AMENDED AND RESTATED BUSINESS LOAN AND SECURITY AGREEMENT

Exhibit 10.4

AMENDED AND RESTATED

BUSINESS LOAN AND SECURITY AGREEMENT

dated as of October 5, 2005

by and among

ICF CONSULTING GROUP HOLDINGS, INC. and

ICF CONSULTING GROUP, INC. and other

“Borrower” parties hereto from time to time, as Borrowers,

CITIZENS BANK OF PENNSYLVANIA,

CHEVY CHASE BANK, F.S.B.,

PNC BANK, NATIONAL ASSOCIATION, COMMERCE BANK, N.A.,

and other “Lender” parties hereto from time to time, as Lenders,

and

CITIZENS BANK OF PENNSYLVANIA,

as Agent

 

TABLE OF CONTENTS

 

 

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AMENDED AND RESTATED BUSINESS LOAN AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED BUSINESS LOAN AND SECURITY AGREEMENT is executed as of October 5 ^th , 2005, and is by and among (i) CITIZENS BANK OF PENNSYLVANIA, a Pennsylvania state chartered bank (“Citizens Bank”), acting in the capacity of Lender, Swing Line Lender and as Agent for the Lenders; (ii) CHEVY CHASE BANK, F.S.B., a federal savings bank (“Chevy Chase Bank”), PNC BANK, NATIONAL ASSOCIATION, as successor-in-interest to Riggs Bank, N.A., a national banking association (“PNC Bank”), COMMERCE BANK, N.A., a national banking association (“Commerce Bank”), and other “Lender” parties to this Amended and Restated Business Loan and Security Agreement from time to time; (iii) ICF CONSULTING GROUP, INC., a Delaware corporation, ICF CONSULTING GROUP HOLDINGS, INC., a Delaware corporation, ICF CONSULTING LIMITED, a private limited company organized under the laws of England and Wales, COMMENTWORKS.COM COMPANY, L.L.C., a Delaware limited liability company, THE K.S. CRUMP GROUP, L.L.C., a Delaware limited liability company, ICF INCORPORATED, L.L.C., a Delaware limited liability company, ICF INFORMATION TECHNOLOGY, L.L.C., a Delaware limited liability company, ICF RESOURCES L.L.C., a Delaware limited liability company, SYSTEMS APPLICATIONS INTERNATIONAL, L.L.C., a Delaware limited liability company, ICF ASSOCIATES, L.L.C., a Delaware limited liability company, ICF SERVICES COMPANY, L.L.C., a Delaware limited liability company, ICF CONSULTING SERVICES, L.L.C., a Delaware limited liability company, ICF EMERGENCY MANAGEMENT SERVICES, LLC, a Delaware limited liability company, ICF CONSULTING PTY LTD, an Australian corporation, ICF CONSULTING CANADA, INC., a Canadian corporation, ICF/EKO, a Russian corporation, ICF CONSULTORIA DO BRASIL LTDA., a Brazilian limited liability company, SYNERGY, INC., a District of Columbia corporation (“Synergy”), SIMULATION SUPPORT, INC., a Virginia corporation (“Simulation”), SYNERGY BIOMEDICAL, LLC, a Delaware limited liability company (“Synergy Biomedical”), ICF PROGRAM SERVICES LLC, a Delaware limited liability company, and CALIBER ASSOCIATES, INC., a Virginia corporation, COLLINS MANAGEMENT CONSULTING, INC., a Virginia corporation, FRIED & SHER, INC., a Virginia corporation; and (iv) other “Borrower” parties to this Amended and Restated Business Loan and Security Agreement from time to time.

W I T N E S S E T H T H A T :

WHEREAS, pursuant to a certain Business Loan Agreement dated August 27, 2003 (as heretofore amended or modified from time to time, the “Existing Loan Agreement”) by and among certain of the Borrowers, the Agent and certain of the Lenders, certain of the Borrowers obtained loans and certain other financial accommodations (collectively, the “Existing Loan”) from certain of the Lenders in the aggregate maximum principal amount of Fifty Million and No/100 Dollars ($50,000,000.00); and

WHEREAS, the Borrowers, the Agent and the Lenders have agreed to increase the maximum principal of the Existing Loan from Fifty Million and No/100 Dollars ($50,000,000.00) to Seventy-five Million and No/100 Dollars ($75,000,000.00), and amend and restate the Existing Loan Agreement, in its entirety, as hereinafter provided.

In consideration of the mutual covenants and agreements herein contained, Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree, represent and warrant as follows:

CERTAIN DEFINITIONS

For the purposes of this Amended and Restated Business Loan and Security Agreement, the terms set forth below shall have the following definitions:

“Account Debtor” shall mean any person or entity who is indebted to one (1) or more of the Borrowers for the payment of any Receivable; it being understood and agreed that when computations are being

made with respect to amounts due and owing from an Account Debtor (a) such computations shall be made on a contract by contract basis (as opposed to on an Account Debtor basis), with respect to amounts owing in connection with Government Contracts and Government Subcontracts, and (b) such computations shall be made on the basis of all amounts due from the Account Debtor and any Affiliate of the particular Account Debtor, with respect to amounts owing in connection with contracts which are not Government Contracts or Government Subcontracts.

“Accounts” shall have the meaning attributed to such term under the UCC, and shall include any and all of the following, whether now or hereafter existing: (a) all accounts receivable, other receivables, book debts and other forms of obligations (other than forms of obligations evidenced by Chattel Paper, or Instruments), (including any such obligations that may be characterized as an account or contract right under the UCC), (b) all rights in, to and under all purchase orders or receipts for goods or services, (c) all rights to any goods represented by any of the foregoing (including unpaid sellers’ rights of rescission, replevin, reclamation and stoppage in transit and rights to returned, reclaimed or repossessed goods), (d) all rights to payment due for property sold, leased, licensed, assigned or otherwise disposed of, for a policy of insurance issued or to be issued, for a secondary obligation incurred or to be incurred, for energy provided or to be provided, for the use or hire of a vessel under a charter or other contract, arising out of the use of a credit card or charge card, or for services rendered or to be rendered in connection with any other transaction (whether or not yet earned by performance), (e) all “health care insurance receivables”, as such term is defined in the UCC and (f) all collateral security of any kind, given by any person or entity with respect to any of the foregoing.

“ADA” shall have the meaning attributed to such term in Section 5.14(a) of the Agreement.

“Additional Equity Stock” shall mean the shares of either treasury stock or newly issued preferred stock, common stock or other equity interests (including options, warrants or rights to purchase) of any Borrower issued to any person or entity on or after the Restatement Date.

“Additional Base Rate Interest Margin” shall have the meaning attributed to such term in the Notes and in Exhibit 7 attached to this Agreement.

“Additional Libor Interest Margin” shall have the meaning attributed to such term in the Notes and in Exhibit 7 attached to this Agreement.

“Affiliate” shall mean, as to any person or entity, any other person or entity which, directly or indirectly, is in control of, is controlled by or is under common control with such person or entity, or which owns, directly or indirectly, five percent (5%) or more of the outstanding equity interests of any entity.

“Affirmative Covenant” shall mean any affirmative or similar covenant made by the Borrowers set forth in this Agreement or in any other Loan Document.

“Agent” shall mean Citizens Bank, acting in its capacity as agent for the Lenders, or any successor Agent appointed pursuant to Section 10.10 of this Agreement.

“Agent Fee” shall have the meaning attributed to such term in Section 1.7(c) of this Agreement.

“Agent Fee Due Date” shall mean the Restatement Date and each anniversary thereof.

“Agent’s Commitment” shall have the meaning attributed to such term in Section 10.8(b) of this Agreement.

“Agreement” or “Loan Agreement” shall mean this Amended and Restated Business Loan and Security Agreement, together with the schedules and exhibits attached hereto and any and all amendments or modifications of this Amended and Restated Business Loan and Security Agreement.

“Annual Excess Cash Limitation” shall mean One Million and No/100 Dollars ($1,000,000.00).

 

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“Applicable Interest Rate” shall mean either the (i) LIBOR Lending Rate, plus the Additional Libor Interest Margin or (ii) Base Rate, plus the Additional Base Rate Interest Margin, as set forth in the Notes.

“Applicable Laws” shall mean any federal, state or local law, ordinance, statute, rule or regulation to which any Borrower or the property of any Borrower is subject, whether domestic or international.

“Approved ESOP” shall have the meaning assigned to such term in Section 7.1(b) of this Agreement.

“Approved ESPP” shall have the meaning assigned to such term in Section 7.1(b) of this Agreement.

“Approved International Organization” shall mean, as of the date hereof, any of the international multilateral organizations listed on Schedule B hereto, or any other similar organization deemed acceptable by the Agent from time to time, in its sole and absolute discretion.

“Base Rate” shall mean the higher of the (i) Federal Funds Rate plus one-half of one percent (.50%) or (ii) Prime Rate.

“Bonded Accounts Receivable” shall mean any Receivable which, as of any date of determination, is subject to the rights or remedies of any surety, bonding company or similar entity.

“Borrower” and “Borrowers” shall mean, individually or collectively, as the context may require, one or more of the following entities: the Parent Company, the Primary Operating Company, the entities listed on Schedule A hereto, and each other entity which, as of any date of determination, is a “Borrower” party to this Agreement and the other Loan Documents.

“Borrowing Base/Non-Default Certificate” shall mean a certificate in the form of Exhibit 4 hereto.

“Borrowing Base Deficiency” shall have the meaning assigned to such term in Section 1.3 of this Agreement.

“Business Day” shall mean (a) any day which is neither a Saturday or Sunday nor a legal holiday on which commercial banks are authorized or required to be closed in the Commonwealth of Virginia; (b) when such term is used to describe a day on which a borrowing, payment, prepaying, or repaying is to be made in respect of any LIBOR Rate Loan, any day which is: (i) neither a Saturday or Sunday nor a legal holiday on which commercial banks are authorized or required to be closed in New York City; and (ii) a London Banking Day; and (c) when such term is used to describe a day on which an interest rate determination is to be made in respect of any LIBOR Rate Loan, any day which is a London Banking Day.

“Caliber” shall mean Caliber Associates, Inc., a Virginia corporation.

“Caliber Acquisition” shall mean the acquisition by the Primary Operating Company of all of the issued and outstanding capital stock of Caliber pursuant to the Caliber Purchase Agreement.

“Caliber Entities” shall mean, collectively, Caliber, Collins and F&S.

“Caliber ESOP” shall mean the Caliber Associates, Inc. Employee Stock Ownership Plan and Trust.

“Caliber Purchase Agreement” shall mean that certain Stock Purchase Agreement of even date herewith by and between the Primary Operating Company, the Caliber ESOP, Caliber, Gerald Croan and Sharon Bishop.

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601 et seq .).

 

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“Chattel Paper” shall have the meaning attributed to such term under the UCC, and shall include “electronic chattel paper” and “tangible chattel paper”, as such terms are defined in the UCC, whether now or hereafter existing.

“Citizens Bank” shall mean Citizens Bank of Pennsylvania, a Pennsylvania state chartered bank, acting individually, together with its successors and assigns.

“CM Equity Consulting Agreement” shall mean that certain Consulting Agreement dated as of July 25, 1999, by and between CMLS Management, L.P., a Delaware limited partnership, and the Primary Operating Company, as the same may be amended or modified from time to time pursuant to this Agreement.

“Collateral” shall have the meaning assigned to such term in Article 3 of this Agreement.

“Collateral Account” shall have the meaning assigned to such term in Article 8 of this Agreement.

“Collins” shall mean Collins Management Consulting, Inc., a Virginia corporation and wholly-owned direct subsidiary of Caliber.

“Commercial Contract” shall mean any written contract to which a Borrower is a party (other than a Government Contract or Government Subcontract) which gives rise or may give rise to Receivables.

“Commercial Tort Claims” shall have the meaning attributed to such term under the UCC, and shall include any and all claims now existing or hereafter arising in tort with respect to which (a) the claimant is an organization, or (b) the claimant is an individual and the claim (i) arose in the course of the claimant’s business or profession, and (ii) does not include damages arising out of personal injury to or death of any individual.

“Commitment Amount” shall mean Seventy-five Million and No/100 Dollars ($75,000,000.00), or if the maximum aggregate commitment of the Lenders hereunder is reduced pursuant to the terms of this Agreement, such lesser amount.

“Commitment Fee” shall have the meaning assigned to such term in Section 1.7(b) of this Agreement.

“Commitment Letter” shall mean that certain letter dated September 24, 2005, from the Agent to the Primary Operating Company relating to the Loan, including the term sheet and schedules annexed thereto.

“Consolidated Net Operating Income” shall mean, with respect to the Borrowers for any period of determination, the sum of consolidated gross revenues, minus all consolidated operating expenses (excluding interest expense and taxes), plus all Agent-approved non-cash, non-recurring charges against Consolidated Net Operating Income (including, without limitation, the non-cash, non-recurring charges against Consolidated Net Operating Income set forth on Schedule C-1 hereto), minus any non-cash gain (to the extent included in determining Consolidated Net Operating Income), and with respect to the calculation of Consolidated Net Operating Income for the quarter ending December 31, 2005, plus all Agent-approved transaction costs and expenses incurred by any Borrower during such quarterly period (including, without limitation, the transaction costs and expenses set forth on Schedule C-2 hereto), all as determined in accordance with GAAP.

“Contribution Agreement” shall mean that certain Amended and Restated Contribution Agreement of even date herewith, by and among the Borrowers, and delivered by the Borrowers prior to or simultaneously with their execution and delivery of this Agreement or a Joinder Agreement (as the case may be), together with all Agent-approved amendments and modifications thereof.

“Deposit Accounts” shall have the meaning attributed to such term under the UCC, and shall include any and all demand, time, savings, passbook or similar account(s) from time to time established and maintained with a bank.

 

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“Documents” shall have the meaning attributed to such term under the UCC, and shall include any and all documents of any type and nature, whether now or hereafter existing.

“EBITDA” shall mean, with respect to the Borrowers for any period of determination, net income, plus interest expense, plus federal, state and local income taxes, plus depreciation expense, plus amortization expense, plus all Agent-approved non-cash, non-recurring charges against income, plus any non-cash charges related to stock and stock-option compensation, minus any non-cash gain (to the extent included in determining net income); and with respect to the determinations of EBITDA for the quarters ending December 31, 2005, March 31, 2006 and June 30, 2006, the consolidated results will be calculated and tested on an annualized basis, and solely with respect to the determinations of EBITDA with respect to the quarter ending December 31, 2005, plus Agent approved transaction costs and expenses incurred by any Borrower during such quarterly period (including, without limitation, the transaction costs and expenses set forth on Schedule C-2 hereto), all as determined on a consolidated basis in accordance with GAAP.

“Eligible Assignee” shall mean any Lender, an Affiliate of any Lender, a Federal Reserve Bank or any other “Qualified Institutional Buyer”, as such term is defined under Rule 144(A), promulgated under the Securities Act of 1933, as amended.

“Eligible Billed Government Accounts Receivable” shall mean any and all Receivables arising from Government Contracts or Government Subcontracts which (a) with respect to “cost-plus” or “time and materials” type contracts, represent amounts due and owing for products actually delivered or services actually performed or rendered by or on behalf of a Borrower pursuant to such contract(s), and with respect to “fixed-price” type contracts, represent amounts due and owing on a percentage-of-completion or milestone billing basis in accordance with such contract(s); (b) have been properly billed; (c) are outstanding less than one hundred twenty-one (121) days from the date of original invoice; (d) arise in the ordinary course of the Borrower’s business; (e) are due, owing and not subject to any defense, set-off or counterclaim; (f) are not close out invoices arising from any “cost-plus” type contract; and (g) are not otherwise Ineligible Receivables.

“Eligible Billed Commercial Accounts Receivable” shall mean any and all Receivables arising from Commercial Contracts which (a) with respect to “cost-plus” or “time and materials” type contracts, represent amounts due and owing for products actually delivered or services actually performed or rendered by or on behalf of a Borrower to or for the benefit of an Account Debtor pursuant to such contract(s), and with respect to “fixed-price” type contracts, represent amounts due and owing on a percentage-of-completion or milestone billing basis in accordance with such contract(s); (b) have been properly billed; (c) are outstanding less than ninety-one (91) days from the date of original invoice; (d) arise in the ordinary course of the Borrower’s business; (e) are due, owing and not subject to any defense, dispute, set-off, claim, counterclaim, escrow arrangement, prior assignment, lien, security interest or encumbrance (other than in favor of the Agent); and (f) are not otherwise Ineligible Receivables.

“Eligible Foreign Accounts Receivable” shall mean any and all Receivables which (a) with respect to “cost-plus” or “time and materials” type contracts, represent amounts due and owing for products actually delivered or services actually performed or rendered by or on behalf of a Borrower to or for the benefit of a Foreign Account Debtor pursuant to such contract(s), and with respect to “fixed-price” type contracts, represent amounts due and owing from a Foreign Account Debtor on a percentage-of-completion or milestone billing basis in accordance with such contract(s); (b) are outstanding less than ninety-one (91) days from the date of original invoice; (c) are owing from a Foreign Account Debtor deemed acceptable by the Agent from time to time, in its sole and absolute discretion (including, without limitation, as of the Restatement Date, the Foreign Account Debtors listed on Schedule D hereto); and (d) are not otherwise Ineligible Receivables.

“Equipment” shall have the meaning attributed to such term under the UCC, and shall include any and all of the following, whether now or hereafter existing: machinery and equipment, including processing equipment, conveyors, machine tools, data processing and computer equipment, including embedded software and peripheral equipment and all engineering, processing and manufacturing equipment, office machinery, furniture, materials handling equipment, tools, attachments, accessories, automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other equipment of every kind and nature, trade fixtures and fixtures not forming a part of real property, together with all additions and accessions thereto, replacements therefor,

 

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all parts therefor, all substitutes for any of the foregoing, fuel therefor, and all manuals, drawings, instructions, warranties and rights with respect thereto, and all products and proceeds thereof and condemnation awards and insurance proceeds with respect thereto.

“ERISA” shall have the meaning assigned to such term in Section 5.13(a) of this Agreement.

“Event of Default” shall have the meaning assigned to such term in Section 9.1 of this Agreement.

“Excess Cash Event” shall mean (i) any sale or disposition of any of the assets of any Borrower which is (a) not in the ordinary course of business; or (b) prohibited by the terms of this Agreement; (ii) the issuance by any Borrower after the date of this Agreement of debt securities or other debt obligations (other than in connection with debt expressly permitted pursuant to Section 7.7(a) of this Agreement); (iii) the receipt by or on behalf of any Borrower of insurance proceeds (other than insurance recoveries for business interruption loss, workers compensation or damage to tangible property, which (a) with respect to any of the foregoing insurance losses, do not exceed Five Hundred Thousand and No/100 Dollars ($500,000.00), individually or in the aggregate, and (b) with respect to insurance recoveries for damage(s) to tangible property, are promptly applied toward repair or replacement of the damaged property); (iv) the reversion of any pension plan assets; and/or (v) any other extraordinary cash event resulting in excess cash to a Borrower, including, without limitation, cash proceeds resulting from the issuance of additional equity interests or capital stock by a Borrower (other than the issuance of additional equity interests or capital stock by a Borrower pursuant to an Approved ESOP or an Approved ESPP).

“Existing Loan” shall have the meaning attributed to such term in the recitals to this Agreement.

“Existing Loan Agreement” shall have the meaning attributed to such term in the recitals to this Agreement.

“Facility” or “Facilities” shall mean Facility A, Facility B, Facility C and/or the Swing Line Facility, individually or collectively, as the context may require.

“Facility A” shall mean the revolving credit facility being extended pursuant to this Agreement on the basis of Eligible Billed Government Accounts Receivable, Eligible Billed Commercial Accounts Receivable and Eligible Foreign Accounts Receivable, in the maximum principal amount of Forty-five Million and No/100 Dollars ($45,000,000.00), with a sub-limit of Five Million and No/100 Dollars ($5,000,000.00) for Letters of Credit.

“Facility A Commitment Amount” shall mean Forty-five Million and No/100 Dollars ($45,000,000.00), or if such amount shall be reduced pursuant to this Agreement, such lesser amount.

“Facility A Commitment Fee” shall have the meaning assigned to such term in Section 1.7(b) of this Agreement.

“Facility B” shall mean the term loan being extended pursuant to this Agreement, in the original principal amount of Twenty-two Million and No/100 Dollars ($22,000,000.00).

“Facility B Commitment Amount” shall mean Twenty-two Million and No/100 Dollars ($22,000,000.00).

“Facility C” shall mean the term loan being extended pursuant to this Agreement, in the original principal amount of Eight Million and No/100 Dollars ($8,000,000.00).

“Facility C Commitment Amount” shall mean Eight Million and No/100 Dollars ($8,000,000.00).

“Federal Funds Rate” for any day shall mean the rate per annum (rounded upward to the nearest 1/8 of 1%) determined by the Agent to be the rate per annum announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight Federal Funds transactions

 

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arranged by Federal Funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate” as of the date of this Agreement; provided that if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the “Federal Funds Effective Rate” for such day shall be the Federal Funds Rate for the last day on which such rate was announced.

“Fiscal Year” shall mean any annual period designated by the Borrowers as a fiscal year for financial accounting purposes.

“Fixed Charge Coverage Ratio” shall have the meaning assigned to such term in Section 6.15(a) of this Agreement.

“Foreign Account Debtor” shall mean any Account Debtor not organized, existing and doing business within the United States of America.

“Foreign Borrower” and “Foreign Borrowers” shall mean, as of any date of determination and individually or collectively (as the context may require), each and all of the Borrowers listed on Schedule A-1 hereto, and any other Borrower not incorporated, formed or organized within the United States.

“F&S” shall mean Fried & Sher, Inc., a Virginia corporation and a wholly-owned direct subsidiary of Caliber.

“GAAP” shall mean generally accepted accounting principles.

“General Intangibles” shall have the meaning attributed to such term under the UCC, and shall include any and all of the following, whether now or hereafter existing: all right, title and interest in or under any contract, all “payment intangibles”, as such term is defined under the UCC, customer lists, licenses, copyrights, trademarks, patents, and all applications therefor and reissues, extensions or renewals thereof, rights in intellectual property, interests in partnerships, joint ventures and other business associations, licenses, permits, copyrights, trade secrets, proprietary or confidential information, inventions (whether or not patented or patentable), technical information, procedures, designs, knowledge, know how, software, data bases, data, skill, expertise, experience, processes, models, drawings, materials and records, goodwill (including the goodwill associated with any trademark or trademark license), all rights and claims in or under insurance policies (including insurance for fire, damage, loss and casualty, whether covering personal property, real property, tangible rights or intangible rights, all liability, life, key man and business interruption insurance, and all unearned premiums), uncertificated securities, choses in action, deposit, checking and other bank accounts, rights to receive tax refunds and other payments, rights to receive dividends, distributions, cash, Instruments and other property in respect of or in exchange for pledged stock and investment property, rights of indemnification, all books and records, correspondence, credit files, invoices and other papers, including without limitation all tapes, cards, computer runs and other papers and documents.

“Goods” shall have the meaning attributed to such term under the UCC, and shall include any and all Goods whether now or hereafter existing.

“Government” shall mean the United States government, any state government, any local government, any department, instrumentality or any agency of the United States government, any state government or any local government, or any Approved International Organization.

“Government Contract Assignments” shall have the meaning assigned to such term in Section 6.11 of this Agreement.

“Government Contract” and “Government Contracts” shall mean, individually or collectively as the context may require, (i) written contracts between any Borrower and the Government; and (ii) written subcontracts between any Borrower and a Prime Contractor who is providing goods or services to the Government

 

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pursuant to a written contract with the Government (a “Government Subcontract”), provided that the subcontract relates only to goods or services being provided to the Government pursuant to the Government Subcontract.

“Government Subcontract” shall have the meaning attributed to such term under the definition of “Government Contract”.

“Hazardous Substance” shall mean, without limitation, any flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous materials, hazardous wastes, hazardous or toxic substances, pollutants or contaminants as defined in CERCLA, HMTA, RCRA or any other applicable environmental law, rule, order or regulation.

“Hazardous Wastes” shall mean, without limitation, all waste materials subject to regulation under CERCLA, RCRA or analogous state law, and/or any other applicable Federal and/or state law now in force or hereafter enacted relating to hazardous waste treatment or disposal.

“Hedging Contracts” shall mean interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, or any other agreements or arrangements entered into between any Borrower and the Agent or a Lender and designed to protect such Borrower against fluctuations in interest rates or currency exchange rates.

“Hedging Obligations” shall mean all liabilities of any and all Borrowers to the Agent or a Lender under Hedging Contracts.

“HMTA” shall mean the Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801 et seq .).

“Ineligible Receivables” shall mean Receivables which are (i) evidenced by a promissory note, trade acceptance draft or other similar instrument; (ii) owed or payable by an Account Debtor pursuant to a Commercial Contract, if payment of fifty percent (50%) or more of the aggregate balance due from such Account Debtor is outstanding for more than ninety (90) days from the date of original invoice; (iii) owed or payable by an Account Debtor pursuant to a Government Contract or Government Subcontract, if the payment of fifty percent (50%) or more of the aggregate balance due from such Account Debtor is outstanding for more than one hundred twenty (120) days from the date of original invoice; (iv) owing from any Account Debtor that is the subject of any (a) suit, lien, levy or judgment which would or could reasonably be expected to affect the collectibility of said account(s), or (b) bankruptcy, insolvency or a similar process or proceeding, unless the payment of the Receivables owed by such Account Debtor to a Borrower shall have been approved or authorized by a court of competent jurisdiction; (v) owing from Foreign Account Debtors, but do not constitute Eligible Foreign Accounts Receivable; (vi) unbilled Receivables; (vii) close out invoices arising from any “cost-plus” type contract; (viii) Bonded Accounts Receivable; or (ix) owed or payable to a Foreign Borrower, unless (A) with respect to the Receivables of any Primary Foreign Borrower, the Agent shall have a perfected lien on and security interest in and to (or, as the case may be under any applicable foreign law, such foreign jurisdiction’s equivalent of a perfected lien on and security interest in and to) sixty-five percent (65%) of all the issued and outstanding stock or other ownership interests of such Primary Foreign Borrower, as determined by the Agent in its sole, but reasonable discretion, and (B) with respect to the Receivables of any Foreign Borrower (other than any Primary Foreign Borrower), the Agent shall have a perfected lien on and security interest in and to (or, as the case may be under any applicable foreign law, such foreign jurisdiction’s equivalent of a perfected lien on and security interest in and to) sixty-five percent (65%) of all the issued and outstanding stock or other ownership interests of each of the Primary Foreign Borrowers, as determined by the Agent in its sole, but reasonable discretion. Additionally, without limiting any other provision of this Agreement, or the discretion of the Agent to deem Receivables ineligible pursuant to any other provision of this Agreement, it is expressly understood and agreed that if any Borrower (I) has been debarred or suspended by the Government, or been issued a notice of proposed debarment or notice of proposed suspension by the Government; (II) is the subject of a Government investigation (other than a normal and customary review by the Government) involving or possibly involving fraud, willful misconduct or other wrongdoing; (III) is a party to any Government Contract or Government Subcontract which has been actually terminated due to such Borrower’s alleged fraud, willful misconduct or any other wrongdoing; (IV) is a party to any Government Contract or Government Subcontract which has been actually

 

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terminated for any other reason whatsoever, which could result in liability or expense in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00); or (V) has been issued a cure notice or show cause notice under any Government Contract or Government Subcontract involving amounts in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00), and has failed to cure the default giving rise to such cure notice or failed to resolve the matter set forth in the show cause notice (a) within the time period available to such Borrower pursuant to such Government Contract, Government Subcontract and/or such notice, or (b) before the date on which the Government or other contracting party is entitled to exercise its rights and remedies under the Government Contract or Government Subcontract (as a the case may be) as a consequence of such default or matter set forth in the show cause notice, then in any such event, any and all Receivables of such Borrower may, in the sole discretion of the Agent, be deemed and treated as Ineligible Receivables.

“Instrument” shall have the meaning attributed to such term under the UCC, and shall include any and all of the following, whether now or hereafter existing: all certificates of deposit, and all “promissory notes”, as such term is defined under the UCC, and other evidences of indebtedness (other than instruments that constitute, or are a part of a group of writings that constitute, Chattel Paper).

“Interest Expense” shall mean, as of the date of any determination, the Borrowers’ aggregate cash interest expense for borrowed money (including, without limitation, premiums and interest expense arising from or relating to interest rate protection agreements and original issue discounts), plus the amount of all other interest due (whether paid or not paid) on any indebtedness of each Borrower for the applicable measurement period, all as determined on a consolidated basis in accordance with GAAP.

“Interest Payment Date” shall mean, relative to any LIBOR Rate Loan having an Interest Period of three months or less, the last Business Day of such Interest Period, and as to any LIBOR Rate Loan having an Interest Period longer than three months, each Business 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” shall mean, relative to any LIBOR Rate Loans, (i) initially, the period beginning on (and including) the date on which such LIBOR Rate Loan is made or continued as, or converted into, a LIBOR Rate Loan pursuant to this Agreement (including, without limitation, Exhibit 3 hereto) and the Notes and ending on (but excluding) the day which numerically corresponds to such date one, three or six months thereafter (or, if such month has no numerically corresponding day, on the last Business Day of such month), in each case as the Borrower may select in its notice pursuant to this Agreement (including, without limitation, Exhibit 3 hereto) and the Notes; and (ii) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such LIBOR Rate Loan and ending one, three or six months thereafter, as selected by the Borrower by irrevocable notice to the Agent not less than three (3) Business Days prior to the last day of the then current Interest Period with respect thereto.

“Inventory” shall have the meaning attributed to such term under the UCC, and shall include any and all of the following, whether now or hereafter existing: all inventory, merchandise, goods and other personal property for sale or lease or are furnished or are to be furnished under a contract of service, or that constitute raw materials, work in process, finished goods, returned goods, or materials or supplies of any kind, nature or description used or consumed or to be used or consumed or in the processing, production, packaging, promotion, delivery or shipping of the same, including all supplies and embedded software.

“Investment Property” shall have the meaning attributed to such term under the UCC, and shall include any and all of the following, whether now or hereafter existing: (a) all securities, whether certificated or uncertificated, including stocks, bonds, interests in limited liability companies, partnership interests, treasuries, certificates of deposit, and mutual fund shares; (b) all Securities Entitlements, including the rights to any securities account and the financial assets held by a securities intermediary in such securities account and any free credit balance or other money owing by any securities intermediary with respect to that account; (c) all securities accounts; (d) all commodity contracts; and (e) all commodity accounts.

“Joinder Agreement” shall have the meaning assigned to such term in Section 1.10 of this Agreement.

 

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“Key Man Life Insurance Policies” shall mean each and all of those certain key man life insurance policies covering the lives of Sudakhar Kesavan and Don Zimmerman, respectively, for the benefit of the Borrowers, each in a minimum amount of Three Million and No/100 Dollars ($3,000,000.00).

“Kaiser Group Debt” shall mean the subordinated debt owing by the Primary Operating Company and certain other Borrowers to Kaiser Group International, Inc. in a principal amount not to exceed Six Million Four Hundred Forty-one Thousand Nine Hundred Fifty-nine and 59/100 Dollars ($6,441,959.59), which subordinated debt is evidenced by a certain Parent Promissory Note dated June 30, 2002, made by the Primary Operating Company and certain other Borrowers which are signatories thereto, and payable to the order of Kaiser Group International, Inc., a Delaware corporation, in the original principal amount of Six Million Four Hundred Forty-one Thousand Nine Hundred Fifty-nine and 59/100 Dollars ($6,441,959.59).

“Lender” and “Lenders” shall mean, respectively, each and all of the banking or financial institutions which, as of any date of determination, have (i) extended credit or agreed to extend credit to the Borrowers pursuant to this Agreement, and/or (ii) agreed in writing to be bound by the terms and provisions of this Agreement.

“Letter of Credit” and “Letters of Credit” shall mean, respectively, each and all of the standby letters of credit issued pursuant to this Agreement.

“Letter of Credit Application” shall have the meaning assigned to such term in Section 2.1 of this Agreement.

“Letter of Credit Administration Fee” shall have the meaning assigned to such term in Section 2.3 of this Agreement.

“Letter of Credit Fee” shall have the meaning assigned to such term in Section 2.3 of this Agreement.

“Letter of Credit Rights” shall have the meaning attributed to such term under the UCC, and shall include any and all of the following, whether now or hereafter existing: any right to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance, but specifically excludes any right of a beneficiary to demand payment or performance under a letter of credit.

“Leverage Ratio” shall have the meaning attributed to such term in Section 6.15(b) of this Agreement.

“LIBOR” or “LIBOR Rate” shall mean relative to any Interest Period for LIBOR Rate Loans, the offered rate for deposits of U.S. Dollars in an amount approximately equal to the amount of the requested LIBOR Rate Loan for a term coextensive with the designated Interest Period which the British Bankers’ Association fixes as its LIBOR rate and which appears on the Telerate Page 3750 as of 11:00 a.m. London time on the day which is two London Banking Days prior to the beginning of such Interest Period.

“LIBOR Election Form and Certification” shall mean the form attached as Exhibit 2 hereto.

“LIBOR Rate Loan” shall mean any loan or advance, the rate of interest applicable to which is based upon the LIBOR Rate.

“LIBOR Lending Rate” shall mean, relative to any LIBOR Rate Loan to be made, continued or maintained as, or converted into, a LIBOR Rate Loan for any Interest Period, a rate per annum determined pursuant to the following formula:

 

 

10

“LIBOR Reserve Percentage” shall mean, relative to any day of any Interest Period for LIBOR Rate Loans, the maximum aggregate (without duplication) of the rates (expressed as a decimal fraction) of reserve requirements (including all basic, emergency, supplemental, marginal and other reserves and taking into account any transitional adjustments or other scheduled changes in reserve requirements) under any regulations of the Board of Governors of the Federal Reserve System (the “Board”) or other governmental authority having jurisdiction with respect thereto as issued from time to time and then applicable to assets or liabilities consisting of “Eurocurrency Liabilities”, as currently defined in Regulation D of the Board, having a term approximately equal or comparable to such Interest Period.

“Loan” and “Loans” shall mean, individually or collectively as the context may require, the loan and loans made by the Lenders to the Borrowers in the aggregate maximum principal amount of Seventy-five Million and No/100 Dollars ($75,000,000.00), or so much thereof as shall be advanced or readvanced from time to time, which are represented by the Facilities, and which are evidenced by, bear interest and are payable in accordance with the terms and provisions set forth in the Notes.

“Loan Document” and “Loan Documents” shall mean, respectively, each and all of this Agreement, the Notes, the Stock Security Agreement, the Membership Interest Assignment and each other document, instrument, agreement or certificate heretofore, now or hereafter executed and delivered by any Borrower in connection with the Loan.

“London Banking Day” shall mean a day on which dealings in US dollar deposits are transacted in the London interbank market.

“Mandatory Payment” and “Mandatory Payments” shall mean, individually or collectively as the context may require, any and all mandatory payments required to be made on the Loan pursuant to Section 1.5 of this Agreement.

“Material Contract” and “Material Contracts” shall mean, as of any date of determination and individually or collectively as the context may require, any and all contracts or agreements to which a Borrower is a party and pursuant to which such Borrower (a) is or may be entitled to receive payment(s) in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00), in the aggregate, per annum, or (b) is obligated to make payment(s) or have any other obligation or liability thereunder in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00), in the aggregate, per annum.

“Maturity Date” shall mean October      , 2010, or such other date as may be agreed to by the Agent, the Lenders and the Borrowers in writing.

“Maximum Borrowing Base” shall have the meaning assigned to such term in Section 1.3 of this Agreement.

“Membership Interest Assignment” shall mean that certain Amended and Restated Collateral Assignment of Membership Interests dated as of the Restatement Date, entered into by certain “Borrower” parties thereto in favor of the Agent for the benefit of the Lenders ratably, as the same may be modified or amended from time to time.

“Negative Covenants” shall mean any negative or similar restrictive covenant made by the Borrowers set forth in this Agreement or in any other Loan Document.

“Net Cash” shall mean the cash proceeds (net of cash taxes paid and reasonable and customary costs paid to unrelated and unaffiliated third parties in connection with a particular transaction) arising from any Excess Cash Event.

 

11

“Note” and “Notes” shall mean, respectively, each and all of the amended and restated promissory notes and other promissory notes executed, issued and delivered pursuant to this Agreement, together with all extensions, renewals, modifications, replacements and substitutions thereof and therefor.

“Obligation” and “Obligations” shall mean, respectively, any and all obligations or liabilities of any Borrower to any Lender or the Agent in connection with the Loan, whether now existing or hereafter created or arising, direct or indirect, matured or unmatured, and whether absolute or contingent, joint, several or joint and several, and no matter how the same may be evidenced or shall arise (including, without limitation, any and all Hedging Obligations and/or Interest Rate Contracts).

“Ordinary Course Payments” shall mean payments made directly by a Borrower to any non-Borrower Affiliate; provided that such payments are made (i) in the ordinary course of such Borrower’s business, (ii) for products actually delivered or services actually performed, and (iii) pursuant to an “arm’s length” transaction (i.e., a transaction that would otherwise be made with an unrelated and unaffiliated third party).

“Parent Company” shall mean ICF Consulting Group Holdings, Inc., a Delaware corporation, and its successors and assigns.

“Patriot Act” shall mean the U.S.A. Patriot Act (Title III of Pub. L. 107-56 (signed into law on October 26, 2001)), as amended.

“Pension Plan” or “Pension Plans” shall have the meaning assigned to such term in Section 5.13(a) of this Agreement.

“Percentage” shall mean, as of any date of determination and with respect to each Lender, the percentage(s) corresponding to such Lender’s name on Schedule 1 attached to this Agreement in respect of the Commitment Amount, the Facility A Commitment Amount, the Facility B Commitment Amount, the Facility C Commitment Amount and/or the Swing Line Commitment Amount (as the context may require), as the same may be modified or amended from time to time.

“Permitted Acquisition” shall mean (i) the Caliber Acquisition; or (ii) any merger or acquisition which is (a) expressly permitted pursuant to Section 7.1(d)(ii) of this Agreement, or (b) consummated pursuant to and in strict accordance with all of the terms and provisions set forth in any modification or amendment to this Agreement or in a consent letter specifically issued by the Agent, acting at the direction of the Required Lenders, for such merger or acquisition.

“Permitted Foreign Bank Accounts” shall mean any and all of the bank accounts described on Schedule E hereto, together with any and all other foreign bank accounts approved from time to time by the Agent in writing; provided that each such bank account (a) has been established by and in the name of a Borrower, (b) is located outside of the United States of America, (c) is used solely for the collection of Receivables, payment of Ordinary Course Payments and other general operating purposes, (d) is not subject to any lien, claim, charge or encumbrance (other than (i) the security interests granted to the Agent under this Agreement or any other Loan Document, and (ii) normal and customary rights of set off or similar rights (of the financial institution maintaining such account), but only if such rights may be exercised solely for past due fees, charges and expenses arising from the general administration of such bank account, (e) if required by the Agent, is subject to a control agreement or blocked account agreement, in form and substance reasonably satisfactory to the Agent, and (f) if not subject to a control agreement or blocked account agreement, in form and substance reasonably satisfactory to the Agent, does not, for thirty (30) or more consecutive days, contain funds and/or other items of value which, in the aggregate, exceed the U.S. Dollar equivalent of One Million and No/100 Dollars ($1,000,000.00).

“Permitted Investments” shall mean: (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States), in each case maturing within one year from the date of acquisition thereof; (b) commercial paper having the highest rating, at the time of acquisition thereof, of Standard and Poor’s or Moody’s Investors Services and in either case maturing within six (6) months from the date

 

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of acquisition thereof; (c) certificates of deposit, bankers’ acceptances and time deposits maturing within one hundred eighty (180) days of the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States or any state thereof which has a combined capital and surplus and undivided profits of not less than Five Hundred Million Dollars ($500,000,000); (d) fully collateralized repurchase agreements with a term of not more than thirty (30) days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and (e) mutual funds investing solely in any one or more of the Permitted Investments described in clauses (a) through (d) above.

“Permitted Liens” shall mean: (a) liens for taxes which are being contested in good faith and by appropriate proceedings, which (i) the Borrower has the financial ability to pay, including penalties and interest, and (ii) the non-payment thereof will not result in the execution of any such tax lien or otherwise jeopardize the interests of the Agent and/or the Lenders in, on or to any Collateral; (b) deposits or pledges to secure obligations under workers’ compensation, social security or similar laws, incurred in the ordinary course of business; (c) liens securing secured indebtedness of the Borrowers, but only to the extent and dollar amount such secured indebtedness is permitted pursuant to Section 7.7(a) of this Agreement; (d) cash deposits pledged to secure the performance of bids, tenders, contracts (other than contracts for the payment of money), leases, statutory obligations, surety and appeal bonds and other obligations of like nature made in the ordinary course of business; (e) mechanics’, workmen’s, repairmen’s, warehousemen’s, vendors’, lessors’ or carriers’ liens or other similar liens; provided that such liens arise in the ordinary course of the Borrowers’ business and secure sums which are not past due, or which are separately secured by cash deposits or pledges in an amount adequate to obtain the release of such liens; (f) except as otherwise provided in this Agreement, statutory or contractual landlord’s liens on the Borrower’s tangible personal property located in such Borrower’s demised premises; (g) zoning or other similar and customary land use restrictions, which do not materially impair the use or value of any Collateral or property of any Borrower; (h) judgment liens which are not prohibited by Section 7.4 of this Agreement; (i) other liens expressly permitted by the terms and provisions of this Agreement; and (j) liens in favor of the Agent and/or any Lender with respect to the Loans.

“Person” shall mean an individual, partnership, corporation, trust, limited liability company, limited liability partnership, unincorporated association or organization, joint venture or any other entity.

“Primary Foreign Borrower” and “Primary Foreign Borrowers” shall mean, individually or collectively (as the context may require), each and all of ICF Consulting Limited, a private limited company organized under the laws of England and Wales, and ICF Consulting Canada, Inc., a Canadian corporation.

“Primary Operating Company” shall mean ICF Consulting Group, Inc., a Delaware corporation.

“Prime Contractor” shall mean any person or entity (other than a Borrower) which is a party to any Government Subcontract.

“Prime Rate” shall mean the rate of interest from time to time established and publicly announced by Citizens Bank as its prime rate, in Citizens Bank’s sole discretion, which rate of interest may be greater or less than other interest rates charged by Citizens Bank to other borrowers and is not solely based or dependent upon the interest rate which Citizens Bank may charge any particular borrower or class of borrowers.

“Proceeds” shall have the meaning assigned to that term under the UCC or under other applicable law, and, in any event, shall include, but shall not be limited to, any and all of the following, whether now owned or hereafter acquired: (i) any and all proceeds of, or amounts (in any form whatsoever, whether cash, securities, property or other assets) received under or with respect to, any insurance, indemnity, warranty or guaranty payable from time to time, and claims for insurance, indemnity, warranty or guaranty effected or held with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever, whether cash, securities, property or other assets) made or due and payable from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any person acting under color of governmental authority), (iii) any claim against third parties (a) for past, present or future infringement of any patent or patent license, or (b) for past, present or future infringement or dilution of any copyright, copyright license,

 

13

trademark or trademark license, or for injury to the goodwill associated with any trademark or trademark license, (iv) any recoveries against third parties with respect to any litigation or dispute concerning any of the Collateral including claims arising out of the loss or nonconformity of, interference with the use of, defects in, or infringement of rights in, or damage to, Collateral, (v) all amounts collected on, or distributed on account of, other Collateral, including dividends, interest, distributions and Instruments with respect to Investment Property and pledged stock, and (vi) any and all other amounts (in any form whatsoever, whether cash, securities, property or other assets) from time to time paid or payable under or in connection with any of the Collateral (whether or not in connection with the sale, lease, license, exchange or other disposition of the Collateral).

“RCRA” shall mean the Resource Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901 et. seq .).

“Receivable” and “Receivables” shall mean, individually or collectively as the context may require, any and all of the Borrowers’ present and future accounts, contracts, contract rights, chattel paper, general intangibles, notes, drafts, acceptances, chattel mortgages, conditional sale contracts, bailment leases, security agreements, contribution rights and other forms of obligations now or hereafter arising out of or acquired in the course of or in connection with any business the Borrowers conduct, together with all liens, guaranties, securities, rights, remedies and privileges pertaining to any of the foregoing, whether now existing or hereafter created or arising, and all rights with respect to returned and repossessed items of inventory.

“Request for Advance and Certification” shall mean any Request for Advance and Certification in the form attached as Exhibit 1 hereto.

“Required Lenders” shall mean all of the Lenders who at any given time, are not in default under or in breach of any of the terms and conditions of this Agreement applicable to such Lender, and who hold Notes or participation interests representing, in the aggregate, at least sixty-six and two-thirds percent (66  ² / 3 %) of the aggregate Commitment Amount (excluding the Swing Line Commitment Amount).

“Restatement” shall mean the settlement of the transactions contemplated by this Agreement.

“Restatement Date” shall mean the date on which the Restatement shall occur, such date being also the date of this Agreement.

“Revolver Notes” shall mean each and all of the promissory notes executed, issued and delivered pursuant to this Agreement in connection with Facility A, together with all extensions, renewals, modifications, replacements and substitutions thereof and therefor.

“Security Entitlements” shall have the meaning attributed to such term under the UCC, and shall include any and all Security Entitlements whether now or hereafter existing.

“Stock Security Agreement” shall mean that certain Amended and Restated Stock Security Agreement dated as of the Restatement Date, entered into by certain “Borrower” parties thereto in favor of the Agent for the benefit of the Lenders ratably, as the same may be modified or amended from time to time.

“Supporting Obligations” shall have the meaning attributed to such term under the UCC, and shall include any and all of the following, whether now or hereafter existing: any and all letter of credit rights or secondary obligations that support the payment or performance of an Account, Chattel Paper, Document, General Intangible, Instrument or Investment Property.

“Swing Line Commitment” shall mean the Swing Line Lender’s obligation to make Swing Line Loans to the Borrowers in an aggregate principal amount not to exceed Ten Million and No/100 Dollars ($10,000,000.00).

“Swing Line Commitment Amount” shall mean Ten Million and No/100 Dollars ($10,000,000.00).

 

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“Swing Line Commitment Period” shall mean the period commencing on the Restatement Date and ending on the Swing Line Termination Date.

“Swing Line Facility” shall mean the swing line credit facility being extended pursuant to this Agreement, in the original maximum principal amount equal to the Swing Line Commitment Amount.

“Swing Line Lender” shall mean Citizens Bank.

“Swing Line Loan” or “Swing Line Loans” shall have the meaning attributed to such term in Section 1.1(b) of this Agreement.

“Swing Line Note” shall mean that certain Amended and Restated Swing Line Promissory Note of even date herewith, made by the Borrowers and payable to the order of the Swing Line Lender, in the maximum principal amount of Ten Million and No/100 Dollars ($10,000,000.00) or so much thereof as shall be advanced or readvanced, together with all extensions, renewals, modifications, replacements and substitutions thereof or therefor.

“Swing Line Outstandings” shall mean, as of any date of determination, the aggregate principal amount of all Swing Line Loans then outstanding.

“Swing Line Termination Date” shall mean the fifth (5 ^th ) Business Day prior to the Maturity Date, or such earlier date on which the Swing Line Lender shall have elected, in its sole and absolute discretion, to terminate the Swing Line Facility.

“Synergy Entities” shall mean Synergy, Simulation and Synergy Biomedical.

“Total Debt” shall mean the actual amount of borrowed money (including, without limitation, subordinated debt, capital leases and synthetic leases that remain unpaid or outstanding as of the date of any determination), plus the aggregate amount of any and all financial guarantees (i.e., contingent monetary obligations or liabilities) and the face amount of any and all outstanding letters of credit.

“Total Senior Debt” shall have the meaning attributed to such term in Section 6.15(e) of this Agreement.

“Transitional Deposit Account” shall have the meaning attributed to such term in Article 8 of this Agreement.

“UCC” shall mean the Uniform Commercial Code as the same may, from time to time, be enacted and in effect in the Commonwealth of Virginia; provided , that to the extent that the UCC is used to define any term herein and such term is defined differently in different Articles or Divisions of the UCC, the definition of such term contained in Article or Division 9 shall govern; provided further , that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, the Agent’s lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the Commonwealth of Virginia, the term “UCC” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

INTERPRETIVE PROVISIONS

(a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms

(b) The words “hereof”, “herein”, “hereunder” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and “Subsection”, “Section”, “Schedule” and “Exhibit” references are to this Agreement unless otherwise specified.

 

15

(c) Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of this Agreement, and (ii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting the statute or regulation.

(d) The article, section and paragraph headings of this Agreement are for convenience of reference only, and in no way define, limit or describe the scope of this Agreement or the intent of any provision hereof.

(e) This Agreement and the other Loan Documents are the result of negotiations among all parties hereto, and have been reviewed by counsel to the Agent, the Borrowers and the Lenders, and are the products of all parties. Accordingly, this Agreement and the other Loan Documents shall not be construed against the Agent or the Lenders merely because of the Agent’s or Lenders’ involvement in their preparation.

ARTICLE 1

COMMITMENT

1.1 Maximum Loan Amount .

(a) Subject to the terms and conditions of this Agreement, (i) each Lender severally agrees to make the Loans to the Borrowers (except for the Swing Line Loan, which shall be extended only by the Swing Line Lender), with the maximum amount of each Lender’s obligation being equal to the Lender’s Percentage of the Commitment Amount; and (ii) as set forth more fully in Section 1.1(b) below, the Swing Line Lender will make the Swing Line Loan to the Borrowers. The Loans, including the Swing Line Loan, shall bear interest and be payable in accordance with the terms and provisions of and be initially evidenced by thirteen (13) promissory notes, four (4) amended and restated promissory notes or other promissory notes shall evidence Facility A, four (4) amended and restated promissory notes or other promissory notes shall evidence Facility B, four (4) promissory notes shall evidence Facility C, and one (1) amended and restated promissory note shall evidence the Swing Line Facility. Concurrent with the Borrowers’ execution of this Agreement, (a) Citizens Bank shall receive an amended and restated revolving promissory note in the maximum principal amount of Twenty-two Million Five Hundred Thousand and No/100 Dollars ($22,500,000.00) or so much thereof as shall be advanced or readvanced, an amended and restated term promissory note in the original principal amount of Eleven Million and No/100 Dollars ($11,000,000.00) or so much thereof as shall be advanced (but not readvanced), a time promissory note in the original principal amount of Four Million and No/100 Dollars ($4,000,000.00) or so much as shall be advanced (but not readvanced), and the Swing Line Note, (b) Chevy Chase Bank shall receive an amended and restated revolving promissory note in the maximum principal amount of Five Million Six Hundred Twenty-five Thousand and No/100 Dollars ($5,625,000.00) or so much thereof as shall be advanced or readvanced, an amended and restated term promissory note in the original principal amount of Two Million Seven Hundred Fifty Thousand and No/100 Dollars ($2,750,000.00) or so much thereof as shall be advanced (but not readvanced), and a time promissory note in the original principal amount of One Million and No/100 Dollars ($1,000,000.00) or so much as shall be advanced (but not readvanced), (c) PNC Bank shall receive an amended and restated revolving promissory note in the maximum principal amount of Eleven Million Two Hundred Fifty Thousand and No/100 Dollars ($11,250,000.00) or so much thereof as shall be advanced or readvanced, an amended and restated term promissory note in the original principal amount of Five Million Five Hundred Thousand and No/100 Dollars ($5,500,000.00) or so much thereof as shall be advanced (but not readvanced), and a time promissory note in the original principal amount of Two Million and No/100 Dollars ($2,000,000.00) or so much as shall be advanced (but not readvanced), and (d) Commerce Bank shall receive a revolving promissory note in the maximum principal amount of Five Million Six Hundred Twenty-five Thousand and No/100 Dollars ($5,625,000.00) or so much thereof as shall be advanced or readvanced, a term promissory note in the original principal amount of Two Million Seven Hundred Fifty Thousand and No/100 Dollars ($2,750,000.00) or so much thereof as shall be advanced (but not readvanced), and a time promissory note in the original principal amount of One Million and No/100 Dollars ($1,000,000.00) or so much as shall be advanced (but not readvanced).

 

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(b) Subject to the terms and conditions of this Agreement, the Swing Line Lender shall make swing line loans (each, a “Swing Line Loan” and collectively, the “Swing Line Loans”) to the Borrowers from time to time during the Swing Line Commitment Period, in the aggregate principal amount at any one time outstanding not to exceed Ten Million and No/100 Dollars ($10,000,000.00); provided, however, that at no time may the aggregate outstanding principal amount of the Swing Line Loans, plus the aggregate outstanding principal amount of Facility A (including the aggregate face amount of all Letters of Credit outstanding), exceed the lesser of (i) the Facility A Commitment Amount, and (ii) the applicable Maximum Borrowing Base. During the Swing Line Commitment Period, the Borrowers may use the Swing Line Commitment by borrowing, repaying Swing Line Loans in whole or in part, and reborrowing, all in accordance with the terms of this Agreement. At the request of the Swing Line Lender, the Agent may, at any time, on behalf of the Borrowers (which hereby irrevocably direct the Agent to act on their behalf) request each Lender having a Percentage of Facility A, including the Lender then acting as the Swing Line Lender, to make, and each such Lender, including the Lender then acting as the Swing Line Lender, shall make an advance under Facility A, in an amount equal to such Lender’s Percentage of Facility A, of the amount of the Swing Line Outstandings as of the date such request is made. In such event, each such Lender shall make the requested proceeds available to the Agent for the account of the Swing Line Lender in accordance with the funding provisions set forth in this Agreement. The proceeds of Facility A advanced pursuant to this Section 1.1(b) shall be immediately applied to repay the Swing Line Outstandings.

1.2 Use of Proceeds . The Loan shall be used by the Borrowers only for the following purposes: (i) to refinance certain existing indebtedness of the Borrowers, including, without limitation, the Kaiser Group Debt; (ii) to finance any Permitted Acquisition (including, the purchase price of a Permitted Acquisition, together with customary transaction costs and expenses payable to unrelated and unaffiliated third parties relating thereto); and (iii) for working capital and general corporate needs. Each Borrower agrees that it will not use or permit the Loan proceeds to be used for any other purpose without the prior written consent of the Agent.

1.3 Borrowing Base and Maximum Advances . Notwithstanding any term or provision of this Agreement or any other Loan Document to the contrary, it is understood and agreed that in no event whatsoever shall the Lenders (including the Swing Line Lender) be obligated to advance any amount or issue any Letter of Credit hereunder if such advance or the issuance of such Letter of Credit would cause the aggregate amount of outstanding Loans (including Swing Line Outstandings), plus the face amount of all outstanding Letters of Credit, to exceed the following amounts:

 

(a)

as to Facility A, the lesser of:

 

(i)

the Facility A Commitment Amount; or

 

(ii)

the aggregate of (the “Maximum Borrowing Base”):

 

A.

ninety percent (90%) of Eligible Billed Government Accounts Receivable; plus

 

B.

eighty percent (80%) of Eligible Billed Commercial Accounts Receivable; plus

 

C.

the lesser of (i) sixty percent (60%) of Eligible Foreign Accounts Receivable, and (ii) Two Million and No/100 Dollars ($2,000,000.00);

 

(b)

as to Facility B, the Facility B Commitment Amount;

 

(c)

as to Facility C, the Facility C Commitment Amount; and

 

(d)

as to the Swing Line Facility, the Swing Line Commitment Amount.

 

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All determinations regarding whether any Receivable constitutes an Eligible Billed Government Account Receivable, Eligible Billed Commercial Account Receivable or Eligible Foreign Account Receivable shall be made by the Agent, from time to time, in its sole and absolute discretion.

If at any time the outstanding principal balance of Facility A (including the maximum aggregate face amount of all outstanding Letters of Credit, plus Swing Line Outstandings) shall exceed the lesser of (i) the Facility A Commitment Amount, and (ii) the Maximum Borrowing Base (such excess, in either case, being referred to herein as a “Borrowing Base Deficiency”), then the Borrowers shall immediately make a principal payment in the amount of the Borrowing Base Deficiency.

1.4 Advances.

(a) Agreement to Advance and Readvance; Procedure . So long as no Event of Default shall have occurred and be continuing, and no act, event or condition shall have occurred and be continuing which with notice or the lapse of time, or both, shall constitute an Event of Default, and subject to the terms and provisions of this Agreement, the Lenders (and the Swing Line Lender, as the case may be) shall (i) advance and readvance the proceeds of Facility A and the proceeds of the Swing Line Facility (as applicable) from time to time in accordance with this Agreement; and (ii) advance the proceeds of Facility B and Facility C to the Borrowers upon the Borrowers’ execution and delivery of this Agreement and all other documents, instruments and agreements required by the Agent and Lenders in connection herewith. Requests for advances with respect to Facility A shall be in the form attached as Exhibit 1 hereto, and requests for advances with respect to the Swing Line Facility shall be in the form attached as Exhibit 1(a) hereto. Requests for advances of Loan proceeds with respect to Facility A and the Swing Line Facility may be made via facsimile on any given Business Day if the Borrowers provide the Agent, in advance, with a written list of the names of the specific officers authorized to request disbursements by facsimile. Upon request by the Agent, the Borrowers shall confirm, in an original writing, each facsimile request for advance made by any Borrower. Notwithstanding the foregoing, (a) the Lenders shall have no obligation to make any advance with respect to Facility A after the Maturity Date; and (b) the Swing Line Lender shall have no obligation to make any advance with respect to the Swing Line Facility after the Swing Line Termination Date.

(b) Interest Rate Election; Certain Advance Procedures and Limits . Amounts advanced in connection with the Loans shall bear interest either on a Base Rate basis or LIBOR basis, as more fully set forth in the Notes and in the exhibits attached to this Agreement, except that Swing Line Loans shall only be made available to the Borrowers on a Base Rate basis. Advances bearing interest on a Base Rate basis shall be in minimum and incremental amounts of One Hundred Thousand and No/100 Dollars ($100,000.00), and shall be made available on a same-day basis, if requested by 12:00 Noon, Washington, D.C. time, on any Business Day. Advances bearing interest on a LIBOR basis shall also be in minimum and incremental amounts of One Hundred Thousand and No/100 Dollars ($100,000.00), and shall be made available not less than three (3) Business Days, nor more than five (5) Business Days, after request therefor. The Borrowers’ right to request LIBOR based interest, as well as certain additional terms, conditions and requirements relating thereto, are set forth in the Notes and in the exhibits attached to this Agreement, and each Borrower expressly acknowledges and consents to such additional terms and provisions.

(c) Automatic Advances/Payments . The Borrowers hereby authorize the Agent, on any Business Day, to transfer funds from the Collateral Account or any other designated account of the Borrowers to pay down the Obligations and to make advances available to the Borrowers to cover shortages or overdrafts in the Collateral Account or such other designated account of the Borrowers. All such transfers are subject to the availability of Loan proceeds under Facility A (with respect to advances) and the availability of funds in the Collateral Account or such other designated account of the Borrowers (with respect to paydowns). The Lenders may, in their discretion, make such transfers, but shall have no liability for its failure to do so. Subject to the terms of any cash management agreement between the Borrowers and any Lender, the Borrowers may, at any time, terminate the authority granted by the Borrowers to the Agent herein upon not less than two (2) Business Days prior written notice to the Agent.

1.5 Additional Mandatory Payments; Reduction of Commitment . In addition to all other sums payable by the Borrowers pursuant to any of the Notes, this Agreement or any other Loan Document, the

 

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Borrowers shall also make mandatory payments on the Notes (applied first to amounts outstanding under Facility C, then to Facility B, then to Swing Line Outstandings (if any), and then to amounts outstanding under Facility A, as provided herein below), upon the occurrence of any Excess Cash Event. Notwithstanding the foregoing, no mandatory payment shall be due and payable unless the Net Cash arising from any Excess Cash Event occurring in any Fiscal Year, when aggregated with the Net Cash arising from all other Excess Cash Events occurring during such Fiscal Year, exceeds the Annual Excess Cash Limitation, in which event the amount of such mandatory payment shall be equal to the amount by which the Net Cash arising from such Excess Cash Event(s) exceeds the Annual Excess Cash Limitation. In the event any payment(s) made or required to be made by the Borrowers pursuant to this Section 1.5 shall be applied to Facility A ( i.e. , all amounts outstanding under Facility B, Facility C and Swing Line Outstandings (if any) shall have been paid and satisfied in full), the Facility A Commitment Amount shall be automatically (and without further documentation) reduced by an amount equal to such payment, unless such reduction shall have been waived in writing by the Agent.

1.6 Field Audits . The Agent has the right at any time and in its discretion to conduct field audits with respect to the Collateral and each Borrower’s Receivables, inventory, business and operations. All field audits shall be at the cost and expense of the Borrowers; it being understood and agreed that, in the absence of an Event of Default, the Borrowers’ maximum liability for field audit costs and expenses shall be limited to the reasonable costs and expenses of only two (2) field audits conducted during any twelve (12) month period (unless the Agent shall conduct a field audit pursuant to Section 1.10 of this Agreement in connection with the joinder of a new “Borrower” hereunder, in which event the Borrowers shall be liable for the costs and expenses of such field audit as well). Any and all field audits conducted following an Event of Default shall be at the Borrowers’ cost and expense, with the foregoing limitation on maximum costs and expense being inapplicable.

1.7 Certain Fees . In addition to principal, interest and other sums payable under the Notes, the Borrowers shall pay the following fees:

(a) Upfront Fee . Simultaneously with the execution of this Agreement, the Borrowers shall pay to the Agent, for the benefit of all Lenders pro-rata based on each Lender’s Percentage (herein referred to as the “benefit of the Lenders ratably”), an upfront fee in the aggregate amount of One Hundred Thousand and No/100 Dollars ($100,000.00).

(b) Commitment Fee . So long as any amounts remain outstanding in connection with Facility A, or the Lenders have any obligation to make any advance in connection therewith, the Borrowers agree to pay to the Agent for the benefit of the Lenders ratably, a quarterly commitment fee (the “Facility A Commitment Fee”), at a per annum rate equal to one-quarter of one percent (.25%), calculated on the difference between (i) the Facility A Commitment Amount, and (ii) the sum of the average daily outstanding principal balance of Facility A and Swing Line Outstandings during the applicable three (3) month period, plus the aggregate face amount of all Letters of Credit outstanding at any time during the applicable three (3) month period. The Facility A Commitment Fee shall be calculated on the basis of the actual number of days elapsed and a three hundred sixty (360) day year, shall be due for any three (3) month period during which the Lenders shall have any obligation in connection with the Facility, and shall be payable in arrears, commencing on December 31, 2005, and continuing on the last Business Day of every third (3 ^rd ) calendar month thereafter for so long as this Agreement remains in effect, and on the date on which the Obligations have been paid and satisfied in full.

(c) Agent Fee . On each Agent Fee Due Date, the Borrowers shall pay to the Agent, for its own account, an agent fee (the “Agent Fee”), in a per annum amount equal to the sum of (i) Ten Thousand and No/100 Dollars ($10,000.00), plus (ii) the product of (a) Five Thousand and No/100 Dollars ($5,000.00), multiplied by (b) the number of Lender parties to this Agreement (excluding the Lender then acting in the capacity as the Agent) as of the applicable Agent Fee Due Date; provided, however, that if the number of Lender parties to this Agreement shall increase at any time (a “Lender Joinder Date”) other than on an Agent Fee Due Date, then the Borrowers shall pay to the Agent, on the Lender Joinder Date, for the Agent’s own account and in addition to the Agent Fee paid or payable on the immediately preceding Agent Fee Due Date, an amount equal to the product of (I) Thirteen and 89/100 Dollars ($13.89), multiplied by (II) the actual number of days that will elapse between (but including) the Lender Joinder Date and the next Agent Fee Due Date.

 

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(d) Letter of Credit Fees . The Borrowers shall pay any and all Letter of Credit fees as and when such fees become due and payable pursuant to this Agreement.

(e) Out-of-Pocket Fees and Expenses . The Borrowers shall be liable for and shall timely pay all out-of-pocket costs and expenses (including reasonable attorneys’ fees and expenses of counsel for the Agent, and of other special and local counsel and other experts, if any, engaged by the Agent) from time to time incurred by the Agent in connection with the administration of, preservation of rights in and enforcement of this Agreement, the other Loan Documents and the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, the Borrowers shall be liable for all of the Agent’s out-of-pocket costs and expenses (including reasonable attorneys’ fees and expenses of counsel for the Agent) associated with any and all amendments, waivers and/or consents prepared, negotiated, executed, issued and/or delivered in connection with this Agreement.

1.8 Intentionally Omitted .

1.9 Appointment of the Primary Operating Company . Each Borrower acknowledges that (i) the Lenders have agreed to extend credit to each of the Borrowers on an integrated basis for the purposes herein set forth; (ii) it is receiving direct and/or indirect benefits from each such extension of credit; and (iii) the obligations of the “Borrower” or “Borrowers” under this Agreement are the joint and several obligations of each Borrower. To facilitate the administration of the Loan, each Borrower hereby irrevocably appoints the Primary Operating Company as its true and lawful agent and attorney-in-fact with full power and authority to execute, deliver and acknowledge on such Borrower’s behalf, each Request for Advance and Certification, Borrowing Base/Non-Default Certificate and all other Loan Documents or other materials provided or to be provided to the Agent or any Lender pursuant to this Agreement or in connection with the Loan. This power-of-attorney is coupled with an interest and cannot be revoked, modified or amended without the prior written consent of the Agent. Upon request of the Agent, each Borrower shall execute, acknowledge and deliver to the Agent a Power of Attorney, in form and substance reasonably satisfactory to the Agent, confirming and restating the power-of-attorney granted herein.

1.10 Joinder of New Subsidiaries and Affiliates; Release of Certain Borrowers .

(a) Unless waived in writing by the Agent, in its sole and absolute discretion, the Borrowers shall cause any present or future Affiliate of any Borrower in which such Borrower now or hereafter owns, directly or indirectly, an ownership interest of greater than fifty percent (50%) to execute and deliver to the Agent (i) within forty-five (45) days of the date of formation or acquisition (as applicable) of any domestic entity, and (ii) ninety (90) days of the date of formation or acquisition (as applicable) of any foreign entity (x) a Joinder Agreement in the form attached as Exhibit 6 hereto (a “Joinder Agreement”), pursuant to which such Affiliate shall (A) join in and become a party to this Agreement and the other Loan Documents; (B) agree to comply with and be bound by the terms and conditions of this Agreement and all of the other Loan Documents; and (C) become a “Borrower” and thereafter be jointly and severally liable for the performance of all the past, present and future obligations and liabilities of the Borrowers hereunder and under the Loan Documents; and (y) such other documents, instruments and agreements as may be reasonably required by the Agent in connection therewith (including, without limitation, an opinion of counsel), in form and substance acceptable to the Agent and its counsel in all respects. The Borrowers acknowledge and agree that the Agent shall have the right, at the Borrowers’ cost and expense, to perform a field audit of the Receivables, inventory, business and operations of any present or future Affiliate proposed to be joined as a “Borrower” hereunder;

(b) Subject to the terms and provisions set forth in Exhibit 9 attached hereto, the Agent agrees that it shall not unreasonably withhold, delay or condition (i) its waiver of any or all of the joinder requirements set forth in clause (a) above, (ii) its consent to any Foreign Borrower entering into other financing arrangements with any person or entity, whether secured or unsecured, and/or (iii) in connection with any such financing arrangement(s), its release of any Foreign Borrower from such Foreign Borrower’s Obligations, including any security interest of the Agent in such Foreign Borrower’s assets granted in connection herewith.

 

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ARTICLE 2

LETTERS OF CREDIT

2.1 Issuance . The Borrowers and Lenders acknowledge that from time to time the Borrowers may request that Citizens Bank issue or amend Letter(s) of Credit. Subject to the terms and conditions of this Agreement, and any other requirements for letters of credit normally and customarily imposed by Citizens Bank, Citizens Bank agrees to issue such requested letters of credit, provided that no Event of Default has occurred and is continuing, and no act, event or condition has occurred or exists which with notice or the passage of time, or both, would constitute an Event of Default. If any such Letter(s) of Credit are issued by Citizens Bank, each of the Lenders shall purchase from Citizens Bank a risk participation with respect to such Letter(s) of Credit in an amount equal to such Lender’s Percentage of such Letter(s) of Credit. Citizens Bank shall have no obligation to issue any Letter of Credit which has an expiration date beyond the Maturity Date, unless the Borrowers shall have deposited with Citizens Bank, concurrent with the issuance of any such Letter of Credit, cash security therefor in an amount equal to the face amount of the Letter of Credit. Any request for a Letter of Credit shall be made by a Borrower submitting to the Agent an Application and Agreement for Letter of Credit or Amendment to Letter of Credit (each being herein referred to as a “Letter of Credit Application”) on Citizens Bank’s standard form, at least three (3) Business Days prior to the date on which the issuance or amendment of the Letter of Credit shall be required, which Letter of Credit Application shall be executed by a duly authorized officer of a Borrower, and be accompanied by such other supporting documentation and information as the Agent may from time to time reasonably request. Each Letter of Credit Application shall be deemed to govern the terms of issuance of the subject Letter of Credit, except to the extent inconsistent with the terms of this Agreement. It is understood and agreed that Letters of Credit shall not be issued for durations of longer than one (1) year. Any outstanding Letter of Credit may be renewed from time to time; provided that (i) at least sixty (60) days’ prior written notice thereof shall have been given by the Borrower to the Agent and the Lenders; and (ii) no Event of Default exists under the terms and provisions of the particular Letter of Credit or this Agreement, and no act, event or condition has occurred or exists which with notice or the passage of time, or both, would constitute an Event of Default under the terms and provisions of the particular Letter of Credit or this Agreement.

2.2 Amounts Advanced Pursuant to Letters of Credit . Upon the issuance of any Letter(s) of Credit (i) any amounts drawn under any Letter of Credit shall be deemed advanced ratably under the Revolver Notes, shall bear interest and be payable in accordance with the terms of the Revolver Notes and shall be secured by the Collateral (in the same manner as all other sums advanced under the Revolver Notes); and (ii) each Lender shall purchase from Citizens Bank such risk participations in the Letter(s) of Credit as shall be necessary to cause each Lender to share the funding obligations with respect thereto ratably in accordance with such Lender’s Percentage. It is expressly understood and agreed that all obligations and liabilities of the Borrowers to Citizens Bank in connection with any such Letter(s) of Credit shall be deemed to be “Obligations,” and the Agent shall not be required to release its security interest in the Collateral until (i) all Notes and all other sums due to the Lenders in connection with the Loan have been paid and satisfied in full, (ii) all Letters of Credit have been canceled or expired, and (iii) no Lender has any further obligation or responsibility to make additional Loan advances or issue additional Letters of Credit. Furthermore, in no event whatsoever shall Citizens Bank have any obligation to issue any Letter of Credit which would cause the face amount of all then outstanding Letters of Credit issued for the account of any or all Borrowers to exceed Five Million and No/100 Dollars ($5,000,000.00), in the aggregate, at any time.

2.3 Letter of Credit Fees . The Borrowers shall be jointly and severally liable for the payment of: (i) to the Agent, for the benefit of the Lenders ratably, a quarterly- fee (the “Letter of Credit Fee”) at the annual rate equal to the Additional Libor Interest Margin corresponding to the Borrower’s Leverage Ratio reported as of the immediately preceding quarter, as set forth on Exhibit 7 hereto, which shall be calculated (a) on the face amount of each Letter of Credit as of the date of issuance (or the anniversary or amendment date, as applicable), and (b) on the basis of the actual number of days elapsed and a three hundred sixty (360) day year; and (ii) to the Agent, customary issuance and administrative charges (the “Letter of Credit Administration Fee”). The Letter of Credit Fee shall be due and payable, in advance, on the date the Letter of Credit is issued, amended, extended or renewed and on the same day of every third (3rd) month thereafter during which such Letter of Credit shall remain issued or outstanding. The Letter of Credit Administration Fee shall be due and payable simultaneously with the Agent’s issuance, amendment, extension or renewal of the particular Letter of Credit (as the case may be).

 

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ARTICLE 3

SECURITY

3.1 Security Generally . As collateral security for the Loan and all other Obligations, the Borrowers hereby grant and convey to the Agent, for the benefit of the Lenders ratably, a security interest in all of the following (collectively, the “Collateral”):

Receivables . All of each Borrower’s present and future right, title and interest in and to any and all Accounts, contracts, contract rights, Chattel Paper, General Intangibles, notes, drafts, acceptances, chattel mortgages, conditional sale contracts, bailment leases, security agreements and other forms of obligations now or hereafter arising out of or acquired in the course of or in connection with any business each Borrower conducts, together with all liens, guaranties, securities, rights, remedies and privileges pertaining to any of the foregoing, whether now existing or hereafter created or arising, and all rights with respect to returned and repossessed items of Inventory;

Inventory . All of each Borrower’s present and future right, title and interest in and to any and all Inventory and Goods, wherever located, and whether held for sale or lease or furnished or to be furnished under contracts of service, and all raw materials, work in process and materials now or hereafter owned by each Borrower, wherever located, and used or consumed in its business, including all returned and repossessed items; and all other property now or hereafter constituting Inventory;

Other Collateral . All of each Borrower’s present and future right, title and interest in and to any and all Deposit Accounts, Documents, Instruments, Investment Property, Letter of Credit Rights and Supporting Obligations, whether any of the foregoing shall be now owned or hereafter acquired by such Borrower, together with all of each Borrower’s present and future furniture, fixtures, Equipment, machinery, supplies and other assets (other than stock, as below provided) and personal property of every type or nature whatsoever, including without limitation, all of each Borrower’s present and future inventions, designs, patents, patent applications, trademarks, trademark applications, trade names, trade secrets, goodwill, registrations, copyrights, licenses, franchises, customer lists, tax refunds, tax refund claims, rights of claims against carriers and shippers, leases and rights to indemnification;

Stock or Other Ownership Interests . All of each Borrower’s present and future right, title and interest in and to any and all of the issued and outstanding capital stock, membership interests and/or other ownership interests in any Foreign Borrower, Caliber and the Synergy Entities whether such interests are now or hereafter issued or outstanding and whether now or hereafter acquired by such Borrower, together with all voting, economic and other rights thereof or appurtenant thereto, pursuant to the Stock Security Agreement, Membership Interest Assignment and/or such other documents, instruments or agreements as may be reasonably required by the Agent;

Leases . All of each Borrower’s present and future right, title and interest in and to any and all leases, occupancy agreements, subleases, contracts, licenses, agreements and other understandings of or relating to the use, enjoyment or occupancy of real property or any improvements thereon; provided, however, that if the terms of any such lease or other contract require such Borrower to notify or obtain the prior written consent of a third party for the grant of a security interest in such lease or other contract, the security interest granted hereby in such lease or other contract shall not be effective until such notification is delivered or such consent is obtained;

Key Man Life Insurance . All of each Borrower’s present and future right, title and interest in and to the Key Man Life Insurance Policies.

Records . All of each Borrower’s present and future right, title and interest in and to any and all records, documents and files, in whatever form, pertaining to the Collateral; and

 

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Proceeds, Etc . Any and all Proceeds of the foregoing, whether cash or non-cash proceeds, and all increases, substitutions, replacements and/or additions to any or all of the foregoing.

It is expressly understood and agreed that the foregoing grant and conveyance of a security interest in the Collateral is in confirmation of (and not replacement of) the grant and conveyance of a security interest in the Collateral which was previously made pursuant to or in accordance with the Existing Loan Agreement and the other Loan Documents; that the liens created by such prior grant and conveyance of a security interest in the Collateral remain in full force and effect; and that the grant of and conveyance of a security interest in the Collateral pursuant hereto shall be supplemental to such prior grant and conveyance.

Notwithstanding the foregoing, the above described conveyance shall not be deemed to include the conveyance of (A) any Government Contract, Government Subcontract or Commercial Contract, which by its terms or applicable law may not be conveyed; it being understood, however, that in any such situation(s), the Agent’s security interest shall include (i) the entirety of each Borrower’s right, title and interest in and to all Receivables and all other Proceeds directly or indirectly arising from such Government Contract, Government Subcontract or Commercial Contract, and (ii) all other rights and interests which any Borrower may lawfully convey to the Agent with respect to such Government Contract, Government Subcontract or Commercial Contract; (B) any stock or other ownership interests of a Foreign Borrower in excess of sixty-five percent (65%) of all of the issued and outstanding stock or other ownership interests of such Foreign Borrower; (C) motor vehicles titled in the name of any Borrower; and (D) except as otherwise set forth in Section 3.1 of this Agreement with respect to leases, interests in real property owned by any Borrower.

3.2 No Preference or Priority . It is expressly understood and agreed that each of the Notes shall be secured without preference or priority; it being the intention of the parties that the Notes shall be co-equal and coordinate in right of payment of principal, interest, late charges and other sums due thereunder.

ARTICLE 4

CONDITIONS TO THE LENDERS’ OBLIGATIONS

The initial performance of the Lenders’ obligations under this Agreement shall be subject to the following conditions:

4.1 Compliance with Law and Agreements; Third Party Consents . The Lenders shall be reasonably satisfied that (a) the Loan shall be in full compliance with all legal requirements, (b) all regulatory and third party consents and approvals required to be obtained have been obtained, and (c) the Borrowers shall have performed all agreements theretofore to be performed by the Borrowers.

4.2 Financial Condition . There shall have been no material adverse change in the financial condition of the Borrowers, in the aggregate, between the date of the most recent financial statement(s) delivered to the Lenders and the Restatement Date.

4.3 Litigation/Bankruptcy . There shall be no pending or threatened litigation by any entity (private or governmental) with respect to the Loan or any documentation executed in connection therewith (except for such litigation disclosed to and not objected to by the Agent prior to Closing), nor shall there be any litigation, bankruptcy or other proceedings which the Agent believes, in good faith, could reasonably be expected to have a material adverse effect on a going forward basis.

4.4 Opinion of Counsel . The Agent shall have received an opinion of Borrowers’ counsel with respect to each Borrower that is incorporated, formed or organized within the United States, in form and substance satisfactory to the Agent and its counsel in all respects.

4.5 No Default . There shall exist no Event of Default, and no act, event or condition shall have occurred or exist which with notice or the lapse of time, or both, would constitute an Event of Default.

 

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4.6 Documentation . The Agent shall have received an initial Borrowing Base/Non-Default Certificate, and such financial statements, projections, certificates of good standing, corporate resolutions, limited liability company consents, UCC financing statements, opinions, certifications, schedules to be attached to this Agreement and such other documents, instruments and agreements as may be reasonably required by the Lenders or the Agent, in such form and content and from such parties, as the Agent shall require (including, without limitation, all documentation and other information required by bank regulatory authorities applicable to “know your customer” and anti-money laundering rules and regulations, including the Patriot Act). All documentation relating to the Loan and all related transactions must be satisfactory in all respects to the Agent, the Lenders and their respective counsel.

4.7 Restatement Costs and Expenses . The Borrowers shall have paid all fees payable to the Agent and/or the Lenders, plus all restatement/closing costs and expenses incurred by the Agent in connection with the transactions contemplated hereby, including, without limitation, all filing fees, recording costs and the reasonable attorneys’ fees and expenses of the Agent’s counsel.

4.8 Restatement Matters . On or before the Restatement Date:

(a) The Agent shall have received (i) a certificate, dated the Restatement Date and signed by Chief Financial Officer or other duly authorized officer of the Borrowers, certifying (A) that except as set forth on any schedule attached thereto, the certificate or articles of incorporation or formation (or similar document) of each Borrower previously delivered to the Agent and its counsel in connection with the Existing Loan Agreement have not been amended since the date of the last amendment thereto shown on the certificate of good standing so furnished, (B) that except as set forth on any schedule attached thereto, the by-laws of each Borrower as in effect and delivered in connection with the Existing Loan Agreement have not been amended, (C) that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors or other equivalent body of each Borrower, authorizing the execution, delivery and performance of this Agreement, the Notes and the other Loan Documents by such Borrower, the undertaking by such Borrower of the Obligations, and that such resolutions have not been modified, rescinded or amended and are in full force and effect as of the Restatement Date, and (D) as to the incumbency and specimen signature of each officer executing this Agreement, the Notes, or any other Loan Document or any other document delivered in connection therewith on behalf of such Borrower; and (ii) a certificate of another officer as to the incumbency and specimen signature of the Chief Financial Officer or other duly authorized officer executing the certificate pursuant to clause (i) above;

(b) This Agreement, the Notes and all other Loan Documents required to be executed and delivered by any Lender and/or any Borrower shall have been executed and delivered to the Agent and its counsel in form and substance acceptable to the Agent, all such documents shall be in full force and effect, and each such document (including each UCC financing statement) required by law or reasonably requested by the Agent to be filed, registered or recorded in order to create or continue in favor of the Agent for the benefit of the Lenders a valid, legal and perfected first-priority (except to the extent otherwise provided therein) security interest in and lien on the Collateral (subject to any Permitted Lien) described therein shall have been prepared and delivered to the Agent and its counsel;

(c) All legal matters incident to this Agreement and the Restatement shall be reasonably satisfactory to the Lenders, the Agent and their respective counsel; and

(d) After giving effect to the Restatement, all representations and warranties of the Borrowers set forth in this Agreement and the other Loan Documents shall be true, accurate and complete in all material respects, and not misleading in any material respect.

4.9 Financial Documents . The Agent shall have received the following with respect to the Borrowers an initial Borrowing Base/Non-Default Certificate evidencing excess borrowing availability in an amount greater than Five Million and No/100 Dollars ($5,000,000.00) as of the Closing Date. All of the foregoing must be satisfactory to the Agent in all respects.

 

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4.10 Security Interests . The Borrowers shall have executed and delivered all documentation that the Agent deems necessary or appropriate for the perfection of any Liens granted