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EXHIBIT 10.27
$100,000,000 McLean, Virginia
January 15, 2001
SUBORDINATED REVOLVING NOTE
DUE AUGUST 24, 2004
FOR VALUE RECEIVED, the undersigned, KPMG CONSULTING, INC., a
Delaware corporation (the "Borrower"), promises to pay to the order of KPMG LLP,
a Delaware limited liability partnership, or its successors and assigns (such
party, and each of its successors in interest, hereinafter being referred to as
the "Holder"), at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other
place as the holder of this Subordinated Term Note ("Note") may designate from
time to time in writing the principal sum of ONE HUNDRED MILLION DOLLARS AND
NO/100 DOLLARS OF THE UNITED STATES OF AMERICA ($100,000,000.00), or such lesser
principal amount of the "Advances" (as defined below) as may from time to time
be outstanding hereunder, together with interest xxxxxxx as provided below.
1. Revolving Advance Facility. The Holder may, upon request
therefor by the Borrower to the Holder, make loans to the Borrower (each, an
"Advance" and, collectively, the "Advances") during the period commencing on
January 15, 2001 and ending on the earlier of August 24, 2004 and the date of
the Borrower's consummation of an "IPO" (as defined in Section 2 below);
provided, however, that (a) the aggregate outstanding principal balance of the
Advances shall not exceed $100,000,000 at any time and (b) the Holder shall have
no obligation or commitment to make any such requested Advance and all such
Advances shall be made in the Holder's sole and absolute discretion, except to
the extent (and in an amount rounded up to the next nearest increment of
$1,000,000) that the Borrower certifies to the Holder that any requested Advance
will be necessary to enable the Borrower to comply with one or more of its
financial covenants under that certain Credit Agreement dated as of May 24, 2000
among the Borrower, certain of the Borrower's subsidiaries, certain financial
institutions named as "Banks" thereunder, and PNC Bank, N. A., in its capacity
as agent for such financial institutions thereunder as the same may be amended,
restated, refinanced, refunded and replaced from time to time (the "Credit
Agreement"), and at the time of such request and the making of such Advance no
"Default" has occurred under and as defined in this Note, in which case the
Holder shall be committed to make such Advance to the Borrower hereunder.
Advances made pursuant to this Note shall be made on a revolving basis and may
be advanced, repaid and reborrowed from time to time subject to the terms and
conditions hereof. The timing and form of all requests for Advances hereunder,
and the manner, timing and place of funding, and the place of repayment, of such
Advances and accrued interest thereon, shall be determined by the Holder in its
sole and absolute discretion, subject to the terms of this Note, provided that
the Holder shall not require more than four (4) Business Days' advance notice of
any committed funding hereunder. The date, applicable rate of interest, and
outstanding principal balance from time to time, of each Advance shall be
recorded in the books and records of the Holder, which books and records shall
be deemed to be correct absent manifest error; provided, however, that any
failure by the Holder to record any such information shall not cause a
forgiveness of any of the Borrower's obligations hereunder.
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2. Principal Repayment. The aggregate outstanding principal
balance of all Advances made hereunder shall be repaid in full, in cash or other
immediately available funds, on August 24, 2004 and in United States Dollars,
unless required to be repaid on an earlier date pursuant to Section 4 hereof;
provided, however, that the Borrower shall prepay the outstanding principal
balance of this Note on the date of the Borrower's consummation of an IPO in an
amount equal to the lesser of the outstanding principal balance thereof and the
amount of net proceeds (gross proceeds net of underwriting commissions and
closing fees and expenses) received by the Borrower with respect to the IPO.
Each such repayment or prepayment of principal shall be accompanied by a payment
of all accrued and unpaid interest on the amount of such repayment or
prepayment. Subject to the provisions of Section 8 hereof, the outstanding
principal balance of the Advances may be voluntarily repaid in whole or in part
at the Borrower's option, together with accrued interest thereon, at any time
without premium or penalty. Any such prepayments shall be applied first to
interest accrued, and then to principal, unless otherwise specified by the
Holder in its discretion. For purposes hereof, "IPO" shall mean the initial
public offering of the common stock of the Borrower registered under the
Securities Act of 1933, as amended.
3. Interest. The outstanding principal balance of the Advances
shall bear interest from the date advanced hereunder until paid in full, in cash
or other immediately available funds, at a per annum rate equal to the "Base
Rate" (as defined below) in effect from time to time minus one percent (1.00%)
per annum. Interest hereunder shall be payable with respect to the Advances in
arrears on the fifth (5th) Business Day of each January, April, July and October
commencing hereafter and on each other day on which any portion of the principal
balance of the Advances is repaid in full or in part (with respect to such
portion). Interest shall be calculated based upon a year of 365 or 366 days, as
applicable, and for actual days elapsed. For purposes hereof, (a) the "Base
Rate" shall mean, as of any date of determination, the interest rate per annum
announced from time to time by PNC Bank, N.A. (or its successor) at its
principal office in Pittsburgh, Pennsylvania (or successor principal office) as
its then "prime rate" and (b) "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. The effective date
of any change in the Base Rate hereunder shall, for purposes hereof, be the
first day of the calendar month immediately following the effective date of the
announced change in the above-described "prime rate." In the event that interest
purported to be charged hereunder exceeds the maximum rate of interest permitted
by applicable law, such excess shall be applied toward the repayment of the
principal amount of this Note, and any further excess shall be paid over to the
Borrower.
4. Default; Remedies. In the event of the occurrence of any
one or more of the following events at any time or times hereafter, any one of
which shall constitute a default ("Default") hereunder: (a) the failure of the
Borrower to pay when due any principal amount of this Note, or within three
Business Days of its due date any interest or other amounts due under this Note;
(b) the occurrence of any "Event of Default" under and as defined in the Credit
Agreement; (c) the occurrence of a default or other event which permits the
holder or holders of any indebtedness for borrowed money in excess of
$15,000,000 owing by the Borrower (other than pursuant to the Credit Agreement)
or any "Material Subsidiary" (as defined in Section 8) to accelerate such
indebtedness; (d) any final judgments or orders for the payment of money in
excess of $15,000,000 in the aggregate shall be entered against the Borrower or
any Material
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Subsidiary by a court having jurisdiction over the property of the Borrower or
such Material Subsidiary, which judgment is not discharged, vacated, bonded or
stayed pending appeal within a period of thirty (30) days from the date of its
entry; or (e) any of the events described in Sections 9.1.8, 9.1.9, 9.1.11,
9.1.13 or 9.1.14 of the Credit Agreement shall occur (as respectively provided
in such sections as of the date hereof); then, upon or at any time after the
occurrence of any such Default, this Note and all other obligations and
liabilities of the Borrower to the Holder may, at the Holder's option, and
without demand or notice of any kind, be declared and thereupon shall become
immediately due and payable, and the Holder may, at its option, and without
notice of any kind, declare any and all commitments to make additional Advances
hereunder thereupon terminated; provided, however, upon the occurrence of a
Default under clause (e) hereof, all such obligations and liabilities shall
immediately become due and payable, and any and all such commitments of the
Holder shall immediately become terminated, in each case without demand, notice
or the exercise of any other action on the part of the Holder.
5. No Waiver. The Holder's failure at any time or times
hereafter to require strict performance by the Borrower of any of the
provisions, terms and conditions contained in this Note shall not waive, affect
or diminish any right of the Holder at any time or times hereafter to demand
strict performance thereof and such right shall not be deemed to have been
waived by any act or knowledge of the Holder, its agents, officers or employees,
unless such waiver is contained in an instrument in writing signed by an officer
of the Holder and directed to the Borrower, specifying such waiver. No waiver by
the Holder of any Default shall operate as a waiver of any other Default or the
same Default on a future occasion. No delay on the part of the Holder in the
exercise of any right or remedy shall operate as a waiver thereof, and no single
or partial exercise by the Holder of any right or remedy shall preclude other or
further exercise thereof or the exercise of any other right or remedy.
6. Applications; No Setoff. The Holder may, at any time or
times after the occurrence of a Default hereunder, take and apply towards the
indebtedness of the Borrower to the Holder, to the extent that such indebtedness
is then permitted to be paid under Section 8, in such manner as the Holder may
deem appropriate, any and all of the Borrower's present and future monies,
securities, deposits (general or special) with, and credits and claims against,
the Holder, instruments, documents, chattel paper and any and all other property
and interest in property of the Borrower now or hereafter coming into the actual
possession, custody or control of the Holder or any of its agents, affiliates,
associates or correspondents in any way and for any purpose (whether for
safekeeping, deposit, custody, pledge, transmission, collection or otherwise).
The Borrower hereby irrevocably waives all of its now existing and hereafter
arising rights to set-off any amounts owing to the Holder under this Note, or
otherwise, against any amounts now or hereafter owing by the Holder to the
Borrower. Xxxxxx, presentment, protest and notice of nonpayment and protest are
hereby severally waived by the Borrower.
7. Expense; Indemnification. If at any time or times hereafter
the Holder employs counsel to commence, defend or intervene in any court
proceedings, or to file a petition, complaint, answer, motion or other
pleadings, or to take any other action in or with respect to any suit or
proceeding (bankruptcy or otherwise) relating to this Note, or to enforce any
rights of the Holder to collect any of the obligations and liabilities of the
Borrower hereunder, then, in all of such events, the Borrower agrees to pay the
Holder on demand the reasonable attorneys' fees arising from such services, and
any reasonable expenses, costs and charges thereto. The
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Xxxxxxxx additionally agrees to reimburse and indemnify the Holder, and each of
the Holder's officers, employees, attorneys and agents, from and against all
costs, expenses, liabilities and obligations incurred by such parties in
connection with the preparation, documentation, negotiation, interpretation,
amendment, modification, waiver, closing and enforcement of the transactions
contemplated by this Note.
8. Subordination. The Borrower and the "Subordinated
Guarantor" (which term, together with the other undefined capitalized terms used
in this Section 8, is defined in Section 8 below) each covenants and agrees, and
each Holder by its acceptance of this Note covenants and agrees, that this Note
and the Subordinated Guaranty shall be issued subject to the provisions of this
Section 8 and each such Holder accepts and agrees to be bound by such
provisions. The payment of the principal of and interest on this Note, all
payments under the Subordinated Guaranty, and any other payment of Subordinated
Indebtedness shall, to the extent and in the manner set forth in this Section 8,
be subordinated and subject in right of payment to the prior payment in full of
all Senior Indebtedness, whether outstanding as of the date of this Note or
hereafter created, assumed or guaranteed. As between the Holder and the holders
of the Senior Indebtedness, the provisions of Section 8 supersede all contrary
and inconsistent provisions of the other sections of this Note and the
Subordinated Guaranty.
(a) Note and Guaranty Subordinated to Prior Payment of All
Senior Indebtedness on Dissolution, Liquidation, Reorganization, Etc.,
of the Borrower, Subordinated Guarantor or any Other Subsidiary. Upon
the payment or distribution of the assets of the Borrower, the
Subordinated Guarantor or any other Subsidiary of the Borrower of any
kind or character, whether in cash, property or securities to creditors
upon any dissolution, winding-up, total or partial liquidation or
reorganization of the Borrower, the Subordinated Guarantor or any other
Subsidiary (whether voluntary or involuntary, or in an Insolvency
Proceeding or otherwise), then in such event: (i) all Senior
Indebtedness (including principal thereof, interest thereon and fees
and expenses relating thereto) shall first be paid in full, in cash, or
have provision made for such payment in a manner acceptable to the
Senior Lenders, before any payment is made on account of the principal
of the indebtedness evidenced by this Note, the Subordinated Guaranty
or on account of any other Subordinated Indebtedness; (ii) any payment
or distribution of assets of the Borrower, the Subordinated Guarantor
or any other Subsidiary of any kind or character, whether in cash,
property or securities (other than securities issued in exchange
therefor to the Holder at the time outstanding which are subordinated
under the terms of this Section 8), to which the Holder would be
entitled except for the provisions of this Section 8, including any
such payment or distribution which may be payable or deliverable by
reason of the payment of another debt of the Borrower, the Subordinated
Guarantor or any other Subsidiary being subordinated to the payment of
this Note, the Subordinated Guaranty or other Subordinated
Indebtedness, shall be paid or delivered by any debtor, custodian or
other person making such payment or distribution, directly to the
Senior Agent, for application to payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior
Indebtedness in full, in cash, after giving effect to any concurrent
payment or distribution, or provision is made therefor in a manner
acceptable to the Requisite Senior Lenders, to the Senior Lenders; and
(iii) in the event that, notwithstanding the foregoing provisions of
this Section 8, any payment or distribution of assets of the Borrower,
the Subordinated
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Guarantor or any other Subsidiary of any kind or character, whether in
cash, property or securities (other than any equity securities issued
in exchange for this Note, the Subordinated Guaranty or other
Subordinated Indebtedness), shall be received by the Holder before all
Senior Indebtedness is paid in full, in cash, or provision made for its
payment in a manner acceptable to the Requisite Senior Lenders, such
payment or distribution shall be held in trust for the benefit of, and
shall be immediately paid or delivered by the Holder to, the Senior
Agent, to the extent necessary to pay all Senior Indebtedness in full,
in cash, after giving effect to any concurrent payment or distribution,
or provision is made therefor in a manner acceptable to the Requisite
Senior Lenders, to the Senior Lenders, (iv) the Holder agrees to
execute and deliver to Senior Agent and the Senior Lenders all such
further instruments reasonably requested by Senior Agent confirming the
authorization referred to in the foregoing clause (ii); (v) the Holder
agrees (A) not to waive, release or compromise any claim of the Holder
in respect of the Note or other Subordinated Indebtedness without the
prior written consent of the Requisite Senior Lenders and (B) to take
all actions as the Senior Agent reasonably may request in order to
enable the Senior Agent to enforce all claims upon or in respect of the
Subordinated Indebtedness for the benefit of the Senior Lenders; and
(vi) the Holder agrees to execute, verify, deliver and file any proofs
of claim in respect of the Note, the Subordinated Guaranty and other
Subordinated Indebtedness within at least twenty (20) business days
prior to any claims bar date in an Insolvency Proceeding with respect
to the Borrower, the Subordinated Guarantor or any of its other
Subsidiaries obligated with respect to any Subordinated Indebtedness,
and if the Holder fails to so act within such period, the Senior Agent
shall be, and hereby irrevocably is, authorized, empowered and
appointed the agent and attorney-in-fact of the Holder to take all such
actions to execute, verify, deliver and file such proofs of claim. The
Borrower and the Subordinated Guarantor shall give prompt notice to the
Holder of any dissolution, winding-up, liquidation or reorganization of
the Borrower, the Subordinated Guarantor or any other Subsidiary. Upon
any distribution of assets of the Borrower, the Subordinated Guarantor
or any other Subsidiary referred to in this Section 8, the Holder shall
be entitled to rely upon any order or decree by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceeding is pending, or a certificate of the
liquidating trustee or agent or other person making any distribution to
the Holder, for the purpose of ascertaining the persons entitled to
participate in such distribution, the Senior Lenders, the Requisite
Senior Lenders, the amount of the Senior Indebtedness, the amount or
amounts paid or distributed thereon and all other facts pertinent
thereto or to this section.
(b) Restriction on Action by Xxxxxx.
(i) Until the Senior Indebtedness is paid in full in cash and
the Commitments have terminated, and notwithstanding anything contained
in the Note, the Subordinated Guaranty, any other document governing
any Subordinated Indebtedness or the Credit Agreement to the contrary,
the Holder shall not agree to any amendment or modification of, or
supplement to, the Note, the Subordinated Guaranty or any other
document governing any Subordinated Indebtedness as in effect on the
date hereof, the effect of which is to: (A) provide for any increase in
the rate of interest on, or for the payment of any fees in respect of,
the Note, or any increase in the frequency of any payment thereof, (B)
require any principal payments of the Note prior to any required date
of repayment or
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prepayment provided in Section 2, (C) make any required date of
repayment or prepayment provided in Section 2 an earlier date, (D)
increase the maximum stated principal amount of Advances which may be
made under this Note, (E) secure the Note, the Subordinated Guaranty or
any other guaranty obligations with respect thereto with the grant of
any security interests, mortgage liens or other collateral assignments
on the property of the Borrower, the Subordinated Guarantor or its
other Subsidiaries or any "Loan Party" under and as defined in the
Credit Agreement, or (F) add covenants in this Note, the Subordinated
Guaranty or any other document governing any Subordinated Indebtedness
that are materially restrictive, or amend Section 10 (Choice of Law) or
Section 11 (Exclusive Submission to Jurisdiction) hereof.
(ii) The Holder shall not take any Subordinated Collection
Action, upon the occurrence and during the continuance of a Default
under the Note or otherwise, until the earliest to occur of any of the
following:
(A) the Senior Indebtedness is paid in full in cash and the
Commitments have terminated;
(B) commencement of an Insolvency Proceeding (so long as such
Insolvency Proceeding was not initiated by or at the request
of the Holder or any other Persons acting in concert with the
Holder); and
(C) the date which is 180 days after receipt by the Senior
Agent of a written notice from the Holder to the Borrower, the
Subordinated Guarantor and the Senior Agent of the occurrence
of a Default under the Note;
provided, that, notwithstanding anything to the contrary contained in
this Note, the Subordinated Guaranty or any other related document,
unless and until all Senior Indebtedness has been paid in full in cash
and the Commitments have terminated, all distributions or other
proceeds of any Subordinated Collection Action received by the Holder
shall be subject to the terms of this Section 8 and paid or delivered
to the Senior Agent, as provided herein.
(c) Holder to Be Subrogated to Right of Holders of Senior
Indebtedness. Subject to the prior payment in full, in cash, of all
Senior Indebtedness then due, the Holder shall be subrogated to the
rights of the Senior Lenders to receive payments or distributions of
assets of the Borrower, the Subordinated Guarantor or any other
Subsidiary applicable to the Senior Indebtedness until the principal of
the Note shall be paid in full, and, for purposes of such subrogation,
no payments or distributions to the Senior Lenders, whether in cash,
property or securities, distributable to the Senior Lenders under the
provisions hereof to which the Holder would be entitled except for the
provisions of this Section 8, and no payment pursuant to the provisions
of this Section 8 to the Senior Lenders by the Holder shall, as among
the Borrower, the Subordinated Guarantor or any other Subsidiary, its
creditors other than the Senior Lenders, and the Holder, be deemed to
be a payment by the Borrower, the Subordinated Guarantor or such other
Subsidiary to or on account of Senior Indebtedness, it being understood
that the provisions of this Section 8 are, and are intended, solely for
the purpose of defining the
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relative rights of the Holder, on the one hand, and the Senior Agent
and the Senior Lenders, on the other hand.
(d) Obligations of the Borrower Unconditional. Nothing
contained in this Section 8 or elsewhere in this Note or in the
Subordinated Guaranty is intended to or shall impair, as among the
Borrower, the Subordinated Guarantor and its other Subsidiaries, their
creditors other than the Senior Lenders, and the Holder, the
obligations of the Borrower, the Subordinated Guarantor and its other
Subsidiaries, which are absolute and unconditional, to pay to the
Holder the indebtedness under this Note and the Subordinated Guaranty,
as and when the same shall become due and payable in accordance with
the terms hereof and thereof or any other document governing any
Subordinated Indebtedness, or to affect the relative rights of the
Holder and other creditors of the Borrower, the Subordinated Guarantor
or any other Subsidiary other than the Senior Lenders.
(e) Borrower and Subordinated Guarantor Not to Make Payment in
Certain Circumstances. Notwithstanding any other provision of the Note,
the Subordinated Guaranty or any other document governing any
Subordinated Indebtedness to the contrary and in addition to any other
limitations set forth herein or therein, except as expressly permitted
under this Section 8(e) or otherwise permitted by the Requisite Senior
Lenders in writing, the Holder hereby agrees that it will not ask,
demand, sue for, take, receive, accept or retain, directly or
indirectly, including by exercise of any right of set-off or
recoupment, any payment of principal, interest, fees or any other
amount due with respect to the Subordinated Indebtedness, until all of
the Senior Indebtedness is paid in full in cash and the Commitments
have terminated; provided, that, notwithstanding the foregoing
provisions of this Section 8(e), but subject in all respects to the
other terms and provisions of this Section 8, the Holder may accept
from the Borrower or the Subordinated Guarantor repayments of the
outstanding principal balance hereof on the dates and to the extent
such payments are required to be paid pursuant to Section 2, regularly
scheduled payments of interest and other amounts required to be paid to
the Holder hereunder on a non-accelerated basis, voluntary prepayments
of principal of this Note, and payments of accrued and unpaid interest
with respect to and at the times of any repayment or prepayment of
principal under and pursuant to this Note; provided, further, that no
such payment shall be taken, received, accepted or retained by the
Holder:
(i) Upon the happening of a default in payment
(whether at maturity or at a date fixed for prepayment or by
acceleration or otherwise) of the principal of or interest on
any Senior Indebtedness, as such default is defined under or
in respect of such Senior Indebtedness or in any agreement
pursuant to which such Senior Indebtedness has been incurred
and until the amount of such Senior Indebtedness then due
shall have been paid in full, in cash, or provision made
therefor in a manner satisfactory to the Requisite Senior
Lenders, or such default shall have been cured or waived in
writing by the Requisite Senior Lenders or shall have ceased
to exist;
(ii) Upon the happening of an event of default with
respect to the Senior Indebtedness (other than in an event
described in clause (i) of this Section 8(e)),
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permitting the holders thereof to immediately accelerate the
maturity thereof, or upon the failure of the Borrower to
comply with the covenants in Section 8.3.1 or 8.3.2 of the
Credit Agreement irrespective of any applicable "grace
periods" under Section 9 of the Credit Agreement, and upon
written notice thereof given to the Borrower and the Initial
Holder by the Senior Agent (a "Block Notice") and until such
event of default shall have been cured or waived in writing
by the Requisite Senior Lenders or shall have ceased to
exist; provided, however, that this clause (ii) shall not
prevent the making of any such payment (which is not
otherwise prohibited by clause (i) of this Section 8(e)) more
than 269 days after the Block Notice shall have been given
unless the Senior Indebtedness in respect of which such event
of default exists has been declared due and payable in its
entirety, in which case no such payment may be made until
such acceleration has been waived, rescinded or annulled, or
such Senior Indebtedness shall have been paid in full, in
cash, or payment thereof shall be duly provided for in a
manner satisfactory to the Requisite Senior Lenders.
Notwithstanding the foregoing, no event of default with
respect to the Senior Indebtedness that existed or was
continuing on the date of delivery of any Block Notice to the
Holder shall be, or be made, the basis for any subsequent
Block Notice;
(iii) In the case of mandatory prepayments of the
principal balance of this Note pursuant to Section 2 on the
date of the consummation of the IPO, or in the case of
payments of accrued and unpaid interest with respect to such
prepaid principal balance (and without limiting the generality
of the provisions of clauses (i) and (ii) of this Section 8(e)
it being acknowledged that such prepayments or payments may
not be made if prohibited by such clauses), unless (A) no
Event of Default or Potential Default exists and is continuing
at the time of such payments or would result therefrom, and
(B) no Material Adverse Change shall have occurred as of the
date of such payments since the end of the then most recently
ended fiscal quarter of the Borrower with respect to which
financial statements of the Borrower have been required to be
delivered to the Senior Agent pursuant to Section 8.3 of the
Credit Agreement;
(iv) In the case of voluntary prepayment of the
principal balance of this Note, in the case of payments of
accrued and unpaid interest with respect to such prepaid
principal balance, or in the case of payments of any other
amounts from time to time due and payable under this Note
(other than principal and interest), in any case (and without
limiting the generality of the provisions of clauses (i) and
(ii) of this Section 8(e) it being acknowledged that such
prepayments or payments may not be made if prohibited by such
clauses), unless (A) no Event of Default or Potential Default
exists and is continuing at the time of such payments or would
result therefrom, (B) as of the date of such payments, no
Material Adverse Change shall have occurred since the end of
the then most recently ended fiscal quarter of the Borrower
with respect to which financial statements of the Borrower
have been required to be delivered to the Senior Agent
pursuant to Section 8.3 of the Credit Agreement, (C) the
Borrower would be in pro forma compliance with each of its
covenants contained in the Credit Agreement as of the end of
the then most recently ended fiscal quarter of the Borrower
with respect to which financial
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statements of the Borrower have been required to be delivered
to the Senior Agent pursuant to Section 8.3 of the Credit
Agreement had such payments been made as of the last day of
such fiscal quarter, and the Borrower shall have delivered to
the Senior Agent, not later than three (3) Business Days
prior to such payments, a pro forma Compliance Certificate
demonstrating such pro forma compliance, (D) after giving
effect to such payments, the sum of (1) the amount, if any,
by which (x) the sum of the Revolving Credit Commitments and
the Line of Credit Commitments exceeds (y) the sum of the
outstanding principal balance of the Revolving Credit Loans,
Swing Loans and Line of Credit Loans and the amount of
Letters of Credit Outstanding, plus (2) the aggregate amount
of cash and cash equivalents of the Borrower and its
Subsidiaries as of the date of such payments as determined in
accordance with GAAP, is greater than or equal to
$40,000,000, and (E) in the case of any such payments made
after the consummation of the IPO, Consolidated Net Worth
would be greater than or equal to $385,000,000 calculated on
a pro forma basis based upon the Borrower's financial
condition as of the end of the then most recently ended
fiscal quarter with respect to which financial statements
have been required to be delivered to the Senior Agent
pursuant to Section 8.3 of the Credit Agreement but after
giving effect to such payments and, if not otherwise included
in such financial results, after giving effect to the IPO;
and
(v) In the event that, notwithstanding the foregoing
provisions of this Section 8(e), any payment on account of
the indebtedness under this Note, the Subordinated Guaranty
or any other Subordinated Indebtedness shall be made by or on
behalf of the Borrower, the Subordinated Guarantor or any
other Subsidiary and received by the Holder at a time during
which the Holder shall not be permitted to receive, accept or
retain such payment pursuant to clauses (i) through (iv) of
this Section 8(e), then, unless and until the amount of such
Senior Indebtedness then due shall have been paid in full, in
cash, or provision made therefor in a manner acceptable to
the Requisite Senior Lenders or such default shall have been
cured or waived in writing by the Requisite Senior Lenders,
such payment shall be held in trust for the benefit of, and
shall be immediately paid over to, the Senior Lenders for
application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior
Indebtedness in accordance with its terms, after giving
effect to any concurrent payment or distribution to or for
the benefit of the Senior Lenders.
(f) Notice to Holder. The Borrower shall give prompt written
notice to the Holder of any fact known to the Borrower which would
prohibit the making of any payment to the Holder in respect of this
Note or any other Subordinated Indebtedness pursuant to the terms of
this Section 8. Notwithstanding the provisions of this Section 8 or any
other provision of this Note or the Subordinated Guaranty, the Holder
shall not at any time be charged with knowledge of the existence of any
facts which would prohibit the making of any payment to the Holder,
unless and until the Holder shall have received written notice thereof
from the Borrower or from the Senior Lenders; and, prior to the receipt
of any such written notice, the Holder shall be entitled to assume
conclusively that such facts do not exist. The Holder shall be entitled
to rely on the delivery to it of a statement of account by the Senior
Agent listing the Senior Lenders, the Requisite Senior
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Xxxxxxx and the amounts due to the Senior Lenders with respect to the
Senior Indebtedness.
(g) Subordination Rights Not Impaired by Acts or Omissions of
Borrower, Subordinated Guarantor, Other Subsidiaries or Holders of
Senior Indebtedness; Beneficiaries; Modifications. No right of the
Senior Agent or any present or future Senior Lenders to enforce
subordination, as herein provided, shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the
Borrower, the Subordinated Guarantor or any other Subsidiary or by any
act or failure to act, in good faith, by any such person, or by any
noncompliance by the Borrower, the Subordinated Guarantor or any other
Subsidiary with the terms, provisions and covenants of this Note, the
Subordinated Guaranty or other document governing any Subordinated
Indebtedness, regardless of any knowledge thereof which any such holder
may have or be otherwise charged with. The Senior Agent and the Senior
Lenders may extend, renew, modify or amend the terms of such Senior
Indebtedness or any security therefor and release, sell or exchange
such security and otherwise deal freely with the Borrower, the
Subordinated Guarantor or any other Subsidiary, all without affecting
the liabilities and obligations of the Borrower, the Subordinated
Guarantor any other Subsidiary or the Holder under this Note, the
Subordinated Guaranty or other documents governing any Subordinated
Indebtedness. The provisions of this Section 8 are for the benefit of
the Senior Agent and the Senior Lenders. No provision in any amendment,
modification or waiver of Section 8 of this Note, the Subordinated
Guaranty or any other provision of this Note, the Subordinated Guaranty
or other document governing Subordinated Indebtedness which affects the
terms of such section shall be effective against the Senior Agent or
the Senior Lenders unless the Senior Agent has consented in writing
thereto.
(h) Reinstatement; Disgorgement. If, following any payment in
full or provision for such payment in full of Senior Indebtedness, (i)
any payment with respect to the Subordinated Indebtedness is received
by the Holder and (ii) as a consequence of any subsequent Insolvency
Proceeding with respect to the Borrower, the Subordinated Guarantor or
any of its other Subsidiaries, any holder of Senior Indebtedness is
required by competent court authority to disgorge or repay any such
payments it had received with respect to the Senior Indebtedness to the
Borrower, the Subordinated Guarantor or such other Subsidiary, or any
trustee, receiver or other representative on behalf of such entity or
its estate, then:
(A) Senior Indebtedness shall thereupon be deemed to
again be outstanding for all purposes of this Section 8; and
(B) any and all payments that had been received by
the Holder with respect to the Subordinated Indebtedness
during the period following the original payment in full of
Senior Indebtedness and before the disgorgement or repayment
by the holders of Senior Indebtedness referred to in clause
(ii) of this Section 8(h), shall be, immediately upon request
therefor by the Senior Agent, paid over to the Senior Agent,
for the benefit of the Senior Lenders, for application to the
Senior Indebtedness, except to the extent that such payments
to the Holder are required by competent court authority to be
disgorged or repaid to the Borrower, the
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Subordinated Guarantor any other Subsidiary of the Borrower,
or any trustee, receiver or other representative on behalf of
such entity or its estate.
(i) Representations and Warranties. By acceptance of this
Note, the Holder hereby represents and warrants to the Senior Lenders
as follows:
(i) Authority. It has full power and authority to
enter into, execute, deliver and carry out the terms of this
Note and to incur the obligations provided for herein, all of
which have been duly authorized by all proper and necessary
action and are not prohibited by the organizational
instruments of the Holder.
(ii) Binding Agreements. This Note has, upon
acceptance by the Holder, been executed and delivered by, and
shall constitute the valid and legally binding obligation of,
the Holder enforceable in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and
by equitable principles.
(j) Certain Definitions. For purposes of this Note, the
following terms shall have the following respective meanings:
"Commitments" has the meaning assigned to such term under the
Credit Agreement.
"Initial Holder" means KPMG LLP, a Delaware limited liability
partnership.
"Insolvency Proceeding" means, with respect to any entity, (a)
any case, action or proceeding with respect to such entity before any
court or other governmental authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshaling of assets for creditors,
or other, similar arrangement in respect of its creditors generally or
any substantial portion of its creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors; undertaken under United States Federal, state or foreign
law, including the Federal Bankruptcy Reform Act of 1978, as amended
(11 U.S.C. ss.101 et. seq.).
"Requisite Senior Lenders" means the "Required Banks" as
defined in the Credit Agreement as of the date hereof.
"Senior Agent" means PNC Bank, National Association as the
agent for the Senior Lenders under the Credit Agreement.
"Senior Indebtedness" means the principal of and premium, if
any, and interest (including, without limitation, any interest accruing
subsequent to the commencement of an Insolvency Proceeding, whether or
not constituting an allowed claim in any such proceedings) on all loans
and other financial accommodations provided under the Credit Agreement,
and fees, costs, enforcement expenses (including legal fees
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and disbursements), collateral protection expenses and other
reimbursement or indemnity obligations, or any other "Obligations" (as
defined in the Credit Agreement) thereunder or under any other "Loan
Documents" referred to and defined therein, as such Credit Agreement
and Loan Documents may hereafter be amended, restated or replaced.
"Senior Lenders" means the "Banks" under the Credit Agreement
and their successors and assigns.
"Subordinated Collection Action" shall mean (a) any
acceleration of the Note, (b) to file or initiate, or to join with
other persons in filing or initiating, an Insolvency Proceeding against
the Borrower, the Subordinated Guarantor or any other "Guarantor" under
the Credit Agreement, (c) any judicial proceeding or other action
initiated or taken by the Holder, or by the Holder in concert with
other persons or entities, against the Borrower, the Subordinated
Guarantor or any other "Guarantor" under the Credit Agreement to
collect under the Note, the Subordinated Guaranty or under any other
document governing or evidencing any Subordinated Indebtedness or
otherwise to enforce any rights or remedies of the Holder under the
Note, the Subordinated Guaranty or other such document or applicable
law with respect to the obligations under the Note, the Subordinated
Guaranty or such document; or (d) any other exercise by Holder of
remedies, either at law or in equity, pertaining to the collection of
the Note, the Subordinated Guaranty or other document governing or
evidencing any Subordinated Indebtedness; provided, however, that
effecting payments under the Note through the exercise of setoff rights
by the Holder shall not constitute a Subordinated Collection Action
unless such action is conducted unilaterally by the Holder following
the occurrence and during the continuation of a Default hereunder or
such payments are not then permitted to be paid under this Section 8.
"Subordinated Guarantor" shall mean KPMG Consulting, LLC, a
Delaware limited liability company.
"Subordinated Guaranty" shall mean that certain Subordinated
Guaranty of even date herewith executed and delivered by the
Subordinated Guarantor in favor of the Holder with respect to the
Borrower's obligations under this Note.
"Subordinated Indebtedness" means the principal of and
premium, if any, and interest, if any (including, without limitation,
any interest accruing subsequent to the commencement of an Insolvency
Proceeding, whether or not constituting an allowed claim in any such
proceedings) on the Advances, and all other fees, costs, enforcement
expenses (including legal fees and disbursements), collateral
protection expenses and other reimbursement or indemnity obligations
under or related to this Note, all obligations of the Subordinated
Guaranty under the Subordinated Guaranty, and all obligations of any
other Subsidiary which has guaranteed or hereafter guaranties all or
any portion of the foregoing obligations of the Borrower to the Holder.
Each of the terms, "Consolidated Net Worth," "Compliance
Certificate," "GAAP," "Letters of Credit Outstanding," "Line of Credit Loans,"
"Material Adverse Change," "Material Subsidiary," "Revolving Credit Loans,"
"Subsidiary" and "Swing Loans," and any
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other undefined capitalized terms which are used herein, shall have the meanings
respectively ascribed to such terms in the Credit Agreement as of the date
hereof.
9. Successors and Assigns. Whenever in this Note there is
reference made to any of the Holder, the Borrower or the Subordinated Guarantor,
such reference shall be deemed to include, as applicable, a reference to the
successors and assigns, or heirs, executors and administrators of said party.
The provisions of this Note shall be binding upon and shall inure to the benefit
of said successors and assigns, or heirs, executors and administrators, as
applicable. Notwithstanding the foregoing, the Borrower may not assign any
rights or interests it may have hereunder to any person or entity without the
prior written consent of the Holder. The Holder may assign its rights and
interests in this Note and the other Loan Documents to any person or entity, but
only if such assignment is made subject to all of the provisions of this Note
including, without limitation, the provisions of Section 8 hereof and (b)
written notice of the name and address of the subsequent Holder shall have been
delivered to the Senior Agent. Any successor to the Senior Agent shall be
entitled to the rights and benefits afforded to the Senior Agent hereunder and
all obligations of the Holder, the Borrower and the Subordinated Guarantor under
Section 8 hereof or otherwise under this Note shall remain in full force and
effect after any assignment by the Senior Agent of its rights and obligations
under the Credit Agreement.
10. Notices. All notices, requests and other communications to
any party hereunder shall be given or made by telecopier or other writing and
telecopied, or mailed or delivered to the intended recipient at its address or
telecopier number set forth on the signature pages hereof or such other address
or telecopy number as such party may hereafter specify for such purpose by
notice to the other party hereto. Except as otherwise provided in this Note, all
such communications shall be deemed to have been duly given when transmitted by
telecopier, or personally delivered or, in the case of a mailed notice sent by
certified mail return-receipt requested, on the date set forth on the receipt
(provided that any refusal to accept any such notice shall be deemed to be
notice thereof as of the time of any such refusal), in each case given or
addressed as aforesaid.
11. Governing Law. THIS NOTE HAS BEEN DELIVERED AT AND SHALL
BE DEEMED TO HAVE BEEN MADE AT NEW YORK, NEW YORK, AND SHALL BE INTERPRETED, AND
THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY
CONFLICTS OF LAWS PRINCIPLES.
12. Submission to Jurisdiction; Service of Process. EACH OF
THE HOLDER AND THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF
AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT
OR FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK, AND ANY COURT
HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY ACTION
OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS NOTE, WHETHER
ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
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PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT
OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE HOLDER
AND THE BORROWER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THE BORROWER WAIVES IN ALL
DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING
THE DISPUTE. THE BORROWER AGREES THAT THE HOLDER SHALL HAVE THE RIGHT TO PROCEED
AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE THE
HOLDER TO ENFORCE A JUDGMENT OF ANOTHER COURT ORDER ENTERED IN FAVOR OF THE
HOLDER. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF
THE COURT IN WHICH THE HOLDER MAY COMMENCE A PROCEEDING DESCRIBED HEREIN.
THE BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF
ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY AGENT
OF THE BORROWER IN THE STATE OF NEW YORK (WITH A COPY OF SUCH NOTICE DELIVERED
TO THE BORROWER AT ITS ADDRESS INDICATED BELOW), SUCH SERVICE TO BECOME
EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. THE BORROWER IRREVOCABLY WAIVES ANY
OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS NOTE
IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF
THE HOLDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION.
13. Waiver of Jury Trial. EACH OF THE HOLDER AND THE BORROWER
IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO
THIS NOTE.
14. Severability. Wherever possible each provision of this
Note shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Note shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Note.
* * *
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IN WITNESS WHEREOF, this Note has been executed and delivered
as of the date first above written.
KPMG CONSULTING, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxx
---------------------
Title: Treasurer
---------------------
Address:
KPMG Consulting, Inc.
0 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
With copies to:
Xxxxx X. Xxxxx, General Counsel
KPMG Consulting, Inc.
0000 Xxxxxxxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
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KPMG CONSULTING, LLC, as the Subordinated
Guarantor for purposes of Section 8
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxx
---------------------
Title: Treasurer
---------------------
Address:
KPMG Consulting, LLC
0 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
With copies to:
Xxxxx X. Xxxxx, General Counsel
KPMG Consulting, LLC
0000 Xxxxxxxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
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Agreed and Accepted:
KPMG LLP, as the Holder
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
----------------------
Title: Chairman
---------------------
0 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
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SUBORDINATED GUARANTY
THIS SUBORDINATED GUARANTY (this "Guaranty") is made as of the 15th day
of January, 2001, by KPMG Consulting, LLC, a Delaware limited liability company
(the "Guarantor"), in favor of the Holder with respect to the Subordinated Note
referred to below;
WITNESSETH:
WHEREAS, KPMG Consulting, Inc., a Delaware corporation (the
"Principal"), and KPMG LLP, a Delaware limited liability partnership (together
with its successors and assigns, the "Holder"), have executed and delivered a
Subordinated Revolving Note Due August 24, 2004 of even date herewith (as same
may be amended or modified from time to time, the "Subordinated Note"),
providing, subject to the terms and conditions thereof, for extensions of credit
to be made by the Holder to the Principal;
WHEREAS, it is a condition precedent to the Holder's executing and
delivering the Subordinated Note and making advances thereunder that the
Guarantor execute and deliver this Guaranty whereby the Guarantor shall
guarantee the payment when due of all Guaranteed Obligations, as defined below;
and
WHEREAS, in consideration of the financial and other support that the
Principal has provided, and such financial and other support as the Principal
may in the future provide, to the Guarantor, and in order to induce the Holder
to enter into the Subordinated Note and make advances thereunder, and because
the Guarantor has determined that executing this Guaranty is in its interest and
to its financial benefit, the Guarantor is willing to guarantee the obligations
of the Principal under the Subordinated Note;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1.1 Terms in Subordinated Note. Capitalized terms used herein
but not defined herein shall have the meaning set forth in the Subordinated
Note.
SECTION 1.2 Subordination. The Guarantor covenants and agrees, and each
Holder by its acceptance of this Guaranty covenants and agrees, that this
Guaranty shall be issued subject to the provisions of Section 8 of the
Subordinated Note and each such Holder accepts and agrees to be bound by such
provisions. The payment of any amounts, including, without limitation, the
Guaranteed Obligations, under this Guaranty and any other payment of
"Subordinated Indebtedness" (as defined in the Subordinated Note) shall, to the
extent and in the manner set forth in such Section 8, be subordinated and
subject in right of payment to the prior payment in full of all Senior
Indebtedness, whether outstanding as of the date of this Guaranty or hereafter
created, assumed or guaranteed. Notwithstanding anything herein to the contrary,
all obligations of the Guarantor hereunder shall constitute Subordinated
Indebtedness under and as defined in the Subordinated Note.
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SECTION 2.1 Representations and Warranties. The Guarantor represents
and warrants (which representations and warranties shall be deemed to have been
renewed upon the making of each Advance under the Subordinated Note) that:
(a) It is a limited liability company duly and properly
organized, validly existing and (to the extent such concept applies to such
entity) in good standing under the laws of its jurisdiction of organization and
has all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
(b) It has the power and authority and legal right to execute
and deliver this Guaranty and to perform its obligations hereunder. The
execution and delivery by it of this Guaranty and the performance of its
obligations hereunder have been duly authorized by proper corporate proceedings,
and this Guaranty constitutes a legal, valid and binding obligation of the
Guarantor enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
(c) Neither the execution and delivery by it of this Guaranty,
nor the consummation of the transactions herein contemplated, nor compliance
with the provisions hereof will violate (i) any law, rule, regulation, order,
writ, judgment, injunction, decree or award binding on it or any of its
subsidiaries or (ii) its articles or certificate of organization, or operating
or other management agreement, as the case may be, or (iii) the provisions of
any indenture, instrument or agreement to which it or any of its Subsidiaries is
a party or is subject, or by which it, or its property, is bound, or conflict
with or constitute a default thereunder, or result in, or require, the creation
or imposition of any lien in, of or on the property of such Guarantor or a
Subsidiary thereof pursuant to the terms of any such indenture, instrument or
agreement. No order, consent, adjudication, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, or
other action in respect of any governmental or public body or authority, or any
subdivision thereof, which has not been obtained by it or any of its
Subsidiaries, is required to be obtained by it or any of its Subsidiaries in
connection with the execution and delivery of this Guaranty or the performance
by it of its obligations hereunder or the legality, validity, binding effect or
enforceability of this Guaranty.
SECTION 3. The Guaranty. The Guarantor hereby absolutely and
unconditionally guarantees, as primary obligor and not as surety, the full and
punctual payment (whether at stated maturity, upon acceleration or early
termination or otherwise, and at all times thereafter) and performance of all of
the Principal's obligations to the Holder under and with respect to the
Subordinated Note, including without limitation any such obligations incurred or
accrued during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, whether or not allowed or allowable in such proceeding
(collectively, the "Guaranteed Obligations"). Upon failure by the Principal to
pay punctually any such amount, the Guarantor agrees that it shall forthwith on
demand pay to the Holder the amount not so paid at the place and in the manner
specified in the Subordinated Note. This Guaranty is a guaranty of payment and
not of collection. The Guarantor waives any right to require the Holder to sue
the Principal, any other guarantor, or any other person obligated for all or any
part of the Guaranteed Obligations, or otherwise to enforce its payment against
any collateral securing all or any part of the Guaranteed Obligations.
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SECTION 4. Guaranty Unconditional. The obligations of the Guarantor
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect of any of the Guaranteed Obligations, by operation
of law or otherwise, or any obligation of any other guarantor of any of
the Guaranteed Obligations, or any default, failure or delay, willful
or otherwise, in the payment or performance of the Guaranteed
Obligations;
(ii) any modification or amendment of or supplement to the
Subordinated Note;
(iii) any release, nonperfection or invalidity of any direct
or indirect security for any obligation of the Principal under the
Subordinated Note or any obligations of any other guarantor of any of
the Guaranteed Obligations, or any action or failure to act by the
Holder with respect to any collateral securing all or any part of the
Guaranteed Obligations;
(iv) any change in the corporate existence, structure or
ownership of the Principal or any other guarantor of any of the
Guaranteed Obligations, or any insolvency, bankruptcy, reorganization
or other similar proceeding affecting the Principal, or any other
guarantor of the Guaranteed Obligations, or its assets or any resulting
release or discharge of any obligation of the Principal, or any other
guarantor of any of the Guaranteed Obligations;
(v) the existence of any claim, setoff or other rights which
the Guarantor may have at any time against the Principal, any other
guarantor of any of the Guaranteed Obligations, the Holder or any other
person or entity, whether in connection herewith or any unrelated
transactions;
(vi) any invalidity or unenforceability relating to or against
the Principal, or any other guarantor of any of the Guaranteed
Obligations, for any reason related to the Subordinated Note, or any
provision of applicable law or regulation purporting to prohibit the
payment by the Principal, or any other guarantor of the Guaranteed
Obligations, of the principal of or interest on the Subordinated Note
or any other amount payable by the Principal under the Subordinated
Note; or
(vii) any other act or omission to act or delay of any kind by
the Principal, any other guarantor of the Guaranteed Obligations, the
Holder or any other person or entity or any other circumstance
whatsoever which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the Guarantor's
obligations hereunder.
SECTION 5. Discharge Only Upon Payment In Full: Reinstatement In
Certain Circumstances. The Guarantor's obligations hereunder shall remain in
full force and effect until all Guaranteed Obligations shall have been
indefeasibly paid in full and any commitments of the Holder under the
Subordinated Note shall have terminated or expired. If at any time any payment
of the principal of or interest on any Note or any other amount payable by the
Principal
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or any other party under the Subordinated Note is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of the
Principal or otherwise, the Guarantor's obligations hereunder with respect to
such payment shall be reinstated as though such payment had been due but not
made at such time.
SECTION 6. Waivers. The Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and, to the fullest extent permitted by law, any
notice not provided for herein, as well as any requirement that at any time any
action be taken by any person or entity against the Principal, any other
guarantor of any of the Guaranteed Obligations, or any other person or entity.
SECTION 7. Subrogation. The Guarantor hereby agrees not to assert any
right, claim or cause of action, including, without limitation, a claim for
subrogation, reimbursement, indemnification or otherwise, against the Principal
arising out of or by reason of this Guaranty or the obligations hereunder,
including, without limitation, the payment or securing or purchasing of any of
the Guaranteed Obligations by the Guarantor unless and until the Guaranteed
Obligations are indefeasibly paid in full and any commitment of the Holder to
make additional Advances under the Subordinated Note is terminated or expired.
SECTION 8. Stay of Acceleration. If acceleration of the time for
payment of any of the Guaranteed Obligations is stayed upon the insolvency,
bankruptcy or reorganization of the Principal, all such amounts otherwise
subject to acceleration under the terms of the Subordinated Note shall
nonetheless be payable by the Guarantor hereunder forthwith on demand by the
Holder.
SECTION 9. Application of Payments. All payments received by the Holder
hereunder shall be applied by the Holder to payment of the Guaranteed
Obligations in the following order unless a court of competent jurisdiction
shall otherwise direct:
(a) FIRST, to payment of all costs and expenses of the Holder
incurred in connection with the collection and enforcement of the
Guaranteed Obligations or of any security interest granted to the
Holder in connection with any collateral securing the Guaranteed
Obligations;
(b) SECOND, to payment of that portion of the Guaranteed
Obligations constituting accrued and unpaid interest;
(c) THIRD, to payment of the principal of the Guaranteed
Obligations; and
(d) FOURTH, to payment of any Guaranteed Obligations (other
than those listed above).
SECTION 10. Notices. All notices, requests and other communications to
any party hereunder shall be given or made by telecopier or other writing and
telecopied, or mailed or delivered to the intended recipient at its address or
telecopier number set forth on the signature pages hereof or such other address
or telecopy number as such party may hereafter specify for such purpose by
notice to the other party hereto. Except as otherwise provided in this Guaranty,
all such communications shall be deemed to have been duly given when transmitted
by
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telecopier, or personally delivered or, in the case of a mailed notice sent by
certified mail return-receipt requested, on the date set forth on the receipt
(provided, that any refusal to accept any such notice shall be deemed to be
notice thereof as of the time of any such refusal), in each case given or
addressed as aforesaid.
SECTION 11. No Waivers. No failure or delay by the Holder in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies provided in this Guaranty or the Subordinated Note shall be
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 12. No Duty to Advise. The Guarantor assumes all responsibility
for being and keeping itself informed of the Principal's financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks that
the Guarantor assumes and incurs under this Guaranty, and agrees that the Holder
does not have any duty to advise the Guarantor of information known to it
regarding those circumstances or risks.
SECTION 13. Successors and Assigns. This Guaranty is for the benefit of
the Holder and its successors and assigns and in the event of an assignment of
any amounts payable under the Subordinated Note, the rights hereunder, to the
extent applicable to the indebtedness so assigned, shall be transferred with
such indebtedness. This Guaranty shall be binding upon the Guarantor and its
successors and assigns. Any successor to the Senior Agent shall be entitled to
the rights and benefits afforded to the Senior Agent hereunder and all
obligations of the Guarantor and the Holder under Section 1.2 hereof or
otherwise under this Guaranty shall remain in full force and effect after any
assignment by the Senior Agent of its rights and obligations under the Credit
Agreement.
SECTION 14. Changes in Writing. Neither this Guaranty nor any provision
hereof may be changed, waived, discharged or terminated orally, but only in
writing signed by the Guarantor and the Holder.
SECTION 15. Costs of Enforcement. The Guarantor agrees to pay all costs
and expenses including, without limitation, all court costs and attorneys' fees
and reasonable expenses paid or incurred by the Holder in endeavoring to collect
all or any part of the Guaranteed Obligations from, or in prosecuting any action
against, the Principal, the Guarantor or any other guarantor of all or any part
of the Guaranteed Obligations.
SECTION 16. Governing Law. THIS GUARANTY HAS BEEN DELIVERED AT AND
SHALL BE DEEMED TO HAVE BEEN MADE AT NEW YORK, NEW YORK, AND SHALL BE
INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO ANY CONFLICTS OF LAWS PRINCIPLES.
SECTION 17. Submission to Jurisdiction; Service of Process. EACH OF THE
HOLDER AND THE GUARANTOR IRREVOCABLY AND UNCONDITIONALLY
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SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY
NEW YORK STATE COURT OR FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN, NEW
YORK, AND ANY COURT HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH
COURTS, IN ANY ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO
OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
GUARANTY, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE
EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE HOLDER AND THE
GUARANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. THE GUARANTOR WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
THE GUARANTOR AGREES THAT THE HOLDER SHALL HAVE THE RIGHT TO PROCEED AGAINST THE
GUARANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE THE HOLDER TO
ENFORCE A JUDGMENT OF ANOTHER COURT ORDER ENTERED IN FAVOR OF THE HOLDER. THE
GUARANTOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH THE HOLDER MAY COMMENCE A PROCEEDING DESCRIBED HEREIN.
THE GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
ANY AGENT OF THE GUARANTOR IN THE STATE OF NEW YORK (WITH A COPY OF SUCH NOTICE
DELIVERED TO THE GUARANTOR AT ITS ADDRESS INDICATED BELOW), SUCH SERVICE TO
BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. THE GUARANTOR IRREVOCABLY
WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO
THIS GUARANTY IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT
THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT OF THE HOLDER TO BRING PROCEEDINGS AGAINST THE GUARANTOR IN THE COURTS
OF ANY OTHER JURISDICTION.
SECTION 18. Waiver of Jury Trial. EACH OF THE HOLDER AND THE GUARANTOR
IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO
THIS GUARANTY.
SECTION 19. Setoff. Without limiting the rights of the Holder under
applicable law, but subject to Section 8 of the Subordinated Note, if all or any
part of the Guaranteed Obligations is then due, whether pursuant to the
occurrence of a "Default" (as defined in the Subordinated
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Note) or otherwise, then the Guarantor authorizes the Holder to apply any sums
standing to the credit of the Guarantor with the Holder toward the payment of
the Guaranteed Obligations.
* * * *
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed, under seal, by its authorized officer as of the day and year first
above written.
KPMG CONSULTING, LLC
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Title: Treasurer
------------------------
Address:
KPMG Consulting, LLC
0 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With copies to:
Xxxxx X. Xxxxx, General Counsel
KPMG Consulting, LLC
0000 Xxxxxxxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
Agreed and Accepted:
KPMG LLP
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxx
---------------------------
Title: Chairman
--------------------------
0 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
8
