STOCK PURCHASE AGREEMENT

Exhibit 10.11

STOCK PURCHASE AGREEMENT

BY AND AMONG

ICF CONSULTING GROUP, INC.

CALIBER ASSOCIATES, INC. EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST

CALIBER ASSOCIATES, INC.

GERALD CROAN AND

SHARON BISHOP

Effective September 12, 2005

TABLE OF CONTENTS

This Table of Contents is for convenience of reference only and is not intended to define, limit or describe the scope, intent or meaning of any provision of this Agreement.

 

 

i

 

ii

 

iii

 

iv

SCHEDULES

 

 

v

 

vi

 

vii

EXHIBITS

 

 

viii

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT (“ Agreement ”), dated September 12, 2005 (the “ Effective Date ”), by and among (i) ICF Consulting Group, Inc., a Delaware corporation (“ ICF ”), (ii) Caliber Associates, Inc., a Virginia corporation (“ Caliber ”), (iii) the Caliber ESOP (as hereinafter defined), the sole shareholder of Caliber (the “ Shareholder ”) and (iv) Gerald Croan (“ Croan ”) and Sharon Bishop (“ Bishop ” and jointly with Croan the “ Founders ”).

RECITALS:

R-1. The Shareholder is the holder and owner of all of the issued and outstanding shares of capital stock of Caliber (all of such outstanding shares being hereinafter referred to as the “ Shares ”).

R-2. Each of the Founders, among others, holds a promissory note payable by Caliber collectively the “ Founders’ Promissory Notes ”) with Croan holding a promissory note (the “ Croan Promissory Note ”) in the aggregate outstanding amount as of the Effective Date of Six Million Nine Hundred Eighty Six Eight Hundred Forty and 11/100 Dollars ($6,986,840.11) and Bishop holding a promissory note (the “ Bishop Promissory Note ”) in the aggregate outstanding amount as of the Effective Date of Four Million Two Hundred Twenty One Thousand Six Hundred Seventeen and 40/100 Dollars ($4,221,617.40).

R-3. ICF desires to acquire all of the outstanding Shares for cash and the Shareholder, the Founders, and Caliber desire the same, upon the terms and subject to the conditions of this Agreement.

NOW THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, ICF and the Shareholder agree as follows:

ARTICLE I

Definitions and Rules of Construction

1.1 Definitions .

As used in this Agreement, the following terms shall have the meanings set forth:

“ Accrued Bonuses ” has the meaning referred to in Section 3.26(b).

“ Acquired Business ” means the collective operations and business activities of Caliber and the Acquired Subsidiaries as conducted and existing as of the Closing Date.

“ Acquired Subsidiaries ” means and refers to all of Caliber’s wholly owned subsidiaries, other than the ESOP Sponsor Subsidiary (a list of which is shown on Section 3.1(c) of the Disclosure Schedule) and “ Acquired Subsidiary ” means and refers to any one of the Acquired Subsidiaries.

 

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“ Adjusted Closing Net Working Capital ” has the meaning referred to in Section 2.3(b).

“ Affiliate ” means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

“ Agreement ” has the meaning referred to in the Preamble.

“ Audited Financial Statements ” means collectively the audited consolidated balance sheets and statements of income, changes in stockholders’ equity, and cash flow together with accompanying notes of Caliber and the Acquired Subsidiaries as of December 31, 2001, December 31, 2002, and December 31, 2003 together with the December 2004 Financial Statements.

“ Auditor ” has the meaning referred to in Section 2.4.

“ Balance Sheet Escrow Funds ” has the meaning referred to in Section 2.2(a)(ii).

“ Balance Sheet Escrow Agreement ” has the meaning referred to in Section 2.2(a)(ii).

“ Balance Sheet Escrow Deposit ” has the meaning referred to in Section 2.2(a)(ii).

“ Base Net Working Capital Range ” means a range of between Seven Million Five Hundred Thousand Dollars ($7,500,000) (reduced by the Subsidiary Capitalization Amount) and Nine Million Dollars ($9,000,000).

“ Base Period Value ” has the meaning set forth in Section 2.2(c).

“ Benefit Arrangement ” has the meaning referred to in Section 3.28(a).

“ Bid ” has the meaning set forth in Section 3.18(a)(ii).

“ Bishop ” has the meaning referred to in the Preamble.

“ Bishop Promissory Note ” has the meaning referred to in Recital R-2.

“ Business Day ” shall mean any day other than a Saturday, Sunday, or any Federal or Commonwealth of Virginia holiday. If any period expires on a day that is not a Business Day or any event or condition is required by the terms of this Agreement to occur or be fulfilled on a day that is not a Business Day, such period shall expire or such event or condition shall occur or be fulfilled, as the case may be, on the next succeeding Business Day.

“ Caliber ” has the meaning referred to in the Preamble.

 

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“ Caliber ESOP ” means the Caliber Associates Employee Stock Ownership Plan and the Caliber Associates Employee Stock Ownership Trust.

“ Capital Stock ” of any Person means any and all shares, rights to purchase, warrants or options (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) the equity (including without limitation common stock, preferred stock and limited liability company, partnership and joint venture interests) of such Person.

“ Claimant ” has the meaning set forth in Section 11.11(a).

“ Claims ” means jointly all Third-Party Claims and Direct Claims.

“ Closing ” has the meaning set forth in Section 2.1.

“ Closing Balance Sheet ” has the meaning referred to in Section 2.3(d).

“ Closing Cash ” has the meaning referred to in Section 2.3(b).

“ Closing Date ” has the meaning set forth in Section 2.1.

“ Closing Cash Consideration ” has the meaning set forth in Section 2.2(a)(i).

“ Closing Net Working Capital ” has the meaning referred to in Section 2.3(b).

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time, or corresponding provisions of subsequent superseding federal revenue Laws.

“ Commercial Software ” means commercially available Software licensed pursuant to a standard license agreement.

“ Commitment Letter ” has the meaning set forth in Section 5.23.

“ Competitive Business Activities ” has the meaning set forth in Section 5.8(a).

“ Consultant ” means all persons who are or have been engaged as consultants by Caliber or any of the Acquired Subsidiaries or who otherwise provide services to Caliber or any Acquired Subsidiary under a contractual arrangement.

“ Contemplated Transactions ” means the transactions contemplated by this Agreement and the other Transaction Documents.

“ Copyrights ” means all United States and foreign copyright registrations and applications therefor.

“ Croan ” has the meaning referred in the Preamble.

“ Croan/Bishop Employment Agreements ” has the meaning set forth in Section 5.10(b).

 

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“ Croan Promissory Note ” has the meaning referred to in Recital R-2.

“ Current Value ” has the meaning set forth in Section 2.2(c).

“ Customer ” has the meaning set forth in Section 5.8(c).

“ Damages ” has the meaning set forth in Section 2.5(b).

“ December 2004 Balance Sheet ” means the audited consolidated balance sheets of Caliber and the Acquired Subsidiaries as of December 31, 2004 included in the December 2004 Financial Statements.

“ December 2004 Financial Statements ” means the audited consolidated balance sheets and statements of income, changes in stockholders’ equity, and cash flow together with accompanying notes of Caliber and the Acquired Subsidiaries as of December 31, 2004, a copy of which is included in the Financial Statements attached as Exhibit A.

“ Direct Claim ” and “ Direct Claims ” mean any claim or claims (other than Third Party Claims) by an Indemnified Party against an Indemnifying Party for which the Indemnified Party may seek indemnification under this Agreement.

“ Direct Claim Notice ” has the meaning set forth in Section 9.2(d).

“ Direct Claim Notice Period ” has the meaning set forth in Section 9.2(d).

“ Dispute Notice ” has the meaning set forth in Section 11.11(a).

“ Earn Out ” has the meaning referred to in Section 2.2(b).

“ Earn Out Escrow ” means the escrow established under the Earn Out Escrow Agreement to hold the Earn Out Escrow Funds.

“ Earn Out Escrow Agreement ” has the meaning referred to in Section 2.2(a)(ii).

“ Earn Out Escrow Deposit ” has the meaning referred to in Section 2.2(a)(ii).

“ Earn Out Escrow Funds ” has the meaning referred to in Section 2.2(a)(ii).

“ Effective Date ” has the meaning set forth in the Preamble.

“ Employee Bonuses ” has the meaning referred to in Section 3.26(c).

“ Employment Agreement Release ” has the meaning referred to in Section 6.3(n).

“ Entity ” means any general partnership, limited partnership, limited liability partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative, association, foreign trust or foreign business organization.

 

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“ Environmental Laws ” means any and all Federal, state, local and foreign statutes, laws (including case or common law), regulations, ordinances, rules, judgments, orders, decrees, codes, injunctions, permits, concessions, grants, franchises, licenses, or agreements relating to human health, the environment or omissions, discharges or releases of pollutants, contaminants, Hazardous Substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, facilities, structures, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, Hazardous Substances or wastes or the investigation, clean-up or other remediation thereof. Without limiting the generality of the foregoing, “Environmental Laws” include: (a) the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq ., as amended; (b) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 26 U.S.C. § 4611 and 42 U.S.C. § 9601 et seq ., as amended; (c) the Superfund Amendment and Reauthorization Act of 1984, as amended; (d) the Clean Air Act, 42 U.S.C. § 7401 et seq ., as amended; (e) the Clean Water Act, 33 U.S.C. 5 1251 et seq .; (f) the Safe Drinking Water Act, 42 U.S.C. § 300f et seq .; and (g) the Occupational Safety and Health Act of 1976, 29 U.S.C.A. § 651, as amended, and all rules and regulations promulgated thereunder.

“ Environmental Liabilities ” means all liabilities, whether vested or unvested, fixed or unfixed, actual or potential, that arise under or relate to Environmental Laws, as applied to the facilities and business of Caliber or any of the Acquired Subsidiaries, including, without limitation: (i) the investigation, clean-up or remediation of contamination or environmental degradation or damage caused by or arising from the generation, use handling, treatment, storage, transportation, disposal, discharge, release or emission of Hazardous Substances; (ii) personal injury, wrongful death or property damage claims; or (iii) claims for natural resource damages.

“ ERISA ” has the meaning set forth in Section 3.28(a).

“ ERISA Affiliate ” has the meaning set forth in Section 3.28(a).

“ Escrow Account ” and “ Escrow Accounts ” have the meanings referred to in Section 2.2(a)(ii).

“ Escrow Agent ” means and refers to Citizens Bank.

“ Escrow Agreements ” has the meaning referred to in Section 2.2(a)(ii).

“ Escrow Deposits ” has the meaning referred to in Section 2.2(a)(ii).

“ Escrowed Funds ” has the meaning referred to in Section 2.2(a)(ii).

“ Estimated Closing Balance Sheet ” has the meaning referred to in Section 2.3(b).

“ Estimated Closing Cash Purchase Price ” has the meaning referred to in Section 2.3(a).

“ ESOP Sponsor Subsidiary ” means and refers to a corporation, of which one hundred (100) percent of the issued and outstanding shares of capital stock is owned directly by Caliber prior to the Closing Date, that Caliber causes to assume the sponsorship of the Caliber ESOP prior to the Closing.

 

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“ Executive Deferred Compensation ” has the meaning set forth in Section 3.26(c).

“ Executive Deferred Compensation Plan ” means the “Executive Non-Qualified Excess Plan” of Caliber dated December 1, 2001.

“ Executive Deferred Compensation Releases ” has the meaning referred to in Section 6.3(m).

“ Financial Statements ” means collectively (i) the Audited Financial Statements and (ii) the Interim Financial Statements, copies of all of which are attached hereto as Exhibit A.

“ Form 5310 Letter ” has the meaning referred to in Section 5.16.

“ Form 5500 ” means the Internal Revenue Service Form 5500 Annual Return/ Report of Employee Benefit Plan.

“ Founders ” has the meaning referred to in the Preamble.

“ Founders’ Promissory Notes ” has the meaning referred to in Recital R-2.

“ Full Earn Out Amount ” has the meaning referred to in Section 2.2(b).

“ GAAP ” means generally accepted accounting principles as set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession in the United States.

“ General Indemnity Escrow ” means the escrow established under the General Indemnity Escrow Agreement to hold the General Indemnity Escrow Funds.

“ General Indemnity Escrow Funds ” has the meaning referred to in Section 2.2(a)(ii).

“ General Indemnity Escrow Agreement ” has the meaning referred to in Section 2.2(a)(ii).

“ General Indemnity Escrow Deposit ” has the meaning referred to in Section 2.2(a)(ii).

“ Gross Profit ” has the meaning referred to in Section 2.2(b).

“ Governmental Authority ” means any nation or government, any foreign or domestic Federal, state, county, municipal or other political instrumentality or subdivision thereof and any foreign or domestic entity or body exercising executive, legislative, judicial, regulatory, administrative or taxing functions of or pertaining to government.

 

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“ Government Contract ” has the meaning set forth in Section 3.18(a)(iii).

“ Government Furnished Property ” has the meaning set forth in Section 3.18(n).

“ Government Subcontract ” has the meaning set forth in Section 3.18(a)(iv).

“ Hazardous Substances ” means any substance that is toxic, ignitable, reactive, corrosive, radioactive, caustic, or regulated as a hazardous substance, contaminant, toxic substance, toxic pollutant, hazardous waste, special waste, or pollutant, including, without limitation, petroleum, its derivatives, by-products and other hydrocarbons, poly-chlorinated bi-phenyls and asbestos regulated under, or that is the subject of, applicable Environmental Laws.

“ ICF ” has the meaning referred to in the Preamble.

“ ICF Indemnitees ” has the meaning set forth in Section 9.2(b)(i).

“ Indemnified Party ” means and refers to a party that has the right under Article IX to seek indemnification from an Indemnifying Party.

“ Indemnifying Party ” means and refers to a party that has the obligation under Article IX to indemnify an Indemnified Party.

“ Intellectual Property ” means Software and Technology.

“ Intellectual Property Rights ” means rights that exist under Laws respecting Copyrights, Patents, Trademarks and Trade Secrets.

“ Interim Financial Statements ” means the internally prepared consolidated interim balance sheets and related interim consolidated statements of operations, changes in shareholders equity and cash flows of Caliber and the Acquired Subsidiaries for the period January 1, 2005 through June 30, 2005 a copy of which is included as part of the Financial Statements attached as Exhibit A hereto.

“ IRS ” means and refers to the Internal Revenue Service.

“ Key Employee Offer Letter ” has the meaning referred to in Section 5.10(c).

“ Key Employees ” has the meaning set forth in Section 5.10(a).

“ Knowledge of Caliber ” means the actual knowledge of Croan, Bishop , John Yglesias, John Cousins, Marsha Moulton, or Timothy Boyle.

“ Knowledge of ICF ” means the actual knowledge of Sudhakar Kesavan, John Wasson, Alan Stewart, or George Lowden.

“ Laws ” means (a) all constitutions, treaties, laws, statutes, codes, regulations, ordinances, orders, decrees, rules, or other requirements with similar effect of any Governmental Authority, (b) all judgments, orders, writs, injunctions, decisions, rulings, decrees and awards of any Governmental Authority, and (c) all provisions of the foregoing, in each case binding on or affecting the Person referred to in the context in which such word is used; “Law” means any one of them and the words “Laws” and “Law” include Environmental Laws.

 

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“ Lien ” means any lien, statutory or otherwise, security interest, mortgage, deed of trust, priority, pledge, charge, conditional sale, title retention agreement, financing lease or other encumbrance or similar right of others, or any agreement to give any of the foregoing.

“ Losses ” has the meaning set forth in Section 9.2(a)(i).

“ Maximum Re-Award Payment ” has the meaning set forth in Section 2.2(c).

“ NCCIC Control ” has the meaning set forth in Section 2.2(c).

“ Non-Compete / Non-Solicitation Payments ” has the meaning set forth in Section 5.8(g).

“ Non-Competition Period ” has the meaning set forth in Section 5.8(a).

“ Non-Key Employees ” has the meaning set forth in Section 5.10(a).

“ Non-Key Billable Employees ” has the meaning set forth in Section 5.10(a).

“ Non-Key Non-Billable Employees ” has the meaning set forth in Section 5.10(a).

“ Non-Solicitation Period ” has the meaning referred to in Section 5.8(b).

“ Patents ” means issued patents, including United States and foreign patents and applications therefor; divisions, reissues, continuations, continuations-in-part, reexaminations, renewals and extensions of any of the foregoing; and utility models and utility model applications.

“ PBGC ” has the meaning set forth in Section 3.28(a).

“ Pension Plan ” has the meaning set forth in Section 3.28(a).

“ Permits ” has the meaning set forth in Section 3.23(a).

“ Person ” means any individual, person, Entity, or Governmental Authority, and the heirs, executors, administrators, legal representatives, successors and assigns of the “Person” when the context so permits.

“ Personal Property ” has the meaning set forth in Section 3.15.

“ Personnel ” has the meaning set forth in Section 3.26(a).

“ Plan ” has the meaning set forth in Section 3.28(a).

“ Post-Closing Tax Period ” has the meaning set forth in Section 5.11(b)(ii)(1).

 

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“ Pre-Closing Tax Period ” has the meaning set forth in Section 5.11(b)(i).

“ Prior Period Returns ” has the meaning set forth in Section 5.11(a).

“ Proposals ” has the meaning referred to in Section 3.17(c).

“ Prospective Customer ” has the meaning set forth in Section 5.8(c).

“ Real Property Interests ” has the meaning set forth in Section 3.14.

“ Re-Award or Re-Awarded ” has the meaning referred to in Section 2.2(c)(i).

“ Re-Award Escrow ” means the escrow established under the Re-Award Escrow Agreement to hold the Re-Award Escrow Funds.

“ Re-Award Escrow Agreement ” has the meaning referred to in Section 2.2(a)(ii).

“ Re-Award Escrow Deposit ” has the meaning referred to in Section 2.2(a)(ii).

“ Re-Award Escrow Funds ” has the meaning referred to in Section 2.2(a)(ii).

“ Re-Award Payment ” has the meaning referred to in Section 2.2(c)(i).

“ Re-Award Payment Percentage ” has the meaning referred to in Section 2.2(c).

“ Respondent ” has the meaning set forth in Section 11.11(a).

“ Schedule ” as used in this Agreement together with a numerical designation, means a section of the Disclosure Schedule of even date herewith delivered by the Shareholder, Caliber, and/or the Founders in connection with the execution and delivery of this Agreement (the “ Disclosure Schedule ”).

“ Scheduled Contract ” has the meaning set forth in Section 3.17(a).

“ Scheduled Transaction Costs ” has the meaning referred to in Section 5.7(a).

“ Selected Contracts ” has the meaning referred to in Section 2.1(c).

“ Shareholder ” has the meaning referred to in the Preamble.

“ Shareholder Indemnitees ” has the meaning set forth in Section 9.2(a).

“ Shareholder’s Representative ” has the meaning set forth in Section 2.5.

“ Shares ” has the meaning set forth in Recital R-1.

“ Software ” means the manifestation, in tangible or physical form, including, but not limited to, in magnetic media, firmware, and documentation, of computer programs and databases, such computer programs and databases to include, but not limited to, management

 

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information systems, and personal computer programs. The tangible manifestation of such programs may be in the form of, among other things, source code, flow diagrams, listings, object code, and microcode. Software does not include any Technology.

“ Standard Employee Documents ” has the meaning set forth in Section 5.10(d).

“ Straddle Periods ” has the meaning set forth in Section 5.11(b)(i).

“ Subcontract ” has the meaning set forth in Section 3.18(a)(vi).

“ Subsidiary ” means and refers to any corporation, association or other business entity of which more than fifty (50) percent of the issued and outstanding shares of capital stock or equity interests is owned or controlled, directly or indirectly, by Caliber, or ICF, as the case may be, and in which Caliber or ICF, as the case may be, has the power, directly or indirectly, to elect a majority of the directors.

“ Subsidiary Capitalization Amount ” has the meaning referred to in Section 5.15.

“ Survival Date ” has the meaning set forth in Section 9.1.

“ Surviving Representations ” has the meaning set forth in Section 9.1.

“ Target Gross Profit ” has the meaning referred to in Section 2.2(b).

“ Tax ” or “ Taxes ” means any Federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, ad valorem, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto.

“ Taxpayer ” and “Taxpayers” shall have the meaning set forth in Section 3.29.

“ Tax Return ” means any return, report, form or similar statement or document (including, without limitation, any related or supporting information or schedule attached thereto and any information return, claim for refund, amended return and declaration of estimated tax) that has been or is required to be filed with any Taxing Authority or that has been furnished to any Taxing Authority in connection with the determination, assessment or collection of any Taxes or the administration of any Laws or administrative requirements relating to any Taxes.

“ Taxing Authority ” means any government or any subdivision, agency, commission or authority thereof, or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or other imposition of Taxes.

“ Teaming Agreement ” has the meaning set forth in Section 3.18(a)(vii).

“ Technology ” means all types of technical information and data, whether or not reduced to tangible or physical form, including, but not limited to: know-how; product

 

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definitions and designs; research and development, engineering, manufacturing, process, test, quality control, procurement, and service specifications, procedures, standards, and reports; blueprints; drawings; materials specifications, procedures, standards, and lists; catalogs; technical information and data relating to marketing and sales activity; and formulae. Technology does not include any Software.

“ Third-Party Claims ” means a claim made by an Indemnified Party against an Indemnifying Party in connection with any third party litigation, arbitration, action, suit, proceeding, claim or demand made upon the Indemnified Party for which the Indemnified Party may seek indemnification from the Indemnifying Party under the terms of this Agreement.

“ Threshold Gross Profit ” has the meaning referred to in Section 2.2(b).

“ Trademarks ” means all United States and foreign trademark and service mark registrations and applications therefor and unregistered trademarks and service marks.

“ Trade Secrets ” means information in any form that is considered to be proprietary information by the owner, is maintained on a confidential or secret basis by the owner, and is not generally known to other parties.

“ Transaction Documents ” has the meaning set forth in Section 3.2.

“ Transaction Costs ” has the meaning referred to in Section 5.7(a).

“ Transaction Costs Release ” has the meaning referred to in Section 5.7(a).

“ VEBA ” has the meaning referred to in Section 3.28(d).

“ Welfare Plan ” has the meaning set forth in Section 3.28(a).

“ Windsor ” refers to BB&T Capital Markets/Windsor Group, formerly Windsor Group, LLC.

“ Windsor Agreement ” has the meaning set forth in Section 3.33.

“ Windsor Fees ” has the meaning set forth in Section 5.14.

1.2 Rules of Construction .

Unless the context otherwise requires:

(a) A capitalized term has the meaning assigned to it;

(b) An accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(c) References in the singular or to “him,” “her,” “it,” “itself,” or other like references, and references in the plural or the feminine or masculine reference, as the case may be, shall also, when the context so requires, be deemed to include the plural or singular, or the masculine or feminine reference, as the case may be;

 

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(d) References to Articles, Sections and Exhibits shall refer to articles, sections and exhibits of this Agreement, unless otherwise specified;

(e) The headings in this Agreement are for convenience and identification only and are not intended to describe, interpret, define or limit the scope, extent, or intent of this Agreement or any provision thereof;

(f) This Agreement shall be construed without regard to any presumption or other rule requiring construction against the party that drafted and caused this Agreement to be drafted;

(g) References to “best efforts” in this Agreement shall require commercially reasonable best efforts, and not commercially unreasonable expenditures of money, time or other resources; and

(h) A monetary figure given in United States dollars shall be deemed to refer to the equivalent amount of foreign currency when used in a context that refers to or includes operations conducted principally outside of the United States.

ARTICLE II

Closing; Purchase Price; Adjustments; Escrow

2.1 Closing .

The closing (the “ Closing ”) of the Contemplated Transactions shall take place at the offices of Squire, Sanders & Dempsey L.L.P., 8000 Towers Crescent Drive, Tysons Corner, Virginia 22182-2700, at 10:00 A.M. local time on the third (3 ^rd ) Business Day after the conditions and deliveries referred to in Articles VI, VII and VIII have been satisfied, or at such other time, date and place that shall be mutually agreed upon by the parties hereto (the “ Closing Date ”); provided , however , that in no event shall the Closing Date occur after October 10, 2005. At the Closing, the Shareholder shall sell, transfer, convey or assign and deliver to ICF and ICF shall purchase, acquire and accept from the Shareholder, the Shares, free and clear of any and all liens, claims, encumbrances or rights of any third party (and the Shareholder shall thereafter cease to have any rights as a Shareholder in Caliber other than any rights granted to the Shareholder pursuant to the terms of this Agreement and the other Transaction Documents) and ICF shall deliver to the Shareholder an amount equal to the Closing Cash Consideration and deliver to the Escrow Agent the Escrow Deposits pursuant to Section 2.2.

2.2 Purchase Price; Payment .

(a) Closing Consideration and Escrows . The purchase price for the Shares and payment thereof shall be as set forth below:

(i) Closing Cash Consideration : cash payable at the Closing in the amount of the Estimated Closing Cash Purchase Price and less the Balance Sheet Escrow and the General Indemnity Escrow (the “ Closing Cash Consideration ”). In addition and pursuant to Section 2.2(a)(ii), ICF shall deliver (x) the Earn Out Escrow Deposit to the Escrow Agent as security for the payment of the Earn-Out and (y) the Re-Award Escrow Deposit to the Escrow Agent as security for the Re-Award Payment.

 

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(ii) Escrows . At the Closing, ICF shall deposit with the Escrow Agent the following amounts (collectively the “ Escrow Deposits ”): (i) $400,000 (the “ Balance Sheet Escrow Deposit ”) to be held by the Escrow Agent pursuant to the terms of an escrow agreement substantially in the form of Exhibit B-1 (the “ Balance Sheet Escrow Agreement ”); (ii) $3,000,000 (the “ General Indemnity Escrow Deposit ”) to be held by the Escrow Agent pursuant to the terms of an escrow agreement substantially in the form of Exhibit B-2 (the “ General Indemnity Escrow Agreement ”); (iii) $1,500,000 ( the “ Earn Out Escrow Deposit ”) to be held by the Escrow Agent pursuant to the terms of an escrow agreement substantially in the form of Exhibit B-3 (the “ Earn Out Escrow Agreement ”), and (iv) $2,000,000 (the “ Re-Award Escrow Deposit ”) to be held by the Escrow Agent pursuant to the terms of an escrow agreement substantially in the form of Exhibit B-4 (the “ Re-Award Escrow Agreement ” and together with the Balance Sheet Escrow Agreement, the General Indemnity Escrow Agreement, and the Earn Out Escrow Agreement, being hereinafter collectively referred to as the “ Escrow Agreements ”). The escrow accounts set up by the Escrow Agent with respect to each of the Escrow Agreements are hereinafter individually referred to as an “ Escrow Account ” and collectively as the “ Escrow Accounts .” The aggregate amount held in the Escrow Accounts by the Escrow Agent at any time and from time to time, together with any interest or appreciation thereon, shall be referred to as the “ Escrowed Funds ” with that portion of the Escrowed Funds held from time to time in the Balance Sheet Escrow Account being hereinafter sometimes referred to as the “ Balance Sheet Escrow Funds ,” that portion of the Escrowed Funds held from time to time in the General Indemnity Escrow Account being hereinafter sometimes referred to as the “ General Indemnity Escrow Funds ,” that portion of the Escrow Funds held from time to time in the Earn Out Escrow Account being hereinafter sometimes referred to as the “ Earn Out Escrow Funds ,” and that portion of the Escrow Funds held from time to time in the Re-Award Escrow Account being hereinafter sometimes referred to as the “ Re-Award Escrow Funds .”

(A) The Balance Sheet Escrow Funds shall be released and delivered to ICF or the Shareholder, as applicable, pursuant to Section 2.3(e).

(B) Upon the expiration of the Survival Date, the Escrow Agent shall release and deliver to the Shareholder the amount then remaining in the General Indemnity Escrow Account, if any, less the amount of any pending claims all as more particularly described and in accordance with the provisions of Section 9.3(a). As any pending indemnification claims referenced in the previous sentence are resolved, the Escrow Agent, after making any payments related to such claims, shall release and deliver to the Shareholder any amounts remaining from the amounts reserved for the released claims. Any earnings on the General Indemnity Escrow Funds, net of escrow expenses and taxes, shall be paid, pro rata, to the parties receiving distributions from the General Indemnity Escrow Account.

 

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(C) The Earn Out Escrow Funds shall be released and delivered to ICF, or the Shareholder, as applicable, pursuant to Section 2.2(b).

(D) The Re-Award Escrow Funds shall be released and delivered to ICF, or the Shareholder, as applicable, pursuant to Section 2.2(c).

(b) Earn Out .

(i) Depending on “Gross Profits” of Caliber during the “Earn Out Period” as those terms are defined below, the Shareholder shall be entitled to receive up to $1,500,000 from the Earn Out Escrow pursuant to this Section 2.2(b) (the “ Earn Out ”). If Caliber’s Gross Profits for the period from October 1, 2005 through December 31, 2006 (the “ Earn Out Period ”) is equal to or greater than $28,654,000 (the “ Target Gross Profit ”), then the Escrow Agent shall pay to the Shareholder from the Earn Out Escrow One Million Five Hundred Thousand Dollars ($1,500,000) (the “ Full Earn Out Amount ”). In the event that Gross Profit is less than Target Gross Profit but exceeds $24,356,000 (the “ Threshold Gross Profit ”), the Shareholder shall be entitled to receive from the Earn Out Escrow an amount equal to the product of the Full Earn Out Amount multiplied by a fraction, the numerator of which is an amount equal to the actual Gross Profit less the Threshold Gross Profit and the denominator of which is the Target Gross Profit less the Threshold Gross Profit. In the event that Gross Profit is less than the Threshold Gross Profit, no Earn Out shall be payable. Caliber’s “ Gross Profits ” means Caliber’s gross revenue with respect to the five consecutive fiscal quarters falling within the Earn Out Period less Caliber’s direct costs (including direct labor, direct consultant, direct subcontract, and other direct costs, but excluding ICF’s corporate overhead allocations and direct fringe benefits) for that period, multiplied by 1.01. Prior to the use by a business unit of ICF or any of its Affiliates (excluding Caliber or the Acquired Subsidiaries) (each a “Business Unit”) of any Caliber employee (including, without limitation, Caliber and former Caliber employees rendering information technology services to or on behalf of Caliber) during the Earn Out Period on projects where the revenue therefrom would not otherwise be included in Caliber’s gross revenues, the Shareholder’s Representative and the lead manager of such Business Unit shall negotiate in good faith and agree as to the portion of revenue generated by the utilization of such Caliber employee(s) (less applicable direct costs) on such Business Unit’s project that would be attributed to Caliber. Prior to the material and active participation of one or more Caliber employees (including, without limitation, Caliber and former Caliber employees rendering information technology services to or on behalf of Caliber) during the Earn Out Period in a successful bid, proposal, or other business development activity of a Business Unit, the Shareholder’s Representative and the lead manager of such Business Unit shall negotiate in good faith and agree as to the number of Caliber employees to be utilized on the resulting project(s), and as to the portion of revenue generated by such utilization of any Caliber employee(s) (less applicable direct costs) on the resulting project(s) that would be attributed to Caliber. If there is a dispute regarding the portion of revenue that would be attributed to Caliber that cannot be resolved between the Shareholder’s Representative and the lead manager of such Business Unit, then the ICF Chief Operating Officer will make the final determination. ICF agrees that any such revenue during the Earn Out Period agreed to be allocated to Caliber pursuant to the preceding sentence shall be included in Caliber’s gross revenues for purposes of determining Caliber’s Gross Profits.

 

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(ii) The amounts, if any, due the Shareholder for the Earn Out shall be computed by ICF within thirty (30) days following the completion of ICF’s financial audit for the calendar year 2006 and such computation, together with reasonably detailed support, will be provided to the Shareholder’s Representative. If within thirty (30) days following delivery of such computation and support, the Shareholder’s Representative has not given ICF notice of his objection to the computation (which notice must contain a statement in reasonable detail of the basis of any such objection), then such computation shall be final. If the Shareholder’s Representative gives notice of an objection, the parties shall use their respective best efforts to resolve any dispute by negotiation. If such dispute cannot be settled by negotiation within thirty (30) days after ICF’s receipt of the Shareholder’s Representative’s notice, the dispute shall be resolved in accordance with the Financial Issue Resolution Process set forth in Section 2.4. The payments, if any, of any Earn Out shall be made by the Escrow Agent from the Earn Out Escrow within five (5) business days after the finalization of the computation referred to in this Section 2.2(b). Any amounts remaining in the Earn Out escrow at the time the amount of the Earn Out payment is finalized and paid to the Shareholder shall be paid to ICF. All earnings on the Earn Out Escrow Funds, net of escrow expenses, shall be paid to ICF at least annually.

(c) Re-Award Payment .

(i) For purposes of this Section, the following terms shall have the meanings set forth in the table and definitions below:

 

“ Base Period Value ” means (i) for a contract based primarily on option year funding and issued to succeed a Selected Contract (other than the Children’s Bureau Clearinghouse Contract, the contract first listed in the table above), the funded value for the initial period of performance of the contract as awarded (annualized based on the length of the initial period of performance), (ii) for a contract based primarily on task order funding and issued to succeed a Selected Contract, the revenues Caliber, ICF and/or an ICF Affiliate receives during

 

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the first twelve months after contract award from that contract, (iii) for a contract issued to succeed the Children’s Bureau Clearinghouse Contract, the revenues Caliber, ICF, and/or an Affiliate receives during calendar year 2007 from that contract or, if the contract is Re-Awarded during 2007, the first twelve months after contract award, and (iv) for the purposes of determining whether an extension of a Selected Contract shall permit a later award of a successor contract to be considered a Re-Award, the value of the extension as determined pursuant to clause (i), (ii) or (iii) of this definition, as applicable, as if the extended period were a successor contract to such Selected Contract, provided the funded value or revenues received from the extension, as applicable, shall be annualized based on the length of the period of the extension.

“ Current Value ” of a Selected Contract means the revenues Caliber received in calendar year 2005 from that contract.

“ Maximum Re-Award Payment ” for a Selected Contract means the Re-Award Payment for that Selected Contract as shown on the table above.

“ NCCIC Contract ” means the National Child Care Information Clearinghouse contract, listed second in the table above.

“ Re-Award ” and “ Re-Awarded ” shall mean, with respect to a particular Selected Contract, the award in calendar year 2006 (A) by the entity that awarded that Selected Contract, (B) to Caliber, ICF or one of ICF’s Affiliates of a successor contract (or the direction of an award of a subcontract) that (x) is on terms (including, but not limited to, price, but excluding period of performance and value) substantially similar to the applicable Selected Contract, (y) has a period of performance (including option periods) equal to or longer than the period of performance (including option periods) of the applicable Selected Contract ( provided , a period of performance of not less than three years, including option periods, shall be deemed to satisfy this clause (y)), and (z) in the case of each Selected Contract other than the NCCIC Contract has a Base Period Value to Caliber, ICF, or one of ICF’s Affiliates equal to at least seventy-five percent (75%), or more, of the Current Value of the applicable Selected Contract (and in the case that the applicable Selected Contract is the NCCIC Contract, has a Base Period Value to Caliber, ICF, or one of ICF’s Affiliates equal to at least forty-five percent (45%), or more, of the Current Value of the NCCIC Contract). A Selected Contract shall also be considered to have been Re-Awarded if it is first extended for up to a year beyond the current scheduled end date of the Selected Contract, on the same terms as and for a Base Period Value equal to or greater than seventy-five percent (75%) of the Current Value of the Selected Contract, and is thereafter Re-Awarded to Caliber at or prior to the expiration of the extended term.

“ Re-Award Payment ” has the meaning set forth in Section 2.2(c)(ii) below.

“ Re-Award Payment Percentage ” has the meaning set forth in Section 2.2(c)(ii)(B) below.

“ Selected Contract ” means any one of the Selected Contracts set forth in the table above.

 

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(ii) Based upon whether Caliber is Re-Awarded any of the Selected Contracts, the Shareholder shall be entitled to receive payment as calculated below from the Re-Award Escrow pursuant to this Section 2.2(c) (the “ Re-Award Payment ”).

(A) If the Base Period Value of the Re-Awarded contract is equal to at least one hundred percent (100%) of the Current Value of the applicable Selected Contract, then the Re-Award Payment with respect to that Re-Awarded contract shall be the applicable Maximum Re-Award Payment for the applicable Selected Contract.

(B) If the Base Period Value of the Re-Awarded contract to Caliber, ICF, or one of its Affiliates is equal to at least seventy-five percent (75%) (or forty-five percent (45%) in the case of the NCCIC Contract), but less than one hundred percent (100%) of the Current Value of that contract (in each case the “ Re-Award Payment Percentage ”), then the Re-Award Payment with respect to that Re-Awarded contract shall be an amount equal to the product of the applicable Maximum Re-Award Payment for the applicable Selected Contract multiplied by the Re-Award Payment Percentage (between seventy-five percent (75%) and one hundred percent in the case of each Selected Contract other than the NCCIC Contract and between forty-five percent (45%) and one hundred percent in the case of the NCCIC Contract). For any Re-Award Payment to be made, the proposal to obtain the Re-Awarded Selected Contract must be prepared and approved in advance of submission pursuant to ICF’s applicable policies and procedures, and the Re-Awarded Selected Contract must be approved in advance of execution pursuant to ICF’s applicable policies and procedures. If (x) the Base Period Value of any successor Selected Contract to Caliber, ICF, or one of its Affiliates is less than seventy five percent (75%) (or forty-five percent (45%) in the case of the NCCIC Contract) of the Current Value of that Selected Contract, or (y) Caliber, ICF, or one of its Affiliates is not Re-Awarded the Selected Contract in 2006, or (z) the Selected Contract is extended, as described above, and Caliber, ICF, or one of its Affiliates is not Re-Awarded the Selected Contract at or prior to the expiration of the extended term, then there shall be no Re-Award Payment with respect to that contract.

(iii) The amounts, if any, due the Shareholder for any Re-Award Payment shall be computed within thirty (30) days following the (a) later of the actual start of work by Caliber on the Re-Awarded Selected Contract or the expiration of the applicable time period for the filing of a protest or any other applicable challenge with respect to the Re-Awarded Selected Contract in the case of the Selected Contracts where the Base Period Value is calculated based on the level of funding in the initial period of performance of the contract as awarded, or (b) the closing of the financial books of ICF for the twelfth month following the award of the Re-Awarded Selected Contract in the case of the Selected Contracts where the Base Period Value is calculated based on the revenues generated under the contract for Caliber during the first twelve months after contract award, or (c) the closing of the financial books of ICF for 2007 where revenues for calendar year 2007 are used to determine the Base Period Value. Such computation, together with reasonably detailed support, will be provided to the Shareholder’s Representative. If within thirty (30) days following delivery of such computation and support, the Shareholder’s Representative has not given ICF notice of his objection to the computation (which notice must contain a statement in reasonable detail of the basis of any such objection), then such computation shall be final. If the Shareholder’s Representative gives notice of an objection, the parties shall use their respective best efforts to resolve any dispute by negotiation.

 

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If such dispute cannot be settled by negotiation within thirty (30) days after ICF’s receipt of the Shareholder’s Representative’s notice, the dispute shall be resolved in accordance with the Financial Issue Resolution Process set forth in Section 2.4. The payment, if any, of any Re-Award Payment shall be made by the Escrow Agent from the Re-Award Escrow within five (5) business days after the finalization of the computation referred to in this Section 2.2(c). All amounts remaining in the Re-Award Escrow as of March 31, 2007 shall be returned to ICF, unless:

(x) one or more Selected Contracts have been extended beyond the current scheduled end date of the Selected Contract, on the same terms as and for a Base Period Value equal to or greater than seventy-five percent (75%) of the Current Value of the Selected Contract, but such Selected Contract has not yet been Re-Awarded, in which case an amount equal to the maximum Re-Award Payment for that Selected Contract shall remain in the Re-Award Escrow until the earlier of the date any Re-Award Payment is made with respect to that Selected Contract or March 31, 2008, at which time all amounts remaining in the Re-Award Escrow shall be returned to ICF except with respect to Re-Award Payments relating to Selected Contracts as provided in clause (y) of this sentence; or

(y) a successor contract to one or more of the Selected Contracts has been awarded to Caliber, ICF, or its Affiliates for which the Base Period Value depends on the revenues generated in 2007 or the first twelve months after contract award, but the period for calculating the Re-Award Payment has not yet run, in which case an amount equal to the maximum Re-Award Payment for that Selected Contract shall remain in the Re-Award Escrow until the earlier of the date any Re-Award Payment is made with respect to that Selected Contract or 90 days after the end of that twelve-month period, at which time all amounts remaining in the Re-Award Escrow shall be returned to ICF except with respect to Re-Award Payments relating to Selected Contracts as provided in clause (x) of this sentence.

Notwithstanding the preceding sentence, undisputed amounts payable as a result of one or more Re-Awarded Selected Contracts but not yet paid as of the date or dates remaining amounts in the Re-Award Escrow are to be returned to ICF, shall be distributed to the Shareholder on such date or dates, as applicable. All earnings on the Re-Award Escrow Funds, net of escrow expenses, shall be paid to ICF.

2.3 Estimated Closing Cash Purchase Price and Net Working Capital Adjustments .

(a) Estimated Closing Cash Purchase Price . The estimated cash portion of the Purchase Price (the “ Estimated Closing Cash Purchase Price ”) payable to the Shareholder at Closing shall be an amount equal to Nineteen Million Dollars ($19,000,000) as adjusted upward or downward pursuant to Sections 2.3(b) and (c) below and as reduced by the Scheduled Transaction Costs. The Estimated Closing Cash Purchase Price shall be paid by ICF to the Shareholder.

(b) Not less than two (2) Business Days prior to the Closing Date, the Shareholder shall deliver to ICF an estimated, unaudited balance sheet (the “ Estimated Closing Balance Sheet ”) of Caliber as of the Closing Date, together with all supporting documentation. The Estimated Closing Balance Sheet shall include cash/accrual taxes of Caliber and shall be

 

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prepared by Caliber’s controller and reviewed by Caliber’s external auditors, in accordance with GAAP and in a manner consistent with the December 2004 Balance Sheet except that the Estimated Closing Balance Sheet shall include a calculation of the “Adjusted Closing Net Working Capital” (hereinafter defined). For purposes of this Agreement, the terms “Adjusted Closing Net Working Capital” and “Closing Net Working Capital” shall have the following meanings.

(i) The term “ Adjusted Closing Net Working Capital ” shall mean the “Closing Net Working Capital” (as hereinafter defined and as adjusted pursuant to Section 2.3(d) below) of Caliber as shown on the Estimated Closing Balance Sheet as reduced to reflect, to the extent not otherwise reflected in the Closing Net Working Capital or the calculation of Closing Cash: (A) the payment in full of any and all outstanding indebtedness of Caliber and the Acquired Subsidiaries, including, but not limited to, any indebtedness that Caliber or the Acquired Subsidiaries may have to the Caliber ESOP, the ESOP Sponsor, or any third party; (B) the payment of the Transaction Costs other than the Scheduled Transaction Costs (including (1) any payments due Caliber employees resulting from the Contemplated Transactions and (2) the accrual or full funding, through the Effective Date, of all qualified or unqualified Pension Plans); (C) payment of the Subsidiary Capitalization Amount; and (D) the Accrued Bonuses.

(ii) The term “ Closing Net Working Capital ” shall mean the amount as of the Closing Date and as shown by the Closing Balance Sheet by which Caliber’s current assets (exclusive of cash and inclusive of accounts receivable, unbilled receivables, income taxes and other currents assets) exceed current liabilities (exclusive of the line of credit and current portions of subordinated notes payable to employees, which will be repaid at Closing, and inclusive of accounts payable and accrued expenses, accrued payroll and related liabilities, billings in excess of revenue recognized and deferred rent), all calculated in accordance with GAAP in a manner consistent with the December 31, 2004 Financial Statements.

(iii) The term “ Closing Cash ” shall mean Caliber’s cash on the Closing Date, as reduced to reflect (A) the payment in full of any and all outstanding indebtedness of Caliber and the Acquired Subsidiaries, including, but not limited to, any other indebtedness that Caliber or the Acquired Subsidiaries may have to the Caliber ESOP, the ESOP Sponsor, or any third party; and (B) payment of the Subsidiary Capitalization Amount.

(c) Adjustments to Estimated Closing Cash Purchase Price . The Estimated Closing Cash Purchase Price will be adjusted (i) downwards on a dollar-for-dollar basis to the extent that the Adjusted Closing Net Working Capital, as shown on the Estimated Closing Balance Sheet, is below the Base Net Working Capital Range and (ii) upwards on a dollar-for-dollar basis to the extent that the Adjusted Closing Net Working Capital is above the Base Net Working Capital Range. The Estimated Closing Cash Purchase Price will be further adjusted (i) downwards on a dollar-for-dollar basis to the extent that the Closing Cash is less than zero and (ii) upwards on a dollar-for-dollar basis to the extent that the Closing Cash is greater than zero.

(d) Closing Balance Sheet and Adjusted Closing Net Working Capital . Promptly following the Closing, ICF will cause Grant Thornton LLP to review the Estimated Closing Balance Sheet, including the Adjusted Closing Net Working Capital, the Closing Net Working Capital and the Closing Cash as reflected thereon. Based on such review, ICF will

 

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deliver a proposed Closing Balance Sheet, prepared in a manner consistent with Section 2.3(b) above together with all related work papers, to the Shareholder’s Representative within fifteen (15) Business Days after the later of (i) the Closing Date, or (ii) the date of receipt by ICF of all information sufficient for ICF to complete its review of all aspects of the Estimated Closing Balance Sheet (the “ Proposed Closing Balance Sheet ”). If within fifteen (15) Business Days following delivery of the Proposed Closing Balance Sheet, the Shareholder’s Representative has not given ICF notice of his objection to the Proposed Closing Balance Sheet (which notice must contain a statement in reasonable detail of the basis of any such objection), then such Proposed Closing Balance Sheet shall constitute the “ Closing Balance Sheet ,” and the Adjusted Closing Net Working Capital, Closing Net Working Capital and Closing Cash amounts included therein shall constitute the “Adjusted Closing Net Working Capital,” “Closing Net Working Capital” and “Closing Cash.” If the Shareholder’s Representative gives notice of an objection, the parties shall use their respective best efforts to resolve any dispute by negotiation. If such dispute cannot be settled by negotiation within thirty (30) days after receipt by ICF of the Shareholder’s Representative’s notice, the dispute shall be resolved in accordance with the Financial Issue Resolution Process set forth in Section 2.4.

(e) Final Adjustment to the Estimated Closing Cash Purchase Price . If the Adjusted Closing Net Working Capital and the Closing Cash are such that Sections 2.3(d) and/or 2.4 do not require an adjustment to the Estimated Closing Cash Purchase Price, then the Escrow Agent shall disburse to the Shareholder the Balance Sheet Escrow within five (5) days after the finalization of the Closing Balance Sheet pursuant to Sections 2.3(d) and/or 2.4. If the Adjusted Closing Net Working Capital or the Closing Cash are such that Sections 2.3(d) or 2.4 require an adjustment to the Estimated Closing Cash Purchase Price, any amount due to the Shareholder by ICF in excess of the Balance Sheet Escrow shall be paid by ICF to the Shareholder, and any amount due to ICF from the Shareholder shall be paid to ICF by the Escrow Agent from the Escrow and, if the amount due ICF is in excess of the Balance Sheet Escrow, then such excess shall be paid to ICF by the Shareholder, all payments to be made within five (5) days after the finalization of the Closing Balance Sheet pursuant to Sections 2.3(d) and/or 2.4. In the event that the Shareholder for any reason fails to make the payment contemplated in the previous sentence, then ICF may bring an indemnification claim under Article IX and the Shareholder and the Founders shall be jointly and severally liable for that payment in accordance with Article IX. Any earnings on the Balance Sheet Escrow Funds, net of escrow expenses and taxes, shall be paid, pro rata, to the parties receiving distributions from the Balance Sheet Escrow Account.

2.4 Financial Issue Resolution Process .

Disputes between ICF and the Shareholder’s Representative that cannot be resolved by negotiation within thirty (30) days after receipt by ICF of the Shareholder’s Representative’s notice in accordance with Sections 2.2(b) or 2.3(d) shall be referred no later than such 30th day for decision to RSM McGladrey, provided if at such time they serve as the independent public accountants of ICF or are otherwise unavailable for any reason, then to a nationally-recognized independent public accounting firm mutually selected by the Shareholder’s Representative and ICF (which firm shall not be either (a) the independent public accountants of ICF or (b) the independent public accountants used by Caliber prior to the Closing Date) (the “ Auditor ”) who shall act as arbitrator and determine, based solely on presentations by the Shareholder’s Representative and ICF and only with respect to the

 

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remaining differences so submitted. If RSM McGladrey is ineligible to serve or is otherwise unavailable and such an alternate accounting firm cannot be identified within ten (10) business days after the identification of the need for dispute resolution, the dispute shall be resolved in accordance with Section 11.11. The Auditor shall deliver its written determination to ICF and the Shareholder’s Representative no later than the 30th day after the remaining differences underlying the dispute are referred to the Auditor, or such longer period of time as the Auditor determines is necessary. The Auditor’s determination shall be conclusive and binding upon the parties. The fees and disbursements of the Auditor shall be allocated equally between ICF and the Shareholder’s Representative. ICF and the Shareholder shall make readily available to the Auditor all relevant information, books and records and any work papers relating to the dispute and all other items reasonably requested by the Auditor. In no event may the Auditor’s resolution of any difference be for an amount that is outside the range of ICF’s and the Shareholder’s Representative’s disagreement.

2.5 Shareholder’s Representative .

(a) Croan is hereby appointed as the Shareholder’s and the Founders’ true and lawful representative, proxy, agent and attorney-in-fact (the “ Shareholder’s Representative ”) for a term that shall be continuing and indefinite and without a termination date except as otherwise provided herein, to act for and on behalf of the Shareholder and the Founders in connection with or relating to the Transaction Documents and the Contemplated Transactions, including, without limitation, to give and receive notices and communications, to receive and accept service of legal process in connection with any proceeding arising under the Transaction Documents or in connection with the Contemplated Transactions, to authorize delivery of cash from each of the Escrow Accounts, to object to or accept any claims against or on behalf of the Shareholder and/or the Founders pursuant to Article IX, to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to such amounts or claims, and to take all actions necessary or appropriate in the sole opinion of the Shareholder’s Representative for the accomplishment of the foregoing. Until all amounts in each of the Escrow Accounts have been fully and finally been distributed by the Escrow Agent, the Shareholder may remove and replace any Shareholder’s Representative. At such time as all amounts in each of the Escrow Accounts have been fully and finally distributed by the Escrow Agent, the Shareholder shall cease to have the authority to remove and replace the Shareholder’s Representative and Croan shall have the authority to remove and replace any Shareholder’s Representative. Any change in the Shareholder’s Representative shall become effective only upon delivery of written notice of such change to ICF. The Shareholder’s Representative shall not receive compensation for his or her services. Notices, deliveries or communications to or from the Shareholder’s Representative by or to any of the parties to the Transaction Documents shall constitute notices, deliveries or communications to or from the Shareholder.

(b) The Shareholder’s Representative shall not be liable for any act done or omitted hereunder in his capacity as Shareholder’s Representative in the absence of gross negligence or willful misconduct on his or her part. The Shareholder and the Founders (so long as the Shareholder has the authority to remove and replace the Shareholder’s Representative) and the Founders, but not the Shareholder (commencing at the time Croan has the authority to remove and replace the Shareholder’s Representative) shall protect and indemnify the

 

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Shareholder’s Representative and hold the Shareholder’s Representative harmless from and against any and all damages, actions, proceedings, demands, liabilities, losses, taxes, fines, penalties, costs, claims and expenses (including, without limitation, reasonable fees of counsel) (“ Damages ”) of any kind or nature whatsoever (whether or not arising out of third-party claims and including all amounts paid in investigation, defense or settlement of the foregoing) that may be sustained or suffered by the Shareholder’s Representative in connection with the administration of its duties hereunder, except where such Damages arise from or are the result of the Shareholder’s Representative’s gross negligence or willful misconduct.

(c) Any decision, act, consent or instruction taken or given by the Shareholder’s Representative pursuant to this Agreement shall be and constitute a decision, act, consent or instruction of the Shareholder and/or the Founders, as the case may be, and shall be final, binding and conclusive upon the Shareholder and the Founders. The Escrow Agent and ICF may rely upon any such decision, act, consent or instruction of the Shareholder’s Representative as being the decision, act, consent or instruction of the Shareholder and/or the Founders and shall have no duty to inquire as to the acts and omissions of the Shareholder’s Representative. The Escrow Agent and ICF are hereby relieved from any liability to any Person for any acts done by them in accordance with such decision, act, consent or instruction of the Shareholder’s Representative.

(d) Notices given to the Shareholder’s Representative in accordance with Section 11.2 shall constitute notice to the Shareholder and the Founders for all purposes under this Agreement.

(e) This Section 2.5 shall survive the termination or expiration of this Agreement or any one or more of the Escrow Agreements.

ARTICLE III

Representations and Warranties of the Shareholder, Caliber and Founders

Except as set forth in the Disclosure Schedule, the Shareholder, Caliber and the Founders jointly and severally represent and warrant to ICF as follows:

3.1 Organization and Power .

(a) Shareholder . The Shareholder is a duly organized and existing trust under the laws of the Commonwealth of Virginia and the trustees thereunder have the full power and authority to execute, deliver and perform this Agreement and the other Transaction Documents to which it is a party and to consummate the Contemplated Transactions.

(b) Caliber . Caliber (i) is a corporation duly incorporated, validly existing and in good standing under the laws of the Commonwealth of Virginia, (ii) has full power and authority to execute, deliver and perform this Agreement, (iii) has all requisite corporate power to own or lease and to operate its properties and carry out the businesses in which it is engaged, and (iv) is duly qualified or licensed to do business as a foreign corporation in good standing in every jurisdiction where its ownership of property, or the conduct of its business, requires such qualification, other than jurisdictions in which the failure to so qualify, individually or in the

 

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aggregate, would not have a material adverse effect on Caliber. Section 3.1(b) of the Disclosure Schedule lists each of the jurisdictions in which Caliber is qualified or licensed to do business as a foreign corporation. Caliber is in good standing in each jurisdiction listed on Section 3.1(b) of the Disclosure Schedule.

(c) Acquired Subsidiaries . Each of the Acquired Subsidiaries (i) is a corporation duly incorporated, validly existing and in good standing under the laws of its respective jurisdiction of incorporation, (ii) has all requisite corporate power to own or lease and to operate its properties and carry out the businesses in which it is engaged, and (iii) is duly qualified or licensed to do business as a foreign corporation in good standing in every jurisdiction where such corporation’s ownership of property, or the conduct of such corporation’s business, requires such qualification, other than jurisdictions in which the failure to so qualify, individually or in the aggregate, would not have a material adverse effect on Caliber or such Acquired Subsidiary. Section 3.1(c) of the Disclosure Schedule lists each of the Acquired Subsidiaries and the jurisdictions in which each of the Acquired Subsidiaries is qualified or licensed to do business as a foreign corporation. Each Acquired Subsidiary is in good standing in each jurisdiction listed for such Acquired Subsidiary on Section 3.1(c) of the Disclosure Schedule.

3.2 Authorization and Enforceability .

This Agreement has been, and each of the other documents, agreements and instruments to be executed and delivered at Closing by the Shareholder and Caliber (together with this Agreement, the “ Transaction Documents ”) will be, duly authorized, executed and delivered by Caliber and the Shareholder and each of the Founders, as the case may be, and constitutes, or as of the Closing Date will constitute, a valid and legally binding agreement of each of Caliber, the Shareholder or the Founders, as the case may be, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles. The Contemplated Transactions have been duly authorized by (i) the Trustee(s) of the Shareholder in accordance with all applicable Law and the Shareholder’s Trust Agreement and (ii) the Board of Directors of Caliber in accordance with all applicable Law and the Articles of Incorporation and Bylaws of Caliber.

3.3 No Violation .

The execution and delivery of this Agreement by Caliber and the Shareholder, the consummation of the Contemplated Transactions and compliance with the terms of the Transaction Documents will not:

(a) conflict with or violate any provision of the Caliber Associates Employee Stock Ownership Trust Agreement or other document of Shareholder;

(b) conflict with or violate any provision of the Articles of Incorporation, any bylaw or any corporate charter or document of Caliber or the Acquired Subsidiaries;

(c) result in the creation of, or require the creation of, any Lien upon any (i) Shares or (ii) property of Caliber or any of the Acquired Subsidiaries;

 

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(d) result in (i) the termination, cancellation, modification, amendment, violation, or renegotiation of any contract, agreement, indenture, instrument, or commitment pertaining to the business of Caliber, or any of the Acquired Subsidiaries, or (ii) the acceleration or forfeiture of any term of payment;

(e) give any Person the right to (i) terminate, cancel, modify, amend, vary, or renegotiate any contract, agreement, indenture, instrument, or commitment pertaining to the business of Caliber or any of the Acquired Subsidiaries, or (ii) to accelerate or forfeit any term of payment; or

(f) violate any Law applicable to Caliber or any of the Acquired Subsidiaries or the Shareholder or by which their properties are bound or affected.

3.4 Consents .

Except as set forth on Section 3.4 of the Disclosure Schedule, neither the execution and delivery of this Agreement by the Shareholder and Caliber, nor the consummation of the Contemplated Transactions or compliance with the terms of the Transaction Documents, will require (a) the consent or approval under any agreement or instrument or (b) the Shareholder, Caliber, or any of the Acquired Subsidiaries to obtain the approval or consent of, or make any declaration, filing (other than administrative filings with Taxing Authorities, foreign companies registries and the like) or registration with, any Governmental Authority and all such consents or approvals have been obtained or waived.

3.5 Financial Statements .

(a) In General . The Audited Financial Statements were prepared in accordance with GAAP applied consistently and the Interim Financial Statement and the Estimated Closing Balance Sheet were internally prepared by Caliber, in a manner consistent with past practices for such internally prepared unaudited financial statements. Throughout the periods involved, the Financial Statements fairly and accurately present in all material respects the consolidated financial position of Caliber and the Acquired Subsidiaries, as of the dates thereof, and the consolidated statements of operations, changes in shareholders’ equity, and cash flows for the periods then ended.

(b) Financial Books and Records . The financial books and records of Caliber and the Acquired Subsidiaries fairly and accurately reflect, in accordance with applicable Law and GAAP and on a basis consistent with past periods and throughout the periods involved, (i) the financial position of Caliber and the Acquired Subsidiaries and (ii) all transactions of Caliber and the Acquired Subsidiaries. Neither Caliber nor any of the Acquired Subsidiaries has received any advice or notification from its independent certified public accountants that Caliber or any of the Acquired Subsidiaries has used any improper accounting practice that would have the effect of not reflecting or incorrectly reflecting in the books and records of Caliber or any of the Acquired Subsidiaries any properties, assets, liabilities, revenues, or expenses.

(c) No Undisclosed Liabilities; Etc . Except as set forth on Section 3.5(c) of the Disclosure Schedule, neither Caliber nor any of the Acquired Subsidiaries has any liabilities or obligations of any nature (whether known or unknown and whether absolute, accrued, contingent, or otherwise), except for amounts of liabilities or obligations reflected or reserved against in the Financial Statements.

 

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(d) Accounts Receivable . All receivables (including intercompany and unbilled receivables) reflected in the Financial Statements or recorded on the books of Caliber and each of the Acquired Subsidiaries resulted from the ordinary course of business, have been properly recorded in the ordinary course of business, and, to the Knowledge of Caliber and subject to the reserves reflected in the Financial Statements, which reserves are determined in accordance with GAAP applied on a basis consistent with prior periods and throughout the periods involved, are good and collectible in full without any discount, setoff or valid counterclaim (net of recovery from vendors or subcontractors), in amounts equal to not less than the aggregate face amounts thereof.

(e) No Letters of Credit or Guarantees . Except as reflected in the Financial Statements or as set forth on Section 3.5(e) of the Disclosure Schedule, neither Caliber nor any of the Acquired Subsidiaries (i) has any letters of credit outstanding as to which Caliber or the Acquired Subsidiaries has any actual or contingent reimbursement obligations, and (ii) is a party to or bound, either absolutely or on a contingent basis, by any agreement of guarantee, indemnification or any similar commitment with respect to the liabilities or obligations of any other Person (whether accrued, absolute, or contingent).

(f) Contingent or Deferred Acquisition Expenses or Payments . Except as otherwise disclosed on Section 3.5(f) of the Disclosure Schedule, neither Caliber, nor any of the Acquired Subsidiaries are obligated, or otherwise liable for the payment of any contingent or deferred acquisition payments relating to the direct or indirect acquisition of any business, enterprise, or combination.

3.6 Relationships with Affiliates .

Except as set forth on Section 3.6 of the Disclosure Schedule, no Shareholder or any Affiliate of any Shareholder, Caliber or any of the Acquired Subsidiaries has, or has had, any interest in any property (real, personal, or mixed and whether tangible or intangible), used in or pertaining to the business of Caliber or any of the Acquired Subsidiaries. No Shareholder or any Affiliate of any Shareholder, Caliber or any of the Acquired Subsidiaries is, or has owned (of record or as a beneficial owner) an equity interest or any other financial or a profit interest in, a Person that has (a) had business dealings or a material financial interest in any transaction with Caliber or any Acquired Subsidiary or (b) engaged in competition with Caliber or any Acquired Subsidiary with respect to any line of the products or services of Caliber or any Acquired Subsidiary in any market presently served by Caliber or any of the Acquired Subsidiaries. Except as set forth on Section 3.6 of the Disclosure Schedule, no Shareholder or any Affiliate of any Shareholder, Caliber or any of the Acquired Subsidiaries is a party to any contract or agreement with, or has any claim or right against, Caliber or any of the Acquired Subsidiaries.

3.7 Indebtedness to/from Officers, Directors, Shareholder and Employees .

Except as set forth on Section 3.7 of the Disclosure Schedule, neither Caliber nor any of the Acquired Subsidiaries is indebted, directly or indirectly, to any Person who

 

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immediately prior to the Closing was a Shareholder, officer or director of either Caliber or any of the Acquired Subsidiaries in any amount whatsoever, other than for salaries for services rendered or reimbursable business expenses. No Shareholder, officer, director, or employee is indebted to either Caliber or any of the Acquired Subsidiaries except for advances made to employees of either Caliber or any of the Acquired Subsidiaries in the ordinary course of business to meet reimbursable business expenses anticipated to be incurred by such obligor.

3.8 No Adverse Change .

Since December 31, 2004, there has not been any material adverse change in the businesses, operations, properties or condition, financial or otherwise, or prospects of either Caliber or any of the Acquired Subsidiaries, nor has any event, condition or contingency occurred that is reasonably likely to result in such an adverse change.

3.9 Conduct of the Business .

(a) Cooperative Business Arrangements . Except as set forth on Section 3.9(a) of the Disclosure Schedule, none of the business of Caliber or the Acquired Subsidiaries is, or since December 31, 2004 has been, conducted through any (i) joint venture, teaming agreement or relationship, partnership or other entity, or (ii) any subcontract, agreement or other arrangement pursuant to which a third party manufactures or processes products for Caliber or the Acquired Subsidiaries, or performs services for customers of Caliber or the Acquired Subsidiaries. Neither Caliber nor any of the Acquired Subsidiaries (nor to the Knowledge of Caliber, any other party to such agreements) is in breach of any term of any such agreement.

(b) Letters of Intent, Non-Competition and Non-Disclosure Arrangements . Except as set forth in Section 3.9(b) of the Disclosure Schedule, neither Caliber, nor any of the Acquired Subsidiaries, is party to any letters of intent, memoranda of understanding, non-competition arrangements, non-disclosure agreements or confidentiality agreements that remain in effect.

3.10 Corporate and Capital Structure.

(a) Capital Structure . Section 3.10(a) of the Disclosure Schedule sets forth the capitalization and record owners of all of the Capital Stock of each of Caliber and the Acquired Subsidiaries. All Capital Stock of Caliber and the Acquired Subsidiaries previously issued and now cancelled was duly authorized, and issued and cancelled in compliance with the applicable Virginia law, the Securities Act of 1933, as amended, and any applicable state “Blue Sky” laws or exemptions therefrom. All outstanding Capital Stock of Caliber and the Acquired Subsidiaries is duly authorized, has been validly issued and is fully paid and non-assessable, owned beneficially and of record by the Shareholder, free and clear of any Lien, and was issued in compliance with the Securities Act of 1933, as amended, and any applicable state “Blue Sky” laws or exemptions therefrom. Caliber has good and valid title to all of the issued and outstanding shares of Capital Stock of the Acquired Subsidiaries registered in its name, in each case free and clear of any Lien. The holders of Caliber’s Capital Stock have no preemptive rights with respect to securities of Caliber. None of the holders of Caliber’s Capital Stock has granted any proxy, or entered into any voting trust, voting agreement or similar arrangement,

 

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with respect to his or her Shares. Neither Caliber nor any Acquired Subsidiary (i) has any outstanding securities convertible into or exchangeable or exercisable for any shares of its Capital Stock, or (ii) has outstanding any rights to subscribe for or to purchase, or any options for the purchase, or any agreements providing for the issuance (contingent or otherwise), of, or any calls against, commitments by or claims against them of any character relating to, any shares of their Capital Stock or any securities convertible into or exchangeable or exercisable for any shares of their Capital Stock.

(b) Interests In Other Persons . Except as set forth on Section 3.10(b) of the Disclosure Schedule, neither Caliber, nor any of the Acquired Subsidiaries owns, directly or indirectly, any shares of Capital Stock or any other equity interest in any other Person.

3.11 Title to Shares .

At the completion of the Closing, ICF will own all of the issued and outstanding Capital Stock of Caliber, and Caliber will own all of the issued and outstanding Capital Stock of the Acquired Subsidiaries, in each case free and clear of any Liens.

3.12 Charter, Bylaws and Corporate Records .

True and complete copies of the Charter and Bylaws of Caliber and each of the Acquired Subsidiaries, as currently in effect, and the minute books and stock record books thereof have been provided to ICF. The minute books of Caliber and each of the Acquired Subsidiaries contain accurate and complete records of all meetings held of, and corporate actions taken by, the shareholders, the Boards of Directors, and committees of the Boards of Directors of Caliber and the Acquired Subsidiaries, and no meeting of any such shareholders, Board of Directors or committee has been held for which minutes have not been prepared and are not contained in such minute books. The aforesaid Charter, Bylaws and minutes (including written consents or other actions) are true, correct and complete as of the date hereof.

3.13 Assets – In General .

Except as set forth on Section 3.13 of the Disclosure Schedule, the assets and rights of Caliber and the Acquired Subsidiaries include (a) all of the assets and rights of Caliber and the Acquired Subsidiaries that were used in the conduct of their businesses as conducted prior to December 31, 2004, subject to such changes as have occurred in the ordinary course of business since December 31, 2004, and (b) all assets reflected in the December 2004 Financial Statements, subject to such changes as have occurred in the ordinary course of business since December 31, 2004. Except as set forth on Section 3.13 of the Disclosure Schedule, Caliber and each of the Acquired Subsidiaries, has good and marketable title to all of their respective assets, free and clear of any Lien. Except as set forth on Section 3.13 of the Disclosure Schedule, all assets necessary for the conduct of the business of Caliber and the Acquired Subsidiaries in accordance with past practice are (i) in good operating condition and repair, ordinary wear and tear excepted, (ii) not in need of maintenance or repair, except for ordinary routine maintenance or repairs that are not material in nature or cost, and (iii) adequate and sufficient for the continuing conduct of the businesses of Caliber and the Acquired Subsidiaries as conducted prior to the date hereof.

 

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3.14 Real Property Interests .

Except as set forth on Section 3.14 of the Disclosure Schedule, neither Caliber nor any of the Acquired Subsidiaries now owns, or has ever owned, any real property. Section 3.14 of the Disclosure Schedule sets forth a list and summary description of all leases, subleases, or other occupancies used by Caliber or any of the Acquired Subsidiaries or to which any of them is a party (the “ Real Property Interests ”). Except as set forth on Section 3.14 of the Disclosure Schedule, each of the Real Property Interests listed and described on Section 3.14 of the Disclosure Schedule is in full force and effect, and there is no default by Caliber or any of the Acquired Subsidiaries under any such Real Property Interests.

3.15 Personal Property .

Set forth on Section 3.15 of the Disclosure Schedule is a list of all material equipment, machinery, motor vehicles, and other material tangible personal property owned or leased by Caliber and the Acquired Subsidiaries (the “ Personal Property ”). Caliber and each of the Acquired Subsidiaries has good title to all of their respective Personal Property, free and clear of any Lien.

3.16 Intellectual Property Rights .

(a) Section 3.16(a) of the Disclosure Schedule includes a true and complete list of all Commercial Software used by or in connection with the businesses of Caliber and each of the Acquired Subsidiaries. Section 3.16(a) of the Disclosure Schedule also includes a true and complete list of (i) all Copyrights, Patents and Trademarks (other than those comprising or reflected in Commercial Software) used by or in connection with the businesses of Caliber and each of the Acquired Subsidiaries and (ii) all pending applications for Copyrights, Patents and Trademarks filed by or on behalf of Caliber or the Acquired Subsidiaries and used by or in connection with the businesses of Caliber or the Acquired Subsidiaries as presently conducted. None of such rights has been opposed or held unenforceable. Each of the aforesaid Intellectual Property Rights (other than those comprising or reflected in Commercial Software) is valid, subsisting and enforceable. Each of the registered Intellectual Property Rights (other than those comprising or reflected in Commercial Software) is duly registered in the name of Caliber or an Acquired Subsidiary, as appropriate.

(b) Except as set forth on Section 3.16(b) of the Disclosure Schedule, the business of Caliber and the Acquired Subsidiaries as presently conducted does not require or use any Intellectual Property Rights (including without limitation those comprising or reflected in Commercial Software) not owned by or licensed to Caliber or the Acquired Subsidiaries. Caliber and the Acquired Subsidiaries are the owners or have the right to use the Commercial Software and the Intellectual Property Rights listed on Section 3.16(a) of the Disclosure Schedule without making any payment to others or granting rights to others in exchange therefor.

(c) Except as set forth on Section 3.16(c) of the Disclosure Schedule, no Person (other than Caliber or the Acquired Subsidiaries) has any right to use any Intellectual Property Rights owned by Caliber or the Acquired Subsidiaries. No shareholder, director, officer or employee of, or Consultant to, Caliber or the Acquired Subsidiaries has any right to use, other than in connection with the business activities of Caliber or the Acquired Subsidiaries as presently conducted, any of the Intellectual Property or Intellectual Property Rights.

 

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(d) The operation of the business of Caliber and each of the Acquired Subsidiaries in the normal course of business prior to the Effective Date does not infringe in any respect upon the Intellectual Property Rights of any Person, and, to the Knowledge of Caliber, no Person who does not have the right to use the Intellectual Property Rights has claimed or threatened to claim the right to use any Intellectual Property Rights or to deny the right of Caliber or any of the Acquired Subsidiaries to use same. No proceeding alleging infringement of the Intellectual Property Rights of any Person is pending or, to the Knowledge of Caliber, threatened against Caliber or any of the Acquired Subsidiaries.

(e) With respect to each Trade Secret of Caliber or of an Acquired Subsidiary, the documentation relating to such Trade Secret is current, accurate and in sufficient detail and content to identify and explain it and allow its full and proper use without reliance on the knowledge or memory of any individual. Caliber and the Acquired Subsidiaries have taken all reasonable precautions to protect the secrecy, confidentiality, and value of their respective Trade Secrets. Such Trade Secrets are not part of the public knowledge or literature, and have not been used, divulged, or appropriated either for the benefit of any Person (other than Caliber and the Acquired Subsidiaries) or to the detriment of Caliber or the Acquired Subsidiaries.

(f) Section 3.16(f) of the Disclosure Schedule includes a true and complete list of any rights (e.g. unlimited, limited, restrictive, government purpose license rights, and march-in) that any Governmental Authority has in any copyrights, patents, trademarks, Technology, or Software (other than Commercial Software) that Caliber or any of the Acquired Subsidiaries use in their respective businesses. Except as set forth in Section 3.16(f) of the Disclosure Schedule, neither Caliber nor any of the Acquired Subsidiaries has developed any item, component, process or software as a requirement of any Government Contract, or for which any Governmental Authority paid some or all of the cost of development.

3.17 Scheduled Contracts and Proposals .

(a) Scheduled Contracts . Section 3.17(a) of the Disclosure Schedule is a true and complete description of all “Scheduled Contracts” (as hereinafter defined) to which either Caliber or an Acquired Subsidiary is a party, by which its assets are bound, or which otherwise pertain to the businesses of Caliber and the Acquired Subsidiaries. For the purposes of this Section 3.17(a), the term “ Scheduled Contracts ” shall mean the following written or oral contracts, agreements, indentures, instruments, commitments and amendments thereof with suppliers, customers, producers, consumers, lenders of Caliber and the Acquired Subsidiaries and other third parties that are currently in effect, but excluding any agreement, contract or other document listed or required to be listed in any of Sections 3.18(b) through (f) of the Disclosure Schedule:

(i) loan and credit agreements, revolving credit agreements, security agreements, guarantees, notes, agreements evidencing any lien, conditional sales agreements, factoring agreements, leasing agreements, sale and leaseback and synthetic lease agreements, or title retention agreements;

 

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(ii) hedging and similar agreements;

(iii) sales orders and other contracts and commitments for the future sale by Caliber or the Acquired Subsidiaries of goods, materials, supplies, services or equipment (other than Government Contracts) providing for annual payments greater than $10,000;

(iv) purchase orders and other contracts and commitments providing for annual payments greater than $10,000 for the future purchase of materials, supplies, services or equipment by Caliber or any of the Acquired Subsidiaries in excess of the requirements for normal operating inventories or for business now booked;

(v) agreements (other than “shrink wrap” licenses) relating to Intellectual Property Rights listed on Section 3.17(a) of the Disclosure Schedule;

(vi) contracts, agreements, indentures, instruments or commitments by and between Caliber or any of the Acquired Subsidiaries and Persons with whom Caliber or any of the Acquired Subsidiaries is not dealing at arm’s length;

(vii) agreements listed on Section 3.9(a) of the Disclosure Schedule;

(viii) franchise, distribution, license or consignment contracts or agreements;

(ix) sales, agency or advertising contracts or agreements commitments providing for annual payments greater than $10,000;

(x) leases under which Caliber or any Acquired Subsidiary is the lessor or lessee other than operating leases that require future payments by Caliber or any Acquired Subsidiary of less than $10,000 per annum;

(xi) management or service contracts or agreements, and contracts and agreements with Consultants, independent contractors and sub-contractors commitments providing for annual payments greater than $10,000;

(xii) agreements of any kind with any Affiliate of Caliber or any of the Acquired Subsidiaries;

(xiii) agreements of any kind relating to the business of Caliber or any of the Acquired Subsidiaries to which employees of Caliber or any Acquired Subsidiary, or entities controlled by them, are parties; and

(xiv) discount policies and practices.

(b) Status of Scheduled Contracts . Except as otherwise disclosed on Section 3.17(b) of the Disclosure Schedule, (x) each of the Scheduled Contracts is in full force and effect; (y) a true and complete copy of each written Scheduled Contract (and all amendments thereto) and a true and accurate summary of all provisions of each oral Scheduled Contract has been

 

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delivered or made available to ICF; and (z) there are no oral modifications or amendments to any of the Scheduled Contracts. In addition:

(i) All of the Scheduled Contracts have been legally awarded and are binding on the parties thereto, and Caliber or the applicable Acquired Subsidiary, as the case may be, is in material compliance with all terms and conditions in such Scheduled Contracts;

(ii) Neither Caliber nor any of the Acquired Subsidiaries has received any written notice of deficient performance or administrative deficiencies relating to any Scheduled Contract;

(iii) Neither Caliber nor any of the Acquired Subsidiaries has received any notice of any stop work orders, terminations, cure notices, show cause notices or notices of default or breach under any of the Scheduled Contracts, nor, to the Knowledge of Caliber, has any such action been threatened or asserted;

(iv) Each Scheduled Contract was entered into in the ordinary course of business and, based upon assumptions that Caliber’s or the applicable Acquired Subsidiaries’ management believes to be reasonable and subject to such assumptions being fulfilled, should be capable of being performed in accordance with its terms and conditions without a loss. There is no Scheduled Contract for which the most recent estimated total costs of completing, including any unexercised options, as estimated in good faith by Caliber or the applicable Acquired Subsidiaries, indicates that such Scheduled Contract will be completed at a loss;

(v) There are no Scheduled Contracts for the provision of goods or services by Caliber or any of the Acquired Subsidiaries that include a liquidated damages clause or unlimited liability by Caliber or any of the Acquired Subsidiaries, or liability for consequential damages;

(vi) There are no Scheduled Contracts for the provision of goods or services by Caliber or any of the Acquired Subsidiaries that require Caliber or the applicable Acquired Subsidiaries to post a surety, performance or other bond or to be an account party to a letter of credit or bank guarantee;

(vii) There are no written claims of any type, or requests for equitable adjustments outstanding or, to the Knowledge of Caliber, threatened under any Scheduled Contracts in process and no money presently due to Caliber or to any Acquired Subsidiary on any Scheduled Contract has been withheld or set off or subject to attempts to withhold or setoff; and

(viii) No party to a Scheduled Contract has notified either Caliber, or any of the Acquired Subsidiaries that Caliber or any of the Acquired Subsidiaries has breached or violated any Law or any certification, representation, clause, provision or requirement of any Scheduled Contract.

(c) Proposals . Section 3.17(c) of the Disclosure Schedule sets forth a true and accurate summary of all bids, proposals, offers, or quotations (other than a “Bid” as defined in Section 3.18(a)) made by Caliber or any of the Acquired Subsidiaries that were outstanding as of

 

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the date of this Agreement (collectively the “Proposals”), true and complete copies of which have been made available to ICF. Section 3.17(c) of the Disclosure Schedule identifies each Proposal by number and the party to whom such bid, proposal, or quotation was made, the subject matter of such bid, proposal, or quotation and the proposed price. In addition:

(i) As estimated in good faith by Caliber or the applicable Acquired Subsidiaries (and based upon assumptions that Caliber’s or the applicable Acquired Subsidiaries’ management believes to be reasonable and subject to such assumptions being capable of being performed), each Proposal can be performed in accordance with its terms and conditions without a loss; and

(ii) None of the Proposals requires Caliber or the applicable Acquired Subsidiaries to post a surety, performance or other bond or to be an account party to a letter of credit or bank guarantee.

3.18 Government Contracting .

(a) Definitions . The following capitalized terms, when used in this Section 3.18, shall have the respective meanings set forth below:

(i)