Exhibit No. 10(a)(1)
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement, dated as of December 17,
1996 (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
WHEREAS, Borrower, each Subsidiary Guarantor, the Banks and the Agent
are parties to a Credit Agreement, dated as of May 6, 1996, whereby the Banks
have agreed to provide a revolving credit facility for loans and for letters of
credit;
WHEREAS, the Borrower and the Subsidiary Guarantors have requested,
and the Banks and the Agent have agreed, to amend the Credit Agreement in
certain respects, as provided herein.
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Amendment to Credit Agreement
a. The following definitions are hereby amended in their entirety so that
such definitions, as so amended, shall read as follows:
"Excluded Transaction" shall mean the redemption on or before January
13, 1997 of the Series 2D Senior Preferred Stock of Borrower from the proceeds
of any one or more of (i) the sale of some or all of Borrower's investment in
the entities owning and operating a pulverized coal injection facility in Gary,
Indiana, (ii) the 1996 Senior Notes and (iii) up to $6,500,000 of Loans
hereunder.
"Security Agreement" shall mean the Security Agreement, dated as of
May 6, 1996, as amended as of the date hereof.
b. The following definitions are hereby added to Section 1.1:
"Amendment Closing Date" shall mean December 17, 1996.
"1996 Senior Notes" shall mean the Borrower's 12% Senior Notes due
2003, Series A, to be issued December 23, 1996, and all 12% Senior Notes due
2003, Series B, issued in exchange therefor.
"Overadvance Availability" shall mean, prior to and on March 31, 1997,
$5,000,000, and after March 31, 1997, $0, subject to reductions provided in
Section 2.7 (c).
"Overadvance Amount" shall mean, at any time, the amount by which the
unpaid principal amount of all Revolving Credit Loans then outstanding plus the
Letter of Credit Outstandings at such time exceeds the then current Borrowing
Base.
c. Clauses (3), (4) and (5) of Section 2.1 (a) are hereby amended in
their entirety so that such clauses, as so amended, shall read as follows:
(3) Notwithstanding the foregoing, Borrower shall not be entitled to
a Revolving Credit Loan if, after giving effect to such Revolving Credit Loans
to Borrower then outstanding plus the Letter of Credit Outstandings at
such time would exceed the lesser of (i) the Aggregate Revolving Loan Commitment
or (ii) the then current Borrowing Base plus the Overadvance Availability 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 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 Revolving
Termination Date.
d. Section 2.4(e) is hereby amended in its entirety so that such Section,
as so amended, shall read as follows:
(e) Applicable Margins. The margin applicable to Base Rate Loans and
the Loans (in each such case, the "Applicable Margin"), other than the
Overadvance Amount, will be determined from time to time based on the ratio of
EBIT to Consolidated Interest Expense. 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 EBIT to Consolidated Interest
Expense 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.
Overadvance Amounts shall be subject to a Base Rate Margin of 1% and a LIBO Rate
Margin of 2 1/2 %. For purposes of determining the interest rate applicable to
outstanding Loans, the Overadvance Amount shall be included in Base Rate Loans
then outstanding and, to the extent the Overadvance Amount exceeds the Base Rate
Loans then outstanding, LIBO Rate Loans then outstanding.
e. Section 2.7(c) is hereby amended by inserting, at the end of such
Section, the following sentences:
In addition, the Aggregate Revolving Loan Commitment shall be reduced by
$5,000,000 on March 31, 1997. Any reduction in the Aggregate Revolving Loan
Commitment pursuant to this Section 2.7(c) shall also result in a corresponding
reduction in the Overadvance Availability.
f. Section 2.8(a) is hereby amended in its entirety, so for such Section,
as amended, shall read as follows:
(a) Mandatory Prepayments. If at any time 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 plus the Overadvance Availability, 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 plus the Overadvance Availability. If prepayment in full
as 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 Borrowing
Base plus the Overadvance Availability, Borrower 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
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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
plus the Overadvance Availability, 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 plus the Overadvance Availability, 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 plus the Overadvance Availability, 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 plus the Overadvance Availability 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.
g. The first sentence of Section 3.5 is hereby amended to read as
follows:
The consolidated financial statements of Borrower and its Subsidiaries as of and
for the nine (9) months ended September 30, 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.
h. Section 6.1 is hereby amended by the addition of the following
subsection (k) at the end of such Section.
(k) Additional Information during Overadvance Availability. Until
the later of reduction of the Overadvance Availability to $0 and repayment of
the Overadvance Amount (i) as soon as available but no later than twenty-five
(25) Business Days after the end of each month, a consolidated balance sheet of
Borrower and its Subsidiaries and related consolidated statements of operations,
retained earnings and cash flows for such month and for the period from the
beginning of such fiscal year to the end of such month, together with
consolidating information, and a corresponding financial statement for the same
periods in the preceding year certified by the Executive Vice President and
Chief Financial Officer or the Vice President and Treasurer of Borrower as
having been financial statements and weekly statement of cash flow will be in a
form reasonably acceptable to the Agent.
i. Section 6.11 is hereby amended by the addition, at the end of such
Section of the following phrase:
"and for the redemption of the Series 2D Senior Preferred Stock as and to the
extent provided in the definition of "Excluded Transaction".
j. Section 7.2 is hereby amended by deleting subsection (e) and replacing
it with new (e) as follows:
(e) the 1996 Senior Notes.
k. Section 7.6 is hereby amended by the addition, at the end of such
Section, of the following:
; provided, however, that no Investment otherwise permitted under any of the
clauses (d), (e) or (f) above (other than an Investment not in excess of
$300,000 in connection with a New York light rail transit proposal) shall be
made after the Amendment Closing Date until the later of reduction of the
Overadvance Availability to $0 and repayment of the Overadvance Amount.
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l. Section 7.10 is hereby amended in its entirety so that such Section,
as so amended, shall read as follows:
7.10 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 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 20, 1996
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, 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.
m. Article VIII is hereby amended in its entirety so that such Article,
as so amended, shall read as follows:
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:
8.1 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
Amendment Closing Date through September 30, 1997 1.05:1.0
October 1, 1997 through June 30, 1998 1.20:1.0
8.2 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
Amendment Closing Date through September 30, 1997 1.5:1.0
October 1, 1997 through June 30, 1998 1.75:1.0
8.3 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.
8.4 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:
8.5 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:
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Test Period
Amendment Closing Date through March 30, 1997 6.25:1.0
March 31, 1997 through June 30, 1997 6.00:1.0
July 1, 1997 through September 30, 1997 5.50:1.0
October 1, 1997 through December 31, 1997 5.00:1.0
January 1, 1998 through June 30, 1998 4.75:1.0
n. Exhibit A is hereby amended to read in the form attached hereto as
Exhibit A.
2. Conditions Precedent. The Amendment to the Credit Agreement contained
in Section 1 hereof shall be effective upon satisfaction of the following
conditions precedent.
(a) 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 this Amendment, the
Security Agreement and the Loan Documents as amended hereby together with such
other related papers as the Banks shall reasonably require;
(b) Legal Opinions. The Banks shall have received a favorable
written opinion of Xxxxxxx & Xxxxxx, 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;
(c) 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, in
substitution for the Notes previously issued;
(d) 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;
(e) Other Agreements. Borrower and each Subsidiary Guarantor shall
have executed and delivered each other Loan Document required hereunder;
3. Additional Conditions Precedent. Notwithstanding the satisfaction of
the conditions set forth in Section 2 above, the amendment to the Credit
Agreement contained in Subsections 1(c), (d), (e), (f) and (o) hereof shall not
be effective until satisfaction of the following additional conditions
precedent:
(a) Issuance of 1996 Senior Notes. The Agent shall have received
evidence in form and substance satisfactory to it that not less than $15,000,000
of the 1996 Senior Notes shall have been issued by the Company, which 1996
Senior Notes shall have terms satisfactory to each of the Banks in its sole
discretion.
4. Representations and Warranties.
The Borrower confirms the accuracy of the representations and
warranties made in Article 3 of the Credit Agreement as of the date originally
given and restates to the Banks such representations and warranties, as
previously amended, on and as of the date hereof as if originally given on such
date.
5. Covenants.
(a) The Borrower warrants to the Banks that the Borrower is in
compliance and have complied with all covenants, agreements and conditions in
each Loan Document on and as of the date hereof, that no Potential Default or
Event of Default has occurred and is continuing on the date hereof and that,
upon the consummation of
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the transactions contemplated hereby, no Potential Default or Event of Default
shall have occurred and be continuing.
(b) The Borrowers shall provide to the Agent and its representatives
all requested access and assistance as shall be reasonably necessary for such
due diligence review as the Agent shall determine is necessary or advisable,
including without limitation a collateral audit.
6. Effect of Agreement.
This Agreement amends the Loan Documents only to the extent and in the
manner herein set forth, and in all other respects the Loan Documents are
ratified and confirmed.
7. Counterparts.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures hereto
were upon the same instrument.
8. Governing Law.
This Agreement and all rights and obligations of the parties hereunder
shall be governed by and be construed and enforced in accordance with the laws
of Pennsylvania without regard to principles of conflict of law.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures hereto
were upon the same instrument.
8. Governing Law.
This Agreement and all rights and obligations of the parties hereunder
shall be governed by and be construed and enforced in accordance with the laws
of Pennsylvania without regard to principles of conflict of law.
IN WITNESS WHEREOF, Borrower 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: /s/ Xxxxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
XXXXXXX INTERNATIONAL CYGNA GROUP, INC. XXXXX X. XXXXXX COMPANY
CORPORATION By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx
By: /s/ Xxxxxxx X. Xxxxx Title: Treasurer Title: Treasurer
Title: Assistant Treasurer
EXCELL DEVELOPMENT ICF INFORMATION ICF INCORPORATED
CONSTRUCTION, INC. TECHNOLOGY, INC. By: /s/ Xxxxxxx X. Xxxxx
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx Title: Assistant Treasurer
Title: Assistant Treasurer Title: Assistant Treasurer
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ICF XXXXXX ENGINEERS ICF XXXXXX ENGINEERS ICF XXXXXX ENGINEERS
CORPORATION (CALIFORNIA) CORPORATION MASSACHUSETTS, INC.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx
Title: Treasurer Title: Assistant Treasurer Title: Treasurer
ICF XXXXXX ENGINEERS ICF XXXXXX GOVERNMENT ICF XXXXXX ENGINEERS, INC.
GROUP, INC. PROGRAMS, INC. By: /s/ Xxxxxxx X. Xxxxx
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx Title: Treasurer
Title: Treasurer Title: Treasurer
ICF XXXXXX HOLDINGS ICF XXXXXX XXXXXXX COMPANY ICF RESOURCES
UNLIMITED, INC. By: /s/ Xxxx Xxxxx, II INCORPORATED
By: /s/ Xxxxxxx X. Xxxxx Title: Assistant Secretary By: /s/ Xxxxxxx X. Xxxxx
Title: Assistant Treasurer Title: Assistant Treasurer
ICF LEASING CORPORATION, KE SERVICES CORPORATION XX XXXXXXXXX, INC.
INC. By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx
By: /s/ Xxxxxxx X. Xxxxx Title: Treasurer Title: Treasurer
Title: Assistant Treasurer
XXXXXX ENGINEERS AND XXXXXX ENGINEERS CYGNA CONSULTING
CONSTRUCTORS, INC. INTERNATIONAL, INC. ENGINEERS & PROJECT
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx MANAGEMENT, INC.
Title: Treasurer Title: Treasurer By: /s/ Xxxxxxx X. Xxxxx
Title: Treasurer
TUDOR ENGINEERING COMPANY PCI OPERATING COMPANY, INC. SYSTEMS APPLICATIONS
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx INTERNATIONAL, INC.
Title: Treasurer Title: Treasurer By: /s/ Xxxxxxx X. Xxxxx
Title: Treasurer
CORESTATES BANK, N.A. BHF-BANK AKTIENGESELLSCHAFT SIGNET BANK
By: /s/ Xxxx X. Xxxxx By: Xxxxx Xxxx By: Xxxxx Xxxxxxxx
Title: Assistant Vice President Title: Assistant Vice President Title: Vice President
By: Xxxxx Xxxxxx
Title: Vice President
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