Exhibit 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the "Second Amendment")
dated as of November 14, 2002, by and among BEARINGPOINT, INC. (formerly known
as KPMG Consulting, Inc.), a Delaware corporation (the "Borrower"), the
Guarantors, the Banks, and PNC BANK, NATIONAL ASSOCIATION, as Administrative
Agent.
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to that certain Credit
Agreement dated as of May 29, 2002 (as amended by that certain Waiver And First
Amendment To Credit Agreement dated as of August 20, 2002 and as hereafter
amended, supplemented, restated or modified, the "Credit Agreement") by and
among the Borrower, the Banks, the Guarantors, and PNC Bank, National
Association, as Administrative Agent, and desire to further amend the terms
thereof as set forth herein; and
WHEREAS, the parties to the Credit Agreement desire to amend the
Credit Agreement as set forth herein; and
WHEREAS, defined terms used herein unless otherwise defined herein
shall have the meanings ascribed to them in the Credit Agreement.
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. Amendments to the Credit Agreement.
The parties hereby amend the Credit Agreement as follows:
A. Existing Definitions.
The definitions of "EBITDA" and "Leverage Ratio" are hereby amended
and restated to read as follows:
"EBITDA for any Person during any period of determination shall
mean the net income of such Person, plus the sum of the following items to
the extent deducted in arriving as such net income: (i) depreciation, (ii)
amortization, (iii) interest expense, (iv) income tax expense, (v) FAS 142
charges incurred on or before March 31, 2002 and deducted in arriving at
such net income, (vi) 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, (vii) non-cash compensation
expense recorded in connection with the issuance by the Borrower of shares
of its common stock to key employees of acquired businesses pursuant to
pre-acquisition commitments made by the Borrower to issue such shares to
such employees in an amount not to exceed $3,500,000 during any fiscal
quarter, plus (viii)
any non-cash expense recorded in connection with the issuance of stock
options to employees (in the event that GAAP should require that such
expenses be deducted from net income).
"Leverage Ratio shall mean as of any date of determination, the
ratio of the amount in (A) to the amount in (B) below:
(A) the sum of the following items of the Borrower and its
Subsidiaries existing as of such date:
(i) consolidated Indebtedness excluding obligations in
respect of reimbursement agreements, letters of credit or bank guarantees
supporting client engagements (collectively, "Client Engagement Support
Obligations"), plus
(ii) 20% of Client Engagement Support Obligations,
TO
(B) Consolidated EBITDA for the most recent four consecutive
quarters ended on or prior to such date of determination."
Clause (iv) of the definition of "Indebtedness" is hereby amended to
read as follows:
"(iv) net liability arising (either directly or by way of a Guaranty) 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;"
B. New Definitions.
The following new definitions are hereby added to Section 1.1 in
alphabetical order:
"Consolidated Total Assets shall mean, as of any date, the total
assets of the Borrower and its Subsidiaries which would be shown as assets
on a consolidated balance sheet of the Borrower and its Subsidiaries as of
such date prepared in accordance with GAAP, after eliminating all amounts
properly attributable to minority interests, if any, in the stock and
surplus of Subsidiaries.
Subsequent Indebtedness shall mean, as of any date of
determination (without duplication), the sum of all outstanding unsecured
Indebtedness on such date of all Subsidiaries of the Borrower other than
any such Indebtedness incurred pursuant to Subsections (i) through (vi) and
(viii) of Section 7.2.1 [Indebtedness]."
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C. Section 7.2.3 [Guaranties].
Clause (i) of Section 7.2.3 [Guaranties] is hereby amended and
restated to read as follows:
"(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),
(ix), (xii) or (xiii) of Section 7.2.4 [Loans and Investments],"
D. Section 7.2.4 [Loans and Investments].
New clauses (xii) and (xiii) are hereby added to Section 7.2.4,
to immediately follow clause (xi), and to read as follows:
"(xii) Guarantees by the Borrower of loans made to Foreign
Subsidiaries by Persons who are not Loan Parties or Subsidiaries of Loan
Parties; provided that the total amount of obligations guarantied under such
Guarantees does not exceed $200,000,000; and
(xiii) Guarantees by the Borrower of foreign currency hedge
agreements entered into by Foreign Subsidiaries solely to hedge their foreign
currency risks associated with intercompany loans made by or to such Foreign
Subsidiaries to or by the Borrower or its other Subsidiaries."
E. Section 7.2.6 [Liquidations, Mergers, Consolidations,
Acquisitions].
The last paragraph of clause (vii)(b) of Section 7.2.6
[Liquidations, Mergers, Consolidations, Acquisitions] which begins " In
connection with calculations of the covenants in Sections 7.2.16 [Maximum
Facility Usage] through 7.2.19 [Minimum Net Worth]," is hereby amended and
restated to read as follows:
"In connection with such acquisition:
(A) Inclusion of Pre Acquisition Results of the Acquired Business.
(i) if the total consideration paid or given is greater than or
equal to $50,000,000 and the acquisition was consummated after the date of
this Second Amendment, 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 acquisition in the computation of the
covenants in Sections 7.2.16 [Maximum Facility Usage] through 7.2.19
[Minimum Net Worth] both as of the date of such acquisition (reported in
the applicable acquisition compliance certificate) and as of each quarter
ending before or thereafter (reported in the quarterly Compliance
Certificates); and
(ii) if the total consideration paid or given is less than
$50,000,000 or if the acquisition was consummated prior to the date of this
Second Amendment (but after the date of the Credit Agreement), the Loan
Parties shall:
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(a) include income statement and other cash flow statement items
of the acquired Person or business for periods prior to the date of such
acquisition in the computation of the covenants in Sections 7.2.16 [Maximum
Facility Usage] through 7.2.19 [Minimum Net Worth] as of the date of such
acquisition (reported in the applicable acquisition compliance certificate
for such acquisition) and
(b) exclude such income statement and other cash flow statement
items (referred to in clause (a) immediately above) in all quarterly
computations of the covenants in Sections 7.2.16 [Maximum Facility Usage]
through 7.2.19 [Minimum Net Worth] reported in quarterly Compliance
Certificates;
(B) Financial Statements of the Acquired Business; Pro Forma
Statements and Computations.
The Loan Parties shall deliver the following documents (i) with
their acquisition compliance certificate which they deliver under this
Section 7.2.6(vii), and (ii) with each of their quarterly Compliance
Certificates which they deliver following such acquisition (if the Loan
Parties are required to include in such quarterly computations of their
financial covenants the income statement and other cash flow statement
items of the acquired Person or business for periods prior to the date of
such acquisition pursuant to clauses (A)(i) and (ii) of this Section
7.2.6(vii)(b) above):
(1) the pre-aquisition financial statements of such Person or
business (which shall not be older than 135 days prior to the date of such
acquisition);
(2) pro forma combined computations of the covenants in Sections
7.2.16 [Maximum Facility Usage] through 7.2.19 [Minimum Net Worth] and pro
forma combined financial statements, in each case of the Loan Parties and
the acquired business, and a certification to the Administrative Agent for
the benefit of the Banks that the Borrower 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"
F. Section 7.2.15 [Negative Pledges Covenants].
Section 7.2.15 [Negative Pledges Covenants] of the Credit
Agreement is hereby deleted and the words "Intentionally Omitted" are inserted
in lieu thereof.
G. Section 7.2.18 [Adjusted Fixed Charge Coverage Ratio].
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Section 7.2.18 [Adjusted Fixed Charge Coverage Ratio] is
hereby amended and restated in its entirety to read as follows:
"The Loan Parties shall not at any time permit the ratio of the amount in
clause (i) below to the amount in clause (ii) below for the four quarters
then ending, to be less than 1.25 to 1.0:
(i) Consolidated EBITDA plus rent expense,
TO
(ii) the sum of interest expense, rent expense, cash dividends, and
scheduled principal payments on Indebtedness, excluding in this clause (ii)
the following:
(1) payments under this Agreement,
(2) payments under the PNC Receivables Purchase Facility, and
(3) any of the following payments under any revolving credit facility
provided to a Foreign Subsidiary for working capital purposes or under the
Revolving Credit Facility dated August 21, 2002 (the "Bridge Loan"),
between the Borrower, BearingPoint LLC, the guarantors referred to therein,
the banks party thereto, XX Xxxxxx Xxxxx Bank, as the administrative agent,
and X.X. Xxxxxx Securities, Inc., as the sole arranger and book runner,
which is attached as Exhibit 10.31 on the Borrower's Form 10-K filed on
September 30, 2002:
(I) voluntary prepayments under such facility prior to maturity,
or
(II) the scheduled payment of principal on the maturity date of
such facility:
(A) to the extent that such payment is made from the
proceeds of a replacement revolving credit working capital facility,
(B) in the case of the Bridge Loan, to the extent that such
payment (which shall be due in December, 2002) is made from the proceeds of
the proposed senior note offering of the Borrower or
(C) if the maturity date of such facility is extended by
mutual agreement of the parties thereto prior to maturity,
but including in both clauses (i) and (ii) capitalized leases and cash
taxes paid, with respect to each item referred to in such clauses (i) and
(ii)."
H. Section 7.2.20 [Subsequent Indebtedness].
A new Section 7.2.20 [Subsequent Indebtedness] is hereby
added to the Credit Agreement to follow immediately after Section 7.2.19
and to read as follows:
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"7.2.20 Subsequent Indebtedness.
The Borrower will not permit at any time Subsequent Indebtedness
to exceed 10% of Consolidated Total Assets."
I. Amendments to Compliance Certificates.
The following exhibits to the Credit Agreement are hereby
amended and restated in the forms attached hereto. Such exhibits are being
amended to reflect the changes to the Credit Agreement set forth in Sections
1(A) through 1(G) of this Second Amendment.
EXHIBIT 7.2.6 - ACQUISITION COMPLIANCE CERTIFICATE
EXHIBIT 7.3.3 - QUARTERLY COMPLIANCE CERTIFICATE
2. Representations, Warranties and covenants.
The Loan Parties hereby represent, warrant and covenant to the
Banks as follows:
(a) The representations and warranties of Loan Parties contained
in the Credit Agreement are true and correct on and as of the date hereof with
the same force and effect as though made by the Loan Parties on such date,
except to the extent that any such representation or warranty expressly relates
solely to a previous date in which case such representations and warranties are
true and correct as of such date; and
(b) The Loan Parties are in compliance with all terms,
conditions, provisions, and covenants contained in the Credit Agreement; and the
execution, delivery, and performance of this Second Amendment have been duly
authorized by all necessary corporate action, require no governmental approval,
and will not contravene, conflict with, nor result in the breach of any law,
charter, articles, or certificate of incorporation, bylaws, or agreement
governing or binding upon the Loan Parties or any of their property; and no
Event of Default or Potential Default has occurred and is continuing or would
result from the making of this Second Amendment.
3. Conditions to Effectiveness.
This Second Amendment shall be effective upon completion of the
following conditions precedent:
(i) Execution. The Required Banks, the Administrative Agent, the
Borrower and the other Loan Parties shall have executed and delivered to the
Administrative Agent signature pages hereto by counterpart or otherwise.
(ii) Joinders. BearingPoint Technology Procurement Services, LLC,
BearingPoint USA, Inc., BearingPoint Puerto Rico, LLC, BearingPoint
International I, Inc. and BearingPoint International II, Inc. shall have
executed and delivered to the Administrative Agent
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Guarantor Joinders and all other documents required under the Credit Agreement
or such Guarantor Joinders to be delivered in connection therewith shall have
been executed and delivered to the Administrative Agent.
(iii) Fees. The Borrower shall have paid to the Agent for the
benefit of each Bank a fee in the amount of .15% times the Commitment of such
Bank.
4. Amendment.
Any reference to the Credit Agreement or other Loan Documents in
any document, instrument, or agreement shall hereafter mean and include the
Credit Agreement or such Loan Document, including exhibits thereto, as amended
hereby. In the event of any irreconcilable inconsistency between the terms or
provisions hereof and the terms or provisions of the Credit Agreement or such
Loan Document, including such exhibits, the terms and provisions hereof shall
control.
5. Force and Effect.
The Loan Parties reconfirm, restate, and ratify the Credit
Agreement and all other documents executed in connection therewith and the Loan
Parties confirm that all such documents have remained in full force and effect
since the date of their execution except to the extent that the Credit Agreement
is expressly modified by this Second Amendment.
6. Governing Law.
This Second Amendment 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.
7. Counterparts.
This Second Amendment may be signed in any number of counterparts
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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[SIGNATURE PAGE 1 OF 15 TO SECOND AMENDMENT 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:
BEARINGPOINT, INC. (formerly known as
KPMG Consulting, Inc.)
By:____________________________________(SEAL)
Name:
Title:
GUARANTORS:
BEARINGPOINT, LLC
By:____________________________________(SEAL)
Name:
Title:
BEARINGPOINT ISRAEL, LLC
By:____________________________________(SEAL)
Name:
Title:
SOFTLINE ACQUISITION CORP.
By:____________________________________(SEAL)
Name:
Title:
BEARINGPOINT GLOBAL OPERATIONS, INC.
By:____________________________________(SEAL)
Name:
Title:
[SIGNATURE PAGE 2 OF 15 TO SECOND AMENDMENT 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:
BEARINGPOINT TECHNOLOGY
PROCUREMENT SERVICES, LLC
By:_____________________________(SEAL)
Name:
Title:
BEARINGPOINT CAPITAL, LLC
By:_____________________________(SEAL)
Name:
Title:
[SIGNATURE PAGE 3 OF 15 TO SECOND AMENDMENT TO CREDIT
AGREEMENT]
OAD GROUP, INC.
By:_____________________________(SEAL)
Name:
Title:
METRIUS, INC.
By:_____________________________(SEAL)
Name:
Title:
PEATMARWICK, INC.
By:_____________________________(SEAL)
Name:
Title:
BEARINGPOINT ENTERPRISE HOLDINGS, LLC
By:_____________________________(SEAL)
Name:
Title:
BEARINGPOINT GLOBAL DE, LLC
By:_____________________________(SEAL)
Name:
Title:
BEARINGPOINT INTERNATIONAL, INC.
By:_____________________________(SEAL)
Name:
Title:
[SIGNATURE PAGE 4 OF 15 TO SECOND AMENDMENT TO CREDIT
AGREEMENT]
BEARINGPOINT SOUTH PACIFIC, LLC
By:_____________________________(SEAL)
Name:
Title:
BEARINGPOINT AMERICAS, INC.
By:_____________________________(SEAL)
Name:
Title:
BEARINGPOINT BG, LLC
By:_____________________________(SEAL)
Name:
Title:
PELOTON HOLDINGS, L.L.C.
By:_____________________________(SEAL)
Name:
Title:
[SIGNATURE PAGE 5 OF 15 TO SECOND AMENDMENT TO CREDIT
AGREEMENT]
BEARINGPOINT EUROPEAN HOLDINGS, LLC
By:_____________________________(SEAL)
Name:
Title:
BEARINGPOINT SOUTHEAST ASIA, LLC
By:_____________________________(SEAL)
Name:
Title:
BEARINGPOINT RUSSIA, LLC
By:_____________________________(SEAL)
Name:
Title:
BEARINGPOINT USA, INC.
By:_____________________________(SEAL)
Name:
Title:
BEARINGPOINT PUERTO RICO, LLC
By:_____________________________(SEAL)
Name:
Title:
BEARINGPOINT INTERNATIONAL I, INC.
By:_____________________________(SEAL)
Name:
Title:
BEARINGPOINT INTERNATIONAL II, INC.
By:_____________________________(SEAL)
Name:
Title:
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[SIGNATURE PAGE 6 OF 15 TO SECOND AMENDMENT TO CREDIT
AGREEMENT]
PNC BANK, NATIONAL ASSOCIATION,
individually and as Administrative Agent
By: ____________________________________
Title: _________________________________
[SIGNATURE PAGE 7 OF 15 TO SECOND AMENDMENT TO CREDIT
AGREEMENT]
JPMORGAN CHASE BANK
individually and as Documentation Agent
By: ___________________________________
Title: ________________________________
[SIGNATURE PAGE 8 OF 15 TO SECOND AMENDMENT TO CREDIT
AGREEMENT]
BARCLAYS BANK PLC, individually and as
Syndication Agent
By: ____________________________________
Title: _________________________________
[SIGNATURE PAGE 9 OF 15 TO SECOND AMENDMENT TO CREDIT
AGREEMENT]
SOCIETE GENERALE
By: ____________________________________
Title: _________________________________
[SIGNATURE PAGE 10 OF 15 TO SECOND AMENDMENT TO CREDIT
AGREEMENT]
SUNTRUST BANK, individually and as the
Co-Agent
By: ____________________________________
Title: _________________________________
[SIGNATURE PAGE 11 OF 15 TO SECOND AMENDMENT TO CREDIT
AGREEMENT]
BANK OF AMERICA, N.A., individually and as
Documentation Agent
By:________________________________
Title:_____________________________
[SIGNATURE PAGE 12 OF 15 TO SECOND AMENDMENT TO CREDIT
AGREEMENT]
THE NORTHERN TRUST COMPANY
By: ______________________________
Title:____________________________
[SIGNATURE PAGE 13 OF 15 TO SECOND AMENDMENT TO CREDIT
AGREEMENT]
WESTPAC BANKING CORPORATION
By:______________________________
Title:___________________________
[SIGNATURE PAGE 14 OF 15 TO SECOND AMENDMENT TO CREDIT
AGREEMENT]
MELLON BANK, N.A.
By:_______________________________
Title:____________________________
[SIGNATURE PAGE 15 OF 15 TO SECOND AMENDMENT TO CREDIT
AGREEMENT]
CITIBANK, N.A., individually and as
Documentation Agent
By:________________________________
Title:_____________________________
EXHIBIT 7.2.6-- ACQUISITION COMPLIANCE CERTIFICATE
[to be attached]
EXHIBIT 7.3.3-- QUARTERLY COMPLIANCE CERTIFICATE
[to be attached]
