revolving Credit Loans of a Bank and terminate its Revolving Credit
Commitment under this Section, the Revolving Credit Commitment of such Bank
shall be provided by one or more of the remaining Banks or a replacement bank
reasonably acceptable to the Administrative Agent; and provided, further, that
the remaining Banks shall have no obligation hereunder to increase their
Revolving
-26-
Credit Commitments. Notwithstanding the foregoing, the Administrative Agent may
only be replaced subject to the requirements of Section 9.14 [Successor
Administrative Agent].
4.4.3. Change of Lending Office.
Each Bank agrees that upon the occurrence of any event giving
rise to increased costs or other special payments under Section 3.4.2
[Illegality, Etc.] or 4.5.1 [Increased Costs, Etc.] with respect to such Bank,
or in the event such Bank seeks indemnification for Taxes under Section 11.3, it
will if requested by the Borrower, use reasonable efforts (subject to overall
policy considerations of such Bank) to designate another lending office for any
Revolving Credit Loans affected by such event, provided that such designation is
made on such terms that such Bank and its lending office suffer no
economic(including increased taxes), legal or regulatory disadvantage, with the
object of avoiding the consequence of the event giving rise to the operation of
such Section. Nothing in this Section 4.4.3 shall affect or postpone any of the
Obligations of the Borrower or any other Loan Party or the rights of the
Administrative Agent or any Bank provided in this Agreement.
4.4.4. Mandatory Prepayment.
The Borrower shall immediately repay Revolving Credit Loans
(subject to its indemnity obligation in Section 4.5.2(i)) to the extent required
so that the amount of Revolving Credit Loans then outstanding never exceeds the
Revolving Credit Commitments, as reduced under Section 2.7.
4.5 Additional Compensation in Certain Circumstances.
4.5.1. Increased Costs or Reduced Return Resulting from Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc.
If, after the date hereof, any Law, guideline or interpretation
or any change in any Law, guideline or interpretation or application thereof by
any Official Body charged with the interpretation or administration thereof or
compliance with any request or directive (whether or not having the force of
Law) of any central bank or other Official Body:
(i) subjects any Bank to any tax or changes the basis of
taxation with respect to this Agreement, the Revolving Credit Notes, the
Revolving Credit Loans or payments by the Borrower of principal, interest,
Commitment Fees, or other amounts due from the Borrower hereunder or under the
Revolving Credit Notes (except for taxes on the net income of such Bank),
(ii) imposes, modifies or deems applicable any reserve, special
deposit or similar requirement against credits or commitments to extend credit
extended by, or assets (funded or contingent) of, deposits with or for the
account of, or other acquisitions of funds by, any Bank, or
(iii) imposes, modifies or deems applicable any capital adequacy
or similar requirement (A) against assets (funded or contingent) of, or letters
of credit, other credits
-27-
or commitments to extend credit extended by, any Bank, or (B) otherwise
applicable to the obligations of any Bank under this Agreement,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank with respect to this Agreement, the Revolving Credit Notes or the making,
maintenance or funding of any part of the Revolving Credit Loans (or, in the
case of any capital adequacy or similar requirement, to have the effect of
reducing the rate of return on any Bank's capital, taking into consideration
such Bank's customary policies with respect to capital adequacy) by an amount
which such Bank in its sole discretion deems to be material, such Bank shall
from time to time notify the Borrower and the Administrative Agent of the amount
determined in good faith (using any averaging and attribution methods employed
in good faith) by such Bank to be necessary to compensate such Bank for such
increase in cost, reduction of income, additional expense or reduced rate of
return. Such notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the Borrower to such Bank
ten (10) Business Days after such notice is given.
4.5.2. Indemnity.
In addition to the compensation required by Section 4.5.1
[Increased Costs, Etc.], the Borrower shall indemnify each Bank against all
liabilities, losses or expenses (including loss of margin, any loss or expense
incurred in liquidating or employing deposits from third parties and any loss or
expense incurred in connection with funds acquired by a Bank to fund or maintain
Revolving Credit Loans subject to a Euro-Rate Option or a Money Market Option)
which such Bank sustains or incurs as a consequence of any
(i) payment, prepayment, conversion or renewal of any
Revolving Credit Loan to which a Euro-Rate Option or a Money Market Option
applies on a day other than the last day of the corresponding Interest Period
(whether or not such payment or prepayment is mandatory, voluntary or automatic
and whether or not such payment or prepayment is then due),
(ii) attempt by the Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any Revolving Credit Loan
Requests under Section 2.4 [Making Revolving Credit Loans], or Section 3.2
[Interest Periods] or notice relating to prepayments under Section 4.4
[Voluntary Prepayments], or
(iii) default by the Borrower in the performance or observance
of any covenant or condition contained in this Agreement or any other Loan
Document, including any failure of the Borrower to pay when due (by acceleration
or otherwise) any principal, interest, Commitment Fee or any other amount due
hereunder.
If any Bank sustains or incurs any such loss or expense, it shall from
time to time notify the Borrower of the amount determined in good faith by such
Bank (which determination may include such assumptions, allocations of costs and
expenses and averaging or attribution methods as such Bank shall deem
reasonable) to be necessary to indemnify such Bank for such loss or expense.
Such notice shall set forth in reasonable detail the basis for such
determination.
-28-
Such amount shall be due and payable by the Borrower to such Bank ten (10)
Business Days after such notice is given.
5. REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties.
The Loan Parties, jointly and severally, represent and warrant to the
Administrative Agent and each of the Banks as follows:
5.1.1. Organization and Qualification.
Each Loan Party and each Subsidiary of each Loan Party is a
corporation, partnership or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization. Each Loan Party and each Subsidiary of each Loan Party has the
lawful power to own or lease its properties and to engage in the business it
presently conducts or proposes to conduct. Each Loan Party and each Subsidiary
of each Loan Party is duly licensed or qualified and in good standing in all
other jurisdictions where the property owned or leased by it or the nature of
the business transacted by it or both makes such licensing or qualification
necessary except to the extent that a failure to be in good standing is not
reasonably expected to result in a Material Adverse Change.
5.1.2. Capitalization, Ownership and Indebtedness.
As of the KCA Acquisition Effective Time, the authorized
capital stock of the Borrower and the ownership of such shares of stock as of
the KCA Acquisition Effective Time (referred to herein as the "Shares") which is
issued and outstanding (ownership by individuals may be disclosed in the
aggregate) is indicated on Schedule 5.1.2 (which amount shall be estimated as of
August 16, 2002 but in any event shall be within 5% of the actual amount as of
the KCA Acquisition Effective Time). All of the Shares have been validly issued
and are fully paid and nonassessable. As of the KCA Acquisition Effective Time,
there are no options, warrants or other rights outstanding to purchase any such
Shares except as indicated on Schedule 5.1.2. All outstanding third-party
Indebtedness (or commitments therefor) of the Borrower and each of its
Subsidiaries as of the KCA Acquisition Effective Time is indicated on Schedule
5.1.2 (which amount shall be estimated as of August 16, 2002 but in any event
shall be within 5% of the actual amount as of the KCA Acquisition Effective
Time).
5.1.3. Subsidiaries.
Schedule 5.1.3 states the name of each of the Borrower's
Subsidiaries, its jurisdiction of incorporation, its authorized capital stock,
the issued and outstanding shares (referred to herein as the "Subsidiary
Shares") and the owners thereof if it is a corporation, its outstanding
partnership interests (the "Partnership Interests") if it is a partnership and
its outstanding limited liability company interests, interests assigned to
managers thereof and the voting rights associated therewith (the "LLC
Interests") if it is a limited liability company; provided, however, that such
schedule need not state the authorized number of shares of equity interests or
the number of outstanding equity interests of any Foreign Subsidiary if it does
state the names and relative percentages of ownership of each owner of
outstanding equity interests of
-29-
such Foreign Subsidiary. The Borrower and each Subsidiary of the Borrower has
good and marketable title to all of the Subsidiary Shares, Partnership Interests
and LLC Interests it purports to own, free and clear in each case of any Lien
subject to Permitted Liens. All Subsidiary Shares, Partnership Interests and LLC
Interests have been validly issued, and all Subsidiary Shares are fully paid and
nonassessable. All capital contributions and other consideration required to be
made or paid in connection with the issuance of the Partnership Interests and
LLC Interests have been made or paid, as the case may be. There are no options,
warrants or other rights outstanding to purchase any such Subsidiary Shares,
Partnership Interests or LLC Interests except as indicated on Schedule 5.1.3.
The Borrower shall update Schedule 5.1.3 with each quarterly Compliance
Certificate and with each Guarantor Joinder delivered pursuant to Section 10.18
or otherwise under this Agreement and shall not be required to update such
Schedule at other times and the warranties hereunder relating to such Schedule
shall apply only on the dates of such updates.
5.1.4. Power and Authority.
Each Loan Party has full power to enter into, execute, deliver
and carry out this Agreement, the KCA Acquisition Agreement and the other Loan
Documents to which it is a party, to incur the Indebtedness contemplated by the
Loan Documents and to perform its Obligations under the Loan Documents to which
it is a party, and all such actions have been duly authorized by all necessary
proceedings on its part.
5.1.5. Validity and Binding Effect.
This Agreement has been duly and validly executed and
delivered by each Loan Party, and the KCA Acquisition Agreement and each other
Loan Document which any Loan Party is required to execute and deliver on or
after the date hereof will have been duly executed and delivered by such Loan
Party on the required date of delivery of the KCA Acquisition Agreement or such
Loan Document. This Agreement, the KCA Acquisition Agreement and each other Loan
Document constitutes, or will constitute, legal, valid and binding obligations
of each Loan Party which is or will be a party thereto on and after its date of
delivery thereof, enforceable against such Loan Party in accordance with its
terms, except to the extent that enforceability of any such Loan Document may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforceability of creditors' rights generally or limiting the
right of specific performance.
5.1.6. No Conflict.
Neither the execution and delivery of this Agreement, the KCA
Acquisition Agreement or the other Loan Documents by any Loan Party nor the
consummation of the transactions herein or therein contemplated or compliance
with the terms and provisions hereof or thereof by any of them will conflict
with, constitute a default under or result in any breach of (i) the terms and
conditions of the certificate of incorporation, bylaws, certificate of limited
partnership, partnership agreement, certificate of formation, limited liability
company agreement or other organizational documents of any Loan Party or (ii)
any Law or any material agreement or instrument or order, writ, judgment,
injunction or decree to which any Loan Party or any of its Subsidiaries is a
party or by which it or any of its Subsidiaries is bound or to which
-30-
it is subject, or result in the creation or enforcement of any Lien, charge or
encumbrance whatsoever upon any property (now or hereafter acquired) of any Loan
Party or any of its Subsidiaries (other than Liens granted under the Loan
Documents).
5.1.7. Litigation.
There are no actions, suits, proceedings or investigations
pending or, to the knowledge of any Loan Party, threatened against such Loan
Party or any Subsidiary of such Loan Party at law or equity before any Official
Body which individually or in the aggregate could reasonably be expected to
result in any Material Adverse Change. None of the Loan Parties or any
Subsidiaries of any Loan Party is in violation of any order, writ, injunction or
any decree of any Official Body which could reasonably be expected to result in
any Material Adverse Change.
5.1.8. Title to Properties.
Each Loan Party and each Subsidiary of each Loan Party has
good and marketable title to or valid leasehold interest in all properties,
assets and other rights which it purports to own or lease or which are reflected
as owned or leased on its books and records, free and clear of all Liens and
encumbrances except Permitted Liens, and subject to the terms and conditions of
the applicable leases.
5.1.9. Financial Statements.
(i) Historical Statements. The Borrower has delivered to the
Administrative Agent copies of its and KCA's audited consolidated year-end
financial statements for and as of the end of the two (2) fiscal years ended on
June 30, 2001 (the "Annual Statements"). In addition, the Borrower has delivered
to the Administrative Agent copies of its and KCA's unaudited consolidated
interim financial statements for the fiscal year to date and as of the end of
the fiscal quarters ended September 30, 2001, December 31, 2001 and March 31,
2002 (the "Interim Statements") (the Annual and Interim Statements being
collectively referred to as the "Historical Statements"). The Historical
Statements were compiled from the books and records maintained by the Borrower's
or KCA's management, as applicable, are correct and complete in all material
respects and fairly represent the consolidated financial condition of the
Borrower and its Subsidiaries and KCA and its Subsidiaries, as applicable, as of
their dates and the results of operations for the fiscal periods then ended and
have been prepared in accordance with GAAP consistently applied, subject (in the
case of the Interim Statements) to normal year-end audit adjustments.
(ii) Financial Projections. The Borrower has delivered to the
Administrative Agent financial projections of the Borrower and its Subsidiaries
for the period June 30, 2002 through June 30, 2005 derived from various
assumptions of the Borrower's management (the "Financial Projections"). The
Financial Projections represent a reasonable range of possible results in light
of the history of the business, present and foreseeable conditions and the
intentions of the Borrower's management. The Financial Projections accurately
reflect the liabilities of the Borrower and its Subsidiaries upon consummation
of the transactions contemplated hereby as of the KCA Acquisition Effective
Time.
-31-
(iii) Accuracy of Financial Statements. Neither the Borrower
nor any Subsidiary of the Borrower has any liabilities, contingent or otherwise,
or forward or long-term commitments that are not disclosed in the Historical
Statements or in the notes thereto which are required under GAAP to be so
disclosed, and except as disclosed therein there are no unrealized or
anticipated losses from any Revolving Credit Commitments of the Borrower or any
Subsidiary of the Borrower which could reasonably be expected to cause a
Material Adverse Change. Since June 30, 2001, no Material Adverse Change has
occurred.
5.1.10. Use of Proceeds; Margin Stock.
5.1.10.1 General.
The Loan Parties shall use the proceeds of the Revolving
Credit Loans in accordance with Sections 2.8 and 7.1.10.
5.1.10.2 Margin Stock.
None of the Loan Parties or any Subsidiaries of any Loan
Party engages or intends to engage principally, or as one of its important
activities, in the business of extending credit for the purpose, immediately,
incidentally or ultimately, of purchasing or carrying margin stock (within the
meaning of Regulation U). No part of the proceeds of any Revolving Credit Loan
has been or will be used, immediately, incidentally or ultimately, to purchase
or carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock or to refund Indebtedness originally
incurred for such purpose, or for any other purpose, in any such case which
entails a violation of or which is inconsistent with the provisions of the
regulations of the Board of Governors of the Federal Reserve System. None of the
Loan Parties or any Subsidiary of any Loan Party holds or intends to hold margin
stock in such amounts that more than 25% of the reasonable value of the assets
of any Loan Party or Subsidiary of any Loan Party are or will be represented by
margin stock.
5.1.11. Full Disclosure.
Neither this Agreement nor any other Loan Document, nor any
certificate, statement, agreement or other documents furnished to the
Administrative Agent or any Bank in connection herewith or therewith, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein and therein, in light
of the circumstances under which they were made, not misleading in any material
respect. There is no fact known to any Loan Party which could reasonably be
expected to result in a Material Adverse Change which has not been set forth in
this Agreement or in the certificates, statements, agreements or other documents
furnished in writing to the Administrative Agent and the Banks prior to or at
the date hereof in connection with the transactions contemplated hereby.
5.1.12. Taxes.
All federal, state, local and other tax returns required to
have been filed with respect to each Loan Party and each Subsidiary of each Loan
Party have been filed, and payment or adequate provision has been made for the
payment of all taxes, fees, assessments and other governmental charges which
have or may become due pursuant to said returns or to
-32-
assessments received, except to the extent that such taxes, fees, assessments
and other charges are being contested in good faith by appropriate proceedings
diligently conducted and for which such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made. There are
no agreements or waivers extending the statutory period of limitations
applicable to any federal income tax return of any Loan Party or Subsidiary of
any Loan Party for any period.
5.1.13. Consents and Approvals.
No consent, approval, exemption, order or authorization of, or
a registration or filing with, any Official Body or any other Person is required
by any Law or any agreement in connection with the execution, delivery and
carrying out of this Agreement, the KCA Acquisition Agreement and the other Loan
Documents by any Loan Party, except as listed on Schedule 5.1.13 which shall
have been obtained or made on or prior to the Closing Date and in full force and
effect.
5.1.14. No Event of Default; Compliance with Instruments.
No event has occurred and is continuing and no condition
exists or will exist after giving effect to the borrowings or other extensions
of credit to be made on the Closing Date under or pursuant to the Loan Documents
which constitutes an Event of Default or Potential Default. None of the Loan
Parties or any Subsidiaries of any Loan Party is in violation of (i) any term of
its certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement or other organizational documents or (ii) any material agreement or
instrument to which it is a party or by which it or any of its properties may be
subject or bound where such violation would could reasonably be expected to
result in a Material Adverse Change.
5.1.15. Patents, Trademarks, Copyrights, Licenses, Etc.
Each Loan Party and each Subsidiary of each Loan Party owns or
possesses all the material patents, trademarks, service marks, trade names,
copyrights, licenses, registrations, franchises, permits and rights necessary to
own and operate its properties and to carry on its business as presently
conducted and planned to be conducted by such Loan Party or Subsidiary, without
known possible, alleged or actual conflict with the rights of others except for
violations which could not reasonably be expected to result in a Material
Adverse Change.
5.1.16. Insurance.
All insurance policies and performance, bid and similar bonds
to which any Loan Party or Subsidiary of any Loan Party is a party are valid and
in full force and effect. No notice has been given or claim made and no grounds
exist to cancel or avoid any of such policies or bonds or to reduce the coverage
provided thereby. Such policies and bonds provide adequate coverage from
reputable and financially sound insurers in amounts sufficient to insure the
assets and risks of each Loan Party and each Subsidiary of each Loan Party in
accordance with prudent business practice in the industry of the Loan Parties
and their Subsidiaries.
-33-
5.1.17. Compliance with Laws.
The Loan Parties and their Subsidiaries are in compliance in
all material respects with all applicable Laws including environmental laws in
all jurisdictions in which any Loan Party or Subsidiary of any Loan Party is
presently or will be doing business except where the failure to do so which
could reasonably be expected to result in a Material Adverse Change.
5.1.18. Material Contracts; Burdensome Restrictions.
All material contracts relating to the business operations of
each Loan Party and each Subsidiary of any Loan Party, including all material
employee benefit plans and Labor Contracts are valid, binding and enforceable
upon such Loan Party or Subsidiary and each of the other parties thereto in
accordance with their respective terms, and there is no default thereunder, to
the Loan Parties' knowledge, with respect to parties other than such Loan Party
or Subsidiary. None of the Loan Parties or their Subsidiaries is bound by any
contractual obligation, or subject to any restriction in any organization
document or any requirement of Law which could reasonably be expected to result
in a Material Adverse Change.
5.1.19. Investment Companies; Regulated Entities.
None of the Loan Parties or any Subsidiaries of any Loan Party
is an "investment company" registered or required to be registered under the
Investment Company Act of 1940 or under the "control" of an "investment company"
as such terms are defined in the Investment Company Act of 1940 and shall not
become such an "investment company" or under such "control." None of the Loan
Parties or any Subsidiaries of any Loan Party is subject to any other Federal or
state statute or regulation limiting its ability to incur Indebtedness for
borrowed money.
5.1.20. Plans and Benefit Arrangements.
(i) The Borrower and to the best of Borrower's knowledge
after reasonable inquiry each other member of the ERISA Group are in compliance
in all material respects with any applicable provisions of ERISA with respect to
all Benefit Arrangements, Plans and, to the best of Borrower's knowledge after
reasonable inquiry, Multiemployer Plans. There has been no Prohibited
Transaction with respect to any Benefit Arrangement or any Plan or, to the best
knowledge of the Borrower, with respect to any Multiemployer Plan or Multiple
Employer Plan, which could result in any material liability of the Borrower or
any other member of the ERISA Group. The Borrower and, to the best of Borrower's
knowledge after reasonable inquiry, all other members of the ERISA Group have
made when due any and all payments required to be made under any agreement
relating to a Multiemployer Plan or a Multiple Employer Plan or any Law
pertaining thereto. With respect to each Plan and Multiemployer Plan, the
Borrower and, to the best of Borrower's knowledge after reasonable inquiry, each
other member of the ERISA Group (i) have fulfilled in all material respects
their obligations under the minimum funding standards of ERISA, (ii) have not
incurred any liability to the PBGC other than premiums the payment of which is
not yet due, and (iii) have not had asserted against them any penalty for
failure to fulfill the minimum funding requirements of Section 302 of ERISA.
-34-
(ii) To the best of the Borrower's knowledge, each
Multiemployer Plan and Multiple Employer Plan is able to pay benefits thereunder
when due.
(iii) Neither the Borrower nor, to the best of Borrower's
knowledge after reasonable inquiry, any other member of the ERISA Group has
instituted or intends to institute proceedings to terminate any Plan.
(iv) No event requiring notice to the PBGC under Section
302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur with
respect to any Plan, and no amendment with respect to which security is required
under Section 307 of ERISA has been made or is reasonably expected to be made to
any Plan, provided, however, that as applied to Plans of members of the ERISA
Group other than the Borrower, the foregoing representation is made to the best
of Borrower's knowledge after reasonable inquiry.
(v) The aggregate actuarial present value of the current
liability (whether or not vested) as defined in Section 412(1)(7) of the
Internal Revenue Code under all Plans subject to Title IV of ERISA as disclosed
in, and as of the date of, the most recent actuarial reports for such Plans,
does not exceed the aggregate fair market value of the assets of such Plans by
more than $10 million in the aggregate. Based on the funded status of Plans
subject to Title IV of ERISA (not including any Multiemployer Plans) as of the
date of the most recent actuarial reports for such Plans, termination of such
Plans would not have a material adverse effect on Borrower.
(vi) Neither the Borrower nor, to the best of Borrower's
knowledge after reasonable inquiry, any other member of the ERISA Group has
incurred or reasonably expects to incur any material withdrawal liability under
ERISA to any Multiemployer Plan or Multiple Employer Plan. Neither the Borrower
nor, to the best of Borrower's knowledge after reasonable inquiry, any other
member of the ERISA Group has been notified by any Multiemployer Plan or
Multiple Employer Plan that such Multiemployer Plan or Multiple Employer Plan
has been terminated within the meaning of Title IV of ERISA and, to the best
knowledge of the Borrower, no Multiemployer Plan or Multiple Employer Plan is
reasonably expected to be reorganized or terminated, within the meaning of Title
IV of ERISA.
(vii) To the extent that any Benefit Arrangement is insured,
the Borrower and, to the best of Borrower's knowledge after reasonable inquiry,
all other members of the ERISA Group have paid when due all premiums required to
be paid for all periods through the Closing Date. To the extent that any Benefit
Arrangement is funded other than with insurance, the Borrower and all other
members of the ERISA Group have made when due all contributions required to be
paid for all periods through the Closing Date.
(viii) All Plans, Benefit Arrangements and Multiemployer Plans
have been administered in accordance with their terms and applicable Law,
provided, however, that as applied to Plans, Benefit Arrangements and
Multiemployer Plans the foregoing representation is made to the best of
Borrower's knowledge after reasonable inquiry.
-35-
5.1.21. Employment Matters.
Each of the Loan Parties and each of their Subsidiaries is in
compliance with the Labor Contracts and all applicable federal, state and local
labor and employment Laws, including those related to equal employment
opportunity and affirmative action, labor relations, minimum wage, overtime,
child labor, medical insurance continuation, worker adjustment and relocation
notices, immigration controls and worker and unemployment compensation, where
the failure to comply could reasonably be expected to result in a Material
Adverse Change. There are no outstanding grievances, arbitration awards or
appeals therefrom arising out of the Labor Contracts or current or threatened
strikes, picketing, handbilling or other work stoppages or slowdowns at
facilities of any of the Loan Parties or any of their Subsidiaries which in any
case could reasonably be expected to result in a Material Adverse Change.
5.1.22. Environmental Matters.
There are no pending or threatened Environmental Claims
against any Loan Party or any Subsidiary of a Loan Party which could be
reasonably expected to result in a Material Adverse Change.
5.1.23. Senior Debt Status.
The Obligations of each Loan Party under this Agreement, the
Revolving Credit Notes, the Guaranty Agreement and each of the other Loan
Documents to which it is a party do rank and will rank at least pari passu in
priority of payment with all other Indebtedness (including all Indebtedness
under the PNC Credit Agreement) of such Loan Party except Indebtedness of such
Loan Party to the extent secured by Permitted Liens. There is no Lien upon or
with respect to any of the properties or income of any Loan Party or Subsidiary
of any Loan Party which secures indebtedness or other obligations of any Person
except for Permitted Liens.
5.1.24. KCA Acquisition Agreement.
The Administrative Agent has received a complete and correct
copy of the KCA Acquisition Agreement (including all exhibits, schedules and
disclosure letters referred to therein or delivered pursuant thereto) and all
amendments thereto, waivers relating thereto and other side letters or
agreements affecting the terms thereof. Each of the representations and
warranties contained in the KCA Acquisition Agreement is true and correct in all
material respects as of the KCA Acquisition Effective Time. All transactions
contemplated by the KCA Acquisition Agreement to be consummated on or prior to
the Closing Date have been consummated without any material amendment, waiver or
modification of the terms thereof.
5.1.25. Continuation of Representations.
The Borrower makes the representations and warranties in this
Section 6 on the date hereof and at the KCA Acquisition Effective Time and each
date thereafter on which a Revolving Credit Loan is made as provided in and
subject to Sections 7.1 and 7.2.
-36-
5.1.26. Solvency.
After giving effect to the transactions contemplated by the
Loan Documents, including all Indebtedness incurred thereby, and the payment of
all fees related thereto, the Loan Parties, taken as a whole, will be Solvent.
5.2 Updates to Schedules.
Except in the case of those schedules disclosing information solely as
of the KCA Acquisition Effective Time as expressly provided herein, should any
of the information or disclosures provided on any of the Schedules attached
hereto become outdated or incorrect in any material respect, the Borrower shall
provide the Administrative Agent in writing with such revisions or updates to
such Schedule as may be necessary or appropriate to update or correct same;
provided, however, that no Schedule shall be deemed to have been amended,
modified or superseded by any such correction or update, nor shall any breach of
warranty or representation resulting from the inaccuracy or incompleteness of
any such Schedule be deemed to have been cured thereby, unless and until the
Required Banks, in their sole and absolute discretion, shall have accepted in
writing such revisions or updates to such Schedule. Notwithstanding the
forgoing, the Borrower shall update Schedule 5.1.3 [Subsidiaries] only (1) on a
quarterly basis with the delivery of the Borrower's Compliance Certificate, and
(2) at the time that the Borrower delivers an Acquisition Compliance Certificate
in connection with each Permitted Acquisition, which Acquisition Compliance
Certificate shall disclose the Borrower's Subsidiaries after giving effect to
such Permitted Acquisition, except that it shall not be required to disclose any
newly formed entities which have do not conduct business, have no assets (except
for minimum capital required under the laws of the applicable jurisdiction of
organization) and will not be acquiring assets or stock in the Permitted
Acquisition.
6. CONDITIONS OF LENDING
The obligation of each Bank to make Revolving Credit Loans hereunder is
subject to the performance by each of the Loan Parties of its Obligations to be
performed hereunder at or prior to the making of any such Revolving Credit Loans
and to the satisfaction of the following further conditions on or before the
Closing Date:
6.1 First Loans.
On the Closing Date:
6.1.1. Officer's Certificate.
The representations and warranties of each of the Loan Parties
contained in Section 5 and in each of the other Loan Documents shall be true and
accurate on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which relate solely to an earlier date or time,
which representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein), and each of the Loan Parties shall
have performed and complied with all covenants and conditions hereof and
thereof, no Event of Default or Potential Default shall have occurred and be
continuing or shall exist; and there shall be delivered to the
-37-
Administrative Agent for the benefit of each Bank a certificate of each of the
Loan Parties, dated the Closing Date and signed by the Chief Executive Officer,
President, Treasurer or Chief Financial Officer of each of the Loan Parties, to
each such effect.
6.1.2. Secretary's Certificate.
There shall be delivered to the Administrative Agent for the
benefit of each Bank a certificate dated the Closing Date and signed by the
Secretary or an Assistant Secretary of each of the Loan Parties, certifying as
appropriate as to:
(i) all action taken by each Loan Party in connection with
this Agreement, the KCA Acquisition Agreement and the other Loan Documents as of
the Closing Date;
(ii) the names of the officer or officers authorized to sign
this Agreement, the KCA Acquisition Agreement and the other Loan Documents and
the true signatures of such officer or officers and specifying the Authorized
Officers permitted to act on behalf of each Loan Party for purposes of this
Agreement and the true signatures of such officers, on which the Administrative
Agent and each Bank may conclusively rely; and
(iii) copies of its organizational documents, including its
certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, and limited liability company
agreement as in effect on the Closing Date and, with respect to the Borrower and
KPMG Consulting, LLC, certified by the appropriate state official where such
documents are filed in a state office together with certificates from the
appropriate state officials as to the continued existence and good standing of
the Borrower and KPMG Consulting, LLC (good standing certificates for the other
Loan Parties shall be delivered promptly after the Closing Date) in each state
where organized certified as of a date not earlier than thirty (30) days prior
to the Closing Date.
6.1.3. Delivery of Loan Documents.
This Agreement, the Guaranty Agreement, the Intercompany
Subordination Agreement, the Revolving Credit Notes, each dated as of the
Closing Date, and each of the other Loan Documents shall have been duly executed
and delivered to the Administrative Agent for the benefit of the Banks.
6.1.4. Delivery of Schedules.
The Loan Parties shall have delivered all of the schedules to
this Agreement.
6.1.5. Opinion of Counsel.
There shall be delivered to the Administrative Agent for the
benefit of each Bank written opinions of In-house counsel and Sidley & Austin,
each as counsel for the Loan Parties, dated the Closing Date and in form and
substance satisfactory to the Administrative Agent and its counsel which
collectively shall address:
-38-
(i) the matters set forth in Exhibit 6.1.5; and
(ii) such other matters incident to the transactions
contemplated herein as the Administrative Agent may reasonably request.
6.1.6. KCA Acquisition.
The Borrower shall have provided to the Administrative
Agent:
(i) evidence that the KCA Acquisition shall have
been consummated in accordance with the KCA Acquisition Agreement without any
material amendment, waiver or modification of the terms thereof; and
(ii) true and correct copies of all financial
statements required to be delivered under Section 5.1.9 and all documents
required to be delivered under Section 5.1.24.
6.1.7. Legal Details.
All legal details and proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be in form and substance reasonably satisfactory to the Administrative Agent and
counsel for the Administrative Agent, and the Administrative Agent shall have
received all such other counterpart originals or certified or other copies of
such documents and proceedings in connection with such transactions, in form and
substance reasonably satisfactory to the Administrative Agent and said counsel,
as the Administrative Agent or said counsel may reasonably request.
6.1.8. Payment of Fees.
The Borrower shall have paid or caused to be paid to the
Administrative Agent for itself and for the account of the Banks and the costs
and expenses for which the Administrative Agent and the Banks are entitled to be
reimbursed as set forth herein.
6.1.9. Consents.
All material consents required to effectuate the
transactions contemplated hereby as set forth on Schedule 5.1.13 shall have been
obtained.
6.1.10. Certification Regarding Changes in the Borrower's
Executive Committee.
In the six months prior to the Closing Date, there has not
been a termination or departure of more than a majority of the Borrower's
officers serving on its Executive Committee.
6.1.11. No Violation of Laws.
The making of the Revolving Credit Loans shall not
contravene any Law applicable to any Loan Party or any of the Banks.
-39-
6.1.12. Officer's Certificate Regarding MACs.
Since June 30, 2001, no Material Adverse Change shall have
occurred; and there shall have been delivered to the Administrative Agent for
the benefit of each Bank a certificate dated the Closing Date and signed by the
Chief Executive Officer, President, Chief Financial Officer or Treasurer of each
Loan Party to such effect.
6.1.13. No Actions or Proceedings.
No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, this Agreement, the KCA Acquisition Agreement, the
other Loan Documents or the consummation of the transactions contemplated hereby
or thereby or which is in violation of the warranty in Section 5.1.7.
6.2 Each Additional Loan.
At the time of making any Revolving Credit Loans other than
Revolving Credit Loans made on the Closing Date and after giving effect to the
proposed extensions of credit: the representations and warranties of the Loan
Parties contained in Section 5.1 and in the other Loan Documents shall be true
on and as of the date of such additional Revolving Credit Loan with the same
effect as though such representations and warranties had been made on and as of
such date (except representations and warranties which expressly relate solely
to an earlier date or time, which representations and warranties shall be true
and correct on and as of the specific dates or times referred to therein) and
the Loan Parties shall have performed and complied with all covenants and
conditions hereof; no Event of Default or Potential Default shall have occurred
and be continuing or shall exist; the making of the Revolving Credit Loans shall
not contravene any Law applicable to any Loan Party or Subsidiary of any Loan
Party or any of the Banks; and the Borrower shall have delivered to the
Administrative Agent a duly executed and completed Revolving Credit Loan
Request.
7. COVENANTS
7.1 Affirmative Covenants.
The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Revolving Credit Loans and interest thereon,
satisfaction of all of the Loan Parties' other Obligations under the Loan
Documents and termination of the Revolving Credit Commitments, the Loan Parties
shall comply at all times with the following affirmative covenants:
7.1.1. Preservation of Existence, Etc.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain its legal existence as a corporation, limited
partnership or limited liability company and its license or qualification and
good standing (except to the extent that failure to be in good standing could
not reasonably be expected to result in a Material Adverse Change) in each
jurisdiction in which its ownership or lease of property or the nature of its
business makes such license or
-40-
qualification necessary, except as otherwise expressly permitted in Section
7.2.6 [Liquidations, Mergers, Etc.].
7.1.2. Payment of Liabilities, Including Taxes, Etc.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, duly pay and discharge all liabilities to which it is subject
or which are asserted against it, promptly as and when the same shall become due
and payable, including all taxes, assessments and governmental charges upon it
or any of its properties, assets, income or profits, prior to the date on which
penalties attach thereto, except to the extent that such liabilities, including
taxes, assessments or charges, are being contested in good faith and by
appropriate and lawful proceedings diligently conducted and for which such
reserve or other appropriate provisions, if any, as shall be required by GAAP
shall have been made, but only to the extent that failure to discharge any such
liabilities would not result in any additional liability which would adversely
affect to a material extent the financial condition of any Loan Party or
Subsidiary of any Loan Party, provided that the Loan Parties and their
Subsidiaries will pay all such liabilities forthwith upon the commencement of
proceedings to foreclose any Lien which may have attached as security therefor.
7.1.3. Maintenance of Insurance.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, insure its properties and assets against loss or damage by fire
and such other insurable hazards as such assets are commonly insured (including
fire, extended coverage, property damage, professional liability, workers'
compensation, general liability and extra expense insurance) and against other
risks (including errors and omissions) in such amounts as similar properties and
assets are insured by prudent companies in similar circumstances carrying on
similar businesses, and with reputable and financially sound insurers, including
self-insurance to the extent customary.
7.1.4. Maintenance of Properties and Leases.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain in good repair, working order and condition (ordinary
wear and tear excepted) in accordance with the general practice of other
businesses of similar character and size, all of those properties useful or
necessary to its business.
7.1.5. Maintenance of Patents, Trademarks, Etc.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain in full force and effect all patents, trademarks,
service marks, trade names, copyrights, licenses, franchises, permits and other
authorizations necessary for the ownership and operation of its properties and
business if the failure so to maintain the same could reasonably be expected to
result in a Material Adverse Change.
7.1.6. Visitation Rights.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, permit any of the officers or authorized employees or
representatives of the Administrative Agent or any
-41-
of the Banks to visit and inspect any of its properties and to examine and make
excerpts from its books and records and discuss its business affairs, finances
and accounts with its officers, all in such detail and at such times (which
shall be during regular business hours if no Potential Default or Event of
Default exists and is continuing) and as often as any of the Banks may
reasonably request, provided that each Bank shall provide the Borrower and the
Administrative Agent with reasonable notice prior to any visit or inspection. In
the event any Bank desires to conduct an audit of any Loan Party, such Bank
shall make a reasonable effort to conduct such audit contemporaneously with any
audit to be performed by the Administrative Agent.
7.1.7. Keeping of Records and Books of Account.
The Borrower shall, and shall cause each Subsidiary of the
Borrower to, maintain and keep proper books of record and account which enable
the Borrower and its Subsidiaries to issue financial statements in accordance
with GAAP and as otherwise required by applicable Laws of any Official Body
having jurisdiction over the Borrower or any Subsidiary of the Borrower, and in
which full, true and correct entries shall be made in all material respects of
all its dealings and business and financial affairs.
7.1.8. Plans and Benefit Arrangements.
The Borrower shall comply with ERISA, the Internal Revenue
Code and other applicable Laws applicable to Plans and Benefit Arrangements
except where such failure, alone or in conjunction with any other failure, could
not reasonably be expected to result in a Material Adverse Change. Without
limiting the generality of the foregoing, the Borrower shall cause all of its
Plans to be funded in accordance with the minimum funding requirements of ERISA
and shall make, in a timely manner, all contributions due to Plans, Benefit
Arrangements and Multiemployer Plans.
7.1.9. Compliance with Laws.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, comply with all applicable Laws, including all environmental
laws, in all respects, provided that it shall not be deemed to be a violation of
this Section 7.1.9 if any failure to comply with any Law would not result in
fines, penalties, remediation costs, other similar liabilities or injunctive
relief which in the aggregate could reasonably be expected to result in or
constitute a Material Adverse Change.
7.1.10. Use of Proceeds.
The Loan Parties will use the proceeds of the Revolving
Credit Loans only for the KCA Acquisition, for general corporate purposes, for
working capital and for Permitted Acquisitions. The Loan Parties shall not use
the proceeds of the Revolving Credit Loans for any purpose which contravenes any
applicable Law or any provision hereof.
-42-
7.1.11. Subordination of Intercompany Loans.
Each Loan Party shall cause any intercompany Indebtedness,
loans or advances owed by any Loan Party to any other Loan Party to be
subordinated pursuant to the terms of the Intercompany Subordination Agreement.
7.1.12. Most Favored Nation Status.
Concurrently with any amendment, supplement, modification,
restatement or replacement of the PNC Credit Agreement or any other "Loan
Document" (as defined in the PNC Credit Agreement), the Borrower will notify the
Administrative Agent thereof and, at the request of the Administrative Agent,
each Loan Party will, within 5 Business Days, amend this Agreement and the other
Loan Documents to include any term, covenant or condition (including with
respect to pricing, fees, guaranties and collateral) the Administrative Agent
determines to be more favorable to the "Banks" under and as defined in the PNC
Credit Agreement (after giving effect to any such amendment, supplement,
modification, restatement or replacement) than the terms of this Agreement and
the other Loan Documents.
7.2 Negative Covenants.
The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Revolving Credit Loans and interest thereon,
satisfaction of all of the Loan Parties' other Obligations hereunder and
termination of the Revolving Credit Commitments, the Loan Parties shall comply
with the following negative covenants:
7.2.1. Indebtedness.
Each of the Loan Parties shall not, and shall not permit
any of its Subsidiaries to, at any time create, incur, assume or suffer to exist
any Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Indebtedness under or with respect to the PNC
Receivables Purchase Facility;
(iii) Existing Indebtedness as set forth on Schedule 7.2.1
(including any extensions or renewals thereof, provided there is no increase in
the amount thereof and there is no other significant change in the terms thereof
unless otherwise specified on Schedule 7.2.1);
(iv) Capitalized leases and operating leases;
(v) Indebtedness secured by Purchase Money Security
Interests not exceeding $25,000,000;
(vi) Indebtedness of a Loan Party to another Loan Party
not in excess of $10,000,000 in the aggregate which is subordinated in
accordance with the provisions of Section 8.1.12 [Subordination of Intercompany
Loans] and Indebtedness of a Subsidiary which is not a Loan Party to another
Subsidiary which is not a Loan Party;
-43-
(vii) Other Indebtedness provided that the amount thereof does
not cause the Loan Parties to violate Section 7.2.16 [Maximum Leverage Ratio];
and
(viii) Indebtedness of any Subsidiary of the Borrower which is
not a Loan Party to a Loan Party, provided that such Indebtedness is permitted
under Section 7.2.4 [Loans and Investments].
7.2.2. Liens.
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Lien on any of its property or assets, tangible or intangible, now owned or
hereafter acquired, or agree or become liable to do so, except Permitted Liens.
7.2.3. Guaranties.
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time, directly or indirectly, become or be liable in
respect of any Guaranty, or assume, guarantee, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable upon or with
respect to any obligation or liability of any other Person, except for
(i) Guaranties of Indebtedness or other obligations of the
Loan Parties not prohibited hereunder and Guaranties of Indebtedness of Foreign
Subsidiaries if such Guaranties are permitted under clauses (vi) or (ix) of
Section 7.2.4 [Loans and Investments],
(ii) Guaranties constituting Investments which are permitted
under clause (vii) of Section 7.2.4,
(iii) customary indemnities in favor of directors and officers
of the Loan Parties and their Subsidiaries,
(iv) customary indemnities relating to warranties, covenants
and assumed liabilities in favor of sellers in acquisition agreements in
connection with Permitted Acquisitions, and
(v) endorsements of instruments in the ordinary course of
business.
7.2.4. Loans and Investments.
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time make or suffer to remain outstanding any loan
or advance to, or purchase, acquire or own any stock, bonds, notes or securities
of, or any partnership interest (whether general or limited) or limited
liability company interest in, or any other debt or equity investment or
interest in, or make any capital contribution to, any other Person, or agree,
become or remain liable to do any of the foregoing, or become or be liable in
respect of any Guaranties (other than those permitted under clauses (i), (iii),
(iv) and (v) of Section 7.2.3) (collectively the foregoing shall be referred to
as "Investments"), except:
-44-
(i) trade credit extended on usual and customary terms in the
ordinary course of business;
(ii) advances to employees to meet expenses incurred by such
employees in the ordinary course of business;
(iii) Permitted Investments;
(iv) Investments in other Loan Parties;
(v) Investments made in connection with the PNC Receivables
Purchase Facility;
(vi) Investments in Foreign Subsidiaries made on and after May
29, 2002 by the Loan Parties not referred to in and permitted under clause(s)
(viii) and/or (ix) of this Section 7.2.4, provided that the aggregate amount
thereof plus the aggregate amount of investments described in clause (xi) of
this Section 7.2.4 may not exceed $125,000,000;
(vii) Securities received for services rendered in the ordinary
course of business;
(viii) Investments (which may include reasonable aggregations)
existing as of the Closing Date listed on Schedule 7.2.4;
(ix) Investments made to acquire assets or stock in
consummation of, and as part of the consideration for, Permitted Acquisitions
(including cash payments (or intercompany loans to make such payments) made
after the date of a Permitted Acquisition in repayment of a seller note
delivered as part of the consideration for a Permitted Acquisition);
(x) acquisitions of additional ownership interests in
Subsidiaries which are not wholly owned to the extent paid for with common
stock; and
(xi) Investments in Persons other than Foreign Subsidiaries in
an amount not to exceed $20,000,000 in the aggregate.
7.2.5. Dividends and Related Distributions.
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, make or pay, or agree to become or remain liable to make or
pay, any dividend or other distribution of any nature (whether in cash,
property, securities or otherwise) on account of or in respect of its shares of
capital stock, partnership interests or limited liability company interests on
account of the purchase, redemption, retirement or acquisition of its shares of
capital stock (or warrants, options or rights therefor), partnership interests
or limited liability company interests, except
(1) dividends or other distributions payable to another Loan
Party and dividends paid ratably to its shareholders by a Subsidiary which is
not wholly-owned by a Loan Party;
-45-
(2) dividends by the Borrower that are paid in capital stock
of the Borrower;
(3) dividends, and repurchases of stock from employees and
directors, made by the Borrower, provided that (a) the amount of such dividends
shall not exceed the Dividend Limitation (computed with respect to each such
dividend immediately prior to the payment of such dividend without giving effect
thereto) and (b) at the time of Borrower's making any dividend payment and after
giving effect to such dividend, there shall exist no Potential Default or Event
of Default and that the Loan Parties provide satisfactory evidence to such
effect on their next Compliance Certificate;
(4) redemption of the non-voting common stock of Softline
Consulting and Integrators, Inc., the obligation of which is described and
characterized in Schedule 7.2.1 in an amount not to exceed $15,000,000;
(5) Dividends payable by Subsidiaries of the Loan Parties
which are not Loan Parties to the Loan Parties or other Subsidiaries of the Loan
Parties; and
(6) repurchases of stock of the Borrower, provided that (a)
the aggregate amount of such repurchases made on and after May 29, 2002 shall
not exceed $115,000,000, (b) at the time the Borrower makes the repurchase and
after giving effect to such repurchase, there shall exist no Potential Default
or Event of Default and (c) the Loan Parties shall indicate the aggregate amount
of such repurchases on their next Compliance Certificate.
7.2.6. Liquidations, Mergers, Consolidations, Acquisitions.
7.2.6.1 Generally
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a
party to any merger or consolidation, or acquire by purchase, lease or otherwise
all or substantially all of the assets or capital stock of any other Person,
provided that in each case, the Borrower must survive any merger, consolidation
of acquisition and
(1) Among Subsidiaries and Borrower. Any Subsidiary of the
Borrower may consolidate or merge or liquidate into the Borrower or any
Subsidiary, except that a Loan Party may not merge, consolidate or liquidate
into a Subsidiary which is not a Loan Party, and
(2) With Other Persons subject to Section 7.2.6.2, any Loan
Party or any Foreign Subsidiary may acquire, whether by purchase or by merger
(provided that in a transaction involving a Loan Party such Loan Party shall
survive), (A) all or substantially all of the ownership interests of another
Person or (B) substantially all of assets of another Person or of a business or
division of another Person (each a "Permitted Acquisition"), provided that each
of the following requirements is met:
(i) if the Loan Parties are acquiring the ownership
interests in such Person and such Person is a Subsidiary which is not a Foreign
Subsidiary, such Person shall
-46-
execute a Guarantor Joinder and join this Agreement as a Guarantor pursuant to
Section 10.18 [Joinder of Guarantors] on or before the date of such Permitted
Acquisition if the total consideration in connection with such Permitted
Acquisition is $25,000,000 or more and within thirty (30) days after such
Permitted Acquisition if the total consideration in connection with such
Permitted Acquisition is less than $25,000,000;
(ii) the board of directors or other equivalent governing body
of such Person shall have approved such Permitted Acquisition, except in the
case of an acquisition of stock of such Person, other than by tender offer, with
respect to which the board of directors of such Person have not advised against
or disapproved such acquisition;
(iii) the business acquired, or the business conducted by the
Person whose ownership interests are being acquired, as applicable, shall be
substantially the same as one or more line or lines of business conducted by the
Loan Parties or their Subsidiaries and shall comply with Section 7.2.10
[Continuation of or Change in Business];
(iv) no Potential Default or Event of Default shall exist
immediately prior to and after giving effect to such Permitted Acquisition;
(v) the representations and warranties under this Agreement
are true and correct as of the date of such Permitted Acquisition;
(vi) the Borrower shall provide all documents and/or
information reasonably requested by the Banks, except for documents and/or
information that are subject to privilege (with reasonable consideration to
waiver thereof if appropriate); and
(vii) the Borrower shall demonstrate that it shall be in pro
forma compliance with the covenants contained in Section 7.2 after giving effect
to such Permitted Acquisition by delivering to the Administrative Agent and the
Banks a certificate in the form of Exhibit 7.2.6 evidencing such compliance (A)
at least ten (10) Business Days prior to such Permitted Acquisition if both the
total consideration in connection with such Permitted Acquisition is greater
than or equal to $100,000,000 and the acquired business is a partnership or
employs partnership accounting, or (B) at least five (5) Business Days prior to
such Permitted Acquisition if such Permitted Acquisition is not a Permitted
Acquisition described in clause (A) of this clause (vii). Such computation shall
include:
(a) EBITDA and other income and expense items and
results of operations for a period identical to the period of a fiscal quarter
or quarters for which financial statements and related compliance certificate
were most recently delivered under Section 7.3.1 or 7.3.2, as the case may be,
and Section 7.3.3;
(b) for any Permitted Acquisition, Indebtedness as
of the date of such Permitted Acquisition (including Indebtedness or other
liabilities assumed or incurred in connection with such Permitted Acquisition).
In connection with calculations of the covenants in Sections 7.2.16 [Maximum
Leverage Ratio] through 7.2.18 [Minimum Net Worth], the Loan Parties shall
include income statement and other cash flow statement items of the acquired
Person or business for periods prior to the date of the
-47-
acquisition and shall have delivered the financial statements of such Person or
business (which shall not be older than 135 days prior to the date of such
acquisition (or 180 days in connection with the KCA Acquisition)) and pro forma
combined computations of such covenants to the Banks and the Borrower delivers
copies of such statements to the Administrative Agent and the Banks together
with pro forma combined statements and the Borrower certifies to the
Administrative Agent for the benefit of the Banks that it has reviewed such
financial statements and either (i) the assets, liabilities, shareholders
equity, income and expenses and other components of such statements are computed
consistently with the corresponding items of the Borrower and its Subsidiaries
in all material respects (subject to the adjustments described in Section
7.2.6.2 and Schedule 7.2.6), or (ii) to the extent there are differences in such
computations that result in covenant levels more favorable (and not less
favorable) to Borrower than they would be if such differences did not exist, the
Borrower shall adjust in its pro forma combined financial statements to
eliminate such differences (subject to the adjustments described in Section
7.2.6.2 and Schedule 7.2.6, to the extent the Permitted Acquisition is an
Xxxxxxxx Acquisition or an Acquired Xxxxxxxx Business); and
(c) The Applicable Margin and the Applicable
Commitment Fee Rate which shall be effective on and after the date of such
Permitted Acquisition after giving effect thereto.
(viii) the EBITDA of the acquired Person or business
during the 4-quarter period prior to the date of acquisition referred to in
clause (vii)(a) (above) of this Section shall be greater than zero (except that
such 4-quarter EBITDA of any single acquired Person may be less than zero
provided such 4-quarter EBITDA equals or exceeds negative $15,000,000 and
provided that in any fiscal year the aggregate of the 4-quarter EBITDA of all
Persons acquired under this parenthetical (i.e. with negative 4-quarter EBITDA)
shall exceed negative $30,000,000), and the Borrower shall demonstrate the same
in pro forma compliance certificate that the Borrower delivers pursuant to such
clause (vii)(a).
7.2.6.2 Xxxxxxxx Acquisition.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, acquire an interest in the consulting business or assets (as
defined by GAAP) or any other assets (as defined by GAAP) of Xxxxxx Xxxxxxxx LLP
("Xxxxxx Xxxxxxxx") or its subsidiaries, whether directly or indirectly (e.g.
through formation of, merger with, or acquisition or purchase from, any Persons
which acquire such assets) (the "Xxxxxxxx Acquisition", it is acknowledged that
upon satisfaction of all of the conditions set forth in this Section 7.2.6.2 and
of Section 7.2.6.1, the Xxxxxxxx Acquisition shall constitute a "Permitted
Acquisition") unless:
(i) the Borrower shall make the deliveries referred to
in subclause (v) of clause (2) of Section 7.2.6.1 at least ten (10) Business
Days prior to the date of such Xxxxxxxx Acquisition and shall include with such
delivery copies of the current draft documents relating to the Xxxxxxxx
Acquisition,
(ii) the Borrower shall have complied with each of the
requirements contained in clause (2) (and subclauses (i) through (viii) thereof)
of Section 7.2.6.1 except that (a) the Borrower may compute its EBITDA according
to the procedures and subject
-48-
to the adjustments set forth on Schedule 7.2.6 and shall be required to deliver
only those historical financial statements of Xxxxxx Xxxxxxxx listed on such
Schedule 7.2.6 (which statements include all historical financial statements
delivered by Xxxxxx Xxxxxxxx to the Borrower),
(iii) a Supermajority of the Banks, in their sole
discretion, shall have approved of such Xxxxxxxx Acquisition; and
(iv) on or before the closing of such Xxxxxxxx
Acquisition, (1) all required approvals shall have been obtained, including
approvals of any Official Body and such acquisition shall be consummated in
accordance with applicable Law and the acquisition documents, and (2) the
Borrower shall have delivered to the Administrative Agent a copy of each
opinion, report, and other document required to be delivered pursuant to the
acquisition documents (or when available drafts thereof for review prior to
closing).
7.2.7. Dispositions of Assets or Subsidiaries.
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer
or dispose of, voluntarily or involuntarily, any of its properties or assets,
tangible or intangible (including sale, assignment, discount or other
disposition of accounts, contract rights, chattel paper, equipment or general
intangibles with or without recourse or of capital stock, shares of beneficial
interest, partnership interests or limited liability company interests of a
Subsidiary of such Loan Party), except:
(i) transactions involving the sale of inventory in the
ordinary course of business;
(ii) any sale, transfer or lease of assets in the ordinary
course of business which are no longer necessary or required in the conduct of
such Loan Party's or such Subsidiary's business;
(iii) any sale, transfer or lease of assets by any Subsidiary of
such Loan Party to another Loan Party or by any Foreign Subsidiary to another
Foreign Subsidiary;
(iv) any sale, transfer or lease of assets in the ordinary
course of business which are replaced by substitute assets acquired or leased;
(v) transfers of receivables and related assets pursuant to
the PNC Receivables Purchase Facility;
(vi) any sale, transfer or lease of assets, including those
pursuant to asset securitizations, which is approved by the Required Banks; and
(vii) other sales or dispositions provided that if the book
value of the assets sold or disposed in any fiscal year of the Borrower shall
exceed ten percent (10%) of the total assets of the Borrower as of the first day
of such fiscal year, then the Borrower shall reduce the Revolving Credit
Commitments by an amount equal to or greater than the amount of such
-49-
excess and such reduction of Revolving Credit Commitments shall be subject to
the requirements of Section 2.7.
7.2.8. Affiliate Transactions.
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, enter into or carry out any transaction (including
purchasing property or services from or selling property or services to any
Affiliate of any Loan Party if such Affiliate is not a Loan Party) with an
Affiliate, but excluding the transactions (the "Excluded Transactions") listed
in the numbered clauses below, unless such transaction (A) is not otherwise
prohibited by this Agreement, (B) is entered into upon fair and reasonable
arm's-length terms and conditions, (C) is in accordance with all applicable Laws
and (D) is fully disclosed to the Administrative Agent if such transaction
involves consideration or other payments which exceed $25,000,000. The Excluded
Transactions include the following:
(1) transactions exclusively between or among Subsidiaries and
Affiliates which are not Loan Parties;
(2) transactions exclusively among Loan Parties;
(3) transactions under the Separation Agreements, as may be
amended in a manner not prohibited by Section 7.2.14;
(4) subcontracts for services among the Borrower and its
Subsidiaries;
(5) Investments described in and permitted under clause (ii),
(iv), (v), (vi), (vii) or (viii) of Section 7.2.4;
(6) administrative overhead costs reasonably allocated among the
Borrower and its Subsidiaries; and
(7) any transaction between any Loan Party, Subsidiary or
Affiliate and Cisco provided that such transaction is entered into upon fair and
reasonable arm's-length terms and conditions and is in accordance with all
applicable Law.
7.2.9. Subsidiaries, Partnerships and Joint Ventures.
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, own or create directly or indirectly any Subsidiaries other
than (i) any Subsidiary which has joined this Agreement as Guarantor on the
Closing Date; (ii) any Subsidiary formed after the Closing Date which joins this
Agreement as a Guarantor pursuant to Section 10.18 [Joinder of Guarantors],
(iii) Education Information Management Systems LLC and KCI Funding Corporation,
and (iii) any Foreign Subsidiary.
7.2.10. Continuation of or Change in Business.
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, engage in any business other than the same business as
conducted and operated
-50-
by such Loan Party or Subsidiary during the present fiscal year and other lines
of consulting services businesses which are substantially the same or
substantially similar as one or more lines of business then conducted by the
Loan Parties and their Subsidiaries.
7.2.11. Plans and Benefit Arrangements.
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to:
(i) fail to satisfy the minimum funding requirements of ERISA
and the Internal Revenue Code with respect to any Plan;
(ii) request a minimum funding waiver from the Internal
Revenue Service with respect to any Plan;
(iii) engage in a Prohibited Transaction with any Plan, Benefit
Arrangement or Multiemployer Plan which, alone or in conjunction with any other
circumstances or set of circumstances resulting in liability under ERISA, could
reasonably be expected to constitute a Material Adverse Change;
(iv) permit the aggregate actuarial present value of all
benefit liabilities (whether or not vested) under each Plan, determined on a
plan termination basis, as disclosed in the most recent actuarial report
completed with respect to such Plan, to exceed, as of any actuarial valuation
date, the fair market value of the assets of such Plan;
(v) fail to make when due any contribution to any
Multiemployer Plan that the Borrower may be required to make under any agreement
relating to such Multiemployer Plan, or any Law pertaining thereto;
(vi) withdraw (completely or partially) from any Multiemployer
Plan or withdraw (or be deemed under Section 4062(e) of ERISA to withdraw) from
any Multiple Employer Plan, where any such withdrawal is likely to result in a
material liability of the Borrower;
(vii) terminate, or institute proceedings to terminate, any
Plan, where such termination is likely to result in a material liability to the
Borrower;
(viii) make any amendment to any Plan with respect to which
security is required under Section 307 of ERISA; or
(ix) fail to give any and all notices and make all disclosures
and governmental filings required under ERISA or the Internal Revenue Code,
where such failure could reasonably be expected to result in a Material Adverse
Change.
7.2.12. Fiscal Year.
The Borrower shall not, and shall not permit any Subsidiary of
the Borrower to, change its fiscal year from the twelve-month period beginning
July 1 and ending
-51-
June 30, other than changes to fiscal years ending on September 30, December 31
or March 31 and other than changes to the fiscal year of a Foreign Subsidiary
for the purpose of facilitating the consolidation of such Foreign Subsidiary's
financial statements with those of the Borrower.
7.2.13. Changes in Organizational Documents.
The Borrower shall not amend in any respect its certificate of
incorporation (including any provisions or resolutions relating to capital
stock) or by-laws without providing at least fifteen (15) calendar days' prior
written notice to the Administrative Agent and the Banks and, in the event such
change would be materially adverse to the Banks as reasonably determined by the
Administrative Agent in its sole discretion, obtaining the prior written consent
of the Required Banks.
7.2.14. Amendments to and Termination of Separation Agreements and Cisco
Agreements.
Borrower and Guarantor will not modify or terminate any of their
Separation Agreements or Cisco Agreements in any way which may materially
adversely affect the business of the Borrower or any Guarantor.
7.2.15. Negative Pledges Covenants.
Each of the Loan Parties covenants and agrees that it shall not,
and shall not permit any of its Subsidiaries to, enter into any agreement,
promise commitment or other undertaking with any Person which, conditionally or
unconditionally, prohibits, or limits in any way the right of, any of the Loan
Parties or their Subsidiaries from granting any Liens to the Administrative
Agent or the Banks in the stock or other ownership interests of any Foreign
Subsidiaries (or from exercising their rights to transfer or dispose of such
stock or interests under such Liens) or which imposes any conditions upon such a
grant of Liens or the exercise by the Administrative Agent or the Banks of their
rights under such Liens.
7.2.16. Maximum Leverage Ratio.
The Loan Parties shall not at any time permit the Leverage Ratio
to exceed (a) 2.25 to 1.0 on the effective date of any Permitted Acquisition
(complying with such ratio shall be a condition to the making of such Permitted
Acquisition) and (b) 2.50 to 1.0 at all other times.
7.2.17. Adjusted Fixed Charge Coverage Ratio.
The Loan Parties shall not at any time permit the ratio of (i)
Consolidated EBITDA plus rent expense, to (ii) the sum of interest expense, rent
expense, cash dividends, scheduled principal payments on Indebtedness (excluding
payments under this Agreement and under the PNC Receivables Purchase Facility),
including capitalized leases and cash taxes paid, with respect to each item
referred to in clauses (i) and (ii) for the four quarters then ending, to be
less than 1.25 to 1.0.
-52-
7.2.18. Minimum Net Worth.
The Borrower shall not at any time permit Consolidated Net
Worth to be less than Base Net Worth.
7.3 Reporting Requirements.
The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Revolving Credit Loans and interest thereon,
satisfaction of all of the Loan Parties' other Obligations hereunder and under
the other Loan Documents and termination of the Revolving Credit Commitments,
the Loan Parties will furnish or cause to be furnished to the Administrative
Agent and each of the Banks:
7.3.1. Quarterly Financial Statements.
As soon as available and in any event within forty-five
(45) calendar days after the end of each of the first three fiscal quarters in
each fiscal year financial statements of the Borrower and its Subsidiaries,
consisting of a consolidated balance sheet as of the end of such fiscal quarter,
related consolidated statements of income for the fiscal quarter then ended and
the fiscal year through that date, and related consolidated statements of cash
flows for the fiscal year through that date and a consolidated income statement
for the Loan Parties (excluding all Subsidiaries of the Borrower which are not
Loan Parties), all in reasonable detail and certified (subject to normal
year-end audit adjustments) by the Chief Executive Officer, President or Chief
Financial Officer of the Borrower as having been prepared in accordance with
GAAP, consistently applied, and setting forth in comparative form the respective
financial statements for the corresponding date and period in the previous
fiscal year.
7.3.2. Annual Financial Statements.
As soon as available and in any event within ninety (90)
days after the end of each fiscal year of the Borrower, (1) financial statements
of the Borrower consisting of a consolidated balance sheet as of the end of such
fiscal year, and related consolidated statements of income, stockholders' equity
and cash flows for the fiscal year then ended, all in reasonable detail and
setting forth in comparative form the financial statements as of the end of and
for the preceding fiscal year, and certified by independent certified public
accountants of nationally recognized standing satisfactory to the Administrative
Agent and (2) and unaudited consolidated income statement for the Loan Parties
(excluding all Subsidiaries of the Borrower which are not Loan Parties) for the
fiscal year then ended. The certificate or report of accountants referred to in
clause (1) of the preceding sentence shall be free of qualifications (other than
any consistency qualification that may result from a change in the method used
to prepare the financial statements as to which such accountants concur) and
shall not indicate the occurrence or existence of any event, condition or
contingency which would materially impair the prospect of payment or performance
of any covenant, agreement or duty of any Loan Party under any of the Loan
Documents. The Loan Parties shall deliver with such financial statements and
certification by their accountants a letter of such accountants to the
Administrative Agent and the Banks substantially to the effect that, based upon
their ordinary and customary examination of the affairs of the Borrower,
performed in connection with the preparation of such consolidated
-53-
financial statements, and in accordance with generally accepted auditing
standards, they are not aware of the existence of any condition or event which
constitutes an Event of Default or Potential Default or, if they are aware of
such condition or event, stating the nature thereof and confirming the
Borrower's calculations with respect to the certificate to be delivered pursuant
to Section 8.3.3 [Certificate of the Borrower] with respect to such financial
statements
7.3.3. Certificate of the Borrower.
Concurrently with the financial statements of the Borrower
furnished to the Administrative Agent and to the Banks pursuant to Sections
7.3.1 [Quarterly Financial Statements] and 7.3.2 [Annual Financial Statements],
a certificate of the Borrower signed by the Chief Executive Officer, President,
Treasurer or Chief Financial Officer of the Borrower, in the form of Exhibit
7.3.3 (each a "Compliance Certificate"), to the effect that, except as described
pursuant to Section 7.3.5 [Notice of Default], (i) the representations and
warranties of the Borrower contained in Section 5.1 [Representations and
Warranties] and in the other Loan Documents are true on and as of the date of
such certificate with the same effect as though such representations and
warranties had been made on and as of such date (except representations and
warranties which expressly relate solely to an earlier date or time) and the
Loan Parties have performed and complied with all covenants and conditions
hereof, (ii) no Event of Default or Potential Default exists and is continuing
on the date of such certificate and (iii) containing calculations in sufficient
detail to demonstrate compliance as of the date of such financial statements
with all financial covenants contained in Section 7.2 [Negative Covenants].
7.3.4. Annual List of Insurance
Concurrently with the financial statements of the Borrower
furnished to the Administrative Agent and to the Banks pursuant to 7.3.2 [Annual
Financial Statements], a certificate of the Borrower signed by the Chief
Executive Officer, President or Chief Financial Officer of the Borrower,
attaching a list of the insurance coverage of the Loan Parties.
7.3.5. Notice of Default.
Promptly after any officer of any Loan Party has learned of the
occurrence of an Event of Default or Potential Default, a certificate signed by
the Chief Executive Officer, President or Chief Financial Officer of such Loan
Party setting forth the details of such Event of Default or Potential Default
and the action which the such Loan Party proposes to take with respect thereto.
7.3.6. Notice of Litigation.
Promptly after the commencement thereof, notice of all actions,
suits, proceedings or investigations before or by any Official Body or any other
Person against any Loan Party or Subsidiary of any Loan Party which involve a
claim or series of claims in excess of $10,000,000 or which could be reasonably
expected to result in a Material Adverse Change.
-54-
7.3.7. Notice of Rating or Change in Debt Rating.
The Borrower shall notify the Administrative Agent and the
Banks if the Borrower or its Subsidiaries or their Indebtedness shall be rated
by either Xxxxx'x or Standard & Poor's (and after any such Debt Rating shall
have been made, of any change in such Debt Rating) within two (2) Business Days
after Standard & Poor's or Xxxxx'x, as the case may be, announces such rating
(or change). Borrower will deliver together with such notice a copy of any
written notification which Borrower received from the applicable rating agency
regarding such Debt Rating or change.
7.3.8. Budgets, Forecasts, Other Reports and Information.
Promptly upon their becoming available to the Borrower:
(i) any management letters submitted to the Borrower by
independent accountants in connection with any annual, interim or special audit,
(ii) any reports, notices or proxy statements generally
distributed by the Borrower to its stockholders on a date no later than the date
supplied to such stockholders,
(iii) regular or periodic reports, including Forms 10-K, 10-Q
and 8-K, registration statements and prospectuses, filed by the Borrower with
the Securities and Exchange Commission,
(iv) a copy of any order in any proceeding to which the
Borrower or any of its Subsidiaries is a party issued by any Official Body which
could reasonably be expected to result in a Material Adverse Change, and
(v) such other reports and information as any of the Banks
may from time to time reasonably request. The Borrower shall also notify the
Banks upon its becoming aware of the enactment or adoption of any Law which
could reasonably be expected to result in a Material Adverse Change.
7.3.9. Notices Regarding Plans and Benefit Arrangements.
7.3.9.1 Certain Events.
Promptly upon becoming aware of the occurrence thereof,
notice (including the nature of the event and, when known, any action taken or
threatened by the Internal Revenue Service or the PBGC with respect thereto) of:
(i) any Reportable Event with respect to the Borrower
or any other member of the ERISA Group,
(ii) any Prohibited Transaction which could subject the
Borrower or any other member of the ERISA Group to a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the
Internal Revenue Code in connection with any Plan, any Benefit Arrangement or
any trust created thereunder,
-55-
(iii) any assertion of material withdrawal liability with
respect to any Multiemployer Plan,
(iv) any partial or complete withdrawal from a Multiemployer
Plan by the Borrower or any other member of the ERISA Group under Title IV of
ERISA (or assertion thereof), where such withdrawal is likely to result in
material withdrawal liability,
(v) any cessation of operations (by the Borrower or any
other member of the ERISA Group) at a facility in the circumstances described in
Section 4062(e) of ERISA,
(vi) withdrawal by the Borrower or any other member of the
ERISA Group from a Multiple Employer Plan,
(vii) a failure by the Borrower or any other member of the
ERISA Group to make a payment to a Plan required to avoid imposition of a Lien
under Section 302(f) of ERISA,
(viii) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA, or
(ix) any change in the actuarial assumptions or funding
methods used for any Plan, where the effect of such change is to materially
increase or materially reduce the unfunded benefit liability or obligation to
make periodic contributions.
7.3.9.2 Notices of Involuntary Termination and Annual
Reports.
Promptly after receipt thereof, copies of (a) all notices
received by the Borrower of the PBGC's intent to terminate any Plan administered
or maintained by the Borrower, or to have a trustee appointed to administer any
such Plan; and (b) at the request of the Administrative Agent or any Bank each
annual report (IRS Form 5500 series) and all accompanying schedules, the most
recent actuarial reports, the most recent financial information concerning the
financial status of each Plan administered or maintained by the Borrower, and
schedules showing the amounts contributed to each such Plan by or on behalf of
the Borrower or any other member of the ERISA Group and each Schedule B
(Actuarial Information) to the annual report filed by the Borrower with the
Internal Revenue Service with respect to each such Plan.
7.3.9.3 Notice of Voluntary Termination.
Promptly upon the filing thereof, copies of any Form 5310, or
any successor or equivalent form to Form 5310, filed with the PBGC in connection
with the termination of any Plan.
-56-
8. DEFAULT
8.1 Events of Default.
An Event of Default shall mean the occurrence or existence of any one
or more of the following events or conditions (whatever the reason therefor and
whether voluntary, involuntary or effected by operation of Law):
8.1.1. Payments Under Loan Documents.
The Borrower shall fail to pay any principal of any Revolving
Credit Loan (including scheduled installments, mandatory prepayments or the
payment due at maturity whether by acceleration or otherwise) when due or shall
fail to pay any interest on any Revolving Credit Loan or any other amount owing
hereunder or under the other Loan Documents within three Business Days after
such interest or other amount becomes due in accordance with the terms hereof or
thereof;
8.1.2. Breach of Warranty.
Any representation or warranty made at any time by any of the
Loan Parties herein or by any of the Loan Parties in any other Loan Document, or
in any certificate, other instrument or statement furnished pursuant to the
provisions hereof or thereof, shall prove to have been false or misleading in
any material respect as of the time it was made or furnished;
8.1.3. Breach of Negative Covenants or Visitation Rights.
Any of the Loan Parties shall default in the observance or
performance of any covenant contained in Section 7.1.6 [Visitation Rights] or
Section 7.2 [Negative Covenants] and, if the default relates to any covenant in
Section 7.2.1, 7.2.2, 7.2.3, 7.2.8, and 7.2.9 and the dollar amount of such
default plus any other existing default under such sections outstanding does not
exceed $25,000,000, such default shall continue unremedied for a period of
thirty (30) days after any officer of any Loan Party becomes aware of the
occurrence thereof;
8.1.4. Breach of Other Covenants.
Any of the Loan Parties shall default in the observance or
performance of any other covenant, condition or provision hereof or of any other
Loan Document and such default shall continue unremedied for a period of thirty
(30) days after any officer of any Loan Party becomes aware of the occurrence
thereof;
8.1.5. Defaults in Other Agreements or Indebtedness.
A default or event of default shall occur at any time under the
terms of any other agreement involving borrowed money or the extension of credit
or any other Indebtedness under which any Loan Party or Subsidiary of any Loan
Party may be obligated as a borrower or guarantor in excess of $15,000,000 in
the aggregate, and such breach, default or event of default consists of the
failure to pay (beyond any period of grace permitted with respect thereto,
whether waived or not) any indebtedness when due (whether at stated maturity, by
acceleration or
-57-
otherwise) or if such breach or default permits or causes the acceleration of
any indebtedness (whether or not such right shall have been waived) or the
termination of any Revolving Credit Commitment to lend;
8.1.6. Final Judgments or Orders.
Any final judgments or orders for the payment of money in
excess of $15,000,000 in the aggregate shall be entered against any Loan Party
by a court having jurisdiction in the premises, which judgment is not
discharged, vacated, bonded or stayed pending appeal within a period of thirty
(30) days from the date of entry;
8.1.7. Loan Document Unenforceable.
Any of the Loan Documents shall cease to be legal, valid and
binding agreements enforceable against the party executing the same or such
party's successors and assigns (as permitted under the Loan Documents) in
accordance with the respective terms thereof or shall in any way be terminated
(except in accordance with its terms) or become or be declared ineffective or
inoperative or shall in any way be challenged or contested by the Loan Parties
or cease to give or provide the respective Liens, security interests, rights,
titles, interests, remedies, powers or privileges intended to be created
thereby;
8.1.8. Notice of Lien or Assessment.
A notice of Lien or assessment in excess of $10,000,000 which
is not a Permitted Lien is filed of record with respect to all or any part of
any of the Loan Parties' or any of their Subsidiaries' assets by the United
States, or any department, agency or instrumentality thereof, or by any state,
county, municipal or other governmental agency, including the PBGC, or any taxes
or debts owing at any time or times hereafter to any one of these becomes
payable and the same is not paid within thirty (30) days after the same becomes
payable;
8.1.9. Insolvency.
Any Loan Party or any Material Subsidiary or, within a 12-month
period, any Material Aggregate of Non-Material Subsidiaries ceases to be Solvent
or admits in writing its inability to, pay its debts as they mature;
8.1.10. Events Relating to Plans and Benefit Arrangements.
Any of the following occurs: (i) any Reportable Event, which
the Administrative Agent determines in good faith constitutes grounds for the
termination of any Plan by the PBGC or the appointment of a trustee to
administer or liquidate any Plan, shall have occurred and be continuing; (ii)
proceedings shall have been instituted or other action taken to terminate any
Plan, or a termination notice shall have been filed with respect to any Plan
covered by Title IV of ERISA; (iii) a trustee shall be appointed to administer
or liquidate any Plan covered by Title IV of ERISA; (iv) the PBGC shall give
notice of its intent to institute proceedings to terminate any Plan or Plans or
to appoint a trustee to administer or liquidate any Plan; and, in the case of
the occurrence of (i), (ii), (iii) or (iv) above, the Administrative Agent
determines in good faith that the amount of the Borrower's liability is likely
to exceed 10% of its
-58-
Consolidated Net Worth; (v) the Borrower or any member of the ERISA Group shall
fail to make any contributions when due to a Plan or a Multiemployer Plan; (vi)
the Borrower or any other member of the ERISA Group shall make any amendment to
a Plan with respect to which security is required under Section 307 of ERISA;
(vii) the Borrower or any other member of the ERISA Group shall withdraw
completely or partially from a Multiemployer Plan; or (viii) the Borrower or any
other member of the ERISA Group shall withdraw (or shall be deemed under Section
4062(e) of ERISA to withdraw) from a Multiple Employer Plan and, with respect to
any of the events specified in (v), (vi), (vii) or (viii), the Administrative
Agent determines in good faith that any such occurrence would be reasonably
likely to materially and adversely affect the total enterprise represented by
the Borrower and the other members of the ERISA Group;
8.1.11. Cessation of Business.
Any Loan Party or any Material Subsidiary or, within a 12-month
period, any Material Aggregate of Non-Material Subsidiaries ceases to conduct
its business as contemplated, except as expressly permitted under Section 7.2.6
[Liquidations, Mergers, Etc.] or 7.2.7 [Dispositions of Assets or Subsidiaries],
or any Loan Party or any Material Subsidiary or, within a 12-month period, any
Material Aggregate of Non-Material Subsidiaries is enjoined, restrained or in
any way prevented by court order from conducting all or any material part of its
business and such injunction, restraint or other preventive order is not
dismissed within thirty (30) days after the entry thereof;
8.1.12. Change of Control.
(i) Any person or group of persons (within the meaning of
Sections 13(d) or 14(a) of the Securities Exchange Act of 1934, as amended)
shall after the date hereof have acquired beneficial ownership of (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under said Act) 30% or more of the voting capital stock of the Borrower; or (ii)
within a period of six (6) consecutive calendar months, individuals who were a
majority of the officers serving on the Executive Committee of the Borrower on
the first day of such period shall cease to serve on the Executive Committee of
the Borrower and such terminations or departures materially and adversely affect
the business of the Borrower and any Guarantor taken as a whole.
8.1.13. Involuntary Proceedings.
A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
any Loan Party or Material Subsidiary of a Loan Party in an involuntary case
under any applicable bankruptcy, insolvency, reorganization or other similar law
now or hereafter in effect, or for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator, conservator (or similar official) of
any Loan Party or Subsidiary of a Loan Party for any substantial part of its
property, or for the winding-up or liquidation of its affairs, and such
proceeding shall remain undismissed or unstayed and in effect for a period of
forty-five (45) consecutive days or such court shall enter a decree or order
granting any of the relief sought in such proceeding; or
-59-
8.1.14. Voluntary Proceedings.
Any Loan Party or Material Subsidiary of a Loan Party shall
commence a voluntary case under any applicable bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect, shall consent to
the entry of an order for relief in an involuntary case under any such law, or
shall consent to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator, conservator (or other similar
official) of itself or for any substantial part of its property or shall make a
general assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any action in furtherance of any of
the foregoing.
8.2 Consequences of Event of Default.
8.2.1. Events of Default Other Than Bankruptcy, Insolvency or
Reorganization Proceedings.
If an Event of Default specified under Sections 8.1.1
through 8.1.12 shall occur and be continuing, the Banks and the Administrative
Agent shall be under no further obligation to make Revolving Credit Loans and
the Administrative Agent may, and upon the request of the Required Banks, shall
by written notice to the Borrower, take one or both of the following actions:
(i) terminate the Revolving Credit Commitments and thereupon the Revolving
Credit Commitments shall be terminated and of no further force and effect, or
(ii) declare the unpaid principal amount of the Revolving Credit Loans then
outstanding and all interest accrued thereon, any unpaid fees and all other
Indebtedness of the Borrower to the Banks hereunder and thereunder to be
forthwith due and payable, and the same shall thereupon become and be
immediately due and payable to the Administrative Agent for the benefit of each
Bank without presentment, demand, protest or any other notice of any kind, all
of which are hereby expressly waived; and
8.2.2. Bankruptcy, Insolvency or Reorganization Proceedings.
If an Event of Default specified under Section 8.1.13
[Involuntary Proceedings] or 8.1.14 [Voluntary Proceedings] shall occur, the
Revolving Credit Commitments shall automatically terminate and be of no further
force and effect, the Banks shall be under no further obligations to make
Revolving Credit Loans hereunder and the unpaid principal amount of the
Revolving Credit Loans then outstanding and all interest accrued thereon, any
unpaid fees and all other Indebtedness of the Borrower to the Banks hereunder
and thereunder shall be immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived;
and
8.2.3. Set-off.
If an Event of Default shall occur and be continuing, any
Bank to whom any Obligation is owed by any Loan Party hereunder or under any
other Loan Document or any participant of such Bank which has agreed in writing
to be bound by the provisions of Section 9.13 [Equalization of Banks] and any
branch, Subsidiary or Affiliate of such Bank or participant anywhere in the
world shall have the right, in addition to all other rights and remedies
available to it, without notice to such Loan Party, to set-off against and apply
to the then unpaid
-60-
balance of all the Revolving Credit Loans and all other Obligations of the
Borrower and the other Loan Parties hereunder or under any other Loan Document
any debt owing to, and any other funds held in any manner for the account of,
the Borrower or such other Loan Party by such Bank or participant or by such
branch, Subsidiary or Affiliate, including all funds in all deposit accounts
(whether time or demand, general or special, provisionally credited or finally
credited, or otherwise) now or hereafter maintained by the Borrower or such
other Loan Party for its own account (but not including funds held in custodian
or trust accounts) with such Bank or participant or such branch, Subsidiary or
Affiliate. Such right shall exist whether or not any Bank or the Administrative
Agent shall have made any demand under this Agreement or any other Loan
Document, whether or not such debt owing to or funds held for the account of the
Borrower or such other Loan Party is or are matured or unmatured and regardless
of the existence or adequacy of any collateral, Guaranty or any other security,
right or remedy available to any Bank or the Administrative Agent; and
8.2.4. Suits, Actions, Proceedings.
If an Event of Default shall occur and be continuing, and whether
or not the Administrative Agent shall have accelerated the maturity of Revolving
Credit Loans pursuant to any of the foregoing provisions of this Section 8.2,
the Administrative Agent or any Bank, if owed any amount with respect to the
Revolving Credit Loans, may proceed to protect and enforce its rights by suit in
equity, action at law and/or other appropriate proceeding, whether for the
specific performance of any covenant or agreement contained in this Agreement or
the other Loan Documents and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of the Administrative Agent or such Bank; and
8.2.5. Application of Proceeds.
From and after the date on which the Administrative Agent has
taken any action pursuant to this Section 8.2 and until all Obligations of the
Loan Parties have been paid in full, any and all proceeds received by the
Administrative Agent from the exercise of any other remedy by the Administrative
Agent, shall be applied as follows:
(i) first, to reimburse the Administrative Agent and the Banks
for reasonable out-of-pocket costs, expenses and disbursements, including
reasonable attorneys' and paralegals' fees and legal expenses, incurred by the
Administrative Agent or the Banks in connection with collection of any
Obligations of any of the Loan Parties under any of the Loan Documents;
(ii) second, to the repayment of all Indebtedness then due and
unpaid of the Loan Parties to the Banks incurred under this Agreement or any of
the other Loan Documents, whether of principal, interest, fees, expenses or
otherwise, in such manner as the Administrative Agent may determine in its
discretion; and
(iii) the balance, if any, as required by Law.
-61-
8.2.6. Other Rights and Remedies.
In addition to all of the rights and remedies contained in
this Agreement or in any of the other Loan Documents, the Administrative Agent
shall have all of the rights and remedies available to it under applicable Law,
all of which rights and remedies shall be cumulative and non-exclusive, to the
extent permitted by Law. The Administrative Agent may, and upon the request of
the Required Banks shall, exercise all post-default rights granted to the
Administrative Agent and the Banks under the Loan Documents or applicable Law.
9. THE ADMINISTRATIVE AGENT
9.1 Appointment.
Each Bank hereby irrevocably designates, appoints and authorizes
JPMorgan to act as Administrative Agent for such Bank under this Agreement and
to execute and deliver or accept on behalf of each of the Banks the other Loan
Documents. Each Bank hereby irrevocably authorizes, and each holder of any
Revolving Credit Note by the acceptance of a Revolving Credit Note shall be
deemed irrevocably to authorize, the Administrative Agent to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and any other instruments and agreements referred to herein, and to exercise
such powers and to perform such duties hereunder as are specifically delegated
to or required of the Administrative Agent by the terms hereof, together with
such powers as are reasonably incidental thereto. JPMorgan agrees to act as the
Administrative Agent on behalf of the Banks to the extent provided in this
Agreement.
9.2 Delegation of Duties.
The Administrative Agent may perform any of its duties hereunder by
or through agents or employees (provided such delegation does not constitute a
relinquishment of its duties as Administrative Agent) and, subject to Sections
9.5 [Reimbursement of Administrative Agent by Borrower, Etc.] and 9.6, shall be
entitled to engage and pay for the advice or services of any attorneys,
accountants or other experts concerning all matters pertaining to its duties
hereunder and to rely upon any advice so obtained.
9.3 Nature of Duties; Independent Credit Investigation.
The Administrative Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement and no implied covenants,
functions, responsibilities, duties, obligations, or liabilities shall be read
into this Agreement or otherwise exist. The duties of the Administrative Agent
shall be mechanical and administrative in nature; the Administrative Agent shall
not have by reason of this Agreement a fiduciary or trust relationship in
respect of any Bank; and nothing in this Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon the Administrative Agent
any obligations in respect of this Agreement except as expressly set forth
herein. Without limiting the generality of the foregoing, the use of the term
"agent" in this Agreement with reference to the Administrative Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent
-62-
contracting parties. Each Bank expressly acknowledges (i) that the
Administrative Agent has not made any representations or warranties to it and
that no act by the Administrative Agent hereafter taken, including any review of
the affairs of any of the Loan Parties, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Bank; (ii) that it
has made and will continue to make, without reliance upon the Administrative
Agent, its own independent investigation of the financial condition and affairs
and its own appraisal of the creditworthiness of each of the Loan Parties in
connection with this Agreement and the making and continuance of the Revolving
Credit Loans hereunder; and (iii) except as expressly provided herein, that the
Administrative Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Bank with any credit or other information
with respect thereto, whether coming into its possession before the making of
any Revolving Credit Loan or at any time or times thereafter.
9.4 Actions in Discretion of Administrative Agent; Instructions From the
Banks.
The Administrative Agent agrees, upon the written request of the
Required Banks, to take or refrain from taking any action of the type specified
as being within the Administrative Agent's rights, powers or discretion herein,
provided that the Administrative Agent shall not be required to take any action
which exposes the Administrative Agent to personal liability or which is
contrary to this Agreement or any other Loan Document or applicable Law. In the
absence of a request by the Required Banks, the Administrative Agent shall have
authority, in its sole discretion, to take or not to take any such action,
unless this Agreement specifically requires the consent of the Required Banks or
all of the Banks. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Banks, subject to Section 9.6
[Exculpatory Provisions, Etc.]. Subject to the provisions of Section 9.6, no
Bank shall have any right of action whatsoever against the Administrative Agent
as a result of the Administrative Agent acting or refraining from acting
hereunder in accordance with the instructions of the Required Banks, or in the
absence of such instructions, in the absolute discretion of the Administrative
Agent.
9.5 Reimbursement and Indemnification of Administrative Agent by the
Borrower.
The Borrower unconditionally agrees to pay or reimburse the
Administrative Agent and hold the Administrative Agent harmless against (a)
liability for the payment of all reasonable out-of-pocket costs, expenses and
disbursements, including fees and expenses of counsel, appraisers and
environmental consultants, reasonably incurred by the Administrative Agent (i)
in connection with the development, negotiation, preparation, printing,
execution, administration, syndication, interpretation and performance of this
Agreement and the other Loan Documents, (ii) relating to any requested
amendments, waivers or consents pursuant to the provisions hereof, (iii) in
connection with the enforcement of this Agreement or any other Loan Document or
collection of amounts due hereunder or thereunder or the proof and allowability
of any claim arising under this Agreement or any other Loan Document, whether in
bankruptcy or receivership proceedings or otherwise, and (iv) in any workout or
restructuring or in connection with the protection, preservation, exercise or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document or in connection with any foreclosure, collection or
bankruptcy proceedings, and (b) all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent,
-63-
in its capacity as such, in any way relating to or arising out of this Agreement
or any other Loan Documents or any action taken or omitted by the Administrative
Agent hereunder or thereunder, provided that the Borrower shall not be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements if the same results
from the Administrative Agent's gross negligence or willful misconduct, or if
the Borrower was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense (except that the Borrower
shall remain liable to the extent such failure to give notice does not result in
a loss to the Borrower), or if the same results from a compromise or settlement
agreement entered into without the consent of the Borrower, which shall not be
unreasonably withheld. In addition, the Borrower agrees to reimburse and pay all
reasonable out-of-pocket expenses of the Administrative Agent's regular
employees and agents engaged periodically to perform audits of the Loan Parties'
books, records and business properties provided that the Borrower shall not be
obligated to pay for more than one audit in any fiscal year if no Event of
Default or Potential Default has occurred and is continuing but shall be
obligated to pay for any audit by the Administrative Agent (regardless of
whether the Administrative Agent has previously conducted an audit during such
fiscal year) that the Administrative Agent commences when an Event of Default or
Potential Default exists and is continuing.
9.6 Exculpatory Provisions; Limitation of Liability.
Neither the Administrative Agent nor any of its directors, officers,
employees, agents, attorneys or Affiliates shall (a) be liable to any Bank for
any action taken or omitted to be taken by it or them hereunder, or in
connection herewith including pursuant to any Loan Document, unless caused by
its or their own gross negligence or willful misconduct, (b) be responsible in
any manner to any of the Banks for the effectiveness, enforceability,
genuineness, validity or the due execution of this Agreement or any other Loan
Documents or for any recital, representation, warranty, document, certificate,
report or statement herein or made or furnished under or in connection with this
Agreement or any other Loan Documents, or (c) be under any obligation to any of
the Banks to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions hereof or thereof on the part of the Loan
Parties, or the financial condition of the Loan Parties, or the existence or
possible existence of any Event of Default or Potential Default. No claim may be
made by any of the Loan Parties, any Bank, the Administrative Agent or any of
their respective Subsidiaries against the Administrative Agent, any Bank or any
of their respective directors, officers, employees, agents, attorneys or
Affiliates, or any of them, for any special, indirect or consequential damages
or, to the fullest extent permitted by Law, for any punitive damages in respect
of any claim or cause of action (whether based on contract, tort, statutory
liability, or any other ground) based on, arising out of or related to any Loan
Document or the transactions contemplated hereby or any act, omission or event
occurring in connection therewith, including the negotiation, documentation,
administration or collection of the Revolving Credit Loans, and each of the Loan
Parties, (for itself and on behalf of each of its Subsidiaries), the
Administrative Agent and each Bank hereby waive, releases and agree never to xxx
upon any claim for any such damages, whether such claim now exists or hereafter
arises and whether or not it is now known or suspected to exist in its favor.
Each Bank agrees that, except for notices, reports and other documents expressly
required to be furnished to the Banks by the Administrative Agent hereunder or
given to the Administrative Agent for the account of or with copies for the
Banks, the Administrative Agent and each of its directors,
-64-
officers, employees, agents, attorneys or Affiliates shall not have any duty or
responsibility to provide any Bank with credit or other information concerning
the business, operations, property, condition (financial or otherwise),
prospects or creditworthiness of the Loan Parties which may come into the
possession of the Administrative Agent or any of its directors, officers,
employees, agents, attorneys or Affiliates.
9.7 Reimbursement and Indemnification of Administrative Agent by Banks.
Each Bank agrees to reimburse and indemnify the Administrative Agent
(to the extent not reimbursed by the Borrower and without limiting the
Obligation of the Borrower to do so) in proportion to its Ratable Share from and
against all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements, including attorneys' fees
and disbursements (including the allocated costs of staff counsel), and costs of
appraisers and environmental consultants, of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against the Administrative Agent, in
its capacity as such, in any way relating to or arising out of this Agreement or
any other Loan Documents or any action taken or omitted by the Administrative
Agent hereunder or thereunder, provided that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (a) if the same results from
the Administrative Agent's gross negligence or willful misconduct, or (b) if
such Bank was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense (except that such Bank shall
remain liable to the extent such failure to give notice does not result in a
loss to the Bank), or (c) if the same results from a compromise and settlement
agreement entered into without the consent of such Bank, which shall not be
unreasonably withheld. In addition, each Bank agrees promptly upon demand to
reimburse the Administrative Agent (to the extent not reimbursed by the Borrower
and without limiting the Obligation of the Borrower to do so) in proportion to
its Ratable Share for all amounts due and payable by the Borrower to the
Administrative Agent in connection with the Administrative Agent's periodic
audit of the Loan Parties' books, records and business properties.
9.8 Reliance by Administrative Agent.
The Administrative Agent shall be entitled to rely upon any writing,
telegram, telex or teletype message, resolution, notice, consent, certificate,
letter, cablegram, statement, order or other document or conversation by
telephone or otherwise believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons, and upon the advice and
opinions of counsel and other professional advisers selected by the
Administrative Agent. The Administrative 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 Banks against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.
9.9 Notice of Default.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Potential Default or Event of Default unless the
Administrative Agent has
-65-
received written notice from a Bank or the Borrower referring to this Agreement,
describing such Potential Default or Event of Default and stating that such
notice is a "notice of default."
9.10 Notices.
The Administrative Agent shall promptly send to each Bank a copy of
all notices received from the Borrower pursuant to the provisions of this
Agreement or the other Loan Documents promptly upon receipt thereof. The
Administrative Agent shall promptly notify the Borrower and the other Banks of
each change in the Base Rate and the effective date thereof.
9.11 Banks in Their Individual Capacities; Administrative Agents in its
Individual Capacity.
With respect to its Revolving Credit Commitment and the Revolving
Credit Loans made by it and any other rights and powers given to it as a Bank
hereunder or under any of the other Loan Documents, the Administrative Agent
shall have the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not the Administrative Agent, and the term
"Bank" and "Banks" shall, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. JPMorgan and its Affiliates and
each of the Banks and their respective Affiliates may, without liability to
account, except as prohibited herein, make loans to, issue letters of credit for
the account of, acquire equity interests in, accept deposits from, discount
drafts for, act as trustee under indentures of, and generally engage in any kind
of banking, trust, financial advisory, underwriting or other business with, the
Loan Parties and their Affiliates, in the case of the Administrative Agent, as
though it were not acting as Administrative Agent hereunder and in the case of
each Bank, as though such Bank were not a Bank hereunder, in each case without
notice to or consent of the other Banks. The Banks acknowledge that, pursuant to
such activities, the Administrative Agent or its Affiliates may (i) receive
information regarding the Loan Parties or any of their Subsidiaries or
Affiliates (including information that may be subject to confidentiality
obligations in favor of the Loan Parties or such Subsidiary or Affiliate) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them, and (ii) accept fees and other consideration
from the Loan Parties for services in connection with this Agreement and
otherwise without having to account for the same to the Banks.
9.12 Holders of Notes.
The Administrative Agent may deem and treat any payee of any
Revolving Credit Note as the owner thereof for all purposes hereof unless and
until written notice of the assignment or transfer thereof shall have been filed
with the Administrative Agent. Any request, authority or consent of any Person
who at the time of making such request or giving such authority or consent is
the holder of any Revolving Credit Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Revolving Credit Note or of
any Revolving Credit Note or Revolving Credit Notes issued in exchange therefor.
9.13 Equalization of Banks.
The Banks and the holders of any participations in any Revolving
Credit Notes agree among themselves that, with respect to all amounts received
by any Bank or any such
-66-
holder for application on any Obligation hereunder or under any Revolving Credit
Note or under any such participation, whether received by voluntary payment, by
realization upon security, by the exercise of the right of set-off or banker's
lien, by counterclaim or by any other non-pro rata source, equitable adjustment
will be made in the manner stated in the following sentence so that, in effect,
all such excess amounts will be shared ratably among the Banks and such holders
in proportion to their interests in payments under the Revolving Credit Notes,
except as otherwise provided in Section 3.4.3 [Administrative Agent's and Bank's
Rights], 4.4.2 [Replacement of a Bank] or 4.5 [Additional Compensation in
Certain Circumstances]. The Banks or any such holder receiving any such amount
shall purchase for cash from each of the other Banks an interest in such Bank's
Revolving Credit Loans in such amount as shall result in a ratable participation
by the Banks and each such holder in the aggregate unpaid amount under the
Revolving Credit Notes, provided that if all or any portion of such excess
amount is thereafter recovered from the Bank or the holder making such purchase,
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, together with interest or other amounts, if any, required by
law (including court order) to be paid by the Bank or the holder making such
purchase.
9.14 Successor Administrative Agent.
The Administrative Agent (i) may resign as Administrative Agent or
(ii) shall resign if such resignation is requested by the Required Banks (if the
Administrative Agent is a Bank, the Administrative Agent's Revolving Credit
Loans and its Revolving Credit Commitment shall be considered in determining
whether the Required Banks have requested such resignation) or required by
Section 4.4.2 [Replacement of a Bank], in either case of (i) or (ii) by giving
not less than forty-five (45) days' prior written notice to the Borrower. If the
Administrative Agent shall resign under this Agreement, then either (a) the
Required Banks shall appoint from among the Banks a successor agent for the
Banks, subject to the consent of the Borrower, such consent not to be
unreasonably withheld, or (b) if a successor agent shall not be so appointed and
approved within the thirty (30) day period following the Administrative Agent's
notice to the Banks of its resignation, then the Administrative Agent shall
appoint, with the consent of the Borrower, such consent not to be unreasonably
withheld, a successor agent who shall serve as Administrative Agent until such
time as the Required Banks appoint and the Borrower consents to the appointment
of a successor agent. Upon its appointment pursuant to either clause (a) or (b)
above, such successor agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent, effective upon its appointment, and the former Administrative
Agent's rights, powers and duties as Administrative Agent shall be terminated
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement. After the
resignation of any Administrative Agent hereunder, the provisions of this
Section 9.14 shall inure to the benefit of such former Administrative Agent and
such former Administrative Agent shall not by reason of such resignation be
deemed to be released from liability for any actions taken or not taken by it
while it was an Administrative Agent under this Agreement.
9.15 Availability of Funds.
The Administrative Agent may assume that each Bank has made or will
make the proceeds of a Revolving Credit Loan available to the Administrative
Agent unless the
-67-
Administrative Agent shall have been notified by such Bank on or before the
later of (1) the close of Business on the Business Day preceding the Borrowing
Date with respect to such Revolving Credit Loan or two (2) hours before the time
on which the Administrative Agent actually funds the proceeds of such Revolving
Credit Loan to the Borrower (whether using its own funds pursuant to this
Section 9.15 or using proceeds deposited with the Administrative Agent by the
Banks and whether such funding occurs before or after the time on which Banks
are required to deposit the proceeds of such Revolving Credit Loan with the
Administrative Agent). The Administrative Agent may, in reliance upon such
assumption (but shall not be required to), make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Bank, the Administrative Agent shall be
entitled to recover such amount on demand from such Bank (or, if such Bank fails
to pay such amount forthwith upon such demand from the Borrower) together with
interest thereon, in respect of each day during the period commencing on the
date such amount was made available to the Borrower and ending on the date the
Administrative Agent recovers such amount, at a rate per annum equal to (i) the
Federal Funds Effective Rate during the first three (3) days after such interest
shall begin to accrue and (ii) the applicable interest rate in respect of such
Loan after the end of such three-day period.
9.16 Calculations.
In the absence of gross negligence or willful misconduct, the
Administrative Agent shall not be liable for any error in computing the amount
payable to any Bank whether in respect of the Revolving Credit Loans, fees or
any other amounts due to the Banks under this Agreement. In the event an error
in computing any amount payable to any Bank is made, the Administrative Agent,
the Borrower and each affected Bank shall, forthwith upon discovery of such
error, make such adjustments as shall be required to correct such error, and any
compensation therefor will be calculated at the Federal Funds Effective Rate.
9.17 Beneficiaries.
Except as expressly provided herein, the provisions of this Section
9.17 are solely for the benefit of the Administrative Agent and the Banks, and
the Loan Parties shall not have any rights to rely on or enforce any of the
provisions hereof. In performing its functions and duties under this Agreement,
the Administrative Agent shall act solely as agent of the Banks and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any of the Loan Parties.
10. MISCELLANEOUS
10.1 Modifications, Amendments or Waivers.
With the written consent of the Required Banks, the Administrative
Agent, acting on behalf of all the Banks, and the Borrower, on behalf of the
Loan Parties, may from time to time enter into written agreements amending or
changing any provision of this Agreement or any other Loan Document or the
rights of the Banks or the Loan Parties hereunder or thereunder, or may grant
written waivers or consents to a departure from the due performance of the
Obligations of the Loan Parties hereunder or thereunder. Any such agreement,
waiver or consent
-68-
made with such written consent shall be effective to bind all the Banks and the
Loan Parties; provided, that, without the written consent of all the Banks, no
such agreement, waiver or consent may be made which will:
10.1.1. Increase of Commitment; Extension of Expiration Date.
Increase the amount of the Revolving Credit Commitment of any
Bank hereunder or extend any Expiration Date;
10.1.2. Extension of Payment; Reduction of Principal Interest or Fees;
Modification of Terms of Payment.
Whether or not any Revolving Credit Loans are outstanding,
extend the time for payment of principal or interest of any Revolving Credit
Loan (excluding the due date of any mandatory prepayment of a Revolving Credit
Loan or any mandatory Revolving Credit Commitment reduction in connection with
such a mandatory prepayment hereunder except for mandatory reductions of the
applicable Revolving Credit Commitments on any Expiration Date), the Commitment
Fee or any other fee payable to any Bank, or reduce the principal amount of or
the rate of interest borne by any Revolving Credit Loan or reduce the Commitment
Fee or any other fee payable to any Bank, or otherwise affect the terms of
payment of the principal of or interest of any Revolving Credit Loan, the
Commitment Fee or any other fee payable to any Bank;
10.1.3. Release of Guarantor.
Except for sales of assets permitted by Section 7.2.7
[Disposition of Assets], release any Guarantor from its Obligations under the
Guaranty Agreement; or
10.1.4. Miscellaneous
Amend Section 4.2 [Pro Rata Treatment of Banks], 9.6
[Exculpatory Provisions, Etc.] or 9.13 [Equalization of Banks] or this Section
10.1, alter any provision regarding the pro rata treatment of the Banks, change
the definition of Required Banks or Supermajority of the Banks, or change any
requirement providing for the Banks or the Required Banks or Supermajority of
the Banks to authorize the taking of any action hereunder;
provided, further, that no agreement, waiver or consent which would modify the
interests, rights or obligations of the Administrative Agent in its capacity as
Administrative Agent shall be effective without the written consent of the
Administrative Agent.
10.2 No Implied Waivers; Cumulative Remedies; Writing Required.
No course of dealing and no delay or failure of the Administrative
Agent or any Bank in exercising any right, power, remedy or privilege under this
Agreement or any other Loan Document shall affect any other or future exercise
thereof or operate as a waiver thereof, nor shall any single or partial exercise
thereof or any abandonment or discontinuance of steps to enforce such a right,
power, remedy or privilege preclude any further exercise thereof or of any other
right, power, remedy or privilege. The rights and remedies of the Administrative
Agent
-69-
and the Banks under this Agreement and any other Loan Documents are cumulative
and not exclusive of any rights or remedies which they would otherwise have. Any
waiver, permit, consent or approval of any kind or character on the part of any
Bank of any breach or default under this Agreement or any such waiver of any
provision or condition of this Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing.
10.3 Reimbursement and Indemnification of Banks by the Borrower; Taxes.
The Borrower agrees unconditionally upon demand to pay or
reimburse to each Bank (other than the Administrative Agent, as to which the
Borrower's Obligations are set forth in Section 9.5 [Reimbursement of
Administrative Agent By Borrower, Etc.]) and to indemnify and to save such Bank
and its officers, directors and employees harmless against (i) liability for the
payment of all reasonable out-of-pocket costs, expenses and disbursements
(including fees and expenses of counsel (including allocated costs of staff
counsel) for each Bank except with respect to (a) and (b) below), incurred by
such Bank (a) in connection with the administration and interpretation of this
Agreement, and other instruments and documents to be delivered hereunder, (b)
relating to any amendments, waivers or consents pursuant to the provisions
hereof, (c) in connection with the enforcement of this Agreement or any other
Loan Document, or collection of amounts due hereunder or thereunder or the proof
and allowability of any claim arising under this Agreement or any other Loan
Document, whether in bankruptcy or receivership proceedings or otherwise, and
(d) in any workout or restructuring or in connection with the protection,
preservation, exercise or enforcement of any of the terms hereof or of any
rights hereunder or under any other Loan Document or in connection with any
foreclosure, collection or bankruptcy proceedings, or (ii) all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements (including fees and expenses of counsel (including
allocated costs of staff counsel) of any kind or nature whatsoever incurred by
or imposed upon or against such Bank, its officers, directors or employees,
whether or not such Bank, officers, directors or employees are a party to any
related legal proceeding which may be imposed on, incurred by or asserted
against such Bank, officers or employees, in their capacity as such, in any way
relating to or arising out of this Agreement or any other Loan Documents or any
action taken or omitted by such Bank, officers or employees hereunder or
thereunder, provided that the Borrower shall not be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements (A) if the same results from such
Bank's, directors', officers' or employees' gross negligence or willful
misconduct, or (B) if the Borrower was not given notice of the subject claim and
the opportunity to participate in the defense thereof, at its expense (except
that the Borrower shall remain liable to the extent such failure to give notice
does not result in a loss to the Borrower), or (C) if the same results from a
compromise or settlement agreement entered into without the consent of the
Borrower, which shall not be unreasonably withheld. The Banks will attempt to
minimize the fees and expenses of legal counsel for the Banks which are subject
to reimbursement by the Borrower hereunder by considering the usage of one law
firm to represent the Banks and the Administrative Agent if appropriate under
the circumstances. Any and all payments by the Borrower to or for the account of
the Administrative Agent or any Bank under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
Administrative Agent and each Bank, taxes imposed on or measured by its net
income, and
-70-
franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction
(or any political subdivision thereof) under the Laws of which the
Administrative Agent or such Bank, as the case may be, is organized or maintains
a lending office (all such non-excluded taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and liabilities
being hereinafter referred to as "Taxes"). If the Borrower shall be required by
any Laws to deduct any Taxes from or in respect of any sum payable under any
Loan Document to the Administrative Agent or any Bank, (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section),
the Administrative Agent and such Bank receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
Laws, and (iv) within thirty (30) days after the date of such payment, the
Borrower shall furnish to the Administrative Agent (which shall forward the same
to such Bank) the original or a certified copy of a receipt evidencing payment
thereof. The Borrower agrees unconditionally to pay all stamp, document,
transfer, recording or filing taxes or fees and similar impositions ("Other
Taxes") now or hereafter determined by the Administrative Agent or any Bank to
be payable in connection with this Agreement or any other Loan Document, and the
Borrower agrees unconditionally to save the Administrative Agent and the Banks
harmless from and against any and all present or future claims, liabilities or
losses with respect to or resulting from any omission to pay or delay in paying
any such Other Taxes. If the Borrower shall be required to deduct or pay any
Taxes or Other Taxes from or in respect of any sum payable under any Loan
Document to the Administrative Agent or any Bank, the Borrower shall also pay to
the Administrative Agent (for the account of such Bank) or to such Bank, at the
time interest is paid, such additional amount that such Bank specifies as
necessary to preserve the after-tax yield (after factoring in all taxes,
including taxes imposed on or measured by net income) such Bank would have
received if such Taxes or Other Taxes had not been imposed. The Borrower agrees
to indemnify the Administrative Agent and each Bank for (i) the full amount of
Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by
any jurisdiction on amounts payable under this Section) paid by the
Administrative Agent and such Bank (ii) amounts payable under the immediately
preceding sentence, and (iii) any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, in each case whether or not
such Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Official Body. Payment under this Section 10.3 shall be made within
thirty (30) days after the date the Bank or the Administrative Agent makes a
demand therefor.
10.4 Holidays.
Whenever payment of a Revolving Credit Loan to be made or taken
hereunder shall be due on a day which is not a Business Day such payment shall
be due on the next Business Day (except as provided in Section 3.2 [Interest
Periods] with respect to Euro-Rate Loan Interest Periods under the Euro-Rate
Option) and such extension of time shall be included in computing interest and
fees, except that the Revolving Credit Loans shall be due on the Business Day
preceding the applicable Expiration Date if such Expiration Date is not a
Business Day. Whenever any payment or action to be made or taken hereunder
(other than payment of the Revolving Credit Loans) shall be stated to be due on
a day which is not a Business Day, such payment or action shall be made or taken
on the next following Business Day, and such
-71-
extension of time shall not be included in computing interest or fees, if any,
in connection with such payment or action.
10.5 Funding by Branch, Subsidiary or Affiliate.
10.5.1. Notional Funding.
Each Bank shall have the right from time to time, without
notice to the Borrower, to deem any branch, Subsidiary or Affiliate (which for
the purposes of this Section 10.5 shall mean any corporation or association
which is directly or indirectly controlled by or is under direct or indirect
common control with any corporation or association which directly or indirectly
controls such Bank) of such Bank to have made, maintained or funded any
Revolving Credit Loan to which the Euro-Rate Option applies at any time,
provided that immediately following (on the assumption that a payment were then
due from the Borrower to such other office), and as a result of such change, the
Borrower would not be under any greater financial obligation pursuant to Section
4.5 [Additional Compensation in Certain Circumstances] than it would have been
in the absence of such change. Notional funding offices may be selected by each
Bank without regard to such Bank's actual methods of making, maintaining or
funding the Revolving Credit Loans or any sources of funding actually used by or
available to such Bank.
10.5.2. Actual Funding.
Each Bank shall have the right from time to time to make
or maintain any Revolving Credit Loan by arranging for a branch, Subsidiary or
Affiliate of such Bank to make or maintain such Revolving Credit Loan subject to
the last sentence of this Section 10.5.2. If any Bank causes a branch,
Subsidiary or Affiliate to make or maintain any part of the Revolving Credit
Loans hereunder, all terms and conditions of this Agreement shall, except where
the context clearly requires otherwise, be applicable to such part of the
Revolving Credit Loans to the same extent as if such Revolving Credit Loans were
made or maintained by such Bank, but in no event shall any Bank's use of such a
branch, Subsidiary or Affiliate to make or maintain any part of the Revolving
Credit Loans hereunder cause such Bank or such branch, Subsidiary or Affiliate
to incur any cost or expenses payable by the Borrower hereunder or require the
Borrower to pay any other compensation to any Bank (including any expenses
incurred or payable pursuant to Section 4.5 [Additional Compensation in Certain
Circumstances]) which would otherwise not be incurred.
10.6 Notices.
Any notice, request, demand, direction or other communication (for
purposes of this Section 10.6 only, a "Notice") to be given to or made upon any
party hereto under any provision of this Agreement shall be given or made by
telephone or in writing (including by means of electronic transmission (i.e.,
"e-mail") or facsimile transmission or by setting forth such Notice on a secure
site on the World Wide Web (a "Website Posting") if Notice of such Website
Posting (including the information necessary to access such website) has been
previously delivered to the parties hereto by another means set forth in this
Section 10.6) in accordance with this Section 10.6. Any such Notice must be
delivered to the applicable parties hereto at the addresses and numbers set
forth under their respective names on Schedule 1.1(B)
-72-
hereof or in accordance with any subsequent unrevoked Notice from any such party
that is given in accordance with this Section 10.6. Any Notice shall be
effective:
(i) In the case of hand-delivery, when delivered;
(ii) If given by mail, four days after such Notice is
deposited with the United States Postal Service, with first-class postage
prepaid, return receipt requested;
(iii) In the case of a telephonic Notice, when a party is
contacted by telephone, if delivery of such telephonic Notice is confirmed no
later than the next Business Day by facsimile, electronic transmission, Website
Posting or overnight courier (received on or before such next Business Day);
(iv) In the case of a facsimile transmission, when
transmitted to the applicable facsimile number;
(v) In the case of electronic transmission, when actually
received;
(vi) In the case of Website Posting, upon delivery of a
Notice of such posting (including the information necessary to access such web
site) by another means set forth in this Section 10.6; and
(vii) If given by any other means (including by overnight
courier), when actually received.
Any Bank giving a Notice to a Loan Party shall concurrently send a copy thereof
to the Administrative Agent, and the Administrative Agent shall promptly notify
the other Banks of its receipt of such Notice.
10.7 Severability.
The provisions of this Agreement are intended to be severable. If
any provision of this Agreement shall be held invalid or unenforceable in whole
or in part in any jurisdiction, such provision shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without in
any manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
10.8 Governing Law.
This Agreement shall be deemed to be a contract under the laws of
the State of New York and for all purposes shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York
without regard to its conflict of laws principles.
10.9 Prior Understanding.
This Agreement and the other Loan Documents supersede all prior
understandings and agreements, whether written or oral, between the parties
hereto and thereto relating to the
-73-
transactions provided for herein and therein, including any prior
confidentiality agreements and commitments.
10.10 Duration; Survival.
All representations and warranties of the Loan Parties contained
herein or made in connection herewith shall survive the making of Revolving
Credit Loans and shall not be waived by the execution and delivery of this
Agreement, any investigation by the Administrative Agent or the Banks, the
making of Revolving Credit Loans or payment in full of the Revolving Credit
Loans. All covenants and agreements of the Loan Parties contained in Sections
7.1 [Affirmative Covenants], 7.2 [Negative Covenants] and 7.3 [Reporting
Requirements] herein shall continue in full force and effect from and after the
date hereof so long as the Borrower may borrow hereunder and until termination
of the Revolving Credit Commitments and payment in full of the Revolving Credit
Loans. All covenants and agreements of the Borrower contained herein relating to
the payment of principal, interest, premiums, additional compensation or
expenses and indemnification, including those set forth in the Revolving Credit
Notes, Section 4 [Payments] and Sections 9.5 [Reimbursement of Administrative
Agent by Borrower, Etc.], 9.7 [Reimbursement of Administrative Agent by Banks,
Etc.] and 10.3 [Reimbursement of Banks by Borrower; Etc.], shall survive payment
in full of the Revolving Credit Loans and termination of the Revolving Credit
Commitments.
10.11 Successors and Assigns.
This Agreement shall be binding upon and shall inure to the
benefit of the Banks, the Administrative Agent, the Loan Parties and their
respective successors and assigns, except that none of the Loan Parties may
assign or transfer any of its rights and Obligations hereunder or any interest
herein. Each Bank may, at its own cost, make assignments of or sell
participations in all or any part of its Revolving Credit Commitments and the
Revolving Credit Loans and any of its other rights and/or obligations made by it
to one or more banks or other entities, subject to the consent of the Borrower
and the Administrative Agent with respect to any assignee, such consent not to
be unreasonably withheld, provided that (1) no consent of the Borrower shall be
required (A) if an Event of Default exists and is continuing, or (B) in the case
of an assignment by a Bank to an Affiliate of such Bank or another Bank, and (2)
any assignment by a Bank of a Revolving Credit Commitment to a Person other than
an Affiliate of such Bank may not be made in amounts less than the lesser of
$5,000,000 or the amount of the assigning Bank's Revolving Credit Commitment. In
the case of an assignment, upon receipt by the Administrative Agent of the
Assignment and Assumption Agreement, the assignee shall have, to the extent of
such assignment (unless otherwise provided therein), the same rights, benefits
and obligations as it would have if it had been a signatory Bank hereunder, the
Revolving Credit Commitments shall be adjusted accordingly, and upon surrender
of any Revolving Credit Note subject to such assignment, the Borrower shall
execute and deliver a Revolving Credit Note to the assignee in the amounts equal
to the amounts of the Revolving Credit Commitments assumed by it and a new
Revolving Credit Note to the assigning Bank in an amount equal to the Revolving
Credit Commitments retained by it hereunder. Any Bank which assigns any or all
of its Revolving Credit Commitments or Revolving Credit Loans to a Person other
than an Affiliate of such Bank shall pay to the Administrative Agent a service
fee in the amount of $3,500 for each assignment. In the case of a participation,
the participant shall only have the rights
-74-
specified in Section 8.2.3 [Set-off] (the participant's rights against such Bank
in respect of such participation to be those set forth in the agreement executed
by such Bank in favor of the participant relating thereto and not to include any
voting rights except with respect to changes of the type referenced in Sections
10.1.1 [Increase of Commitment, Etc.], 10.1.2 [Extension of Payment, Etc.], or
10.1.3 [Release of Guarantor]), all of such Bank's obligations under this
Agreement or any other Loan Document shall remain unchanged, and all amounts
payable by any Loan Party hereunder or thereunder shall be determined as if such
Bank had not sold such participation.
(i) Any assignee or participant which is not incorporated
under the Laws of the United States of America or a state thereof shall deliver
to the Borrower and the Administrative Agent the form of certificate described
in Section 10.17 [Tax Withholding Clause] relating to federal income tax
withholding. Each Bank may furnish any publicly available information concerning
any Loan Party or its Subsidiaries and any other information concerning any Loan
Party or its Subsidiaries in the possession of such Bank from time to time to
assignees and participants (including prospective assignees or participants),
provided that such assignees and participants agree to be bound by the
provisions of Section 10.12 [Confidentiality].
(ii) Notwithstanding any other provision in this Agreement,
any Bank may at any time pledge or grant a security interest in all or any
portion of its rights under this Agreement, its Revolving Credit Note and the
other Loan Documents to any Federal Reserve Bank in accordance with Regulation A
of the FRB or U.S. Treasury Regulation 31 CFR Section 203.14 without notice to
or consent of the Borrower or the Administrative Agent. No such pledge or grant
of a security interest shall release the transferor Bank of its obligations
hereunder or under any other Loan Document.
10.12 Confidentiality.
10.12.1. General.
The Administrative Agent and the Banks each agree to keep
confidential all information obtained from any Loan Party or its Subsidiaries
which is nonpublic and confidential or proprietary in nature (including any
information the Borrower specifically designates as confidential), except as
provided below, and to use such information only in connection with their
respective capacities under this Agreement and for the purposes contemplated
hereby. The Administrative Agent and the Banks shall be permitted to disclose
such information (i) to outside legal counsel, accountants and other
professional advisors who need to know such information in connection with the
administration and enforcement of this Agreement, subject to agreement of such
Persons to maintain the confidentiality, (ii) to assignees and participants as
contemplated by Section 10.11, and prospective assignees and participants,
subject to agreement of such Persons to maintain the confidentiality, (iii) to
the extent requested by any bank regulatory authority or, with notice to the
Borrower (provided that such notice is permitted under applicable Law), as
otherwise required by applicable Law or by any subpoena or similar legal
process, or in connection with any investigation or proceeding arising out of
the transactions contemplated by this Agreement, (iv) if it becomes publicly
available other than as a result of a breach of this Agreement or becomes
available from a source not known to be subject
-75-
to confidentiality restrictions, or (v) if the Borrower shall have consented in
writing to such disclosure.
10.12.2. Sharing Information With Affiliates of the Banks.
Each Loan Party acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Borrower or one or more of its Affiliates (in connection with this Agreement
or otherwise) by any Bank or by one or more Subsidiaries or Affiliates of such
Bank and each of the Loan Parties hereby authorizes each Bank to share any
information delivered to such Bank by such Loan Party and its Subsidiaries
pursuant to this Agreement, or in connection with the decision of such Bank to
enter into this Agreement, to any such Subsidiary or Affiliate of such Bank, it
being understood that any such Subsidiary or affiliate of any Bank receiving
such information shall be bound by the provisions of Section 10.12.1 as if it
were a Bank hereunder. Such Authorization shall survive the repayment of the
Revolving Credit Loans and other Obligations and the termination of the
Revolving Credit Commitments.
10.13 Counterparts.
This Agreement may be executed by different parties hereto on any
number of separate counterparts, each of which, when so executed and delivered,
shall be an original, and all such counterparts shall together constitute one
and the same instrument.
10.14 Administrative Agent's or Bank's Consent.
Whenever the Administrative Agent's or any Bank's consent is required
to be obtained under this Agreement or any of the other Loan Documents as a
condition to any action, inaction, condition or event, the Administrative Agent
and each Bank shall be authorized to give or withhold such consent in its sole
and absolute discretion and to condition its consent upon the giving of
additional collateral, the payment of money or any other matter.
10.15 Exceptions.
The representations, warranties and covenants contained herein shall
be independent of each other, and no exception to any representation, warranty
or covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.
10.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL.
EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF THE SUPREME COURT OF NEW YORK COUNTY AND THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH LOAN PARTY AT
THE ADDRESSES PROVIDED FOR IN SECTION 10.6 AND SERVICE SO
-76-
MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. EACH LOAN
PARTY WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED
AGAINST IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK
OF JURISDICTION OR VENUE. EACH LOAN PARTY, THE ADMINISTRATIVE AGENT AND THE
BANKS HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM
OF ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT
OR THE COLLATERAL TO THE FULL EXTENT PERMITTED BY LAW.
10.17 Tax Withholding Clause.
Each Bank or assignee or participant of a Bank that is not
incorporated under the Laws of the United States of America or a state thereof
(and, upon the written request of the Administrative Agent, each other Bank or
assignee or participant of a Bank) agrees that it will deliver to each of the
Borrower and the Administrative Agent two (2) duly completed appropriate valid
Withholding Certificates (as defined under (S) 1.1441-1(c)(16) of the Income Tax
Regulations (the "Regulations")) certifying its status (i.e. U.S. or foreign
person) and, if appropriate, making a claim of reduced, or exemption from, U.S.
withholding tax on the basis of an income tax treaty or an exemption provided by
the Internal Revenue Code. The term "Withholding Certificate" means a Form W-9;
a Form W-8BEN; a Form W-8ECI; a Form W-8IMY and the related statements and
certifications as required under (S) 1.1441-1(e)(2) and/or (3) of the
Regulations; a statement described in (S) 1.871-14(c)(2)(v) of the Regulations;
or any other certificates under the Internal Revenue Code or Regulations that
certify or establish the status of a payee or beneficial owner as a U.S. or
foreign person. Each Bank, assignee or participant required to deliver to the
Borrower and the Administrative Agent a Withholding Certificate pursuant to the
preceding sentence shall deliver such valid Withholding Certificate as follows:
(A) each Bank which is a party hereto on the Closing Date shall deliver such
valid Withholding Certificate at least five (5) Business Days prior to the first
date on which any interest or fees are payable by the Borrower hereunder for the
account of such Bank; (B) each assignee or participant shall deliver such valid
Withholding Certificate at least five (5) Business Days before the effective
date of such assignment or participation (unless the Administrative Agent in its
sole discretion shall permit such assignee or participant to deliver such valid
Withholding Certificate less than five (5) Business Days before such date in
which case it shall be due on the date specified by the Administrative Agent).
Each Bank, assignee or participant which so delivers a valid Withholding
Certificate further undertakes to deliver to each of the Borrower and the
Administrative Agent two (2) additional copies of such Withholding Certificate
(or a successor form) on or before the date that such Withholding Certificate
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent Withholding Certificate so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Administrative Agent. Notwithstanding the
submission of a Withholding Certificate claiming a reduced rate of or exemption
from U.S. withholding tax, the Administrative Agent shall be entitled to
withhold United States federal income taxes at the full 30% withholding rate if
in its reasonable judgment it is required to do so under the due diligence
requirements imposed upon a withholding agent under (S) 1.1441-7(b) of the
Regulations. Further, the Administrative Agent is indemnified under (S)
1.1461-1(e) of the Regulations against any claims and demands of any Bank or
assignee or participant of a Bank for
-77-
the amount of any tax it deducts and withholds in accordance with regulations
under (S) 1441 of the Internal Revenue Code.
10.18 Joinder of Guarantors.
Any Subsidiary of the Borrower which is required to join this
Agreement as a Guarantor pursuant to Section 7.2.9 [Subsidiaries, Partnerships
and Joint Ventures] shall execute and deliver to the Administrative Agent (i) a
Guarantor Joinder in substantially the form attached hereto as Exhibit 1.1(G)(1)
pursuant to which it shall join as a Guarantor each of the documents to which
the Guarantors are parties; and (ii) documents in the forms described in Section
6.1 [First Loans] modified as appropriate to relate to such Subsidiary. The Loan
Parties shall deliver such Guarantor Joinder and related documents to the
Administrative Agent at such times as required under Section 7.2.6
[Liquidations, Mergers, Consolidations, Acquisitions] if the Subsidiary is
acquired in a Permitted Acquisition and within five (5) Business Days after the
date of the filing of such Subsidiary's articles of incorporation if the
Subsidiary is a corporation, the date of the filing of its certificate of
limited partnership if it is a limited partnership or the date of its
organization if it is an entity other than a limited partnership or corporation
if such Subsidiary is formed by the Loan Parties and is not acquired in a
Permitted Acquisition.
-78-
[SIGNATURE PAGE 1 OF 6 TO CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Agreement as of the day and year first above
written.
BORROWER:
KPMG CONSULTING, INC.
By:________________________________________(SEAL)
Name:
Title:
GUARANTORS:
KPMG CONSULTING, LLC
By:________________________________________(SEAL)
Name:
Title:
KPMG CONSULTING ISRAEL, LLC
By:________________________________________(SEAL)
Name:
Title:
SOFTLINE ACQUISITION CORP.
By:________________________________________(SEAL)
Name:
Title:
KPMG CONSULTING GLOBAL OPERATIONS, INC.
By:________________________________________(SEAL)
Name:
Title:
[SIGNATURE PAGE 2 OF 6 TO CREDIT AGREEMENT]
SOFTLINE CONSULTING & INTEGRATORS, INC.
By:_________________________________________(SEAL)
Name:
Title:
I2 MIDATLANTIC LLC
By:_________________________________________(SEAL)
Name:
Title:
I2 NORTHWEST LLC
By:_________________________________________(SEAL)
Name:
Title:
OAD ACQUISITION CORP.
By:_________________________________________(SEAL)
Name:
Title:
KPMG ENTERPRISE INTEGRATION SERVICES LLC
By:_________________________________________(SEAL)
Name:
Title:
KCIN CAPITAL LLC
By:_________________________________________(SEAL)
Name:
Title:
[SIGNATURE PAGE 3 OF 6 TO CREDIT AGREEMENT]
OAD GROUP, INC.
By:_________________________________________(SEAL)
Name:
Title:
METRIUS, INC.
By:_________________________________________(SEAL)
Name:
Title:
PEATMARWICK, INC.
By:_________________________________________(SEAL)
Name:
Title:
KPMG ENTERPRISE HOLDINGS LLC
By:_________________________________________(SEAL)
Name:
Title:
GLOBAL CONSULTING DELAWARE, LLC
By:_________________________________________(SEAL)
Name:
Title:
KPMG CONSULTING INTERNATIONAL, INC.
By:_________________________________________(SEAL)
Name:
Title:
[SIGNATURE PAGE 4 OF 6 TO CREDIT AGREEMENT]
KPMG CONSULTING INTERNATIONAL I, INC.
By:_________________________________________(SEAL)
Name:
Title:
KPMG CONSULTING INTERNATIONAL II, INC.
By:_________________________________________(SEAL)
Name:
Title:
KPMG SOUTH PACIFIC, LLC
By:_________________________________________(SEAL)
Name:
Title:
KPMG CONSULTING AMERICAS, INC.
By:_________________________________________(SEAL)
Name:
Title:
KPMG CONSULTING USA, INC.
By:_________________________________________(SEAL)
Name:
Title:
BARENTS GROUP, L.L.C.
By:_________________________________________(SEAL)
Name:
Title:
[SIGNATURE PAGE 5 OF 6 TO CREDIT AGREEMENT]
PELOTON HOLDINGS, L.L.C.
By:_________________________________________(SEAL)
Name:
Title:
BARENTS EUROPEAN HOLDINGS, L.L.C.
By:_________________________________________(SEAL)
Name:
Title:
K CONSULTING SOUTHEAST ASIA, L.L.C.
By:_________________________________________(SEAL)
Name:
Title:
BARENTS GROUP RUSSIA, L.L.C.
By:_________________________________________(SEAL)
Name:
Title:
BARENTS GROUP PUERTO RICO, L.L.C.
By:_________________________________________(SEAL)
Name:
Title:
[SIGNATURE PAGE 6 OF 6 TO CREDIT AGREEMENT]
JPMORGAN CHASE BANK, individually and as
Administrative Agent
By:______________________________________
Title:___________________________________
SCHEDULE 1.1(A)
VARIABLE PRICING AND FEES BASED ON LEVERAGE RATIO
-------------------------------------------------------------------------------------------
Revolving Credit Revolving Credit Revolving Credit
Level Leverage Ratio Commitment Fee Euro Rate Spread Base Rate Spread
----- -------------- ---------------- ----------------
-------------------------------------------------------------------------------------------
I Less than 1.0 to 1.0 .200% .875% 0%
-------------------------------------------------------------------------------------------
Greater than or equal
to 1.0 to 1.0 but less
II than 1.5 to 1.0 .225% 1.125% 0%
-------------------------------------------------------------------------------------------
Greater than or equal
to 1.5 to 1.0 but less
III than 2.0 to 1.0 .250% 1.375% 0%
-------------------------------------------------------------------------------------------
Greater than or equal
IV to 2.0 to 1.0 .275% 1.625% 0%
-------------------------------------------------------------------------------------------
For purposes of determining the Applicable Margin and the Applicable
Commitment Fee Rate:
(a) The Applicable Margin and the Applicable Commitment Fee Rate shall be
as set forth in Level II on the date hereof and until subsequently adjusted
under Paragraph (b) below.
(b) The Applicable Margin and the Applicable Commitment Fee Rate shall be
recomputed (i) on the date of each Permitted Acquisition based on the Leverage
Ratio in effect on such date after giving effect to such Permitted Acquisition
as reported on the Acquisition Compliance Certificate and any increase or
decrease in the Applicable Margin or the Applicable Commitment Fee Rate shall be
effective on the date of such Permitted Acquisition, and (ii) as of the end of
each fiscal quarter ending after the Closing Date based on the Leverage Ratio as
of such quarter end and any increase or decrease in the Applicable Margin or the
Applicable Commitment Fee Rate computed as of a quarter end shall be effective
on the date on which the Compliance Certificate evidencing such computation is
due to be delivered under Section 7.3.3.
SCHEDULE 1.1(A) - 1
SCHEDULE 1.1(B)
Part 1 - Commitments of Banks and Addresses for Notices to Banks
Amount of Commitment
--------------------
for Revolving Credit
--------------------
Bank Loans Ratable Share
---- ----- -------------
JPMorgan Chase Bank
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx Aria
Telephone: 000-000-0000
Telecopy: 000-000-0000 $220,000,000 100.00%
Total $220,000,000 100.00%
============ ======
SCHEDULE 1.1(B) - 1
SCHEDULE 1.1(B)
COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
Part 2 - Addresses for Notices to Administrative Agent, Borrower, and
Guarantors:
ADMINISTRATIVE AGENT
Name: JPMorgan Chase Bank
Address: 000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Aria
Telephone: (000) 000-0000
Telecopy: (000)-000-0000
BORROWER:
Name: KPMG Consulting, Inc.
Address: 0 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With copies to:
Xxxxx X. Xxxxxxxxx, Associate General Counsel
KPMG Consulting, Inc.
0000 Xxxxxxxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
GUARANTORS:
C/o KPMG Consulting LLC
Address: 0 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SCHEDULE 1.1(B) - 2
With copies to:
Xxxxx X. Xxxxxxxxx, Associate General Counsel
KPMG Consulting, Inc.
0000 Xxxxxxxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
SCHEDULE 1.1(B) - 3
