EXHIBIT 10(a)
________________________________________________________________________________
AMENDED AND RESTATED CREDIT AGREEMENT
among
ICF XXXXXX INTERNATIONAL, INC.,
CERTAIN SUBSIDIARIES THEREOF, AS GUARANTORS,
and
THE BANKING INSTITUTIONS NAMED HEREIN
with
CORESTATES BANK, N.A.
as Agent
December 3, 1997
________________________________________________________________________________
TABLE OF CONTENTS
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Page
I. CERTAIN DEFINITIONS................................................................ 1
1.1 Definitions.................................................................. 1
1.2 Accounting Terms............................................................. 17
II. THE CREDIT......................................................................... 18
2.1 The Loans.................................................................... 18
(a) Revolving Credit Loans................................................. 18
2.2 The Revolving Credit Notes................................................... 19
2.3 Funding Procedures........................................................... 19
2.4 Interest..................................................................... 21
(a) Base Rate............................................................... 21
(b) LIBO Rate............................................................... 21
(c) Conversions of Loans.................................................... 21
(d) Default Rate............................................................ 22
(e) Applicable Margins...................................................... 22
2.5 Letters of Credit............................................................ 22
(a) General Requirements.................................................... 22
(b) Letter of Credit Requests............................................... 23
(c) Letter of Credit Participations......................................... 23
(d) Agreement to Repay Letter of Credit Drawings, Collateral, etc........... 26
2.6 Fees......................................................................... 27
(a) Commitment Fee.......................................................... 27
(b) Letter of Credit Fees................................................... 28
(c) Fronting Fee............................................................ 28
(d) Closing Fee............................................................. 28
2.7 Reduction or Termination of Aggregate Revolving Loan Commitment.............. 28
(a) Notice of Voluntary Reduction or Termination............................ 28
(b) Mandatory Termination................................................... 28
(c) Mandatory Reduction..................................................... 28
2.8 Prepayments.................................................................. 29
(a) Mandatory Prepayments................................................... 29
(b) Base Rate Loans......................................................... 29
(c) LIBO Rate Loans......................................................... 30
2.9 Payments..................................................................... 30
(a) LIBO Loans.............................................................. 30
(b) Base Rate Loans......................................................... 30
(c) Letter of Credit Fees................................................... 30
(d) Form of Payments, Application of Payments, Payment Administration, Etc.. 30
(e) Net Payments............................................................ 31
2.10 Changes in Circumstances; Yield Protection................................... 32
2.11 Illegality................................................................... 33
III. REPRESENTATIONS AND WARRANTIES..................................................... 34
3.1 Organization, Standing....................................................... 34
3.2 Corporate Authority, Validity Etc....................................... 34
3.3 Litigation.............................................................. 35
3.4 ERISA................................................................... 35
3.5 Financial Statements.................................................... 35
3.6 Not in Default; Judgments, etc.......................................... 36
3.7 Taxes................................................................... 36
3.8 Permits, Licenses, Etc.................................................. 36
3.9 Compliance With Laws.................................................... 36
3.10 Solvency................................................................ 37
3.11 No Burdensome Agreements................................................ 37
3.12 Subsidiaries, Investments, Etc.......................................... 37
3.13 Amounts Owed to or from Affiliates; Intercompany Agreements............. 37
(a) Affiliates....................................................... 37
(b) Intercompany Agreements.......................................... 38
3.14 Subsidiaries............................................................ 38
3.15 Maintenance of Insurance................................................ 38
3.16 U.S. Government Contracts............................................... 38
3.17 Margin Stock............................................................ 38
3.18 Properties.............................................................. 38
3.19 Change.................................................................. 38
3.20 Disclosure Generally.................................................... 38
IV. SECURITY....................................................................... 39
4.1 Security Documents...................................................... 39
V. CONDITIONS PRECEDENT........................................................... 39
5.1 All Loans and Letters of Credit......................................... 39
(a) Documents......................................................... 39
(b) Covenants; Representations........................................ 39
(c) Defaults.......................................................... 39
(d) Change............................................................ 39
(e) Lock-Box Accounts................................................. 40
(f) Fees and Reimbursable Expenses.................................... 40
(g) Actions to Perfect Liens.......................................... 40
(h) Amended and Restated Security Agreement........................... 40
5.2 Conditions to Effectiveness............................................. 40
(a) Articles, Bylaws.................................................. 40
(b) Evidence of Authorization......................................... 40
(c) Legal Opinions.................................................... 40
(d) Incumbency........................................................ 41
(e) Notes............................................................. 41
(f) Documents......................................................... 41
(g) Consents.......................................................... 41
(h) Other Agreements.................................................. 41
(i) Change............................................................ 41
(j) Due Diligence Review.............................................. 41
VI. AFFIRMATIVE COVENANTS.......................................................... 41
6.1 Financial Statements and Reports........................................ 41
(a) Annual Statements........................................................... 41
(b) Quarterly Statements........................................................ 42
(c) Statements excluding Xxxxxx-Xxxx............................................ 42
(d) Financial Statements and Reports Sent to Shareholders or Filed With the SEC. 43
(e) No Default.................................................................. 43
(f) Compliance.................................................................. 43
(g) Borrowing Base Certificate.................................................. 43
(h) Projections................................................................. 43
(i) ERISA....................................................................... 44
(j) Material Changes............................................................ 44
(k) Other Information........................................................... 44
(l) Quarterly Status Reports.................................................... 44
6.2 Corporate Existence............................................................... 44
6.3 ERISA............................................................................. 44
6.4 Compliance with Regulations....................................................... 45
6.5 Conduct of Business; Permits and Approvals; Compliance with Laws.................. 45
6.6 Maintenance of Insurance.......................................................... 45
6.7 Payment of Debt; Payment of Taxes; Etc............................................ 45
6.8 Notice of Events.................................................................. 45
6.9 Inspection Rights................................................................. 46
6.10 Generally Accepted Accounting Principles.......................................... 46
6.11 Use of Proceeds................................................................... 47
6.12 Further Assurances................................................................ 47
VII. NEGATIVE COVENANTS....................................................................... 47
7.1 Merger, Consolidation............................................................. 47
7.2 Indebtedness for Borrowed Money................................................... 47
7.3 Liens............................................................................. 48
7.4 Guarantees........................................................................ 48
7.5 Margin Stock...................................................................... 48
7.6 Acquisitions and Investments...................................................... 48
7.7 Transfer of Assets; Nature of Business............................................ 50
7.8 Restricted Payments............................................................... 50
7.9 Accounting Change................................................................. 51
7.10 Modification of Indenture......................................................... 51
7.11 New Subsidiaries and Subsidiary Guarantors........................................ 51
VIII. FINANCIAL COVENANTS...................................................................... 51
8.1 Fixed Charge Coverage............................................................. 52
8.2 Interest Coverage................................................................. 52
8.3 Senior Funded Indebtedness to EBITDA.............................................. 52
8.4 Indebtedness for Borrowed Money to Total Capitalization........................... 52
8.5 Indebtedness for Borrowed Money to EBITDA......................................... 52
IX. GUARANTY................................................................................. 53
9.1 Guaranty.......................................................................... 53
9.2 No Impairment of Guaranty......................................................... 54
9.3 Continuation and Reinstatement, Etc............................................... 54
9.4 Representations and Warranties................................................... 55
X. DEFAULT.................................................................................. 55
10.1 Events of Default............................................................... 55
(a) Payments................................................................ 55
(b) Covenants............................................................... 55
(c) Representations, Warranties, Etc........................................ 55
(d) Bankruptcy, Etc......................................................... 55
(e) Certain Other Defaults.................................................. 56
(f) Judgments............................................................... 56
(g) Attachments............................................................. 56
(h) Change in Control....................................................... 56
XI. AGENT.................................................................................... 57
11.1 Appointment and Authorization................................................... 57
11.2 Duties and Obligations.......................................................... 57
11.3 The Agent as a Bank............................................................. 58
11.4 Independent Credit Decisions.................................................... 58
11.5 Indemnification................................................................. 58
11.6 Successor Agent................................................................. 59
11.7 Allocations Made By Agent....................................................... 59
XII. MISCELLANEOUS............................................................................ 59
12.1 Waiver.......................................................................... 59
12.2 Amendments...................................................................... 59
12.3 Governing Law................................................................... 60
12.4 Participations and Assignments.................................................. 60
12.5 Captions........................................................................ 61
12.6 Notices......................................................................... 61
12.7 Sharing of Collections, Proceeds and Set-Offs; Application of Payments.......... 61
12.8 Expenses of the Agent; Indemnification of the Agent and the Banks............... 62
12.9 Survival of Warranties and Certain Agreements................................... 63
12.10 Severability.................................................................... 63
12.11 Banks' Obligations Several; Independent Nature of Banks' Rights................. 63
12.12 No Fiduciary Relationship....................................................... 64
12.13 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.................................. 64
12.14 WAIVER OF JURY TRIAL............................................................ 64
12.15 Counterparts; Effectiveness..................................................... 65
12.16 Use of Defined Terms............................................................ 65
EXHIBITS
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A Commitments
B Security Agreement
C Revolving Credit Note
D Loan Requests
E Opinion of Counsel for Borrower
F Officer's Certificate
G Borrowing Base Certificate
H Form of Joinder Agreement
I Form of Insurance
6.1(l) Form of Contract Status Report
SCHEDULES
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1.1(b) Existing Liens
2.4(e) Applicable Margins
2.5(a) Existing Letters of Credit
3.3 Litigation
3.5 Liabilities
3.7 Taxes
3.12 Subsidiaries
3.13 Intercompany Debt; Intercompany Agreements; Dividends
7.4 Existing Guarantees
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AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 3, 1997
(this "AGREEMENT"), is entered into by and among ICF XXXXXX INTERNATIONAL, INC.
("BORROWER"), a Delaware corporation, each of its subsidiaries signatories
hereto (each a "Subsidiary Guarantor" and collectively the "Subsidiary
Guarantors"), the banking institutions signatories hereto (each, a "BANK" and
collectively, the "BANKS") and CORESTATES BANK, N.A., as agent for the Banks
under this Agreement (in such capacity, the "AGENT").
WITNESSETH:
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WHEREAS, the Borrower, certain of the Subsidiary Guarantors and certain of
the Banks are parties to a Credit Agreement, dated as of May 6, 1996, as amended
(the "1996 Credit Agreement"), providing for a secured revolving credit facility
for loans and letters of credit, which revolving credit facility is used to
provide working capital to the Borrower and its Subsidiaries and for general
corporate purposes;
WHEREAS, the Borrower, the Subsidiary Guarantors, the Banks and the Agent
have agreed to amend the 1996 Credit Agreement as provided herein, to add
subsidiaries as Subsidiary Guarantors, to add banking institutions as Banks, and
to amend and restate the 1996 Credit Agreement as so amended.
I. CERTAIN DEFINITIONS.
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I.1 DEFINITIONS. As used in this Agreement, the following terms shall
have these meanings:
"1996 SENIOR NOTES" shall mean the Borrower's 12% Senior Notes due 2003,
Series A, issued December 23, 1996, and all 12% Senior Notes due 2003, Series
B, issued March 7, 1997, in exchange therefor.
"ACCOUNT" shall mean all rights to payment for goods sold or leased or for
services rendered, whether or not such rights have been earned by performance.
"ACQUISITION" shall have the meaning set forth in Section 7.6(d).
"ADDITIONAL AMOUNT" shall have the meaning set forth in Section 2.1(a)(6).
"AFFILIATE" shall mean any Person (other than a Subsidiary) (1) which
directly or indirectly controls, or is controlled by, or is under common control
with Borrower or a Subsidiary; (2) which directly or indirectly beneficially
owns or holds ten percent (10%) or more of any class of voting stock of Borrower
or any Subsidiary; or (3) ten percent (10%) or more of whose voting stock of
which is directly or indirectly beneficially owned or held by Borrower or a
Subsidiary. The term control shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract, or
otherwise.
"AGREEMENT" shall mean this Credit Agreement, as amended, supplemented, or
modified from time to time and all exhibits and schedules attached hereto.
"AGGREGATE REVOLVING LOAN COMMITMENT" shall have the meaning set forth in
Section 2.1(a)(1).
"APPLICABLE MARGIN" shall mean the margin applicable to Base Rate Loans and
to LIBO Rate Loans determined in accordance with Schedule 2.4(e) hereto.
"BASE RATE" shall mean, for any day, the higher of the Federal Funds Rate
plus 1/2 of 1% per annum or the prime commercial lending rate of the Agent, as
announced from time to time at its head office, calculated on the basis of the
actual number of days elapsed in a year of 365/366 days.
"BASE RATE LOANS" shall mean Revolving Credit Loans accruing interest based
on the Base Rate.
"BLOCKED ACCOUNT AGREEMENTS" shall have the meaning set forth in the
Security Agreement.
"BORROWING BASE" shall mean the sum of (i) 85% of Eligible Domestic Billed
Accounts Receivable, (ii) 50% of Eligible Unbilled Accounts Receivable and (iii)
90% of Eligible Foreign Billed Accounts Receivable; provided, however, that the
maximum Borrowing Base value of Eligible Unbilled Accounts Receivable shall not
exceed $15,000,000.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday, or other
day on which commercial banks in Philadelphia are authorized or required to
close under the laws of the Commonwealth of Pennsylvania and, if the applicable
day relates to a LIBO Rate Loan, or notice with respect to a LIBO Rate Loan, a
day on which dealings in Dollar deposits are also carried on in the London
interbank market and banks are open for business in London ("London Business
Day").
"CAPITAL EXPENDITURES" shall mean expenditures for any fixed assets or
improvements, replacements, substitutions or additions thereto which have a
useful life of more than one year, including assets acquired pursuant to a
Capitalized Lease but not including any such expenditures that constitute
Investments made in accordance with Section 7.6, less 50% of Capital
Expenditures of Xxxxxx-Xxxx and K-H Funding.
"CAPITAL STOCK" shall mean any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person other than a corporation, and
any and all warrants or options to purchase any of the foregoing.
"CAPITALIZED LEASE" shall mean all lease obligations of any Person for any
property (whether real, personal or mixed) which have been or should be
capitalized on the books of the lessee in accordance with Generally Accepted
Accounting Principles.
"CHANGE OF CONTROL" means any of the following: (i) the sale, lease,
conveyance or other disposition of all or substantially all of Borrower's assets
as an entirety or substantially as
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an entirety to any Person or "group" (within the meaning of Section 13(d)(3) of
the Exchange Act) in one or a series of transactions, provided that a
transaction where the holders of all classes of voting Capital Stock of Borrower
immediately prior to such transaction own, directly or indirectly, more than 50%
of the aggregate voting power of all classes of voting Capital Stock of such
Person or group immediately after such transactions shall not be a Change of
Control; (ii) the acquisition by Borrower and any of its Subsidiaries of 50% or
more of all classes of voting Capital Stock of Borrower in one transaction or a
series of related transactions; (iii) the approval by Borrower of a plan of
liquidation of Borrower; (iv) any transaction or series of transactions (as a
result of a tender offer, merger, consolidation or otherwise) that results in,
or that is in connection with, (a) any Person, including a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) that includes such Person,
acquiring "beneficial ownership" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of 50% or more of the aggregate voting power of
all classes of voting Capital Stock of Borrower or any Person that possesses
"beneficial ownership" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 50% or more of the aggregate voting power of all
classes of voting Capital Stock of Borrower, or (b) less than 50% (measured by
the aggregate voting power of all classes) of Borrower's voting Capital Stock
being registered under Section 12(b) or 12(g) of the Exchange Act; or (v) a
majority of the Board of Directors of Borrower not being comprised of Continuing
Directors.
"CLOSING DATE" shall mean December 3, 1997.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and all rules and regulations with respect thereto in effect from time
to time.
"COLLATERAL" shall have the meaning set forth in the Security Agreement.
"COMMITMENT FEE" shall have the meaning set forth in Section 2.6(a).
"COMMITMENT PERCENTAGE" shall mean with respect to each Bank the percentage
set forth opposite its name on Exhibit A to this Agreement.
"CONSOLIDATED FIXED CHARGES" shall mean for any period, Consolidated
Interest Expense, Consolidated Lease Expense and dividends payable by Borrower
on its Capital Stock, determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles, for such period, less 50% of the
Consolidated Fixed Charges of Xxxxxx-Xxxx and K-H Funding.
"CONSOLIDATED INTEREST EXPENSE" shall mean for any period, interest expense
of Borrower and its Subsidiaries other than its Single Purpose Subsidiaries for
such period, determined on a consolidated basis in accordance with Generally
Accepted Accounting Principles (net of interest income for such period).
"CONSOLIDATED LEASE EXPENSE" shall mean for any period, the aggregate
rental expenses of Borrower and its Subsidiaries other than its Single Purpose
Subsidiaries, determined on a consolidated basis in accordance with Generally
Accepted Accounting Principles, payable in respect of such period under leases
(other than capitalized leases) for real and/or personal property (net of income
from subleases thereof).
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"CONSOLIDATED NET INCOME" shall mean for any period, the consolidated net
income (or deficit) of Borrower and its Subsidiaries other than its Single
Purpose Subsidiaries for such period (taken as a cumulative whole), determined
in accordance with Generally Accepted Accounting Principles, provided that there
shall be excluded therefrom (a) the income (or deficit) of any Person accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated with
Borrower or any Subsidiary except mergers accounted for under the pooling of
interests method, (b) the income (or deficit) of any Person (other than a
Subsidiary) in which Borrower or any Subsidiary has an ownership interest,
except to the extent that Borrower or such Subsidiary has received, or has the
right to receive, such income, (c) the undistributed earnings of any Subsidiary
to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any contractual obligation or requirement of law applicable to such Subsidiary,
(d) any aggregate net gain (but not any aggregate net loss) during such period
arising from the sale, exchange or other disposition of capital assets (such
term to include all fixed assets, whether tangible or intangible, all inventory
sold in conjunction with the disposition of fixed assets and all securities),
(e) any write-up of any asset, (f) any net gain from the collection of the
proceeds of life insurance policies, (g) any gain arising from the acquisition
of any securities, or the extinguishment, under Generally Accepted Accounting
Principles, of any Indebtedness for Borrowed Money of Borrower or any
Subsidiary, (h) in the case of a successor to Borrower by consolidation or
merger or as a transferee of its assets, any earnings of the successor
corporation prior to such consolidation, merger or transfer of assets and (i)
any deferred credit representing the excess of equity in any Subsidiary at the
date of acquisition over the cost of the investment in such Subsidiary;
provided, however, that Consolidated Net Income shall include the consolidated
net income of Xxxxxx-Xxxx and K-H Funding to the extent included in the
consolidated net income of Borrower in accordance with Generally Accepted
Accounting Principles.
"CONSOLIDATED NET WORTH" shall mean the aggregate amount of the capital
stock accounts plus (or minus in the case of a deficit) the retained earnings of
Borrower and its Subsidiaries determined on a consolidated basis in accordance
with Generally Accepted Accounting Principles.
"CONTINUING DIRECTOR" of Borrower as of any date means a member of the
Board of Directors of Borrower who (i) was a member of the Board of Directors of
Borrower on the date hereof or (ii) was nominated for election or elected to the
Board of Directors of Borrower with the affirmative vote of at least a majority
of the directors who were Continuing Directors at the time of such nomination or
election.
"CREDIT RECLASSIFICATIONS" shall mean net credit balances on an individual
account basis which remain outstanding for greater than 90 days.
"DEBT" shall mean, as of any date of determination, with respect to
Borrower and its Subsidiaries, without duplication, (i) all items which in
accordance with Generally Accepted Accounting Principles would be included in
determining total liabilities as shown on the liability side of a consolidated
balance sheet of Borrower and its Subsidiaries as of the date on which Debt is
to be determined, (ii) all indebtedness secured by any Lien on any property or
asset owned or held by Borrower or any Subsidiary subject thereto, whether or
not the indebtedness
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secured thereby shall have been assumed, (iii) all indebtedness of others with
respect to which Borrower or any Subsidiary has become liable by way of a
guarantee (including, any obligation of the guaranteeing person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof, (iv)
all contingent liabilities of Borrower or any Subsidiary, including but not
limited to contingent liabilities in connection with outstanding letters of
credit, and (v) lease obligations that, in conformity with Generally Accepted
Accounting Principles, have been or should be capitalized on such entity's
balance sheet.
"DEFAULT RATE" shall mean 2% per annum above the interest rate otherwise
applicable on all Loans and Unpaid Drawings and 2% per annum above the rate of
all fees otherwise applicable to Letters of Credit.
"DEFERRED REVENUE" shall mean with respect to any Accounts due from any
Person to which Borrower has a liability to provide services as a result of
xxxxxxxx in excess of the value of work performed, the lesser of (a) such excess
and (b) the amount of such Accounts due from such Person.
"DISCOUNTED TREASURIES" shall have the meaning set forth in Section 2.5(d).
"DOCUMENTARY LETTER OF CREDIT" shall mean a letter of credit issued for the
account of Borrower in the ordinary course of business of Borrower to secure the
deferred purchase price of goods.
"DOLLARS" shall mean the lawful currency of the United States of America.
"DOMESTIC SUBSIDIARY" shall mean as to any Person, a Subsidiary of such
Person the jurisdiction of incorporation of which is, and the chief executive
office of which is located in, one of the States of the United States or the
District of Columbia.
"DRAWING" shall have the meaning set forth in Section 2.5(d).
"EBIT" shall mean, for any period, Consolidated Net Income plus the sum of
(a) Consolidated Interest Expense and (b) income tax expense to the extent such
items are taken into account in determining Consolidated Net Income.
"EBITDA" shall mean, for any period, Consolidated Net Income plus the sum
----
of (a) Consolidated Interest Expense, (b) income tax expense, (c) depreciation
expense, (d) amortization expense, (e) extraordinary or unusual losses or other
losses not incurred in the ordinary course of business included in the
calculation of net income, (f) any non-cash charge against net income required
to be recognized in connection with the issuance of capital stock to
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employees (whether upon lapse of vesting restrictions, exercise of employee
options or otherwise) and (g) any non-cash charge against net income required to
be recognized in connection with employee benefit plans, less extraordinary or
----
unusual gains or other gains not incurred in the ordinary course of business
included in the calculation of net income, in each case to the extent such items
are taken into account in determining Consolidated Net Income.
"ELIGIBLE DOMESTIC BILLED ACCOUNTS RECEIVABLE" shall mean, as of the time
of submission of a Borrowing Base Certificate pursuant to Section 6.1(f),
Accounts that represent a valid obligation from actual sale and delivery of
goods or rendition of services to or for the benefit of such account debtor
arising in the ordinary course of business invoiced by Borrower and the
Subsidiary Guarantors on or prior to the Receivables Record Date applicable to
such Borrowing Base Certificate and which have been outstanding less than 90
days from the date of such invoice, excluding (a) intercompany accounts, (b)
accounts as to which the account debtor of which is not incorporated or
otherwise organized under the laws of one of the States, territories or
possessions of the United States, the District of Columbia, or the Commonwealth
of Puerto Rico, (c) accounts as to which the account debtor of which is a debtor
in any bankruptcy, insolvency, or reorganization proceedings, (d) any non-trade
Accounts and (e) Accounts which the Agent or the Required Banks, exercising
reasonable discretion, have otherwise determined to be unacceptable to them,
provided, that Eligible Domestic Billed Accounts Receivable shall be reduced by
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the sum of (a) the amount at such date of reserves against such reductions in
accounts otherwise qualifying as Eligible Domestic Billed Accounts Receivable,
as from time to time Borrower shall determine in the ordinary course of its
business, (b) any retainages or variances, (c) Deferred Revenue, (d) Unapplied
Cash and (e) Credit Reclassification.
"ELIGIBLE FOREIGN BILLED ACCOUNTS RECEIVABLE" shall mean, as of the time of
submission of a Borrowing Base Certificate pursuant to Section 6.1(f), Accounts
that represent a valid obligation from actual sale and delivery of goods or
rendition of services to or for the benefit of an account debtor that is not
incorporated or otherwise organized under the laws of one of the States,
territories or possessions of the United States, the District of Columbia, or
the Commonwealth of Puerto Rico arising in the ordinary course of business
invoiced by Borrower or the Subsidiary Guarantors on or prior to the Receivables
Record Date applicable to such Borrowing Base Certificate and which have been
outstanding less than 90 days from the date of such invoice, where such obligor
is covered by a letter of credit or is a member of the OECD, or Borrower or the
Subsidiary Guarantor has obtained insurance in form and substance substantially
as attached hereto as Exhibit I or other guarantee similar to a letter of credit
satisfactory to the Agent, provided that Foreign Billed Accounts Receivable
shall be reduced by the sum of (a) the amount at such date of reserves against
such reductions in accounts otherwise qualifying as Foreign Billed Accounts
Receivable, as from time to time Borrower shall determine in the ordinary course
of its business, (b) any retainages or variances, (c) Deferred Revenue, (d)
Unapplied Cash and (e) Credit Reclassification.
"ELIGIBLE UNBILLED ACCOUNTS RECEIVABLE" shall mean, as of the time of
submission of a Borrowing Base Certificate pursuant to Section 6.1(f), Accounts
of Borrower or a Subsidiary Guarantor that represent a valid obligation from
actual sale and delivery of goods or rendition of services to or for the benefit
of the applicable account debtor completed within thirty days of the applicable
Receivables Record Date and arising in the ordinary course of business that are
not invoiced as of such Receivables Record Date but otherwise meeting the
criteria set forth in the
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definition of "Eligible Domestic Billed Accounts Receivable"or "Eligible Foreign
Billed Accounts Receivable" in all respects, and subject to reductions
comparable to reductions taken in account in such definition.
"ENVIRONMENTAL CONTROL STATUTES" shall mean each and every applicable
federal, state, county or municipal statute, ordinance, rule, regulation, order,
directive or requirement, together with all successor statutes, ordinances,
rules, regulations, orders, directives or requirements, of any Governmental
Authority, including without limitation laws in any way related to Hazardous
Substances.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
"ERISA AFFILIATE" shall mean any corporation which is a member of the same
controlled group of corporations as Borrower within the meaning of Section
414(b) of the Code, or any trade or business which is under common control with
Borrower within the meaning of Section 414(c) of the Code.
"EVENT OF DEFAULT" shall have the meaning set forth in Section 10.1.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (i) if the day for which such rate is to be determined is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean generally accepted
accounting principles as in effect from time to time in the United States,
consistently applied.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"HAZARDOUS SUBSTANCE" shall mean (a) any substance designated pursuant to
section 311(b)(2)(A) of the Federal Water Pollution Control Act, (b) any
element, compound, mixture, solution or substance designated pursuant to section
102 of CERCLA, (c) any hazardous waste having the characteristics identified
under or listed pursuant to section 3001 of the Solid Waste Disposal Act (but
not including any waste the regulation of which under the Solid Waste Disposal
Act has been suspended by Act of Congress), (d) any toxic pollutant listed under
section 307(a) of the Federal Water Pollution Control Act, (e) any hazardous air
pollutant listed under section 112 of the Clean Air Act, and (f) any imminently
hazardous chemical substance or mixture with respect to which the Administrator
has taken action pursuant to section 7 of the Toxic Substances Control Act. The
term specifically includes petroleum, including crude oil or any faction
thereof, asbestos, asbestos containing materials and urea formaldehyde
insulation.
-7-
The term does not include natural gas, natural gas liquids, liquefied natural
gas, or synthetic gas useable for fuel (or mixtures of natural gas and such
synthetic gas).
"HUNTERS BRANCH INVESTMENT" shall mean the direct or indirect Investment by
the Borrower or any Subsidiary in the buildings and associated land at 9300
and/or 0000 Xxx Xxxxxxx, Xxxxxxx, Xxxxxxxx.
"ICF XXXXXX BRAZIL HOLDINGS" shall mean ICF Xxxxxx Brazil Holdings, Inc., a
corporation organized under the laws of the State of Delaware which will have as
its sole purpose the ownership of ICF Xxxxxx Participacoes Ltda.
"ICF XXXXXX HUNTERS BRANCH" shall mean ICF Xxxxxx Hunters Branch Leasing,
Inc., a corporation (however denominated) organized under the laws of the State
of Delaware, created in order to own the Hunters Branch Investment either
directly or indirectly.
"ICF XXXXXX NETHERLANDS" shall mean ICF Xxxxxx Netherlands B.V., a
corporation organized under the laws of the country of Netherlands which is an
indirect wholly owned Subsidiary of Borrower and a Subsidiary Guarantor.
"ICF XXXXXX PARTICIPACOES LTDA." shall mean the entity (however
denominated) organized under the laws of Brazil which will own substantially all
of the capital stock of IESA following the IESA Investment.
"IESA" shall mean Internacional de Engenharia S.A., a corporation organized
under the laws of Brazil, together with its subsidiaries IESA-Technologia de
Sistemas Ltda., Servap Engenharia e Consultoria Ltda., IESA Negocios Ltda., IESA
Participacoes Ltda., and Project Engineering Ltd/Cayman Islands.
"IESA INVESTMENT" shall mean the Investment in and eventual ownership of
substantially all of the capital stock of IESA by ICF Xxxxxx Participacoes Ltda.
"INDEBTEDNESS FOR BORROWED MONEY" shall mean without duplication (i) all
indebtedness, liabilities, and obligations, now existing or hereafter arising
for money borrowed by Borrower and its Subsidiaries (other than indebtedness of
Borrower to any Subsidiary or of any Subsidiary to Borrower or any one or more
other Subsidiaries of Borrower), whether or not evidenced by any note,
indenture, or agreement (including, without limitation, the Notes and any
indebtedness for money borrowed from a Borrower Affiliate) (ii) Letter of Credit
Outstandings, and (iii) all indebtedness of others for money borrowed (including
a Borrower Affiliate) with respect to which Borrower or a Subsidiary has become
liable by way of a guarantee or indemnity.
"INDEMNITEES" shall have the meaning set forth in Section 12.8(b).
"INDENTURES" shall mean the Indenture dated as of December 23, 1996 between
Borrower and The Bank of New York and the Indenture dated as of January 11, 1994
between Borrower and The Bank of New York.
"INTERCOMPANY AGREEMENTS" shall have the meaning set forth in Section
3.13(b).
-8-
"INTERCOMPANY DEBT" shall have the meaning set forth in Section 3.13.
"INTEREST PERIOD" shall mean with respect to any LIBO Rate Loan, each
period commencing on the date any such Loan is made, or, with respect to a Loan
being renewed, the last day of the next preceding Interest Period with respect
to a Loan, and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day of the calendar month) in the
first, second, third or sixth calendar month thereafter as selected under the
procedures specified in Section 2.3, if the Banks are then offering LIBO Rate
Loans for such period; provided that each LIBO Rate Loan Interest Period which
would otherwise end on a day which is not a Business Day (or, for purposes of
Loans to be repaid in London, such day is not a London Business Day) shall end
on the next succeeding Business Day (or London Business Day, as appropriate)
unless such next succeeding Business Day (or London Business Day, as
appropriate) falls in the next succeeding calendar month, in which case the
Interest Period shall end on the next preceding Business Day (or London Business
Day, as appropriate).
"INVESTMENT" in any Person shall mean, without duplication:
(a) the acquisition (whether for cash, property, services or
securities or otherwise) of Capital Stock, bonds, notes, debentures,
partnership or other ownership interests or other securities of such
Person; and
(b) any deposit with, or advance, loan or other extension of credit
to, such Person or guarantee or assumption of, or other contingent
obligation with respect to, Indebtedness for Borrowed Money of such Person,
other than Indebtedness for Borrowed Money permitted by Section 7.2 or
guarantees permitted by Section 7.4;
provided, however, that the term "INVESTMENT" shall not include:
--------- -------
(i) extensions of trade credit and advances to customers and
suppliers and other contractual and trade relationships, requiring
repayment within reasonable commercial periods, to the extent made in the
ordinary course of business consistent with past practice and in accordance
with normal industry practice;
(ii) loans and advances to non-executive employees of Borrower
and its Subsidiaries requiring repayment within commercially reasonable
periods and made in the ordinary course of business consistent with past
practice, provided that the aggregate amount of loans and advances under
this clause (ii) shall not exceed $250,000 at any one time;
(iii) investments of Borrower in any Subsidiary existing prior
to the time of such investment (other than a Single Purpose Subsidiary) and
by any Subsidiary in Borrower or any other Subsidiary existing prior to the
time of such investment (other than a Single Purpose Subsidiary) of
Borrower;
-9-
(iv loans to officers of Borrower and its Subsidiaries in
connection with any relocation of residence, approved by a majority of the
independent members of the Board of Directors of Borrower, provided that
--------
the aggregate of amount of loans under this clause (iv) shall not exceed
$1,000,000 in any fiscal year; and
(v investments in the form, or out of the net proceeds of the
sale (other than to a Subsidiary or employee stock ownership plan of
Borrower) of, Capital Stock of Borrower.
"ISSUING BANK" shall have the meaning set forth in Section 2.5(a).
"XXXXXX-XXXX" shall mean Xxxxxx-Xxxx Company, LLC, a limited liability
company indirectly owned equally by Borrower and CH2M Hill Companies, Ltd.
"K-H FUNDING" shall mean Xxxxxx-Xxxx Funding Company, L.L.C., a limited
liability company formed under the laws of the State of Delaware, owned in the
following percentages by Xxxxxx-Xxxx (98%), ICF Xxxxxx Government Programs, Inc.
(1%), and CH2M Hill Federal Group, Ltd. (1%), a wholly owned subsidiary of CH2M
Hill Companies, Ltd.
"L/C BANK" shall have the meaning set forth in Section 2.5(a).
"LETTER OF CREDIT" shall mean a Documentary Letter of Credit or a Standby
Letter of Credit issued hereunder, and shall include all existing Letters of
Credit described in Schedule 2.5(a) hereto which were issued by a Bank and
remain outstanding on the date of this Agreement.
"LETTER OF CREDIT OUTSTANDINGS" shall mean, at any time, the aggregate
Stated Amount of all outstanding Letters of Credit plus the aggregate amount of
Unpaid Drawings.
"LIBO RATE" shall mean, for the applicable Interest Period, (i) the rate,
rounded upwards to the next one-sixteenth of one percent, determined by the
Agent two London Business Days prior to the date of the corresponding LIBO Rate
Loan, at which the Agent is offered deposits in Dollars at approximately 11:00
A.M., London time, by leading banks in the interbank eurodollar market for
delivery on the date of such Loan in an amount and for a period comparable to
the amount and Interest Period of such Loan and in like funds, divided by (ii) a
number equal to one (1.0) minus the LIBO Rate Reserve Percentage. The LIBO Rate
shall be adjusted automatically with respect to any LIBO Rate Loan outstanding
on the effective date of any change in the LIBO Rate Reserve Percentage, as of
such effective date. LIBO Rate shall be calculated on the basis of the number
of days elapsed in a year of 360 days.
"LIBO RATE LOANS" shall mean Revolving Credit Loans accruing interest based
on the LIBO Rate.
"LIBO RATE RESERVE PERCENTAGE" shall mean, for any LIBO Rate Loan for any
Interest Period therefor, the daily average of the stated maximum rate
(expressed as a decimal) at which reserves (including any marginal,
supplemental, or emergency reserves) are required to be maintained during such
Interest Period under Regulation D by the Agent against "Eurocurrency
-10-
liabilities" (as such terms is used in Regulation D) but without benefit of
credit proration, exemptions, or offsets that might otherwise be available to
the Agent from time to time under Regulation D. Without limiting the effect of
the foregoing, the LIBO Rate Reserve Percentage shall reflect any other reserves
required to be maintained by the Agent against (1) any category of liabilities
which includes deposits by reference to which the rate for LIBO Rate Loans is to
be determined; or (2) any category of extension of credit or other assets which
include LIBO Rate Loans.
"LIEN" shall mean any lien, mortgage, security interest, chattel mortgage,
pledge or other encumbrance (statutory or otherwise) of any kind securing
satisfaction of an obligation, including any agreement to give any of the
foregoing, any conditional sales or other title retention agreement, any lease
in the nature thereof, and the filing of or the agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction or similar
evidence of any encumbrance, whether within or outside the United States.
"LOAN" shall mean a Revolving Credit Loan.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Security
Agreement, the Blocked Account Agreements and each other agreement, document and
instrument referred to herein or therein.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in ERISA
Section 4001(a)(3).
"NON-RECOURSE INDEBTEDNESS" shall mean Indebtedness for Borrowed Money of a
Single Purpose Subsidiary with respect to which (a) the sole legal recourse for
collection of principal, premium, if any, and interest on such Indebtedness is
against (i) the specific property identified in the instruments evidencing or
securing such Indebtedness and such property was acquired with the proceeds of
such Indebtedness or such Indebtedness was incurred within 90 days of the
acquisition of such property, and/or (ii) the Capital Stock of such Single
Purpose Subsidiary, provided that such Single Purpose Subsidiary has no assets
other than the specific property acquired with the proceeds of such Indebtedness
for Borrowed Money, capital contributed to such Subsidiary in compliance with
the terms of this Agreement, and such other assets as may be reasonably required
for the limited operations of such Subsidiary, and (b) neither Borrower nor any
Subsidiary of Borrower, other than the referent Single Purpose Subsidiary, is
directly or indirectly liable to make any payment thereon, has any guarantee
obligation in respect of such Indebtedness for Borrowed Money or such Single
Purpose Subsidiary or has pledged or granted any lien or encumbrances on any
assets as collateral or security with respect thereto, other than the capital
stock of the referent Single Purpose Subsidiary.
"NOTES" shall mean the Revolving Credit Notes.
"OBLIGATIONS" shall mean all now existing or hereafter arising debts,
obligations, covenants, and duties of payment or performance of every kind,
matured or unmatured, direct or contingent, owing, arising, due, or payable to
the Banks or the Agent by or from Borrower arising out of this Agreement or any
other Loan Document, including, without limitation, all
-11-
obligations to repay principal of and interest on all the Revolving Credit
Loans, to make reimbursements or payments with respect to Letters of Credit, and
to pay interest, fees, costs, charges, expenses, professional fees, and all sums
chargeable to Borrower under the Loan Documents, whether or not evidenced by any
note or other instrument.
"OPERATING LEASE" shall mean an operating lease as defined by Generally
Accepted Accounting Principles, excluding all leases the expenses for which may
be charged to a customer of Borrower or a Subsidiary pursuant to the written
terms of the contract with such customer.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"PENSION PLAN" shall mean, at any time, any Plan (including a Multiemployer
Plan), the funding requirements of which (under ERISA Section 302 or Code
Section 412) are, or at any time within the six years immediately preceding the
time in question, were in whole or in part, the responsibility of Borrower or
any ERISA Affiliate.
"PERMITTED BUSINESSES" shall mean the businesses of providing consulting,
engineering or construction services to public and private sector clients in the
environment, energy, infrastructure and industry markets.
"PERMITTED LIENS" shall mean:
(a) any Liens for current taxes, assessments and other governmental
charges not yet due and payable or being contested in good faith by
Borrower or one or more of its Subsidiaries by appropriate proceedings and
for which adequate reserves have been established by Borrower or one or
more of its Subsidiaries as reflected in Borrower's or one or more of its
Subsidiaries' financial statements;
(b) any mechanic's, materialman's, carrier's, warehousemen's or
similar Liens for sums not yet due or being contested in good faith by
Borrower or one or more of its Subsidiaries by appropriate proceedings and
for which adequate reserves have been established by Borrower or one or
more of its Subsidiaries as reflected in Borrower's or one or more of its
Subsidiaries' financial statements;
(c) Liens in favor of the Banks under the Loan Documents;
(d) easements, rights-of-way, restrictions and other similar
encumbrances on the real property or fixtures of Borrower or one or more of
its Subsidiaries incurred in the ordinary course of business which
individually or in the aggregate are not substantial in amount and which do
not in any case materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business of Borrower
or any of its Subsidiaries;
(e) Liens (other than Liens imposed on any property of Borrower or one
or more of its Subsidiaries or any ERISA Affiliate pursuant to ERISA or
section 412 of the Code) incurred or deposits made in the ordinary course
of
-12-
business, including Liens in connection with workers' compensation,
unemployment insurance and other types of social security and Liens to
secure performance of tenders, statutory obligations, trade contracts
(other than for Indebtedness for Borrowed Money), surety and appeal bonds
(in the case of appeal bonds such Lien shall not secure any reimbursement
or indemnity obligation in an amount greater than $250,000), bids, leases
that are not capitalized leases, performance bonds, sales contracts and
other similar obligations, deposits securing liability to insurance
carriers under insurance or self-insurance arrangements, in each case, not
incurred in connection with the obtaining of credit or the payment of a
deferred purchase price, and which do not, in the aggregate, result in a
material adverse effect on the business, operations, assets or condition
(financial or otherwise) of Borrower or one or more of its Subsidiaries;
(f) Liens existing upon the date hereof as set forth in Schedule
1.1(b) hereto.
(g) Liens securing obligations incurred to finance the deferred
purchase price of property, provided that (i) such Liens shall be created
--------
within 120 days after the acquisition of such property, (ii) such Liens do
not at any time encumber any property other than the property financed by
such obligations, (iii) the amount of the obligation secured thereby is not
increased, and (iv) the principal amount of an obligation secured by any
such Lien shall at no time exceed the lesser of (A) 100% of the original
purchase price of such property and (B) the fair value (as determined in
good faith by the Board of Directors of Borrower) of such property at the
time it was acquired;
(h) Liens securing obligations assumed in connection with Investments
made in accordance with Section 7.6, provided that (i) such Liens exist at
--------
the time of the Investment and were not created in anticipation thereof,
(ii) any such Lien is not spread to cover any additional property or assets
after the time of such Investment, and (iii) the amount of the obligation
secured by any such Lien is not increased;
(i) Liens securing Non-Recourse Indebtedness; and
(j) Liens (not otherwise permitted hereunder) which secure obligations
not exceeding (as to Borrower and its Subsidiaries) $500,000 in aggregate
amount at any time outstanding, provided that such Liens are limited to
assets other than Accounts.
"PERSON" shall mean any individual, corporation, partnership, joint
venture, association, company, business trust or entity.
"PLAN" shall mean an employee benefit plan as defined in Section 3(3) of
ERISA, other than a Multiemployer Plan, whether formal or informal and whether
or not legally binding.
-13-
"POTENTIAL DEFAULT" shall mean an event, condition or circumstance, that
with the giving of notice or lapse of time or both would become an Event of
Default.
"PROHIBITED TRANSACTION" shall mean a transaction that is prohibited under
Code Section 4975 or ERISA Section 406 and not exempt under Code Section 4975 or
ERISA Section 408.
"RECEIVABLES RECORD DATE" shall mean, as to any Borrowing Base Certificate
submitted pursuant to Section 6.1(f) hereof, the last calendar day of the
immediately preceding calendar month.
"REGULATION" shall mean any statute, law, ordinance, regulation, order or
rule of any United States or foreign, federal, state, local or other government
or governmental body, including, without limitation, those covering or related
to banking, financial transactions, securities, public utilities, environmental
control, energy, safety, health, transportation, bribery, record keeping,
zoning, antidiscrimination, antitrust, wages and hours, employee benefits, and
price and wage control matters.
"REGULATORY CHANGE" shall mean any change after the date of this Agreement
in United States, federal, state or foreign laws or regulations (including
Regulation D of the Board of Governors of the Federal Reserve System) or the
adoption or making after such date of any interpretations, directives or
requests of or under any United States federal, state, or foreign laws or
(whether or not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or administration thereof
applying to a class of banks including any one of the Banks but excluding any
foreign office of any Bank.
"RELEASE OF HAZARDOUS SUBSTANCES" shall mean any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, or disposing into the environment of any Hazardous Substances
(including the abandonment or discarding of barrels, containers, and other
closed receptacles containing any Hazardous Substance), but excludes the normal
application of fertilizer or pesticides.
"REPORTABLE EVENT" shall mean, with respect to a Pension Plan: (a) Any of
the events set forth in ERISA Sections 4043(c) (other than a reportable event as
to which the provision of 30 days' notice to the PBGC is waived under the
applicable statute or regulations) or 4063(a) or the regulations thereunder, (b)
an event requiring Borrower or any ERISA Affiliate to provide security to a
Pension Plan under Code Section 401(a)(29) and (c) any failure by Borrower or
any ERISA Affiliate to make payments required by Code Section 412(m).
"REQUIRED BANKS" shall mean Banks whose outstanding Revolving Loan
Commitments equal or exceed 66_% of the total of such Revolving Loan
Commitments.
"REVOLVER TERMINATION DATE" shall have the meaning set forth in Section
2.1.
"REVOLVING LOAN COMMITMENT" shall have the meaning set forth in Section
2.1.
"REVOLVING CREDIT LOAN" or "LOAN" shall have the meaning set forth in
Section 2.1.
-14-
"REVOLVING CREDIT NOTE" shall have the meaning set forth in Section 2.2.
"SECURITY AGREEMENT" shall mean the Amended and Restated Security
Agreement, dated as of the date hereof, among Borrower, the Subsidiary
Guarantors and the Agent in the form of Exhibit B hereto.
"SECURITY DOCUMENTS" shall mean the Security Agreement and all financing
statements, documents and instruments contemplated by such agreements to create,
perfect and maintain the lien of the Agent in and to the Collateral.
"SENIOR FUNDED INDEBTEDNESS" shall mean as of the date of determination,
the sum of (i) Indebtedness for Borrowed Money, excluding Subordinated Debt and
guarantees to the extent included in Indebtedness for Borrowed Money; (ii)
Capitalized Lease obligations; and (iii) obligations in connection with bankers'
acceptances, of Borrower and its Subsidiaries, determined on a consolidated
basis in accordance with Generally Accepted Accounting Principles.
"SINGLE PURPOSE SUBSIDIARY" shall mean as to any Person, a Subsidiary of
such Person the activities of which, including its Subsidiaries and partnerships
or other entities owned, or the management of which are otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by such
Single Purpose Subsidiary, are limited to (a) ownership of all or a portion of
the interests in a single project constituting one or more Permitted Businesses,
either directly or through the ownership of the Capital Stock of another Person,
and (b) the development, engineering, design, project management, construction
or operation of such project; ICF Xxxxxx Brazil Holdings, ICF Xxxxxx
Participacoes Ltda., and IESA shall be deemed to be Single Purpose Subsidiaries
for all purposes hereunder.
"SOLVENT" shall mean, with respect to any Person, that the aggregate
present fair saleable value of such Person's assets is in excess of the total
amount of its probable liabilities on its existing debts as they become absolute
and matured, such Person has not incurred debts beyond its foreseeable ability
to pay such debts as they mature, and such Person has capital adequate to
conduct the business it is presently engaged in or is about to engage in.
"STANDBY LETTER OF CREDIT" shall mean a letter of credit issued for the
account of Borrower, other than a Documentary Letter of Credit.
"STATED AMOUNT" of each Letter of Credit shall mean, at any time, the
maximum amount available to be drawn thereunder, determined without regard to
whether any conditions to drawing could then be met.
"SUBORDINATED DEBT" shall mean Borrower's Senior Subordinated Notes due
2003 and any other Indebtedness for Borrowed Money subordinated to payment of
the Obligations in a manner satisfactory to the Required Banks in their sole
discretion.
"SUBSIDIARY" shall mean as to any Person, (i) a corporation of which shares
of stock or other ownership interests having ordinary voting power (other than
stock having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such corporation
are at the time owned, or the management of which is otherwise
-15-
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person and (ii) any limited liability company in which such Person,
directly or indirectly, owns at least a majority of the ownership interests
having ordinary voting power, or the management of which is otherwise
controlled, directly or indirectly, through one or more intermediaries by such
Person, or both; provided, however, that in no event shall either Xxxxxx-Xxxx or
-------- -------
K-H Funding constitute a Subsidiary within the meaning of this definition;
unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
Borrower.
"TAXES" shall have the meaning set forth in Section 2.9(e)(1).
"TERMINATION EVENT" shall mean, with respect to a Pension Plan: (a) a
Reportable Event, (b) the termination of a Pension Plan, or the filing of a
notice of intent to terminate a Pension Plan, or the treatment of a Pension Plan
amendment as a termination under ERISA Section 4041(c), (c) the institution of
proceedings to terminate a Pension Plan under ERISA Section 4042(a) or (d) the
appointment of a trustee to administer any Pension Plan under ERISA Section
4042(b).
"TOTAL CAPITALIZATION" shall mean as of the date of determination, the sum
of (i) the Consolidated Net Worth of Borrower and its Subsidiaries at such date
and (ii) the outstanding principal amount of the Indebtedness for Borrowed Money
of Borrower and its Subsidiaries at such date.
"TRANSACTION" shall mean the establishment of the facility contemplated by
this Agreement.
"UNAPPLIED CASH" shall mean Accounts of Borrower which have been paid by
the relevant obligor but which payments have not yet been reflected on the
accounts receivables records of Borrower.
"UNFUNDED PENSION LIABILITIES" shall mean, with respect to any Pension Plan
at any time, the amount determined by taking the accumulated benefit obligation,
as disclosed in accordance with Statement of Accounting Standards No. 87, over
the fair market value of Pension Plan assets.
"UNPAID DRAWING" shall have the meaning set forth in Section 2.5(d).
"UNRECOGNIZED RETIREE WELFARE LIABILITY" shall mean, with respect to any
Plan that provides post-retirement benefits other than pension benefits, the
amount of the accumulated post-retirement benefit obligation, as determined in
accordance with Statement of Financial Accounting Standards No. 106, as of the
most recent valuation date. For purposes of determining the aggregate amount of
the Unrecognized Retiree Welfare Liability, Plans maintained by a Subsidiary
that is not otherwise a ERISA Affiliate shall be taken into account.
I.2 ACCOUNTING TERMS. All accounting terms used herein shall be construed
----------------
in accordance with Generally Accepted Accounting Principles consistent with
those applied in the preparation of the financial statements referred to in
Section
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3.5, and all financial data submitted pursuant to this Agreement shall be
prepared in accordance with such principles.
II. THE CREDIT.
-----------
II.1 THE LOANS
---------
(a) REVOLVING CREDIT LOANS.
(1 Subject to the terms and conditions hereof, each Bank
agrees, severally and not jointly with the other Banks, to make revolving credit
loans (collectively called the "REVOLVING CREDIT LOANS" and individually a
"REVOLVING CREDIT LOAN") to Borrower from time to time during the period
commencing the date hereof and ending three (3) years from the date hereof, or
on any earlier date as provided in Sections 2.7(b) and 10.1 hereof (the
"REVOLVER TERMINATION DATE"), in principal amounts not to exceed at any time
outstanding in the aggregate the amount set forth opposite the name of each such
Bank on Exhibit A hereto under the caption "Revolving Loan Commitment" (each
such amount being hereinafter called such Bank's "REVOLVING LOAN COMMITMENT" and
collectively, the Banks' "AGGREGATE REVOLVING LOAN COMMITMENT"). All Loans shall
be made by the Banks simultaneously and pro rata in accordance with the
--- ----
Revolving Loan Commitments. The failure of any one or more of the Banks to make
Revolving Credit Loans in accordance with its or their obligations shall not
relieve the other Banks of their several obligations under this subsection, but
in no event shall the aggregate amount at any one time outstanding which any
Bank shall be required to lend under this Section 2.1(a), when added to such
Bank's Commitment Percentage of Letter of Credit Outstandings at such time,
exceed the amount of such Bank's Revolving Loan Commitment at that time.
(2 Borrower may request Revolving Credit Loans to bear
interest at either the Base Rate or LIBO Rate options described in Section 2.4.
The Revolving Credit Loans outstanding at any one time may involve any
combination of such interest rate options in such amounts as Borrower may
determine, subject to the terms and conditions hereof, including the requirement
concerning minimum Loan requests and the requirements that (i) no request may be
made which would require more than one interest rate option or more than one
Interest Period to apply to a single Revolving Credit Loan, and (ii), in the
case of LIBO Rate Loans, (a) not more than five such Loans may be outstanding at
any one time, in the aggregate and (b) no LIBO Rate Loan may have an Interest
Period extending beyond the Revolver Termination Date.
(3 Notwithstanding the foregoing, Borrower shall not be
entitled to a Revolving Credit Loan if, after giving effect to such Revolving
Credit Loan, (A) the unpaid principal amount of the Revolving Credit Loans to
Borrower then outstanding plus the Letter of Credit Outstandings at such time
would exceed the least of (i) the Aggregate Revolving Loan Commitment, (ii) the
then current Borrowing Base or (iii) $60,000,000 until such time as the
Indentures each have been terminated or modified to permit a greater level of
indebtedness under this Agreement or (B) the unpaid principal amount of the
Revolving Credit Loans to Borrower then outstanding would exceed $25,000,000.
(4 Except for Revolving Credit Loans which exhaust the
full remaining amount permitted by clause (3) above, and conversions which
result in the conversion
-17-
of all Revolving Credit Loans subject to a particular interest rate option, each
of which hereof may be in lesser amounts, each Loan when made and each
conversion of Loans of one type into Loans of another type hereunder shall be in
an amount at least equal to $1,000,000, or if greater, then in such minimum
amount plus $1,000,000 multiples.
(5 Within the limits of clause (3) above, the Aggregate
Revolving Loan Commitment and the Borrowing Base, Borrower may borrow, prepay
(in accordance with Section 2.8) and reborrow Revolving Credit Loans. All
Revolving Credit Loans shall, in any event, be repaid by Borrower on the
Revolver Termination Date.
(6 If any principal of a LIBO Rate Loan shall be repaid
(whether upon prepayment or acceleration) or converted to a Base Rate Loan
pursuant to Section 2.3 prior to the last day of the Interest Period applicable
to such LIBO Rate Loan or if Borrower fails for any reason to borrow a LIBO Rate
Loan after giving irrevocable notice pursuant to Section 2.3, Borrower shall pay
to each Bank, in addition to the principal and interest then to be paid, such
additional amounts as may be necessary to compensate each Bank for all direct
and indirect costs and losses (including losses resulting from redeployment of
prepaid or unborrowed funds at rates lower than the cost of such funds to such
Bank and including lost profits) incurred or sustained by such Bank (the
"ADDITIONAL AMOUNT") as a result of such repayment or failure to borrow. The
Additional Amount (which each Bank shall take reasonable measures to minimize)
shall be specified in a written notice or certificate delivered to Borrower by
the Agent in the form provided by each Bank sustaining such costs or losses.
Such notice or certificate shall contain a calculation in reasonable detail of
the Additional Amount to be compensated and shall be conclusive as to the facts
and the amounts stated therein, absent manifest error.
II.2 THE REVOLVING CREDIT NOTES. The Revolving Credit Loans made by each
--------------------------
Bank shall all be evidenced by a single promissory note of Borrower (each such
promissory note, as it may be amended, extended, modified or renewed, a
"REVOLVING CREDIT NOTE") in principal face amount equal to such Bank's Revolving
Loan Commitment, payable to the order of such Bank and otherwise in the form
attached hereto as Exhibit C. The Revolving Credit Notes shall be dated the
Closing Date, shall bear interest at the rate per annum and shall be payable as
to principal and interest in accordance with the terms hereof, and shall be
delivered in substitution for any Revolving Credit Note previously delivered to
such Bank. The Revolving Credit Notes shall mature upon the Revolver Termination
Date and, upon maturity each outstanding Revolving Credit Loan evidenced thereby
shall be due and payable. The Agent shall maintain records of all Loans
evidenced by the Revolving Credit Notes and of all payments thereon, which
records shall be conclusive absent manifest error.
II.3 FUNDING PROCEDURES.
-------------------
(a) Each request for a Revolving Credit Loan or the conversion or
renewal of an interest rate with respect to a Loan shall be made not later than
11:00 A.M. on a Business Day by delivery to the Agent of a written request
signed by Borrower, or in the alternative a telephone request followed promptly
by written confirmation of the request, specifying the date and amount of the
Loan to be made, converted or renewed, selecting the interest rate option
applicable thereto and specifying in the case of LIBO Rate Loans the Interest
Period. The form of request attached hereto as Exhibit D shall be used to
request the making, conversion or renewal of Revolving
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Credit Loans, unless otherwise agreed. Each request shall be received not less
than one Business Day prior to the date of the proposed borrowing, conversion or
renewal in the case of Base Rate Loans, and three London Business Days prior to
the date of the proposed borrowing, conversion or renewal in the case of LIBO
Rate Loans. No request shall be effective until actually received in writing by
the Agent.
(b) Upon receipt of a request for a Loan and if the conditions
precedent provided herein shall be satisfied at the time of such request, the
Agent promptly (and not later than 2:00 P.M. on the date of receipt of such
request) shall notify each Bank of such request and of such Bank's ratable share
of such Loan. Upon receipt by the Agent the request for a Loan shall not be
revocable by Borrower.
(c) Not later than 11:00 A.M. on the date of each Loan, each Bank
shall make available (except as provided in clause (d) below) its ratable share
of such Loan, in immediately available funds, to the Agent at the address set
forth opposite its name on the signature page hereof or at such office or
account in London as the Agent shall specify to Borrower and the Banks. Unless
an officer of the Agent active on Borrower's accounts knows that any applicable
condition specified herein has not been satisfied, the Agent will make the funds
so received from the Banks immediately available to Borrower on the date of each
Loan by a credit to the account of Borrower at the Agent's aforesaid address.
(d) If the Agent has notified the Banks as contemplated by Section
2.3(b) hereof, then unless the Agent shall have been notified by any Bank at
least one Business Day prior to the date of the making, conversion or renewal of
any LIBO Rate Loan, or by 3:00 P.M. on the date a Base Rate Loan is requested,
that such Bank does not intend to make available to the Agent such Bank's
portion of the total amount of the Loan to be made, converted or renewed on such
date, the Agent may assume that such Bank has made such amount available to the
Agent on the date of the Loan and the Agent may, in reliance upon such
assumption, make available to Borrower a corresponding amount. If and to the
extent such Bank shall not have so made such funds available to the Agent, such
Bank agrees to repay the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to Borrower until the date such amount is repaid to the Agent, at the
Federal Funds Rate plus 50 basis points for three Business Days, and thereafter
at the Base Rate. If such Bank shall repay to the Agent such corresponding
amount, such amounts so repaid shall constitute such Bank's Loan for purposes of
this Agreement. If such Bank does not repay such corresponding amount forthwith
upon the Agent's demand therefor, the Agent shall promptly notify Borrower, and
Borrower immediately shall pay such corresponding amount to the Agent, without
any prepayment penalty or premium, but with interest on the amount repaid, for
each day from the date such amount is made available to Borrower until the date
such amount is repaid to the Agent, at the rate of interest applicable at the
time to such Loan. Nothing herein shall be deemed to relieve any Bank of its
obligation to fulfill its Revolving Loan Commitment hereunder or to prejudice
any rights which Borrower may have against any Bank as a result of any default
by such Bank hereunder.
(e) If the Banks make, convert or renew a Loan on a day on which all
or any part of an outstanding Loan from the Banks is to be repaid, each Bank
shall apply the proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any)
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between the amount being borrowed and the amount being repaid shall be made
available by such Bank to the Agent as provided in clause (c).
II.4 INTEREST.
---------
(a) BASE RATE. Each Base Rate Loan shall bear interest on the
principal amount thereof from the date made until such Loan is paid in full or
converted, at a rate per annum equal to the Base Rate plus the Applicable Margin
determined from time to time.
(b) LIBO RATE. Each LIBO Rate Loan shall bear interest on the
principal amount thereof from the date made until such Loan is paid in full or
converted, at a fixed rate per annum equal to the LIBO Rate plus the Applicable
Margin determined from time to time.
(i After receipt of a request for a LIBO Rate Loan, the Agent
shall proceed to determine the LIBO Rate to be applicable thereto. The
Agent shall give prompt notice by telephone or facsimile to Borrower and to
each Bank of the LIBO Rate thus determined in respect of each LIBO Rate
Loan or any change therein.
(ii In the event Borrower fails or is not permitted to select
an Interest Period for any LIBO Rate Loan within the time period and
otherwise as provided herein, such Loan shall be automatically converted
into a Base Rate Loan on the last day of the Interest Period for such Loan.
(c) CONVERSIONS OF LOANS. Borrower shall have the right to convert
Base Rate Loans into LIBO Loans, and vice versa, from time to time, provided
that: (i) Borrower shall give the Agent notice of each permitted conversion as
provided in Section 2.3 hereof; (ii) LIBO Rate Loans may be converted only as of
the last day of the applicable Interest Period for such Loans; and (iii) without
the consent of each of the Banks, no Base Rate Loan may be converted into a LIBO
Rate Loan and no Interest Period may be renewed if on the proposed date of
conversion an Event of Default, or Potential Default, exists or would thereby
occur. The Agent shall use its best efforts to notify Borrower of the
effectiveness of such conversion, and the new interest rate to which the
converted Loan is subject, as soon as practicable after the conversion;
provided, however, that any failure to give such notice shall not affect
Borrower's obligations or the Banks' rights and remedies hereunder in any way
whatsoever.
(d) DEFAULT RATE.
(i If any Event of Default specified in Section 10.1(a) or
Section 10.1(d) shall occur; or
(ii If any other Event of Default occurs and the Notes are
declared to be immediately due and payable;
-20-
THEN, the rate of interest applicable to each Loan then outstanding, all Unpaid
Drawings and the fees applicable to all Letters of Credit provided for in
Section 2.6(c) shall be the Default Rate. Unless waived by the Required Banks,
the Default Rate shall apply from the date of the Event of Default until the
date such Event of Default or breach is cured, and interest accruing at the
Default Rate shall be payable upon demand.
(e) APPLICABLE MARGINS. The margin applicable to Base Rate Loans and
the LIBO Rate Loans (in each such case, the "APPLICABLE MARGIN") will be
determined from time to time based on the ratio of Indebtedness for Borrowed
Money to EBITDA. Upon receipt by the Agent of the quarterly financial statements
required to be delivered pursuant to Section 6.1(b), the Agent shall determine
the ratio of Indebtedness for Borrowed Money to EBITDA for the quarterly period
covered by such statements. The Agent shall thereupon determine the Applicable
Margin corresponding to such ratio, in each case pursuant to the schedule
attached as Schedule 2.4(e) hereto. Any adjustment to the Applicable Margins
shall become effective five Business Days following receipt by the Agent of the
financial statements required pursuant to Section 6.1(b) hereof or, if Borrower
fails to provide financial statements within the time period required by Section
6.1(b) hereof, and such financial statements cause the Applicable Margins to
increase, such adjustment of the Applicable Margins shall become effective
retroactive to the date five Business Days following the date the financial
statements were required under Section 6.1(b) to be furnished. Any adjustment in
such Applicable Margins shall affect the Applicable Margin of Base Rate Loans
then in effect or thereafter made, and shall apply to the Applicable Margin of
LIBO Rate Loans thereafter made.
II.5 LETTERS OF CREDIT.
------------------
(a) GENERAL REQUIREMENTS.
(1 Subject to and upon the terms and conditions herein set
forth, Borrower may request CoreStates Bank, N.A. ("L/C BANK") or, upon the
written consent of L/C Bank and the requested Bank, any other Bank at any time
and from time to time prior to the Revolver Termination Date, to issue, and
subject to the terms and conditions contained herein such Bank (the "ISSUING
BANK") shall issue, for the account of Borrower, one or more Letters of Credit
in such form as is approved by the Issuing Bank in its sole discretion. The
Borrower agrees not to request the issuance of any Letter of Credit for use by,
in connection with, or for IESA, ICF Xxxxxx Participacoes Ltda., and/or ICF
Xxxxxx Brazil Holdings unless the Borrower has obtained the prior written
consent of the Agent for the issuance of such Letter of Credit.
(2 Notwithstanding the foregoing, no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of Credit
Outstandings and outstanding principal amount of Revolving Credit Loans at such
time, would exceed the least of (i) the Aggregate Revolving Loan Commitment (ii)
the Borrowing Base or (iii)$60,000,000 until such time as the Indentures each
have been terminated or modified to permit a greater level of indebtedness under
this Agreement.
(3 (i No Letter of Credit shall bear an expiry date later
than the Revolver Termination Date, and (ii) the aggregate Stated Amount of all
Letters of Credit containing any term or provision that extends the expiry date
or otherwise renews such Letter of
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Credit without explicit action being taken by the Issuing Bank outstanding at
any time shall not exceed $3,000,000.
(b) LETTER OF CREDIT REQUESTS.
(1 Whenever Borrower desires that a Letter of Credit be issued
for its account, Borrower shall give the Issuing Bank (with copies to be sent to
the Agent and each other Bank) at least five Business Days' prior written
request therefor (or such shorter period of notice as the Issuing Bank may agree
upon with Borrower from time to time).
(2 The execution and delivery of each request for a Letter of
Credit shall be deemed to be a representation and warranty by Borrower that such
Letter of Credit may be issued in accordance with, and will not violate the
requirements of, this Section 2.5. Unless the Issuing Bank has received notice
from the Agent or the Required Banks before it issues the respective Letter of
Credit that one or more of the conditions specified in Section 5.1 are not then
satisfied, or that the issuance of such Letter of Credit would violate this
Section 2.5, then the Issuing Bank may issue the requested Letter of Credit for
the account of Borrower in accordance with the terms of this Agreement and, with
respect to any matters not specifically covered by this Agreement, in accordance
with the Issuing Bank's usual and customary practices.
(c) LETTER OF CREDIT PARTICIPATIONS.
(1 Immediately upon the issuance by the Issuing Bank of any
Letter of Credit (or in the case of the existing Letters of Credit, upon the
effective date of this Agreement), the Issuing Bank shall be deemed to have sold
and transferred to each Bank (other than the Issuing Bank), and each such Bank
shall be deemed irrevocably and unconditionally to have purchased and received
from the Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such Bank's Commitment Percentage, in such
Letter of Credit, each substitute letter of credit, each drawing made thereunder
and the obligations of Borrower under this Agreement with respect thereto, and
any security therefor or guaranty pertaining thereto. Upon any change in the
Revolving Loan Commitments of the Banks, it is hereby agreed that, with respect
to all outstanding Letters of Credit and Unpaid Drawings, there shall be an
automatic adjustment to the participations pursuant to this Section 2.5(c) to
reflect the new Commitment Percentages of the assigning and assignee Banks.
(2 In determining whether to pay under any Letter of Credit,
the Issuing Bank shall have no obligation relative to the Banks other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to comply on their face with
the requirements of such Letter of Credit. Any action taken or omitted to be
taken by the Issuing Bank under or in connection with any Letter of Credit if
taken or omitted in the absence of gross negligence or wilful misconduct, shall
not create for the Issuing Bank any resulting liability to any Bank.
(3 In the event that the Issuing Bank makes any payment under
any Letter of Credit and Borrower shall not have reimbursed such amount in full
in cash to the Issuing Bank pursuant to and as required by Section 2.5(d), the
Issuing Bank shall promptly notify the Agent, which shall promptly notify each
Bank of such failure, and each Bank shall
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promptly and unconditionally pay to the Agent for the account of the Issuing
Bank, the amount of such Bank's Commitment Percentage of such unreimbursed
payment in same day funds. Such payment shall be made to the Agent at the
address set forth opposite its name on the signature page hereof or at such
office or account in London as the Agent shall specify to the Banks. If the
Agent so notifies, prior to 11:00 A.M. on any Business Day, any Bank required to
fund a payment under a Letter of Credit, such Bank shall make its required
payment on the same Business Day. If and to the extent such Bank shall not have
so made its Commitment Percentage of the amount of such payment available to the
Agent for the account of the Issuing Bank, such Bank agrees to pay to the Agent
for the account of the Issuing Bank, forthwith on demand, such amount, together
with interest thereon, for each day from such date until the date such amount is
paid to the Agent for the account of the Issuing Bank at the Federal Funds Rate
plus 50 basis points. The failure of any Bank to make available to the Agent for
the account of the Issuing Bank its Commitment Percentage of any payment under
any Letter of Credit shall not relieve any other Bank of its obligation
hereunder to make available to the Agent for the account of the Issuing Bank its
Commitment Percentage of any payment under any Letter of Credit on the date
required, as specified above; but no Bank shall be responsible for the failure
of any other Bank to make available to the Agent for the account of the Issuing
Bank such other Bank's Commitment Percentage of any such payment.
(4 Whenever the Issuing Bank receives a payment of a reimbursement
obligation as to which the Agent has received for the account of the Issuing
Bank any payments from the Banks pursuant to clause (3) above, the Issuing Bank
shall pay to the Agent and the Agent shall promptly pay to each Bank which has
paid its Commitment Percentage thereof, in same day funds, an amount equal to
such Bank's Commitment Percentage thereof.
(5 Upon the request of any Bank, the Issuing Bank shall furnish to
such Bank copies of any Letter of Credit to which the Issuing Bank is party and
such other documentation relating to such Letter of Credit as may reasonably be
requested by such Bank.
(6 As between Borrower on the one hand and the Issuing Bank and the
Banks on the other hand, Borrower assumes all risks of the acts and omissions
of, or misuse of the Letters of Credit by the respective beneficiaries of such
Letters of Credit. Without limiting the generality of the foregoing, neither
the Issuing Bank nor any other Bank shall be responsible (except in the case of
its gross negligence or willful misconduct) for the following:
(i the form, validity, sufficiency, accuracy, genuineness
or legal effect of any documents submitted by any party in connection with
the application for and issuance of or any drawing under such Letters of
Credit, even if it should in fact prove to be in any respects invalid,
insufficient, inaccurate, fraudulent or forged;
(ii the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign any such Letter of Credit
or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason;
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(iii failure of the beneficiary of any such Letter of
Credit to comply fully with conditions required in order to draw upon
such Letter of Credit, other than material conditions or instructions
that expressly appear in such Letter of Credit;
(iv errors, omissions, interruptions or delays in the
transmission or delivery of any messages by mail, cable, telegraph,
telecopier, telex or otherwise, whether or not they are encoded;
(v errors in interpretation of technical terms;
(vi any loss or delay in the transmission or otherwise of
any document required in order to make a drawing under any such Letter
of Credit or the proceeds thereof;
(vii the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing of any such Letter of
Credit; and
(viii any consequences arising from causes beyond the
control of the Issuing Bank, including without limitation any acts of
governments.
(7 The obligations of the Banks to make payments to the Agent
for the account of the Issuing Bank with respect to Letters of Credit issued in
conformity with this Agreement shall be irrevocable and not subject to any
qualification or exception whatsoever (except that no Bank shall be obligated to
reimburse any Issuing Bank for wrongful payments made as a result of acts or
omissions constituting wilful misconduct or gross negligence by such Issuing
Bank) and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii the existence of any claim, setoff, defense or other
right which Borrower may have at any time against a beneficiary named
in a Letter of Credit, any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting), the Agent, the
Issuing Bank, any Bank, or any other Person, whether in connection
with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions;
(iii any draft, certificate or any other document presented
under the Letter of Credit shall prove to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein shall
prove to be untrue or inaccurate in any respect;
-24-
(iv the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents;
(v the occurrence of any Potential Default or Event of
Default; or
(vi the termination of this Agreement or any Revolving
Loan Commitment (but only with respect to Letters of Credit issued
prior to such termination).
(d) AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS, COLLATERAL, ETC.
(1 Borrower agrees to reimburse the Issuing Bank, in
immediately available funds, for any payment made by the Issuing Bank under any
Letter of Credit issued for the benefit of Borrower (each such amount so paid
until reimbursed, an "UNPAID DRAWING") immediately after, and in any event on
the date of, such payment, with interest on the amount so paid by the Issuing
Bank, to the extent not reimbursed prior to 11:00 A.M. (Philadelphia time) on
the date of such payment such interest shall accrue, from and including the date
paid to but excluding the date reimbursement is made as provided above, at a
rate per annum equal to the Base Rate plus 200 basis points, such interest to be
payable promptly following demand.
(2 The obligations of Borrower under this Section 2.5(d) to
reimburse the Issuing Bank with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which Borrower may have or have had against any Bank (including in its capacity
as the Issuing Bank or as a participant in any Letter of Credit), including,
without limitation, any defense based upon any non-application or misapplication
by the beneficiary of the proceeds of any drawing under a Letter of Credit
(each, a "DRAWING"); provided, however, that Borrower shall not be obligated to
reimburse the Issuing Bank for any wrongful payment made by the Issuing Bank
under a Letter of Credit as a result of acts or omissions constituting wilful
misconduct or gross negligence on the part of the Issuing Bank.
(3 On the Revolver Termination Date, Borrower shall deliver to
the Agent cash or U.S. Treasury Bills with maturities of not more than ninety
(90) days from the date of delivery (discounted in accordance with customary
banking practice to present value to determine amount) ("DISCOUNTED TREASURIES")
in an amount equal at all times to one hundred and five percent (105%) of the
Letter of Credit Outstandings, such cash or Discounted Treasuries and all
interest earned thereon to constitute cash collateral for Borrower's
reimbursement obligation with respect to all Letters of Credit outstanding on
the Revolver Termination Date. If such cash collateral or Discounted Treasuries
have not been deposited within five (5) days after the date required, one or
more of the Banks shall be entitled to charge any account maintained by Borrower
or any wholly owned Subsidiary with such Bank or Banks to the extent necessary
to create such cash collateral for the benefit of all Banks. Any cash collateral
deposited under this paragraph, and all interest earned thereon, shall be held
by the Agent and invested and reinvested at the expense and the written
direction of Borrower, in U.S. Treasury Bills with maturities of no
-25-
more than ninety (90) days from the date of investment. Upon expiration of such
Letters of Credit or reimbursement by Borrower of Unpaid Drawings thereunder and
if no Event of Default or Potential Default then exists, any such collateral
shall be released to Borrower.
(e) TRADE COLLATERAL. Borrower hereby grants to the Bank issuing a
Documentary Letter of Credit an absolute security interest in and unqualified
right to possession and disposal of all property shipped under or in connection
with each Documentary Letter of Credit issued, created or entered into by such
Bank, and in and to all shipping documents, documents of title, or drafts drawn
under a Documentary Letter of Credit, together with the proceeds of each and all
of the foregoing, as and to the extent required by the applicable application
for each Documentary Letter of Credit when issued, until such time as all the
obligations and liabilities of Borrower to such Bank under or with reference to
such Documentary Letter of Credit, and all other Obligations, now or hereafter
incurred, have been fully paid and discharged. Borrower will execute and
deliver to each Bank from time to time all such other agreements, instruments
and other documents (including without limitation all requested financing and
continuation statements) and do all such further acts and things as a Bank may
reasonably request in order to further evidence or carry out the intent of this
Section or to perfect the lien and security interest created hereby or intended
so to be.
II.6 FEES.
----
(a) COMMITMENT FEE. Borrower shall pay to the Agent on behalf of
each Bank as compensation for such Bank's Revolving Loan Commitment a fee (the
"COMMITMENT FEE"), pro rata based upon each Bank's Commitment Percentage,
computed at the rate of 5/8 of 1% per annum on the average daily amount of the
unused portion of the Aggregate Revolving Loan Commitment accrued from and after
the date hereof. The unused portion of the Aggregate Revolving Loan Commitment
shall mean the Aggregate Revolving Loan Commitment less the sum of the aggregate
unpaid principal of outstanding Revolving Credit Loans plus the Letter of Credit
Outstandings. The Commitment Fee shall be payable in arrears on the first
Business Day of each January, April, July and October, commencing July 1, 1996
(for the three month period or portion thereof ended on the preceding day), and
on the Revolver Termination Date. Payment shall be made to the Agent on behalf
of the Banks and the Agent shall promptly forward to each Bank the pro rata
amount due such Bank. The Commitment Fee shall be calculated on the basis of a
360-day year for the actual number of days elapsed.
(b) LETTER OF CREDIT FEES. The fee applicable to Letters of Credit
shall be computed at the applicable LIBO Rate Applicable Margin per annum as
provided in Schedule 2.4(e) hereto on the average daily amount of Letter of
Credit Outstandings accrued from and after the date hereof. Such fee shall be
due and payable by the Borrower to the Banks (on the basis of each Bank's
Commitment Percentage) quarterly in arrears on and through the first Business
Day of each January, April, July and October, commencing July 1, 1996 (for the
three-month period or portion thereof ended on the preceding day) and on the
Revolver Termination Date.
(c) FRONTING FEE. Borrower agrees to pay to the Issuing Bank, for
its own account, (A) a fee (the "FRONTING FEE") equal to one-eighth of one
percent (1/8%) per annum of the aggregate face amount of the outstanding Letters
of Credit which shall be computed and paid
-26-
on a quarterly basis, in arrears, on the first Business Day of each calendar
quarter, beginning in the first calendar quarter after the date hereof, in each
case for the actual number of days elapsed over a 360 day year, and (B)
customary issuance, amendment, extension, cancellation and administration fees
and charges for each Letter of Credit, due and payable upon demand of the
Issuing Bank.
(d) CLOSING FEE. Borrower shall pay to the Agent the fees set forth
in the term sheet dated October 15, 1997 executed by Borrower.
II.7 REDUCTION OR TERMINATION OF AGGREGATE REVOLVING LOAN COMMITMENT.
---------------------------------------------------------------
(a) NOTICE OF VOLUNTARY REDUCTION OR TERMINATION. Borrower may at any
time, on not less than three Business Days' written notice by Borrower to the
Agent, terminate or permanently reduce the Aggregate Revolving Loan Commitment
pro rata among the Banks, provided that any reduction shall be in the amount of
$3,000,000 or a multiple thereof.
(b) MANDATORY TERMINATION. In the event the Aggregate Revolving Loan
Commitment is terminated by Borrower, the Revolver Termination Date shall
accelerate and Borrower shall, simultaneously with such termination, repay the
Base Rate Loans and LIBO Rate Loans in accordance with Section 2.8, and shall
deliver to the Agent cash or Discounted Treasuries relating to Letter of Credit
Outstandings in accordance with Section 2.5(d)(3).
(c) MANDATORY REDUCTION. Except to the extent (i) proceeds arise from
a sale that is permitted by Section 7.7(i) through (iv) hereof, or (ii)
otherwise agreed by the Required Banks, the Aggregate Revolving Loan Commitment
shall be reduced from time to time by the full amount of net cash proceeds of
assets sold by Borrower or any Subsidiary on or after the date hereof, if and to
the extent the aggregate amount of all such sales after the date hereof exceed
15% of the lesser of (i) total assets of Borrower and its Subsidiaries on a
consolidated basis or (ii) EBITDA for the immediately preceding four fiscal
quarters, determined as of the end of the fiscal quarter immediately preceding
such sale.
II.8 PREPAYMENTS.
-----------
(a) MANDATORY PREPAYMENTS. If at any time (a) the aggregate
outstanding Revolving Credit Loans plus Letter of Credit Outstandings exceed the
lesser of (y) the then Aggregate Revolving Loan Commitment or (z) the then
current Borrowing Base or (b) the unpaid principal amount of the Revolving
Credit Loans to Borrower then outstanding exceed $25,000,000, Borrower shall
make a prepayment of principal in respect of the Base Rate Loans in such amount
as is necessary to assure that the aggregate principal amount of Loans
outstanding immediately after such reduction plus Letter of Credit Outstandings
will not exceed the lesser of the then Aggregate Revolving Loan Commitment and
the then current Borrowing Base. If prepayment in full of the Base Rate Loans
does not reduce the amount of all Loans outstanding plus Letter of Credit
Outstandings to an amount that will not exceed the lesser of the then Aggregate
Revolving Loan Commitment and the then current
-00-
Xxxxxxxxx Xxxx, Xxxxxxxx shall deposit with the Agent cash and Discounted
Treasuries in an amount sufficient to repay that portion of the principal amount
of LIBO Rate Loans outstanding, with interest thereon through the end of each
applicable Interest Period, as is necessary to assure that the aggregate
principal amount of Loans outstanding immediately after such reduction of the
Base Rate Loans less the principal amount of LIBO Loans repaid by such
collateral plus Letter of Credit Outstandings will not exceed the lesser of the
then Aggregate Revolving Loan Commitment and the then current Borrowing Base,
such collateral to be held by the Agent on behalf of the Banks until each such
maturity date and then applied to the repayment of such Loans. If, upon
prepayment in full of the Base Rate Loans and deposit of cash and Discounted
Treasuries in an amount sufficient to repay the principal amount of the LIBO
Rate Loans, the Letter of Credit Outstandings exceed the lesser of the then
Aggregate Revolving Loan Commitment and the then current Borrowing Base,
Borrower shall deposit with the Agent cash and Discounted Treasuries in an
amount equal to one hundred five percent (105%) of the amount by which Letters
of Credit Outstandings exceed the lesser of the then Aggregate Revolving Loan
Commitment and the then current Borrowing Base, such collateral to be held by
the Agent on behalf of the Banks to reimburse the Issuing Bank for the amount of
any Unpaid Drawings. Upon reduction of Letter of Credit Outstandings to an
amount equal to the lesser of the then Aggregate Revolving Loan Commitment and
the then current Borrowing Base and if no Event of Default or Potential Default
then exists, any such collateral held for reimbursement of Unpaid Drawings of
Letters of Credit shall be released to Borrower. If Borrower sells or otherwise
disposes of assets requiring a reduction in the Aggregate Revolving Loan
Commitment pursuant to Section 2.7(c) hereof, Borrower shall use the proceeds of
each such sale or disposition to prepay the Revolving Credit Loans, unless the
Required Banks consent in writing to the waiver of this provision, such waiver
being required for each sale or disposition.
(b) BASE RATE LOANS. In addition, on one Business Day's notice by
Borrower to the Agent and the Banks, Borrower may, at its option, prepay the
Base Rate Loans in whole at any time or in part from time to time, provided that
each partial prepayment shall be in the principal amount of multiples of
$1,000,000.
(c) LIBO RATE LOANS. On three Business Days' notice by Borrower to
the Agent and the Banks, Borrower may prepay any LIBO Rate Loan provided that if
Borrower shall prepay a LIBO Rate Loan prior to the last day of the applicable
Interest Period, or shall fail to borrow any LIBO Rate Loan on the date such
Loan is to be made, Borrower shall pay to each Bank, in addition to the
principal and interest then to be paid in the case of a prepayment, the
Additional Amount incurred or sustained by such Bank as a result of such
prepayment or failure to borrow as provided in Section 2.1(a)(6).
II.9 PAYMENTS.
(a) LIBO LOANS. Accrued interest on LIBO Loans with Interest Periods
of one, two or three months shall be due and payable on the last day of such
Interest Period. Accrued interest on LIBO Loans with Interest Periods of six
months shall be due and payable at the end of the third month and on the last
day of such Interest Period.
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(b) BASE RATE LOANS. Accrued interest on all Base Rate Loans shall
be due and payable on the first Business Day of each calendar month and upon the
Revolver Termination Date.
(c) LETTER OF CREDIT FEES. Accrued Letter of Credit fees on all
Letters of Credit shall be due and payable on the first Business Day of each
calendar quarter and upon the Revolver Termination Date.
(d) FORM OF PAYMENTS, APPLICATION OF PAYMENTS, PAYMENT
ADMINISTRATION, ETC. Provided that no Event of Default or Potential Default
thenexists and except as provided in Section 2.8(a) hereof, all payments and
prepayments shall be applied to the Loans in such order and to such extent as
shall be specified by Borrower, by written notice to the Agent at the time of
such payment or prepayment. If no such written notice is received by the Agent
or if an Event of Default or Potential Default then exists, the payment or
prepayment shall be applied to the Loans in such order and to such extent as the
Agent shall determine in accordance with Section 12.7. Except as otherwise
provided herein, all payments of principal, interest, fees, or other amounts
payable by Borrower hereunder shall be remitted to the Agent on behalf of the
Banks at the address set forth opposite its name on the signature page hereof or
at such office or account in London as the Agent shall specify to Borrower and
the Banks, in immediately available funds not later than 2:00 P.M. on the day
when due. The Agent will promptly distribute to each Bank by wire transfer in
immediately available funds each Bank's pro rata share of such payment based
upon such Bank's Commitment Percentage. Whenever any payment is stated as due on
a day which is not a Business Day, the maturity of such payment shall, except as
otherwise provided in the definition of "Interest Period" in Section 1.1, be
extended to the next succeeding Business Day and interest and fees shall
continue to accrue during such extension. Borrower authorizes the Agent to
deduct from any account of Borrower or any wholly owned Subsidiary maintained at
the Agent or over which the Agent has control any amount payable under this
Agreement, the Notes or any other Loan Document which is not paid in a timely
manner. The Agent's failure to deliver any xxxx, statement or invoice with
respect to amounts due under this Section or under any Loan Document shall not
affect Borrower's obligation to pay any installment of principal, interest or
any other amount under this Agreement when due and payable.
(e) NET PAYMENTS.
(1) All payments made to the Banks and the Agent by Borrower
hereunder, under any Note or under any other Loan Document will be made without
setoff, counterclaim or other defense. All such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or any political subdivision or
taxing authority thereof or therein (but excluding, except as provided below,
any tax imposed on or measured by the gross or net income of a Bank (including
all interest, penalties or similar liabilities related thereto) pursuant to the
laws of the United States of America or any political subdivision thereof, or
taxing authority of the United States of America or any political subdivision
thereof, in which the principal office or applicable lending office of such Bank
is located), and all interest, penalties or similar liabilities with respect
thereto
-29-
(collectively, together with any amounts payable pursuant to the next sentence,
"TAXES"). Borrower shall also reimburse each Bank, upon the written request of
such Bank, for Taxes imposed on or measured by the gross or net income of such
Bank pursuant to the laws of the United States of America (or any State or
political subdivision thereof), or the jurisdiction (or any political
subdivision or taxing authority thereof) in which the principal office or
applicable lending office of such Bank is located as such Bank shall determine
are payable by such Bank due to the amount of Taxes paid to or on behalf of such
Bank pursuant to this or the preceding sentence. If any Taxes are so levied or
imposed, Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
hereunder, under any Note or under any other Loan Document, after withholding or
deduction for or on account of any Taxes, will not be less than the amount
provided for herein or in such Note. Borrower will furnish to the Agent upon
request certified copies of tax receipts evidencing such payment by Borrower.
Borrower will indemnify and hold harmless the Agent and each Bank, and reimburse
the Agent or such Bank upon its written request, for the amount of any Taxes so
levied or imposed and paid or withheld by such Bank.
(2) Notwithstanding the preceding paragraph (1), Borrower shall
be entitled, to the extent required to do so by law, to deduct or withhold Taxes
imposed by the United States of America (or any political subdivision or taxing
authority thereof) from interest, fees or other amounts payable hereunder for
the account of any Person other than a Bank (x) that is a domestic corporation
(as such term is defined in Section 7701 of the Code) for federal income tax
purposes (but excluding any foreign office of any Bank) or (y) that has
necessary forms on file with Borrower for the applicable year to the extent
deduction or withholding of such Taxes is not required as a result of the filing
of such forms, provided that if Borrower shall so deduct or withhold any such
Taxes, it shall provide a statement to the Agent and such Bank, setting forth
the amount of such Taxes so deducted or withheld, the applicable rate and any
other information or documentation which such Bank may reasonably request for
assisting such Bank to obtain any allowable credits or deductions for the taxes
so deducted or withheld in the jurisdiction or jurisdictions in which such Bank
is subject to tax.
II.10 CHANGES IN CIRCUMSTANCES; YIELD PROTECTION.
------------------------------------------
(a) If any Regulatory Change or compliance by the Banks with any
request made after the date of this Agreement by the Board of Governors of the
Federal Reserve System or by any Federal Reserve Bank or other central bank or
fiscal, monetary or similar authority (in each case whether or not having the
force of law) shall:
(i) impose, modify or make applicable any reserve, special
deposit, Federal Deposit Insurance Corporation premium or similar
requirement or imposition against assets held by, or deposits in or
for the account of, or loans made by, or any other acquisition of
funds for loans or advances by, the Banks;
(ii) impose on the Banks any other condition regarding the Notes
or the Letters of Credit;
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(iii) subject the Banks to, or cause the withdrawal or
termination of any previously granted exemption with respect to, any
tax (including any withholding tax but not including any income tax
not currently causing the Banks to be subject to withholding) or any
other levy, impost, duty, charge, fee or deduction on or from any
payments due from Borrower; or
(iv) change the basis of taxation of payments from Borrower to
the Banks (other than by reason of a change in the method of taxation
of a Bank's net income);
and the result of any of the foregoing events is to increase the cost to a Bank
of making or maintaining any Loan or Letter of Credit or to reduce the amount of
principal, interest or fees to be received by the Bank hereunder in respect of
any Loan or Letter of Credit, the Agent will immediately so notify Borrower. If
a Bank determines in good faith that the effects of the change resulting in such
increased cost or reduced amount cannot reasonably be avoided or the cost
thereof mitigated, then upon notice by the Agent to Borrower, Borrower shall pay
to such Bank on each interest payment date of the Loan or, as to those increased
costs or reduced amounts relating to Letters of Credit within thirty days of
such notice, such additional amount as shall be necessary to compensate the Bank
for such increased cost or reduced amount.
(b) If any Bank shall determine that any Regulation regarding capital
adequacy or the adoption of any Regulation regarding capital adequacy, which
Regulation is applicable to banks (or their holding companies) generally and not
such Bank (or its holding company) specifically, or any change therein, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Bank (or its holding company) with
any such request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
the effect of reducing the rate of return on such Bank's capital as a
consequence of its obligations hereunder to a level below that which such Bank
could have achieved but for such adoption, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, Borrower shall promptly pay to the
Agent for the account of such Bank, upon the demand of such Bank, such
additional amount or amounts as will compensate such Bank for such reduction.
(c) If the Agent shall determine (which determination will be made
after consultation with any Bank requesting same and shall be, in the absence of
fraud or manifest error, conclusive and binding upon all parties hereto) that by
reason of abnormal circumstances affecting the interbank eurodollar or
applicable eurocurrency market adequate and reasonable means do not exist for
ascertaining the LIBO Rate to be applicable to the requested LIBO Rate Loan or
that eurodollar or eurocurrency funds in amounts sufficient to fund all the LIBO
Rate Loans are not obtainable on reasonable terms, the Agent shall give notice
of such inability or determination by telephone to Borrower and to each Bank at
least two Business Days prior to the date of the proposed Loan and thereupon the
obligations of the Banks to make, convert other Loans to, or renew such LIBO
Rate Loan shall be excused, subject, however, to the right of Borrower at any
time thereafter to submit another request.
-31-
(d) Determination by a Bank for purposes of this Section 2.10 of the
effect of any Regulatory Change or other change or circumstance referred to
above on its costs of making or maintaining Loans or Letters of Credit or on
amounts receivable by it in respect of the Loans or Letters of Credit, and of
the additional amounts required to compensate such Bank in respect of any
additional costs, shall be made in good faith and shall be evidenced by a
certificate, signed by an officer of such Bank and delivered to Borrower, as to
the fact and amount of the increased cost incurred by or the reduced amount
accruing to the Bank owing to such event or events. Such certificate shall be
prepared in reasonable detail and shall be conclusive as to the facts and
amounts stated therein, absent manifest error.
(e) The affected Bank will notify Borrower of any event occurring
after the date of this Agreement that will entitle the Bank to compensation
pursuant to this Section as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation. Said notice shall be in
writing, shall specify the applicable Section or Sections of this Agreement to
which it relates and shall set forth the amount of amounts then payable pursuant
to this Section 2.10. Borrower shall pay such Bank the amount shown as due on
such notice within 10 days after its receipt of the same.
II.11 ILLEGALITY. Notwithstanding any other provision in this Agreement,
----------
if the adoption of any applicable Regulations, or any change therein, or any
change in the interpretation or administration thereof by any governmental
authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by the Banks with any request or directive
(whether or not having the force of law) of any such authority, central bank, or
comparable agency shall make it unlawful or impossible for the Banks to (1)
maintain their Revolving Loan Commitments, then upon notice to Borrower by the
Agent, the Revolving Loan Commitments shall terminate; or (2) maintain or fund
their LIBO Rate Loans, then upon notice to Borrower of such event, Borrower's
outstanding LIBO Rate Loans shall be converted into Base Rate Loans.
III. REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower represents and warrants to the Banks as to itself and each
Subsidiary or Subsidiary Guarantor, as the case may be, that:
III.1 ORGANIZATION, STANDING. Borrower and each Subsidiary Guarantor (i)
----------------------
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, (ii) has the corporate power and
authority necessary to own its assets, carry on its business and enter into and
perform its obligations hereunder, under each Loan Document to which it is a
party and (iii) is qualified to do business and is in good standing in each
jurisdiction where the nature of its business or the ownership of its properties
requires such qualification except where the failure to be so qualified would
not have a material adverse effect on the business, operations, assets or
condition (financial or otherwise) of Borrower and its Subsidiaries taken as a
whole.
-32-
III.2 CORPORATE AUTHORITY, VALIDITY ETC. The making and performance of
---------------------------------
the ETC. Loan Documents to which it is a party are within the power and
authority of Borrower and each Subsidiary Guarantor and have been duly
authorized by all necessary corporate action. The making and performance of the
Loan Documents do not and under present law will not require any consent or
approval of any of Borrower's or any Subsidiary Guarantor's shareholders or any
other person, do not and under present law will not violate any law, rule,
regulation order, writ, judgment, injunction, decree, determination or award, do
not violate any provision of its charter or by-laws, do not and will not result
in any breach of any material agreement, lease or instrument to which it is a
party, by which it is bound or to which any of its assets are or may be subject,
and do not and will not give rise to any Lien, other than Liens in favor of the
Banks under the Loan Documents, upon any of its assets. The number of shares and
classes of the capital stock of Borrower and each Subsidiary Guarantor and the
ownership thereof are accurately set forth on Schedule 3.12 attached hereto; all
such shares are validly issued, fully paid and non-assessable, and the issuance
and sale thereof are in compliance with all applicable federal and state
securities and other applicable laws; and the shareholders' ownership thereof is
free and clear of any liens or encumbrances or other contractual restrictions.
Further, neither Borrower nor any Subsidiary Guarantor is in default under any
material agreement, lease or instrument except to the extent such default
reasonably could not have a material adverse effect on the business, operations,
assets or condition (financial or otherwise) of Borrower and its Subsidiaries
taken as a whole and except to the extent such default reasonably could not have
a material adverse effect on Borrower's ability to perform its obligations under
the Loan Documents. No authorizations, approvals or consents of, and no filings
or registrations with, any governmental or regulatory authority or agency are
necessary for the execution, delivery or performance by Borrower or any
Subsidiary Guarantor of any Loan Document to which Borrower is a party or for
the validity or enforceability thereof. Each Loan Document, when executed and
delivered, will be the legal, valid and binding obligation of Borrower and each
Subsidiary Guarantor, enforceable against it in accordance with its terms except
to the extent that such enforcement may be limited by applicable bankruptcy,
insolvency, and other similar laws affecting creditors' rights generally.
III.3 LITIGATION. Except as disclosed on Schedule 3.3, there are no
----------
actions, suits or proceedings pending or, to Borrower's knowledge, threatened
against or affecting Borrower or any Subsidiary or any assets of Borrower or any
Subsidiary before any court, government agency, or other tribunal which if
adversely determined reasonably could have a material adverse effect on the
financial condition, operations or assets of Borrower and its Subsidiaries taken
as a whole or upon the ability of Borrower or any Subsidiary Guarantor to
perform under the Loan Documents. The status (including the tribunal, the nature
of the claim and the amount in controversy) of each such litigation matter as of
the date of this Agreement is set forth in Schedule 3.3.
III.4 ERISA. Borrower and each Subsidiary and ERISA Affiliate is in
-----
compliance in all material respects with all applicable provisions of ERISA and
the regulations promulgated thereunder; and, (a) neither Borrower, any
Subsidiary, nor any ERISA Affiliate maintains or contributes to or has
maintained or contributed to any multi employer plan (as defined in section 4001
of ERISA) under which Borrower, any Subsidiary or any ERISA Affiliate could have
any withdrawal liability; (b) neither Borrower, any Subsidiary, nor any ERISA
Affiliate, sponsors or maintains any Plan under which there is an accumulated
funding
-33-
deficiency within the meaning of (S)412 of the Code, whether or not waived; (c)
the aggregate liability for accrued benefits and other ancillary benefits under
each Plan that is or will be sponsored or maintained by Borrower, any Subsidiary
or any ERISA Affiliate (determined on the basis of actuarial assumptions
utilized by the actuary for the plan in preparing the most recent Annual Report)
does not exceed the aggregate fair market value of the assets under each such
defined benefit pension Plan; (d) the aggregate liability of Borrower and each
Subsidiary and each ERISA Affiliate arising out of or relating to a failure of
any Plan to comply with the provisions of ERISA or the Code, will not have a
material adverse effect on Borrower or any Subsidiary; and (e) there does not
exist any unfunded liability (determined on the basis of actuarial assumptions
utilized by the actuary for the plan in preparing the most recent Annual Report)
of Borrower, any Subsidiary or ERISA Affiliate under any plan, program or
arrangement providing post-retirement life or health benefits.
III.5 FINANCIAL STATEMENTS. The consolidated financial statements of
--------------------
Borrower and its Subsidiaries as of and for the year ended December 31, 1996
consisting in each case of a balance sheet, a statement of operations, a
statement of shareholders' equity, a statement of cash flows and accompanying
footnotes, present fairly, in all material respects, the financial position,
results of operations and cash flows of Borrower and its Subsidiaries as of the
dates and for the periods referred to, in conformity with Generally Accepted
Accounting Principles. Except as set forth on Schedule 3.5, there are no
liabilities, fixed or contingent, which are not reflected in such financial
statements, other than liabilities which are not required to be reflected in
such balance sheets. There has been no material adverse change in the business,
operations or assets or condition (financial or otherwise) of Borrower or any of
the Subsidiary Guarantors since December 31, 1996.
III.6 NOT IN DEFAULT; JUDGMENTS, ETC. No Event of Default or Potential
------------------------------
Default under any Loan Document has occurred and is continuing. Borrower and its
Subsidiaries have satisfied all judgments and neither Borrower nor any
Subsidiary is in default with respect to any judgment, writ, injunction, decree,
rule, or regulation of any court, arbitrator, or federal, state, municipal, or
other governmental authority, commission, board bureau, agency, or
instrumentality, domestic or foreign.
III.7 TAXES. Borrower and each Subsidiary has filed all federal, state,
-----
local and foreign tax returns and reports which it is required by law to file
and has paid all taxes, including wage taxes, assessments, withholdings and
other governmental charges which are presently due and payable (other than those
being contested in good faith by appropriate proceedings and disclosed on
Schedule 3.7). The tax charges, accruals and reserves on the books of Borrower
and each Subsidiary are adequate to pay all such taxes that have accrued but are
not presently due and payable. Borrower and each Subsidiary Guarantor is a
member of an affiliated group of corporations filing consolidated returns for
United States federal income tax purposes, and Borrower is the "common parent"
of such group.
III.8 PERMITS, LICENSES, ETC. Borrower and each Subsidiary possesses all
----------------------
permits, licenses, franchises, trademarks, trade names, copyrights and patents
necessary to the conduct of its business as presently conducted or as presently
proposed to be conducted, except where the failure to possess the same would not
have a material effect on the financial condition, operations or assets of
Borrower and its Subsidiaries taken as a whole.
-34-
III.9 COMPLIANCE WITH LAWSIII.9 COMPLIANCE WITH LAWS.
-----------------------------------------------
(a) Borrower and each Subsidiary is in compliance in all material
respects with all Regulations applicable to its business (including obtaining
all authorizations, consents, approvals, orders, licenses, exemptions from, and
making all filings or registrations or qualifications with, any court or
governmental department, public body or authority, commission, board, bureau,
agency, or instrumentality), the noncompliance with which reasonably could have
a material adverse effect on the business, operations, assets or condition
(financial or otherwise) of Borrower and its Subsidiaries taken as a whole.
(b) Hazardous Wastes, Substances and Petroleum Products.
---------------------------------------------------
(1) Borrower and each Subsidiary: (i) has received all permits
and filed all material notifications necessary to carry on their respective
business(es); and (ii) is in compliance in all respects with all Environmental
Control Statutes.
(2) Neither Borrower nor any Subsidiary has given any written or
oral notice, nor has it failed to give required notice, to the Environmental
Protection Agency ("EPA") or any state or local agency with regard to any actual
or imminently threatened Release of Hazardous Substances on properties owned,
leased or operated by Borrower or any Subsidiary or used in connection with the
conduct of its business and operations.
(3) Neither Borrower nor any Subsidiary has received notice that
it is potentially responsible for costs of clean-up or remediation of any actual
or imminently threatened Release of Hazardous Substances pursuant to any
Environmental Control Statute.
(4) No real property owned or leased by Borrower or any
Subsidiary is in material violation of any Environmental Control Statutes, no
Hazardous Substances are present on said real property and neither Borrower nor
any Subsidiary has been identified in any litigation, administrative proceedings
or investigation as a potentially responsible party for any liability under any
Environmental Control Statutes.
III.10 SOLVENCY. Borrower and each Subsidiary Guarantor, on a consolidated
--------
basis, are, and after giving effect to the transactions contemplated hereby,
will be, Solvent.
III.11 NO BURDENSOME AGREEMENTS. Neither Borrower nor any Subsidiary is a
------------------------
party to or bound by any agreement or instrument or subject to any corporate or
other restriction, the performance or observance of which now has or, as far as
Borrower or any Subsidiary can reasonably foresee, may have a materially adverse
effect on the financial condition, operations or assets of Borrower or of
Borrower and its Subsidiaries taken as a whole.
III.12 SUBSIDIARIES, INVESTMENTS, ETC. Set forth in Schedule 3.12 hereto
------------------------------
is a complete and correct list, as of the date of this Agreement, of all
Subsidiaries (and the respective jurisdiction of incorporation of each such
Subsidiary), and of all
-35-
Investments held by Borrower in any joint venture or other Person. Except as
disclosed in Schedule 3.12 hereto, as of the date hereof, Borrower owns,
directly or through a Subsidiary, free and clear of Liens, the percentage and
nature of ownership interests of each Subsidiary as set forth in Schedule 3.12
and all such interests are validly issued, fully paid and non-assessable, and
Borrower (or the respective Subsidiary) also owns, free and clear of Liens, all
such Investments. Schedule 3.12 also sets forth as to each Subsidiary the
percentage and nature of ownership interests, and names of the record and
beneficial owners of all such issued and outstanding interests. Except as set
forth on Schedule 3.12, all of the issued and outstanding Capital Stock of each
Subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable and held free and clear of all Liens whatsoever, and there are no
outstanding subscriptions, options, warrants, calls, conversion or exchange
rights, commitments or agreements of any character obligating any Subsidiary to
issue, deliver or sell additional Capital Stock of any class or any securities
convertible into or exchangeable for any such Capital Stock.
III.13 AMOUNTS OWED TO OR FROM AFFILIATES; INTERCOMPANY AGREEMENTS.
-----------------------------------------------------------
(a) AFFILIATES. Except as disclosed on Schedule 3.13 as of the date
of this Agreement, there is not outstanding and unpaid any debt, loan, advance,
guaranty or investment (i) by Borrower or any Subsidiary to or for the benefit
of any Subsidiary or Borrower Affiliate or (ii) to Borrower or any Subsidiary
from any Subsidiary or Borrower Affiliate (collectively, "INTERCOMPANY DEBT"),
and there has not been paid (1) by Borrower to or for the benefit of any
Borrower Affiliate or (2) to Borrower or any Subsidiary from any Subsidiary or
Borrower Affiliate, any amount for management, administrative, operational,
consulting, brokerage or other services. Neither Borrower nor any Subsidiary has
prepaid to or for the benefit of any Subsidiary or Borrower Affiliate any
Intercompany Debt or amount for management, administrative, operational,
consulting, brokerage or other services.
(b) INTERCOMPANY AGREEMENTS. Except as disclosed on Schedule 3.13
hereto as of the date of this Agreement, there are no agreements between
Borrower or any Subsidiary and any Subsidiary or Borrower Affiliate relating to
the extension of any funds to Borrower, the sharing of any costs among Borrower
and any Subsidiary or Borrower Affiliate or the provision of any management,
administrative, operational, consulting, brokerage or other services to Borrower
("INTERCOMPANY AGREEMENTS").
III.14 SUBSIDIARIES. The Subsidiaries of Borrower listed on Schedule 3.12,
------------
as supplemented from time to time, constitute all of the Subsidiaries of
Borrower. Borrower and the Subsidiary Guarantors collectively own (directly and
not through other Subsidiaries) at least 90% of the assets of Borrower and its
consolidated Domestic Subsidiaries on a consolidated basis. Borrower and the
Domestic Subsidiaries collectively own (directly and not through other
Subsidiaries) at least 75% of the assets of Borrower and its consolidated
Subsidiaries on a consolidated basis.
III.15 MAINTENANCE OF INSURANCE. Borrower maintains insurance with
------------------------
financially sound and reputable insurance companies or associations in such
amounts and covering such risks as are usually carried by companies engaged in
the same
-36-
or a similar business and similarly situated, which insurance may provide for
reasonable deductibility from coverage thereof.
III.16 U.S. GOVERNMENT CONTRACTS. Neither the Borrower nor any Subsidiary
-------------------------
is in receipt of any notice from any governmental authority that Borrower is
disqualified, barred or suspended from bidding on or performing any contract or
proposed contract.
III.17 MARGIN STOCK. Borrower has not and will not use or permit any
------------
proceeds of the Loans to be used, either directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of buying or carrying margin
stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve Systems, as amended from time to time.
III.18 PROPERTIES. Borrower has good title to, or in the case of leased
----------
property has valid leasehold interests in, all of its material properties and
assets (whether real or personal, tangible or intangible).
III.19 CHANGE. No material adverse change shall have occurred in the
------
business, operations, property, financial condition or prospects of the Borrower
since December 31, 1996.
III.20 DISCLOSURE GENERALLY. The representations and statements made by or
--------------------
on behalf of Borrower or any Subsidiary in connection with this credit facility
and each Loan hereunder, including representations and statements in each of the
Loan Documents, do not contain any untrue statement of a material fact or omit
to state a material fact or any fact necessary to make the representations made
not materially misleading. No written information, exhibit, report or financial
statement furnished by Borrower or any Subsidiary to the Banks in connection
with this Agreement, the Loans, or any Loan Document, contains any material
misstatement of fact or omits to state a material fact or any fact necessary to
make the statements contained therein not materially misleading.
IV. SECURITY.
--------
IV.1 SECURITY DOCUMENTS. As security for the punctual payment in full of
------------------
all Obligations, the Agent on behalf of the Banks shall have and shall continue
to have a valid first lien on and security interest in all the Collateral (as
defined in the Security Agreement) of Borrower and each Subsidiary Guarantor,
excluding ICF Kaiser Netherlands, to the extent provided in the Security
Agreement. In addition, Borrower and the Subsidiary Guarantors or any of them,
excluding ICF Kaiser Netherlands, will obtain for the Banks a valid first lien
on and security interest in those assets of the nature of the Collateral of each
Person, a majority of the voting stock of which is held by Borrower or a
Subsidiary Guarantor to the extent provided in the Security Agreement, upon the
acquisition by any of them of a majority of the voting stock of any Person
through the purchase of capital stock or otherwise. The Borrower agrees to use
commercially reasonable efforts to obtain such a valid first lien on and
security interest in the Collateral of ICF Kaiser Netherlands. Upon the granting
of such lien, such assets shall become Collateral for all purposes of this
Agreement and the Security Agreement.
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V. CONDITIONS PRECEDENT.
--------------------
V.1 ALL LOANS AND LETTERS OF CREDIT..1 ALL LOANS AND LETTERS OF CREDIT.
The obligation of each Bank to make any Loan or issue any Letter of Credit, is
conditioned upon the following:
(a) DOCUMENTS. In the case of a Loan, Borrower shall have delivered
and the Agent shall have received a request for a Loan, as provided in Sections
2.1 and 2.3. In the case of a Letter of Credit the Issuing Bank shall have
received an appropriate request therefor.
(b) COVENANTS; REPRESENTATIONS. Each Person that is a party thereto
other than the Banks and the Agent shall be in compliance with all covenants,
agreements and conditions in each Loan Document and each representation and
warranty contained in each Loan Document shall be true with the same effect as
if such representation or warranty had been made on the date such Loan or Letter
of Credit is made or issued.
(c) DEFAULTS. Immediately prior to and after giving effect to such
transaction, no Event of Default or Potential Default shall exist.
(d) CHANGE. No material adverse change shall have occurred in the
financial condition or prospects of Borrower or Borrower and its Subsidiaries
taken as a whole since the date hereof.
(e) LOCK-BOX ACCOUNTS. The Agent and Borrower shall have entered
into one or more lock-box agreements, in form and substance satisfactory to the
Agent and the Banks, pursuant to Section 3 of the Security Agreement. The Agent
and the Banks shall have received evidence, in form and substance satisfactory
to them, that Borrower and each Subsidiary Guarantor shall have instructed all
of its account debtors to make all payments in respect of the Accounts to the
relevant Lock-Box Account (as defined in the Security Agreement).
(f) FEES AND REIMBURSABLE EXPENSES. The Agent shall have received
the fees and reimbursable expenses to be received on the date hereof referred to
in Sections 2.6(d) and 12.8(a) hereof.
(g) ACTIONS TO PERFECT LIENS. The Agent shall have received evidence
in form and substance reasonably satisfactory to it that all filings,
recordings, registrations and other actions, including, without limitation, the
filing of duly executed financing statements on form UCC-1, necessary or, in the
opinion of the Agent, desirable to perfect the Liens created by the Security
Documents shall have been completed.
(h) AMENDED AND RESTATED SECURITY AGREEMENT. The Borrower, the
Subsidiary Guarantors and the Agent shall have entered into the Security
Agreement.
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V.2 CONDITIONS TO EFFECTIVENESS. This Agreement shall not be effective
until each of the following conditions has been satisfied:
(a) ARTICLES, BYLAWS. The Banks shall have received copies of the
Articles or Certificates of Incorporation and Bylaws of Borrower and each of the
Subsidiary Guarantors, certified by such party's Secretary or Assistant
Secretary (or the certificate of such officer that the copies of such documents
previously delivered to the Banks are still true and complete); together with
Certificates of Good Standing from any jurisdiction where the nature of the
business of Borrower and each of the Subsidiary Guarantor or the ownership of
their respective properties requires such qualification except where the failure
to be so qualified would not have a material adverse effect on the business,
operations, assets or condition (financial or otherwise) of Borrower or Borrower
and its Subsidiaries taken as a whole;
(b) EVIDENCE OF AUTHORIZATION. The Banks shall have received copies
certified by the Secretary or Assistant Secretary of Borrower and each
Subsidiary Guarantor of all corporate or other action taken by such party to
authorize its execution and delivery and performance of the Loan Documents and
to authorize the Revolving Credit Loans and Letters of Credit hereunder,
together with such other related papers as the Banks shall reasonably require;
(c) LEGAL OPINIONS. The Banks shall have received a favorable
written opinion of Xxxxxxx & Xxxxxx LLP, Counsel for Borrower and the Subsidiary
Guarantors, which shall be addressed to the Banks and be dated the date of the
first Loan, in substantially the form attached as Exhibit E, and such other
legal opinion or opinions as the Banks may reasonably request;
(d) INCUMBENCY. The Banks shall have received a certificate signed
by the Secretary or Assistant Secretary of Borrower and each Subsidiary
Guarantor, together with the true signature of the officer or officers
authorized to execute and deliver the Loan Documents and certificates
thereunder, upon which the Banks shall be entitled to rely conclusively until
the Agent shall have received a further certificate of the appropriate Secretary
or Assistant Secretary amending the prior certificate and submitting the
signature of the officer or officers named in the new certificate as being
authorized to execute and deliver Loan Documents and certificates thereunder;
(e) NOTES. Each Bank shall have received an executed Note payable to
the order of such Bank and otherwise in the form of Exhibit C hereto.
(f) DOCUMENTS. The Agent shall have received all certificates,
instruments and other documents then required to be delivered pursuant to any
Loan Documents, in each instance in form and substance reasonably satisfactory
to the Agent and the Banks;
(g) CONSENTS. Borrower shall have provided to the Banks evidence
satisfactory to the Banks that all governmental, shareholder and third party
consents and approvals necessary in connection with the transactions
contemplated hereby have been obtained and remain in effect;
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(h) OTHER AGREEMENTS. Borrower and each Subsidiary Guarantor shall
have executed and delivered each other Loan Document required hereunder;
(i) CHANGE. No material adverse change shall have occurred in the
financial condition or prospects of Borrower since December 31, 1996; and
(j) DUE DILIGENCE REVIEW. Each Bank shall be fully satisfied in its
sole discretion with the results of its review of, and its other due diligence
investigations with respect to, the business, management, finances, operations,
affairs, prospects, assets, existing and potential liabilities, obligations,
profits or condition of Borrower, and its environmental review of all real
property used in Borrower's business.
VI. AFFIRMATIVE COVENANTS
---------------------
Borrower covenants and agrees that, without the prior written consent of
the Required Banks, from and after the date hereof and so long as the Revolving
Loan Commitments are in effect or any Obligations remain unpaid or outstanding,
Borrower will:
VI.1 FINANCIAL STATEMENTS AND REPORTS. Furnish to the Agent and each of the
--------------------------------
Banks the following financial information:
(a) ANNUAL STATEMENTS. As soon as available but no later than one
hundred and five (105) days after the end of each fiscal year, a balance sheet
of Borrower and its Subsidiaries as of the end of such year and the prior year
in comparative form, and related statements of operations, shareholders' equity,
and cash flows for Borrower and its Subsidiaries for the fiscal year and the
prior fiscal year in comparative form. The financial statements shall be on a
consolidated basis and shall include consolidating information. The financial
statements shall be in reasonable detail with appropriate notes and be prepared
in accordance with Generally Accepted Accounting Principles. The annual
financial statements (other than the consolidating information) shall be
certified (without any qualification or exception) by independent public
accountants of nationally recognized standing acceptable to the Banks and such
consolidating information shall be certified by the Executive Vice President and
Chief Financial Officer of Borrower. Such financial statements shall be
accompanied by a report of such independent certified public accountants, and
such consolidating information shall be accompanied by a report of such
Executive Vice President and Chief Financial Officer, in each case stating that,
in the opinion of such accountants or officer, respectively, such financial
statements or consolidating information present fairly, in all material
respects, the financial position, and the results of operations and the cash
flows of Borrower and its Subsidiaries for the period then ended in conformity
with Generally Accepted Accounting Principles, except for inconsistencies
resulting from changes in accounting principles and methods agreed to by such
accountants or officer and specified in such report, and that, in the case of
such financial statements, the examination by such accountants of such financial
statements has been made in accordance with generally accepted auditing
standards and accordingly included examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements and assessing
the accounting principles used and significant estimates made, as well as
evaluating the overall financial statement presentation. Each financial
statement provided under this subsection
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(a) (other than the consolidating financial statements) shall be accompanied by
a certificate signed by such accountants either stating that during the course
of their examination nothing came to their attention which would cause them to
believe that any event has occurred and is continuing which constitutes an Event
of Default or Potential Default, or describing each such event. In addition to
the annual financial statements, Borrower shall, promptly upon receipt thereof,
furnish to the Banks a copy of each other report submitted to the board of
directors of Borrower by its independent accountants in connection with any
annual, interim or special audit made by them of the financial records of
Borrower and its Subsidiaries.
(b) QUARTERLY STATEMENTS. As soon as available but no later than
sixty (60) calendar days after the end of each fiscal quarter of each fiscal
year, a consolidated balance sheet of Borrower and its Subsidiaries and related
consolidated statements of operations, retained earnings and cash flows for such
quarterly period and for the period from the beginning of such fiscal year to
the end of such fiscal quarter, together with consolidating information,
excluding Xxxxxx-Xxxx, and a corresponding financial statement for the same
periods in the preceding fiscal year certified by the Executive Vice President
and Chief Financial Officer or the Vice President and Treasurer of Borrower as
having been prepared in with Generally Accepted Accounting Principles (subject
to changes resulting from audits and year-end adjustments).
(c) STATEMENTS EXCLUDING XXXXXX-XXXX. As soon as available but no
later than sixty (60) calendar days after the end of each fiscal quarter of each
fiscal year, and as soon as available but no later than one hundred and five
(105) calendar days after the end of each fiscal year, a consolidated balance
sheet of Borrower and its Subsidiaries and related consolidated statements of
operations for such quarterly or annual period, as the case may be, excluding
all financial information relating to Xxxxxx-Xxxx, and a corresponding financial
statement for the same periods in the preceding fiscal year certified as correct
by the Executive Vice President and Chief Financial Officer or the Vice
President and Treasurer.
(d) FINANCIAL STATEMENTS AND REPORTS SENT TO SHAREHOLDERS OR FILED
WITH THE SEC. Within fifteen (15) days after the same are sent copies of all
financial statements and reports which Borrower and its Subsidiaries sends to
its shareholders, and within fifteen (15) days after the same are filed, copies
of all financial statements, notices, reports, and filings which Borrower may
make to, or file with, the Securities and Exchange Commission or any successor
or analogous Governmental Authority.
(e) NO DEFAULT. Within sixty (60) calendar days after the end of each
of the first three fiscal quarters of each fiscal year and within one hundred
five (105) calendar days after the end of each fiscal year, a certificate signed
by the Executive Vice President and Chief Financial Officer of Borrower
certifying that, to the best of such officer's knowledge, after due inquiry, (i)
Borrower and each Subsidiary Guarantor has complied with all covenants,
agreements and conditions in each Loan Document and that each representation and
warranty contained in each Loan Document is true and correct with the same
effect as though each such representation and warranty had been made on the date
of such certificate (except to the extent such representation or warranty
related to a specific prior date), and (ii) no event has
-41-
occurred and is continuing which constitutes an Event of Default or Potential
Default, or describing each such event and the remedial steps being taken by
Borrower.
(f) COMPLIANCE. Within sixty (60) calendar days after the end of each
of the first three fiscal quarters of each fiscal year and within one hundred
five (105) calendar days after the end of each fiscal year, a certificate signed
by the Executive Vice President and Chief Financial Officer or the Vice
President and Treasurer of Borrower demonstrating compliance with all financial
covenants (including all relevant calculations) and representations contained in
this Agreement as of the end of such period. Such certificate will be
substantially in the form of Exhibit F hereto, or in such other form as the
Agent may reasonably request from time to time. The Executive Vice President and
Chief Financial Officer or the Vice President and Treasurer of Borrower shall
provide any and all reports, audits, and such other information as may be
reasonably requested by the Agent to substantiate such compliance by Borrower or
upon which said officer may have relied in signing such certificate.
(g) BORROWING BASE CERTIFICATE. Within twenty (20) calendar days
after the end of each month, a Borrowing Base Certificate in the form attached
hereto as Exhibit G signed by the Executive Vice President and Chief Financial
Officer or the Vice President and Treasurer of Borrower, together with an aging
of all Accounts, consolidating financial statements and such other information
as may be reasonably requested by the Agent to substantiate such Borrowing Base
Certificate.
(h) PROJECTIONS. Not later than 30 days prior to the end of each
fiscal year of Borrower, projections of the operating budget and cash flows for
Borrower and its Subsidiaries for the immediately following fiscal year,
satisfactory in form to the Agent and the Banks.
(i) ERISA. Within fifteen (15) Business Days of filing, all reports
and forms filed with respect to all Plans, except as filed in the normal course
of business and that would not result in an adverse action to be taken under
ERISA, and details of related information of a Reportable Event.
(j) MATERIAL CHANGES. Within five (5) Business Days of the occurrence
thereof, notice of any litigation, administrative proceeding, investigation,
business development, or change in financial condition which could reasonably be
expected to have a material adverse effect on the business, operations, assets
or condition (financial or otherwise) of Borrower or its Subsidiaries taken as a
whole.
(k) OTHER INFORMATION. All material press releases simultaneously
with release. In addition, promptly upon request by the Agent or the Banks from
time to time (which may be on a monthly or other basis), Borrower shall provide
such other information and reports regarding the operations, business affairs,
prospects and financial condition of Borrower or Affiliate as the Agent or the
Banks may reasonably request; provided, however, that Borrower shall not be
obligated to disclose any information with respect to such Affiliate if such
information has no relation to Borrower and disclosure thereof would violate any
applicable federal or state securities law.
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(l) QUARTERLY STATUS REPORTS. Within thirty (30) calendar days after
the end of each fiscal quarter of each fiscal year, a contract status report,
substantially in the form of Exhibit 6.1(l) hereto, listing the top twenty-five
(25) contracts by overall dollar value of Borrower and its Subsidiaries.
VI.2 CORPORATE EXISTENCE. Preserve its corporate existence and material
-------------------
franchises, licenses, patents, copyrights, trademarks and tradenames consistent
with good business practice. Maintain, keep, and preserve, and cause each
Subsidiary Guarantor to maintain, keep, and preserve, all of its properties
(tangible and intangible) necessary or useful in the conduct of its business in
good working order and condition, ordinary wear and tear expected.
VI.3 ERISA. (a) Comply in all material respects with the provisions of
-----
ERISA to the extent applicable to any Plan maintained for the employees of
Borrower, any Subsidiary or any ERISA Affiliate; (b) do or cause to be done all
such acts and things that are required to maintain the qualified status of each
Plan and tax exempt status of each trust forming part of such Plan; (c) not
incur any material accumulated funding deficiency (within the meaning of ERISA
and the regulations promulgated thereunder), or any material liability to the
PBGC (as established by ERISA); (d) permit any event to occur (i) as described
in Section 4042 of ERISA or (ii) which may result in the imposition of a lien on
its properties or assets; and (e) notify Banks in writing promptly after it has
come to the attention of senior management of Borrower of the assertion or
threat of any "reportable event" or other event described in Section 4042 of
ERISA (relating to the soundness of a Plan) or the PBGC's ability to assert a
material liability against it or impose a lien on Borrower's, any Subsidiary's,
or any ERISA Affiliates' properties or assets; and (f) refrain from engaging in
any Prohibited Transactions or actions causing possible liability under Section
502 of ERISA.
VI.4 COMPLIANCE WITH REGULATIONS. Comply in all material respects with all
---------------------------
Regulations applicable to its business, the noncompliance with which reasonably
could be expected to have a material adverse effect on the business, operations,
assets or condition (financial or otherwise) of Borrower or of Borrower and its
Subsidiaries taken as a whole.
VI.5 CONDUCT OF BUSINESS; PERMITS AND APPROVALS; COMPLIANCE WITH LAWS.
-----------------------------------------------------------------
Continue to engage in Permitted Businesses; maintain, and cause each Subsidiary
Guarantor to maintain, in full force and effect, its franchises, and all
licenses, patents, trademarks, trade names, contracts, permits, approvals and
other rights necessary to the conduct of its business.
VI.6 MAINTENANCE OF INSURANCE. Maintain insurance with financially sound
------------------------
and reputable insurance companies or associations in such amounts and covering
such risks as are usually carried by companies engaged in the same or a similar
business and similarly situated, which insurance may provide for reasonable
deductibility from coverage thereof.
VI.7 PAYMENT OF DEBT; PAYMENT OF TAXES; ETC. Promptly pay and discharge:
---------------------------------------
43
(a) all of its Debt in accordance with the terms thereof;
(b) all taxes, assessments, and governmental charges or levies
imposed upon it or upon its income and profits, upon any of its property,
real, personal or mixed, or upon any part thereof, before the same shall
become in default; or
(c) all lawful claims for labor, materials and supplies or otherwise,
which, if unpaid, might become a lien or charge upon such property or any
part thereof;
provided, however, that so long as Borrower first notifies the Agent of its
intention to do so, Borrower shall not be required to pay and discharge (or to
cause such Subsidiary to pay and discharge) any such Debt, tax, assessment,
charge, levy or claim so long as the failure to so pay or discharge does not
constitute or result in a Event of Default or Potential Default hereunder and so
long as no foreclosure or other similar proceedings shall have been commenced
against such property or any part thereof and so long as the validity thereof
shall be contested in good faith by appropriate proceedings diligently pursued
and it shall have set aside on its books adequate reserves with respect thereto.
VI.8 NOTICE OF EVENTS. Promptly upon discovery by Borrower or any officer
----------------
of Borrower of any of the events described in Subsections (a) through (f)
hereof, Borrower shall deliver to the Agent telephone notice, and within three
(3) calendar days of such telephone notice deliver to the Agent a written
notice, which describes the event and all action Borrower proposes to take with
respect thereto:
(a) an Event of Default or Potential Default under this Agreement;
(b) any default or event of default under a contract or contracts and
the default or event of default involves payments by Borrower or any
Subsidiary in an aggregate amount equal to or in excess of $1,000,000;
(c) a default or event of default under or as defined in any evidence
of or agreements for Indebtedness for Borrowed Money under which Borrower's
or any Subsidiary's liability is equal to or in excess of $1,000,000
singularly or in the aggregate, whether or not an event of default
thereunder has been declared by any party to such agreement or any event
which, upon the lapse of time or the giving of notice or both, would become
an event of default under any such agreement or instrument or would permit
any party to any such instrument agreement to terminate or suspend any
commitment to lend to Borrower or the Subsidiaries or to declare or to
cause any such indebtedness to be accelerated or payable before it would
otherwise be due;
(d) the institution of, any material adverse determination in, or the
entry of any default judgment or order or stipulated judgment or order in,
any suit, action, arbitration, administrative proceeding, criminal
prosecution or
-44-
governmental investigation against Borrower or any Subsidiary in which the
amount in controversy is in excess of $1,000,000 singularly or in the
aggregate;
(e) any change in any Regulation, including, without limitation,
changes in tax laws and regulations, which could reasonably have a material
adverse impact on the ability of Borrower to perform its obligations under
the Loan Documents or a material adverse effect on the business,
operations, assets or condition (financial or otherwise) of Borrower and
its Subsidiaries taken as a whole; or
(f) the receipt of any notice from any governmental authority that
Borrower is disqualified, barred or suspended from bidding on or performing
any contract or proposed contract.
VI.9 INSPECTION RIGHTS. At any time during regular reasonably requested of
-----------------
Borrower by the Agent, permit the Agent on behalf of the Banks, or any Bank, or
any authorized officer, employee, agent, or representative of the Agent or any
Bank to examine and make abstracts from the records and books of account of
Borrower or any Subsidiary, wherever located and to visit the properties of
Borrower or any Subsidiary, as permitted by law; and to discuss the affairs,
finances, and accounts of Borrower or any Subsidiary with any of Borrower's or
any Subsidiary's officers, directors or independent accountants, as permitted by
law, which activities shall be at the expense of such Bank. The Banks shall also
have the right to have conducted by the Agent, one (1) financial and collateral
audit per year, and two (2) additional collateral audits per year. The Borrower
shall bear the expense of such audits.
VI.10 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Maintain its books and
----------------------------------------
records at all times in accordance with Generally Accepted Accounting
Principles.
VI.11 USE OF PROCEEDS. The proceeds of the Loans hereunder shall be used by
---------------
Borrower and its Subsidiaries for working capital and general corporate
purposes, including the issuance of Documentary Letters of Credit and Standby
Letters of Credit.
VI.12 FURTHER ASSURANCES. Do such further acts and things and execute and
-------------------
deliver to the Agent such additional assignments, agreements, powers and
instruments, as the Banks may reasonably require or reasonably deem advisable to
carry into affect the purposes of this Agreement or to better assure and confirm
unto the Banks rights, powers and remedies hereunder.
VII. NEGATIVE COVENANTS.
------------------
Borrower covenants and agrees that, without the prior written consent of
the Required Banks, from and after the date hereof and so long as the Revolving
Loan Commitments are in effect or any Obligations remain unpaid or outstanding,
Borrower will not, and will not permit any Subsidiary to:
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VII.1 MERGER, CONSOLIDATION. Merge or consolidate with or into any
---------------------
corporation except, if no Potential Default or Event of Default shall have
occurred and be continuing either immediately prior to or upon the consummation
of such transaction, a Subsidiary may be merged with or into Borrower or another
Subsidiary, subject to compliance with Section 7.11, or a Subsidiary may be
merged with or into another Person in connection with the acquisition of an
Investment permitted by Section 7.6.
VII.2 INDEBTEDNESS FOR BORROWED MONEY. Incur, create, or permit to exist
-------------------------------
any Indebtedness for Borrowed Money except:
(a) the Obligations;
(b) Subordinated Debt;
(c) Non-Recourse Indebtedness;
(d) Indebtedness incurred by Borrower or any Subsidiary to finance
the acquisition of property (whether pursuant to a loan, financing lease or
otherwise) in the ordinary course of business not exceeding in aggregate
principal amount at any one time outstanding of $1,000,000;
(e) the 1996 Senior Notes; and
(f) (1) Non-Recourse Indebtedness in the amount of $950,000 incurred
by ICF Xxxxxx Participacoes Ltda. in order to complete the IESA Investment;
(2) Non-Recourse Indebtedness incurred by IESA and/or ICF Xxxxxx
Participacoes Ltda. following the IESA Investment; and (3) Indebtedness for
Borrowed Money and other Debt of IESA existing as of the date of the
closing of the IESA Investment; provided that in each of (1), (2) and (3)
--------
above, neither the Borrower nor any Subsidiary other than ICF Xxxxxx Brazil
Holdings, ICF Xxxxxx Participacoes Ltda., or IESA shall be permitted (x) to
have any guarantee obligation in respect of such Indebtedness or Debt
otherwise permitted by this subsection or (y) to pledge or grant any lien
or encumbrances on any assets as collateral or security with respect to
such Indebtedness or Debt otherwise permitted by this subsection.
VII.3 LIENS. Create, assume or permit to exist any Lien on any property or
-----
assets, whether now owned or hereafter acquired, or upon any income or profits
therefrom, except Permitted Liens.
VII.4 GUARANTEES. Guarantee or otherwise in any way become or be
----------
responsible for indebtedness or obligations (including working capital
maintenance, take-or-pay contracts, etc.) of any other Person, contingently or
otherwise, except:
(a) the endorsement of negotiable instruments of deposit in the
normal course of business;
-46-
(b) guarantees by Borrower or a Subsidiary issued to secure the
indebtedness or obligation of any Subsidiary, which underlying indebtedness
or obligation is permitted hereunder;
(c) guarantees (other than those described in subsection (a) and
(b)) made in the ordinary course of business; and
(d) existing guarantees described on Schedule 7.4 hereto.
VII.5 MARGIN STOCK. Use or permit any proceeds of the Loans to be used,
------------
either directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock within the meaning of Regulation U
of The Board of Governors of the Federal Reserve System, as amended from time to
time.
VII.6 ACQUISITIONS AND INVESTMENTS.
----------------------------
Make any Investments in any Person, except:
(a) Borrower may maintain its ownership interest in each of the
Subsidiaries listed on Schedule 3.12 at the percentage of ownership
disclosed on said Schedule.
(b) any Subsidiary may make and own Investments in Borrower;
(c) Borrower or any Subsidiary may acquire and hold stock,
obligations or securities received in settlement of debts owing to Borrower
or such Subsidiary;
(d) Borrower or any Subsidiary may make and own Investments in a
Person or acquire all or substantially all of the assets or Capital Stock
of any Person (an "ACQUISITION") provided that the aggregate amount of all
such Acquisitions after the date hereof shall not exceed $5,000,000 in the
aggregate and any single Acquisition shall not exceed $2,000,000;
(e) Borrower or any Subsidiary may acquire in the ordinary course of
business interests in project-related joint ventures similar to other joint
ventures in which Borrower or its Subsidiaries owns an interest on the date
hereof, provided that the aggregate amount of cash and fair value of other
--------
assets (other than services) contributed by Borrower and its Subsidiaries
shall not exceed $750,000 in any twelve-month period;
(f) Borrower or any Subsidiary may (i) make investments in Single
Purpose Subsidiaries and (ii) serve as partner, shareholder, member,
investor, developer and/or owner/operator/lessee of project finance
ventures in which the output of the project being developed is under
contract to a Person which is not an Affiliate of Borrower or any of its
Subsidiaries pursuant to a "take-or-pay", tolling or similar contract and
which Borrower, in its reasonable judgment, determines to be in a business
presently conducted by Borrower and/or its Subsidiaries, provided that such
--------
venture described in clause (ii)
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above is entered into during such time as no Default or Event of Default
has occurred and is continuing or would occur after giving effect thereto,
and provided, further, that the sum of (x) the aggregate investments and
-------- -------
commitments to make investments by Borrower and its Subsidiaries in all
such ventures described in clause (ii) above plus (y) such investments
described in clause (i) above shall not exceed an amount equal to
$7,500,000;
(g) Borrower or any Subsidiary may make and own:
(i) Investments in certificates of deposit or time deposits
having maturities in each case not exceeding one year from the date of
issuance thereof and issued by a Bank, or any FDIC-insured commercial
bank incorporated in the United States or any state thereof having a
combined capital and surplus of not less than $500,000,000;
(ii) Investments in marketable direct obligations issued or
unconditionally guaranteed by the United States of America, any agency
thereof, or backed by the full faith and credit of the United States
of America, in each case maturing within one year from the date of
issuance or acquisition thereof;
(iii) Investments in commercial paper issued by a corporation
incorporated in the United States or any State thereof maturing no
more than one year from the date of issuance thereof and, at the time
of acquisition, having a rating of A-1 (or better) by Standard &
Poor's Corporation or P-1 (or better) by Xxxxx'x Investors Service,
Inc.; and
(iv) Investments in money market mutual funds all of the assets
of which are invested in cash or investments described in clauses (i),
(ii) and (iii) of this paragraph (g).
(h) ICF Xxxxxx Hunters Branch may make such additional Hunters
Branch Investments in amounts not to exceed the amounts set forth below and
$6,000,000 in the aggregate without deducting any such Investments from the
$5,000,000 aggregate Acquisitions limit set forth in subsection (d) of this
Section 7.6:
$600,000 in each of years 1997, 1998 and 1999; and
$700,000 in each of years 2000, 2001, 2002, 2003, 2004, 2005 and
2006.
(i) ICF Xxxxxx Participacoes Ltda. may complete the IESA Investment,
provided that any cash from Borrower or any Subsidiary made available to
ICF Xxxxxx Participacoes Ltda. in connection with the IESA Investment
shall be limited to a maximum of $350,000; provided, further, that such
amount (when used) shall not be required to be deducted from the $5,000,000
aggregate Acquisitions limit set forth in subsection (d) of this Section
7.6.
-48-
(j) Borrower or any Subsidiary may complete the Investment in KWA
Kenwalt Australia Pty Ltd., a corporation organized under the laws of the
country of Australia, provided that any cash from Borrower or any
Subsidiary used in connection with said Investment after the date hereof
shall be limited to a maximum of $300,000; provided, further, that such
amount (when used) shall not be required to be deducted from the $5,000,000
aggregate Acquisitions limit set forth in subsection (d) of this Section
7.6.
VII.7 TRANSFER OF ASSETS; NATURE OF BUSINESS. Except as otherwise provided
--------------------------------------
in this Agreement, sell, transfer, pledge, assign or otherwise dispose of any
assets of Borrower or any Subsidiary (including by means of dilution of
Borrower's or a Subsidiary's interest in a Person as and to the extent Borrower
or a Subsidiary receives a portion of the proceeds of the dilutive issuance)
unless (i) such sale or disposition shall be in the ordinary course of
Borrower's or such Subsidiary's business; (ii) sales or other dispositions of
assets from Borrower to a Subsidiary of Borrower, or from a Subsidiary of
Borrower to Borrower or one or more other Subsidiaries of Borrower so long as
such subsidiary meets the requirements of Section 3.14; (iii) sales of assets in
connection with sale and leaseback transactions otherwise in compliance with
this Agreement; or (iv) a mandatory reduction in the Aggregate Revolving Loan
Commitment is made to the extent required by Section 2.7(c), and, in any such
case, no Event of Default or Potential Default shall have occurred or will
thereby occur; provided, however, that no such sale transfer, pledge, assignment
or disposition shall include any of the Collateral; discontinue any substantial
part of the existing businesses of Borrower and its Subsidiaries taken as a
whole or change the nature of such businesses or otherwise change the legal form
of such businesses.
VII.8 RESTRICTED PAYMENTS. Make any redemptions, repurchases, dividends or
-------------------
distributions of any kind in respect of Borrower's Capital Stock, other than
redemptions, repurchases, dividends or distributions payable in the form of, or
with the net proceeds of the sale (other than to a Subsidiary or employee stock
ownership plan of Borrower) of, Capital Stock of Borrower.
VII.9 ACCOUNTING CHANGE. Make or permit any change in financial accounting
-----------------
policies or financial reporting practices, except as permitted by Generally
Accepted Accounting Principles or regulations of the Securities and Exchange
Commission.
VII.10 MODIFICATION OF INDENTURE. Consent to or permit any amendment,
modification or waiver of any material provision or term contained in (a) the
Indenture dated as of January 11, 1994, as supplemented through the Sixth
Supplemental Indenture, between Borrower and The Bank of New York, as Trustee,
relating to the 12% Senior Subordinated Notes due 2003 issued by Borrower or (b)
the Indenture dated as of December 23, 1996, as supplemented through the First
Supplemental Indenture, between the Borrower, the guarantors named therein and
The Bank of New York, as Trustee, relating to the 1996 Senior Notes unless,
fifteen (15) days before consenting to or permitting such amendment,
modification or waiver, Borrower shall furnish to the Agent and each of the
Banks a certificate signed by the Executive Vice President and Chief Financial
Officer or Vice President and Treasurer of Borrower certifying that, to the best
of such officer's knowledge, after due inquiry, immediately after such
amendment, modification or waiver, (i) Borrower has complied with all covenants,
-49-
agreements and conditions in each Loan Document and each representation and
warranty contained in each Loan Document is true and correct with the same
effect as though each such representation and warranty had been made on the date
of such certificate (except to the extent such representation or warranty
related to a specific prior date), and (ii) no event has occurred and is
continuing that constitutes an Event of Default or Potential Default.
VII.11 NEW SUBSIDIARIES AND SUBSIDIARY GUARANTORS. Within fifteen (15)
------------------------------------------
days after each day on which the representation set forth in Section 3.14 would
be incorrect if made on such day, deliver to the Agent and each Bank a
supplement to Schedule 3.12 adding such Subsidiaries as shall be required in
order to render such representation correct and execute and deliver a Joinder
Agreement in the form attached hereto as Exhibit H and such other documents as
the Agent shall determine are necessary or desirable to add such additional
Subsidiary or Subsidiaries as Subsidiary Guarantors hereunder and to grant to
the Agent a first priority perfected security interest in all Collateral of such
additional Subsidiary Guarantors; provided, that in determining whether the
--------
representation set forth in Section 3.14 would be incorrect if made on any day,
Borrower may rely on the most recent financial statements of Borrower delivered
pursuant to Section 6.1(b) unless Borrower has taken any action which, to the
knowledge of Borrower, has caused such representation to be incorrect as of such
date of determination.
VIII. FINANCIAL COVENANTS.
-------------------
Borrower covenants and agrees that, without the prior written consent of
the Required Banks, from and after the date hereof and so long as the Revolving
Loan Commitments are in effect or any Obligations remain unpaid or outstanding,
Borrower will not:
VIII.1 FIXED CHARGE COVERAGE. Permit, as of the end of any fiscal quarter
---------------------
ending in the periods set forth below for the immediately preceding four fiscal
quarters, the ratio of (i) EBITDA less Capital Expenditures plus Consolidated
Lease Expenses of Borrower and its Subsidiaries, to (ii) Consolidated Fixed
Charges for such period to be less than the ratio set forth opposite such period
below:
Fiscal Quarters Ending
----------------------
December 31, 1997 through March 31, 1998 1.10:1.0
April 1, 1998 through September 30, 1998 1.15:1.0
October 1, 1998 and thereafter 1.20:1.0
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VIII.2 INTEREST COVERAGE. Permit, as of the end of any fiscal quarter
-----------------
ending in the periods set forth below for the immediately preceding four fiscal
quarters, the ratio of (i) EBITDA for such period to (ii) Consolidated Interest
Expense for such period to be less than the ratio set forth opposite such period
below:
Test Period
-----------
December 31, 1997 through March 31, 1998 1.55:1.0
April 1, 1998 through June 30, 1998 1.60:1.0
July 1, 1998 through September 30, 1998 1.70:1.0
October 1, 1998 and thereafter 1.80:1.0
VIII.3 SENIOR FUNDED INDEBTEDNESS TO EBITDA. Permit the ratio of Senior
------------------------------------
Funded Indebtedness on the last day of any fiscal quarter to EBITDA as of such
day for the immediately preceding four fiscal quarters to be greater than
2.5:1.0.
VIII.4 INDEBTEDNESS FOR BORROWED MONEY TO TOTAL CAPITALIZATION. Permit the
-------------------------------------------------------
ratio of Indebtedness for Borrowed Money to Total Capitalization on the last day
of any fiscal quarter to be greater than .86:1.0.
VIII.5 INDEBTEDNESS FOR BORROWED MONEY TO EBITDA. Permit the ratio of
-----------------------------------------
Indebtedness for Borrowed Money on the last day of any fiscal quarter ending in
the periods set forth below to EBITDA as of such day for the immediately
preceding four (4) fiscal quarters to be greater than the ratio set forth
opposite such period below:
Test Period
-----------
December 31, 1997 through June 30, 1998 6.75:1.0
July 1, 1998 through September 30, 1998 6.50:1.0
October 1, 1998 through December 31, 1998 6.00:1.0
January 1, 1999 through June 30, 1999 5.75:1.0
July 1, 1999 through December 31, 1999 5.00:1.0
January 1, 2000 and thereafter 4.75:1.0
; except as provided below, in all calculations made pursuant to this Article,
the Borrower shall exclude any and all amounts (positive and negative)
attributable to IESA, ICF Xxxxxx Participacoes Ltda., and/or ICF Xxxxxx Brazil
Holdings that otherwise might be includible in Capital Expenditures,
Consolidated Fixed Charges, Consolidated Interest Expense, Consolidated Lease
Expenses, Consolidated Net Income, Consolidated Net Worth, EBITDA, Indebtedness
for Borrowed Money, Senior Funded Indebtedness and Total Capitalization.
IX. GUARANTY.
--------
IX.1 GUARANTY.
--------
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(a) Each Subsidiary Guarantor unconditionally and irrevocably
guarantees the due and punctual payment by, and performance of, the Obligations
of Borrower. Each Subsidiary Guarantor further agrees that the Obligations may
be extended or renewed, in whole or in part, without notice or further assent
from it (except as may be otherwise required herein), and it will remain bound
upon this guaranty notwithstanding any extension or renewal of any Obligation.
(b) Each Subsidiary Guarantor waives presentation to, demand for
payment from and protest to, as the case may be, Borrower, any Subsidiary
Guarantor or any other guarantor of the Obligations, and also waives notice of
protest for nonpayment. The obligations of each Subsidiary Guarantor hereunder
shall not be affected by (i) the failure of the Agent or any Bank to assert any
claim or demand or to enforce any right or remedy against Borrower, any
Subsidiary Guarantor or any other guarantor of the Obligations under the
provisions of this Agreement, any other Loan Document, any other agreement or
otherwise; (ii) any extension or renewal of any provision hereof or thereof;
(iii) the failure of the Agent or any Bank to notify or obtain the consent of
any Subsidiary Guarantor with respect to any rescission, waiver, compromise,
acceleration, amendment or modification of any of the terms or provisions of
this Agreement, any other Loan Document or any other agreement; (iv) the
release, exchange, waiver or foreclosure of any security held by the Agent or
any Bank for the Obligations or any of them; (v) the failure of the Agent or a
Bank to exercise any right or remedy against any Subsidiary Guarantor or any
other guarantor of the Obligations; or (vi) the release or substitution of any
Subsidiary Guarantor.
(c) Each Subsidiary Guarantor further agrees that this guaranty
constitutes a guaranty of performance and of payment when due and not just of
collection, and expressly waives any right to require that any resort be had by
the Agent or any Bank to any security held for payment of the Obligations or to
any balance of any deposit, account or credit on the books of the Agent or any
Bank in favor of Borrower, any Subsidiary Guarantor or any other guarantor of
the Obligations or to any other Person.
(d) Each Subsidiary Guarantor hereby expressly assumes all
responsibilities to remain informed of the financial condition of Borrower and
any circumstances affecting the ability of Borrower to perform under this
Agreement or any other Loan Document.
(e) Each Subsidiary Guarantor's guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Obligations, or any
other Loan Documents, or by the existence, validity, enforceability, perfection,
or extent of collateral therefor or by any other circumstances relating to the
Obligations which might otherwise constitute a defense to this Guaranty. The
Banks and the Agent make no representation or warranty in respect to any such
circumstances and have no duty or responsibility whatsoever to each Subsidiary
Guarantor in respect to the management and maintenance of the Obligations or any
collateral security for the Obligations.
IX.2 NO IMPAIRMENT OF GUARANTY. The obligations of each Subsidiary
-------------------------
Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality
-52-
or unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Subsidiary Guarantor
hereunder shall not be discharged or impaired or otherwise affected by the
failure of the Agent or any Bank to assert any claim or demand or to enforce any
remedy under this Agreement or any other agreement, by any waiver or
modification of any provision thereof, by any default, failure or modification
of any provision thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of
law, unless and until the Obligations are finally and indefeasibly paid in full.
IX.3 CONTINUATION AND REINSTATEMENT, ETC.
-----------------------------------
(a) Each Subsidiary Guarantor further agrees that its guaranty
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any Obligation is rescinded or
is otherwise restored by any Bank. In furtherance of the provisions of this
Section 9.3, and not in limitation of any other right which the Agent or a Bank
may have at law or in equity against Borrower or a Subsidiary Guarantor by
virtue hereof, upon failure of Borrower to pay any Obligation when and as the
same shall become due, whether at maturity, by acceleration, after notice or
otherwise, each Subsidiary Guarantor hereby promises to and will, upon receipt
of written demand by the Agent or any Bank, forthwith pay or cause to be paid to
the Agent or such Bank in cash an amount equal to the unpaid amount of all the
Obligations with interest at the Default Rate.
(b) All rights of the Subsidiary Guarantors against Borrower, arising
as a result of the payment by any Subsidiary Guarantor of the sums to the Agent
or a Bank by way of right of subrogation or otherwise shall in all respects be
subordinated and junior in right of payment to the prior final and indefeasible
payment in full of all the Obligations to the Agent and the Banks. If any
amount shall be paid to such Subsidiary Guarantors for the account of Borrower,
such amount shall be held in trust for the benefit of the Banks and shall
forthwith be paid to the Banks to be credited and applied to the Obligations,
whether matured or unmatured.
(c) Each Subsidiary Guarantor shall have a right of contribution
from each other Subsidiary Guarantor with respect to any sums paid by a
Subsidiary Guarantor to a Bank hereunder, which right of contribution shall in
all respects be subordinated and junior in right of payment to the prior final
and indefeasible payment in full of the Obligations to the Agent and the Banks.
(d) The obligations of the Subsidiary Guarantors hereunder shall
terminate upon the final and indefeasible payment in full of the Obligations to
the Agent and the Banks. In addition, the Agent and the Banks shall release a
Subsidiary Guarantor from its obligations hereunder upon the disposition of all
of the capital stock of such Subsidiary Guarantor.
IX.4 REPRESENTATIONS AND WARRANTIES. Each Subsidiary Guarantor hereby
------------------------------
represents and warrants to the Agent and the Banks that each representation and
warranty by Borrower set forth in this Agreement and each other Loan
-53-
Document relating to such Subsidiary Guarantor, including without limitation the
representations and warranties contained in Article III hereof, is true, correct
and complete in all respects.
X. DEFAULT.
-------
X.1 EVENTS OF DEFAULT. Borrower shall be in default if any one or more of
-----------------
the following events ("EVENT OF DEFAULT") occurs:
(a) PAYMENTS. Borrower fails to pay any principal of or interest on
any Note when due and payable (whether at maturity, by notice of intention to
prepay, or otherwise) or fails to pay when it is due and payable any other
amount payable under any Loan Document;
(b) COVENANTS.
(i) Borrower fails to observe or perform as and when required
any of the terms, conditions or covenants contained in any Loan
Document (other than those referred to in clause (ii) below); or
(ii) Borrower fails to observe or perform as and when required
any of the terms, conditions or covenants contained in Sections 6.2
(other than as to the corporate existence of Borrower), 6.5, 6.8(b),
6.8(c), and 6.8(d) of this Agreement, and such failure shall continue
for fifteen (15) days after Borrower obtains knowledge of such breach.
(c) REPRESENTATIONS, WARRANTIES, ETC. Any representation or warranty
made, or deemed made, by Borrower herein or in any Loan Document or in any
exhibit, schedule, report or certificate delivered pursuant hereto or thereto
shall prove to have been false, misleading or incorrect in any material respect
when made or deemed to have been made;
(d) BANKRUPTCY, ETC. Borrower is dissolved or liquidated, makes an
assignment for the benefit of creditors, files a petition in bankruptcy, is
adjudicated insolvent or bankrupt, petitions or applies to any tribunal for any
receiver or trustee, commences any proceeding relating to itself under any
bankruptcy, reorganization, readjustment of debt, dissolution or liquidation law
or statute of any jurisdiction, has commenced against it any such proceeding
which remains undismissed for a period of sixty (60) days, indicates its consent
to, approval of or acquiescence in any such proceeding, or any receiver of or
trustee for Borrower or any substantial part of the property of Borrower is
appointed, or Borrower suffers any such receivership or trusteeship to continue
undischarged for a period of sixty (60) days;
(e) CERTAIN OTHER DEFAULTS. If Borrower or any Subsidiary shall fail
to pay when due any Indebtedness for Borrowed Money which singularly or in the
aggregate exceeds $1,000,000, and such failure shall continue beyond any
applicable cure period, or Borrower or any Subsidiary shall suffer to exist any
default or event of default in the performance or observance, subject to any
applicable grace period, of any agreement, term, condition or covenant with
respect to any agreement or document relating to
-54-
Indebtedness for Borrowed Money, if the effect of such default is to permit,
with the giving of notice or passage of time or both, the holders thereof, or
any trustee or agent for said holders, to terminate or suspend any commitment
(which is equal to or in excess of $1,000,000) to lend money or to cause or
declare any portion of any borrowings thereunder to become due and payable prior
to the date on which it would otherwise be due and payable, provided that during
any applicable cure period the Banks' obligations hereunder to make further
Loans or issue Letters of Credit shall be suspended;
(f) JUDGMENTS. Any judgments against Borrower or any Subsidiary or
any attachments against its assets or property for amounts in excess of
$1,000,000 in the aggregate remain unpaid, unstayed on appeal, undischarged,
unbonded and undismissed for a period of thirty (30) days;
(g) ATTACHMENTS. Any assets of Borrower or any Subsidiary shall be
subject to attachments, levies, or garnishments for amounts in excess of
$1,000,000 in the aggregate which have not been dissolved or satisfied within
thirty (30) days after service of notice thereof to Borrower or such Subsidiary;
or
(h) CHANGE IN CONTROL. A Change of Control shall occur.
Then and in every such event other than that specified in clause (d), the Agent
shall, at the written request of the Required Banks, terminate the Revolving
Loan Commitments and may declare the Revolving Loans and all other Obligations,
including without limitation accrued interest, to be, and the Revolving Loans
and all other Obligations shall thereupon become, due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by Borrower. Upon the occurrence of any event specified in clause
(d) above, the Revolving Loan Commitments shall automatically terminate and the
Revolving Loans and all other Obligations, including without limitation accrued
interest, shall immediately be due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by Borrower.
To the extent that the Obligations accelerated hereunder relate to Letters of
Credit, the amount becoming due and payable shall be the aggregate amount of the
Letter of Credit Outstandings, whether or not any drawings or claims have been
presented thereunder. Any date on which the Loans and such other obligations
are declared due and payable pursuant to this Section 10.1, shall be a Revolver
Termination Date for purposes of this Agreement.
XI. AGENT.
-----
XI.1 APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably appoints
-----------------------------
and authorizes the Agent to take such action on its behalf and to exercise such
powers under this Agreement and the Loan Documents as are specifically delegated
to the Agent by the terms hereof or thereof, together with such other powers as
are reasonably incidental thereto. The relationship between the Agent and each
Bank has no fiduciary aspects, and the Agent's duties (as Agent) hereunder are
acknowledged to be only ministerial and not involving the exercise of discretion
on its part. Nothing in this Agreement or any Loan Document shall be construed
to impose on the Agent any duties or responsibilities other than those for which
express provision is made herein or therein. In performing its duties
-55-
and functions hereunder, the Agent does not assume and shall not be deemed to
have assumed, and hereby expressly disclaims, any obligation with or for
Borrower. As to matters not expressly provided for in this Agreement or any Loan
Document, the Agent shall not be required to exercise any discretion or to take
any action or communicate any notice, but shall be fully protected in so acting
or refraining from acting upon the instructions of the Required Banks (or all
Banks, if required by the applicable Section of this Agreement) and their
respective successors and assigns; provided, however, that in no event shall the
Agent be required to take any action which exposes it to personal liability or
which is contrary to this Agreement, any Loan Document or applicable law, and
the Agent shall be fully justified in failing or refusing to take any action
hereunder unless it shall first be specifically indemnified to its satisfaction
by the Banks against any and all liability and expense which may be incurred by
it by reason of taking or omitting to take any such action. If an indemnity
furnished to the Agent for any purpose shall, in the reasonable opinion of the
Agent, be insufficient or become impaired, the Agent may call for additional
indemnity from the Banks and not commence or cease to do the acts for which such
indemnity is requested until such additional indemnity is furnished.
XI.2 DUTIES AND OBLIGATIONS. In performing its functions and duties
----------------------
hereunder on behalf of the Banks, the Agent shall exercise the same care and
skill as it would exercise in dealing with loans for its own account. Neither
the Agent nor any of its directors, officers, employees or other agents shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or any Loan Document except for its or their own
gross negligence or willful misconduct. Without limiting the generality of the
foregoing, the Agent (a) may consult with legal counsel and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith and in accordance with the advice of such experts; (b)
makes no representation or warranty to any Bank as to, and shall not be
responsible to any Bank for, any recital, statement, representation or warranty
made in or in connection with this Agreement, any Loan Document or in any
written or oral statement (including a financial or other such statement),
instrument or other document delivered in connection herewith or therewith or
furnished to any Bank by or on behalf of Borrower; (c) shall have no duty to
ascertain or inquire into Borrower's performance or observance of any of the
covenants or conditions contained herein or to inspect any of the property
(including the books and records) of Borrower or inquire into the use of the
proceeds of the Revolving Credit Loans or (unless the officers of the Agent
active in their capacity as officers of the Agent on Borrower's account have
actual knowledge thereof or have been notified in writing thereof) to inquire
into the existence or possible existence of any Event of Default or Potential
Default; (d) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, effectiveness, genuineness, sufficiency,
collectability or value of this Agreement or any other Loan Document or any
instrument or document executed or issued pursuant hereto or in connection
herewith, except to the extent that such may be dependent on the due
authorization and execution by the Agent itself; (e) except as expressly
provided herein in respect of information and data furnished to the Agent for
distribution to the Banks, shall have no duty or responsibility, either
initially or on a continuing basis, to provide to any Bank any credit or other
information with respect to Borrower, whether coming into its possession before
the making of the Loans or at any time or times thereafter; and (f) shall incur
no liability under or in respect of this Agreement or any other Loan Document
for, and shall be entitled to rely and act upon, any notice, consent,
certificate or other instrument or writing (which may be by facsimile
(telecopier), telegram, cable, or other electronic means) believed by it to be
genuine and correct and to have been signed or sent by the
-56-
proper party or parties.
XI.3 THE AGENT AS A BANK. With respect to its Revolving Loan Commitment
-------------------
and the Loans made and to be made by it and the Letters of Credit issued and to
be issued by it, CoreStates Bank, N.A. shall have the same rights and powers
under this Agreement and all other Loan Documents as the other Banks and may
exercise the same as if it were not the Agent. The terms "Bank" and "Banks" as
used herein shall, unless otherwise expressly indicated, include CoreStates
Bank, N.A. in its individual capacity. CoreStates Bank, N.A. and any successor
Agent which is a commercial bank, and their respective affiliates, may accept
deposits from, lend money to, act as trustee under indentures of and generally
engage in any kind of business with, Borrower and its Affiliates from time to
time, all as if such entity were not the Agent hereunder and without any duty to
account therefor to any Bank.
XI.4 INDEPENDENT CREDIT DECISIONS. Each Bank acknowledges to the Agent
----------------------------
that it has, independently and without reliance upon the Agent or any other
Bank, and based upon such documents and information as it has deemed
appropriate, made its own independent credit analysis and decision to enter into
this Agreement. Each Bank also acknowledges that it will, independently or
through other advisers and representatives but without reliance upon the Agent
or any other Bank, and based upon such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or refraining from taking any action under this Agreement or any Loan
Document.
XI.5 INDEMNIFICATION. The Banks agree to indemnify the Agent (to the
---------------
extent not reimbursed by Borrower), ratably in proportion to each Bank's
Commitment Percentage, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against the Agent in such capacity in any way relating to or
arising out of this Agreement or any Loan Document or any action taken or
omitted to be taken by the Agent in such capacity hereunder or under any Loan
Document; provided that none of the Banks shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct. Without limiting the generality of the
foregoing, each Bank agrees to reimburse the Agent, promptly on demand, for such
Bank's ratable share (based upon the aforesaid apportionment) of any out-of-
pocket expenses (including counsel fees and disbursements) incurred by the Agent
in connection with the preparation, execution, administration or enforcement of,
or the preservation of any rights under, this Agreement and the Loan Documents
to the extent that the Agent is not reimbursed for such expenses by Borrower.
XI.6 SUCCESSOR AGENT. The Agent may resign at any time by giving written
---------------
notice of such resignation to the Banks and Borrower, such resignation to be
effective only upon the appointment of a successor Agent as hereinafter
provided. Upon any such notice of resignation, the Banks shall jointly appoint a
successor Agent upon written notice to Borrower and the retiring Agent. If no
successor Agent shall have been jointly appointed by such Banks and shall have
accepted such appointment within thirty (30) days after the retiring Agent shall
have given notice of resignation, the retiring Agent may, upon notice to
Borrower and the Banks, appoint a successor Agent. Upon its acceptance of any
appointment as Agent hereunder, the successor Agent shall succeed to and become
vested with all the rights, powers,
-57-
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations as Agent under this Agreement and the
Loan Documents. After any retiring Agent's resignation hereunder, the provisions
hereof shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was the Agent under this Agreement and the Loan Documents.
XI.7 ALLOCATIONS MADE BY AGENT. As between the Agent and the Banks,
-------------------------
unless a Bank objecting to a determination or allocation made by the Agent
pursuant to this Agreement delivers to the Agent written notice of such
objection within one hundred twenty (120) days after the date any distribution
was made by the Agent, such determination or allocation shall be conclusive on
such one hundred twentieth day and only those items expressly objected to in
such notice shall be deemed disputed by such Bank. The Agent shall not have any
duty to inquire as to the application by the Banks of any amounts distributed to
them.
XII. MISCELLANEOUS
-------------
XII.1 WAIVER. No failure or delay on the part of the Agent or any Bank or
------
any holder of any Note in exercising any right, power or remedy under any Loan
Document shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy under any
Loan Document. The remedies provided under the Loan Documents are cumulative and
not exclusive of any remedies provided by law.
XII.2 AMENDMENTS. No amendment, modification, termination or waiver of
----------
any Loan Document or any provision thereof nor any consent to any departure by
Borrower therefrom shall be effective unless the same shall have been approved
in writing by the Required Banks, be in writing and be signed by the Agent and
then any such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No notice to or demand on Borrower
shall entitle Borrower to any other or further notice or demand in similar or
other circumstances. Notwithstanding any other provision contained in any Loan
Document, no amendment, modification, termination or waiver shall affect the
manner of calculating the Borrowing Base, the payment of principal (including
without limitation the date when due), extend the Revolver Termination Date,
reduce any interest rate margin or any fee provided herein, increase any
Revolving Loan Commitment, release any Collateral, modify the definition of
"Required Bank" or adversely affect the security interest or any voting or
consent rights of the Banks herein without the written consent of all the Banks.
The rights and responsibilities of the Agent hereunder cannot be changed without
the Agent's prior written consent.
XII.3 GOVERNING LAW. The Loan Documents and all rights and obligations of
-------------
the parties thereunder shall be governed by and be construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania without regard to
Pennsylvania or federal principles of conflict of laws.
XII.4 PARTICIPATIONS AND ASSIGNMENTS. This Agreement shall bind and
------------------------------
inure to the benefit of the parties and their respective successors
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and assigns except that neither the Borrower nor any Subsidiary Guarantor may
assign any such Person's rights or obligations hereunder. Borrower hereby
acknowledges and agrees that a Bank may at any time: (a) grant participations in
all or any portion of its Revolving Loan Commitment, any Note or of its right,
title and interest therein or in or to any Loan Document (collectively,
"Participations") to any other lending office or to any other bank, lending
institution or other entity which has the requisite sophistication to evaluate
the merits and risks of investments in Participations ("Participants");
provided, however, that: (i) all amounts payable by Borrower hereunder shall be
determined as if such Bank had not granted such Participation; and (ii) any
agreement pursuant to which any Bank may grant a Participation: (x) shall
provide that such Bank shall retain the sole right and responsibility to enforce
the obligations of Borrower hereunder including, without limitation, the right
to approve any amendment, modification or waiver of any provisions of this
Agreement; (y) such participation agreement may provide that such Bank will not
agree to any modification, amendment or waiver of this Agreement without the
consent of the Participant if such modification, amendment or waiver would
reduce the principal of or rate of interest on the Loan or postpone the date
fixed for any payment of principal of or interest on the Loan; and (z) shall not
relieve such Bank from its obligations, which shall remain absolute, to make
Loans hereunder and issue (or assume a participation in) Letters of Credit
hereunder; and (b) each Bank may assign any of its rights or interests under the
Loan Documents (but only with the consent of Borrower and the Agent, which
consent shall not be unreasonably withheld), provided that: (i) each such
assignment shall be in an amount of at least $5,000,000 and the transferor
Bank's remaining interest shall be not less than 33% of its original Revolving
Loan Commitment; (ii) each such assignment by a Bank of its Loans, or Revolving
Credit Commitment shall be made in such manner so that the same portion of its
Loans, Note, Revolving Credit Commitment and obligations under Letters of Credit
is assigned to the respective assignee and (iii) each such assignment during the
existence of an Event of Default shall not require the consent of Borrower, but
if such assignment is made to a foreign entity or a Person controlled by a
foreign entity, the transferor Bank shall give the Borrower five (5) days notice
prior to such assignment. Upon execution and delivery by the assignee to
Borrower and the Agent of an instrument in writing pursuant to which such
assignee agrees to become a "Bank" hereunder (if not already a Bank) having the
Commitment (s) and Loans specified in such instrument, and upon consent thereto
by Borrower and the Agent, to the extent required above, the assignee shall
have, to the extent of such assignment (unless otherwise provided in such
assignment with the consent of Borrower and the Agent), the obligations, rights
and benefits of a Bank hereunder holding the Revolving Credit Commitment(s),
Loans (or portions thereof) and Letters of Credit or participations therein, as
applicable, assigned to it (in addition to the Revolving Credit Commitment(s),
Loans and Letters of Credit or participations therein, as applicable, if any,
theretofore held by such assignee) and the assigning Bank shall, to the extent
of such assignment, be released from the Commitment (s) (or portion (s) thereof)
so assigned. Upon each such assignment the assigning Bank shall pay the Agent an
assignment fee of $3,500.
XII.5 CAPTIONS. Captions in the Loan Documents are included for
--------
convenience of reference only and shall not constitute a part of any Loan
Document for any other purpose.
XII.6 NOTICES. All notices, requests, demands, directions, declarations
-------
and other communications between the Banks and Borrower or a Subsidiary
Guarantor provided
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for in any Loan Document shall, except as otherwise expressly provided, be
mailed by registered or certified mail, return receipt requested, or
telegraphed, or telefaxed, or delivered in hand to the applicable party, in the
case of the Agent or any of the Banks, at its address indicated opposite its
name on the signature pages hereto, and, in the case of the Borrower or any
Subsidiary Guarantor, at its address indicated on Schedule 3.12 hereto. The
foregoing shall be effective and deemed received three days after being
deposited in the mails, postage prepaid, addressed as aforesaid and shall
whenever sent by telegram, telegraph or telefax or delivered in hand be
effective when received. Any party may change its address by a communication in
accordance herewith.
XII.7 SHARING OF COLLECTIONS, PROCEEDS AND SET-OFFS; APPLICATION OF
-------------------------------------------------------------
PAYMENTS.
--------
(a) If any Bank, by exercising any right of set-off, counterclaim or
foreclosure against trade collateral or otherwise, receives payment of principal
or interest or other amount due on any Loan or Letter of Credit which is greater
than the percentage share of such Bank (determined as set forth below), the Bank
receiving such proportionately greater payment shall purchase such
participations in the Loans and Letter of Credit reimbursement obligations held
by the other Banks, and such other adjustments shall be made as may be required,
so that all such payments shall be shared by the Banks on the basis of their
percentage shares; provided that if all or any portion of such proportionately
greater payment of such indebtedness is thereafter recovered from, or must
otherwise be restored by, such purchasing Bank, the purchase shall be rescinded
and the purchase price restored to the extent of such recovery, but without
interest being paid by such purchasing Bank. The percentage share of each Bank
shall be based on the portion of the outstanding Loans of such Bank (prior to
receiving any payment for which an adjustment must be made under this Section
12.7(a)) in relation to the aggregate outstanding Loans of all the Banks.
Borrower agrees, to the fullest extent it may effectively do so under applicable
law, that any holder of a participation in a Loan or reimbursement obligation,
whether or not acquired pursuant to the foregoing arrangements, may exercise
rights of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or other similar law, any Bank receives a
secured claim in lieu of a set-off to which this Section would apply, such Bank
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Banks entitled under this
Section to share in the benefits of any recovery on such secured claim.
(b) If an Event of Default or a Potential Default shall have occurred
and be continuing, the Agent and each Bank and Borrower agree that all payments
on account of the Loans and Letters of Credit shall be applied by the Agent and
the Banks as follows:
(1) First, to the Agent for any Agent fees then due and payable under
this Agreement until such fees are paid in full;
(2) Second, to the Agent for any fees, costs or expenses (including
expenses described in Section 12.8) incurred by the Agent under any of the
Loan Documents or this Agreement, then due and payable and not reimbursed
by Borrower or the Banks until such fees, costs and expenses are paid in
full;
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(3) Third, to the Banks for their percentage shares of the Commitment
Fee then due and payable under this Agreement until such fee is paid in
full;
(4) Fourth, to the Banks for their respective shares of all costs,
expenses and fees then due and payable from Borrower until such costs,
expenses and fees are paid in full;
(5) Fifth, to the Banks for their percentage shares of all interest
then due and payable from Borrower until such interest is paid in full,
which percentage shares shall be calculated by determining each Bank's
percentage share (determined as set forth in Section 12.7(a)) of the
amounts allocated in (a) above; and
(6) Sixth, to the Banks for their percentage shares of the principal
amount of the Loans and reimbursement obligations with respect to Letters
of Credit then due and payable from Borrower until such principal is paid
in full, which percentage shares shall be calculated by determining each
Bank's percentage share (determined as set forth in Section 12.7(a)) of the
amounts allocated in (a) above.
XII.8 EXPENSES OF THE AGENT; INDEMNIFICATION OF THE AGENT AND THE BANKS.
-----------------------------------------------------------------
(a) Borrower will from time to time reimburse the Agent promptly
following demand for all out-of-pocket expenses (including the reasonable fees
and expenses of legal counsel) in connection with (i) the preparation of the
Loan Documents and any amendments or waivers thereto, (ii) the making of any
Loans, (iii) the administration of the Loan Documents, and (iv) the enforcement
of the Loan Documents; and reimburse the Banks for all out-of-pocket expenses
(including reasonable fees and expenses of legal counsel) in connection with the
enforcement of the Loan Documents.
(b) In addition to the payment of the foregoing expenses, Borrower
hereby agrees to indemnify, protect and hold the Agent, each Bank and any holder
of the Notes and the officers, directors, employees, agents, affiliates and
attorneys of the Agent, each Bank and such holder (collectively, the
"INDEMNITEES") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind or nature, including reasonable fees and expenses of
legal counsel, and including legal fees and settlement costs whether or not the
transaction contemplated hereby is consummated, which may be imposed on,
incurred by, or asserted against such Indemnitee by Borrower or other third
parties and arise out of or relate to this Agreement or the other Loan Documents
or any other matter whatsoever related to the transactions contemplated by or
referred to in this Agreement or the other Loan Documents; provided, however,
that Borrower shall have no obligation to an Indemnitee hereunder to the extent
that the liability incurred by such Indemnitee has been determined by a court of
competent jurisdiction to be the result of gross negligence or willful
misconduct of such Indemnitee.
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XII.9 SURVIVAL OF WARRANTIES AND CERTAIN AGREEMENTS. All agreements,
---------------------------------------------
representations and warranties made or deemed made herein shall survive the
execution and delivery of this Agreement, the making of the Loans hereunder and
the execution and delivery of the Notes. Notwithstanding anything in this
Agreement or implied by law to the contrary, the agreements of Borrower set
forth in Sections 2.5(d), 2.7(b), 2.9, 2.10 and 12.8 and the agreements of the
Banks set forth in Sections 11.1, 11.5 and 12.7 shall survive the payment of the
Loans and the termination of this Agreement. This Agreement shall remain in full
force and effect until the latest to occur of the termination of the Aggregate
Revolving Loan Commitment or the repayment in full of all amounts owed by
Borrower under any Loan Document.
XII.10 SEVERABILITY. The invalidity, illegality or unenforceability in
------------
any jurisdiction of any provision in or obligation under this Agreement, the
Notes or other Loan Documents shall not affect or impair the validity, legality
or enforceability of the remaining provisions or obligations under this
Agreement, the Notes or other Loan Documents or of such provision or obligation
in any other jurisdiction.
XII.11 BANKS' OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF BANKS' RIGHTS.
---------------------------------------------------------------
The obligation of each Bank hereunder is several and not joint and no Bank shall
be the agent of any other (except to the extent the Agent is authorized to act
as such hereunder). No Bank shall be responsible for the obligation or
commitment of any other Bank hereunder. In the event that any Bank at any time
should fail to make a Loan as herein provided, the other Banks, or any of them
as may then be agreed upon, at their sole option, may make the Loan that was to
have been made by the Bank so failing to make such Loan. Nothing contained in
any Loan Document and no action taken by Agent or any Bank pursuant hereto or
thereto shall be deemed to constitute Banks to be a partnership, an association,
a joint venture or any other kind of entity. The amounts payable at any time
hereunder to each Bank shall be a separate and independent debt, and, subject to
the terms of this Agreement, each Bank shall be entitled to protect and enforce
its rights arising out of this Agreement and it shall not be necessary for any
other Bank to be joined as an additional party in any proceeding for such
purpose.
XII.12 NO FIDUCIARY RELATIONSHIP. No provision in this Agreement or in
-------------------------
in any of the other Loan Documents and no course of dealing between the parties
shall be deemed to create any fiduciary duty by Agent or any Bank to Borrower.
XII.13 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. BORROWER, EACH
----------------------------------------------
SUBSIDIARY GUARANTOR, THE AGENT AND EACH BANK HEREBY CONSENTS TO THE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE EASTERN DISTRICT
OF PENNSYLVANIA AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING
OUT OF OR RELATING TO THE NOTES, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY
BE LITIGATED IN SUCH COURTS. EACH PARTY TO THIS AGREEMENT ACCEPTS FOR ITSELF AND
IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE
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BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, SUCH
NOTE, OR SUCH OTHER LOAN DOCUMENT.
XII.14 WAIVER OF JURY TRIAL. BORROWER, EACH SUBSIDIARY GUARANTOR, THE
--------------------
AGENT AND EACH BANK HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE
LOAN DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF
THIS AGREEMENT AND THE LENDER/BORROWER RELATIONSHIP ESTABLISHED HEREBY. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. BORROWER, EACH
SUBSIDIARY GUARANTOR, THE AGENT AND EACH BANK ACKNOWLEDGE THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO THE TRANSACTION, THAT EACH HAS ALREADY RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON
THE WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER, EACH SUBSIDIARY
GUARANTOR, AGENT AND EACH BANK FURTHER WARRANTS AND REPRESENTS THAT EACH HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
LOANS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
XII.15 COUNTERPARTS; EFFECTIVENESS. This Agreement and any amendment
---------------------------
hereto or waiver hereof may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement and any amendments
hereto or waivers hereof shall become effective when the Agent shall have
received signed counterparts or notice by telecopy of the signature page that
the counterpart has been signed and is being delivered to the Agent or facsimile
that such counterparts have been signed by all the parties hereto or thereto.
XII.16 USE OF DEFINED TERMS. All words used herein in the singular or
--------------------
plural shall be deemed to have been used in the plural or singular where the
context or construction so requires. Any defined term used in the singular
preceded by "any" shall be taken to indicate any number of the members of the
relevant class.
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[SIGNATURE PAGE TO CREDIT AGREEMENT]
IN WITNESS WHEREOF, Borrower, the Subsidiary Guarantors, and the Banks
have caused this Agreement to be executed by their proper corporate officers
thereunto duly authorized as of the day and year first above written.
ICF XXXXXX INTERNATIONAL, INC.
By:____________________________
Title:
XXXXXXX INTERNATIONAL
CORPORATION CYGNA GROUP, INC.
By:______________________________ By:____________________________
Title: Title:
EXCELL DEVELOPMENT
XXXXX X. XXXXXX COMPANY CONSTRUCTION, INC.
By:______________________________ By:____________________________
Title: Title:
ICF INFORMATION TECHNOLOGY,
INC. ICF INCORPORATED
By:______________________________ By:____________________________
Title: Title:
ICF XXXXXX ENGINEERS ICF XXXXXX ENGINEERS
CORPORATION (CALIFORNIA) CORPORATION
By:______________________________ By:____________________________
Title: Title:
ICF XXXXXX ENGINEERS ICF XXXXXX ENGINEERS
MASSACHUSETTS, INC. GROUP, INC.
By:______________________________ By:____________________________
Title: Title:
ICF KAISER GOVERNMENT
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[SIGNATURE PAGE TO CREDIT AGREEMENT]
PROGRAMS, INC. ICF XXXXXX ENGINEERS, INC.
By:______________________________ By:____________________________
Title: Title:
ICF XXXXXX HOLDINGS
UNLIMITED, INC. ICF XXXXXX XXXXXXX COMPANY
By:______________________________ By:____________________________
Title: Title:
ICF RESOURCES INCORPORATED ICF LEASING CORPORATION, INC.
By:______________________________ By:____________________________
Title: Title:
KE SERVICES CORPORATION XX XXXXXXXXX, INC.
By:______________________________ By:____________________________
Title: Title:
KAISER ENGINEERS AND XXXXXX ENGINEERS INTERNATIONAL,
CONSTRUCTORS, INC. INC.
By:______________________________ By:____________________________
Title: Title:
SYSTEMS APPLICATIONS INTERNATIONAL, TUDOR ENGINEERING COMPANY
INC.
By:______________________________ By:____________________________
Title: Title:
CYGNA CONSULTING ENGINEERS AND
PCI OPERATING COMPANY, INC. PROJECT MANAGEMENT, INC.
By:______________________________ By:____________________________
Title: Title:
ICF XXXXXX SYSTEMS, INC. ICF KAISER/XXXXXXX XXXXXX, INC.
-65-
[SIGNATURE PAGE TO CREDIT AGREEMENT]
By:______________________________ By:____________________________
Title: Title:
GLOBAL TRADE & INVESTMENT, INC. ICF XXXXXX ENGINEERS PACIFIC,
INC.
By:______________________________ By:____________________________
Title: Title:
EDA, INCORPORATED ICF KAISER REMEDIATION COMPANY
By:______________________________ By:____________________________
Title: Title:
ICF KAISER OVERSEAS ENGINEERING, ICF KAISER EUROPE, INC.
INC.
By:______________________________ By:____________________________
Title: Title:
ICF XXXXXX NETHERLANDS B.V.
By:______________________________
Title:
FC 1-8-3-16 CORESTATES BANK, N.A.,
1339 Xxxxxxxx Xxxxxx, 0xx Xxxxx as a Bank and as Agent
Xxxxxxxxxxxx, XX 00000-0000
By:____________________________
Title:
0000 Xxxxxxxx Xxxx, Xxxxx 000 XXXXXX XXXX
Xxxxx Xxxxxx, XX 00000
By:____________________________
Title:
Xxxxx Xxxxx Xxxxxx XXXXXXXX XXXX XX XXXXXX, a
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000 Xxxxxxxx Chartered Bank
-66-
[SIGNATURE PAGE TO CREDIT AGREEMENT]
Xxxxxxxxx, XX 00000
By:____________________________
Title:
By:____________________________
Title:
000 Xxxxxxx Xxxxxx XXXXXXXXXX, X.X.
Mail Code: 01-09-06
Xxxxxx, XX 00000 By:____________________________
Title:
-67-
EXHIBIT A
COMMITMENTS
Commitment Amount Percentage
CoreStates Bank, N.A. $20,000,000 30.769%
Signet Bank $15,000,000 23.077%
National Bank of Canada $15,000,000 23.077%
BankBoston, N.A. $15,000,000 23.077%
SCHEDULE 2.4(e)
Indebtedness for Borrowed
Money to EBITDA Ratio Base Rate Margin LIBO Rate Margin
--------------------- ---------------- ----------------
Less than 5x 0 1-1/2%
Equal to or greater than 5x 1/2% 2%
but less than 5-1/2x
Equal to or greater than 5-1/2x 3/4% 2-1/4%
but less than 6x
Equal to or greater than 6x 1% 2-1/2%
