<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1993 Commission File No. 1-12248
ICF KAISER INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 54-1437073
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9300 Lee Highway, Fairfax, Virginia 22031-1207
----------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (703) 934-3600
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
---------- ----------
On December 31, 1993, there were 20,890,399 shares of ICF Kaiser
International, Inc. Common Stock, par value $0.01 per share, outstanding.
================================================================================
<PAGE>
ICF KAISER INTERNATIONAL, INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets -
November 30, 1993 and February 28, 1993................. 3
Consolidated Statements of Operations -
Nine Months Ended November 30, 1993 and 1992............ 4
Consolidated Statements of Operations -
Three Months Ended November 30, 1993 and 1992........... 5
Consolidated Statements of Cash Flows -
Nine Months Ended November 30, 1993 and 1992............ 6
Notes to Consolidated Financial Statements.............. 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations........... 9-11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings....................................... 12
Item 2. Changes in Securities................................... 12
Item 3. Defaults Upon Senior Securities......................... 12
Item 4. Submission of Matters to a Vote of Security Holders..... 12
Item 5. Other Information....................................... 12
Item 6. Exhibits and Reports on Form 8-K........................ 12-13
</TABLE>
2
<PAGE>
Consolidated Balance Sheets
ICF Kaiser International, Inc. and Subsidiaries
(Dollars in thousands)
<TABLE>
<CAPTION>
November 30, February 28,
1993 1993
(Unaudited)
--------------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 22,416 $ 8,445
Contract receivables, net 133,983 160,681
Prepaid expenses and other current assets 19,418 21,503
Refundable income taxes 1,090 1,294
Deferred income taxes 12,045 12,553
---------------- ----------------
Total Current Assets 188,952 204,476
---------------- ----------------
Fixed Assets
Furniture, equipment and leasehold improvements 40,923 40,120
Less allowances for depreciation and amortization 24,335 20,440
---------------- ----------------
16,588 19,680
---------------- ----------------
Other Assets
Goodwill, net 52,379 53,896
Investments in and advances to affiliates 5,233 2,207
Due from officers and employees 1,301 1,361
Other 14,004 13,958
---------------- ----------------
72,917 71,422
---------------- ----------------
$ 278,457 $ 295,578
================ ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 47,287 $ 60,192
Accrued salaries and employee benefits 23,465 25,804
Current portion of long-term liabilities 2,850 5,276
Income taxes payable 735 1,448
Deferred revenue 12,774 13,804
Other 9,126 10,107
---------------- ----------------
Total Current Liabilities 96,237 116,631
---------------- ----------------
Long-term Liabilities, less current portion
Long-term debt 46,474 39,115
Subordinated debt 30,000 30,000
Other 3,325 6,487
---------------- ----------------
79,799 75,602
---------------- ----------------
Commitments and Contingencies
Redeemable Preferred Stock 44,445 44,824
Preferred Stock 6,900 6,900
Common Stock, par value $.01 per share:
Authorized--90,000,000 shares
Issued and outstanding-- 20,891,052 and 21,303,807 shares 209 213
Additional Paid-in Capital 62,351 65,040
Notes Receivable Related to Common Stock (1,732) (2,725)
Retained Earnings (Deficit) (6,152) (4,206)
Cumulative Translation Adjustment (1,933) (1,701)
ESOP Guaranteed Bank Loan (1,667) (5,000)
---------------- ----------------
$ 278,457 $ 295,578
================ ================
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
Consolidated Statements of Operations (Unaudited)
ICF Kaiser International, Inc. and Subsidiaries
(In thousands, except per share data)
<TABLE>
<CAPTION>
Nine Months Ended
November 30,
1993 1992
--------------------------------
<S> <C> <C>
Revenue
Gross revenue $ 454,069 $ 527,961
Subcontract and direct material costs (180,942) (238,836)
Equity in income of joint ventures
and affiliated companies 3,355 4,447
----------- -----------
Service revenue 276,482 293,572
Operating expenses
Direct cost of services and overhead 215,187 222,000
Administrative and general expense 45,223 43,036
Depreciation and amortization 7,352 8,294
Unusual items 500 1,400
Cost (recovery) of restructuring and
disposal of businesses, net -- 1,336
----------- -----------
Operating income 8,220 17,506
Other income (expense)
Interest income 1,116 1,322
Interest expense (5,089) (6,550)
----------- -----------
Income before income taxes 4,247 12,278
Income tax provision 2,208 5,157
----------- -----------
Net income 2,039 7,121
Preferred stock dividends 3,770 3,770
----------- -----------
Net income (loss) available for
common shareholders $ (1,731) $ 3,351
=========== ===========
Net income (loss) per common share
Primary $ (0.09) $ 0.15
Fully diluted $ (0.09) $ 0.15
Weighted average common and
common equivalent shares outstanding:
Primary 20,881 21,259
Fully diluted 20,881 21,259
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
Consolidated Statements of Operations (Unaudited)
ICF Kaiser International, Inc. and Subsidiaries
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
November 30,
1993 1992
----------------------------
<S> <C> <C>
Revenue
Gross revenue $ 179,227 $ 158,086
Subcontract and direct material costs (79,787) (64,835)
Equity in income of joint ventures
and affiliated companies 2,614 1,436
----------- -----------
Service revenue 102,054 94,687
Operating expenses
Direct cost of services and overhead 80,112 71,635
Administrative and general expense 15,305 13,600
Depreciation and amortization 2,490 2,633
Unusual items -- 1,400
Costs (recovery) of restructuring and
disposal of businesses, net -- (100)
----------- -----------
Operating income 4,147 5,519
Other income (expense)
Interest income 411 424
Interest expense (1,748) (2,140)
----------- -----------
Income before income taxes 2,810 3,803
Income tax provision 1,461 1,597
----------- -----------
Net income 1,349 2,206
Preferred stock dividends 1,257 1,257
----------- -----------
Net income available for
common shareholders $ 92 $ 949
=========== ===========
Net income per common share
Primary $ 0.00 $ 0.04
Fully diluted $ 0.00 $ 0.04
Weighted average common and
common equivalent shares outstanding:
Primary 20,806 21,274
Fully diluted 20,806 21,274
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
Consolidated Statements of Cash Flows (Unaudited)
ICF Kaiser International, Inc. and Subsidiaries
(In thousands)
<TABLE>
<CAPTION>
Nine Months Ended
November 30,
1993 1992
---------------------
<S> <C> <C>
Operating Activities
Net income $ 2,039 $ 7,121
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 7,352 8,294
Provision for losses on accounts receivable 1,677 1,244
Provision for deferred income taxes 508 5,157
Earnings less than (in excess of) cash distributions
from joint ventures and affiliated companies 1,943 (4,029)
Decrease in provision for restructuring
and disposal of businesses, net of cash -- (6,551)
Other operating activities -- 1,400
Changes in operating assets and liabilities related to
operating activities, net of dispositions:
Contract receivables 25,021 (8,773)
Prepaid expenses and other current assets 2,432 51
Other assets (902) 54
Accounts payable and accrued expenses (16,501) (17,858)
Income taxes payable (290) 271
Deferred revenue (1,030) 2,339
Other liabilities (4,042) (9,024)
-------- --------
Net Cash Provided by (Used in) Operating Activities 14,321 (20,304)
-------- --------
Investing Activities
Investments in subsidiaries and affiliates, net of cash (2,381) (1,146)
Purchases of fixed assets, net (876) (3,563)
Sales of subsidiaries -- 5,894
Other investing activities -- 439
-------- --------
Net Cash Provided by (Used in) Investing Activities (3,257) 1,624
-------- --------
Financing Activities
Proceeds from borrowings 10,000 34,748
Principal payments (1,734) (14,590)
Proceeds from (uses in) common stock transactions (1,814) 132
Redemption of redeemable preferred stock (800) (800)
Preferred stock dividends (2,513) (2,623)
-------- --------
Net Cash Provided by Financing Activities 3,139 16,867
-------- --------
Effect of Exchange Rate Changes on Cash (232) (275)
-------- --------
Increase (Decrease) in Cash and Cash Equivalents 13,971 (2,088)
Cash and Cash Equivalents at Beginning of Period 8,445 8,516
-------- --------
Cash and Cash Equivalents at End of Period $ 22,416 $ 6,428
======== ========
Supplemental Information:
Cash payments for interest $ 9,242 $ 7,456
Cash payments (refunds) for income taxes 14 (176)
Decrease of ESOP guaranteed bank loan (3,333) (3,333)
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
ICF KAISER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A-BASIS OF PRESENTATION
The accompanying consolidated financial statements of ICF Kaiser International,
Inc. and subsidiaries, formerly known as ICF International, Inc. ("ICF Kaiser"
or the "Company"), except for the February 28, 1993 consolidated financial
statements, are unaudited and have been prepared in accordance with generally
accepted accounting principles for interim financial information. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments considered necessary for a fair
presentation have been included. These statements should be read in conjunction
with the Company's audited consolidated financial statements and footnotes
thereto for the year ended February 28, 1993 and the information included in the
Company's Annual Report to the Securities and Exchange Commission on Form 10-K
for the fiscal year ended February 28, 1993. Certain reclassifications have
been made to the November 30, 1992 financial statements to conform to the
presentation used in the November 30, 1993 financial statements.
NOTE B-NET INCOME PER COMMON SHARE
Net income per common share is computed using net income (loss) available to
common shareholders, as adjusted under the modified treasury stock method, and
the weighted average number of common stock and common stock equivalents
outstanding during the periods presented. Common stock equivalents include
stock options and warrants and the potential conversion of convertible preferred
stock. The adjustments that would be required by the modified treasury stock
method to net income (loss) available for common shareholders and to weighted
average number of shares were anti-dilutive and therefore excluded from earnings
per share computations for the periods presented. In computing net income per
share, net income (loss) available for common shareholders was adjusted for the
amortization of discounts on senior preferred stock.
NOTE C-POST-EMPLOYMENT BENEFITS
Effective March 1, 1993, ICF Kaiser adopted Statement of Financial Accounting
Standards No. 106, Employers' Accounting for Postretirement Benefits Other Than
Pensions ("SFAS No. 106"). Prior to the adoption of SFAS No. 106, ICF Kaiser
had been recognizing the cost of postretirement benefits when paid. ICF Kaiser
provides certain benefits, primarily health insurance, to a limited group of
retirees (and their spouses) who joined ICF Kaiser through an acquisition. The
cost of the postretirement benefits is funded when paid and limited to a fixed
amount per retiree or spouse per month. All service cost related to these
benefits has been included in the Company's transition obligation.
The Company has elected the prospective transition method of recognizing these
postretirement benefit expenses. Under this method, the Company's $14.2 million
accumulated postretirement benefit obligation at March 1, 1993 is being
amortized over 14.5 years, the average remaining life expectancy of the retirees
and their spouses. A discount rate of 7% was used to determine the accumulated
postretirement benefit obligation. The Company's ongoing expense under SFAS No.
106 includes the interest component and the amortization of the transition
obligation.
NOTE D-SUBSEQUENT EVENTS
On January 11, 1994, ICF Kaiser issued 125,000 Units, each unit consisting of
$1,000 principal amount of the Company's newly issued 12% Senior Subordinated
Notes due 2003 ("12% Notes") and 4.8 warrants, each to purchase one share of the
Company's Common Stock at $5.00 per share. The warrants expire in December
1998. Of the Units' net issue price of $121,487,500 ($125,000,000 less a
$3,512,500 discount), $900,000
7
<PAGE>
was allocated to the value of the 600,000 warrants and $120,587,500 to the 12%
Notes. The net proceeds were used to retire the Company's 13.5% Senior
Subordinated Notes ("13.5% Notes") at 114.17% ($34.3 million), to repurchase
warrants issued in connection with the 13.5% Notes ($1.6 million), to repurchase
its Series 1 Junior Convertible Preferred Stock and pay accrued dividends
thereon ($5.1 million), to repurchase its Series 2C Senior Preferred Stock at
106.25% together with the Series 2C Warrants ($26.6 million), to repay the
Company's current revolving credit facility ($45.0 million), and to repay, on
behalf of the Company's ESOP, the outstanding balance on the ESOP loan ($1.7
million). The balance will be used for general corporate purposes. Since the
revolving credit facility and 13.5% Notes were repaid with the proceeds from the
Units, they are classified as long-term liabilities as of November 30, 1993 on
the accompanying balance sheet.
The early extinguishment of debt will result in an approximately $3.8 million
after-tax extraordinary charge in the fourth quarter. Additionally, although
not directly reducing net income, the premium related to the Company's exercise
of its early repurchase rights on the Series 2C Senior Preferred Stock will
reduce net income available for common shareholders by approximately $2.0
million in the fourth quarter.
Upon issuance of the 125,000 Units discussed above, an amended $60 million
revolving credit facility became effective (the "New Credit Facility"), amending
the Company's previous credit facility, which was due to expire on September 30,
1994. The New Credit Facility is provided by a lead bank and a consortium of
other banks with terms and covenants similar to those under the existing credit
facility. The New Credit Facility expires on October 31, 1996 and contains
Eurodollar and alternate base rate options with margins dependent upon the
Company's financial operating results.
NOTE E-CONTINGENCIES
Normally in the Company's business, various claims or charges are asserted
against the Company arising from or related to property damage, personal
injuries, breaches of contracts, acquisitions, and dispositions. These claims
or charges often result in litigation against the Company, and there currently
are pending a number of lawsuits relating to such claims and charges. Amounts
claimed against the Company whether in litigation or otherwise may not bear any
reasonable relationship to the merits of the claim or to a final court judgment.
In the opinion of management, adequate reserves have been provided for the
effect, net of insurance coverage, of any such claims or final judgments which
the Company has chosen to settle or which might be decided or rendered against
the Company. Accordingly, the Company believes that the aggregate amount of
such claims and final judgments, if any, will not have a material adverse effect
on the Company's financial position.
The Company may from time to time be, either individually or in conjunction with
other government contractors operating in similar types of businesses, involved
in U.S. government investigations for alleged violations of procurement or other
federal laws and regulations. The Company currently is the subject of a number
of U.S. government investigations and is cooperating with the responsible
government agencies involved. No charges are presently known to have been filed
against the Company by these agencies. The Company is unable to predict the
outcome of the investigations in which it is currently involved. Management
does not believe that there will be any material adverse effect on the Company's
financial position as a result of these investigations.
The Company has a substantial number of U.S. government contracts, the costs of
which are subject to audit by the U. S. government. In one such audit, the
government has asserted that certain costs claimed as reimbursable under
government contracts were not allocated in accordance with government cost
accounting standards. Management believes that the potential effect of
disallowed costs, if any, for the periods currently under audit and for periods
not yet audited has been adequately provided for and will not have a material
adverse effect on the Company's financial position.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Net Income
For the quarter ended November 30, 1993, ICF Kaiser's net income was $1,349,000
and net income available for common shareholders was $92,000 or $0.00 per share,
compared to net income of $2,206,000 and net income available for common
shareholders of $949,000, or $0.04 per share, for the quarter ended November 30,
1992. For the nine months ended November 30, 1993, ICF Kaiser's net income was
$2,039,000 and net loss available for common shareholders was $(1,731,000), or
$(0.09) per share, compared to net income of $7,121,000 and net income available
for common shareholders of $3,351,000, or $0.15 per share, for the nine months
ended November 30, 1992. The decrease in net income was caused by a decline in
volume due to weakened demand in the Company's markets, the completion of
several large industrial projects, the sale of two income-producing businesses
(ICF-Lewin, Inc. and an equity interest in Acer Group Limited), a decline in the
Company's energy engineering business, and the delayed impact of the Company's
cost reduction efforts which began in the fourth quarter of fiscal 1993.
Effective October 1, 1993, the Company entered into a material amendment to its
contract to provide architect-engineering and construction management services
to the Department of Energy (DOE) at its Hanford site. The Company estimates
that it will realize over $800 million in gross revenue under the two and
one-half years of the amended contract and that fees under this contract will
increase significantly. In addition, the Company will be eligible to earn
additional incentive fees related to contractor efficiency and technology
transfer. The full operating income impact of this contract amendment was not
realized in the third quarter.
However, similar to many companies in its industry, during fiscal 1994 ICF
Kaiser continued to experience weak demand and a corresponding reduction in
operating income levels generated in its other markets, when compared to fiscal
1993. Federal spending under existing environmental contracts, although
increasing throughout the year, was lower than last year. ICF Kaiser's
management continues to focus on developing marketing opportunities, improving
the efficiency of operations, and areas for additional cost-cutting.
ICF Kaiser increased its contract backlog to $1.8 billion of gross revenue at
November 30, 1993, primarily as a result of the amended DOE contract at Hanford.
Gross Revenue
Gross revenue for the nine months ended November 30, 1993, was $454.1 million
compared to $528.0 million in the comparable period last year, a $73.9 million
or 14.0% decrease. The decrease is attributable to the successful completion of
two large industrial projects in fiscal 1993 ($73.4 million); the sale of the
Company's Lewin-ICF subsidiary at the end of the third quarter of fiscal 1993
($14.4 million); a decline in the Company's energy engineering business ($9.5
million); and the general impact of reduced government spending, the completion
of other large projects, and sluggish demand. The decline was partially offset
by a significant increase in ICF Kaiser's engineer/constructor services to the
DOE at the Hanford site ($50.7 million). Gross revenue for the quarter ended
November 30, 1993 was $179.2 million, a $21.1 million or 13.4% increase from
$158.1 million in the comparable period last year. The increase is primarily
attributable to the increase in volume at Hanford ($45.1 million), partially
offset by the other factors discussed above.
Service Revenue
Service revenue for the nine months ended November 30, 1993 was $276.5 million,
a decrease of $17.1 million or 5.8% from $293.6 million for the comparable
period in fiscal 1993. Service revenue for the quarter ended November 30, 1993
was $102.1 million, a $7.4 million or 7.8% increase from $94.7 million in the
comparable period last year. Service revenue was primarily impacted by the same
factors affecting gross revenue discussed above, as well as by a decline at the
Company's Kaiser Engineers Australia Pty. Ltd. ("KEA") subsidiary due
9
<PAGE>
to the successful early completion of a natural gas liquefaction project on
Australia's northwest shelf ($3.4 million for the nine months ended November 30,
1993).
Service revenue under the DOE contract at Hanford increased $22.3 million for
the nine month period ended November 30, 1993, and $18.0 million for the quarter
ended November 30, 1993, in comparison to the same periods in the prior year.
Operating income on this contract generally fluctuates based on performance and
not with the volume of gross or service revenue. Consequently, fluctuations in
revenue on this contract can impact the Company's operating margins expressed as
a percentage of service revenue.
Equity in income of joint ventures and affiliates decreased $1.1 million for the
nine months ended November 30, 1993 over the comparable period last year,
primarily as a result of the decrease at KEA and the sale of the Company's
interest in Acer Group Limited. The $1.2 million increase in equity in income
of joint ventures and affiliates for the comparable third quarters is primarily
due to resolution of certain joint venture contingencies at KEA and also the
Company's equity investment in a pulverized coal injection facility.
Service revenue as a percentage of gross revenue was 60.9% and 56.9% for the
nine months and quarter ended November 30, 1993, respectively, compared to 55.6%
and 59.9%, for the nine months and quarter ended November 30, 1992,
respectively. The increase in this percentage for the comparable nine month
period is a result of the changing nature of ICF Kaiser's contract base. As
several large industrial projects were completed, a greater portion of the
Company's projects during the current year were performed by ICF Kaiser and its
personnel as opposed to subcontractors.
Expenses
Operating expenses and income as a percentage of service revenue for the periods
shown were as follows:
<TABLE>
<CAPTION>
================================================================================
Nine months ended Quarter ended
November 30, November 30,
- --------------------------------------------------------------------------------
1993 1992 1993 1992
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Direct cost of services and overhead 77.8% 75.6% 78.5% 75.7%
Administrative and general 16.4% 14.7% 15.0% 14.4%
Depreciation and amortization 2.7% 2.8% 2.4% 2.8%
Operating income 3.0% 6.0% 4.1% 5.8%
==============================================================================
</TABLE>
The increase in direct cost of services and overhead as a percentage of service
revenue is generally attributable to the changing mix of the Company's contract
base. Although the Company has continued its cost-cutting efforts, certain
indirect costs, such as a large portion of the Company's rent expense, are
relatively more fixed in nature. The increase in administrative and general
expenses is primarily the result of the Company's increased marketing efforts
and additional absorption of fixed expenses after the completion of ICF Kaiser's
restructuring program in fiscal 1993, partially offset by reductions realized by
the Company's cost-cutting program.
Depreciation and amortization expense decreased $0.9 million to $7.4 million for
the nine months ended November 30, 1993, primarily as the result of the
write-off of certain software assets in the third quarter of fiscal 1993 and the
sale of ICF Kaiser's interest in Acer Group Limited at the end of fiscal 1993.
ICF Kaiser's interest expense for the nine months and quarter ended November 30,
1993 decreased 22.3% and 18.3%, respectively, from the comparable periods last
year. This was primarily because of reduced average long-term debt outstanding
and lower interest rates. Interest expense will increase over future periods as
a result of the restructuring of the Company's balance sheet, discussed under
"Liquidity and Capital Resources". The increase in interest expense will be
partially offset by a reduction in preferred dividends.
10
<PAGE>
Impact of New Accounting Standard
The Company adopted Statement of Financial Accounting Standards No. 106,
Employers' Accounting for Postretirement Benefits ("SFAS No. 106"), effective
March 1, 1993. The Company's postemployment obligation extends to only a
limited group of retirees (and their spouses) who joined ICF Kaiser through an
acquisition, and their benefits are limited to a fixed amount per employee and
spouse. SFAS No. 106 requires that companies accrue postemployment benefits
over the period benefits are earned. The Company has elected the prospective
transition method and is amortizing its $14.2 million transition obligation over
14.5 years, the average remaining life expectancy of the retirees and their
spouses. The Company's ongoing expense under SFAS No. 106 includes the interest
component and the amortization of the transition obligation.
LIQUIDITY AND CAPITAL RESOURCES
In the nine months ended November 30, 1993, ICF Kaiser's cash position increased
$14.0 million. Working capital increased slightly since February 28, 1993, $4.9
million or a 5.5% increase, to $92.7 million as of November 30, 1993.
Operations provided $17.3 million of cash, including the collection of contract
receivables partially offset by a decrease in outstanding accounts payable.
Cash was also provided from borrowings under the Company's credit facility. ICF
Kaiser uses bank financing to supplement its ongoing working capital
requirements.
On January 11, 1994, ICF Kaiser issued 125,000 Units, each unit consisting of
$1,000 principal amount of the Company's newly issued 12% Senior Subordinated
Notes due 2003 ("12% Notes") and 4.8 warrants, each to purchase one share of the
Company's Common Stock at $5.00 per share. Of the net issue price of
$121,487,500 ($125,000,000 less a $3,512,500 discount), $900,000 was allocated
to the value of the 600,000 warrants and $120,587,500 to the 12% Notes. The net
proceeds were used to retire the Company's 13.5% Senior Subordinated Notes
("13.5% Notes") at 114.17% ($34.3 million), to repurchase warrants issued in
connection with the 13.5% Notes ($1.6 million), to repurchase its Series 1
Junior Convertible Preferred Stock and pay accrued dividends thereon ($5.1
million), to repurchase its Series 2C Senior Preferred Stock at 106.25% together
with the Series 2C Warrants ($26.6 million), to repay the Company's current
revolving credit facility ($45.0 million), and to repay, on behalf of the
Company's ESOP, the outstanding balance on the ESOP loan ($1.7 million). The
balance will be used for general corporate purposes.
The early extinguishment of debt will result in an approximately $3.8 million
after-tax extraordinary charge in the fourth quarter. Additionally, although
not directly reducing net income, the premium related to the Company's exercise
of its early repurchase rights on the Series 2C Senior Preferred Stock will
reduce net income available for common shareholders by approximately $2.0
million in the fourth quarter.
Upon issuance of the 125,000 Units discussed above, an amended $60 million
revolving credit facility became effective (the "New Credit Facility"), amending
the Company's previous credit facility, which was due to expire on September 30,
1994. The New Credit Facility is provided by a lead bank and a consortium of
other banks with terms and covenants similar to those under the existing credit
facility. The New Credit Facility expires on October 31, 1996 and contains
Eurodollar and alternate base rate options with margins dependent upon the
Company's financial operating results.
ICF Kaiser expects that current projected levels of cash flows and operating
revenues and the availability of borrowings under the Company's New Credit
Facility will be adequate to fund operations for the next twelve months.
11
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
As previously reported in the Report on Form 10-K for the year ended
February 28, 1993.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits filed as part of this report are listed below:
-----------------------------------------------------------
Exhibit No. 4 Instruments Defining the Rights of Security Holders, including
Indentures
4(a) Indenture dated as of January 11, 1994, between the Registrant
and The Bank of New York, as Trustee
4(b) Form of 12% Senior Subordinated Note due 2003
4(c) Warrant Agreement dated as of January 11, 1994, between the
Registrant and The Bank of New York, as Warrant Agent
4(d) Form of Warrant expiring December 31, 1998
4(e) Form of Common Stock Purchase Warrant expiring May 15, 1999 (as
amended and restated through January 11, 1994)
4(f) Series 2D Warrant, No. 2D-2, dated January 11, 1994
EXHIBIT NO. 10 MATERIAL CONTRACTS
10(a) Amended and Restated Credit Agreement dated as of December 8,
1993, among the Registrant, the several Lenders from time to time
Parties hereto, and Chemical Bank, as Agent, including Exhibits
thereto (Closing Date: January 11, 1994)
EXHIBIT NO. 11 COMPUTATION OF EARNINGS PER SHARE
12
<PAGE>
EXHIBIT NO. 21 SUBSIDIARIES OF THE REGISTRANT
(b) Report on Form 8-K
------------------
None
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report of Form 10-Q to be signed on its behalf
by the undersigned thereunto duly authorized.
ICF KAISER INTERNATIONAL, INC.
(Registrant)
Date: January 13, 1993 /s/ Michael J. Rowny
------------------------------
Michael J. Rowny
Executive Vice President
and Chief Financial Officer
(Duly authorized officer and
principal financial officer)
13
<PAGE>
INDEX
EXHIBIT DESCRIPTION OF EXHIBIT PAGE
- ------- ---------------------- ----
No. 4 INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES
4(a) Indenture dated as of January 11, 1994, between the Registrant
and The Bank of New York, as Trustee.............................
4(b) Form of 12% Senior Subordinated Note due 2003 ...................
4(c) Warrant Agreement dated as of January 11, 1994, between the
Registrant and The Bank of New York, as Warrant Agent............
4(d) Form of Warrant expiring December 31, 1998 ......................
4(e) Form of Common Stock Purchase Warrant expiring May 15, 1999 (as
amended and restated through January 11, 1994) ..................
4(f) Series 2D Warrant, No. 2D-2, dated January 11, 1994..............
EXHIBIT NO. 10 MATERIAL CONTRACTS
10(a) Amended and Restated Credit Agreement dated as of December 8,
1993, among the Registrant, the several Lenders from time to time
Parties hereto, and Chemical Bank, as Agent, including Exhibits
thereto (Closing Date: January 11, 1994)........................
EXHIBIT NO. 11 COMPUTATION OF EARNINGS PER SHARE ...............................
EXHIBIT NO. 21 SUBSIDIARIES OF THE REGISTRANT ..................................
<PAGE>
Exhibit 4(a)
ICF KAISER INTERNATIONAL, INC.
$125,000,000
12% Senior Subordinated Notes due 2003
--------------------
INDENTURE
Dated as of January 11, 1994
-------------------------
The Bank of New York
Trustee
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
- --------------- -----------------
<S> <C>
310(a)(1) ................................................. 8.09
(a)(2) .................................................. 8.09
(a)(3) .................................................. N.A.
(a)(4) .................................................. N.A.
(a)(5) .................................................. **
(b) ..................................................... **
(c) ..................................................... N.A.
311(a) .................................................... **
(b) ..................................................... **
(c) ..................................................... N.A.
312(a) .................................................... **
(b) ..................................................... **
(c) ..................................................... **
313(a) .................................................... 8.10
(b)(1) .................................................. 8.10
(b)(2) .................................................. 8.10
(c) ..................................................... 8.10
(d) ..................................................... 8.10
314(a)(1) ................................................. 5.12
(a)(2) .................................................. **
(a)(3) .................................................. **
(a)(4) .................................................. 5.17
(b) ..................................................... N.A.
(c)(1) ................................................. 12.03
(c)(2) ................................................. 12.03
(c)(3) .................................................. N.A.
(d) ..................................................... N.A.
(e) .................................................... 12.04
(f) ..................................................... N.A.
315(a) .................................................. 8.01(2)
(b) ................................................ 8.05,12.02
(c) ................................................... 8.01(1)
(d) ................................................... 8.01(3)
(e) ..................................................... 7.11
316(a)(last sentence) ..................................... 2.08
(a)(1)(A) ............................................... 7.05
(a)(1)(B) ............................................... 7.04
(a)(2) .................................................. N.A.
(b) ..................................................... 7.07
(c) .................................................... 10.04
317(a)(1) ................................................. 7.08
(a)(2) .................................................. 7.09
(b) ..................................................... 2.04
318(a) ................................................... 12.01
</TABLE>
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
** Included pursuant to Section 318(c) of the Trust Indenture Act of 1939.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE 1 DEFINITIONS AND INCORPORATION BY
REFERENCE............................ 1
Section 1.01 Definitions.......................... 1
Section 1.02 Other Definitions.................... 17
Section 1.03 Incorporation by Reference of Trust
Indenture Act........................ 17
Section 1.04 Rules of Construction................ 18
ARTICLE 2 THE NOTES............................ 18
Section 2.01 Form and Dating...................... 18
Section 2.02 Execution and Authentication......... 18
Section 2.03 Registrar and Paying Agent........... 19
Section 2.04 Paying Agent to Hold Money in Trust.. 19
Section 2.05 Registration of Transfer and Exchange 20
Section 2.06 Replacement Notes.................... 20
Section 2.07 Outstanding Notes.................... 21
Section 2.08 Treasury Notes....................... 21
Section 2.09 Temporary Notes...................... 21
Section 2.10 Cancellation......................... 21
Section 2.11 Defaulted Interest................... 22
Section 2.12 CUSIP Numbers........................ 22
ARTICLE 3 ASSET SALE OFFER..................... 22
Section 3.01 Notices to Trustee................... 22
Section 3.02 Notices to Holders................... 22
Section 3.03 Deposit of Purchase Price............ 24
Section 3.04 Asset Sale Offer..................... 24
ARTICLE 4 OPTIONAL REDEMPTION.................. 25
Section 4.01 Redemption Date; Redemption Price.... 25
Section 4.02 Notices to Trustee and Paying Agent.. 26
Section 4.03 Selection of Notes to be Redeemed.... 26
Section 4.04 Notice to Holders.................... 26
Section 4.05 Effect of Notice of Redemption....... 27
Section 4.06 Deposit of Redemption Price.......... 28
Section 4.07 Notes Redeemed in Part............... 28
ARTICLE 5 COVENANTS............................ 28
Section 5.01 Payment of Notes..................... 28
Section 5.02 Maintenance of Office or Agency...... 28
Section 5.03 Change of Control.................... 29
</TABLE>
i
<PAGE>
<TABLE>
<C> <S> <C>
Section 5.04 Limitations on Additional
Indebtedness......................... 32
Section 5.05 Limitations on Subsidiary Debt and
Preferred Stock...................... 33
Section 5.06 Limitations on Restricted Payments... 34
Section 5.07 Limitations on Restrictions on
Distributions from Subsidiaries...... 36
Section 5.08 Limitations on Transactions With
Affiliates........................... 37
Section 5.09 Limitations on Asset Sales........... 38
Section 5.10 Restrictions on Sale of Stock of
Subsidiaries......................... 39
Section 5.11 Limitations on Guarantees............ 39
Section 5.12 SEC Reports.......................... 40
Section 5.13 Corporate Existence.................. 41
Section 5.14 Stay, Extension and Usury Laws....... 41
Section 5.15 Insurance; Books and Records;
Compliance with Law.................. 41
Section 5.16 Inspection and Confidentiality....... 42
Section 5.17 Compliance Certificate............... 42
ARTICLE 6 SUCCESSORS........................... 43
Section 6.01 Limitations on Mergers and
Consolidations....................... 43
Section 6.02 Successor Corporation Substituted.... 44
ARTICLE 7 DEFAULTS AND REMEDIES................ 45
Section 7.01 Events of Default.................... 45
Section 7.02 Acceleration......................... 46
Section 7.03 Other Remedies....................... 47
Section 7.04 Waiver of Past Defaults.............. 47
Section 7.05 Control by Majority.................. 47
Section 7.06 Limitations on Suits................. 48
Section 7.07 Rights of Holders to Receive Payment. 48
Section 7.08 Collection Suit by Trustee........... 48
Section 7.09 Trustee May File Proofs of Claim..... 49
Section 7.10 Priorities........................... 49
Section 7.11 Undertaking for Costs................ 50
Section 7.12 Restoration of Rights and Remedies... 50
ARTICLE 8 TRUSTEE.............................. 50
Section 8.01 Duties of Trustee.................... 50
Section 8.02 Rights of Trustee.................... 51
Section 8.03 Individual Rights of Trustee......... 52
Section 8.04 Trustee's Disclaimer................. 52
Section 8.05 Notice of Defaults................... 53
Section 8.06 Compensation and Indemnity........... 53
Section 8.07 Replacement of Trustee............... 54
Section 8.08 Successor Trustee by Merger, etc..... 55
</TABLE>
ii
<PAGE>
<TABLE>
<C> <S> <C>
Section 8.09 Eligibility; Disqualification........ 55
Section 8.10 Reports by Trustee to Holders........ 55
ARTICLE 9 DISCHARGE OF INDENTURE............... 55
Section 9.01 Termination of Company's Obligations. 55
Section 9.02 Application of Trust Money........... 57
Section 9.03 Repayment to Company................. 57
Section 9.04 Reinstatement........................ 58
ARTICLE 10 AMENDMENTS........................... 58
Section 10.01 Without Consent of Holders........... 58
Section 10.02 With Consent of Holders.............. 59
Section 10.03 Compliance with Trust Indenture Act.. 60
Section 10.04 Revocation and Effect of Consents.... 60
Section 10.05 Notation on or Exchange of Notes..... 61
Section 10.06 Trustee to Sign Amendments, etc...... 61
ARTICLE 11 SUBORDINATION........................ 62
Section 11.01 Agreement to Subordinate............. 62
Section 11.02 Liquidation; Dissolution; Bankruptcy. 62
Section 11.03 Default on Senior Indebtedness....... 62
Section 11.04 Acceleration of Notes................ 64
Section 11.05 When Distributions Must Be Paid Over. 64
Section 11.06 Notice by the Company................ 64
Section 11.07 Subrogation.......................... 65
Section 11.08 Relative Rights...................... 65
Section 11.09 Subordination May Not Be Impaired by 65
the Company.......................... 65
Section 11.10 Distribution or Notice to the
Representative....................... 66
Section 11.11 Rights of the Trustee and Paying
Agent................................ 66
Section 11.12 No Fiduciary Duty to Holders of
Senior Indebtedness.................. 67
ARTICLE 12 MISCELLANEOUS........................ 67
Section 12.01 Trust Indenture Act Controls......... 67
Section 12.02 Notices.............................. 67
Section 12.03 Certificate and Opinion as to
Conditions Precedent................. 68
Section 12.04 Statements Required in Certificate or
Opinion.............................. 69
Section 12.05 Rules by Trustee and Agents.......... 69
Section 12.06 Legal Holidays....................... 69
Section 12.07 No Recourse Against Others........... 70
Section 12.08 Governing Law........................ 70
</TABLE>
iii
<PAGE>
<TABLE>
<C> <S> <C>
Section 12.09 No Adverse Interpretation of Other
Agreements........................... 70
Section 12.10 Successors........................... 70
Section 12.11 Severability......................... 70
Section 12.12 Counterpart Originals................ 70
Section 12.13 Trustee as Paying Agent and Registrar
Section 12.14 Table of Contents, Headings, etc..... 71
SIGNATURES.............................................. 71
EXHIBIT A FORM OF NOTE
</TABLE>
iv
<PAGE>
INDENTURE dated as of January 11, 1994, between ICF Kaiser
International, Inc., a Delaware corporation, and The Bank of New York, a New
York banking corporation (the "Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 12% Senior
Subordinated Notes due 2003 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01 DEFINITIONS
"Acquired Indebtedness" means: (i) with respect to any Person that
becomes a direct or indirect Subsidiary of the Company after the date of this
Indenture, Indebtedness of such Person and its Subsidiaries existing at the time
such Person becomes a Subsidiary of the Company that was not incurred in
connection with, or in contemplation of, such Person becoming a Subsidiary of
the Company; and (ii) with respect to the Company or any of its Subsidiaries,
any Indebtedness assumed by the Company or any of its Subsidiaries in connection
with the acquisition of an asset from another Person that was not incurred by
such other Person in connection with, or in contemplation of, such acquisition.
"Affiliate" of any Person means any Person (i) which directly or
indirectly controls or is controlled by, or is under direct or indirect common
control with, the referent Person, (ii) which beneficially owns or holds 10% or
more of any class of the Voting Stock of the referent Person or (iii) of which
10% or more of the Voting Stock (or, in the case of a Person which is not a
corporation, 10% or more of the equity interest) is beneficially owned or held
by the referent Person. For purposes of this definition, control of a Person
shall mean the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise. Notwithstanding the foregoing, the term "Affiliate"
shall not include, with respect to the Company or any Wholly Owned Subsidiary of
the Company, (a) any Wholly Owned Subsidiary of the Company or (b) any
Subsidiary of the Company that is not a Wholly Owned Subsidiary or any Joint
Venture, provided that such Subsidiary or Joint Venture is not under the control
of, and does not have any Capital Stock (other than directors' qualifying
shares) or Indebtedness owned or held by, any Affiliate of the Company.
"Agent" means any Registrar or Paying Agent.
1
<PAGE>
"Asset Sale" for any Person means the sale, lease, transfer or other
disposition or series of sales, leases, transfers or other dispositions
(including without limitation by merger or consolidation, and whether by
operation of law or otherwise) of any of that Person's assets (including without
limitation the sale or other disposition of Capital Stock of any Subsidiary of
such Person, whether by such Person or by such Subsidiary), whether owned on the
date of this Indenture or subsequently acquired, excluding, however: (i) any
sale, lease, transfer or other disposition between the Company and any of its
Wholly Owned Restricted Subsidiaries; (ii) any transfer of assets of the Company
or any of its Restricted Subsidiaries that constitutes and is treated as a
Designated Investment; (iii) any transfer of assets of the Company or any of its
Restricted Subsidiaries that constitutes a Change of Control and that is
governed by and effected in accordance with the provisions of Section 5.03 and
Article 6; and (iv) any sale, lease, transfer or other disposition, or series of
sales, leases, transfers or other dispositions, of assets having a purchase
price or transaction value, as the case may be, of $1,000,000 or less, provided
that no Default or Event of Default exists at the time of such sale.
"Asset Sale Offer" means an Asset Sale Offer as defined in Section
5.09.
"Attributable Indebtedness", when used with respect to any Sale and
Leaseback Transaction, means, as at the time of determination, the greater of
(i) the fair market value of the property subject to such Sale and Leaseback
Transaction and (ii) the present value (discounted at a rate equivalent to the
Company's then-current weighted average cost of funds for borrowed money as at
the time of determination, compounded on a semi-annual basis) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in any such Sale and Leaseback Transaction.
"Bank Credit Agreement" means the Credit Agreement among the Company,
certain banks and Chemical Bank, as successor to Manufacturers Hanover Trust
Company, as agent for the banks, as such agreement has been and may be amended,
restated, supplemented or otherwise modified from time to time, and includes any
successor bank credit agreement.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Board of Directors" for any Person means the Board of Directors of such
Person or any authorized committee of the Board of Directors of such Person.
"Board Resolution" for any Person means a duly adopted resolution of
the Board of Directors of such Person.
2
<PAGE>
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" of any Person means any and all shares, rights to
purchase, warrants or options (whether or not currently exercisable),
participations or other equivalents of or interests in (however designated) the
equity (including without limitation common stock, preferred stock and
partnership and joint venture interests) of such Person.
"Capitalized Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
"Cash Equivalents" means: (i) obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof or obligations
issued by any agency or instrumentality thereof and backed by the full faith and
credit of the United States of America; (ii) commercial paper rated the highest
grade by Moody's Investors Service, Inc. and Standard & Poor's Corporation and
maturing not more than one year from the date of creation thereof; and (iii)
readily marketable direct obligations issued by any state of the United States
of America or any political subdivision thereof having one of the two highest
rating categories obtainable from either Moody's Investors Service, Inc. or
Standard & Poor's Corporation.
"Change of Control" means any of the following: (i) the sale, lease,
conveyance or other disposition of all or substantially all of the Company's
assets as an entirety or substantially as 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
Common Equity of the Company immediately prior to such transaction own, directly
or indirectly, more than 50% of the aggregate voting power of all classes of
Common Equity of such Person or group immediately after such transactions shall
not be a Change of Control; (ii) the acquisition by the Company and any of its
Subsidiaries of 50% or more of all classes of Common Equity of the Company in
one transaction or a series of related transactions; (iii) the approval by the
Company of a Plan of Liquidation of the Company; (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 Common Equity of the Company or any
Person that possesses "beneficial ownership" (as defined in Rule 13d-3 under
3
<PAGE>
the Exchange Act), directly or indirectly, of 50% or more of the aggregate
voting power of all classes of Common Equity of the Company, or (b) less than
50% (measured by the aggregate voting power of all classes) of the Company's
Common Equity being registered under Section 12(b) or 12(g) of the Exchange Act;
or (v) a majority of the Board of Directors of the Company not being comprised
of Continuing Directors.
"Common Equity" of any Person means all Capital Stock of such Person
that is generally entitled to (i) vote in the election of directors of such
Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or others
that will control the management and policies of such Person.
"Company" means (i) ICF Kaiser International, Inc., a Delaware
corporation, and (ii) subject to the provisions of Article 6, in replacement of
or in addition to ICF Kaiser International, Inc., as the case may be, any
successor of ICF Kaiser International, Inc.
"Company Order" means a written order or request signed in the name of
the Company by its Chairman, President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Consolidated Amortization Expense" of any Person for any period means
the amortization expense of such Person and its Restricted Subsidiaries for such
period (to the extent included in the computation of Consolidated Net Income of
such Person), determined on a consolidated basis in accordance with GAAP.
"Consolidated Depreciation Expense" of any Person for any period means
the depreciation expense of such Person and its Restricted Subsidiaries for such
period (to the extent included in the computation of Consolidated Net Income of
such Person), determined on a consolidated basis in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" of any Person means, with
respect to any determination date, the ratio of (i) EBITDA for such Person's
prior four full fiscal quarters for which financial results have been reported
immediately preceding the determination date to (ii) the aggregate Fixed Charges
of such Person for such four fiscal quarters; provided, however, that if any
calculation of the Company's Consolidated Fixed Charge Coverage Ratio requires
the use of any quarter beginning prior to the date of this Indenture, such
calculation shall be made on a pro forma basis, giving effect to the issuance of
the Notes and the use of the net proceeds therefrom as if the same had occurred
at the beginning of the four-quarter period used to make such calculation; and
provided, further, that if any such calculation requires the use of any quarter
prior to the date that any Asset Sale was consummated, or that any
4
<PAGE>
Indebtedness was incurred, or that any acquisition was effected, by the Company
or any of its Restricted Subsidiaries, such calculation shall be made on a pro
forma basis, giving effect to each such Asset Sale, incurrence of Indebtedness
or acquisition, as the case may be, and the use of any proceeds therefrom, as if
the same had occurred at the beginning of the four-quarter period used to make
such calculation.
"Consolidated Income Tax Expense" means, for any Person for any period,
the provision for taxes based on income and profits of such Person and its
Restricted Subsidiaries to the extent such income or profits were included in
computing Consolidated Net Income of such Person for such period.
"Consolidated Net Income" of any Person for any period means the net
income (or loss) of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded from such net income (to the extent otherwise included
therein), without duplication: (i) the net income (or loss) of any Person
(other than a Restricted Subsidiary of the referent Person) in which any Person
other than the referent Person has an ownership interest, except to the extent
that any such income has actually been received by the referent Person or any of
its Wholly Owned Restricted Subsidiaries in the form of cash dividends or
similar cash distributions during such period; (ii) except to the extent
includible in the consolidated net income of the referent Person pursuant to the
foregoing clause (i), the net income (or loss) of any Person that accrued prior
to the date that (a) such Person becomes a Restricted Subsidiary of the referent
Person or is merged into or consolidated with the referent Person or any of its
Restricted Subsidiaries or (b) the assets of such Person are acquired by the
referent Person or any of its Restricted Subsidiaries; (iii) the net income (or
loss) of any Restricted Subsidiary of the referent Person to the extent that the
declaration or payment of dividends or similar distributions by such Restricted
Subsidiary of that income is not permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary during such
period (provided that the amount of loss excluded pursuant to this clause (iii)
shall not exceed that amount of net income excluded pursuant to this clause
(iii)); (iv) any gain (but not loss, except pursuant to clause (vii) below),
together with any related provisions for taxes on any such gain, realized during
such period by the referent Person or any of its Restricted Subsidiaries upon
(a) the acquisition of any securities, or the extinguishment of any
Indebtedness, of the referent Person or any of its Restricted Subsidiaries or
(b) any Asset Sale by the referent Person or any of its Restricted Subsidiaries;
(v) any extraordinary gain (but not extraordinary loss, except pursuant to
clause (vii) below), together with any related provision for taxes on any such
extraordinary gain, realized by the referent Person or any of its Restricted
5
<PAGE>
Subsidiaries during such period; (vi) in the case of a successor to such Person
by consolidation, merger or transfer of its assets, any earnings of the
successor prior to such merger, consolidation or transfer of assets; and (vii)
in the case of the Company, any extraordinary loss directly related to the
repurchase or repayment, substantially concurrently with the sale of the Notes,
of (a) the Company's 13.5% Senior Subordinated Notes due 1999 and warrants
issued in connection with the issuance of such notes, (b) the Bank Credit
Agreement and (c) the Company's Series 2C Senior Preferred Stock and related
Series 2C Warrants.
"Consolidated Net Tangible Assets" of any Person as of any date means
the Consolidated Tangible Assets of such Person and its Restricted Subsidiaries
less the total current liabilities of such Person and its Restricted
Subsidiaries, on a consolidated basis as of such date.
"Consolidated Tangible Assets" of any Person as of any date means the
total assets of such Person and its Restricted Subsidiaries (excluding any
assets that would be classified as "intangible assets" under GAAP) on a
consolidated basis at such date, determined in accordance with GAAP, less all
write-ups subsequent to August 31, 1993 in the book value of any asset owned by
such Person or any of its Restricted Subsidiaries.
"Consolidated Tangible Net Worth" of any Person as of any date means the
stockholders' equity (including any preferred stock that is classified as equity
under GAAP, other than Disqualified Stock) of such Person and its Restricted
Subsidiaries (excluding any equity adjustment for foreign currency translation
for any period subsequent to August 31, 1993 and any assets that would be
classified as "intangible assets" under GAAP) on a consolidated basis at such
date, as determined in accordance with GAAP, less all write-ups subsequent to
August 31, 1993 in the book value of any asset owned by such Person or any of
its Restricted Subsidiaries.
"Continuing Director" of the Company as of any date means a member of
the Board of Directors of the Company who (i) was a member of the Board of
Directors of the Company on the date of this Indenture or (ii) was nominated for
election or elected to the Board of Directors of the Company with the
affirmative vote of at least a majority of the directors who were Continuing
Directors at the time of such nomination or election.
"Corporate Trust Office of the Trustee" means the address of the Trustee
specified in Section 12.02 or such other address as the Trustee may give notice
to the Company.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
6
<PAGE>
"Default" means any event, act or condition that is, or after notice or
the passage of time or both would be, an Event of Default.
"Designated Investments" means Investments made after the date of this
Indenture in (i) any Subsidiary of the Company that is not a Wholly Owned
Restricted Subsidiary or (ii) any Joint Venture, provided that such Subsidiary
or Joint Venture is engaged in one or more Permitted Businesses.
"Disqualified Stock" means any Capital Stock that, by its terms, by the
terms of any agreement related thereto or by the terms of any security into
which it is convertible, puttable or exchangeable, is, or upon the happening of
any event or the passage of time would be, required to be redeemed or
repurchased by the issuer thereof or any of its Subsidiaries, whether or not at
the option of the holder thereof, or matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, in whole or in part, on or
prior to the final maturity date of the Notes.
"EBITDA" means, with respect to any Person for any period, without
duplication, the sum of the amounts for such period of (i) Consolidated Net
Income, (ii) Consolidated Income Tax Expense, (iii) Consolidated Amortization
Expense (but only to the extent not included in Fixed Charges), (iv)
Consolidated Depreciation Expense, (v) Fixed Charges and (vi) all other non-cash
items reducing the Consolidated Net Income of such Person and its Restricted
Subsidiaries, in each case determined on a consolidated basis in accordance with
GAAP (provided, however, that the amounts set forth in clauses (ii) through (vi)
shall be included only to the extent such amounts reduce Consolidated Net
Income), less the aggregate amount of all non-cash items, determined on a
consolidated basis, to the extent such items increase Consolidated Net Income.
"Exchange Act" means the Securities Exchange Act of 1934.
"Existing Indebtedness" means all of the Indebtedness of the Company and
its Restricted Subsidiaries that is outstanding on the date of this Indenture.
"Fixed Charges" means, with respect to any Person for any period, the
aggregate amount of (i) interest, whether expensed or capitalized, paid, accrued
or scheduled to be paid or accrued during such period (except to the extent
accrued in a prior period) in respect of all Indebtedness of such Person and its
Restricted Subsidiaries (including (a) original issue discount on any
Indebtedness and (b) the interest portion of all deferred payment obligations,
calculated in accordance with the effective interest method, in each case to the
extent attributable to such period) and (ii) dividend requirements on preferred
stock of such Person and its Subsidiaries (whether in
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cash or otherwise), but not including dividends payable solely in shares of
Qualified Capital Stock, paid, accrued or scheduled to be paid or accrued during
such period (except to the extent accrued in a prior period), and excluding
items eliminated in consolidation. For purposes of this definition, (1)
interest on a Capitalized Lease Obligation shall be deemed to accrue at the rate
of interest implicit in such Capitalized Lease Obligation in accordance with
GAAP, (2) interest on Indebtedness that is determined on a fluctuating basis
shall be deemed to have accrued at a fixed rate per annum equal to the rate of
interest of such Indebtedness in effect on the last day of the period with
respect to which Fixed Charges are being calculated, (3) interest on
Indebtedness that may optionally be determined at an interest rate based upon a
factor of a prime or similar rate, a eurocurrency interbank offered rate or
other rates, shall be deemed to have been based upon the rate actually chosen,
or, if none, then based upon such optional rate chosen as such Person may
designate and (4) Fixed Charges shall be increased or reduced by the net cost
(including without limitation amortization of discount) or benefit associated
with Hedging Obligations attributable to such period. For purposes of clause
(ii) above, dividend requirements (other than dividends payable solely in shares
of Qualified Capital Stock) shall be increased to an amount representing the
pretax earnings that would be required to cover such dividend requirements;
accordingly, the increased amount shall be equal to a fraction, the numerator of
which is such dividend requirements and the denominator of which is 1 minus the
applicable actual combined Federal, state, local and foreign income tax rate of
such Person and its Subsidiaries (expressed as a decimal), on a consolidated
basis, for the fiscal year immediately preceding the date of the transaction
giving rise to the need to calculate Fixed Charges.
"Foreign Asset Sale" means any Asset Sale in respect of the Capital
Stock or assets of a Foreign Subsidiary.
"Foreign Subsidiary" means any Subsidiary of the Company that is
organized under the laws of any jurisdiction other than the United States of
America, any state thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the date of this Indenture.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any interest rate swap agreement, foreign currency exchange
agreement, interest rate collar agreement, option or futures contract or other
similar
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agreement or arrangement relating to interest rates or foreign exchange
rates.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" of any Person at any date means, without duplication:
(i) all liabilities, contingent or otherwise, of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof); (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (iii) all
obligations of such Person in respect of letters of credit or other similar
instruments (or reimbursement obligations with respect thereto), other than
standby letters of credit issued for the benefit of, or surety or performance
bonds issued by, such Person in the ordinary course of business to the extent
such letters of credit are not drawn upon; (iv) all obligations of such Person
with respect to Hedging Obligations; (v) all obligations of such Person to pay
the deferred and unpaid purchase price of property or services, except trade
payables and accrued expenses incurred by such Person in the ordinary course of
business in connection with obtaining goods, materials or services, which
payable is not overdue according to industry practice or the original terms of
sale unless such payable is being contested in good faith; (vi) the maximum
fixed repurchase price of all Disqualified Stock of such Person; (vii) all
Capitalized Lease Obligations of such Person; (viii) all Indebtedness of others
secured by a Lien on any asset of such Person, whether or not such Indebtedness
is assumed by such Person, other than a pledge by a Single Purpose Subsidiary of
the Capital Stock of an Unrestricted Subsidiary or Joint Venture of such Single
Purpose Subsidiary to secure Indebtedness of such Unrestricted Subsidiary or
Joint Venture incurred to finance a project constituting one or more Permitted
Businesses; (ix) all Indebtedness of others guaranteed by, or otherwise the
Liability of, such Person to the extent of such guarantee or Liability; and (x)
all Attributable Indebtedness. The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all unconditional
obligations as described above, the maximum liability of such Person for any
such contingent obligations at such date and, in the case of clause (viii), the
fair market value of any asset subject to a Lien securing the Indebtedness of
others on the date that the Lien attaches. For purposes of the first sentence
hereof, the "maximum fixed repurchase price" of any Disqualified Stock that does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Disqualified Stock as if such Disqualified Stock were purchased on
any date on which Indebtedness shall be required to be determined pursuant to
this Indenture, and if such price is based upon, or measured by, the fair market
value of such Disqualified Stock (or any equity security for which it may be
exchanged or converted), such fair market value shall be determined in good
faith by the Board of Directors of such
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Person, which determination shall be evidenced by a Board Resolution.
"Indenture" means this Indenture as amended from time to time.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
reasonable judgment of the Company's Board of Directors, qualified to perform
the task for which it has been engaged and disinterested and independent with
respect to the Company and its Affiliates.
"Interest Payment Date" has the meaning assigned to such term in the
Notes.
"Investments" of any Person means (i) all investments by such Person in
any other Person in the form of loans, advances or capital contributions or
similar credit extensions constituting Indebtedness of such Person, and any
guarantee of Indebtedness of any other Person, (ii) all purchases (or other
acquisitions for consideration) by such Person of Indebtedness, Capital Stock or
other securities of any other Person and (iii) all other items that would be
classified as investments (including without limitation purchases of assets
outside the ordinary course of business) on a balance sheet of such Person
prepared in accordance with GAAP; provided, however, that advances to
non-executive employees and 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, shall not be deemed to constitute Investments.
"Joint Venture" means (i) a corporation of which less than a majority of
the aggregate voting power of all classes of the Common Equity is owned by the
Company or its Restricted Subsidiaries and (ii) any entity other than a
corporation in which the Company and its Restricted Subsidiaries own less than a
majority of the Common Equity of such entity.
"Junior Subordinated Indebtedness" of the Company at any date means
Indebtedness of the Company which by its terms, or by the terms of any agreement
or instrument pursuant to which such Indebtedness is issued, (i) is expressly
subordinated in right of payment to the Notes and (ii) provides that no payment
of principal of such Indebtedness by way of sinking fund, mandatory redemption,
defeasance or otherwise is required to be made by the Company (including without
limitation at the option of the holder thereof) at any time prior to the
maturity of the Notes.
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"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or other similar encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law (including without limitation any conditional sale or other title
retention agreement, and any lease in the nature thereof, any option or other
agreement to sell, and any filing of, or agreement to give, any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Net Proceeds" with respect to any Asset Sale by any Person means the
aggregate net proceeds received by such Person from such Asset Sale (including
without limitation the amount of cash applied to repay Indebtedness secured by
any asset involved in such Asset Sale or otherwise received as consideration for
the assumption or incurrence of liabilities incurred in connection with or in
anticipation of such Asset Sale) after (i) provision for all income or other
taxes measured by or resulting from such Asset Sale or the transfer of the
proceeds of such Asset Sale to such Person and (ii) payment of all brokerage
commissions and the underwriting and other fees and expenses related to such
Asset Sale, whether such proceeds are in cash or property (valued at the fair
market value thereof at the time of receipt as determined in good faith by the
Board of Directors of such Person, which determination shall be evidenced by a
Board Resolution).
"Net Reductions in Investments" means the amount of cash and Cash
Equivalents, less all fees and expenses incurred or accrued in connection with
the realization or collection of such cash and Cash Equivalents, and after
giving effect to all taxes payable with respect thereto, received with respect
to any Designated Investment, whether from the payment of interest on
Indebtedness, dividends, repayments of loans or advances or other transfers of
assets from the Person in which such Designated Investment was made, but only to
the extent that such cash or Cash Equivalents have been paid to the Company or
one or more Wholly Owned Restricted Subsidiaries of the Company in compliance
with all applicable laws, rules and regulations and all relevant documents,
agreements and instruments.
"Non-Recourse Indebtedness" of a Single Purpose Subsidiary means
Indebtedness for which (i) the sole legal recourse for collection of principal,
premium, if any, and interest on such Indebtedness is against (a) 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 or
(b) 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 plus a reasonable amount of
working capital, (ii) no assets of such Single Purpose Subsidiary, other than
those assets
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identified in clause (i)(a) of this definition, may be realized upon in
collection of principal, premium, if any, or interest on such Indebtedness and
(iii) neither the Company nor any Restricted Subsidiary of the Company, other
than the referent Single Purpose Subsidiary, is directly or indirectly liable to
make any payment thereon, has made any guarantee of payment or performance of
such Indebtedness 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" means the Notes described above issued under this Indenture.
"Officer" means the Chief Executive Officer, Chief Operating Officer,
Chief Financial Officer, the Treasurer, any Assistant Treasurer, Controller,
Secretary or any Vice President of the Company.
"Officers' Certificate" means a certificate signed by two Officers, one
of whom must be the Company's Chief Executive Officer, Chief Financial Officer
or Controller.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Payment Restriction", with respect to a Subsidiary of any Person, means
any encumbrance, restriction or limitation, whether by operation of the terms of
its charter or by reason of any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation, on the ability of (i) such Subsidiary
to (a) pay dividends or make other distributions on its Capital Stock or make
payments on any obligation, liability or Indebtedness owed to such Person or any
other Subsidiary of such Person, (b) make loans or advances to such Person or
any other Subsidiary of such Person or (c) transfer any of its properties or
assets to such Person or any other Subsidiary of such Person or (ii) such Person
or any other Subsidiary of such Person to receive or retain any such (a)
dividends, distributions or payments, (b) loans or advances or (c) transfer of
properties or assets.
"Permitted Businesses" means the businesses of providing consulting,
engineering or construction services to public and private sector clients in the
environment, energy, infrastructure and industry markets.
"Permitted Investments" means: (i) direct obligations of the United
States of America or any agency thereof, or obligations guaranteed by the United
States of America or any agency thereof, in each case maturing within 180 days
of the date of acquisition thereof; (ii) certificates of deposits or Eurodollar
deposits, due within 180 days of the date of
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acquisition thereof, with a commercial bank which is organized under the laws of
the United States of America or any state thereof having capital funds of at
least $500,000,000 or more; and (iii) commercial paper given the highest rating
by two established national credit rating agencies and maturing not more than
180 days from the date of acquisition thereof.
"Person" means any individual, corporation, partnership, joint venture,
incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Plan of Liquidation", with respect to any Person, means a plan that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise): (i) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of such Person otherwise than as an entirety or
substantially as an entirety; and (ii) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and all
or substantially all of the remaining assets of such Person to Holders of
Capital Stock of such Person.
"Qualified Capital Stock" means Capital Stock that is not Disqualified
Stock.
"Refinancing Indebtedness" means Indebtedness of the Company or a
Restricted Subsidiary of the Company issued in exchange for, or the proceeds
from the issuance and sale or disbursement of which are used substantially
concurrently to repay, redeem, refund, refinance, discharge or otherwise retire
for value, in whole or in part (collectively, "repay"), or constituting an
amendment, modification or supplement to or a deferral or renewal of
(collectively, an "amendment"), any Indebtedness of the Company or any of its
Restricted Subsidiaries existing immediately after the original issuance of the
Notes or incurred pursuant to the provisions of Section 5.04 in a principal
amount not in excess of the principal amount of the Indebtedness so refinanced;
provided that: (i) the Refinancing Indebtedness is the obligation of the same
Person, and is subordinated to the Notes, if at all, to the same extent, as the
Indebtedness being repaid; (ii) the Refinancing Indebtedness is scheduled to
mature either (a) no earlier than the Indebtedness being repaid or (b) after the
maturity date of the Notes; and (iii) the portion, if any, of the Refinancing
Indebtedness that is scheduled to mature on or prior to the maturity date of the
Notes has a Weighted Average Life to Maturity at the time such Refinancing
Indebtedness is incurred that is equal to or greater than the Weighted Average
Life to Maturity of the portion of the Indebtedness being repaid that is
scheduled to mature on or prior to the maturity date of the Notes.
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"Related Business Investment" means any Investment directly by the
Company or one or more of its Wholly Owned Restricted Subsidiaries in any
business that is closely related to or complements the business of the Company
and its Subsidiaries as such business exists on the date thereof.
"Representative" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Indebtedness.
"Restricted Debt Payment" means any purchase, redemption, defeasance
(including without limitation in substance or legal defeasance) or other
acquisition or retirement for value, directly or indirectly, by the Company or a
Subsidiary of the Company, prior to the scheduled maturity or prior to any
scheduled repayment of principal or sinking fund payment, as the case may be, in
respect of Indebtedness of the Company that is subordinate in right of payment
to the Notes other than a Restricted Debt Payment made with the proceeds of a
substantially concurrent sale (other than to a Subsidiary of the Company or an
employee stock ownership plan) of the Company's Qualified Capital Stock,
provided that all Indebtedness so purchased, redeemed, defeased or otherwise
acquired or retired for value promptly is surrendered for cancellation to the
trustee for such Indebtedness.
"Restricted Investment", with respect to any Person, means any
Investment by such Person in any of its Affiliates or in any Person other than a
Wholly Owned Restricted Subsidiary other than (i) a Permitted Investment or (ii)
an Investment made with the proceeds of a substantially concurrent sale (other
than to a Subsidiary of the Company or an employee stock ownership plan) of the
Company's Qualified Capital Stock.
"Restricted Payment" means with respect to any Person: (i) the
declaration of any dividend (other than a dividend declared by a Wholly Owned
Restricted Subsidiary to holders of its Common Equity) or the making of any
other payment or distribution of cash, securities or other property or assets in
respect of such Person's Capital Stock, except that a dividend payable solely in
Qualified Capital Stock of such Person shall not constitute a Restricted Payment
(for purposes of this clause (i), the declaration of any such dividend, or the
making of any other such distribution, by any Restricted Subsidiary shall only
constitute a Restricted Payment to the extent of the amounts paid or payable to
Persons other than the Company or a Wholly Owned Restricted Subsidiary); (ii)
any payment on account of the purchase, redemption, retirement or other
acquisition for value of such Person's Capital Stock or any other payment or
distribution made in respect thereof, either directly or indirectly (other than
a payment solely in Qualified Capital Stock); (iii) any Restricted Investment;
or (iv) any Restricted Debt Payment.
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"Restricted Subsidiary" means each of the Subsidiaries of the Company
which, as of the determination date, is not an Unrestricted Subsidiary of the
Company.
"Sale and Leaseback Transaction" means with respect to any Person an
arrangement with any bank, insurance company or other lender or investor or to
which such lender or investor is a party, providing for the leasing by such
Person or any of its Subsidiaries of any property or asset of such Person or any
of its Subsidiaries which has been or is being sold or transferred by such
Person or such Subsidiary to such lender or investor or to any Person to whom
funds have been or are to be advanced by such lender or investor on the security
of such property or asset. Notwithstanding the foregoing, no transaction
exclusively between the Company and any Wholly Owned Restricted Subsidiary shall
be deemed to constitute a Sale and Leaseback Transaction.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933.
"Senior Indebtedness" means all Indebtedness of the Company other than
Indebtedness that is specifically designated, by the terms of the instrument
creating or evidencing the same, as not being senior in right of payment to the
Notes.
"Single Purpose Subsidiary" of any Person means a Subsidiary of such
Person which has no Subsidiaries other than Unrestricted Subsidiaries and the
activities of which are limited to (i) 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 (ii) the development, engineering, design, project management, construction
or operation of such project.
"Subsidiary" of any Person means (i) any corporation of which at least a
majority of the aggregate voting power of all classes of the Common Equity is
owned by such Person directly or through one or more other Subsidiaries of such
Person and (ii) any entity other than a corporation in which such Person,
directly or indirectly, owns at least a majority of the Common Equity of such
entity.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date
hereof, except as provided in Section 10.03.
"Trustee" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
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"Unrestricted Subsidiary" means American Venture Holdings, Inc., a
Delaware corporation, American Venture Investments Incorporated, a Delaware
corporation, Excell Development Construction, Inc., a Delaware corporation, ICF
Kaiser Holdings Unlimited, Inc., a Delaware corporation, ICF Leasing
Corporation, Inc., a Delaware corporation, International Systems, Inc., a
Colorado corporation, Cygna Energy Services, a California corporation, Cygna
Energy Services Michigan, Inc., a Michigan corporation, and ICF Environnement, a
French corporation, and each of the other Subsidiaries of the Company so
designated by a resolution adopted by the Board of Directors of the Company and
whose creditors have no direct or indirect recourse (including without
limitation recourse with respect to the payment of principal of or interest on
Indebtedness of such Subsidiary) to the Company or a Restricted Subsidiary other
than a Lien on the Capital Stock of such Unrestricted Subsidiary; provided,
however, that (a) no Subsidiary may be an Unrestricted Subsidiary if it owns any
Capital Stock of a Restricted Subsidiary and (b) the Board of Directors of the
Company will be prohibited after the date of this Indenture from designating as
an Unrestricted Subsidiary any Subsidiary existing on the date of this
Indenture. The Board of Directors of the Company may designate an Unrestricted
Subsidiary to be a Restricted Subsidiary, provided that (i) any such designation
shall be deemed to be an incurrence by the Company and its Restricted
Subsidiaries of the Indebtedness (if any) of such designated Subsidiary for
purposes of the provisions of Section 5.04 as of the date of such designation
and (ii) immediately after giving effect to such designation and the incurrence
of any such additional Indebtedness, the Company and its Restricted Subsidiaries
could incur $1.00 of additional Senior Indebtedness pursuant to the provisions
of Section 5.04. Any such designation or redesignation by the Board of
Directors shall be evidenced to the Trustee by the filing with the Trustee of a
certified copy of the Board Resolution of the Company giving effect to such
designation or redesignation and an Officers' Certificate certifying that such
designation or redesignation complied with the foregoing conditions and setting
forth the underlying calculations of such Officers' Certificate, and upon which
certificate the Trustee shall conclusively rely without any investigation
whatsoever.
"U.S. Government Obligations" means direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged.
"Voting Stock", with respect to any Person, means securities of any
class of Capital Stock of such Person entitling the holders thereof (whether at
all times or only so long as no senior class of stock has voting power by reason
of any contingency) to vote in the election of members of the board of directors
of such Person.
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"Weighted Average Life to Maturity", when applied to any Indebtedness at
any date, means the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of the Company means a Restricted
Subsidiary of the Company, of which 100% of the Common Equity (except for
directors' qualifying shares or certain minority interests owned by other
Persons solely due to local law requirements that there be more than one
stockholder, but which interest is not in excess of what is required for such
purpose) is owned directly by the Company or through one or more Wholly Owned
Restricted Subsidiaries of the Company.
"Wholly Owned Subsidiary" of the Company means a Subsidiary of the
Company, of which 100% of the Common Equity (except for directors' qualifying
shares or certain minority interests owned by other Persons solely due to local
law requirements that there be more than one stockholder, but which interest is
not in excess of what is required for such purpose) is owned directly by the
Company or one or more Wholly Owned Subsidiaries of the Company.
SECTION 1.02 OTHER DEFINITIONS
<TABLE>
<CAPTION>
Defined
Term in Section
---- ----------
<S> <C>
"Affiliate Transaction"............ 5.08(a)
"Asset Sale Offer Date"............ 5.09(b)
"Asset Sale Offer Period".......... 3.04(a)
"Asset Sale Payment Date".......... 3.04(a)
"Change of Control Offer".......... 5.03(a)
"Change of Control Payment Date"... 5.03(a)
"Event of Default"................. 7.01
"incur"............................ 5.04(a)
"Legal Holiday".................... 12.06
"Paying Agent"..................... 2.03
"Registrar"........................ 2.03
"Successor"........................ 6.01
</TABLE>
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
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All terms used in this Indenture that are defined by the TIA, defined by
TIA reference to another statute or defined by SEC rule under the TIA have the
meanings so assigned to them.
SECTION 1.04 RULES OF CONSTRUCTION
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2
THE NOTES
SECTION 2.01 FORM AND DATING
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A. The Notes may have notations, legends
or endorsements required by law, stock exchange rule or usage. Each Note shall
be dated the date of its authentication. The Notes shall be in denominations of
$1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and to the extent applicable
the Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
SECTION 2.02 EXECUTION AND AUTHENTICATION
Two Officers shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Notes and may be in
facsimile form.
If an Officer whose signature is on a Note no longer holds that office
at the time the Note is authenticated, the Note nevertheless shall be valid.
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A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall authenticate Notes for original issue up to the
aggregate principal amount stated in paragraph 4 of the Notes, upon receipt of a
Company Order. The aggregate principal amount of Notes outstanding at any time
may not exceed such amount except as provided in Section 2.06.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
SECTION 2.03 REGISTRAR AND PAYING AGENT
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall
notify the Trustee of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
Each Note shall be dated the date of its authentication.
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, or interest on the Notes, and will notify the
Trustee of any default by the Company in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee. Upon payment over to the Trustee,
the Paying Agent (if other than the Company or a Subsidiary) shall have no
further liability for the money. If the Company or a Subsidiary acts as
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Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent.
SECTION 2.05 REGISTRATION OF TRANSFER AND EXCHANGE
Where Notes are presented to the Registrar with a request to register a
transfer of or to exchange the Notes for an equal principal amount of Notes of
other denominations, the Registrar shall register the transfer or make the
exchange if its requirements for such transactions are met; provided, however,
that any Note presented or surrendered for registration of transfer or exchange
shall be duly endorsed or accompanied by a written instruction of transfer in a
form satisfactory to the Registrar and the Trustee, duly executed by the Holder
thereof or the Holder's attorney duly authorized in writing. To permit
registrations of transfer and exchanges, the Company shall issue and the Trustee
shall authenticate Notes at the Registrar's request.
No service charge shall be made to a Holder for any registration of
transfer or exchange (except as otherwise expressly permitted herein), but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than such
transfer tax or similar governmental charge payable upon exchanges pursuant to
Section 10.05).
Without the prior consent of the Company, the Registrar is not required
(a) to register the transfer or exchange of any Note selected for redemption,
(b) to register the transfer or exchange of any Note for a period of 15 days
before a selection of Notes to be redeemed or (c) to register the transfer or
exchange of a Note between a record date and the next succeeding interest
payment date.
SECTION 2.06 REPLACEMENT NOTES
If any mutilated Note is surrendered to the Trustee, or the Company and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon receipt of a
Company Order, shall authenticate a replacement Note if the Trustee's
requirements are met. The Trustee or the Company may require that the Holder
supply an indemnity bond that is sufficient in the judgment of the Trustee and
the Company to protect the Company, the Trustee, any Agent or any authenticating
agent from any loss which any of them may suffer if a Note is replaced. The
Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company.
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SECTION 2.07 OUTSTANDING NOTES
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation
and those described in this Section 2.07 as not outstanding.
If a Note is replaced pursuant to Section 2.06, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
5.01, it ceases to be outstanding and interest on it ceases to accrue.
Except as set forth in Section 2.08, a Note does not cease to be
outstanding because the Company or an Affiliate holds the Note.
SECTION 2.08 TREASURY NOTES
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or by any Affiliate of the Company shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which the Trustee actually knows are so owned shall be so disregarded.
SECTION 2.09 TEMPORARY NOTES
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes.
SECTION 2.10 CANCELLATION
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee shall cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation. Unless the Company shall direct
by a written order signed by two Officers that canceled Notes be returned to it,
certification of their destruction shall be delivered to the Company. The
Company may not issue new Notes to replace Notes that it has paid or that
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have been delivered to the Trustee for cancellation, provided, however, that the
Trustee shall not be required to destroy Notes.
SECTION 2.11 DEFAULTED INTEREST
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful, any
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 5.01. The Company, with the consent of the Trustee, shall fix
each such special record date and payment date. At least 15 days before the
record date, the Company (or the Trustee, in the name of and at the expense of
the Company) shall mail to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.
SECTION 2.12 CUSIP NUMBERS
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers.
ARTICLE 3
ASSET SALE OFFER
SECTION 3.01 NOTICES TO TRUSTEE
If the Company offers to purchase Notes pursuant to the provisions of
Section 3.04, it shall furnish to the Trustee, within five days after an Asset
Sale Offer Date, an Officers' Certificate setting forth the Asset Sale Payment
Date, the principal amount of Notes the Company is offering to purchase and the
purchase price of such Notes, and further setting forth a statement to the
effect that (a) the Company has consummated an Asset Sale and (b) the conditions
set forth in Section 5.09(a) have been satisfied.
SECTION 3.02 NOTICES TO HOLDERS
(a) As provided in Section 3.04, within 15 days after an Asset Sale
Offer Date, the Company shall mail a notice by first-class mail to each Holder.
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(b) The notice shall state:
(1) that an Asset Sale Offer is being made pursuant to Section 3.04
and the length of time the Asset Sale Offer will remain open;
(2) the purchase price and the Asset Sale Payment Date;
(3) the principal amount of Notes the Company is offering to
purchase;
(4) that any Note not tendered or accepted for payment will continue
to accrue interest;
(5) that any Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest on the Asset Sale Payment
Date;
(6) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse
side of the Note completed, to the Company, a depository if
appointed by the Company, or a Paying Agent at the address
specified in the notice prior to termination of the Asset Sale
Offer;
(7) that Holders will be entitled to withdraw their election if the
Company, depository or Paying Agent, as the case may be,
receives, not later than the expiration of the Asset Sale Offer
Period, or such longer period as may be required by law, a
telegram, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have the Note purchased;
(8) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the aggregate principal amount of Notes offered
to be purchased, the Company shall select the Notes to be
purchased on a pro rata basis or by lot (with such adjustments as
may be deemed appropriate by the Company so that only Notes in
denominations of $1,000 or integral multiples thereof shall be
purchased);
(9) that Holders whose Notes are purchased only in part will be
issued new Notes equal in
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<PAGE>
principal amount to the unpurchased portion of the Notes
surrendered; and
(10) the instructions that Holders must follow to tender their Notes.
(c) At the Company's written request, the Trustee shall give any notice
required in this Section 3.02 in the Company's name and at its expense;
provided, however, that the Company shall deliver to the Trustee on or prior to
the fifth day following an Asset Sale Offer Date an Officers' Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in this Section 3.02.
SECTION 3.03 DEPOSIT OF PURCHASE PRICE
One Business Day prior to the Asset Sale Payment Date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
purchase price of, and accrued interest on, all Notes to be purchased on that
date. Upon completion of any Asset Sale Offer, the Trustee shall return to the
Company any money not required for that purpose.
If the Company complies with the preceding paragraph, interest on the
Notes or portions thereof purchased pursuant to any Asset Sale Offer will cease
to accrue on the Asset Sale Payment Date. If any Note to be purchased shall not
be so paid on the Asset Sale Payment Date, because of the failure of the Company
to comply with the preceding paragraph, then interest will be paid on the unpaid
principal from the Asset Sale Payment Date until such principal is paid and on
any interest not paid on such unpaid principal, in each case, at the rate
provided in the Notes and in Section 5.01.
SECTION 3.04 ASSET SALE OFFER
(a) Within 15 days after an Asset Sale Offer Date, the Company shall
mail (with notice to the Trustee) or shall cause the Trustee to mail (in the
Company's name and at its expense) notice of any Asset Sale Offer to each Holder
of Notes as set forth in Section 3.02. The Asset Sale Offer shall be deemed to
have commenced on the date of such mailing and shall terminate 20 Business Days
after its commencement unless a longer offering period is required by law (the
"Asset Sale Offer Period"). Promptly after the termination of the Asset Sale
Offer Period (the "Asset Sale Payment Date"), the Company shall purchase and
mail or deliver payment for, on a pro rata basis or as selected by lot, from
Holders tendering their Notes pursuant to an Asset Sale Offer, the amount of
Notes required to be purchased pursuant to Section 5.09. If an Asset Sale
Payment Date is on or after an interest payment record date and on or before the
related Interest Payment Date, accrued interest will be paid to the Person in
whose name a Note is registered at the close of
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business on such record date, and no additional interest will be payable to
Holders who tender Notes pursuant to any such Asset Sale Offer.
(b) On or before any Asset Sale Payment Date, the Company, to the
extent lawful, shall (i) accept for payment (on a pro rata basis or as selected
by lot) Notes or portions thereof tendered pursuant to the Asset Sale Offer,
(ii) if the Company appoints a depositary or Paying Agent, deposit with such
depositary or Paying Agent money sufficient to pay the purchase price of all
Notes or portions thereof so accepted, (iii) deliver or cause the depositary or
Paying Agent to deliver to the Trustee Notes so accepted and (iv) deliver an
Officers' Certificate identifying the Notes or portions thereof accepted for
payment by the Company in accordance with the terms of this Section 3.04. The
depositary, the Paying Agent or the Company, as the case may be, promptly shall
mail or deliver to each tendering Holder an amount equal to the purchase price
of the Notes tendered by such Holder and accepted by the Company for purchase
and the Trustee promptly shall authenticate and mail or deliver to any such
Holder a new Note equal in principal amount to any unpurchased portion of the
Note surrendered by such Holder. Any Notes not so accepted promptly shall be
mailed or delivered by the Company to the Holder thereof. The Company will
publicly announce the results of any Asset Sale Offer on the Asset Sale Payment
Date.
(d) Any offer to purchase Notes pursuant to this Section 3.04 shall be
made pursuant to the provisions of Sections 3.01, 3.02 and 3.03.
(e) Any such offer shall be conducted in compliance with applicable
tender offer rules, including Section 14(e) of the Exchange Act and Rule 14e-1
thereunder, and any other applicable securities laws or regulations.
ARTICLE 4
OPTIONAL REDEMPTION
SECTION 4.01 REDEMPTION DATE; REDEMPTION PRICE
The Notes may not be redeemed prior to December 31, 1998, but will be
redeemable at the option of the Company, in whole or in part, at any time on or
after December 31, 1998, at the following redemption prices (expressed as
percentages of principal amount), together with accrued and unpaid interest
thereon to the redemption date, if redeemed during the 12-month period beginning
December 31:
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<TABLE>
<CAPTION>
Optional
Year Redemption Price
---- ----------------
<S> <C>
1998 108.0%
1999 106.4
2000 104.8
2001 103.2
2002 101.6
</TABLE>
On and after the redemption date, interest will cease to accrue on the Notes or
portions thereof called for redemption.
SECTION 4.02 NOTICES TO TRUSTEE AND PAYING AGENT
If the Company elects to redeem Notes pursuant to Section 4.01 and
Section 5 of the Notes, it shall notify the Trustee and the Paying Agent in
writing of the redemption date and the principal amount of Notes to be redeemed.
The Company shall give each notice provided for in this Section 4.02 at least 60
days before the redemption date, together with an Officers' Certificate stating
that such redemption shall comply with the conditions contained herein and in
the Notes.
SECTION 4.03 SELECTION OF NOTES TO BE REDEEMED
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes being redeemed are listed or, if the Notes are not listed on a national
securities exchange, on a pro rata basis, by lot or by such other method as the
Trustee shall deem fair and appropriate.
The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption. The Trustee promptly shall notify the Company
in writing of such Notes selected for redemption and, in the case of Notes
selected for partial redemption, the principal amount to be redeemed. The
Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Notes that have denominations larger than
$1,000. The Notes and portions thereof the Trustee selects shall be in amounts
of $1,000 or integral multiples of $1,000. Provisions of this Indenture that
apply to Notes called for redemption also apply to portions of Notes called for
redemption.
SECTION 4.04 NOTICE TO HOLDERS
At least 30 days but not more than 60 days prior to a redemption date,
the Company shall mail or cause the mailing of a notice of redemption by
first-class mail to each Holder of Notes to be redeemed and the Trustee and
Paying Agent.
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The notice shall identify the Notes, including "CUSIP" number, to be
redeemed and shall state:
(1) the redemption date;
(2) the redemption price and the amount of accrued interest, if any,
to be paid;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price and accrued interest, if any;
(5) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date and the only remaining right of the Holders is to
receive payment of the redemption price, together with accrued and unpaid
interest thereon to the redemption date, upon surrender to the Trustee or
the Paying Agent of the Notes so redeemed;
(6) if any Note is being redeemed in part, the portion of the
principal amount (equal to $1,000 or any integral multiple thereof) of such
Note to be redeemed, and that, on and after the redemption date, upon
surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion thereof shall be issued without charge to the
Holder; and
(7) if less than all of the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be redeemed,
as well as the aggregate principal amount of Notes to be redeemed and the
aggregate principal amount of Notes estimated to be outstanding after the
redemption.
At the Company's request, the Trustee shall give the notice of redemption in the
Company's name and at the Company's expense.
SECTION 4.05 EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed, Notes called for redemption become
due and payable on the redemption date and at the redemption price and shall
cease to bear interest from and after the redemption date (unless the Company
shall default in the payment of the redemption price or accrued interest). Upon
surrender to the Paying Agent, such Notes shall be paid at the redemption price,
plus accrued interest to the redemption date but any interest installment with
respect to an Interest Payment Date that is on or prior to such redemption date
shall be payable on such Interest Payment Date to Holders of record at the close
of business on the record date referred to in the Notes.
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<PAGE>
SECTION 4.06 DEPOSIT OF REDEMPTION PRICE
At least one Business Day prior to the redemption date, the Company
shall deposit with the Paying Agent money sufficient to pay the redemption price
of and accrued interest on all Notes or portions thereof to be redeemed on that
date.
If any Note surrendered for redemption in the manner provided in this
Indenture shall not be so paid on the redemption date due to the failure of the
Company to deposit sufficient funds with the Paying Agent, interest shall
continue to accrue from the redemption date until such payment is made on the
unpaid principal and, to the extent lawful, on any interest not paid on such
unpaid principal, in each case at the date and in the manner provided in the
Notes.
SECTION 4.07 NOTES REDEEMED IN PART
Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
ARTICLE 5
COVENANTS
SECTION 5.01 PAYMENT OF NOTES
The Company shall pay the principal of, premium, if any, and interest on
the Notes on the dates and in the manner provided in the Notes. Principal of,
premium, if any, and interest shall be considered paid on the date due if the
Paying Agent, other than the Company or a Subsidiary of the Company, holds on
that date money deposited by the Company designated for and sufficient to pay
all principal of, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 5.02 MAINTENANCE OF OFFICE OR AGENCY
The Company will maintain, in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee or the
Registrar) where Notes may be surrendered
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<PAGE>
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company also from time to time may designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and from time to time may rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.
SECTION 5.03 CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control, the Company will offer
(a "Change of Control Offer") to purchase all outstanding Notes at a purchase
price equal to 101% of the aggregate principal amount of the Notes, plus accrued
and unpaid interest to the date of purchase. The Change of Control Offer shall
be deemed to have commenced upon mailing of the notice described in Section
5.03(b), which notice shall specify a payment date (which shall be no earlier
than 30 days nor later than 60 days from the date such notice is mailed), and
shall terminate on the specified payment date, unless a longer offering period
is required by law. Promptly after the termination of the Change of Control
Offer (the "Change of Control Payment Date"), the Company will purchase and mail
or deliver payment for all Notes tendered in response to the Change of Control
Offer. If the Change of Control Payment Date is on or after an interest payment
record date and on or before the related Interest Payment Date, any accrued
interest will be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest will be
payable to Holders who tender Notes pursuant to the Change of Control Offer.
(b) Within 30 days after any Change of Control, the Company, or the
Trustee at the Company's request and expense, will mail or cause to be mailed to
all Holders on the date of the Change of Control a notice of the occurrence of
such Change of Control. Such notice, which shall govern the terms of the Change
of Control Offer, shall state:
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<PAGE>
(1) that a Change of Control has occurred and that the Holders have
the right to require the Company to purchase any or all of the
outstanding Notes at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if
any, to the date of purchase;
(2) that the Change of Control Offer is being made pursuant to this
Section 5.03 and the length of time the Change of Control Offer
will remain open;
(3) the purchase price and the Change of Control Payment Date;
(4) that any Note not tendered will continue to accrue interest;
(5) that any Note accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest on the Change of
Control Payment Date;
(6) that Holders electing to have a Note purchased pursuant to any
Change of Control Offer will be required to surrender the Note,
with the form entitled "Option of Holder to Elect Purchase" on
the reverse side of the Note completed, to the Company, a
depository if appointed by the Company or a Paying Agent at the
address specified in the notice prior to termination of the
Change of Control Offer;
(7) that Holders will be entitled to withdraw their election if the
Company, depository or Paying Agent, as the case may be,
receives, not later than the expiration of the Change of Control
Offer, or such longer period as may be required by law, a
telegram, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have the Note purchased;
(8) that Holders whose Notes are purchased only in part will be
issued Notes equal in principal amount to the unpurchased portion
of the Notes surrendered;
(9) the instructions, determined by the Company consistent with this
Indenture, that Holders must follow in order to have their Notes
purchased;
(10) the circumstances and relevant facts regarding such Change of
Control (including without
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<PAGE>
limitation information with respect to pro forma historical
income, cash flow and capitalization after giving effect to such
Change of Control); and
(11) information regarding the Persons acquiring control and an
information regarding such Person's business plans going forward.
(c) On, but in no event before, a Change of Control Payment Date, the
Company, to the extent lawful, will: (i) deposit with the depository or Paying
Agent, if the Company appoints any depository or Paying Agent, money in
immediately available funds sufficient to pay the purchase price of all Notes
tendered; (ii) deliver or cause such depository or Paying Agent to deliver to
the Trustee Notes so tendered; and (iii) deliver an Officers' Certificate
identifying the Notes accepted for payment by the Company in accordance with the
terms of this Section 5.03. The depository, the Paying Agent or the Company, as
the case may be, promptly shall mail or deliver to each tendering Holder an
amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Trustee promptly shall
authenticate and mail or deliver to such Holders a new Note equal in principal
amount to any unpurchased portion of the Note so surrendered. Any Notes not
accepted promptly shall be mailed or delivered by the Company to the Holder
thereof. The Company publicly will announce the results of the Change of
Control Offer on the Change of Control Payment Date.
(d) Neither the Board of Directors nor the stockholders of the Company
may adopt a Plan of Liquidation that provides for or contemplates, or the
effectuation of which is preceded by, (i) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company otherwise
than substantially as an entirety, and (ii) the distribution of all or
substantially all of the proceeds of such sale, lease, conveyance or other
disposition and of the remaining assets of the Company to the holders of the
Company's Capital Stock unless, prior to making any liquidating distribution
pursuant to such Plan of Liquidation, the Company makes provision for the
satisfaction of its obligations hereunder and under the Notes. The Company
shall be deemed to have made provision for such payments only if the Company
delivers in trust to the Trustee or Paying Agent (other than the Company or a
Subsidiary) money or U.S. Government Obligations maturing as to principal and
interest in such amounts and at such times as are sufficient without
consideration of any reinvestment of such principal or interest to pay, when
due, the principal of and interest on the Notes and also delivers to the Trustee
an Opinion of Counsel or a tax ruling to the effect that Holders of the Notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such action and will be subject to federal income tax on the same
amount and in the same manner and at the same times as would have been the case
if such action has not been taken;
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<PAGE>
provided, however, that the Company shall not make any liquidating distribution
until after the Company shall have certified to the Trustee with an Officers'
Certificate at least five days prior to the making of any liquidating
distribution that it has complied with the provisions of this Section 5.03(d)
and that no Default or Event of Default then exists or would occur as a result
of any such liquidating distribution.
(e) Any Change of Control Offer will be conducted in compliance with
applicable tender offer rules, including Section 14(e) of the Exchange Act and
Rule 14e-1 promulgated thereunder, and any other applicable securities laws or
regulations.
SECTION 5.04 LIMITATIONS ON ADDITIONAL INDEBTEDNESS
(a) After the date hereof: (i) the Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, assume, guarantee, extend the maturity of or otherwise become liable with
respect to (collectively, "incur"), any Indebtedness (including without
limitation Acquired Indebtedness), other than (a) Junior Subordinated
Indebtedness incurred by the Company in compliance with the provisions of the
immediately following sentence or (b) Indebtedness between the Company and its
Wholly Owned Restricted Subsidiaries (provided that such Indebtedness of the
Company to any Wholly Owned Restricted Subsidiary is expressly subordinated in
right of payment to the Notes) or among such Wholly Owned Restricted
Subsidiaries (provided, however, that any subsequent issue or transfer of any
Capital Stock that results in any such Wholly Owned Restricted Subsidiary
ceasing to be a Wholly Owned Restricted Subsidiary or any transfer of such
Indebtedness (other than to a Wholly Owned Restricted Subsidiary) shall be
deemed, in each case, to constitute the incurrence of such Indebtedness by the
Company) and (ii) the Company will not permit any of its Restricted Subsidiaries
to issue (except to the Company or any of its Wholly Owned Restricted
Subsidiaries) any Capital Stock having a preference in liquidation or with
respect to the payment of dividends, unless, after giving effect thereto, the
Company's Consolidated Fixed Charge Coverage Ratio on the date thereof would be
at least:
(1) 2.00 to 1, if such date is on or prior to February 29, 1996;
(2) 2.25 to 1, if such date is after February 29, 1996 and on or prior
to February 28, 1998; and
(3) 2.50 to 1, if such date is after February 28, 1998,
in each case determined on a pro forma basis as if the incurrence of such
additional Indebtedness or the issuance of such Capital Stock, as the case may
be, and the application of the net proceeds therefrom, had occurred at the
beginning of the four-
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quarter period used to calculate the Company's Consolidated Fixed Charge
Coverage Ratio. In addition, after the date hereof the Company will not
directly or indirectly incur any Junior Subordinated Indebtedness unless, after
giving effect thereto, the Company's Consolidated Fixed Charge Coverage Ratio on
the date thereof would be at least 1.50 to 1, in each case determined on a pro
forma basis as if the incurrence of such additional Indebtedness, and the
application of the net proceeds therefrom, had occurred at the beginning of the
four-quarter period used to calculate the Company's Consolidated Fixed Charge
Coverage Ratio.
(b) Notwithstanding the provisions of Section 5.04(a), the Company and
its Restricted Subsidiaries may: (i) incur Indebtedness under the Bank Credit
Agreement in an amount not to exceed $60,000,000; (ii) incur Indebtedness not
otherwise permitted by any other provision hereof, so long as the aggregate
principal amount of Indebtedness incurred under this clause (ii) does not exceed
7.5% of the Consolidated Tangible Assets of the Company; and (iii) incur
Refinancing Indebtedness. In addition, notwithstanding the provisions of
Section 5.04(a): (A) Subsidiaries of the Company that are not Wholly Owned
Restricted Subsidiaries may incur Indebtedness to the Company or any of its
Wholly Owned Restricted Subsidiaries in the amounts and subject to the
restrictions in Section 5.05(iii) and (B) Single Purpose Subsidiaries of the
Company may incur Non-Recourse Indebtedness to the extent permitted by Section
5.05(iv).
(c) Notwithstanding the provisions of Sections 5.04(a) and 5.04(b), the
Company may not incur any Indebtedness if such Indebtedness is subordinate or
junior in ranking in any respect to any Senior Indebtedness unless such
Indebtedness is Junior Subordinated Indebtedness. In addition, the Company may
not incur any secured Indebtedness which is not Senior Indebtedness unless
contemporaneously therewith effective provision is made to secure the Notes
equally and ratably with such secured Indebtedness for so long as such secured
Indebtedness is secured by a Lien.
SECTION 5.05 LIMITATIONS ON SUBSIDIARY DEBT AND PREFERRED STOCK
After the date hereof, the Company will not permit any of its Restricted
Subsidiaries, directly or indirectly, to create, incur, assume, guarantee,
extend the maturity of or otherwise become liable with respect to (collectively,
"incur"), any Indebtedness (which, with respect to any Restricted Subsidiary,
includes without limitation preferred stock of such Restricted Subsidiary)
except: (i) guarantees by any Restricted Subsidiary of the payment of the
principal of, premium, if any, and interest on the Indebtedness incurred
pursuant to the Bank Credit Agreement and in compliance with the provisions of
Section 5.04(b)(i) and with the provisions of Section 5.11; (ii) Indebtedness
issued to and held by the Company or a Wholly Owned Restricted Subsidiary of the
Company (provided, however,
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that any subsequent issue or transfer of any Capital Stock that results in any
such Wholly Owned Restricted Subsidiary ceasing to be a Wholly Owned Restricted
Subsidiary or any transfer of such Indebtedness (other than to a Wholly Owned
Restricted Subsidiary) shall be deemed, in each case, to constitute the
incurrence of such Indebtedness by such Restricted Subsidiary); (iii)
Indebtedness to the Company or any of its Wholly Owned Restricted Subsidiaries
incurred by Subsidiaries of the Company that are not Wholly Owned Restricted
Subsidiaries that are engaged in Permitted Businesses in an aggregate amount
(together with all Designated Investments made in Subsidiaries that are not
Wholly Owned Restricted Subsidiaries in compliance with the provisions of
Section 5.06(b)(E)) not to exceed 5% of Consolidated Tangible Assets; and (iv)
Non-Recourse Indebtedness incurred by a Single Purpose Subsidiary.
SECTION 5.06 LIMITATIONS ON RESTRICTED PAYMENTS
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any Restricted Payment if at the
time of such Restricted Payment:
(i) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof;
(ii) the Company would be unable to incur an additional $1.00 of
Senior Indebtedness under the provisions of Section 5.04(a); or
(iii) the amount of such Restricted Payment, when added to the
aggregate amount of all Restricted Payments (other than those made pursuant
to the provisions of clause (A), (C), (D), (E) or (G) of Section 5.06(b))
made after the date of this Indenture, exceeds the sum of: (a) 50% of the
Company's Consolidated Net Income accrued during the period since August
31, 1993 (or, if such aggregate Consolidated Net Income shall be a deficit,
minus 100% of such aggregate deficit); plus (b) the aggregate amount of Net
Reductions in Investments attributable to Designated Investments made by
the Company or any Subsidiary subsequent to the date of this Indenture;
provided, however, that (1) the Net Reductions in Investments attributable
to any Designated Investment for purposes of this calculation shall not
exceed the amount of such Designated Investment, (2) to the extent that
cash or Cash Equivalents included in any Net Reductions in Investments
pursuant to the definition thereof have been or will be included in the
computation of Consolidated Net Income for purposes of determining the
ability of the Company or any of its Restricted Subsidiaries to make
Restricted Payments under clause (iii)(a) of this Section 5.06(a), such
cash or Cash Equivalents shall not also be included in computing Net
Reductions in Investments for purposes of this clause (iii)(b) and (3) the
Company
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will not be permitted to make any Restricted Payment described in
clause (i) or (ii) of the definition of Restricted Payment from any Net
Reductions in Investments.
(b) Notwithstanding the foregoing, the provisions of clauses (ii) and
(iii) of Section 5.06(a) will not prevent:
(A) the Company or any Wholly Owned Restricted Subsidiary from
making Investments in Subsidiaries, in an aggregate amount not to exceed
$4,000,000, pursuant to contractual obligations in existence on the date of
the Indenture or directly related to projects in existence on the date of
the Indenture;
(B) the Company from paying any dividend within 60 days after
the date of its declaration if such dividend could have been paid on the
date of its declaration without violation of this covenant;
(C) the Company from purchasing or redeeming and retiring any
shares of Capital Stock of the Company, and paying accrued and unpaid
dividends on such shares at the time of such repurchase or redemption, in
exchange for, or out of the net proceeds of a substantially concurrent sale
(other than to a Subsidiary of the Company or an employee stock ownership
plan) of, shares of Qualified Capital Stock of the Company;
(D) the Company or any Subsidiary from making (1) Investments
pursuant to the provisions of employee benefit plans of the Company or any
of its Subsidiaries in an aggregate amount not to exceed $500,000 in any
fiscal year, or (2) making loans to officers of the Company in connection
with any relocation of residence, approved by a majority of the independent
members of the Board of Directors of the Company, provided that the
aggregate amount of Investments and loans under this clause (D) shall not
exceed $1,000,000 in any fiscal year;
(E) the Company or any Wholly Owned Restricted Subsidiary from
making Designated Investments (1) in Subsidiaries that are not Wholly Owned
Restricted Subsidiaries in an aggregate amount (together with Indebtedness
incurred by or on behalf of Subsidiaries that are not Wholly Owned
Restricted Subsidiaries in compliance with the provisions of Section
5.05(iii)) not to exceed 5% of Consolidated Tangible Assets or (2) in Joint
Ventures in an aggregate amount not to exceed 5% of Consolidated Tangible
Assets, provided that: (x) the Person in whom the Investment is made is
engaged only in Permitted Businesses; (y) the Company, directly or through
Wholly Owned Restricted Subsidiaries of the Company, controls, under an
operating and management agreement or otherwise, the day to day management
and operation of such Person or otherwise has the
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right to exercise significant influence over the management and operation
of such Person in all material respects (including without limitation the
right to control or veto any material act or decision); and (z) after
giving effect to such Investment, the aggregate amount of Indebtedness and
Investments made by the Company and its Subsidiaries in such Person does
not exceed $5,000,000;
(F) the Company or any Wholly Owned Restricted Subsidiary from
making Designated Investments in Subsidiaries that are not Wholly Owned
Restricted Subsidiaries or in Joint Ventures; provided that such Designated
Investments are made solely from (1) the net proceeds of a substantially
concurrent sale (other than to a Subsidiary of the Company or an employee
stock ownership plan) of shares of Qualified Capital Stock of the Company,
(2) 50% of the Company's Consolidated Net Income accrued during the period
since August 31, 1993 or (3) the aggregate amount of Net Reductions in
Investments (not to exceed the aggregate amount of such Designated
Investments) made by the Company or any Subsidiary subsequent to the date
of the Indenture;
(G) the Company from redeeming for cash all (but not less than all) of
the outstanding shares of the Company's Series 2D Senior Preferred Stock;
provided, however, that such redemption shall not be at a price in excess
of the redemption price set forth in Section 17.01 of the Company's
Amended and Restated Certificate of Incorporation in effect as of the date
of this Indenture; or
(H) the Company from making (1) the final redemption payment, in
an amount not to exceed $799,400, on the 700,000 outstanding shares of ICF
Kaiser Engineers Group, Inc. Series 1 Redeemable Preferred Stock on
September 30, 1994 or from paying on such date accumulated dividends on
such shares in an amount not to exceed $47,950 or (2) payments of up to
four regularly quarterly dividends, each such quarterly dividend payment
not to exceed $487,500 in the aggregate or $2,437.50 per share on the
outstanding shares of the Company's Series 2D Senior Preferred Stock.
SECTION 5.07 LIMITATIONS ON RESTRICTIONS ON DISTRIBUTIONS FROM SUBSIDIARIES
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual Payment Restriction with respect to any of its
Restricted Subsidiaries, except for (i) Payment Restrictions covering not more
than $1,000,000 in the aggregate of retained earnings of ICF Kaiser Servicios
Ambientales, S.A. de C.V., (ii) any such Payment Restriction contained in
Existing Indebtedness or existing contracts to which the Company or any of its
Restricted Subsidiaries are parties, (iii) any such Payment Restriction under
any agreement evidencing any Acquired Indebtedness that was permitted to be
incurred pursuant to the provisions of this Indenture, provided that such
Payment Restriction only applies to assets that were subject to such
restrictions and encumbrances prior to the acquisition of such assets by the
Company or its Restricted Subsidiaries and (iv) any such Payment Restriction
arising in connection with Refinancing Indebtedness; provided that any such
Payment
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Restrictions that arise under such Refinancing Indebtedness are not, taken as a
whole, more restrictive than those under the agreement creating or evidencing
the Indebtedness being refunded or refinanced.
SECTION 5.08 LIMITATIONS ON TRANSACTIONS WITH AFFILIATES
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any loan, advance, guarantee or capital contribution to or
for the benefit of, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to or for the benefit of, or make any Investment in, or
purchase or lease any property or assets from, or enter into or amend any
contract, agreement or understanding with or for the benefit of, any Affiliate
of the Company or any of its Subsidiaries (each an "Affiliate Transaction"),
other than Affiliate Transactions in the ordinary course of business and
consistent with past practice that are fair to the Company or such Restricted
Subsidiary, as the case may be, and are on terms at least as favorable as would
have been obtainable at such time from an unaffiliated party, unless the Board
of Directors of the Company or such Restricted Subsidiary, as the case may be,
pursuant to a Board Resolution reasonably and in good faith determines that such
Affiliate Transaction is fair to the Company or such Restricted Subsidiary, as
the case may be, and is on terms at least as favorable as would have been
obtainable at such time from an unaffiliated party.
(b) In addition, the Company will not, and will not permit any of its
Restricted Subsidiaries to, enter into any Affiliate Transaction or series of
Affiliate Transactions involving or having a value of more than (i) $1,000,000
unless a majority of the members of the Board of Directors of the Company who
are not affiliated with any other party to such Affiliate Transaction reasonably
and in good faith shall have determined that such Affiliate Transaction or
series of Affiliate Transactions is fair to the Company or such Restricted
Subsidiary, as the case may be, and is on terms at least as favorable as would
have been obtainable at such time from an unaffiliated party and (ii) $5,000,000
unless the Company or such Restricted Subsidiary, as the case may be, has
received an opinion from an Independent Financial Advisor to the effect that the
financial terms of such Affiliate Transaction are fair to the Company or such
Restricted Subsidiary, as the case may be, from a financial point of view.
(c) The provisions of Sections 5.08(a) and 5.08(b) shall not apply to:
(i) transactions exclusively between or among the Company and any of its Wholly
Owned Restricted Subsidiaries or exclusively between or among any of the
Company's Wholly Owned Restricted Subsidiaries, provided that such transactions
are not otherwise prohibited by the Indenture; (ii) arms-length transactions
between the Company or any of its
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Wholly Owned Restricted Subsidiaries and the other owners of any Subsidiary or
Joint Venture described in the last sentence of the definition of Affiliate; and
(iii) reasonable compensation, indemnification and other benefits paid or made
available to officers, directors and employees of the Company or any Subsidiary
for services rendered in such Person's capacity as an officer, director or
employee.
SECTION 5.09 LIMITATIONS ON ASSET SALES
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate any Asset Sale unless: (i) the Company or its
Restricted Subsidiaries receive consideration at the time of such Asset Sale at
least equal to the fair market value of the assets or Capital Stock included in
such Asset Sale; (ii) the aggregate fair market value of the consideration from
such Asset Sale (other than consideration in the form of assumption of
Indebtedness of the Company or one or more of its Restricted Subsidiaries from
which the Company or such Restricted Subsidiaries, as the case may be, are
released) that is not in the form of cash or Cash Equivalents shall not, when
aggregated with the fair market value of all other non-cash or non-Cash
Equivalent consideration received by the Company and its Restricted Subsidiaries
from all previous Asset Sales since the date of this Indenture that have not yet
been converted into cash or Cash Equivalents, exceed 5% of Consolidated Tangible
Assets of the Company at the time of such Asset Sale; and (iii) if the aggregate
fair market value of the assets or Capital Stock to be sold in such Asset Sale
exceeds $3,000,000, such Asset Sale has been approved by the Company's Board of
Directors.
(b) Within six months after consummation of any such Asset Sale (the
Business Day closest to the end of such six-month period is referred to as the
"Asset Sale Offer Date"), the Company shall, or shall cause the applicable
Restricted Subsidiary to: (i) reinvest the cash and Cash Equivalent portion of
the Net Proceeds of such Asset Sale in a manner that would constitute a Related
Business Investment; (ii) apply or cause to be applied the cash and Cash
Equivalent portion of the Net Proceeds of such Asset Sale to repay outstanding
Senior Indebtedness of the Company or any Restricted Subsidiary, provided,
however, that any such repayment of Indebtedness under any revolving credit
facility or similar agreement shall result in a permanent reduction in the
lending commitment relating thereto in an amount equal to the principal amount
so repaid; or (iii) apply or cause to be applied the cash and Cash Equivalent
portion of the Net Proceeds of such Asset Sale that is neither reinvested as
provided in clause (i) nor applied to the repayment of Senior Indebtedness as
provided in clause (ii) to the purchase of Notes tendered to the Company at a
purchase price equal to 100% of the principal thereof, plus accrued interest
thereon to the date of purchase, pursuant to an offer to purchase made by the
Company as set forth in Article 3 and this Section 5.09 (an "Asset Sale Offer");
provided, however, that the Company may
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defer the Asset Sale Offer until the amount subject thereto would be at least
$5,000,000.
(c) Notwithstanding the provisions of Sections 5.09(a) and 5.09(b):
(i) to the extent that any or all of the Net Proceeds of any Foreign Asset Sale
are prohibited or delayed by applicable local law from being repatriated to the
United States, the portion of such Net Proceeds so affected will not be required
to be applied in the manner set forth in this Section 5.09 but may be retained
by the applicable Foreign Subsidiary so long, but only so long, as the
applicable local law will not permit repatriation to the United States (the
Company hereby agreeing to cause the applicable Foreign Subsidiary promptly to
take all actions required by the applicable local law to permit such
repatriation) and, once such repatriation of any of such affected Net Proceeds
is permitted under the applicable local law, such repatriation will be
immediately effected and such repatriated Net Proceeds will be applied in the
manner set forth in this Section 5.09; and (ii) to the extent that the Board of
Directors has determined in good faith that repatriation of any or all of the
Net Proceeds of any Foreign Asset Sale would have a material adverse tax
consequence, the Net Proceeds so affected may be retained by the applicable
Foreign Subsidiary for so long as such material adverse tax consequence would
continue.
SECTION 5.10 RESTRICTIONS ON SALE OF STOCK OF SUBSIDIARIES
The Company may not sell or otherwise dispose of any of the Capital
Stock of any Restricted Subsidiary of the Company unless: (i) (a)(x) the
Company shall retain ownership of more than 50% of the Common Equity of such
Restricted Subsidiary or (y) all of the Capital Stock of such Restricted
Subsidiary shall be sold or otherwise disposed of, and (b) the Net Proceeds from
any such sale or disposition are applied in a manner consistent with the
provisions of Section 5.09; or (ii) the Company elects to treat the amount of
its remaining investment in any such Restricted Subsidiary that has become a
Joint Venture as a result of such sale or other disposition as an Investment in
such Joint Venture subject to the provisions of Section 5.06.
SECTION 5.11 LIMITATIONS ON GUARANTEES
The Company will not permit any of its Restricted Subsidiaries to
guarantee any Indebtedness (other than (i) guarantees permitted under the
provisions of Section 5.05(i) and (ii) guarantees delivered pursuant to the Bank
Credit Agreement by Subsidiaries of the Company who have delivered similar
guarantees prior to the date of this Indenture) unless the Company causes each
such Subsidiary to execute and deliver to the Trustee, prior to or concurrently
with the issuance of such guarantee, a supplemental indenture, in form
satisfactory to the Trustee, pursuant to which such Subsidiary unconditionally
guarantees the payment of principal of, premium, if any, and
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interest on the Notes. Any such guarantee shall be subordinated in right of
payment to the guarantee by such Subsidiary pursuant to the Bank Credit
Agreement.
SECTION 5.12 SEC REPORTS
(a) At any time that the Company has a class of securities registered
under the Exchange Act, the Company shall file with the Trustee and provide to
Holders, within 15 days after it files the same with the SEC, copies of its
annual reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company or any Subsidiary of the Company is required to
file with the SEC pursuant to Section 12, 13 or 15(d) of the Exchange Act. The
Company shall cause any annual report furnished to its stockholders generally
and any quarterly or other financial reports furnished by it to its stockholders
generally to be filed with the Trustee and mailed to the Holders at their
addresses appearing in the register of Notes maintained by the Registrar.
(b) At any time that the Company does not have a class of securities
registered under the Exchange Act, the Company shall furnish to the Trustee (who
is hereby authorized and directed to furnish a copy thereof to any Person
requesting the same in writing) and shall mail (or cause to be mailed by the
Trustee at the Company's expense) to each of the Holders at their addresses as
set forth in the register of Notes maintained by the Registrar within 60 days
after the close of each of the first three quarters of each fiscal year and
within 105 days after the close of each fiscal year consolidated balance sheets
of the Company as of the end of each such quarter or fiscal year, as the case
may be, and consolidated statements of income and cash flow of the Company for
the period commencing at the end of the Company's previous fiscal year and
ending with the end of such quarter or fiscal year, as the case may be, all such
financial statements setting forth in comparative form the corresponding figures
for the corresponding period of the preceding fiscal year, all in reasonable
detail and duly certified (subject to year-end adjustments) by an Officer of the
Company as having been prepared in accordance with GAAP consistently applied,
and, in the case of annual consolidated financial statements, certified by
independent public accountants of established national reputation, and a
discussion and analysis of the results of operations and financial condition of
the Company and its subsidiaries for the periods presented, which discussion and
analysis shall be prepared by the management of the Company in a manner
responsive to the requirements of Item 303 (or any successor item or section) of
Regulation S-K promulgated by the SEC. All financial statements shall be
prepared in accordance with GAAP consistently applied, except for changes with
which the Company's independent public accountants concur and except that
quarterly statements may be subject to year-end adjustments.
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(c) Delivery of the above-referenced reports, information and documents
to the Trustee is for informational purposes only and the Trustee's receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 5.13 CORPORATE EXISTENCE
Subject to the provisions of Sections 5.09 and 6.01, the Company shall,
and shall cause each Restricted Subsidiary to, do or cause to be done all things
necessary to preserve and keep in full force and effect its rights (charter and
statutory), licenses and franchises, except in such cases where a failure to do
so would not have a material adverse effect on (a) the business, prospects,
assets or financial condition of the Company and its Restricted Subsidiaries
taken as a whole, or (b) the Holders.
SECTION 5.14 STAY, EXTENSION AND USURY LAWS
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the Company's
obligation to pay the Notes; and the Company (to the extent that it may lawfully
do so) hereby expressly waives all benefit or advantage of any such law insofar
as such law applies to the Notes, and covenants that it will not, by resort to
any such law, hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every such power as
though no such law has been enacted.
SECTION 5.15 INSURANCE; BOOKS AND RECORDS; COMPLIANCE WITH LAW
(a) The Company will and will cause each Subsidiary to maintain
insurance with financially sound and responsible insurance companies on all its
property in at least such amounts and against at least such risks (but including
in any event public liability, product liability and business interruption) as
are usually insured against in the same general area by companies engaged in the
same or a similar business.
(b) The Company will and will cause each Subsidiary to keep proper
books of record and account in which full and correct entries shall be made of
all financial transactions and the assets and business of the Company and each
Subsidiary, in accordance with GAAP consistently applied to the Company and its
Subsidiaries taken as a whole.
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(c) The Company will and will cause each Subsidiary to comply with all
statutes, laws, ordinances or government rules and regulations to which it is
subject, non-compliance with which would materially adversely affect the
business, prospects, earnings, properties, assets or condition (financial or
otherwise) of the Company and its Subsidiaries taken as a whole.
SECTION 5.16 INSPECTION AND CONFIDENTIALITY
(a) The Company shall, and shall cause each of its Subsidiaries to,
permit authorized representatives of the Trustee to visit and inspect the
properties of the Company or its Subsidiaries, all upon reasonable prior notice
and at such reasonable times during normal business hours and as often as may be
reasonably requested.
(b) The Trustee and its authorized representatives referred to in
Section 5.16(a) agree not to use any information obtained pursuant to this
Section 5.16 for any unlawful purpose and to keep confidential and not to
disclose any such information to any Person except that (i) the recipient of the
information may disclose any information that becomes publicly available other
than as a result of disclosure by such recipient, (ii) the recipient of the
information may disclose any information that its counsel reasonably concludes
is necessary to be disclosed by law, pursuant to any court or administrative
order or ruling or in any pending legal or administrative proceeding or
investigation after prior written notice, reasonable under the circumstances, to
the Company and (iii) the recipient of the information may disclose any
information necessary to be disclosed pursuant to any provision of the TIA.
SECTION 5.17 COMPLIANCE CERTIFICATE
(a) The Company shall deliver to the Trustee, within 105 days after the
end of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Restricted Subsidiaries during
the preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such Officers' Certificate, that to the
best of such Officer's knowledge the Company has kept, observed, performed and
fulfilled each covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which such Officer may have knowledge and what
action the Company is taking or proposes to take with respect thereto) and that
to the best of such Officer's knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of, premium,
if any, or interest on the Notes are prohibited or, if such event has occurred,
a
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description of the event and what action the Company is taking or proposes to
take with respect thereto. Such compliance shall be determined without regard
to periods of grace or requirements of notice.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 5.12 shall be accompanied by a written
statement of the Company's independent public accountants (who shall be a firm
of established national reputation) that in making the examination necessary for
certification of such financial statements nothing has come to their attention
that would lead them to believe that the Company has violated any provisions of
Article 5 or 6 or, if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such accountants shall not
be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(c) The Company, so long as any of the Notes are outstanding, will
deliver to the Trustee, within five Business Days of any Officer becoming aware
of any Default or Event of Default under this Indenture, an Officers'
Certificate specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.
ARTICLE 6
SUCCESSORS
SECTION 6.01 LIMITATIONS ON MERGERS AND CONSOLIDATIONS
(a) The Company, in a single transaction or a series of related
transactions, will not (i) consolidate or merge with or into, or sell, lease,
convey or otherwise dispose of all or substantially all of its assets, or assign
any of its obligations under the Notes or this Indenture, to any Person or (ii)
adopt a Plan of Liquidation unless, in either case:
(A) the Person formed by or surviving such consolidation or merger
(if other than the Company) or to which such sale, lease, conveyance or
other disposition or assignment shall be made (or, in the case of a Plan of
Liquidation, one Person to which assets are transferred) (collectively, the
"Successor"), is a corporation organized and existing under the laws of the
United States or any State thereof or the District of Columbia, and the
Successor assumes by supplemental indenture in a form
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satisfactory to the Trustee all of the obligations of the Company under the
Notes and this Indenture;
(B) immediately prior to and immediately after and giving effect to
such transaction and the assumption of the obligations as set forth in
clause (A) above and the incurrence of any Indebtedness to be incurred in
connection therewith, no Default or Event of Default shall have occurred
and be continuing; and
(C) immediately after and giving effect to such transaction and the
assumption of the obligations as set forth in clause (A) above and the
incurrence of any Indebtedness to be incurred in connection therewith, and
the use of any net proceeds therefrom on a pro forma basis, (1) the
Consolidated Tangible Net Worth of the Company or the Successor, as the
case may be, would be at least equal to the Consolidated Tangible Net Worth
of the Company immediately prior to such transaction and (2) the Company or
the Successor, as the case may be, could incur at least $1.00 of additional
Senior Indebtedness under the provisions of Section 5.04.
(b) In addition, the Company will not permit any Single Purpose
Subsidiary that has outstanding Indebtedness to consolidate or merge with any
other Person other than a Person the activities of which are limited to
ownership of a portion of the same project in which the referent Single Purpose
Subsidiary owns an interest.
(c) The provisions of Sections 6.01(a) and 6.01(b) will not prohibit a
transaction the sole purpose of which (as determined in good faith by the Board
of Directors of the Company and evidenced by a Board Resolution) is to change
the state of incorporation of the Company or a Single Purpose Subsidiary, as the
case may be, and such transaction does not have as one of its purposes the
evasion of the limitations described above.
SECTION 6.02 SUCCESSOR CORPORATION SUBSTITUTED
(a) Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company or
any assignment of its obligations under this Indenture or the Notes in
accordance with Section 6.01, the Successor formed by such consolidation or into
or with which the Company is merged or to which such sale, lease, conveyance or
other disposition or assignment is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such Successor had been named as the Company herein.
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(b) Subject to the provisions of Section 5.03(a), in the event of any
such sale, lease, conveyance or other disposition (other than a transfer by way
of lease), the Company or any Successor which theretofore shall have been
substituted for the Company pursuant to the provisions of this Article 6 shall
be discharged from all obligations and covenants under this Indenture and the
Notes and may, but need not be, liquidated and dissolved.
ARTICLE 7
DEFAULTS AND REMEDIES
SECTION 7.01 EVENTS OF DEFAULT
An "Event of Default" occurs if:
(1) the Company fails to pay interest on any of the Notes when it
becomes due and payable and such failure continues for 30 days, whether or
not such payment is prohibited by Article 11;
(2) the Company fails to pay the principal or premium, if any, of
the Notes when it becomes due and payable, whether at stated maturity, upon
redemption, upon acceleration or otherwise (including failure to make
payment pursuant to a Change in Control Offer or an Asset Sale Offer),
whether or not such payment is prohibited by Article 11;
(3) the Company fails to comply with any covenant in this
Indenture and such failure continues for 60 days after notice of such
failure has been given to the Company by the Trustee or by the Holders of
at least 25% of the aggregate principal amount of the Notes then
outstanding;
(4) the Company or any of its Subsidiaries fail to make any
payment when due or during any applicable grace period in respect of any
Indebtedness of the Company or any of its Subsidiaries, other than
Non-Recourse Indebtedness of a Single Purpose Subsidiary, that has an
aggregate outstanding principal amount of $2,000,000 or more;
(5) the Company defaults under any Indebtedness, other than
Non-Recourse Indebtedness of a Single Purpose Subsidiary, whether such
Indebtedness existed on the date of this Indenture or thereafter shall be
created, if (A) such default results in the holder or holders of such
Indebtedness causing such Indebtedness to become due prior to its stated
maturity and (B) the principal amount of such Indebtedness, together with
the principal amount of any other such Indebtedness the maturity of which
has been so
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accelerated, aggregate $2,000,000 or more at any one time
outstanding;
(6) one or more final judgments or orders that exceed $2,000,000
in the aggregate for the payment of money have been entered by a court or
courts of competent jurisdiction against the Company or any of its
Subsidiaries and such judgment or judgments have not been satisfied,
stayed, annulled or rescinded within 60 days of being entered;
(7) the Company or any of its Subsidiaries pursuant to or within
the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in
an involuntary case,
(c) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(d) makes a general assignment for the benefit of its creditors;
or
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company or any of its Subsidiaries
as debtor in an involuntary case,
(b) appoints a Custodian of the Company or any of its
Subsidiaries or a Custodian for all or substantially all of
the property of the Company or any of its Subsidiaries, or
(c) orders the liquidation of the Company or any of its
Subsidiaries,
and the order or decree remains unstayed and in effect for 60 days.
SECTION 7.02 ACCELERATION
If an Event of Default (other than an Event of Default with respect to
the Company specified in clause (7) or (8) of Section 7.01) occurs and is
continuing, the Trustee by written notice to the Company, or the Holders of at
least 25% in aggregate principal amount of the Notes then outstanding by notice
to the Company and the Trustee, may declare all amounts owing under the Notes to
be due and payable immediately for an amount equal to 100% of the principal
amount of the Notes plus
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accrued interest to date of payment. Upon such declaration of acceleration, the
aggregate principal of and interest on the Notes shall immediately become due
and payable. If an Event of Default with respect to the Company specified in
clause (7) or (8) of Section 7.01 occurs, such an amount shall ipso facto become
and be immediately due and payable without any declaration, notice or other act
on the part of the Trustee or any Holder. The Holders of a majority in
aggregate principal amount of the Notes then outstanding by written notice to
the Trustee may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default (except nonpayment of principal or interest on the Notes that has become
due solely as a result of such acceleration) have been cured or waived.
SECTION 7.03 OTHER REMEDIES
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment of
principal of, premium, if any, or interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of
any other remedy. All remedies are cumulative to the extent permitted by law.
SECTION 7.04 WAIVER OF PAST DEFAULTS
Subject to the provisions of Section 7.07 and Section 10.02, the Holders
of a majority in principal amount of the then outstanding Notes by notice to the
Trustee may waive an existing Default or Event of Default and its consequences,
except a continuing Default or Event of Default specified in clause (1), (2),
(7) or (8) of Section 7.01 or in respect of the provisions of Section 5.03 or
any provision hereof that cannot be modified or amended without the consent of
the Holder so affected pursuant to Section 10.02. Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 7.05 CONTROL BY MAJORITY
The Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
it. However, the
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Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that the Trustee determines may be unduly prejudicial to the rights
of other Holders, or that may involve the Trustee in personal liability.
SECTION 7.06 LIMITATIONS ON SUITS
Except as provided in Section 7.07, a Holder may pursue a remedy with
respect to this Indenture or the Notes only if:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee
a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
SECTION 7.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal of, premium, if any, and
interest on the Note, on or after the respective due dates expressed in the
Note, or to bring suit for the enforcement of any such payment on or after such
respective dates, is absolute and unconditional and shall not be impaired or
affected without the consent of the Holder.
SECTION 7.08 COLLECTION SUIT BY TRUSTEE
If an Event of Default specified in Section 7.01(1) or (2) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the amount of principal,
premium, if any, and interest remaining unpaid on the Notes, determined in
accordance with Section 7.02, and interest on overdue principal and, to the
extent lawful, premium, if any, and interest, and such further amount as shall
be sufficient to cover the costs and
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expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 7.09 TRUSTEE MAY FILE PROOFS OF CLAIM
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company, its
creditors or its property and shall be entitled and empowered to collect,
receive and distribute any money or other property payable or deliverable on any
such claims and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee, and in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 8.06. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 7.10 PRIORITIES
If the Trustee collects any money pursuant to this Article 7, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 8.06;
Second: to holders of Senior Indebtedness to the extent required
by Article 11;
Third: to Holders for amounts due and unpaid on the Notes for
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for interest;
Fourth: to Holders for amounts due and unpaid on the Notes for
principal and premium, if any, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Notes for
principal and premium, if any, respectively; and
Fifth: as a court of competent jurisdiction may direct.
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The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 7.10.
SECTION 7.11 UNDERTAKING FOR COSTS
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 7.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 7.07 or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.
SECTION 7.12 RESTORATION OF RIGHTS AND REMEDIES
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Trustee and the Holder shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
ARTICLE 8
TRUSTEE
SECTION 8.01 DUTIES OF TRUSTEE
(1) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in such exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(2) Except during the continuance of an Event of Default:
(a) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
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(b) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; however, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(3) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(a) this paragraph does not limit the effect of paragraph (2) of
this Section 8.01;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 7.05.
(4) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(1), (2) and (3) of this Section 8.01.
(5) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee may refuse to perform
any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(6) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held
in trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 8.02 RIGHTS OF TRUSTEE
Subject to the provisions of Section 8.01:
(1) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the
document.
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(2) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both.
The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such Officers' Certificate or
Opinion of Counsel. The Trustee may consult with counsel and an
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
(3) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent (other than
an agent who is an employee of the Trustee) appointed with due care.
(4) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or
within its rights or powers conferred upon it by this Indenture.
(5) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(6) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be
incurred by it in compliance with such request or direction.
SECTION 8.03 INDIVIDUAL RIGHTS OF TRUSTEE
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company or any of its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
SECTION 8.04 TRUSTEE'S DISCLAIMER
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes. It shall not be accountable for the Company's use
of the proceeds from the Notes or any money paid to the Company or upon the
Company's direction under any provision hereof. It shall not be responsible for
the use or application of any money received by any Paying Agent other than the
Trustee. It shall not be responsible for any statement or recital herein or any
statement in the Notes other than its certificate of authentication.
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SECTION 8.05 NOTICE OF DEFAULTS
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders, as their names and
addresses shall appear on the Notes register, a notice of the Default or Event
of Default within 60 days after it occurs. Except in the case of a Default or
Event of Default in payment of principal of, premium, if any, or interest on any
Note or that resulted from a failure to comply with Section 5.03, the Trustee
may withhold the notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the interests of
Holders.
SECTION 8.06 COMPENSATION AND INDEMNITY
The Company shall pay to the Trustee such compensation as the Company
and the Trustee may from time to time agree upon in writing for its acceptance
of this Indenture and services hereunder. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
disbursements, advances and expenses incurred by it. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify each of the Trustee and any predecessor
Trustee against any and all loss, damage, claim, liability or expense including
taxes (other than taxes based upon, measured by or determined by the income of
the Trustee), incurred by it arising out of or in connection with the acceptance
or administration of its duties under this Indenture, except as set forth in the
next paragraph. The Trustee promptly shall notify the Company of any claim for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any loss
or liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section 8.06, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal of,
premium, if any, and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 7.01(7) or (8)
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occurs, the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
SECTION 8.07 REPLACEMENT OF TRUSTEE
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 8.07.
The Trustee may resign and be discharged from the trust hereby created
by so notifying the Company. The Holders of a majority in principal amount of
the then outstanding Notes may remove the Trustee by so notifying the Trustee
and the Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 310(b) of the TIA;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a Custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 310 of the TIA, any Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all
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the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Holders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the Lien provided for in Section 8.06.
Notwithstanding replacement of the Trustee pursuant to this Section 8.07, the
Company's obligations under Section 8.06 shall continue for the benefit of the
retiring Trustee.
SECTION 8.08 SUCCESSOR TRUSTEE BY MERGER, ETC.
Subject to Section 8.09, if the Trustee consolidates, merges or converts
into, or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor Trustee.
SECTION 8.09 ELIGIBILITY; DISQUALIFICATION
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, shall be authorized
under such laws to exercise corporate trust power, shall be subject to
supervision or examination by federal or state (or the District of Columbia)
authority and shall have a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition.
SECTION 8.10 REPORTS BY TRUSTEE TO HOLDERS
To the extent required by TIA (S) 313(a), within 60 days after May 15 of
each year commencing with 1994 and for as long as there are Notes outstanding
hereunder, the Trustee shall mail to each Holder the Company's brief report
dated as of such date that complies with TIA (S) 313(a). The Trustee also shall
comply with TIA (S) 313(b), (c) and (d). A copy of such report at the time of
its mailing to Holders shall be filed with the SEC, if required, and each stock
exchange, if any, on which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become listed
on any national securities exchange and the Trustee shall comply with Section
313(d) of the TIA.
ARTICLE 9
DISCHARGE OF INDENTURE
SECTION 9.01 TERMINATION OF COMPANY'S OBLIGATIONS
This Indenture shall cease to be of further effect (except that the
Company's obligations under Section 8.06 and the
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Trustee's and Paying Agent's obligations under Section 9.03 shall survive) when
all outstanding Notes theretofore authenticated and issued have been delivered
(other than destroyed, lost or stolen Notes that have been replaced or paid) to
the Trustee for cancellation and the Company has paid all sums payable
hereunder. In addition, the Company may terminate all of its obligations under
this Indenture if:
(1) the Company irrevocably deposits in trust with the Trustee
or, at the option of the Trustee, with a trustee satisfactory to the
Trustee and the Company under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee, money or
U.S. Government Obligations sufficient to pay principal of, premium,
if any, and interest on the Notes to maturity and to pay all other
sums payable by it hereunder; provided that (i) the trustee of the
irrevocable trust shall have been irrevocably instructed to pay such
money or the proceeds of such U.S. Government Obligations to the
Trustee, (ii) the Trustee shall have been irrevocably instructed to
apply such money or the proceeds of such U.S. Government Obligations
to the payment of said principal, premium and interest with respect to
the Notes and (iii) the Company is permitted to do so under Article
11;
(2) the Company delivers to the Trustee an Officers' Certificate
stating that all conditions precedent to satisfaction and discharge of
this Indenture have been complied with, and an Opinion of Counsel to
the same effect;
(3) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit; and
(4) the Company shall have delivered to the Trustee an Opinion
of Counsel from nationally recognized counsel acceptable to the
Trustee or a tax ruling to the effect that the Holders of the Notes
will not recognize income, gain or loss for federal income tax
purposes as a result of the Company's exercise of its option under
this Section 9.01 and will be subject to federal income tax on the
same amount and in the same manner and at the same times as would have
been the case if such option had not been exercised.
In such event, this Indenture shall cease to be of further effect (except as
provided in the next succeeding paragraph), and the Trustee, on demand of the
Company, shall execute proper instruments acknowledging confirmation of and
discharge under this Indenture.
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However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06,
5.01, 5.02, 8.06 and 8.07 and the Company's, the Trustee's and Paying Agent's
obligations in Section 9.03 shall survive until the Notes are no longer
outstanding. Thereafter, only the Company's obligations in Section 8.06 and the
Trustee's and Paying Agent's obligations in Section 9.03 shall survive.
After such irrevocable deposit made pursuant to this Section 9.01 and
satisfaction of the other conditions set forth herein, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
this Indenture except for those surviving obligations specified above.
In order to have money available on a payment date to pay principal of,
premium, if any, or interest on the Notes, the U.S. Government Obligations shall
be payable as to principal or interest on or before such payment date in such
amounts as will provide the necessary money. U.S. Government Obligations shall
not be callable at the issuer's option.
SECTION 9.02 APPLICATION OF TRUST MONEY
The Trustee or a trustee satisfactory to the Trustee and the Company
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to Section 9.01. It shall apply the deposited money and the money from
U.S. Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of, premium, if any, and interest on the
Notes. Money and securities so held in trust are not subject to Article 11.
SECTION 9.03 REPAYMENT TO COMPANY
The Trustee and the Paying Agent shall promptly pay to the Company upon
written request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal, premium, if any, or
interest that remains unclaimed for two years after the date upon which such
payment shall have become due; provided, however, that the Company shall have
either caused notice of such payment to be mailed to each Holder entitled
thereto no less than 30 days prior to such repayment or within such period shall
have published such notice in a financial newspaper of general circulation
published in The City of New York. After payment to the Company, Holders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
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SECTION 9.04 REINSTATEMENT
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 9.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 9.01 until such
time as the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 9.01; provided, however, that
if the Company has made any payment of principal of, premium, if any, or
interest on any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE 10
AMENDMENTS
SECTION 10.01 WITHOUT CONSENT OF HOLDERS
The Company and the Trustee may amend this Indenture or the Notes or
waive any provision hereof without the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 6.01;
(3) to provide for uncertificated Notes in addition to certificated
Notes;
(4) to make any change that does not adversely affect the legal
rights hereunder of any Holder;
(5) to surrender any right or power herein conferred upon the
Company; or
(6) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification
of the Indenture under the TIA, or under any similar federal
statute hereafter enacted.
Upon the request of the Company, accompanied by a resolution of the
Board of Directors authorizing the execution of any such supplemental indenture,
and upon receipt by the Trustee of the documents described in Section 10.06, the
Trustee shall join with the Company in the execution of any supplemental
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indenture authorized or permitted by the terms of this Indenture and make any
further appropriate agreements and stipulations that may be therein contained,
but the Trustee shall not be obligated to enter into any supplemental indenture
that affects its own rights, duties or immunities under this Indenture or
otherwise. After an amendment or waiver under this Section 10.01 becomes
effective, the Company shall mail to the Holders of each Note affected thereby a
notice briefly describing the amendment or waiver. Any failure of the Company
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 10.02 WITH CONSENT OF HOLDERS
Except as provided in this Section 10.02, the Company and the Trustee
may amend this Indenture or the Notes with the written consent (including
consents obtained in connection with a tender offer or exchange offer for Notes)
of the Holders of at least a majority in principal amount of the then
outstanding Notes.
Upon the request of the Company, accompanied by a resolution of the
Board of Directors of the Company authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence of the
consent of the Holders as aforesaid, and upon receipt by the Trustee of the
documents described in Section 10.06, the Trustee shall join with the Company in
the execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under this
Section 10.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
The Holders of a majority in principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes (including waivers obtained in
connection with a tender offer or exchange offer for Notes). However, without
the consent of each Holder affected, an amendment or waiver under this Section
10.02 may not:
(1) reduce the amount of Notes whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
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(3) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to optional redemption or
mandatory repurchase of the Notes under this Indenture, including
without limitation purchases of Notes under Section 3.04;
(4) make any Note payable in money other than that stated in the
Note;
(5) make any change in Section 5.03, 7.04 or 7.07 or in this
paragraph of this Section 10.02;
(6) waive a continuing Default or Event of Default in the payment of
principal of or interest on the Notes or that resulted from a
failure to comply with Section 5.03; or
(7) make any change to the subordination provisions of Article 11
that adversely affects the rights of any Holder.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of this Indenture (and the obligation of the Company
to obtain any such consent otherwise required from such Holder) may be subject
to the requirement that such Holder shall have been the Holder of record of any
Notes with respect to which such consent is required or sought as of a date
identified by the Trustee or the Company in a notice furnished to Holders in
accordance with the terms of this Indenture.
After the issuance of any Notes, an amendment under this Section 10.02
or under Section 10.01 may not make any change that adversely affects in any
material respect the rights under Article 11 of the holders of Senior
Indebtedness, unless such holders consent to the change.
SECTION 10.03 COMPLIANCE WITH TRUST INDENTURE ACT
Every amendment to this Indenture or the Notes shall comply in form
and substance with the TIA as then in effect.
SECTION 10.04 REVOCATION AND EFFECT OF CONSENTS
Until an amendment (which includes any supplement) or waiver becomes
effective, a consent to it by a Holder of a Note is a continuing consent by the
Holder and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder or subsequent Holder may
revoke the consent as to his or her Note or portion of a Note if the Trustee
receives written notice of revocation before the date the amendment or waiver
becomes effective. An
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amendment or waiver becomes effective in accordance with its terms and
thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment or
waiver. If the Company elects to fix a record date for such purpose, the record
date shall be fixed at (i) the later of 30 days prior to the first solicitation
of such consent or the date of the most recent list of Holders furnished to the
Trustee prior to such solicitation, or (ii) such other date as the Company shall
designate. If a record date is fixed, then notwithstanding the provisions of
the immediately preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to consent to such amendment or waiver or to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No consent shall be valid or effective for more than 90 days after
such record date unless consents from Holders of the principal amount of Notes
required hereunder for such amendment or waiver to be effective shall have also
been given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every
Holder, unless it is of the type described in any of clauses (1) through (7) of
Section 10.02. In such case, the amendment or waiver shall bind each Holder of
a Note who has consented to it and every subsequent Holder of a Note that
evidences the same debt as the consenting Holder's Note.
SECTION 10.05 NOTATION ON OR EXCHANGE OF NOTES
The Trustee may place an appropriate notation about an amendment or
waiver on any Note thereafter authenticated. The Company in exchange for all
Notes may issue and the Trustee shall authenticate new Notes that reflect the
amendment or waiver.
SECTION 10.06 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 10 if the amendment does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it
does, the Trustee may, but need not, sign it. In signing or refusing to sign
such amendment or supplemental indenture, the Trustee shall be entitled to
receive and, subject to Section 8.01, shall be fully protected in relying upon,
an Officers' Certificate and an Opinion of Counsel as conclusive evidence that
such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith and that it will be valid and
binding upon the Company in accordance with its terms.
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ARTICLE 11
SUBORDINATION
SECTION 11.01 AGREEMENT TO SUBORDINATE
The Company agrees, and each Holder by accepting a Note agrees, that the
indebtedness evidenced by the Notes is subordinated in right of payment, to the
extent and in the manner provided in this Article 11, to the prior payment in
full of all Senior Indebtedness and that the subordination is for the benefit of
the holders of Senior Indebtedness.
SECTION 11.02 LIQUIDATION; DISSOLUTION; BANKRUPTCY
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property
(whether voluntary involuntary), or upon an assignment for the benefit of
creditors or any other marshaling of the assets and liabilities of the Company:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash of the principal of and interest
(including interest accruing after the commencement of any such
proceeding) to the date of payment on the Senior Indebtedness
before Holders shall be entitled to receive any payment of
principal of or interest on Notes, except to the extent that
Holders receive securities that are subordinated to Senior
Indebtedness to at least the same extent as the Notes; and
(2) until the Senior Indebtedness is paid in full in cash, any
distribution to which Holders would be entitled but for this
Article 11 shall be made to holders of Senior Indebtedness as
their interests may appear, except to the extent that Holders
receive securities that are subordinated to Senior Indebtedness
to at least the same extent as the Notes.
For purposes of this Article 11, a distribution may consist of cash,
securities or other property, by set-off or otherwise.
SECTION 11.03 DEFAULT ON SENIOR INDEBTEDNESS
(a) The Company may not pay principal of, premium, if any, or interest
on the Notes or make any deposit pursuant to
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Section 9.01 and may not repurchase, redeem, defease or otherwise retire any
Notes (collectively, "pay the Notes") if:
(i) a default in the payment of any principal or other
obligations with respect to Senior Indebtedness (other than
Non-Recourse Indebtedness) occurs and is continuing beyond
any applicable grace period in the agreement, indenture or
other document governing such Senior Indebtedness; or
(ii) any other default on Senior Indebtedness (other than
Non-Recourse Indebtedness) occurs and the maturity of such
Senior Indebtedness is accelerated in accordance with its
terms.
The Company may and shall resume payments on the Notes and may acquire them upon
the earlier of: (1) the date upon which the default is cured or waived and any
acceleration has been rescinded, or (2) the date upon which such Senior
Indebtedness has been repaid.
(b) During the continuance of any default (other than a default
described in Section 11.03(a)(i) or 11.03(a)(ii)) with respect to any Senior
Indebtedness (other than Non-Recourse Indebtedness) pursuant to which the
maturity thereof may be accelerated immediately without further notice (except
such notice as may be required to effect such acceleration) or the expiration of
any applicable grace periods, the Company may not pay the Notes for a period (a
"Payment Blockage Period") commencing upon the receipt by the Company and the
Trustee of written notice of such default from the holders of Senior
Indebtedness, the Agent under the Bank Credit Agreement or the trustee for the
holders of any other Senior Indebtedness specifying an election to effect a
Payment Blockage Period (a "Payment Notice") and ending 179 days thereafter (or
earlier if such Payment Blockage Period is terminated (i) by written notice to
the Trustee and the Company from the Person or Persons who gave such Payment
Notice, (ii) by repayment in full of such Senior Indebtedness or (iii) because
the default giving rise to such Payment Notice is no longer continuing).
Notwithstanding the provisions described in the immediately preceding sentence
(but subject to the provisions of Section 11.03(a)), unless the holders of
Senior Indebtedness, the Agent under the Bank Credit Agreement or the trustee
for the holders of any other Senior Indebtedness have accelerated the maturity
of such Senior Indebtedness, the Company may resume payments on the Notes after
such Payment Blockage Period expires. Not more than one Payment Notice may be
given in any consecutive 360-day period, irrespective of the number of defaults
with respect to Senior Indebtedness during such period. No default or event of
default which existed or was continuing on the date of the commencement of any
Payment Blockage Period with respect to the Senior Indebtedness initiating such
Payment Blockage Period shall be, or
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be made, the basis of the commencement of a subsequent Payment Blockage Period
by the holders of such Senior Indebtedness, the Agent under the Bank Credit
Agreement or the trustee for the holders of any other Senior Indebtedness
whether or not within a period of 360 consecutive days unless such default or
event of default shall have been cured or waived for a period of not less than
90 consecutive days.
SECTION 11.04 ACCELERATION OF NOTES
If payment of the Notes is accelerated because of an Event of Default,
the Company or the Trustee shall promptly notify the Representative of any issue
of Senior Indebtedness of the acceleration. If the Trustee provides such notice
it will notify the Company of the acceleration. The Company shall pay the Notes
when 179 days pass after the acceleration occurs if this Article 11 permits the
payment at that time; provided, however, that if no Senior Indebtedness is
outstanding at the time of such acceleration, the Company shall pay the Notes in
accordance with the provisions of Article 7.
SECTION 11.05 WHEN DISTRIBUTIONS MUST BE PAID OVER
In the event that the Company shall make any payment to the Trustee on
account of the principal or interest on the Notes at a time when the Trustee
shall have received notice in accordance with Section 11.11 that such payment is
prohibited by Section 11.02 or 11.03, such payment shall be held by the Trustee
in trust for the benefit of, and shall forthwith be paid over and delivered,
upon written request to, the holders of Senior Indebtedness (pro rata as to each
of such holders on the basis of the respective amounts of Senior Indebtedness
held by them) or their Representative under the indenture or other agreement (if
any) pursuant to which Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.
If a distribution is made to Holders that because of this Article 11
should not have been made to them, the Holders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness and, upon written
request, pay it over to them as their interests may appear for application to
the payment of all Senior Indebtedness remaining unpaid to the extent necessary
to pay all Senior Indebtedness in full in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.
SECTION 11.06 NOTICE BY THE COMPANY
The Company promptly shall notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a
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payment of principal of or interest on the Notes to violate this Article 11, but
failure to give such notice shall not affect the subordination of the Notes to
the Senior Indebtedness provided in this Article 11. Nothing in this Article 11
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 8.06.
SECTION 11.07 SUBROGATION
After all Senior Indebtedness is paid in full and until the Notes are
paid in full, Holders shall be subrogated to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to the Holders have been applied to
the payment of Senior Indebtedness. A distribution made under this Article 11
to holders of Senior Indebtedness which otherwise would have been made to
Holders is not, as between the Company and Holders, a payment by the Company on
Senior Indebtedness.
SECTION 11.08. RELATIVE RIGHTS.
This Article 11 defines the relative rights of Holders and holders of
Senior Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal of
and interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the
Company, other than their rights in relation to holders of Senior
Indebtedness; or
(3) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the
rights of holders of Senior Indebtedness to receive distributions
otherwise payable to Holders.
If the Company fails because of this Article 11 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
SECTION 11.09 SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY
No right of any holder of Senior Indebtedness to enforce the
subordination of the indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or by its failure to comply with this
Indenture.
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SECTION 11.10 DISTRIBUTION OR NOTICE TO THE REPRESENTATIVE
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to in
this Article 11, the Trustee and the Holders shall be entitled to rely
conclusively upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative (as to the Senior
Indebtedness for which it is the Representative) or of any liquidating trustee
or agent for the purpose of ascertaining the persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other Indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article 11.
SECTION 11.11 RIGHTS OF THE TRUSTEE AND PAYING AGENT
Notwithstanding any provision of this Article 11 or any other provision
of this Indenture, the Trustee and Paying Agent shall not at any time be charged
with knowledge of the existence of any facts that would prohibit the making of
any payment to or by the Trustee or a Paying Agent or the taking of any other
action (pursuant to this Article 11) by the Trustee or a Paying Agent unless and
until the Trustee or such Paying Agent, as the case may be, shall have received
at its office specified in Section 12.02 written notice thereof from the
Company, a Representative or a holder of Senior Indebtedness entitled to give
such notice and, prior to the receipt of any such written notice, the Trustee
and such Paying Agent shall be entitled in all respects conclusively to assume
that no such fact exists. The Trustee or Paying Agent may continue to make
payments on the Notes unless it receives such a notice at least three Business
Days prior to the date upon which payment is due.
The Trustee shall be entitled to rely in good faith on the delivery to
it of a written notice by a Person representing himself, herself or itself to be
a Representative or a holder of Senior Indebtedness to establish that such
notice has been given by a Representative or a holder of such Senior
Indebtedness. Only the Company, a Representative or a holder of Senior
Indebtedness that has no Representative may give the notice.
In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 11, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person
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is entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article 11, and if such
evidence is not furnished, the Trustee may defer any payment which it may be
required to make for the benefit of such Person pursuant to the terms of this
Indenture pending judicial determination as to the rights of such Person to
receive such payment.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
SECTION 11.12 NO FIDUCIARY DUTY TO HOLDERS OF SENIOR INDEBTEDNESS
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee or Paying Agent. Neither the Trustee
nor the Paying Agent shall be deemed to owe any fiduciary duty to the holders of
such Senior Indebtedness, and the Trustee shall not be liable to any holder of
such Senior Indebtedness if it shall, in the absence of bad faith, pay over or
deliver to holders of Notes, the Company or any other person money or assets to
which any holder of such Senior Indebtedness shall be entitled by virtue of this
Article 11 or otherwise.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01 TRUST INDENTURE ACT CONTROLS
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA (S) 318(c), the imposed duties shall control.
SECTION 12.02 NOTICES
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in Person or mailed by first-class
mail (registered or certified, return receipt requested), telecopier or
overnight air courier guaranteeing next day delivery, to the other's address:
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If to the Company:
ICF Kaiser International, Inc.
9300 Lee Highway
Fairfax, Virginia 22031-1207
Attention: Executive Vice President and Chief
Financial Officer
cc: Senior Vice President and General Counsel
If to the Trustee:
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications shall be deemed to have been duly given:
at the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class
mail to the Holder's address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall mail
a copy to the Trustee and each Agent at the same time.
SECTION 12.03 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements
set forth in Section 12.04) stating that, in the opinion of the signers,
all conditions precedent
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and covenants, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 12.04) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been complied with.
SECTION 12.04 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to Section 314(a)(4) of the TIA) shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
SECTION 12.05 RULES BY TRUSTEE AND AGENTS
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 12.06 LEGAL HOLIDAYS
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized or
obligated by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
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SECTION 12.07 NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder of the Company, as such,
shall not have any liability for any obligations of the Company under the Notes
or this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability.
SECTION 12.08 GOVERNING LAW
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.
SECTION 12.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 12.10 SUCCESSORS
All agreements of the Company in this Indenture and the Notes shall bind
its successor. All agreements of the Trustee in this Indenture shall bind its
successor.
SECTION 12.11 SEVERABILITY
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 12.12 COUNTERPART ORIGINALS
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 12.13 TRUSTEE AS PAYING AGENT AND REGISTRAR
The Company initially appoints the Trustee as Paying Agent and
Registrar.
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SECTION 12.14 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SIGNATURES
ICF KAISER INTERNATIONAL, INC.
By: /s/ Michael J. Ronny
---------------------------
THE BANK OF NEW YORK
Trustee
By: /s/ Lloyd A. McKenzie
---------------------------
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EXHIBIT A
For purposes of Section 1275 of the Internal Revenue Code of 1986, as
amended: (i) the issue date of this Note is January 11, 1994; (ii) the yield to
maturity is 12.63%; (iii) the original issue discount per $1,000 face amount at
which this Note is issued is $35.30; and (iv) the issue price per $1,000 face
amount at which this Note is issued is $964.70. The amount of original issue
discount allocable to the short initial accrual period is 0.087% of its
principal amount determined on the basis of the exact method.
ICF KAISER INTERNATIONAL, INC.
12% SENIOR SUBORDINATED NOTES DUE 2003
CUSIP. NO. ________
ISSUE DATE: January 11, 1994 ISSUE PRICE: $964.70
(for each $1,000 Principal Amount)
ORIGINAL ISSUE DISCOUNT: $35.30 YIELD TO MATURITY: 12.63%
(for each $1,000 Principal Amount)
No. $___________
ICF KAISER INTERNATIONAL, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars on December 31, 2003
Interest Payment Dates: June 30 and December 31
Record Dates: June 15 and December 15
ICF KAISER INTERNATIONAL, INC.
By:
-------------------------------
By:
-------------------------------
(SEAL)
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Notes referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK
as Trustee
By:
----------------------------
Authorized Signature
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12% SENIOR SUBORDINATED NOTES DUE 2003
Certain capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture under which this Note is issued.
1. Interest. ICF Kaiser International, Inc., a Delaware corporation
(the "Company", which term shall include any Successor under the Indenture),
promises to pay interest on the principal amount of this Note at 12% per
annum from the date this Note is issued until maturity. The Company will pay
interest semiannually on June 30 and December 31 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from the date of issuance; provided, that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be June 30, 1994. The
Company shall pay interest on overdue principal from time to time on demand at
the rate of 1% per annum in excess of the interest rate then in effect; it shall
pay interest on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the record date next preceding the Interest Payment
Date, even if such Notes are canceled after such record date and on or before
such Interest Payment Date. The Holder must surrender this Note to a Paying
Agent to collect principal payments. The Company will pay the principal of,
premium, if any, and interest on the Notes in money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts. The Company, however, may pay such amounts by check payable in
such money. It may mail an interest check to a Holder's registered address.
3. Paying Agent and Registrar. Initially, The Bank of New York (the
"Trustee") will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or co-registrar without notice to any Holder. The
Company may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture dated as
of January 11, 1994 (the "Indenture") between
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the Company and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code (S)(S) 77aaa-77bbbb), as in
effect on the date of execution of the Indenture. The Notes are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. Capitalized and certain other terms used herein and
not otherwise defined have the meanings set forth in the Indenture. The Notes
are unsecured general obligations of the Company limited to $125,000,000 in
aggregate principal amount.
5. Optional Redemption. The Notes may not be redeemed prior to
December 31, 1998, but will be redeemable at the option of the Company, in whole
or in part, at any time on or after December 31, 1998, at the following
redemption prices (expressed as percentages of principal amount), together with
accrued and unpaid interest thereon to the redemption date, if redeemed during
the 12-month period beginning December 31:
<TABLE>
<CAPTION>
Optional
Year Redemption Price
---- ----------------
<S> <C>
1998 108.0%
1999 106.4
2000 104.8
2001 103.2
2002 101.6
</TABLE>
If fewer than all of the Notes are to be redeemed at any time, selection
of the Notes to be redeemed will be made by the Trustee from among the
outstanding Notes on a pro rata basis, by lot or by any other method permitted
in the Indenture. Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder whose Notes are to
be redeemed at the registered address of such Holder. On and after the
redemption date, interest shall cease to accrue on the Notes or portions thereof
called for redemption.
6. MANDATORY OFFERS TO REPURCHASE.
(a) Change of Control Offer. In accordance with the terms of the
Indenture, upon the occurrence of a Change of Control, the Company will be
required to offer (a "Change of Control Offer") to purchase all outstanding
Notes at a purchase price equal to 101% of the aggregate principal amount of the
Notes, plus accrued and unpaid interest to the date of purchase.
A Holder of Notes may tender or refrain from tendering all or any
portion of his Notes at his discretion by completing the form entitled "OPTION
OF HOLDER TO ELECT PURCHASE" appearing below on this Note. Any portion of Notes
tendered must be in integral multiples of $1,000.
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(b) Asset Sale Offer. In accordance with the terms of the Indenture,
if the Company or any Restricted Subsidiary consummates an Asset Sale, the
Company will, under certain circumstances, be required to utilize a portion of
the net proceeds received from such Asset Sale to offer to purchase Notes at a
purchase price equal to 100% of the aggregate principal amount of the Notes plus
accrued interest to the date fixed for the purchase.
A Holder of Notes may tender or refrain from tendering all or any
portion of his Notes at his discretion by completing the form entitled "OPTION
OF HOLDER TO ELECT PURCHASE" appearing below this Note. Any portion of Notes
tendered must be in integral multiples of $1,000.
Subject to the provisions described above and compliance with Article 6
of the Indenture, the Company may sell or otherwise dispose of all or
substantially all of its assets to a Successor that assumes all of the Company's
obligations under the Notes and Indenture, and thereafter be discharged from
such obligations.
7. Subordination. To the extent set forth in Article 11 of the
Indenture, the Notes are subordinated to Senior Indebtedness, which means all
Indebtedness of the Company other than Indebtedness that is specifically
designated, by the terms of the instrument creating or evidencing the same, as
not being senior in right of payment to the Notes. To the extent provided in
the Indenture, Senior Indebtedness must be paid before the Notes may be paid.
The Company agrees, and each Noteholder by accepting a Note agrees, to the
subordination and authorizes the Trustee to give it effect.
8. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture.
9. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
10. Amendments and Waivers. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent (which
may include consents obtained in connection with a tender offer or exchange
offer for Notes) of the Holders of at least a majority in principal amount of
the Notes then outstanding, and any existing Default under, or compliance with
any provision of, the Indenture may be waived (other than any continuing Default
or Event of Default in the payment of interest on or the principal of the Notes,
or any
A-5
<PAGE>
failure to comply with the provisions of the Indenture relating to a Change of
Control Offer(as defined in the Indenture)) with the consent (which may include
consents obtained in connection with a tender offer or exchange offer for Notes)
of the Holders of a majority in principal amount of the Notes then outstanding.
Without the consent of any Holder, the Company and the Trustee may amend or
supplement the Indenture or the Notes to cure any ambiguity, defect or
inconsistency; to provide for the assumption of the Company's obligations to
Holders in the case of a merger or acquisition; to provide for uncertificated
Notes in addition to or in place of certificated Notes; to make any change that
does not adversely affect the legal rights of any Holder; to surrender any right
or power conferred upon the Company in the Indenture or the Notes; or to modify,
eliminate or add to the provisions of the Indenture or the Notes to such extent
as shall be necessary to effect the qualification of the Indenture under the TIA
or under any similar federal statute hereafter enacted.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of the Indenture (and the obligation of the Company
to obtain any such consent otherwise required from such Holder) may be subject
to the requirement that such Holder shall have been the Holder of record of any
Notes with respect to which such consent is required or sought as of a date
identified by the Trustee or the Company in a notice furnished to Holders in
accordance with the terms of the Indenture.
Without the consent of each Holder affected, the Company may not take
certain actions, including: (i) reduce the amount of Notes whose Holders must
consent to an amendment, supplement or waiver; (ii) reduce the rate of or
change the time for payment of interest, including default interest, on any
Note; (iii) reduce the principal of or change the fixed maturity of any Note or
alter the provisions with respect to optional redemption or mandatory repurchase
of the Notes under the Indenture; (iv) make any Note payable in money other
than that stated in this Note; (v) make any change in certain provisions of the
Indenture regarding a Change of Control, a waiver of past Defaults and the
rights of Holders to receive payment; (vi) waive a continuing Default or Event
of Default in the payment of principal of or interest on the Notes or that
resulted from a failure to comply with the Change of Control provisions of the
Indenture; or (vii) make any change to the subordination provisions of the
Indenture that adversely affects the rights of any Holder.
11. Defaults and Remedies. Events of Default include: default in
payment of interest on the Notes for 30 days; default in payment of principal on
the Notes; failure by the Company for 60 days after notice to it to comply with
any of its other agreements in the Indenture or the Notes; certain defaults
under other Indebtedness; certain final judgments that remain
A-6
<PAGE>
undischarged; and certain events of bankruptcy or insolvency. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
immediately due and payable for an amount equal to 100% of the principal amount
of the Notes plus accrued interest to the date of payment, except that in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes become due and payable immediately without
further action or notice. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders notice of any continuing default (except a
default in payment of principal or interest) if it determines that withholding
notice is in their interests. The Company must furnish an annual compliance
certificate to the Trustee.
12. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
13. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
14. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
15. Abbreviations. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (-- tenants in common), TEN ENT (--
tenants by the entireties), JT TEN (-- joint tenants with right of survivorship
and not as tenants in common), CUST (-- Custodian), and U/G/M/A (-- Uniform
Gifts to Minors Act).
16. GOVERNING LAW. THIS NOTE AND THE INDENTURE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Request may be made to:
A-7
<PAGE>
ICF Kaiser International, Inc.
9300 Lee Highway
Fairfax, Virginia 22031-1207
Attention: Executive Vice President and
Chief Financial Officer
A-8
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- -----------------------------------------------------------------------
(Insert assignee's Soc. Sec. or tax I.D. no.)
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-----------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
-------------------
Your Signature:
---------------
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee:
A-9
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to an Asset Sale Offer or a Change in Control Offer, please execute and return
this form to the Company.
If you want to elect to have only part of the Note purchased by the
Company pursuant to the Indenture, state the amount you elect to have purchased:
$_____________
Date:
-------------------
Your Signature:
---------------
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee:
A-10
<PAGE>
Exhibit 4(b)
For purposes of Section 1275 of the Internal Revenue Code of 1986, as
amended: (i) the issue date of this Note is January 11, 1994; (ii) the yield to
maturity is 12.63%; (iii) the original issue discount per $1,000 face amount at
which this Note is issued is $35.30; and (iv) the issue price per $1,000 face
amount at which this Note is issued is $964.70. The amount of original issue
discount allocable to the short initial accrual period is 0.087% of its
principal amount determined on the basis of the exact method.
ICF KAISER INTERNATIONAL, INC.
12% SENIOR SUBORDINATED NOTES DUE 2003
CUSIP. NO. 449244 AA 0
-----------
ISSUE DATE: January 11, 1994 ISSUE PRICE: $964.70
(for each $1,000 Principal Amount)
ORIGINAL ISSUE DISCOUNT: $35.30 YIELD TO MATURITY: 12.63%
(for each $1,000 Principal Amount)
No. $___________
ICF KAISER INTERNATIONAL, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars on December 31, 2003
Interest Payment Dates: June 30 and December 31
Record Dates: June 15 and December 15
ICF KAISER INTERNATIONAL, INC.
By: /s/ James O. Edwards
-------------------------------
By: /s/ Paul Weeks, II
-------------------------------
(SEAL)
1
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Notes referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK
as Trustee
By: /s/ Lloyd A. McKenzie
----------------------------
Authorized Signature
2
<PAGE>
12% SENIOR SUBORDINATED NOTES DUE 2003
Certain capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture under which this Note is issued.
1. Interest. ICF Kaiser International, Inc., a Delaware
corporation (the "Company", which term shall include any Successor under the
Indenture), promises to pay interest on the principal amount of this Note at
12% per annum from the date this Note is issued until maturity. The Company
will pay interest semiannually on June 30 and December 31 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from the date of issuance; provided, that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be June 30, 1994. The
Company shall pay interest on overdue principal from time to time on demand at
the rate of 1% per annum in excess of the interest rate then in effect; it shall
pay interest on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the record date next preceding the Interest Payment
Date, even if such Notes are canceled after such record date and on or before
such Interest Payment Date. The Holder must surrender this Note to a Paying
Agent to collect principal payments. The Company will pay the principal of,
premium, if any, and interest on the Notes in money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts. The Company, however, may pay such amounts by check payable in
such money. It may mail an interest check to a Holder's registered address.
3. Paying Agent and Registrar. Initially, The Bank of New York
(the "Trustee") will act as Paying Agent and Registrar. The Company may change
any Paying Agent, Registrar
3
<PAGE>
or co-registrar without notice to any Holder. The Company may act in any such
capacity.
4. Indenture. The Company issued the Notes under an Indenture
dated as of January 11, 1994 (the "Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code (S)(S) 77aaa-77bbbb), as in effect on the date of
execution of the Indenture. The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. Capitalized and certain other terms used herein and not otherwise
defined have the meanings set forth in the Indenture. The Notes are unsecured
general obligations of the Company limited to $125,000,000 in aggregate
principal amount.
5. Optional Redemption. The Notes may not be redeemed prior to
December 31, 1998, but will be redeemable at the option of the Company, in whole
or in part, at any time on or after December 31, 1998, at the following
redemption prices (expressed as percentages of principal amount), together with
accrued and unpaid interest thereon to the redemption date, if redeemed during
the 12-month period beginning December 31:
<TABLE>
<CAPTION>
Optional
Year Redemption Price
---- ----------------
<S> <C>
1998 108.0%
1999 106.4
2000 104.8
2001 103.2
2002 101.6
</TABLE>
If fewer than all of the Notes are to be redeemed at any time, selection
of the Notes to be redeemed will be made by the Trustee from among the
outstanding Notes on a pro rata basis, by lot or by any other method permitted
in the Indenture. Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder whose Notes are to
be redeemed at the registered address of such Holder. On and after the
redemption date, interest shall cease to accrue on the Notes or portions thereof
called for redemption.
6. MANDATORY OFFERS TO REPURCHASE.
(a) Change of Control Offer. In accordance with the terms of the
Indenture, upon the occurrence of a Change of Control, the Company will be
required to offer (a "Change of Control Offer") to purchase all outstanding
Notes at a purchase price equal to 101% of the aggregate principal amount
4
<PAGE>
of the Notes, plus accrued and unpaid interest to the date of purchase.
A Holder of Notes may tender or refrain from tendering all or any
portion of his Notes at his discretion by completing the form entitled "OPTION
OF HOLDER TO ELECT PURCHASE" appearing below on this Note. Any portion of Notes
tendered must be in integral multiples of $1,000.
(b) Asset Sale Offer. In accordance with the terms of the Indenture,
if the Company or any Restricted Subsidiary consummates an Asset Sale, the
Company will, under certain circumstances, be required to utilize a portion of
the net proceeds received from such Asset Sale to offer to purchase Notes at a
purchase price equal to 100% of the aggregate principal amount of the Notes plus
accrued interest to the date fixed for the purchase.
A Holder of Notes may tender or refrain from tendering all or any
portion of his Notes at his discretion by completing the form entitled "OPTION
OF HOLDER TO ELECT PURCHASE" appearing below this Note. Any portion of Notes
tendered must be in integral multiples of $1,000.
Subject to the provisions described above and compliance with Article 6
of the Indenture, the Company may sell or otherwise dispose of all or
substantially all of its assets to a Successor that assumes all of the Company's
obligations under the Notes and Indenture, and thereafter be discharged from
such obligations.
7. Subordination. To the extent set forth in Article 11 of the
Indenture, the Notes are subordinated to Senior Indebtedness, which means all
Indebtedness of the Company other than Indebtedness that is specifically
designated, by the terms of the instrument creating or evidencing the same, as
not being senior in right of payment to the Notes. To the extent provided in
the Indenture, Senior Indebtedness must be paid before the Notes may be paid.
The Company agrees, and each Noteholder by accepting a Note agrees, to the
subordination and authorizes the Trustee to give it effect.
8. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture.
5
<PAGE>
9. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
10. Amendments and Waivers. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent (which
may include consents obtained in connection with a tender offer or exchange
offer for Notes) of the Holders of at least a majority in principal amount of
the Notes then outstanding, and any existing Default under, or compliance with
any provision of, the Indenture may be waived (other than any continuing Default
or Event of Default in the payment of interest on or the principal of the Notes,
or any failure to comply with the provisions of the Indenture relating to a
Change of Control Offer(as defined in the Indenture)) with the consent (which
may include consents obtained in connection with a tender offer or exchange
offer for Notes) of the Holders of a majority in principal amount of the Notes
then outstanding. Without the consent of any Holder, the Company and the
Trustee may amend or supplement the Indenture or the Notes to cure any
ambiguity, defect or inconsistency; to provide for the assumption of the
Company's obligations to Holders in the case of a merger or acquisition; to
provide for uncertificated Notes in addition to or in place of certificated
Notes; to make any change that does not adversely affect the legal rights of any
Holder; to surrender any right or power conferred upon the Company in the
Indenture or the Notes; or to modify, eliminate or add to the provisions of the
Indenture or the Notes to such extent as shall be necessary to effect the
qualification of the Indenture under the TIA or under any similar federal
statute hereafter enacted.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of the Indenture (and the obligation of the Company
to obtain any such consent otherwise required from such Holder) may be subject
to the requirement that such Holder shall have been the Holder of record of any
Notes with respect to which such consent is required or sought as of a date
identified by the Trustee or the Company in a notice furnished to Holders in
accordance with the terms of the Indenture.
Without the consent of each Holder affected, the Company may not take
certain actions, including: (i) reduce the amount of Notes whose Holders must
consent to an amendment, supplement or waiver; (ii) reduce the rate of or change
the time for payment of interest, including default interest, on any Note; (iii)
reduce the principal of or change the fixed maturity of any Note or alter the
provisions with respect to optional redemption or mandatory repurchase of the
Notes under the Indenture; (iv)
6
<PAGE>
make any Note payable in money other than that stated in this Note; (v) make
any change in certain provisions of the Indenture regarding a Change of Control,
a waiver of past Defaults and the rights of Holders to receive payment; (vi)
waive a continuing Default or Event of Default in the payment of principal of or
interest on the Notes or that resulted from a failure to comply with the Change
of Control provisions of the Indenture; or (vii) make any change to the
subordination provisions of the Indenture that adversely affects the rights of
any Holder.
11. Defaults and Remedies. Events of Default include: default in
payment of interest on the Notes for 30 days; default in payment of principal on
the Notes; failure by the Company for 60 days after notice to it to comply with
any of its other agreements in the Indenture or the Notes; certain defaults
under other Indebtedness; certain final judgments that remain undischarged; and
certain events of bankruptcy or insolvency. If an Event of Default occurs and
is continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be immediately due and
payable for an amount equal to 100% of the principal amount of the Notes plus
accrued interest to the date of payment, except that in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all outstanding
Notes become due and payable immediately without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders of
a majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interests. The Company must furnish an annual compliance certificate to the
Trustee.
12. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
13. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
7
<PAGE>
14. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
15. Abbreviations. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (-- tenants in common), TEN ENT (--
tenants by the entireties), JT TEN (-- joint tenants with right of survivorship
and not as tenants in common), CUST (-- Custodian), and U/G/M/A (-- Uniform
Gifts to Minors Act).
16. GOVERNING LAW. THIS NOTE AND THE INDENTURE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Request may be made to:
ICF Kaiser International, Inc.
9300 Lee HighwayFairfax, Virginia 22031-1207
Attention: Executive Vice President and
Chief Financial Officer
8
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- -------------------------------------------------------------------------------
(Insert assignee's Soc. Sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: ___________________
Your Signature:
-----------------------------------
(Sign exactly as your name
appears
on the face of this Note)
Signature Guarantee:
9
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to an Asset Sale Offer or a Change in Control Offer, please execute and return
this form to the Company.
If you want to elect to have only part of the Note purchased by the
Company pursuant to the Indenture, state the amount you elect to have purchased:
$_____________
Date: ___________________
Your Signature:
---------------------------------
(Sign exactly as your name
appears
on the face of this Note)
Signature Guarantee:
10
<PAGE>
Exhibit 4(c)
WARRANT AGREEMENT dated as of January 11, 1994, between ICF KAISER
INTERNATIONAL, INC., a Delaware corporation (the "Company"), and The Bank of New
York, a New York banking corporation, as warrant agent (the "Warrant Agent").
WHEREAS, the Company proposes to issue and deliver its warrant
certificates (the "Warrant Certificates") evidencing warrants (the "Warrants")
to acquire, under certain circumstances, up to an aggregate of 600,000 shares,
subject to adjustment, of its Common Stock (as defined below), in connection
with an offering by the Company of 125,000 Units comprised of the Warrants and
$125,000,000 aggregate principal amount of its 12% Senior Subordinated Notes
due 2003 (the "Notes"). The Notes are to be issued under an indenture to be
dated as of January 11, 1994 between the Company and The Bank of New York, a New
York banking corporation, as trustee (the "Indenture"). Each Warrant shall
represent the right to purchase from the Company one share of Common Stock, at
an initial price of $5.00 per share, subject to adjustment under certain
circumstances.
NOW, THEREFORE, in consideration of the foregoing and for the purpose of
defining the terms and provisions of the Warrants and the respective rights and
obligations thereunder of the Company, the Warrant Agent and the record holders
from time to time of the Warrants, the Company and the Warrant Agent hereby
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the
following respective meanings:
"Affiliate" of any person means any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such person. For purposes of this definition, "control" when used with respect
to any person means the power to direct the management and policies of such
person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Common Equity Securities" means Common Stock and securities convertible
into, or exercisable or exchangeable
<PAGE>
for, Common Stock or rights or options to acquire Common Stock or such other
securities, excluding the Warrants.
"Common Stock" means the common stock, $0.01 par value per share, of the
Company, and any other capital stock of the Company into which such common stock
may be converted or reclassified or that may be issued in respect of, in
exchange for, or in substitution of, such common stock by reason of any stock
splits, stock dividends, distributions, mergers, consolidations or other like
events.
"Company" means ICF Kaiser International, Inc., a Delaware
corporation, and its successors and assigns.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expiration Date" means December 31, 1998, subject to the provisions
of Section 3.05.
"Holders" means, from time to time, the holders of the Warrants.
"NASDAQ" means the National Association of Securities Dealers, Inc.
Automated Quotation System.
"Non-Surviving Combination" means any merger, consolidation or other
business combination by the Company with one or more persons (other than a
wholly-owned subsidiary of the Company) in which the Company is not the
survivor, or a sale of all or substantially all of the assets of the Company to
one or more such other persons, if, in connection with any of the foregoing,
consideration (other than consideration which includes Common Equity Securities)
is distributed to holders of Common Stock in exchange for all or substantially
all of their equity interest in the Company.
"person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Purchase Price" means the purchase price per share of Common Stock to
be paid upon the exercise of each Warrant in accordance with the terms hereof,
which price shall initially be $5.00 per share, subject to adjustment from
time to time pursuant to Article IV hereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
2
<PAGE>
"Surviving Combination" means any merger, consolidation or other
business combination by the Company with one or more person in which the Company
is the survivor, or a purchase of assets by the Company from one or more other
persons.
"Underlying Common Stock" means the shares of Common Stock issuable
upon the exercise of the Warrants.
"Warrant Agent" means The Bank of New York, a New York banking
corporation, or the successor or successors of such Warrant Agent appointed in
accordance with the terms hereof.
SECTION 1.02 CERTAIN OTHER DEFINED TERMS
<TABLE>
<CAPTION>
Defined
Term in Section
---- ----------
<S> <C>
"Change of Shares"........... 4.01(a)
"Common Stock Distribution".. 4.01(b)
"Convertible Securities"..... 4.01(c)
"Indenture".................. Preamble
"Note"....................... Preamble
"Options".................... 4.01(c)
"Rights"..................... 4.01(c)
"Survivor"................... 3.05(b)
"Warrant Certificates"....... Preamble
"Warrants"................... Preamble
</TABLE>
ARTICLE II
ORIGINAL ISSUE OF WARRANTS
SECTION 2.01 FORM OF WARRANT CERTIFICATES
The Warrant Certificates (a) shall be issued in registered form only and
substantially in the form attached hereto as Exhibit A, (b) shall be dated the
date of issuance thereof (whether upon initial issuance, registration of
transfer, exchange or replacement), (c) shall show the date of countersignature
and (d) shall have such legends and endorsements, each as provided by the
Company, typed, stamped, printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any law or with any rule or
regulation pursuant thereto or with any rule or regulation of any securities
exchange on which the Warrant may be listed, or to conform to customary usage.
The Warrant Certificates shall be in a format and in a form reasonably
satisfactory to the Warrant Agent.
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Pending the preparation of definitive Warrant Certificates, temporary
Warrant Certificates may be issued, which may be printed, lithographed,
typewritten, mimeographed or otherwise produced, and which will be substantially
of the tenor of the definitive Warrant Certificates in lieu of which they are
issued.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates to the Warrant Agent, without
charge to the Holder. Until so exchanged the temporary Warrant Certificates
shall in all respects be entitled to the same benefits under this Agreement as
definitive Warrant Certificates.
SECTION 2.02 EXECUTION AND DELIVERY OF WARRANT CERTIFICATES
Warrant Certificates evidencing Warrants to purchase initially an
aggregate of up to 600,000 shares of Common Stock shall be executed, on or after
the date of this Agreement, by the Company and delivered to the Warrant Agent
for countersignature, and the Warrant Agent shall thereupon countersign and
deliver such Warrant Certificates upon the order and at the direction of the
Company to the purchasers thereof on the date of issuance. The Warrant Agent is
hereby authorized to countersign and deliver Warrant Certificates as required by
this Section 2.02 or by Section 3.04, Article V or Section 9.04. The Warrant
Certificates shall be executed on behalf of the Company by its Chairman, Chief
Executive Officer or President or by any of its Vice Presidents, either manually
or by facsimile signature printed thereon. The Warrant Certificates shall be
manually countersigned by an authorized signatory of the Warrant Agent and shall
not be valid for any purpose unless so countersigned. In case any officer of
the Company whose signature shall have been placed upon any of the Warrant
Certificates shall cease to be the Chairman, Chief Executive Officer, President
or a Vice President of the Company before countersignature by the Warrant Agent
and issue and delivery thereof, such Warrant Certificates may, nevertheless, be
countersigned by the Warrant Agent and issued and delivered with the same force
and effect as though such person had not ceased to be such officer of the
Company.
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ARTICLE III
EXERCISE PRICE; EXERCISE OF WARRANTS
GENERALLY; NON-SURVIVING COMBINATION
SECTION 3.01 EXERCISE PRICE
Each Warrant Certificate shall, when countersigned by the Warrant Agent,
entitle the Holder thereof, subject to the provisions thereof and of this
Agreement, to receive one share of Common Stock for each Warrant represented
thereby, subject to adjustment as herein provided upon payment of the Purchase
Price for each of such shares. The Purchase Price shall be payable by certified
or official bank check or wire transfer, payable in United States currency to
the order of the Company.
SECTION 3.02 EXERCISE OF WARRANTS
Subject to the terms and conditions set forth herein, the Warrants shall
be exercisable at any time on or prior to the Expiration Date.
SECTION 3.03 EXPIRATION OF WARRANTS
The Warrants shall terminate and become void as of the close of business
on the Expiration Date; provided, however, that the Warrants will terminate and
become void prior to the Expiration Date in the event of a Non-Surviving
Combination, pursuant to Section 3.05.
The Company shall give notice not less than 90, and not more than 120,
days prior to the Expiration Date to the Holders of all then outstanding
Warrants to the effect that the Warrants will terminate and become void as of
the close of business on the Expiration Date; provided, however, that the
failure by the Company to give such notice as provided in this Section shall not
affect such termination and becoming void of the Warrants as of the close of
business on the Expiration Date.
SECTION 3.04 METHOD OF EXERCISE
In order to exercise a Warrant, the Holder thereof must surrender the
Warrant Certificates evidencing such Warrant to the Warrant Agent, with one of
the forms on the reverse of or attached to the Warrant Certificate duly
executed, and tender the Purchase Price therefor in accordance with this Article
III.
If fewer than all of the Warrants represented by a Warrant Certificate
are surrendered, such Warrant Certificate
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shall be surrendered and, subject to the provisions of Article V, a new Warrant
Certificate of the same tenor and for the number of Warrants that were not
surrendered shall be executed by the Company. The Warrant Agent shall
countersign the new Warrant Certificate, register it in such name or names as
may be directed in writing by the Holder and deliver the new Warrant Certificate
to the person or persons entitled to receive the same.
Upon surrender of a Warrant Certificate and payment of the Purchase
Price in conformity with the foregoing provisions, the Warrant Agent shall
thereupon promptly notify the Company, and the Warrant Agent will deliver or
cause to be delivered to or upon written order of any Holder appropriate
evidence of ownership of any shares of Underlying Common Stock or other
securities or property (including any money) to which the Holder is entitled,
subject to the provisions of Section 9.02.
SECTION 3.05 NON-SURVIVING COMBINATION
(a) If the Company proposes, prior to the Expiration Date, to enter
into a transaction that would constitute a Non-Surviving Combination if
consummated, the Company shall give written notice thereof to the Warrant Agent
and to the Holders of Warrants, promptly after an agreement is reached with
respect to the Non-Surviving Combination but in no event less than 30 days prior
to the consummation thereof. Such notice shall describe the transaction in
reasonable detail and specify the consideration to be received by the Holders.
The Company shall also furnish to each Holder of Warrants all notices and
materials furnished to its stockholders in connection with such transactions.
(b) The Company agrees that it will not enter into an agreement
providing for a Non-Surviving Combination, unless the party to such transaction
that is the surviving entity (the "Survivor") shall be obligated to distribute
or pay to each Holder of Warrants, upon payment of the Purchase Price prior to
the Expiration Date, the number of shares of stock or other securities or other
property (including any cash) of the Survivor that would have been distributable
or payable on account of the Underlying Common Stock if such Holder's Warrants
had been exercised immediately prior to such Non-Surviving Combination (or, if
applicable, the record date therefor). Following the consummation of a
Non-Surviving Combination, the Warrants shall represent only the right to
receive such shares of stock or other property from the Survivor upon payment of
the Purchase Price prior to the Expiration Date.
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ARTICLE IV
ADJUSTMENTS
SECTION 4.01 ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SHARES OF COMMON STOCK
The number and kind of shares purchasable upon the exercise of Warrants
and the Purchase Price shall be subject to adjustment from time to time as
follows:
(a) Changes in Common Stock. In the event the Company shall, at any
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time or from time to time after the date hereof, (i) issue any shares of Common
Stock as a stock dividend to the holders of Common Stock, (ii) subdivide or
combine the outstanding shares of Common Stock into a greater or lesser number
of shares or (iii) issue any shares of its capital stock in a reclassification
or reorganization of the Common Stock (any such issuance, subdivision,
combination, reclassification or reorganization being herein called a "Change of
Shares"), then (A) in the case of (i) or (ii) above, the number of shares of
Common Stock that may be purchased upon the exercise of each Warrant shall be
adjusted to the number of shares of Common Stock that the Holder of such Warrant
would have owned or have been entitled to receive after the happening of such
event had such Warrant been exercised immediately prior to the record date (or,
if there is no record date, the effective date) for such event, and the Purchase
Price shall be adjusted to the price (calculated to the nearest 1,000th of one
cent) determined by multiplying the Purchase Price immediately prior to such
event by a fraction, the numerator of which shall be the number of shares of
Common Stock purchasable with one Warrant immediately prior to such event and
the denominator of which shall be the number of shares of Common Stock
purchasable with one Warrant after the adjustment referred to above and (B) in
the case of (iii) above, paragraph (l) below shall apply. An adjustment made
pursuant to clause (A) of this paragraph (a) shall become effective
retroactively immediately after the record date in the case of such dividend and
shall become effective immediately after the effective date in other cases, but
any shares of Common Stock issuable solely as a result of such adjustment shall
not be issued prior to the effective date of such event.
(b) Common Stock Distribution. In the event the Company shall, at any
-------------------------
time or from time to time after the date hereof, issue, sell or otherwise
distribute (including by way of deemed distributions pursuant to paragraphs (c)
and (d) below) any shares of Common Stock (other than pursuant to a Change of
Shares or the exercise of any Option, Convertible Security (each as defined in
paragraph (c) below) or Warrant)
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(any such event, including any deemed distributions described in paragraphs (c)
and (d), being herein called a "Common Stock Distribution"), for a consideration
per share less than the current market price per share of Common Stock (as
defined in paragraph (f) below), on the date of such Common Stock Distribution,
then, effective upon such Common Stock Distribution, the Purchase Price shall be
reduced to the price (calculated to the nearest 1,000th of one cent) determined
by multiplying the Purchase Price in effect immediately prior to such Common
Stock Distribution by a fraction, the numerator of which shall be the sum of (i)
the number of shares of Common Stock outstanding (exclusive of any treasury
shares) immediately prior to such Common Stock Distribution multiplied by the
current market price per share of Common Stock on the date of such Common Stock
Distribution, plus (ii) the consideration, if any, received by the Company upon
such Common Stock Distribution, and the denominator of which shall be the
product of (A) the total number of shares of Common Stock outstanding (exclusive
of any treasury shares) immediately after such Common Stock Distribution
multiplied by (B) the current market price per share of Common Stock on the date
of such Common Stock Distribution.
If any Common Stock Distribution shall require an adjustment to the
Purchase Price pursuant to the foregoing provisions of this paragraph (b),
including by operation of paragraph (c) or (d) below, then, effective at the
time such adjustment is made, the number of shares of Common Stock purchasable
upon the exercise of each Warrant shall be increased to a number determined by
multiplying the number of such shares so purchasable immediately prior to such
Common Stock Distribution by a fraction, the numerator of which shall be the
Purchase Price in effect immediately prior to such adjustment and the
denominator of which shall be the Purchase Price in effect immediately after
such adjustment. In computing adjustments under this paragraph, fractional
interests in Common Stock shall be taken into account to the nearest 1,000th of
a share.
The provisions of this paragraph (b), including by operation of
paragraph (c) or (d) below, shall not operate to increase the Purchase Price or
reduce the number of shares of Common Stock purchasable upon the exercise of any
Warrant, except by operation of paragraph (j) or (k) below.
(c) Issuance of Options. In the event the Company shall, at any time
-------------------
or from time to time after the date hereof, issue, sell, distribute or otherwise
grant in any manner (including by assumption) any rights to subscribe for or to
purchase, or any warrants or options for the purchase of, Common Stock or any
stock or securities convertible into or exchangeable for Common Stock (any such
rights, warrants or
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options being herein called "Options" (the term "Options" shall also include
without limitation any rights ("Rights") to purchase Common Stock and each other
security for which such rights are at any time exercisable issued pursuant to
the Rights Agreement between the Company and the Rights Agent designated therein
approved by the Board of Directors of the Company on January 13, 1992, as
amended from time to time) and any such convertible or exchangeable stock or
securities being herein called "Convertible Securities"), whether or not such
Options or the rights to convert or exchange such Convertible Securities are
immediately exercisable, and the price per share at which Common Stock is
issuable upon the exercise of such Options or upon the conversion or exchange of
such Convertible Securities (determined by dividing (i) the aggregate amount, if
any, received or receivable by the Company as consideration for the issuance,
sale, distribution or granting of such Options, plus the minimum aggregate
amount of additional consideration, if any, payable to the Company upon the
exercise of all such Options, plus, in the case of Options to acquire
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the conversion or exchange of all such
Convertible Securities, by (ii) the total maximum number of shares of Common
Stock issuable upon the exercise of all such Options or upon the conversion or
exchange of all Convertible Securities issuable upon the exercise of all such
Options) shall be less than the current market price per share of Common Stock
on the date of the issuance, sale, distribution or granting of such Options
then, for purposes of paragraph (b) above, the total maximum number of shares of
Common Stock issuable upon the exercise of all such Options or upon the
conversion or exchange of the total maximum amount of the Convertible Securities
issuable upon the exercise of all such Options shall be deemed to have been
issued as of the date of the issuance, sale, distribution or granting of such
Options and thereafter shall be deemed to be outstanding and the Company shall
be deemed to have received as consideration such price per share, determined as
provided above, therefor. Except as otherwise provided in paragraphs (j) and
(k) below, no additional adjustment of the Purchase Price shall be made upon the
actual exercise of such Options or upon conversion or exchange of the
Convertible Securities issuable upon the exercise of such Options. If the
minimum and maximum numbers or amounts referred to in this paragraph (c) or in
paragraph (d) below cannot be calculated with certainty as of the date of the
required adjustment, such numbers and amounts shall be determined in good faith
by the Board of Directors of the Company.
(d) Issuance of Convertible Securities. In the event the Company
----------------------------------
shall, at any time or from time to time after the date hereof, issue, sell or
otherwise distribute
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(including by assumption) any Convertible Securities (other than upon the
exercise of any Option), whether or not the rights to convert or exchange such
Convertible Securities are immediately exercisable, and the price per share at
which Common Stock is issuable upon the conversion or exchange of such
Convertible Securities (determined by dividing (i) the aggregate amount, if any,
received or receivable by the Company as consideration for the issuance, sale or
distribution of such Convertible Securities, plus the minimum aggregate amount
of additional consideration, if any, payable to the Company upon the conversion
or exchange of all such Convertible Securities, by (ii) the total maximum number
of shares of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the current market price per share of
Common Stock on the date of such issuance, sale or distribution, then, for the
purposes of paragraph (b) above, the total number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities
shall be deemed to have been issued as of the date of the issuance, sale or
distribution of such Convertible Securities and thereafter shall be deemed to be
outstanding and the Company shall be deemed to have received as consideration
such price per share, determined as provided above, therefor. Except as
otherwise provided in paragraphs (j) and (k) below, no additional adjustment of
the Purchase Price shall be made upon the actual conversion or exchange of such
Convertible Securities.
(e) Dividends and Distributions. In the event the Company shall, at
---------------------------
any time or from time to time after the date hereof, distribute to the holders
of Common Stock any dividend or other distribution of cash, evidences of its
indebtedness, other securities or other properties or assets (in each case other
than (i) dividends payable in Common Stock, Options or Convertible Securities
and (ii) any cash dividend that, when added to all other cash dividends paid in
the one year prior to the declaration date of such dividend (excluding any such
other dividend included in a previous adjustment of the Purchase Price pursuant
to this paragraph (e)), does not exceed 10% of the current market price per
share of Common Stock on such declaration date), or any options, warrants or
other rights to subscribe for or purchase any of the foregoing, then (A) the
Purchase Price shall be decreased to a price determined by multiplying the
Purchase Price then in effect by a fraction, the numerator of which shall be the
current market price per share of Common Stock on the record date for such
distribution less the sum of (X) the cash portion, if any, of such distribution
per share of Common Stock outstanding (exclusive of any treasury shares) on the
record date for such distribution plus (Y) the then fair market value (as
determined in good faith by the Board of Directors of the Company) per share of
Common Stock
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outstanding (exclusive of any treasury shares) on the record date for such
distribution of that portion, if any, of such distribution consisting of
evidences of indebtedness, other securities, properties, assets, options,
warrants or subscription or purchase rights, and the denominator of which shall
be such current market price per share of Common Stock and (B) the number of
shares of Common Stock purchasable upon the exercise of each Warrant shall be
increased to a number determined by multiplying the number of shares of Common
Stock so purchasable immediately prior to the record date for such distribution
by a fraction, the numerator of which shall be the Purchase Price in effect
immediately prior to the adjustment required by clause (A) of this sentence and
the denominator of which shall be the Purchase Price in effect immediately after
such adjustment. The adjustments required by this paragraph (e) shall be made
whenever any such distribution is made and shall be retroactive to the record
date for the determination of stockholders entitled to receive such
distribution.
(f) Current Market Price. For the purpose of any computation under
--------------------
paragraphs (b), (c), (d) and (e) of this Section, the current market price per
share of Common Stock at any date shall be the average of the daily closing
prices for the shorter of (i) the 20 consecutive trading days ending on the last
full trading day on the exchange or market specified in the second succeeding
sentence prior to the Time of Determination and (ii) the period commencing on
the date next succeeding the first public announcement of the issuance, sale,
distribution or granting in question through such last full trading day prior to
the Time of Determination. The term "Time of Determination" as used herein
shall be the time and date of the earlier to occur of (A) the date as of which
the current market price is to be computed and (B) the last full trading day on
such exchange or market before the commencement of "ex-dividend" trading in the
Common Stock relating to the event giving rise to the adjustment required by
paragraph (b), (c), (d) or (e). The closing price for any day shall be the last
reported sale price regular way or, in case no such reported sale takes place on
such day, the average of the closing bid and asked prices regular way for such
day, in each case (1) on the principal national securities exchange on which the
shares of Common Stock are listed or to which such shares are admitted to
trading or (2) if the Common Stock is not listed or admitted to trading on a
national securities exchange, in the over-the-counter market as reported by
NASDAQ or any comparable system or (3) if the Common Stock is not listed on
NASDAQ or a comparable system, as furnished by two members of the NASDAQ
selected from time to time in good faith by the Board of Directors of the
Company for that purpose. In the absence of all of the foregoing, or if for any
other reason the current market price per share cannot be determined
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pursuant to the foregoing provisions of this paragraph (f), the current market
price per share shall be the fair market value thereof as determined in good
faith by the Board of Directors of the Company.
(g) Certain Distributions. If the Company shall pay a dividend or make
---------------------
any other distribution payable in Options or Convertible Securities, then, for
purposes of paragraph (b) above (by operation of paragraph (c) or (d) above, as
the case may be), such Options or Convertible Securities shall be deemed to have
been issued or sold without consideration except for such amounts of
consideration as shall have been deemed to have been received by the Company
pursuant to paragraphs (c) or (d) above, as appropriate.
(h) Consideration Received. If any shares of Common Stock shall be
----------------------
issued and sold in an underwritten public offering, the consideration received
by the Company for such shares of Common Stock shall be deemed to include the
underwriting discounts and commissions realized by the underwriters of such
public offering. If any shares of Common Stock, Options or Convertible
Securities shall be issued, sold or distributed for a consideration other than
cash, the amount of the consideration other than cash received by the Company in
respect thereof shall be deemed to be the then fair market value of such
consideration (as determined in good faith by the Board of Directors of the
Company). If any Options shall be issued in connection with the issuance and
sale of other securities of the Company, together comprising one integral
transaction in which no specific consideration is allocated to such Options by
the parties thereto, such Options shall be deemed to have been issued, sold or
distributed for such amount of consideration as shall be allocated to such
Options in good faith by the Board of Directors of the Company.
(i) Deferral of Certain Adjustments. No adjustment to the Purchase
-------------------------------
Price (including the related adjustment to the number of shares of Common Stock
purchasable upon the exercise of each Warrant) shall be required hereunder (i)
unless such adjustment, together with other adjustments carried forward as
provided below, would result in an increase or decrease of at least one percent
of the Purchase Price, provided, however, that any adjustment which by reason of
this clause (i) of this paragraph (i) is not required to be made shall be
carried forward and taken into account in any subsequent adjustment and (ii)
solely with respect to Options that are Rights, until the time such Options
become exercisable.
(j) Changes in Options and Convertible Securities. If the exercise
---------------------------------------------
price provided for in any Options referred to in paragraph (c) above, the
additional consideration, if any, payable upon the conversion or exchange of any
Convertible
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Securities referred to in paragraph (c) or (d) above, or the rate at which any
Convertible Securities referred to in paragraph (c) or (d) above are convertible
into or exchangeable for Common Stock shall change at any time (other than under
or by reason of provisions designed to protect against dilution upon an event
which results in a related adjustment pursuant to this Article IV), the Purchase
Price then in effect and the number of shares of Common Stock purchasable upon
the exercise of each Warrant shall forthwith be readjusted (effective only with
respect to any exercise of any Warrant after such readjustment) to the Purchase
Price and number of shares of Common Stock so purchasable that would then be in
effect had the adjustment made upon the issuance, sale, distribution or granting
of such Options or Convertible Securities been made based upon such changed
purchase price, additional consideration or conversion rate, as the case may be,
but only with respect to such Options and Convertible Securities as then remain
outstanding.
(k) Expiration of Options and Convertible Securities. If, at any time
------------------------------------------------
after any adjustment to the number of shares of Common Stock purchasable upon
the exercise of each Warrant shall have been made pursuant to paragraph (c), (d)
or (j) above or this paragraph (k), any Options or Convertible Securities shall
have expired unexercised or, solely with respect to Options that are Rights, are
redeemed, the number of such shares so purchasable shall, upon such expiration
or such redemption, be readjusted and shall thereafter be such as they would
have been had they been originally adjusted (or had the original adjustment not
been required, as the case may be) as if (i) the only shares of Common Stock
deemed to have been issued in connection with such Options or Convertible
Securities were the shares of Common Stock, if any, actually issued or sold upon
the exercise of such Options or Convertible Securities and (ii) such shares of
Common Stock, if any, were issued or sold for the consideration actually
received by the Company upon such exercise plus the aggregate consideration, if
any, actually received by the Company for the issuance, sale, distribution or
granting of all such Options or Convertible Securities, whether or not
exercised; provided, however, that (x) no such readjustment shall have the
effect of decreasing the number of such shares so purchasable by an amount
(calculated by adjusting such decrease to account for all other adjustments made
pursuant to this Article IV following the date of the original adjustment
referred to above) in excess of the amount of the adjustment initially made in
respect of the issuance, sale, distribution or granting of such Options or
Convertible Securities and (y) in the case of the redemption of any Rights,
there shall be deemed (for the purposes of paragraph (c) above) to have been
issued as of the date of such redemption for no consideration a number of
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shares of Common Stock equal to the aggregate consideration paid to effect such
redemption divided by the current market price of the Common Stock on the date
of such redemption.
(l) Other Adjustments. In the event that at any time, as a result of
-----------------
an adjustment made pursuant to this Article IV, the Holders shall become
entitled to receive any securities of the Company other than shares of Common
Stock, thereafter the number of such other securities so receivable upon
exercise of the Warrants and the Purchase Price applicable to such exercise
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the shares of
Common Stock contained in this Article IV.
(m) Excluded Transactions. Notwithstanding any provision in this
---------------------
Article IV to the contrary, no adjustment shall be made pursuant to this Article
IV in respect of (i) any change in the par value of the Common Stock, (ii) the
granting of any Options or the issuance of any shares of Common Stock, in either
case, which would otherwise trigger an adjustment under paragraph (b) above,
that may be registered on Form S-8 or any successor form under the Securities
Act, to any officers, directors or employees of, or any consultants or advisors
to, the Company, or (iii) the issuance of Common Stock pursuant to any dividend
reinvestment plan which provides that the price of the Common Stock purchased
for plan participants from the Company will be no less than 95% of the average
of the high and low sales prices of the Common Stock on the investment date or,
if no trading in the Common Stock occurs on such date, the next preceding date
on which trading occurred (1) on the principal national securities exchange on
which the shares of Common Stock are listed or to which such shares are admitted
to trading or (2) if the Common Stock is not listed or admitted to trading on a
national securities exchange, in the over-the-counter market as reported by
NASDAQ or any comparable system or (3) if the Common Stock is not listed on
NASDAQ or a comparable system, as furnished by two members of the NASD selected
from time to time in good faith by the Board of Directors of the Company for
that purpose. In the absence of all of the foregoing, or if for any other
reason the current market price per share cannot be determined pursuant to the
foregoing provisions of this paragraph, the current market price per share shall
be the fair market value thereof as determined in good faith by the Board of
Directors of the Company; provided, however, that clause (ii) of this paragraph
(m) shall not apply to any such grant or issuance if, after giving effect
thereto, the aggregate amount of Common Stock issued in all transactions covered
by clause (ii) of this paragraph (m) (assuming the exercise of all then
outstanding Options granted in such transactions) would exceed 5% of the number
of shares of Common Stock then outstanding
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(after giving effect to the exercise of the Options so granted and all then
outstanding Options or Convertible Securities).
SECTION 4.02 NOTICE OF ADJUSTMENT
Whenever the number of shares of Common Stock or other stock or property
issuable upon the exercise of each Warrant is adjusted, as herein provided, the
Company shall promptly give a written certificate of the Company to the Warrant
Agent of such adjustment or adjustments and shall cause the Warrant Agent
promptly to mail by first class mail, postage prepaid, to each Holder and the
Warrant Agent notice of such adjustment or adjustments. In addition, the
Company at its sole expense shall within 120 calendar days following the end of
each fiscal year of the Company during which any Warrants remain outstanding,
and promptly upon the request of any Holder of a Warrant in connection the
exercise of any of such Holder's Warrants, cause to be delivered to the Warrant
Agent a certificate of a firm of independent public accountants selected by the
Board of Directors of the Company (who may be the regular accountants employed
by the Company) setting forth the number of shares of Common Stock or other
stock or property issuable upon the exercise of each Warrant after such
adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.
The Warrant Agent shall be entitled to rely on such certificates and shall be
under no duty or responsibility with respect to any such certificate except to
exhibit the same from time to time to any Holder desiring an inspection thereof
during reasonable business hours. The Warrant Agent shall not at any time be
under any duty or responsibility to any Holder to determine whether any facts
exist that may require any adjustment of the number of shares of Common Stock or
other stock or property issuable on exercise of the Warrants, or with respect to
the nature or extent or any such adjustment when made, or with respect to the
method employed in making such adjustment or the validity or value (or the kind
or amount) of any shares of Common Stock or other stock or property which may be
issuable on exercise of the Warrants. The Warrant Agent shall not be
responsible for any failure of the Company to make any cash payment or to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
common stock or property upon the exercise or any Warrant.
SECTION 4.03 STATEMENT OF WARRANTS
Irrespective of any adjustment in the number or kind of shares issuable
upon the exercise of the Warrants, Warrants theretofore or thereafter issued may
continue to express the same number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
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SECTION 4.04 FRACTIONAL INTEREST
The Company shall not be required to issue fractional shares of Common
Stock on the exercise of Warrants. If more than one Warrant shall be presented
for exercise in full at the same time by the same Holder, the number of full
shares of Common Stock which shall be issuable upon such exercise shall be
computed on the basis of the aggregate number of shares of Common Stock
acquirable on exercise of the Warrants so presented. If any fraction of a share
of Common Stock would, except for the provisions of this Section, be issuable on
the exercise of any Warrant (or specified portion thereof), the Company shall
pay an amount in cash calculated by it to be equal to the then current market
price per share multiplied by such fraction computed to the nearest whole cent.
The Holders, by their acceptance of the Warrant Certificates, expressly waive
any and all rights to receive any fraction of a share of Common Stock or a stock
certificate representing a fraction of a share of Common Stock.
ARTICLE V
WARRANT TRANSFER BOOKS
SECTION 5.01 WARRANT TRANSFER BOOKS
The Warrant Certificates shall be issued in registered form only. The
Company shall cause to be kept at the office of the Warrant Agent a register in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Warrant Certificates and of transfers or
exchanges of Warrant Certificates by the Warrant Agent as herein provided.
At the option of the Holder thereof, Warrant Certificates may be
exchanged at such office, upon payment of the charges hereinafter provided.
Whenever any Warrant Certificates are so surrendered for exchange, the Company
shall execute, and the Warrant Agent shall countersign and deliver, the Warrant
Certificates that the Holder making the exchange is entitled to receive.
All Warrant Certificates issued upon any registration of transfer or
exchange of Warrant Certificates shall be the valid obligations of the Company,
evidencing the same obligations, and entitled to the same benefits under this
Agreement, as the Warrant Certificates surrendered for such registration of
transfer or exchange.
Every Warrant Certificate surrendered for registration of transfer or
exchange shall (if so required by
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the Company or the Warrant Agent) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Warrant Agent, duly executed by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be payable by Holders for any registration of
transfer or exchange of Warrant Certificates. The Company may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Warrant
Certificates.
Any Warrant Certificate when duly endorsed in blank shall be deemed
negotiable. The Holder of any Warrant Certificate duly endorsed in blank may be
treated by the Company, the Warrant Agent and all other persons dealing
therewith as the absolute owner thereof for any purpose and as the person
entitled to exercise the rights represented thereby, or to the transfer thereof
on the register of the Company maintained by the Warrant Agent, any notice to
the contrary notwithstanding; but until such transfer on such register, the
Company and the Warrant Agent may treat the registered Holder thereof as the
owner for all purposes.
ARTICLE VI
WARRANT HOLDERS
SECTION 6.02 NO VOTING RIGHTS
Prior to the exercise of the Warrants, no Holder of a Warrant
Certificate, as such, shall be entitled to any rights of a stockholder of the
Company, including, without limitation, the right to receive dividends or
subscription rights, the right to vote, to consent, to exercise any preemptive
right, to receive any notice of meetings of stockholders for the election of
directors of the Company or any other matter or to receive any notice of any
proceedings of the Company, except as may be specifically provided for herein.
SECTION 6.02 RIGHT OF ACTION
All rights of action in respect of this Agreement are vested in the
Holders of the Warrants, and any Holder of any Warrant, without the consent of
the Warrant Agent or any Holder of any other Warrant, may, on such Holder's own
behalf and for such Holder's own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company suitable to enforce,
or otherwise in respect of, such
17
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Holder's rights hereunder, including the right to exercise, exchange or
surrender for purchase such Holder's Warrants in the manner provided in this
Agreement.
ARTICLE VII
WARRANT AGENT
SECTION 7.01 NATURE OF DUTIES AND RESPONSIBILITIES ASSUMED
The Company hereby appoints the Warrant Agent to act as agent of the
Company as set forth in this Agreement. The Warrant Agent hereby accepts the
appointment as agent of the Company and agrees to perform that agency upon the
terms and conditions herein set forth, by all of which the Company and the
Holders of Warrants, by their acceptance thereof, shall be bound. The Warrant
Agent shall not by countersigning Warrant Certificates or by any other act
hereunder be deemed to make any representation as to validity or authorization
of the Warrants or the Warrant Certificates (except as to its countersignature
thereon) or of any securities or other property delivered upon exercise of any
Warrant, or as to the number or kind or amount of stock or other securities or
other property deliverable upon exercise of any Warrant or the correctness of
the representations of the Company made in such certificates that the Warrant
Agent receives. The Warrant Agent shall not have any duty to calculate or
determine any adjustments with respect to the kind and amount of shares or other
securities or any property receivable by Holders upon the exercise of Warrants
required from time to time, and the Warrant Agent shall have no duty or
responsibility in determining the accuracy or correctness of any such
calculation, other than to apply any adjustment, notice of which is given by the
Company to the Warrant Agent to be mailed to the Holders in accordance with
Section 4.02. The Warrant Agent shall not (a) be liable for any recital or
statement of fact contained herein or in the Warrant Certificates or for any
action taken, suffered or omitted by it in good faith in the belief that any
Warrant Certificate or any other document or any signature is genuine or
properly authorized, (b) be responsible for any failure on the part of the
Company to comply with any of its covenants and obligations contained in this
Agreement or in the Warrant Certificates or (c) be liable for any act or
omission in connection with this Agreement except for its own gross negligence
or willful misconduct. The Warrant Agent is hereby authorized to accept
instructions with respect to the performance of its duties hereunder from the
Chief Executive Officer, the President, any Vice President, the Chief Financial
Officer, the Treasurer, the Secretary or the Assistant Secretary of the Company
and to apply to any such officer for instructions
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(which instructions will be promptly given in writing when requested), and the
Warrant Agent shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with the instructions of any such officer,
except for its own gross negligence or willful misconduct, but in its discretion
the Warrant Agent may in lieu thereof accept other evidence of such or may
require such further or additional evidence as it may deem reasonable. Any
application by the Warrant Agent for written instructions from the Company may,
at the option of the Warrant Agent, set forth in writing any action proposed to
be taken or omitted by the Warrant Agent under this Agreement and the date on
and/or after which such action shall be taken or such omission shall be
effective. The Warrant Agent shall not be liable for any action taken by, or
omission of, the Warrant Agent in accordance with a proposal included in such
application on or after the date specified in such application (which date shall
not be less than three business days after the date any officer of the Company
actually receives such application, unless any such officer shall have consented
in writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Warrant Agent shall have
received written instructions in response to such application specifying the
action to be taken or omitted.
The Warrant Agent may execute and exercise any of the rights and powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys, agents or employees, provided reasonable care has been exercised
in the selection of any such attorney, agent or employee. The Warrant Agent
shall not be under any obligation or duty to institute, appear in or defend any
action, suit or legal proceeding in respect hereof, unless first indemnified to
its satisfaction, but this provision shall not affect the power of the Warrant
Agent to take such action as the Warrant Agent may consider proper, whether with
or without such indemnity. The Warrant Agent shall promptly notify the Company
in writing of any claim made or action, suit or proceeding instituted against or
arising out of or in connection with this Agreement. No provision of this
Agreement shall require the Warrant Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be reasonable grounds
for believing that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
The Company will perform, execute, acknowledge and deliver or cause to
be performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may reasonably be required by the Warrant Agent in
order to
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enable it to carry out or perform its duties under this Agreement.
The Warrant Agent shall act solely as agent of the Company hereunder.
The Warrant Agent shall not be liable except for the failure to perform such
duties as are specifically set forth herein, and no implied covenants or
obligations shall be read into this Agreement against the Warrant Agent, whose
duties and obligations shall be determined solely by the express provisions
hereof.
SECTION 7.02 RIGHT TO CONSULT COUNSEL
The Warrant Agent may at any time consult with legal counsel of its
selection satisfactory to it (who may be legal counsel for the Company), and the
Warrant Agent shall incur no liability or responsibility to the Company or to
any Holder for any action taken, suffered or omitted by it in good faith in
accordance with the opinion or advice of such counsel.
SECTION 7.03 COMPENSATION AND REIMBURSEMENT
The Company agrees to pay to the Warrant Agent from time to time
compensation for all services rendered by it hereunder as the Company and the
Warrant Agent may agree from time to time in writing, and to reimburse the
Warrant Agent for reasonable expenses and disbursements incurred in connection
with the execution and administration of this Agreement (including the
reasonable compensation and the expenses of its counsel), and further agrees to
indemnify the Warrant Agent for, and to hold it harmless against, any and all
loss, liability, damage, claim or expense incurred without gross negligence, bad
faith or willful misconduct on its part, arising out of or in connection with
the acceptance and administration of this Agreement, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. The
provisions of this Section 7.03 shall survive the termination of this Agreement.
SECTION 7.04 WARRANT AGENT MAY HOLD COMPANY SECURITIES
Except as may be limited by applicable law, the Warrant Agent and any
stockholder, director, officer or employee of the Warrant Agent may buy, sell or
deal in any of the Warrants or other securities of the Company or its Affiliates
or become pecuniarily interested in transactions in which the Company or its
Affiliates may be interested, or contract with or lend money to the Company or
its Affiliates or otherwise act as fully and freely as though it were not the
Warrant Agent under this Agreement. Nothing herein shall
20
<PAGE>
preclude the Warrant Agent from acting in any other capacity for the Company or
for any other person.
SECTION 7.05 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
(a) No resignation or removal of the Warrant Agent and no appointment
of a successor warrant agent shall become effective until the acceptance of
appointment by the successor warrant agent as provided herein. The Warrant
Agent may resign its duties and be discharged from all further duties and
liability hereunder (except liability arising as a result of the Warrant Agent's
own gross negligence, bad faith or willful misconduct) after giving written
notice to the Company. The Company may remove the Warrant Agent upon written
notice, and the Warrant Agent shall thereupon in like manner be discharged from
all further duties and liabilities hereunder, except as aforesaid. The Warrant
Agent shall, at the Company's expense, cause to be mailed (by first class mail,
postage prepaid) to each Holder of a Warrant at his last address as shown on the
register of the Company maintained by the Warrant Agent a copy of said notice of
resignation or notice of removal, as the case may be. Upon such resignation or
removal, the Company shall appoint in writing a new warrant agent. If the
Company shall fail to make such appointment within a period of 30 days after it
has been notified in writing of such resignation by the resigning Warrant Agent
or after such removal, then the Company shall become Warrant Agent until a
successor Warrant Agent has been appointed, and the Holder of any Warrant may
apply to any court of competent jurisdiction for the appointment of a new
warrant agent. Any new warrant agent, whether appointed by the Company or by
such a court, shall be a corporation doing business under the laws of the United
States, any state thereof or the District of Columbia, in good standing and
having a combined capital and surplus of not less than $50,000,000. The
combined capital and surplus of any such new warrant agent shall be deemed to be
the combined capital and surplus as set forth in the most recent annual report
of its condition published by such warrant agent prior to its appointment,
provided that such reports are published at least annually pursuant to law or to
the requirements of a federal or state supervising or examining authority.
After acceptance in writing of such appointment by the new warrant agent, it
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named herein as the Warrant Agent, without any further
assurance, conveyance, act or deed; but if for any reason it shall be necessary
or expedient to execute and deliver any further assurance, conveyance, act or
deed, the same shall be done at the expense of the Company and shall be legally
and validly executed and delivered by the resigning or removed Warrant Agent.
Not later than the effective date of any such
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appointment, the Company shall give notice thereof to the resigning or removed
Warrant Agent. Failure to give any notice provided for in this Section,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Warrant Agent or the appointment of a new warrant
agent, as the case may be.
(b) Any corporation into which the Warrant Agent or any new warrant
agent may be merged or any corporation resulting from any consolidation to which
the Warrant Agent or any new warrant agent shall be a party or any person to
whom the Warrant Agent transfers substantially all of its corporate trust
business shall be a successor Warrant Agent under this Agreement without any
further act, provided that such corporation (i) would be eligible for
appointment as successor to the Warrant Agent under the provisions of Section
7.05(a) or (ii) is a wholly-owned subsidiary of the Warrant Agent. Any such
successor Warrant Agent shall promptly cause notice of its succession as Warrant
Agent to be mailed (by first class mail, postage prepaid) to each Holder at such
Holder's last address as shown on the register maintained by the Warrant Agent
pursuant to Section 5.01.
ARTICLE VIII
COVENANTS OF THE COMPANY
SECTION 8.01 RESERVATION OF COMMON STOCK FOR ISSUANCE ON EXERCISE OF WARRANTS;
LISTING
The Company will at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, solely for
the purpose of issuance upon exercise of Warrants as herein provided, such
number of shares of Common Stock as shall then be issuable upon the exercise of
all outstanding Warrants. The Company covenants that all shares of Common Stock
which shall be so issuable shall, upon such issuance, be duly and validly issued
and fully paid and nonassessable, and that upon issuance such shares shall be
listed on each national securities exchange or quotation system (including
NASDAQ), if any, on which any other shares of outstanding Common Stock of the
Company are then listed.
SECTION 8.02 REPORTS TO HOLDERS
To the extent such documents are required to be sent by the Company to
the holders of its outstanding Common Stock, the Company shall file with the
Warrant Agent and provide Holders of Warrants, within 15 days after it files
them with the SEC, copies of its annual report and of the information,
22
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documents and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.
Notwithstanding that the Company may not be required to remain subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, it shall
continue to file with the SEC and, to the extent it is required to send such
documents to the holders of its outstanding Common Stock, provide the Warrant
Agent and the Holders of the Warrants with reports containing substantially the
same information as would have been required to be filed with the SEC and sent
to holders of its outstanding Common Stock had the Company continued to have
been subject to such reporting requirements; provided, however, that the Company
shall not be so obligated to file with the SEC if the SEC does not permit such
filings. In such event, such reports shall be provided to the Warrant Agent and
Holders of Warrants at the times the Company would have been required to provide
such reports had it been subject to such reporting requirements. Delivery of
such reports, information and documents to the Warrant Agent is for
informational purposes only and the Warrant Agent's receipt of such shall not
constitute constructive notice of any information contained therein, including
the Company's compliance with any of its covenants hereunder.
SECTION 8.03 AGREEMENTS RESPECTING WARRANTS
The Company agrees that it will not enter into any agreement or
instrument which would preclude the exercise of the Warrants for shares of
Underlying Common Stock.
SECTION 8.04 QUALIFICATION UNDER THE SECURITIES LAWS
The Company will register or otherwise qualify the Underlying Common
Stock issuable upon exercise of the Warrants pursuant to the provisions of the
Securities Act and pursuant to applicable state securities laws. So long as any
unexpired Warrants remain outstanding, the Company will file such amendments
and/or supplements to any registration statement under the Securities Act or
under any state securities laws covering the issuance of such Underlying Common
Stock and supplement and keep current any prospectus forming a part of such
registration statement as may be necessary to permit the Company to deliver to
each person exercising a Warrant a prospectus meeting the requirements of the
Securities Act and the regulations of the SEC thereunder, and as may be
necessary to comply with any applicable state securities laws.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 MONEY AND OTHER PROPERTY DEPOSITED WITH THE WARRANT AGENT
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Any money, securities or other property which at any time shall be
deposited by the Company or on its behalf with the Warrant Agent pursuant to
this Agreement shall be and are hereby assigned, transferred and set over to the
Warrant Agent in trust for the purpose for which such moneys, securities or
other property shall have been deposited; but such moneys, securities or other
property need not be segregated from other funds, securities or other property
of the Warrant Agent except to the extent required by law. The Warrant Agent
shall distribute any money deposited with it for payment and distribution to any
Holder by mailing by first-class mail a check in such amount as is appropriate,
to such Holder at the address shown on the Warrant register maintained pursuant
to Section 5.01, or as it may be otherwise directed in writing by such Holder,
upon surrender of such Holder's Warrants. Any money or other property deposited
with the Warrant Agent for payment and distribution to any Holder that remains
unclaimed for two years, less one day, after the date the money was deposited
with the Warrant Agent shall be paid to the Company upon its request therefor.
SECTION 9.02 PAYMENT OF TAXES
The Company will pay all taxes and other governmental charges that may
be imposed on the Company or on the holders of the Warrants or on the holders of
any securities deliverable upon exercise of Warrants with respect thereto. The
Company will not be required, however, to pay any tax or other charge imposed in
connection with any transfer involved in the issue of any certificate for shares
of Common Stock or other securities underlying the Warrants or payment of cash
or other property to any person other than the Holder of a Warrant Certificate
surrendered upon the exercise thereof, and in case of such transfer or payment,
the Warrant Agent and the Company shall not be required to issue any stock
certificate or security or pay any cash or distribute any property until such
tax or charge has been paid or it has been established to the Warrant Agent's
and the Company's satisfaction that no such tax or other charge is due.
SECTION 9.03 SURRENDER OF CERTIFICATES
Any Warrant Certificate surrendered for exercise or purchased or
otherwise acquired by the Company shall, if surrendered to the Company, be
delivered to the Warrant Agent, and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall promptly be canceled by such Warrant Agent
and shall not be reissued by the Company. The Warrant Agent shall return such
canceled Warrant Certificates to the Company.
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<PAGE>
SECTION 9.04 MUTILATED, DESTROYED, LOST AND STOLEN WARRANT CERTIFICATES
If (a) any mutilated Warrant Certificate is surrendered to the Warrant
Agent or (b) the Company and the Warrant Agent receive evidence to their
satisfaction of the destruction, loss or theft of any Warrant Certificate, and
there is delivered to the Company and the Warrant Agent such security or
indemnity as may be reasonably required by them to save each of them harmless,
then, in the absence of notice to the Company or any officer in the corporate
trust department of the Warrant Agent that such Warrant Certificate has been
acquired by a bona fide purchaser, the Company shall execute and upon its
written request the Warrant Agent shall countersign and deliver, in exchange for
any such mutilated Warrant Certificate or in lieu of any such destroyed, lost or
stolen Warrant Certificate, a new Warrant Certificate of like tenor and for a
like aggregate number of warrants.
Upon the issuance of any new Warrant Certificate under this Section
9.04, the Company may require the payment by the Holder of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and other expenses (including the reasonable fees and expenses of the
Warrant Agent) in connection therewith.
Every new Warrant Certificate executed and delivered pursuant to this
Section 9.04 in lieu of any destroyed, lost or stolen Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
destroyed, lost or stolen Warrant Certificate shall be at any time enforceable
by anyone, and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder.
The provisions of this Section 9.04 are exclusive and shall preclude (to
the extent lawful) all other rights or remedies with respect to the replacement
of mutilated, destroyed, lost or stolen Warrant Certificates.
SECTION 9.05 MISCELLANEOUS RIGHTS
The rights of Holders upon the occurrence of the events set forth in
this Agreement are cumulative. If more than one such event shall occur and the
periods following the occurrence of such events and prior to the closing of the
transactions that are the subject of such events overlap, each Holder may
exercise such rights arising therefrom as such Holder may elect without any
condition imposed upon such exercise not contained in this Agreement.
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Neither the Company nor any of its Affiliates involved in any proposed
transaction that is the subject of such an event shall have any obligation to
the Holders to consummate any such proposed transaction once an agreement or
agreement in principle or decision to proceed with respect thereto is reached,
whether on the terms first proposed or as revised, or to include any Holder in,
or apprise any Holder of, any negotiations or discussions concerning any such
proposed transaction among the prospective parties thereto.
SECTION 9.06 NOTICES
Any notice or communication by the Company or the Warrant Agent to the
other is duly given if in writing and delivered in person, mailed by first-class
mail (registered or certified, return receipt requested), or sent by telecopier
or overnight air courier guaranteeing next day delivery, to the other's address:
If to the Company:
ICF Kaiser International, Inc.
9300 Lee Highway
Fairfax, Virginia 22031-1207
Attention: Executive Vice President and Chief
Financial Officer
cc: Senior Vice President and General Counsel
If to the Warrant Agent:
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
The Company or the Warrant Agent by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications shall be deemed to have been duly given:
at the time delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and the next business day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class
mail to the Holder's address shown on the register of the Company maintained by
the Warrant Agent. Failure to mail a notice or communication to a Holder or any
26
<PAGE>
defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Warrant Agent at the same time.
SECTION 9.07 PERSONS BENEFITING
This Agreement shall be binding upon and inure to the benefit of the
Company and the Warrant Agent, and their respective successors and assigns, and
the Holders from time to time of the Warrants. Nothing in this Agreement is
intended or shall be construed to confer upon any person, other than the
Company, the Warrant Agent and the Holders of the Warrants, any right, remedy or
claim under or by reason of this Agreement or any part hereof.
SECTION 9.08 COUNTERPART ORIGINALS
The parties may sign any number of copies of this Agreement. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 9.09 AMENDMENTS
The Company may, without the consent of the Holders of the Warrants, by
supplemental agreement or otherwise, make any changes or corrections in this
Agreement (a) to cure any ambiguity or to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
(b) to add to the covenants and agreements of the Company for the benefit of the
Holders, or surrender any rights or power reserved to or conferred upon the
Company in this Agreement, or (c) that do not adversely affect the interests of
the Holders in any material respect. The Warrant Agent shall join with the
Company in the execution and delivery of any such supplemental agreements unless
it affects the Warrant Agent's own rights, duties or immunities hereunder, in
which case such party may, but shall not be required to, join in such execution
and delivery. Prior to executing any such supplemental agreement, the Warrant
Agent shall be entitled to receive and shall be protected in relying upon a
certificate of the Company which states that the proposed supplemental agreement
is in compliance with the terms of this Section 9.09.
SECTION 9.10 TERMINATION
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This Agreement (other than the Company's obligations with respect to
Warrants previously exercised under Article III, and with respect to
compensation, reimbursement and indemnification under Section 7.03) shall
terminate and be of no further force and effect, provided the Company has
complied with Section 3.05 hereof in the case of a Non-Surviving Combination, on
the earlier of (a) the Expiration Date and (b) the consummation of a
Non-Surviving Combination.
SECTION 9.11 GOVERNING LAW
THIS AGREEMENT AND EACH WARRANT ISSUED HEREUNDER SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 9.12 HEADINGS
The headings of the Articles and Sections of this Agreement have been
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
ICF KAISER INTERNATIONAL, INC.
By: /s/ Michael J. Rowny
-----------------------------------------
Name: Michael J. Rowny
Title: Executive Vice President and Chief
Financial Officer
THE BANK OF NEW YORK,as Warrant Agent
By: /s/ Lloyd A. McKenzie
-----------------------------------------
Name: Lloyd A. McKenzie
Title: Assistant Vice President
29
<PAGE>
EXHIBIT A
[FORM OF FACE OF WARRANT CERTIFICATE]
ICF KAISER INTERNATIONAL, INC.
WARRANT CERTIFICATE
No. _____ Certificate for Warrants
CUSIP
WARRANTS TO ACQUIRE COMMON STOCK OF
ICF KAISER INTERNATIONAL, INC.
This certifies that , or registered assigns, is
-----------------------
the registered holder of the number of Warrants set forth above (the
"Warrants"). Each Warrant entitles the holder thereof (the "Holder"), subject
to the provisions contained herein and in the Warrant Agreement referred to
below, to acquire from ICF Kaiser International, Inc., a Delaware corporation
(the "Company"), one share of Common Stock, $0.01 par value per share, of the
Company (the "Common Stock") for consideration equal to the Purchase Price (as
defined in the Warrant Agreement) per share of Common Stock. The Warrants
evidenced by this Warrant Certificate shall not be exercisable after and shall
terminate and become void as of the close of business on December 31, 1998 (the
"Expiration Date") or as of the closing of any Non-Surviving Combination, if
earlier.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of January 11, 1994 (the "Warrant Agreement"), among
the Company and The Bank of New York, as warrant agent (the "Warrant Agent",
which term includes any successor Warrant Agent under the Warrant Agreement),
and is subject to the terms and provisions contained in the Warrant Agreement,
to all of which terms and provisions the Holder of this Warrant Certificate
consents by acceptance hereof. The Warrant Agreement is hereby incorporated
herein by reference and made a part hereof. Reference is hereby made to the
Warrant Agreement for a full statement of the respective rights, limitations of
rights, duties and obligations of the Company, the Warrant Agent and the Holders
of the Warrants. Capitalized terms not defined herein have the meanings
ascribed thereto in the Warrant Agreement. A copy of the Warrant Agreement may
be obtained for inspection by the Holder hereof upon written request to the
Company at 9300 Lee Highway, Fairfax, Virginia 22031-1207, Attention of Senior
Vice President, General Counsel and Secretary.
<PAGE>
As provided in the Warrant Agreement and subject to the terms and
conditions therein set forth, the Warrants are immediately exercisable.
If the Company proposes, prior to the Expiration Date, to enter into a
merger, consolidation, sale of assets or other business combination with one or
more persons (other than a wholly-owned subsidiary of the Company) in which
consideration (other than Common Equity Securities) is distributed to the
holders of Common Stock in exchange for all or substantially all of their equity
interest in the Company (a "Non-Surviving Combination"), the Company shall give
written notice thereof to the Holders promptly after an agreement is reached but
in no event less than 30 days prior to the closing thereof. In the event the
Company enters into a Non-Surviving Combination, upon payment of the Purchase
Price prior to the Expiration Date, the Holder hereof will be entitled to
receive the shares of stock or other securities or other property (including any
money) of the surviving entity in such Non-Surviving Combination as the Holder
would have received had the Holder exercised its Warrants immediately prior to
such Non-Surviving Combination (or, if applicable, the record date therefor).
2
<PAGE>
In order to exercise a Warrant, the registered Holder hereof must
surrender this Warrant Certificate at the office of the Warrant Agent, with the
Exercise Subscription Form on the reverse hereof duly executed by the Holder
hereof, with signature guaranteed as therein specified and tender the Purchase
Price therefor.
ICF KAISER INTERNATIONAL, INC.
By:
---------------------------
Name:
Title:
[SEAL]
Attest:
------------------------
Secretary
DATED:
Countersigned:
The Bank of New York,
as Warrant Agent
By:
----------------------------
Authorized Signatory
Date of Countersignature:
3
<PAGE>
[FORM OF REVERSE OF WARRANT CERTIFICATE]
ICF KAISER INTERNATIONAL, INC.
This Warrant Certificate and all rights hereunder are transferable by
the registered Holder hereof, in whole or in part, on the register maintained by
the Warrant Agent, upon surrender of this Warrant Certificate for registration
of transfer at the office of the Warrant Agent maintained for such purpose, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Warrant Agent duly executed by, the
registered Holder hereof or his attorney duly authorized in writing, with
signature guaranteed as specified in the attached Form of Assignment. Upon any
partial transfer, the Company will issue and deliver to such Holder a new
Warrant Certificate or Certificates with respect to any portion not so
transferred. No service charge shall be made for any registration of transfer
or exchange of Warrant Certificates, but the Company may require payment by the
Holder of a sum sufficient to cover any tax or other governmental charge payable
in connection therewith.
All shares of Common Stock issuable by the Company upon the exercise of
the Warrants shall, upon such issue, be duly and validly issued and fully paid
and nonassessable, and upon issuance such shares shall be listed on each
national securities exchange or quotation system (including NASDAQ), if any, on
which any other shares of outstanding Common Stock are then listed.
Each taker and holder of this Warrant Certificate, by taking or holding
the same, consents and agrees that the holder of this Warrant Certificate when
duly endorsed in blank may be treated by the Company, the Warrant Agent and all
other persons dealing with this Warrant Certificate as the absolute owner hereof
for any purpose and as the person entitled to exercise the rights represented
hereby, or to the transfer hereof on the register of the Company maintained by
the Warrant Agent, any notice to the contrary notwithstanding, but until such
transfer on such register, the Company and the Warrant Agent may treat the
registered Holder hereof as the owner for all purposes.
The number of shares of Common Stock issuable upon exercise of the
Warrants is subject to adjustment in certain events, including (i) stock
dividends, stock splits and reclassifications affecting the Common Stock, (ii)
the issuance of certain rights, warrants or options, or convertible or
exchangeable securities, to the holders of
<PAGE>
Common Stock entitling them to acquire Common Stock at a price per share lower
than its then market value and (iii) sales by the Company of Common Stock at a
price per share lower than its
then market value.
The Warrants do not entitle any Holder to any of the rights of a
stockholder of the Company.
This Warrant Certificate and the Warrant Agreement are subject to
amendment as provided in the Warrant Agreement.
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an authorized signatory of the
Warrant Agent.
This Warrant Certificate and all rights hereunder shall be governed by
and construed in accordance with the laws of the State of New York, without
regard to principles of conflicts of laws.
2
<PAGE>
EXERCISE SUBSCRIPTION FORM
(to be executed only upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise __________ of the
Warrants represented by this Warrant Certificate, for the acquisition of one
share each of Common Stock, $0.01 par value per share, of ICF Kaiser
International, Inc., on the terms and conditions specified in this Warrant
Certificate and the Warrant Agreement herein referred to, surrenders this
Warrant Certificate and all right, title and interest therein to ICF Kaiser
International, Inc. and directs that the shares of Common Stock deliverable upon
the exercise of such Warrants be registered or placed in the name and at the
address specified below and delivered thereto.
Date: __________, ____
/(3)/
----------------------------
(Signature of Owner)
----------------------------
(Street Address)
-----------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
-----------------------------
- -----------------------
/(3)/ The signature must correspond with the name as written upon the face of
the within Warrant Certificate in every particular, without alteration or
enlargement or any change whatsoever, and must be guaranteed.
<PAGE>
FORM OF TRANSFER
FOR VALUE RECEIVED the undersigned registered Holder of this Warrant
Certificate hereby sells, assigns and transfers unto the Assignee(s) named below
(including the undersigned with respect to any Warrants constituting a part of
the Warrants evidenced by this Warrant Certificate not being assigned hereby)
all of the right of the undersigned under this Warrant Certificate, with respect
to the number of Warrants set forth below:
<TABLE>
------------------------------------------------------------------------
<S> <C> <C> <C>
Social Security
or other
identifying
Name of number of Number of
Assignee(s) Address assignee(s) Warrants
------------------------------------------------------------------------
------------------------------------------------------------------------
</TABLE>
and does hereby irrevocably constitute and appoint the Warrant Agent as the
undersigned's attorney to make such transfer on the register maintained by the
Warrant Agent for that purpose, with full power of substitution in the premises.
Date: __________, ____
/(1)/
---------------------------
(Signature of Owner)
---------------------------
(Street Address)
---------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
---------------------------
- -------------------
/(1)/ The signature must correspond with the name as written upon the face of
the within Warrant Certificate in every particular, without alteration
or enlargement or any change whatsoever, and must be guaranteed.
<PAGE>
Exhibit 4(d)
[FORM OF FACE OF WARRANT CERTIFICATE]
ICF KAISER INTERNATIONAL, INC.
WARRANT CERTIFICATE
No. _____ Certificate for __ Warrants
CUSIP 449244 110
WARRANTS TO ACQUIRE COMMON STOCK OF
ICF KAISER INTERNATIONAL, INC.
This certifies that _______________________, or registered assigns, is
the registered holder of the number of Warrants set forth above (the
"Warrants"). Each Warrant entitles the holder thereof (the "Holder"), subject
to the provisions contained herein and in the Warrant Agreement referred to
below, to acquire from ICF Kaiser International, Inc., a Delaware corporation
(the "Company"), one share of Common Stock, $0.01 par value per share, of the
Company (the "Common Stock") for consideration equal to the Purchase Price (as
defined in the Warrant Agreement) per share of Common Stock. The Warrants
evidenced by this Warrant Certificate shall not be exercisable after and shall
terminate and become void as of the close of business on December 31, 1998 (the
"Expiration Date") or as of the closing of any Non-Surviving Combination, if
earlier.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of January 11, 1994 (the "Warrant Agreement"), among
the Company and The Bank of New York, as warrant agent (the "Warrant Agent",
which term includes any successor Warrant Agent under the Warrant Agreement),
and is subject to the terms and provisions contained in the Warrant Agreement,
to all of which terms and provisions the Holder of this Warrant Certificate
consents by acceptance hereof. The Warrant Agreement is hereby incorporated
herein by reference and made a part hereof. Reference is hereby made to the
Warrant Agreement for a full statement of the respective rights, limitations of
rights, duties and obligations of the Company, the Warrant Agent and the Holders
of the Warrants. Capitalized terms not defined herein have the meanings
ascribed thereto in the Warrant Agreement. A copy of the Warrant Agreement may
be obtained for inspection by the Holder hereof upon written request to the
Company at 9300 Lee Highway, Fairfax, Virginia 22031-1207, Attention of Senior
Vice President, General Counsel and Secretary.
<PAGE>
As provided in the Warrant Agreement and subject to the terms and
conditions therein set forth, the Warrants are immediately exercisable.
If the Company proposes, prior to the Expiration Date, to enter into a
merger, consolidation, sale of assets or other business combination with one or
more persons (other than a wholly-owned subsidiary of the Company) in which
consideration (other than Common Equity Securities) is distributed to the
holders of Common Stock in exchange for all or substantially all of their equity
interest in the Company (a "Non-Surviving Combination"), the Company shall give
written notice thereof to the Holders promptly after an agreement is reached but
in no event less than 30 days prior to the closing thereof. In the event the
Company enters into a Non-Surviving Combination, upon payment of the Purchase
Price prior to the Expiration Date, the Holder hereof will be entitled to
receive the shares of stock or other securities or other property (including any
money) of the surviving entity in such Non-Surviving Combination as the Holder
would have received had the Holder exercised its Warrants immediately prior to
such Non-Surviving Combination (or, if applicable, the record date therefor).
2
<PAGE>
In order to exercise a Warrant, the registered Holder hereof must
surrender this Warrant Certificate at the office of the Warrant Agent, with the
Exercise Subscription Form on the reverse hereof duly executed by the Holder
hereof, with signature guaranteed as therein specified and tender the Purchase
Price therefor.
ICF KAISER INTERNATIONAL, INC.
By: /s/ James O. Edwards
-----------------------------------------
Name: James O. Edwards
Title: Chairman and Chief Executive Officer
[SEAL]
Attest: /s/ Paul Weeks, II
----------------------
Secretary
DATED:
Countersigned:
The Bank of New York,
as Warrant Agent
By: /s/ Lloyd A. McKenzie
---------------------------
Authorized Signatory
Date of Countersignature:
3
<PAGE>
[FORM OF REVERSE OF WARRANT CERTIFICATE]
ICF KAISER INTERNATIONAL, INC.
This Warrant Certificate and all rights hereunder are transferable by
the registered Holder hereof, in whole or in part, on the register maintained by
the Warrant Agent, upon surrender of this Warrant Certificate for registration
of transfer at the office of the Warrant Agent maintained for such purpose, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Warrant Agent duly executed by, the
registered Holder hereof or his attorney duly authorized in writing, with
signature guaranteed as specified in the attached Form of Assignment. Upon any
partial transfer, the Company will issue and deliver to such Holder a new
Warrant Certificate or Certificates with respect to any portion not so
transferred. No service charge shall be made for any registration of transfer
or exchange of Warrant Certificates, but the Company may require payment by the
Holder of a sum sufficient to cover any tax or other governmental charge payable
in connection therewith.
All shares of Common Stock issuable by the Company upon the exercise of
the Warrants shall, upon such issue, be duly and validly issued and fully paid
and nonassessable, and upon issuance such shares shall be listed on each
national securities exchange or quotation system (including NASDAQ), if any, on
which any other shares of outstanding Common Stock are then listed.
Each taker and holder of this Warrant Certificate, by taking or holding
the same, consents and agrees that the holder of this Warrant Certificate when
duly endorsed in blank may be treated by the Company, the Warrant Agent and all
other persons dealing with this Warrant Certificate as the absolute owner hereof
for any purpose and as the person entitled to exercise the rights represented
hereby, or to the transfer hereof on the register of the Company maintained by
the Warrant Agent, any notice to the contrary notwithstanding, but until such
transfer on such register, the Company and the Warrant Agent may treat the
registered Holder hereof as the owner for all purposes.
The number of shares of Common Stock issuable upon exercise of the
Warrants is subject to adjustment in certain events, including (i) stock
dividends, stock splits and reclassifications affecting the Common Stock, (ii)
the issuance of certain rights, warrants or options, or convertible or
exchangeable securities, to the holders of
<PAGE>
Common Stock entitling them to acquire Common Stock at a price per share lower
than its then market value and (iii) sales by the Company of Common Stock at a
price per share lower than its then market value.
The Warrants do not entitle any Holder to any of the rights of a
stockholder of the Company.
This Warrant Certificate and the Warrant Agreement are subject to
amendment as provided in the Warrant Agreement.
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an authorized signatory of the
Warrant Agent.
This Warrant Certificate and all rights hereunder shall be governed by
and construed in accordance with the laws of the State of New York, without
regard to principles of conflicts of laws.
2
<PAGE>
EXERCISE SUBSCRIPTION FORM
(to be executed only upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise __________ of the
Warrants represented by this Warrant Certificate, for the acquisition of one
share each of Common Stock, $0.01 par value per share, of ICF Kaiser
International, Inc., on the terms and conditions specified in this Warrant
Certificate and the Warrant Agreement herein referred to, surrenders this
Warrant Certificate and all right, title and interest therein to ICF Kaiser
International, Inc. and directs that the shares of Common Stock deliverable upon
the exercise of such Warrants be registered or placed in the name and at the
address specified below and delivered thereto.
Date: __________, ____
/(3)/
----------------------------
(Signature of Owner)
----------------------------
(Street Address)
-----------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
-----------------------------
- -----------------------
/(3)/ The signature must correspond with the name as written upon the face of
the within Warrant Certificate in every particular, without alteration or
enlargement or any change whatsoever, and must be guaranteed.
<PAGE>
FORM OF TRANSFER
FOR VALUE RECEIVED the undersigned registered Holder of this Warrant
Certificate hereby sells, assigns and transfers unto the Assignee(s) named below
(including the undersigned with respect to any Warrants constituting a part of
the Warrants evidenced by this Warrant Certificate not being assigned hereby)
all of the right of the undersigned under this Warrant Certificate, with respect
to the number of Warrants set forth below:
<TABLE>
------------------------------------------------------------------------
<S> <C> <C> <C>
Social Security
or other
identifying
Name of number of Number of
Assignee(s) Address assignee(s) Warrants
------------------------------------------------------------------------
------------------------------------------------------------------------
</TABLE>
and does hereby irrevocably constitute and appoint the Warrant Agent as the
undersigned's attorney to make such transfer on the register maintained by the
Warrant Agent for that purpose, with full power of substitution in the premises.
Date: __________, ____
/(1)/
---------------------------
(Signature of Owner)
---------------------------
(Street Address)
---------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
---------------------------
- -------------------
/(1)/ The signature must correspond with the name as written upon the face of
the within Warrant Certificate in every particular, without alteration
or enlargement or any change whatsoever, and must be guaranteed.
<PAGE>
Exhibit 4(e)
This Warrant and any shares acquired upon the exercise of this Warrant (i)
have not been registered under the Securities Act of 1933, as amended, and
may not be transferred in the absence of such registration or an exemption
therefrom under such Act, except under circumstances where neither such
registration nor such an exemption is required by law and (ii) are subject
to the provisions of a Registration and Liquidity Rights Agreement, dated
as of May 15, 1989, and as amended from time to time, between ICF Kaiser
International, Inc. (formerly American Capital and Research Corporation and
ICF International, Inc.) the several Purchasers named in Schedule I
thereto, and a copy of such Registration and Liquidity Rights Agreement is
on file at the principal office of ICF Kaiser International, Inc. Any
transferee of this Warrant, by such transferee's acceptance thereof, takes
subject to certain agreements by the holder of this Warrant contained
herein.
ICF KAISER INTERNATIONAL, INC.
(formerly AMERICAN CAPITAL AND RESEARCH CORPORATION
and ICF INTERNATIONAL, INC.)
Amended and Restated
Common Stock Purchase Warrant
Expiring May 15, 1999
May 31,1989
(As amended through
January 11, 1994)
No. W-_____
Private Placement No. 02489*114
ICF KAISER INTERNATIONAL, INC. (formerly American Capital and Research
Corporation and ICF International, Inc.), a Delaware corporation (herein,
together with its successors and assigns, the "Company"), for value received,
-------
hereby certifies that _______________________________, or registered assigns,
is entitled to purchase from the Company, at any time or from time to time prior
to 5 p.m., New York City time, on May 15, 1999, ______ duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock of the Company, par
value $0.01 per share (the "Common Stock"), determined as provided herein, at a
------------
purchase price of $6.87 per share, all subject to the terms, conditions and
adjustments set forth below in this Warrant.
This Warrant is one of the Common Stock Purchase Warrants (the "Warrants",
--------
such term to include all Warrants issued in exchange therefor or in substitution
thereof) originally issued by the Company in connection with the issuance and
sale by the
<PAGE>
Company of $30,000,000 in aggregate principal amount of its 13.50%
Senior Subordinated Notes due 1999 (the "Notes", such term to include all Notes
-----
issued in exchange therefor and in substitution thereof), pursuant to the
Purchase Agreement, dated as of May 15, 1989 as amended from time to time, the
"Purchase Agreement"), between the Company and the several purchasers of the
------------------
Notes named therein (each a "Purchaser" and, together, the "Purchasers").
--------- ----------
Copies of the Purchase Agreement are on file at the princial office of the
Company at 9300 Lee Highway, Fairfax, Virginia 22031. The Warrants originally
so issued (as amended through January 11, 1994 and to the extent such Warrants
remain outstanding on such date) evidence rights to purchase an aggregate of
275,088 shares of Common Stock of the Company, subject to adjustment as provided
herein. The Warrants shall be issued only in registered form. Certain
capitalized terms used in this Warrant are defined in section 13; capitalized
terms used herein and not defined are defined in the Purchase Agreement.
References in this Warrant to a particular "section" are, unless otherwise
specified, to that section of this Warrant.
1. Exercise of Warrant. 1.1. Manner of Exercise. This Warrant may
------------------- ------------------
be exercised by the holder hereof, in whole or in part, during normal business
hours on any Business Day, upon five Business Days' notice (the "Exercise
--------
Notice") by the holder hereof to the Company and by surrender of this Warrant to
- ------
the Company at the principal office of the Company, accompanied by a
subscription in substantially the form annexed hereto, specifying the number of
shares of Common Stock (or Other Securities) for which this Warrant is then to
be exercised, duly executed by such holder and by payment, in cash or by
certified or official bank check payable to the order of the Company or by the
application of certain securities in the manner provided in section 1.5 (or by
any combination of such methods), in the amount obtained by multiplying (x) the
-
number of shares of Common Stock (without giving effect to any adjustment
therein) by (y) $6.87, whereupon such holder shall be entitled to receive the
-
number of duly authorized, validly issued, fully paid and nonassessable shares
of Common Stock (or Other Securities) determined as provided in sections 2
through 6.
1.2. When Exercise Effective. Each exercise of this Warrant shall be
-----------------------
deemed to have been effected immediately prior to the close of business on the
Business Day on which this Warrant shall have been surrendered to the Company
upon the expiration of the notice period of five Business Days as provided in
section 1.1, and at such time the Person or Persons in whose name or names any
certificate or certificates for shares of Common Stock (or Other Securities)
shall be issuable upon such exercise as provded in section 1.3 shall be deemed
to have become the holder or holders of record thereof.
1.3. Delivery of Stock Certificates, etc. As soon as practicable
-----------------------------------
after the exercise of this Warrant, in whole or in part, and in any event within
five Business Days thereafter, the
-2-
<PAGE>
Company at its expense (including the payment by it of any applicable issuance
taxes) will cause to be issued in the name of and delivered to the holder hereof
or, subject to section 8, as such holder (upon payment by such holder of any
applicable transfer taxes) may direct,
(a) a certificate or certificates for the number of duly
authorized, validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such holder shall be
entitled upon such exercise plus, in lieu of any fractional share to
which such holder would otherwise be entitled, cash in an amount equal
to the same fraction of the Market Price per share on the Business Day
next preceding the date of such exercise, and
(b) in case such exercise is in part only, a new Warrant or
Warrants of like tenor, dated the date hereof, calling in the
aggregate on the face or faces thereof for issuance of the number of
shares of Common Stock equal (without giving effect to any adjustment
therein) to the number of such shares called for on the face of this
Warrant minus the number of such shares so designated by such holder
upon such exercise as provided in section 1.1.
1.4. Company to Reaffirm Obligations. The Company will, at the time
-------------------------------
of each exercise of this Warrant, upon the request of the holder hereof,
acknowledge in writing its continuing obligation to afford to such holder all
rights to which such holder shall continue to be entitled after such exercise in
accordance with the terms of this Warrant; provided, however, that if the holder
-------- -------
of this Warrant shall fail to make any such request, such failure shall not
affect the continuing obligation of the Company to afford such rights to such
holder.
2. Adjustment of Common Stock Issuable upon Exercise. 2.1.
-------------------------------------------------
Number of Shares. The number of shares of Common Stock which the holder of any
- ----------------
Warrant shall be entitled to receive upon each exercise thereof shall be
determined by multiplying the number of shares of Common Stock which would
otherwise (but for the provisions of this section 2) be issuable upon such
exercise, as designated by the holder thereof, by a fraction of which (a) the
-
numerator is $6.87 and (b) the denominator is the Warrant Price (as defined
-
below) in effect on the date of such exercise. The Warrant Price as of January
11, 1994 shall be $6.87, shall be adjusted and readjusted from time to time as
provided in this section 2.1, and, as so adjusted or readjusted, shall remain in
effect until a further adjustment or readjustment thereof is required by this
section 2.
2.2. Adjustment of Warrant Price. (a) Issuance of Additional Shares
--------------------------- -----------------------------
of Common Stock. In case the Company, at any time or from time to time on or
- ---------------
after January 11, 1994, shall
-3-
<PAGE>
issue or sell Additional Shares of Common Stock (including Additional Shares of
Common Stock deemed to be issued pursuant to section 2.3 or 2.4) without
consideration or for a consideration per share less than the greater of the
Current Market Price in respect of such class of stock and the Warrant Price in
effect immediately prior to such issuance or sale, then, and in each such case,
subject to section 2.8, such Warrant Price shall be reduced, concurrently with
such issuance or sale, to an amount (calculated to the nearest .01 of a cent)
determined by multiplying such Warrant Price by a fraction:
(i) the numerator of which shall be (A) the number of shares of
-
Common Stock outstanding immediately prior to such issuance or sale,
plus (B) the number of shares of Common Stock which the aggregate
-
consideration received by the Company for the total number of such
Additional Shares of Common Stock so issued or sold would purchase at
the greater of such Current Market Price and such Warrant Price, and
(ii) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such issuance or sale;
provided, however, that for the purposes of this section 2.2(a), (x) immediately
- -------- ------- -
after any Additional Shares of Common Stock are deemed to have been issued
pursuant to section 2.3 or 2.4 of this section 2, such Additional Shares of
Common Stock shall be deemed to be outstanding, and (y) notwithstanding clause
-
(x) of this proviso, treasury shares shall not be deemed to be outstanding and
-------
the disposition of any shares thereof by the Company shall be considered an
issuance or sale of Common Stock for purposes of this section 2. For purposes
of this section 2.2(a), shares of Common Stock "outstanding" at any time shall
include (i) shares of Common Stock outstanding at such time, and (ii) shares of
Common Stock issuable upon exercise of outstanding unexecised Options, or the
conversion of outstanding unconverted Convertible Securities.
(b) Extraordinary Dividends and Distributions. In case the Company
-----------------------------------------
at any time or from time to time on or after January 11, 1994 shall declare,
order, pay or make a dividend or other distribution (including, without
limitation, any distribution of other or additional stock or other securities or
property or Options by way of dividend or spin-off, reclassification,
recapitalization or similar corporate rearrangement) on the Common Stock other
than (i) a dividend payable in Additional Shares of Common Stock (in which case
-
the provisions of section 2.3 or 2.4 shall apply) or (ii) a dividend payable in
--
cash or other property and declared out of the earned surplus of the Company as
at the date of the original issuance of this Warrant as increased by any credits
(other than credits resulting from a reevaluation of property) and decreased by
any debits made thereto after such date, determined in accordance with
-4-
<PAGE>
GAAP, then, and in each such case, subject to section 2.8, the Warrant Price in
effect immedately prior to the close of business on the record date fixed for
the determination of holders of any class of securities entitled to receive such
dividend or distribution shall be reduced, effective as of the close of business
on such record date, to a price (calculated to the nearest .01 of a cent)
determined by multiplying such Warrant Price by a fraction:
(x) the numerator of which shall be the Current Market Price in
effect on such record date or, if the Common Stock trades on an
ex-dividend basis, on the date prior to the commencement of
ex-dividend trading, less the amount of such dividend or distribution
(as determined in good faith by a resolution of the Board of Directors
of the Company) applicable to one share of Common Stock, and
(y) the denominator of which shall be such Current Market Price.
2.3. Treatment of Options and Convertible Securities. In case the
-----------------------------------------------
Company at any time or from time to time on or after January 11, 1994 shall
issue, sell, grant or assume, or shall fix a record date for the determination
of holders of any class of scurities entitled to receive, any Options or
Convertible Securities, then, and in each such case, the maximum number of
Additional Shares of Common Stock (as set forth in the instrument relating
thereto, without regard to any provisions contained therein for a subsequent
adjustment of such number) issuable upon the exercise of such Options or, in the
case of Convertible Securities and Options therefor, the conversion or exchange
of such Convertible Securities, shall be deemed to be Additional Shares of
Common Stock issued as of the time of such issuance, sale, grant or assumption
(or, in case such a record date shall have been fixed, as of the close of
business on such record date; or, if the Common Stock trades on an ex-dividend
basis, on the date prior to the commencement of ex-dividend trading); provided,
--------
however, that such Additional Shares of Common Stock shall not be deemed to have
- -------
been issued unless the consideration per share (determined pursuant to section
2.5) of such shares would be less than the greater of the Current Market Price
and the Warrant Price in effect on the date of and immediately prior to such
issuance, sale, grant or assumption (or immediately prior to the close of
business on such record date or, if the Common Stock trades on an ex-dividend
basis, on the date prior to the commencement of ex-dividend trading), as the
case may be; and provided, further, that in any such case in which Additional
-------- -------
Shares of Common Stock are deemed to be issued:
(a) no further adjustment of the Warrant Price shall be made
upon the subsequent issuance or sale of Convertible Securities or
shares of Common Stock upon
-5-
<PAGE>
the exercise of such Options or the conversion or exchange of such
Convertible Securities;
(b) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in
the consideration payable to the Company, or decrease in the number of
Additional Shares of Common Stock issuable, upon the exercise,
conversion or exchange thereof (by change of rate or otherwise), the
Warrant Price computed upon the original issuance, sale, grant or
assumption thereof (or upon the occurrence of the record date with
respect thereto or, if the Common Stock trades on an ex-dividend
basis, on the date prior to the commencement of ex-dividend trading),
and any subsequent adjustments based thereon, shall, upon any such
increases or decreases becoming effective, be recomputed to reflect
such increase or decrease insofar as it affects such Options, or the
rights of conversion or exchange under such Convertible Securities,
which are outstanding at such time;
(c) upon the expiration (or purchase by the Company and
cancellation or retirement) of any such Options which shall not have
been exercised or the expiration of any rights of conversion or
exchange under any such Convertible Securities which (or purchase by
the Company and cancellation or retirement of any such Convertible
Securities the rights of conversion or exchange under which) shall not
have been exercised, the Warrant Price computed upon the original
issuance, sale, grant or assumption thereof (or upon the occurrence of
the record date, or date prior to the commencement of ex-dividend
trading, as the case may be, with respect thereto), and any subsequent
adjustments based thereon, shall, upon such expiration (or such
cancellation or retirement, as the case may be), be recomputed as if:
(i) in the case of such Convertible Securities or Options
for Common Stock, the only Additional Shares of Common Stock
issued or sold were the shares of Common Stock, if any, actually
issued or sold upon the exercise of such Options or the
conversion or exchange of such Convertible Securities and the
consideration received therefor was the consideration actually
received by the Company for the issuance, sale, grant or
assumption of all such Options, whether or not exercised, plus
the consideration actually received by the Company upon such
exercise, or for the issuance or sale of all such Convertible
Securities which were actually converted or exchanged, plus the
additional consideration, if any, actually received by the
Company upon such conversion or exchange,
-6-
<PAGE>
(ii) in the case of such Options for Convertible Securities,
only the Convertible Securities, if any, actually issued or sold
upon the exercise thereof were issued at the time of the
issuance, sale, grant or assumption of such Options, and the
consideration received by the Company for the Additional Shares
of Common Stock deemed to have then been issued was the
consideration actually received by the Company for the issuance,
sale, grant or assumption of all such Options, whether or not
exercise, plus the consideration deemed to have been received by
the Company (pursuant to section 2.5) upon the issuance or sale
of the Convertible Securities with respect to which such Options
were actually exercised, and
(iii) in the case of the purchase by the Company of any such
Options issued pursuant to the Rights Agreement, for purposes of
this section 2, there shall be deemed to have been issued for no
consideration a number of Additional Shares of Common Stock
equal to (x) the aggregate consideration paid by the Company to
purchase such Options divided by (y) the lesser of the Current
Market Price and the Warrant Price in effect on the date of such
purchase.
(d) no readjustment pursuant to clause (b) or (c) above shall have
the effect of increasing the Warrant Price by an amount in excess of the amount
of the adjustment thereof originally made in respect of the issuance, sale,
grant or assumption of such Options or Convertible Securities; and
(e) in the case of any such Options (other than rights issued
pursuant to the Rights Agreement) which expire by their terms not more than 30
days after the date of issuance, sale, grant or assumption thereof, no
adjustment of the Warrant Price shall be made until the expiration or exercise
of all such Options, whereupon such adjustment shall be made in the manner
provided in clause (c) above.
2.4. Treatment of Stock Dividends, Stock Splits, etc. In case the
-----------------------------------------------
Company at any time or from time to time on or after January 11, 1994 shall
declare or pay any dividend on the Common Stock payable in Common Stock, or
shall effect a subdivision of the outstanding shares of Common Stock into a
greater number of shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in Common Stock), then, and in each such case,
Additional Shares of Common Stock shall be deemed to have been issued (a) in the
-
case of any such dividend, immediately after the close of business on the record
date for the determination of holders of any class of securities entitled to
receive such dividend, or (b) in the case of any such subdivision,
-
-7-
<PAGE>
at the close of business on the day immediately prior to the day upon which such
corporate action becomes effective.
2.5. Computation of Consideration. For the purposes of this section,
----------------------------
(a) The consideration for the issuance or sale of any Additional
Shares of Common Stock shall, irrespective of the accounting treatment of such
consideration:
(i) insofar as it consists of cash, be computed at the net
amount of cash received by the Company, without deducting any expenses
paid or incurred by the Company or any commission or compensations
paid or concessions or discounts allowed to underwriters, dealers or
others performing similar services in connection with such issuance or
sale,
(ii) insofar as it consists of property (including securities)
other than cash, be computed at the fair market value thereof at the
time of such issuance or sale, as determined in good faith by the
resolution of the Board of Directors of the Company, and
(iii) in case Additional Shares of Common Stock are issued or
sold together with other stock or securities or other assets of the
Company for a consideration which covers both, be the portion of such
consideration so received, computed as provided in clauses (i) and
(ii) above, allocable to such Additional Shares of Common Stock, all
as determined in good faith by a resolution of the Board of Directors
of the Company;
(b) Additional Shares of Common Stock deemed to have been issued
pursuant to section 2.3, relating to Options and Convertible Securities, shall
be deemed to have been issued for a consideration per share determined by
dividing:
(i) the total amount, if any, received and receivable by the
Company as consideration for the issuance, sale, grant or assumption
of the Options or Convertible Securities in question, plus the minimum
aggregate amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration)
payable to the Company upon the exercise in full of such Options or
the conversion or exchange of such Convertible Securities, or, in the
case of Options for Convertible Securities, the exercise of such
Options for Convertible Securities and the conversion or exchange of
such Convertible Securities, in each case computing such
-8-
<PAGE>
consideration as provided in the foregoing subdivision (a),
by
(ii) the maximum number of shares of Common Stock (as set forth
in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or the conversion or exchange of
such Convertible Securities; and
(c) Additional Shares of Common Stock deemed to have been issued
pursuant to section 2.4, relating to stock dividends, stock splits, stock
appreciation rights exchanged for stock or cash, etc. shall be deemed to have
been issued for no consideration.
2.6. Adjustments for Combinations, etc. In case the outstanding
---------------------------------
shares of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Warrant Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.
2.7. Dilution in Case of Other Securities. In case any Other
------------------------------------
Securities shall be issued or sold or shall become subject to issuance or sale
upon the conversion or exchange of any stock (or Other Securities) of the
Company (or any issuer of Other Securities or any other Person referred to in
this section 2) or to subscription, purchase or other acquisition pursuant to
any Options issued or granted by the Company (or by any such other issuer or
Person) for consideration such as to dilute, on a basis consistent with the
standards established in the other provisions of this section 2, the rights
granted by any Warrant (it being understood that the right to purchase
securities of any other entity pursuant to the Rights Agreement at a price less
then the then current market value of such securities shall be deemed, at the
time such right becomes exercisable for such securities, to be an issuance of
Other Securities which shall be deemed to dilute the rights granted by the
Warrants), then, and in each such case, the computations, adjustments and
readjustments provided for in this section 2 with respect to the Warrant Price
shall be made as nearly as possible in the manner so provided and applied to
determine the amount of Other Securities from time to time receivable upon the
exercise of any Warrant, so as to protect the holder of the Warrant against the
effect of such dilution.
2.8. Minimum Adjustment of Warrant Price. If the amount of any
-----------------------------------
adjustment of the Warrant Price required pursuant to this section 2 would be
less than one-tenth (1/10) of 1% of the Warrant Price in effect at the time such
adjustment is otherwise so required to be made, such amount shall be carried
forward and
-9-
<PAGE>
adjustment with respect thereto made at the time of and together with any
subsequent adjustment which, together with such amount and any other amount or
amounts so carried forward, shall aggregate at least one-tenth (1/10) of 1% of
such Warrant Price.
3. Changes in Capital Stock. (a) In case at any time the Company
------------------------
shall be a party to any transaction (including, without limitation, a merger,
consolidation, sale of all or substantially all of the Company's assets,
liquidation or recapitalization of Common Stock or any combination thereof) in
which previously outstanding shares of Common Stock shall be changed into or
exchanged for different securities of the Company (other than by subdivision of
its outstanding shares of the Common Stock by reason of which an adjustment is
made under section 2.2(a)) or common stock or other securities of another
corporation or interests in a noncorporate entity or other property (including
cash) or any combination of any of the foregoing (each such transaction being
hereinafter referred to as the "Transaction", and the Company (in the case of a
-----------
recapitalization of the Common Stock or any combination thereof) or such other
corporation or entity (in each other case) being hereinafter referred to as the
"Acquiring Company"), and the voting common stock (or equivalent equity
-----------------
interests) of the Acquiring Company being hereinafter referred to as the
"Acquirer's Common Stock"), then, as a condition to the consummation of the
-----------------------
Transaction, lawful and adequate provisions shall be made so that each holder of
Warrants, upon the exercise thereof at any time on or after the consummation of
the Transaction (but subject, in the case of an election pursuant to clause (ii)
below, to the time limitation hereinafter provided for such election), shall be
entitled to receive (at the aggregate Warrant Price in effect at the time of
such consummation for all Common Stock or Other Securities issuable upon such
exercise immediately prior to consummation of such Transaction), and such
Warrants shall thereafter represent the right to receive, in lieu of the Common
Stock or Other Securities issuable upon such exercise prior to such
consummation, either of the following, as such holder shall elect within 60 days
following the date on which such holder shall have received a written notice of
the Transaction describing the material terms thereof and specifying the amounts
and types of securities referred to in clauses (i) and (ii) below, by written
notice to the Acquiring Company (and, in the absence of such notice, the
provisions of clause (ii)(A) below shall be deemed to have been elected by such
holder, and if the Transaction is a Change in Control Event, the provisions of
clause (ii)(B) shall be deemed to have been elected by such holder):
(i) the stock and other securities, cash and property to which
such holder would have been entitled upon such consummation if such
holder had exercised this Warrant immediately prior thereto, subject
to adjustments (subsequent to consummation of such Transaction) as
nearly equivalent as possible to the adjustments provided for in
section 2 and this section 3; or
-10-
<PAGE>
(ii) (A) the number of shares of Acquirer's Common Stock,
subject to adjustments (subsequent to such corporate action) as nearly
equivalent as possible to the adjustments provided for in section 2
and this section 3, determined by dividing (x) the product obtained by
multiplying (1) the number of shares of Common Stock (or Other
Securities) to which the holder of this Warrant would have been
entitled had such holder exercised this Warrant immediately prior to
such consummation, times (2) the greater of the Acquisition Price and
the Warrant Price in effect on the date immediately preceding the date
of such consummation, by (y) the current market price per share
(determined in the same manner as provided in the definition of
Current Market Price) of the Acquirer's Common Stock on the date
immediately preceding the date of such consummation, but after giving
effect to any change in the capital of the Acquiring Company in
connection with the Transaction (other than any such change resulting
fom a contribution by, merger with or other transaction with respect
to the Company or any Subsidiary or Affiliate thereof); and (B) if the
Transaction is a Change in Control Event, then, at the option of the
holder, cash upon exercise of such Warrants within the 60-day notice
period referred to in section 3(a), in an amount determined by
multiplying (1) the number of shares of Common Stock (or Other
Securities) to which the holder of this Warrant would have been
entitled had such holder exercised this Warrant immediately prior to
such consummation, times (2) the Change of Control Event Acquisition
Price.
(b) Notwithstanding anything contained herein to the contrary, the
Company shall not effect any Transaction unless prior to the consummation
thereof each corporation or entity (other than the Company) which may be
required to deliver any securities, cash or other property upon the exercise of
Warrants as provided herein shall assume, by written instrument delivered to,
and reasonably satisfactory to, each holder of Warrants, the obligation to
deliver to such holder such securities, cash or other property as to which, in
accordance with the foregoing provisions, such holder may be entitled, and such
corporation or entity shall have similarly delivered to each holder of Warrants
an opinion of counsel for such corporation or entity, satisfactory to the
holders of 66-2/3% of shares issuable upon exercise of the Warrants then
outstanding, which opinion shall state that all the outstanding Warrants,
including, without limitation, the exercise provisions applicable thereto, shall
thereafter continue in full force and effect and shall be enforceable against
the Company and such corporation or entity in accordance with the terms hereof
and thereof, together with such other matters as such holders may reasonably
request.
-11-
<PAGE>
4. Other Dilutive Events. In case any event shall occur as to
---------------------
which the provisions of section 2 or section 3 are not strictly applicable but
the failure to make any adjustment would not in the reasonable opinion of any
holder of a Warrant or the Company fairly protect the purchase rights
represented by any Warrant in accordance with the essential intent and
principles of such sections, then, in each such case, upon the written request
of such holder or on its own motion, the Company shall appoint a firm of
independent certified public accountants of recognized national standing (which
may be the regular auditors of the Company), which shall give their opinion upon
the adjustment, if any, on a basis consistent with the essential intent and
pinciples established in sections 2 and 3, necessary to preserve, without
dilution, the purchase rights represented by such Warrant, which opinion shall
be binding upon the Company and each holder of a Warrant. Upon receipt of such
opinion, the Company will promptly mail a copy thereof to each holder of
Warrants and shall make the adjustments described therein.
5. No Dilution or Impairment. The Company will not, by amendment
-------------------------
of its certificate of incorporation or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issuance or sale of securities
or any other voluntary action, void or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in carrying out all of such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of each
holder of a Warrant against dilution or other impairment. Without limiting the
generality of the foregoing, the Company (a) will not permit the par value of
-
any shares of stock receivable upon the exercise of any Warrant to exceed the
amount payable therefor upon such exercise, (b) will take all such action as may
-
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock on the exercise of
the Warrants from time to time outstanding, (c) will not take any action which
-
results in any adjustment of the Warrant Price if the total number of shares of
Common Stock (or Other Securities) issuable after such action, upon the exercise
of all of the Warrants, would exceed the total number of shares of Common Stock
(or Other Securities) then authorized by the certificate of incorporation and
available for the purpose of issuance upon such exercise, (d) will not issue any
-
capital stock of any class which is preferred as to dividends or as to the
distribution of assets upon voluntary or involuntary dissolution, liquidation or
winding up unless the rights of the holders thereof shall be limited to a fixed
sum or percentage of par value in respect of paticipation in dividends and in
the distribution of such assets, and (e) shall not institute any shareholder
rights or similar plan that is in any respect more detrimental to the interests
of the holders of the Warrants than the plan set forth in the Rights Agreement.
-12-
<PAGE>
6. Accountant's Report as to Adjustments. In each case of any
-------------------------------------
adjustment or readjustment in the number of shares of Common Stock (or Other
Securities) issuable upon the exercise or conversion of any Warrant, the Company
at its expense will promptly compute such adjustment or readjustment in
accordance with the terms of the Warrants and prepare a report setting forth
such adjustment or readjustment and showing in detail the method of calculation
thereof and the facts upon which such adjustment or readjustment is based,
including a statement of (a) the consideration received or to be received by the
-
Company for any Additional Shares of Common Stock issued or sold or deemed to
have been issued, (b) the number of shares of Common Stock outstanding or deemed
-
to be outstanding, and (c) the Warrant Price in effect immediately prior to such
-
issuance or sale and as adjusted and readjusted (if required by section 2) on
account thereof. The Company will forthwith (and in any event not later than 20
days following the occurrence of the event requiring such adjustment) furnish a
copy of each such report to each holder of a Warrant, and will, upon the written
request at any time of any holder of a Warrant, furnish to such holder a like
report setting forth he Warrant Price at the time in effect and showing how it
was calculated. At the end of each fiscal year, and at any time that any holder
of any Warrant shall exercise such Warrant, the Company will cause independent
certified public accountants of recognized national standing (which may be the
regular auditors of the Company) selected by the Company to verify any such
computations referred to in the preceding sentence made by the Company during
the preceding fiscal year or, in the case of any such report prepared at the
time of exercise of such Warrant, any such computations made after the close of
the prior fiscal period, and to prepare a report setting forth each such
adjustment referred to in the preceding sentence and showing in detail the
method of calculation thereof and the facts upon which any such adjustments are
based, including a statement verifying the information provided by the Company
with respect to each adjustment as set forth in clauses (a), (b) and (c) of the
- - -
first sentence of this section, and the Company will as soon as practicable and
in any event within 60 days after the end of each fiscal year and promptly after
notice by any holder of its intention to exercise a Warrant, and in any event
within 30 days after the giving of such notice, cause to be delivered to each
holder of a Warrant a copy of such report. The Company will also keep copies of
all such reports at its principal office, and will cause the same to be
available for inspection at such office during normal business hours by any
holder of a Warrant or any prospective purchaser of a Warrant designated by the
holder thereof. In addition, the Company will deliver to each holder of a
Warrant, as soon as available and in any event within 60 days after the close of
each fiscal quarter, a copy of any appraisal report prepared as contemplated by
the definition of Market Price set forth in section 13.
-13-
<PAGE>
7. Notices of Corporate Action. In the event of:
---------------------------
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a regular
periodic dividend payable in cash out of earned surpus in an amount
not in excess of the amount of the cash dividend paid for the
immediately preceding period of the same duration) or other
distribution, or any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company, any consolidation or merger involving the Company and any
other Person, any transfer of all or substantially all the assets of
the Company to any other Person, or any sale or arrangement to sell a
majority of the Common Stock to Persons which are not Affiliates of
the Company, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
the Company will deliver to each holder of Warrant a notice specifying (i) the
-
date or expected date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and amount and character of such dividend,
distribution or right, or (ii) the date or expected date on which any such
--
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place and the time,
if any such time is to be fixed, as of which the holders of record of Common
Stock (or Other Securities) shall be entitled to exchange their shares of Common
Stock (or Other Securities) for the securities or other property deliverable
upon such reorganization, reclassification, recapitalization, consolidation,
merger, transfer, dissolution, liquidation or winding-up. Such notice shall be
furnished at least 20 days prior to the date therein specified.
8. Restrictions on Transfer. 8.1. Restrictive Legends. Except
------------------------ -------------------
as otherwise permitted by this section 8, each Warrant originally issued
pursuant to the Purchase Agreement and each Warrant issued upon direct or
indirect transfer or in substitution for any Warrant pursuant to section 12
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
This Warrant and any shares acquired upon the exercise of this
Warrant (i) have not been registered under the Securities Act of 1933,
as amended, and may not be transferred in the absence of such
registration
-14-
<PAGE>
or an exemption therefrom under such Act, except under circumstances
where neither such registration nor such an exemption is required by
law and (ii) are subject to the provisions of a Registration and
Liquidity Rights Agreement, dated as of May 15, 1989, and as amended
from time to time, between ICF Kaiser International Inc. (formerly
American Capital and Research Corporation and ICF International, Inc.)
and the several Purchasers named in Annex I thereto, and a copy of
such Registration and Liquidity Rights Agreement is on file at the
principal office of ICF Kaiser International, Inc.
Except as otherwise permitted by this section 8, each certificate for
Common Stock (or Other Securities) issued upon the exercise of any such Warrant
and each certificate issued upon the direct or indirect transfer of any such
Common Stock (or Other Securities), shall be stamped or otherwise imprinted with
a legend in substantially the following form:
The shares represented by this certificate (i) have not been
registered under the Securities Act of 1933, as amended, and may not
be transferred in the absence of such registration or an exemption
therefrom under such Act, except under circumstances where neither
such registration nor such an exemption is required by law and (ii)
are subject to the provisions of a Registration and Liquidity Rights
Agreement, dated as of May 15, 1989, and as amended from time to time,
between ICF Kaiser International, Inc. (formerly American Capital and
Research Corporation and ICF International, Inc.) and the several
Purchasers named in Annex I thereto, and a copy of such Registration
and Liquidity Rights Agreement is on file at the principal office of
ICF Kaiser International, Inc.
8.2. Registration of Common Stock. If any shares of Common Stock
----------------------------
required to be reserved for purposes of exercise of this Warrant require
registration with or approval of any governmental authority under any federal or
state law (other than the Securities Act and any state blue sky law) before such
shares may be issued upon exercise, the Company will, at its expense and as
expeditiously as possible, use its best efforts to cause such shares to be duly
registered or approved, as the case may be.
8.3. Resale of Securities. If any Purchaser should decide to
--------------------
dispose of any Restricted Securities, other than pursuant to (a) the last
sentence of this section 8.3, (b) an effective registration statement under the
Securities Act or (c) Rule 144 (or any successor provision) under the Securities
Act, such Purchaser shall designate counsel (who may be its in-house counsel or
other counsel reasonably acceptable to the Company) in connection with such
disposition and such Purchaser will be entitled to transfer such Restricted
Securities free of
-15-
<PAGE>
the restrictions imposed by this section 8 upon the issuance to the Company of
the opinion of such counsel, provided that such opinion is reasonably acceptable
--------
to the Company and to the effect that the proposed distribution would not be in
violation of the Securities Act or any applicable state securities or blue sky
law. Each certificate and/or Warrant, if any, issued upon or in connection with
such transfer shall bear the applicable restrictive legend set forth in section
8.1 of this section 8, unless in the opinion of such counsel such legend is no
longer required to ensure compliance with the Securities Act or applicable state
securities or blue sky laws. Notwithstanding the foregoing, such Purchaser
shall be permitted to transfer any Restricted Securities to one or more
sophisticated institutional investors or to its nominee in accordance with
such laws, provided that (i) each such investor or nominee represents in writing
--------
that it is acquiring such Restricted Securities for investment and not with a
view to the distribution thereof (subject, however, to any requirement of law
that the disposition thereof shall at all times be within the control of such
transferee) unless in the written opinion of counsel for such Purchaser
designated as provided above, which opinion is delivered to and reasonably
acceptable to the Company, such a representation is not required in order to
ensure compliance with the Securities Act or applicable state blue sky laws and
(ii) each such investor or nominee agrees in writing to be bound by all the
restrictions on transfer of such Restricted Securities contained in this section
8.
8.4 Termination of Restrictions. The restrictions imposed by this
---------------------------
section 8 upon the transferability of Restricted Securities, except those
restrictions set forth in the first sentence of section 8.3, shall cease and
terminate as to any particular Restricted Securities (a) when such securities
-
shall have been effectively registered under the Securities Act and disposed of
in accordance with the registration statement covering such securities, or
(b) when, in the opinions of both counsel for the holder thereof (who may be its
-
in-house counsel or other counsel reasonably acceptable to the Company) and
counsel for the Company, such restrictions are no longer required in order to
ensure compliance with the Securities Act. The Company agrees to request an
opinion of its counsel as contemplated by clause (b) of the preceding sentence
-
upon receipt of such an opinion of counsel for the holder of a Restricted
Security setting forth or accompanied by the certificate of a duly authorized
officer of such holder setting forth facts sufficient to allow counsel for the
Company to render its opinion; and if the Company shall fail to deliver an
opinion of its counsel on this issue (whether favorable or unfavorable) within
five Business Days after delivery to the Company of such an opinion of counsel
for the holder of a Restricted Security, it shall not be necessary that any
opinion of the Company's counsel be delivered in order for the requirements of
said clause (b) to be satisfied. Whenever such restrictions shall terminate as
-
to any Restricted Securities, the holder thereof shall be entitled to receive
from the Company, without expense (other than transfer taxes, if any), new
securities of
-16-
<PAGE>
like tenor not bearing the restrictive legend set foth in section 8.1.
8.5. Expenses; Benefits to Certain Transferees. The Company will
-----------------------------------------
pay the reasonable fees, expenses and disbursements of counsel to the Purchaser
(if the Purchaser designates counsel who is not one of its officers or
employees) in connection with all opinions rendered to the Company pursuant to
this section 8. The Company agrees to afford the benefits of sections 8.3 and
8.4 to any institutional investor to whom any Restricted Security has been
transferred pursuant to the last sentence of section 8.3.
8.6. Alien Persons. (a) No holder of a Warrant or any shares of
-------------
Common Stock may transfer any such securities to any Person whom it reasonably
believes to be an Alien Person (except that any holder which is an Alien Person
may transfer to its Affilate which is an Alien Person) unless (i) it shall have
provided at least 30 days prior written notice to the Company (which notice
shall provide sufficient identifying information regarding the Alien Person to
permit the Company to complete and file a notice of proposed transfer and a DD
Form 441s (or such other form required to be filed with respect to transfers to
Alien Persons) with respect to such transfer); and (ii) the Company shall not
have notified the holder that it has been notified by the cognizant security
officer that such transfer would adversely affect the then current United States
Government security clearances of the Company and any of its Subsidiaries,
provided however, that if the cognizant security officer should notify the
- -------- -------
Company that the transfer may take place without adversely affecting the then
current security clearances of the Company or any of its Subsidiaries if
adequate steps are taken to negate or reduce foreign ownership, control or
influence, the transfer may take place if the transferee implements such steps
with the Company and its Subsidiaries.
(b) The Holder of a Warrant or any shares of Common Stock may rely
on a certificate from a proposed transferee as to whether it is an Alien Person
(and other identifying data) in forming its reasonable belief for purposes of
clause (a) above.
(c) If the cognizant security officer should require that steps be
taken to negate or reduce foreign ownership, control or influence of the Company
and its Subsidiaries in order to prevent an adverse effect on their respective
then current security clearances, then the Company, its Subsidiaries and any
Alien Person who holds such securities shall promptly implement those steps.
For purposes of this section, "Alien Person" shall mean any Person not
------------
a citizen or national of or organized or existing under the laws of, the United
States or any state or territory thereof, any representative of any such Person,
any foreign government or agency and any Person organized or existing under the
laws of the United States or any state or territory thereof
-17-
<PAGE>
which is under foreign ownership, control or influence within the meaning of the
Department of Defense Industrial Security Regulations.
9. Availability of Information. (a) The Company will comply with
---------------------------
all other public information reporting requirements of the Commission (including
Rule 144 promulgated by the Commission under the Securities Act) from time to
time in effect and relating to the availability of an exemption from the
Securities Act for the sale of any Restricted Securities. The Company shall
furnish to any holder of Restricted Securities all financial information that is
furnished to a holder of Notes pursuant to Section 7 of the Purchase Agreement
(whether or not any such Notes are outstanding) in the same manner as such
information is required to be delivered to such holder of Notes pursuant to
Section 7 of the Purchase Agreement. The Company will also cooperate with each
holder of any Restricted Securities in supplying such information as maybe
necessary for such holder to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to the
availabilty of an exemption from the Securities Act for the sale of any
Restricted Securities. The Company will furnish to each holder of any Warrants,
promptly upon their becoming available, copies of all financial statements,
reports, notices and proxy statements sent or made available generally by the
Company to its stockholders in their capacity as stockholders, and copies of all
regular and periodic reports and all registration statements and prospectuses
filed by the Company with any securities exchange or with the Commission.
(b) The holder of this Warrant, by acceptance hereof, agrees to
hold in confidence and to use only for purposes of assessing the investment
evidenced by this Warrant and the position of the Company and in enforcing the
rights of the holder of this Warrant, all unpublished information furnished
pursuant to this Warrant and relating to the Company or any Subsidiary which has
been conspicuously designated in writing as "confidential" at the time the same
was furnished; provided, however, that such holer may disclose any such
-------- -------
information in respect of the Company or any Subsidiary, irrespective of whether
or not such information shall have been designated as "confidential," (i) to
Affiliates of such holder and to actual or prospective purchasers of the
Securities in private transactions, (ii) to prospective assignees, (iii) if
required pursuant to or in connection with any action, suit, proceeding (whether
or not having the force of law) by, or any statute, rule or regulation of, any
governmental body, (iv) pursuant to any order of any court, arbitrator or
governmental body or as otherwise required by law, (v) to such holder's
auditors, to the extent required in the course of their audit, or to the
National Association of Insurance Commissioners, or (vi) to the extent necessary
in the enforcement of such holder's rights under this Warrant and the Collateral
Agreement; and the Company, for itself and on behalf of its Subsidiaries,
expressly consents to the disclosure of any such information to any of such
Persons (and under any such circumstances)
-18-
<PAGE>
contemplated in this Section; provided, further, however, that any Person to
-------- ------- -------
whom any such information shall be disclosed pursuant to clause (i) or (ii) of
the foregoing proviso shall agree with such holder to likewise be bound by and
subject to the provisions of this Section. Nothing contained in this Section
shall be construed to require the Company or any Subsidiary to disclose any
information which they are specifically prohibited from disclosing pursuant to
the Department of Defense Industrial Security Manual or other federal laws or
regulations relating to national security or pursuant to the terms of any
contract containing customary provisions prohibiting, on a reasonable basis, the
disclosure of such information.
10. Reservation of Stock, etc. The Company will at all times
-------------------------
reserve and keep available, solely for issuance and delivery upon the exercise
of the Warrants, the number of shares of Common stock (or Other Securities) from
time to time issuable upon the exercise of all Warrants at the time outstanding.
All such securities shall be duly authorized and, when issued upon such
exercise, shall be validly issued and, in the case of shares, fully paid and
nonassessable with no liability on the part of the holders thereof.
11. Inclusion in NASDAQ or Listing on Securities Exchange. The
-----------------------------------------------------
Company will, at its expense, use its best efforts to (a) maintain the approval
for inclusion in NASDAQ, or (b) at its option, obtain the approval for listing
on a national securities exchange upon official notice of issuance, of all
shares of Common Stock issuable upon exercise of the Warrants and to maintain
the listing or inclusion of such shares after their issuance; and the Company
will use its best efforts to so list on such national securities exchange or
include in NASDAQ, as the case may be, and to maintain such listing or inclusion
of, any Other Securities that at any time are issuable upon exercise of the
Warrants after any such Other Securities have been registered under the Exchange
Act.
12. Ownership, Transfer and Substitution of Warrants.
------------------------------------------------
12.1. Ownership of Warrants. The Company may treat the Person in
---------------------
whose name any Warrant is registered on the register kept at the principal
office of the Company as the owner and holder thereof for all purposes,
notwithstanding any notice to the contrary. Subject to section 8, a Warrant, if
properly assigned, may be exercised by a new holder without first having a new
Warrant issued. No Warrant may be assigned in blank.
12.2. Transfer and Exchange of Warrants. Upon the surrender of any
---------------------------------
Warrant, properly endorsed, for registration of transfer or for exchange at the
principal office of the Company, the Company at its expense will (subject to
compliance with section 8, if applicable) execute and deliver to or upon the
order of the holder thereof a new Warrant or Warrants of like tenor, exercisable
for not less than 20,000 shares of Common Stock
-19-
<PAGE>
(except one Warrant may be exercisable for less than 20,000 shares if the number
of shares of Common Stock subject to the surrendered Warrant is not evenly
divisible by 20,000) in the name of such holder or as such holder (upon payment
by such holder of any applicable transfer taxes) may direct, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face or faces of the Warrant or Warrants so surrendered.
12.3. Replacement of Warrants. Upon receipt of evidence reasonably
-----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant (which, in the case of the Purchaser or any institutional holder of a
Warrant, may be a written statement as to such loss, theft, destruction or
mutilation) and, in the case of such loss, theft or destruction of any Warrant,
upon delivery of indemnity reasonably satisfactory to the Company in form and
amount (which in the case of any Warrant held by a Purchaser or any
institutional investor may be the written indemnity of such Purchaser or
institutional investor), or, in the case of any such mutilation, upon surrender
of such Warrant for cancellation at the principal office of the Company, the
Company at its expense will execute and deliver, in lieu thereof, a new Warrant
of like tenor.
12.4. Registration and Liquidity Rights Agreement. The holder of
-------------------------------------------
this Warrant and any holder of shares of Common Stock (or Other Securities)
issued upon exercise of this Warrant (so long as such securities are "Restricted
Securities" as such term is defined in the registration and Liquidity Rights
Agreement referred to below), shall have the rights of the Purchasers under the
Registration and Liquidity Rights Agreement, dated as of May 15, 1989, and as
amended from time to time, among the Company and the Purchasers. This Warrant
and such shares are subject, however, to the rights of the Company to call the
Warrants for consideration as provided in the Registration and Liquidity Rights
Agreement.
13. Definitions. As used herein, unless the context otherwise
-----------
requires, the following terms have the following respective meanings:
"Acquirer's Common Stock" shall have the meaning specified in section
-----------------------
3(a)(ii)(A).
"Acquiring Company" shall have the meaning specified in section 3.
-----------------
"Acquisition Price" shall mean the consideration per share to be paid
-----------------
for or received by the holders of the previously outstanding shares of Common
Stock in accordance with the terms of the Transaction, determined (a) in the
-
case where the holders of the previously outstanding Common Stock of the Company
received solely shares of the Acquirer's Common Stock in the Transaction, (i)
-
the Market Price in respect for such class of stock on the
-20-
<PAGE>
date immediately preceding the date on which any Transaction is consummated, or
(ii) if a purchase, tender or exchange offer is made by the Acquiring Company
--
(or by any of its affiliates) to the holders of the Common Stock and such offer
is accepted by the holders of shares constituting more than 50% of the
outstanding shares of Common Stock, the greater of (x) the price determined in
-
accordance with the provisions of the foregoing clause (i) of this sentence and
(y) the Market Price in respect of such class of stock on the date immediately
-
preceding the acceptance of such offer by the holders of shares constituting
more than 50% of the outstanding shares of Common Stock and (b) in any other
-
case, by dividing the aggregate fair market value, as of the date of
consummation of such Transaction, of the aggregte consideration to be received
by the holders of such previously outstanding shares of Common Stock by the
number of shares of such previously outstanding shares of Common Stock.
"Additional Shares of Common Stock" shall mean all shares (including
---------------------------------
treasury shares) of Common Stock issued or sold (or, pursuant to section 2.3 or
2.4, deemed to be issued) by the Company after the date hereof, whether or not
subsequently reacquired or retired by the Company, other than shares of Common
Stock issued upon the exercise of the Company's Warrants initially exercisable
for 1,801,681 shares of Common Stock of the Company, issued pursuant to the
Purchase Agreement.
"Affiliate" shall have the meaning specified in the Purchase
---------
Agreement.
A "Beneficial Owner" of securities shall be determined as set forth in
----------------
Rule 13d-3 under the Exchange Act; provided, however, that a Person shall also
-------- -------
be deemed to be the Beneficial Owner of any securities (a) of which such Person
or any of its Affiliates is, directly or indirectly, the Beneficial Owner, or
(b) of which such Person or any of its Affiliates has (i) the right to acquire
(whether such right is exercisable immediately or only after the passage of
time), pursuant to any agreement, arrangement or understanding or upon the
exercise of Options or Convertible Securities, or otherwise, or (ii) sole or
shared voting or investment power with respect thereto pursuant to any
agreement, arrangement, understanding, relationship or otherwise (but shall not
be deemed to be the Beneficial Owner of any voting securities solely by reason
of a revocable proxy granted for a particular meeting of shareholders, pursuant
to a public solicitation of proxies for such meeting, with respect to shares of
which neither such Person, nor any such Affiliate is otherwise deemed the
Beneficial Owner) or (c) of which any other Person is, directly or indirectly,
the Beneficial Owner as to which such first mentioned Person or any of its
Affiliates acts with such other Person as a partnership, syndicate or other
group pursuant to any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any shares as a partnership,
syndicate or other group pursuant to any agreement, arrangement or uderstanding
for the purpose of acquiring,
-21-
<PAGE>
holding, voting or disposing of any shares of capital stock of the Company; and
provided further, however, that (i) no director or officer of the Company nor
- -------- ------- -------
any Affiliate of any such director or officer shall, slely by reason of any or
all of such directors or officers acting in their capacities as such, be deemed
for any purposes hereof to be the Beneficial Owner of any voting security of
which any other such director or officer (or any Affiliate thereof) is the
Beneficial Owner, (ii) no trustee of an employee stock ownership or similar plan
of the Company or any Subsidiary ("Employee Plan Trustee") or any Affiliate of
---------------------
any such Employee Plan Trustee shall, solely by reason of being an Employee Plan
Trustee or Affiliate thereof, be deemed for any purpose hereof to be the
Beneficial Owner of any voting security held by or under any such plan, and
(iii) no securities which continue to be owned by a director or office of the
Company shall be aggregated with securities owned by any other Person solely as
a result of such Persons collectively having taken actions or formed an intent
as a result of which they may be deemed all or part of a "group" within the
meaning of Section 13(d)(3) of the Exchange Act.
"Business Day" shall mean any day other than a Saturday, Sunday or any
------------
other day on which commercial banks are authorized or required by law to be
closed in New York, New York.
"Change in Control Event" shall mean the occurrence of any of the
-----------------------
following: (a) any Person (other than (i) the Company, any Subsidiary of the
Company, or the Senior Preferred Holder or any Affiliate thereof, (ii) any
pension, profit sharing, employee stock ownership or other employee benefit plan
of the Company or any Subsidiary thereof or any trustee or fiduciary with
respect to any such Plan when acting in such capacity, or (iii) any Person who
is, as of January 11, 1994, the Beneficial Owner of 40% or more of the total
voting power of the capital stock of the Company) is or becomes after January
11, 1994 the Beneficial Owner of 40% or more of the total voting power of the
Company; (b) during any two consecutive years, (i) individuals who at the
beginnng of such period constitute the Board of Directors of the Company, and
(ii) new directors whose election or appointment by the Board of Directors or
nomination or recommendation for election by the Company's shareholders was
approved by a vote of at least a majority of the directors then still in office
who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, and (iii) new directors
elected with the affirmative vote of the Senior Preferred Holder or its
Affiliates, cease for any reason (other than a shareholder proposal or proxy
solicitation initiated by or participated in or in favor of which the Senior
Preferred Holder or any one or more of its Affiliates exercises its voing power
in the capital stock of the Company) to constitute a majority thereof; or (c)
the shareholders of the Company approve a merger or consolidation of the Company
with any other corporation or other entity, other than a merger or consolidation
which, either individually or when aggregated with all other such transactions
consummated within the preceding nine months, would
-22-
<PAGE>
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 55% of the
total voting power represented by the voting securities of the Company or such
surviving entity outstanding, or the shareholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets.
"Change of Control Event Acquisition Price" shall mean the highest of
-----------------------------------------
the consideration per share to be paid for or received by the holders of the
previously outstanding shares of Common Stock or Other Securities (subject to
adjustment), respectively, in accordance with the terms of the Transaction,
determined by dividing the aggregate fair market value, as of the date of
consummation of such Transaction, of the aggregate consideration to be received
by the holders of such previously outstanding shares of Common Stock or Other
Securities, as the case may be, by the number of shares of such previously
outstanding shares of Common Stock or Other Securities, the value thereof
reasonably determined in good faith by the Board of Directors of the Company,
or, if the Board of Directors shall not make such determination, then and in
such case the aggregate fair market value shall be determined by a firm of
independent certified public accountants of recognized national standing (which
may not be the regular auditors of the Company but shall jointly be selected by
the Company, on the one hand, and the holders of the Warrants, on the other
hand, provided that Warrants for at least 500,000 shares of Common Stock are at
--------
the time outstanding) appointed by the Company, which determination shall be
binding upon the Company and each holder of a Warrant.
"Commission" shall mean the Securities and Exchange Commission or any
----------
other Federal agency at the time administering the Securities Act.
"Common Stock" shall have the meaning specified in the first paragraph
------------
of this Warrant, such term to include any stock into which such Common Stock
shall have been changed or any stock resulting from any reclassification of such
Common Stock.
"Company" shall have the meaning specified in the opening paragraphs
-------
of this Warrant, including any corporation which shall succeed to or assume the
obligations of the Company hereunder in compliance with section 3.
"Consummation Date" shall have the meaning specified in section 3.
-----------------
"Convertible Securities" shall mean any evidences of indebtedness,
----------------------
shares of stock (other than Common Stock) or other securities directly or
indirectly convertible into or exchangeable for Common Stock.
-23-
<PAGE>
"Current Market Price" per share of Common Stock shall mean, on any
--------------------
date specified herein for the determination thereof, (a) the average daily
-
Market Price of such class of stock for those days during the period of 20 days,
ending on such date, on which the national securities exchanges were open for
trading, and (b) if the Common Stock is not then listed or admitted to trading
-
on any national securities exchange or quoted in the over-the-counter market,
the Market Price of such class of stock on such date.
"Exchange Act" shall mean the Securities Exchange Act of 1934, or any
------------
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Exercise Notice" shall have the meaning specified in section 1.1.
---------------
"Market Price" shall mean, per share of Common Stock on any date
------------
specified herein, (a) the last sale price of the Common Stock on such date or,
-
if no such sale takes place on such date, the average of the closing bid and
asked prices on such date, in each case as officially reported on the principal
national securities exchange on which the Common Stock is then listed or
admitted to trading, or (b) if the Common Stock is not then listed or admitted
-
to trading on any national securities exchange, but is designated as a national
market system security by the NASD, the last trading price of the Common Stock
on such date, or (c) if there shall have been no trading on such date or if the
-
Common Stock is not so designated, the average of the reported closing bid and
asked prices of the Common Stock on such date as shown by NASDAQ and reported by
any member firm of the New York Stock Exchange selected by the Company, or (d)
-
if neither (a), (b) nor (c) is applicable in respect of such class of common
stock, a price per share in respect of such class of common stock equal to the
price per share of the other class of common stock determined as provided in the
foregoing clause (a), or if not applicable, clause (b), or, if not applicable,
clause (c), or (e) if neither (a), (b), (c) nor (d) is applicable, a market
price per share determined at the Company's expense by an appraiser chosen by
the Company, provided, however, that if at any time after November 15, 1989 the
-------- -------
holder or holders of Warrants exercisable for 66-2/3% of the aggregate number of
shares of Common Stock at the time subject to Warrants so elect, the market
price determined pursuant to this clause (e) shall be a price per share
determined at the Company's expense by an appraiser selected by mutual agreement
of the Company and such holder or holders.
"NASD" shall mean the National Association of Securities Dealers, Inc.
----
-24-
<PAGE>
"NASDAQ" shall mean the National Market System of the National
------
Association of Securities Dealers, Inc. Automated Quotations System.
"Note" and "Notes" shall have the respective meanings specified in the
---- -----
opening paragraphs of this Warrant.
"Options" shall mean options, warrants or rights (including, without
-------
limitation, rights issued pursuant to the Rights Agreement, provided that rights
--------
issued under the Rights Agreement shall be deemed to be Options to purchase
Common Stock and each other security for which such rights are at any time
exercisable, which Options shall be deemed for purposes of section 2 to be
issued, with respect to each of the Common Stock and each such other security,
on the date that such rights first become exercisable or Common Stock or such
other security, as the case may be, and provided further that if such rights are
----------------
redeemed, any adjustment to the Warrant Price made as a result of the issuance
of such rights shall be recomputed, in accordance with the principles set forth
in section 2.3(c), as if the only shares of Common Stock or other securities
issued or sold upon exercise of such rights were the shares of Common Stock or
other securities actually so issued or sold, provided that section 2.3(c)(iii)
--------
shall be given effect, if applicable) to subscribe for, purchase or otherwise
acquire capital stock of the Company or Convertible Securities.
"Other Securities" shall mean any stock (other than Common Stock) and
----------------
other securities of the Company or any other Person (corporate or otherwise)
which the holders of the Warrants at any time shall be entitled to receive, or
shall have received, upon the exercise of the Warrants, in lieu of or in
addition to Common Stock, or which at any time shall be issuable or shall have
been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to section 3 or otherwise.
"Person" shall mean a corporation, an association, a partnership, an
------
organization, or business, an individual, a government or political subdivision
thereof or a governmental agency.
"Purchase Agreement" shall have the meaning specified in the opening
------------------
paragraphs of this Warrant.
"Purchaser" and "Purchasers" shall have the respective meanings
--------- ----------
specified in the opening paragraphs of this Warrant.
"Restricted Securities" shall mean (a) any Warrants bearing the
--------------------- -
applicable legend set forth in section 8.1, (b) any shares of Common Stock (or
-
Other Securities) issued upon the exercise of Warrants which are evidenced by a
certificate or certificates bearig the applicable legend set forth in such
section, (c) any shares of Common Stock (or Other Securities)
-25-
<PAGE>
issued subsequent to the exercise of any of the Warrants as a dividend or other
distribution with respect to, or resulting from a subdivision of the outstanding
shares of Common Stock (or Other Securities) into a greater number of shares by
reclassification, stock splits or otherwise, or in exchange for or in
replacement of Common Stock (or Other Securities) issued upon such exercise,
which are evidenced by a certificate or certificates bearing the applicable
legend set forth in such section, and (d) unless the context otherwise requires,
-
any shares of Common Stock (or Other Securities) issuable upon the exercise of
Warrants, which, when so issue, will be evidenced by a certificate or
certificates bearing the applicable legend set forth in such section.
"Rights Agreement" shall mean the Rights Agreement between the Company
----------------
and the Rights Agent designated therein approved by the Board of Directors of
the Company on January 13, 1992, as amended from time to time, provided that,
--------
without limitation of the rights of the holders of the Warrants, any holder of a
Warrant may exercise the rights set forth in section 4 in respect of any
amendment of the Rights Agreement that affects the rights of the holders of the
Warrants.
"Securities Act" shall mean the Securities Act of 1933, or any similar
--------------
Federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
"Senior Preferred Holder" means IFINT-USA Inc., a Delaware
-----------------------
corporation, or any Affiliate thereof.
"Subsidiary" shall have the meaning specified in the Purchase
----------
Agreement.
"Transaction" shall have the meaning specified in section 3.
-----------
"Warrant Price" shall have the meaning specified in section 2.
-------------
"Warrants" shall have the meaning specified in the opening paragraphs
--------
of this Warrant.
14. Remedies. The Company stipulates that the remedies at law of the
--------
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that, to the extent permitted by
applicable law, such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.
15. No Rights or Liabilities as Stockholder. Nothing contained in
---------------------------------------
this Warrant shall be construed as conferring upon
-26-
<PAGE>
the holder hereof at any time prior to the exercise hereof any rights as a
stockholder of the Company or as imposing any obligation on such holder to
purchase any securities or as imposing any liabilities on such holder as a
stockholder of the Company, whether such obligation or liabilities are asserted
by the Company or by creditors of the Company.
16. Notices. All notices and other communications provided for
-------
herein shall be mailed by first class mail, postage prepaid, or delivered by
telecopier, if confirmed in writing within the next three days, or overnight
courier, addressed (a) if to any holder of any Warrant, at the registered
-
address of such holder as set forth in the register kept at the principal office
of the Company, or (b) if to the Company, at its principal office, 9300 Lee
-
Highway, Fairfax, Virginia 22031, to the attention of the Chief Financial
Officer, or at the address of such other principal office of the Company as the
Company shall have furnished to each holder of any Warrants in writing;
provided, however, that the exercise of any Warrant shall be effective in the
- -------- -------
manner provided in section 1.
17. Miscellaneous. This Warrant and any term hereof may be changed,
-------------
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. Any provision of this Warrant which shall be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the Company
waives any provision of law which shall render any provision hereof prohibited
or unenforceable in any respect. This Warrant shall be governed by the laws of
the State of New York. The headings of this Warrant are inserted for
convenience only and shall not be deemed to constitute a part hereof.
ICF KAISER INTERNATIONAL, INC.
By /s/ Michael J. Rowny
-------------------------------------
Name: Michael J. Rowny
Title: Executive Vice President
and Chief Financial Officer
-27-
<PAGE>
FORM OF SUBSCRIPTION
--------------------
[To be executed only upon exercise of Warrant]
To: ICF KAISER INTERNATIONAL, INC.
The undersigned registered holder of the attached Warrant hereby
irrevocably exercises such Warrant for, and purchases thereunder, ___________*
shares of Common Stock of ICF Kaiser International, Inc. and herewith makes
payment of $___________ therefor, and requests that the certificates for such
shares be issued in the name of, and delivered to __________________________
__________________________, whose address is:
Dated:
---------------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of Warrant)
---------------------------------------
(Street Address)
---------------------------------------
(City) (State) (Zip Code)
- -------------------------------------
* Insert here the number of shares called for on the face of this Warrant (or
in the case of a partial exercise, the portion thereof as to which this Warrant
is being exercised), in either case without making any adjustment for additional
Common Stock or any other stock or other securities or property or cash which,
pursuant to the adjustment provisions of this Warrant, may be delivered upon
exercise. In the case of a partial exercise, a new Warrant or Warrants will be
issued and delivered, representing the unexercised portion of the Warrant, to
the holder surrendering the Warrant. The holder of this Warrant shall in any
event be entitled to receive such number of shares of Common Stock as shall be
determined as adjusted pursuant to the provisions of this Warrant.
<PAGE>
FORM OF ASSIGNMENT
------------------
[To be executed only upon transfer of Warrant]
For value received, the undersigned registered holder of the
attached Warrant hereby sells, assigns and transfers unto
________________________________ the right represented by such Warrant to
purchase _______ shares of Common Stock of ICF KAISER INTERNATIONAL, INC. to
which such Warrant relates, and appoints _________________ Attorney to make such
transfer on the books of ICF KAISER INTERNATIONAL, INC. maintained for such
purpose, with full power of substitution in the premises.
----------------------------------------------
(Signature must conform in all respects to
name of holder as specified on the face of
Warrant)
----------------------------------------------
(Street Address)
----------------------------------------------
(City) (State) (Zip Code)
Signed in the presence of:
- -------------------------------------------------
<PAGE>
Exhibit 4(f)
This Series 2D Warrant and any shares of Common Stock acquired upon the
exercise of this Series 2D Warrant have not been registered under the
Securities Act of 1933, as amended, and may not be transferred in the
absence of such registration or an exemption therefrom under such Act,
except under circumstances where neither such registration nor such an
exemption is required by law. Any transferee of this Series 2D Warrant, by
such transferee's acceptance hereof, takes subject to certain agreements by
the holder of this Series 2D Warrant contained herein. Transfer of this
Series 2D Warrant is further limited by certain conditions set forth in that
certain Securities Purchase Agreement, dated as of December 20, 1990, among
American Capital and Research Corporation, IFINT-USA Inc. and FIMA Finance
Management Inc., as amended from time to time.
ICF KAISER INTERNATIONAL, INC.
Series 2D Warrant to Purchase 2,680,952 Shares of Common Stock (subject to
adjustment)
Expiring January 13, 1997 (subject to extension)
January 11, 1994
Series 2D Warrant
No. 2D-2
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Exercise of Series 2D Warrant.................. 2
1.1 Manner of Exercise........................ 2
1.2 When Exercise Effective................... 5
1.3 Delivery of Stock Certificates............ 5
1.4 Company to Reaffirm Obligations........... 6
1.5 Payment by Application of Series 2D
Preferred Shares or Exchange Securities... 7
1.6 Extension of Expiration................... 8
2. Adjustment of Number and Price of Shares of
Common Stock Issuable upon Exercise of
Series 2D Warrant.............................. 8
2.1 Number and Price of Shares................ 8
2.2 Adjustment of Series 2D Warrant Price..... 9
(a) Issuance of Additional Shares of
Common Stock......................... 9
(b) Extraordinary Dividends and
Distributions........................ 11
2.3 Treatment of Options and Convertible
Securities................................ 12
2.4 Treatment of Stock Dividends, Subdivisions
or Splits................................. 15
2.5 Computation of Consideration.............. 16
2.6 Combinations or Reclassifications......... 18
2.7 Dilution for Other Securities............. 19
2.8 Minimum Adjustment of Series 2D Warrant
Price..................................... 20
2.9 Change in Control Event................... 20
3. Transactions Resulting in Changes in Capital
Stock.......................................... 20
4. Adjustments for Other Dilutive Events.......... 24
5. No Dilution or Impairment...................... 25
6. Accountant's Report as to Adjustments.......... 26
7. Notices of Corporate Action.................... 28
8. Restrictions on Transfer....................... 30
8.1 Restrictive Legends....................... 30
8.2 Registration of Common Stock.............. 31
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C> <C>
8.3 Transfer of Restricted Securities......... 32
9. Availability of Information.................... 32
10. Reservation of Stock........................... 34
11. Inclusion in NASDAQ or Listing on a National
Securities Exchange............................ 35
12. Procedure for Ownership, Transfer and
Substitution of Series 2D Warrants............. 35
12.1 Ownership of Series 2D Warrants........... 35
12.2 Transfer and Exchange of Series 2D
Warrants....................................... 34
12.3 Replacement of Series 2D Warrants......... 36
13. Definitions.................................... 37
14. Remedies....................................... 49
15. No Rights or Liabilities as Stockholder........ 49
16. Notices........................................ 49
17. Miscellaneous.................................. 50
</TABLE>
-ii-
<PAGE>
ICF KAISER INTERNATIONAL, INC., a Delaware corporation (herein, together
with its successors and assigns, the "Company"), for value received, hereby
-------
certifies that FIMA FINANCE MANAGEMENT INC. (the "Purchaser"), or registered
---------
assigns permitted under section 8, is entitled to purchase from the Company, at
---------
any time or from time to time prior to 5 p.m. New York City time on January 13,
1997 (the "Expiration Date," subject to extension as provided in section 1.6),
-----------
2,680,952 duly authorized, validly issued, fully paid and nonassessable shares
of Common Stock of the Company, par value $0.01 per share (the "Common Stock"),
------------
at a purchase price of $6.90 per share, subject to the terms, conditions and
adjustments set forth in this Series 2D Warrant.
This Series 2D Warrant is one of the Series 2D Class A Common Stock Purchase
Warrants (the "Series 2D Warrants", such term to include all Series 2D Warrants
------------------
issued in exchange therefor or in substitution thereof) originally issued by the
Company in connection with the issuance and sale by the Company on the Issuance
Date of $20,000,000 liquidation value of Series 2D Senior Preferred Stock, par
value $0.01 per share (all such shares issued on the Issuance Date are the
"Series 2D Preferred Shares," such term to include all Series 2D Preferred
- ---------------------------
Shares issued in exchange therefor and in substitution thereof), pursuant to the
Securities Purchase Agreement dated as of December 20, 1990 as amended by
Amendment No. 1 dated as of January 13, 1992, among the Company, IFINT-USA Inc.,
a Delaware Corporation, and the Purchaser (as further amended from time to time,
the "Securities Purchase Agreement"). Copies of the
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1
<PAGE>
Securities Purchase Agreement are on file at the principal office of the
Company at 9300 Lee Highway, Fairfax, Virginia 22031. The Series 2D Warrants
originally so issued evidence rights to purchase an aggregate of 2,680,952
shares of Common Stock of the Company, subject to adjustment as provided herein.
The Series 2D Warrants shall be issued only in registered form. Certain
capitalized terms used in this Series 2D Warrant are defined in section 13.
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References in this Series 2D Warrant to a particular "section" are, unless
otherwise specified, to that section of this Series 2D Warrant.
1. Exercise of Series 2D Warrant.
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1.1 Manner of Exercise. This Series 2D Warrant may be exercised by
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the holder hereof, in whole or in part, during normal business hours on any
Business Day, upon five Business Days' notice (the "Exercise Notice") by the
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holder hereof to the Company and by surrender of this Series 2D Warrant to the
Company at the principal office of the Company, accompanied by a subscription in
substantially the form annexed hereto, specifying the number of shares of Common
Stock (or Other Securities) for which this Series 2D Warrant is then to be
exercised, duly executed by such holder and accompanied by payment, either (a)
in cash, by confirmed wire transfer of immediately-available funds into an
account or accounts to be designated by the Company at least three Business Days
prior to such exercise or, if no such account is so designated, by certified or
official bank check payable to the order of the Company, or (b) by the
application of Series 2D Preferred Shares or Exchange Securities in the manner
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<PAGE>
provided in section 1.5 or (c) by any combination of such methods, in the
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amount obtained by multiplying (x) the number of shares of Common Stock to be
acquired (without giving effect to any adjustment thereto) by (y) $6.90 (the
"Initial Series 2D Warrant Price"). Upon such payment such holder shall be
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entitled to receive the number of duly authorized, validly issued, fully paid
and nonassessable shares of Common Stock (or Other Securities) determined as
provided in sections 2 through 6. The holder hereof shall have the right to
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specify in its subscription form that, in lieu of the holder paying for the
exercise of this Series 2D Warrant and receiving shares of Common Stock in the
manner provided for in the first two sentences of this section 1.1, and in
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complete substitution therefor, the Company shall issue to the holder that
number of duly authorized, validly issued, fully paid and nonassessable shares
of Common Stock determined by the following formula:
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<PAGE>
N = S x (M-(WP x 0.9))
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M
where:
N = Number of shares of Common Stock to be issued to holder.
S = Number of shares of Common Stock that would be acquired if
this Series 2D Warrant were exercised in the manner provided
for in the first two sentences of this section 1.1 (giving
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effect to any adjustments thereto as provided in section 2).
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M = Current Market Price per share on the Business Day next
preceding the date of such exercise.
WP = Series 2D Warrant Price then in effect.
At any time during the 15 days ending on the Expiration Date, the holder hereof
shall have the additional irrevocable right to specify in its subscription form
that, in lieu of the holder paying for the exercise of this Series 2D Warrant
and receiving shares of Common Stock in the manner provided for in the first two
sentences of this section 1.1, or exercising this Series 2D Warrant in the
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manner provided for in the foregoing sentence, and in complete substitution
therefor, the Company shall pay the holder cash, by confirmed wire transfer of
immediately available funds on the Business Day immediately following the
Expiration Date, into an account or accounts designated by such holder in its
subscription form, in an amount equal to the product obtained by multiplying (i)
the number of shares of Common Stock that would be acquired if this Series 2D
Warrant were exercised in the manner provided for in the first two sentences of
this section
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<PAGE>
1.1 (giving effect to any adjustments thereto as provided in section 2) by (ii)
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the difference obtained by subtracting (A) the Series 2D Warrant Price (as
defined in section 2.1) then in effect from (B) the Current Market Price per
-----------
share on the Business Day next preceding the Expiration Date; provided, however,
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that in the event the Company cannot make such cash payment without violating a
covenant or covenants contained in any credit agreement, indenture or similar
agreement relating to indebtedness for borrowed money of the Company, the
Company shall, in lieu of making such cash payment, issue to the holder that
number of duly authorized, validly issued, fully paid and nonassessable shares
of Common Stock determined by the formula set forth in the foregoing sentence,
applied as of the Expiration Date.
1.2 When Exercise Effective. Each exercise of this Series 2D Warrant
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shall be deemed to have been effected immediately prior to the close of business
on the Business Day on which this Series 2D Warrant shall have been surrendered
to the Company, accompanied by payment in full as provided in this Section 1,
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upon the expiration of the notice period of five Business Days as provided in
section 1.1, and at such time the Person or Persons in whose name or names any
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certificate or certificates for shares of Common Stock (or Other Securities)
shall be issuable upon such exercise as provided in section 1.3 shall be deemed
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to have become the holder or holders of record thereof.
1.3 Delivery of Stock Certificates. As soon as practicable after the
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exercise of this Series 2D Warrant, in
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<PAGE>
whole or in part, and in any event within five Business Days thereafter, the
Company at its expense (including the payment by it of any applicable issuance
taxes) shall cause to be issued in the name of and delivered to the holder
hereof or, subject to section 8, as such holder (upon payment by such holder of
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any applicable transfer taxes) may direct,
(a) a certificate or certificates for the number of duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock
(or Other Securities) to which such holder shall be entitled upon such exercise
plus, in lieu of any fractional shares to which such holder otherwise would be
entitled, cash in an amount equal to the same fraction of the Market Price per
share on the Business Day next preceding the date of such exercise, and
(b) if such exercise is in part only, a new Series 2D Warrant or
Series 2D Warrants of like tenor, dated the date hereof, calling in the
aggregate on the face or faces thereof for the issuance of the number of shares
of Common Stock equal (without giving effect to any adjustment therein) to the
number of such shares called for on the face of this Series 2D Warrant minus the
number of such shares so designated by such holder upon such exercise as
provided in section 1.1.
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1.4 Company to Reaffirm Obligations. The Company, at the time of each
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exercise of this Series 2D Warrant, upon the request of the holder hereof, shall
acknowledge in writing its continuing obligation to afford to such holder all
rights to which such holder shall continue to be entitled after such
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<PAGE>
exercise in accordance with the terms of this Series 2D Warrant; provided,
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however, that if the holder of this Series 2D Warrant shall fail to make any
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such request, such failure shall not affect the continuing obligation of the
Company to afford such rights to such holder.
1.5 Payment by Application of Series 2D Preferred Shares or Exchange
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Securities. Upon any exercise of this Series 2D Warrant by the holder of any
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Series 2D Preferred Shares or of any securities received in exchange therefor as
provided in the Certificate of Designation under which the Series 2D Preferred
Shares were created (collectively, "Exchange Securities"), such holder may, at
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its option, by written instructions from such holder to the Company, apply all
or any part of the liquidation preference or unpaid principal amount, as the
case may be, of such Exchange Securities, together with any accrued and unpaid
dividends or payments of interest, as the case may be, as to which the Company
is then in arrears, and, if the Company is then in arrears with respect to any
such payments, then together with any accrued but unpaid dividends or payments
of interest, as the case may be, which are not yet due and payable
(collectively, "Securities Payments"), against the payment required upon such
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exercise pursuant to section 1.1, in which case the Company, upon surrender of
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such Exchange Securities, shall accept such specified amount in satisfaction of
a like amount of such payment. Upon the application of less than the full
amount of available Securities Payments to any such Series 2D Warrant exercise,
the Company shall execute and deliver a new certificate
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<PAGE>
evidencing Exchange Securities in exchange for any such surrendered Exchange
Securities under the conditions and in the manner provided in section 6 of the
Certificate of Designations pursuant to which the Series 2D Preferred Shares
were created.
1.6 Extension of Expiration. The Expiration Date shall be extended
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cumulatively by a number of days equal to the number of days in which the
Company is in arrears in the payment of any one or more dividend or mandatory
redemption payments in respect of the Series 2D Preferred Shares. Any such
extension of the Expiration Date shall be permanent and irrevocable and shall
survive the payment of any such dividend or mandatory redemption payment.
Within 15 days after the end of each fiscal quarter in which the Expiration Date
has been extended pursuant to this section 1.6, the Company shall give notice to
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the registered holder of this Series 2D Warrant setting forth the Expiration
Date as so extended.
2. Adjustment of Number and Price of Shares of Common Stock Issuable upon
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Exercise of Series 2D Warrant.
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2.1 Number and Price of Shares. The number of shares of Common Stock
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which the holder of this Series 2D Warrant shall be entitled to receive upon
each exercise hereof shall be determined by multiplying the number of shares of
Common Stock which would otherwise (but for the provisions of this section 2) be
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issuable upon such exercise, as designated by the holder hereof, by a fraction
of which (a) the numerator is the Initial Series 2D Warrant Price and (b) the
denominator is the Series 2D Warrant Price (as defined below) in effect on the
date of such
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<PAGE>
exercise. The Series 2D Warrant Price initially shall be the Initial Series 2D
Warrant Price, shall be adjusted and readjusted from time to time as provided in
this section 2 and, as so adjusted or readjusted, shall remain in effect until a
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further adjustment or readjustment thereof is required by this section 2.
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2.2 Adjustment of Series 2D Warrant Price.
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(a) Issuance of Additional Shares of Common Stock. If the
---------------------------------------------
Company, at any time or from time to time after the Issuance Date, shall issue
or sell Additional Shares of Common Stock (including Additional Shares of Common
Stock deemed to be issued pursuant to section 2.3 or section 2.4), either
--------------------------
without consideration or for a consideration per share less than the greater of
(x) the Current Market Price in effect immediately prior to such issuance or
sale or (y) the Series 2D Warrant Price, then, and in each such case, subject to
section 2.8, the Series 2D Warrant Price shall be reduced, concurrently with
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such issuance or sale, to an amount (calculated to the nearest 0.01 of a cent)
determined by multiplying such Series 2D Warrant Price by a fraction:
(i) the numerator of which shall be (A) the number of
shares of Common Stock outstanding immediately prior to such issuance or
sale, plus (B) the number of shares of Common Stock which the aggregate
consideration received by the Company for the total number of such
Additional Shares of Common Stock so issued or sold would purchase at the
greater of (x) the Current Market Price or (y) the Series 2D Warrant Price,
and
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<PAGE>
(ii) the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such issuance or sale;
provided, however, that for the purposes of this section 2.2(a), (x)
- -------- ------- --------------
immediately after any Additional Shares of Common Stock are deemed to have been
issued pursuant to section 2.3 or section 2.4, such Additional Shares of Common
--------------------------
Stock shall be deemed to be outstanding, and (y) notwithstanding clause (x) of
this proviso, treasury shares shall not be deemed to be outstanding, and the
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disposition of any shares thereof by the Company shall be considered an issuance
or sale of Common Stock for purposes of this section 2; and provided further,
--------- -------- -------
that no adjustment to the Series 2D Warrant Price shall be made under this
section 2.2(a) upon an issuance or sale of Additional Shares of Common Stock if
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(i) the consideration per share is less than the Series 2D Warrant Price but not
less than the Current Market Price in effect immediately prior to such issuance
or sale, and (ii) the aggregate consideration received by the Company for the
Additional Shares of Common Stock so issued or sold is less than (A) $6,000,000
in any single transaction and (B) $12,000,000 in the aggregate, together with
all other such transactions occurring after the Issuance Date. For purposes of
this section 2.2(a), shares of Common Stock "outstanding" at any time shall
--------------
include (i) shares of Common Stock outstanding at such time and (ii) shares of
Common Stock issuable upon exercise of outstanding unexercised Options, or the
conversion of outstanding unconverted Convertible Securities.
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<PAGE>
(b) Extraordinary Dividends and Distributions. If the Company
-----------------------------------------
at any time or from time to time after the Issuance Date shall declare, order,
pay or make a dividend or other distribution (including, without limitation, any
distribution of other or additional capital stock or Other Securities or
property or Options or Convertible Securities by way of a dividend or spin-off,
reclassification, recapitalization or similar corporate rearrangement) on Common
Stock, other than (i) a dividend payable in Additional Shares of Common Stock
(in which case the provisions of section 2.3 or section 2.4 shall apply) or (ii)
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a regular periodic dividend or dividends payable in cash in an aggregate amount
in any fiscal year not in excess of 40% of the Company's net earnings for its
preceding fiscal year, then, and in each such case, subject to section 2.8, the
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Series 2D Warrant Price in effect immediately prior to the close of business on
the record date fixed for the determination of holders of any class of
securities entitled to receive such dividend or distribution shall be reduced,
effective as of the close of business on such record date, to a price
(calculated to 0.01 of a cent) determined by multiplying such Series 2D Warrant
Price by a fraction:
(x) the numerator of which shall be the Current Market Price in
effect on such record date or, if the Common Stock trades on an ex-dividend
basis, on the date prior to the commencement of ex-dividend trading, less
the amount of such dividend or distribution (as determined in
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<PAGE>
good faith by a resolution of the Board of Directors of the Company)
applicable to one share of Common Stock, and
(y) the denominator of which shall be such Current Market Price.
2.3 Treatment of Options and Convertible Securities. If the Company at
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any time or from time to time after the Issuance Date shall issue, sell, grant
or assume, or shall fix a record date for the determination of holders of any
class of securities entitled to receive, any Options or Convertible Securities,
then, and in each such case, the maximum number of Additional Shares of Common
Stock (as set forth in the instrument relating thereto, without regard to any
provisions contained therein for a subsequent adjustment of such number)
issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common Stock issued as of
the time of such issuance, sale, grant or assumption (or, if such a record date
shall have been fixed, as of the close of business on such record date; or, if
the Common Stock trades on an ex-dividend basis, on the date prior to the
commencement of ex-dividend trading); provided, however, that such Additional
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Shares of Common Stock shall not be deemed to have been issued unless the
consideration per share (determined pursuant to section 2.5) of such shares
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would be less than the greater of (x) the Current Market Price in effect on the
date of and immediately prior to such issuance, sale, grant or assumption (or
immediately prior to the close of business on such
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<PAGE>
record date or, if the Common Stock trades on an ex-dividend basis, on the date
prior to the commencement of ex-dividend trading), as the case may be, or (y)
the Series 2D Warrant Price; and provided, further, that in any such case in
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which Additional Shares of Common Stock are deemed to be issued:
(a) no further adjustment of the Series 2D Warrant Price shall
be made upon the subsequent issuance or sale of Convertible Securities or
shares of Common Stock upon the exercise of such Options or the conversion or
exchange of such Convertible Securities;
(b) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase or decrease in
the consideration payable to the Company, or increase or decrease in the number
of Additional Shares of Common Stock issuable upon the exercise, conversion or
exchange thereof (by change of rate or otherwise), the Series 2D Warrant Price
computed upon the original issuance, sale, grant or assumption thereof (or upon
the occurrence of the record date with respect thereto or, if the Common Stock
trades on an ex-dividend basis, on the date prior to the commencement of
ex-dividend trading), and any subsequent adjustments based thereon shall, upon
any such increases or decreases becoming effective, be recomputed to reflect
such increase or decrease insofar as it affects such Options, or the rights of
conversion or exchange under such Convertible Securities, which are outstanding
at such time;
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<PAGE>
(c) upon the expiration (or purchase by the Company and
cancellation or retirement) of any such Options which shall not have been
exercised or the expiration of any rights of conversion or exchange under any
such Convertible Securities which (or purchase by the Company and cancellation
or retirement of any such Convertible Securities the rights of conversion or
exchange under which) shall not have been exercised, the Series 2D Warrant Price
computed upon the original issuance, sale, grant or assumption thereof (or upon
the occurrence of the record date, or date prior to the commencement of
ex-dividend trading, as the case may be, with respect thereto) and any
subsequent adjustments based thereon shall, upon such expiration (or such
cancellation or retirement, as the case may be), be recomputed as if:
(i) in the case of such Convertible Securities or Options for
Common Stock, the only Additional Shares of Common Stock issued or sold were
the shares of Common Stock, if any, actually issued or sold upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities and the consideration received therefor was the consideration
actually received by the Company for the issuance, sale, grant or assumption
of all such Options or Convertible Securities, as the case may be, whether
or not exercised or converted or exchanged, as the case may be, plus the
consideration actually received by the Company upon such exercise,
conversion or exchange, and
(ii) in the case of such Options for Convertible Securities,
only the Convertible Securities, if any,
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<PAGE>
actually issued or sold upon the exercise thereof were issued at the time of
the issuance, sale, grant or assumption of such Options, and the
consideration received by the Company for the Additional Shares of Common
Stock deemed to have been issued at such time was the consideration actually
received by the Company for the issuance, sale, grant or assumption of all
such Options, whether or not exercised, plus the consideration deemed to
have been received by the Company (pursuant to section 2.5) upon the
-----------
issuance or sale of the Convertible Securities with respect to which such
Options actually were exercised;
(d) no readjustment pursuant to clause (b) or (c) above shall
-----------------
have the effect of increasing the Series 2D Warrant Price by an amount in excess
of the amount of the adjustment thereof originally made in respect of the
issuance, sale, grant or assumption of such Options or Convertible Securities;
and
(e) in the case of any such Options (other than rights issued
pursuant to the Rights Agreement) which expire by their terms not more than 30
days after the date of issuance, sale, grant or assumption thereof, no
adjustment of the Series 2D Warrant Price shall be made until the expiration or
exercise of all such Options, whereupon such adjustment shall be made in the
manner provided in clause (c) above.
2.4 Treatment of Stock Dividends, Subdivisions or Splits. If the
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Company at any time or from time to time after the Issuance Date shall declare
or pay any dividend on Common Stock payable in Common Stock, or shall effect a
subdivision or
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<PAGE>
split-up of outstanding shares of Common Stock into a greater number of shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock), then, and in each such case, Additional Shares of
Common Stock shall be deemed to have been issued (a) in the case of any such
dividend, immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to receive such
dividend, or (b) in the case of any such subdivision or split-up, at the close
of business on the day immediately prior to the day upon which such corporate
action becomes effective.
2.5 Computation of Consideration. For the purposes of this section 2:
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(a) The consideration for the issuance or sale of any Additional
Shares of Common Stock shall, irrespective of the accounting treatment of such
consideration:
(i) insofar as it consists of cash, be computed as the net
amount of cash received by the Company, without deducting any expenses paid
or incurred by the Company or any commission or compensations paid or
concessions or discounts allowed to underwriters, dealers or others
performing similar services in connection with such issuance or sale,
(ii) insofar as it consists of property (including securities)
other than cash, be computed as the fair market value thereof at the time of
such issuance or
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<PAGE>
sale, as determined in good faith by a resolution of the Board of Directors
of the Company, and
(iii) in case Additional Shares of Common Stock are issued or
sold together with other stock or securities or other assets of the Company
for a consideration which covers both, be the portion of such consideration
so received, computed as provided in clauses (i) and (ii) above, allocable
to such Additional Shares of Common Stock, all as determined in good faith
by a resolution of the Board of Directors of the Company;
(b) Additional Shares of Common Stock deemed to have been issued
pursuant to section 2.3, relating to Options and Convertible Securities, shall
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be deemed to have been issued for a consideration per share determined by
dividing:
(i) the total amount, if any, received and receivable by the
Company as consideration for the issuance, sale, grant or assumption of the
Options or Convertible Securities in question plus the minimum aggregate
amount of additional consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for a subsequent
adjustment of such consideration, except as set forth in section 2.3(b) or
-----------------
2.3(c) hereof) payable to the Company upon the exercise in full of such
------
Options or the conversion or exchange of such Convertible Securities or, in
the case of Options for Convertible Securities, the exercise of such Options
for Convertible Securities and the conversion or exchange of such
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<PAGE>
Convertible Securities, in each case computing such consideration as
provided in the foregoing subdivision (a), by
(ii) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number, except as set
forth in Section 2.3(b) or 2.3(c) hereof) issuable upon the exercise of such
------------------------
Options or the conversion or exchange of such Convertible Securities;
(c) The portion of any bonuses or other amounts granted to
directors, officers or employees of the Company or any of its Subsidiaries which
is expressly conditioned on the application of some or all of such amounts to
the exercise or conversion of Options or Convertible Securities, and is so used,
shall be deemed to reduce ab initio the amount of consideration for the issuance
-- ------
or sale of any such Additional Shares of Common Stock, by an amount determined
by dividing the number of Additional Shares of Common Stock so acquired by the
amount of any such portion so applied.
(d) Additional Shares of Common Stock deemed to have been issued
pursuant to section 2.4, relating to stock dividends, subdivisions or stock
-----------
splits, shall be deemed to have been issued for no consideration.
2.6 Combinations or Reclassifications. If outstanding shares of
---------------------------------
Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of
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Common Stock, the Series 2D Warrant Price in effect immediately prior to such
combination or consolidation shall, concurrently with the effectiveness of such
combination or consolidation, be proportionately increased.
2.7 Dilution for Other Securities. If any Other Securities shall be
-----------------------------
issued or sold or shall become subject to issuance or sale upon the conversion
or exchange of Common Stock (or Other Securities) of the Company (or any issuer
of Other Securities or any other Persons referred to in this section 2) or to
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subscription, purchase or other acquisition pursuant to exercise of any Options
or conversion or exchange of Convertible Securities issued or granted by the
Company (or by any such other issuer or Person) for consideration such as to
dilute, on a basis consistent with the standards established in the other
provisions of this section 2, the rights granted by any Series 2D Warrant (it
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being understood that the right to purchase securities of any other entity
pursuant to the Rights Agreement at a price less than the then current market
value of such securities shall be deemed, at the time such right becomes
exercisable for such securities, to be an issuance of Other Securities which
shall be deemed to dilute the rights granted by the Series 2D Warrants), then,
and in each such case, the computations, adjustments and readjustments provided
for in this section 2 with respect to the Series 2D Warrant Price shall be made
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as nearly as possible in the manner so provided and applied to determine the
amount of Other Securities from time to time receivable upon the exercise
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<PAGE>
of any Series 2D Warrant, so as to protect the holder of any Series 2D Warrant
against the effect of such dilution.
2.8 Minimum Adjustment of Series 2D Warrant Price. If the amount of
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any adjustment of the Series 2D Warrant Price required pursuant to this section
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2 would be less than 1% of the Series 2D Warrant Price in effect at the time
- -
such adjustment is otherwise so required to be made, such amount shall be
carried forward and adjustment with respect thereto made at the time of and
together with any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate at least 1% of such
Series 2D Warrant Price.
2.9 Change in Control Event. If a Change in Control Event occurs
-----------------------
prior to January 13, 1995, the Series 2D Warrant Price shall be reduced to $7.00
(as adjusted in accordance with this section 2 for events occurring after the
---------
Issuance Date, with such adjustments calculated as if the Series 2D Warrant
Price as of the Issuance Date were $7.00). If such Change in Control Event is a
Transaction (as defined in section 3(a)), the adjustment to the Series 2D
------------
Warrant Price provided for in this section 2.9 shall be effective immediately
-----------
prior to the consummation of such Transaction.
3. Transactions Resulting in Changes in Capital Stock.
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(a) If at any time the Company shall be a party to any transaction
(including, without limitation, a merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation or recapitalization of
Common Stock or any combination thereof) in which previously outstanding shares
of
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Common Stock shall be changed into or exchanged for different securities of the
Company (other than by subdivision of outstanding shares of Common Stock by
reason of which an adjustment is made under section 2.2(a)) or common stock or
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other securities of another corporation or interests in a noncorporate entity or
other property (including cash) or any combination of any of the foregoing (each
such transaction being hereinafter referred to as the "Transaction" and the
-----------
Company (in the case of a recapitalization of Common Stock or any combination
thereof) or such other corporation or entity (in each other case) being
hereinafter referred to as the "Acquiring Company"), then, as a condition to the
-----------------
consummation of the Transaction, lawful and adequate provisions shall be made so
that each holder of Series 2D Warrants, upon the exercise thereof at any time on
or after the consummation of the Transaction (but subject, in the case of an
election pursuant to clause (ii) below, to the time limitation hereinafter
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provided for such election), shall be entitled to receive (at the aggregate
Series 2D Warrant Price in effect at the time of such consummation for all
Common Stock or Other Securities issuable upon such exercise immediately prior
to consummation of the Transaction, subject to adjustments after the
consummation of the Transaction as nearly equivalent as possible to the
adjustments provided for in section 2 and this section 3), and such Series 2D
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Warrants shall thereafter represent the right to receive, for the remaining term
of this Series 2D Warrant, in lieu of the Common Stock or Other Securities
issuable upon such exercise prior to such consummation, either of the following,
as
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<PAGE>
such holder shall elect within sixty (60) days following the date on which such
holder shall have received a written notice of the Transaction describing the
material terms thereof and specifying the amounts and types of securities
referred to in clauses (i) and (ii) below, by written notice to the Acquiring
--------------------
Company (and, in the absence of such notice, the provisions of clause (ii) below
-----------
shall be deemed to have been elected by such holder and, if the Transaction is a
Change in Control Event the provisions of clause (ii)(B) below shall be deemed
--------------
to have been elected by such holder):
(i) the stock and other securities, cash and property to which
such holder would have been entitled upon such consummation if such holder
had exercised this Series 2D Warrant immediately prior thereto, subject to
adjustments (subsequent to consummation of the Transaction) as nearly
equivalent as possible to the adjustments provided for in section 2 and this
---------
section 3; or
---------
(ii) (A) if the Transaction is not a Change in Control Event, the
number of shares of the voting common stock or equivalent equity interests
with the greatest voting power per share of the Acquiring Company (the
"Acquirer's Common Stock"), subject to adjustments (subsequent to such
------------------------
corporate action) as nearly equivalent as possible to the adjustments
provided for in section 2 and this section 3, determined by dividing (x) the
--------- ---------
product obtained by multiplying (1) the number of shares of Common Stock (or
Other Securities) to which the holder of this
-22-
<PAGE>
Series 2D Warrant would have been entitled had such holder exercised this
Series 2D Warrant immediately prior to such consummation, times (2) the
Acquisition Price by (y) the current market price per share (determined in
the same manner as provided in the definition of Current Market Price) of
the Acquirer's Common Stock immediately preceding such consummation, but
after giving effect to any change in the capital of the Acquiring Company in
connection with the Transaction (other than any such change resulting from a
contribution by, merger with or other transaction with respect to the
Company or any Subsidiary or Affiliate thereof); and (B) if the Transaction
is a Change in Control Event, then, at the option of the holder, cash upon
exercise of such Series 2D Warrants within the 60-day notice period referred
to in section 3(a), in an amount determined by multiplying (1) the number of
------------
shares of Common Stock (or Other Securities) to which the holder of this
Series 2D Warrant would have been entitled had such holder exercised this
Series 2D Warrant immediately prior to such consummation, times (2) the
Acquisition Price.
(b) Notwithstanding anything contained herein to the contrary,
the Company shall not effect any Transaction unless prior to the consummation
thereof each corporation or entity (other than the Company) which may be
required to deliver any securities, cash or other property upon the exercise of
Series 2D Warrants as provided herein shall assume, by written instrument, the
obligation to deliver to such holder such securities, cash or
-23-
<PAGE>
other property as to which, in accordance with the foregoing provisions, such
holder may be entitled, and such corporation or entity shall have similarly
delivered to each holder of Series 2D Warrants exercisable for an aggregate of
at least 500,000 shares of Common Stock (prior to any adjustment thereof, and
without giving effect in the case of calculations made with respect to the
Series 2D Warrants to the anti-dilution provisions of Exhibit C to the
Securities Purchase Agreement) (each a "Significant Holder") an opinion of
------------------
outside independent counsel for such corporation or entity having expertise in
securities matters, reasonably satisfactory to the original Purchaser hereof, or
Affiliates thereof, so long as such original Purchaser or Affiliates thereof
collectively shall be a Significant Holder, which opinion shall state that all
outstanding Series 2D Warrants, including, without limitation, the exercise
provisions applicable thereto, thereafter shall continue in full force and
effect and shall be enforceable against the Company and such corporation or
entity in accordance with the terms hereof and thereof.
4. Adjustments for Other Dilutive Events. In case any event shall occur
-------------------------------------
as to which the provisions of section 2 or section 3 are not strictly applicable
--------- ---------
but the failure to make any adjustment would not in the reasonable opinion of
any Significant Holder or the Company fairly protect the purchase rights
represented by any Series 2D Warrant in accordance with the essential intent and
principles of such sections, then, in each such case, upon the written request
of such Significant Holder or
-24-
<PAGE>
on its own motion, the Company shall appoint a firm of independent certified
public accountants of recognized national standing (which may not be the regular
auditors of the Company), which shall give its opinion upon the adjustment, if
any, on a basis consistent with the essential intent and principles established
in sections 2 and 3, necessary to preserve, without dilution, the purchase
----------------
rights represented by the Series 2D Warrants, which opinion shall be binding
upon the Company and each holder of a Series 2D Warrant. Upon receipt of such
opinion, the Company promptly shall mail a copy thereof to each holder of Series
2D Warrants and shall make the adjustments described therein.
5. No Dilution or Impairment. The Company shall not, by amendment of its
-------------------------
certificate of incorporation or by-laws or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issuance or sale of securities
or other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Series 2D Warrant as originally issued, but at all
times in good faith shall assist in carrying out all of such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holder hereof against dilution or other impairment. Without
limiting the generality of the foregoing, the Company (a) shall not permit the
par value of any shares of stock receivable upon the exercise of any Series 2D
Warrant to exceed the amount payable therefor upon such exercise, (b) shall take
all such actions as may be necessary or appropriate in order that the
-25-
<PAGE>
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock (or Other Securities) on the exercise of this Series 2D Warrant
from time to time, (c) shall not take any action which results in any adjustment
of the Series 2D Warrant Price if the total number of shares of Common Stock (or
Other Securities) issuable after such action, upon the exercise of all of the
Series 2D Warrants, would exceed the total number of shares of Common Stock (or
Other Securities) then authorized by the certificate of incorporation and
available for the purpose of issuance upon such exercise, (d) shall not issue
any capital stock of any class which is preferred as to dividends or as to the
distribution of assets upon voluntary or involuntary dissolution, liquidation or
winding-up (other than shares of Series 4 Junior Participating Preferred Stock
issued pursuant to the Rights Agreement, provided that the issuance of such
--------
Series 4 Junior Participating Preferred Stock does not result in any dilution or
other impairment of the rights of the holders of the Series 2D Warrants) unless
the rights of the holders thereof shall be limited to a fixed sum or percentage
of par value in respect of participation in dividends and in the distribution of
such assets and (e) shall not institute any shareholder rights or similar plan
that is in any respect more detrimental to the interests of the holders of the
Series 2D Warrants than the plan set forth in the Rights Agreement.
6. Accountant's Report as to Adjustments. In each case of any adjustment
-------------------------------------
or readjustment in the shares of Common Stock (or Other Securities) issuable
upon the exercise or conversion of any
-26-
<PAGE>
Series 2D Warrant, the Company at its expense promptly shall compute such
adjustment or readjustment in accordance with the terms hereof and prepare a
report setting forth such adjustment or readjustment and showing in detail the
method of calculation thereof and the facts upon which such adjustment or
readjustment is based, including a statement of (a) the consideration received
or to be received by the Company for any Additional Shares of Common Stock
issued or sold or deemed to have been issued, (b) the number of shares of Common
Stock outstanding or deemed to be outstanding, and (c) the Series 2D Warrant
Price in effect immediately prior to such issuance or sale and as adjusted and
readjusted (if required by section 2) on account thereof. The Company forthwith
---------
(and in any event not later than 20 days following the occurrence of the event
requiring such adjustment) shall furnish a copy of each such report to each
holder of a Series 2D Warrant, and upon the written request at any time of any
holder of a Series 2D Warrant, shall furnish to such holder a like report
setting forth the Series 2D Warrant Price in effect at such time and showing how
it was calculated. At the end of each fiscal year, and at any time that any
holder of any Series 2D Warrant shall exercise such Series 2D Warrant, the
Company shall cause independent certified public accountants of recognized
national standing (which may be the regular auditors of the Company) selected by
the Company to verify any such computations referred to in the preceding
sentence made by the Company during the preceding fiscal year or, in the case of
any such report prepared at the time of exercise of such Series 2D
-27-
<PAGE>
Warrant, any such computations made after the close of the prior fiscal period,
and to prepare a report setting forth each such adjustment referred to in the
preceding sentence and showing in detail the method of calculation thereof and
the facts upon which any such adjustments are based, including a statement
verifying the information provided by the Company with respect to each
adjustment as set forth in clauses (a), (b) and (c) of the first sentence of
this section and, as soon as practicable, and in any event within 120 days after
the end of each fiscal year, and promptly after notice by any holder of its
intention to exercise a Series 2D Warrant, and in any event within 30 days after
the giving of such notice, the Company shall cause to be delivered to each
holder of a Series 2D Warrant a copy of such report. The Company also shall
keep copies of all such reports at its principal office, and shall cause the
same to be available for inspection at such office during normal business hours
by any holder of a Series 2D Warrant or any prospective purchaser of a Series 2D
Warrant designated by the holder thereof. In addition, the Company shall
deliver to each holder of a Series 2D Warrant, as soon as available and in any
event within 60 days after the close of each fiscal quarter, a copy of any
appraisal report prepared as contemplated by the definition of Market Price set
forth in section 13.
----------
7. Notices of Corporate Action. In the event of:
---------------------------
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or
-28-
<PAGE>
dividends (other than a regular periodic dividend payable in cash in an
aggregate amount in any fiscal year not in excess of 40% of the Company's net
earnings for its preceding fiscal year) or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company, any
consolidation or merger involving the Company and any other Person, any transfer
of all or substantially all the assets of the Company to any other Person, or
any sale or arrangement to sell a majority of the Common Stock to Persons which
are not Affiliates of the Company, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any plan or proposal to change in any manner the voting
rights of the Common Stock or of any capital stock of the Company;
then, and in each such case, the Company shall deliver to each holder of a
Series 2D Warrant a notice specifying (i) the date or expected date on which any
such record is to be taken for the purpose of such dividend, distribution or
right, and the amount and character of such dividend, distribution or right, or
(ii) the date or expected date on which any such reorganization,
reclassification, recapitalization, consolidation, merger, transfer,
dissolution, liquidation or winding-up is to take place and the time, if any
such time is to be fixed, as of which the
-29-
<PAGE>
holders of record of Common Stock (or Other Securities) shall be entitled to
exchange their shares of Common Stock (or Other Securities) for the securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation or
winding-up or (iii) the date or expected date on which any plan to change the
voting rights of the Common Stock of the Company or of any capital stock of the
Company is to be voted upon by the Board of Directors of the Company or any
Committee thereof or of the shareholders or any class of shareholders of the
Company. Such notice shall be furnished at least 20 days prior to the date
therein specified, subject to the provisions of section 3.
---------
8. Restrictions on Transfer.
------------------------
8.1 Restrictive Legends. Except as otherwise permitted by this
-------------------
section 8, each Series 2D Warrant originally issued pursuant to the Securities
- ---------
Purchase Agreement and each Series 2D Warrant issued upon direct or indirect
transfer or in substitution for any Series 2D Warrant pursuant to section 12
----------
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
This Series 2D Warrant and any shares of Common Stock
acquired upon the exercise of this Series 2D Warrant have
not been registered under the Securities Act of 1933, as
amended, and may not be transferred in the absence of such
registration or an exemption therefrom under such Act,
except under circumstances where neither such registration
nor such an exemption is required by law. Any transferee
of this Series 2D Warrant, by such transferee's acceptance
hereof, takes subject to certain agreements by the holder
-30-
<PAGE>
of the Series 2D Warrant contained herein. Transfer of this Series 2D
Warrant is further limited by certain conditions set forth in that
certain Securities Purchase Agreement, dated as of December 20, 1990,
among American Capital and Research Corporation, IFINT-USA Inc. and
FIMA Finance Management Inc., as amended from time to time.
Except as otherwise permitted by this section 8, each certificate for Common
---------
Stock (or Other Securities) issued upon the exercise of any Series 2D Warrant
and each certificate issued upon the direct or indirect transfer of any such
Common Stock (or Other Securities) shall be stamped or otherwise imprinted with
a legend in substantially the following form:
The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not be
transferred in the absence of such registration or an exemption
therefrom under such Act, except under circumstances where neither such
registration nor such an exemption is required by law. Transfer of the
shares represented by this certificate is further limited by certain
conditions set forth in that certain Securities Purchase Agreement,
dated as of December 20, 1990, among American Capital and Research
Corporation, IFINT-USA Inc. and FIMA Finance Management Inc., as
amended from time to time.
8.2 Registration of Common Stock. If any shares of Common Stock
----------------------------
required to be reserved for purposes of exercise of this Series 2D Warrant
require registration with or approval of any governmental authority under any
federal or state law (other than the Securities Act and any state blue sky law)
before such shares may be issued upon exercise, the Company, at its expense and
as expeditiously as possible, shall use its best efforts to
-31-
<PAGE>
cause such shares to be duly registered or approved, as the case may be.
8.3 Transfer of Restricted Securities.
---------------------------------
(a) The Purchaser shall not transfer any Restricted Securities,
except as set forth in the Securities Purchase Agreement or in the instruments
creating, authorizing or setting forth the terms of such Restricted Securities.
(b) In connection with any transfer of Restricted Securities,
each transferee shall agree in writing with the Company, in form reasonably
acceptable to the Company, to be bound by all of the restrictions on transfer of
such Restricted Securities contained in or incorporated by reference into this
section 8.
- ---------
9. Availability of Information. The Company shall comply with all public
--------------------------
information-reporting requirements of the Commission from time to time in effect
and relating to the availability of an exemption from the Securities Act for the
sale of any Restricted Securities. In addition, and without limitation, the
Company shall furnish to any holder who holds an amount of Restricted Securities
that, if all Series 2D Warrants held by such holder were deemed exercised and
the shares of Common Stock (or Other Securities) obtained thereby were
aggregated with the shares of Common Stock already held by such holder, would
result in such holder holding at least 500,000 shares of Common Stock (prior to
any adjustment, and in the case of calculations made with respect to the Series
2D Warrants without giving effect to the anti-dilution provisions of Exhibit
-32-
<PAGE>
C to the Securities Purchase Agreement), the following financial information,
provided, that so long as the Company is subject to the requirements of Section
- --------
13 or 15(d) under the Exchange Act compliance with clause (c) below shall be
----------
deemed for all purposes to be compliance with clauses (a) and (b) below: (a)
-------------------
not later than 90 days after the end of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such fiscal year, and the related consolidated statements of income,
shareholders' equity and cash flows for such fiscal year, in reasonable detail
and accompanied by an opinion as to such financial statements by independent
public accountants of recognized standing, which opinion shall state that such
financial statements fairly present the consolidated financial position of the
Company and its Subsidiaries as of the date of such financial statements and the
consolidated results of operations of the Company and its Subsidiaries for the
period covered by such financial statements in conformity with generally
accepted accounting principles applied on a consistent basis; (b) not later than
45 days after the end of each of the first three fiscal quarters of the Company,
unaudited consolidated balance sheets of the Company and its Subsidiaries as for
the end of such fiscal quarter and the related statements of income and cash
flows for such fiscal quarter, each in reasonable detail and accompanied by a
certificate of the chief financial officer of the Company stating that such
financial statements fairly present the consolidated financial position of the
Company and its Subsidiaries as of the date of such financial statements and the
-33-
<PAGE>
consolidated results of operations of the Company and its Subsidiaries for the
period covered by such financial statements in conformity with generally
accepted accounting principles applied on a consistent basis, subject to normal
year-end adjustments; and (c) not later than ten days after the filing thereof,
a copy of each document filed with the SEC by the Company pursuant to the
Securities Act, the Exchange Act or the rules and regulations thereunder. The
Company shall furnish to each Significant Holder, promptly upon their becoming
available, copies of all financial statements, reports, notices and proxy
statements sent or made available generally by the Company to its stockholders
in their capacity as stockholders, and copies of all regular and periodic
reports and all registration statements and prospectuses filed by the Company
with any securities exchange or with the Commission.
10. Reservation of Stock. The Company at all times shall reserve and keep
--------------------
available, free from preemptive rights, out of the aggregate of its authorized
but unissued shares of Common Stock or its issued shares of Common Stock held in
its treasury, or both, solely for issuance and delivery upon the exercise of the
Series 2D Warrants, the full number of shares of Common Stock (or Other
Securities) from time to time issuable upon the exercise of all Series 2D
Warrants at the time outstanding. All such securities shall be duly authorized
and, when issued upon such exercise, validly issued and, in the case of shares,
fully paid and nonassessable.
-34-
<PAGE>
11. Inclusion in NASDAQ or Listing on a National Securities Exchange. The
----------------------------------------------------------------
Company, at its expense, shall use its best efforts to maintain the approval for
inclusion in NASDAQ, or, at its option, obtain the approval for listing on a
national securities exchange upon official notice of issuance, of all shares of
Common Stock issuable upon exercise of the Series 2D Warrants, and to maintain
the listing or inclusion of such shares after their issuance; and the Company
shall use its best efforts to so list on such national securities exchange or
include in NASDAQ, as the case may be, and to maintain such listing or inclusion
of, any Other Securities that at any time are issuable upon exercise of the
Series 2D Warrants after any such Other Securities have been registered under
the Exchange Act.
12. Procedure for Ownership, Transfer and Substitution of Series 2D
---------------------------------------------------------------
Warrants.
- --------
12.1 Ownership of Series 2D Warrants. The Company may treat the Person
-------------------------------
in whose name any Series 2D Warrant is registered on the register kept at the
principal office of the Company as the owner and holder thereof for all
purposes, notwithstanding any notice to the contrary. Subject to section 8, a
---------
Series 2D Warrant, if properly assigned, may be exercised by a new holder
without first having a new Series 2D Warrant issued. No Series 2D Warrant may be
assigned in blank.
12.2 Transfer and Exchange of Series 2D Warrants. Subject to section 8,
------------------------------------------- ---------
upon the surrender of any Series 2D Warrant, properly endorsed for registration
of transfer or for exchange at the principal office of the Company, the Company
at
-35-
<PAGE>
its expense (subject to compliance with section 8, if applicable) shall execute
---------
and deliver to or upon the order of the holder thereof a new Series 2D Warrant
or Series 2D Warrants of like tenor, in the name of such holder or as such
holder may direct, calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock or Other Securities, as the case may be, called
for on the face or faces of the Series 2D Warrant or Series 2D Warrants so
surrendered.
12.3 Replacement of Series 2D Warrants. Upon receipt of evidence
---------------------------------
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Series 2D Warrant (which, in the case of the Purchaser, any
Affiliate thereof or any institutional holder of a Series 2D Warrant, may be a
written statement as to such loss, theft, destruction or mutilation) and, in the
case of such loss, theft or destruction of any Series 2D Warrant, upon delivery
of indemnity reasonably satisfactory to the Company in form and amount (which in
the case of any Series 2D Warrant held by a Purchaser or an Affiliate thereof or
of any institutional investor may be the written indemnity of such Purchaser or
Affiliate thereof or of such institutional investor), or, in the case of any
such mutilation, upon surrender of such Series 2D Warrant for cancellation at
the principal office of the Company, the Company at its expense shall execute
and deliver, in lieu thereof, a new Series 2D Warrant of like tenor.
-36-
<PAGE>
13. Definitions. As used herein, unless the context otherwise requires,
-----------
the following terms have the following respective meanings:
"Acquirer's Common Stock" shall have the meaning specified in section 3.
----------------------- ---------
"Acquiring Company" shall have the meaning specified in section 3.
----------------- ---------
"Acquisition Price" shall mean the highest of the consideration per share to
-----------------
be paid for or received by the holders of the previously outstanding shares of
Common Stock, or Other Securities (subject to adjustment), respectively, in
accordance with the terms of the Transaction, determined by dividing the
aggregate fair market value, as of the date of consummation of such Transaction,
of the aggregate consideration to be received by the holders of such previously
outstanding shares of Common Stock, or Other Securities, as the case may be, by
the number of shares of such previously outstanding shares of Common Stock, or
Other Securities, the value thereof reasonably determined in good faith by the
Board of Directors of the Corporation, or, if the Board of Directors shall not
make such determination, then and in such case the aggregate fair market value
shall be determined by a firm of independent certified public accountants of
recognized national standing (which may not be the regular auditors of the
Company but shall jointly be selected by the Company, on the one hand, and the
Purchaser or its Affiliates, if they continue to be Significant Holders, on the
other hand) appointed by the
-37-
<PAGE>
Company, which determination shall be binding upon the Company and each holder
of a Series 2D Warrant.
"Additional Shares of Common Stock" shall mean all shares (including
---------------------------------
treasury shares) of Common Stock issued or sold (or, pursuant to section 2.3 or
--------------
section 2.4, deemed to be issued) by the Company, including, without limitation,
- -----------
for purposes of Section 2, (i) the issuance of Common Stock or Options
---------
exercisable or Convertible Securities convertible into or exchangeable for
Common Stock at a price per share below the Current Market Price; (ii) payment
of a stock dividend on shares of Common Stock; (iii) subdivisions, split-ups and
combinations of the Common Stock; (iv) capital reorganizations or
reclassifications of the Common Stock (other than a change in par value to no
par value or from no par value to par value or as a result of a stock dividend
or subdivision, split-up or combination of shares); or (v) the issuance of
non-cash dividends; but excluding, however, the issuance or sale of Common Stock
(or Options exercisable or Convertible Securities convertible into or
exchangeable for Common Stock) in connection with (i) an underwritten public
offering approved by the Company's Board of Directors or a committee thereof;
(ii) an employee benefit plan or arrangement or executive compensation
arrangement of the Company or one or more of its Subsidiaries in existence as of
the Issuance Date, or the terms of which thereafter are approved by a majority
of the members of the Compensation Committee of the Company's Board of Directors
who are not officers or employees of the Company; (iii) any "Limited
-38-
<PAGE>
Market" maintained, or other transaction effected, pursuant to the Shareholders
Agreement as in effect on the date hereof; or (iv) any exchange related to an
acquisition of assets or securities by the Company or one or more of its
Subsidiaries approved by a majority of the Company's Board of Directors or, in
the case of such an acquisition from a Person, firm or entity that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, the Company or an executive officer or director of
the Company, approved by both the Company's Board of Directors and a majority of
the disinterested members of the Company's Board of Directors who are not
officers or employees of the Company or any of its Subsidiaries or Affiliates
voting on the matter.
"Affiliate" shall have the meaning specified in the Securities Purchase
---------
Agreement.
"Amended and Restated Registration Rights Agreement" shall mean that certain
--------------------------------------------------
amended and restated registration rights agreement, dated January 13, 1992,
between the Company and the Purchaser, as amended from time to time.
A "Beneficial Owner" of securities shall be determined as set forth in Rule
----------------
13d-3 under the Exchange Act; provided, however, that a Person shall also be
-------- -------
deemed to be the Beneficial Owner of any securities (a) of which such Person or
any of its Affiliates is, directly or indirectly, the Beneficial Owner, or (b)
of which such person or any of its Affiliates has (i) the right to acquire
(whether such right is exercisable immediately or only after the passage of
time), pursuant to any agreement,
-39-
<PAGE>
arrangement or understanding or upon the exercise of Options or Convertible
Securities, or otherwise, or (ii) sole or shared voting or investment power with
respect thereto pursuant to any agreement, arrangement, understanding,
relationship or otherwise (but shall not be deemed to be the Beneficial Owner of
any voting securities solely by reason of a revocable proxy granted for a
particular meeting of shareholders, pursuant to a public solicitation of proxies
for such meeting, with respect to shares of which neither such Person, nor any
such Affiliate is otherwise deemed the Beneficial Owner) or (c) of which any
other Person is, directly or indirectly, the Beneficial Owner as such first
mentioned Person or any of its Affiliates acts with such other Person as a
partnership, syndicate or other group pursuant to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of any
shares of as a partnership, syndicate or other group pursuant to any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Company; and provided further,
----------------
however, that (i) no director or officer of the Company nor any Affiliate of any
- -------
such director or officer shall, solely by reason of any or all of such directors
or officers acting in their capacities as such, be deemed for any purposes
hereof to be the Beneficial Owner of any voting security of which any other such
director or officer (or any Affiliate thereof) is the Beneficial Owner, (ii) no
trustee of an employee stock ownership or similar plan of the Company or any
Subsidiary ("Employee Plan Trustee") or any Affiliate of any
---------------------
-40-
<PAGE>
such Employee Plan Trustee shall, solely by reason of being an Employee Plan
Trustee or Affiliate thereof, be deemed for any purpose hereof to be the
Beneficial Owner of any voting security held by or under any such plan, and
(iii) no securities which continue to be owned by a director or officer of the
Company shall be aggregated with securities owned by any other Person solely as
a result of such Persons collectively having taken actions or formed an intent
as a result of which they may be deemed all or part of a "group" within the
meaning of Section 13(d)(3) of the Exchange Act.
"Business Day" shall mean any day other than a Saturday, Sunday or any other
------------
day on which commercial banks are authorized or required by law to be closed in
New York, New York.
"Change in Control Event" shall mean the occurrence of any of the following:
-----------------------
(a) any Person (other than (i) the Company, any Subsidiary of the Company
or the Purchaser or any Affiliate of the Purchaser, (ii) any pension, profit
sharing, employee stock ownership or other employee benefit plan of the Company
or any Subsidiary thereof or any trustee or fiduciary with respect to any such
plan when acting in such capacity, or (iii) any Person who is, as of December
20, 1990, the Beneficial Owner of 40% or more of the total voting power of the
capital stock of the Company) is or becomes after December 20, 1990, the
Beneficial Owner of 40% or more of the total voting power of the Company; (b)
during any two consecutive years, (i) individuals who at the beginning of such
period constitute the Board of Directors of the Company, (ii) new directors
whose election or appointment by the
-41-
<PAGE>
Board of Directors or nomination or recommendation for election by the
Company's shareholders was approved by a vote of at least a majority of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved
and (iii) new directors elected with the affirmative votes of the Purchaser or
its Affiliates, cease for any reason (other than a shareholder proposal or proxy
solicitation initiated by or participated in or in favor of which the Purchaser
or any one or more of its Affiliates exercises its voting power in the capital
stock of the Company) to constitute a majority thereof; or (c) the shareholders
of the Company approve a merger or consolidation of the Company with any other
corporation or other entity, other than a merger or consolidation which either
individually or when aggregated with all other such transactions consummated
within the preceding nine months, would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 55% of the total voting power represented by the
voting securities of the Company or such surviving entity outstanding, or the
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.
-42-
<PAGE>
"Commission" shall mean the Securities and Exchange Commission or any other
----------
Federal agency at the time administering the Securities Act.
"Common Stock" shall have the meaning specified in the opening paragraph of
------------
this Series 2D Warrant, or any stock into which such Common Stock or any
successor security thereto shall have been changed, or any stock resulting from
any reclassification of such Common Stock or any successor security thereto, and
shall include the former Class A Common Stock, par value $0.01 per share, and
Class B Common Stock, par value $0.01 per share, of the Company.
"Company" shall have the meaning specified in the opening paragraphs of this
-------
Class 2D Warrant, including any entity which shall succeed to or assume the
obligations of the Company hereunder in compliance with section 3.
---------
"Consummation Date" shall have the meaning specified in section 3.
----------------- ---------
"Convertible Securities" shall mean any evidences of indebtedness, shares of
----------------------
stock (other than Common Stock) or other securities directly or indirectly
convertible into or exchangeable for Common Stock.
"Current Market Price" per share shall mean, on any date specified herein
--------------------
for the determination thereof, (a) the average daily Market Price of the Common
Stock for those days during the period of 20 days, ending on such date, on which
the national securities exchanges were open for trading, and (b) if the Common
Stock is not then listed or admitted to trading on any national
-43-
<PAGE>
securities exchange or quoted in the over-the-counter market, the Market Price
on such date.
"Exchange Act" shall mean the Securities Exchange Act of 1934, or any
------------
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Exchange Securities" shall have the meaning specified in section 1.5.
------------------- -----------
"Exercise Notice" shall have the meaning specified in section 1.1.
--------------- -----------
"Expiration Date" shall have the meaning specified in the first paragraph of
---------------
the Series 2D Warrant.
"Initial Series 2D Warrant Price" shall have the meaning specified in
-------------------------------
section 1.1.
- -----------
"Issuance Date" shall mean January 13, 1992.
-------------
"Market Price" shall mean, per share of Common Stock, on any date specified
------------
herein: (a) the last sale price of the Common Stock, or Other Securities, as
the case may be, on such date or, if no such sale takes place on such date, the
average of the closing bid and asked prices on such date, in each case as
officially reported on the principal national securities exchange on which the
Common Stock, or Other Securities, as the case may be, are then listed or
admitted to trading; or (b) if the Common Stock, or Other Securities, as the
case may be, are not then listed or admitted to trading on any national
securities exchange but is designated as a national market system security by
the NASD, the last trading price of the Common Stock, or Other
-44-
<PAGE>
Securities, as the case may be, on such date; or (c) if there shall have been no
trading on such date or if the Common Stock, or Other Securities, as the case
may be, are not so designated, the average of the reported closing bid and asked
prices of the Common Stock, or Other Securities, as the case may be, on such
date as shown by NASDAQ and reported by any member firm of the New York Stock
Exchange selected by the Company; or (d) if none of (a), (b) or (c) is
applicable, a market price per share determined at the Company's expense by an
appraiser chosen by a majority of the Significant Holders or, if no such
appraiser is chosen by the Significant Holders more than twenty Business Days
after notice of the necessity of such calculation shall have been delivered by
the Company to the Significant Holders, then by an appraiser chosen by the
Company.
"NASD" shall mean the National Association of Securities Dealers, Inc.
----
"NASDAQ" shall mean the National Market System of the National Association
------
of Securities Dealers, Inc. Automated Quotations System.
"Options" shall mean options, warrants or rights (including, without
-------
limitation, rights issued pursuant to the Rights Agreement or any other
shareholder rights plan which may at any time be adopted by the Company,
provided that rights issued under the Rights Agreement shall be deemed to be
- --------
Options to purchase Common Stock and each other security for which such rights
are at any time exercisable, which Options shall be deemed for purposes of
section 2 to be issued, with respect to each of the Common
- ---------
-45-
<PAGE>
Stock and each such other security, on the date that such rights first become
exercisable for Common Stock or such other security, as the case may be, and
provided further that if such rights are redeemed, any adjustment to the Series
- -------- -------
2D Warrant Price made as a result of the issuance of such rights shall be
recomputed, in accordance with the principles set forth in section 2.3(c), as if
--------------
the only shares of Common Stock or other securities issued or sold upon exercise
of such rights were the shares of Common Stock or other securities actually so
issued or sold) to subscribe for, purchase or otherwise acquire capital stock of
the Company or Convertible Securities.
"Other Securities" shall mean any stock, other than Common Stock, or other
----------------
securities of the Company or any other Person (corporate or otherwise), which
the holders of the Series 2D Warrants at any time shall be entitled to receive,
or shall have received, upon the exercise of Series 2D Warrants, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to section 3 or otherwise.
---------
"Person" shall mean a corporation, association, partnership, organization,
------
business, individual, government or political subdivision thereof or
governmental agency.
"Purchaser" shall have the meaning specified in the opening paragraphs of
---------
this Series 2D Warrant.
"Restricted Securities" shall mean (a) any Series 2D Warrants bearing the
---------------------
applicable legend set forth in section 8.1,
-----------
-46-
<PAGE>
(b) any shares of Common Stock (or Other Securities) issued upon the exercise of
Series 2D Warrants, which securities are evidenced by a certificate or
certificates bearing the applicable legend set forth in section 8.1, (c) any
-----------
shares of Common Stock (or Other Securities) issued subsequent to the exercise
of any of the Series 2D Warrants as a dividend or other distribution with
respect to, or resulting from a subdivision, of the outstanding shares of Common
Stock (or Other Securities) into a greater number of shares by reclassification,
subdivision, stock split or otherwise, or in exchange for or in replacement of
the Common Stock (or Other Securities) issued upon such exercise, which are
evidenced by a certificate or certificates bearing the applicable legend set
forth in section 8.1, and (d) unless the context otherwise requires, any shares
-----------
of Common Stock (or Other Securities) issuable upon the exercise of Series 2D
Warrants which, when so issued, shall be evidenced by a certificate or
certificates bearing the applicable legend set forth in section 8.1.
-----------
Notwithstanding the above, however, the term "Restricted Securities" shall not
include any shares of Common Stock registered as provided in the Amended and
Restated Registration Rights Agreement.
"Rights Agreement" shall mean the Rights Agreement between the Company and
----------------
the Rights Agent designated therein approved by the Board of Directors of the
Company on January 13, 1992, as amended from time to time.
"Securities Act" shall mean the Securities Act of 1933, or any similar
--------------
Federal statute, and the rules and regulations of the
-47-
<PAGE>
Commission thereunder, all as the same shall be in effect at the time.
"Securities Payments" shall have the meaning specified in section 1.5.
------------------- -----------
"Securities Purchase Agreement" shall have the meaning specified in the
-----------------------------
opening paragraphs of this Series 2D Warrant.
"Series 2D Preferred Shares" shall have the meaning specified in the opening
--------------------------
paragraphs of this Series 2D Warrant.
"Series 2D Warrants" shall have the meaning specified in the opening
------------------
paragraphs of this Series 2D Warrant.
"Series 2D Warrant Price" shall have the meaning specified in section 2.
----------------------- ---------
"Significant Holder" shall have the meaning specified in section 3(b).
------------------ ------------
"Shareholders Agreement" shall mean the Amended and Restated Shareholders
----------------------
Agreement of the Company dated as of November 21, 1989, as amended or restated
from time to time.
"Subsidiaries" shall mean, with respect to any Person, each corporation or
------------
other entity in which such Person directly or indirectly owns or has the power
to vote shares of any capital stock or other ownership interests having ordinary
voting power to elect a majority of the directors of such corporation, or other
persons performing similar functions for such entity, as the case may be.
"Tranche 1 Closing Date" shall have the meaning set forth therefor in the
----------------------
Securities Purchase Agreement.
-48-
<PAGE>
14. Remedies. The Company stipulates that the remedies at law of the
--------
holder of this Series 2D Warrant in the event of any default or threatened
default by the Company in the performance of or compliance with any of the
terms of this Series 2D Warrant are not and shall not be adequate, and that, to
the extent permitted by applicable law, such terms may be specifically enforced
by a decree for the specific performance of any agreement contained herein or by
an injunction against a violation of any of the terms hereof or otherwise.
15. No Rights or Liabilities as Stockholder. Nothing contained in this
---------------------------------------
Series 2D Warrant shall be construed as conferring upon the holder hereof at any
time prior to the exercise hereof any rights as a stockholder of the Company or
as imposing any obligation on such holder to purchase any securities or as
imposing any liabilities on such holder as a stockholder of the Company, whether
such obligation or liabilities are asserted by the Company or by creditors of
the Company.
16. Notices. All notices and other communications provided for herein
-------
shall be mailed by first class mail, postage prepaid, or delivered by
telecopier, if confirmed in writing within the next three days, or overnight
courier, addressed (a) if to any holder of any Series 2D Warrant, at the
registered address of such holder as set forth in the register kept at the
principal office of the Company, or (b) if to the Company, at its principal
office, 9300 Lee Highway, Fairfax, Virginia 22031, to the attention of the Chief
Financial Officer, or at the address of such other principal office of the
Company as the Company shall
-49-
<PAGE>
have furnished to each holder of any Series 2D Warrants in writing; provided,
--------
however, that the exercise of any Series 2D Warrant shall be effective in the
- -------
manner provided in section 1.
---------
17. Miscellaneous. This Series 2D Warrant and any term hereof may be
-------------
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought. Any provision of this Series 2D Warrant which shall
be prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the Company waives any provision of law which shall
render any provision hereof prohibited or unenforceable in any respect. This
Series 2D Warrant shall be governed by the laws of the State of New York. The
headings of this Series 2D Warrant are inserted for convenience only and shall
not be deemed to constitute a part hereof.
ICF KAISER INTERNATIONAL, INC.
By /s/ Michael J. Rowny
-------------------------------
Name: Michael J. Rowny
Title: Executive Vice
President and Chief
Financial Officer
-50-
<PAGE>
FORM OF SUBSCRIPTION
--------------------
[To be executed only upon exercise of Series 2D Warrant]
To ICF KAISER INTERNATIONAL, INC.
The undersigned registered holder of the attached Series 2D Warrant hereby
irrevocably exercises such Series 2D Warrant for, and purchases thereunder,
* shares of Common Stock of ICF KAISER INTERNATIONAL, INC. and [herewith
makes payment of $ therefor], and requests that the certificates for such
shares be issued in the name of, and delivered to ,
whose address is: .
Dated: __________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of
Series 2D Warrant)
__________________________________
(Street Address)
__________________________________
(City) (State) (Zip Code)
________________
* Insert here the number of shares called for on the face of this Series 2D
Warrant (or in the case of a partial exercise, the portion thereof as to
which this Series 2D Warrant is being exercised), in either case without
making any adjustment for additional Common Stock or any other stock or
other securities or property or cash which, pursuant to the adjustment
provisions of this Series 2D Warrant, may be delivered upon exercise. In
the case of a partial exercise, a new Series 2D Warrant or Series 2D
Warrants will be issued and delivered, representing the unexercised portion
of the Series 2D Warrant, to the holder surrendering the Series 2D Warrant.
The holder of this Series 2D Warrant shall in any event be entitled to
receive such number of shares of Common Stock as shall be determined as
adjusted pursuant to the provisions of this Series 2D Warrant.
-51-
<PAGE>
FORM OF ASSIGNMENT
------------------
[To be executed upon transfer of Series 2D Warrant]
For value received, the undersigned registered holder of the attached Series
2D Warrant hereby sells, assigns and transfers unto the
right represented by such Series 2D Warrant to purchase
shares of Common Stock of ICF KAISER INTERNATIONAL, INC. to which such
Series 2D Warrant relates, and appoints
Attorney to make such transfer on the books of ICF KAISER INTERNATIONAL,
INC. maintained for such purpose, with full power of substitution in the
premises.
__________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of
Series 2D Warrant)
__________________________________
(Street Address)
__________________________________
(City) (State) (Zip Code)
Signed in the presence of:
__________________________
-52-
<PAGE>
Exhibit 10 (a)
- --------------------------------------------------------------------------------
AMENDED AND RESTATED
CREDIT AGREEMENT
among
ICF KAISER INTERNATIONAL, INC.,
The Several Lenders
from Time to Time Parties Hereto
and
CHEMICAL BANK,
as Agent
DATED AS OF DECEMBER 8, 1993
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
Page
----
<S> <C>
SECTION 1. DEFINITIONS ................................................ 1
1.1 Defined Terms ................................................ 1
1.2 Other Definitional Provisions ................................ 19
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS ........... 20
2.1 Revolving Credit Commitments ................................. 20
2.2 Notes ........................................................ 20
2.3 Procedure for Revolving Credit Borrowing ..................... 21
2.4 Fees ......................................................... 21
2.5 Termination or Reduction of Commitments ...................... 21
2.6 Optional and Mandatory Prepayments ........................... 22
2.7 Conversion and Continuation Options .......................... 23
2.8 Minimum Amounts of Eurodollar Tranches ....................... 23
2.9 Interest Rates and Payment Dates ............................. 24
2.10 Computation of Interest and Fees ............................. 24
2.11 Inability to Determine Interest Rate ......................... 24
2.12 Pro Rata Treatment and Payments .............................. 25
2.13 Illegality ................................................... 26
2.14 Requirements of Law .......................................... 26
2.15 Taxes ........................................................ 28
2.16 Indemnity .................................................... 29
SECTION 3. LETTERS OF CREDIT .......................................... 30
3.1 L/C Commitment .............................................. 30
3.2 Procedure for Issuance and Renewal of Letters of Credit ...... 30
3.3 Fees, Commissions and Other Charges .......................... 31
3.4 L/C Participations ........................................... 32
3.5 Reimbursement Obligation of the Borrower ..................... 33
3.6 Borrower's Obligations Absolute .............................. 34
3.7 Letter of Credit Payments .................................... 34
3.8 Role of Issuing Bank ......................................... 35
3.9 L/C Participants' Obligations Absolute ....................... 35
3.10 Application .................................................. 36
SECTION 4. REPRESENTATIONS AND WARRANTIES ............................. 36
4.1 Financial Condition .......................................... 36
4.2 No Change .................................................... 37
4.3 Corporate Existence; Compliance with Law ..................... 37
4.4 Corporate Power; Authorization; Enforceable Obligations ...... 37
4.5 No Legal Bar ................................................. 38
4.6 No Material Litigation ....................................... 38
4.7 No Default ................................................... 38
4.8 Ownership of Property; Liens ................................. 38
4.9 Intellectual Property ........................................ 38
4.10 No Burdensome Restrictions ................................... 39
4.11 Taxes ........................................................ 39
4.12 Federal Regulations .......................................... 39
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
4.13 ERISA ........................................................ 39
4.14 Investment Company Act; Other Regulations .................... 40
4.15 Subsidiaries ................................................. 40
4.16 Capital Stock ................................................ 40
4.17 Accuracy of Information ...................................... 41
4.18 Purpose of Loans ............................................. 41
4.19 Debarment or Suspension ...................................... 41
4.20 Environmental Matters ........................................ 42
4.21 Insurance .................................................... 42
4.22 Indemnification from Customers ............................... 42
SECTION 5. CONDITIONS PRECEDENT ....................................... 42
5.1 Conditions to Initial Extension of Credit .................... 42
5.2 Conditions to Each Extension of Credit ....................... 46
SECTION 6. AFFIRMATIVE COVENANTS ...................................... 46
6.1 Financial Statements ......................................... 47
6.2 Certificates; Other Information .............................. 48
6.3 Borrowing Base Certificates .................................. 49
6.4 Payment of Obligations ....................................... 49
6.5 Conduct of Business and Maintenance of Existence ............. 49
6.6 Maintenance of Property; Insurance ........................... 50
6.7 Inspection of Property; Books and Records; Discussions ....... 50
6.8 Notices ...................................................... 50
6.9 Contracts with Customers ..................................... 52
6.10 New Subsidiaries and Subsidiary Guarantors ................... 52
6.11 Audits of Accounts; Examination Letter ....................... 52
6.12 Change of Control ............................................ 53
SECTION 7. NEGATIVE COVENANTS ......................................... 53
7.1 Financial Condition Covenants ................................ 53
7.2 Limitation on Indebtedness ................................... 54
7.3 Limitation on Liens .......................................... 55
7.4 Limitation on Guarantee Obligations .......................... 57
7.5 Limitation on Fundamental Changes ............................ 57
7.6 Limitation on Sale of Assets ................................. 57
7.7 Limitation on Restricted Payments ............................ 58
7.8 Limitation on Transactions with Affiliates ................... 59
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments ................................................ 60
7.10 Limitation on Investments, Loans and Advances ................ 60
7.11 Corporate Documents .......................................... 61
7.12 Compliance with ERISA ........................................ 61
7.13 Maintenance of Accounts ...................................... 62
7.14 Nature of Business ........................................... 62
SECTION 8. EVENTS OF DEFAULT .......................................... 62
SECTION 9. THE AGENT .................................................. 66
9.1 Appointment .................................................. 66
9.2 Delegation of Duties ......................................... 66
9.3 Exculpatory Provisions ....................................... 66
</TABLE>
- ii -
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
9.4 Reliance by Agent ............................................ 67
9.5 Notice of Default ............................................ 67
9.6 Non-Reliance on Agent and Other Lenders ...................... 67
9.7 Indemnification .............................................. 68
9.8 Agent in Its Individual Capacity ............................. 68
9.9 Successor Agent .............................................. 69
SECTION 10. MISCELLANEOUS ............................................. 69
10.1 Amendments and Waivers ...................................... 69
10.2 Notices ..................................................... 70
10.3 No Waiver; Cumulative Remedies .............................. 71
10.4 Survival of Representations and Warranties .................. 71
10.5 Payment of Expenses and Taxes ............................... 71
10.6 Successors and Assigns; Participations and Assignments ...... 72
10.7 Adjustments; Set-off ........................................ 75
10.8 Counterparts ................................................ 75
10.9 Severability ................................................ 75
10.10 Integration ................................................. 76
10.11 Submission To Jurisdiction; Waivers ......................... 76
10.12 GOVERNING LAW ............................................... 76
10.13 Acknowledgements ............................................ 77
10.14 WAIVERS OF JURY TRIAL ....................................... 77
10.15 Confidentiality ............................................. 77
10.16 Amendment and Restatement of Existing Credit Agreement ...... 77
10.17 The Cash Collateral Account ................................. 77
</TABLE>
- iii -
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SCHEDULES
Schedule I Lenders and Commitments
Schedule II Certain Existing Letters of Credit
Schedule III Subsidiaries and Subsidiary Guarantors
Schedule IV Capital Stock of the Borrower
Schedule V Insurance
Schedule VI Indemnification from Customers
Schedule VII Existing Indebtedness
Schedule VIII Existing Liens
EXHIBITS
Exhibit A Form of Note
Exhibit C Form of Subsidiaries Guarantee
Exhibit D Form of Borrower Security Agreement
Exhibit E Form of Subsidiaries Security Agreement
</TABLE>
- iv -
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 8, 1993,
among ICF KAISER INTERNATIONAL, INC., a Delaware corporation (the "Borrower"),
--------
the several banks and other financial institutions from time to time parties to
this Agreement (the "Lenders") and CHEMICAL BANK, a New York banking
-------
corporation, as agent for the Lenders hereunder (in such capacity, the "Agent").
-----
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower is a party to the Credit Agreement, dated as of
May 14, 1991, as amended (the "Existing Credit Agreement"), among the Borrower,
-------------------------
the banks parties thereto (the "Existing Lenders") and Chemical Bank (successor
----------------
by merger to Manufacturers Hanover Trust Company), as agent for the Existing
Lenders (in such capacity, the "Existing Agent"); and
--------------
WHEREAS, effective as of June 26, 1993, the Borrower changed its name
from "ICF International, Inc." to "ICF Kaiser International, Inc."; and
WHEREAS, the Borrower proposes to restate the Existing Credit Agreement
in this Agreement in order to provide financing for certain of its working
capital and general corporate requirements in the original aggregate amount of
$60,000,000; and
WHEREAS, the Existing Lenders listed on the signature pages hereto
(collectively, the "Continuing Lenders"), the Existing Agent and CoreStates
------------------
Bank, N.A. are willing to provide such financing upon the terms and subject to
the conditions hereinafter set forth; and
WHEREAS, it is intended that the indebtedness evidenced by the Notes (as
hereinafter defined) be a continuation of the indebtedness of the Borrower to
the Existing Lenders under the Existing Credit Agreement and that each Security
Document (as hereinafter defined) be a continuation of the corresponding
existing Security Document (as defined in the Existing Credit Agreement);
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree that on the Closing
Date the Existing Credit Agreement shall be amended and restated in its entirety
as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
-------------
shall have the following meanings:
<PAGE>
2
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
---
to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%.
For purposes hereof: "Prime Rate" shall mean the rate of interest per
----------
annum publicly announced from time to time by the Agent as its prime rate
in effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by Chemical Bank
in connection with extensions of credit to debtors); "Base CD Rate" shall
------------
mean the sum of (a) the product of (i) the Three-Month Secondary CD Rate
and (ii) a fraction, the numerator of which is one and the denominator of
which is one minus the C/D Reserve Percentage and (b) the C/D Assessment
Rate; "Three-Month Secondary CD Rate" shall mean, for any day, the
-----------------------------
secondary market rate for three-month certificates of deposit reported as
being in effect on such day (or, if such day shall not be a Business Day,
the next preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of New York (which
rate will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week following
such day), or, if such rate shall not be so reported on such day or such
next preceding Business Day, the average of the secondary market quotations
for three-month certificates of deposit of major money center banks in New
York City received at approximately 10:00 A.M., New York City time, on such
day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Agent from three New York City negotiable certificate
of deposit dealers of recognized standing selected by it; and "Federal
-------
Funds Effective Rate" shall mean, for any day, the weighted average of the
--------------------
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the
average of the quotations for the day of such transactions received by the
Agent from three federal funds brokers of recognized standing selected by
it. If for any reason the Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to ascertain
the Base CD Rate or the Federal Funds Effective Rate, or both, for any
reason, including the inability or failure of the Agent to obtain
sufficient quotations in accordance with the terms thereof, the ABR shall
be determined without regard to clause (b) or (c), or both, of the first
sentence of this definition, as appropriate, until the circumstances giving
rise to such inability no longer exist. Any change in the ABR due to a
change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal
Funds Effective Rate shall be effective as of the opening of business on
the effective
<PAGE>
3
day of such change in the Prime Rate, the Three-Month Secondary CD Rate or
the Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is based
---------
upon the ABR.
"Accounts": as defined in Section 9-106 of the New York Uniform
--------
Commercial Code.
"Adjusted Consolidated Net Income": for any fiscal period,
--------------------------------
Consolidated Net Income for such fiscal period, plus the amounts deducted
from earnings in determining such Consolidated Net Income for Consolidated
Fixed Charges and income taxes.
"Affiliate": as to any Person, any other Person (other than a
---------
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, directly or indirectly,
either to (a) vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether by
contract or otherwise.
"Aggregate Outstanding Extensions of Credit": as to any Lender at any
------------------------------------------
time, an amount equal to the sum of (a) the aggregate principal amount of
all Loans made by such Lender then outstanding and (b) such Lender's
Commitment Percentage of the L/C Obligations then outstanding.
"Agreement": this Amended and Restated Credit Agreement, as amended,
---------
supplemented or otherwise modified from time to time.
"Applicable Margin": for each day during each fiscal quarter of the
-----------------
Borrower, the rate per annum set forth for the relevant Type of Loan below
opposite the Interest Coverage Ratio of the Borrower and its consolidated
Subsidiaries as shown on the Applicable Margin Certificate required
pursuant to subsection 6.2(e) to be delivered for the immediately preceding
fiscal quarter:
<PAGE>
4
<TABLE>
<CAPTION>
Interest
Coverage Eurodollar
Ratio ABR Loans Loans
-------- --------- ----------
<C> <S> <C> <C>
(a) Less than 2.0:1.0 1/2% 2-1/4%
(b) Less than 2.5:1.0 1/2% 2%
but greater than
or equal to
2.0:1.0
(c) Less than 3.0:1.0 1/4% 1-3/4%
but greater than
or equal to
2.5:1.0
(d) Less than 3.5:1.0 1/4% 1-1/2%
but greater than
or equal to
3.0:1.0
(e) Less than 4.0:1.0 0% 1-1/4%
but greater than
or equal to
3.5:1.0
(f) Greater than or 0% 1%
equal to 4.0:1.0
</TABLE>
; provided, however, that, (i) in the event that no Applicable Margin
-------- -------
Certificate has been delivered for a fiscal quarter prior to the last day
of the next succeeding fiscal quarter, the Applicable Margin during such
next succeeding fiscal quarter shall be that described in the foregoing
clause (a), (ii) in the event that the actual Interest Coverage Ratio for
any fiscal quarter is subsequently determined to be less than that set
forth in the Applicable Margin Certificate for such fiscal quarter, the
Applicable Margin during the fiscal quarter next succeeding the fiscal
quarter in respect of which such Interest Coverage Ratio has been
determined shall be determined based upon such actual Interest Coverage
Ratio and (iii) if any interest payment is made during the period between
the first day of a fiscal quarter and the date of delivery of the
Applicable Margin Certificate for the immediately preceding fiscal quarter
pursuant to subsection 6.2(e), such interest payment in respect of such
period shall be tentatively calculated on the basis of the Applicable
Margin in effect for such immediately preceding fiscal quarter until
delivery of such Applicable Margin Certificate. Changes in the Applicable
Margin, if any, resulting from the operation of any of clauses (i), (ii) or
(iii) above for any fiscal quarter shall be given effect through
adjustments in subsequent interest payments so as to give effect to such
Applicable Margin retroactively to the beginning of such fiscal quarter.
"Applicable Margin Certificate": as defined in subsection 6.2(e).
-----------------------------
<PAGE>
5
"Application": an application, in such form as the Issuing Bank may
-----------
specify from time to time, requesting the Issuing Bank to open a Letter of
Credit.
"Assignee": as defined in subsection 10.6(c).
--------
"Available Commitment": as to any Lender, at any time, an amount
--------------------
equal to the excess, if any, of (a) such Lender's Commitment over (b) such
Lender's Aggregate Outstanding Extensions of Credit.
"Board": the Board of Governors of the Federal Reserve System (or any
-----
successor).
"Borrower Security Agreement": the Amended and Restated Borrower
---------------------------
Security Agreement to be executed and delivered by the Borrower,
substantially in the form of Exhibit D, as the same may be amended,
supplemented or otherwise modified from time to time.
"Borrowing Base": on any date of determination, the sum of (i) 85% of
--------------
Eligible Billed Accounts Receivable of the Borrower and its Domestic
Subsidiaries plus (ii) 30% of Unbilled Accounts Receivable of the Borrower
----
and its Domestic Subsidiaries.
"Borrowing Base Certificates": the monthly certificates provided by
---------------------------
the Borrower pursuant to this Agreement setting forth the calculation of
the Borrowing Base for such month, substantially in the form of Exhibit B.
"Borrowing Date": any Business Day specified in a notice pursuant to
--------------
subsection 2.3 as a date on which the Borrower requests the Lenders to make
Loans hereunder.
"Business": as defined in subsection 4.17.
--------
"Business Day": a day other than a Saturday, Sunday or other day on
------------
which commercial banks in New York City are authorized or required by law
to close.
"Capital Stock": 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.
"Cash Collateral Account": a collateral account with the Agent over
-----------------------
which the Agent shall have sole dominion and control for the benefit of the
Lenders and from which the Borrower shall have no right of withdrawal, the
funds on deposit in which shall be invested by the Agent, in consultation
with the Borrower, and, together with earnings
<PAGE>
6
on such investments, shall be held by the Agent as collateral security for
the Borrower's obligations under this Agreement, the Notes and the L/C
Obligations.
"Cash Equivalents": (i) direct obligations of the United States of
----------------
America or any agency or instrumentality thereof, or obligations guaranteed
by the United States of America or any agency or instrumentality thereof,
in each case maturing within 180 days of the date of acquisition thereof;
(ii) certificates of deposit or Eurodollar deposits, due within 180 days of
the date of acquisition thereof, with a commercial bank which is organized
under the laws of the United States of America or any state thereof having
capital funds of at least $500 million; and (iii) commercial paper given
the highest rating by two established national credit rating agencies and
maturing not more than 180 days from the date of acquisition thereof.
"C/D Assessment Rate": for any day as applied to any ABR Loan, the
-------------------
annual assessment rate in effect on such day which is payable by a member
of the Bank Insurance Fund classified as well-capitalized and within
supervisory subgroup "B" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. (S) 327.3(d) (or any
successor provision) to the Federal Deposit Insurance Corporation (or any
successor) for such Corporation's (or such successor's) insuring time
deposits at offices of such institution in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR Loan,
----------------------
that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement
for a Depositary Institution (as defined in Regulation D of the Board) in
respect of new non-personal time deposits in Dollars having a maturity of
30 days or more.
"Chemical": Chemical Bank.
--------
"Closing Date": the date on which the conditions precedent set forth
------------
in subsection 5.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time to
----
time.
"Collateral": all assets of the Loan Parties, now owned or
----------
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Commercial Letter of Credit": as defined in subsection 312.
---------------------------
"Commitment": as to any Lender, the obligation of such Lender to make
----------
Loans to and/or issue or participate in
<PAGE>
7
Letters of Credit issued on behalf of the Borrower hereunder in an
aggregate principal and/or face amount at any one time outstanding not to
exceed the amount set forth opposite such Lender's name on Schedule I, as
such amount may be reduced from time to time in accordance with the
provisions of this Agreement.
"Commitment Percentage": as to any Lender at any time, the percentage
---------------------
which such Lender's Commitment then constitutes of the aggregate
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such
Lender's Loans then outstanding constitutes of the aggregate principal
amount of the Loans then outstanding).
"Commitment Period": the period from and including the date hereof to
-----------------
but not including the Termination Date or such earlier date on which the
Commitments shall terminate as provided herein.
"Commonly Controlled Entity": an entity, whether or not incorporated,
--------------------------
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"Consolidated Capital Funds": as of the date of determination, the
--------------------------
sum of (i) the Consolidated Net Worth of the Borrower at such date and (ii)
the outstanding principal amount of the Borrower's Consolidated Funded
Indebtedness at such date.
"Consolidated Fixed Charges": for any period, the sum of Consolidated
--------------------------
Interest Expense and Consolidated Lease Expense for such period.
"Consolidated Funded Indebtedness": as of the date of determination,
--------------------------------
the sum of all Indebtedness and (without duplication) Guarantee Obligations
of the Borrower and its Subsidiaries, other than Non-Recourse Indebtedness,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense": for any period, interest expense of
-----------------------------
the Borrower and its Subsidiaries other than its Single Purpose
Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP (net of interest income for such period).
"Consolidated Lease Expense": for any period, the aggregate rental
--------------------------
expenses of the Borrower and its Subsidiaries other than its Single Purpose
Subsidiaries, determined on a consolidated basis in accordance with GAAP,
payable in respect of such period under leases (other than
<PAGE>
8
capitalized leases) for real and/or personal property (net of income from
subleases thereof).
"Consolidated Net Income": for any period, the consolidated net
-----------------------
income (or deficit) of the Borrower and its Subsidiaries other than its
Single Purpose Subsidiaries (except to the extent actually received from a
Single Purpose Subsidiary by a Subsidiary that is not a Single Purpose
Subsidiary) for such period (taken as a cumulative whole), determined in
accordance with GAAP, 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 the 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 the Borrower or any Subsidiary has an ownership interest, except
to the extent that the 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 GAAP, of any Indebtedness, of the
Borrower or any Subsidiary, (h) in the case of a successor to the 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, (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, (j) any extraordinary loss directly related
to the repurchase or repayment, substantially concurrently with the
occurrence of the Closing Date, of (x) the Borrower's 13.5% Senior
Subordinated Notes due 1999 and warrants issued in connection therewith,
(y) the Existing Credit Agreement and (z) the Borrower's Series 2C Senior
Preferred Stock and related Series 2C Warrants and (k) any extraordinary
loss directly related to the execution and delivery of this Agreement
incurred on the Closing Date.
"Consolidated Net Worth": at a particular date, all amounts which
----------------------
would be included under shareholders' equity on a consolidated balance
sheet of the Borrower and its
<PAGE>
9
Subsidiaries other than its Single Purpose Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"Continuing Lenders": as defined in the preamble hereto.
------------------
"Contractual Obligation": as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Reclassifications": net credit balances on an individual
------------------------
account basis which remain outstanding for greater than 90 days.
"Default": any of the events specified in Section 8, whether or not
-------
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Deferred Revenue": with respect to any Accounts due from any Person
----------------
to which the Borrower or any Domestic Subsidiary has a liability to provide
services as a result of billings 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.
"Dollars" and "$": dollars in lawful currency of the United States of
------- -
America.
"Domestic Subsidiary: 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.
"Eligible Billed Accounts Receivable": at a particular date,
-----------------------------------
Accounts: (a) (i) which are bona fide, valid and legally enforceable
obligations of the account debtor in respect thereof and arise from the
actual sale and delivery of goods or rendition of services to or for the
benefit of such account debtor in the ordinary course of business, (ii)
with respect to which all consents, licenses, approvals or authorizations
of, or registrations or declarations with, any Governmental Authority
required to be obtained, effected or given in connection with the
execution, delivery and performance of such Accounts have been duly
obtained, effected or given, are in full force and effect and do not
subject the scope of such Accounts to any materially adverse limitation,
either specific or general in nature, to the best of the Borrower's
knowledge and (iii) which conform in all other respects to the
representations and warranties contained herein; (b) which have been
invoiced by the
<PAGE>
10
Borrower or a Domestic Subsidiary and which have been outstanding for less
than 90 days after the date of such invoice; (c) which are not owed by an
obligor which (i) is an Affiliate (other than Accounts owed to the Borrower
or any Domestic Subsidiary by joint ventures in which the Borrower or any
Subsidiary has an interest or project related partnerships in which the
Borrower or any Subsidiary is a general partner which are not otherwise
included as Eligible Billed Accounts Receivable pursuant to this
definition) or Subsidiary of the Borrower or (ii) is organized under the
laws of a jurisdiction outside the United States of America unless (x) such
Account is secured by a commercial letter of credit in favor of the
Borrower or a Domestic Subsidiary which has been confirmed by a bank which
is a member of the New York Clearinghouse or which is otherwise
satisfactory to the Agent or (y) the Borrower or a Domestic Subsidiary has
obtained with respect to such Account insurance or other guarantee
substantially similar to a letter of credit which such insurance or
guarantee is satisfactory to the Agent; (d) which, to the best of the
Borrower's or any Domestic Subsidiary's knowledge, are not owed by an
obligor which has taken any of the actions or suffered any of the events of
the kind described in paragraph (g) of Section 8; and (e) which the Agent
or the Required Lenders, exercising reasonable discretion, have not
otherwise determined to be unacceptable to them; provided, that Eligible
--------
Billed Accounts Receivable shall be reduced by the sum of (a) the amount at
such date of reserves against returns, discounts, claims, credits and
allowances and other such reductions in accounts, as from time to time the
Borrower shall determine in the ordinary course of its business, (b) any
retainages or variances, (c) Deferred Revenue, (d) Unapplied Cash and (e)
Credit Reclassifications.
"Environmental Laws": any and all foreign, Federal, state, local or
------------------
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability
or standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"ESOP Credit Agreement": the ESOP Credit Agreement, dated as of May
---------------------
14, 1991, as amended, among, (i) the trustees of the ESOP Trust, (ii) the
Borrower, as guarantor, (iii) the Existing Lenders and (iv) the Existing
Agent.
<PAGE>
11
"ESOP Trust": the ICF Kaiser International, Inc. Employee Stock
----------
Ownership Trust created pursuant to the ICF Kaiser International, Inc.
Employee Stock Ownership Plan.
"Eurocurrency Reserve Requirements": for any day as applied to a
---------------------------------
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board) maintained by a
member bank of such System.
"Eurodollar Base Rate": with respect to each day during each Interest
--------------------
Period pertaining to a Eurodollar Loan, the rate per annum equal to the
rate at which Chemical is offered Dollar deposits at or about 10:00 A.M.,
New York City time, two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations in respect of its Eurodollar Loans
are then being conducted, for delivery on the first day of such Interest
Period for the number of days comprised therein and in an amount comparable
to the amount of its Eurodollar Loan to be outstanding during such Interest
Period.
"Eurodollar Loans": Loans the rate of interest applicable to which is
----------------
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
---------------
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans the
------------------
then current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
----------------
provided that any requirement for the giving of notice, the lapse of time,
--------
or both, or any other condition, has been satisfied.
"Existing Agent": as defined in the preamble hereto.
--------------
<PAGE>
12
"Existing Credit Agreement": as defined in the preamble hereto.
-------------------------
"Existing Lenders": as defined in the preamble hereto.
----------------
"Financing Lease": any lease of property, real or personal, the
---------------
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"GAAP": generally accepted accounting principles in the United States
----
of America in effect from time to time.
"Governmental Authority": 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.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
-------------------- -------------------
without duplication, any obligation of (a) the guaranteeing person or (b)
another Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has issued
a reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, Financing Leases,
dividends or other financial or payment obligations (the "primary
-------
obligations") of any other third Person (the "primary obligor") in any
----------- ---------------
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) 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, (iii) 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 (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
-------- -------
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business or any
Indebtedness. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless
<PAGE>
13
such primary obligation and the maximum amount for which such guaranteeing
person may be liable are not stated or determinable, in which case the
amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined
by the Borrower in good faith.
"Hazardous Materials": any hazardous materials, hazardous wastes,
-------------------
hazardous constituents, hazardous or toxic substances, petroleum products
(including crude oil or any fraction thereof), defined or regulated as such
in or under any Environmental Law.
"Indebtedness": of any Person at any date, without duplication (a)
------------
all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of such
Person which is evidenced by a note, bond, debenture or similar instrument,
(c) all obligations of such Person under Financing Leases, (d) all
obligations of such Person in respect of outstanding letters of credit,
acceptances and similar obligations issued or created for the account of
such Person and (e) all liabilities secured by any Lien on any property
owned by such Person even though such Person has not assumed or otherwise
become liable for the payment thereof.
"Insolvency": with respect to any Multiemployer Plan, the condition
----------
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
---------
"Interest Coverage Ratio": as defined in subsection 7.1(b).
-----------------------
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
---------------------
March, June, September and December to occur while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period, and (c) as to
any Eurodollar Loan having an Interest Period longer than three months,
each day which is three months or a whole multiple thereof after the first
day of such Interest Period, and the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
---------------
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two,
<PAGE>
14
three or six months thereafter, as selected by the Borrower in its
notice of borrowing or notice of conversion, as the case may be, given
with respect thereto; and
(ii) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Eurodollar Loan
and ending one, two, three or six months thereafter, as selected by
the Borrower by irrevocable notice to the Agent not less than three
Business Days prior to the last day of the then current Interest
Period with respect thereto;
provided that, the foregoing provisions relating to Interest Periods are
--------
subject to the following:
(1) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(2) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date;
(3) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(4) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"Issuing Bank": Chemical Bank (Delaware), in its capacity as issuer
------------
of any Letter of Credit or such other Lender satisfactory to the Company
and the Agent as shall be selected by the Company and the Agent to issue
Letters of Credit under this Agreement.
"L/C Commitment": $60,000,000.
--------------
"L/C Fee Payment Date": the last day of each March, June, September
--------------------
and December.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
---------------
aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the
<PAGE>
15
aggregate amount of drawings under Letters of Credit which have not then
been reimbursed pursuant to subsection 3.5(a).
"L/C Participants": the collective reference to all the Lenders other
----------------
than the Issuing Bank.
"Letters of Credit": as defined in paragraph 3.1(a).
-----------------
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or similar preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Financing Lease having substantially the same
economic effect as any of the foregoing).
"Loan Documents": this Agreement, the Notes, the Applications and the
--------------
Security Documents.
"Loan Parties": the Borrower and each of the Subsidiary Guarantors.
------------
"Loans": as defined in subsection 2.1.
-----
"Material Adverse Effect": a material adverse effect on (a) the
-----------------------
business, operations, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole or (b) the
validity or enforceability of this Agreement, any of the Notes, any
Application or any of the other Loan Documents or the rights or remedies of
the Agent or the Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
------------------
in Section 4001(a)(3) of ERISA.
"Net Borrowing Base": at any time, the excess, if any, of (i) the
------------------
Borrowing Base at such time over (ii) the aggregate amount of Indebtedness
----
permitted pursuant to subsection 7.2(i) outstanding at such time.
"Non-Excluded Taxes": as defined in subsection 2.15.
------------------
<PAGE>
16
"Non-Recourse Indebtedness": Indebtedness 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, 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 the Borrower nor any Subsidiary of the 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 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.
"Note": as defined in subsection 2.2.
----
"Participant": as defined in subsection 10.6(b).
-----------
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
----
to Subtitle A of Title IV of ERISA.
"Permitted Businesses": the businesses of providing consulting,
--------------------
engineering or construction services to public and private sector clients
in the environment, energy, infrastructure and industry markets.
"Person": an individual, partnership, corporation, business trust,
------
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is
----
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Properties": as defined in subsection 4.17.
----------
"Register": as defined in subsection 10.6(d).
--------
<PAGE>
17
"Regulation U": Regulation U of the Board of Governors of the Federal
------------
Reserve System as in effect from time to time.
"Reimbursement Obligation": the obligation of the Borrower to
------------------------
reimburse the Issuing Bank pursuant to subsection 3.5(a) for amounts drawn
under Letters of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
--------------
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
----------------
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. (S)
2615.
"Required Lenders": at any time, Lenders the Commitment Percentages
----------------
of which aggregate at least 60%.
"Requirement of Law": as to any Person, the Certificate of
------------------
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer": the chairman, the chief executive officer or
-------------------
the president of the Borrower or, with respect to financial matters, the
chief financial officer of the Borrower.
"Security Agreements": the collective reference to the Borrower
-------------------
Security Agreement and the Subsidiaries Security Agreement.
"Security Documents": the collective reference to the Security
------------------
Agreements, the Subsidiaries Guarantee and all other security documents and
guarantees hereafter delivered to the Agent either granting a Lien on any
asset or assets of any Person to secure, or guaranteeing, the obligations
and liabilities of the Borrower hereunder, under the Notes and/or under any
of the other Loan Documents or to secure any guarantee of any such
obligations and liabilities.
"Single Employer Plan": any Plan which is covered by Title IV of
--------------------
ERISA, but which is not a Multiemployer Plan.
"Single Purpose Subsidiary": as to any Person, a Subsidiary of such
-------------------------
Person the activities of which, including its Subsidiaries and partnerships
or other entities owned,
<PAGE>
18
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.
"Standby Letter of Credit": as defined in paragraph 3.1(b)(i)(1).
------------------------
"Subordinated Debt": (a) the Subordinated Notes and (b) any other
-----------------
unsecured Indebtedness of the Borrower no part of the principal of which is
required to be paid (whether by way of mandatory sinking fund, mandatory
redemption or mandatory prepayment or otherwise) prior to the Termination
Date, and the payment of the principal of and interest on which and any
other obligations of the Borrower in respect thereof is subordinated to the
prior payment in full of the principal of and interest (including
post-petition interest) on the Notes and all amounts payable with respect
to the Letters of Credit and all other obligations and liabilities of the
Borrower to the Lenders hereunder on terms and conditions approved in
writing by the Required Lenders prior to the incurrence of such
obligations.
"Subordinated Notes": the Borrower's Senior Subordinated Notes due
------------------
2003 to be issued on or about the Closing Date.
"Subsidiaries Guarantee": the Amended and Restated Subsidiaries
----------------------
Guarantee to be executed and delivered by each Subsidiary Guarantor,
substantially in the form of Exhibit C, as the same may be amended,
supplemented or otherwise modified from time to time.
"Subsidiaries Security Agreement": the Amended and Restated
-------------------------------
Subsidiaries Security Agreement to be executed and delivered by each
Subsidiary Guarantor in favor of the Agent, substantially in the form of
Exhibit E, as the same may be amended, supplemented or otherwise modified
from time to time.
"Subsidiary": as to any Person, 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
controlled, directly or indirectly through one or more intermediaries, or
both, by such Person. Unless otherwise qualified, all references to a
"Subsidiary"
<PAGE>
19
or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower appearing
--------------------
under the heading "Subsidiary Guarantors" in Schedule III as supplemented
from time to time in accordance with subsection 6.10.
"Termination Date": October 31, 1996.
----------------
"Transferee": as defined in subsection 10.6(f).
----------
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar
----
Loan.
"Unapplied Cash": Accounts of the Borrower or any Domestic Subsidiary
--------------
which have been paid by the relevant obligor but which payments have not
yet been reflected on the accounts receivables records of the Borrower or
such Domestic Subsidiary.
"Unbilled Accounts Receivable": Accounts which have not been invoiced
----------------------------
by the Borrower or any Subsidiary but which comply in all other respects
with the requirements of the definition of Eligible Billed Accounts
Receivable set forth herein, as such Unbilled Accounts Receivable are set
forth in the Borrowing Base Certificates from time to time, provided that
--------
(a) no more than 10% of such Unbilled Accounts Receivable are owned by any
Domestic Subsidiary which is not a Subsidiary Guarantor; (b) the invoice
for each such Unbilled Account Receivable is in fact billable within thirty
days from the date on which such Unbilled Account Receivable debtor
incurred liability for costs with respect to goods or services provided in
connection with the creation of such Unbilled Account Receivable; and (c)
the Borrower or Domestic Subsidiary which provided such goods and services
at all times intends to render an invoice within such thirty day period for
the total amount of the costs included in such Unbilled Account Receivable.
"Uniform Customs": the Uniform Customs and Practice for Documentary
---------------
Credits (1983 Revision), International Chamber of Commerce Publication No.
400, as the same may be amended from time to time.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
-----------------------------
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in the Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrower and its Subsidiaries not defined in subsection 1.1 and accounting terms
partly defined
<PAGE>
20
in subsection 1.1, to the extent not defined, shall have the respective meanings
given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
----------------------------
conditions hereof, each Lender severally agrees to make revolving credit loans
("Loans") to the Borrower from time to time during the Commitment Period in an
-----
aggregate principal amount at any one time outstanding which, when added to such
Lender's Commitment Percentage of the then outstanding L/C Obligations, does not
exceed the lesser of (i) the amount of such Lender's Commitment or (ii) such
Lender's Commitment Percentage of the Net Borrowing Base at such time. During
the Commitment Period the Borrower may use the Commitments by borrowing,
prepaying the Loans in whole or in part, and reborrowing, all in accordance with
the terms and conditions hereof.
(b) The Loans may from time to time be (i) Eurodollar Loans, (ii) ABR
Loans or (iii) a combination thereof, as determined by the Borrower and notified
to the Agent in accordance with subsections 2.3 and 2.7, provided that no Loan
--------
shall be made as a Eurodollar Loan after the day that is one month prior to the
Termination Date.
2.2 Notes. The Loans made by each Lender shall be evidenced by a
-----
promissory note of the Borrower, substantially in the form of Exhibit A, with
appropriate insertions as to payee, date and principal amount (a "Note"),
----
payable to the order of such Lender and in a principal amount equal to the
lesser of (a) the amount of the initial Commitment of such Lender and (b) the
aggregate unpaid principal amount of all Loans made by such Lender. Each Lender
is hereby authorized to record the date, Type and amount of each Loan made by
such Lender, each continuation thereof, each conversion of all or a portion
thereof to another Type, the date and amount of each payment or prepayment of
principal thereof and, in the case of Eurodollar Loans, the length of each
Interest Period with respect thereto, on the schedule annexed to and
constituting a part of its Note, and any such recordation shall constitute prima
-----
facie evidence of the accuracy of the information so recorded. Each Note shall
- -----
(x) be dated the Closing Date, (y) be stated to mature on the
<PAGE>
21
Termination Date and (z) provide for the payment of interest in accordance with
subsection 2.9.
2.3 Procedure for Revolving Credit Borrowing. The Borrower may borrow
----------------------------------------
under the Commitments during the Commitment Period on any Business Day, provided
--------
that the Borrower shall give the Agent irrevocable notice (which notice must be
received by the Agent prior to 10:00 A.M., New York City time, (a) three
Business Days prior to the requested Borrowing Date, if all or any part of the
requested Loans are to be initially Eurodollar Loans or (b) one Business Day
prior to the requested Borrowing Date, otherwise), specifying (i) the amount to
be borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing is
to be of Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the
borrowing is to be entirely or partly of Eurodollar Loans, the amount of such
Type of Loan and the length of the initial Interest Period therefor. Each
borrowing under the Commitments shall be in an amount equal to (x) in the case
of ABR Loans, $1,000,000 or a whole multiple thereof (or, if the then Available
Commitments are less than $1,000,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $5,000,000 or a whole multiple of $1,000,000 in excess
thereof. Upon receipt of any such notice from the Borrower, the Agent shall
promptly notify each Lender thereof. Each Lender will make the amount of its
pro rata share of each borrowing available to the Agent for the account of the
Borrower at the office of the Agent specified in subsection 10.2 prior to 11:00
A.M., New York City time, on the Borrowing Date requested by the Borrower in
funds immediately available to the Agent. Such borrowing will then be made
available to the Borrower by the Agent crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made available to the
Agent by the Lenders and in like funds as received by the Agent.
2.4 Fees. (a) The Borrower agrees to pay to the Agent for the account
----
of each Lender a facility fee equal to 1% of such Lender's initial Commitment,
payable on the Closing Date.
(b) The Borrower agrees to pay to the Agent for the account of each
Lender a commitment fee for the period from and including the first day of the
Commitment Period to the Termination Date, computed at the rate of 1/2 of 1% per
annum on the average daily amount of the Available Commitment of such Lender
during the period for which payment is made, payable quarterly in arrears on the
last day of each March, June, September and December and on the Termination Date
or such earlier date as the Commitments shall terminate as provided herein,
commencing on the first of such dates to occur after the date hereof.
2.5 Termination or Reduction of Commitments. (a) The Borrower shall
---------------------------------------
have the right, upon not less than five Business Days' notice to the Agent, to
terminate the Commitments or, from time to time, to reduce the amount of the
Commitments. Any such
<PAGE>
22
reduction shall be in an amount equal to $1,000,000 or a whole multiple thereof
and shall reduce permanently the Commitments then in effect.
(b) Upon the sale of any assets pursuant to subsection 7.6(b), the
Commitments shall be permanently reduced by an amount equal to 50% of the net
proceeds of such sale, whether such net proceeds consists of cash, indebtedness,
assets or other consideration, whenever received; provided that no Commitment
--------
reduction shall be required under this subsection 2.5(b) with respect to the
first $10,000,000 in such net proceeds received by the Borrower after the
Closing Date.
2.6 Optional and Mandatory Prepayments. (a) The Borrower may on the
----------------------------------
last day of any Interest Period with respect thereto, in the case of Eurodollar
Loans, or at any time and from time to time, in the case of ABR Loans, prepay
the Loans, in whole or in part, without premium or penalty, upon at least four
Business Days' irrevocable notice to the Agent, specifying the date and amount
of prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each. Upon receipt of any such notice the Agent shall promptly notify each
Lender thereof. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein, together with any
amounts payable pursuant to subsection 2.16. Partial prepayments shall be in an
aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in
excess thereof.
(b) If any Borrowing Base Certificate delivered to the Agent pursuant
to subsection 6.3 shall show that as of the date of such certificate the Net
Borrowing Base was less than the sum of the Loans and L/C Obligations
outstanding on the date on which such Borrowing Base Certificate is delivered,
the Borrower shall on the date of such delivery prepay the Loans in an amount
equal to the amount of such excess; provided that if the aggregate principal
--------
amount of the Loans then outstanding is less than such excess (because the L/C
Obligations constitute a portion thereof), a bank satisfactory to the Agent
shall have issued a letter of credit for the account of the Borrower in favor of
the Agent, for the benefit of the Lenders, in an amount equal to such difference
or the Borrower shall deposit an amount equal to such difference in the Cash
Collateral Account in each case for application to payment of Reimbursement
Obligations pursuant to subsection 3.5.
(c) Any termination or reduction of the Commitments pursuant to
subsection 2.5 shall be accompanied by prepayment of the Loans (together with
accrued interest on the amount so prepaid to the date of such prepayment) to the
extent, if any, that the sum of the then outstanding Loans and L/C Obligations
exceeds the amount of the Commitments as then reduced; provided that if the
--------
aggregate principal amount of the Loans then
<PAGE>
23
outstanding is less than such excess (because the L/C Obligations constitute a
portion thereof), a bank satisfactory to the Agent shall have issued a letter of
credit for the account of the Borrower in favor of the Agent, for the benefit of
the Lenders, in an amount equal to such difference or the Borrower shall deposit
an amount equal to such difference in the Cash Collateral Account in each case
for application to payment of Reimbursement Obligations pursuant to subsection
3.5.
(d) Each prepayment pursuant to this subsection 2.6 shall be
accompanied by payment of any amounts payable pursuant to subsection 2.16.
2.7 Conversion and Continuation Options. (a) The Borrower may elect
-----------------------------------
from time to time to convert Eurodollar Loans to ABR Loans by giving the Agent
at least two Business Days' prior irrevocable notice of such election, provided
--------
that any such conversion may only be made on the last day of an Interest Period
with respect thereto. The Borrower may elect from time to time to convert ABR
Loans to Eurodollar Loans by giving the Agent at least three Business Days'
prior irrevocable notice of such election. Any such notice of conversion to
Eurodollar Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the Agent shall
promptly notify each Lender thereof. All or any part of outstanding Eurodollar
Loans and ABR Loans may be converted as provided herein, provided that no Loan
--------
may be converted into a Eurodollar Loan (i) when any Event of Default has
occurred and is continuing and the Agent has or the Required Lenders have
determined that such a conversion is not appropriate and (ii) after the date
that is one month prior to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
notice to the Agent, in accordance with the applicable provisions of the term
"Interest Period" set forth in subsection 1.1, of the length of the next
Interest Period to be applicable to such Loans, provided that no Eurodollar Loan
--------
may be continued as such (i) when any Event of Default has occurred and is
continuing and the Agent has or the Required Lenders have determined that such a
continuation is not appropriate or (ii) after the date that is one month prior
to the Termination Date and provided, further, that if the Borrower shall fail
-------- -------
to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso such Loans shall
be automatically converted to ABR Loans on the last day of such then expiring
Interest Period.
2.8 Minimum Amounts of Eurodollar Tranches. All borrowings,
--------------------------------------
conversions and continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after
<PAGE>
24
giving effect thereto, the aggregate principal amount of the Loans comprising
each Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof.
2.9 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
--------------------------------
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
ABR plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of any Loan, (ii)
any interest payable thereon or (iii) any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum which is (x) in the case of overdue principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
subsection plus 2% or (y) in the case of overdue interest, commitment fee or
other amount, the rate described in paragraph (b) of this subsection plus 2%, in
each case from the date of such non-payment until such amount is paid in full
(as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this subsection
- --------
shall be payable from time to time on demand.
2.10 Computation of Interest and Fees. (a) Commitment fees and
--------------------------------
interest shall be calculated on the basis of a 360-day year for the actual days
elapsed. The Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of a Eurodollar Rate. Any change in the interest
rate on a Loan resulting from a change in the ABR or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Agent shall as soon as practicable
notify the Borrower and the Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower and
the Lenders in the absence of manifest error. The Agent shall, at the request
of the Borrower, deliver to the Borrower a statement showing the quotations used
by the Agent in determining any interest rate pursuant to subsection 2.9(a).
2.11 Inability to Determine Interest Rate. If prior to the first day
------------------------------------
of any Interest Period:
<PAGE>
25
(a) the Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Agent shall have received notice from the Required Lenders
that the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Agent shall give telecopy or telephonic notice thereof to the Borrower and
the Lenders as soon as practicable thereafter. If such notice is given (x) any
Eurodollar Loans requested to be made on the first day of such Interest Period
shall be made as ABR Loans, (y) any Loans that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
ABR Loans and (z) any outstanding Eurodollar Loans shall be converted, on the
first day of such Interest Period, to ABR Loans. Until such notice has been
withdrawn by the Agent, no further Eurodollar Loans shall be made or continued
as such, nor shall the Borrower have the right to convert ABR Loans to
Eurodollar Loans.
2.12 Pro Rata Treatment and Payments. (a) Each borrowing by the
-------------------------------
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee hereunder and any reduction of the Commitments of the Lenders
shall be made pro rata according to the respective Commitment Percentages of the
Lenders. Each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Loans shall be made pro rata according to the
respective outstanding principal amounts of the Loans then held by the Lenders.
All payments (including prepayments) to be made by the Borrower hereunder and
under the Notes, whether on account of principal, interest, fees or otherwise,
shall be made without set off or counterclaim and shall be made prior to 12:00
Noon, New York City time, on the due date thereof to the Agent, for the account
of the Lenders, at the Agent's office specified in subsection 10.2, in Dollars
and in immediately available funds. The Agent shall distribute such payments to
the Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension. If
any payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which
<PAGE>
26
event such payment shall be made on the immediately preceding Business Day.
(b) Unless the Agent shall have been notified in writing by any Lender
prior to a borrowing that such Lender will not make the amount that would
constitute its Commitment Percentage of such borrowing available to the Agent,
the Agent may assume that such Lender is making such amount available to the
Agent, and the Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to
the Agent by the required time on the Borrowing Date therefor, such Lender shall
pay to the Agent, on demand, such amount with interest thereon at a rate equal
to the daily average Federal Funds Effective Rate for the period until such
Lender makes such amount immediately available to the Agent. A certificate of
the Agent submitted to any Lender with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If such
Lender's Commitment Percentage of such borrowing is not made available to the
Agent by such Lender within three Business Days of such Borrowing Date, the
Agent shall also be entitled to recover such amount with interest thereon at the
rate per annum applicable to ABR Loans hereunder, on demand, from the Borrower.
Nothing in this subsection 2.12(b) shall limit any rights of the Borrower
against any Lender that fails to fulfill its obligations to fund any Loan.
2.13 Illegality. Notwithstanding any other provision herein, if the
----------
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 2.16.
2.14 Requirements of Law. (a) If the adoption of or any change in any
-------------------
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note, any Letter of Credit, any
Application or any Eurodollar Loan
<PAGE>
27
made by it, or change the basis of taxation of payments to such Lender in
respect thereof (except for Non-Excluded Taxes covered by subsection 2.15
and changes in the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable for which such Lender has not
been fully compensated by the Borrower pursuant to other provisions of this
Agreement directly related to the event or circumstances which gave rise to such
increased costs or reduced amount receivable. If any Lender becomes entitled to
claim any additional amounts pursuant to this subsection, it shall promptly
notify the Borrower, through the Agent, of the event by reason of which it has
become so entitled. A certificate as to any additional amounts payable pursuant
to this subsection submitted by such Lender, through the Agent, to the Borrower
shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter of Credit to a
level below that which such Lender or such corporation could have achieved but
for such change or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, after submission by such
Lender to the Borrower (with a copy to the Agent) of a written request
<PAGE>
28
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction.
2.15 Taxes. (a) All payments made by the Borrower under this
-----
Agreement and the Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Agent or any Lender as a result of a
present or former connection between the Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or the Notes). If any such non-excluded taxes, levies, imposts,
duties, charges, fees deductions or withholdings ("Non-Excluded Taxes") are
------------------
required to be withheld from any amounts payable to the Agent or any Lender
hereunder or under the Notes, the amounts so payable to the Agent or such Lender
shall be increased to the extent necessary to yield to the Agent or such Lender
(after payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement and
the Notes, provided, however, that the Borrower shall not be required to
-------- -------
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this subsection. Whenever any
Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to the Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent and the Lenders for
any incremental taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure. The agreements in this
subsection shall survive the termination of this Agreement and the payment of
the Notes and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) deliver to the Borrower and the Agent (A) two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, and (B) an Internal Revenue
Service Form
<PAGE>
29
W-8 or W-9, or successor applicable form, as the case may be;
(ii) deliver to the Borrower and the Agent two further copies of
any such form or certification on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recent form previously delivered by it
to the Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the Borrower
or the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the Agent.
Such Lender shall certify (i) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (ii) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a Participant
pursuant to subsection 10.6 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms and statements required
pursuant to this subsection, provided that in the case of a Participant such
Participant shall furnish all such required forms and statements to the Lender
from which the related participation shall have been purchased.
2.16 Indemnity. The Borrower agrees to indemnify each Lender and to
---------
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if
<PAGE>
30
any) over (ii) the amount of interest (as reasonably determined by such Lender)
which would have accrued to such Bank on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. This covenant shall survive the termination of this Agreement and the
payment of the Notes and all other amounts payable hereunder.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions hereof,
--------------
the Issuing Bank, in reliance on the agreements of the other Lenders set forth
in subsection 3.4(a), agrees to issue letters of credit ("Letters of Credit")
-----------------
for the account of the Borrower on any Business Day during the Commitment
Period in such form as may be approved from time to time by the Issuing Bank;
provided that the Issuing Bank shall have no obligation to issue or extend or
- --------
renew any Letter of Credit if, after giving effect to such issuance, extension
or renewal, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the
sum of the Loans and L/C Obligations then outstanding would exceed the Net
Borrowing Base then in effect; provided, further, that at no time shall L/C
-------- -------
Obligations denominated in currency other than Dollars equal, in the aggregate,
an amount greater than an amount equal to 20% of the total L/C Commitment at
such time; and provided, further, that for the purposes of calculating the
-------- -------
amount of L/C Obligations at any time, the amount of any L/C Obligation
denominated in currency other than Dollars shall be calculated using the Dollar
equivalent of such currency at such time as determined by the Agent.
(b) Each Letter of Credit shall:
(i) be either (1) a standby letter of credit issued to support
obligations of the Borrower or one or more of its Subsidiaries,
contingent or otherwise (a "Standby Letter of Credit"), or (2) a
------------------------
commercial letter of credit issued in respect of the purchase of goods
or services by the Borrower and its Subsidiaries in the ordinary
course of business (a "Commercial Letter of Credit") and
---------------------------
(ii) expire no later than the Termination Date.
(c) Each Letter of Credit shall be subject to the Uniform Customs and,
to the extent not inconsistent therewith, the laws of the State of New York.
(d) The Issuing Bank shall not at any time be obligated to issue,
extend or renew any Letter of Credit hereunder if such issuance would conflict
with, or cause the Issuing Bank or any L/C Participant to exceed any limits
imposed by, any applicable Requirement of Law.
<PAGE>
31
3.2 Procedure for Issuance and Renewal of Letters of Credit. (a)
-------------------------------------------------------
Subject to the terms and conditions hereof, the standby letters of credit issued
by Chemical Bank (Delaware) pursuant to the Existing Credit Agreement and listed
on Schedule II are hereby deemed to be Letters of Credit issued pursuant to this
Agreement for all purposes hereof.
(b) The Borrower may from time to time request that the Issuing Bank
issue additional Letters of Credit by delivering to the Issuing Bank at its
address for notices specified herein an Application therefor, completed to the
satisfaction of the Issuing Bank, and such other certificates, documents and
other papers and information as the Issuing Bank may reasonably request. Upon
receipt of any Application, the Issuing Bank will process such Application and
the certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Bank be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Bank and the Borrower. The Issuing Bank
shall furnish a copy of such Letter of Credit to the Borrower promptly following
the issuance thereof.
(c) Subject to the provisions of subsection 3.1, the Borrower may request
the extension or renewal of a Letter of Credit issued hereunder which is not
automatically renewed in accordance with the terms contained therein, by giving
written notice to such Issuing Bank with respect thereto at least five Business
Days prior to the then current expiry date of such Letter of Credit (provided
--------
that such Issuing Bank may accommodate notices on shorter notice in its sole
discretion). If no Default or Event of Default has occurred and is continuing
and the other applicable conditions of this Agreement are complied with, such
Issuing Bank shall promptly issue such extension or renewal and shall furnish
the Agent and each Lender with a copy of such extended or renewed Letter of
Credit.
(d) Subject to the provisions of 3.1, with respect to any Letter of Credit
issued hereunder which by its terms is automatically renewed or extended unless
notice to the contrary is received by the beneficiary thereunder within the time
period set forth therein, the Issuing Bank with respect thereto shall, upon
issuance of such notice to such beneficiary, promptly notify the Borrower and
the Lenders that such Letter of Credit shall not be renewed.
3.3 Fees, Commissions and Other Charges. (a) The Borrower shall pay
-----------------------------------
to the Agent, for the account of the Issuing Bank, a fronting fee with respect
to each Letter of Credit in an amount equal to 1/8 of 1% per annum on the face
amount of such Letter of Credit. Such fronting fee shall be payable in
advance on the date of issuance, extension or renewal of each Letter of Credit
and shall be nonrefundable.
(b) The Borrower shall pay to the Agent, for the account of the Issuing
Bank and the L/C Participants, a letter of credit commission with respect to
each Letter of Credit, computed
<PAGE>
32
for the period from the date of such payment to the date upon which the next
such payment is due hereunder, at a rate per annum equal to the Applicable
Margin then applicable to Eurodollar Loans, calculated on the basis of a
360-day year, on the aggregate amount available under such Letter of Credit on
the date on which such commission is calculated. Such commission shall be
payable to the Issuing Bank and the L/C Participants to be shared ratably among
them in accordance with their respective Commitment Percentages. Such
commissions shall be payable in advance on the date of issuance of each Letter
of Credit and on each L/C Fee Payment Date to occur thereafter and shall be
nonrefundable, provided that in the event that the amount of any such payment
--------
is less than or greater than the amount which would have been payable for such
period computed on the basis of the average aggregate amount available under
such Letter of Credit during such period, the next payment of letter of credit
commissions shall be adjusted to account for such difference.
(c) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Bank for such normal and customary costs and
expenses as are incurred or charged by the Issuing Bank in issuing, effecting
payment under, amending or otherwise administering any Letter of Credit.
(d) The Agent shall, promptly following its receipt thereof, distribute
to the Issuing Bank and the L/C Participants all fees and commissions received
by the Agent for their respective accounts pursuant to this subsection.
3.4 L/C Participations. (a) The Issuing Bank irrevocably agrees to
------------------
grant and hereby grants to each L/C Participant, and, to induce the Issuing Bank
to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Bank, on
the terms and conditions hereinafter stated, for such L/C Participant's own
account and risk an undivided interest equal to such L/C Participant's
Commitment Percentage in the Issuing Bank's obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by the
Issuing Bank thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Bank that, if a draft is paid under any Letter of Credit
for which the Issuing Bank is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, or if any amount so reimbursed is
required to be returned by the Issuing Bank to the Borrower, such L/C
Participant shall pay to the Issuing Bank upon demand at the Issuing Bank's
address for notices specified herein an amount equal to such L/C Participant's
Commitment Percentage of the amount of such draft, or any part thereof, which
is not so reimbursed or is required to be returned, as the case may be.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Bank pursuant to subsection 3.4(a) in respect of any unreimbursed
portion of any payment made by the
<PAGE>
33
Issuing Bank under any Letter of Credit is paid to the Issuing Bank within three
Business Days after the date such payment is due, such L/C Participant shall pay
to the Issuing Bank on demand an amount equal to the product of (i) such amount,
times (ii) the daily average Federal Funds Effective Rate, during the period
from and including the date such payment is required to the date on which such
payment is immediately available to the Issuing Bank, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. If any such amount required to be paid by any L/C
Participant pursuant to subsection 3.4(a) is not in fact made available to the
Issuing Bank by such L/C Participant within three Business Days after the date
such payment is due, the Issuing Bank shall be entitled to recover from such L/C
Participant, on demand, such amount with interest thereon calculated from such
due date at the rate per annum applicable to ABR Loans hereunder. A certificate
of the Issuing Bank submitted to any L/C Participant with respect to any amounts
owing under this subsection shall be conclusive in the absence of manifest
error.
(c) Whenever, at any time after the Issuing Bank has made payment under
any Letter of Credit and has received from any L/C Participant its pro rata
share of such payment in accordance with subsection 3.4(a), the Issuing Bank
receives any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of collateral applied thereto by the
Issuing Bank), or any payment of interest on account thereof, the Issuing Bank
will distribute to such L/C Participant its pro rata share thereof; provided,
--------
however, that in the event that any such payment received by the Issuing Bank
- -------
shall be required to be returned by the Issuing Bank, such L/C Participant shall
return to the Issuing Bank the portion thereof previously distributed by the
Issuing Bank to it.
3.5 Reimbursement Obligation of the Borrower. (a) The Borrower agrees
----------------------------------------
to reimburse the Issuing Bank on each date on which the Issuing Bank notifies
the Borrower of the date and amount of a draft presented under any Letter of
Credit and paid by the Issuing Bank for the amount of (i) such draft so paid and
(ii) any taxes, fees, charges or other costs or expenses incurred by the Issuing
Bank in connection with such payment. Each such payment shall be made to the
Issuing Bank at its address for notices specified herein in lawful money of the
United States of America and in immediately available funds.
(b) Interest shall be payable on any and all amounts remaining unpaid
by the Borrower under this subsection from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment in full
at the rate which would be payable on any outstanding ABR Loans which were then
overdue.
<PAGE>
34
(c) Each drawing under any Letter of Credit shall constitute a request
by the Borrower to the Agent for a borrowing pursuant to subsection 2.3 of ABR
Loans in the amount of such drawing. The Borrowing Date with respect to such
borrowing shall be the date of such drawing.
3.6 Borrower's Obligations Absolute. (a) The Borrower's obligations
-------------------------------
under this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrower may have or have had against the Issuing Bank or any
beneficiary of a Letter of Credit.
(b) The Borrower also agrees with the Issuing Bank that the Issuing
Bank shall not be responsible for, and the Borrower's Reimbursement Obligations
under subsection 3.5(a) shall not be affected by, among other things, (i) the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or (ii)
any dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
(iii) any claims whatsoever of the Borrower against any beneficiary of such
Letter of Credit or any such transferee.
(c) The Issuing Bank shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Bank's gross negligence or willful
misconduct.
(d) The Borrower agrees that any action taken or omitted by the Issuing
Bank under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence of willful misconduct and
in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York, shall be binding on the Borrower and shall not
result in any liability of the Issuing Bank to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for
-------------------------
payment under any Letter of Credit, the Issuing Bank shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing Bank
to the Borrower in connection with any draft presented for payment under any
Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment appear on their face to be in conformity with
such Letter of Credit.
<PAGE>
35
3.8 Role of Issuing Bank. The Issuing Bank will exercise and give the
--------------------
same care and attention to each Letter of Credit as it gives to its other
letters of credit and similar obligations, and such Issuing Bank's sole
liability to each L/C Participant shall be to distribute promptly to such L/C
Participant, as and when received by such Issuing Bank, as stated in subsection
3.4(c), such L/C Participant's pro rata share of any payments made to the
Issuing Bank by the Borrower pursuant to subsection 3.5. Each L/C Participant
agrees that, in paying any drawing under a Letter of Credit, the Issuing Bank
shall not have any responsibility to obtain any document (other than as required
by such Letter of Credit) or to ascertain or inquire as to the validity or
accuracy of any such document or the authority of any Person delivering any such
document. Neither the Issuing Bank nor any of its representatives, officers,
employees or agents shall be liable to any L/C Participant for (a) any action
taken or omitted to be taken in connection herewith at the request or with the
approval of the Required Lenders, (b) any action taken or omitted to be taken in
the absence of gross negligence or willful misconduct, (c) any recitals,
statements, representations or warranties contained in any document distributed
to any L/C Participant, (d) the creditworthiness of the Borrower or (e) the
execution, effectiveness, genuineness, validity, or enforceability of this
Agreement, any Letter of Credit, any Application or any other document
contemplated hereby or thereby. The Issuing Bank shall not incur any liability
by acting in reliance upon any notice, consent, certificate, statement or other
writing (which may be a bank wire, facsimile or similar writing) believed by it
to be genuine or to be signed by the proper party or parties. The obligations
of the L/C Participants hereunder are several, and no L/C Participant shall be
liable for the performance or nonperformance of the obligations of any other L/C
Participant under this Agreement.
3.9 L/C Participants' Obligations Absolute. Each L/C Participant
--------------------------------------
acknowledges that its obligations to the Issuing Bank under this Section 3,
including the obligation to purchase and fund a participation in the obligations
and rights of such Issuing Bank under each Letter of Credit and any unpaid
Reimbursement Obligation, are absolute and unconditional and shall not be
affected by any circumstance whatsoever, including, without limitation, (i) the
occurrence and continuance of a Default or Event of Default, (ii) the fact that
a condition precedent (other than the conditions set forth in subsection 5.1
relating to delivery of documents to the Agent to the extent such conditions
have not been waived by the Required Lenders) to the issuance of any Letter of
Credit was not in fact satisfied, (iii) any failure or inability of any other
L/C Participant to purchase or fund such a participation hereunder or (iv) any
other failure by any other L/C Participant to fulfill its obligations hereunder.
Without affecting the rights and remedies of the Issuing Bank, the Agent and the
L/C Participants with respect to the Borrower in the event any such condition
precedent is not in fact satisfied, each L/C Participant authorizes the Agent in
its
<PAGE>
36
sole discretion and on behalf of such L/C Participant (but without
obligating the Issuing Bank), without notice to such L/C Participant, to waive
any condition precedent set forth in Section 5 (other than the conditions set
forth in subsection 5.1 relating to delivery of documents to the Agent to the
extent such conditions have not been waived by the Required Lenders) to the
issuance of the Letters of Credit (or deem each such condition precedent
satisfied) in connection with each issuance of Letters of Credit. Each payment
by such L/C Participant to the Issuing Bank for its own account or to the Agent
for the account of the Issuing Bank shall be made without any offset, abatement,
withholding or reduction whatsoever.
3.10 Application. To the extent that any provision of any Application
-----------
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and to
make the Loans and issue or participate in the Letters of Credit, the Borrower
hereby represents and warrants to the Agent and each Lender that:
4.1 Financial Condition. The consolidated balance sheet of the
-------------------
Borrower and its consolidated Subsidiaries as at February 28, 1993 and the
related consolidated statements of income and retained earnings and of cash
flows for the fiscal year ended on such date, reported on by Coopers & Lybrand,
copies of which have heretofore been furnished to each Lender, are complete and
correct and present fairly the consolidated financial condition of the Borrower
and its consolidated Subsidiaries as at such date, and the consolidated results
of their operations and their consolidated cash flows for the fiscal year then
ended. The unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at August 31, 1993 and the related unaudited
consolidated statements of income and retained earnings and of cash flows for
the six-month period ended on such date, certified by a Responsible Officer,
copies of which have heretofore been furnished to each Lender, are complete and
correct and present fairly the consolidated financial condition of the Borrower
and its consolidated Subsidiaries as at such date, and the consolidated results
of their operations and their consolidated cash flows for the six-month period
then ended (subject to normal year-end adjustments). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by such accountants or Responsible Officer, as the
case may be, and as disclosed therein). Neither the Borrower nor any of its
consolidated Subsidiaries had, at the date of the most recent balance sheet
referred to above, any material Guarantee
<PAGE>
37
Obligation, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment, including, without limitation, any
interest rate or foreign currency swap or exchange transaction, which is not
reflected in the foregoing statements or in the notes thereto. During the
period from February 28, 1993 to and including the date hereof, there has been
no sale, transfer or other disposition by the Borrower or any of its
consolidated Subsidiaries of any material part of its business or property and
no purchase or other acquisition of any business or property (including any
capital stock of any other Person) material in relation to the consolidated
financial condition of the Borrower and its consolidated Subsidiaries at
February 28, 1993.
4.2 No Change. Since February 28, 1993 there has been no development
---------
or event which has had or could reasonably be expected to have a Material
Adverse Effect. Between February 28, 1993 and the Closing Date, except as
permitted by subsection 7.6 of the Existing Agreement, consented to by the
Lenders thereunder or contemplated by subsection 5.1(n) hereof, and since the
Closing Date, except as permitted by subsection 7.7 hereof, no dividends or
other distributions have been declared, paid or made upon the Capital Stock of
the Borrower nor has any of the Capital Stock of the Borrower been redeemed,
retired, purchased or otherwise acquired for value by the Borrower or any of its
Subsidiaries.
4.3 Corporate Existence; Compliance with Law. Each of the Borrower and
----------------------------------------
its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
and (d) is in compliance with all Requirements of Law, except, in the case of
clauses (c) and (d), to the extent that the failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations. The
-------------------------------------------------------
Borrower has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and to borrow
hereunder and has taken all necessary corporate action to authorize the
borrowings on the terms and conditions of this Agreement, the Notes and the
Applications and to authorize the execution, delivery and performance of the
Loan Documents to which it is a party. Except for Foreign Ownership and Control
Reports filed with the United States Department of Energy and Department of
Defense, no consent or authorization of, filing with, notice to or other act by
or in respect of, any Governmental Authority or any other Person is
<PAGE>
38
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan Documents to which
the Borrower is a party. This Agreement has been, and each other Loan Document
to which it is a party will be, duly executed and delivered on behalf of the
Borrower. This Agreement constitutes, and each other Loan Document to which it
is a party when executed and delivered will constitute, a legal, valid and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of the Loan
------------
Documents to which the Borrower is a party, the borrowings hereunder and the use
of the proceeds thereof will not violate any Requirement of Law or Contractual
Obligation of the Borrower or of any of its Subsidiaries and will not result in,
or require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation.
4.6 No Material Litigation. No litigation, investigation or proceeding
----------------------
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrower, threatened by or against the Borrower or any of its
Subsidiaries or against any of its or their respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) which could reasonably be expected to
have a Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its Subsidiaries is in
----------
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Each of the Borrower and its
----------------------------
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by subsection 7.3.
4.9 Intellectual Property. The Borrower and each of its Subsidiaries
---------------------
owns, or is licensed to use, all trademarks,
tradenames, copyrights, technology, know-how and processes necessary for the
conduct of its business as currently conducted except for those the failure to
own or license which could not reasonably be expected to have a Material Adverse
Effect (the "Intellectual Property"). No claim has been asserted and is pending
---------------------
by any Person challenging or questioning the use of any
<PAGE>
39
such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Borrower know of any valid basis for any
such claim. The use of such Intellectual Property by the Borrower and its
Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
4.10 No Burdensome Restrictions. No Requirement of Law or Contractual
--------------------------
Obligation of the Borrower or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.
4.11 Taxes. Each of the Borrower and its Subsidiaries has filed or
-----
caused to be filed all tax returns which, to the knowledge of the Borrower, are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be); no tax Lien has
been filed, and, to the knowledge of the Borrower, no claim is being asserted,
with respect to any such tax, fee or other charge. The tax returns of Kaiser
Engineers Group, Inc. and its Subsidiaries have been audited by appropriate
Federal tax authorities for the period of 1977-1986, and have been reviewed for
1987 and 1988. To the best knowledge and belief of Borrower, all deficiencies
asserted as a result of such examinations have been paid. The Borrower has
received certain Internal Revenue Service Center notices for some of these years
indicating that amounts are due. The Borrower believes that these notices are
erroneous and has notified the Internal Revenue Service to that effect, and the
Internal Revenue Service is looking into the matter. The Borrower believes that
negative determinations by the Internal Revenue Service with respect to all of
such notices would not have a Material Adverse Effect.
4.12 Federal Regulations. No part of the proceeds of any Loans will be
-------------------
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board as now and
from time to time hereafter in effect or for any purpose which violates the
provisions of the Regulations of such Board. If requested by any Lender or the
Agent, the Borrower will furnish to the Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form U-1 referred to
in said Regulation U.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
-----
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred
<PAGE>
40
during the five-year period prior to the date on which this representation is
made or deemed made with respect to any Plan, and each Plan has complied in all
material respects with the applicable provisions of ERISA and the Code. No
termination of a Single Employer Plan has occurred, and no Lien in favor of the
PBGC or a Plan has arisen, during such five-year period. The present value of
all accrued benefits under each Single Employer Plan (based on those assumptions
used to fund such Plans) did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made, exceed the value
of the assets of such Plan allocable to such accrued benefits. Neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan, and neither the Borrower nor any
Commonly Controlled Entity would become subject to any liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. The Borrower is not an
-----------------------------------------
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to regulation under any Federal or State statute or
regulation which limits its ability to incur Indebtedness.
4.15 Subsidiaries. The Subsidiaries of the Borrower listed on Schedule
------------
III, as supplemented from time to time, constitute all of the Subsidiaries of
the Borrower. The Borrower and the Subsidiary Guarantors collectively (a) own
(directly and not through other Subsidiaries) at least 90% of the assets of the
Borrower and its consolidated Domestic Subsidiaries on a consolidated basis and
(b) received at least 90% of the gross revenues and 90% of the Consolidated Net
Income received by the Borrower and its consolidated Domestic Subsidiaries on a
consolidated basis for the fiscal quarter most closely preceding the fiscal
quarter during which this representation is made or deemed made. The Borrower
and the Domestic Subsidiaries collectively (a) own (directly and not through
other Subsidiaries) at least 75% of the assets of the Borrower and its
consolidated Subsidiaries on a consolidated basis and (b) received at least 75%
of the gross revenues and 75% of the Consolidated Net Income received by the
Borrower and its consolidated Subsidiaries on a consolidated basis for the
fiscal quarter most closely preceding the fiscal quarter during which this
representation is made or deemed made.
4.16 Capital Stock. The authorized Capital Stock of the Borrower, the
-------------
par value of such Capital Stock and the number of shares of its Capital Stock
which are issued and outstanding are specified in Schedule IV. All of such
outstanding shares have been duly and validly issued and are fully paid and
<PAGE>
41
nonassessable. There are no outstanding options or agreements pursuant to which
the Borrower is or may be obligated to issue any additional shares of its
Capital Stock except as disclosed in the financial statements referred to in
subsection 4.1 or in Schedule IV.
4.17 Accuracy of Information. To the best of the Borrower's knowledge,
-----------------------
all written information, reports and other papers and data with respect to the
Borrower (other than projections and estimates) furnished to the Lenders by or
on behalf of the Borrower by a Responsible Officer were, at the time the same
were so furnished, correct in all material respects, or have been subsequently
supplemented by other information, reports or other papers or data, to the
extent necessary to make them correct in all material respects. All projections
and estimates with respect to the Borrower so furnished by or on behalf of the
Borrower by a Responsible Officer, as supplemented, were prepared and presented
in good faith by the Borrower, it being recognized by the Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results. No fact is known to the Borrower which materially
and adversely affects or in the future may (so far as the Borrower can
reasonably foresee as at the date hereof) materially and adversely affect the
business, assets or liabilities, financial condition, results of operations or
business prospects of the Borrower which is not publicly available or which has
not been set forth in the financial statements referred to in subsection 4.1 or
in such information, reports, papers and data or otherwise disclosed in writing
to the Lenders prior to the date hereof. To the best of the Borrower's
knowledge, no document furnished or statement made in writing to the Lenders by
or on behalf of the Borrower by a Responsible Officer in connection with the
negotiation, preparation or execution of this Agreement contains any untrue
statement of a material fact, or omits to state any such material fact necessary
in order to make the statements contained therein not misleading, in any case
which has not been corrected, supplemented or remedied by subsequent documents
furnished or statements made in writing to the Lenders.
4.18 Purpose of Loans. The proceeds of the Loans made on the Closing
----------------
Date shall be used to repay amounts outstanding under the Existing Credit
Agreement; the proceeds of other Loans and the issuance of the Letters of Credit
shall be used by the Borrower for working capital and general corporate purposes
including acquisitions in the ordinary course of business.
4.19 Debarment or Suspension. Neither the Borrower nor any Subsidiary
-----------------------
or, to the best of the Borrower's knowledge, any Affiliate, has been debarred or
suspended from contracting with the United States Government or any
instrumentality thereof, and no event has occurred or condition exists which is
likely to result in such debarment or suspension.
<PAGE>
42
4.20 Environmental Matters. (a) The facilities and properties owned
---------------------
or leased by the Borrower or any of its Subsidiaries (the "Properties") do not
----------
contain, and have not previously contained, any Materials of Environmental
Concern in amounts or concentrations which (i) constitute or constituted a
violation of, or (ii) could reasonably be expected to give rise to liability
under, any Environmental Law, except in either case insofar as such violation or
liability, or any aggregation thereof, could not reasonably be expected to have
a Material Adverse Effect.
(b) The Properties and all operations of the Borrower and its
Subsidiaries at the Properties and at all other locations where the Borrower and
its subsidiaries are conducting business (collectively, the "Business") are in
--------
compliance with all applicable Environmental Laws, except insofar as the failure
so to comply could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(c) Neither the Borrower nor any of its Subsidiaries has received any
notice of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental Laws
with regard to any of the Properties or the Business, nor does the Borrower have
knowledge or reason to believe that any such notice will be received or is being
threatened except insofar as such notice or threatened notice, or any
aggregation thereof, does not involve a matter or matters that could reasonably
be expected to have a Material Adverse Effect.
4.21 Insurance. Schedule V lists all insurance maintained by the
---------
Borrower or any of its Subsidiaries as of the date hereof.
4.22 Indemnification from Customers. The Borrower and its Subsidiaries
------------------------------
have been indemnified by their clients and customers against potential future
damages resulting from any release of pollution or other Hazardous Material in
circumstances related to any Contractual Obligation with any such clients or
customers to the extent set forth in Schedule VI.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The occurrence of the
-----------------------------------------
Closing Date, and agreement of each Lender to make the initial extension of
credit requested to be made by it are subject to the satisfaction, immediately
prior to or concurrently with the making of such extension of credit on the
Closing Date, of the following conditions precedent:
(a) Loan Documents. The Agent shall have received (i) this
--------------
Agreement, executed and delivered by a duly authorized officer of the
Borrower, with a counterpart for
<PAGE>
43
each Lender, (ii) for the account of each Lender, a Note conforming to the
requirements hereof and executed by a duly authorized officer of the
Borrower, (iii) the Subsidiaries Guarantee, executed and delivered by a
duly authorized officer of each Subsidiary Guarantor, with a counterpart or
a conformed copy for each Lender and (iv) each of the Security Agreements,
each executed and delivered by a duly authorized officer of each party
thereto, with a counterpart or a conformed copy for each Lender.
(b) Related Agreements. The Agent shall have received, with a copy
------------------
for each Lender, true and correct copies, certified as to authenticity by
the Borrower, of such documents or instruments as may be reasonably
requested by the Agent, including, without limitation, a copy of any debt
instrument, security agreement or other material contract to which the
Borrower or its Subsidiaries may be a party.
(c) Borrowing Base Certificate. The Agent shall have received, with
--------------------------
a counterpart for each Lender, a Borrowing Base Certificate of the
Borrower, dated the Closing Date, executed by a Responsible Officer of the
Borrower.
(d) Corporate Proceedings of the Borrower. The Agent shall have
-------------------------------------
received, with a counterpart for each Lender, a copy of the resolutions, in
form and substance satisfactory to the Agent, of the Board of Directors of
the Borrower authorizing (i) the execution, delivery and performance of
this Agreement, the Notes and the other Loan Documents to which it is a
party, (ii) the borrowings contemplated hereunder and (iii) the granting by
it of the Liens created pursuant to the Borrower Security Agreement,
certified by the Secretary or an Assistant Secretary of the Borrower as of
the Closing Date, which certificate shall be in form and substance
satisfactory to the Agent and shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded.
(e) Borrower Incumbency Certificate. The Agent shall have received,
-------------------------------
with a counterpart for each Lender, a certificate of the Borrower, dated
the Closing Date, as to the incumbency and signature of the officers of the
Borrower executing any Loan Document satisfactory in form and substance to
the Agent, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of the Borrower.
(f) Corporate Proceedings of Subsidiary Guarantors. The Agent shall
----------------------------------------------
have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Agent, of the Board
of Directors of each Subsidiary Guarantor authorizing (i) the execution,
delivery and performance of the Loan Documents to which it is a party
<PAGE>
44
and (ii) the granting by it of the Liens created pursuant to the
Subsidiaries Security Agreement, certified by the Secretary or an Assistant
Secretary of each such Subsidiary Guarantor as of the Closing Date, which
certificate shall be in form and substance satisfactory to the Agent and
shall state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.
(g) Subsidiary Guarantor Incumbency Certificates. The Agent shall
--------------------------------------------
have received, with a counterpart for each Lender, a certificate of each
Subsidiary Guarantor, dated the Closing Date, as to the incumbency and
signature of the officers of such Subsidiary Guarantor executing any Loan
Document, satisfactory in form and substance to the Agent, executed by the
President or any Vice President and the Secretary or any Assistant
Secretary of each such Subsidiary Guarantor.
(h) Corporate Documents. The Agent shall have received, with a
-------------------
counterpart for each Lender, true and complete copies of the certificate of
incorporation and by-laws of each Loan Party, certified as of the Closing
Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary of such Loan Party.
(i) Good Standing Certificates. The Agent shall have received, with
--------------------------
a counterpart for each Lender, copies of certificates dated as of a recent
date from the Secretary of State or other appropriate authority of such
jurisdiction, evidencing the good standing of the Borrower and each of the
Subsidiary Guarantors in each jurisdiction of incorporation of any such
Person and in each state in which any such Person has its principal place
of business.
(j) Financial Information. The Agent shall have received, with a
---------------------
counterpart for each Lender, a copy of each of the financial statements
referred to in subsection 4.1.
(k) Examination Letter. The Agent shall have received, with a copy
------------------
for each Lender, the Collateral Review dated June 1993 reporting the
results of an examination of the Borrower's systems, procedures and
reporting methods regarding the Borrower's accounts receivable, together
with an aging report in respect of such accounts receivable.
(l) Lock-Box Accounts. The Agent, the Borrower and the Subsidiary
-----------------
Guarantors shall have entered into one or more lock-box agreements, in form
and substance satisfactory to the Agent and the Lenders, pursuant to
Section 3 of each of the Security Agreements. The Agent and the Lenders
shall have received evidence, in form and substance satisfactory to them,
that the Borrower and the Subsidiary Guarantors shall have instructed all
of their account debtors to make all payments in respect of the Accounts to
the relevant
<PAGE>
45
Lock-Box Account (as defined in each of the Security Agreements).
(m) Subordinated Notes. The Agent and the Lenders shall have
------------------
received evidence reasonably satisfactory to them of the issuance and sale
of between $100,000,000 and $125,000,000 principal amount of the
Subordinated Notes on terms and conditions satisfactory to them.
(n) Repayment of Certain Indebtedness and Preferred Stock. The Agent
-----------------------------------------------------
and the Lenders shall have received evidence reasonably satisfactory to
them that the proceeds of the Subordinated Notes and cash on hand shall
have been used: (1) to retire the Borrower's 13.5% Senior Subordinated
Notes due 1999; (ii) to repurchase certain of the Warrants issued in
connection with such 13.5% Notes; (iii) to repurchase the Borrower's Series
1 Junior Convertible Preferred Stock and pay accrued dividends thereon;
(iv) to repurchase the Borrower's Series 2C Senior Preferred Stock and pay
accrued dividends thereon and the related Series 2C Warrants; (v) to pay
accrued dividends on the Borrower's Series 2D Senior Preferred Stock; (vi)
to repay in full all Indebtedness outstanding under the Existing Credit
Agreement; and (vi) to contribute funds sufficient to enable the ESOP Trust
to prepay in full all Indebtedness outstanding under the ESOP Credit
Agreement.
(o) Fees. The Agent shall have received the fees to be received on
----
the Closing Date referred to in subsection 2.4(a) (except such fees that
the Borrower and any Lender have agreed in writing shall be paid by the
Borrower to such Lender at a date later than the Closing Date) and in the
letter dated November 18, 1993 from the Agent to the Borrower.
(p) Legal Opinions. The Agent shall have received, with a
--------------
counterpart for each Lender, one or more executed legal opinions of counsel
to the Borrower and the Subsidiary Guarantors reasonably satisfactory to
the Agent, substantially in the form of Exhibit F. Such legal opinions
shall cover such other matters incident to the transactions contemplated by
this Agreement as the Agent may reasonably require.
(q) 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.
<PAGE>
46
(r) Lien Searches. The Agent shall have received the results of a
-------------
recent search by a Person satisfactory to the Agent, of the Uniform
Commercial Code, judgment and tax lien filings which may have been filed
with respect to personal property of the Borrower and the Subsidiary
Guarantors, and the results of such search shall be satisfactory to the
Agent.
(s) Closing Date Outstanding Loans. No Loans shall be outstanding on
------------------------------
the Closing Date.
5.2 Conditions to Each Extension of Credit. The agreement of each
--------------------------------------
Lender to make any extension of credit requested to be made by it on any date
(including, without limitation, its initial extension of credit) is subject to
the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties made by the Borrower and the other Loan Parties in or pursuant
to the Loan Documents shall be true and correct in all material respects on
and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred
----------
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
(c) Additional Matters. All corporate and other proceedings, and all
------------------
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents
shall be satisfactory in form and substance to the Agent, and the Agent
shall have received such other documents and legal opinions in respect of
any aspect or consequence of the transactions contemplated hereby or
thereby as it shall reasonably request.
Each borrowing by and Letter of Credit issued on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such Loan that the conditions contained in this subsection 5.2 have
been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Note or any Letter of Credit remains outstanding and unpaid or any
other amount is owing to any Lender or the Agent hereunder, the Borrower shall
and (except in the case of delivery of financial information, reports and
notices) shall cause each of its Subsidiaries to:
<PAGE>
47
6.1 Financial Statements. Furnish to each Lender:
--------------------
(a) as soon as available, but in any event within 105 days after the
end of the fiscal year of the Borrower, a copy of (i) the consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the
end of such year and the related consolidated statements of income and
retained earnings and of cash flows for such year, setting forth in each
case in comparative form the figures for the previous year, reported on
without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by Coopers & Lybrand
or other independent certified public accountants of nationally recognized
standing not unacceptable to the Required Lenders and (ii) consolidating
balance sheet and income statement of the Borrower and its consolidated
Subsidiaries as at the end of such fiscal year, showing inter-company
eliminations, setting forth in each case in comparative form the figures
for the previous fiscal year, certified by a Responsible Officer as being
fairly stated in all material respects when considered in relation to the
consolidated financial statements of the Borrower and its consolidated
Subsidiaries;
(b) as soon as available, but in any event not later than 60 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, a copy of (i) the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of
such quarter and the related unaudited consolidated statements of income
and retained earnings and of cash flows of the Borrower and its
consolidated Subsidiaries for such quarter and the portion of the fiscal
year through the end of such quarter, and (ii) the unaudited consolidating
balance sheet and income statement of the Borrower and its consolidated
Subsidiaries as at the end of such quarter, in the case of clauses (i) and
(ii) setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly stated in
all material respects (subject to normal year-end adjustments); and
(c) as soon as available, but in any event not later than 60 days
after the end of each month, a copy of the unaudited consolidated and
consolidating balance sheet and income statement of the Borrower and its
consolidated Subsidiaries as at the end of each such month, certified by a
Responsible Officer (which statements shall be prepared in accordance with
the Borrower's customary practices, which may not require presentation in
accordance with GAAP);
except for the statements delivered pursuant to paragraph (c) above, all such
financial statements shall be complete and correct in all material respects and
shall be prepared in
<PAGE>
48
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein and with prior periods (except as approved by such
accountants or officer, as the case may be, and disclosed therein).
6.2 Certificates; Other Information. Furnish to each Lender:
-------------------------------
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained
of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and 6.1(b), a certificate of a
Responsible Officer (i) stating that, to the best of such Officer's
knowledge, the Borrower during such period has observed or performed all of
its covenants and other agreements, and satisfied every condition,
contained in this Agreement and in the Notes and the other Loan Documents
to which it is a party to be observed, performed or satisfied by it, and
that such Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate and (ii) showing in detail
the calculations supporting such statement in respect of subsections 6.10,
7.1, 7.2(i), 7.6(b), 7.7, 7.10(e), 7.10(g), 7.10(h) and 7.10(i) to the
extent that such calculations have changed from the date of the most recent
certificate furnished pursuant to this subsection 6.2(b);
(c) not later than thirty days prior to the end of each fiscal year
of the Borrower, a copy of the projections by the Borrower of the operating
budget and cash flow budget of the Borrower and its Subsidiaries for the
succeeding fiscal year, such projections to be accompanied by a certificate
of a Responsible Officer to the effect that such projections have been
prepared on the basis of sound financial planning practice and that such
Officer has no reason to believe they are incorrect or misleading in any
material respect;
(d) within five days after the same are sent, copies of all financial
statements and reports which the Borrower sends to its stockholders, and
within fifteen days after the same are filed, copies of all financial
statements and reports which the Borrower may make to, or file with, the
Securities and Exchange Commission or any successor or analogous
Governmental Authority;
(e) within 45 days after the end of each quarter in each fiscal year
of the Borrower, a certificate of the
<PAGE>
49
principal financial officer of the Borrower showing in detail the
computations necessary to calculate the Applicable Margin (an
"Applicable Margin Certificate");
-----------------------------
(f) within 45 days after the end of each quarter in each fiscal year
of the Borrower, a certificate of the principal financial officer of the
Borrower showing in detail the computations necessary to determine the
correctness of the representation set forth in subsection 4.15 with respect
to such fiscal quarter;
(g) within 30 days after the occurrence of any transaction, event or
other circumstance (other than any disposition of collateral permitted
pursuant to this Agreement and the Security Documents) which could cause
any security interest granted pursuant to any Security Document to become
unperfected or otherwise invalid (including, without limitation, any change
of name of a grantor, any movement of the chief executive office of any
grantor or any other circumstance giving rise to the need to file
additional Uniform Commercial Code financing statements or amendments in
order to obtain or maintain perfection), notice thereof; and
(h) promptly, such additional financial and other information as any
Lender may from time to time reasonably request, subject to the Industrial
Security Manual for Safeguarding Classified Information, DOD 5220.22M, and
all other laws and regulations of any Governmental Authority relating to
security matters.
6.3 Borrowing Base Certificates. Furnish to each Lender not later than
---------------------------
30 days after the end of each calendar month, a Borrowing Base Certificate
setting forth the Borrowing Base as of the last day of such calendar month with
supporting documentation, including a summary aged accounts receivable report
for such month, duly completed and signed by a Responsible Officer.
6.4 Payment of Obligations. Pay, discharge or otherwise satisfy at or
----------------------
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or Subsidiary, as the case may be.
6.5 Conduct of Business and Maintenance of Existence. Continue to
------------------------------------------------
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except as
<PAGE>
50
otherwise permitted pursuant to subsection 7.5; comply with all Contractual
Obligations and Requirements of Law except, in each case, (i) when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or its Subsidiaries, as the case may be
and (ii) to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.6 Maintenance of Property; Insurance. Keep all property useful and
----------------------------------
necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but including
in any event public liability, product liability and business interruption) as
are usually insured against in the same general area by companies engaged in the
same or a similar business; and furnish to each Lender, upon written request,
full information as to the insurance carried.
6.7 Inspection of Property; Books and Records; Discussions. Keep
------------------------------------------------------
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and, subject to the
Industrial Security Manual for Safeguarding Classified Information, DOD
5220-22M, and all other laws and regulations of any Governmental Authority
relating to security matters, permit representatives of any Lender to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable time and as often as may reasonably be
desired and to discuss the business, operations, properties and financial and
other condition of the Borrower and its Subsidiaries with officers and employees
of the Borrower and its Subsidiaries and with its independent certified public
accountants.
6.8 Notices. Promptly give notice to the Agent and each Lender of:
-------
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority, which
in either case, if not cured or if adversely determined, as the case may
be, could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which the amount
<PAGE>
51
involved is $500,000 or more and not covered by insurance or in which
injunctive or similar relief that, if granted, could be reasonably expected
to have a Material Adverse Effect, is sought against the Borrower or any
Subsidiary;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal from,
or the termination, Reorganization or Insolvency of, any Multiemployer Plan
or (ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan;
(e) (i) any written statement received by the Borrower from the
obligor on any Eligible Billed Account Receivable regarding such obligor's
refusal to pay on such account if the amount in question is in excess of
$500,000, and (ii) the bankruptcy, insolvency, receivership, assignment for
the benefit of creditors or suspension of business of any obligor on any
Eligible Billed Account Receivable of which the Borrower has knowledge if
the amount in question is in excess of $500,000;
(f) any final decision of a contracting officer disallowing incurred
costs aggregating more than $500,000, net of reserves, which disallowed
costs arise out of any audit of contracts with the United States Government
by the Defense Contract Audit Agency or any other agency of the United
States Government which audits contracts of the Borrower or any of its
Subsidiaries;
(g) any advance, loan, extension of credit or capital contribution
to, or purchase of, any stock, bonds, notes, debentures or other investment
in any Person or any acquisition of all or substantially all of the assets
of any Person, in each case in an amount in excess of $1,000,000 (other
than the purchase of stock of the Borrower from employees), within five
Business Days of the occurrence of such event, together with all financial
information and any other information reasonably requested by any Lender
through the Agent; and
(h) any development or event which could reasonably be expected to
have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the
<PAGE>
52
occurrence referred to therein and stating what action the Borrower proposes to
take with respect thereto.
6.9 Contracts with Customers. Use its best efforts to obtain full
------------------------
indemnification protection from all clients and customers entering into
agreements with the Borrower or any Subsidiary against potential future damages
resulting from any release of pollution or other Hazardous Material in
circumstances related to such agreements.
6.10 New Subsidiaries and Subsidiary Guarantors. Within 15 days after
------------------------------------------
each day on which the representation set forth in subsection 4.15 would be
incorrect if made on such day, deliver to the Agent and each Lender a supplement
to Schedule III setting forth any change to such Schedule which would be
required in order to render such representation correct; and within 15 days
after any Subsidiary Guarantor is required to be added to Schedule III pursuant
to the immediately preceding clause, grant to the Agent, pursuant to
documentation substantially similar to the Security Documents:
(i) a guarantee of such Subsidiary Guarantor of the obligations under
this Agreement; and
(ii) a first priority perfected security interest in (A) all Accounts
and General Intangibles (as defined in the Uniform Commercial Code as in
effect from time to time in the State of New York) of such Subsidiary
Guarantor, (B) all Chattel Paper and Instruments (as defined in the Uniform
Commercial Code as in effect from time to time in the State of New York) of
such Subsidiary Guarantor which are of a type which would be included in
the calculation of the Borrowing Base, (C) all patent and trademark
licenses to which such Subsidiary Guarantor is a party from time to time
specified by the Agent, to the extent that such licenses do not prohibit
such grant, (D) all patents and trademarks from time to time registered in
the name of such Subsidiary Guarantor and from time to time specified by
the Agent and (E) all products and proceeds of any of the foregoing;
provided, that in determining whether the representation set forth in subsection
- --------
4.15 would be incorrect if made on any day, the Borrower may rely on the
financial statements of the Borrower for the first preceding fiscal quarter
ended on a date which is more than 45 days prior to such date of determination
unless the Borrower has taken any action which, to the actual knowledge of the
Borrower, has caused such representation to be incorrect as of such date of
determination.
6.11 Audits of Accounts; Examination Letter. (a) At the request of
--------------------------------------
the Agent, which request may be made no more than once during each fiscal year
of the Borrower unless requested by the Required Lenders, permit representatives
of the Agent, or a firm chosen by the Agent, to conduct an audit of the
accounts,
<PAGE>
53
records and contracts of the Borrower and its Subsidiaries, and pay the
reasonable costs of each such audit.
(b) At the request of the Agent, deliver a letter prepared by a party
acceptable to the Agent reporting the results of an examination of the
Borrower's systems, procedures and reporting methods regarding the Borrower's
accounts receivable.
6.12 Change of Control. Within two days following any "Change of
-----------------
Control" under and as defined in the indenture governing the terms of the
Subordinated Notes, deliver to the Agent notice thereof. Within five days
following any "Change of Control" under and as defined in the indenture
governing the terms of the Subordinated Notes, deliver to the Trustee under such
indenture written notice, in form and substance satisfactory to the Agent,
stating that all amounts outstanding under this Agreement will automatically
become immediately due and payable not later than one day prior to the "Change
of Control Payment Date" in connection with such "Change of Control".
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Note or any Letter of Credit remains outstanding and unpaid or any
other amount is owing to any Lender or the Agent hereunder, the Borrower shall
not, and (except with respect to subsection 7.1) shall not permit any of its
Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
-----------------------------
(a) Fixed Charge Coverage. Permit, for any period of four
---------------------
consecutive fiscal quarters ending during any "Test Period" set forth
below, the ratio of (i) Adjusted Consolidated Net Income for such period to
(ii) Consolidated Fixed Charges for such period to be less than the ratio
set forth opposite such period below:
<TABLE>
<CAPTION>
Fixed Charge
Test Period Coverage Ratio
----------- --------------
<S> <C>
Closing Date through August 31, 1994 1.0:1.0
September 1, 1994 through August 31, 1995 1.05:1.0
Thereafter 1.1:1.0
</TABLE>
(b) Interest Coverage. Permit, for any period of four consecutive
-----------------
fiscal quarters ending during any "Test Period" set forth below, the ratio
(the "Interest Coverage Ratio") of (i) the sum of Consolidated Net Income
-----------------------
for such period plus income taxes deducted in determining such Net Income
plus Consolidated Interest Expense for such period to (ii)
<PAGE>
54
Consolidated Interest Expense for such period to be less than the ratio set
forth opposite such period below:
<TABLE>
<CAPTION>
Interest
Test Period Coverage Ratio
----------- --------------
<S> <C>
Closing Date through February 28, 1994 1.05:1.0
March 1, 1994 though August 31, 1994 1.1:1.0
September 1, 1994 through August 31, 1995 1.2:1.0
Thereafter 1.3:1.0
</TABLE>
(c) Consolidated Funded Indebtedness to Consolidated Capital Funds.
--------------------------------------------------------------
Permit the ratio of Consolidated Funded Indebtedness to Consolidated
Capital Funds on the last day of any fiscal quarter ending during any "Test
Period" set forth below to be greater than the ratio set forth opposite
such period below:
<TABLE>
<CAPTION>
Test Period Ratio
----------- -----
<S> <C>
Closing Date through May 31, 1994 .76:1.0
June 1, 1994 through November 30, 1994 .75:1.0
December 1, 1994 through August 31, 1995 .74:1.0
September 1, 1995 through February 28, 1996 .73:1.0
Thereafter .72:1.0
</TABLE>
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to
--------------------------
exist any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement and the Notes;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary;
(c) Indebtedness of the Borrower and any of its Subsidiaries incurred
to finance the acquisition of property (whether pursuant to a loan, a
Financing Lease or otherwise) in the ordinary course of business;
(d) Subordinated Debt;
(e) trade and other accounts payable in the ordinary course of
business;
(f) Indebtedness outstanding on the date hereof and listed on
Schedule VII;
(g) Indebtedness incurred by the Borrower for purposes of
repurchasing (subject to the restrictions contained in subsection 7.7)
shares of the Borrower's common stock pursuant to (i) employee benefit
plans or arrangements or executive and director compensation arrangements,
including, without limitation, the ICF Kaiser International, Inc.
<PAGE>
55
Employee Stock Ownership Plan, as in existence on the date hereof and as
the same may be amended from time to time with the approval of the members
of the Compensation Committee of the Borrower's Board of Directors who are
not officers or employees of the Borrower; and (ii) arrangements relating
to the temporary repurchase of shares in contemplation of a substantially
simultaneous underwritten public offering that will include such shares;
(h) Indebtedness assumed in connection with any acquisition permitted
under subsection 7.10, provided that (i) such Indebtedness existed at the
--------
time of such acquisition and was not created in anticipation thereof and
(ii) immediately after giving effect to such acquisition no Default or
Event of Default shall have occurred and be continuing;
(i) additional Indebtedness not exceeding in aggregate principal
amount at any one time outstanding the lesser of (i) $10,000,000 and (ii)
the excess of (A) the Borrowing Base at such time over (B) the sum of the
Loans and L/C Obligations outstanding at such time; and
(j) Non-Recourse Indebtedness.
7.3 Limitation on Liens. Create, incur, assume or suffer to exist any
-------------------
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
--------
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which secure
obligations not overdue for a period of more than 60 days or which are
being contested in good faith by appropriate proceedings or which, in the
aggregate, are not substantial in amount and do not in any case materially
interfere with the ordinary conduct of the business of the Borrower and its
consolidated Subsidiaries on a consolidated basis;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and
<PAGE>
56
other obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, 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
materially interfere with the ordinary conduct of the business of the
Borrower and its consolidated Subsidiaries on a consolidated basis;
(f) Liens in existence on the date hereof listed on Schedule VIII,
securing Indebtedness permitted by subsection 7.2(f), provided that no such
--------
Lien is spread to cover any additional property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower and its Subsidiaries
permitted by subsection 7.2(c) 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
Indebtedness, (iii) the amount of Indebtedness secured thereby is not
increased and (iv) the principal amount of Indebtedness 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 the Borrower) of such property at
the time it was acquired;
(h) Liens securing Indebtedness of the Borrower and its Subsidiaries
permitted by subsection 7.2(h), provided that (i) such Liens existed at the
--------
time of the related acquisition 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 acquisition, and (iii) the amount of
Indebtedness secured thereby is not increased;
(i) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to the Borrower and all Subsidiaries)
$1,000,000 in aggregate amount at any time outstanding;
(j) Liens created or continued pursuant to the Security Documents;
and
(k) Liens securing Non-Recourse Indebtedness;
provided, that, other than as permitted pursuant to subsection 7.3(k), in no
- --------
case shall the Borrower or any of its Subsidiaries
<PAGE>
57
create, incur, assume or suffer to exist any Lien upon any of the capital stock
of the Subsidiaries of the Borrower owned by the Borrower or such Subsidiary.
7.4 Limitation on Guarantee Obligations. Create, incur, assume or
-----------------------------------
suffer to exist any Guarantee Obligation except for Guarantee Obligations in
respect of Indebtedness which the Borrower or such Subsidiary would have been
permitted to incur under subsection 7.2.
7.5 Limitation on Fundamental Changes. Enter into any merger,
---------------------------------
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting or form
of business, except:
(a) so long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom, any Subsidiary of the Borrower may
be merged or consolidated with or into the Borrower (provided that the
--------
Borrower shall be the continuing or surviving corporation) or with or into
any one or more wholly owned Subsidiaries of the Borrower including any
Subsidiary which becomes a Subsidiary pursuant to an acquisition
substantially simultaneous therewith (provided that Subsidiary Guarantors
--------
may not be merged into Subsidiaries which are not Subsidiary Guarantors
unless the surviving corporation assumes all obligations of such Subsidiary
Guarantor under the Security Documents, and provided, further, that the
-------- -------
wholly owned Subsidiary or Subsidiaries shall be the continuing or
surviving corporation); and
(b) any wholly owned Subsidiary may sell, lease, dividend,
contribute, transfer or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or any other wholly
owned Subsidiary of the Borrower.
7.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
----------------------------
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person other than the
Borrower or any wholly owned Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out property in
the ordinary course of business;
(b) the sale or other disposition of any property not otherwise
permitted pursuant to this subsection 7.6, provided that the Commitments
--------
are permanently reduced in
<PAGE>
58
connection with such sale in accordance with subsection 2.5(b);
(c) the sale or other disposition of any property in the ordinary
course of business, provided that (i) any item so sold or disposed of shall
--------
have a book value at the time of such sale or disposition not in excess of
$1,000,000, and (ii) the aggregate book value of all assets so sold or
disposed of in any period of twelve consecutive months (or any shorter
period commencing on the Closing Date) shall not exceed 2% of consolidated
total assets of the Borrower and its Subsidiaries as at the date of the
most recent audited consolidated balance sheet of the Borrower;
(d) the sale of assets in connection with sale and leaseback
transactions otherwise in compliance with this Agreement;
(e) the sale or other disposition of assets acquired pursuant to
subsection 7.10(g);
(f) the sale of inventory in the ordinary course of business; and
(g) as permitted by subsection 7.5(b).
7.7 Limitation on Restricted Payments. Declare or pay any dividend
---------------------------------
(other than dividends payable solely in common stock or rights or other equity
securities (not including preferred stock) of the Borrower) (such declarations
and payments, collectively, "Dividends") on, or make any payment on account of,
---------
or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition (collectively,
"Redemptions"; together with Dividends, "Restricted Payments") of, any shares of
- ------------ -------------------
any class of Capital Stock of the Borrower or any Subsidiary or any warrants or
options to purchase any such Stock, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Borrower or any Subsidiary,
provided that:
- --------
(a) the Borrower or any Subsidiary may make any Restricted Payment in
respect of its Capital Stock so long as (i) the sum of (x) the aggregate
amount of Dividends declared on the Capital Stock of the Borrower and its
Subsidiaries (other than Dividends described in clauses (b), (c) and (d)
below) and (y) the amount paid on account of the Redemption by the Borrower
of any shares of the Capital Stock of the Borrower and its Subsidiaries
(other than Redemptions described in clauses (b), (c) and (d) below), in
each case for the period commencing on the Closing Date, shall not exceed
an amount equal to the sum of (1) the aggregate amount received by the
Borrower as equity upon the issuance of any shares of its Capital Stock for
the period
<PAGE>
59
commencing on the Closing Date plus (2) 20% of Consolidated Net Income for
the period from September 1, 1993 through the date of such Restricted
Payment and (ii) after giving effect to such Restricted Payment and
assuming such Restricted Payment was made on the last day of the most
recent fiscal quarter for which financial statements have been furnished
pursuant to subsection 4.1 or 6.1, no Default or Event of Default will be
in existence;
(b) any Subsidiary may make Restricted Payments to the Borrower or any
Subsidiary of the Borrower;
(c) so long as after giving effect to such Restricted Payment as if
such Restricted Payment was made on the last day of the most recent fiscal
quarter for which financial statements have been furnished pursuant to
subsection 4.1 or 6.1, no Default or Event of Default will be in existence,
(i) the Borrower may make Restricted Payments on account of a Redemption by
the Borrower of any shares of its common stock temporarily repurchased in
conjunction with a substantially simultaneous underwritten public offering
that will include such shares, (ii) the Borrower shall be permitted to
acquire shares of common stock pursuant to employee benefit plans or
arrangements , including without limitation, the ICF Kaiser International,
Inc. Employee Stock Ownership Plan, as in existence on the date hereof or
as the same may be amended from time to time with the approval of a
majority of the members of the Compensation Committee of the Borrower's
Board of Directors who are not officers or employees of the Borrower, (iii)
ICF Kaiser Engineers Group, Inc. ("Engineers") may make a final redemption
---------
payment on September 30, 1994 of up to $799,400 (plus up to $47,950 of
accumulated dividends) on the 700,000 shares of Engineers' Series 1
Redeemable Preferred Stock and (iv) the Borrower may declare and pay
regularly scheduled quarterly dividends on the shares of the Borrower's
Series 2D Senior Preferred Stock outstanding on the date hereof; and
(d) on or before the Closing Date, the Borrower may make Restricted
Payments with respect to the Borrower's Series 1 Junior Convertible
Preferred Stock and Series 2C and 2D Senior Preferred Stock referred to in
subsection 5.1(n).
7.8 Limitation on Transactions with Affiliates. Enter into any
------------------------------------------
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of the Borrower's or such Subsidiary's business and (c) upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary,
as the case may be, than it would
<PAGE>
60
obtain in a comparable arm's length transaction with a Person which is not an
Affiliate.
7.9 Limitation on Optional Payments and Modifications of Debt
---------------------------------------------------------
Instruments. Except as contemplated by subsection 5.1(n), (a) make any optional
- -----------
payment or prepayment on or redemption of any Subordinated Debt or (b) amend,
modify or change, or consent or agree to any amendment, modification or change
to (i) any of the terms relating to the payment or prepayment of principal of or
interest on, or the redemption of, any such Subordinated Debt (other than any
such amendment, modification or change which would extend the maturity or reduce
the amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest thereon) or (ii) the subordination
provisions of such Subordinated Debt.
7.10 Limitation on Investments, Loans and Advances. Make any advance,
---------------------------------------------
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) loans and advances to non-executive employees of the Borrower or
its Subsidiaries requiring repayment within commercially reasonable periods
and made in the ordinary course of business consistent with past practice
and normal industry practice;
(d) investments by the Borrower in its wholly owned Subsidiaries
(other than Single Purpose Subsidiaries) and investments by the
Subsidiaries in the Borrower and in wholly owned Subsidiaries (other than
Single Purpose Subsidiaries);
(e) (i) investments pursuant to the provisions of employee benefit
plans of the Borrower or any of its Subsidiaries in an aggregate amount not
to exceed $500,000 in any fiscal year and (ii) loans to officers of the
Borrower in connection with any relocation of residence, approved by a
majority of the independent members of the Board of Directors of the
Borrower; provided that the aggregate amount of investments and loans under
--------
this clause (e) shall not exceed $1,000,000 in any fiscal year;
(f) the repurchase of Capital Stock of the Borrower and its
Subsidiaries to the extent permitted by subsection 7.7;
<PAGE>
61
(g) acquisitions and investments not to exceed $2,000,000
individually; provided that the aggregate cumulative amount of acquisitions
--------
and investments made pursuant to this clause (g) shall not exceed the total
of (i) $5,000,000 minus (ii) the aggregate amount of acquisitions and
-----
investments made pursuant to this clause (g) since the Closing Date plus
----
(iii) the net cash proceeds from all dispositions of acquisitions and
investments made pursuant to this clause (g) since the Closing Date;
(h) the Company or its Subsidiaries shall be permitted to acquire in
the ordinary course of business interests in project-related joint ventures
similar to other joint ventures in which the Company or its Subsidiaries
owns an interest on December 1, 1993, provided that the aggregate amount of
cash and fair value of other assets (other than services) contributed by
the Company or its Subsidiaries shall not exceed $500,000 in any
twelve-month period;
(i) the Company and/or its Subsidiaries shall be permitted (i) to
make investments in Single Purpose Subsidiaries and (ii) to serve as
partner, shareholder, 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 the Company or
any of its Subsidiaries pursuant to a "take-or-pay", tolling or similar
contract and which the Company, in its reasonable judgment, determines to
be in a business presently conducted by the Company and/or its
Subsidiaries, provided that such venture described in clause (ii) 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 the Company 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
$12,500,000; and
(j) loans and advances permitted pursuant to subsection 7.2(b).
7.11 Corporate Documents. Amend its Certificate of Incorporation
-------------------
(except to increase the number of authorized shares of its Capital Stock and
except when such amendment does not materially affect the interests of the
Lenders hereunder or the ability of the Borrower or any of its Subsidiaries to
comply with the provisions of this Agreement or fulfill its obligations under
this Agreement or the Notes), without the prior written consent of the Required
Lenders.
7.12 Compliance with ERISA. (a) Terminate any Plan so as to result in
---------------------
any material liability to PBGC, (b) engage in any "prohibited transaction" (as
defined in Section 4975 of the
<PAGE>
62
Code) involving any Plan which would result in a material liability for an
excise tax or civil penalty in connection therewith, (c) incur or suffer to
exist any material "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived involving any Plan, or (d) allow or suffer to
exist any event or condition, which presents a material risk of incurring a
material liability to PBGC by reason of termination of any such Plan.
7.13 Maintenance of Accounts. Permit Accounts which have been invoiced
-----------------------
by the Borrower or such Subsidiary, as the case may be, and which represent more
than 25% of all Accounts of the Borrower and its consolidated Subsidiaries on a
consolidated basis, net of reserves, to be more than 90 days past due.
7.14 Nature of Business. Engage in any line of business in which it is
------------------
not currently engaged if as a result thereof the business of the Borrower and
its consolidated Subsidiaries on a consolidated basis would be substantially
different from what it was at the date of this Agreement.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Note or any
Reimbursement Obligation when due in accordance with the terms thereof or
hereof; or the Borrower shall fail to pay any interest on any Note, or any
other amount payable hereunder, within five days after any such interest or
other amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower or any other Loan Party herein or in any other Loan Document or
which is contained in any certificate, document or financial or other
statement furnished by it at any time under or in connection with this
Agreement or any such other Loan Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed made;
or
(c) The Borrower shall default in the observance or performance of
any agreement contained in subsection 6.10, subsection 6.12 or Section 7;
or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in paragraphs
(a) through (c) of this Section), and such default shall continue
unremedied for a period of 30 days; or
<PAGE>
63
(e) A "Change of Control" under and as defined in the indenture
governing the terms of the Subordinated Notes shall have occurred, and
there shall have passed a number of days equal to the fewer of (i) the
number of days after the occurrence of such Change of Control which must
pass before the occurrence of the "Change of Control Payment Date" (as
defined in such indenture) in connection with such Change of Control minus
-----
one day or (ii) eighty-nine (89) days; or
(f) The Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on any Indebtedness (other than the
Notes, the Reimbursement Obligations and any Non-Recourse Indebtedness)
and/or in the payment of any Guarantee Obligation, beyond the period of
grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee Obligation was
created; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or Guarantee
Obligation or contained in any instrument or agreement evidencing, securing
or relating thereto, or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Guarantee Obligation (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to become due prior to
its stated maturity or such Guarantee Obligation to become payable;
provided in each case that all such Indebtedness and/or all such Guarantee
--------
Obligations shall equal not less than $1,000,000 in the aggregate; or
(g) (i) The Borrower or any Subsidiary Guarantor shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Borrower or any of the Subsidiary Guarantors
shall make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against the Borrower or any of the Subsidiary
Guarantors any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or
any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against the Borrower or any of the
<PAGE>
64
Subsidiary Guarantors any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) the Borrower or any of the Subsidiary Guarantors shall take any action
in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the Borrower or any of the Subsidiary Guarantors shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(h) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders shall be likely to, incur any liability in connection with
a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could have a Material Adverse Effect; or
(i) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $1,000,000 or more, and all
such judgments or decrees shall not have been vacated, discharged, stayed
or bonded pending appeal within 60 days from the entry thereof; or
(j) Other than in connection with any permitted release of Collateral
provided for in this Agreement or the relevant Security Document, (i) any
of the Security Documents shall cease, for any reason, to be in full force
and effect, or the Borrower or any other Loan Party which is
<PAGE>
65
a party to any of the Security Documents shall so assert or (ii) the Lien
created by any of the Security Documents shall cease to be enforceable and
of the same effect and priority purported to be created thereby; or
(k) Any material adverse change in the business, operations, assets
or financial or other condition of the Borrower and its consolidated
Subsidiaries on a consolidated basis shall occur; or
(l) The Borrower or any of its Subsidiaries shall be suspended for a
period of not less than 60 days from contracting with a Governmental
Authority; provided that the aggregate gross revenues no longer accruing to
--------
the Borrower or such Subsidiary as a result of such suspended contract
shall equal not less than $10,000,000; or
(m) The subordination provisions of any of the Subordinated Debt
shall cease, for any reason, to be in full force and effect;
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (e) above or clause (i) or (ii) of paragraph (g) above with respect
to the Borrower, automatically the Commitments shall immediately terminate and
the Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) and the Notes
shall immediately become due and payable, and (B) if such event is any other
Event of Default, either or both of the following actions may be taken: (i) with
the consent of the Required Lenders, the Agent may, or upon the request of the
Required Lenders, the Agent shall, by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Required Lenders, the
Agent may, or upon the request of the Required Lenders, the Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement (including, without
limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) and the Notes to be due and payable forthwith, whereupon
the same shall immediately become due and payable.
With respect to all Letters of Credit as to which presentment for honor
shall not have occurred at the time of an acceleration pursuant to the preceding
paragraph, the Borrower shall at such time deposit in the Cash Collateral
Account an amount equal to the aggregate then undrawn and unexpired amount of
such Letters of Credit.
<PAGE>
66
Except as expressly provided above in this Section, presentment, demand,
protest and all other notices of any kind are hereby expressly waived.
SECTION 9. THE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates and
-----------
appoints Chemical Bank as the Agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes Chemical Bank,
as the Agent for such Lender, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to the Agent by the
terms of this Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
9.2 Delegation of Duties. The Agent may execute any of its duties
--------------------
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither the Agent nor any of its officers,
----------------------
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Loan Document (except
for its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or the Notes or any other Loan Document or for
any failure of the Borrower to perform its obligations hereunder or thereunder.
The Agent shall not be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of the Borrower.
<PAGE>
67
9.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
-----------------
be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any Note as the
owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the Notes and the
other Loan Documents in accordance with a request of the Required Lenders, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Notes.
9.5 Notice of Default. The Agent shall not be deemed to have knowledge
-----------------
or notice of the occurrence of any Default or Event of Default hereunder unless
the Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Lenders. The Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
--------
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
9.6 Non-Reliance on Agent and Other Lenders. Each Lender expressly
---------------------------------------
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents
to the Agent that it has, independently and without reliance upon the Agent or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and made its own decision to
<PAGE>
68
make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the Agent or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify the Agent in its
---------------
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Commitment Percentages in effect on the date on which indemnification
is sought under this subsection (or, if indemnification is sought after the date
upon which the Commitments shall have terminated and the Loans shall have been
paid in full, ratably in accordance with their Commitment Percentages
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against the Agent in any way relating to
or arising out of this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Lender shall be
--------
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the payment of the Notes and all
other amounts payable hereunder.
9.8 Agent in Its Individual Capacity. The Agent and its Affiliates may
--------------------------------
make loans to, accept deposits from and generally engage in any kind of business
with the Borrower as though the Agent were not the Agent hereunder and under the
other Loan Documents. With respect to its Loans made or renewed by it and any
Note issued to it and with respect to any Letter of Credit issued or
participated in by it, the Agent shall have the same rights and powers under
this Agreement and the other Loan
<PAGE>
69
Documents as any Lender and may exercise the same as though it were not the
Agent, and the terms "Lender" and "Lenders" shall include the Agent in its
individual capacity.
9.9 Successor Agent. The Agent may resign as Agent upon 10 days'
---------------
notice to the Lenders. If the Agent shall resign as Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent shall be
approved by the Borrower, whereupon such successor agent shall succeed to the
rights, powers and duties of the Agent, and the term "Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Agent's rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Notes. After any retiring
Agent's resignation as Agent, the provisions of this subsection shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement and the other Loan Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any Note or any
----------------------
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. The Required Lenders may, or, with the written consent of the
Required Lenders, the Agent may, from time to time, (a) enter into with the
Borrower written amendments, supplements or modifications hereto and to the
Notes and the other Loan Documents for the purpose of adding any provisions to
this Agreement, the Notes or the other Loan Documents or changing in any manner
the rights of the Lenders or of the Borrower hereunder or thereunder or (b)
waive, on such terms and conditions as the Required Lenders or the Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement, the Notes or the other Loan Documents or any Default or Event of
Default and its consequences; provided, however, that no such waiver and no such
-------- -------
amendment, supplement or modification shall (i) reduce the amount or extend the
scheduled date of maturity of any Note or of any installment thereof, or reduce
the stated rate of any interest or fee payable hereunder or extend the scheduled
date of any payment thereof or increase the amount or extend the expiration date
of any Lender's Commitment, in each case without the consent of each Lender, or
(ii) amend, modify or waive any provision of this subsection or reduce the
percentage specified in the definition of Required Lenders, or consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, or release any Subsidiary
Guarantor from its obligations under the Subsidiaries Guarantee or release any
of the Collateral, in each case without the written consent of all the Lenders,
or (iii) amend, modify or
<PAGE>
70
waive any provision of Section 9 without the written consent of the then Agent.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Borrower, the
Lenders, the Agent and all future holders of the Notes. In the case of any
waiver, the Borrower, the Lenders and the Agent shall be restored to their
former position and rights hereunder and under the outstanding Notes and any
other Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
Notwithstanding anything to the contrary contained herein, upon any sale
or other disposition of any assets pursuant to and in accordance with subsection
7.6, such assets shall no longer constitute Collateral; provided that in the
--------
case of any sale or disposition of assets pursuant to subsection 7.6(b), the
Commitments are reduced in accordance with subsection 2.5(b) and subsection
7.6(b). Upon any release of Collateral as contemplated above, the Lenders
hereby direct the Agent to execute and deliver any documents or instruments and
take such other actions as may be necessary to evidence such release (without
any further notice to or consent or direction from any Lender).
10.2 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or five days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the Agent, and as
set forth in Schedule I in the case of the other parties hereto, or to such
other address as may be hereafter notified by the respective parties hereto and
any future holders of the Notes:
The Borrower: ICF Kaiser International, Inc.
9300 Lee Highway
Fairfax, Virginia 22031
Attention: Chief Financial Officer
Telecopy: (703) 591-3599
With a copy to: Paul Weeks, II
ICF Kaiser International, Inc.
9300 Lee Highway
Fairfax, Virginia 22031
Telecopy: (703) 273-4047
<PAGE>
71
The Agent: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: Allan Cyron
Telecopy:
provided that any notice, request or demand to or upon the Agent, the Issuing
- --------
Bank or the Lenders pursuant to subsection 2.3, 2.5, 2.6, 2.7, 2.12 or 3.2 shall
not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement, the Letters of
Credit and the Notes and the extensions of credit hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
-----------------------------
reimburse the Agent for all its out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement, the Notes and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the fees and
disbursements of counsel to the Agent, (b) to pay or reimburse each Lender and
the Agent for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the Notes, the
other Loan Documents and any such other documents, including, without
limitation, the fees and disbursements of counsel to the Agent and to each
Lender, and (c) to pay, indemnify, and hold each Lender and the Agent harmless
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the Notes,
the other Loan Documents and any such other documents, and (d) to pay,
indemnify, and hold each Lender and the Agent harmless from and
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72
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the Notes, the other Loan
Documents and any such other documents, including, without limitation, any of
the foregoing relating to the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of the Borrower, any
of its Subsidiaries or any of the Properties (all the foregoing in this clause
(d), collectively, the "indemnified liabilities"), provided, that the Borrower
----------------------- --------
shall have no obligation hereunder to the Agent or any Lender with respect to
indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the Agent or any such Lender, (ii) legal proceedings commenced
against the Agent or any such Lender by any security holder or creditor thereof
arising out of and based upon rights afforded any such security holder or
creditor solely in its capacity as such, (iii) legal proceedings threatened or
commenced against the Agent or any such Lender by any other Lender or by any
Transferee or (iv) legal proceedings commenced against the Agent or such Lender
which do not directly relate to the Loan Documents. The agreements in this
subsection shall survive repayment of the Notes and all other amounts payable
hereunder.
10.6 Successors and Assigns; Participations and Assignments. (a) This
------------------------------------------------------
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Agent, all future holders of the Notes and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any Loan
------------
owing to such Lender, any Note held by such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder and under the other Loan
Documents. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Note for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. The Borrower
agrees that if amounts outstanding under this Agreement and the Notes are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall be deemed to have
the right of setoff in respect of its participating interest in amounts owing
<PAGE>
73
under this Agreement and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement or any Note, provided that, in purchasing such participating interest,
--------
such Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in subsection 10.7(a) as fully as if it were a
Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of subsections 2.14, 2.15 and 2.16 with respect to its
participation in the Commitments and the Loans outstanding from time to time as
if it was a Lender; provided that, in the case of subsection 2.15, such
--------
Participant shall have complied with the requirements of said subsection and
provided, further, that no Participant shall be entitled to receive any greater
- -------- -------
amount pursuant to any such subsection than the transferor Lender would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred. The Lenders agree that each Participant shall have the right, solely
to the extent of its participating interest in a Loan hereunder, to agree to the
amendment of the following provisions with respect to such Loan: the amount,
date of maturity, interest rate, fees payable in connection therewith, and the
timing of payments thereunder. Each Lender agrees that any participation
agreement between it and a Participant will not give such Participant the right
to prevent any amendment or modification of this Agreement or the Notes other
than any such amendment or modification that would require the approval of all
the Lenders pursuant to subsection 10.1. Each Lender agrees to give the
Borrower prior written notice of any sale made pursuant to this subsection
10.6(b) of any participating interests in any Loans, which notification shall
include the name of the Participant and the amount of the participating interest
sold to such Participant.
(c) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time and from time to
time assign to any Lender or any affiliate thereof or to an additional bank or
financial institutions (an "Assignee") all or any part of its rights and
--------
obligations under this Agreement and the Notes pursuant to an Assignment and
Acceptance, substantially in the form of Exhibit G, executed by such Assignee
and such assigning Lender and delivered to the Agent for its acceptance and
recording in the Register; provided that any such assignment to an Assignee
--------
which, prior to such assignment, is not a Lender or an affiliate thereof shall
be in a minimum amount of $5,000,000 (or such lesser amount as is equal to the
full amount of such Lender's Commitment). Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with a Commitment as set forth
therein, and (y) the assigning Lender thereunder shall, to the extent provided
in
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74
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto).
(d) The Agent shall maintain at its address referred to in subsection
10.2 a copy of each Assignment and Acceptance delivered to it and a register
(the "Register") for the recordation of the names and addresses of the Lenders
--------
and the Commitment of, and principal amount of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Agent and the Lenders may treat
each Person whose name is recorded in the Register as the owner of the Loan
recorded therein for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee together with payment to the Agent of a
registration and processing fee of $2,500, the Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and the Borrower.
On or prior to such effective date, the Borrower, at its own expense, shall
execute and deliver to the Agent (in exchange for the Note of the assigning
Lender) a new Note to the order of such Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment hereunder, a new Note to the order of
the assigning Lender in an amount equal to the Commitment retained by it
hereunder. Such new Notes shall be dated the Closing Date and shall otherwise
be in the form of the Note replaced thereby.
(f) Subject to the provisions of subsection 10.15, the Borrower
authorizes each Lender to disclose to any Participant or Assignee (each, a
"Transferee") and any prospective Transferee any and all financial information
- -----------
in such Lender's possession concerning the Borrower and its Affiliates which has
been delivered to such Lender by or on behalf of the Borrower pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Borrower in connection with such Lender's credit evaluation of the Borrower and
its Affiliates prior to becoming a party to this Agreement.
(g) Nothing herein shall prohibit any Lender from pledging or assigning
any Note to any Federal Reserve Bank in accordance with applicable law.
<PAGE>
75
10.7 Adjustments; Set-off. (a) If any Lender (a "benefitted Lender")
-------------------- -----------------
shall at any time receive any payment of all or part of its Loans or the
Reimbursement Obligations owing to it, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section 8(g), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's Loans or
the Reimbursement Obligations owing to it, or interest thereon, such benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loans or the Reimbursement
Obligations owing to it, or shall provide such other Lenders with the benefits
of any such collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, however, that
-------- -------
if all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder or under the Notes (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Agent after any such set-off and
application made by such Lender, provided that the failure to give such notice
--------
shall not affect the validity of such set-off and application.
10.8 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the Agent.
10.9 Severability. Any provision of this Agreement which is prohibited
------------
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the
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76
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
-----------
represent the agreement of the Borrower, the Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agent or any Lender relative to the subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
10.11 Submission To Jurisdiction; Waivers. The Borrower hereby
-----------------------------------
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in subsection 10.2 or at such other
address of which the Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this subsection any special, exemplary, punitive or consequential
damages.
10.12 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
-------------
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
<PAGE>
77
10.13 Acknowledgements. The Borrower hereby acknowledges that:
----------------
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the Notes and the other Loan Documents;
(b) neither the Agent nor any Lender has any fiduciary relationship
with or duty to the Borrower arising out of or in connection with this
Agreement or any of the other Loan Documents, and the relationship between
Agent and Lenders, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT AND THE LENDERS
---------------------
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
10.15 Confidentiality. Each Lender agrees to keep confidential
---------------
any written or oral information provided to it by or on behalf of
the Borrower or any of its Subsidiaries pursuant to or in connection with this
Agreement; provided that nothing herein shall prevent any Lender from disclosing
--------
any such information (i) to the Agent or any other Lender, (ii) to any
Transferee which agrees to comply with the provisions of this subsection, (iii)
to its employees, directors, agents, attorneys, accountants and other
professional advisors, (iv) upon the request or demand of any Governmental
Authority having jurisdiction over such Lender, (v) in response to any order of
any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, (vi) which has been publicly disclosed other
than in breach of this Agreement or (vii) in connection with the exercise of any
remedy hereunder.
10.16 Amendment and Restatement of Existing Credit Agreement. On the
------------------------------------------------------
Closing Date, the commitments pursuant to the Existing Credit Agreement shall be
restated and replaced in their entirety by the Commitments, all loans made
pursuant to the Existing Credit Agreement shall be repaid and replaced with
Loans and all letters of credit issued pursuant to the Existing Credit Agreement
(other than the letters of credit listed on Schedule II and continued pursuant
to subsection 3.2) shall be terminated.
10.17 The Cash Collateral Account. The Borrower hereby grants to the
---------------------------
Agent, for the benefit of the Issuing Bank and the L/C Participants, a security
interest in the Cash
<PAGE>
78
Collateral Account to secure all obligations of the Borrower under this
Agreement and the other Loan Documents. Amounts held in the Cash Collateral
Account shall be applied by the Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired, terminated or been fully drawn upon, if any, shall be
applied to repay other obligations of the Borrower hereunder and under the
Notes. After all such Letters of Credit shall have expired or been fully drawn
upon, all Reimbursement Obligations shall have been satisfied and all other
obligations of the Borrower hereunder and under the Notes shall have been paid
in full, the balance, if any, in the Cash Collateral Account shall be returned
to the Borrower. The Borrower shall execute and deliver to the Agent, for the
account of the Issuing Bank and the L/C Participants, such further documents and
instruments as the Agent may request to evidence the creation and perfection of
the within security interest in the Cash Collateral Account.
<PAGE>
79
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
ICF KAISER INTERNATIONAL, INC.
By:
----------------------------------------------
Title:
CHEMICAL BANK,
as Agent, as Issuing Bank and as
a Lender
By:
----------------------------------------------
Title:
THE BANK OF TOKYO, LTD.,
NEW YORK AGENCY
By:
----------------------------------------------
Title:
AMERICAN SECURITY BANK
By:
----------------------------------------------
Title:
BHF-BANK
By:
----------------------------------------------
Title:
By:
----------------------------------------------
Title:
THE BANK OF NOVA SCOTIA
By:
----------------------------------------------
Title:
<PAGE>
80
BANCA COMMERCIALE ITALIANA
NEW YORK BRANCH
By:
----------------------------------------------
Title:
By:
----------------------------------------------
Title:
THE FUJI BANK, LIMITED
By:
----------------------------------------------
Title:
CORESTATES BANK, N.A.
By:
----------------------------------------------
Title:
<PAGE>
EXHIBIT A
---------
FORM OF NOTE
$____________
New York, New York
December ___, 1993
FOR VALUE RECEIVED, the undersigned, ICF KAISER INTERNATIONAL, INC., a
Delaware corporation (the "Borrower"), hereby promises to pay to the order of
--------
__________ (the "Lender"), at the office of Chemical Bank located at 270 Park
------
Avenue, New York, New York 10017, on the Termination Date in lawful money of the
United States of America and in immediately available funds, the principal
amount of the lesser of (a) _______________ DOLLARS ($____________) or (b) the
aggregate unpaid principal amount of all Loans made by the Bank to the Borrower
pursuant to subsection 2.1 of the Amended and Restated Credit Agreement, dated
as of December ___, 1993 (as amended, modified or supplemented from time to
time, the "Credit Agreement") among the Borrower, the Bank, the other banks and
----------------
financial institutions from time to time parties thereto and Chemical Bank, as
Agent. The Borrower further agrees to pay interest in like money on the unpaid
principal amount hereof from time to time from the date of each Loan evidenced
hereby at the office, on the dates, at the rates and for the periods specified
in Section 2 of the Credit Agreement.
The holder of this Note is authorized to record the date, amount and
Type of each Loan made or converted by the Bank, the date and amount of each
payment or prepayment of principal thereof and the length of each Interest
Period with respect to the portion of such Loans made and/or being maintained as
Eurodollar Loans, on the schedules annexed hereto and made a part hereof, or on
a continuation thereof which shall be attached hereto and made a part hereof,
which recordation shall constitute prima facie evidence of the accuracy of the
----- -----
information recorded in the absence of manifest error; provided, however, that
-------- -------
failure by any holder to make any such recordation on such schedules or
continuation thereof shall not in any manner affect any of the obligations of
the Borrower to make payments of principal and interest in accordance with the
terms of this Note and the Credit Agreement.
This Note is one of the Notes referred to in, and is entitled to the
benefits of the Credit Agreement which, among other things, contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events and also for optional and mandatory prepayments on account of principal
hereof prior to the maturity hereof on the terms and
<PAGE>
2
conditions therein specified. This Note is secured and guaranteed as provided
in the Loan Documents. Reference is hereby made to the Loan Documents for a
description of the properties and assets in which a security interest has been
granted, the nature and extent of the security and the guarantees, the terms and
conditions upon which the security interests and the guarantees were granted and
the rights of the holder of this Note in respect thereof. All notices,
requests, demands or other communications with respect to this Note shall be
given in the manner set forth in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
[This Note is in replacement of and substitution for, but not in
repayment of, and does not constitute a novation of, that certain Note dated May
14, 1991 made by the Borrower payable to the order of the Lender pursuant to the
Credit Agreement dated as of May 14, 1991 among the Borrower, certain banks and
Chemical Bank (successor by merger to Manufacturers Hanover Trust Company), as
agent.]/1/
[This Note represents certain outstanding indebtedness of the
undersigned on the date hereof and does not represent new indebtedness incurred
on the date hereof.]/2/
Terms defined in the Credit Agreement are used herein with their defined
meanings unless otherwise defined herein. THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
ICF KAISER INTERNATIONAL, INC.
By:
--------------------------
Title:
- ---------------------------
/1/ Insert in Notes of Continuing Lenders.
/2/ Insert in Notes of new Lenders.
<PAGE>
<TABLE>
<CAPTION>
ABR LOANS AND CONVERSIONS
AND REPAYMENTS OF PRINCIPAL
Amount of ABR Loans Amount of Eurodollar
Amount of Converted into Loans Converted into Amount of Principal Unpaid Principal Notation
Date ABR Loans Eurodollar Loans ABR Loans Repaid Balance Made by
- ------ --------- ------------------- -------------------- ------------------- ---------------- --------
<S> <C> <C> <C> <C> <C> <C>
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EURODOLLAR LOANS AND CONVERSIONS
AND REPAYMENTS OF PRINCIPAL
Amount of Amount of ABR Loans Amount of Eurodollar
Eurodollar Converted into Loans Converted into Amount of Principal Unpaid Principal Notation
Date Loans Eurodollar Loans ABR Loans Repaid Balance Made by
- ------ --------- ------------------- -------------------- ------------------- ---------------- --------
<S> <C> <C> <C> <C> <C> <C>
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
______ _________ ___________________ ____________________ ___________________ ________________ ________
</TABLE>
<PAGE>
EXHIBIT C
AMENDED AND RESTATED SUBSIDIARIES GUARANTEE
AMENDED AND RESTATED SUBSIDIARIES GUARANTEE, dated as of December __,
1993, by each of the corporations that are signatories hereto (the "Guarantors";
----------
each, a "Guarantor") in favor of CHEMICAL BANK, a New York banking corporation,
---------
as agent (in such capacity, the "Agent") for the banks and other financial
-----
institutions (the "Lenders") from time to time parties to the Credit Agreement
-------
described below.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, ICF KAISER International, Inc., a Delaware corporation (the
"Borrower") (under its former name, ICF International, Inc.) is a party to
- ---------
the Credit Agreement, dated as of May 14, 1991 (as amended, the "Existing
--------
Credit Agreement"), among the Borrower, the banks parties thereto (the
- ----------------
"Existing Lenders") and Chemical Bank (successor by merger to Manufacturers
----------------
Hanover Trust Company), as agent (in such capacity, the "Existing Agent");
--------------
WHEREAS, the trustees (collectively, the "Trustees") of the ICF Kaiser
--------
International, Inc. Employee Stock Ownership Trust created pursuant to the ICF
Kaiser International, Inc. Employee Stock Ownership Plan are parties to the ESOP
Credit Agreement, dated as of May 14, 1991, among the Trustees, the Borrower, as
guarantor, the Existing Lenders and the Existing Agent (as amended, the "ESOP
----
Credit Agreement");
- ----------------
WHEREAS, the Existing Credit Agreement is being amended and restated
pursuant to the Amended and Restated Credit Agreement, dated as of December ___,
1993 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the Lenders and the Agent;
- -----------------
WHEREAS, the ESOP Credit Agreement is being terminated on the Closing
Date under and as defined in the Credit Agreement;
WHEREAS, the Borrower owns directly or indirectly all of the issued and
outstanding stock of each Guarantor and is a member of an affiliated group of
corporations and other entities that includes each Guarantor;
WHEREAS, the Borrower and the Guarantors are engaged in related
businesses, and each Guarantor has derived and will derive substantial direct
and indirect benefit from the making of extensions of credit by the Lenders to
the Borrower pursuant to the Credit Agreement;
<PAGE>
2
WHEREAS, in connection with the Existing Credit Agreement and the ESOP
Credit Agreement, certain of the Guarantors previously executed and delivered to
the Existing Agent the Amended and Restated Subsidiary Guarantee, dated as of
August 29, 1991 (the "Existing Subsidiaries Guarantee"); and
-------------------------------
WHEREAS, in connection with the amendment and restatement of the
Existing Credit Agreement and the termination of the ESOP Credit Agreement, the
Guarantors and the beneficiaries of the Existing Subsidiaries Guarantee wish to
amend and restate the Existing Subsidiaries Guarantee as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, the Guarantors and the
Agent, with the consent of the Lenders, hereby agree that the Existing
Subsidiaries Guarantee is hereby restated in its entirety as follows:
1. Defined Terms. As used in this Guarantee, terms defined in the
-------------
Credit Agreement are used herein as therein defined, and the following term
shall have the following meaning:
"Obligations" shall mean the unpaid principal of and interest on the
-----------
Notes and all other obligations and liabilities of the Borrower to the
Agent, the Issuing Bank or any Lender (including, without limitation,
interest accruing after the maturity of the Loans and interest accruing
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post petition interest is allowed
in such proceeding), whether direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter incurred, which may arise
under, out of, or in connection with, the Credit Agreement, the Notes, the
Letters of Credit, the other Loan Documents or any other document made,
delivered or given in connection therewith, in each case whether on account
of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees and disbursements
of counsel to the Agent, the Issuing Bank or any Lender) or otherwise.
2. Guarantee. (a) Each of the Guarantors hereby, jointly and
---------
severally, unconditionally and irrevocably, guarantees to the Agent and the
Lenders and their respective successors, indorsees, transferees and assigns, the
prompt and complete payment and performance by the Borrower when due (whether at
the stated maturity, by acceleration or otherwise) of the Obligations, and each
Guarantor further agrees to pay any and all expenses (including, without
limitation, all fees and disbursements of counsel) which may be paid or incurred
by the Agent or any Lender in enforcing, or obtaining advice of counsel in
respect of, any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect
<PAGE>
3
to, or collecting against, such Guarantor under this Guarantee; provided,
--------
however, that, anything herein or in any other Loan Document to the contrary
- -------
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents (including, without limitation, any collateral security
documents entered into by such Guarantor to secure the Obligations) and, without
duplication, the maximum amount secured pursuant to any such collateral security
documents, shall in no event exceed the amount of obligations which such
Guarantor can incur and secure under applicable federal and state laws relating
to the insolvency of debtors.
(b) Each Guarantor agrees that the Obligations may at any time and from
time to time exceed the amount determined in accordance with the proviso in
Paragraph (a) of this Section 2 with respect to such Guarantor or with respect
to all of the Guarantors without impairing this Guarantee or affecting the
rights and remedies of the Agent and the Lenders hereunder.
(c) No payment or payments made by the Borrower, any of the Guarantors,
any other guarantor or any other Person or received or collected by the Agent or
any Lender from the Borrower, any of the Guarantors, any other guarantor or any
other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor hereunder which shall,
notwithstanding any such payment or payments other than payments made by such
Guarantor in respect of the Obligations or payments received or collected from
such Guarantor in respect of the Obligations, remain liable for the Obligations
up to the amount determined with respect to such Guarantor in accordance with
the proviso in Paragraph (a) of this Section 2 until the Obligations are paid in
full and the Commitments are terminated.
(d) Each Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to the Agent or any Lender on account of its
liability hereunder, it will notify the Agent in writing that such payment is
made under this Guarantee for such purpose.
3. Right of Contribution. Each Guarantor hereby agrees that to
---------------------
the extent that a Guarantor shall have paid more than its proportionate share of
any payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder who has not paid its
proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 5 hereof. The
provisions of this Section 3 shall in no respect limit the obligations and
liabilities of any Guarantor to the Agent and the Lenders, and each Guarantor
shall remain liable to the Agent and the Lenders for the full amount guaranteed
by such Guarantor hereunder.
<PAGE>
4
4. Right of Set-off. Upon the occurrence of any Event of Default,
----------------
each Guarantor hereby irrevocably authorizes each Lender at any time and from
time to time without notice to such Guarantor or any other Guarantor, any such
notice being expressly waived by each Guarantor, to set-off and appropriate and
apply any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender to or for the
credit or the account of such Guarantor, or any part thereof in such amounts as
such Lender may elect, against and on account of the obligations and liabilities
of such Guarantor to such Lender hereunder as such Lender may elect, whether or
not the Agent or any Lender has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. Each Lender
agrees to notify such Guarantor promptly of any such set-off and the application
made by such Lender, provided that the failure to give such notice shall not
--------
affect the validity of such set-off and application. The rights of each Lender
under this paragraph are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which such Lender may have.
5. No Subrogation. Notwithstanding any payment or payments made by
--------------
any of the Guarantors hereunder or any set-off or application of funds of any of
the Guarantors by any Lender, no Guarantor shall be entitled to be subrogated to
any of the rights of the Agent or any Lender against the Borrower or any other
Guarantor or any collateral security or guarantee or right of offset held by any
Lender for the payment of the Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder until
the Obligations have been paid in full. If any amount shall be paid to any
Guarantor on account of any such subrogation rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Agent and the Lenders, segregated from other funds of
such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
over to the Agent in the exact form received by such Guarantor (duly indorsed by
such Guarantor to the Agent, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as the Agent may
determine.
6. Amendments, etc. with respect to the Obligations; Waiver of
-----------------------------------------------------------
Rights. Each Guarantor shall remain obligated hereunder notwithstanding that,
- ------
without any reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, any demand for payment of any of the
Obligations made by the Agent or any Lender may be rescinded by such party and
any of the Obligations continued, and the Obligations, or the liability of any
other party upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with
<PAGE>
5
respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Agent or any Lender and the Credit Agreement, the Notes, the
other Loan Documents or any other document in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the Agent
and/or any Lender may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Agent or any
Lender for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Obligations or for this Guarantee or any property subject
thereto. When making any demand hereunder against any of the Guarantors, the
Agent or any Lender may, but shall be under no obligation to, make a similar
demand on the Borrower or any other Guarantor or guarantor, and any failure by
the Agent or any Lender to make any such demand or to collect any payments from
the Borrower or any such other Guarantor or guarantor or any release of the
Borrower or such other Guarantor or guarantor shall not relieve any of the
Guarantors in respect of which a demand or collection is not made or any of the
Guarantors not so released of their several obligations or liabilities
hereunder, and shall not impair or affect the rights and remedies, express or
implied, or as a matter of law, of the Agent or any Lender against any of the
Guarantors. For the purposes hereof "demand" shall include the commencement and
continuance of any legal proceedings.
7. Guarantee Absolute and Unconditional. Each Guarantor waives any
------------------------------------
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Agent or any Lender upon
this Guarantee or acceptance of this Guarantee; the Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon this Guarantee; and
all dealings between the Borrower or any of the Guarantors and the Agent or any
Lender shall likewise be conclusively presumed to have been had or consummated
in reliance upon this Guarantee. Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Borrower or any of the Guarantors with respect to the Obligations. Each
Guarantor understands and agrees that this Guarantee shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity, regularity or enforceability of the Credit Agreement, the
Notes, the other Loan Documents, any of the Obligations or any other collateral
security therefor or guarantee or right of offset with respect thereto at any
time or from time to time held by the Agent or any Lender, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance) which
may at any time be available to or be asserted by the Borrower against the Agent
or any Lender, or (c) any other circumstance whatsoever (with or without notice
to or
<PAGE>
6
knowledge of the Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Obligations, or of such Guarantor under this Guarantee, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against any
Guarantor, the Agent and any Lender may, but shall be under no obligation to,
pursue such rights and remedies as it may have against the Borrower or any other
Person or against any collateral security or guarantee for the Obligations or
any right of offset with respect thereto, and any failure by the Agent or any
Lender to pursue such other rights or remedies or to collect any payments from
the Borrower or any such other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
the Borrower or any such other Person or any such collateral security, guarantee
or right of offset, shall not relieve such Guarantor of any liability hereunder,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Agent or any Lender against such
Guarantor. This Guarantee shall remain in full force and effect and be binding
in accordance with and to the extent of its terms upon each Guarantor and the
successors and assigns thereof, and shall inure to the benefit of the Agent and
the Lenders, and their respective successors, indorsees, transferees and
assigns, until all the Obligations and the obligations of each Guarantor under
this Guarantee shall have been satisfied by payment in full and the commitment
of the Lenders to extend credit to the Borrower shall have terminated.
8. Reinstatement. This Guarantee shall continue to be effective, or
-------------
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Obligations is rescinded or must otherwise be restored or returned
by the Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or any Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any Guarantor or any substantial
part of its property, or otherwise, all as though such payments had not been
made.
9. Payments. Each Guarantor hereby guarantees that payments
--------
hereunder will be paid to the Agent without set-off or counterclaim in U.S.
Dollars at the office of the Agent located at 270 Park Avenue, New York, New
York 10017.
10. Representations and Warranties. Each Guarantor hereby represents
------------------------------
and warrants that:
(a) such Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of
<PAGE>
7
property or the conduct of its business requires such qualification, except
where the failure to be so qualified could not have a material adverse
effect on the business, operations, property or financial or other
condition of such Guarantor and could not materially adversely affect the
ability of such Guarantor to perform its obligations under this Guarantee,
and such Guarantor has the corporate power and authority and the legal
right to own and operate its property, to lease the property it operates
and to conduct the business in which it is currently engaged;
(b) such Guarantor has the corporate power and authority and the
legal right to execute and deliver, and to perform its obligations under,
this Guarantee, and has taken all necessary corporate action to authorize
its execution, delivery and performance of this Guarantee;
(c) this Guarantee constitutes a legal, valid and binding obligation
of such Guarantor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally;
(d) the execution, delivery and performance of this Guarantee will
not violate in any material respect any provision of any Requirement of Law
or Contractual Obligation of such Guarantor and will not result in or
require the creation or imposition of any Lien on any of the properties or
revenues of such Guarantor pursuant to any Requirement of Law or
Contractual Obligation of such Guarantor; and
(e) except for Foreign Ownership and Control Reports filed with the
United States Department of Energy and Department of Defense (which filings
have been duly made), no consent or authorization of, filing with, or other
act by or in respect of, any arbitrator or Governmental Authority and no
consent of any other Person (including, without limitation, any stockholder
or creditor of such Guarantor) is required in connection with the
execution, delivery, performance, validity or enforceability of this
Guarantee.
Each Guarantor agrees that the foregoing representations and warranties
shall be deemed to have been made by such Guarantor on the date of each
borrowing by the Borrower or issuance of a Letter of Credit under the Credit
Agreement on and as of such date of borrowing as though made hereunder on and as
of such date.
11. Severability. Any provision of this Guarantee which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the
<PAGE>
8
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
12. Paragraph Headings. The paragraph headings used in this
------------------
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
13. No Waiver; Cumulative Remedies. Neither the Agent nor any Lender
------------------------------
shall by any act (except by a written instrument pursuant to Section 14 hereof),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default or in
any breach of any of the terms and conditions hereof. No failure to exercise,
nor any delay in exercising, on the part of the Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Agent or any Lender of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or remedy which
the Agent or such Lender would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights or remedies provided by law.
14. Integration; Waivers and Amendments; Successors and Assigns;
------------------------------------------------------------
Governing Law. This Guarantee represents the agreement of each Guarantor with
- -------------
respect to the subject matter hereof and there are no promises or
representations by the Agent or any Lender relative to the subject matter hereof
not reflected herein. None of the terms or provisions of this Guarantee may be
waived, amended or supplemented or otherwise modified except by a written
instrument executed by each Guarantor and the Agent, provided that any provision
--------
of this Guarantee may be waived by the Agent and the Lenders in a letter or
agreement executed by the Agent or by facsimile transmission from the Agent.
This Guarantee shall be binding upon the successors and assigns of each
Guarantor and shall inure to the benefit of the Agent and the Lenders and their
respective successors and assigns. THIS GUARANTEE SHALL BE GOVERNED BY AND BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
15. Notices. All notices, requests and demands to or upon the
-------
Guarantors or the Agent or any Lender to be effective shall be in writing or by
telecopy and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or, in the case of mail, 5
days after deposit in the postal system, first class postage pre-paid, or, in
the case of telecopy notice, when sent, confirmation received, addressed to a
party at the address provided for such
<PAGE>
9
party in Schedule I to the Credit Agreement or Schedule I hereto, as the case
may be.
16. Submission to Jurisdiction; Waivers. (a) Each Guarantor hereby
-----------------------------------
irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Guarantee or any other Loan Document to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(iii) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form and mail), postage prepaid, to such
Guarantor at its address set forth in Schedule I hereof or at such other
address of which the Agent shall have been notified; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction.
(b) EACH GUARANTOR AND, BY ACCEPTANCE HEREOF, THE AGENT AND EACH
LENDER, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING REFERRED TO IN SECTION 16(a).
17. Counterparts. This Guarantee may be executed by one or more of
------------
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
18. Authority of Agent. Each Guarantor acknowledges that the rights
------------------
and responsibilities of the Agent under this Guarantee with respect to any
action taken by the Agent or the exercise or non-exercise by the Agent of any
option, right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Guarantee shall, as between the Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Agent and such Guarantor, the Agent shall be conclusively presumed to be acting
as agent
<PAGE>
10
for the Lenders with full and valid authority so to act or refrain from acting,
and no Guarantor shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to
be duly executed and delivered by its duly authorized officer as of the day and
year first above written.
CLEMENT INTERNATIONAL CORPORATION
By:
---------------------------
Title: Authorized
Representative
CYGNA GROUP, INC.
By:
---------------------------
Title: Authorized
Representative
EXCELL DEVELOPMENT CONSTRUCTION,
INC.
By:
---------------------------
Title: Authorized
Representative
ICF CONSULTING ASSOCIATES, INC.
By:
---------------------------
Title: Authorized
Representative
ICF INCORPORATED
By:
---------------------------
Title: Authorized
Representative
<PAGE>
11
ICF INFORMATION TECHNOLOGY, INC.
By:
---------------------------
Title: Authorized
Representative
ICF KAISER ENGINEERS GROUP, INC.
By:
---------------------------
Title: Authorized
Representative
ICF KAISER ENGINEERS, INC.
By:
---------------------------
Title: Authorized
Representative
ICF RESOURCES INCORPORATED
By:
---------------------------
Title: Authorized
Representative
ICF TECHNOLOGY INCORPORATED
By:
---------------------------
Title: Authorized
Representative
KAISER ENGINEERS HANFORD COMPANY
By:
---------------------------
Title: Authorized
Representative
<PAGE>
12
ICF LEASING CORPORATION, INC.
By:
---------------------------
Title: Authorized
Representative
PHASE LINEAR SYSTEMS INCORPORATED
By:
---------------------------
Title: Authorized
Representative
TUDOR ENGINEERING COMPANY
By:
---------------------------
Title: Authorized
Representative
HENRY J. KAISER COMPANY
By:
---------------------------
Title: Authorized
Representative
ICF KAISER ENGINEERS (CALIFORNIA)
CORPORATION
By:
---------------------------
Title: Authorized
Representative
KAISER ENGINEERS AND CONSTRUCTORS,
INC.
By:
---------------------------
Title: Authorized
Representative
<PAGE>
13
KAISER ENGINEERS INTERNATIONAL,
INC.
By:
---------------------------
Title: Authorized
Representative
KE LIVERMORE, INC.
By:
---------------------------
Title: Authorized
Representative
ICF KAISER ENGINEERS MASSACHUSETTS,
INC.
By:
---------------------------
Title: Authorized
Representative
ICF KAISER HOLDINGS UNLIMITED, INC.
By:
---------------------------
Title: Authorized
Representative
ICF KAISER ENGINEERS CORPORATION
By:
---------------------------
Title: Authorized
Representative
<PAGE>
14
KE SERVICES CORPORATION
By:
---------------------------
Title: Authorized
Representative
ICFCORP INTERNATIONAL, INC.
By:
---------------------------
Title: Authorized
Representative
AGREED AND ACCEPTED:
CHEMICAL BANK,
as Agent
By:
-----------------------------
Title:
<PAGE>
EXHIBIT D
AMENDED AND RESTATED BORROWER
SECURITY AGREEMENT
AMENDED AND RESTATED BORROWER SECURITY AGREEMENT, dated as of December
__, 1993, made by ICF KAISER INTERNATIONAL, INC., a Delaware corporation (the
"Borrower"), in favor of CHEMICAL BANK, as Agent (in such capacity, the "Agent")
-------- -----
for the banks and other financial institutions (the "Lenders") from time to time
-------
parties to the Credit Agreement described below.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower is a party to the Credit Agreement, dated as of May
14, 1991 (as amended, the "Existing Credit Agreement"), among the Borrower, the
-------------------------
banks parties thereto (the "Existing Lenders") and Chemical Bank (successors by
----------------
merger to Manufacturers Hanover Trust Company), as agent (in such capacity the
"Existing Agent");
--------------
WHEREAS, the trustees (collectively, the "Trustees") of the ICF Kaiser
--------
International, Inc. Employee Stock Ownership Trust created pursuant to the ICF
Kaiser International, Inc. Employee Stock Ownership Plan are parties to the ESOP
Credit Agreement, dated as of May 14, 1991, among the Trustees, the Borrower, as
guarantor, the Existing Lenders and the Existing Agent (as amended, the "ESOP
----
Credit Agreement");
- ----------------
WHEREAS, in connection with the Existing Credit Agreement and the ESOP
Agreement, the Borrower entered into the Amended and Restated Company Security
Agreement, dated as of February 14, 1992 (the "Existing Security Agreement"), in
---------------------------
favor of the Existing Agent;
WHEREAS, the Existing Credit Agreement is being amended and restated
pursuant to the Amended and Restated Credit Agreement, dated as of December __,
1993 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the Lenders and the Agent;
----------------
WHEREAS, the ESOP Credit Agreement is being terminated on the Closing
Date under and as defined in the Credit Agreement;
WHEREAS, the Credit Agreement provides that extensions of credit may only
be made thereunder pursuant to a borrowing base formula in respect of certain
collateral, which formula is similar to the borrowing base formula in respect of
such collateral provided under the Existing Credit Agreement; and
<PAGE>
2
WHEREAS, the Borrower and the Agent, with the consent of the Lenders,
wish to amend and restate the Existing Security Agreement in the manner set
forth herein.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the Borrower and the Agent hereby agree that the Existing
Security Agreement is amended and restated in its entirety, as follows:
1. Defined Terms. Unless otherwise defined herein, terms which are
-------------
defined in the Credit Agreement and used herein are so used as so defined; the
following terms which are defined in the Uniform Commercial Code in effect in
the State of New York on the date hereof are used herein as so defined:
Accounts, Chattel Paper, Instruments and Proceeds; and the following terms shall
have the following meanings:
"Code" shall mean the Uniform Commercial Code as from time to time in
----
effect in the State of New York.
"Collateral" shall have the meaning assigned to it in Section 2 of this
----------
Security Agreement.
"Collateral Accounts" shall have the meaning assigned to it in Section 3
-------------------
of this Security Agreement.
"General Intangibles" shall have the meaning assigned to such term in the
-------------------
Code, provided, however, that in no event shall uncertificated securities
-------- -------
issued or owned by the Borrower or any Subsidiary be deemed to constitute
General Intangibles for purposes hereof.
"Lock-Box Accounts" shall have the meaning assigned to it in Section 3 of
-----------------
this Security Agreement.
"Lock-Box Agreements" shall have the meaning assigned to it in Section 3
-------------------
of this Security Agreement.
"Obligations" shall mean the unpaid principal of and interest on the
-----------
Notes and all other obligations and liabilities of the Borrower to the Agent,
the Issuing Bank or any Lender (including, without limitation, interest
accruing after the maturity of the Loans and interest accruing after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such
proceeding), whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, which may arise under, out of,
or in connection with, the Credit Agreement, the Notes, the Letters of Credit,
this Security Agreement, the other Loan Documents or any other document made,
delivered or given in connection therewith, in each case whether on account of
principal,
<PAGE>
3
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees and disbursements of counsel to the
Agent, the Issuing Bank or any Lender) or otherwise.
"Patents" means (a) all registered letters patent of the United States
-------
and all reissues and extensions thereof, in each case referred to in Schedule
I hereto and any thereof specified by the Agent, and (b) all applications for
letters patent of the United States and all divisions, continuations and
continuations-in-part thereof or any other country, in each case referred to
in Schedule I hereto and any thereof specified by the Agent.
"Patent License" means all agreements, whether written or oral, providing
--------------
for the grant by the Borrower of any right to manufacture, use or sell any
invention covered by a Patent referred to in Schedule I hereto and any thereof
specified by the Agent.
"Security Agreement" means this Amended and Restated Borrower Security
------------------
Agreement, as amended, supplemented or otherwise modified from time to time.
"Trademarks" means (a) all trademarks, trade names, corporate names,
----------
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers (in each case
such of the foregoing that are registered), and the goodwill associated
therewith, now existing or hereafter adopted or acquired, all registrations
and recordings thereof, and all applications in connection therewith, whether
in the United States Patent and Trademark Office or in any similar office or
agency of the United States, any State thereof or any other country or any
political subdivision thereof, or otherwise, in each case referred to in
Schedule II hereto and any thereof specified by the Agent, and (b) all
renewals thereof.
"Trademark License" means any agreement, written or oral, providing for
-----------------
the grant by the Borrower of any right to use any Trademark referred to in
Schedule II hereto and any thereof specified by the Agent.
2. Grant of Security Interest. As collateral security for the prompt
--------------------------
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations, the Borrower hereby confirms
that it has granted, and to the extent, if any, necessary, does hereby grant to
the Agent for the ratable benefit of the Lenders a security interest in all of
the following property now owned or at any time hereafter acquired by the
Borrower or in which the Borrower now has or at any time in the future may
acquire any right, title or interest (collectively, the "Collateral"):
----------
<PAGE>
4
(i) all Accounts;
(ii) all Chattel Paper which is of a type which would be included in
the calculation of the Borrowing Base;
(iii) all General Intangibles;
(iv) all Instruments which are of a type which would be included in
the calculation of the Borrowing Base;
(v) all Patents, to the extent, if any, not included within General
Intangibles;
(vi) all Patent Licenses, to the extent, if any, not included within
General Intangibles;
(vii) all Trademarks, to the extent, if any, not included within
General Intangibles;
(viii) all Trademark Licenses, to the extent, if any, not included
within General Intangibles;
(ix) the Lock-Box Accounts and the Collateral Accounts, and all
amounts from time to time on deposit therein; and
(x) to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing.
Notwithstanding anything in the foregoing to the contrary, no security interest
is granted by this Section 2 in (1) any securities issued by the Borrower or any
Subsidiary of the Borrower and (2) any Patent Licenses or Trademark Licenses to
the extent such Licenses prohibit such grant, provided that the Borrower shall
--------
use its reasonable best efforts to avoid the inclusion of any such prohibition
in any Patent Licenses or Trademark Licenses entered into after the date hereof.
3. Rights of Agent and Lenders; Limitations on Agent's and Lender's
----------------------------------------------------------------
Obligations.
- -----------
(a) Borrower Remains Liable under Accounts. Anything herein to the
--------------------------------------
contrary notwithstanding, the Borrower shall remain liable under each of the
Accounts and each contract or agreement to which it is a party under which any
Account or General Intangible may arise to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any such contract or agreement. Neither the Agent
nor any Lender shall have any obligation or liability under any Account or any
such contract or agreement by reason of or arising out of this Security
Agreement
<PAGE>
5
or the receipt by the Agent or any such Lender of any payment relating to such
Account pursuant hereto, nor shall the Agent or any Lender be obligated in any
manner to perform any of the obligations of the Borrower under or pursuant to
any Account or any such contract or agreement to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as
to the sufficiency of any performance by any party under any Account or any such
contract or agreement, to present or file any claim, to take any action to
enforce any performance or to collect the payment of any amounts which may have
been assigned to it or to which it may be entitled at any time or times.
(b) Notice to Account Debtors. Upon the request of the Agent (given
-------------------------
only after consultation with the Required Lenders) at any time after the
occurrence and during the continuance of an Event of Default, the Borrower shall
notify account debtors on the Accounts that a security interest has been granted
in the Accounts to the Agent hereunder and that payments in respect thereof
shall be made directly to the Agent. The Borrower shall cause all account
debtors on its Accounts to make all payments in respect thereof into the
appropriate Lock-Box or Lock-Box Account. The Agent may in its own name or in
the name of others communicate with account debtors on the Accounts to verify
with them to its satisfaction the existence, amount and terms of any Accounts.
(c) Analysis of Accounts. The Agent shall have the right to make test
--------------------
verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable, and the Borrower shall furnish all such
assistance and information as the Agent may reasonably require in connection
therewith. At any time and from time to time, upon the Agent's request and at
the expense of the Borrower, the Borrower shall cause independent public
accountants or others satisfactory to the Agent to furnish to the Agent reports
showing reconciliations, aging and test verifications of, and trial balances
for, the Accounts.
(d) Collections on Accounts. On or before the date hereof, the Borrower
-----------------------
and certain of its Subsidiaries shall enter into one or more lock-box
agreements with the Agent on terms and conditions reasonably acceptable to the
Agent and the Borrower (collectively, the "Lock-Box Agreements") pursuant to
-------------------
which there shall be established one or more lock-boxes and lock-box accounts
(collectively, the "Lock-Boxes" and the "Lock-Box Accounts"), together with one
---------- -----------------
or more collateral accounts maintained with the Agent (the "Collateral
----------
Accounts"). The Agent shall have sole dominion and control over the Lock-Box
Accounts and the Collateral Accounts, and neither the Borrower nor any
Subsidiary shall have any right of withdrawal therefrom; provided that upon
--------
receipt of collected funds in any Lock-Box Accounts, such funds may be withdrawn
in accordance with the Lock-Box Agreement, unless a Default or Event of Default
shall be in existence, in which event the Agent may, and upon the direction of
the Required
<PAGE>
6
Lenders shall, transfer to the Collateral Accounts all funds received in the
Lock-Box Accounts so long as such Default or Event of Default shall continue.
The Borrower shall cause each account debtor on Accounts owing the Borrower to
make all payments in respect of such Accounts to the appropriate Lock-Box. If,
notwithstanding such direction, the Borrower shall receive any such payment,
such payment, when collected by the Borrower, shall be forthwith (and, in any
event, within two Business Days) deposited by the Borrower in the exact form
received, duly indorsed by the Borrower to the Agent if required, in the
appropriate Lock-Box Account subject to withdrawal by the Agent for the account
of the Lenders only, as hereinafter provided, and, until so turned over, shall
be held by the Borrower in trust for the Agent and the Lenders, segregated from
other funds of the Borrower. Each deposit of any such Proceeds shall be
accompanied by a report identifying in reasonable detail the nature and source
of the payments included in the deposit. All Proceeds constituting collections
of Accounts while held by the Agent (or by the Borrower in trust for the Agent
and the Lenders) shall continue to be collateral security for all of the
Obligations and shall not constitute payment thereof until applied as
hereinafter provided. Subject to the terms of the Lock-Box Agreements, if an
Event of Default shall have occurred and be continuing, at any time at the
Agent's election, the Agent shall apply all or any part of the funds on deposit
in the Collateral Accounts on account of the Obligations in such order as the
Agent may elect, and any part of such funds which the Agent elects not so to
apply and deems not required as collateral security for the Obligations shall be
paid over from time to time by the Agent to the Borrower or to whomsoever may be
lawfully entitled to receive the same. At the Agent's request, the Borrower
shall deliver to the Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the Accounts,
including, without limitation, all original orders, invoices and shipping
receipts.
(e) Compliance with Assignment of Claims Act. If requested by the
----------------------------------------
Required Lenders at any time and from time to time, the Borrower shall take all
actions necessary to comply with the United States Assignment of Claims Act in
respect of all Collateral under this Security Agreement to which such act is
applicable.
4. Representations and Warranties. The Borrower hereby represents and
------------------------------
warrants that:
(a) Title; No Other Liens. Except for the Lien granted to the Agent for
---------------------
the ratable benefit of the Lenders pursuant to this Security Agreement and the
other Liens, if any, permitted to exist on the Collateral pursuant to
subsection 7.3 of the Credit Agreement, the Borrower owns each item of the
Collateral free and clear of any and all Liens or claims of others. No
security agreement, financing statement or other public notice granting a Lien
on all or any part of the
<PAGE>
7
Collateral is on file or of record in any public office, except such as may
have been filed in favor of the Agent, for the ratable benefit of the Lenders,
pursuant to this Security Agreement.
(b) Perfected First Priority Liens. The Liens granted pursuant to this
------------------------------
Security Agreement constitute perfected Liens on the Collateral in favor of
the Agent, which are prior to all other Liens (other than Liens, if any,
permitted by subsection 7.3 of the Credit Agreement) on the Collateral created
by the Borrower and in existence on the date hereof and which are enforceable
as such against all creditors of and purchasers from the Borrower.
(c) Accounts. The amount represented by the Borrower to the Lenders
--------
from time to time as owing by each account debtor or by all account debtors in
respect of the Accounts will at such time be the correct amount actually owing
by such account debtor or debtors thereunder. No amount payable to the
Borrower which is of a type which would be included in the calculation of the
Borrowing Base is evidenced by any Instrument or Chattel Paper which has not
been delivered to the Agent. The place where the Borrower keeps its records
concerning the Accounts is 9300 Lee Highway, Fairfax, Virginia 22031.
(d) Chief Executive Office. The Borrower's chief executive office and
----------------------
chief place of business is located at 9300 Lee Highway, Fairfax, Virginia
22031.
(e) Power and Authority; Authorization. The Borrower has the corporate
----------------------------------
power and authority and the legal right to execute and deliver, to perform its
obligations under, and to grant the Lien on the Collateral pursuant to, this
Security Agreement and has taken all necessary corporate action to authorize
its execution, delivery and performance of, and grant of the Lien on the
Collateral pursuant to, this Security Agreement.
(f) Patents and Trademarks. Schedule I hereto includes all Patents and
----------------------
Patent Licenses owned by the Borrower in its own name as of the date hereof.
Schedule II hereto includes all Trademarks and Trademark Licenses owned by the
Borrower in its own name as of the date hereof. To the best of the Borrower's
knowledge, each Patent and Trademark is valid, subsisting, unexpired,
enforceable and has not been abandoned. Except as set forth in either such
Schedule, none of such Patents and Trademarks is the subject of any licensing
or franchise agreement. To the best of the Borrower's knowledge after
reasonable inquiry, no holding, decision or judgment has been rendered by any
Governmental Authority which would limit in any material way, cancel or
question in any material way the validity of any Patent or Trademark. To the
best of the Borrower's knowledge after
<PAGE>
8
reasonable inquiry, no action or proceeding is pending (i) seeking to limit in
any material way, cancel or question in any material way the validity of any
Patent or Trademark, or (ii) which, if adversely determined, would have a
material adverse effect on the value to the Borrower or any Subsidiary of any
Patent or Trademark.
5. Covenants. The Borrower covenants and agrees with the Agent and the
---------
Lenders that, from and after the date of this Security Agreement until the
Obligations are paid in full and the Commitments are terminated:
(a) Further Documentation; Pledge of Instruments and Chattel Paper. At
--------------------------------------------------------------
any time and from time to time, upon the written request of the Agent, and at
the sole expense of the Borrower, the Borrower will promptly and duly execute
and deliver such further instruments and documents and take such further
action as the Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Security Agreement and of the rights and
powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code in
effect in any jurisdiction with respect to the Liens created hereby. The
Borrower also hereby authorizes the Agent to file any such financing or
continuation statement without the signature of the Borrower to the extent
permitted by applicable law. A carbon, photographic or other reproduction of
this Security Agreement shall be sufficient as a financing statement for
filing in any jurisdiction. If any amount payable under or in connection with
any of the Collateral shall be or become evidenced by any Instrument or
Chattel Paper, such Instrument or Chattel Paper shall be immediately delivered
to the Agent, duly endorsed in a manner satisfactory to the Agent, to be held
as Collateral pursuant to this Security Agreement.
(b) Indemnification. The Borrower agrees to pay, and to save the Agent
---------------
and the Lenders harmless from, any and all liabilities, costs and expenses
(including, without limitation, legal fees and expenses) (i) with respect to,
or resulting from, any delay in paying, any and all excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral, (ii) with respect to, or resulting from, any delay by it in
complying with any Requirement of Law applicable to any of the Collateral or
(iii) in connection with the negotiation, execution and enforcement of this
Security Agreement and the maintenance and perfection of the security
interests granted hereunder. In any suit, proceeding or action brought by the
Agent or any Lender under any Account for any sum owing thereunder, or to
enforce any provisions of any Account, the Borrower will save, indemnify and
keep the Agent and such Lender harmless from and against all expense, loss or
damage suffered by reason of any defense, setoff, counterclaim,
<PAGE>
9
recoupment or reduction or liability whatsoever of the account debtor
thereunder, arising out of a breach by the Borrower of any obligation
thereunder or arising out of any other agreement, indebtedness or liability at
any time owing to or in favor of such account debtor or its successors from
the Borrower. The Borrower shall have no obligation to indemnify under this
Section 5(b) with respect to any liability, cost or expense which arises from
any of the situations specified in clauses (i) through (iv) in the proviso to
subsection 10.5 of the Credit Agreement.
(c) Maintenance of Records. The Borrower will keep and maintain at its
----------------------
own cost and expense satisfactory and complete records of the Collateral,
including, without limitation, a record of all payments received and all
credits granted with respect to the Accounts. The Borrower will mark its
books and records pertaining to the Collateral to evidence this Security
Agreement and the security interests granted hereby. For the Agent's and the
Lenders' further security, the Agent, for the ratable benefit of the Lenders,
shall have a security interest in all of the Borrower's books and records
pertaining to the Collateral, and the Borrower shall permit the Agent to
inspect, and shall make and deliver copies to the Agent of, any such books and
records to the Agent or to its representatives during normal business hours at
the request of the Agent.
(d) Right of Inspection. The Agent and the Lenders shall have, upon
-------------------
reasonable prior notice absent the continuance of any Event of Default, full
and free access during normal business hours to all the books, correspondence
and records of the Borrower, and the Agent and the Lenders and their
respective representatives may examine the same, take extracts therefrom and
make photocopies thereof, and the Borrower agrees to render to the Agent and
the Lenders, at the Borrower's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto. Without
limiting any of their rights under this Section 5(d) or otherwise under this
Security Agreement, the Lenders shall attempt to minimize any inconvenience
caused to the Borrower as a result of the exercise of the rights granted to
them pursuant to this subsection 5(d).
(e) Compliance with Laws, etc. The Borrower will comply in all material
--------------------------
respects with all Requirements of Law applicable to the Collateral or any part
thereof or to the operation of the Borrower's business; provided, however,
-------- -------
that the Borrower may contest any Requirement of Law in any reasonable manner
which shall not, in the sole opinion of the Agent, adversely affect the
Agent's or the Lenders' rights or the priority of their Liens on the
Collateral.
(f) Compliance with Terms of Contracts, etc. The Borrower will perform
----------------------------------------
and comply in all material respects
<PAGE>
10
with all its Contractual Obligations relating to the Collateral.
(g) Payment of Obligations. The Borrower will pay promptly when due all
----------------------
taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if (i) the validity thereof is being contested in good
faith by appropriate proceedings, (ii) such proceedings do not involve any
material danger of the sale, forfeiture or loss of any of the Collateral or
any interest therein and (iii) such charge is adequately reserved against on
the Borrower's books in accordance with GAAP.
(h) Limitation on Liens on Collateral. The Borrower will not create,
---------------------------------
incur or permit to exist, will defend the Collateral against, and will take
such other action as is necessary to remove, any Lien or claim on or to the
Collateral (other than (i) the Liens created hereby, (ii) as permitted
pursuant to subsection 7.3 of the Credit Agreement, and (iii) as permitted by
clauses (i), (ii) and (iii) of Section 5(g) above), and will defend the right,
title and interest of the Agent and the Lenders in and to any of the
Collateral against the claims and demands of all Persons whomsoever.
(i) Limitations on Dispositions of Collateral. The Borrower will not
-----------------------------------------
sell, transfer, lease or otherwise dispose of any of the Collateral, or
attempt, offer or contract to do so, except as permitted pursuant to
subsection 7.6 of the Credit Agreement.
(j) Limitations on Modifications, Waivers, Extensions of Agreements
---------------------------------------------------------------
Giving Rise to Accounts. Except as permitted by Section 5(k) below, the
-----------------------
Borrower will not (i) amend, modify, terminate or waive any provision of any
agreement giving rise to an Account in any manner which could reasonably be
expected to materially adversely affect the value of such Account as
Collateral, (ii) fail to exercise promptly and diligently each and every
material right which it may have under each agreement giving rise to an
Account (other than any right of termination) or (iii) fail to deliver to the
Agent a copy of each material demand, notice or document received by it
relating in any way to any agreement giving rise to an Account.
(k) Limitations on Discounts, Compromises, Extensions of Accounts.
-------------------------------------------------------------
Other than in the ordinary course of business as generally conducted by the
Borrower over a period of time, the Borrower will not grant any extension of
the time of payment of any of the Accounts, compromise, compound or
<PAGE>
11
settle the same for less than the full amount thereof, release, wholly or
partially, any Person liable for the payment thereof, or allow any credit,
refund or discount whatsoever thereon.
(l) Further Identification of Collateral. The Borrower will furnish to
------------------------------------
the Agent and the Lenders from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Agent may reasonably request, all in reasonable
detail.
(m) Notices. The Borrower will advise the Agent and the Lenders
-------
promptly, in reasonable detail, at their respective addresses set forth in the
Credit Agreement, (i) of any Lien (other than Liens permitted by subsection
7.3 of the Credit Agreement) on, or claim asserted against, any of the
Collateral and (ii) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate
value of the Collateral or on the Liens created hereunder.
(n) Changes in Locations, Name, etc. The Borrower will not (i) change
--------------------------------
the location of its chief executive office and chief place of business from
that specified in Section 4(d) or remove its books and records from the
location specified in Section 4(c) or (ii) change its name, identity or
corporate structure to such an extent that any financing statement filed by
the Agent in connection with this Security Agreement would become seriously
misleading unless, in the case of either clause (i) or (ii), the Borrower
shall have given the Agent at least thirty days prior written notice and shall
have executed and delivered to the Agent financing statements reasonably
satisfactory to the Agent prior to such change so as to preserve, in the sole
judgement of the Agent, the perfection and priority of the security interest
granted hereby.
(o) Patents and Trademarks.
----------------------
(i) The Borrower (either itself or through licensees) will, except
with respect to any Trademark that the Borrower shall reasonably determine is
of negligible economic value to it and except as permitted by subsection 7.6
of the Credit Agreement, (i) continue to use each Trademark so as to maintain
such Trademark in full force free from any claim of abandonment for non-use,
(ii) maintain as in the past the quality of products and services offered
under such Trademark, (iii) employ such Trademark with the appropriate notice,
if any, of registration, (iv) not adopt or use any mark which is confusingly
similar or a colorable imitation of such Trademark unless the Agent, for the
ratable benefit of the Lenders, shall obtain a perfected security interest in
such mark pursuant to this Security Agreement,
<PAGE>
12
and (v) not (and not knowingly permit any licensee or sublicensee thereof to)
do any act or knowingly omit to do any act whereby any Trademark may become
invalidated.
(ii) The Borrower will not, except with respect to any Patent that
the Borrower shall reasonably determine is of negligible economic value to it,
fail diligently to pursue all actions where such failure may cause any Patent
to become abandoned or dedicated to public use.
(iii) The Borrower will notify the Agent and the Lenders promptly if
it knows, or has reason to know, that any application or registration relating
to any Patent or Trademark may become abandoned or dedicated to public use, or
of any materially adverse determination or development (including, without
limitation, the institution of, or any such determination or development in,
any proceeding in the United States Patent and Trademark Office or any court
or tribunal in any country) regarding the Borrower's ownership of any Patent
or Trademark or its right to register the same or to keep and maintain the
same.
(iv) Whenever the Borrower, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Patent or Trademark with the United States Patent and Trademark Office
or any similar office or agency in any other country or any political
subdivision thereof, the Borrower shall report such filing to the Agent and
the Lenders within ten Business Days after the last day of the fiscal quarter
in which such filing occurs. Except with respect to any Patent, Trademark,
Patent License or Trademark License that the Borrower shall reasonably
determine is of negligible economic value to it, whenever the Borrower
acquires an ownership interest in any Patent, Trademark, Patent License or
Trademark License, the Borrower shall notify the Agent within ten days after
the last day of the fiscal quarter in which such acquisition occurs, and the
Agent may designate such Patent, Trademark, Patent License or Trademark
License as subject to the grant of a security interest in such Patent,
Trademark, Patent License or Trademark License under Section 2 hereof. Upon
request of the Agent, the Borrower shall execute and deliver any and all
agreements, instruments, documents, and papers as the Agent may request to
evidence the Agent's and the Lenders' security interest in any Patent or
Trademark and the goodwill and general intangibles of the Borrower relating
thereto or represented thereby, and the Borrower hereby constitutes the Agent
its attorney-in-fact to execute and file all such writings for the foregoing
purposes (but only if the Borrower shall fail to do so after a request
therefor), all acts of such attorney being hereby ratified and confirmed; such
power being coupled with an interest is irrevocable until the Obligations are
paid in full and the Commitments are terminated.
<PAGE>
13
(v) The Borrower will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States
Patent and Trademark Office, or any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of the Patents and Trademarks, including, without limitation,
filing of applications for renewal, affidavits of use and affidavits of
incontestability.
(vi) In the event that any Patent or Trademark included in the
Collateral is, to any material extent, infringed, misappropriated or diluted
by a third party, the Borrower shall promptly notify the Agent and the Lenders
after it learns thereof and shall, unless the Borrower shall reasonably
determine that such Patent or Trademark is of negligible economic value to the
Borrower, promptly sue for infringement, misappropriation or dilution, to seek
injunctive relief where appropriate and to recover any and all damages for
such infringement, misappropriation or dilution, or take such other actions
(if any) as the Borrower shall reasonably deem appropriate under the
circumstances to protect such Patent or Trademark.
6. Agent's Appointment as Attorney-in-Fact.
---------------------------------------
(a) Powers. The Borrower hereby irrevocably constitutes and appoints
------
the Agent and any officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and authority
in the place and stead of the Borrower and in the name of the Borrower or in its
own name, from time to time in the Agent's discretion, for the purpose of
carrying out the terms of this Security Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Security
Agreement, and, without limiting the generality of the foregoing, the Borrower
hereby gives the Agent the power and right, on behalf of the Borrower, without
notice to or assent by the Borrower, to do the following:
(i) at any time when any Event of Default shall have occurred and is
continuing, in the name of the Borrower or its own name, or otherwise, to take
possession of and indorse and collect any checks, drafts, notes, acceptances
or other instruments for the payment of moneys due under any Account, General
Intangible or with respect to any other Collateral and to file any claim or to
take any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Agent for the purpose of collecting any and all such
moneys due under any Account or General Intangible or with respect to any
other Collateral whenever payable;
<PAGE>
14
(ii) to pay or discharge taxes which the Borrower has failed to pay in
violation of Section 5(g) hereof and Liens levied or placed on or threatened
against the Collateral which are not permitted by this Security Agreement, to
effect any repairs or any insurance called for by the terms of this Security
Agreement and to pay all or any part of the premiums therefor and the costs
thereof; and
(iii) upon the occurrence and during the continuance of any Event of
Default, (A) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Agent or as the Agent shall direct; (B) to ask or
demand for, collect, receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (C) to sign and indorse any invoices, freight
or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral; (D) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any thereof and to enforce any other
right in respect of any Collateral; (E) to defend any suit, action or
proceeding brought against the Borrower with respect to any Collateral; (F) to
settle, compromise or adjust any suit, action or proceeding described in
clause (E) above and, in connection therewith, to give such discharges or
releases as the Agent may deem appropriate; (G) to assign any Patent or
Trademark (along with the goodwill of the business which any such Trademark
symbolizes), throughout the world for such term or terms, on such conditions,
and in such manner, as the Agent shall in its sole discretion determine; and
(H) generally, to sell, transfer, pledge and make any agreement with respect
to or otherwise deal with any of the Collateral as fully and completely as
though the Agent were the absolute owner thereof for all purposes, and to do,
at the Agent's option and the Borrower's expense, at any time, or from time to
time, all acts and things which the Agent deems necessary to protect, preserve
or realize upon the Collateral and the Agent's and the Lenders' Liens thereon
and to effect the intent of this Security Agreement, all as fully and
effectively as the Borrower might do.
The Borrower hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
(b) Other Powers. The Borrower also authorizes the Agent and the
------------
Lenders, at any time and from time to time, to execute, in connection with the
sale provided for in Section 9 hereof, any indorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral.
<PAGE>
15
(c) No Duty on Agent or Lenders' Part. The powers conferred on the
---------------------------------
Agent and the Lenders hereunder are solely to protect the Agent's and the
Lenders' interests in the Collateral and shall not impose any duty upon the
Agent or any Lender to exercise any such powers. The Agent and the Lenders
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to the Borrower for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct.
7. Performance by Agent of Borrower's Obligations. If the Borrower
----------------------------------------------
fails to perform or comply with any of its agreements contained herein and the
Agent, as provided for by the terms of this Security Agreement, shall itself
perform or comply, or otherwise cause performance or compliance, with such
agreement, the reasonable expenses of the Agent incurred in connection with such
performance or compliance, together with interest thereon at a rate per annum 2%
above the rate applicable to ABR Loans shall be payable by the Borrower to the
Agent on demand and shall constitute Obligations secured hereby.
8. Proceeds. In addition to the rights of the Agent and the Lenders
--------
specified in Section 3(d) with respect to payments of Accounts, it is agreed
that if an Event of Default shall occur and be continuing (a) all Proceeds
received by the Borrower consisting of cash, checks and other near-cash items
shall be held by the Borrower in trust for the Agent and the Lenders, segregated
from other funds of the Borrower, and shall, forthwith upon receipt by the
Borrower, be turned over to the Agent in the exact form received by the Borrower
(duly indorsed by the Borrower to the Agent, if required), and (b) any and all
such Proceeds received by the Agent (whether from the Borrower or otherwise)
may, in the sole discretion of the Agent, be held by the Agent for the ratable
benefit of the Lenders as collateral security for, and/or then or at any time
thereafter may be applied by the Agent against, the Obligations (whether matured
or unmatured), such application to be in such order as the Agent shall elect.
Any balance of such Proceeds remaining after the Obligations shall have been
paid in full and the Commitments shall have been terminated shall be paid over
to the Borrower or to whomsoever may be lawfully entitled to receive the same.
9. Remedies. If an Event of Default shall occur and be continuing, the
--------
Agent, on behalf of the Lenders may exercise (following consultation with the
Required Lenders), in addition to all other rights and remedies granted to them
in this Security Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the Code. Without limiting the generality of the foregoing, the
Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
<PAGE>
16
to below) to or upon the Borrower or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Agent or any Lender shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption in the Borrower, which right or equity is hereby waived or
released. The Borrower further agrees, at the Agent's request, to assemble the
Collateral and make it available to the Agent at places which the Agent shall
reasonably select, whether at the Borrower's premises or elsewhere. The Agent
shall apply the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care or safekeeping
of any of the Collateral or in any way relating to the Collateral or the rights
of the Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the Obligations, in such order as the Agent may elect, and only after such
application and after the payment by the Agent of any other amount required by
any provision of law, including, without limitation, Section 9-504(1)(c) of the
Code, need the Agent account for the surplus, if any, to the Borrower. To the
extent permitted by applicable law, the Borrower waives all claims, damages and
demands it may acquire against the Agent or any Lender arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other
disposition. The Borrower shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay the Obligations and the fees and disbursements of any attorneys employed by
the Agent or any Lender to collect such deficiency.
10. Limitation on Duties Regarding Preservation of Collateral. The
---------------------------------------------------------
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Code or otherwise, shall be to deal with it in the same manner as the Agent
deals with similar property for its own account. Neither the Agent, any Lender,
nor any of their respective directors, officers, employees or agents shall be
liable for failure to demand, collect or realize upon all or any part of the
Collateral or for
<PAGE>
17
any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of the Borrower or otherwise.
11. Powers Coupled with an Interest. All authorizations and agencies
-------------------------------
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
12. Severability. Any provision of this Security Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13. Paragraph Headings. The paragraph headings used in this Security
------------------
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
14. No Waiver; Cumulative Remedies. Neither the Agent nor any Lender
------------------------------
shall by any act (except by a written instrument pursuant to Section 15 hereof),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default or in
any breach of any of the terms and conditions hereof. No failure to exercise,
nor any delay in exercising, on the part of the Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Agent or any Lender of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or remedy which
the Agent or such Lender would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights or remedies provided by law.
15. Waivers and Amendments; Successors and Assigns. None of the terms
----------------------------------------------
or provisions of this Security Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the Borrower and
the Agent, provided that any provision of this Security Agreement may be waived
--------
by the Agent in a written letter or agreement executed by the Agent or by telex
or facsimile transmission from the Agent. This Security Agreement shall be
binding upon the successors and assigns of the Borrower and shall inure to the
benefit of the Agent and the Lenders and their respective successors and
assigns.
<PAGE>
18
16. Notices. Notices hereunder may be given by mail or by facsimile
-------
transmission, addressed or transmitted to the Person to which it is being given
at such Person's address or transmission number set forth in the Credit
Agreement and shall be effective (a) in the case of mail, 5 days after deposit
in the postal system, first class postage pre-paid and (b) in the case of
facsimile notices, when sent and confirmation is received. The Borrower may
change its address and transmission number by written notice to the Agent, and
the Agent or any Lender may change its address and transmission number by
written notice to the Borrower and, in the case of a Lender, to the Agent.
17. Authority of Agent. The Borrower acknowledges that the rights and
------------------
responsibilities of the Agent under this Security Agreement with respect to any
action taken by the Agent or the exercise or non-exercise by the Agent of any
option, right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Security Agreement shall, as between the Agent
and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Agent and the Borrower, the Agent shall be conclusively presumed
to be acting as agent for the Lenders with full and valid authority so to act or
refrain from acting, and the Borrower shall not be under any obligation, or
entitlement, to make any inquiry respecting such authority.
18. Termination. This Security Agreement shall terminate upon payment
-----------
in full of all of the Obligations and termination of all commitments to lend or
otherwise extend credit pursuant to the Credit Agreement, provided, however,
-------- -------
that this Security Agreement shall continue to be effective, or be reinstated,
as the case may be, if at any time payment, or any part thereof, of any of the
Obligations is rescinded or must otherwise be restored or returned by the Agent
or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or the Borrower, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any substantial part of its property, or otherwise,
all as though such payments had not been made. Upon termination of this
Security Agreement, the Agent will take such action and will execute and deliver
such instruments and documents as are required pursuant to Section 9-404(1) of
the Code or as are otherwise required with respect to the release of the
security interests granted herein in Patents, Patent Licenses, Trademarks and
Trademark Licenses.
19. GOVERNING LAW. THIS SECURITY AGREEMENT AND THE RIGHTS AND
-------------
OBLIGATIONS OF THE BORROWER UNDER THIS SECURITY AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
<PAGE>
19
IN WITNESS WHEREOF, the Borrower and the Agent have caused this Amended
and Restated Security Agreement to be duly executed and delivered as of the date
first above written.
ICF KAISER INTERNATIONAL, INC.
By:
---------------------------
Title:
CHEMICAL BANK, as Agent
By:
------------------------
Title:
<PAGE>
EXHIBIT E
AMENDED AND RESTATED SUBSIDIARIES
SECURITY AGREEMENT
AMENDED AND RESTATED SUBSIDIARIES SECURITY AGREEMENT, dated as of
December __, 1993, made by each of the corporations that are signatories hereto
(the "Subsidiaries"), in favor of CHEMICAL BANK, as Agent (in such capacity, the
------------
"Agent") for the banks and other financial institutions (the "Lenders") under
----- -------
the Subsidiaries Guarantee described below.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, each of the Subsidiaries is a party to the Amended and Restated
Subsidiaries Guarantee, dated as of December __, 1993 (as the same may from time
to time be amended, supplemented or otherwise modified, the "Subsidiaries
------------
Guarantee");
- ---------
WHEREAS, pursuant to the Subsidiaries Guarantee, each Subsidiary has
guaranteed, subject to the limitations set forth therein, the Obligations (as
defined in the Subsidiaries Guarantee);
WHEREAS, the Obligations guaranteed by the Subsidiary Guarantee (the
obligations under which are secured hereby) include obligations of ICF Kaiser
International, Inc. (the "Borrower") under the Amended and Restated Credit
--------
Agreement, dated as of December __, 1993 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
----------------
Lenders and the Agent;
WHEREAS, the Credit Agreement is an extension, refunding and refinancing
of the Amended and Restated Credit Agreement, dated as of May 14, 1991 (as
amended, the "Existing Credit Agreement") among the Borrower, the lenders party
-------------------------
thereto and Chemical Bank (successor by merger to Manufacturers Hanover Trust
Company), as agent, and the Credit Agreement provides that extensions of credit
may only be made thereunder pursuant to a borrowing base formula in respect of
certain collateral, which formula is similar to the borrowing base formula in
respect of such collateral provided under the Existing Credit Agreement;
WHEREAS, in connection with the Existing Credit Agreement, certain of
the Subsidiaries entered into separate Amended and Restated Subsidiary Security
Agreements, each dated as of February 14, 1992 (collectively, the "Existing
--------
Security Agreements"); and
- -------------------
<PAGE>
2
WHEREAS, the Subsidiaries and the Agent, with the consent of the
Lenders, wish to amend and restate each of the Existing Security Agreements in
the manner set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the Subsidiaries and the Agent hereby agree that each of the
Existing Security Agreements is hereby amended and restated in its entirety as
follows:
1. Defined Terms. Unless otherwise defined herein, terms which are
-------------
defined in the Subsidiaries Guarantee or in the Credit Agreement and used herein
are so used as so defined; the following terms which are defined in the Uniform
Commercial Code in effect in the State of New York on the date hereof are used
herein as so defined: Accounts, Chattel Paper, General Intangibles, Instruments
and Proceeds; and the following terms shall have the following meanings:
"Code" shall mean the Uniform Commercial Code as from time to time in
----
effect in the State of New York.
"Collateral" shall have the meaning assigned to it in Section 2 of
----------
this Security Agreement.
"Collateral Accounts" shall have the meaning assigned to it in Section
-------------------
3 of this Security Agreement.
"General Intangibles" shall have the meaning assigned to such term in
-------------------
the Code, provided, however, that in no event shall uncertificated
-------- -------
securities issued or owned by any Subsidiary or the Borrower be deemed to
constitute General Intangibles for purposes hereof.
"Lock-Box Accounts" shall have the meaning assigned to it in Section 3
-----------------
of this Security Agreement.
"Lock-Box Agreement" shall have the meaning assigned to it in Section
------------------
3 of this Security Agreement.
"Patents" means (a) all registered letters patent of the United States
-------
and all reissues and extensions thereof in each case referred to in
Schedule IV hereto, and any thereof specified by the Agent, and (b) all
applications for letters patent of the United States and all divisions,
continuations and continuations-in-part thereof or any other country, in
each case referred to in Schedule IV hereto, and any thereof specified by
the Agent.
"Patent License" means all agreements, whether written or oral,
--------------
providing for the grant by any Subsidiary of any right to manufacture, use
or sell any invention covered by a Patent referred to in Schedule IV hereto
and any thereof specified by the Agent.
<PAGE>
3
"Secured Obligations" means the collective reference to (a) the
-------------------
Obligations and (b) all obligations and liabilities of the Subsidiaries
which may arise under or in connection with this Security Agreement or any
other Loan Document to which such Subsidiaries are parties, whether on
account of reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees and disbursements of counsel to
the Agent or to the Lenders) or otherwise.
"Security Agreement" shall mean this Amended and Restated Subsidiaries
------------------
Security Agreement, as amended, supplemented or otherwise modified from
time to time.
"Trademarks" means (a) all trademarks, trade names, corporate names,
----------
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers (in each case
such of the foregoing that are registered), and the goodwill associated
therewith, now existing or hereafter adopted or acquired, all registrations
and recordings thereof, and all applications in connection therewith,
whether in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, in each case
referred to in Schedule V hereto and any thereof specified by the Agent,
and (b) all renewals thereof.
"Trademark License" means any agreement, written or oral, providing
-----------------
for the grant by any Subsidiary of any right to use any Trademark referred
to in Schedule V hereto and any thereof specified by the Agent.
2. Grant of Security Interest. As collateral security for the prompt
--------------------------
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Secured Obligations, each Subsidiary hereby
confirms that it has granted, and to the extent, if any, necessary, does hereby
grant to the Agent a security interest in all of the following property now
owned or at any time hereafter acquired by such Subsidiary or in which such
Subsidiary now has or at any time in the future may acquire any right, title or
interest (collectively, the "Collateral"):
----------
(i) all Accounts;
(ii) all Chattel Paper which is of a type which would be included
in the calculation of the Borrowing Base;
(iii) all General Intangibles;
<PAGE>
4
(iv) all Instruments which are of a type which would be included
in the calculation of the Borrowing Base;
(v) all Patents, to the extent, if any, not included within
General Intangibles;
(vi) all Patent Licenses, to the extent, if any, not included
within General Intangibles;
(vii) all Trademarks, to the extent, if any, not included within
General Intangibles;
(viii) all Trademark Licenses, to the extent, if any, not included
within General Intangibles;
(ix) the Lock-Box Accounts, and the Collateral Accounts, and all
amounts from time to time on deposit therein; and
(x) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing.
Notwithstanding anything in the foregoing to the contrary, no security interest
is granted by this Section 2 in (1) any securities issued by the Borrower or any
subsidiary of the Borrower and (2) any Patent Licenses or Trademark Licenses to
the extent such Licenses prohibit such grant, provided that each Subsidiary
--------
shall use its reasonable best efforts to avoid the inclusion of any such
prohibition in any Patent Licenses or Trademark Licenses entered into after the
date hereof.
3. Rights of Agent and Lenders; Limitations on Agent's and Lenders'
----------------------------------------------------------------
Obligations.
- -----------
(a) Subsidiaries Remain Liable Under Accounts. Anything herein to the
-----------------------------------------
contrary notwithstanding, each Subsidiary shall remain liable under each of its
Accounts and each contract or agreement to which it is a party under which any
Account or General Intangible may arise to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any such contract or agreement. Neither the Agent
nor any Lender shall have any obligation or liability under any Account or any
such contract or agreement by reason of or arising out of this Security
Agreement or the receipt by the Agent or any such Lender of any payment relating
to such Account pursuant hereto, nor shall the Agent or any Lender be obligated
in any manner to perform any of the obligations of any Subsidiary under or
pursuant to any Account or any such contract or agreement, to make any payment,
to make any inquiry as to the nature or the sufficiency of any payment received
by it or as to the sufficiency of any performance by any party under any Account
or any such contract or agreement, to
<PAGE>
5
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
(b) Notice to Account Debtors. Upon the request of the Agent (given
-------------------------
only after consultation with the Required Lenders) at any time after the
occurrence and during the continuance of an Event of Default, each Subsidiary
shall notify account debtors on its Accounts that a security interest has been
granted in the Accounts to the Agent and that payments in respect thereof shall
be made directly to the Agent. Each Subsidiary shall cause all account debtors
on its Accounts to make all payments in respect thereof directly into the
appropriate Lock-Box or Lock-Box Account. The Agent may in its own name or in
the name of others communicate with account debtors on the Accounts to verify
with them to its satisfaction the existence, amount and terms of any Accounts.
(c) Analysis of Accounts. The Agent shall have the right to make test
--------------------
verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable, and each Subsidiary shall furnish all such
assistance and information as the Agent may reasonably require in connection
therewith. At any time and from time to time, upon the Agent's request and at
the expense of such Subsidiary, each Subsidiary shall cause independent public
accountants or others satisfactory to the Agent to furnish to the Agent reports
showing reconciliations, aging and test verifications of, and trial balances
for, its Accounts.
(d) Collections on Accounts. The Borrower and certain of its
-----------------------
subsidiaries (including the Subsidiaries) shall enter into one or more lock-box
agreements with the Agent on terms and conditions reasonably acceptable to the
Agent and the Borrower (collectively, the "Lock-Box Agreements") pursuant to
-------------------
which there shall be established one or more lock-boxes and lock-box accounts
(collectively, the "Lock-Boxes" and the "Lock-Box Accounts"), together with one
---------- -----------------
or more collateral accounts maintained with the Agent (the "Collateral
----------
Accounts"). The Agent shall have sole dominion and control over the Lock-Box
Accounts and the Collateral Accounts, and neither the Borrower nor any
Subsidiary shall have any right of withdrawal therefrom; provided that upon
--------
receipt of collected funds in any Lock-Box Account, such funds may be withdrawn
in accordance with the Lock-Box Agreement, unless a Default or Event of Default
shall be in existence, in which event the Agent may, and upon the direction of
the Required Lenders shall, transfer to the Collateral Accounts all funds
received in the Lock-Box Accounts so long as such Default or Event of Default
shall continue. Each Subsidiary shall cause each account debtor on Accounts
owing such Subsidiary to make all payments in respect of such Accounts to the
appropriate Lock-Box. If, notwithstanding such direction, such Subsidiary shall
receive any such payment, such payment, when collected by such
<PAGE>
6
Subsidiary, shall be forthwith (and, in any event, within two Business Days)
deposited by such Subsidiary in the exact form received, duly indorsed by such
Subsidiary to the Agent if required, in the appropriate Lock-Box Account subject
to withdrawal by the Agent for the account of the Lenders only, as hereinafter
provided, and, until so turned over, shall be held by such Subsidiary in trust
for the Agent and the Lenders, segregated from other funds of such Subsidiary.
Each deposit of any such Proceeds shall be accompanied by a report identifying
in reasonable detail the nature and source of the payments included in the
deposit. All Proceeds constituting collections of Accounts while held by the
Agent (or by any Subsidiary in trust for the Agent and the Lenders) shall
continue to be collateral security for all of the Secured Obligations and shall
not constitute payment thereof until applied as hereinafter provided. Subject to
the terms of the Lock-Box Agreements, if an Event of Default shall have occurred
and be continuing, at any time at the Agent's election, the Agent shall apply
all or any part of the funds on deposit in the Collateral Accounts on account of
the Secured Obligations in such order as the Agent may elect, and any part of
such funds which the Agent elects not so to apply and deems not required as
collateral security for the Secured Obligations shall be paid over from time to
time by the Agent to the appropriate Subsidiary or to whomsoever may be lawfully
entitled to receive the same. At the Agent's request, each Subsidiary shall
deliver to the Agent all original and other documents evidencing, and relating
to, the agreements and transactions which gave rise to its Accounts, including,
without limitation, all original orders, invoices and shipping receipts.
(e) Compliance with Assignment of Claims Act. If requested by the
----------------------------------------
Required Lenders at any time and from time to time, each Subsidiary shall take
all actions necessary to comply with the United States Assignment of Claims Act
in respect of all Collateral under this Security Agreement to which such act is
applicable.
4. Representations and Warranties. Each Subsidiary hereby represents
------------------------------
and warrants that:
(a) Title; No Other Liens. Except for the Lien granted to the Agent
---------------------
for the ratable benefit of the Lenders pursuant to this Security Agreement
and the other Liens, if any, permitted to exist on the Collateral pursuant
to subsection 7.3 of the Credit Agreement, such Subsidiary owns each item
of the Collateral free and clear of any and all Liens or claims of others.
No security agreement, financing statement or other public notice granting
a Lien on all or any part of the Collateral is on file or of record in any
public office, except such as may have been filed in favor of the Agent,
for the ratable benefit of the Lenders, pursuant to this Security
Agreement.
<PAGE>
7
(b) Perfected First Priority Liens. The Liens granted pursuant to
------------------------------
this Security Agreement constitute perfected Liens on the Collateral in
favor of the Agent, which are prior to all other Liens (other than Liens,
if any, permitted by subsection 7.3 of the Credit Agreement) on the
Collateral created by such Subsidiary and in existence on the date hereof
and which are enforceable as such against all creditors of and purchasers
from such Subsidiary.
(c) Accounts. The amount represented by such Subsidiary to the
--------
Lenders from time to time as owing by each account debtor or by all account
debtors in respect of the Accounts will at such time be the correct amount
actually owing by such account debtor or debtors thereunder. No amount
payable to such Subsidiary which is of a type which would be included in
the calculation of the Borrowing Base is evidenced by any Instrument or
Chattel Paper which has not been delivered to the Agent. The place where
such Subsidiary keeps its records concerning the Accounts is listed on
Schedule I hereto.
(d) Chief Executive Office. Such Subsidiary's chief executive office
----------------------
and chief place of business are located as described on Schedule II hereto.
(e) Power and Authority; Authorization. Such Subsidiary has the
----------------------------------
corporate power and authority and the legal right to execute and deliver,
to perform its obligations under, and to grant the Lien on the Collateral
pursuant to, this Security Agreement and has taken all necessary corporate
action to authorize its execution, delivery and performance of, and grant
of the Lien on the Collateral pursuant to, this Security Agreement.
(f) Enforceability. This Security Agreement constitutes a legal,
--------------
valid and binding obligation of such Subsidiary enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally.
(g) No Conflict. The execution, delivery and performance of this
-----------
Security Agreement will not violate any provision of any Requirement of Law
or Contractual Obligation of such Subsidiary and will not result in the
creation or imposition of any Lien on any of the properties or revenues of
such Subsidiary pursuant to any Requirement of Law or Contractual
Obligation applicable to such Subsidiary, except as contemplated hereby.
(h) No Consents, etc. No consent or authorization of, filing with,
-----------------
or other act by or in respect of, any arbitrator or Governmental Authority
and no consent of any other Person (including, without limitation, any
stockholder
<PAGE>
8
or creditor of such Subsidiary), is required in connection with the
execution, delivery, performance, validity or enforceability of this
Security Agreement.
(i) Patents and Trademarks. Schedule IV hereto includes all Patents
----------------------
and Patent Licenses owned by such Subsidiary in its own name as of the date
hereof. Schedule V hereto includes all Trademarks and Trademark Licenses
owned by such Subsidiary in its own name as of the date hereof. To the
best of such Subsidiary's knowledge, each Patent and Trademark is valid,
subsisting, unexpired, enforceable and has not been abandoned. Except as
set forth in either such Schedule, none of such Patents and Trademarks is
the subject of any licensing or franchise agreement. To the best of such
Subsidiary's knowledge after reasonable inquiry, no holding, decision or
judgment has been rendered by any Governmental Authority which would limit
in any material way, cancel or question in any material way the validity
of any Patent or Trademark. To the best of such Subsidiary's knowledge
after reasonable inquiry, no action or proceeding is pending (i) seeking to
limit in any material way, cancel or question in any material way the
validity of any Patent or Trademark, or (ii) which, if adversely
determined, would have a material adverse effect on the value to such
Subsidiary, the Borrower or any other subsidiary of the Borrower of any
Patent or Trademark.
5. Covenants. Each Subsidiary covenants and agrees with the Agent and
---------
the Lenders that, from and after the date of this Security Agreement until the
Secured Obligations are paid in full and the Commitments are terminated:
(a) Further Documentation; Pledge of Instruments and Chattel Paper.
--------------------------------------------------------------
At any time and from time to time, upon the written request of the Agent,
and at the sole expense of such Subsidiary, such Subsidiary will promptly
and duly execute and deliver such further instruments and documents and
take such further action as the Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Security
Agreement and of the rights and powers herein granted, including, without
limitation, the filing of any financing or continuation statements under
the Uniform Commercial Code in effect in any jurisdiction with respect to
the Liens created hereby. Each Subsidiary also hereby authorizes the Agent
to file any such financing or continuation statement without the signature
of such Subsidiary to the extent permitted by applicable law. A carbon,
photographic or other reproduction of this Security Agreement shall be
sufficient as a financing statement for filing in any jurisdiction. If any
amount payable under or in connection with any of the Collateral shall be
or become evidenced by any Instrument or Chattel Paper, such Instrument or
Chattel Paper shall be immediately delivered to the Agent, duly endorsed in
a manner satisfactory to the
<PAGE>
9
Agent, to be held as Collateral pursuant to this Security Agreement.
(b) Indemnification. Such Subsidiary jointly and severally agrees to
---------------
pay, and to save the Agent and the Lenders harmless from, any and all
liabilities, costs and expenses (including, without limitation, legal fees
and expenses) (i) with respect to, or resulting from, any delay in paying,
any and all excise, sales or other taxes which may be payable or determined
to be payable with respect to any of the Collateral, (ii) with respect to,
or resulting from, any delay by it in complying with any Requirement of Law
applicable to any of the Collateral or (iii) in connection with the
negotiation, execution and enforcement of this Security Agreement and the
maintenance and perfection of the security interests granted hereunder. In
any suit, proceeding or action brought by the Agent or any Lender under any
Account for any sum owing thereunder, or to enforce any provisions of any
Account, each Subsidiary will jointly and severally save, indemnify and
keep the Agent and such Lender harmless from and against all expense, loss
or damage suffered by reason of any defense, setoff, counterclaim,
recoupment or reduction of liability whatsoever of the account debtor or
obligor thereunder, arising out of a breach by any Subsidiary of any
obligation thereunder or arising out of any other agreement, indebtedness
or liability at any time owing to or in favor of such account debtor or
obligor or its successors from any Subsidiary. The Subsidiaries shall not
have any obligation to indemnify under this Section 5(b) with respect to
any liability, cost or expense which arises from any of the situations
specified in clauses (i) through (iv) in the proviso to subsection 10.5 of
the Credit Agreement.
(c) Maintenance of Records. Such Subsidiary will keep and maintain
----------------------
at its own cost and expense satisfactory and complete records of the
Collateral, including, without limitation, a record of all payments
received and all credits granted with respect to its Accounts. Each
Subsidiary will mark its books and records pertaining to the Collateral to
evidence this Security Agreement and the security interests granted hereby.
For the Agent's and the Lenders' further security, the Agent, for the
ratable benefit of the Lenders, shall have a security interest in all of
the books and records of each Subsidiary pertaining to the Collateral, and
each Subsidiary shall permit the Agent to inspect, and shall make and
deliver copies to the Agent of, any such books and records to the Agent or
to its representatives during normal business hours at the request of the
Agent.
(d) Right of Inspection. The Agent and the Lenders shall have, upon
-------------------
reasonable prior notice absent the continuance of any Event of Default,
full and free access at
<PAGE>
10
all times during normal business hours to all the books, correspondence and
records of such Subsidiary, and the Agent and the Lenders and their
respective representatives may examine the same, take extracts therefrom
and make photocopies thereof, and such Subsidiary agrees to render to the
Agent and the Lenders, at such Subsidiary's cost and expense, such clerical
and other assistance as may be reasonably requested with regard thereto.
Without limiting any of their rights under this Section 5(d) or otherwise
under this Security Agreement, the Lenders shall attempt to minimize any
inconvenience caused to the Subsidiaries as a result of the exercise of the
rights granted to them pursuant to this Section 5(d).
(e) Compliance with Laws, etc. Such Subsidiary will comply in all
--------------------------
material respects with all Requirements of Law applicable to the Collateral
or any part thereof or to the operation of such Subsidiary's business;
provided, however, that such Subsidiary may contest any Requirement of Law
-------- -------
in any reasonable manner which shall not, in the sole opinion of the Agent,
adversely affect the Agent's or the Lenders' rights or the priority of
their Liens on the Collateral.
(f) Compliance with Terms of Contracts, etc. Such Subsidiary will
----------------------------------------
perform and comply in all material respects with all its Contractual
Obligations relating to the Collateral except where the validity thereof is
currently being contested in good faith by appropriate proceedings.
(g) Payment of Obligations. Such Subsidiary will pay promptly when
----------------------
due all taxes, assessments and governmental charges or levies imposed upon
the Collateral or in respect of its income or profits therefrom, as well as
all claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to the Collateral, except
that no such charge need be paid if (i) the validity thereof is being
contested in good faith by appropriate proceedings, (ii) such proceedings
do not involve any material danger of the sale, forfeiture or loss of any
of the Collateral or any interest therein and (iii) such charge is
adequately reserved against on such Subsidiary's books in accordance with
GAAP.
(h) Limitation on Liens on Collateral. Such Subsidiary will not
---------------------------------
create, incur or permit to exist, will defend the Collateral against, and
will take such other action as is necessary to remove, any Lien or claim on
or to the Collateral (other than (i) the Liens created hereby, (ii) as
permitted pursuant to subsection 7.3 of the Credit Agreement and (iii) as
permitted by clauses (i), (ii) and (iii) of Section 5(g) above), and will
defend the right, title and interest of the Agent and the Lenders in and to
any of the Collateral against the claims and demands of all Persons
whomsoever.
<PAGE>
11
(i) Limitations on Dispositions of Collateral. Such Subsidiary will
-----------------------------------------
not sell, transfer, lease or otherwise dispose of any of the Collateral, or
attempt, offer or contract to do so, except as permitted pursuant to
subsection 7.6 of the Credit Agreement.
(j) Limitations on Modifications, Waivers, Extensions of Agreements
---------------------------------------------------------------
Giving Rise to Accounts. Except as permitted by Section 5(k) below, such
-----------------------
Subsidiary will not (i) amend, modify, terminate or waive any provision of
any agreement giving rise to an Account in any manner which could
reasonably be expected to materially adversely affect the value of such
Account as Collateral, (ii) fail to exercise promptly and diligently each
and every material right which it may have under each agreement giving rise
to a Account (other than any right of termination) or (iii) fail to deliver
to the Agent a copy of each material demand, notice or document received by
it relating in any way to any agreement giving rise to an Account.
(k) Limitations on Discounts, Compromises, Extensions of Accounts.
-------------------------------------------------------------
Other than in the ordinary course of business as generally conducted by
such Subsidiary over a period of time, such Subsidiary will not grant any
extension of the time of payment of any of its Accounts, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partially, any Person liable for the payment thereof, or allow
any credit, refund or discount whatsoever thereon.
(l) Further Identification of Collateral. Such Subsidiary will
------------------------------------
furnish to the Agent and the Lenders from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
(m) Notices. Such Subsidiary will advise the Agent and the Lenders
-------
promptly, in reasonable detail, at their respective addresses set forth in
the Credit Agreement, (i) of any Lien (other than Liens permitted by
subsection 7.3 of the Credit Agreement) on, or claim asserted against, any
of the Collateral and (ii) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate
value of the Collateral or on the Liens created hereunder.
(n) Changes in Locations, Name, etc. Such Subsidiary will not (i)
--------------------------------
change the location of its chief executive office or chief place of
business from that listed on Schedule II or remove its books and records
from the location specified on Schedule I or (ii) change its name,
identity or corporate structure to such an extent that any financing
statement filed by the Agent in connection with
<PAGE>
12
this Security Agreement would become seriously misleading unless, in the
case of either clause (i) or (ii), such Subsidiary shall have given the
Agent at least thirty days prior written notice and shall have executed and
delivered to the Agent financing statements reasonably satisfactory to the
Agent prior to such change so as to preserve, in the sole judgement of the
Agent, the perfection and priority of the security interest granted hereby.
(o) Patents and Trademarks.
----------------------
(i) Such Subsidiary (either itself or through licensees) will,
except with respect to any Trademark that such Subsidiary shall reasonably
determine is of negligible economic value to it and except as permitted by
subsection 7.6 of the Credit Agreement, (i) continue to use each of its
Trademarks so as to maintain such Trademark in full force free from any
claim of abandonment for non-use, (ii) maintain as in the past the quality
of products and services offered under such Trademark, (iii) employ such
Trademark with the appropriate notice (if any) of registration, (iv) not
adopt or use any mark which is confusingly similar or a colorable imitation
of such Trademark unless the Agent, for the ratable benefit of the Lenders,
shall obtain a perfected security interest in such mark pursuant to this
Security Agreement, and (v) not (and not knowingly permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby
any of its Trademarks may become invalidated.
(ii) Such Subsidiary will not, except with respect to any Patent
that such Subsidiary shall reasonably determine is of negligible economic
value to it, fail diligently to pursue all actions where such failure may
cause any Patent to become abandoned or dedicated to public use.
(iii) Such Subsidiary will notify the Agent and the Lenders
promptly if it knows, or has reason to know, that any application or
registration relating to any of its Patents or Trademarks may become
abandoned or dedicated to public use, or of any materially adverse
determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding
in the United States Patent and Trademark Office or any court or tribunal
in any country) regarding such Subsidiary's ownership of any Patent or
Trademark or its right to register the same or to keep and maintain the
same.
(iv) Whenever such Subsidiary, either by itself or through any
agent, employee, licensee or
<PAGE>
13
designee, shall file an application for the registration of any Patent or
Trademark with the United States Patent and Trademark Office or any similar
office or agency in any other country or any political subdivision thereof,
such Subsidiary shall report such filing to the Agent and the Lenders
within ten Business Days after the last day of the fiscal quarter in which
such filing occurs. Except with respect to any Patent, Trademark, Patent
License or Trademark License that such Subsidiary shall reasonably
determine is of negligible economic value to it, whenever such Subsidiary
acquires an ownership interest in any Patent, Trademark, Patent License or
Trademark License, such Subsidiary shall notify the Agent within ten days
after the last day of the fiscal quarter in which such acquisition occurs,
and the Agent may designate such Patent, Trademark, Patent License or
Trademark License as subject to the grant of a security interest such
Patent, Trademark, Patent License or Trademark License under Section 2
hereof. Upon request of the Agent, such Subsidiary shall execute and
deliver any and all agreements, instruments, documents, and papers as the
Agent may request to evidence the Agent's and the Lenders' security
interest in any Patent or Trademark and the goodwill and general
intangibles of such Subsidiary relating thereto or represented thereby, and
such Subsidiary hereby constitutes the Agent its attorney-in-fact to
execute and file all such writings for the foregoing purposes (but only if
such Subsidiary shall fail to do so after a request therefor), all acts of
such attorney being hereby ratified and confirmed; such power being coupled
with an interest is irrevocable until the Secured Obligations are paid in
full and the Commitments are terminated.
(v) Such Subsidiary will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States
Patent and Trademark Office, or any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of its Patents and Trademarks, including, without limitation,
filing of applications for renewal, affidavits of use and affidavits of
incontestability.
(vi) In the event that any Patent or Trademark included in the
Collateral is to any material extent infringed, misappropriated or diluted
by a third party, such Subsidiary shall promptly notify the Agent and the
Lenders after it learns thereof and shall, unless such Subsidiary shall
reasonably determine that such Patent or Trademark is of negligible
economic value to it, promptly sue for infringement,
<PAGE>
14
misappropriation or dilution, to seek injunctive relief where appropriate
and to recover any and all damages for such infringement, misappropriation
or dilution, or take such other actions (if any) as such Subsidiary shall
reasonably deem appropriate under the circumstances to protect such Patent
or Trademark.
6. Agent's Appointment as Attorney-in-Fact.
---------------------------------------
(a) Powers. Each Subsidiary hereby irrevocably constitutes and
------
appoints the Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Subsidiary and in the name of
such Subsidiary or in its own name, from time to time in the Agent's discretion,
for the purpose of carrying out the terms of this Security Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Security Agreement, and, without limiting the generality of the foregoing,
such Subsidiary hereby gives the Agent the power and right, on behalf of such
Subsidiary without notice to or assent by such Subsidiary, to do the following:
(i) at any time when any Event of Default shall have occurred and
is continuing, in the name of such Subsidiary or its own name, or
otherwise, to take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of moneys
due under any Account or General Intangible or with respect to any other
Collateral and to file any claim or to take any other action or proceeding
in any court of law or equity or otherwise deemed appropriate by the Agent
for the purpose of collecting any and all such moneys due under any Account
or General Intangible or with respect to any other Collateral whenever
payable;
(ii) to pay or discharge taxes which such Subsidiary has failed to
pay in violation of Section 5(g) hereof and Liens levied or placed on or
threatened against the Collateral which are not permitted by this
Agreement, to effect any repairs or any insurance called for by the terms
of this Security Agreement and to pay all or any part of the premiums
therefor and the costs thereof; and
(iii) upon the occurrence and during the continuance of any Event of
Default, (A) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Agent or as the Agent shall direct; (B) to ask
or demand for, collect, receive payment of and receipt for, any and
<PAGE>
15
all moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (C) to sign and indorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices and
other documents in connection with any of the Collateral; (D) to commence
and prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any thereof
and to enforce any other right in respect of any Collateral; (E) to defend
any suit, action or proceeding brought against such Subsidiary with respect
to any Collateral; (F) to settle, compromise or adjust any suit, action or
proceeding described in clause (E) above and, in connection therewith, to
give such discharges or releases as the Agent may deem appropriate; (G) to
assign any Patent or Trademark (along with the goodwill of the business
which any such Trademark symbolizes), throughout the world for such term or
terms, on such conditions, and in such manner, as the Agent shall in its
sole discretion determine; and (H) generally, to sell, transfer, pledge and
make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Agent were the absolute
owner thereof for all purposes, and to do, at the Agent's option and the
Subsidiary's expense, at any time, or from time to time, all acts and
things which the Agent deems necessary to protect, preserve or realize upon
the Collateral and the Agent's and the Lenders' Liens thereon and to effect
the intent of this Security Agreement, all as fully and effectively as such
Subsidiary might do.
Each Subsidiary hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.
(b) Other Powers. Each Subsidiary also authorizes the Agent and the
------------
Lenders, at any time and from time to time, to execute, in connection with the
sale provided for in Section 9 hereof, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral.
(c) No Duty on Agent or Lenders' Part. The powers conferred on the
---------------------------------
Agent and the Lenders hereunder are solely to protect the Agent's and the
Lenders' interests in the Collateral and shall not impose any duty upon the
Agent or any Lender to exercise any such powers. The Agent and the Lenders
shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be
<PAGE>
16
responsible to any Subsidiary for any act or failure to act hereunder, except
for their own gross negligence or willful misconduct.
7. Performance by Agent of Subsidiary's Obligations. If any Subsidiary
------------------------------------------------
fails to perform or comply with any of its agreements contained herein and the
Agent, as provided for by the terms of this Security Agreement, shall itself
perform or comply, or otherwise cause performance or compliance, with such
agreement, the reasonable expenses of the Agent incurred in connection with such
performance or compliance, together with interest thereon at a rate per annum 2%
above the rate applicable to ABR Loans shall be jointly and severally payable by
each Subsidiary to the Agent on demand and shall constitute Secured Obligations.
8. Proceeds. In addition to the rights of the Agent and the Lenders
--------
specified in Section 3(d) with respect to payments of Accounts, it is agreed
that if an Event of Default shall occur and be continuing (a) all Proceeds
received by any Subsidiary consisting of cash, checks and other near-cash items
shall be held by such Subsidiary in trust for the Agent and the Lenders,
segregated from other funds of such Subsidiary, and shall, forthwith upon
receipt by such Subsidiary, be turned over to the Agent in the exact form
received by such Subsidiary (duly indorsed by such Subsidiary to the Agent, if
required), and (b) any and all such Proceeds received by the Agent (whether from
such Subsidiary or otherwise) may, in the sole discretion of the Agent, be held
by the Agent for the ratable benefit of the Lenders as collateral security for,
and/or then or at any time thereafter may be applied by the Agent against, the
Secured Obligations (whether matured or unmatured), such application to be in
such order as the Agent shall elect. Any balance of such Proceeds of Collateral
granted by any Subsidiary remaining after the Secured Obligations shall have
been paid in full and the Commitments shall have been terminated shall be paid
over to such Subsidiary or to whomsoever may be lawfully entitled to receive the
same.
9. Remedies. If an Event of Default shall occur and be continuing, the
--------
Agent, on behalf of the Lenders may exercise (following consultation with the
Required Lenders), in addition to all other rights and remedies granted to them
in this Security Agreement and in any other instrument or agreement securing,
evidencing or relating to the obligations secured hereby, all rights and
remedies of a secured party under the Code. Without limiting the generality of
the foregoing, the Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Subsidiary or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
<PAGE>
17
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Agent or any Lender or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk. The Agent or any Lender shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in the relevant Subsidiary, which right or
equity is hereby waived or released. Each Subsidiary further agrees, at the
Agent's request, to assemble its Collateral and make it available to the Agent
at places which the Agent shall reasonably select, whether at such Subsidiary's
premises or elsewhere. The Agent shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Agent and the Lenders hereunder,
including, without limitation, reasonable attorneys' fees and disbursements, to
the payment in whole or in part of the Secured Obligations, in such order as the
Agent may elect, and only after such application and after the payment by the
Agent of any other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the Code, need the Agent account for the
surplus, if any, to the relevant Subsidiary. To the extent permitted by
applicable law, each Subsidiary waives all claims, damages and demands it may
acquire against the Agent or any Lender arising out of the exercise by them of
any rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition. Each
Subsidiary shall remain jointly and severally liable for any deficiency (subject
to the proviso to subsection 2(a) of the Subsidiaries Guarantee) if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay the
Secured Obligations and the fees and disbursements of any attorneys employed by
the Agent or any Lender to collect such deficiency.
10. Limitation on Duties Regarding Preservation of Collateral. The
---------------------------------------------------------
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Code or otherwise, shall be to deal with it in the same manner as the Agent
deals with similar property for its own account. Neither the Agent, any Lender,
nor any of their respective directors, officers, employees or agents shall be
liable for failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or
<PAGE>
18
otherwise dispose of any Collateral upon the request of any Subsidiary or
otherwise.
11. Powers Coupled with an Interest. All authorizations and agencies
-------------------------------
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
12. Severability. Any provision of this Security Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13. Paragraph Headings. The paragraph headings used in this Security
------------------
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
14. No Waiver; Cumulative Remedies. Neither the Agent nor any Lender
------------------------------
shall by any act (except by a written instrument pursuant to Section 15 hereof),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default or in
any breach of any of the terms and conditions hereof. No failure to exercise,
nor any delay in exercising, on the part of the Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Agent or any Lender of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or remedy which
the Agent or such Lender would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights or remedies provided by law.
15. Waivers and Amendments; Successors and Assigns. None of the terms
----------------------------------------------
or provisions of this Security Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by each Subsidiary
and the Agent, provided that any provision of this Security Agreement may be
--------
waived by the Agent in a written letter or agreement executed by the Agent or by
facsimile transmission from the Agent. This Security Agreement shall be binding
upon the successors and assigns of each Subsidiary and shall inure to the
benefit of the Agent and the Lenders and their respective successors and
assigns.
16. Notices. Notices hereunder may be given by mail or by facsimile
-------
transmission, addressed or transmitted to the
<PAGE>
19
Person to which it is being given at such Person's address or transmission
number set forth in the Credit Agreement or in Schedule III hereto, as the case
may be, and shall be effective (a) in the case of mail, 5 days after deposit in
the postal system, first class postage pre-paid and (b) in the case of facsimile
notices, when sent and confirmation is received. Each Subsidiary may change its
address and transmission number by written notice to the Agent, and the Agent or
any Lender may change its address and transmission number by written notice to
the Borrower on behalf of the Subsidiaries and, in the case of a Lender, to the
Agent.
17. Authority of Agent. Each Subsidiary acknowledges that the rights
------------------
and responsibilities of the Agent under this Security Agreement with respect to
any action taken by the Agent or the exercise or non-exercise by the Agent of
any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Security Agreement shall, as between
the Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Agent and such Subsidiary, the Agent shall be conclusively
presumed to be acting as agent for the Lenders with full and valid authority so
to act or refrain from acting, and such Subsidiary shall not be under any
obligation, or entitlement, to make any inquiry respecting such authority.
18. Termination. This Security Agreement shall terminate (subject to
-----------
reinstatement simultaneously with any reinstatement of the Subsidiaries
Guarantee pursuant to Section 8 thereof) upon payment in full of all of the
Secured Obligations and termination of all commitments to lend or otherwise
extend credit pursuant to the Credit Agreement. Upon termination of this
Security Agreement, the Agent will take such action and will execute and deliver
such instruments and documents as are required pursuant to Section 9-404(1) of
the Code or as are otherwise required with respect to the release of the
security interests granted herein in Patents, Patent Licenses, Trademarks and
Trademark Licenses.
19. GOVERNING LAW. THIS SECURITY AGREEMENT AND THE RIGHTS AND
-------------
OBLIGATIONS OF THE SUBSIDIARIES UNDER THIS SECURITY AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
<PAGE>
20
IN WITNESS WHEREOF, the Subsidiaries and the Agent have caused this
Amended and Restated Subsidiaries Security Agreement to be duly executed and
delivered as of the date first above written.
CLEMENT INTERNATIONAL CORPORATION
By:____________________________
Title: Authorized
Representative
CYGNA GROUP, INC.
By:____________________________
Title: Authorized
Representative
EXCELL DEVELOPMENT CONSTRUCTION,
INC.
By:_____________________________
Title: Authorized
Representative
ICF CONSULTING ASSOCIATES, INC.
By:_____________________________
Title: Authorized
Representative
ICF INCORPORATED
By:_____________________________
Title: Authorized
Representative
<PAGE>
21
ICF INFORMATION TECHNOLOGY, INC.
By:_____________________________
Title: Authorized
Representative
ICF KAISER ENGINEERS GROUP, INC.
By:_____________________________
Title: Authorized
Representative
ICF KAISER ENGINEERS, INC.
By:_____________________________
Title: Authorized
Representative
ICF RESOURCES INCORPORATED
By:____________________________
Title: Authorized
Representative
ICF TECHNOLOGY INCORPORATED
By:____________________________
Title: Authorized
Representative
KAISER ENGINEERS HANFORD COMPANY
By:______________________________
Title: Authorized
Representative
<PAGE>
22
ICF LEASING CORPORATION, INC.
By:____________________________
Title: Authorized
Representative
PHASE LINEAR SYSTEMS INCORPORATED
By:____________________________
Title: Authorized
Representative
TUDOR ENGINEERING COMPANY
By:____________________________
Title: Authorized
Representative
HENRY J. KAISER COMPANY
By:____________________________
Title: Authorized
Representative
ICF KAISER ENGINEERS (CALIFORNIA)
CORPORATION
By:____________________________
Title: Authorized
Representative
<PAGE>
23
KAISER ENGINEERS AND
CONSTRUCTORS, INC.
By:____________________________
Title: Authorized
Representative
KAISER ENGINEERS INTERNATIONAL,
INC.
By:____________________________
Title: Authorized
Representative
KE LIVERMORE, INC.
By:____________________________
Title: Authorized
Representative
ICF KAISER ENGINEERS
MASSACHUSETTS,
INC.
By:____________________________
Title: Authorized
Representative
ICF KAISER HOLDINGS UNLIMITED,
INC.
By:____________________________
Title: Authorized
Representative
<PAGE>
24
ICF KAISER ENGINEERS CORPORATION
By: ____________________________
Title: Authorized
Representative
KE SERVICES CORPORATION
By: ____________________________
Title: Authorized
Representative
ICFCORP INTERNATIONAL, INC.
By: ____________________________
Title: Authorized
Representative
<PAGE>
EXHIBIT 11
ICF KAISER INTERNATIONAL, INC.
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Nine Months Ended November 30,
------------------------------
1993 1992
---------- ----------
<S> <C> <C>
PRIMARY AND FULLY DILUTED
Net income (loss) available for common
shareholders, as reported $ (1,731,000) $ 3,351,000
Less: amortization of discount on
redeemable preferred stock, net of tax 202,000 201,000
------------ -----------
Net income (loss) available for common
shareholders after amortization of dis-
count on redeemable preferred stock $ (1,933,000) $ 3,150,000
============ ===========
Weighted average of common shares
oustanding 20,880,769 21,259,384
as as
20,881,000 21,259,000
Net income (loss) per common and
common stock equivalent $ (0.09) $ 0.15
============ ===========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended November 30,
-------------------------------
1993 1992
------------ -----------
<S> <C> <C>
PRIMARY AND FULLY DILUTED
Net income available for common
shareholders, as reported $ 92,000 $ 949,000
Less: amortization of discount on
redeemable preferred stock, net of tax 67,000 66,000
----------- -----------
Net income available for common
shareholders after amortization of dis-
count on redeemable preferred stock $ 25,000 $ 883,000
=========== ===========
Weighted average of common shares
outstanding 20,805,992 21,274,195
as as
20,806,000 21,274,000
=========== ===========
Net income per common and
common stock equivalent $ 0.00 $ 0.04
=========== ===========
</TABLE>
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF ICF KAISER INTERNATIONAL, INC.
The following list contains the names and jurisdictions of incorporation of
the six tiers of directly and indirectly owned subsidiaries of ICF Kaiser
International, Inc. The ownership of entities which are less than wholly owned
is indicated by an ownership percentage figure in parentheses following the name
of the entity.
Jurisdiction
of
Incorporation
-------------
I. BIOS CORPORATION (48%) Delaware
I. CLEMENT INTERNATIONAL CORPORATION Delaware
II. Newsys Environmental Technology System (15%) Taiwan
I. CYGNA GROUP, INC. Delaware
II. Liability Risk Management, Inc. California
I. GLOBAL TRADE & INVESTMENT, INC. Delaware
I. ICF CANNON ASSOCIATES, INC. Delaware
I. ICF CONSULTING ASSOCIATES, INC. Delaware
II. ICF/CHEM-CONSULT (Consulting and Service Ltd.) (50%) Hungary
I. ICF INCORPORATED Delaware
II. ICF/EKO (37.5%) Russia
I. ICF INFORMATION TECHNOLOGY, INC. Delaware
II. Phase Linear Systems Incorporated Delaware
I. ICF KAISER ENGINEERS MASSACHUSETTS, INC. Delaware
- Page 1 of 3 - Current as of January 12, 1994
<PAGE>
I ICF KAISER HOLDINGS UNLIMITED, INC. Delaware
II. American Venture Investments Incorporated (100%) Delaware
III. American Venture Holdings, Inc. Delaware
II. Cygna Energy Services California
III. Cygna Energy Services Michigan, Inc. Michigan
II. Excell Development Construction, Inc. Delaware
III. International Systems, Inc. Colorado
II. ICF Leasing Corporation, Inc. Delaware
II. ICF Environnement France
I. ICFCORP INTERNATIONAL, INC. Delaware
II. ICF Kaiser Engineers Group, Inc. Delaware
III. EKO-KOKS Kaiser Engineers, Inc. (50%) Delaware
III. Henry J. Kaiser Company Nevada
III. ICF Florida First, Inc. Delaware
III. ICF Kaiser Engineers, Inc. Ohio
IV. (See following page)
III. ICF Technology Incorporated Delaware
III. International Waste Energy Systems, Inc. Delaware
III. KE Livermore, Inc. Delaware
II. ICF Resources Incorporated Delaware
III. ICF R G.P. No. 1, Inc. Delaware
III. HBG Hawaii, Inc. Delaware
IV. Silversword, Inc. (50%) Delaware
I. KAISER ENGINEERS HANFORD COMPANY Delaware
I. KAISER ENGINEERS SOUTHERN COMPANY Nevada
I. MONUMENT SELECT INSURANCE COMPANY Vermont
I. SYSTEMS APPLICATIONS INC. (Name Holding Subsidiary Only) Nevada
I. TUDOR ENGINEERING COMPANY Delaware
- Page 2 of 3 - Current as of January 12, 1994
<PAGE>
SUBSIDIARIES OF ICF KAISER INTERNATIONAL, INC. (CONTINUED)
III. ICF Kaiser Engineers, Inc. Ohio
IV. Henry J. Kaiser Company (Canada) Ltd. Canada
IV. ICF Kaiser Engineers (California) Corporation Delaware
IV. ICF Kaiser Engineers Corporation New York
IV. ICF Kaiser Engineers of Michigan, Inc. Michigan
IV. Kaiser Engineers Australia Pty. Limited (50%) Australia
V. High Speed Rail Engineers Pty. Ltd. (25%) Australia
V. Kaiser Engineers (NZ) Ltd (99%) New Zealand
IV. Kaiser Engineers and Constructors, Inc. Nevada
V. ICF Pty. Ltd. (50%) Australia
V. Kaiser Engineers Limited (0.02%) U.K.
V. Kaiser Engineers Australia Pty. Limited (50%) Australia
V. Kaiser Engenharia de Portugal Limitada (50%) Portugal
V. Kaiser Engineers (NZ) Ltd (1%) New Zealand
V. Kaiser Engineers Pty. Ltd. (50%) Australia
V. Kaiser Ingenieria de Chile Limitada (51%) Chile
IV. Kaiser Engineers International, Inc. Nevada
V. American Transit Consultants, Inc. (33 1/3%) Delaware
V. ICF Pty. Ltd. (50%) Australia
V. Kaiser Engenharia de Portugal Limitada (50%) Portugal
V. Kaiser Engineers Pty. Ltd. (50%) Australia
V. Kaiser Ingeniera de Chile Limitada (49%) Chile
IV. Kaiser Engineers Limited (99.98%) U.K.
V. Kaiser Engineers Technical Services Limited (75%) Cyprus
V. Kaiser Engineers (UK) Limited (50%) U.K.
IV. Kaiser Engineers (UK) Limited (50%) U.K.
V. Kaiser Engineers Technical Services Limited (25%) Cyprus
IV. Kaiser Engenharia e Constructoes Limitada Brazil
IV. KE, Inc. Philippines
IV. KE, Inc. (dba in Massachusetts: Kaiser Engineers Co.) Delaware
IV. KE Services Corporation Delaware
IV. Overseas Constructors & Engineers, Inc. Delaware
IV. PCI Operating Company, Inc. Delaware
- Page 3 of 3 - Current as of January 12, 1994
