Exhibit 10.1

 

FIRST AMENDMENT

TO

REVOLVING CREDIT AGREEMENT

 

First Amendment dated as of June 11, 2003 to Revolving Credit Agreement (the
“First Amendment”), by and among KEANE, INC., a Massachusetts corporation (the
“Borrower”) and FLEET NATIONAL BANK and the other lending institutions listed on
Schedule 1 to the Credit Agreement (as hereinafter defined) (the “Lenders”),
amending certain provisions of the Revolving Credit Agreement dated as of
February 28, 2003 (as amended and in effect from time to time, the “Credit
Agreement”) by and among the Borrower, the Lenders, and FLEET NATIONAL BANK in
its capacity as administrative agent for the Lenders (the “Administrative
Agent”). Terms not otherwise defined herein which are defined in the Credit
Agreement shall have the same respective meanings herein as therein.

 

WHEREAS, the Borrower and the Lenders have agreed to modify certain terms and
conditions of the Credit Agreement as specifically set forth in this First
Amendment;

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

§1. Amendment to §1 of the Credit Agreement. Section 1.1 of the Credit Agreement
is hereby amended by inserting the following definitions in the appropriate
alphabetical order:

 

Designated Event. As such term is defined in the Subordinated Indenture.

 

Indenture Effective Date. The date on which the Subordinated Indenture becomes
effective and the Borrower has incurred the Subordinated Debt, which date shall
be prior to June 30, 2003.

 

Indenture Trustee. Wachovia National Bank.

 

Open Market Purchases. The purchase by the Borrower of all or any portion of the
Subordinated Notes from the holders thereof so long as (a) the total, cumulative
amount of the consideration paid for all such purchases from and after the
Indenture Effective Date does not exceed, in the aggregate, $15,000,000 in each
fiscal year, and the Subordinated Notes so purchased in each case are promptly
cancelled by the Borrower; (b) the total cumulative amount of the consideration
paid for each Subordinated Note does not exceed 110% of the face amount of each
such Subordinated Note plus accrued and unpaid interest thereon; (c) the
Borrower has no Revolving Credit Loans outstanding both immediately prior to and
after giving effect to such repurchase; and (d) the

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Borrower has demonstrated to the satisfaction of the Administrative Agent that
the Borrower’s Unencumbered Cash both immediately prior to and after giving
effect to each such repurchase is not less than $35,000,000.

 

Senior Leverage Ratio. As of any date of determination, the ratio of (a)
Consolidated Total Funded Debt outstanding on such date less the aggregate
amount of Subordinated Debt outstanding on such date to (b) Consolidated EBITDA
for the Reference Period ending on such date (or if such date is not a fiscal
quarter end date, the fiscal quarter most recently ended).

 

Subordinated Debt. Unsecured Indebtedness of the Borrower that is expressly
subordinated and made junior to the payment and performance in full of the
Obligations, as evidenced as such by the Subordinated Indenture or by another
written instrument containing subordination provisions and terms and conditions
in form and substance approved by the Lenders in advance in writing.

 

Subordinated Debt Documents. Collectively, the Subordinated Purchase Agreement,
the Subordinated Indenture, the Subordinated Registration Rights Agreement, and
the Subordinated Notes.

 

Subordinated Indenture. The Indenture dated as of a date after June 11, 2003 but
prior to June 30, 2003 between the Borrower and the Indenture Trustee relating
to the Subordinated Notes, which shall contain substantially identical terms and
conditions to those contained in the draft Offering Memorandum dated June 11,
2003 and distributed to the Administrative Agent and the Lenders on such date.

 

Subordinated Notes. The Convertible Subordinated Debentures due 2013 in the
aggregate principal amount of not more than $150,000,000 issued pursuant to the
Subordinated Indenture, which shall have an interest rate applicable thereto of
not more than five percent (5%) per annum.

 

Subordinated Purchase Agreement. The Purchase Agreement, dated or to be dated
after June 11, 2003 but prior to June 30, 2003, between the Borrower and Morgan
Stanley & Co. Incorporated, Wachovia Securities and certain other parties
thereto as initial purchasers, relating to the issuance and sale by the Borrower
of the Subordinated Notes.

 

Subordinated Registration Rights Agreement. The Registration Rights Agreement,
dated or to be dated after June 11, 2003 but prior to June 30, 2003, between the
Borrower and Morgan Stanley & Co. Incorporated, Wachovia Securities and certain
other parties thereto as initial purchasers, relating to the issuance and sale
by the Borrower of the Subordinated Notes.

 

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§2. Amendment to §7 of the Credit Agreement. Section 7 of the Credit Agreement
is hereby amended by inserting immediately after the text of §7.20 the
following:

 

7.21. Status of Loans as Senior Debt. From and after the Indenture Effective
Date, all Indebtedness of the Borrower and each of its Subsidiaries to the
Lenders and the Administrative Agent in respect of the Revolving Credit Loans
and the Reimbursement Obligations constitutes “Senior Indebtedness” or “Senior
Debt” (or the analogous term used therein) under the terms of the Subordinated
Debt Documents or of any other instrument evidencing or pursuant to which there
is issued Indebtedness which purports to be Subordinated Debt of the Borrower or
any Subsidiary.

 

7.22. Subordinated Debt Documents. Each of the representations and warranties
made by the Borrower in any of the Subordinated Debt Documents was true and
correct in all material respects on the date such representations and warranties
were made and/or deemed to have been made

 

7.23. No Other Senior Debt. The Borrower (a) has not designated any Indebtedness
of the Borrower or any of its Subsidiaries as, and has no, “Designated Senior
Indebtedness” (or the analogous term used therein) for purposes of (and as
defined in) the Subordinated Indenture, other than the Obligations and (b) has
no Indebtedness under a “senior credit facility” (or the analogous term used
therein) as those terms are defined in the Subordinated Indenture other than the
Obligations.

 

§3. Amendment to §9 of the Credit Agreement. Section 9 of the Credit Agreement
is hereby amended as follows:

 

(a) Section 9.1(d) of the Credit Agreement is hereby amended by deleting §9.1(d)
in its entirety and restating it as follows:

 

(d) Indebtedness (i) consisting of the Subordinated Debt; and (ii) in respect of
Hedging Agreements so long as such arrangements are in the ordinary course of
business and are not for speculative purposes;

 

(b) Section 9.4 of the Credit Agreement is hereby amended by deleting the
proviso contained in §9.4 and restating it as follows: “provided (i) the
Borrower has no Revolving Credit Loans outstanding both immediately prior to and
after giving effect to such repurchase; and (ii) the Borrower has demonstrated
to the satisfaction of the Administrative Agent that the Borrower’s Unencumbered
Cash both immediately prior to and after giving effect to such repurchase is not
less than (1) $10,000,000 (if such repurchase is being effected prior to the
Indenture Effective Date); and (2) $35,000,000 (if such repurchase is being
effected after the Indenture Effective Date).

 

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(c) Section 9 of the Credit Agreement is further amended by inserting
immediately after the end of the text of §9.12 the following:

 

9.13. Subordinated Debt. The Borrower will not, and will not permit any of its
Subsidiaries, to amend, supplement or otherwise modify the terms of any of the
Subordinated Debt Documents or prepay, redeem or repurchase (or offer to prepay,
redeem or repurchase) any of the Subordinated Debt [provided, however, so long
as no Default or Event of Default has occurred and is continuing or would exist
as a result thereof, the Borrower shall be permitted to make Open Market
Purchases to the extent permitted by the terms of the Subordinated Indenture.

 

9.14. Senior Debt. The Borrower will not (a) in any manner designate or permit
to exist any Indebtedness of the Borrower or any of its Subsidiaries as
“Designated Senior Indebtedness” (or any analogous term) for purposes of (and as
defined in) the Subordinated Indenture, other than the Indebtedness arising
under this Credit Agreement and the Guarantees, or (b) incur or permit to exist
any Indebtedness under any “senior credit facility” (or any analogous term) as
such terms are defined in the Subordinated Indenture, other than the
Indebtedness arising under this Credit Agreement and the Guarantees and the
other Obligations.

 

§4. Amendment to §10 of the Credit Agreement. Section 10 of the Credit Agreement
is hereby amended as follows:

 

(a) Section 10.2 of the Credit Agreement is hereby amended by deleting §10.2 in
its entirety and restating it as follows:

 

10.2. Leverage Ratio. The Borrower will not permit the Leverage Ratio to (a)
exceed at any time from the Indenture Effective Date through and including
December 30, 2003 the ratio set forth below (with such ratio to be determined
based on the aggregate amount of the Subordinated Notes on the date of
determination):

 

Principal Amount of Subordinated Notes outstanding on date of determination

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   Ratio

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$125,000,000 or less

   3:00:1.00

Greater than $125,000,000 but less than or equal to $135,000,000

   3.25:1.00

Greater than $135,000,000

   3.50:1.00

 

; and (b) exceed 3.00:1.00 at any time from and after December 31, 2003.

 

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(b) Section 10 of the Credit Agreement is further amended by inserting
immediately after the end of the text of §10.3 the following:

 

10.4. Senior Leverage Ratio. The Borrower will not permit the Senior Leverage
Ratio to exceed 1.75:1.00 at any time.

 

§5. Amendment to §13 of the Credit Agreement. Section 13.1 of the Credit
Agreement is hereby amended as follows:

 

(a) Section 13.1(f) of the Credit Agreement is hereby amended by deleting
§13.1(f) in its entirety and restating it as follows:

 

(f) (i) the holders of all or any part of the Subordinated Debt shall accelerate
the maturity of all or any part of the Subordinated Debt; or the Subordinated
Debt shall be (or shall be required at such time to be) prepaid, redeemed or
repurchased in whole or in part; or the Borrower or any of its Subsidiaries
shall be or become required under the terms of any of the Subordinated Debt
Documents to prepay, redeem or repurchase (or shall be or become required
thereunder to offer to prepay, redeem or repurchase) all or any part of the
Subordinated Debt; or (ii) the Borrower or any of its Subsidiaries shall fail to
pay at maturity, or within any applicable period of grace, any obligation for
borrowed money or credit received or in respect of any Capitalized Lease or
Synthetic Lease, in an amount in excess of $5,000,000, or any Subordinated Debt,
or fail to observe or perform any material term, covenant or agreement contained
in any agreement by which it is bound, evidencing or securing borrowed money or
credit received or in respect of any Capitalized Leases or Synthetic Leases, in
an amount in excess of $5,000,000, or any Subordinated Debt, for such period of
time as would permit (assuming the giving of appropriate notices if required)
the holder or holders thereof or of any obligations issued thereunder to
accelerate the maturity thereof, or any such holder or holders shall rescind or
shall have the right to rescind the purchase of any such obligations;

 

(b) Section 13.1(n) of the Credit Agreement is hereby amended by inserting
immediately after the words “Change of Control” the words “or a Designated
Event”.

 

§6. Conditions to Effectiveness. This First Amendment shall not become effective
until the Administrative Agent receives a counterpart of this First Amendment,
executed by the Borrower, the Required Lenders and the Guarantors.

 

§7. Representations and Warranties. The Borrower hereby repeats, on and as of
the date hereof, each of the representations and warranties made by it in §7 of
the Credit Agreement (except to the extent of changes resulting from
transactions contemplated or permitted by the Credit Agreement (as amended by
this First Amendment) and the other Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties relate
expressly to an earlier date), provided, that all references therein to the
Credit Agreement shall refer to such Credit Agreement as amended hereby. In
addition, the Borrower hereby

 

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represents and warrants that the execution and delivery by the Borrower of this
First Amendment and the performance by the Borrower of all of its agreements and
obligations under the Credit Agreement as amended hereby are within the
authority of the Borrower and have been duly authorized by all necessary action
on the part of the Borrower.

 

§8. Ratification, Etc. Except as expressly amended hereby, the Credit Agreement,
the other Loan Documents (which, for the avoidance of doubt, shall included the
Guarantees) and all documents, instruments and agreements related thereto are
hereby ratified and confirmed in all respects and shall continue in full force
and effect. The Credit Agreement and this First Amendment shall be read and
construed as a single agreement. All references in the Credit Agreement or any
related agreement or instrument to the Credit Agreement shall hereafter refer to
the Credit Agreement as amended hereby.

 

§9. No Waiver. Nothing contained herein shall constitute a waiver of, impair or
otherwise affect any Obligations, any other obligation of the Borrower or any
rights of the Administrative Agent or the Lenders consequent thereon.

 

§10. Counterparts. This First Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.

 

§11. Governing Law. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT
REFERENCE TO CONFLICT OF LAWS).

 

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IN WITNESS WHEREOF, the parties hereto have executed this First Amendment as a
document under seal as of the date first above written.

 

KEANE, INC. By:   /s/    JOHN J. LEAHY  

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John J. Leahy

Senior Vice President and Chief Financial Officer

 

 

FLEET NATIONAL BANK By:   /s/    WILLIAM E. RURODE, JR.  

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Name:

Title:

 

William E. Rurode, Jr.

Managing Director

 

 

KEY CORPORATE CAPITAL INC. By:   /s/    JEFF KALINOWSKI  

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Name:

Title:

 

Jeff Kalinowski

Vice President

 

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RATIFICATION OF GUARANTY

 

Each of the undersigned guarantors (the “Guarantors”) hereby acknowledges and
consents to the foregoing First Amendment as of June 11, 2003, and agrees that
the Guaranty dated as of February 28, 2003 from each Guarantor to the
Administrative Agent and each Lender remains in full force and effect, and each
such Guarantor confirms and ratifies all of its obligations thereunder.

 

DATASKILLS, INC. By:   /s/    JOHN J. LEAHY  

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    John J. Leahy, Treasurer

 

 

KEANE FEDERAL SYSTEMS, INC. By:   /s/    JOHN J. LEAHY  

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    John J. Leahy, Treasurer

 

 

KEANE SECURITIES CORPORATION By:   /s/    JOHN J. LEAHY  

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    John J. Leahy, Treasurer

 

 

KEANE TECH, LLC

By: Keane, Inc., its Member and Manager

By:   /s/    JOHN J. LEAHY  

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John J. Leahy

Senior Vice President and Chief Financial Officer

 

 

KEANE BUSINESS TRUST By:   /s/    BRIAN T. KEANE  

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    Brian T. Keane, Trustee

 

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KEANE CARE, INC. By:   /s/    JOHN J. LEAHY  

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    John J. Leahy, Treasurer

 

 

KEANE SERVICE COMPANY By:   /s/    FRANCIS M. CLEARY  

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    Francis M. Cleary, Assistant Treasurer

 

 

KEANE INDIA HOLDINGS, INC. By:   /s/    JOHN J. LEAHY  

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    John J. Leahy, Treasurer

 

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