-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FZgypg8aF+FfXe+/7KlJpc0/lQ+5DAiuAduKL/xz+3lVHqVbY+CRwebO/sErqQbv 5GBA7b+wcx6aeZcKiIFwqw== 0000950109-98-002310.txt : 19980401 0000950109-98-002310.hdr.sgml : 19980401 ACCESSION NUMBER: 0000950109-98-002310 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 35 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980331 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICF KAISER INTERNATIONAL INC CENTRAL INDEX KEY: 0000856200 STANDARD INDUSTRIAL CLASSIFICATION: HAZARDOUS WASTE MANAGEMENT [4955] IRS NUMBER: 541437073 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 001-12248 FILM NUMBER: 98579993 BUSINESS ADDRESS: STREET 1: 9300 LEE HWY CITY: FAIRFAX STATE: VA ZIP: 22031 BUSINESS PHONE: 7039343600 MAIL ADDRESS: STREET 1: 9300 LEE HWY CITY: FAIRFAX STATE: VA ZIP: 22031 FORMER COMPANY: FORMER CONFORMED NAME: ICF INTERNATIONAL INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN CAPITAL & RESEARCH CORP /DE/ DATE OF NAME CHANGE: 19910314 10-K405 1 FORM 10-K405 FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the fiscal year ended December 31, 1997 Commission File No. 1-12248 ICF KAISER INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Delaware 54-1437073 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 9300 Lee Highway, Fairfax, Virginia 22031-1207 - ----------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (703) 934-3600 Securities registered pursuant to Section 12(b) of the Act: Common Stock, par value $0.01 per share Preferred Stock Purchase Rights Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ] The aggregate market value of Common Stock held by non-affiliates of the registrant was $47.9 million based on the New York Stock Exchange Composite Tape closing price of such stock ($2.50) on March 11, 1998. On March 11, 1998, there were 22,691,174 shares of Common Stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the ICF Kaiser International, Inc. Proxy Statement for the 1998 Annual Meeting of Shareholders are incorporated by reference in Part III hereof. PART I Item 1. Business ICF Kaiser International, Inc. through its operating subsidiaries is one of the nation's largest engineering, construction, program management, and consulting services companies. The Company's Environment and Facilities Management, ICF Kaiser Engineers and Constructors, and Consulting Groups provide fully integrated services in the public and private sectors in a variety of areas including environment, infrastructure, transportation, industry, energy, information technology, housing, economic development, and microelectronics markets. The "Company" or "ICF Kaiser" in this Report refers to ICF Kaiser International, Inc. and/or any of its consolidated subsidiaries. For the year ended December 31, 1997, ICF Kaiser reported gross and service revenue of $1.1 billion and $426.1 million, respectively. Service revenue is derived by deducting the costs of subcontracted services and direct project costs from gross revenue and adding the Company's share of the equity in income of unconsolidated joint ventures and affiliated companies. Effective December 31, 1995, the Company changed its fiscal year end from February 28 to December 31. During the years ended December 31, 1997 and 1996, and the ten months ended December 31, 1995, the Company operated predominantly in one industry segment, in which it provided engineering, construction, program management, consulting, and other professional services.
Year Ended Year Ended Ten Months Ended December 31, 1997 December 31, 1996 December 31, 1995 --------------------- --------------------- --------------------- (dollars in thousands) Gross revenue................. $1,108,116 $1,248,443 $916,744 Service revenue............... $ 426,086 $ 532,116 $425,896 Operating income.............. $ 18,069 $ 21,180 $ 17,505 Assets........................ $ 398,466 $ 365,973 $369,517
As of December 31, 1997, the Company's contract backlog totaled approximately $4.1 billion compared to $4.7 billion as of December 31, 1996. Most of the Company's backlog relates to public-sector environmental projects that span from one to five years. Approximately 26% of the $4.1 billion backlog is expected to be worked off during the fiscal year ending December 31, 1998. See "Backlog." The Company's headquarters is located at 9300 Lee Highway, Fairfax, Virginia 22031-1207, and its telephone number is (703) 934-3600. The Company's five regional headquarters are located as follows:
Western United States Eastern United States Asia/Pacific Europe/Africa/ Latin America - --------------------- ------------------------ -------------------- ------------------------- ---------------------------- Middle East ------------------------- 2101 Webster Street Gateway View Plaza Q.V. 1 Building, Regal House, Botafogo Rua Lauro Suite 1000 1600 West Carson St. George's Terrace, London Road, Muller 116-c.j.-2301 Oakland, CA Pittsburgh, PA Perth, WA 6000 Twickenham, Middlesex, Rio de Janeiro-RJ 94612-3060 15220 Australia TW1-3QQ, England Brazil CEP 22.290-160 (510) 419-6000 (412) 497-2000 61-9-366-5366 44-181-892-4433 5-521-542-4997
Other domestic offices include Tempe, Arizona; Los Angeles, Sacramento, San Diego, San Rafael, and Sherman Oaks, California; Golden and Lakewood, Colorado; Washington, DC; Ft. Lauderdale, Jacksonville, Miami, Orlando, and Tampa, Florida; Atlanta and Savannah, Georgia; Boise, Idaho; Chicago, Illinois; Ashland, Kentucky; Ruston, Louisiana; Baltimore, Beltsville, Edgewood, and Lexington Park, Maryland; Boston, Massachusetts; Kansas City, Missouri; Las Vegas, Nevada; Iselin and Mount Arlington, New Jersey; Albuquerque and Los Alamos, New Mexico; New York, New York; Greensboro and Research Triangle Park, North Carolina; Middletown, Pennsylvania; Greenville, South Carolina; Baytown and Houston, Texas; Lehi and Ogden, Utah; Richmond, Virginia; and Richland and Seattle, Washington. The Company's other international offices include Brisbane and Sydney, Australia; Toronto, Ontario, Canada; Ostrava and Prague, Czech Republic; Paris, France; Hong Kong; Budapest, Hungary; Mexico City, Mexico; Panama City, Panama; Manila, the Philippines; Lisbon, Portugal; Moscow, Russia; Taipei, Taiwan; and Istanbul, Turkey. 1 ICF Kaiser International, Inc. is a Delaware corporation incorporated in 1987 under the name American Capital and Research Corporation. It is the successor to ICF Incorporated, a nationwide consulting firm organized in 1969. In 1988, the Company acquired the Kaiser Engineers business, which dates from 1914. As of February 28, 1998, ICF Kaiser employed 4,772 persons. OVERVIEW OF MARKETS SERVED BY THE COMPANY Environmental. In the environmental market, the Company provides services ------------- in connection with the remediation of hazardous and radioactive waste, waste minimization and disposal, risk assessment, global warming and acid rain, alternative fuels, and clean up of harbors and waterways. Demand for ICF Kaiser's environmental services is driven by a number of factors, including the need to restore contaminated sites formerly used for weapons production or military bases; the need to comply with federal, state, and municipal environmental regulation and enforcement regarding the quality of the environment; the need to bring aging production facilities into compliance with current environmental regulations; the need to minimize waste generation on an ongoing basis; and the need to reduce or forestall liability associated with pollution-related injury and damage. In addition, there is a growing international market arising from the increased awareness of the need for additional and/or initial environmental regulations, studies, and remediation. A significant portion of future U.S. Departments of Defense (DOD) and Energy (DOE) environmental expenditures will be directed to cleaning up hundreds of military bases with thousands of contaminated sites and to restoring contaminated former nuclear weapons facilities. DOD has stated that there is an urgent need to ensure that the hazardous wastes present at these sites (often located near population centers) do not pose a threat to the surrounding population, and, in connection with the closure of many military bases, there is an economic incentive to make sure that the environmental restoration enables these sites to be developed commercially by the private sector. DOE has long recognized the need to stabilize and safely store nuclear weapons materials such as plutonium, to clean up areas contaminated with hazardous and radioactive waste, and restore the weapons sites to the public. Significant environmental laws have been enacted in the United States in response to public concern about the environment. These laws and the implementing regulations affected nearly every industrial activity, and efforts to comply with the requirements of these laws create demand for the Company's services. The principal federal legislation that has created a substantial market for the Company, and therefore has the most significant effect on the Company's business, includes the following: The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980, as amended by the Superfund Amendments and Reauthorization Act (SARA) of 1986, established the Superfund program to clean up existing, often abandoned hazardous waste sites and provides for penalties and punitive damages for noncompliance with U.S. Environmental Protection Agency (EPA) orders. The Resource Conservation and Recovery Act (RCRA) of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984 (HSWA), provides a comprehensive scheme for the regulation of hazardous waste from the time of generation to its ultimate disposal (and sometimes thereafter), as well as the regulation of persons engaged in the treatment, storage, and disposal of hazardous waste. The Clean Air Act as amended in 1970 empowered EPA to establish and enforce National Ambient Air Quality Standards, National Emission Standards for Hazardous Air Pollutants and limits on the emission of various pollutants. The 1990 amendments to the Clean Air Act substantially increase the number of sources emitting a regulated air pollutant which will be required to obtain an operating permit; the amendments also address the issues of acid rain, and ozone protection. The Clean Water Act of 1972, originally the Federal Water Pollution Control Act of 1948, established a system of standards, permits and enforcement procedures for the discharge of pollutants to surface water from industrial, municipal, and other wastewater sources. The Toxic Substance Control Act, enacted in 1976, established requirements for identifying and controlling toxic chemical hazards to human health and the environment. Infrastructure and Transportation. Both the domestic and international --------------------------------- infrastructure and transportation markets are driven by the need to maintain and expand ports, roads, highways, rail and bus systems, bridges, people movers, airports, and water resource facilities. Increasingly, environmental concerns, such as wastewater treatment and the reduction of automotive air pollutant emissions, have become a driving force behind new infrastructure and 2 transportation initiatives. These markets primarily are funded by government dollars, although the private sector is seeking an increased role, particularly in international projects where there is a critical need for infrastructure and transportation projects because of the population growth of major cities. Industry. The industry market in a modern, global economy provides the -------- base for the production of industrial metals and chemicals. This market is driven by the need to maintain and retrofit existing plants, to build new facilities such as those required for the burgeoning microelectronics industry, to replace aging production capacity with newer, more efficient and more environmentally responsible facilities, and to reduce costs, improve quality, and enhance competitiveness. Basic industrial materials include iron, steel, alumina / aluminum, chemicals, and copper. Other Markets. Traditionally DOD has maintained most of its own facilities ------------- and performed its own facility activities, but it is now in the process of transferring many of these responsibilities to private contractors and private owners. The "privatization" market has been created by the government's selling an asset or revenue stream--such as military housing and electric, water, and wastewater utilities on a military base--to a private company, which is then responsible for maintenance and operation. The "outsourcing" market has been created by private contractors' taking over site activities currently conducted by government, often military, personnel. The information technology market is driven by the increasing need for software and software tools to manage such diverse activities as financial management, accounting, and reporting capabilities; forecasting wholesale power pricing by independent and electric bulk power marketers; energy-use patterns; and energy use, billing, and monitoring. BUSINESS GROUPS The Company is organized into three business groups: Environment and Facilities Management (EFM); ICF Kaiser Engineers and Constructors (E&C); and Consulting. Environment and Facilities Management The EFM Group oversees major program management and technical support contracts for U.S. government agencies, particularly DOE and DOD. Examples of current projects include providing technical support for environmental restoration projects at certain of DOE's former weapons production facilities; conducting hazardous, toxic, and radioactive waste cleanups for the U.S. Army under two Total Environmental Restoration Contracts (TERC); and providing technical and analytical support to the EPA Superfund, RCRA, and other environmental programs. Another focus of this Group is to provide support to DOD's privatization and outsourcing initiatives. The Company's largest single DOE contract is managed by the EFM Group and performed through Kaiser-Hill Company, LLC, a limited liability company owned equally by the Company and CH2M Hill Companies, Ltd. (Kaiser-Hill). In 1995, Kaiser-Hill won DOE's Performance Based Integrating Management contract at the DOE's Rocky Flats Environmental Technology Site near Denver, Colorado. Rocky Flats is a former DOE nuclear weapons-production facility, and under the five- year contract, Kaiser-Hill is working to stabilize and safely store more than 14 tons of plutonium at the site, to clean up areas contaminated with hazardous and radioactive waste, and to restore much of the 6,000-acre site to the public. Under the multi-year TERC contracts, the EFM Group is providing environmental restoration services to the U.S. Army Corps of Engineers (USACE) at federal installations in California, Arizona, Nevada, and Utah (USACE South Pacific Division) and in the Eastern Atlantic states encompassing USACE's Baltimore, Maryland, District. The services provided under the TERCs include remedial investigation and feasibility studies of contaminated sites and performing remedial action and site cleanup activities. The Group also provides environmental services to USACE, Savannah (Georgia) District, under several contracts, including a contract to support the Corps' South Atlantic Division. Tasks performed by the Group under this contract include site assessments, risk assessments, remedial investigations, feasibility studies, remedial design, and construction support at sites throughout the Savannah District, especially at the Milan Army Ammunition Plant in Tennessee. Under a similar contract with the U.S. Army Environmental Center, the Group is providing a full range of technical support for site 3 investigation and remediation projects at Aberdeen Proving Ground and other Army facilities. Under contracts with DOE, the Group also is conducting environmental restoration and cleanup activities at DOE's Los Alamos National Laboratory in New Mexico and providing support services for major projects at DOE's Hanford Site in Richland, Washington. Effective January 1, 1998, the Company transferred its private-sector environmental services business from the ICF Kaiser Engineers and Constructors Group to its then-named Federal Programs Group. The newly named Environment and Facilities Management Group now is responsible for all of the Company's environmental services to private-sector businesses, including compliance planning, audits, and permitting; risk assessment, site investigations, and feasibility studies; remedial design, construction, and construction management; operation and maintenance of remedial systems; decontamination and decommissioning of facilities; and community relations, Clean Air Act strategies, and expert witness support. Private-sector environmental clients include chemical plants; aerospace manufacturers; iron, steel, and aluminum producers; oil and gas refineries; pharmaceutical companies; the communications industry; and heavy industrial manufacturers. Representative projects include providing investigation and cleanup services at a former textile dye plant in Virginia, including remediation of lead-contaminated hot spots and demolition of a warehouse; remedial design, procurement, and construction management services for a Superfund site remediation project; and engineering and specification development for an in-situ groundwater remediation system at a paint manufacturing facility in Maryland. ICF Kaiser Engineers and Constructors All of the E&C Group's markets are global in nature, and the Group provides engineering, construction, program management, and consulting services in numerous technology sectors through companies managed and staffed by local professionals in Australia, Brazil, the Czech Republic, England, France, Mexico, the Philippines, Portugal, Russia, Taiwan, Turkey, and the United States as well as through project offices throughout the world. To capitalize on international opportunities while minimizing its business development risks, the Group has established international business relationships through joint ventures, marketing agreements, and direct equity investments. Industry Services. The E&C Group's engineering, construction, project ----------------- management, and consulting services to the industrial market involve work with the iron, steel, alumina / aluminum, copper, and other minerals and metals industries as well as chemicals, petrochemicals, and refineries. Current projects include detailed design engineering, procurement, and construction management for the expansion of an alumina refinery in Western Australia; engineering and design services for an aluminum expansion project in the Midwestern United States; design, procurement, construction, and technology for four nitric acid plants in the United States and Canada; and upgrades for coke manufacturing operations at a major steelworks in China. The Group assists clients in private industry by providing the engineering, construction, and program management skills needed to maintain and retrofit existing plants and replace aging production capacity with newer, more environmentally responsible facilities. The Group's largest current international industrial project is a mini-mill project for Nova Hut, a.s., an integrated steel maker based in the Ostrava region of the Czech Republic. In March 1996, ICF Kaiser was awarded a contract to provide turnkey engineering and construction of the first phase of a facility that will receive liquid steel from Nova Hut's existing steelmaking facilities, a ladle metallurgy furnace, and single-strand dual slab caster, site development, and related infrastructure. Under a second-phase contract awarded in 1997, the E&C Group is installing an equalizing furnace, a reversing two-stand steckel mill, and associated facilities. The successful startup in late 1997 included preliminary acceptance of the first phase of the facility by the owners as well as production of steel ahead of schedule. It is expected that the second phase will be completed in late 1999. Infrastructure Services. The E&C Group is helping rebuild the ----------------------- infrastructure of rail and bus systems, highways and bridges, airports, high- speed rail, peoplemovers, and water resources projects in domestic and international markets. Budget constraints at the federal, state, and local government levels have hindered infrastructure market growth, but the Group remains active in major U.S. metropolitan areas, providing planning, design, construction management, and program management services in Seattle (light rail project), San Francisco (commuter rail system renovation), and Orlando (light rail initiative). 4 In the international infrastructure market, the Group's large-scale construction infrastructure skills are at work in Manila, the Philippines, where it is the program manager for the construction of a light rail transit line, a project for which ICF Kaiser supported development and financing since inception; in Portugal, where the Group provides program management of the overhaul and upgrade of Portugal's main intercity freight and passenger rail lines; and in Turkey, where the Group is providing construction management services for the first phase of a light rail system as part of a joint venture. The major ports of many of the world's cities have serious water pollution problems, and the E&C Group is helping to improve the condition of many harbors and waterways. In its largest harbor project, the Group continues as the construction manager of the cleanup of Boston Harbor, one of the largest environmental projects in the country, under a contract extension that runs through 1998. Since the inception of the project in 1988, the Group has served as its construction manager and currently manages construction workers, engineers, architects, and support personnel working to construct a wastewater treatment plant on Deer Island in Boston Harbor, Massachusetts. In Brazil, the E&C Group is providing program management services for the construction of sanitation and wastewater systems for communities surrounding Guanabara Bay. Consulting The Consulting Group serves customers in domestic and international markets, including both public- and private-sector organizations. Among its major customers are U.S. government agencies, especially EPA; U.S. private- sector organizations, particularly major energy producers, such as utilities and oil companies; and governments and businesses around the world, as well as multinational banks, development organizations, and treaty organizations. The Consulting Group draws upon the talents of its multidisciplinary professional staff to support customers within five lines of business. Energy. This line of business supports the development of corporate and ------ technical plans for managing power resources and energy projects (including transmission and distribution, power generation, and customer service), provides economic assessments of short- and long-term market conditions for various fuels, and provides expert support in litigation and regulatory proceedings. The Consulting Group assists its customers in identifying market opportunities, commercializing new technologies, and developing public policy; it links energy markets with energy technology. Environmental. This line of business assists customers in developing ------------- plans and policies, evaluating options for managing environmental responsibilities in the most cost-effective manner, and identifying and employing the best available technologies and practices. The Group has special expertise in such areas as industrial and municipal waste management, air pollution control, chemical accident prevention, and groundwater and drinking water management. The Consulting Group also provides technical and regulatory support to EPA's Office of Solid Waste, focusing on human health and ecological risk assessment and waste characterization. Global environmental issues are also a particular area of focus within the Consulting Group. The Consulting Group works with U.S., international, and private-sector organizations that fund global environmental work and has been actively involved in supporting international environmental treaties. Working on global change issues for EPA for 15 years, the Company supports the EPA's Global Change Division, providing services related to the reduction of methane and other greenhouse gases. Transportation. Transportation-related capabilities include an in-depth -------------- working knowledge of the legislative and policy issues facing the transportation industry; broad modeling and economic analytical capabilities that evaluate the full range of economic and policy trade-offs inherent in transportation decisions; and extensive planning and mission support experience with multinational and government organizations that operate in transportation- related areas throughout the globe. Economic and Community Development. This practice provides training, ---------------------------------- technical assistance, program support, and research services related to affordable housing and community development. Additionally, the Consulting 5 Group helps federal agencies, cities, states, and nonprofit organizations to design and implement programs that provide affordable, cost-effective housing, to promote business and economic development, and to help revitalize deteriorated neighborhoods. Information Management. The Group assists clients in developing decision ---------------------- support systems that facilitate the collection and use of information to track performance, identify opportunities, and improve decision making. The Group offers a number of simulation models and proprietary applications. By combining consulting expertise with information technology skills, the Group helps its customers deal with the unique challenges of their business environments. GENERAL INFORMATION ABOUT THE COMPANY Competition and Contract Award Process The market for the Company's services is highly competitive. The Company and its consolidated subsidiaries compete with many other engineering, construction, program management, and consulting services firms ranging from small firms to large multinational firms having substantially greater financial, management, and marketing resources than the Company. Other competitive factors include quality of services, technical qualifications, reputation, geographic presence, price, and the availability of key professional personnel. Private-Sector Work. Competition for private-sector work generally is ------------------- based on several factors, including quality of work, reputation, price, and marketing approach. The Company's objective is to establish and maintain a strong competitive position in its areas of operations by adhering to its basic philosophy of delivering high-quality work in a timely fashion within its clients' budget constraints. Public-Sector Work. Most of the Company's contracts with public-sector ------------------ clients are awarded through a competitive bidding process that places no limit on the number or type of offerors. The process usually begins with a government Request for Proposal (RFP) that delineates the size and scope of the proposed contract. Proposals are evaluated by the government on the basis of technical merit (for example, response to mandatory solicitation provisions, corporate and personnel qualifications, and experience) and cost. The Company believes that its experience and ongoing work strengthen its technical qualifications and, thereby, enhance its ability to compete successfully for future government work. Teaming Arrangements and Joint Ventures. In both the private and public --------------------------------------- sectors, the Company, acting either as a prime contractor or as a subcontractor, may join with other firms to form a team or a joint venture that competes for a single contract or submits a single proposal. Because a team of firms or a joint venture almost always can offer a stronger set of qualifications than any firm standing alone, these arrangements often are very important to the success of a particular competition or proposal. The Company maintains a large network of business relationships with other companies and has drawn repeatedly upon these relationships to form winning teams. Contract Structure. The Company's consolidated subsidiaries operate under ------------------ a number of different types of contract structures with its private- and public- sector clients, the most common of which are Cost Plus and Fixed Price. Under Cost Plus contracts, the Company's costs are reimbursed with a fee (either fixed or percentage of cost) and/or an incentive or award fee offered to provide inducement for effective project management. A variation of Cost Plus contracts are time-and-materials contracts under which the Company is paid at a specified fixed hourly rate for direct labor hours worked. Under Fixed-Price contracts, the Company is paid a predetermined amount for all services provided as detailed in the design and performance specifications agreed to at the project's inception, and under which the Company retains more performance risk than under Cost Plus contracts. While these Fixed-Price contracts can result in higher profit margins, they also can be costly if the Company experiences cost overruns that are not recoverable from the client. 6 Customers The Company's domestic clients include DOE and other federal departments and agencies; major corporations in the energy, transportation, chemical, steel, aluminum, mining, and manufacturing industries; utilities; and a variety of state and local government agencies throughout the United States. DOE accounted for approximately 56% of the Company's consolidated gross revenue for the year ended December 31, 1997, approximately 69% for the year ended December 31, 1996, and approximately 68% for the ten months ended December 31, 1995. The Company's international clients include both private firms and foreign government agencies. For the years ended December 31, 1997 and 1996, and for the ten months ended December 31, 1995, foreign clients accounted for approximately 14.2%, 5.8%, and 4.7% of the Company's consolidated gross revenue, respectively. For information concerning gross revenue, operating income, and identifiable assets of the Company's business by geographic area, see Note 15 to the consolidated financial statements. Backlog Backlog refers to the aggregate amount of gross contract revenue remaining to be earned pursuant to signed contracts extending beyond one year. At December 31, 1997, the Company's contract backlog was approximately $4.1 billion in gross revenue, down from approximately $4.7 billion in gross revenue at December 31, 1996. The Kaiser-Hill Performance Based Integrating Management contract at Rocky Flats near Denver, Colorado, represents approximately 56% of the Company's total backlog at December 31, 1997. The Company expects that approximately 26% of the backlog at December 31, 1997, will be worked off during 1998. Because of the nature of its contracts, the Company is unable to calculate the amount or timing of service revenue that might be earned pursuant to these contracts. The Company believes that backlog is not a predictor of future gross or service revenue. Differences in contracting practices between the public and private sectors result in the Company's backlog being weighted heavily toward contracts associated with departments and agencies of the federal government. Backlog under contracts with the federal government that extend beyond the government's current fiscal year includes the full contract amount, including, in many cases, amounts anticipated to be earned in option periods and certain performance fees, even though annual funding of the amounts under such contracts generally must be appropriated by Congress before funds can be expended during any year under such contracts. In addition, departments and/or agencies must allocate the appropriated funds to these specific contracts and thereafter authorize work or task orders to be performed under these specific contracts. Such authorizations are generally for periods considerably shorter than the duration of the work the Company expects to perform under a particular contract and generally cover only a percentage of the contract revenue. Because of these factors, the amount of federal government contract backlog for which funds have been appropriated and allocated, and task orders issued, at any given date is a substantially smaller amount than the total federal government contract backlog as of that date. In the event that option periods under any given contract are not exercised or funds are not appropriated, allocated, or authorized to be spent under any given contract, the amount of backlog attributable to that contract would not result in revenue to the Company. All contracts and subcontracts with departments and/or agencies of the federal government are subject to termination, reduction, or modification at any time at the discretion of the government. Potential Environmental Liability The assessment, analysis, remediation, handling, management, and disposal of hazardous substances necessarily involve significant risks, including the possibility of damages or personal injuries caused by the escape of hazardous materials into the environment, and the possibility of fines, penalties, or other regulatory action. These risks include potentially large civil and criminal liabilities for violations of environmental laws and regulations, and liabilities to customers and to third parties for damages arising from performing services for clients. Potential Liabilities Arising Out of Environmental Laws and Regulations ----------------------------------------------------------------------- All facets of the Company's business are conducted in the context of a rapidly developing and changing statutory and regulatory framework. The Company's operations and services are affected by and subject to regulation 7 by a number of federal agencies, including EPA and the Occupational Safety and Health Administration, as well as applicable state and local regulatory agencies. CERCLA addresses cleanup of sites at which there has been a release or threatened release of hazardous substances into the environment. Increasingly, there are efforts to expand the reach of CERCLA to make environmental contractors responsible for cleanup costs by claiming that environmental contractors are owners or operators of hazardous waste facilities or that they arranged for treatment, transportation, or disposal of hazardous substances. Several recent court decisions have accepted these claims. Should the Company be held responsible under CERCLA for damages caused while performing services or otherwise, it may be forced to bear such liability by itself, notwithstanding the potential availability of contribution or indemnity from other parties. RCRA governs hazardous waste generation, treatment, transportation, storage, and disposal. RCRA, or EPA-approved state programs at least as stringent, govern waste handling activities involving wastes classified as "hazardous." Substantial fees and penalties may be imposed under RCRA and similar state statutes for any violation of such statutes and the regulations thereunder. Potential Liabilities Involving Clients and Third Parties --------------------------------------------------------- In performing services for its clients, the Company could potentially be liable for breach of contract, personal injury, property damage, and negligence (including improper or negligent performance or design, failure to meet specifications, and breaches of express or implied warranties). The damages available to a client, should it prevail in its claims, are potentially large and could include consequential damages. Environmental contractors, in connection with work performed for clients, potentially face liabilities to third parties from various claims, including claims for property damage or personal injury stemming from a release of hazardous substances or otherwise. Claims for damage to third parties could arise in a number of ways, including through a sudden and accidental release or discharge of contaminants or pollutants during the performance of services; through the inability, despite reasonable care, of a remedial plan to contain or correct an ongoing seepage or release of pollutants; through the inadvertent exacerbation of an existing contamination problem; or through reliance on reports or recommendations prepared by the Company. Personal injury claims could arise contemporaneously with performance of the work or long after completion of the project as a result of alleged exposure to toxic or hazardous substances. In addition, increasing numbers of claimants assert that companies performing environmental remediation should be adjudged strictly liable, i.e., liable for damages even though its services were performed using reasonable care, on the grounds that such services involved "abnormally dangerous activities." Clients frequently attempt to shift various liabilities arising out of remediation of their own environmental problems to contractors through contractual indemnities. Such provisions seek to require the Company to assume liabilities for damage or personal injury to third parties and property and for environmental fines and penalties. The Company has endeavored to protect itself from potential liabilities resulting from pollution or environmental damage by obtaining indemnification from its private-sector clients and intends to continue this practice in the future. Under most of these contracts, the Company has been successful in obtaining such indemnification; however, such indemnification generally is not available if such liabilities arise as a result of breaches by the Company of specified standards of care or if the indemnifying party has insufficient assets to cover the liability. The Company's subsidiary, ICF Kaiser Remediation Company, is the entity through which the Company intends to increase its remediation activities performed for public- and private-sector clients. The Company will continue its efforts to minimize the risks and potential liability associated with its remediation activities by performing all remediation contracts in a professional manner and by carefully reviewing any and all remediation contracts it signs in an effort to ensure that its environmental clients accept responsibility for their own environmental problems. For EPA contracts involving field services in connection with Superfund response actions, the Company is eligible for indemnification under Section 119 of CERCLA for pollution and environmental damage liability resulting from release or threatened release of hazardous substances. Some of the Company's clients (including private clients, DOE, and DOD) are Potentially Responsible Parties (PRPs) under CERCLA. Under the Company's contracts with these PRPs, the Company has the right to seek contribution from these PRPs for liability imposed on the Company in connection with its work at these clients' CERCLA sites and generally qualifies for the limitations on liabilities under 8 CERCLA Section 119(a). In addition, in connection with contracts involving field services at certain of DOE's weapons facilities, the Company is indemnified under the Price-Anderson Act, as amended, against liability claims arising out of contractual activities involving a nuclear incident. Recently, EPA has constricted significantly the circumstances under which it will indemnify its contractors against liabilities incurred in connection with CERCLA projects. There are other proposals both in Congress and at the regulatory agencies to further restrict indemnification of contractors from third-party claims. Under Kaiser-Hill's contract with DOE, Kaiser-Hill is not responsible for, and DOE pays all costs associated with, any liability (including without limitation, a claim involving strict or absolute liability and any civil fine or penalty, expense, or remediation cost, but limited to those of a civil nature), which may be incurred by, imposed on, or asserted against Kaiser-Hill arising out of any act or failure to act, condition, or exposure which occurred before Kaiser-Hill assumed responsibility on July 1, 1995 ("pre-existing conditions"). To the extent the acts or omissions of Kaiser-Hill constitute willful misconduct, lack of good faith, or failure to exercise prudent business judgment on the part of Kaiser-Hill's managerial personnel and cause or add to any liability, expense, or remediation cost resulting from pre-existing conditions, Kaiser-Hill is responsible, but only for the incremental liability, expense, or remediation caused by Kaiser-Hill. The Kaiser-Hill contract further provides that Kaiser-Hill shall be reimbursed for the reasonable cost of bonds and insurance allocable to the Rocky Flats contract and for liabilities (and expenses incidental to such liabilities, including litigation costs) to third parties not compensated by insurance or otherwise. The exception to this reimbursement provision applies to liabilities caused by the willful misconduct or lack of good faith of Kaiser-Hill's managerial personnel or the failure to exercise prudent business judgment by Kaiser-Hill's managerial personnel. In connection with its services to its environmental, infrastructure, and industrial clients, the Company works closely with federal and state government environmental compliance agencies, and occasionally contests the conclusions those agencies reach regarding the Company's compliance with permits and related regulations. To date, the Company never has paid a fine in a material amount or had material liability imposed on it for pollution or environmental damage in connection with its services; however, there can be no assurance that the Company will not have substantial liability imposed on it for any such damage in the future. Insurance The Company has a comprehensive risk management and insurance program that provides a structured approach to protecting the Company. Included in this program are coverages for general, automobile, pollution impairment, and professional liability; for workers' compensation; and for employers and property liability. The Company believes that the insurance it maintains, including self-insurance, is in such amounts and protects against such risks as is customarily maintained by similar businesses operating in comparable markets. At this time, the Company expects to continue to be able to obtain general, automobile, and professional liability; workers' compensation; and employers and property insurance in amounts generally available to firms in its industry. There can be no assurance that this situation will continue, and if insurance of these types is not available, it could have a material adverse effect on the Company. The Company has pollution insurance coverage on a claims-made basis, in amounts and on terms that are economically reasonable, against possible liabilities that may be incurred in connection with its conduct of its environmental business. An uninsured claim arising out of the Company's environmental activities, however, if successful and of sufficient magnitude, could have a material adverse effect on the Company. Government Regulation The Company has a substantial number of cost-reimbursement contracts with the U.S. government, the costs of which are subject to audit by the U.S. government. As a result of pending audits related to fiscal years 1986 forward, the government has asserted, among other things, that certain costs claimed as reimbursable under government contracts either were not allowable or not allocated in accordance with federal procurement regulations. The Company is actively working with the government to resolve these issues. The Company has provided for its estimate of the potential effect of issues that have been quantified, including its estimate of disallowed costs for the periods currently 9 under audit and for periods not yet audited. Many of the issues, however, have not been quantified by the government or the Company, and others are qualitative in nature, and their potential financial impact, if any, is not quantifiable by the government or the Company at this time. This provision will be reviewed periodically as discussions with the government progress. The Company may, from time to time, either individually or in conjunction with other government contractors operating in similar types of businesses, be involved in U.S. government investigations for alleged violations of procurement or other federal laws and regulations. The Company currently is the subject of a number of U.S. government investigations and is cooperating with the responsible government agencies involved. No charges presently are known to have been filed against the Company by these agencies. Management does not believe that there will be any material adverse effect on the Company's financial position, results of operations, or cash flows as a result of these investigations. Federal agencies that are the Company's regular customers (including DOE, EPA, and DOD) have formal policies against awarding contracts that would present actual or potential conflicts of interest with other activities of the contractor. Because the Company provides a broad range of services in environmental and related fields for the federal government, state governments, and private customers, there can be no assurance that government conflict-of- interest policies will not restrict the Company's ability to pursue business in the future. Because some of the Company's consolidated subsidiaries provide the federal government with nuclear energy and defense-related services, these subsidiaries and a substantial number of their employees are required to have and maintain security clearances from the federal government. These subsidiaries and their employees have been able to obtain these security clearances in the past, and the Company has no reason to believe that there would be any problems in this area in the future; however, there can be no assurance that the required security clearances will be obtained and maintained in the future. Because of its nuclear energy and defense-related services, the Company is subject to foreign ownership, control, and influence (FOCI) regulations imposed by the federal government and designed to prevent the release of classified information to contractors who are under foreign control or influence. FOCI issues arise particularly in connection with foreign ownership of the Company's Common Stock, foreign bank participation in the Company's credit line and increased foreign sources of the Company's gross revenue. The Company has implemented procedures designed to insulate such subsidiaries from any FOCI that might affect the Company. There can be no assurance that such measures will prevent FOCI policies from affecting the ability of the Company's subsidiaries to secure and maintain certain types of federal government contracts. Employees As of February 28, 1998, ICF Kaiser employed 4,772 persons, and the Company believes that its relations with its employees are good. Of the total employees, 1,728 persons are employed at Kaiser-Hill's Rocky Flats site in Colorado. A total of 1,314 of the Rocky Flats employees are represented by the United Steelworkers of America, Local 8031; almost all of the union employees are contracted out to other companies working at Rocky Flats. The Company believes that its relations with the union are good. Description of the Company's Capital Stock The authorized capital stock of the Company consists of 90,000,000 shares of Common Stock, par value $0.01 per share (Common Stock) and 2,000,000 shares of preferred stock, par value $0.01 per share. As of March 27, 1998, the outstanding capital stock of the Company consisted of 24,715,831 shares of Common Stock and no shares of preferred stock. The outstanding Common Stock figure excludes all shares held in escrow in connection with a 1995 acquisition. Common Stock. Each share of Common Stock has one vote per share on all ------------ matters submitted to a vote of shareholders. The Company's Amended and Restated Certificate of Incorporation provides that no action may be taken by the holders of shares of Common Stock by written consent in lieu of holding a meeting of shareholders. 10 The Company has never paid cash dividends on its Common Stock. The Board of Directors anticipates that for the foreseeable future no cash dividends will be paid on its Common Stock and that the Company's earnings will be retained for use in the business. The Board of Directors determines the Company's Common Stock dividend policy based on the Company's results of operations, payment of dividends on preferred stock (if any is outstanding), financial condition, capital requirements, and other circumstances. The Company's debt and credit agreements currently do not permit dividends to be paid on its common stock. Holders of Common Stock have no preemptive or other rights to subscribe for additional shares of Company stock. Upon liquidation, dissolution, or winding up of the Company, each share of Common Stock will share equally in assets legally available for distribution to stockholders. The transfer agent and registrar for the Common Stock is First Chicago Trust Company of New York, 14 Wall Street, Mail Suite 4680, New York, New York 10005. The shareholder relations telephone number at First Chicago is (201) 324-0498, and the First Chicago Web site address is http://www.fctc.com. Since September 14, 1993, the Common Stock has been traded on the New York Stock Exchange under the symbol "ICF." From December 14, 1989, to September 13, 1993, the Common Stock was traded on the NASDAQ National Market. Preferred Stock. Preferred stock is available for issuance from time to --------------- time at the discretion of the Board of Directors of the Company and without shareholder approval. For each series of preferred stock it establishes, the Board of Directors has authority to prescribe the number of shares in that series and the dividend rate. In addition, the Board of Directors has authority to prescribe the voting rights, conversion privileges, redemption, sinking fund provisions and liquidation rights, if any, and any other rights, preferences, and limitations of the particular series. The issuance of preferred stock could decrease the amount of earnings and assets available for distribution to the holders of Common Stock or adversely affect the rights and powers, including voting rights, of the holders of Common Stock. Additionally, the issuance of preferred stock could have the effect of delaying, deferring, or preventing a change in control of the Company without further action by the shareholders. The Company's debt and credit agreements currently do not permit dividends to be paid on its preferred stock. Senior Debt Warrants Issued in 1996. A total of 105,000 Senior Debt ----------------------------------- Warrants (the 1996 Warrants) were issued by the Company under a warrant agreement (the 1996 Warrant Agreement) dated December 23, 1996, between the Company and The Bank of New York, a New York banking corporation, as warrant agent. Each 1996 Senior Warrant entitles the holder thereof to acquire one share of Common Stock of the Company, subject to adjustment, upon payment of the exercise price of $2.30 (the Purchase Price), subject to adjustment as described below. All outstanding 1996 Warrants terminate and become void on December 31, 1999 (the Expiration Date). The 1996 Warrants are subject to the terms contained in the 1996 Warrant Agreement. The Common Stock issuable upon exercise of the 1996 Warrants has been registered with the SEC and listed on the New York Stock Exchange. A total of 600,000 Senior Subordinated Debt Warrants (the 1994 Warrants) were issued by the Company under a warrant agreement (the 1994 Warrant Agreement) dated January 11, 1994, between the Company and The Bank of New York, a New York banking corporation, as warrant agent. Each 1994 Warrant entitles the holder thereof to acquire one share of Common Stock of the Company, subject to adjustment, upon payment of the exercise price of $5.00 (the Purchase Price), subject to adjustment as described below. All outstanding 1994 Warrants terminate and become void on December 31, 1998 (the Expiration Date). The 1994 Warrants are subject to the terms contained in the 1994 Warrant Agreement. The Common Stock issuable upon exercise of the 1994 Warrants has been registered with the SEC and listed on the New York Stock Exchange. If the Company proposes to enter into a transaction that would constitute a Non-Surviving Combination if consummated, the Company must give written notice thereof to the holders of the 1996 Warrants and of the 1994 Warrants promptly after an agreement is reached with respect to the Non-Surviving Combination but in no event less than 30 days prior to the consummation thereof. The 1996 Warrant Agreement and the 1994 Warrant Agreement define a Non-Surviving Combination as any merger, consolidation, or other business combination by the Company with one or more persons (other than a wholly owned subsidiary of the Company) in which the Company is not the 11 survivor, or a sale of all or substantially all of the assets of the Company to one or more such other persons, if consideration (other than consideration which includes Common Stock or securities convertible into, or exercisable or exchangeable for, Common Stock or rights or options to acquire Common Stock or such other securities) is distributed to holders of Common Stock in exchange for all or substantially all of their equity interest in the Company. In a Non-Surviving Combination, the surviving entity (the Survivor) will be obligated to distribute or pay to each holder of 1996 Warrants and each holder of the 1994 Warrants, upon payment of the Purchase Price prior to the Expiration Date, the number of shares of stock or other securities or other property (including any cash) of the Survivor that would have been distributable or payable on account of the Common Stock if such holder's warrants had been exercised immediately prior to such Non-Surviving Combination. Following the consummation of a Non-Surviving Combination, the 1996 Warrants and the 1994 Warrants will represent only the right to receive such shares of stock or other property from the Survivor upon payment of the Purchase Price prior to the Expiration Date. The number of shares of Common Stock issuable upon the exercise of each 1996 Warrant and each 1994 Warrant and the Purchase Price are subject to adjustment in certain events, including (a) a dividend or distribution on the Company's Common Stock in shares of its Common Stock or a combination, subdivision, reorganization, or reclassification of Common Stock, (b) the issuance of shares of Common Stock for a consideration per share less than the market price per share at the time of issuance, (c) the issuance of rights, warrants, or options for the purchase of Common Stock or for the purchase of securities convertible into or exchangeable for Common Stock where the aggregate amount of consideration per share of Common Stock received or receivable by the Company is less than the market price per share at the time of issuance of such right, warrant, or option, (d) the issuance of any securities convertible into or exchangeable for Common Stock where the aggregate amount of consideration per share of Common Stock received or receivable by the Company is less than the market price per share of Common Stock on the date of issuance of such convertible or exchangeable security, and (e) a dividend or distribution on the Company's Common Stock of cash, evidences of its indebtedness, other securities, or other properties or assets other than any cash dividend which, when aggregated with all other cash dividends paid in the year prior to the declaration of such cash dividend, does not exceed 10% of the market price per share of Common Stock on the date of such declaration. If the terms of any of the Company's outstanding rights, warrants, or options for the purchase of Common Stock or securities convertible into or exchangeable for Common Stock change, in each case where the issuance thereof caused an adjustment in the terms of the 1996 Warrants (including by way of expiration of such securities but excluding by way of antidilution provisions thereof triggering an adjustment of the terms thereof upon the occurrence of an event that would cause an adjustment of the terms of the 1996 Warrant), then the Purchase Price and the number of shares of Common Stock issuable upon the exercise of each 1996 Warrant shall be readjusted to take account of such change. Notwithstanding the foregoing, no adjustment in the Purchase Price or the number of shares of Common Stock issuable upon exercise of 1996 Warrants will be required (i) until cumulative adjustments would result in an adjustment of at least 1% in the Purchase Price, (ii) for the granting, in a transaction which would otherwise trigger an adjustment, of any rights, warrants, or options or the issuance of any Common Stock to officers, directors, or employees of, or consultants or advisors to, the Company where such issuances are registered with the SEC on Form S-8 and do not, in the aggregate exceed 5% of the number of shares of Common Stock outstanding (assuming the exercise of the options so granted and all rights, warrants, options, and convertible securities then outstanding), or (iii) the issuance of Common Stock pursuant to any dividend reinvestment plan where the purchase price of Common Stock thereunder is no less than 95% of the market price on the date of issuance. Senior Subordinated Debt Warrants Issued in 1989. In 1989, in connection ------------------------------------------------ with the issuance of senior subordinated notes that were redeemed by the Company in 1994, the Company issued warrants to purchase 1,778,512 shares of Common Stock. In 1994, the Company repurchased 1,503,424 of such warrants, leaving outstanding warrants to purchase 275,088 shares of Common Stock (the 1989 Warrants). The 1989 Warrants, which will expire on May 15, 1999, are exercisable at any time at an exercise price of $6.87 per share, subject to anti-dilution adjustment upon the occurrence of certain events, including any issuance of Common Stock, options, or warrants at less than the higher of market value or $6.87 per share. The holders of the 1989 Warrants have certain rights to require the Company to register the shares of Common Stock underlying the 1989 Warrants for resale. In addition, the Company may not grant to any purchaser 12 of unregistered securities any demand registration rights without giving the holders of the 1989 Warrants the same rights on a pro rata basis as they would have in a demand registration initiated by them. Shareholder Rights Plan. On January 13, 1992, the Board of Directors of ----------------------- the Company declared a dividend distribution to shareholders of record at the close of business on January 31, 1992 (the Record Date) of one Right for each outstanding share of Common Stock. Each Right entitles the registered holder of Common Stock to purchase from the Company a unit consisting of one 1/100th of a share (a Preferred Stock Unit) of Series 4 Junior Preferred Stock (the Series 4 Preferred Stock), at a purchase price of $50.00 per Preferred Stock Unit (the Purchase Price), subject to adjustment. The Rights also are subject to antidilution adjustments. The description of the Rights is set forth in a Rights Agreement (the Rights Agreement) between the Company and the Rights Agent. The Rights Agent is First Chicago Trust Company of New York. A Distribution Date (the Distribution Date) for the Rights will occur upon the earlier of (i) 10 business days following a Stock Acquisition Date, which is the public announcement that a person or group of affiliated or associated persons has acquired, or obtained the right to acquire, beneficial ownership of 20% or more of the outstanding shares of Common Stock (such person or group referred to herein as an Acquiring Person) or (ii) 10 business days following the commencement of a tender offer or exchange offer that would if consummated result in a person or group becoming an Acquiring Person. The Rights are not exercisable until the Distribution Date and will expire at the close of business on January 13, 2002, unless redeemed earlier by the Company as described below. Until the Distribution Date (i) the Rights will be evidenced by the Common Stock certificates and will be transferred with and only with such certificates and (ii) the surrender for transfer of any certificates for Common Stock outstanding will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate. In the event that, at any time following the Distribution Date, a person becomes an Acquiring Person, then each holder of a Right (other than the Acquiring Person) will thereafter have the right to receive, (x) upon exercise and payment of the Purchase Price, Common Stock (or, in certain circumstances, cash, property, or other securities of the Company) having a value equal to two times the Purchase Price of the Right or (y) at the discretion of the Board of Directors, upon exercise and without payment of the Purchase Price, Common Stock (or, in certain circumstances, cash, property, or other securities of the Company) having a value equal to the Purchase Price of the Right. For example, at a Purchase Price of $50.00 per Right, each Right not owned by an Acquiring Person (or by certain related parties) following the event set forth above would entitle its holder to purchase $100 worth of Common Stock (or other consideration, as noted above) for $50.00. Assuming that the Common Stock has a per share value of $10.00 at such time, the holder of each Right would be entitled to purchase 10 shares of Common Stock for a total aggregate purchase price of $50.00. However, Rights are not exercisable following the occurrence of the event set forth above until such time as the Rights are no longer redeemable by the Company as set forth below. In the event that, at any time following the Stock Acquisition Date, (i) the Company is acquired in a merger or other business combination transaction in which the Company is not the surviving corporation, (ii) the Company is the surviving corporation in a merger with any Person (as defined in the Rights Agreement) and its Common Stock is changed into or exchanged for stock or other securities of any other Person or cash or any other property, or (iii) 50% or more of the Company's assets or earning power is sold or transferred, each holder of a Right (except Rights held by an Acquiring Person or which previously have been exercised as set forth above) shall thereafter have the right to receive, upon exercise, common stock of the acquiring Company having a value equal to two times the Purchase Price of the Right. The events set forth in this paragraph and in the immediately preceding paragraph are referred to as the Triggering Events. As noted above, following the occurrence of any of the events described above, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void. The Purchase Price payable, and the number of Preferred Stock Units or other securities or property issuable upon exercise of the Rights, are subject to amendment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination, or reclassification of, the Series 4 Preferred Stock, (ii) if holders of the 13 Series 4 Preferred Stock are granted certain rights or warrants to subscribe for Series 4 Preferred Stock or convertible securities at less than the current market price of the Series 4 Preferred Stock, or (iii) upon the distribution to holders of the Series 4 Preferred Stock of evidences of indebtedness or assets (excluding regular quarterly cash dividends) or of subscription rights or warrants (other than those referred to above). With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments amount to at least 1% of the Purchase Price. In addition, to the extent that the Company does not have sufficient shares of Common Stock issuable upon exercise of the Rights following the occurrence of a Triggering Event, the Company may, under certain circumstances, reduce the Purchase Price. No fractional Preferred Stock Units will be issued and, in lieu thereof, an adjustment in cash will be made. In general, the Company may redeem the Rights in whole, but not in part, at a price of $0.01 per Right (payable in cash, Common Stock, or other consideration deemed appropriate by the Board of Directors), at any time until 10 business days following the Stock Acquisition Date. After the redemption period has expired, the Company's right of redemption may be reinstated if an Acquiring Person reduces its beneficial ownership to less than 10% of the outstanding shares of Common Stock in a transaction or series of transactions not involving the Company and there are no other Acquiring Persons. Immediately upon the action of the Board of Directors ordering redemption of the Rights, and without any notice to the holder of such Rights prior to such redemption, the Rights will terminate and the only right of the holders of Rights will be to receive the $0.01 redemption price. Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder of the Company, including, without limitation, the right to vote or to receive dividends. Other than those provisions relating to the principal economic terms of the Rights (except with respect to increasing the Purchase Price under certain circumstances described in the Rights Agreement), any of the provisions of the Rights Agreement may be amended by the Board of Directors of the Company prior to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be amended by the Board in order to cure any ambiguity, to make changes that do not adversely affect the interests of holders of Rights (excluding the interests of any Acquiring Person) or to shorten or lengthen any time period under the Rights Agreement. However, no amendment to adjust the time period governing redemption shall be made when the Rights are not redeemable. One Right was distributed to shareholders of the Company for each share of Common Stock owned of record by them at the close of business on the Record Date. Until the Distribution Date, the Company will issue a Right with each share of Common Stock so that all shares of Common Stock have attached Rights. The Rights may be deemed to have certain anti-takeover effects. The Rights generally may cause substantial dilution to a person or group that attempts to acquire the Company under circumstances not approved by the Board of Directors of the Company. The Rights should not interfere with any merger or other business combination approved by the Board of Directors of the Company since the Board of Directors may, at its option, at any time prior to the close of business on the earlier of (i) the 10th business day following the Stock Acquisition Date or (ii) January 13, 2002, redeem all but not less than all of the then outstanding Rights at $0.01 per Right. Provisions Affecting Changes of Control and Extraordinary Transactions. In ---------------------------------------------------------------------- addition to the Shareholder Rights Plan, certain provisions of the Company's Amended and Restated Certificate of Incorporation and By-laws and other agreements could have the effect of delaying, deferring, or preventing a change in control of the Company or other extraordinary corporate transaction. The Company's Amended and Restated Certificate of Incorporation and By-laws provide for classification of the Board of Directors into three classes, as nearly equal in number as possible, with one class of directors being elected each year for three-year terms. Under Delaware law, members of a classified board may be removed only for cause. Thus, at least two years would be required to effect a change of control in the Board of Directors, unless a shareholder had sufficient voting power to amend or repeal the Amended and Restated Certificate of Incorporation and By-law provisions relating to classification of the Board of Directors. In addition, the Amended and Restated Certificate of Incorporation imposes supermajority voting requirements for certain corporate transactions that apply if a majority of the Board of Directors has not served in such positions for at least 12 months. Under those circumstances, the approval of two-thirds of the voting power of the 14 Company's capital stock would be required in order for the Company to (i) merge with or consolidate into any other entity, other than a subsidiary of the Company, (ii) sell, lease, or assign all or substantially all of the assets or properties of the Company, or (iii) amend the voting provisions of the Amended and Restated Certificate of Incorporation. Other Amended and Restated Certificate of Incorporation provisions of the type referred to above include (i) the denial of the right of holders of Common Stock to take action by written consent in lieu of at a shareholders' meeting and (ii) the ability of the Board of Directors to determine the rights and preferences (including voting rights) of the Company's authorized but unissued preferred stock, and then to issue such stock. Such By-law provisions include those that (i) require advance nomination of directors, (ii) require advance notice of business to be conducted at shareholders' meetings, and (iii) provide that shareholders owning at least 50% of the voting power of the capital stock are required to call a special meeting of shareholders. With the exception of the provision that authorizes the Board of Directors to fix the terms of and issue authorized but unissued shares of preferred stock, the approval of the holders of at least two-thirds of the voting power of the Company's capital stock is required to amend, alter, or repeal, or to adopt provisions inconsistent with, the Amended and Restated Certificate of Incorporation and By-law provisions described above, regardless of whether a majority of the members of the Board of Directors has served in such positions for more than 12 months at the time of such action. In addition, the 1989 Warrants described above provide that, if the Company is a party to a merger or other extraordinary corporate transaction in which the Company's outstanding Common Stock is exchanged for securities or other consideration (including cash), the holders thereof shall have the right to elect, within 60 days after notice, to receive, at the holder's election, (i) the consideration which the warrant holder would have received had the warrants been exercised immediately prior to the transaction or (ii) the number of shares of the acquiring party's voting stock determined by reference to a formula that gives effect to the fair market value of the consideration paid for the Company's Common Stock in the transaction. If such a transaction constitutes a Change of Control Event (as described above), each of the holders of the 1989 Warrants also has the right to exercise the warrants they hold within the 60-day notice period referred to above and receive cash in an amount equal to the fair market value of the highest per share consideration paid in connection with the transaction, computed as if the warrants had been exercised immediately prior to consummation of the transaction. Delaware Takeover Statute. Section 203 of the Delaware General Corporation ------------------------- Law (the Delaware Takeover Statute) applies to Delaware corporations with a class of voting stock listed on a national securities exchange, authorized for quotation on an inter-dealer quotation system, or held of record by 2,000 or more persons, and restricts transactions which may be entered into by such a corporation and certain of its stockholders. The Delaware Takeover Statute provides, in essence, that a stockholder acquiring more than 15% of the outstanding voting shares of a corporation subject to the statute (an Interested Stockholder), but less than 85% of such shares, may not engage in certain Business Combinations with the corporation for a period of three years subsequent to the date on which the stockholder became an Interested Stockholder, unless (i) prior to such date the corporation's board of directors approved either the Business Combination or the transaction in which the stockholder became an Interested Stockholder or (ii) the Business Combination is approved by the corporation's board of directors and authorized by a vote of at least 66 2/3% of the outstanding voting stock of the corporation not owned by the Interested Stockholder. The Delaware Takeover Statute defines the term Business Combination to encompass a wide variety of transactions with or caused by an Interested Stockholder in which the Interested Stockholder receives or could receive a benefit on other than a pro rata basis with other stockholders, including mergers, certain asset sales, certain issuances of additional shares to the Interested Stockholder, transactions with the corporation which increase the proportionate interest of the Interested Stockholder, or transactions in which the Interested Stockholder receives certain other benefits. 15 Item 2. Properties The Company's operations are conducted in leased facilities or in facilities provided by the federal government or other clients. The Company's headquarters is located at 9300 Lee Highway, Fairfax, Virginia 22031-1207, and its telephone number is (703) 934-3600. The Company's regional headquarters and other offices are listed on page 1 of this Report. Because the Company's operations generally do not require the maintenance of unique facilities, suitable office space is available for lease in all of the areas served. The Company believes that adequate space to conduct its operations will be available for the foreseeable future. For information concerning an investment by the Company in the Fairfax, Virginia, land and buildings where the Company's headquarters are located, see Notes 4 and 10 to the consolidated financial statements. Item 3. Legal Proceedings In the course of the Company's normal business activities, various claims or charges have been asserted and litigation commenced against the Company arising from or related to properties, injuries to persons, and breaches of contract, as well as claims related to acquisitions and dispositions. Claimed amounts may not bear any reasonable relationship to the merits of the claim or to a final court award. In the opinion of management, an adequate reserve has been provided for final judgments, if any, in excess of insurance coverage, that might be rendered against the Company in such litigation. See "General Information about the Company -- Potential Environmental Liability" and "-- Government Regulation." Item 4. Submission of Matters to a Vote of Security Holders None Item 10. Executive Officers of the Registrant The names of the Company's executive officers, who are elected annually, and their ages (as of March 20, 1998), principal corporate positions, and business experience are set forth below. Kenneth L. Campbell, 41, has been Executive Vice President and Chief Financial Officer of ICF Kaiser International, Inc. since July 1997. From July 1996 through June 1997, Mr. Campbell was Chief Operating Officer of Perseus, an international merchant bank based in Washington, D.C. He previously was employed by ICF Kaiser from 1988 through June 1996, holding a variety of senior management positions, including Senior Vice President and Treasurer (1994-1996) and Senior Vice President for Corporate Development (1993-1994). Mr. Campbell first worked for the Company in 1980 as an economic consultant, rejoining the Company in 1988 to assist with the acquisition of Kaiser Engineers. Mr. Campbell has been a director of ICF Kaiser International, Inc. since May 1997. Mr. Campbell graduated from Wesleyan University (B.A.) and the University of Pennsylvania, Wharton Graduate School of Finance (M.B.A.). James O. Edwards, 54, has been Chairman of the Board and Chief Executive Officer of ICF Kaiser International, Inc. since 1987. He also was President of ICF Kaiser International, Inc. from 1987 to 1990. In 1974, he joined ICF Incorporated, the predecessor of ICF Kaiser International, Inc. and was its Chairman and Chief Executive Officer from 1986 until the 1987 establishment of ICF Kaiser International, Inc. Mr. Edwards graduated from Northwestern University (B.S.I.E.) and Harvard University (M.B.A., High Distinction, George F. Baker Scholar). Michael F. Gaffney, 48, has been Executive Vice President and Director of Corporate Development since July 1997. Mr. Gaffney joined ICF Kaiser International, Inc. in June 1994 as Vice President of Special Projects for the Engineering and Construction Group; he was Group Senior Vice President for Business Development of the Company's Engineers and Constructors Group immediately prior to his promotion in July 1997. For the nine years prior to joining ICF Kaiser, Mr. Gaffney held a number of management positions with Jacobs Engineering Group 16 Inc., leaving that firm as Vice President of Operations in Jacobs' Pasadena, California, office. Mr. Gaffney graduated from California Western College (B.S.). Michael K. Goldman, 46, has been an Executive Vice President since 1990 and the Chief Administrative Officer of the Company since 1995. He has held senior management positions in several of the Company's operating subsidiaries since 1980. Prior to joining the Company, Mr. Goldman was in the private practice of law. Mr. Goldman graduated from Harvard University (B.A., M.B.A. High Distinction, George F. Baker Scholar) and the University of California at Berkeley (J.D.). Thomas P. Grumbly, 48, has been President of the Environment and Facilities Management (EFM) Group of ICF Kaiser International, Inc. since its formation on January 1, 1998. He also is an Executive Vice President. He joined the Company in April 1997 as an Executive Vice President and President of the Company's Federal Programs Group and was responsible for combining the Company's private environmental practice with its federal programs practice into the EFM Group in late 1997. Mr. Grumbly was Under Secretary of the U. S. Department of Energy in 1997 prior to joining ICF Kaiser; he had been DOE's Assistant Secretary for Environmental Management prior to becoming Under Secretary. From 1987 to 1993 when he joined DOE, Mr. Grumbly was President of Clean Sites, Inc., a non-profit organization dedicated to solving U.S. hazardous waste problems. Mr. Grumbly graduated from Cornell University (B.A.), University of Toronto (M.A.), and the University of California, Berkeley (Master in Public Policy). Sudhakar Kesavan, 43, has been an Executive Vice President of the Company and President of the Company's Consulting Group since December 1996. He has held senior management positions in the Company's Consulting Group since 1983. Prior to joining the Company, Mr. Kesavan worked for the Indian subsidiary of the Royal Dutch/Shell company. Mr. Kesavan graduated from the Indian Institute of Technology (B. Tech), Indian Institute of Management (P.G.D.M.), and the Massachusetts Institute of Technology. (S.M.). Timothy P. O'Connor, 33, has been Senior Vice President and Treasurer of ICF Kaiser International, Inc. since February 1998. Mr. O'Connor joined the Company in May 1995 and became Vice President and Treasurer in January 1997. From 1990 until 1995, Mr. O'Connor was employed by Lockheed Martin Corporation of Bethesda, Maryland, where he held a number of financial positions, including assistant cash manager, project manager, and senior financial analyst. Prior to that, Mr. O'Connor worked for Lazard Freres and Co. of New York, as an accountant and institutional representative. Mr. O'Connor, who is a Certified Cash Manager, graduated from the University of Delaware (B.S.). Marcy A. Romm, 39, has been Senior Vice President and Director of Human Resources of the Company since 1993. She has held Human Resources positions at ICF Kaiser since 1984. Ms. Romm graduated from George Washington University (B.A., M.B.A.). Marc Tipermas, 50, has been President and Chief Operating Officer of ICF Kaiser International, Inc. since April 1997. He had been Executive Vice President and Director of Corporate Development for the Company from 1993 to 1997 and held senior management positions in several of ICF Kaiser's operating subsidiaries since joining the Company in 1981. From 1977 to 1981, Dr. Tipermas was employed by the U.S. Environmental Protection Agency where he was the Director of the Superfund Policy and Program Management Office from 1980 to 1981. Prior to joining EPA, he was Assistant Professor of Political Science at the State University of New York at Buffalo from 1975 to 1977. Dr. Tipermas has been a director of ICF Kaiser International, Inc. since 1993. Dr. Tipermas graduated from the Massachusetts Institute of Technology (S.B.) and Harvard University (A.M., Ph.D.). David Watson, 53, has been an Executive Vice President and President of the Engineers and Constructors Group since December 1995. From 1989 to November 1995, he was with Day & Zimmerman International, Inc., an engineering and construction firm. From 1989 to 1993 he was President of that firm's Advanced Dzign Systems; in 1993 he led that firm's venture into the international marketplace by taking the position of President of D&Z International, an off- shore international unit, where he established a strategy to pursue engineering and construction work in China and Russia. Prior to joining Day & Zimmerman, Mr. Watson was with Stearns Catalytic, Inc. and Burmah Oil Company. Mr. Watson graduated from Loughborough University of Technology, Loughborough, Leicestershire, England (B. Tech). 17 Paul Weeks, II, 54, has been Senior Vice President, General Counsel, and Secretary of ICF Kaiser International, Inc. since 1990. He joined ICF Incorporated in May 1987 as its Vice President, General Counsel, and Secretary. From 1973 to 1987 he was employed by Communications Satellite Corporation, where from 1983 to 1987 he was Assistant General Counsel for Corporate Matters. Mr. Weeks graduated from Princeton University (B.S.E.E.) and The National Law Center of George Washington University (J.D.). PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters Since September 14, 1993, the Common Stock has traded on the New York Stock Exchange (NYSE) under the symbol "ICF". At March 11, 1998, the Company's record date for its 1998 Annual Meeting of Shareholders, there were 1,502 shareholders of record; the Company believes that there are approximately 4,500 beneficial owners of Common Stock. On March 20, 1998, the closing price of the Common Stock as reported by the NYSE was $2.8125. The following table sets forth, for the periods indicated, the high and low sales prices on the NYSE for the Common Stock:
Common Stock Price High Low Year Ended December 31, 1996 First Quarter............................................. $4.375 $2.625 Second Quarter............................................ 3.375 2.375 Third Quarter............................................. 3.250 2.000 Fourth Quarter............................................ 2.375 1.750 Year Ended December 31, 1997 First Quarter............................................. $2.625 $1.875 Second Quarter............................................ 2.750 1.875 Third Quarter............................................. 2.875 2.125 Fourth Quarter............................................ 2.813 2.000
The Company's Transfer Agent and Registrar is First Chicago Trust Company of New York, P.O. Box 2536, Jersey City, NJ 07303-2536. The Shareholder Relations telephone number is (201) 324-0498, and the First Chicago Web site address is http://www.fctc.com. The Company has never paid cash dividends on its Common Stock. The Board of Directors anticipates that no cash dividends will be paid on its Common Stock for the foreseeable future and that the Company's earnings will be retained for use in the business. The Board of Directors determines the Company's Common Stock dividend policy based on the Company's results of operations, payment of dividends on preferred stock, financial condition, capital requirements, and other circumstances. The Company's debt agreements currently do not permit dividends to be paid on its capital stock. See Note 5 to the consolidated financial statements. 18 Item 6. Selected Financial Data The selected consolidated financial data of the Company for the years ended December 31, 1997 and 1996, the ten months ended December 31, 1995, and each year in the two-year period ended February 28, 1995, have been derived from the Company's audited consolidated financial statements. This information should be read in conjunction with the consolidated financial statements and the related notes thereto appearing elsewhere in this Report and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Certain reclassifications have been made to the prior period financial statements to conform to the presentation used in the December 31, 1997, financial statements. SELECTED CONSOLIDATED FINANCIAL DATA (in thousands except per share data)
Ten Months Year Ended Year Ended Ended Year Ended February 28, December 31, December 31, December 31, ----------------------- 1997 1996 1995 1995 1994 ------------ ------------ ------------ ----------- ------------ STATEMENT OF OPERATIONS DATA: Gross revenue $ 1,108,116 $ 1,248,443 $ 916,744 $ 861,518 $ 651,657 Service revenue(1) 426,086 532,116 425,896 459,786 382,708 Operating income (loss) 18,069 21,180 17,505 13,688 (5,230) Income (loss) before income taxes, minority interest, and extraordinary item 2,561 14,484 6,303 1,239 (12,877) Income (loss) before minority interests and extraordinary item 5,880 11,877 4,212 (1,661) (12,528) Net income (loss) before extraordinary item (4,987) 5,834 2,252 (1,661) (12,528) Net income (loss) (4,987) 5,834 2,252 (1,661) (18,497) Net income (loss) available for common shareholders (4,987) 3,656 449 (3,815) (25,322) BASIC AND DILUTED EARNINGS (LOSS) PER SHARE: Before extraordinary item $ (0.22) $ 0.17 $ 0.02 $ (0.18) $ (0.92) Extraordinary loss on early extinguishment of debt - - - - (0.29) ----------- ----------- --------- --------- --------- Total $ (0.22) $ 0.17 $ 0.02 $ (0.18) $ (1.21) =========== =========== ========= ========= ========= Weighted average common shares outstanding - basic 22,382 22,035 21,132 20,957 20,886 Weighted average common shares outstanding - diluted 22,382 22,057 21,606 20,957 20,886 BALANCE SHEET DATA (END OF PERIOD): Total assets $ 398,466 $ 365,973 $ 369,517 $ 281,422 $ 281,198 Working capital 90,521 113,898 84,589 91,640 87,648 Long-term liabilities 145,590 161,951 125,818 133,130 130,752 Redeemable preferred stock - - 19,787 19,617 20,212 Shareholders' equity 27,327 34,892 28,427 27,624 30,780
- ------------------- (1) Service revenue is derived by deducting the costs of subcontracted services and direct project costs from gross revenue and adding the Company's share of the equity in income of unconsolidated joint ventures and affiliated companies. 19 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations OVERVIEW The Company achieved several important milestones in 1997 that will better position it for long-term expansion and profitable growth. Through sales successes, cost reductions, and cost-containment initiatives, the Company replaced significant 1996 earnings that did not recur in 1997. More specifically, the Company was forced to address and minimize the impact of the loss of the rebid for its then single largest contract, the Management and Integration Services contract with the U.S. Department of Energy's Hanford Nuclear Site, which had contributed $12.0 million to the Company's 1996 operating results. Additionally, the Company sold for a pretax profit of $9.4 million the majority of its interests in entities owning and operating a pulverized coal injection facility, which in 1996 generated over $5.6 million in operating margins . The Company continued to grow internationally and completed the formation of several important strategic teaming relationships with other major international companies. Many marketing activities targeting large contracts have been successful. The Company believes these successes will continue because the Company has proven abilities and resources that give it a competitive advantage in serving both government and commercial customers. The Company achieved improved diversification in its customer base in 1997. In addition to the continued focus on customer diversification, the Company is also experiencing a shift in the mix of the types of contracts under which it performs. The large commercial project market will continue to require the Company to undertake fixed-price contracts in which the Company retains more performance risk than in other contract types. Due to this risk transfer element, these types of contracts can contain premiums for potentially higher profit margins than cost-reimbursable type contracts, but this contract type can also pose more risk. For example, the 1997 results would have been significantly better if not for a fourth-quarter negative adjustment of $6.9 million to operating income for the adverse impacts of cost overruns on a fixed- price contract involving the construction of a plant to produce nitric acid scheduled for completion in 1998 -- the Company's first significant overrun on a fixed-price project since 1992. As a result of this overrun, the Company is adding increased emphasis on its internal policies and activities with the aim of strengthening the management processes needed in performing this type of work. The Company ended 1997 with $4.1 billion in contract backlog. The reduction from $4.7 billion at December 31, 1996, is due primarily to the impact of the completion of another year of the Rocky Flats contract which resulted in the conversion of approximately $600 million of the 1996 backlog into revenue in 1997. Exclusive of the Rocky Flats backlog at December 31, 1997, the Company's backlog grew by 4% over December 31, 1996. The backlog at December 31, 1997, was distributed among the Company's business base in similar proportions to last year. Beyond 1997, in addition to growth expected from new business development, the Company will continue to evaluate reasonable opportunities for acquisitions that will enhance and complement its customer offerings. Although 1997 operating results were not significantly impacted by any major acquisitions, the Company did complete an acquisition on March 17, 1998, of a construction management company specializing in fabrication plants and other facilities for semiconductor and microelectronics customers. The acquired company will continue servicing its primary customers while expanding that base and integrating the Company's engineering capability to grow the business and improve profit margins. 20 Highlights by the Company's operating groups are as follows (in millions):
Year Ended Year Ended December 31, 1997 December 31, 1996 ------------------------------------------------------------------ Gross Service Gross Service Revenue Revenue Revenue Revenue ------------------------------------------------------------------ Environment and Facilities Management $ 649.6 $206.5 $ 895.8 $323.6 Engineers and Constructors 367.9 148.8 266.8 136.7 Consulting (1) 90.8 69.6 86.9 68.4 Other (0.2) 1.2 (1.0) 3.4 -------- ------ -------- ------ $1,108.1 $426.1 $1,248.5 $532.1 ======== ====== ======== ======
(1) During 1996, the Group accelerated its ability to invoice certain indirect costs on cost-reimbursable contracts, resulting in $3.3 million of revenue. Environment and Facilities Management Group (EFM) The EFM Group derives significant revenue from several large environmental projects with the federal government. One of these projects is the U.S. Department of Energy's Rocky Flats Closure Project. This project generated 1997 gross revenue of $588.7 million, an increase of $44.9 million, or 8%, over 1996. Other growth is largely attributable to Total Environmental Restoration Contracts (TERCs) in Baltimore and Sacramento for the U.S. Army Corps of Engineers, which have a maximum contract value of $590 million. In 1997, EFM was awarded $82.3 million in task orders under these two TERCs. Gross revenue generated from the TERC projects totaled $20.5 million in 1997, an increase of $18.4 million over 1996. Beyond 1997, EFM is also focusing on developing a line of business to address facilities privatization and outsourcing opportunities with the U.S. government. Engineers and Constructors Group (E&C) In November 1997, the E&C Group successfully completed the majority of the first phase of the Group's largest project, to construct a mini-mill for an integrated steel maker in the Czech Republic. This project represented $78.8 million of the Group's total $101.1 million increase in 1997 gross revenue over 1996. The second and larger phase of the project continues to be a major activity for the Group in 1998. The Group's Asia-Pacific region also achieved significant revenue and margin growth in 1997, which is expected to continue in 1998. During 1997, notwithstanding the provision for the nitric acid project, the E&C Group continued its efforts to improve profitability of its domestic operations. These efforts included management changes, cost-reduction initiatives, improved training and project management reviews, as well as redirection of marketing efforts to concentrate on large-scale projects. The ability of the E&C Group to increase its operating income is directly dependent upon the success of the Company's marketing strategies on large-scale projects and upon profitable management of awarded work. Consulting Group The Consulting Group completed 1997 with the highest gross revenue, almost $91 million, and with the largest work force in its history, now totaling nearly 700 employees. The Consulting Group historically has derived significant revenue from the U.S. Environmental Protection Agency (EPA) -- a client that the Company is firmly committed to serving. Notably, in 1997, the percentage of the Group's revenue derived from EPA represented less than half of the total Consulting Group revenue for the first time. The Group's successful diversification strategy has expanded the customer base to include international, private-sector, and other federal and state agencies and departments while maintaining the volume of revenue from EPA. Business development efforts in all five lines of business -- energy, environment, economic and community development, transportation, and information management-- are directed at broadening the Group's base of customers. 21 RESULTS OF OPERATIONS Selected elements of the Consolidated Statements of Operations are summarized in the following table (dollars in millions):
Year Ended Year Ended Ten Months Ended December 31, December 31, December 31, 1997 1996 1995 /(1)/ ----------------------------------------------------------- Gross revenue $1,108.1 $1,248.4 $ 916.7 Service revenue $ 426.1 $ 532.1 $ 425.9 Service revenue as a percentage of gross revenue 38.5% 42.6% 46.5% Operating expenses as a percentage of service revenue: Direct labor and fringe benefits 68.0% 71.5% 71.8% Group overhead 20.3% 18.0% 16.1% Corporate general and administrative 5.2% 4.6% 6.0% Depreciation and amortization 2.3% 1.9% 2.0% Operating income as a percentage of service revenue 4.2% 4.0% 4.1%
/(1)/ Effective December 31, 1995, the Company changed its annual reporting period from a fiscal year ending on February 28 to a calendar year ending on December 31. As a result, the accompanying consolidated financial statements include only ten months of operations in 1995. Typically, it is not the results from any individual contract that most effectively depict developments in the financial operations of a contracting business; however, as the Company continues in the execution of a strategy favoring a shift toward larger projects, the timing of activities on such large projects has generated and could continue to generate results that do not adequately explain trends in the underlying business unless their individual results are understood. A key element in the analysis of the Company's results of operations for the periods reported herein is the impact on gross revenue and service revenue of the operations of two of the Company's largest contracts. In April 1995, the U.S. Department of Energy awarded Kaiser-Hill Company, LLC (Kaiser-Hill) with the Rocky Flats contract. Kaiser-Hill is equally owned by the Company and CH2M Hill Companies, Ltd. The cost-reimbursable contract is for a five-year term with a total award value expected of $3.0 billion. The operating results of Kaiser- Hill are consolidated with the Company's other majority-owned or -controlled subsidiaries and have had significant impact on trends in the consolidated results during the early phases of the contract. In August 1996, the Company was unsuccessful in its rebid to provide management and integration services to the U.S. Department of Energy (DOE) for the Hanford Site in Richland, Washington (the Hanford contract). Additionally, the Company's then-existing contract to perform services at Hanford, scheduled for expiration in March 1997, was effectively terminated on October 1, 1996. Gross Revenue The following graph depicts the gross revenue impact of these two contracts discussed above, as well as the remainder of the Company's business. [graph appears here] Excluding the Rocky Flats and Hanford contracts, gross revenue increased by $107.3 million, or 26.0%, from 1996 to 1997. Approximately $59.6 million, or 55.5%, of this increase was due to large quantities of direct material purchases for a contract to construct a mini-mill for an integrated steel maker in the Czech Republic. Gross 22 revenue also increased in each of the Company's business areas, most notably from operations in international sectors, particularly in the European and Asia- Pacific regions. The Hanford contract generated $293.4 million, or 23.5%, of total 1996 gross revenue and Rocky Flats gross revenue increased by $45.0 million, or 8.3% from 1996. Had the reported amounts for 1995 included the actual results for a full 12 months, 1996 gross revenue would have increased over 1995 by $202.5 million, or 19%. Excluding the Rocky Flats and Hanford contracts, gross revenue increased $28.7 million, or 7.5%, in 1996 over 1995. Gross revenue from the Rocky Flats contract increased by $266.2 million, or 96%, in 1996 over the contract's start- up year in 1995. Conversely, the termination of the Hanford contract in 1996 accounts for a $92.4 million, or 24%, decrease in gross revenue from 1995. The Company recognized a provision for contract loss of $6.9 million in the fourth quarter of 1997, representing the financial statement impact of cost overruns on a large fixed-price nitric acid project scheduled to be completed in 1998. Such an adjustment on a fixed-price project was the first for the Company since 1992. The Company intends to pursue claims vigorously with various parties related to this contract, which may result in reductions in the estimated loss at contract completion. Late in 1997, the Company entered into several new joint-venture arrangements for the purpose of executing several large contract awards and for bidding on future large contract opportunities. Operating activities of the newly created ventures were not significant to the Company's consolidated results of operations in 1997. However, as the use of joint ventures continues to be an increasingly important market force in the Company's ability to win large contracts, it is possible that larger portions of the Company's operating results will be generated by entities that will not be consolidated with the remainder of the Company's subsidiaries for financial reporting purposes, but will instead include only the Company's equity in the joint-venture results. Service Revenue Service revenue is derived by deducting the costs of subcontracted services and third-party direct material costs from gross revenue and adding the Company's equity in income of unconsolidated joint ventures and affiliated companies. Management regularly analyzes operating margins and other ratios in relation to service revenue rather than gross revenue believing that the resulting ratios more appropriately reflect the Company's direct activities. The following graph depicts the service revenue impact of the two contracts discussed above, as well as the remainder of the Company's business. [graph appears here] Excluding the Rocky Flats and Hanford contracts, service revenue increased by $15.8 million, or 6.4%, from 1996 to 1997. The increase, most notably, was generated by those operations in the Company's European and Asia-Pacific regions. The total decrease, however, in 1997 service revenue compared to 1996 of $106.0 million, or 19.9%, is due primarily to the Hanford contract which generated $119.2 million, or 22.4%, of total service revenue in 1996. Equity in income of joint ventures and affiliates also decreased by $1.7 million due primarily to the sale of the majority of the Company's interests in entities owning and operating a pulverized coal injection facility in December of 1996. Had the reporting period for 1995 included the actual results for a full 12 months, service revenue would have been higher by $67.8 million and total service revenue growth in 1996 would have been $38.4 million or 7.8%. The total growth was a combination of the Rocky Flats contract generating an additional $76.7 million in service revenue in 1996; a $45.2 million, or 27%, decrease in service revenue from the Hanford contract; and all other business activities collectively achieving a $7.2 million, or 3.0%, increase in service revenue in 1996 over 1995. Service revenue as a percentage of gross revenue decreased from prior years by 9.6% and 8.4% in 1997 and 1996, respectively, as larger amounts of direct material purchases and subcontracted services were required for the contracts performed during those years. If the Company continues to grow in the areas of large environmental 23 monitoring and facilities management activities and in larger engineering and construction projects, this trend in lower service margin percentages may continue. Operating Expenses Direct labor and fringe benefit costs decreased $90.8 million, or 23.8%, from 1996 to 1997. The loss of the Hanford contract accounted for $102.1 million of the decrease and the Rocky Flats contract resulted in a decrease of $9.3 million. Direct labor and fringe benefit costs for all of the Company's other business activities increased in 1997 over 1996 by $20.5 million, or 16.6%. Direct labor and fringe benefit costs as a percentage of service revenue decreased to 68.0% in 1997 from 71.5% in 1996. This reduction is largely the result of a fixed-price project that generated $12.3 million of gross margin (service revenue less direct labor and fringe benefit costs) for which direct labor and fringe benefit costs represented only 20.9% of its total service revenue in 1997. This contract's gross margin represented 9.2% of the Company's total contract gross margin generated in 1997. Based on the remaining uncompleted phases of the contract, management does not expect the gross margin results to remain at 1997 levels, and the significance of this single project to the Company's overall operating results is expected to decline after 1997. The direct labor and fringe benefit costs increased $74.3 million between the ten months ended December 31, 1995 and calendar 1996. The additional two months in 1996 versus 1995 represents $34.9 million, or 47.0%, of the increase. The first full year of operations of the Rocky Flats contract in 1996 accounted for an increase in direct labor and fringe benefit costs of $69.5 million. Federal budget reductions at the Hanford Site and the effective termination of the Hanford contract on October 1, 1996 resulted in a reduction in these costs of $47.0 million. Direct labor and fringe benefit costs for all other contract activities increased by $16.9 million, or 15.8% in 1996 over 1995. Excluding the Rocky Flats and the Hanford contracts, the Company's direct labor and fringe benefit costs as a percentage of service revenue were 55.6%, 50.4%, and 48.1% for the fiscal periods ended December 31, 1997, 1996, and 1995, respectively. [graph appears here] General and administrative, or indirect, expenses are incurred within each of the Company's operating groups and at the corporate level. Total group overhead represents those general and administrative costs incurred by the Company's operating groups for which an indirect benefit is generally not derived by any other operating group. Conversely, corporate general and administrative costs consist of expenses incurred by the Company which provide some indirect benefit to all operating groups. Total indirect expenses, including depreciation and amortization, decreased by $12.1 million, or 9.3%, in 1997 from 1996 as a result of the Company's cost-reduction initiatives undertaken in late 1996 and 1997. Significant reductions were realized in indirect salaries, facilities expenses, consultants costs, and amortization expense. Total indirect expenses remained flat in 1996 versus 1995 as increased marketing efforts directed at large-scale domestic and international contract opportunities were offset by reductions in corporate general and administrative expense spending. Gain on Sale of Investment In December 1996, the Company sold the majority of its interests in entities owning and operating a pulverized coal injection facility for $16.6 million, resulting in a $9.4 million pretax gain in 1996. The buyer exercised its option on January 5, 1998, to purchase the remaining investment for $2.4 million. The Company recognized a total pretax gain on the latter option of $1.0 million during 1997 as the carrying value of the option was increased to reflect fair market value. The Company's investment in this operation generated $0.8 million and $2.8 million in equity income in 1997 and 1996, respectively. 24 Interest Expense Interest expense increased $0.9 million in 1997 from 1996. An increase in interest expense of $1.8 million was a result of the Company's 1996 issuance of $15 million in 12% Senior Notes due in 2003, the proceeds from which were used to redeem preferred stock. This increase in interest expense was offset partially by a one-time, $0.9 million reduction in interest expense as a result of the Company's favorable resolution of potential interest costs associated with a foreign income tax matter. Interest expense increased a total of $4.1 million in 1996 over 1995, $2.7 million because of the additional two months in the 1996 reporting period versus 1995, and an additional $1.2 million in 1996 due to the interest rate on the Company's 12% Subordinated Notes due in 2003 being increased effective March 8, 1996, from 12% to 13%. The Company's average annual debt outstanding and the related average effective interest rates for 1997, 1996, and the ten months ended December 31, 1995, were $140.8 million and 13%, $131.0 million and 13.2%, and $123.7 million and 12.9%, respectively. Interest income increased by $0.5 million in 1997 over 1996 as a result of the earnings on increased available cash balances. The Company's cash flows generated a net increase in cash, after foreign currency conversion, at December 31, 1997, of $2.4 million over December 31, 1996. Income Tax Expense The Company recognized a tax benefit totaling $3.3 million in 1997 versus a tax expense of $2.6 million in 1996. The income tax provision for both years excludes the third-party's ownership interest in Kaiser-Hill's income because Kaiser-Hill is a flow-through entity for tax purposes. The Kaiser-Hill third- party ownership interest exclusion for 1997 was larger than in 1996 due to greater Kaiser-Hill income, thereby positively affecting the 1997 tax provision by $1.7 million. Furthermore, in 1997, the Company completed a research and experimental expenditures study for certain open tax years resulting in the recognition of an income tax benefit of $1.9 million for research tax credits. The tax expense for 1996 also reflects the reversal of valuation allowances on deferred tax assets totaling $2.1 million, whereas no such reversal occurred in 1997. This valuation allowance reversal also represents the primary difference between the 18% effective tax rate in 1996 versus the 33.2% effective tax rate for 1995. LIQUIDITY AND CAPITAL RESOURCES The Company generated significant cash flows from operations during 1997, due in part to increased activity in large commercial projects that had provisions in the contract terms for milestone-based payments. Differences in the timing of the cash payments made to suppliers on some of these large projects versus the collection of customer trade receivables also contributed favorably to the 1997 cash flows. Cash flows generated from operations in 1996 were impacted favorably by similar timing differences and impacted negatively by the Company's timing of supplier payments made related to the termination of the Hanford contract in late 1996. Total investing cash flows of $8.0 million were generated from several non- recurring transactions. Proceeds totaling $16.5 million from the December 31, 1996, sale of the majority of the Company's ownership interests in the pulverized coal injection facility were collected in 1997. The Company's $4.9 million use of cash for fixed asset purchases in 1997 remained relatively consistent with that of 1996 and includes the implementation costs of new accounting and project management software, which began in 1995 and increased in 1996. The Company anticipates completing the majority of this software project in 1998. On November 12, 1997, the Company entered into an investment, the purpose of which was to reduce significantly remaining fixed operating lease costs for the corporate headquarters. The Company obtained a percentage ownership in the underlying leaseholds and buildings as a result of this investment. The Company contributed $1.5 million for a 20% ownership interest in a limited liability company (the Investment Company) and other investors contributed $4.5 million for the remaining 80% ownership interest. The Company also committed to make additional annual capital contributions to the Investment Company totaling $600,000 during each of the first three years and $700,000 during each of the fourth through ninth years of the Investment Company. The 25 Investment Company, in turn, contributed $6 million in exchange for a 20% ownership interest in a limited liability company (the Operating Company) that leases the property and owns the buildings leased primarily by the Company for its corporate headquarters. The Operating Company agreement provides that the Investment Company ownership will increase to 80% in fixed annual 12% increments in each of the 11th through 15th year of the Operating Company. The ownership percentage of the other investors will be correspondingly decreased. Finally, under a separate option agreement, the Investment Company has an option to purchase the property on which the Company's corporate headquarters buildings are located. Management estimates that this investment and associated lease restructuring will reduce the Company's facilities commitment costs by up to $14 million over the life of this new investment/leasing relationship with approximately $11 million of the savings being realized in the first five years. Transaction costs totaling $1.7 million will be amortized over 15 years of the life of the Operating Company. Financing activities in 1997 included the net repayment of $16.5 million in borrowings outstanding on the Company's revolving credit facility and $13.9 million in distributions of Kaiser-Hill earnings to the minority interest owner. In December 1997, the Company entered into an amended and restated revolving credit facility, retaining many of the same terms as the former facility, while increasing total borrowing capacity by $25 million to a total of $65 million. As of December 31, 1997, the Company's total available capacity under the facility, as limited by the facility and by the indentures of its Senior and Subordinated Notes, was $60 million. Total available borrowing is based on certain percentages of the Company's total accounts receivable which qualify to serve as collateral. On December 31, 1997, the Company had $4.0 million outstanding in cash borrowings, $22.7 million outstanding in contract performance letters of credit, and $22.7 million of additional credit available. Partially as a result of recording a $6.9 million provision for the financial statement impacts of cost overruns on a fixed-price nitric acid project, discussed under Overview, the Company was not in compliance with certain financial covenants of the revolving credit facility at December 31, 1997. On March 12, 1998, the Company obtained an amendment to the credit facility that excludes the relevant project results from inclusion in the computations of these covenants. This amendment also requires the Company to update the banks with respect to the total costs to complete the referenced project and to obtain the banks' consent prior to making certain large acquisitions. Management anticipates being able to comply with all covenants set forth in the amended credit facility. Financing activities in 1996 consisted mainly of the private placement issuance on December 23 of 15,000 Units, each Unit consisting of $1,000 principal amount of the Company's 12% Senior Notes due 2003, Series A (Series A Senior Notes). The net proceeds from the issuance of the Series A Senior Notes and borrowings under the credit facility were used to repurchase the majority of the Company's Series 2D Senior Preferred Stock and Series 2D Warrants in December 1996 for $20 million. The Series A Senior Notes were exchanged for substantially identical Series B Senior Notes in March 1997. Kaiser-Hill has a $50 million receivables purchase facility to support its working capital requirements under the Rocky Flats contract. The facility contains certain program fees, specified minimum tangible net worth requirements, and default provisions for delinquent receivables. The facility expires on June 30, 1998, and is non-recourse to Kaiser-Hill's owners. The Company anticipates being able to renegotiate the facility in annual increments beyond the 1998 expiration. Lastly, the Company experienced a significant devaluation in the reported value of its foreign currency in 1997 primarily from balances denominated in Australian dollars. The Australian currency values have experienced declines in value as a result of the Asian financial crisis that surfaced in the fourth quarter of 1997. The Company, however, has not experienced any losses to date as a result of the decline in the currency valuation or from the Asian financial crisis. 26 Liquidity and Capital Resource Outlook The Company believes that current projected levels of cash flows, together with the availability of financing under the Company's revolving credit facility, will be adequate to conduct planned business activities, debt service requirements, planned investments, and capital expenditures and to ensure compliance with debt covenants for the near term. The Company does, however, continually explore options that would provide additional capital for longer- term objectives and operating needs, including replacements for the Company's long-term debt and additional equity infusions. The Company may take advantage of the near-term opportunity to redeem the Series B Senior Notes and the Subordinated Notes, both due in 2003, which can be called on December 31, 1998, at an 8% call premium. The revolving credit facility limits the Company's ability to make acquisitions and other investments, and the indentures governing the Company's Series B Senior Notes and Subordinated Notes limit the Company's ability to make restricted payments, including certain payments in connection with investments and acquisitions. These revolving credit facility and indenture limitations would make it likely that the Company would issue additional equity securities in order to fund any significant acquisitions or to invest significant amounts in joint ventures throughout the terms of the limitations. OTHER MATTERS Acquisition On February 18, 1998, the Company's Board of Directors approved the acquisition of ICT Spectrum Constructors, Inc., a contractor based in Boise, Idaho, specializing in construction management of fabrication plants for semiconductor and microelectronics manufacturers. The transaction closed on March 17, 1998, and business will continue under the name ICF Kaiser Advanced Technology, Inc. Each share of ICT Spectrum stock was exchanged for shares of ICF Kaiser stock, resulting in the issuance of 1.5 million new unregistered shares of ICF Kaiser common stock. The exchanged ICF Kaiser shares carry a guarantee that the fair market value of each share of stock will reach $5.36 by March 1, 2001. In the event the fair market value does not attain the guaranteed level, the Company is obligated to make up the shortfall either through the payment of cash or by issuing additional shares of common stock. Given that the fair market value of each share of stock currently is significantly below the amount of the guarantee and that the Company's current revolving credit facility and indentures restrict the amount of cash that can be used to make up the shortfall, the Company will be required to assume that any periodic shortfall from the guaranteed price will be settled through the issuance of additional shares of common stock. Under the terms of the acquisition, however, total contingently issuable shares of common stock cannot exceed 1.5 million. Any contingent shares assumed issued will be included in the diluted earnings per share calculations for applicable future reporting periods until the earlier of the contingency resolution or March 1, 2001. The new shares issued to complete the acquisition also contain restrictions preventing their sale prior to March 1, 2001. The acquisition will be accounted for as a purchase and will generate approximately $5.0 million in goodwill, which will be amortized over 12 years. Impact of Year 2000 Issue Similar to many organizations that use computer programs in their operations, the Company is addressing the impact of the Year 2000 issue on its business. The Year 2000 issue is the result of computer programs being written using two digits rather than four to define the year. Any of the Company's computer programs that have date-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions, generate financial information, or engage in similar normal business activities. Management's ongoing assessment of its business software tools combined with the impending risks of the Year 2000 issue led the Company in 1995 to begin investment in new financial and project management software. 27 The implementation of the new application began in 1995, and all phases of implementation are scheduled for completion by the end of 1998. The Company then should have sufficient time to test new applications prior to the year 2000. Some of the applications have been operating since 1996. Because the Company is replacing its main business software applications, the costs of the new software, external consultants, and the internal cost of implementation labor is being capitalized and amortized over a period of three years. This investment in the new software application was $0.9 million in 1997, $2.6 million in 1996, and $1.4 million in 1995. Depreciation expense related to these investments totaled $0.9 million in 1997 and $0.6 million in 1996. The total remaining costs of this Year 2000 project is estimated to be less than $2.0 million. Apart from internal risks associated with the Year 2000 issue, the Company does not believe that it has significant exposures from third parties with whom it transacts business. The Company also is evaluating the potential for Year 2000 processing issues in products or services that it has sold to customers. Based on the service orientation of the Company's business, management does not anticipate significant exposures from customers related to Year 2000 issues. Forward-Looking Statements From time to time, certain disclosures in reports and statements released by the Company, or statements made by its officers or directors, will be forward-looking in nature. These forward-looking statements may contain information related to the Company's intent, belief, or expectation with respect to contract awards and performance, potential acquisitions and joint ventures, and cost-cutting measures. In addition, these forward-looking statements contain a number of factual assumptions made by the Company regarding, among other things, future economic, competitive, and market conditions. Because the accurate prediction of any future facts or conditions may be difficult and involve the assessment of events beyond the Company's control, actual results may differ materially from those expressed or implied in such forward-looking statements. The Company is availing itself of the safe harbor provisions provided in the Private Securities Litigation Reform Act of 1995 by cautioning readers that forward-looking statements that use words such as the Company "anticipates," "expects," "estimates," and "believes" are subject to certain risks and uncertainties which could cause actual results of operations to differ materially from expectations. These forward-looking statements will be contained in the Company's federal securities laws filings or in written or oral statements made by the Company's officers and directors to press, potential investors, securities analysts, and others. Any such written or oral forward- looking statements should be considered in context with the risk factors discussed below: . the Company may not be able to maintain existing contracts at current levels and may not be able to realize increased contract performance levels assumed for contracts. The Company is involved in a number of fixed-price contracts under which the Company can benefit from cost savings or performance efficiencies, but if certain pricing and performance assumptions prove inaccurate, unrecoverable cost overruns can occur. . the Company may not be awarded new contracts for which it is competing in its established markets or these awards may be delayed; in addition, the Company may not be able to win contracts in the new markets it is targeting. General economic conditions in the international arena, especially the Asia-Pacific region, could negatively impact the Company's current international business and its ability to expand into new international markets. . the Company is very dependent on federal government contracts, which are subject to annual funding approvals and cost audits, and may be terminated at any time, with or without cause; a large number of federal government contracts are included in the Company's contract backlog, which potentially means that not all contract backlog will become future revenue of the Company. . the Company may not be able to complete acquisitions and/or enter into joint ventures, and if completed, acquisitions and joint ventures may take more time to contribute favorably to the Company's financial results than is currently assumed. The Company is highly leveraged and is subject to restrictive covenants that limit its ability to fund potential acquisitions and joint ventures beyond certain levels established in its debt agreements. 28 . a large portion of the Company's business has been and is generated either directly or indirectly as a result of federal and state environmental laws, regulations, and programs; a reduction in the number or scope of these laws, regulations, or programs could materially affect the Company's business. In addition, environmental work poses risks of large civil and criminal liabilities for violations of environmental laws and regulations, and liabilities to customers and to third parties for damages arising from the Company's performing environmental services to its clients. A large fine or penalty imposed on the Company could negatively impact contract performance fees under certain existing contracts or otherwise negatively affect the Company's financial results. Item 8. Financial Statements and Supplementary Data The Financial Statements and Supplementary Data appear on pages F-1 through F-31 and S-1 hereto. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures None PART III Item 10. Directors and Executive Officers of the Registrant Information regarding the directors of the Registrant is included under the caption "Election of Directors" in the Company's Proxy Statement for the 1998 Annual Meeting of Shareholders (the Proxy Statement) and is incorporated herein by reference. Information regarding executive officers of the Registrant is included under a separate caption in Part I hereof. Information regarding compliance with Section 16(a) of the Exchange Act is included under the caption "Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's Proxy Statement and is incorporated herein by reference. Item 11. Executive Compensation Information regarding this item is included under the caption "Executive Compensation" in the Company's Proxy Statement and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management Information regarding this item is included under the caption "Voting Securities of the Company and Certain Shareholdings" in the Company's Proxy Statement and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions Information regarding this item is included under the captions "Compensation & Human Resources Committee Interlocks and Insider Participation," "Agreements and Transactions with Certain Directors and Nominees," "Agreements and Transactions with Executive Officers Named in the Summary Compensation Table," and "Agreements and Transactions with Other Executive Officers" in the Company's Proxy Statement and is incorporated herein by reference. 29 PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a) Documents filed as part of this Report
Page 1. Consolidated Financial Statements of ICF Kaiser International, Inc. and Subsidiaries a. Report of Independent Accountants.............................................................. F-1 b. Consolidated Balance Sheets as of December 31, 1997 and December 31, 1996...................... F-2 c. Consolidated Statements of Operations for the years ended December 31, 1997 and 1996, and the ten months ended December 31, 1995............................................................. F-3 d. Consolidated Statements of Shareholders' Equity for the years ended December 31, 1997 and 1996, and the ten months ended December 31, 1995..................................................... F-4 e. Consolidated Statements of Cash Flows for the years ended December 31, 1997 and 1996, and the ten months ended December 31, 1995..................................................... F-5 f. Notes to Consolidated Financial Statements..................................................... F-6 2. Supplemental Schedule Relating to the Consolidated Financial Statements of ICF Kaiser International, Inc. and Subsidiaries for the years ended December 31, 1997 and 1996, and the ten months ended December 31, 1995. a. Schedule II: Valuation and Qualifying Accounts................................................. S-1
All Schedules except the one listed above have been omitted because they are not applicable or not required or because the required information is included elsewhere in the financial statements in this filing. (b) Exhibits 3. Exhibits (listed according to the number assigned in the table in Item 601 of Regulation S-K). Exhibit No. 3 -- Articles of Incorporation and By-laws of the Registrant - ------------------------------------------------------------------------ 3(a) Restated Certificate of Incorporation of ICF Kaiser International, Inc. (restated through June 26, 1993) (Incorporated by reference to Exhibit No. 3(a) to Quarterly Report on Form 10-Q (Registrant No. 1- 12248) for the second quarter of fiscal 1994 filed with the Commission on October 15, 1993) 3(b) Amended and Restated By-laws of ICF Kaiser International, Inc. (as amended through June 23, 1995) (Incorporated by reference to Exhibit No. 3(b) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the second quarter of fiscal 1995 filed with the Commission on October 13, 1995) Exhibit No. 3 -- Articles of Incorporation and By-laws of the Subsidiary - ------------------------------------------------------------------------ Guarantors - ---------- 3(c) Articles of Incorporation of Cygna Consulting Engineers and Project Management, Inc. (Incorporated by reference to Exhibit No. 3(c) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 3(d) By-laws of Cygna Consulting Engineers and Project Management, Inc. (Incorporated by reference to Exhibit No. 3(d) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 30 3(e) Certificate of Incorporation of ICF Kaiser Government Programs, Inc. (Incorporated by reference to Exhibit No. 3(e) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 3(f) By-laws of ICF Kaiser Government Programs, Inc. (Incorporated by reference to Exhibit No. 3(f) to Registration Statement on Form S-1 Registration No. 333- 19519 filed with the Commission on January 10, 1997) 3(g) Certificate of Incorporation of PCI Operating Company, Inc. (Incorporated by reference to Exhibit No. 3(g) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 3(h) By-laws of PCI Operating Company, Inc. (Incorporated by reference to Exhibit No. 3(h) to Registration Statement on Form S-1 Registration No. 333- 19519 filed with the Commission on January 10, 1997) 3(i) Certificate of Incorporation of Systems Applications International, Inc. (Incorporated by reference to Exhibit No. 3(i) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 3(j) By-laws of Systems Applications International, Inc. (Incorporated by reference to Exhibit No. 3(j) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 3(k) Certificate of Incorporation of EDA, Incorporated 3(l) Amended and Restated By-laws of EDA, Incorporated 3(m) Certificate of Incorporation of ICF Kaiser Systems, Inc. 3(n) By-laws of ICF Kaiser Systems, Inc. 3(o) Certificate of Incorporation of Global Trade & Investment, Inc. 3(p) Amended and Restated By-laws of Global Trade & Investment, Inc. 3(q) Certificate of Incorporation of ICF Kaiser Europe, Inc. 3(r) By-laws of ICF Kaiser Europe, Inc. 3(s) Certificate of Incorporation of ICF Kaiser / Georgia Wilson, Inc. 3(t) By-laws of ICF Kaiser / Georgia Wilson, Inc. 3(u) Certificate of Incorporation of ICF Kaiser Overseas Engineering, Inc. 3(v) Amended and Restated By-laws of ICF Kaiser Overseas Engineering, Inc. 3(w) Certificate of Incorporation of ICF Kaiser Engineers Pacific, Inc. 3(x) Amended and Restated By-laws of ICF Kaiser Engineers Pacific, Inc. 3(y) Certificate of Incorporation of ICF Kaiser Remediation Company 3(z) By-laws of ICF Kaiser Remediation Company Exhibit No. 4 -- Instruments Defining the Rights of Security Holders, including - ------------------------------------------------------------------------------- Indentures - ---------- 4(a) Indenture dated as of January 11, 1994, between ICF Kaiser International, Inc. and The Bank of New York, as Trustee (Incorporated by reference to Exhibit No. 4(a) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the third quarter of fiscal 1994 filed with the Commission on January 14, 1994) 1. First Supplemental Indenture dated as of February 17, 1995. (Incorporated by reference to Exhibit No. 4(a)(1) to Annual Report on Form 10-K Registrant No. 1-12248 for fiscal year 1995 filed with the Commission on May 23, 1995) 2. Second Supplemental Indenture dated September 1, 1995 (Incorporated by reference to Exhibit No. 4(a) (2) to Registration Statement on Form S-1 Registration No. 33-64655 filed with the Commission on November 30, 1995) 31 3. Third Supplemental Indenture dated October 20, 1995 (Incorporated by reference to Exhibit No. 4(a)(3) to Registration Statement on Form S-1 Registration No. 33-64655 filed with the Commission on November 30, 1995) 4. Fourth Supplemental Indenture dated as of March 8, 1996 (Incorporated by reference to Exhibit No. 4 (a)(4) to Transition Report on Form 10-K Registrant No. 1-12248 for the transition period from March 1, 1995 to December 31, 1995 filed with the Commission on March 29, 1996) 5. Fifth Supplemental Indenture dated as of June 24, 1996 (Incorporated by reference to Exhibit No. 4 (a)(5) to Registration Statement on Form S-1 Registration No. 333-16937 filed with the Commission on November 27, 1996) 6. Sixth Supplemental Indenture dated as of December 3, 1997 4(b) Form of 12% Senior Subordinated Note due 2003 (Incorporated by reference to Exhibit No. 4(b) to Quarterly Report on Form 10-Q Registrant No. 1- 12248 for the third quarter of fiscal 1994 filed with the Commission on January 14, 1994) 4(c) Form of Common Stock Purchase Warrant expiring May 15, 1999 (as amended and restated through January 11, 1994) (Incorporated by reference to Exhibit No. 4(e) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the third quarter of fiscal 1994 filed with the Commission on January 14, 1994) 4(d) Rights Agreement, dated as of January 13, 1992, between ICF Kaiser International, Inc. and Office of the Secretary, ICF Kaiser International, Inc. as Rights Agent, including (1) Form of Certificate of Designations of Series 4 Junior Preferred Stock; (2) Form of Rights Certificate; and (3) Summary of Rights to Purchase Preferred Stock (Incorporated by reference to Exhibit No. 4(h) to Quarterly Report on Form 10-Q Registrant No. 0-18025 for the third quarter of fiscal 1992 filed with the Commission on January 14, 1992) 4(e) Warrant Agreement dated as of January 11, 1994, between the Registrant and The Bank of New York, as Warrant Agent (Incorporated by reference to Exhibit No. 4(c) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the third quarter of fiscal 1994 filed with the Commission on January 14, 1994) 4(f) Form of Warrant expiring December 31, 1998 (Incorporated by reference to Exhibit No. 4(d) to Quarterly Report on Form 10-Q Registrant No. 1- 12248 for the third quarter of fiscal 1994 filed with the Commission on January 14, 1994) 4(g) Indenture dated as of December 23, 1996, between ICF Kaiser International, Inc. and the Bank of New York, as Trustee, including Guarantees, dated December 23, 1996, by each of the Subsidiary Guarantors (Incorporated by reference to Exhibit No. 4(g) to Registration Statement on Form S-1 Registration No. 333- 19519 filed with the Commission on January 10, 1997) 1. First Supplemental Indenture dated as of December 3, 1997 4(h) Form of 12% Senior Note due 2003, Series B (Incorporated by reference to Exhibit No. 4(i) to Registration Statement on Form S-1 Registration No. 333- 19519 filed with the Commission on January 10, 1997) 4(i) Warrant Agreement dated as of December 23, 1996, between ICF Kaiser International, Inc. and The Bank of New York, as Warrant Agent (Incorporated by reference to Exhibit No. 4(j) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 4(j) Form of Warrant expiring December 31, 1999 issued under Warrant Agreement dated as of December 23, 1996 (Incorporated by reference to Exhibit No. 4(k) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 32 Exhibit No. 10 -- Material Contracts - ------------------------------------ 10(a) Amended and Restated Credit Agreement dated as of December 3, 1997, with CoreStates Bank N.A., as agent 1. Amendment No. 1 dated as of March 12, 1998 10(b) Amended and Restated Security Agreement dated as of December 3, 1997, with CoreStates Bank N.A., as agent 10(c) ICF Kaiser International, Inc. Employee Stock Ownership Plan (as amended and restated as of March 1, 1993) (and further amended with respect to name change only as of June 26, 1993) (Incorporated by reference to Exhibit No. 10(c) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the second quarter of fiscal 1994 filed with the Commission on October 15, 1993) 1. Amendment No. 1 dated April 24, 1995 (Incorporated by reference to Exhibit No. 10(l)(1) to Annual Report on Form 10-K Registrant No. 1- 12248 for fiscal 1995 filed with the Commission on May 23, 1995) 2. Amendment No. 2 dated December 15, 1995 (Incorporated by reference to Exhibit No. 10(b)(2) to Transition Report on Form 10-K Registrant No. 1- 12248 for the transition period from March 1, 1995 to December 31, 1995 filed with the Commission on March 29, 1996) 3. Amendment No. 3 dated December 13, 1996 (Incorporated by reference to Exhibit No. 10(b)(3) to Registration Statement on Form S-1 Registration No. 333- 19519 filed with the Commission on January 10, 1997) 10(d) Trust Agreement with Vanguard Fiduciary Trust Company dated as of August 31, 1995, for ICF Kaiser International Inc. Employee Stock Ownership Plan (Incorporated by reference to Exhibit No. 10(c) to Registration Statement on Form S-1 Registration No. 33-64655 filed with the Commission on November 30, 1995) 10(e) ICF Kaiser International, Inc. Retirement Plan (as amended and restated as of March 1, 1993) (and further amended with respect to name change only as of June 26, 1993) (Incorporated by reference to Exhibit No. 10(d) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the second quarter of fiscal 1994 filed with the Commission on October 15, 1993) 1. Amendment No. 1 dated April 24, 1995 (Incorporated by reference to Exhibit No. 10(d)(1) to Annual Report on Form 10-K Registrant No. 1-12248 filed with the Commission on May 23, 1995.) 2. Amendment No. 2 dated December 15, 1995 (Incorporated by reference to Exhibit No. 10(d)(2) to Transition Report on Form 10-K Registrant No. 1- 12248 for the transition period from March 1, 1995 to December 31, 1995 filed with the Commission on March 29, 1996) 3. Amendment No. 3 dated December 13, 1996 (Incorporated by reference to Exhibit No. 10(d)(3) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 10(f) Trust Agreement with Vanguard Fiduciary Trust Company dated as of August 31, 1995, for ICF Kaiser International, Inc. Retirement Plan (Incorporated by reference to Exhibit No. 10(e) to Registration Statement on Form S-1 (Registration No. 33-64655) filed with the Commission on November 30, 1995) 10(g) Consolidated, Amended and Restated Deed of Lease Agreement between HMCE Associates Limited Partnership R.L.L.P. (as Landlord) and ICF Kaiser Hunters Branch Leasing, Inc. (as Tenant), dated November 12, 1997, for the lease of the Registrant's headquarters in Fairfax, Virginia known as Hunters Branch Phase I 10(h) Consolidated, Amended and Restated Deed of Lease Agreement between HMCE Associates Limited Partnership R.L.L.P. (as Landlord) and ICF Kaiser Hunters Branch Leasing, Inc. (as Tenant), dated November 12, 33 1997, for the lease of space in the building adjacent to the Registrant's headquarters in Fairfax, Virginia known as Hunters Branch Phase II 10(i) Contribution Agreement by and among HMCE Associates Limited Partnership R.L.L.P.; ICF Kaiser Hunters Branch Leasing, Inc.; and IFA Nutley Partners, LLC dated November 3, 1997 10(j) ICF Kaiser International, Inc. Stock Incentive Plan (as amended and restated through March 1, 1996) (Incorporated by reference to Exhibit No. 10(j) to Registration Statement on Form S-1 Registration No. 333-16937 filed with the Commission on November 27, 1996) 10(k) Contract (#DE-AC3495RF00825) between Kaiser-Hill Company, LLC, a subsidiary of the Corporation, and the U.S. Department of Energy dated as of April 4, 1995. [IN ACCORDANCE WITH RULE 202 OF REGULATION S-T, THIS EXHIBIT NO. 10(K) WAS FILED IN PAPER ON MAY 23, 1995, ON FORM SE PURSUANT TO A CONTINUING HARDSHIP EXEMPTION is incorporated herein by reference thereto] 1. Modifications 1 to 40 to Contract #DE-AC3495RF00825. (Incorporated by reference to Exhibit No. 10(p)(l) to Registration Statement on Form S-1 Registration No. 333-16937 filed with the Commission on November 27, 1996) 2. Modifications 42 to 46 to Contract #DE-AC3495RF00825 (Modification 41 not received) (Incorporated by reference to Exhibit No. 10(p)(2) to Annual Report on Form 10-K (Registrant No. 1-12248) filed with the Commission on March 25, 1997) 3. Modifications 47 to 81 to Contract #DE-AC3495RF00825 (Modifications 72 and 78 not received) 10(l) ICF Kaiser International, Inc. Section 401(k) Plan (as amended and restated as of March 1, 1993) (and further amended with respect to name change only as of June 26, 1993) (Incorporated by reference to Exhibit No. 10(f) to Quarterly Report on Form 10-Q (Registrant No. 1-12248) for the second quarter of fiscal 1994 filed with the Commission on October 15, 1993) 1. Amendment No. 1 dated April 24, 1995 (Incorporated by reference to Exhibit No. 10(p)(1) to Annual Report on Form 10-K Registrant No. 1-12248 for fiscal 1995 filed with the Commission on May 23, 1995) 2. Amendment No. 2 dated December 15, 1995 (Incorporated by reference to Exhibit No. 10(p)(2) to Transition Report on Form 10-K Registrant No. 1- 12248 for the transition period from March 1, 1995 to December 31, 1995 filed with the Commission on March 29, 1996) 3. Amendment No. 3 dated December 13, 1996 (Incorporated by reference to Exhibit No. 10(q)(3) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 10(m) Trust Agreement with Vanguard Fiduciary Trust Company dated as of March 1, 1989, for the ICF Kaiser International, Inc. Section 401(k) Plan (Incorporated by reference to Exhibit No. 28(b) to Registration Statement on Form S-8 (Registration No. 33-51460) filed with the Commission on August 31, 1992) Exhibit No. 10 -- Material Contracts (management contracts, compensatory plans, - ------------------------------------------------------------------------------- or arrangements.) - ----------------- 10(aa) Agreement dated as of May 19, 1997 with James O. Edwards, Chairman and Chief Executive Officer of the Registrant (Incorporated by reference to Exhibit No. 10(ll) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the second quarter of fiscal 1997 filed with the Commission on August 14, 1997) 10(bb) ICF Kaiser International, Inc. 1998 Compensation (IC) Plan for Senior Executives (adopted by the Board of Directors on February 27, 1998) 34 10(cc) ICF Kaiser International, Inc. Non-employee Director Stock Option Plan (as amended and restated as of June 26, 1993) (Incorporated by reference to Exhibit No. 10(bb) to Quarterly Report on Form 10-Q (Registrant No. 1- 12248) for the second quarter of fiscal 1994 filed with the Commission on October 15, 1993) 10(dd) Agreement dated as of May 19, 1997 with Marc Tipermas, President and Chief Operating Officer of the Registrant (Incorporated by reference to Exhibit No. 10(mm) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the second quarter of fiscal 1997 filed with the Commission on August 14, 1997) 10(ee) ICF Kaiser International, Inc. Senior Executive Officers Severance Plan as approved by the Compensation Committee of the Board of Directors on April 4, 1994, and adopted by the Board of Directors on May 5, 1994, as further amended through May 1, 1997 10(ff) Employment Agreement with Michael K. Goldman, Executive Vice President of the Registrant, effective as of February 28, 1994. (Incorporated by reference to Exhibit No. 10(jj) to Annual Report on Form 10-K Registrant No. 1-12248 for fiscal 1995 filed with the Commission on May 23, 1995) 10(gg) ICF Kaiser International, Inc. Consultants, Agents and Part-Time Employees Stock Plan dated as of June 23, 1995 (Incorporated by reference to Exhibit No. 99 to Registration Statement on Form S-8 Registration No. 33-60665 filed with the Commission on June 28, 1995) 10(hh) ICF Kaiser International, Inc. Stock Incentive Plan (as amended and restated through March 1, 1996) (Incorporated by reference to Exhibit No. 10 (j) to Registration Statement on Form S-1 Registration No. 333-16937 filed with the Commission on November 27, 1996) 10(ii) Amended Employment Agreement dated as of December 1, 1996, with David Watson, Executive Vice President and President, ICF Kaiser Engineers and Constructors Group of the Registrant (Incorporated by reference to Exhibit No. 10(kk) to Annual Report on Form 10-K (Registrant No. 1-12248) filed with the Commission on March 25, 1997). 10(jj) Amended and Restated Employment Agreement dated as of July 1,1997 with Kenneth L. Campbell, Executive Vice President and Chief Financial Officer of the Registrant (Incorporated by reference to Exhibit No. 10(nn) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the second quarter of fiscal 1997 filed with the Commission on August 14, 1997) 10(kk) Employment Agreement with Michael F. Gaffney, Executive Vice President of the Registrant, effective as of January 1, 1997 10(ll) Letter Agreement with Cowen Incorporated and Jarrod M. Cohen, dated as of March 13, 1998 10(mm) ICF Kaiser International, Inc. Non-employee Directors Compensation and Phantom Stock Plan as adopted by the Board of Directors on February 28, 1997, with an effective date of March 1, 1997 10(nn) Letter Agreement with Tennenbaum & Co., L.L.C. and Michael E. Tennenbaum, dated as of March 13, 1998 Exhibit No. 21 -- Consolidated Subsidiaries of the Registrant as of December 31, 1997 Exhibit No. 23 -- Consent of Coopers & Lybrand L.L.P. Exhibit No. 27 -- Financial Data Schedule (c) Reports on Form 8-K None 35 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ICF Kaiser International, Inc. (Registrant) Date: March 27, 1998 By /s/ James O. Edwards ------------------------------------- James O. Edwards, Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. (1) Principal executive officer Date: March 27, 1998 By /s/ James O. Edwards ------------------------------------- James O. Edwards, Chairman and Chief Executive Officer (2) Principal financial and accounting officer Date: March 27, 1998 By /s/ Kenneth L. Campbell ------------------------------------ Kenneth L. Campbell, Executive Vice President and Chief Financial Officer 36 (3) Board of Directors Date: March 27, 1998 By /s/ Kenneth L. Campbell ------------------------------------ Kenneth L. Campbell, Director Date: March 27, 1998 By /s/ Tony Coelho ------------------------------------ Tony Coelho, Director Date: March 27, 1998 By /s/ James O. Edwards ------------------------------------ James O. Edwards, Director Date: March 27, 1998 By /s/ Maynard H. Jackson ------------------------------------ Maynard H. Jackson, Director Date: March 27, 1998 By /s/ Thomas C. Jorling ------------------------------------ Thomas C. Jorling, Director Date: March 27, 1998 By /s/ Hazel R. O'Leary ------------------------------------ Hazel R. O'Leary, Director Date: March 27, 1998 By /s/ Keith M. Price ------------------------------------ Keith M. Price, Director Date: March 27, 1998 By /s/ James T. Rhodes ------------------------------------ James T. Rhodes, Director Date: March 27, 1998 By /s/ Marc Tipermas ------------------------------------ Marc Tipermas, Director 37 Report of Independent Accountants To the Board of Directors and Shareholders ICF Kaiser International, Inc. We have audited the consolidated financial statements and financial statement schedule of ICF Kaiser International, Inc. and Subsidiaries listed in Item 14(a) of this Form 10-K. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of ICF Kaiser International, Inc. and Subsidiaries as of December 31, 1997 and 1996, and the consolidated results of their operations and their cash flows for the years ended December 31, 1997 and 1996, and the ten months ended December 31, 1995, in conformity with generally accepted accounting principles. In addition, in our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information required to be included therein. COOPERS & LYBRAND L.L.P. McLean, Virginia March 26, 1998 F-1
ICF KAISER INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - ------------------------------------------------------------------------------------------------ DECEMBER 31, -------------------------------- 1997 1996 - ------------------------------------------------------------------------------------------------ (In thousands, except shares) Assets Current Assets Cash and cash equivalents $ 19,198 $ 16,761 Contract receivables, net 264,030 223,278 Prepaid expenses and other current assets 14,490 27,096 Deferred income taxes 15,281 9,739 -------- -------- Total Current Assets 312,999 276,874 -------- -------- Fixed Assets Furniture, equipment, and leasehold improvements 51,446 48,410 Less depreciation and amortization (39,648) (37,208) -------- -------- 11,798 11,202 -------- -------- Other Assets Goodwill, net 47,323 49,699 Investments in and advances to affiliates 7,038 6,443 Other 19,308 21,755 -------- -------- 73,669 77,897 -------- -------- Total Assets $398,466 $365,973 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Debt currently payable $ 15 $ 43 Accounts payable 120,368 73,891 Accrued salaries and benefits 37,654 45,779 Other accrued expenses 26,902 20,582 Deferred revenue 36,527 21,829 Income taxes payable 1,012 852 -------- -------- Total Current Liabilities 222,478 162,976 Long-term Liabilities Long-term debt 141,004 156,519 Other 4,586 5,432 -------- -------- Total Liabilities 368,068 324,927 -------- -------- Commitments and Contingencies Minority Interest 3,071 6,154 Shareholders' Equity Preferred Stock - - Common Stock, par value $.01 per share: Authorized-90,000,000 shares Issued and outstanding- 22,475,904 and 22,311,842 shares 225 223 Additional Paid-in Capital 67,116 66,983 Notes Receivable Collateralized by Common Stock (2,422) (1,732) Accumulated Deficit (34,225) (29,238) Cumulative Translation Adjustment (3,367) (1,344) -------- -------- Total Shareholders' Equity 27,327 34,892 -------- -------- Total Liabilities and Shareholders' Equity $398,466 $365,973 ======== ======== - ------------------------------------------------------------------------------------------------ See notes to consolidated financial statements.
F-2
ICF KAISER INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS - ----------------------------------------------------------------------------------------------------------------------------- YEAR YEAR TEN MONTHS ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 1997 1996 1995 - ----------------------------------------------------------------------------------------------------------------------------- (In thousands, except per share amounts) GROSS REVENUE $1,108,116 $1,248,443 $ 916,744 Subcontract and direct material costs (677,431) (720,342) (493,971) Provision for contract loss (6,900) - - Equity in income of joint ventures and affiliated companies 2,301 4,015 3,123 ---------- ---------- --------- SERVICE REVENUE 426,086 532,116 425,896 OPERATING EXPENSES Direct labor and fringe benefits 289,571 380,400 306,100 Group overhead 86,792 95,747 68,703 Corporate general and administrative 22,059 24,441 25,231 Depreciation and amortization 9,595 10,348 8,357 ---------- ---------- --------- OPERATING INCOME 18,069 21,180 17,505 OTHER INCOME (EXPENSE) Gain on sale of investment 1,018 9,384 - Interest income 1,750 1,254 2,053 Interest expense (18,276) (17,334) (13,255) ---------- ---------- --------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 2,561 14,484 6,303 Income tax provision (benefit) (3,319) 2,607 2,091 ---------- ---------- --------- INCOME BEFORE MINORITY INTEREST 5,880 11,877 4,212 Minority interest in net income of subsidiaries 10,867 6,043 1,960 ---------- ---------- --------- NET INCOME (LOSS) (4,987) 5,834 2,252 Preferred stock dividends and accretion - 2,178 1,803 ---------- ---------- --------- NET INCOME (LOSS) AVAILABLE FOR COMMON SHAREHOLDERS $ (4,987) $ 3,656 $ 449 ========== ========== ========= BASIC EARNINGS (LOSS) PER SHARE $ (0.22) $ 0.17 $ 0.02 ========== ========== ========= DILUTED EARNINGS (LOSS) PER SHARE $ (0.22) $ 0.17 $ 0.02 ========== ========== ========= WEIGHTED AVERAGE SHARES FOR BASIC EARNINGS PER SHARE 22,382 22,035 21,132 Effect of dilutive stock options - 22 474 ---------- ---------- --------- WEIGHTED AVERAGE SHARES FOR DILUTED EARNINGS PER SHARE 22,382 22,057 21,606 ========== ========== ========= - ----------------------------------------------------------------------------------------------------------------------------- See notes to consolidated financial statements.
F-3
ICF KAISER INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - ------------------------------------------------------------------------------------------------------------------------- COMMON STOCK -------------------- ADDITIONAL CUMULATIVE PAR PAID-IN NOTES ACCUMULATED TRANSLATION SHAREHOLDERS' SHARES VALUE CAPITAL RECEIVABLE (DEFICIT) ADJUSTMENT EQUITY - ------------------------------------------------------------------------------------------------------------------------ (In thousands, except shares) BALANCE, MARCH 1, 1995 21,011,369 $210 $63,786 $(1,732) $(33,343) $(1,297) $27,624 Net income - - - - 2,252 - 2,252 Preferred stock dividends - - - - (1,633) - (1,633) Preferred stock accretion - - - - (170) - (170) Issuances of common stock 314,422 4 1,167 - - - 1,171 Reacquisition of common stock (61,963) (1) (256) - - - (257) Foreign currency translation adjustment - - - - - (517) (517) Other - - (43) - - - (43) ---------- ---- ------- ------- -------- ------- ------- BALANCE, DECEMBER 31, 1995 21,263,828 213 64,654 (1,732) (32,894) (1,814) 28,427 Net income - - - - 5,834 - 5,834 Preferred stock dividends - - - - (1,965) - (1,965) Preferred stock accretion - - - - (213) - (213) Issuances of common stock 1,153,014 11 2,650 - - - 2,661 Reacquisition of common stock (105,000) (1) (426) - - - (427) Foreign currency translation adjustment - - - - - 470 470 Other - - 105 - - - 105 ---------- ---- ------- ------- -------- ------- ------- BALANCE, DECEMBER 31, 1996 22,311,842 223 66,983 (1,732) (29,238) (1,344) 34,892 Net loss - - - (4,987) - (4,987) Issuances of common stock 319,300 3 644 - - - 647 Reacquisition of common stock (155,238) (1) (511) - - - (512) Foreign currency translation adjustment (2,023) (2,023) Other - - - (690) - - (690) ------------ ---- ------- ------- -------- ------- ------- BALANCE, DECEMBER 31, 1997 22,475,904 $225 $67,116 $(2,422) $(34,225) $(3,367) $27,327 ========== ==== ======= ======= ======== ======= ======= - ---------------------------------------------------------------------------------------------------------------------- See notes to consolidated financial statements.
F-4
ICF KAISER INTERNATIONAL, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - ------------------------------------------------------------------------------------------------------------------------- YEAR YEAR TEN MONTHS ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 1997 1996 1995 - ------------------------------------------------------------------------------------------------------------------------- (In thousands) OPERATING ACTIVITIES Net income (loss) $ (4,987) $ 5,834 $ 2,252 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 9,595 10,348 8,357 Provision for losses 1,195 1,881 601 Provision for deferred income taxes (5,542) 2,127 1,253 Earnings in excess of cash distributions from joint ventures and affiliated companies (91) (374) (1,105) Minority interest in net income of subsidiaries 10,867 6,043 1,960 Gain on sale of investment (1,018) (9,384) - Changes in operating assets and liabilities, net of acquisitions and dispositions: Contract receivables, net (42,494) 2,638 (88,743) Prepaid expenses and other current assets (2,268) 1,843 (3,826) Accounts payable and accrued expenses 41,573 (24,781) 78,801 Deferred revenue 14,698 7,727 3,314 Other liabilities 3,296 (2,202) (3,625) Other operating activities 2,682 (492) (5,296) -------- -------- -------- Net Cash Provided by (Used in) Operating Activities 27,506 1,208 (6,057) -------- -------- -------- INVESTING ACTIVITIES Investments in subsidiaries and affiliates, net of cash acquired (4,074) (1,317) (2,010) Sales of subsidiaries and/or investments 17,028 - 735 Purchases of fixed assets (4,888) (4,932) (1,759) Sales of fixed assets - 22 1,035 -------- -------- -------- Net Cash Provided by (Used in) Investing Activities 8,066 (6,227) (1,999) -------- -------- -------- FINANCING ACTIVITIES Borrowings under revolving credit facility 104,500 114,000 16,000 Principal payments on revolving credit facility (121,000) (98,500) (17,173) Proceeds from issuance of senior notes - 14,700 - Repurchase of preferred stock - (20,000) - Distribution of income to minority interest (13,950) (2,428) - Capital contribution from minority interest - - 500 Proceeds from issuances of common stock 213 383 406 Repurchases of common stock (251) - (257) Preferred stock dividends - (2,615) (1,471) Debt issuance costs (624) (1,427) - Other financing activities - 924 (1,308) -------- -------- -------- Net Cash Provided by (Used in) Financing Activities (31,112) 5,037 (3,303) -------- -------- -------- Effect of Exchange Rate Changes on Cash (2,023) 386 (517) -------- -------- -------- Increase (Decrease) in Cash and Cash Equivalents 2,437 404 (11,876) Cash and Cash Equivalents at Beginning of Period 16,761 16,357 28,233 -------- -------- -------- Cash and Cash Equivalents at End of Period $ 19,198 $ 16,761 $ 16,357 ======== ======== ======== SUPPLEMENTAL CASH FLOW INFORMATION IS AS FOLLOWS: Cash payments for interest $ 18,649 $ 24,701 $ 7,898 Cash payments for income taxes 402 765 1,306 Non-cash transactions: Issuance of common stock 434 2,175 765 Reacquisition of common stock (261) (427) - - -------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements. F-5 ICF KAISER INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of Operations ICF Kaiser International, Inc. and subsidiaries (the Company) provides engineering, construction, program management, and consulting services primarily to clients in a variety of market areas, including industry, transportation, infrastructure, environment, energy, information technology, housing, economic development, and microelectronics. 2. Significant Accounting Policies Principles of Consolidation: The consolidated financial statements include all majority-owned or controlled subsidiaries, including Kaiser-Hill Company, LLC, effective July 1, 1995 (Kaiser-Hill). Investments in unconsolidated joint- ventures and affiliated companies are accounted for using the equity method. The difference between the cost of joint-venture investments and the Company's underlying equity is amortized on a straight-line basis over the estimated lives of the related investments. All significant intercompany balances and transactions have been eliminated. Change in Fiscal Year Reporting: Effective December 31, 1995, the Company changed from a fiscal year ending February 28 to a calendar year ending December 31. The accompanying consolidated financial statements, therefore, include results of operations for only ten months in 1995. Revenue Recognition: The Company's revenue is derived primarily from long-term contracts of various types. Revenue on time-and-materials contracts is recognized based on actual hours delivered times the contracted hourly billing rate, plus the costs incurred for any materials. Revenue on fixed-priced contracts is recognized using the percentage-of-completion method and is comprised of the portion of expected total contract earnings represented by actual costs incurred to date as a percentage of the contract's total estimated costs at completion. Revenue on cost-reimbursable contracts is recognized to the extent of costs incurred plus a proportionate amount of the contracted fee. Certain cost-reimbursable contracts also include provisions for earning performance-based incentive fees. Such incentive fees are included in revenue at the time the amounts can be reasonably determined. Provisions for anticipated contract losses are recognized at the time they become estimable. During the year ended December 31, 1996, the Company accelerated its process for obtaining approval from the U.S. government to invoice certain indirect costs on cost-reimbursable contracts, prior to the completion of government audits of such costs. The net effect of the accelerated ability to invoice these costs resulted in the recognition of approximately $3.3 million of operating income in 1996. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosed amounts of contingent assets and liabilities at the date of the financial statements, and the amounts of revenue and expenses recognized during the reporting period. Actual results could differ from those estimates. Foreign Currency Translation: Results of operations for foreign entities are translated using the average exchange rates during the period. Assets and liabilities are translated to U.S. dollars using the exchange rate in effect at the balance sheet date. Resulting translation adjustments are reflected in shareholders' equity as cumulative translation adjustment. Cash Equivalents and Restricted Cash: The Company considers all highly liquid financial instruments purchased with original maturities of three months or less to be cash equivalents. Other assets as of December 31, 1997, included $600,000 of restricted cash in a short-term investment, which supported a letter of credit for one of the Company's subsidiaries. Cash of the Company's wholly owned insurance company is restricted from use by the Company and is included in prepaid expenses on the balance sheet. Restricted cash balances of the Company's wholly owned insurance company totaled $1,165,000 at December 31, 1997. F-6 Fixed Assets: Furniture and equipment are carried at cost, or fair value at acquisition if acquired through the purchase of a business, and are depreciated using the straight-line method over their estimated useful lives, ranging from three to ten years. Leasehold improvements are carried at cost and are amortized using the straight-line method over the remaining lease terms. Capitalized Software Development Costs: Certain costs, including consultants and internal labor, incurred to develop major software applications for Company use are capitalized and amortized over the estimated economic life of the software. Unamortized capitalized software development costs were approximately $3.4 million and $3.5 million at December 31, 1997 and 1996, respectively. Goodwill: Goodwill represents the excess of cost of acquired businesses over the fair value of the identifiable net tangible and intangible assets acquired. Goodwill is amortized using the straight-line method over the period for which the Company estimates it will benefit directly from the acquisitions. The range of estimated benefit from the Company's historical acquisitions ranges from five to 40 years. The Company periodically evaluates these ranges and the recoverability of goodwill by comparing the estimated future undiscounted operational cash flows for each underlying acquisition to the respective carrying value of goodwill. Accumulated amortization was $17,463,000 and $15,079,000, at December 31, 1997 and 1996, respectively. Income Taxes: Deferred tax assets and liabilities represent the tax effects of differences between the financial statement carrying amounts and the tax basis carrying amounts of the Company's assets and liabilities. These differences are calculated based upon the statutory tax rates in effect in the years in which the differences are expected to reverse. The effect of subsequent changes in tax rates on deferred tax balances is recognized in the period in which a tax rate change is enacted. The Company evaluates its ability to benefit from all deferred tax assets and establishes reserve allowances for amounts it believes may not be realizable. A provision for U.S. income taxes is not made for the undistributed earnings of the Company's foreign subsidiaries because the Company intends to reinvest the undistributed earnings in continuing operations indefinitely. Undistributed earnings of foreign subsidiaries for which income taxes have not been provided amounted to approximately $6.4 million at December 31, 1997. Net Income (Loss) Per Common Share: In 1997 the Company adopted the Statement of Financial Accounting Standards No. 128, Earnings per Share (SFAS No. 128). All EPS computation periods presented in these financial statements have been restated to conform to SFAS No. 128. Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS includes the weighted average effect of dilutive securities assumed to have been issued during the period. The assumed proceeds from the exercise of dilutive securities are used to purchase common stock at the average market price during the period. The difference between the number of shares assumed issued and the number of shares assumed purchased is added to the basic EPS denominator. Concentrations of Credit Risk: The Company maintains cash balances primarily in overnight Eurodollar deposits, investment-grade commercial paper, bank certificates of deposit, and U.S. government securities. The Company grants uncollateralized credit to its customers. Approximately 52% of the Company's contract receivables at December 31, 1997, were from agencies of the U.S. government (see Note 3). When practical and in order to mitigate its credit risk from commercial customers, the Company obtains advance funding of costs for industrial construction work. Stock-based Compensation: Statement of Financial Accounting Standards No. 123, Accounting for Stock-based Compensation (SFAS No. 123), encourages companies to adopt a fair-value method of accounting for employee stock options and similar equity instruments. The fair-value method requires compensation cost to be measured at the grant date based on the value of the award and to be recognized over the service period. As permitted, the Company has continued to account for its stock-based compensation in F-7 accordance with the provisions of Accounting Principles Board Opinion No. 25 (APB 25), "Accounting for Stock Issued to Employees." Recent Accounting Pronouncements: In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards for reporting and displaying comprehensive income and its components in the financial statements. The Company will be required to implement SFAS No. 130 in 1998. Also in June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information." SFAS No. 131 establishes standards for the manner in which public companies report information about operating segments in annual and interim financial statements. The Company is currently evaluating the operating segment information that it will be required to report. The Company will be required to implement SFAS No. 131 in 1998. Reclassifications: Certain reclassifications have been made to the prior-period financial statements in order to conform to the 1997 presentation. 3. Contract Receivables Contract receivables consisted of the following (in thousands):
December 31, -------------------------------------- 1997 1996 -------------------------------------- U.S. government agencies: Currently due $ 19,650 $ 30,322 Retention 2,695 4,041 Unbilled 114,921 107,051 -------- -------- 137,266 141,414 -------- -------- Commercial clients and state and municipal governments: Currently due 97,909 61,255 Retention 18,952 4,855 Unbilled 17,045 25,204 -------- -------- 133,906 91,314 -------- -------- 271,172 232,728 Less allowances for uncollectible receivables (7,142) (9,450) -------- -------- $264,030 $223,278 ======== ========
Unbilled receivables result from revenue that has been earned but not billed. The unbilled receivables can be invoiced at contractually defined intervals or milestones, as well as upon completion of the contract or the U.S. government cost audit. Retention balances are billable at contract completion or upon attainment of other specified contract milestones. Other unbilled amounts consist primarily of indirect costs that will be billed on cost-reimbursable contracts upon completion of government cost audits. Consistent with industry practice, these receivables are classified as current assets. Unbilled receivables with U.S. government agencies includes $4.4 million in claims to which the Company believes it is entitled, and recovery of which may take more than one year. The Company anticipates that the remaining unbilled receivables will be substantially billed and collected within one year. F-8 4. Joint Ventures and Affiliated Companies The Company has ownership interests in certain unconsolidated corporate joint ventures and affiliated companies. The Company's net investments in and advances to these corporate joint ventures and affiliated companies totaled $7.0 million and $6.4 million at December 31, 1997 and 1996, respectively. The ownership percentages range from 20% to 50%. Combined summarized financial information of all of the Company's unconsolidated corporate joint ventures and affiliated companies is as follows (in thousands):
December 31, December 31, December 31, 1997 1996 1995 -------------- --------------- -------------- Current assets $23,508 $26,558 $19,017 Non-current assets 4,507 7,887 15,857 Current liabilities 20,479 13,314 17,404 Non-current liabilities - 53 446 Gross revenue 41,183 28,742 41,262 Net income 7,870 11,930 6,606
In December 1996, the Company sold the majority of its interests in entities owning and operating a pulverized coal injection facility for $16.6 million resulting in a $9.4 million pretax gain. The buyer exercised an option on January 5, 1998, to purchase the remaining equity investment for $2.4 million. The Company recognized a total pretax gain of $1.0 million during 1997 as the carrying value of the option was increased to reflect fair market value. The sales price for both installments is included in other current assets in the accompanying balance sheets and was collected in January of each of the subsequent years. On November 12, 1997, the Company entered into an investment, the purpose of which was to restructure significantly remaining fixed operating lease costs for its corporate headquarters, resulting in a percentage ownership in the underlying leaseholds and buildings. The Company contributed $1.5 million for a 20% ownership interest in a limited liability company (the Investment Company) and other investors contributed $4.5 million for the remaining 80% ownership interest. The Company has committed to make additional annual capital contributions to the Investment Company totaling $600,000 during each of the first three years of the Investment Company and $700,000 during each of the fourth through ninth years of the Investment Company. The Investment Company in turn invested $6.0 million in exchange for a 20% interest in a limited liability company (the Operating Company) that leases the property and owns the buildings leased primarily by the Company for its corporate headquarters. The Operating Company agreement provides that the Investment Company ownership will increase to 80% in fixed annual 12% increases in each of the 11th through 15th years of the Operating Company. The ownership percentage of the other investor(s) will be correspondingly decreased. Under a separate option agreement, the Investment Company has an option to purchase the property on which the Company's corporate headquarters buildings are located. Concurrent with these investments, the Company restructured its lease agreements with the Operating Company, essentially terminating the existing lease agreements that originally expired in 2002 and 2004, and replacing them with new leases expiring in 15 years (see Note 10 for the summarized lease commitments). F-9 5. Long-Term Debt The Company's long-term debt was as follows (in thousands):
December 31, ---------------------------------------- 1997 1996 ------------------ ------------------ 12% Senior Subordinated Notes due 2003 $125,000 $124,500 12% Senior Notes due 2003, Series A - 15,000 12% Senior Notes due 2003, Series B 15,000 - Revolving credit facility 4,000 20,500 Other notes, due in 1998 15 43 -------- -------- 144,015 160,043 Less unamortized discount 2,996 3,481 -------- -------- 141,019 156,562 Less current maturities 15 43 -------- -------- $141,004 $156,519 ======== ========
Scheduled maturities of long-term debt outstanding at December 31, 1997, are $4,000,000 in 2000 and $140,000,000 in 2003. Senior and Subordinated Notes On December 23, 1996, the Company privately issued 15,000 Units, each Unit consisting of $1,000 principal amount of the 12% Senior Notes due in 2003, Series A (Series A Senior Notes), and seven warrants, each to purchase one share of the Company's common stock at an exercise price of $2.30 per share. The warrants contain certain anti-dilution provisions and expire on December 31, 1999. Interest accrues on the Series A Senior Notes at 13% until the Company achieves and maintains a specified level of earnings. In January 1997, the Company registered $15.0 million of 12% Senior Notes due in 2003, Series B (Series B Senior Notes) with the U.S. Securities and Exchange Commission (SEC). In March 1997, the Company completed an offer to all existing holders of Series A Senior Notes and exchanged the Series A Senior Notes for Series B Senior Notes. The terms of the Series B Senior Notes are substantially identical (including principal amount, interest rate, and maturity) to the terms of the Series A Senior Notes. On January 11, 1994, the Company issued 125,000 Units, each Unit consisting of $1,000 principal amount of the Company's 12% Senior Subordinated Notes due 2003 (Subordinated Notes) and 4.8 warrants, each to purchase one share of the Company's common stock at an exercise price of $5.00 per share. The warrants expire on December 31, 1998, and additional warrants may be issued under certain anti-dilution provisions. In March 1996, the interest rate on the Subordinated Notes was increased by 1% until the Company achieves and maintains a specified level of earnings. The Company's obligations under the Subordinated Notes are subordinate to its obligations under the Company's revolving credit facility and the Series B Senior Notes. Interest payments are due semiannually on the Series B Senior Notes and the Subordinated Notes (collectively, the Notes). The Notes may not be prepaid at the Company's option prior to December 31, 1998. Subsequent to that date, the Company may prepay the Notes at a premium. Payment of the principal, premium, if any, and interest on the Notes is unconditionally guaranteed by 12 of the F-10 Company's wholly owned subsidiaries. The indentures governing the Notes contain business and financial covenants, including restrictions on additional indebtedness, dividends, acquisitions and certain types of investments, and asset sales. At December 31, 1997, the fair value of the Series B Senior Notes and Subordinated Notes was approximately $16.4 million and $130.0 million, respectively. At December 31, 1996, the fair value of the Series B Senior and Subordinated Notes was approximately $14.7 million and $118.9 million, respectively. The fair value was derived using an average of quoted market prices obtained from financial institutions. Debt issuance costs of the Notes totaling $4.0 million and $4.6 million at December 31, 1997 and 1996, respectively, are being amortized over the terms of the Notes. Credit Facility In December 1997, the Company entered into an amended and restated credit agreement with a consortium of banks which provides an additional $25 million in revolving credit for a total of $65 million (the Revolver). While the amended and restated agreement retains many of the same terms as the agreement for the former facility, it also modified certain financial covenants and obligated the Company to pledge the stock of certain additional domestic and foreign subsidiaries to the banks. The Company and certain of its subsidiaries, which are guarantors of the Revolver, have granted a security interest in certain accounts receivable and certain other assets. The Revolver limits the payments of cash dividends on common stock, prohibits the issuance of certain types of additional indebtedness, limits certain investments and acquisitions, and requires the maintenance of specified financial ratios. Total available credit is based on a percentage of eligible billed and unbilled accounts receivable, up to a maximum of $60 million. Primarily as a result of a 1997 provision totaling $6.9 million for the financial statement impact of cost overruns on a fixed-price nitric acid project scheduled for completion in 1998, the Company was not in compliance with certain financial covenants of the Revolver at December 31, 1997. On March 12, 1998, the Company obtained an amendment to the Revolver that exempted the relevant project results from inclusion in the computations of these covenants. This amendment also requires the Company to update the banks with respect to the costs to complete the project for which a reserve was taken and to obtain the banks' consent prior to making certain large acquisitions. As of December 31, 1997, the Company was in compliance with its financial covenants under the amended Revolver. The Revolver contains provisions for Eurodollar-based and other Federal Funds- based interest rate borrowing alternatives with margins dependent upon the Company's financial operating results, and expires on December 3, 2000. As of December 31, 1997, the Company had $4.0 million in cash borrowings and $22.7 million of letters of credit outstanding under the Revolver. The letters of credit outstanding under the Revolver are in support of contract performance guarantees, primarily on international projects. As of December 31, 1997, the Company had $22.7 million of additional credit available under the Revolver. Kaiser-Hill has a $50 million receivables purchase facility to support its working capital requirements under a U.S. Department of Energy contract. The receivables purchase facility contains certain program fees, requires the subsidiary to maintain a specified tangible net worth, and contains certain letter of credit and default provisions for delinquent receivables. The receivables purchase facility expires on June 30, 1998, and is non-recourse to the Company and its other consolidated subsidiaries. 6. Contingencies and Uncertainties In the course of the Company's normal business activities, various claims or charges have been asserted and litigation commenced against the Company arising from or related to properties, injuries to persons, and breaches of contract, as well as claims related to acquisitions and dispositions. Claimed amounts may not bear any reasonable relationship to the merits of the claim or to a final court award. Management has provided for estimates of reserves necessary to cover final judgments, if any, in excess of insurance coverage, that might be rendered against the Company in such litigation. F-11 The Company may from time to time, either individually or in conjunction with other government contractors operating in similar types of businesses, be involved in U.S. government investigations for alleged violations of procurement regulations or other federal laws and regulations. The Company currently is the subject of a number of U.S. government investigations and is cooperating with the responsible government agencies involved. No charges presently are known to have been filed against the Company by these agencies. Management does not believe that there will be any material effect on the Company's financial position, results of operations, or cash flows as a result of these investigations. The Company has a substantial number of cost-reimbursement contracts with the U.S. government, the costs of which are subject to audit by the U.S. government. As a result of pending audits related to fiscal years 1986 forward, the government has asserted, among other things, that certain costs claimed as reimbursable under government contracts either were not allowable or not allocated in accordance with federal procurement regulations. The Company is actively working with the government to resolve these issues. Audits have not been completed for any years after 1987. The Company has provided for its estimate of the potential effect of issues that have been quantified, including its estimate of disallowed costs for the periods currently under audit and for periods not yet audited. Many of the issues, however, have not been quantified by the government or the Company, and others are qualitative in nature, and their potential financial impact, if any, is not quantifiable by the government or the Company at this time. Provisions for reserves will be reviewed periodically as progress with the government ensues. 7. Income Taxes The components of income (loss) before income taxes and minority interests and the related provision (benefit) for income taxes are as follows (in thousands): F-12
Year Ended Ten Months ---------------------------------- Ended December 31, December 31, December 31, 1997 1996 1995 -------------- --------------- -------------- Income (loss) before income taxes and minority interests: Domestic $ 675 $13,900 $ 7,419 Foreign 1,886 584 (1,116) ------- ------- ------- $ 2,561 $14,484 $ 6,303 ======= ======= ======= Provision (benefit) for income taxes: Federal: Current $ 129 $ - $ 171 Deferred (4,231) 1,660 2,020 ------- ------- ------- (4,102) 1,660 2,191 ------- ------- ------- State: Current 374 55 258 Deferred (854) 864 293 ------- ------- ------- (480) 919 551 ------- ------- ------- Foreign: Current 764 425 409 Deferred 499 (397) (1,060) ------- ------- ------- 1,263 28 (651) ------- ------- ------- $(3,319) $ 2,607 $ 2,091 ======= ======= =======
The tax effects of the principal temporary differences and carryforwards that give rise to the Company's deferred tax asset (net) are as follows (in thousands): F-13
December 31, ---------------------------------- 1997 1996 -------------- --------------- Reserves for adjustments and allowances $13,162 $ 9,377 Vacation and incentive compensation accruals 3,275 4,514 Tax credit carryforwards 2,472 2,522 Net operating loss carryforwards 555 1,111 Gain on sale of investment (767) (5,011) Unbilled revenue (1,680) (1,082) Other (516) (462) ------- -------- 16,501 10,969 Valuation allowance (1,220) (1,230) ------- -------- $15,281 $ 9,739 ======= ========
At December 31, 1997, the Company had deferred tax assets of $0.6 million related to net operating loss carryforwards that expire within the next five years. Additionally, the Company had deferred tax assets of $2.5 million related to tax credit carryforwards, of which $1.0 million has no expiration and $1.5 million expires by 2011. The Company believes that expected levels of pretax earnings, when adjusted for nondeductible expenses such as goodwill amortization, will generate sufficient future taxable income to be able to realize the net $15.3 million deferred tax asset within the next five years. The $1.2 million valuation allowance is attributed to foreign tax benefits not currently assured of realization. In 1996, the Company recognized a gain on the sale of an investment that would generate substantial taxable income. As a result, the Company partially reversed the valuation allowance on deferred tax assets. The effective income tax provision (benefit) varied from the federal statutory income tax provision (benefit) because of the following differences (in thousands): F-14
Year Year Ten Months Ended Ended Ended December 31, December 31, December 31, 1997 1996 1995 -------------- -------------- -------------- Income tax (benefit) computed at federal statutory tax rate $ 896 $ 5,069 $2,143 Change in tax (benefit) from: Goodwill amortization 1,024 996 737 Minority interest earnings of (3,803) (2,115) (693) State income taxes (312) 597 364 Foreign taxes 316 (427) (580) Valuation allowance - (2,100) - Business meals, entertainment 441 587 468 Research and experimentation credits (1,881) - (348) ------- ------- ------ $(3,319) $ 2,607 $2,091 ======= ======= ======
Kaiser-Hill, is a flow-through entity for tax purposes and is owned equally by a third party. The tax rate effect of the outside party's share of income is reflected above as minority interest earnings. In 1997, the Company reached a favorable settlement of a long-standing foreign tax matter for one of its U.S. branches doing business overseas. This settlement resulted in a reduction in interest expense of $0.9 million for the year ended December 31, 1997. 8. Preferred Stock The Company has 2,000,000 shares of authorized preferred stock of which only a portion has been designated. In 1992, the Company issued 200 shares of Series 2D Senior Preferred Stock for $20 million. The stock had a mandatory redemption date of January 13, 1997, and was redeemed in December 1996 for $20 million. The other designated series of preferred stock consist of 200 shares of Series 1 Junior Convertible Preferred Stock, par value $0.01 per share and 500,000 shares of Series 4 Junior Preferred Stock, par value $0.01 per share. There were no preferred shares issued or outstanding as of December 31, 1997 or 1996. 9. Common Stock Notes Receivable Collaterized by Common Stock: Certain current and former members of senior management have outstanding notes to the Company for which 725,648 shares of the Company's common stock serve as the collateral. Shareholder Rights Plan: The Shareholder Rights Plan (Rights Plan) is designed to provide the Board of Directors (the Board) with the ability to negotiate with a person or group that might, in the future, make an unsolicited attempt to acquire control of the Company, whether through the accumulation of shares in F-15 the open market or through a tender offer that does not offer an adequate price. The Rights Plan provides for one Right (Right) for each outstanding share of the Company's common stock. Each Right entitles the holder to purchase 1/100 of a share of Series 4 Junior Preferred Stock at a purchase price of $50. The Rights generally may cause substantial dilution to a person or group that attempts to acquire the Company on terms not approved by the Board. The Rights should not interfere with any merger or other business combination approved by the Board because the Board may, at its option, following the acquisition by any person or group of 20% of the outstanding shares of the Company's common stock, redeem the Rights upon payment of the redemption price of $0.01 per Right. Current bank and debt covenants restrict the funds available for payment of the redemption price. Unless redeemed earlier by the Board, unexercised Rights expire on January 13, 2002. 10. Leases Future minimum payments on noncancelable operating leases for office space and equipment with initial or remaining terms in excess of one year were as follows at December 31, 1997 (in thousands):
Year Ended Operating December 31, Leases - -------------------------------- 1998 $ 19,409 1999 16,929 2000 13,885 2001 10,755 2002 9,611 Thereafter 79,470 -------- $150,059 ========
The total rental expense for all operating leases was $27,576,000, $31,686,000, and $24,950,000 for the years ended December 31, 1997 and 1996, and the ten months ended December 31, 1995, respectively. Sublease rental income was $4,617,000, $3,887,000, and $3,189,000 for the years ended December 31, 1997 and 1996, and the ten months ended December 31, 1995, respectively. Minimum future sublease rentals to be received under noncancelable subleases during 1998, 1999, and 2000, are approximately $5,210,000, $4,038,000, and $1,833,000, respectively. 11. Stock-Based Compensation As of December 31, 1997, the Company has three fixed stock option plans and an employee stock purchase plan (together, the Stock Plans). Fixed Stock Option Plans: The Company's Stock Incentive Plan (Incentive Plan) provides for the issuance of options, stock appreciation rights, restricted shares, and restricted stock units of up to an aggregate of 6,000,000 shares of the Company's common stock. Awards are made to employees at the discretion of the Compensation and Human Resources Committee of the Board (Committee). The vesting period for each grant under the Plan is determined by the Committee; grants generally vest in equal installments over three to six years. At December 31, 1997, 1,870,212 shares were available for grant under this plan. The Company's Non-Employee Directors Stock Option Plan (Non-Employee Plan) provides that each director of the Company who is not an employee of the Company receive an option to purchase 3,000 shares of the Company's common stock for each year of service. Options granted under this plan become F-16 fully exercisable at the close of business following the date of grant. The Non- Employee Plan does not specify a maximum number of shares for which options may be granted. As of December 31, 1997, there are 135,000 shares of common stock reserved for issuance upon the exercise of options granted under this plan, of which 78,000 are outstanding at December 31, 1997. On February 28, 1997, the Board of Directors suspended this plan and adopted the Company's Non-Employee Directors Compensation and Phantom Stock Plan under which non-employee directors are given annual phantom stock awards (PSA). In lieu of option grants, each year each non-employee director of the Company will be granted a PSA equal to $20,000 of common stock on the date of grant. Three years after each PSA grant, the Company will pay each non-employee director, in cash, the value of the shares to which the PSA relates. Any increases in value of the PSA after the date of grant and prior to the cash payment will be expensed in the period of the value increase. PSAs granted in 1997 totaled 48,545, with an initial share value of $2.06. The Company's Consultants, Agents, and Part-Time Employees Stock Plan (Consultants Plan) provides for the issuance of options or restricted shares of up to 1.0 million shares of the Company's common stock to consultants, agents, and part-time employees at the discretion of the Company's Chief Executive Officer. The vesting period is a minimum of one year. At December 31, 1997, 772,200 shares were available for the granting of options under this plan. All three fixed stock-option plans provide that the option or grant price is not to be less than the fair market value on the date of grant. Under the Incentive and Non-Employee Directors Plans, an option's maximum term is ten years. As of December 31, 1997, there have been no options granted under these plans with terms greater than five years. An option's maximum term under the Consultants Plan is five years. Stock option activity under the option plans granted for the periods indicated is as follows:
Weighted-average Shares Option Price Exercise Price ----------------- ---------------- -------------------- Balance, February 28, 1995 2,416,579 $2.34 to $17.00 $6.54 Granted 678,400 $3.50 to $ 4.42 $4.04 Canceled (257,080) $8.25 $8.25 Expired (382,060) $2.64 to $16.23 $9.82 Exercised (4,166) $2.64 to $ 2.68 $2.68 --------- Balance, December 31, 1995 2,451,673 $2.34 to $17.00 $5.16 Granted 187,200 $1.90 to $ 3.77 $3.30 Expired (451,940) $2.50 to $17.00 $8.69 Exercised (4,002) $3.00 to $ 3.50 $2.68 --------- Balance, December 31, 1996 2,182,931 $1.90 to $ 9.59 $4.29 Granted 885,019 $1.91 to $ 4.00 $2.39 Expired (572,961) $2.23 to $ 9.59 $5.77 --------- Balance, December 31, 1997 2,494,989 $1.90 to $ 6.90 $3.27 =========
F-17 Options exercisable at December 31, 1997, and December 31, 1996, were 1,217,617 and 1,169,715, respectively. The weighted-average remaining contractual life on options outstanding at December 31, 1997, was 2.5 years. There were 6,500 exercisable options outstanding at a price below the fair market value of the Company's common stock at December 31, 1997. The following is a summary of fixed stock options outstanding at December 31, 1997:
Options outstanding: Number Weighted-average Range of Outstanding at Remaining Weighted-average Exercise Prices December 31, 1997 Contractual Life Exercise Price - --------------------- ----------------- ----------------- -------------------- $1.90 to $2.50 837,370 3.88 years $2.19 $2.51 to $3.50 481,359 1.90 years $2.90 $3.51 to $5.00 1,065,946 1.94 years $4.09 $5.01 to $6.50 104,314 0.42 years $5.12 $6.51 to $8.00 6,000 0.10 years $6.85
Options exercisable: Number Range of Exercisable at Weighted-average Exercise Prices December 31, 1997 Exercise Price - -------------------- ---------------------- ------------------- $1.90 to $2.50 65,500 $2.35 $2.51 to $3.50 334,934 $2.87 $3.51 to $5.00 706,869 $4.11 $5.01 to $6.50 104,314 $5.12 $6.51 to $8.00 6,000 $6.85
Employee Stock Purchase Plan: The Company's Stock Purchase Plan provides for the sale of up to 2,000,000 shares of common stock to all eligible employees. Employees may elect to withhold up to 10% of annual base earnings for the purchase of the Company's common stock. Options to purchase shares of common stock are offered quarterly with a purchase price equal to 90% of the lower of the closing market price on the first trading day of the month preceding the quarter or the last trading day of the quarter. During the years ended December 31, 1997 and 1996, 101,927 and 140,411 shares were sold under the plan, respectively. Pro Forma Compensation Cost: No compensation cost has been recognized for the Stock Plans in the periods presented. Had compensation cost for awards granted under the Company's Stock Plans been recorded, net income (loss) would have been reduced to $(5.7) million [$(0.26) per share], $5.2 million [$0.14 per share], and $1.9 million [$0.01 per share] for the years ended December 31, 1997, 1996, and the ten months ended December 31, 1995, respectively. Per share amounts are for both basic and diluted earnings per share. The fair value of each option grant under the fixed-price option plans and the fair value of the employees' purchase rights under the employee stock purchase plan are estimated on the date of grant for pro forma computations using the Black-Scholes option-pricing model. The dividend yield was assumed to be zero for both periods below. The weighted-average of all other significant assumptions for and the weighted average fair value of grants made during the years ended December 31, 1997, 1996, and the ten months ended December 31, 1995, are as follows: F-18
Year Ended Ten Months --------------------------------------- Ended December 31, December 31, December 31, 1997 1996 1995 ----------------- ----------------- ---------------------- Fixed Stock Option Plans: Volatility 61.4% 63.4% 58.9% Risk-free interest rate 6.2% 5.8% 6.5% Expected lives 5.0 years 5.0 years 4.6 years Fair value of grants $1.22 $1.92 $2.30 Employee Stock Purchase Plan: Volatility 61.4% 63.4% 58.9% Risk-free interest rate 5.1% 5.0% 5.5% Expected lives 0.3 years 0.3 years 0.3 years Fair value of grants $1.40 $0.95 $0.66
12. Earnings Per Share Options to purchase 2,494,989 shares of common stock with a weighted-average remaining contractual life of 2.5 years, exercise prices ranging from $1.90 to $6.90 per share, and a weighted-average exercise price of $3.27 per share, were outstanding at December 31, 1997, and were not included in the computation of diluted earnings per share for 1997 due to their anti-dilutive impact. In addition, warrants to purchase 980,088 shares of common stock with a weighted- average remaining contractual life of 1.23 years, exercise prices ranging from $2.30 to $6.87 per share, and a weighted-average exercise price of $5.24 per share, were outstanding at December 31, 1997, and were not included in the computation of diluted earnings per share due to their anti-dilutive impact. On February 27, 1998, pursuant to the Stock Incentive Plan, the Company's Board of Directors approved the issuance of 203,860 shares of restricted stock and 438,000 options to buy shares of common stock with an exercise price of $2.50. 13. Employee Benefit Plans The Company and certain of its subsidiaries sponsor a number of benefit plans covering substantially all employees who meet minimum length of service requirements. These plans include a defined-contribution retirement plan, profit-sharing plan that provides for contributions by the Company based on a percentage of covered compensation, and a 401(k) Plan that allows employees to defer portions of their salary, subject to certain limitations. Total expense for these plans for the years ended December 31, 1997 and 1996, and the ten months ended December 31, 1995, was $7,266,000, $7,427,000, and $5,711,000, respectively. As of December 31, 1997, the Retirement Plan, 401(k) Plan, and a discontinued Employee Stock Ownership Plan owned 862,480, 368,934, and 1,680,178 shares, respectively, of the Company's common stock. Certain of the Company's employees are covered by union-sponsored, collectively bargained, multi-employer benefit plans. Contributions and costs are determined in accordance with the provisions of negotiated labor contracts or terms of the plans. Pension expense for these plans was $482,000, $9,097,000, and $6,384,000 for the years ended December 31, 1997 and 1996, and the ten months ended December 31, 1995, respectively. F-19 14. Other Postretirement Benefits The Company provides certain postretirement benefits to a limited group of retirees. The cost of these benefits is funded when paid and limited to a fixed amount per participant. The funded status of the plan is as follows (in thousands):
December 31, -------------------------------------- 1997 1996 ----------------- ----------------- Accumulated postretirement benefit obligation (APBO) $ 5,508 $ 6,161 Unamortized transition obligation (9,467) (10,447) Unrecognized net gain 6,263 6,617 ------- -------- Accrued postretirement benefit cost $ 2,304 $ 2,331 ======= ========
The net periodic postretirement benefit cost consists of the following (in thousands):
Year Year Ten Months Ended Ended Ended December 31, December 31, December 31, 1997 1996 1995 --------------- --------------- --------------- Interest cost $ 412 $ 525 $ 541 Amortization of transition obligation 980 980 830 Amortization of unrecognized net gain (563) (409) (214) ----- ------ ------ Net periodic postretirement benefit cost $ 829 $1,096 $1,157 ===== ====== ======
All service cost related to the participants' benefits is included in the transition obligation. The discount rate at both December 31, 1997 and 1996, was 7%. The 1997 health care cost trend rate is 5%, effective until 2013 when the cost will be in excess of the Company's maximum obligation. If the trend rate were increased by 1% for each year, the APBO as of December 31, 1997, would increase by approximately $180,000 or 3%. 15. Business Segment, Major Customers, and Foreign Operations Business Segment: The Company operates predominantly in one industry segment in which it provides engineering, construction, program management, and consulting services. Major Customers: Gross revenue from the U.S. Department of Energy was $622,190,000, $866,361,000, and $623,149,000 for the years ended December 31, 1997 and 1996, and the ten months ended December 31, 1995, respectively. Foreign Operations: Gross revenue and operating income from foreign operations and foreign assets of all consolidated subsidiaries and branches were as follows (in thousands): F-20
Year Year Ten Months Ended Ended Ended December 31, December 31, December 31, 1997 1996 1995 ----------------- ------------------ -------------- Foreign gross revenue: Europe $ 86,937 $ 37,105 $ 14,237 Asia-Pacific 44,871 31,327 28,002 Other 25,876 3,676 1,189 ---------- ---------- -------- 157,684 72,108 43,428 Domestic gross revenue 950,432 1,176,335 873,316 ---------- ---------- -------- Total gross revenue $1,108,116 $1,248,443 $916,744 ========== ========== ======== Foreign operating income (loss): Europe $ 11,153 $ 1,346 $ 1,426 Asia-Pacific 2,209 1,002 2,511 Other 785 (422) 20 ---------- ---------- -------- 14,147 1,926 3,957 Domestic operating income 3,922 19,254 13,548 ---------- ---------- -------- Total operating income $ 18,069 $ 21,180 $ 17,505 ========== ========== ======== Foreign assets: Europe $ 34,900 $ 17,666 $ 12,905 Asia-Pacific 15,071 13,562 11,024 Other 833 24 137 ---------- ---------- -------- 50,804 31,252 24,066 Domestic assets 347,662 334,721 345,451 ---------- ---------- -------- Total assets $ 398,466 $ 365,973 $369,517 ========== ========== ========
16. Subsequent Acquisition On February 18, 1998, the Company's Board of Directors approved the acquisition of ICT Spectrum Constructors, Inc., a contractor based in Boise, Idaho, specializing in construction management of fabrication plants and other facilities for semiconductor and microelectronics customers. The transaction closed on March 17, 1998. Each share of ICT Spectrum stock was exchanged for shares of ICF Kaiser stock, resulting in the issuance of 1.5 million shares of ICF Kaiser common stock. The exchanged ICF Kaiser shares carry the guarantee that the fair market value of each share of stock will reach $5.36 by March 1, 2001. In the event the fair market value does not attain the guaranteed level, the Company is obligated to make up the shortfall either through the payment of cash or by issuing additional shares of common stock, depending upon the Company's preference. Given that the fair market value of the stock is significantly below the amount of the guarantee and that the Company's current Revolver and indentures restrict the amount of cash that can be used to make up the shortfall, the Company will be required to assume that any F-21 periodic shortfall from the guaranteed price will be settled through the issuance of additional shares of common stock. Total contingently issuable shares of common stock, however, cannot exceed 1.5 million. Any additional shares assumed issued will be included in the diluted earnings per share calculations for applicable future reporting periods until the earlier of the contingency resolution or March 1, 2001. The exchanged shares also contain restrictions preventing their sale prior to March 1, 2001. The acquisition will be accounted for as a purchase and will generate approximately $5.0 million in goodwill which will be amortized over 12 years. 17. Selected Quarterly Financial Information (Unaudited) Financial information for the quarters in 1997 and 1996 is presented in the following tables (in thousands, except per share amounts):
Year Ended December 31, 1997: Fourth Third Second First Quarter Quarter Quarter Quarter ---------------- ---------------- ---------------- ---------------- Gross revenue $268,400 $332,173 $241,586 $265,957 Service revenue 96,424 116,103 109,581 103,978 Operating income (loss) (3,112) 7,194 7,389 6,598 Net income (loss) (5,157) 120 3 47 Basic earnings (loss) per share $ (0.23) $ 0.01 $ - $ - Dilutive earnings (loss) per share $ (0.23) $ 0.01 $ - $ -
Year Ended December 31, 1996: Fourth Third Second First Quarter Quarter Quarter Quarter ---------------- ---------------- ---------------- ---------------- Gross revenue $225,033 $379,971 $332,320 $311,119 Service revenue 98,469 138,780 150,342 144,525 Operating income 10 5,087 8,615 7,468 Net income 2,114 763 1,633 1,324 Basic earnings per share $ 0.07 $ 0.01 $ 0.05 $ 0.04 Dilutive earnings per share $ 0.07 $ 0.01 $ 0.05 $ 0.04
At March 11, 1998, there were 22,691,174 shares of common stock outstanding held by 1,502 holders of record. 18. Guarantor Subsidiaries As a result of registering the Series B Senior Notes with the SEC in January 1997, the Company now is required to provide financial information for wholly owned subsidiaries of ICF Kaiser International, Inc. (Subsidiary Guarantors) which unconditionally guarantee the payment of the principal, premium, if any, and interest on the Company's Subordinated Notes, and the Series B Senior Notes (see Note 5). The Subsidiary Guarantors are Cygna Consulting Engineers and Project Management, Inc; ICF Kaiser Government Programs, Inc; PCI Operating Company, Inc; Systems Applications International, Inc; EDA, Incorporated; Global Trade & Investment, Inc; ICF Kaiser Europe, Inc; ICF Kaiser/Georgia Wilson, Inc; ICF Kaiser Overseas Engineering, Inc; F-22 ICF Kaiser Engineers Pacific, Inc; ICF Kaiser Remediation Company; and ICF Kaiser Systems, Inc. Presented below is condensed consolidating financial information for ICF Kaiser International, Inc. (Parent Company), the Subsidiary Guarantors, and the Non- Guarantor Subsidiaries as of and for the years ended December 31, 1997 and 1996, and the ten months ended December 31, 1995. Investments in subsidiaries have been presented using the equity method of accounting. The Company does not have a formal tax-sharing arrangement with its subsidiaries and has allocated taxes to its subsidiaries based on the Company's overall effective tax rate. Therefore, the Subsidiary Guarantors are combined in the presentation below. F-23 ICF Kaiser International, Inc. and Subsidiaries CONDENSED CONSOLIDATING BALANCE SHEET December 31, 1997 (In thousands)
- ------------------------------------------------------------------------------------------------------------------ ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated --------- ---------- ------------- ------------ ------------------- ASSETS Current Assets Cash and cash equivalents $ (5,665) $ 10,259 $ 14,604 $ - $ 19,198 Contract receivables, net 3,210 97,055 163,765 - 264,030 Intercompany receivables, net 136,629 1,989 (138,618) - - Prepaid expenses and other current assets 4,181 479 9,830 - 14,490 Deferred income taxes 14,749 - 532 - 15,281 -------- -------- --------- ------------ -------- Total Current Assets 153,104 109,782 50,113 - 312,999 -------- -------- --------- ------------ -------- Fixed Assets Furniture, equipment, and leasehold improvements 9,728 2,505 39,213 - 51,446 Less depreciation and amortization (5,361) (2,275) (32,012) - (39,648) -------- -------- --------- ------------ -------- 4,367 230 7,201 - 11,798 -------- -------- --------- ------------ -------- Other Assets Goodwill, net - 4,793 42,530 - 47,323 Other 50,528 1,847 22,082 (48,111) 26,346 -------- -------- --------- ------------ -------- 50,528 6,640 64,612 (48,111) 73,669 -------- -------- --------- ------------ -------- Total Assets $207,999 $116,652 $ 121,926 $(48,111) $398,466 ======== ======== ========= ============ ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Current portion of long-term debt $ - $ - $ 15 $ - $ 15 Accounts payable and other accrued expenses 23,186 80,026 35,121 - 138,333 Accrued salaries and employee benefits 6,938 16,722 13,994 - 37,654 Other 4,138 905 41,433 - 46,476 -------- -------- --------- ------------ -------- Total Current Liabilities 34,262 97,653 90,563 - 222,478 Long-term Liabilities Long-term debt, less current portion 141,004 - - - 141,004 Other 2,437 26 2,123 - 4,586 -------- -------- --------- ------------ -------- Total Liabilities 177,703 97,679 92,686 - 368,068 -------- -------- --------- ------------ -------- Minority Interests in Subsidiaries - 3,071 - - 3,071 Shareholders' Equity Common Stock 214 149 128 (266) 225 Additional Paid-in Capital 66,888 2,796 58,548 (61,116) 67,116 Accumulated Earnings (Deficit) (34,384) 13,221 (26,333) 13,271 (34,225) Other Equity (2,422) (264) (3,103) - (5,789) -------- -------- --------- ------------ -------- Total Shareholders' Equity 30,296 15,902 29,240 (48,111) 27,327 -------- -------- --------- ------------ -------- Total Liabilities and Shareholders' Equity $207,999 $116,652 $ 121,926 $(48,111) $398,466 ======== ======== ========= ============ ========
F-24
ICF Kaiser International, Inc. and Subsidiaries CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Year Ended December 31, 1997 (In thousands) - ------------------------------------------------------------------------------------------------------------------------ ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated -------- ---------- ------------- ------------ ------------------- GROSS REVENUE $ 727 $ 608,467 $ 498,922 $ - $1,108,116 Subcontract and direct material costs (608) (428,550) (248,273) - (677,431) Provision for contract loss - - (6,900) - (6,900) Equity in income of joint ventures and affiliated companies and subsidiaries (6,059) - 2,562 5,798 2,301 ------- --------- --------- ----------- ---------- SERVICE REVENUE (5,940) 179,917 246,311 5,798 426,086 OPERATING EXPENSES Operating expenses (3,982) 156,315 246,089 - 398,422 Depreciation and amortization 2,350 1,092 6,153 - 9,595 ------- --------- --------- ----------- ---------- OPERATING INCOME (4,308) 22,510 (5,931) 5,798 18,069 OTHER INCOME (EXPENSE) Gain on Sale of Investment - - 1,018 - 1,018 Interest and investment income 570 671 567 (58) 1,750 Interest expense (570) (1,004) (16,755) 53 (18,276) ------- --------- --------- ----------- ---------- INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTERESTS (4,308) 22,177 (21,101) 5,793 2,561 Income tax provision (benefit) 679 4,624 (8,622) - (3,319) ------- --------- --------- ----------- ---------- INCOME BEFORE MINORITY INTERESTS (4,987) 17,553 (12,479) 5,793 5,880 Minority interests in net income of subsidiaries - 10,867 - - 10,867 ------- --------- --------- ----------- ---------- NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS $(4,987) $ 6,686 $ (12,479) $5,793 $ (4,987) ======= ========= ========= =========== ==========
F-25
ICF Kaiser International, Inc. and Subsidiaries CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 1997 (In thousands) - ----------------------------------------------------------------------------------------------------------------------------------- ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated ---------- ---------- -------------- ------------ ------------------- Net Cash Provided by (Used in) Operating Activities $ 21,088 $ 9,389 $(3,465) $ 494 $ 27,506 --------- -------- ------- ----------- --------- INVESTING ACTIVITIES Sales of subsidiaries and subsidiary assets - 2,763 14,265 - 17,028 Purchases of fixed assets (1,871) (53) (2,964) - (4,888) Investments in subsidiaries and affiliates, net of cash acquired - (100) (3,974) - (4,074) --------- -------- ------- ----------- --------- Net Cash Provided by (Used) in Investing Activities (1,871) 2,610 7,327 - 8,066 --------- -------- ------- ----------- --------- FINANCING ACTIVITIES Borrowings under credit facility 104,500 - - - 104,500 Principal payments on credit facility (121,000) - - - (121,000) Distribution of income to minority interest - (13,950) - - (13,950) Proceeds from issuances of common stock 213 - - - 213 Repurchases of common stock (251) - - - (251) Debt issuance costs (624) - - - (624) --------- -------- ------- ----------- --------- Net Cash Used in Financing Activities (17,162) (13,950) - - (31,112) --------- -------- ------- ----------- --------- Effect of Exchange Rate Changes on Cash - - (2,023) - (2,023) --------- -------- ------- ----------- --------- Increase (Decrease) in Cash and Cash Equivalents 2,055 (1,951) 1,839 494 2,437 Cash and Cash Equivalents at Beginning of Period (7,720) 12,210 12,765 (494) 16,761 --------- -------- ------- ----------- --------- Cash and Cash Equivalents at End of Period $ (5,665) $ 10,259 $14,604 $ - $ 19,198 ========= ======== ======= =========== =========
F-26
ICF Kaiser International, Inc. and Subsidiaries CONDENSED CONSOLIDATING BALANCE SHEET December 31, 1996 (In thousands) - ----------------------------------------------------------------------------------------------------------------------------------- ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated -------- ---------- ------------- ------------ ------------------- ASSETS Current Assets Cash and cash equivalents $ (7,720) $12,210 $ 12,765 $ (494) $ 16,761 Contract receivables, net 183 80,803 142,292 - 223,278 Intercompany receivables, net 155,653 (8,102) (147,551) - - Prepaid expenses and other current assets 4,509 383 22,535 (331) 27,096 Deferred income taxes 12,504 - (2,765) - 9,739 -------- ------- --------- -------- -------- Total Current Assets 165,129 85,294 27,276 (825) 276,874 -------- ------- --------- -------- -------- Fixed Assets Furniture, equipment, and leasehold improvements 7,243 2,453 38,714 - 48,410 Less depreciation and amortization (3,430) (2,203) (31,575) - (37,208) -------- ------- --------- -------- -------- 3,813 250 7,139 - 11,202 -------- ------- --------- -------- -------- Other Assets Goodwill, net - 5,182 44,517 - 49,699 Other 58,494 3,377 20,666 (54,339) 28,198 -------- ------- --------- -------- -------- 58,494 8,559 65,183 (54,339) 77,897 -------- ------- --------- -------- -------- Total Assets $227,436 $94,103 $ 99,598 $(55,164) $365,973 ======== ======= ========= ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Current portion of long-term debt $ - $ - $ 43 $ - $ 43 Accounts payable and other accrued expenses 16,467 54,012 18,679 - 89,158 Accrued salaries and employee benefits 10,242 22,820 12,717 - 45,779 Other 4,454 1,365 22,208 (31) 27,996 -------- ------- --------- -------- -------- Total Current Liabilities 31,163 78,197 53,647 (31) 162,976 Long-term Liabilities Long-term debt, less current portion 157,306 - - (787) 156,519 Other 2,731 285 2,416 - 5,432 -------- ------- --------- -------- -------- Total Liabilities 191,200 78,482 56,063 (818) 324,927 -------- ------- --------- -------- -------- Minority Interests in Subsidiaries - 6,154 - - 6,154 Shareholders' Equity Common Stock 223 147 128 (275) 223 Additional Paid-in Capital 66,983 2,796 42,047 (44,843) 66,983 Accumulated Earnings (Deficit) (29,238) 6,530 2,698 (9,228) (29,238) Other Equity (1,732) (6) (1,338) - (3,076) -------- ------- --------- -------- -------- Total Shareholders' Equity 36,236 9,467 43,535 (54,346) 34,892 -------- ------- --------- -------- -------- Total Liabilities and Shareholders' Equity $227,436 $94,103 $ 99,598 $(55,164) $365,973 ======== ======= ========= ======== ========
F-27
ICF Kaiser International, Inc. and Subsidiaries CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Year Ended December 31, 1996 (In thousands) - ------------------------------------------------------------------------------------------------------------------------ ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated -------- ---------- ------------- ------------ ------------------- GROSS REVENUE $ 2,024 $ 565,858 $ 680,561 $ - $1,248,443 Subcontract and direct material costs (777) (385,014) (334,551) - (720,342) Equity in income of joint ventures and affiliated companies and subsidiaries 5,081 - 5,825 (6,891) 4,015 ------- --------- --------- ------- ---------- SERVICE REVENUE 6,328 180,844 351,835 (6,891) 532,116 OPERATING EXPENSES Operating expenses (1,835) 168,247 334,179 (3) 500,588 Depreciation and amortization 2,065 1,636 6,647 - 10,348 ------- --------- --------- ------- ---------- OPERATING INCOME 6,098 10,961 11,009 (6,888) 21,180 OTHER INCOME (EXPENSE) Gain on Sale of Investment - 1,649 7,735 - 9,384 Interest and investment income 284 395 844 (269) 1,254 Interest expense (284) (1,089) (16,169) 208 (17,334) ------- --------- --------- ------- ---------- INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTERESTS 6,098 11,916 3,419 (6,949) 14,484 Income tax provision (benefit) 264 1,243 1,100 - 2,607 ------- --------- --------- ------- ---------- INCOME BEFORE MINORITY INTERESTS 5,834 10,673 2,319 (6,949) 11,877 Minority interests in net income of subsidiaries - 6,043 - - 6,043 ------- --------- --------- ------- ---------- NET INCOME 5,834 4,630 2,319 (6,949) 5,834 Preferred stock dividends and accretion 2,178 - - - 2,178 ------- --------- --------- ------- ---------- NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS $ 3,656 $ 4,630 $ 2,319 $(6,949) $ 3,656 ======= ========= ========= ======= ==========
F-28
ICF Kaiser International, Inc. and Subsidiaries CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 1996 (In thousands) - ----------------------------------------------------------------------------------------------------------------------------------- ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated ---------- ---------- ------------- ------------ ------------------- Net Cash Provided by (Used in) Operating Activities $(16,387) $14,075 $ 2,650 $ 870 $ 1,208 -------- ------- ------- ------- -------- INVESTING ACTIVITIES Purchases of fixed assets (2,002) (227) (2,703) - (4,932) Investments in subsidiaries and affiliates, net of cash acquired - (225) (1,092) - (1,317) Sale of fixed assets - - 22 - 22 -------- ------- ------- ------- -------- Net Cash Used in Investing Activities (2,002) (452) (3,773) - (6,227) -------- ------- ------- ------- -------- FINANCING ACTIVITIES Borrowings under credit facility 114,000 - - - 114,000 Principal payments on credit facility (98,500) - - - (98,500) Proceeds from issuance of senior notes and related warrants 14,700 - - - 14,700 Repurchases of preferred stock (20,000) - - - (20,000) Distribution of income to minority interest - (2,428) - - (2,428) Proceeds from issuances of common stock 383 - - - 383 Preferred stock dividends (2,615) - - - (2,615) Debt issuance costs (1,427) - - - (1,427) Other financing activities - - 924 - 924 -------- ------- ------- ------- -------- Net Cash Used in Financing Activities 6,541 (2,428) 924 - 5,037 -------- ------- ------- ------- -------- Effect of Exchange Rate Changes on Cash - - 386 - 386 -------- ------- ------- ------- -------- Increase (Decrease) in Cash and Cash Equivalents (11,848) 11,195 187 870 404 Cash and Cash Equivalents at Beginning of Period 4,128 1,015 12,578 (1,364) 16,357 -------- ------- ------- ------- -------- Cash and Cash Equivalents at End of Period $ (7,720) $12,210 $12,765 $ (494) $ 16,761 ======== ======= ======= ======= ========
F-29
ICF Kaiser International, Inc. and Subsidiaries CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Ten Months Ended December 31, 1995 (In thousands) - ---------------------------------------------------------------------------------------------------------------------------------- ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated ------------ ------------- -------------- ------------- ------------------- GROSS REVENUE $ 1,539 $ 288,741 $ 626,464 $ - $ 916,744 Subcontract and direct material costs (1,037) (192,267) (300,667) - (493,971) Equity in income of joint ventures and affiliated companies and subsidiaries 754 - 2,962 (593) 3,123 ------- --------- --------- ----- --------- SERVICE REVENUE 1,256 96,474 328,759 (593) 425,896 OPERATING EXPENSES Operating expenses (2,502) 91,934 311,157 (55) 400,534 Depreciation and amortization 1,349 946 6,062 - 8,357 Unusual items, net 1,700 - (2,200) - (500) ------- --------- --------- ----- --------- OPERATING INCOME 709 3,594 13,740 (538) 17,505 OTHER INCOME (EXPENSE) Interest income 488 269 1,319 (23) 2,053 Interest expense 1,147 (491) (13,934) 23 (13,255) ------- --------- --------- ----- --------- INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS 2,344 3,372 1,125 (538) 6,303 Income tax provision (benefit) 92 434 1,565 - 2,091 ------- --------- --------- ----- --------- INCOME BEFORE MINORITY INTERESTS 2,252 2,938 (440) (538) 4,212 Minority interests in net income of subsidiaries - 2,039 (79) - 1,960 ------- --------- --------- ----- --------- NET INCOME 2,252 899 (361) (538) 2,252 Preferred stock dividends and accretion 1,803 - - - 1,803 ------- --------- --------- ----- --------- NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS $ 449 $ 899 $ (361) $(538) $ 449 ======= ========= ========= ===== =========
F-30 ICF KAISER INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Ten Months Ended December 31, 1995 (In thousands) ================================================================================
ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated ----------- ---------- ------------- ------------ -------------------- Net Cash Provided by (Used in) Operating Activities $ (6,297) $1,136 $ 468 $(1,364) $(6,057) -------- ------ ------- ------------ -------- INVESTING ACTIVITIES Purchases of fixed assets (92) (279) (1,388) - (1,759) Investments in subsidiaries and affiliates, net of (1,000) (350) (660) - (2,010) cash acquired Sale of subsidiaries and subsidiary assets - - 735 - 735 Sale of fixed assets - - 1,035 - 1,035 -------- ------ ------- ------------ -------- Net Cash Used in Investing Activities (1,092) (629) (278) - (1,999) -------- ------ ------- ------------ -------- FINANCING ACTIVITIES Borrowings under credit facility 16,000 - - - 16,000 Principal payments on credit facility (16,000) - (1,173) - (17,173) Subsidiary capital contribution from minority interest - 500 - - 500 Proceeds from issuances of common stock 406 - - - 406 Repurchases of common stock (257) - - - (257) Preferred stock dividends (1,471) - - - (1,471) Other financing activities - - (1,308) - (1,308) -------- ------ ------- ------------ -------- Net Cash Used in Financing Activities (1,322) 500 (2,481) - (3,303) -------- ------ ------- ------------ -------- Effect of Exchange Rate Changes on Cash - - (517) - (517) -------- ------ ------- ------------ -------- Increase (Decrease) in Cash and Cash Equivalents (8,711) 1,007 (2,808) (1,364) (11,876) Cash and Cash Equivalents at Beginning of Period 12,839 8 15,386 - 28,233 -------- ------ ------- ------------ -------- Cash and Cash Equivalents at End of Period $ 4,128 $1,015 $12,578 $(1,364) $ 16,357 ======== ====== ======= ============ ========
F-31 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS ICF KAISER INTERNATIONAL, INC AND SUBSIDIARIES (in thousands)
Column A Column B Column C Column D Column E - ---------------------------------------------------------------------------------------------------------------------------------- Additions ------------------------------ Balance at beginning Charged to costs Balance at end Description of Period and expenses Other Deductions of period - ---------------------------------------------------------------------------------------------------------------------------------- Year Ended December 31, 1997 Deducted from asset account: Allowance for doubtful accounts $ 9,450 $ 1,195 1,150 (5) 4,653 (1) $ 7,142 Deducted from asset account and included in other liabilities: provision for future losses on contracts 1,517 494 812 1,199 ------------------------------------------------------------------------------------ $10,967 $ 1,689 $ 1,150 $ 5,465 $ 8,341 ==================================================================================== Year Ended December 31, 1996 Deducted from asset account: Allowance for doubtful accounts $ 9,435 $ 1,881 175 (3) 3,490 (1) $ 9,450 1,449 (5) Deducted from asset account and included in other liabilities: provision for future losses on contracts 2,274 300 491 (4) 1,548 (2) 1,517 ------------------------------------------------------------------------------------ $11,709 $ 2,181 $ 2,115 $ 5,038 $10,967 ==================================================================================== Ten Months Ended December 31, 1995 Deducted from asset account: Allowance for doubtful accounts $ 9,864 $ 601 $ 62 (3) $ 1,092 (1) $ 9,435 Deducted from asset account and included in other liabilities: provision for future losses on contracts 843 1,119 545 (4) 233 (2) 2,274 ------------------------------------------------------------------------------------ $10,707 $ 1,720 $ 607 $ 1,325 $11,709 ====================================================================================
(1) Reflects amounts written off against the allowance and related accounts receivable accounts and settlement of doubtful accounts. (2) Reflects losses charged against the provision for contract losses. (3) Reflects net allowance for doubtful accounts from the purchase of a subsidiary. (4) Reflects provision for future contract losses provided for in connection with the purchase of a subsidiary. (5) Reflects other additions to reserves. EXHIBIT INDEX EXHIBIT NO. 3 -- ARTICLES OF INCORPORATION AND BY-LAWS OF THE REGISTRANT - ------------------------------------------------------------------------ 3(a) Restated Certificate of Incorporation of ICF Kaiser International, Inc. (restated through June 26, 1993) (Incorporated by reference to Exhibit No. 3(a) to Quarterly Report on Form 10-Q (Registrant No. 1- 12248) for the second quarter of fiscal 1994 filed with the Commission on October 15, 1993) 3(b) Amended and Restated By-laws of ICF Kaiser International, Inc. (as amended through June 23, 1995) (Incorporated by reference to Exhibit No. 3(b) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the second quarter of fiscal 1995 filed with the Commission on October 13, 1995) Exhibit No. 3 -- Articles of Incorporation and By-laws of the Subsidiary - ------------------------------------------------------------------------ Guarantors - ---------- 3(c) Articles of Incorporation of Cygna Consulting Engineers and Project Management, Inc. (Incorporated by reference to Exhibit No. 3(c) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 3(d) By-laws of Cygna Consulting Engineers and Project Management, Inc. (Incorporated by reference to Exhibit No. 3(d) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 3(e) Certificate of Incorporation of ICF Kaiser Government Programs, Inc. (Incorporated by reference to Exhibit No. 3(e) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 3(f) By-laws of ICF Kaiser Government Programs, Inc. (Incorporated by reference to Exhibit No. 3(f) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 3(g) Certificate of Incorporation of PCI Operating Company, Inc. (Incorporated by reference to Exhibit No. 3(g) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 3(h) By-laws of PCI Operating Company, Inc. (Incorporated by reference to Exhibit No. 3(h) to Registration Statement on Form S-1 Registration No. 333- 19519 filed with the Commission on January 10, 1997) 3(i) Certificate of Incorporation of Systems Applications International, Inc. (Incorporated by reference to Exhibit No. 3(i) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 3(j) By-laws of Systems Applications International, Inc. (Incorporated by reference to Exhibit No. 3(j) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 3(k) Certificate of Incorporation of EDA, Incorporated 3(l) Amended and Restated By-laws of EDA, Incorporated 3(m) Certificate of Incorporation of ICF Kaiser Systems, Inc. 3(n) By-laws of ICF Kaiser Systems, Inc. 3(o) Certificate of Incorporation of Global Trade & Investment, Inc. 3(p) Amended and Restated By-laws of Global Trade & Investment, Inc. 3(q) Certificate of Incorporation of ICF Kaiser Europe, Inc. 3(r) By-laws of ICF Kaiser Europe, Inc. 3(s) Certificate of Incorporation of ICF Kaiser / Georgia Wilson, Inc. 3(t) By-laws of ICF Kaiser / Georgia Wilson, Inc. 3(u) Certificate of Incorporation of ICF Kaiser Overseas Engineering, Inc. 3(v) Amended and Restated By-laws of ICF Kaiser Overseas Engineering, Inc. 3(w) Certificate of Incorporation of ICF Kaiser Engineers Pacific, Inc. 3(x) Amended and Restated By-laws of ICF Kaiser Engineers Pacific, Inc. 3(y) Certificate of Incorporation of ICF Kaiser Remediation Company 3(z) By-laws of ICF Kaiser Remediation Company Exhibit No. 4 -- Instruments Defining the Rights of Security Holders, including - ------------------------------------------------------------------------------- Indentures - ---------- 4(a) Indenture dated as of January 11, 1994, between ICF Kaiser International, Inc. and The Bank of New York, as Trustee (Incorporated by reference to Exhibit No. 4(a) to Quarterly Report on Form 10-Q Registrant No. 1- 12248 for the third quarter of fiscal 1994 filed with the Commission on January 14, 1994) 1. First Supplemental Indenture dated as of February 17, 1995. (Incorporated by reference to Exhibit No. 4(a)(1) to Annual Report on Form 10-K Registrant No. 1-12248 for fiscal year 1995 filed with the Commission on May 23, 1995) 2. Second Supplemental Indenture dated September 1, 1995 (Incorporated by reference to Exhibit No. 4(a) (2) to Registration Statement on Form S-1 Registration No. 33-64655 filed with the Commission on November 30, 1995) 3. Third Supplemental Indenture dated October 20, 1995 (Incorporated by reference to Exhibit No. 4(a)(3) to Registration Statement on Form S-1 Registration No. 33-64655 filed with the Commission on November 30, 1995) 4. Fourth Supplemental Indenture dated as of March 8, 1996 (Incorporated by reference to Exhibit No. 4 (a)(4) to Transition Report on Form 10-K Registration No. 1-12248 for the transition period from March 1, 1995 to December 31, 1995 filed with the Commission on March 29, 1996) 5. Fifth Supplemental Indenture dated as of June 24, 1996 (Incorporated by reference to Exhibit No. 4 (a)(5) to Registration Statement on Form S-1 Registration No. 333-16937 filed with the Commission on November 27, 1996) 6. Sixth Supplemental Indenture dated as of December 3, 1997 4(b) Form of 12% Senior Subordinated Note due 2003 (Incorporated by reference to Exhibit No. 4(b) to Quarterly Report on Form 10-Q Registrant No. 1- 12248 for the third quarter of fiscal 1994 filed with the Commission on January 14, 1994) 4(c) Form of Common Stock Purchase Warrant expiring May 15, 1999 (as amended and restated through January 11, 1994) (Incorporated by reference to Exhibit No. 4(e) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the third quarter of fiscal 1994 filed with the Commission on January 14, 1994) 4(d) Rights Agreement, dated as of January 13, 1992, between ICF Kaiser International, Inc. and Office of the Secretary, ICF Kaiser International, Inc. as Rights Agent, including (1) Form of Certificate of Designations of Series 4 Junior Preferred Stock; (2) Form of Rights Certificate; and (3) Summary of Rights to Purchase Preferred Stock (Incorporated by reference to Exhibit No. 4(h) to Quarterly Report on Form 10-Q Registrant No. 0-18025 for the third quarter of fiscal 1992 filed with the Commission on January 14, 1992) 4(e) Warrant Agreement dated as of January 11, 1994, between the Registrant and The Bank of New York, as Warrant Agent (Incorporated by reference to Exhibit No. 4(c) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the third quarter of fiscal 1994 filed with the Commission on January 14, 1994) 4(f) Form of Warrant expiring December 31, 1998 (Incorporated by reference to Exhibit No. 4(d) to Quarterly Report on Form 10-Q Registrant No. 1- 12248 for the third quarter of fiscal 1994 filed with the Commission on January 14, 1994) 4(g) Indenture dated as of December 23, 1996, between ICF Kaiser International, Inc. and The Bank of New York, as Trustee, including Guarantees, dated December 23, 1996, by each of the Subsidiary Guarantors (Incorporated by reference to Exhibit No. 4(g) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 1. First Supplemental Indenture dated as of December 3, 1997 4(h) Form of 12% Senior Note due 2003, Series B (Incorporated by reference to Exhibit No. 4(i) to Registration Statement on Form S-1 Registration No. 333- 19519 filed with the Commission on January 10, 1997) 4(i) Warrant Agreement dated as of December 23, 1996, between ICF Kaiser International, Inc. and The Bank of New York, as Warrant Agent (Incorporated by reference to Exhibit No. 4(j) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 4(j) Form of Warrant expiring December 31, 1999 issued under Warrant Agreement dated as of December 23, 1996 (Incorporated by reference to Exhibit No. 4(k) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) Exhibit No. 10 -- Material Contracts - ------------------------------------ 10(a) Amended and Restated Credit Agreement dated as of December 3, 1997, with CoreStates Bank N.A., as agent 1. Amendment No. 1 dated as of March 12, 1998 10(b) Amended and Restated Security Agreement dated as of December 3, 1997, with CoreStates Bank N.A., as agent 10(c) ICF Kaiser International, Inc. Employee Stock Ownership Plan (as amended and restated as of March 1, 1993) (and further amended with respect to name change only as of June 26, 1993) (Incorporated by reference to Exhibit No. 10(c) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the second quarter of fiscal 1994 filed with the Commission on October 15, 1993) 1. Amendment No. 1 dated April 24, 1995 (Incorporated by reference to Exhibit No. 10(l)(1) to Annual Report on Form 10-K Registrant No. 1- 12248 for fiscal 1995 filed with the Commission on May 23, 1995) 2. Amendment No. 2 dated December 15, 1995 (Incorporated by reference to Exhibit No. 10(b)(2) to Transition Report on Form 10-K Registrant No. 1- 12248 for the transition period from March 1, 1995 to December 31, 1995 filed with the Commission on March 29, 1996) 3. Amendment No. 3 dated December 13, 1996 (Incorporated by reference to Exhibit No. 10(b)(3) to Registration Statement on Form S-1 Registration No. 333- 19519 filed with the Commission on January 10, 1997) 10(d) Trust Agreement with Vanguard Fiduciary Trust Company dated as of August 31, 1995, for ICF Kaiser International Employee Stock Ownership Plan (Incorporated by reference to Exhibit No. 10(c) to Registration Statement on Form S-1 Registrant No. 33-64655 filed with the Commission on November 30, 1995) 10(e) ICF Kaiser International, Inc. Retirement Plan (as amended and restated as of March 1, 1993) (and further amended with respect to name change only as of June 26, 1993) (Incorporated by reference to Exhibit No. 10(d) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the second quarter of fiscal 1994 filed with the Commission on October 15, 1993) 1. Amendment No. 1 dated April 24, 1995 (Incorporated by reference to Exhibit No. 10(d)(1) to Annual Report on Form 10-K Registrant No. 1-12248 filed with the Commission on May 23, 1995.) 2. Amendment No. 2 dated December 15, 1995 (Incorporated by reference to Exhibit No. 10(d)(2) to Transition Report on Form 10-K Registrant No. 1- 12248 for the transition period from March 1, 1995 to December 31, 1995 filed with the Commission on March 29, 1996) 3. Amendment No. 3 dated December 13, 1996 (Incorporated by reference to Exhibit No. 10(d)(3) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 10(f) Trust Agreement with Vanguard Fiduciary Trust Company dated as of August 31, 1995, for ICF Kaiser International, Inc. Retirement Plan (Incorporated by reference to Exhibit No. 10(e) to Registration Statement on Form S-1 (Registrant No. 33-64655) filed with the Commission on November 30, 1995) 10(g) Consolidated, Amended and Restated Deed of Lease Agreement between HMCE Associates Limited Partnership R.L.L.P. (as Landlord) and ICF Kaiser Hunters Branch Leasing, Inc. (as Tenant), dated November 12, 1997, for the lease of the Registrant's headquarters in Fairfax, Virginia known as Hunters Branch Phase I 10(h) Consolidated, Amended and Restated Deed of Lease Agreement between HMCE Associates Limited Partnership R.L.L.P. (as Landlord) and ICF Kaiser Hunters Branch Leasing, Inc. (as Tenant), dated November 12, 1997, for the lease of space in the building adjacent to the Registrant's headquarters in Fairfax, Virginia known as Hunters Branch -- Phase II 10(i) Contribution Agreement by and among HMCE Associates Limited Partnership R.L.L.P.; ICF Kaiser Hunters Branch Leasing, Inc.; and IFA Nutley Partners, LLC dated November 3, 1997 10(j) ICF Kaiser International, Inc. Stock Incentive Plan (as amended and restated through March 1, 1996) (Incorporated by reference to Exhibit No. 10(j) to Registration Statement on Form S-1 Registrant No. 333-16937 filed with the Commission on November 27, 1996) 10(k) Contract (#DE-AC3495RF00825) between Kaiser-Hill Company, LLC, a subsidiary of the Corporation, and the U.S. Department of Energy dated as of April 4, 1995. [IN ACCORDANCE WITH RULE 202 OF REGULATION S-T, THIS EXHIBIT NO. 10(o) WAS FILED IN PAPER ON MAY 23, 1995, ON FORM SE PURSUANT TO A CONTINUING HARDSHIP EXEMPTION is incorporated herein by reference thereto] 1. Modifications 1 to 40 to Contract #DE-AC3495RF00825. (Incorporated by reference to Exhibit No. 10(p)(l) to Registration Statement on Form S-1 Registration No. 333-16937 filed with the Commission on November 27, 1996) 2. Modifications 42 to 46 to Contract #DE-AC3495RF00825 (Modification 41 not received) (Incorporated by reference to Exhibit No. 10(p)(2) to Annual Report on Form 10-K (Registrant No. 1-12248) filed with the Commission on May 25, 1997) 3. Modifications 47 to XX to Contract #DE-AC3495RF00825 10(l) ICF Kaiser International, Inc. Section 401(k) Plan (as amended and restated as of March 1, 1993) (and further amended with respect to name change only as of June 26, 1993) (Incorporated by reference to Exhibit No. 10(f) to Quarterly Report on Form 10-Q Registrant No. 1-12248 (Registrant No. 1-12248) for the second quarter of fiscal 1994 filed with the Commission on October 15, 1993) 1. Amendment No. 1 dated April 24, 1995 (Incorporated by reference to Exhibit No. 10(p)(1) to Annual Report on Form 10-K Registrant No. 1-12248 for fiscal 1995 filed with the Commission on May 23, 1995) 2. Amendment No. 2 dated December 15, 1995 (Incorporated by reference to Exhibit No. 10(p)(2) to Transition Report on Form 10-K Registrant No. 1- 12248 for the transition period from March 1, 1995 to December 31, 1995 filed with the Commission on March 29, 1996) 3. Amendment No. 3 dated December 13, 1996 (Incorporated by reference to Exhibit No. 10(q)(3) to Registration Statement on Form S-1 Registration No. 333-19519 filed with the Commission on January 10, 1997) 10(m) Trust Agreement with Vanguard Fiduciary Trust Company dated as of March 1, 1989, for the ICF Kaiser International, Inc. Section 401(k) Plan (Incorporated by reference to Exhibit No. 28(b) to Registration Statement on Form S-8 (Registration No. 33-51460) filed with the Commission on August 31, 1992) Exhibit No. 10 -- Material Contracts (management contracts, compensatory plans, - ------------------------------------------------------------------------------- or arrangements.) - ----------------- 10(aa) Agreement dated as of May 19, 1997 with James O. Edwards, Chairman and Chief Executive Officer of the Registrant (Incorporated by reference to Exhibit No. 10(ll) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the second quarter of fiscal 1997 filed with the Commission on August 14, 1997) 10(bb) ICF Kaiser International, Inc. 1998 Compensation (IC) Plan for Senior Executives (adopted by the Board of Directors on February 27, 1998) 10(cc) ICF Kaiser International, Inc. Non-employee Director Stock Option Plan (as amended and restated as of June 26, 1993) (Incorporated by reference to Exhibit No. 10(bb) to Quarterly Report on Form 10-Q (Registrant No. 1- 12248) for the second quarter of fiscal 1994 filed with the Commission on October 15, 1993) 10(dd) Agreement dated as of May 19, 1997 with Marc Tipermas, President and Chief Operating Officer of the Registrant (Incorporated by reference to Exhibit No. 10(mm) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the second quarter of fiscal 1997 filed with the Commission on August 14, 1997) 10(ee) ICF Kaiser International, Inc. Senior Executive Officers Severance Plan as approved by the Compensation Committee of the Board of Directors on April 4, 1994, and adopted by the Board of Directors on May 5, 1994, as further amended through May 1, 1997 10(ff) Employment Agreement with Michael K. Goldman, Executive Vice President of the Registrant, effective as of February 28, 1994. (Incorporated by reference to Exhibit No. 10(jj) to Annual Report on Form 10-K Registrant No. 1-12248 for fiscal 1995 filed with the Commission on May 23, 1995) 10(gg) ICF Kaiser International, Inc. Consultants, Agents and Part-Time Employees Stock Incentive Plan dated as of June 23, 1995 (Incorporated by reference to Exhibit No. 99 to Registration Statement on Form S-8 Registration No. 33-60665 filed with the Commission on June 28, 1995) 10(hh) ICF Kaiser International, Inc. Stock Incentive Plan (as amended and restated through March 1, 1996) (Incorporated by reference to Exhibit No. 10 (j) to Registration Statement on Form S-1 Registration No. 333-16937 filed with the Commission on November 27, 1996) 10(ii) Amended Employment Agreement dated as of December 1, 1996, with David Watson, Executive Vice President and President, ICF Kaiser Engineers and Constructors Group of the Registrant (Incorporated by reference to Exhibit No. 10(kk) to Annual Report on Form 10-K (Registrant No. 1-12248) filed with the Commission on May 25, 1997). 10(jj) Amended and Restated Employment Agreement dated as of July 1,1997 with Kenneth L. Campbell, Executive Vice President and Chief Financial Officer of the Registrant (Incorporated by reference to Exhibit No. 10(nn) to Quarterly Report on Form 10-Q Registrant No. 1-12248 for the second quarter of fiscal 1997 filed with the Commission on August 14, 1997) 10(kk) Employment Agreement with Michael F. Gaffney, Executive Vice President of the Registrant, effective as of January 1, 1997 10(ll) Letter Agreement with Cowen Incorporated and Jarrod M. Cohen, dated as of March 13, 1998 10(mm) ICF Kaiser International, Inc. Non-employee Directors Compensation and Phantom Stock Plan as adopted by the Board of Directors on February 28, 1997, with an effective date of March 1, 1997 10(nn) Letter Agreement with Tennenbaum & Co., L.L.C. and Michael E. Tennenbaum, dated as of March 13, 1998 Exhibit No. 21 -- Consolidated Subsidiaries of the Registrant as of December 31, 1997 Exhibit No. 23 -- Consent of Coopers & Lybrand L.L.P. Exhibit No. 27 -- Financial Data Schedule EX-3.(K) 2 EXHIBIT 3(K) Exhibit 3(k) ARTICLES OF INCORPORATION OF ENERBANK DESIGN ASSOCIATES, INC. The name of the incorporator is John H. W. Cole. The incorporator is 18 years old or older. The address of the incorporator is as follows: 1015 Twentieth Street, N.W., Suite 200, Washington, D.C. 20036. ARTICLE I - NAME ------- - ---- The name of this corporation is ENERBANK DESIGN ASSOCIATES, INC. ARTICLE II - EFFECTIVE DATE ------- -- -------------- This corporation shall exist perpetually, commencing as of the date of approval of these Articles. ARTICLE III - PURPOSES ------- --- -------- This corporation may engage in any activity or business permitted under the laws of the United States of America and of this State. ARTICLE IV - CAPITAL STOCK ------- -- ------- ----- This corporation is authorized to issue Ten Thousand (10,000) shares of One Dollar ($1.00) par value common stock. ARTICLE V - PRINCIPAL OFFICE AND RESIDENT AGENT ------- - ----------------------------------- The name of the initial Resident Agent of this corporation and his street address are as follows: Daniel Milliron, 1109 Spring Street, Suite 200, Silver Spring, Maryland 20910. ARTICLE VI - BOARD OF DIRECTORS ----------- ------------------- This corporation shall have one (1) director initially. The number of directors may be either increased or decreased from time to time as provided in the Bylaws, but shall never be less than one (1). The name of the initial director of this corporation is Daniel Milliron. The address of the initial director is 1109 Spring Street, Suite 200, Silver Spring, Maryland 20910. ARTICLE VII - AMENDMENT ------------ ---------- This corporation reserves the right to amend or repeal any provisions contained in these Articles of Incorporation, or any amendment hereto, and any right conferred upon the shareholders is subject to this reservation. ARTICLE VIII - BYLAWS --------------------- The initial Bylaws shall be adopted by the Board of Directors. The power to alter, amend, or repeal the Bylaws or adopt new Bylaws is vested in the Board of Directors, subject to repeal or change by action of the Shareholders. ARTICLE IX - CUMULATIVE VOTING ---------- ------------------ At each election for directors every shareholder entitled to vote at such election shall have the right to cumulate his votes by giving one candidate as many votes as the number of directors to be elected at that time multiplied by the number of his shares, or by distributing such votes on the same principle among any number of such candidates. In any election of directors by the shareholders, each shareholder of record entitled to vote shall have the right to cumulate his shares and to give one candidate as many votes as shall equal the number of directors to be elected multiplied by the number of shares owned by such stockholder, or to distribute them on the same principle among as many candidates as he sees fit; provided, however, that notice shall be given by any shareholder to the President or a Vice President of the Corporation not less than twenty-four (24) hours before the time fixed for the holding of the meeting for the election of directors that he intends to accumulate his votes as such election. This right to vote cumulatively shall not be further restricted or qualified by any provision in the Bylaws of this corporation. IN WITNESS WHEREOF, I, the undersigned, being the incorporator, for the purpose of forming a corporation to do business in the State of Maryland and under the laws of Maryland, have signed these articles and acknowledge same to be my act, declaring and certifying that the facts herein stated are true, and do set my hand and seal October 19, 1987. Witness John H. W. Cole ARTICLES OF MERGER ------------------ TO; Superintendent of Corporations Department of Consumer and Regulatory Affairs Pursuant to the District of Columbia Business Corporation Act, Section 29- 368, Enerbank Corporation, a corporation organized under the laws of the District of Columbia and Enerbank Design Associates, Inc., a corporation organized under the laws of the State of Maryland, hereby submit and declare the following Articles of Merger: 1. Plan of Merger Enerbank Corporation shall be merged into Enerbank -------------- Design Associates, Inc. in accordance with the Plan of Merger attached to these Articles as Exhibit "A". 2. Outstanding Shares; Classes of Shares. ------------------------------------- (a) Enerbank Corporation has only one class of stock. On the date of approval of the Plan of Merger by its stockholders Enerbank Corporation had issued and outstanding 100 shares of its stock. (b) Enerbank Design Associates, Inc. has only one class of stock. On the date of approval by the Plan of Merger by its stockholders Enerbank Design Associates, Inc. had issued and outstanding 1,000 shares of its stock. 3. Number of Shares Approving Merger. --------------------------------- (a) 100 shares of stock of Enerbank Corporation voted for the merger. No shares of stock voted against it. (b) 1,000 shares of stock of Enerbank Design Associates, Inc. voted for the merger. No shares of stock voted against it. 4. Jurisdiction. ------------ (a) Enerbank Corporation is a corporation organized under the laws of the District of Columbia. (b) Enerbank Design Associates, Inc. is a corporation organized under the laws of the State of Maryland. The agreement required by Section 29-371 of the Business Corporations Act is enclosed herewith. DATED AND EXECUTED THIS 21/ST/ DAY OF OCTOBER, 1987. ATTEST: Enerbank Corporation ATTEST: Enerbank Design Associates, Inc. EXHIBIT "A" Plan of Merger -------------- WHEREAS, Enerbank Corporation is a corporation duly organized and authorized to conduct business in the District of Columbia; and WHEREAS, Enerbank Design Associates, Inc. is a corporation duly organized and authorized to conduct business in the State of Maryland; and WHEREAS, It is in the best interests of said corporations and their stockholders to merge said corporations, with Enerbank Design Associates, Inc. being the surviving corporation of said merger. NOW THEREFORE, the following Plan of Merger is approved by the directors of Enerbank Corporation and Enerbank Design Associates, Inc.. 1. Enerbank Corporation shall be merged into Enerbank Design Associates, Inc., which shall be the surviving corporation of the merger and shall conduct all business theretofore conducted by Enerbank Corporation. 2. No Amendment to the Articles of Incorporation of Enerbank Design Associates, Inc. is contemplated. 3. The merger shall be effective as of the date on which these articles of merger are approved. 4. As of the effective date of the merger, all of the shares of stock of Enerbank Corporation shall be surrendered, and its shareholders shall be issued 1,000 shares of stock of Enerbank Design Associates, Inc. in exchange therefor. No other consideration shall be given to the shareholders of Enerbank Corporation. 5. The bylaws, principal place of business, officers, directors and resident agent of Enerbank Design Associates, Inc. shall be the same as that prior to the merger. Agreement of Foreign Corporation -------------------------------- WHEREAS, Enerbank Design Associates, Inc. is a corporation organized under the laws of the State of Maryland (hereinafter referred to as "Surviving Corporation"); and WHEREAS, Pursuant to Articles of Merger executed simultaneously herewith, Enerbank Corporation, a corporation organized under the laws of the District of Columbia (hereinafter referred to as the "Merged Corporation") is to be merged with Surviving Corporation; and WHEREAS, As a condition to its approval of said merger the laws of the District of Columbia require that Surviving Corporation agree to certain requirements as to service of process, conduct of business, and treatment of dissenting shareholders. NOW THEREFORE, Surviving Corporation agrees as follows: 1. The above recitals are true and correct and are made a part hereof. 2. Surviving Corporation agrees that to the extent it shall conduct business in the District of Columbia it shall comply with the provisions of the Business Corporation Act of the District of Columbia. 3. Surviving Corporation agrees that it may be served with process in the District of Columbia in any proceeding for the enforcement of any obligation of any domestic corporation which is a party to said merger and in any proceeding for the enforcement of the rights of a dissenting shareholder of Merging Corporation. 4. Surviving Corporation hereby irrevocably appoints the Mayor of the District of Columbia as its agent to accept service of process in any such proceeding. 5. Surviving Corporation agrees that it will promptly pay to the dissenting shareholders of Merging Corporation, the amount, if any, to which they are entitled under the provisions of the Business Corporation Act with respect to the rights of dissenting shareholders. 6. The Mayor may mail a copy of any process against Surviving Corporation which may be served to the following postal address: 1109 Spring Street, Suite 200, Silver Springs, Maryland 20910. Dated and executed October 21st, 1987. Enerbank Design Associates, Inc. "Surviving Corporation" ARTICLES OF AMENDMENT TO ARTICLES OF ORGANIZATION OF ENERBANK DESIGN ASSOCIATES, INC. Pursuant to a special meeting of the Board of the Director and a special meeting of the shareholders of Enerbank Design Associates, Inc. ("Corporation") held on August 1, 1993, the Corporation has decided to amend its charter due to the unanimous vote of the Board of the Director and the unanimous vote of the shareholders to change the name of the Corporation. The Board of Director and all of the shareholders of the Corporation voted in favor of the following amendment to the charter. The name of the Corporation shall be amended from Enerbank Design Associates, Inc. to: EDA, Incorporated Accordingly, because all of the requirements have been satisfied pursuant to the Corporations and Associations Article of the Maryland Code, the Corporation files this Articles of Amendment so that the Corporation shall be known from this day forth as EDA, Incorporated. I, Daniel Milliron, President of Enerbank Design Associates, Inc., hereby acknowledge on behalf of Enerbank Design Associates, Inc. that the foregoing Articles of Amendment are the corporate act of said corporation under the penalties of perjury. Daniel Milliron, President Attest ARTICLES OF MERGER BETWEEN ICF KAISER DISAPPEARING, INC. AND EDA, INCORPORATED THIS IS TO CERTIFY THAT: FIRST: ICF Kaiser Disappearing, Inc. and EDA, Incorporated agree to merge in the manner hereinafter set forth. SECOND: EDA, Incorporated is the corporation to survive the merger (the "Surviving Corporation"). THIRD: Both the Surviving Corporation and ICF Kaiser Disappearing, Inc. (the "Merging Corporation") are incorporated under the laws of the State of Maryland. FOURTH: The principal office of the Surviving Corporation in the State of Maryland is located in Montgomery County, and the principal office of the Merging Corporation in the State of Maryland is located in the City of Baltimore. FIFTH: The Merging Corporation owns no interest in land in the State of Maryland. SIXTH: The charter of the Surviving Corporation will not be amended as a result of the merger. SEVENTH: The total number of shares of all classes of stock which each corporation party to these Articles has the authority to issue and the number of shares of each class are as follows: (a) Surviving Corporation --------------------- The total number of shares of all classes of stock which the Surviving Corporation has authority to issue is 10,000 shares of common stock, $1.00 par value per share. The aggregate par value of all shares of all classes having a par value is $10,000. (b) Merging Corporation ------------------- The total number of shares of all classes of stock which the Merging Corporation has authority to issue is 100 shares of common stock, $1.00 par value per share. The aggregate par value of all shares of all classes having a par value is $100. EIGHTH: Upon the Effective Date, the Merging Corporation shall be merged into the Surviving Corporation; and, thereupon, the Surviving Corporation shall possess any and all purposes and powers of the Merging Corporation; and all leases, licenses, property, rights, privileges, and powers of whatever nature and description of the Merging Corporation shall be transferred to, vested in, and devolved upon the Surviving Corporation, without further act or deed, subject to all of the debts and obligations of the Merging Corporation. At 5:00 p.m., Eastern Daylight Time, on the Effective Date, each share of common stock, $1.00 par value per share, of the Merging Corporation shall be converted into one share of common stock, $1.00 par value per share, of the Surviving Corporation ("New Shares"), without the necessity of any action on the part of the holder thereof. At that time, the Surviving Corporation shall issue a certificate to ICF Kaiser International, Inc., a Delaware corporation, representing the New Shares, and each share of common stock, $1.00 par value per share, of the Surviving Corporation existing prior to the Effective Date ("Old Shares") shall be cancelled and retired. Upon surrender of the certificates evidencing Old Shares, persons who were shareholders of the Surviving Corporation prior to the Effective Date shall receive shares of common stock, $0.01 par value per share, of ICF Kaiser International, Inc. and other consideration in accordance with the Agreement and Plan of Merger approved by the shareholders of the Merging Corporation and the Surviving Corporation. From and after the Effective Date, each holder of an outstanding certificate or certificates which prior thereto represented Old Shares shall, upon surrender of the same, be entitled to receive in exchange therefor the consideration into which the shares therefore represented by the certificate or certificates so surrendered shall have been converted as provided in the foregoing sentence. Until so surrendered, each such outstanding certificate which prior to the Effective Date represented Old Shares shall be deemed for all corporate purposes to evidence the right to receive the consideration into which such Old Shares shall have been so converted. NINTH: The terms and conditions of the transaction described in these Articles were duly advised, authorized and approved by the Merging Corporation in the manner and by the vote required by the laws of the State of Maryland and the charter of the Merging Corporation, as follows: (a) The Board of Directors of the Merging Corporation, by written consent signed by all the members thereof and filed with the minutes of proceedings of the Board, adopted a resolution declaring that the terms and conditions of the transaction described herein were advisable and directing that the proposed transaction be submitted for consideration by the shareholders of the Merging Corporation. (b) A consent in writing, setting forth approval of the terms and conditions of the transaction described herein as so proposed, was signed by the sole shareholder of the Merging Corporation, and such consent is filed with the records of shareholder meetings of the Merging Corporation. TENTH: The terms and conditions of the transaction described in these Articles were duly advised, authorized and approved by the Surviving Corporation in the manner and by the vote required by the laws of the State of Maryland and the charter of the Surviving Corporation, as follows: (a) The Board of Directors of the Surviving Corporation, by written consent to such action signed by all the members thereof and filed with the minutes of proceedings of the Board, adopted a resolution declaring that the terms and conditions of the transaction described herein were advisable and directing that the proposed transaction be submitted for consideration by the shareholders of the Surviving Corporation. (b) A consent in writing, setting forth approval of the terms and conditions of the transaction described herein as so proposed, was signed by the sole shareholder of the Surviving Corporation, and such consent is filed with the records of shareholder meetings of the Surviving Corporation. ELEVENTH: These Articles of Merger shall become effective at 5:00 p.m., Eastern Daylight Time, on the date they are accepted for recordation by the Department of Assessments and Taxation of the State of Maryland (the "Effective Date"). TWELFTH: Each undersigned President acknowledges these Articles of Merger to be the corporate act of the respective corporate party on whose behalf he has signed, and further, as to all matters or facts required to be verified under oath, each President acknowledges that to the best of his knowledge, information and belief, these matters and facts relating to the corporation on whose behalf he has signed are true in all material respects and that this statement is made under the penalties for perjury. IN WITNESS WHEREOF, these Articles of Merger have been duly executed by the parties hereto this 28th day of July, 1995. ATTEST: ICF Kaiser Disappearing, Inc. ATTEST: EDA, Incorporated EX-3.(L) 3 EXHIBIT 3(L) Exhibit 3(l) AMENDED AND RESTATED BY-LAWS of EDA, INCORPORATED ARTICLE I --------- Offices Section 1.01. Registered Office in Maryland. The registered office shall be in - ------------ ----------------------------- Baltimore City, Maryland. The name of the registered agent of the Corporation at such location is Corporation Service Company (CSC-Lawyers Incorporating Service Company). Section 1.02. Principal Office. The Board of Directors is granted full power - ------------ ---------------- and authority to fix and thereafter change the location of the principal office of the Corporation at any location within the United States. Section 1.03. Other Offices. The Corporation may have such other offices - ------------ ------------- either within or without the State of Maryland as the Board of Directors may from time to time determine. ARTICLE II ---------- Meetings of Stockholders Section 2.01. Time and Place of Meeting. Annual meetings of the stockholders - ------------ ------------------------- for the purpose of electing directors, making reports of the affairs of the Corporation and transacting such other business as may properly come before the meeting shall be held at such place, within or without the State of Maryland, on such date and at such time as the Board of Directors shall each year fix, which date shall be within thirteen months subsequent to the later of the date of incorporation or the last annual meeting of stockholders. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Maryland, as shall be fixed by the Board of Directors and stated in the notice of meeting. If no other place is fixed by the Board of Directors, meetings of stockholders shall be held at the principal executive office of the Corporation. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Corporation. Section 2.02. Notice of Meeting. Written notice of meetings of stockholders, - ------------- ------------------ stating the place, date and hour thereof, and in the case of a special meeting, the purpose or purposes for which the meeting is being called, shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote thereat. Section 2.03. Qualified Voters. The officer who has charge of the stock ledger - ------------ ---------------- of the Corporation shall prepare, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting during ordinary business hours for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present and entitled to vote. Section 2.04. Special Meetings. Special meetings of the stockholders may be - ------------- ---------------- called by the Board of Directors or by the President or by a writing signed by stockholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote at such meeting. Such call shall state the purpose or purposes of the proposed meeting. The Secretary shall give notice of such meeting to the stockholders entitled to vote thereat, in accordance with such call. Section 2.05. Business at Special Meetings. Business transacted at any special - ------------- ---------------------------- meeting of stockholders shall be limited to the purposes stated in the notice. Section 2.06. Quorum. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting (if the adjournment is not for more than thirty days and a new record date for the determination of stockholders entitled to vote is not fixed), until a quorum shall be present or represented. At such AMENDED AND RESTATED BY-LAWS OF EDA, INCORPORATED Page 2 of 9 adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. Section 2.07. Vote Required. When a quorum is present at any meeting, the vote - ------------- ------------- of the holders of a majority of the shares of stock having voting power voting, in person or by proxy, on a question shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes, the Certificate of Incorporation or these By-laws a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 2.08. Proxies. Each stockholder shall at every meeting of the - ------------- ------- stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date unless the proxy provides for a longer period. No proxy or power of attorney to vote shall be used to vote at a meeting of the stockholders unless it shall have been filed with the Secretary of the meeting when required by the inspectors of election. All questions regarding the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided by two inspectors of election who shall be appointed by the Board of Directors, or if not so appointed, then by the presiding officer of the meeting. Section 2.09. Presiding Officer. The President of the Corporation shall - ------------- ----------------- preside over all meetings of stockholders. Section 2.10. Consent. Whenever the vote of stockholders at a meeting thereof - ------------- ------- is required or permitted to be taken in connection with any corporate action by any provisions of the statutes, the By-laws or the Certificate of Incorporation, the meeting and vote may be dispensed with if the number of stockholders who would have been entitled to vote upon the action if such meeting were held, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting, shall consent in writing to such corporate action being taken. Prompt notice shall be given by the Secretary to all stockholders of the taking of corporate action without a meeting by less than unanimous written consent. ARTICLE III ----------- Directors Section 3.01. Number and Election. The number of directors which shall - ------------ ------------------- constitute the whole Board shall be no less than one (1) or more than ten (10). By amendment of this By-law, the number may be increased or decreased from time to time by the Board of Directors or stockholders within the limits permitted by law, but no decrease in the number of directors shall change the term of any director in office at the time thereof. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 3.02, and each director shall hold office until his successor is elected and accepts office unless he earlier resigns or is removed. Directors need not be stockholders. A director may resign at any time upon written notice to the Corporation or orally at any meeting of the directors or stockholders. Section 3.02. Removal and Vacancies. A director may be removed with or without - ------------- --------------------- cause by a majority vote of the holders of the outstanding shares entitled to vote. [Subject to any Stockholder's Agreement] Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and accept office, unless sooner displaced. Section 3.03. Management, The business of the Corporation shall be managed by - ------------- ---------- its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-laws directed or required to be exercised or done by the stockholders. Section 3.04. Place of Meetings. The Board of Directors of the Corporation may - ------------- ----------------- hold meetings, both regular and special, either within or without the State of Maryland. Meetings may be held by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting. Section 3.05. Annual Meeting. The first meeting of each newly elected Board of - ------------ -------------- Directors shall be held immediately following the adjournment of the annual meeting of stockholders and at the place thereof. No notice of such meeting shall be necessary to the directors in order legally to constitute the meeting, provided a quorum is present. In the event AMENDED AND RESTATED BY-LAWS OF EDA, INCORPORATED Page 3 of 9 such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors. Section 3.06. Notice for Regular Meetings. Regular meetings of the Board of - ------------- --------------------------- Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors. Section 3.07. Special Meetings. Special meetings of the Board of Directors may - ------------- ---------------- be called by a majority of the Board of Directors or the President and shall be held on notice by letter mailed or delivered for transmission not later than on the third day immediately preceding the day of such meeting, or by written notice delivered or received not later than the day immediately preceding the day of such meeting. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Section 3.08. Quorum. At meetings of the Board of Directors, a majority of the - ------------- ------ full number of directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 3.09. Chairman of the Board. At its first meeting after each annual - ------------- --------------------- meeting of stockholders, the Board of Directors shall elect from among its members a Chairman. The Board of Directors may also choose a Vice Chairman from among its members. The Chairman shall preside at all meetings of the Board of Directors, and shall perform such other duties as the Board may prescribe. The Chairman may participate and act in any meeting of the Board of Directors as a director. The Vice Chairman, if any, shall act under the direction of the Chairman and in the absence or disability of the Chairman shall perform the duties and exercise the powers of the Chairman. The Chairman and the Vice Chairman, if any, (i) shall hold their respective offices at the pleasure of the Board of Directors, and (ii) may be removed with or without cause at any time by the Board of Directors. Any vacancy occurring in the office of the Chairman or Vice Chairman by death, resignation, removal or otherwise shall be filled by the Board of Directors. Section 3.10. Committees. The Board of Directors may, by resolution adopted by - ------------- ---------- a majority of the whole Board, designate one or more committees of the Board of Directors, each committee to consist of one or more of the directors of the Corporation, which, to the extent provided in the resolution, may have and exercise any or all the powers of the Board of Directors in the management of the business and affairs of the Corporation including, but not limited to, the power and authority of the Board of Directors: (i) to authorize the seal of the Corporation to be affixed to all papers; (ii) to declare a dividend; (iii) to authorize the issuance of stock; (iv) to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors, fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for shares of any other class or classes or any other series of the same of any other class or classes of stock of the Corporation. Such committee or committees shall have such name or names as may be determined from time to time by the Board of Directors. The member or members of any such committee present at any meeting and not disqualified from voting may, whether or not they constitute a quorum, unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. At meetings of such committees, a majority of the members or alternate members at any meeting at which there is a quorum shall be the act of the committee. Section 3.11. Committee Minutes. The committees shall keep regular minutes of - ------------- ----------------- their proceedings and report the same to the Board of Directors. Section 3.12. Consent. Any action required or permitted to be taken at any - ------------- ------- meeting of the Board of Directors or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee. Section 3.13. Compensation. The directors may be paid their expenses of - ------------- ------------ attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board of Directors may be allowed like reimbursement and compensation for attending committee meetings. AMENDED AND RESTATED BY-LAWS OF EDA, INCORPORATED Page 4 of 9 ARTICLE IV ---------- Notices Section 4.01. Notice. Notices to directors and stockholders mailed to them at - ------------ ------ their addresses appearing on the books of the Corporation shall be deemed to be given at the time when deposited in the United States mail, postage prepaid. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. Section 4.02. Waiver. Whenever any notice is required to be given under the - ------------ ------ provisions of the statute, the Certificate of Incorporation or of these By-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purposes of, any meeting need be specified in such waiver. Attendance at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. ARTICLE V --------- Officers Section 5.01. Election. The officers of the Corporation shall be chosen by the - ------------ -------- Board of Directors at its first meeting after each annual meeting of stockholders and shall be a President, a Secretary and a Treasurer. The Board of Directors may also choose one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers. Two or more offices may be held by the same person. Section 5.02. Other Officers. The Board of Directors may appoint such other - ------------- -------------- officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. Section 5.03. Salaries. The salaries of all officers of the Corporation shall - ------------- -------- be fixed by or under the direction of the Board of Directors. Section 5.04. Vacancies. The officers of the Corporation shall hold office at - ------------- --------- the pleasure of the Board of Directors. Any officer may be removed with or without cause at any time by the Board of Directors. Each officer shall hold his office until his successor is elected and qualified or until his earlier resignation or removal. The Board of Directors may fill any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise. Section 5.05. President. The President shall serve as Chief Executive Officer - ------------- --------- of the Corporation, shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall execute on behalf of the Corporation, and may affix or cause the seal to be affixed to, all instruments requiring such execution except to the extent the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. He shall perform such additional duties and have such additional powers as the Board of Directors may from time to time prescribe. Section 5.06. Vice Presidents. The Vice Presidents shall act under the - ------------- --------------- direction of the President and in the absence or disability of the President shall perform the duties and exercise the powers of the President. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. The Board of Directors may designate one or more Executive Vice Presidents or may otherwise specify the order of seniority of the Vice Presidents. The duties and powers of the President shall descend to the Vice Presidents in such specified order of seniority. Section 5.07. Secretary. The Secretary shall act under the direction of the - ------------- --------- President. Subject to the direction of the President, he shall attend all meetings of the Board of Directors and all meetings of the stockholders and record the proceedings in a book to be kept for that purpose. He shall perform like duties for committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the President or the Board of Directors. He shall keep in safe custody the seal of the Corporation and, when authorized by the President or the Board of Directors, cause it to be affixed to any instrument requiring it. AMENDED AND RESTATED BY-LAWS OF EDA, INCORPORATED Page 5 of 9 Section 5.08. Assistant Secretaries. The Assistant Secretaries shall act under - ------------- --------------------- the direction of the President. In the order of their seniority, unless otherwise determined by the President or the Board of Directors, they shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. Section 5.09. Treasurer. The Treasurer shall act under the direction of the - ------------- --------- President. Subject to the direction of the President he shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the President or the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. He may affix or cause to be affixed the seal of the Corporation to documents so requiring. Section 5.10. Assistant Treasurers. The Assistant Treasurers in the order of - ------------- -------------------- their seniority, unless otherwise determined by the President or the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. ARTICLE VI ---------- Certificates of Stock Section 6.01. Certificate. Every holder of stock in the Corporation shall be - ------------ ----------- entitled to have a certificate signed by the Chairman or Vice-Chairman of the Board of Directors, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. Every such certificate shall contain a statement of the restrictions provided in Section 4 of this Article. Section 6.02. Facsimile Signature. Any or all the signatures on the - ------------- ------------------- certificate may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued with the same effect as though the person had not ceased to be such officer, transfer agent or registrar. The seal of the Corporation or a facsimile thereof may, but need not, be affixed to certificates of stock. Section 6.03. Lost Certificates. The Board of Directors may direct a new - ------------- ----------------- certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 6.04. Transfer. Upon surrender to the Corporation or the transfer - ------------- -------- agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books, provided, however, the Corporation shall have no obligation to issue new certificates, cancel old certificates or record transactions unless and until it is satisfied that (i) all provisions of the Certificate of Incorporation, these By-laws and any legends on the certificate regarding transfer of shares and restrictions on such transfers have been complied with, and (ii) all other applicable restrictions, including restrictions imposed by law, including federal and state securities law, and by any stockholders agreement to which the Corporation is a party, have been complied with. Section 6.05. Record Date. The Board of Directors may fix in advance a date, - ------------- ----------- not more than sixty days nor less than ten days preceding the date of any meeting of stockholders, or not more than sixty days before the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining a consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to AMENDED AND RESTATED BY-LAWS OF EDA, INCORPORATED Page 6 of 9 receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent, and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. Section 6.06. Recognition of Ownership. The Corporation shall be entitled to - ------------- ------------------------ recognize the person registered on its books as the owner of shares to be the exclusive owner for all purposes including voting and dividends, and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Maryland. ARTICLE VII ----------- Miscellaneous Section 7.01. Reserves. There may be set aside out of any funds of the - ------------ -------- Corporation available for dividends such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper, as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for the purchase of additional property, or for such other purpose as the directors shall think conducive to the interest of the Corporation, and the Board of Directors may modify or abolish any such reserve. Section 7.02. Checks, Demands and Notes. All checks or demands for money and - ------------- ------------------------- notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. Section 7.03. Fiscal Year. The fiscal year of the Corporation shall be as - ------------- ----------- fixed by the Board of Directors. Section 7.04. Seal. The corporate seal shall have inscribed thereon the name - ------------- ---- of the Corporation and the words "Corporate Seal". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. ARTICLE VIII ------------ Indemnification Section 8.01. Indemnification of Directors and Officers for Actions, Suits, or - ------------ ---------------------------------------------------------------- Proceedings Other Than By Or In The Right of the Corporation. To the full - ------------------------------------------------------------ extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans) or by reason of any action alleged to have been taken or omitted in such capacity against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in -------------- good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of ---- ---------- itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.02. Indemnification of Directors and Officers for Actions or Suits By - ------------- ----------------------------------------------------------------- Or In The Right of the Corporation. To the full extent permitted by law, the - ---------------------------------- Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of AMENDED AND RESTATED BY-LAWS OF EDA, INCORPORATED Page 7 of 9 another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the court shall deem proper. Section 8.03. Indemnification of Others for Actions, Suits, or Proceedings - ------------- ------------------------------------------------------------ Other Than By Or In The Right of the Corporation. To the full extent permitted - ------------------------------------------------ by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.04. Indemnification of Others for Actions or Suits By Or In The Right - ------------- ----------------------------------------------------------------- of the Corporation. To the full extent permitted by law, the Corporation, in - ------------------ the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the court shall deem proper. Section 8.05. Indemnification for Costs, Charges and Expenses of Successful - ------------- ------------------------------------------------------------- Party. Notwithstanding the other provisions of these By-laws, to the extent - ----- that a director or officer of the Corporation or other person indemnified under Sections 8.01 through 8.04, herein, has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, he shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection therewith. Section 8.06. Determination of Right to Indemnification. Unless otherwise - ------------- ----------------------------------------- ordered by a court, any indemnification under Sections 8.01 through 8.04, herein, shall be paid by the Corporation unless a determination is made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so AMENDED AND RESTATED BY-LAWS OF EDA, INCORPORATED Page 8 of 9 directs, by independent legal counsel in a written opinion, or (iii) by the stockholders, that indemnification of an individual entitled to indemnification under Sections 8.01 through 8.04, herein, is not proper in the circumstances because he has not met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein. Section 8.07. Advance Payment of Costs, Charges and Expenses. To the full - ------------- ---------------------------------------------- extent permitted by law, the Corporation shall, upon request, pay costs, charges and expenses (including attorneys' fees) incurred by a person entitled to indemnification pursuant to Sections 8.01 and 8.02, herein, and, if applicable, pursuant to Sections 8.03 and 8.04, herein, in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding; provided, however, that the payment of such costs, charges and expenses incurred by a director or officer in his capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer) in advance of the final disposition of such action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event that it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized in these By-laws; such costs, charges and expenses incurred by other employees, agents and contractors may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. Section 8.08. Procedure for Indemnification. Any indemnification or advance of - ------------- ----------------------------- costs, charges and expenses provided for in Sections 8.01 through 8.07, herein, shall be made promptly, and in any event within sixty (60) days, upon the written request of the person entitled to indemnification; the right to indemnification or advances as granted by these By-laws shall be enforceable by a director or officer or other person indemnified hereunder in any court of competent jurisdiction. If the Corporation denies such request, in whole or in part, or if no disposition thereof is made within sixty (60) days, such person's costs, charges and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation; it shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses pursuant to Section 8.07, herein, where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Sections 8.01 through 8.04, herein, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 8.09. Authorization of Corporation Officers. The proper officers of - ------------- ------------------------------------- the Corporation are, and each of them acting without the other is, authorized to take any action, for and in the name of the Corporation, which he deems necessary or appropriate (as conclusively presumed from the taking of such action) to carry out and effect the foregoing Sections 8.01 through 8.08. Section 8.10. Other Rights; Continuation of Right to Indemnification. The - ------------- ------------------------------------------------------ indemnification and advancement of expenses provided by these By-laws shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any law (present or future, common or statutory), by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office or while employed by or acting as agent for the Corporation, and shall continue as to a person who has ceased to serve in the capacity making him eligible for indemnification, and shall inure to the benefit of the estate, heirs, executors and administrators of such person; all rights to indemnification under these By- laws shall be deemed to be a contract between the Corporation and each director and officer of the Corporation and, as applicable, any other person indemnified hereunder who serves or served in such capacity at any time while these By-laws as well as the relevant provisions of the General Corporation Law of the State of Maryland or any other applicable laws are or were in effect; any repeal or modification hereof or of such provisions of such law shall not in any way diminish any rights to indemnification of such director or officer or other person entitled to indemnification or the obligations of the Corporation arising hereunder. Section 8.11. Savings Clause. If Sections 8.01 through 8.10 of these By-laws - ------------- -------------- or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer, and may indemnify any other person entitled to indemnification, as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the AMENDED AND RESTATED BY-LAWS OF EDA, INCORPORATED Page 9 of 9 Corporation, to the full extent permitted by any applicable portion of these By- laws that shall not have been invalidated and to the full extent permitted by applicable law. To the full extent permitted by law, the Corporation may enter into and perform agreements with persons, including, without limitation, present and former officers, directors and employees of the Corporation and of companies acquired by or merged with the Corporation, obligating the Corporation, among other things, to provide indemnification and advancement of costs, charges and expenses to such persons in addition to any indemnification or advancement which may be available to such person under Sections 8.01 through 8.10 of these By- laws. Section 8.12. Insurance. The Board of Directors may cause the Corporation to - ------------- --------- purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise (including employee benefit plans) against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. Section 8.13. Amendment of By-laws. The Board of Directors may from time to - ------------- -------------------- time adopt further By-laws with respect to indemnification and may amend these and such By-laws to provide at all times the fullest indemnification permitted by the General Corporation Law of the State of Maryland. ARTICLE IX ---------- Amendments Section 9.01. Amendment by Stockholders. These By-laws may be amended by a - ------------ ------------------------- majority vote of all the stock issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, provided notice of intention to amend shall have been contained in the notice of the meeting. Section 9.02. Amendment by Board of Directors. The Board of Directors by a - ------------- ------------------------------- majority vote of the whole Board at any meeting may amend these By-laws, including By-laws adopted by the stockholders, but the stockholders may from time to time specify particular provisions of the By-laws which shall not be amended by the Board of Directors. EX-3.(M) 4 EXHIBIT 3(M) Exhibit 3(m) CERTIFICATE OF INCORPORATION OF ICF KAISER SYSTEMS, INC. SECTION 1.01. NAME. The name of the Corporation is ICF Kaiser Systems, Inc. SECTION 2.01. REGISTERED OFFICE AND AGENT. The registered office of the Corporation in the State of Delaware is located in the County of New Castle, at 1013 Centre Road, Wilmington 19805. Its registered agent at such address is Corporation Service Company. SECTION 3.01. PURPOSES. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. SECTION 4.01. AUTHORIZED SHARES. The total number of shares of capital stock which the Corporation shall have authority to issue is one thousand (1,000) shares of Common Stock having a par value of one dollar ($1.00) per share. SECTION 5.01. INCORPORATOR. The name and mailing address of the incorporator is John T. Cassella, 9300 Lee Highway, Fairfax, Virginia 22031-1207. SECTION 5.02. DURATION. The Corporation is to have perpetual existence. SECTION 6.01. LIMITATION OF LIABILITY. (a) No person shall be liable to the Corporation for any loss or damage suffered by it on account of any action taken or omitted to be taken by him or her as a director or officer of the Corporation, if such person (i) in good faith exercised or used the same degree of diligence, care and skill as an ordinarily prudent person would have exercised or used under similar circumstances, or (ii) took, or omitted to take, such action in good faith reliance upon advice of counsel for the Corporation, or upon books of account or reports made to the Corporation by any of its officers or by an independent certified public accountant, or by an appraiser selected with reasonable care by the Board of Directors or by any committee designated by the Board of Directors, or in good faith reliance upon other records of the Corporation. (b) No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that the foregoing shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. SECTION 7.01. RATIFICATION BY STOCKHOLDERS. Any contract, transaction or act of the Corporation, the Board of Directors, or a committee of the Board of Directors which shall be approved or ratified by a majority of a quorum of the stockholders entitled to vote at any meeting or, without a meeting, by the written consent of the holders of a majority of the stock entitled to vote shall be as valid and binding as though approved or ratified by every stockholder of the Corporation; but any failure of the stockholders to approve or ratify such contract, transaction or act, when and if submitted, shall not be deemed in any way to invalidate the same or to deprive the Corporation, its directors or officers, of their right to proceed with such contract, transaction or act. SECTION 8.01. INDEMNIFICATION OF DIRECTORS AND OFFICERS FOR ACTIONS, SUITS, OR PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION. To the full extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, Certificate of Incorporation of Kaiser Systems, Inc. Page 2 criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her on his or her behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him or her in the purchase or sale of securities of the Corporation, if and only if he or she acted in good -------------- faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent ---- ---------- shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. SECTION 8.02. INDEMNIFICATION OF DIRECTORS AND OFFICERS FOR ACTIONS OR SUITS BY OR IN THE RIGHT OF THE CORPORATION. To the full extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or her on his or her behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he or she -------------- acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. SECTION 8.03. INDEMNIFICATION OF OTHERS FOR ACTIONS, SUITS, OR PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION. To the full extent permitted by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him or her in the purchase or sale of securities of the Corporation, if and only if he or she acted in good -------------- faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of ---- ---------- itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Certificate of Incorporation of Kaiser Systems, Inc. Page 3 SECTION 8.04. INDEMNIFICATION OF OTHERS FOR ACTIONS OR SUITS BY OR IN THE RIGHT OF THE CORPORATION. To the full extent permitted by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or her or on his or her behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he or she acted in good faith and ----------- in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. SECTION 8.05. INDEMNIFICATION FOR COSTS, CHARGES AND EXPENSES OF SUCCESSFUL PARTY. Notwithstanding the other provisions of this Certificate, to the extent that a director or officer of the Corporation or other person indemnified under Sections 9.01 through 9.04, herein, has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, he or she shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or her or on his or her behalf in connection therewith. SECTION 8.06. DETERMINATION OF RIGHT TO INDEMNIFICATION. Unless otherwise ordered by a court, any indemnification under Sections 9.01 through 9.04, herein, shall be paid by the Corporation unless a determination is made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders, that indemnification of an individual entitled to indemnification under Sections 9.01 through 9.04, herein, is not proper in the circumstances because he or she has not met the applicable standard of conduct set forth in Sections 9.01 through 9.04, herein. SECTION 8.07. ADVANCE PAYMENT OF COSTS, CHARGES AND EXPENSES. To the full extent permitted by law, the Corporation shall, upon request, pay costs, charges and expenses (including attorneys' fees) incurred by a person entitled to indemnification pursuant to Sections 9.01 and 9.02, herein, and, if applicable, pursuant to Sections 9.03 and 9.04, herein, in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding; provided, however, that the payment of such costs, -------- ------- charges and expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer) in advance of the final disposition of such action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event that it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized in this certificate; such costs, charges and expenses incurred by other employees, agents and contractors may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. SECTION 8.08. PROCEDURE FOR INDEMNIFICATION. Any indemnification or advance of costs, charges and expenses provided for in Sections 9.01 through 9.07, herein, shall be made promptly, and in any event within sixty days, upon the written request of the person entitled to indemnification; the right to indemnification or advances as granted by this Certificate shall be enforceable by a director or officer or other person indemnified hereunder in any court of competent jurisdiction. If the Corporation denies such request, in whole or in part, or if no disposition thereof is made within sixty days, such person's costs, Certificate of Incorporation of Kaiser Systems, Inc. Page 4 charges and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation; it shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses pursuant to Section 9.07, herein, where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Sections 9.01 through 9.04, herein. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Sections 9.01 through 9.04, herein, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. SECTION 8.09. AUTHORIZATION OF CORPORATION OFFICERS. The proper officers of the Corporation are, and each of them acting without the other is, authorized to take any action, for and in the name of the Corporation, which the officer deems necessary or appropriate (as conclusively presumed from the taking of such action) to carry out and effect the foregoing Sections 9.01 through 9.08. SECTION 8.10. THEIR RIGHTS; CONTINUATION OF RIGHT TO INDEMNIFICATION. The indemnification and advancement of expenses provided by this Certificate shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any law (present or future, common or statutory), by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office or while employed by or acting as an agent for the Corporation, and shall continue as to a person who has ceased to serve in the capacity making him or her eligible for indemnification, and shall inure to the benefit of the estate, heirs, executors and administrators of such person; all rights to indemnification under this Certificate shall be deemed to be a contract between the Corporation and each director and officer of the Corporation and, as applicable, any other person indemnified hereunder who serves or served in such capacity at any time while this Certificate as well as the relevant provisions of the Delaware General Corporation Law or any other applicable laws are or were in effect; any repeal or modification hereof or of such provisions of such law shall not in any way diminish any rights to indemnification of such director or officer or other person entitled to indemnification or the obligations of the Corporation arising hereunder. SECTION 8.11. SAVINGS CLAUSE. If this Certificate or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer, and may indemnify any other person entitled to indemnification, as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Certificate that shall not have been invalidated and to the full extent permitted by applicable law. To the full extent permitted by law, the Corporation may enter into and perform agreements with persons, including, without limitation, present and former officers, directors and employees of the Corporation and of companies acquired by or merged with the Corporation, obligating the Corporation, among other things, to provide indemnification and advancement of costs, charges and expenses to such persons in addition to any indemnification or advancement which may be available to such person under Sections 9.01 through 9.10 of this Certificate. SECTION 8.12. INSURANCE. The Board of Directors may cause the Corporation to purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise (including employee benefit plans), against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. Certificate of Incorporation of Kaiser Systems, Inc. Page 5 SECTION 8.13. ADOPTION OF BY-LAWS. The Board of Directors may from time to time adopt By-laws with respect to indemnification and may amend such By-laws to provide at all times the fullest indemnification permitted by the General Corporation Law of the State of Delaware. SECTION 9.01. SETTLEMENT OF DEBTS. Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation. SECTION 10.01. ELECTIONS OF DIRECTORS. Elections of directors need not be by written ballot unless the By-laws of the Corporation shall so provide. SECTION 11.01. STOCKHOLDERS MEETINGS, RECORDS. Stockholders meetings may be held within or without the State of Delaware, as the By-laws may provide. The books of the Corporation may be kept (subject to any provision in the General Corporation Law of the State of Delaware) outside of the State of Delaware at such place or places as may be designated from time to time by the Board of Directors (or duly authorized committee of the Board of Directors) or in the By-laws of the Corporation. SECTION 12.01. BY-LAWS. The Board of Directors (or a duly authorized committee of the Board of Directors) of the Corporation shall have the power to make and, except as may be expressly stated in the By-laws, to alter and repeal its By-laws. SECTION 13.01. AMENDMENT OF CERTIFICATE OF INCORPORATION. The Corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate, in the manner now or hereafter prescribed by the General Corporation Law of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation. IN WITNESS WHEREOF the undersigned, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereto set my signature this 9th day of December 1996. /s/ John T. Cassella EX-3.(N) 5 EXHIBIT 3(N) Exhibit 3(n) BY-LAWS of ICF KAISER SYSTEMS, INC. ARTICLE I --------- Offices Section 1.01. Registered Office in Delaware. The registered office shall be in - ------------ ----------------------------- Wilmington, Delaware. The name of the registered agent of the Corporation at such location is Corporation Service Company. Section 1.02. Principal Office. The Board of Directors is granted full power - ------------ ---------------- and authority to fix and thereafter change the location of the principal office of the Corporation at any location within the United States. Section 1.03. Other Offices. The Corporation may have such other offices - ------------ ------------- either within or without the State of Delaware as the Board of Directors may from time to time determine. ARTICLE II ---------- Meetings of Stockholders Section 2.01. Time and Place of Meeting. Annual meetings of the stockholders - ------------ ------------------------- for the purpose of electing directors, making reports of the affairs of the Corporation and transacting such other business as may properly come before the meeting shall be held at such place, within or without the State of Delaware, on such date and at such time as the Board of Directors shall each year fix, which date shall be within thirteen months subsequent to the later of the date of incorporation or the last annual meeting of stockholders. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be fixed by the Board of Directors and stated in the notice of meeting. If no other place is fixed by the Board of Directors, meetings of stockholders shall be held at the principal executive office of the Corporation. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Corporation. Section 2.02. Notice of Meeting. Written notice of meetings of stockholders, - ------------- ------------------ stating the place, date and hour thereof, and in the case of a special meeting, the purpose or purposes for which the meeting is being called, shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote thereat. Section 2.03. Qualified Voters. The officer who has charge of the stock ledger - ------------ ---------------- of the Corporation shall prepare, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting during ordinary business hours for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present and entitled to vote. Section 2.04. Special Meetings. Special meetings of the stockholders may be - ------------- ---------------- called by the Board of Directors or by the President or by a writing signed by stockholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote at such meeting. Such call shall state the purpose or purposes of the proposed meeting. The Secretary shall give notice of such meeting to the stockholders entitled to vote thereat, in accordance with such call. Section 2.05. Business at Special Meetings. Business transacted at any special - ------------- ---------------------------- meeting of stockholders shall be limited to the purposes stated in the notice. Section 2.06. Quorum. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting (if the adjournment is not for more than thirty days and a new record date for the determination of stockholders entitled to vote is not fixed), until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. BY-LAWS OF ICF KAISER SYSTEMS, INC. Page 2 of 9 Section 2.07. Vote Required. When a quorum is present at any meeting, the vote - ------------- ------------- of the holders of a majority of the shares of stock having voting power voting, in person or by proxy, on a question shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes, the Certificate of Incorporation or these By-laws a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 2.08. Proxies. Each stockholder shall at every meeting of the - ------------- ------- stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date unless the proxy provides for a longer period. No proxy or power of attorney to vote shall be used to vote at a meeting of the stockholders unless it shall have been filed with the Secretary of the meeting when required by the inspectors of election. All questions regarding the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided by two inspectors of election who shall be appointed by the Board of Directors, or if not so appointed, then by the presiding officer of the meeting. Section 2.09. Presiding Officer. The President of the Corporation shall - ------------- ----------------- preside over all meetings of stockholders. Section 2.10. Consent. Whenever the vote of stockholders at a meeting thereof - ------------- ------- is required or permitted to be taken in connection with any corporate action by any provisions of the statutes, the By-laws or the Certificate of Incorporation, the meeting and vote may be dispensed with if the number of stockholders who would have been entitled to vote upon the action if such meeting were held, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting, shall consent in writing to such corporate action being taken. Prompt notice shall be given by the Secretary to all stockholders of the taking of corporate action without a meeting by less than unanimous written consent. ARTICLE III ----------- Directors Section 3.01. Number and Election. The number of directors which shall - ------------ ------------------- constitute the whole Board shall be no less than one (1) or more than ten (10). By amendment of this By-law, the number may be increased or decreased from time to time by the Board of Directors or stockholders within the limits permitted by law, but no decrease in the number of directors shall change the term of any director in office at the time thereof. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 3.02, and each director shall hold office until his successor is elected and accepts office unless he earlier resigns or is removed. Directors need not be stockholders. A director may resign at any time upon written notice to the Corporation or orally at any meeting of the directors or stockholders. Section 3.02. Removal and Vacancies. A director may be removed with or without - ------------- --------------------- cause by a majority vote of the holders of the outstanding shares entitled to vote. [Subject to any Stockholder's Agreement] Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and accept office, unless sooner displaced. Section 3.03. Management, The business of the Corporation shall be managed by - ------------- ---------- its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-laws directed or required to be exercised or done by the stockholders. Section 3.04. Place of Meetings. The Board of Directors of the Corporation may - ------------- ----------------- hold meetings, both regular and special, either within or without the State of Delaware. Meetings may be held by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting. Section 3.05. Annual Meeting. The first meeting of each newly elected Board of - ------------ -------------- Directors shall be held immediately following the adjournment of the annual meeting of stockholders and at the place thereof. No notice of such meeting shall be necessary to the directors in order legally to constitute the meeting, provided a quorum is present. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors. BY-LAWS OF ICF KAISER SYSTEMS, INC. Page 3 of 9 Section 3.06. Notice for Regular Meetings. Regular meetings of the Board of - ------------- --------------------------- Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors. Section 3.07. Special Meetings. Special meetings of the Board of Directors - ------------- ---------------- may be called by a majority of the Board of Directors or the President and shall be held on notice by letter mailed or delivered for transmission not later than on the third day immediately preceding the day of such meeting, or by written notice delivered or received not later than the day immediately preceding the day of such meeting. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Section 3.08. Quorum. At meetings of the Board of Directors, a majority of - ------------- ------ the full number of directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 3.09. Chairman of the Board. At its first meeting after each annual - ------------- --------------------- meeting of stockholders, the Board of Directors shall elect from among its members a Chairman. The Board of Directors may also choose a Vice Chairman from among its members. The Chairman shall preside at all meetings of the Board of Directors, and shall perform such other duties as the Board may prescribe. The Chairman may participate and act in any meeting of the Board of Directors as a director. The Vice Chairman, if any, shall act under the direction of the Chairman and in the absence or disability of the Chairman shall perform the duties and exercise the powers of the Chairman. The Chairman and the Vice Chairman, if any, (i) shall hold their respective offices at the pleasure of the Board of Directors, and (ii) may be removed with or without cause at any time by the Board of Directors. Any vacancy occurring in the office of the Chairman or Vice Chairman by death, resignation, removal or otherwise shall be filled by the Board of Directors. Section 3.10. Committees. The Board of Directors may, by resolution adopted by - ------------- ---------- a majority of the whole Board, designate one or more committees of the Board of Directors, each committee to consist of one or more of the directors of the Corporation, which, to the extent provided in the resolution, may have and exercise any or all the powers of the Board of Directors in the management of the business and affairs of the Corporation including, but not limited to, the power and authority of the Board of Directors: (i) to authorize the seal of the Corporation to be affixed to all papers; (ii) to declare a dividend; (iii) to authorize the issuance of stock; (iv) to adopt a certificate of ownership and merger pursuant to Section 253, of Title 8, Delaware Code; and (v) to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors as provided in Section 151(a) of Title 8, Delaware Code, fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for shares of any other class or classes or any other series of the same of any other class or classes of stock of the Corporation. Such committee or committees shall have such name or names as may be determined from time to time by the Board of Directors. The member or members of any such committee present at any meeting and not disqualified from voting may, whether or not they constitute a quorum, unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. At meetings of such committees, a majority of the members or alternate members at any meeting at which there is a quorum shall be the act of the committee. Section 3.11. Committee Minutes. The committees shall keep regular minutes of - ------------- ----------------- their proceedings and report the same to the Board of Directors. Section 3.12. Consent. Any action required or permitted to be taken at any - ------------- ------- meeting of the Board of Directors or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee. Section 3.13. Compensation. The directors may be paid their expenses of - ------------- ------------ attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board of Directors may be allowed like reimbursement and compensation for attending committee meetings. ARTICLE IV ---------- Notices BY-LAWS OF ICF KAISER SYSTEMS, INC. Page 4 of 9 Section 4.01. Notice. Notices to directors and stockholders mailed to them at - ------------ ------ their addresses appearing on the books of the Corporation shall be deemed to be given at the time when deposited in the United States mail, postage prepaid. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. Section 4.02. Waiver. Whenever any notice is required to be given under the - ------------ ------ provisions of the statute, the Certificate of Incorporation or of these By-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purposes of, any meeting need be specified in such waiver. Attendance at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. ARTICLE V --------- Officers Section 5.01. Election. The officers of the Corporation shall be chosen by the - ------------ -------- Board of Directors at its first meeting after each annual meeting of stockholders and shall be a President, a Secretary and a Treasurer. The Board of Directors may also choose one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers. Two or more offices may be held by the same person. Section 5.02. Other Officers. The Board of Directors may appoint such other - ------------- -------------- officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. Section 5.03. Salaries. The salaries of all officers of the Corporation shall - ------------- -------- be fixed by or under the direction of the Board of Directors. Section 5.04. Vacancies. The officers of the Corporation shall hold office at - ------------- --------- the pleasure of the Board of Directors. Any officer may be removed with or without cause at any time by the Board of Directors. Each officer shall hold his office until his successor is elected and qualified or until his earlier resignation or removal. The Board of Directors may fill any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise. Section 5.05. President. The President shall serve as Chief Executive Officer - ------------- --------- of the Corporation, shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall execute on behalf of the Corporation, and may affix or cause the seal to be affixed to, all instruments requiring such execution except to the extent the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. He shall perform such additional duties and have such additional powers as the Board of Directors may from time to time prescribe. Section 5.06. Vice Presidents. The Vice Presidents shall act under the - ------------- --------------- direction of the President and in the absence or disability of the President shall perform the duties and exercise the powers of the President. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. The Board of Directors may designate one or more Executive Vice Presidents or may otherwise specify the order of seniority of the Vice Presidents. The duties and powers of the President shall descend to the Vice Presidents in such specified order of seniority. Section 5.07. Secretary. The Secretary shall act under the direction of the - ------------- --------- President. Subject to the direction of the President, he shall attend all meetings of the Board of Directors and all meetings of the stockholders and record the proceedings in a book to be kept for that purpose. He shall perform like duties for committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the President or the Board of Directors. He shall keep in safe custody the seal of the Corporation and, when authorized by the President or the Board of Directors, cause it to be affixed to any instrument requiring it. Section 5.08. Assistant Secretaries. The Assistant Secretaries shall act under - ------------- --------------------- the direction of the President. In the order of their seniority, unless otherwise determined by the President or the Board of Directors, they shall, in the absence or BY-LAWS OF ICF KAISER SYSTEMS, INC. Page 5 of 9 disability of the Secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. Section 5.09. Treasurer. The Treasurer shall act under the direction of the - ------------- --------- President. Subject to the direction of the President he shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the President or the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. He may affix or cause to be affixed the seal of the Corporation to documents so requiring. Section 5.10. Assistant Treasurers. The Assistant Treasurers in the order of - ------------- -------------------- their seniority, unless otherwise determined by the President or the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. ARTICLE VI ---------- Certificates of Stock Section 6.01. Certificate. Every holder of stock in the Corporation shall be - ------------ ----------- entitled to have a certificate signed by the Chairman or Vice-Chairman of the Board of Directors, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. Every such certificate shall contain a statement of the restrictions provided in Section 4 of this Article. Section 6.02. Facsimile Signature. Any or all the signatures on the - ------------- ------------------- certificate may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued with the same effect as though the person had not ceased to be such officer, transfer agent or registrar. The seal of the Corporation or a facsimile thereof may, but need not, be affixed to certificates of stock. Section 6.03. Lost Certificates. The Board of Directors may direct a new - ------------- ----------------- certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 6.04. Transfer. Upon surrender to the Corporation or the transfer - ------------- -------- agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books, provided, however, the Corporation shall have no obligation to issue new certificates, cancel old certificates or record transactions unless and until it is satisfied that (i) all provisions of the Certificate of Incorporation, these By-laws and any legends on the certificate regarding transfer of shares and restrictions on such transfers have been complied with, and (ii) all other applicable restrictions, including restrictions imposed by law, including federal and state securities law, and by any stockholders agreement to which the Corporation is a party, have been complied with. Section 6.05. Record Date. The Board of Directors may fix in advance a date, - ------------- ----------- not more than sixty days nor less than ten days preceding the date of any meeting of stockholders, or not more than sixty days before the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining a consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent, and in such case such stockholders and only BY-LAWS OF ICF KAISER SYSTEMS, INC. Page 6 of 9 such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. Section 6.06. Recognition of Ownership. The Corporation shall be entitled to - ------------- ------------------------ recognize the person registered on its books as the owner of shares to be the exclusive owner for all purposes including voting and dividends, and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE VII ----------- Miscellaneous Section 7.01. Reserves. There may be set aside out of any funds of the - ------------ -------- Corporation available for dividends such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper, as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for the purchase of additional property, or for such other purpose as the directors shall think conducive to the interest of the Corporation, and the Board of Directors may modify or abolish any such reserve. Section 7.02. Checks, Demands and Notes. All checks or demands for money and - ------------- ------------------------- notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. Section 7.03. Fiscal Year. The fiscal year of the Corporation shall be as - ------------- ----------- fixed by the Board of Directors. Section 7.04. Seal. The corporate seal shall have inscribed thereon the name - ------------- ---- of the Corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. ARTICLE VIII ------------ Indemnification Section 8.01. Indemnification of Directors and Officers for Actions, Suits, or - ------------ ---------------------------------------------------------------- Proceedings Other Than By Or In The Right of the Corporation. To the full - ------------------------------------------------------------ extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans) or by reason of any action alleged to have been taken or omitted in such capacity against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in -------------- good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of ---- ---------- itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.02. Indemnification of Directors and Officers for Actions or Suits By - ------------- ----------------------------------------------------------------- Or In The Right of the Corporation. To the full extent permitted by law, the - ---------------------------------- Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including BY-LAWS OF ICF KAISER SYSTEMS, INC. Page 7 of 9 attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Section 8.03. Indemnification of Others for Actions, Suits, or Proceedings - ------------- ------------------------------------------------------------ Other Than By Or In The Right of the Corporation. To the full extent permitted - ------------------------------------------------ by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.04. Indemnification of Others for Actions or Suits By Or In The Right - ------------- ----------------------------------------------------------------- of the Corporation. To the full extent permitted by law, the Corporation, in - ------------------ the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Section 8.05. Indemnification for Costs, Charges and Expenses of Successful - ------------- ------------------------------------------------------------- Party. Notwithstanding the other provisions of these By-laws, to the extent - ----- that a director or officer of the Corporation or other person indemnified under Sections 8.01 through 8.04, herein, has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, he shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection therewith. Section 8.06. Determination of Right to Indemnification. Unless otherwise - ------------- ----------------------------------------- ordered by a court, any indemnification under Sections 8.01 through 8.04, herein, shall be paid by the Corporation unless a determination is made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so BY-LAWS OF ICF KAISER SYSTEMS, INC. Page 8 of 9 directs, by independent legal counsel in a written opinion, or (iii) by the stockholders, that indemnification of an individual entitled to indemnification under Sections 8.01 through 8.04, herein, is not proper in the circumstances because he has not met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein. Section 8.07. Advance Payment of Costs, Charges and Expenses. To the full - ------------- ---------------------------------------------- extent permitted by law, the Corporation shall, upon request, pay costs, charges and expenses (including attorneys' fees) incurred by a person entitled to indemnification pursuant to Sections 8.01 and 8.02, herein, and, if applicable, pursuant to Sections 8.03 and 8.04, herein, in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding; provided, however, that the payment of such costs, charges and expenses incurred by a director or officer in his capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer) in advance of the final disposition of such action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event that it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized in these By-laws; such costs, charges and expenses incurred by other employees, agents and contractors may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. Section 8.08. Procedure for Indemnification. Any indemnification or advance of - ------------- ----------------------------- costs, charges and expenses provided for in Sections 8.01 through 8.07, herein, shall be made promptly, and in any event within sixty (60) days, upon the written request of the person entitled to indemnification; the right to indemnification or advances as granted by these By-laws shall be enforceable by a director or officer or other person indemnified hereunder in any court of competent jurisdiction. If the Corporation denies such request, in whole or in part, or if no disposition thereof is made within sixty (60) days, such person's costs, charges and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation; it shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses pursuant to Section 8.07, herein, where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Sections 8.01 through 8.04, herein, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 8.09. Authorization of Corporation Officers. The proper officers of - ------------- ------------------------------------- the Corporation are, and each of them acting without the other is, authorized to take any action, for and in the name of the Corporation, which he deems necessary or appropriate (as conclusively presumed from the taking of such action) to carry out and effect the foregoing Sections 8.01 through 8.08. Section 8.10. Other Rights; Continuation of Right to Indemnification. The - ------------- ------------------------------------------------------ indemnification and advancement of expenses provided by these By-laws shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any law (present or future, common or statutory), by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office or while employed by or acting as agent for the Corporation, and shall continue as to a person who has ceased to serve in the capacity making him eligible for indemnification, and shall inure to the benefit of the estate, heirs, executors and administrators of such person; all rights to indemnification under these By- laws shall be deemed to be a contract between the Corporation and each director and officer of the Corporation and, as applicable, any other person indemnified hereunder who serves or served in such capacity at any time while these By-laws as well as the relevant provisions of the Delaware General Corporation Law or any other applicable laws are or were in effect; any repeal or modification hereof or of such provisions of such law shall not in any way diminish any rights to indemnification of such director or officer or other person entitled to indemnification or the obligations of the Corporation arising hereunder. Section 8.11. Savings Clause. If Sections 8.01 through 8.10 of these By-laws - ------------- -------------- or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer, and may indemnify any other person entitled to indemnification, as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the BY-LAWS OF ICF KAISER SYSTEMS, INC. Page 9 of 9 Corporation, to the full extent permitted by any applicable portion of these By- laws that shall not have been invalidated and to the full extent permitted by applicable law. To the full extent permitted by law, the Corporation may enter into and perform agreements with persons, including, without limitation, present and former officers, directors and employees of the Corporation and of companies acquired by or merged with the Corporation, obligating the Corporation, among other things, to provide indemnification and advancement of costs, charges and expenses to such persons in addition to any indemnification or advancement which may be available to such person under Sections 8.01 through 8.10 of these By- laws. Section 8.12. Insurance. The Board of Directors may cause the Corporation to - ------------- --------- purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise (including employee benefit plans) against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. Section 8.13. Amendment of By-laws. The Board of Directors may from time to - ------------- -------------------- time adopt further By-laws with respect to indemnification and may amend these and such By-laws to provide at all times the fullest indemnification permitted by the General Corporation Law of the State of Delaware. ARTICLE IX ---------- Amendments Section 9.01. Amendment by Stockholders. These By-laws may be amended by a - ------------ ------------------------- majority vote of all the stock issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, provided notice of intention to amend shall have been contained in the notice of the meeting. Section 9.02. Amendment by Board of Directors. The Board of Directors by a - ------------- ------------------------------- majority vote of the whole Board at any meeting may amend these By-laws, including By-laws adopted by the stockholders, but the stockholders may from time to time specify particular provisions of the By-laws which shall not be amended by the Board of Directors. EX-3.(O) 6 EXHIBIT 3(O) Exhibit 3(o) CERTIFICATE OF INCORPORATION OF GLOBAL TRADE & INVESTMENT, INC. Section 1.01. Name. The name of the Corporation is Global Trade & Investment, - ------------ ---- Inc. Section 2.01. Registered Office and Agent. The registered office of the - ------------ --------------------------- Corporation in the State of Delaware is located at 1013 Centre Road, Wilmington, County of New Castle. Its registered agent at such address is Corporation Service Company. Section 3.01. Purposes. The purposes of the Corporation are: - ------------ -------- (a) to engage in the business of providing consulting and information services for international trade related matters; (b) to purchase, sell, lease, trade, hold, license, grant rights in or with respect to, and manage property (both real and personal, tangible and intangible) assets and rights; (c) to provide services of any kind or nature, to third parties and affiliates; and (d) to engage in any lawful act or activities for which corporations may be organized under the General Corporation law of Delaware. Section 4.01. Authorized Shares. The total number of shares of stock which the - ------------ ----------------- Corporation shall have authority to issue is one thousand (1000) shares of common stock having a par value of $1.00 per share and entitled to vote at any annual or special meeting of the stockholders of the Corporation. Section 5.01. Incorporator. The name and mailing address of the incorporator - ------------ ------------ is: Mark E. Mazo, 1001 Pennsylvania Avenue, N.W., Washington, D.C. 20004. Section 5.01. Duration. The Corporation is to have perpetual existence. - ------------ -------- Section 6.01. Initial Board of Directors. The names and mailing addresses of - ------------ -------------------------- the persons who are to serve as directors of the Corporation until the first annual meeting of stockholders or until their successors are elected and qualify are: Mr. Douglas W. McMinn 1850 K Street, N.W. Washington, D.C. 20006 Mr. Nicholas Burakow 1850 K Street, N.W. Washington, D.C. 20006 James O. Edwards 9300 Lee Highway Fairfax, Virginia 22031 Raymond E. List 9300 Lee Highway Fairfax, Virginia 22031 The powers of the incorporator shall terminate upon the filing of this Certificate of Incorporation. Section 7.01. Limitation of Liability. - ------------- ----------------------- (a) No person shall be liable to the Corporation for any loss or damage suffered by it on account of nay action taken or omitted to be taken by him as a director of officer of the Corporation, if such person (i) in good faith exercised or used the same degree of diligence, care and skill as an ordinarily prudent man would have exercised or used under similar circumstances, or (ii) took, or omitted to take, such action in good faith reliance upon advice of counsel for the Corporation, or upon books of account or reports made to the Corporation by any of its officers or by an independent certified public accountant, or by an appraiser selected with reasonable care by the Board of Directors or by any committee designated by the Board of Directors, or in good faith reliance upon other records of the Corporation. (b) No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that the foregoing shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. Section 8.01. Ratification by Stockholders. Any contract, transaction or act - ------------- ---------------------------- of the Corporation, the Board of Directors, or a committee of the Board of Directors which shall be approved or ratified by a majority of a quorum of the stockholders entitled to vote at any meeting or, without a meeting, by the written consent of the holders of a majority of the stock entitled to vote, shall be as valid and binding as though approved or ratified by every stockholder of the Corporation; but any failure or the stockholders to approve or ratify such contract, transaction or act, when and if submitted, shall not be deemed in any way to invalidate the same or to deprive the Corporation, its directors or officers, of their right to proceed with such contract, transaction or act. Section 9.01. Indemnification of Directors and Officers for Actions, Suits, or - ------------- ---------------------------------------------------------------- Proceedings Other than by or in the Right of the Corporation. To the full - ------------------------------------------------------------ extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in right of the Corporation), by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in -------------- good faith and in a manner he reasonably believed to be in or not opposed to be best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of ---- ---------- itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 9.02. Indemnification of Directors and Officers for Actions or Suits by - ------------- ----------------------------------------------------------------- or in the Right of the Corporation. To the full extent permitted by law, the - ----------------------------------- Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith -------------- and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstance of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Section 9.03. Indemnification of Others for Actions, Suites, or Proceedings - ------------- ------------------------------------------------------------- Other Than By or In the Right of the Corporation. To the full extent permitted - ------------------------------------------------ by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that his or she is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against cost, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him or her in the purchase or sale of securities of the Corporation, if and only if he or she acted in good faith and in a manner -------------- he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order settlement, conviction, or upon a pleas of nolo contendere or its equivalent shall not, of itself, create a ---- ---------- presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 9.04. Indemnification of Others for Actions or Suits By or In the Right - ------------- ----------------------------------------------------------------- of the Corporation. To the full extent permitted by law, the Corporation, in - ------------------ the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against cost, charges, expenses (including attorneys' fees) actually and reasonably incurred by him or her or on his or her behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if any only if he or she acted in good -------------- faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Section 9.05. Indemnification for Costs, Charges and Expenses of Successful - ------------- ------------------------------------------------------------- Party. Notwithstanding the other provisions of this Certificate, to the extent - ----- that a director or officer of the Corporation has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, he shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection therewith. Section 9.06. Determination of Right to Indemnification. Unless other wise - ------------- ----------------------------------------- ordered by a court, any indemnification under Sections 9.01 through 9.04, herein, shall be paid by the Corporation unless a determination is made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the stockholders, that indemnification of an individual entitled to indemnification under Section 9.01 through 9.04, herein, is not proper in the circumstances because he has not met the applicable standard of conduct set forth in Section 9.01 through 9.04, herein. Section 9.07. Advance Payment of Costs, Charges and Expenses. To the full - ------------- ---------------------------------------------- extent permitted by law, the Corporation shall, upon request, pay costs, charges and expenses (including attorneys' fees) incurred by a person entitled to indemnification pursuant to Sections 9.01 and 9.02, therein, and, if applicable, pursuant to Sections 9.03 and 9.04, herein, in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding; provided, however, that the payment of such costs, charges and expenses incurred by a director or officer in his capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer) in advance of the final disposition of such action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event that it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized in this certificate; such costs, charges and expenses incurred by other employees, agents and contractors may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. Section 9.08. Procedure for Indemnification. Any indemnification or advance of - ------------- ----------------------------- costs, charges and expenses provided for in Sections 9.01 through 9.07, herein, shall be made promptly, and in any event within sixty days, upon the written request of the person entitled to indemnification; the right to indemnification or advances as granted by this Certificate shall be enforceable by a director of officer in any court of competent jurisdiction. If the Corporation denies such request, in whole or in part, or if no disposition thereof is made within sixty days, such person's costs, charges and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation; it shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses pursuant to Section 9.07, herein, where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Sections 9.01 through 9.04, herein, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its shareholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 9.01 through 9.04, herein, not the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its shareholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 9.09. Authorization of Corporation Officers. The proper officers of - ------------- ------------------------------------- the Corporation are, and each of them acting without the other is, authorized to take any action, for and in the name of the Corporation, which he deems necessary or appropriate (as conclusively presumed from the taking of such action) to carry out and effect the foregoing Sections 9.01 through 9.08. Section 9.10. Other Rights; Continuation of Right to Indemnification. The - ------------- ------------------------------------------------------ indemnification and advancement of expenses provided by this Certificate shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any law (present or future, common or statutory), by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office or while employed by or acting as agent for the Corporation, and shall continue as to a person who has ceased to serve in the capacity making him eligible for indemnification, and shall inure to the benefit of the estate, heirs, executors and administrators of such person; all rights to indemnification under this Certificate shall be deemed to be a contract between the Corporation and each director and officer of the Corporation who serves or served in such capacity at any time while this Certificate as well as the relevant provisions of the Delaware General Corporation Law or any other applicable laws are or were in effect; any repeal or modification hereof or of such provisions of such law shall not in any way diminish any rights to indemnification of such director or officer entitled to indemnification or the obligations of the Corporation arising hereunder. Section 9.11. Savings Clause. If this Certificate or any portion hereof shall - ------------- -------------- be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer, and may indemnify any other person entitled to indemnification, as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including as action by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Certificate that shall not have been invalidated and to the full extent permitted by applicable law. To the full extent permitted by law, the Corporation may enter into and perform agreements with persons, including, without limitation, present and former officers, directors and employees of the Corporation and of companies acquired by or merged with the Corporation, obligating the Corporation, among other things, to provide indemnification and advancement of costs, charges and expenses to such persons in addition to any indemnification or advancement which may be available to such person under Section 9.01 through 9.10 of this Certificate. Section 9.12. Insurance. The Board of Directors may cause the Corporation to - ------------- --------- purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, including employee benefit plans, against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. Section 9.13. Adoption of By-laws. The Board of Directors may from time to - ------------- ------------------- time adopt By-laws with respect to indemnification and may amend such By-laws to provide at all times the fullest indemnification permitted by the General Corporation Law of the State of Delaware. Section 10.01. Settlement of Debts. Whenever a compromise or arrangement is - -------------- ------------------- proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of section 291 of Title 8 of the Delaware Code, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation. Section 11.01. Elections of Directors. Elections of directors need not be by - -------------- ---------------------- written ballot unless the By-laws of the Corporation shall so provide. Section 12.01. Stockholders Meetings, Records. Stockholders meetings may be - -------------- ------------------------------ held within or without the State of Delaware, as the By-laws may provide. The books of the Corporation may be kept (subject to any provision in the General Corporation Law of the State of Delaware) outside of the State of Delaware at such place or places as may be designated from time to time by the Board of Directors (or duly authorized committee of the Board of Directors) or in the By- laws of the Corporation. Section 13.01. By-laws. The Board of Directors (or a duly authorized committee - -------------- ------- of the Board of Directors) of the Corporation shall have the power to make, alter or repeal its By-laws. Section 14.01. Amendment of Certificate of Incorporation. The Corporation - -------------- ----------------------------------------- reserves the right to amend, alter, change or repeal any provision contained in this certificate, in the manner now or hereafter prescribed by the General Corporation Law of the State of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation. IN WITNESS WHEREOF the undersigned, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, does make this certificate hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereto set my signature this 8th day of December, 1987. Mark E. Mazo District of Columbia: BE IT REMEMBERED that on 8th December, 1987, personally came before me, a Notary Public for the District of Columbia, Mark E. Mazo, the subscriber to the foregoing Certificate of Incorporation, known to me personally to be such, and acknowledged the said Certificate to be his act and deed and that the facts therein stated are truly set forth. GIVEN under my hand and seal of office the day and year aforesaid. Notary Public EX-3.(P) 7 EXHIBIT 3(P) Exhibit 3(p) AMENDED AND RESTATED BY-LAWS of GLOBAL TRADE & INVESTMENT, INC. ARTICLE I --------- Offices Section 1.01. Registered Office in Delaware. The registered office shall be in - ------------ ----------------------------- Wilmington, Delaware. The name of the registered agent of the Corporation at such location is Corporation Service Company. Section 1.02. Principal Office. The Board of Directors is granted full power - ------------ ---------------- and authority to fix and thereafter change the location of the principal office of the Corporation at any location within the United States. Section 1.03. Other Offices. The Corporation may have such other offices - ------------ ------------- either within or without the State of Delaware as the Board of Directors may from time to time determine. ARTICLE II ---------- Meetings of Stockholders Section 2.01. Time and Place of Meeting. Annual meetings of the stockholders - ------------ ------------------------- for the purpose of electing directors, making reports of the affairs of the Corporation and transacting such other business as may properly come before the meeting shall be held at such place, within or without the State of Delaware, on such date and at such time as the Board of Directors shall each year fix, which date shall be within thirteen months subsequent to the later of the date of incorporation or the last annual meeting of stockholders. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be fixed by the Board of Directors and stated in the notice of meeting. If no other place is fixed by the Board of Directors, meetings of stockholders shall be held at the principal executive office of the Corporation. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Corporation. Section 2.02. Notice of Meeting. Written notice of meetings of stockholders, - ------------- ------------------ stating the place, date and hour thereof, and in the case of a special meeting, the purpose or purposes for which the meeting is being called, shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote thereat. Section 2.03. Qualified Voters. The officer who has charge of the stock ledger - ------------ ---------------- of the Corporation shall prepare, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting during ordinary business hours for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present and entitled to vote. Section 2.04. Special Meetings. Special meetings of the stockholders may be - ------------- ---------------- called by the Board of Directors or by the President or by a writing signed by stockholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote at such meeting. Such call shall state the purpose or purposes of the proposed meeting. The Secretary shall give notice of such meeting to the stockholders entitled to vote thereat, in accordance with such call. Section 2.05. Business at Special Meetings. Business transacted at any special - ------------- ---------------------------- meeting of stockholders shall be limited to the purposes stated in the notice. Section 2.06. Quorum. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting (if the adjournment is not for more than thirty days and a new record date for the determination of stockholders entitled to vote is not fixed), until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. AMENDED AND RESTATED BY-LAWS OF GLOBAL TRADE & INVESTMENT, INC. Page 2 of 9 Section 2.07. Vote Required. When a quorum is present at any meeting, the vote - ------------- ------------- of the holders of a majority of the shares of stock having voting power voting, in person or by proxy, on a question shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes, the Certificate of Incorporation or these By-laws a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 2.08. Proxies. Each stockholder shall at every meeting of the - ------------- ------- stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date unless the proxy provides for a longer period. No proxy or power of attorney to vote shall be used to vote at a meeting of the stockholders unless it shall have been filed with the Secretary of the meeting when required by the inspectors of election. All questions regarding the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided by two inspectors of election who shall be appointed by the Board of Directors, or if not so appointed, then by the presiding officer of the meeting. Section 2.09. Presiding Officer. The President of the Corporation shall - ------------- ----------------- preside over all meetings of stockholders. Section 2.10. Consent. Whenever the vote of stockholders at a meeting thereof - ------------- ------- is required or permitted to be taken in connection with any corporate action by any provisions of the statutes, the By-laws or the Certificate of Incorporation, the meeting and vote may be dispensed with if the number of stockholders who would have been entitled to vote upon the action if such meeting were held, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting, shall consent in writing to such corporate action being taken. Prompt notice shall be given by the Secretary to all stockholders of the taking of corporate action without a meeting by less than unanimous written consent. ARTICLE III ----------- Directors Section 3.01. Number and Election. The number of directors which shall - ------------ ------------------- constitute the whole Board shall be no less than one (1) or more than ten (10). By amendment of this By-law, the number may be increased or decreased from time to time by the Board of Directors or stockholders within the limits permitted by law, but no decrease in the number of directors shall change the term of any director in office at the time thereof. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 3.02, and each director shall hold office until his successor is elected and accepts office unless he earlier resigns or is removed. Directors need not be stockholders. A director may resign at any time upon written notice to the Corporation or orally at any meeting of the directors or stockholders. Section 3.02. Removal and Vacancies. A director may be removed with or without - ------------- --------------------- cause by a majority vote of the holders of the outstanding shares entitled to vote. [Subject to any Stockholder's Agreement] Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and accept office, unless sooner displaced. Section 3.03. Management, The business of the Corporation shall be managed by - ------------- ---------- its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-laws directed or required to be exercised or done by the stockholders. Section 3.04. Place of Meetings. The Board of Directors of the Corporation may - ------------- ----------------- hold meetings, both regular and special, either within or without the State of Delaware. Meetings may be held by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting. Section 3.05. Annual Meeting. The first meeting of each newly elected Board of - ------------ -------------- Directors shall be held immediately following the adjournment of the annual meeting of stockholders and at the place thereof. No notice of such meeting shall be necessary to the directors in order legally to constitute the meeting, provided a quorum is present. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors. AMENDED AND RESTATED BY-LAWS OF GLOBAL TRADE & INVESTMENT, INC. Page 3 of 9 Section 3.06. Notice for Regular Meetings. Regular meetings of the Board of - ------------- --------------------------- Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors. Section 3.07. Special Meetings. Special meetings of the Board of Directors may - ------------- ---------------- be called by a majority of the Board of Directors or the President and shall be held on notice by letter mailed or delivered for transmission not later than on the third day immediately preceding the day of such meeting, or by written notice delivered or received not later than the day immediately preceding the day of such meeting. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Section 3.08. Quorum. At meetings of the Board of Directors, a majority of the - ------------- ------ full number of directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 3.09. Chairman of the Board. At its first meeting after each annual - ------------- --------------------- meeting of stockholders, the Board of Directors shall elect from among its members a Chairman. The Board of Directors may also choose a Vice Chairman from among its members. The Chairman shall preside at all meetings of the Board of Directors, and shall perform such other duties as the Board may prescribe. The Chairman may participate and act in any meeting of the Board of Directors as a director. The Vice Chairman, if any, shall act under the direction of the Chairman and in the absence or disability of the Chairman shall perform the duties and exercise the powers of the Chairman. The Chairman and the Vice Chairman, if any, (i) shall hold their respective offices at the pleasure of the Board of Directors, and (ii) may be removed with or without cause at any time by the Board of Directors. Any vacancy occurring in the office of the Chairman or Vice Chairman by death, resignation, removal or otherwise shall be filled by the Board of Directors. Section 3.10. Committees. The Board of Directors may, by resolution adopted by - ------------- ---------- a majority of the whole Board, designate one or more committees of the Board of Directors, each committee to consist of one or more of the directors of the Corporation, which, to the extent provided in the resolution, may have and exercise any or all the powers of the Board of Directors in the management of the business and affairs of the Corporation including, but not limited to, the power and authority of the Board of Directors: (i) to authorize the seal of the Corporation to be affixed to all papers; (ii) to declare a dividend; (iii) to authorize the issuance of stock; (iv) to adopt a certificate of ownership and merger pursuant to Section 253, of Title 8, Delaware Code; and (v) to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors as provided in Section 151(a) of Title 8, Delaware Code, fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for shares of any other class or classes or any other series of the same of any other class or classes of stock of the Corporation. Such committee or committees shall have such name or names as may be determined from time to time by the Board of Directors. The member or members of any such committee present at any meeting and not disqualified from voting may, whether or not they constitute a quorum, unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. At meetings of such committees, a majority of the members or alternate members at any meeting at which there is a quorum shall be the act of the committee. Section 3.11. Committee Minutes. The committees shall keep regular minutes of - ------------- ----------------- their proceedings and report the same to the Board of Directors. Section 3.12. Consent. Any action required or permitted to be taken at any - ------------- ------- meeting of the Board of Directors or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee. Section 3.13. Compensation. The directors may be paid their expenses of - ------------- ------------ attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board of Directors may be allowed like reimbursement and compensation for attending committee meetings. ARTICLE IV ---------- Notices AMENDED AND RESTATED BY-LAWS OF GLOBAL TRADE & INVESTMENT, INC. Page 4 of 9 Section 4.01. Notice. Notices to directors and stockholders mailed to them at - ------------ ------ their addresses appearing on the books of the Corporation shall be deemed to be given at the time when deposited in the United States mail, postage prepaid. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. Section 4.02. Waiver. Whenever any notice is required to be given under the - ------------ ------ provisions of the statute, the Certificate of Incorporation or of these By-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purposes of, any meeting need be specified in such waiver. Attendance at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. ARTICLE V --------- Officers Section 5.01. Election. The officers of the Corporation shall be chosen by the - ------------ -------- Board of Directors at its first meeting after each annual meeting of stockholders and shall be a President, a Secretary and a Treasurer. The Board of Directors may also choose one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers. Two or more offices may be held by the same person. Section 5.02. Other Officers. The Board of Directors may appoint such other - ------------- -------------- officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. Section 5.03. Salaries. The salaries of all officers of the Corporation shall - ------------- -------- be fixed by or under the direction of the Board of Directors. Section 5.04. Vacancies. The officers of the Corporation shall hold office at - ------------- --------- the pleasure of the Board of Directors. Any officer may be removed with or without cause at any time by the Board of Directors. Each officer shall hold his office until his successor is elected and qualified or until his earlier resignation or removal. The Board of Directors may fill any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise. Section 5.05. President. The President shall serve as Chief Executive Officer - ------------- --------- of the Corporation, shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall execute on behalf of the Corporation, and may affix or cause the seal to be affixed to, all instruments requiring such execution except to the extent the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. He shall perform such additional duties and have such additional powers as the Board of Directors may from time to time prescribe. Section 5.06. Vice Presidents. The Vice Presidents shall act under the - ------------- --------------- direction of the President and in the absence or disability of the President shall perform the duties and exercise the powers of the President. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. The Board of Directors may designate one or more Executive Vice Presidents or may otherwise specify the order of seniority of the Vice Presidents. The duties and powers of the President shall descend to the Vice Presidents in such specified order of seniority. Section 5.07. Secretary. The Secretary shall act under the direction of the - ------------- --------- President. Subject to the direction of the President, he shall attend all meetings of the Board of Directors and all meetings of the stockholders and record the proceedings in a book to be kept for that purpose. He shall perform like duties for committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the President or the Board of Directors. He shall keep in safe custody the seal of the Corporation and, when authorized by the President or the Board of Directors, cause it to be affixed to any instrument requiring it. Section 5.08. Assistant Secretaries. The Assistant Secretaries shall act under - ------------- --------------------- the direction of the President. In the order of their seniority, unless otherwise determined by the President or the Board of Directors, they shall, in the absence or AMENDED AND RESTATED BY-LAWS OF GLOBAL TRADE & INVESTMENT, INC. Page 5 of 9 disability of the Secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. Section 5.09. Treasurer. The Treasurer shall act under the direction of the - ------------- --------- President. Subject to the direction of the President he shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the President or the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. He may affix or cause to be affixed the seal of the Corporation to documents so requiring. Section 5.10. Assistant Treasurers. The Assistant Treasurers in the order of - ------------- -------------------- their seniority, unless otherwise determined by the President or the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. ARTICLE VI ---------- Certificates of Stock Section 6.01. Certificate. Every holder of stock in the Corporation shall be - ------------ ----------- entitled to have a certificate signed by the Chairman or Vice-Chairman of the Board of Directors, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. Every such certificate shall contain a statement of the restrictions provided in Section 4 of this Article. Section 6.02. Facsimile Signature. Any or all the signatures on the - ------------- ------------------- certificate may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued with the same effect as though the person had not ceased to be such officer, transfer agent or registrar. The seal of the Corporation or a facsimile thereof may, but need not, be affixed to certificates of stock. Section 6.03. Lost Certificates. The Board of Directors may direct a new - ------------- ----------------- certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 6.04. Transfer. Upon surrender to the Corporation or the transfer - ------------- -------- agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books, provided, however, the Corporation shall have no obligation to issue new certificates, cancel old certificates or record transactions unless and until it is satisfied that (i) all provisions of the Certificate of Incorporation, these By-laws and any legends on the certificate regarding transfer of shares and restrictions on such transfers have been complied with, and (ii) all other applicable restrictions, including restrictions imposed by law, including federal and state securities law, and by any stockholders agreement to which the Corporation is a party, have been complied with. Section 6.05. Record Date. The Board of Directors may fix in advance a date, - ------------- ----------- not more than sixty days nor less than ten days preceding the date of any meeting of stockholders, or not more than sixty days before the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining a consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent, and in such case such stockholders and only AMENDED AND RESTATED BY-LAWS OF GLOBAL TRADE & INVESTMENT, INC. Page 6 of 9 such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. Section 6.06. Recognition of Ownership. The Corporation shall be entitled to - ------------- ------------------------ recognize the person registered on its books as the owner of shares to be the exclusive owner for all purposes including voting and dividends, and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE VII ----------- Miscellaneous Section 7.01. Reserves. There may be set aside out of any funds of the - ------------ -------- Corporation available for dividends such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper, as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for the purchase of additional property, or for such other purpose as the directors shall think conducive to the interest of the Corporation, and the Board of Directors may modify or abolish any such reserve. Section 7.02. Checks, Demands and Notes. All checks or demands for money and - ------------- ------------------------- notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. Section 7.03. Fiscal Year. The fiscal year of the Corporation shall be as - ------------- ----------- fixed by the Board of Directors. Section 7.04. Seal. The corporate seal shall have inscribed thereon the name - ------------- ---- of the Corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. ARTICLE VIII ------------ Indemnification Section 8.01. Indemnification of Directors and Officers for Actions, Suits, or - ------------ ---------------------------------------------------------------- Proceedings Other Than By Or In The Right of the Corporation. To the full - ------------------------------------------------------------ extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans) or by reason of any action alleged to have been taken or omitted in such capacity against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in -------------- good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of ---- ---------- itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.02. Indemnification of Directors and Officers for Actions or Suits By - ------------- ----------------------------------------------------------------- Or In The Right of the Corporation. To the full extent permitted by law, the - ---------------------------------- Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including AMENDED AND RESTATED BY-LAWS OF GLOBAL TRADE & INVESTMENT, INC. Page 7 of 9 attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Section 8.03. Indemnification of Others for Actions, Suits, or Proceedings - ------------- ------------------------------------------------------------ Other Than By Or In The Right of the Corporation. To the full extent permitted - ------------------------------------------------ by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.04. Indemnification of Others for Actions or Suits By Or In The Right - ------------- ----------------------------------------------------------------- of the Corporation. To the full extent permitted by law, the Corporation, in - ------------------ the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Section 8.05. Indemnification for Costs, Charges and Expenses of Successful - ------------- ------------------------------------------------------------- Party. Notwithstanding the other provisions of these By-laws, to the extent - ----- that a director or officer of the Corporation or other person indemnified under Sections 8.01 through 8.04, herein, has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, he shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection therewith. Section 8.06. Determination of Right to Indemnification. Unless otherwise - ------------- ----------------------------------------- ordered by a court, any indemnification under Sections 8.01 through 8.04, herein, shall be paid by the Corporation unless a determination is made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so AMENDED AND RESTATED BY-LAWS OF GLOBAL TRADE & INVESTMENT, INC. Page 8 of 9 directs, by independent legal counsel in a written opinion, or (iii) by the stockholders, that indemnification of an individual entitled to indemnification under Sections 8.01 through 8.04, herein, is not proper in the circumstances because he has not met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein. Section 8.07. Advance Payment of Costs, Charges and Expenses. To the full - ------------- ---------------------------------------------- extent permitted by law, the Corporation shall, upon request, pay costs, charges and expenses (including attorneys' fees) incurred by a person entitled to indemnification pursuant to Sections 8.01 and 8.02, herein, and, if applicable, pursuant to Sections 8.03 and 8.04, herein, in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding; provided, however, that the payment of such costs, charges and expenses incurred by a director or officer in his capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer) in advance of the final disposition of such action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event that it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized in these By-laws; such costs, charges and expenses incurred by other employees, agents and contractors may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. Section 8.08. Procedure for Indemnification. Any indemnification or advance of - ------------- ----------------------------- costs, charges and expenses provided for in Sections 8.01 through 8.07, herein, shall be made promptly, and in any event within sixty (60) days, upon the written request of the person entitled to indemnification; the right to indemnification or advances as granted by these By-laws shall be enforceable by a director or officer or other person indemnified hereunder in any court of competent jurisdiction. If the Corporation denies such request, in whole or in part, or if no disposition thereof is made within sixty (60) days, such person's costs, charges and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation; it shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses pursuant to Section 8.07, herein, where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Sections 8.01 through 8.04, herein, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 8.09. Authorization of Corporation Officers. The proper officers of - ------------- ------------------------------------- the Corporation are, and each of them acting without the other is, authorized to take any action, for and in the name of the Corporation, which he deems necessary or appropriate (as conclusively presumed from the taking of such action) to carry out and effect the foregoing Sections 8.01 through 8.08. Section 8.10. Other Rights; Continuation of Right to Indemnification. The - ------------- ------------------------------------------------------ indemnification and advancement of expenses provided by these By-laws shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any law (present or future, common or statutory), by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office or while employed by or acting as agent for the Corporation, and shall continue as to a person who has ceased to serve in the capacity making him eligible for indemnification, and shall inure to the benefit of the estate, heirs, executors and administrators of such person; all rights to indemnification under these By- laws shall be deemed to be a contract between the Corporation and each director and officer of the Corporation and, as applicable, any other person indemnified hereunder who serves or served in such capacity at any time while these By-laws as well as the relevant provisions of the Delaware General Corporation Law or any other applicable laws are or were in effect; any repeal or modification hereof or of such provisions of such law shall not in any way diminish any rights to indemnification of such director or officer or other person entitled to indemnification or the obligations of the Corporation arising hereunder. Section 8.11. Savings Clause. If Sections 8.01 through 8.10 of these By-laws - ------------- -------------- or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer, and may indemnify any other person entitled to indemnification, as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the AMENDED AND RESTATED BY-LAWS OF GLOBAL TRADE & INVESTMENT, INC. Page 9 of 9 Corporation, to the full extent permitted by any applicable portion of these By- laws that shall not have been invalidated and to the full extent permitted by applicable law. To the full extent permitted by law, the Corporation may enter into and perform agreements with persons, including, without limitation, present and former officers, directors and employees of the Corporation and of companies acquired by or merged with the Corporation, obligating the Corporation, among other things, to provide indemnification and advancement of costs, charges and expenses to such persons in addition to any indemnification or advancement which may be available to such person under Sections 8.01 through 8.10 of these By- laws. Section 8.12. Insurance. The Board of Directors may cause the Corporation to - ------------- --------- purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise (including employee benefit plans) against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. Section 8.13. Amendment of By-laws. The Board of Directors may from time to - ------------- -------------------- time adopt further By-laws with respect to indemnification and may amend these and such By-laws to provide at all times the fullest indemnification permitted by the General Corporation Law of the State of Delaware. ARTICLE IX ---------- Amendments Section 9.01. Amendment by Stockholders. These By-laws may be amended by a - ------------ ------------------------- majority vote of all the stock issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, provided notice of intention to amend shall have been contained in the notice of the meeting. Section 9.02. Amendment by Board of Directors. The Board of Directors by a - ------------- ------------------------------- majority vote of the whole Board at any meeting may amend these By-laws, including By-laws adopted by the stockholders, but the stockholders may from time to time specify particular provisions of the By-laws which shall not be amended by the Board of Directors. EX-3.(Q) 8 EXHIBIT 3(Q) Exhibit 3(q) CERTIFICATE OF INCORPORATION OF ICF KAISER EUROPE, INC. SECTION 1.01. NAME. - ------------- ----- The name of the Corporation is ICF Kaiser Europe, Inc. SECTION 2.01. REGISTERED OFFICE AND AGENT. - ------------- ---------------------------- The registered office of the Corporation in the State of Delaware is located in the County of New Castle, at 1013 Centre Road, Wilmington 19805. Its registered agent at such address is Corporation Service Company. SECTION 3.01. PURPOSES. - ------------- --------- The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. SECTION 4.01. AUTHORIZED SHARES. - ------------- ------------------ The total number of shares of capital stock which the Corporation shall have authority to issue is one thousand (1,000) shares of Common Stock having a par value of one dollar ($1.00) per share. SECTION 5.01. INCORPORATOR. - ------------- ------------- The name and mailing address of the incorporator is Paul Weeks, II, 9300 Lee Highway, Fairfax, Virginia 22031-1207. SECTION 5.02. DURATION. - ------------- --------- The Corporation is to have perpetual existence. SECTION 6.01. LIMITATION OF LIABILITY. - ------------- ------------------------ (a) No person shall be liable to the Corporation for any loss or damage suffered by it on account of any action taken or omitted to be taken by him or her as a director or officer of the Corporation, if such person (i) in good faith exercised or used the same degree of diligence, care and skill as an ordinarily prudent person would have exercised or used under similar circumstances, or (ii) took, or omitted to take, such action in good faith reliance upon advice of counsel for the Corporation, or upon books of account or reports made to the Corporation by any of its officers or by an independent certified public accountant, or by an appraiser selected with reasonable care by the Board of Directors or by any committee designated by the Board of Directors, or in good faith reliance upon other records of the Corporation. (b) No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that the foregoing shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. SECTION 7.01. RATIFICATION BY STOCKHOLDERS. - ------------- ----------------------------- Any contract, transaction or act of the Corporation, the Board of Directors, or a committee of the Board of Directors which shall be approved or ratified by a majority of a quorum of the stockholders entitled to vote at any meeting or, without a meeting, by the written consent of the holders of a majority of the stock entitled to vote shall be as valid and binding as though approved or ratified by every stockholder of the Corporation; but any failure of the stockholders to approve or ratify such contract, transaction or act, when and if submitted, shall not be deemed in any way to invalidate the same or to deprive the Corporation, its directors or officers, of their right to proceed with such contract, transaction or act. SECTION 8.01. INDEMNIFICATION OF DIRECTORS AND OFFICERS FOR ACTIONS, SUITS, - ------------- ------------------------------------------------------------- OR PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF THE --------------------------------------------------- CORPORATION. ------------ Certificate of Incorporation of ICF Kaiser Europe, Inc. Page 2 To the full extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her on his or her behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him or her in the purchase or sale of securities of the Corporation, if and only if he or she acted in good faith and -------------- in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent ---- ---------- shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. SECTION 8.02. INDEMNIFICATION OF DIRECTORS AND OFFICERS FOR ACTIONS OR SUITS - ------------- -------------------------------------------------------------- BY OR IN THE RIGHT OF THE CORPORATION. -------------------------------------- To the full extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or her on his or her behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he or she -------------- acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. SECTION 8.03. INDEMNIFICATION OF OTHERS FOR ACTIONS, SUITS, OR PROCEEDINGS - ------------- ------------------------------------------------------------ OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION. ------------------------------------------------- To the full extent permitted by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him or her in the purchase or sale of securities of the Corporation, if and only if he or she acted in good -------------- faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of ---- ---------- itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. SECTION 8.04. INDEMNIFICATION OF OTHERS FOR ACTIONS OR SUITS BY OR IN THE - ------------- ----------------------------------------------------------- RIGHT OF THE CORPORATION. ------------------------- Certificate of Incorporation of ICF Kaiser Europe, Inc. Page 3 To the full extent permitted by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or her or on his or her behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he or she acted in good faith and ----------- in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. SECTION 8.05. INDEMNIFICATION FOR COSTS, CHARGES AND EXPENSES OF SUCCESSFUL - ------------- ------------------------------------------------------------- PARTY. ------ Notwithstanding the other provisions of this Certificate, to the extent that a director or officer of the Corporation or other person indemnified under Sections 9.01 through 9.04, herein, has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, he or she shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or her or on his or her behalf in connection therewith. SECTION 8.06. DETERMINATION OF RIGHT TO INDEMNIFICATION. - ------------- ------------------------------------------ Unless otherwise ordered by a court, any indemnification under Sections 9.01 through 9.04, herein, shall be paid by the Corporation unless a determination is made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders, that indemnification of an individual entitled to indemnification under Sections 9.01 through 9.04, herein, is not proper in the circumstances because he or she has not met the applicable standard of conduct set forth in Sections 9.01 through 9.04, herein. SECTION 8.07. ADVANCE PAYMENT OF COSTS, CHARGES AND EXPENSES. - ------------- ----------------------------------------------- To the full extent permitted by law, the Corporation shall, upon request, pay costs, charges and expenses (including attorneys' fees) incurred by a person entitled to indemnification pursuant to Sections 9.01 and 9.02, herein, and, if applicable, pursuant to Sections 9.03 and 9.04, herein, in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding; provided, however, that the payment of such costs, -------- ------- charges and expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer) in advance of the final disposition of such action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event that it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized in this certificate; such costs, charges and expenses incurred by other employees, agents and contractors may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. SECTION 8.08. PROCEDURE FOR INDEMNIFICATION. - ------------- ------------------------------ Any indemnification or advance of costs, charges and expenses provided for in Sections 9.01 through 9.07, herein, shall be made promptly, and in any event within sixty days, upon the written request of the person entitled to indemnification; the right to indemnification or advances as granted by this Certificate shall be enforceable by a director or officer or other person indemnified hereunder in any court of competent jurisdiction. If the Corporation denies such request, in whole or in part, or if no disposition thereof is made within sixty days, such person's costs, charges and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation; it shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses pursuant to Section 9.07, herein, where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Sections 9.01 through 9.04, herein. Neither the failure of the Corporation (including its Board Certificate of Incorporation of ICF Kaiser Europe, Inc. Page 4 of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Sections 9.01 through 9.04, herein, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. SECTION 8.09. AUTHORIZATION OF CORPORATION OFFICERS. - ------------- -------------------------------------- The proper officers of the Corporation are, and each of them acting without the other is, authorized to take any action, for and in the name of the Corporation, which the officer deems necessary or appropriate (as conclusively presumed from the taking of such action) to carry out and effect the foregoing Sections 9.01 through 9.08. SECTION 8.10. OTHER RIGHTS; CONTINUATION OF RIGHT TO INDEMNIFICATION. - ------------- ------------------------------------------------------- The indemnification and advancement of expenses provided by this Certificate shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any law (present or future, common or statutory), by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office or while employed by or acting as an agent for the Corporation, and shall continue as to a person who has ceased to serve in the capacity making him or her eligible for indemnification, and shall inure to the benefit of the estate, heirs, executors and administrators of such person; all rights to indemnification under this Certificate shall be deemed to be a contract between the Corporation and each director and officer of the Corporation and, as applicable, any other person indemnified hereunder who serves or served in such capacity at any time while this Certificate as well as the relevant provisions of the Delaware General Corporation Law or any other applicable laws are or were in effect; any repeal or modification hereof or of such provisions of such law shall not in any way diminish any rights to indemnification of such director or officer or other person entitled to indemnification or the obligations of the Corporation arising hereunder. SECTION 8.11. SAVINGS CLAUSE. - ------------- --------------- If this Certificate or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer, and may indemnify any other person entitled to indemnification, as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Certificate that shall not have been invalidated and to the full extent permitted by applicable law. To the full extent permitted by law, the Corporation may enter into and perform agreements with persons, including, without limitation, present and former officers, directors and employees of the Corporation and of companies acquired by or merged with the Corporation, obligating the Corporation, among other things, to provide indemnification and advancement of costs, charges and expenses to such persons in addition to any indemnification or advancement which may be available to such person under Sections 9.01 through 9.10 of this Certificate. SECTION 8.12. INSURANCE. - ------------- ---------- The Board of Directors may cause the Corporation to purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise (including employee benefit plans), against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. SECTION 8.13. ADOPTION OF BY-LAWS. - ------------- -------------------- The Board of Directors may from time to time adopt By-laws with respect to indemnification and may amend such By-laws to provide at all times the fullest indemnification permitted by the General Corporation Law of the State of Delaware. SECTION 9.01. SETTLEMENT OF DEBTS. - ------------- -------------------- Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware Certificate of Incorporation of ICF Kaiser Europe, Inc. Page 5 may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation. SECTION 10.01. ELECTIONS OF DIRECTORS. - -------------- ----------------------- Elections of directors need not be by written ballot unless the By-laws of the Corporation shall so provide. SECTION 11.01. STOCKHOLDERS MEETINGS, RECORDS. - -------------- ------------------------------- Stockholders meetings may be held within or without the State of Delaware, as the By-laws may provide. The books of the Corporation may be kept (subject to any provision in the General Corporation Law of the State of Delaware) outside of the State of Delaware at such place or places as may be designated from time to time by the Board of Directors (or duly authorized committee of the Board of Directors) or in the By-laws of the Corporation. SECTION 12.01. BY-LAWS. - -------------- -------- The Board of Directors (or a duly authorized committee of the Board of Directors) of the Corporation shall have the power to make and, except as may be expressly stated in the By-laws, to alter and repeal its By-laws. SECTION 13.01. AMENDMENT OF CERTIFICATE OF INCORPORATION. - -------------- ------------------------------------------ The Corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate, in the manner now or hereafter prescribed by the General Corporation Law of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation. IN WITNESS WHEREOF the undersigned, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereto set my signature this 18th day of July 1997. /s/ Paul Weeks, II EX-3.(R) 9 EXHIBIT 3(R) Exhibit 3(r) BY-LAWS OF ICF KAISER EUROPE, INC. ARTICLE I --------- Offices Section 1.01. Registered Office in Delaware. The registered office shall be in - ------------ ----------------------------- Wilmington, Delaware. The name of the registered agent of the Corporation at such location is Corporation Service Company. Section 1.02. Principal Office. The Board of Directors is granted full power - ------------ ---------------- and authority to fix and thereafter change the location of the principal office of the Corporation at any location within the United States. Section 1.03. Other Offices. The Corporation may have such other offices - ------------ ------------- either within or without the State of Delaware as the Board of Directors may from time to time determine. ARTICLE II ---------- Meetings of Stockholders Section 2.01. Time and Place of Meeting. Annual meetings of the stockholders - ------------ ------------------------- for the purpose of electing directors, making reports of the affairs of the Corporation and transacting such other business as may properly come before the meeting shall be held at such place, within or without the State of Delaware, on such date and at such time as the Board of Directors shall each year fix, which date shall be within thirteen months subsequent to the later of the date of incorporation or the last annual meeting of stockholders. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be fixed by the Board of Directors and stated in the notice of meeting. If no other place is fixed by the Board of Directors, meetings of stockholders shall be held at the principal executive office of the Corporation. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Corporation. Section 2.02. Notice of Meeting. Written notice of meetings of stockholders, - ------------ ----------------- stating the place, date and hour thereof, and in the case of a special meeting, the purpose or purposes for which the meeting is being called, shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote thereat. Section 2.03. Qualified Voters. The officer who has charge of the stock ledger - ------------ ---------------- of the Corporation shall prepare, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting during ordinary business hours for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present and entitled to vote. Section 2.04. Special Meetings. Special meetings of the stockholders may be - ------------- ---------------- called by the Board of Directors or by the President or by a writing signed by stockholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote at such meeting. Such call shall state the purpose or purposes of the proposed meeting. The Secretary shall give notice of such meeting to the stockholders entitled to vote thereat, in accordance with such call. Section 2.05. Business at Special Meetings. Business transacted at any special - ------------ ---------------------------- meeting of stockholders shall be limited to the purposes stated in the notice. Section 2.06. Quorum. The holders of a majority of the stock issued and - ------------ ------ outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting (if the adjournment is not for more than thirty days and a new record date for the determination of stockholders entitled to vote is not fixed), until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might BY-LAWS OF ICF KAISER EUROPE, INC. Page 2 of 10 have been transacted at the meeting as originally notified. Section 2.07. Vote Required. When a quorum is present at any meeting, the vote - ------------ ------------- of the holders of a majority of the shares of stock having voting power voting, in person or by proxy, on a question shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes, the Certificate of Incorporation or these By-laws a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 2.08. Proxies. Each stockholder shall at every meeting of the - ------------ ------- stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date unless the proxy provides for a longer period. No proxy or power of attorney to vote shall be used to vote at a meeting of the stockholders unless it shall have been filed with the Secretary of the meeting when required by the inspectors of election. All questions regarding the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided by two inspectors of election who shall be appointed by the Board of Directors, or if not so appointed, then by the presiding officer of the meeting. Section 2.09. Presiding Officer. The President of the Corporation shall - ------------ ----------------- preside over all meetings of stockholders. Section 2.10. Consent. Whenever the vote of stockholders at a meeting thereof - ------------ ------- is required or permitted to be taken in connection with any corporate action by any provisions of the statutes, the By-laws or the Certificate of Incorporation, the meeting and vote may be dispensed with if the number of stockholders who would have been entitled to vote upon the action if such meeting were held, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting, shall consent in writing to such corporate action being taken. Prompt notice shall be given by the Secretary to all stockholders of the taking of corporate action without a meeting by less than unanimous written consent. ARTICLE III ----------- Directors Section 3.01. Number and Election. The number of directors which shall - ------------ ------------------- constitute the whole Board shall be no less than one (1) or more than ten (10). By amendment of this By-law, the number may be increased or decreased from time to time by the Board of Directors or stockholders within the limits permitted by law, but no decrease in the number of directors shall change the term of any director in office at the time thereof. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 3.02, and each director shall hold office until his successor is elected and accepts office unless he earlier resigns or is removed. Directors need not be stockholders. A director may resign at any time upon written notice to the Corporation or orally at any meeting of the directors or stockholders. Section 3.02. Removal and Vacancies. A director may be removed with or without - ------------ --------------------- cause by a majority vote of the holders of the outstanding shares entitled to vote. [Subject to any Stockholder's Agreement] Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and accept office, unless sooner displaced. Section 3.03. Management, The business of the Corporation shall be managed by - ------------ ---------- its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-laws directed or required to be exercised or done by the stockholders. Section 3.04. Place of Meetings. The Board of Directors of the Corporation may - ------------ ----------------- hold meetings, both regular and special, either within or without the State of Delaware. Meetings may be held by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting. Section 3.05. Annual Meeting. The first meeting of each newly elected Board of - ------------ -------------- Directors shall be held immediately following the adjournment of the annual meeting of stockholders and at the place thereof. No notice of such meeting shall be necessary to the directors in order legally to constitute the meeting, provided a quorum is present. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors. BY-LAWS OF ICF KAISER EUROPE, INC. Page 3 of 10 Section 3.06. Notice for Regular Meetings. Regular meetings of the Board of - ------------ --------------------------- Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors. Section 3.07. Special Meetings. Special meetings of the Board of Directors may - ------------ ---------------- be called by a majority of the Board of Directors or the President and shall be held on notice by letter mailed or delivered for transmission not later than on the third day immediately preceding the day of such meeting, or by written notice delivered or received not later than the day immediately preceding the day of such meeting. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Section 3.08. Quorum. At meetings of the Board of Directors, a majority of the - ------------ ------ full number of directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 3.09. Chairman of the Board. At its first meeting after each annual - ------------ --------------------- meeting of stockholders, the Board of Directors shall elect from among its members a Chairman. The Board of Directors may also choose a Vice-Chairman from among its members. The Chairman shall preside at all meetings of the Board of Directors, and shall perform such other duties as the Board may prescribe. The Chairman may participate and act in any meeting of the Board of Directors as a director. The Vice-Chairman, if any, shall act under the direction of the Chairman and in the absence or disability of the Chairman shall perform the duties and exercise the powers of the Chairman. The Chairman and the Vice- Chairman, if any, (i) shall hold their respective offices at the pleasure of the Board of Directors, and (ii) may be removed with or without cause at any time by the Board of Directors. Any vacancy occurring in the office of the Chairman or Vice Chairman by death, resignation, removal or otherwise shall be filled by the Board of Directors. Section 3.10. Committees. The Board of Directors may, by resolution adopted by - ------------ ---------- a majority of the whole Board, designate one or more committees of the Board of Directors, each committee to consist of one or more of the directors of the Corporation, which, to the extent provided in the resolution, may have and exercise any or all the powers of the Board of Directors in the management of the business and affairs of the Corporation including, but not limited to, the power and authority of the Board of Directors: (i) to authorize the seal of the Corporation to be affixed to all papers; (ii) to declare a dividend; (iii) to authorize the issuance of stock; (iv) to adopt a certificate of ownership and merger pursuant to Section 253, of Title 8, Delaware Code; and (v) to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors as provided in Section 151(a) of Title 8, Delaware Code, fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for shares of any other class or classes or any other series of the same of any other class or classes of stock of the Corporation. Such committee or committees shall have such name or names as may be determined from time to time by the Board of Directors. The member or members of any such committee present at any meeting and not disqualified from voting may, whether or not they constitute a quorum, unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. At meetings of such committees, a majority of the members or alternate members at any meeting at which there is a quorum shall be the act of the committee. Section 3.11. Committee Minutes. The committees shall keep regular minutes of - ------------ ----------------- their proceedings and report the same to the Board of Directors. Section 3.12. Consent. Any action required or permitted to be taken at any - ------------ ------- meeting of the Board of Directors or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee. Section 3.13. Compensation. The directors may be paid their expenses of - ------------ ------------ attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board of Directors may be allowed like reimbursement and compensation for attending committee meetings. BY-LAWS OF ICF KAISER EUROPE, INC. Page 4 of 10 ARTICLE IV ---------- Notices Section 4.01. Notice. Notices to directors and stockholders mailed to them at - ------------ ------ their addresses appearing on the books of the Corporation shall be deemed to be given at the time when deposited in the United States mail, postage prepaid. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. ----- ----- Section 4.02. Waiver. Whenever any notice is required to be given under the - ------------ ------ provisions of the statute, the Certificate of Incorporation or of these By-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purposes of, any meeting need be specified in such waiver. Attendance at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. ARTICLE V --------- Officers Section 5.01. Election. The officers of the Corporation shall be chosen by the - ------------ -------- Board of Directors at its first meeting after each annual meeting of stockholders and shall be a President, a Secretary and a Treasurer. The Board of Directors may also choose one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers. Two or more offices may be held by the same person. Section 5.02. Other Officers. The Board of Directors may appoint such other - ------------ -------------- officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. Section 5.03. Salaries. The salaries of all officers of the Corporation shall - ------------ -------- be fixed by or under the direction of the Board of Directors. Section 5.04. Vacancies. The officers of the Corporation shall hold office at - ------------ --------- the pleasure of the Board of Directors. Any officer may be removed with or without cause at any time by the Board of Directors. Each officer shall hold his office until his successor is elected and qualified or until his earlier resignation or removal. The Board of Directors may fill any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise. Section 5.05. President. The President shall serve as Chief Executive Officer - ------------ --------- of the Corporation, shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall execute on behalf of the Corporation, and may affix or cause the seal to be affixed to, all instruments requiring such execution except to the extent the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. He shall perform such additional duties and have such additional powers as the Board of Directors may from time to time prescribe. Section 5.06. Vice Presidents. The Vice Presidents shall act under the - ------------ --------------- direction of the President and in the absence or disability of the President shall perform the duties and exercise the powers of the President. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. The Board of Directors may designate one or more Executive Vice Presidents or may otherwise specify the order of seniority of the Vice Presidents. The duties and powers of the President shall descend to the Vice Presidents in such specified order of seniority. Section 5.07. Secretary. The Secretary shall act under the direction of the - ------------ --------- President. Subject to the direction of the President, he shall attend all meetings of the Board of Directors and all meetings of the stockholders and record the proceedings in a book to be kept for that purpose. He shall perform like duties for committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the President or the Board of Directors. He shall keep in safe custody the seal of the Corporation and, when authorized by the President or the Board of Directors, cause it to be affixed to any instrument requiring it. BY-LAWS OF ICF KAISER EUROPE, INC. Page 5 of 10 Section 5.08. Assistant Secretaries. The Assistant Secretaries shall act under - ------------ --------------------- the direction of the President. In the order of their seniority, unless otherwise determined by the President or the Board of Directors, they shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. Section 5.09. Treasurer. The Treasurer shall act under the direction of the - ------------ --------- President. Subject to the direction of the President he shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the President or the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. He may affix or cause to be affixed the seal of the Corporation to documents so requiring. Section 5.10. Assistant Treasurers. The Assistant Treasurers in the order of - ------------ -------------------- their seniority, unless otherwise determined by the President or the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. ARTICLE VI ---------- Certificates of Stock Section 6.01. Certificate. Every holder of stock in the Corporation shall be - ------------ ----------- entitled to have a certificate signed by the Chairman or Vice-Chairman of the Board of Directors, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. Every such certificate shall contain a statement of the restrictions provided in Section 4 of this Article. Section 6.02. Facsimile Signature. Any or all the signatures on the - ------------ ------------------- certificate may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued with the same effect as though the person had not ceased to be such officer, transfer agent or registrar. The seal of the Corporation or a facsimile thereof may, but need not, be affixed to certificates of stock. Section 6.03. Lost Certificates. The Board of Directors may direct a new - ------------ ----------------- certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 6.04. Transfer. Upon surrender to the Corporation or the transfer - ------------ -------- agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books, provided, however, the Corporation shall have no obligation to issue new certificates, cancel old certificates or record transactions unless and until it is satisfied that (i) all provisions of the Certificate of Incorporation, these By-laws and any legends on the certificate regarding transfer of shares and restrictions on such transfers have been complied with, and (ii) all other applicable restrictions, including restrictions imposed by law, including federal and state securities law, and by any stockholders agreement to which the Corporation is a party, have been complied with. Section 6.05. Record Date. The Board of Directors may fix in advance a date, - ------------- ----------- not more than sixty days nor less than ten days preceding the date of any meeting of stockholders, or not more than sixty days before the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining a consent, as a record date for the determination BY-LAWS OF ICF KAISER EUROPE, INC. Page 6 of 10 of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent, and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. Section 6.06. Recognition of Ownership. The Corporation shall be entitled to - ------------ ------------------------ recognize the person registered on its books as the owner of shares to be the exclusive owner for all purposes including voting and dividends, and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE VII ----------- Miscellaneous Section 7.01. Reserves. There may be set aside out of any funds of the - ------------ -------- Corporation available for dividends such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper, as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for the purchase of additional property, or for such other purpose as the directors shall think conducive to the interest of the Corporation, and the Board of Directors may modify or abolish any such reserve. Section 7.02. Checks, Demands and Notes. All checks or demands for money and - ------------ ------------------------- notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. Section 7.03. Fiscal Year. The fiscal year of the Corporation shall be as - ------------ ----------- fixed by the Board of Directors. Section 7.04. Seal. The corporate seal shall have inscribed thereon the name - ------------ ---- of the Corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. ARTICLE VIII ------------ Indemnification Section 8.01. Indemnification of Directors and Officers for Actions, Suits, or - ------------ ---------------------------------------------------------------- Proceedings Other Than By or In the Right of the Corporation. To the full - ------------------------------------------------ ----------- extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans) or by reason of any action alleged to have been taken or omitted in such capacity against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in -------------- good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of ---- ---------- itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.02. Indemnification of Directors and Officers for Actions or Suits By - ------------ --------------------------------------------- ------------------- or In the Right of the Corporation. To the full extent permitted by law, the - ---------------------------------- Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a BY-LAWS OF ICF KAISER EUROPE, INC. Page 7 of 10 judgment in its favor by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith -------------- and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Section 8.03. Indemnification of Others for Actions, Suits, or Proceedings - ------------ ------------------------------------------------ ----------- Other Than By or In the Right of the Corporation. To the full extent permitted - ------------------------------------------------ by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in good faith and in a manner he reasonably -------------- believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo ---- contendere or its equivalent, shall not, of itself, create a presumption that - ---------- the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.04. Indemnification of Others for Actions or Suits By or In the Right - ------------ ------------------------------------------------- --------------- of the Corporation. To the full extent permitted by law, the Corporation, in - ------------------ the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith and in a -------------- manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Section 8.05. Indemnification for Costs, Charges and Expenses of Successful - ------------ -------------------------------------------------- ---------- Party. Notwithstanding the other provisions of these By-laws, to the extent - ----- that a director or officer of the Corporation or other person indemnified under Sections 8.01 through 8.04, herein, has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, he shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection therewith. BY-LAWS OF ICF KAISER EUROPE, INC. Page 8 of 10 Section 8.06. Determination of Right to Indemnification. Unless otherwise - ------------ ----------------------------------------- ordered by a court, any indemnification under Sections 8.01 through 8.04, herein, shall be paid by the Corporation unless a determination is made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders, that indemnification of an individual entitled to indemnification under Sections 8.01 through 8.04, herein, is not proper in the circumstances because he has not met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein. Section 8.07. Advance Payment of Costs, Charges and Expenses. To the full - ------------ ---------------------------------------------- extent permitted by law, the Corporation shall, upon request, pay costs, charges and expenses (including attorneys' fees) incurred by a person entitled to indemnification pursuant to Sections 8.01 and 8.02, herein, and, if applicable, pursuant to Sections 8.03 and 8.04, herein, in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding; provided, however, that the payment of such costs, charges -------- ------- and expenses incurred by a director or officer in his capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer) in advance of the final disposition of such action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event that it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized in these By-laws; such costs, charges and expenses incurred by other employees, agents and contractors may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. Section 8.08. Procedure for Indemnification. Any indemnification or advance of - ------------ ----------------------------- costs, charges and expenses provided for in Sections 8.01 through 8.07, herein, shall be made promptly, and in any event within sixty (60) days, upon the written request of the person entitled to indemnification; the right to indemnification or advances as granted by these By-laws shall be enforceable by a director or officer or other person indemnified hereunder in any court of competent jurisdiction. If the Corporation denies such request, in whole or in part, or if no disposition thereof is made within sixty (60) days, such person's costs, charges and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation; it shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses pursuant to Section 8.07, herein, where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Sections 8.01 through 8.04, herein, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 8.09. Authorization of Corporation Officers. The proper officers of - ------------ ------------------------------------- the Corporation are, and each of them acting without the other is, authorized to take any action, for and in the name of the Corporation, which he deems necessary or appropriate (as conclusively presumed from the taking of such action) to carry out and effect the foregoing Sections 8.01 through 8.08. Section 8.10. Other Rights; Continuation of Right to Indemnification. The - ------------ ------------------------------------------------------ indemnification and advancement of expenses provided by these By-laws shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any law (present or future, common or statutory), by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office or while employed by or acting as agent for the Corporation, and shall continue as to a person who has ceased to serve in the capacity making him eligible for indemnification, and shall inure to the benefit of the estate, heirs, executors and administrators of such person; all rights to indemnification under these By- laws shall be deemed to be a contract between the Corporation and each director and officer of the Corporation and, as applicable, any other person indemnified hereunder who serves or served in such capacity at any time while these By-laws as well as the relevant provisions of the Delaware General Corporation Law or any other applicable laws are or were in effect; any repeal or modification hereof or of such provisions of such law shall not in any way diminish any rights to indemnification of such director or officer or other person entitled to indemnification or the obligations of the Corporation arising hereunder. BY-LAWS OF ICF KAISER EUROPE, INC. Page 9 of 10 Section 8.11. Savings Clause. If Sections 8.01 through 8.10 of these By-laws - ------------ -------------- or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer, and may indemnify any other person entitled to indemnification, as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of these By-laws that shall not have been invalidated and to the full extent permitted by applicable law. To the full extent permitted by law, the Corporation may enter into and perform agreements with persons, including, without limitation, present and former officers, directors and employees of the Corporation and of companies acquired by or merged with the Corporation, obligating the Corporation, among other things, to provide indemnification and advancement of costs, charges and expenses to such persons in addition to any indemnification or advancement which may be available to such person under Sections 8.01 through 8.10 of these By-laws. Section 8.12. Insurance. The Board of Directors may cause the Corporation to - ------------ --------- purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise (including employee benefit plans) against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. Section 8.13. Amendment of By-laws. The Board of Directors may from time to - ------------ -------------------- time adopt further By-laws with respect to indemnification and may amend these and such By-laws to provide at all times the fullest indemnification permitted by the General Corporation Law of the State of Delaware. ARTICLE IX ---------- Amendments Section 9.01. Amendment by Stockholders. These By-laws may be amended by a - ------------ ------------------------- majority vote of all the stock issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, provided notice of intention to amend shall have been contained in the notice of the meeting. Section 9.02. Amendment by Board of Directors. The Board of Directors by a - ------------ ------------------------------- majority vote of the whole Board at any meeting may amend these By-laws, including By-laws adopted by the stockholders, but the stockholders may from time to time specify particular provisions of the By-laws which shall not be amended by the Board of Directors. EX-3.(S) 10 EXHIBIT 3(S) Exhibit 3(s) CERTIFICATE OF INCORPORATION OF ICF KAISER / GEORGIA WILSON, INC. SECTION 1.01. NAME. - ------------- ----- The name of the Corporation is ICF Kaiser / Georgia Wilson, Inc. SECTION 2.01. REGISTERED OFFICE AND AGENT. - ------------- ---------------------------- The registered office of the Corporation in the State of Delaware is located in the County of New Castle, at 1013 Centre Road, Wilmington 19805. Its registered agent at such address is Corporation Service Company. SECTION 3.01. PURPOSES. - ------------- --------- The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. SECTION 4.01. AUTHORIZED SHARES. - ------------- ------------------ The total number of shares of capital stock which the Corporation shall have authority to issue is one thousand (1,000) shares of Common Stock having a par value of one dollar ($1.00) per share. SECTION 5.01. INCORPORATOR. - ------------- ------------- The name and mailing address of the incorporator is John T. Cassella, 9300 Lee Highway, Fairfax, Virginia 22031-1207. SECTION 5.02. DURATION. - ------------- --------- The Corporation is to have perpetual existence. SECTION 6.01. LIMITATION OF LIABILITY. - ------------- ------------------------ (a) No person shall be liable to the Corporation for any loss or damage suffered by it on account of any action taken or omitted to be taken by him or her as a director or officer of the Corporation, if such person (i) in good faith exercised or used the same degree of diligence, care and skill as an ordinarily prudent person would have exercised or used under similar circumstances, or (ii) took, or omitted to take, such action in good faith reliance upon advice of counsel for the Corporation, or upon books of account or reports made to the Corporation by any of its officers or by an independent certified public accountant, or by an appraiser selected with reasonable care by the Board of Directors or by any committee designated by the Board of Directors, or in good faith reliance upon other records of the Corporation. (b) No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that the foregoing shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. SECTION 7.01. RATIFICATION BY STOCKHOLDERS. - ------------- ----------------------------- Any contract, transaction or act of the Corporation, the Board of Directors, or a committee of the Board of Directors which shall be approved or ratified by a majority of a quorum of the stockholders entitled to vote at any meeting or, without a meeting, by the written consent of the holders of a majority of the stock entitled to vote shall be as valid and binding as though approved or ratified by every stockholder of the Corporation; but any failure of the stockholders to approve or ratify such contract, transaction or act, when and if submitted, shall not be deemed in any way to invalidate the same or to deprive the Corporation, its directors or officers, of their right to proceed with such contract, transaction or act. SECTION 8.01. INDEMNIFICATION OF DIRECTORS AND OFFICERS FOR ACTIONS, SUITS, - ------------- ------------------------------------------------------------- OR PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION. ---------------------------------------------------------------- To the full extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason Certificate of Incorporation of ICF Kaiser / Georgia Wilson, Inc. Page 2 of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her on his or her behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him or her in the purchase or sale of securities of the Corporation, if and only if he or she -------------- acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or ---- ---------- its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. SECTION 8.02. INDEMNIFICATION OF DIRECTORS AND OFFICERS FOR ACTIONS OR SUITS - ------------- -------------------------------------------------------------- BY OR IN THE RIGHT OF THE CORPORATION. -------------------------------------- To the full extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or her on his or her behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he or she -------------- acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. SECTION 8.03. INDEMNIFICATION OF OTHERS FOR ACTIONS, SUITS, OR PROCEEDINGS - ------------- ------------------------------------------------------------ OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION. ------------------------------------------------- To the full extent permitted by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him or her in the purchase or sale of securities of the Corporation, if and only if he or she acted in good -------------- faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of ---- ---------- itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. SECTION 8.04. INDEMNIFICATION OF OTHERS FOR ACTIONS OR SUITS BY OR IN THE - ------------- ----------------------------------------------------------- RIGHT OF THE CORPORATION. ------------------------- To the full extent permitted by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or her or on his or her behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal Certificate of Incorporation of ICF Kaiser / Georgia Wilson, Inc. Page 3 therefrom, or the defense or settlement of any claim, issue or matter, if and --- only if he or she acted in good faith and in a manner he or she reasonably - ------- believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. SECTION 8.05. INDEMNIFICATION FOR COSTS, CHARGES AND EXPENSES OF SUCCESSFUL - ------------- ------------------------------------------------------------- PARTY. ------ Notwithstanding the other provisions of this Certificate, to the extent that a director or officer of the Corporation or other person indemnified under Sections 9.01 through 9.04, herein, has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, he or she shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or her or on his or her behalf in connection therewith. SECTION 8.06. DETERMINATION OF RIGHT TO INDEMNIFICATION. - ------------- ------------------------------------------ Unless otherwise ordered by a court, any indemnification under Sections 9.01 through 9.04, herein, shall be paid by the Corporation unless a determination is made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders, that indemnification of an individual entitled to indemnification under Sections 9.01 through 9.04, herein, is not proper in the circumstances because he or she has not met the applicable standard of conduct set forth in Sections 9.01 through 9.04, herein. SECTION 8.07. ADVANCE PAYMENT OF COSTS, CHARGES AND EXPENSES. - ------------- ----------------------------------------------- To the full extent permitted by law, the Corporation shall, upon request, pay costs, charges and expenses (including attorneys' fees) incurred by a person entitled to indemnification pursuant to Sections 9.01 and 9.02, herein, and, if applicable, pursuant to Sections 9.03 and 9.04, herein, in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding; provided, however, that the payment of such costs, -------- ------- charges and expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer) in advance of the final disposition of such action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event that it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized in this certificate; such costs, charges and expenses incurred by other employees, agents and contractors may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. SECTION 8.08. PROCEDURE FOR INDEMNIFICATION. - ------------- ------------------------------ Any indemnification or advance of costs, charges and expenses provided for in Sections 9.01 through 9.07, herein, shall be made promptly, and in any event within sixty days, upon the written request of the person entitled to indemnification; the right to indemnification or advances as granted by this Certificate shall be enforceable by a director or officer or other person indemnified hereunder in any court of competent jurisdiction. If the Corporation denies such request, in whole or in part, or if no disposition thereof is made within sixty days, such person's costs, charges and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation; it shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses pursuant to Section 9.07, herein, where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Sections 9.01 through 9.04, herein. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Sections 9.01 through 9.04, herein, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. SECTION 8.09. AUTHORIZATION OF CORPORATION OFFICERS. - ------------- -------------------------------------- Certificate of Incorporation of ICF Kaiser / Georgia Wilson, Inc. Page 4 The proper officers of the Corporation are, and each of them acting without the other is, authorized to take any action, for and in the name of the Corporation, which the officer deems necessary or appropriate (as conclusively presumed from the taking of such action) to carry out and effect the foregoing Sections 9.01 through 9.08. SECTION 8.10. OTHER RIGHTS; CONTINUATION OF RIGHT TO INDEMNIFICATION. - ------------- ------------------------------------------------------- The indemnification and advancement of expenses provided by this Certificate shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any law (present or future, common or statutory), by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office or while employed by or acting as an agent for the Corporation, and shall continue as to a person who has ceased to serve in the capacity making him or her eligible for indemnification, and shall inure to the benefit of the estate, heirs, executors and administrators of such person; all rights to indemnification under this Certificate shall be deemed to be a contract between the Corporation and each director and officer of the Corporation and, as applicable, any other person indemnified hereunder who serves or served in such capacity at any time while this Certificate as well as the relevant provisions of the Delaware General Corporation Law or any other applicable laws are or were in effect; any repeal or modification hereof or of such provisions of such law shall not in any way diminish any rights to indemnification of such director or officer or other person entitled to indemnification or the obligations of the Corporation arising hereunder. SECTION 8.11. SAVINGS CLAUSE. - ------------- --------------- If this Certificate or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer, and may indemnify any other person entitled to indemnification, as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Certificate that shall not have been invalidated and to the full extent permitted by applicable law. To the full extent permitted by law, the Corporation may enter into and perform agreements with persons, including, without limitation, present and former officers, directors and employees of the Corporation and of companies acquired by or merged with the Corporation, obligating the Corporation, among other things, to provide indemnification and advancement of costs, charges and expenses to such persons in addition to any indemnification or advancement which may be available to such person under Sections 9.01 through 9.10 of this Certificate. SECTION 8.12. INSURANCE. - ------------- ---------- The Board of Directors may cause the Corporation to purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise (including employee benefit plans), against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. SECTION 8.13. ADOPTION OF BY-LAWS. - ------------- -------------------- The Board of Directors may from time to time adopt By-laws with respect to indemnification and may amend such By-laws to provide at all times the fullest indemnification permitted by the General Corporation Law of the State of Delaware. SECTION 9.01. SETTLEMENT OF DEBTS. - ------------- -------------------- Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation. Certificate of Incorporation of ICF Kaiser / Georgia Wilson, Inc. Page 5 SECTION 10.01. ELECTIONS OF DIRECTORS. - -------------- ----------------------- Elections of directors need not be by written ballot unless the By-laws of the Corporation shall so provide. SECTION 11.01. STOCKHOLDERS MEETINGS, RECORDS. - -------------- ------------------------------- Stockholders meetings may be held within or without the State of Delaware, as the By-laws may provide. The books of the Corporation may be kept (subject to any provision in the General Corporation Law of the State of Delaware) outside of the State of Delaware at such place or places as may be designated from time to time by the Board of Directors (or duly authorized committee of the Board of Directors) or in the By-laws of the Corporation. SECTION 12.01. BY-LAWS. - -------------- -------- The Board of Directors (or a duly authorized committee of the Board of Directors) of the Corporation shall have the power to make and, except as may be expressly stated in the By-laws, to alter and repeal its By-laws. SECTION 13.01. AMENDMENT OF CERTIFICATE OF INCORPORATION. - -------------- ------------------------------------------ The Corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate, in the manner now or hereafter prescribed by the General Corporation Law of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation. IN WITNESS WHEREOF the undersigned, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereto set my signature this 3rd day of July 1996. /s/ John T. Cassella EX-3.(T) 11 EXHIBIT 3(T) Exhibit 3(t) BY-LAWS OF ICF KAISER/GEORGIA WILSON, INC. ARTICLE I --------- Offices Section 1.01. Registered Office in Delaware. The registered office shall be in - ------------ ----------------------------- Wilmington, Delaware. The name of the registered agent of the Corporation at such location is Corporation Service Company. Section 1.02. Principal Office. The Board of Directors is granted full power - ------------ ---------------- and authority to fix and thereafter change the location of the principal office of the Corporation at any location within the United States. Section 1.03. Other Offices. The Corporation may have such other offices - ------------ ------------- either within or without the State of Delaware as the Board of Directors may from time to time determine. ARTICLE II ---------- Meetings of Stockholders Section 2.01. Time and Place of Meeting. Annual meetings of the stockholders - ------------ ------------------------- for the purpose of electing directors, making reports of the affairs of the Corporation and transacting such other business as may properly come before the meeting shall be held at such place, within or without the State of Delaware, on such date and at such time as the Board of Directors shall each year fix, which date shall be within thirteen months subsequent to the later of the date of incorporation or the last annual meeting of stockholders. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be fixed by the Board of Directors and stated in the notice of meeting. If no other place is fixed by the Board of Directors, meetings of stockholders shall be held at the principal executive office of the Corporation. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Corporation. Section 2.02. Notice of Meeting. Written notice of meetings of stockholders, - ------------ ----------------- stating the place, date and hour thereof, and in the case of a special meeting, the purpose or purposes for which the meeting is being called, shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote thereat. Section 2.03. Qualified Voters. The officer who has charge of the stock ledger - ------------ ---------------- of the Corporation shall prepare, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting during ordinary business hours for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present and entitled to vote. Section 2.04. Special Meetings. Special meetings of the stockholders may be - ------------ ---------------- called by the Board of Directors or by the President or by a writing signed by stockholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote at such meeting. Such call shall state the purpose or purposes of the proposed meeting. The Secretary shall give notice of such meeting to the stockholders entitled to vote thereat, in accordance with such call. Section 2.05. Business at Special Meetings. Business transacted at any special - ------------ ---------------------------- meeting of stockholders shall be limited to the purposes stated in the notice. Section 2.06. Quorum. The holders of a majority of the stock issued and - ------------ ------ outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting (if the adjournment is not for more than thirty days and a new record date for the determination of stockholders entitled to vote is not fixed), until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. BY-LAWS OF ICF KAISER/GEORGIA WILSON, INC. Page 2 of 9 Section 2.07. Vote Required. When a quorum is present at any meeting, the vote - ------------ ------------- of the holders of a majority of the shares of stock having voting power voting, in person or by proxy, on a question shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes, the Certificate of Incorporation or these By-laws a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 2.08. Proxies. Each stockholder shall at every meeting of the - ------------ ------- stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date unless the proxy provides for a longer period. No proxy or power of attorney to vote shall be used to vote at a meeting of the stockholders unless it shall have been filed with the Secretary of the meeting when required by the inspectors of election. All questions regarding the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided by two inspectors of election who shall be appointed by the Board of Directors, or if not so appointed, then by the presiding officer of the meeting. Section 2.09. Presiding Officer. The President of the Corporation shall - ------------ ----------------- preside over all meetings of stockholders. Section 2.10. Consent. Whenever the vote of stockholders at a meeting thereof - ------------ ------- is required or permitted to be taken in connection with any corporate action by any provisions of the statutes, the By-laws or the Certificate of Incorporation, the meeting and vote may be dispensed with if the number of stockholders who would have been entitled to vote upon the action if such meeting were held, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting, shall consent in writing to such corporate action being taken. Prompt notice shall be given by the Secretary to all stockholders of the taking of corporate action without a meeting by less than unanimous written consent. ARTICLE III ----------- Directors Section 3.01. Number and Election. The number of directors which shall - ------------ ------------------- constitute the whole Board shall be no less than one (1) or more than ten (10). By amendment of this By-law, the number may be increased or decreased from time to time by the Board of Directors or stockholders within the limits permitted by law, but no decrease in the number of directors shall change the term of any director in office at the time thereof. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 3.02, and each director shall hold office until his successor is elected and accepts office unless he earlier resigns or is removed. Directors need not be stockholders. A director may resign at any time upon written notice to the Corporation or orally at any meeting of the directors or stockholders. Section 3.02. Removal and Vacancies. A director may be removed with or without - ------------ --------------------- cause by a majority vote of the holders of the outstanding shares entitled to vote. [Subject to any Stockholder's Agreement] Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and accept office, unless sooner displaced. Section 3.03. Management, The business of the Corporation shall be managed by - ------------ ---------- its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-laws directed or required to be exercised or done by the stockholders. Section 3.04. Place of Meetings. The Board of Directors of the Corporation may - ------------ ----------------- hold meetings, both regular and special, either within or without the State of Delaware. Meetings may be held by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting. Section 3.05. Annual Meeting. The first meeting of each newly elected Board of - ------------ -------------- Directors shall be held immediately following the adjournment of the annual meeting of stockholders and at the place thereof. No notice of such meeting shall be necessary to the directors in order legally to constitute the meeting, provided a quorum is present. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors. BY-LAWS OF ICF KAISER/GEORGIA WILSON, INC. Page 3 of 9 Section 3.06. Notice for Regular Meetings. Regular meetings of the Board of - ------------ --------------------------- Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors. Section 3.07. Special Meetings. Special meetings of the Board of Directors may - ------------ ---------------- be called by a majority of the Board of Directors or the President and shall be held on notice by letter mailed or delivered for transmission not later than on the third day immediately preceding the day of such meeting, or by written notice delivered or received not later than the day immediately preceding the day of such meeting. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Section 3.08. Quorum. At meetings of the Board of Directors, a majority of the - ------------ ------ full number of directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 3.09. Chairman of the Board. At its first meeting after each annual - ------------ --------------------- meeting of stockholders, the Board of Directors shall elect from among its members a Chairman. The Board of Directors may also choose a Vice Chairman from among its members. The Chairman shall preside at all meetings of the Board of Directors, and shall perform such other duties as the Board may prescribe. The Chairman may participate and act in any meeting of the Board of Directors as a director. The Vice Chairman, if any, shall act under the direction of the Chairman and in the absence or disability of the Chairman shall perform the duties and exercise the powers of the Chairman. The Chairman and the Vice Chairman, if any, (i) shall hold their respective offices at the pleasure of the Board of Directors, and (ii) may be removed with or without cause at any time by the Board of Directors. Any vacancy occurring in the office of the Chairman or Vice Chairman by death, resignation, removal or otherwise shall be filled by the Board of Directors. Section 3.10. Committees. The Board of Directors may, by resolution adopted by - ------------ ---------- a majority of the whole Board, designate one or more committees of the Board of Directors, each committee to consist of one or more of the directors of the Corporation, which, to the extent provided in the resolution, may have and exercise any or all the powers of the Board of Directors in the management of the business and affairs of the Corporation including, but not limited to, the power and authority of the Board of Directors: (i) to authorize the seal of the Corporation to be affixed to all papers; (ii) to declare a dividend; (iii) to authorize the issuance of stock; (iv) to adopt a certificate of ownership and merger pursuant to Section 253, of Title 8, Delaware Code; and (v) to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors as provided in Section 151(a) of Title 8, Delaware Code, fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for shares of any other class or classes or any other series of the same of any other class or classes of stock of the Corporation. Such committee or committees shall have such name or names as may be determined from time to time by the Board of Directors. The member or members of any such committee present at any meeting and not disqualified from voting may, whether or not they constitute a quorum, unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. At meetings of such committees, a majority of the members or alternate members at any meeting at which there is a quorum shall be the act of the committee. Section 3.11. Committee Minutes. The committees shall keep regular minutes of - ------------ ----------------- their proceedings and report the same to the Board of Directors. Section 3.12. Consent. Any action required or permitted to be taken at any - ------------ ------- meeting of the Board of Directors or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee. Section 3.13. Compensation. The directors may be paid their expenses of - ------------ ------------ attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board of Directors may be allowed like reimbursement and compensation for attending committee meetings. BY-LAWS OF ICF KAISER/GEORGIA WILSON, INC. Page 4 of 9 ARTICLE IV ---------- Notices Section 4.01. Notice. Notices to directors and stockholders mailed to them at - ------------ ------ their addresses appearing on the books of the Corporation shall be deemed to be given at the time when deposited in the United States mail, postage prepaid. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. ----- ----- Section 4.02. Waiver. Whenever any notice is required to be given under the - ------------ ------ provisions of the statute, the Certificate of Incorporation or of these By-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purposes of, any meeting need be specified in such waiver. Attendance at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. ARTICLE V --------- Officers Section 5.01. Election. The officers of the Corporation shall be chosen by the - ------------ -------- Board of Directors at its first meeting after each annual meeting of stockholders and shall be a President, a Secretary and a Treasurer. The Board of Directors may also choose one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers. Two or more offices may be held by the same person. Section 5.02. Other Officers. The Board of Directors may appoint such other - ------------ -------------- officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. Section 5.03. Salaries. The salaries of all officers of the Corporation shall - ------------ -------- be fixed by or under the direction of the Board of Directors. Section 5.04. Vacancies. The officers of the Corporation shall hold office at - ------------ --------- the pleasure of the Board of Directors. Any officer may be removed with or without cause at any time by the Board of Directors. Each officer shall hold his office until his successor is elected and qualified or until his earlier resignation or removal. The Board of Directors may fill any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise. Section 5.05. President. The President shall serve as Chief Executive Officer - ------------ --------- of the Corporation, shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall execute on behalf of the Corporation, and may affix or cause the seal to be affixed to, all instruments requiring such execution except to the extent the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. He shall perform such additional duties and have such additional powers as the Board of Directors may from time to time prescribe. Section 5.06. Vice Presidents. The Vice Presidents shall act under the - ------------ --------------- direction of the President and in the absence or disability of the President shall perform the duties and exercise the powers of the President. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. The Board of Directors may designate one or more Executive Vice Presidents or may otherwise specify the order of seniority of the Vice Presidents. The duties and powers of the President shall descend to the Vice Presidents in such specified order of seniority. Section 5.07. Secretary. The Secretary shall act under the direction of the - ------------ --------- President. Subject to the direction of the President, he shall attend all meetings of the Board of Directors and all meetings of the stockholders and record the proceedings in a book to be kept for that purpose. He shall perform like duties for committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the President or the Board of Directors. He shall keep in safe custody the seal of the Corporation and, when authorized by the President or the Board of Directors, cause it to be affixed to any instrument requiring it. BY-LAWS OF ICF KAISER/GEORGIA WILSON, INC. Page 5 of 9 Section 5.08. Assistant Secretaries. The Assistant Secretaries shall act under - ------------ --------------------- the direction of the President. In the order of their seniority, unless otherwise determined by the President or the Board of Directors, they shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. Section 5.09. Treasurer. The Treasurer shall act under the direction of the - ------------ --------- President. Subject to the direction of the President he shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the President or the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. He may affix or cause to be affixed the seal of the Corporation to documents so requiring. Section 5.10. Assistant Treasurers. The Assistant Treasurers in the order of - ------------ -------------------- their seniority, unless otherwise determined by the President or the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. ARTICLE VI ---------- Certificates of Stock Section 6.01. Certificate. Every holder of stock in the Corporation shall be - ------------ ----------- entitled to have a certificate signed by the Chairman or Vice-Chairman of the Board of Directors, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. Every such certificate shall contain a statement of the restrictions provided in Section 4 of this Article. Section 6.02. Facsimile Signature. Any or all the signatures on the - ------------ ------------------- certificate may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued with the same effect as though the person had not ceased to be such officer, transfer agent or registrar. The seal of the Corporation or a facsimile thereof may, but need not, be affixed to certificates of stock. Section 6.03. Lost Certificates. The Board of Directors may direct a new - ------------ ----------------- certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 6.04. Transfer. Upon surrender to the Corporation or the transfer - ------------ -------- agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books, provided, however, the Corporation shall have no obligation to issue new certificates, cancel old certificates or record transactions unless and until it is satisfied that (i) all provisions of the Certificate of Incorporation, these By-laws and any legends on the certificate regarding transfer of shares and restrictions on such transfers have been complied with, and (ii) all other applicable restrictions, including restrictions imposed by law, including federal and state securities law, and by any stockholders agreement to which the Corporation is a party, have been complied with. Section 6.05. Record Date. The Board of Directors may fix in advance a date, - ------------ ----------- not more than sixty days nor less than ten days preceding the date of any meeting of stockholders, or not more than sixty days before the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining a consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to BY-LAWS OF ICF KAISER/GEORGIA WILSON, INC. Page 6 of 9 receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent, and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. Section 6.06. Recognition of Ownership. The Corporation shall be entitled to - ------------ ------------------------ recognize the person registered on its books as the owner of shares to be the exclusive owner for all purposes including voting and dividends, and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE VII ----------- Miscellaneous Section 7.01. Reserves. There may be set aside out of any funds of the - ------------ -------- Corporation available for dividends such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper, as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for the purchase of additional property, or for such other purpose as the directors shall think conducive to the interest of the Corporation, and the Board of Directors may modify or abolish any such reserve. Section 7.02. Checks, Demands and Notes. All checks or demands for money and - ------------ ------------------------- notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. Section 7.03. Fiscal Year. The fiscal year of the Corporation shall be as - ------------ ----------- fixed by the Board of Directors. Section 7.04. Seal. The corporate seal shall have inscribed thereon the name - ------------ ---- of the Corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. ARTICLE VIII ------------ Indemnification Section 8.01. Indemnification of Directors and Officers for Actions, Suits, or - ------------ ---------------------------------------------------------------- Proceedings Other Than By Or In The Right of the Corporation. To the full - ------------------------------------------------ ----------- extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans) or by reason of any action alleged to have been taken or omitted in such capacity against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in -------------- good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of ---- ---------- itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.02. Indemnification of Directors and Officers for Actions or Suits By - ------------ --------------------------------------------- ------------------- Or In The Right of the Corporation. To the full extent permitted by law, the - ---------------------------------- Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of BY-LAWS OF ICF KAISER/GEORGIA WILSON, INC. Page 7 of 9 another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith -------------- and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Section 8.03. Indemnification of Others for Actions, Suits, or Proceedings - ------------ ------------------------------------------------ ----------- Other Than By Or In The Right of the Corporation. To the full extent permitted - ------------------------------------------------ by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in good faith and in a manner he reasonably -------------- believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo ---- contendere or its equivalent, shall not, of itself, create a presumption that - ---------- the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.04. Indemnification of Others for Actions or Suits By Or In The Right - ------------ ------------------------------------------------- --------------- of the Corporation. To the full extent permitted by law, the Corporation, in - ------------------ the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith and in a -------------- manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Section 8.05. Indemnification for Costs, Charges and Expenses of Successful - ------------ -------------------------------------------------- ---------- Party. Notwithstanding the other provisions of these By-laws, to the extent - ----- that a director or officer of the Corporation or other person indemnified under Sections 8.01 through 8.04, herein, has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, he shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection therewith. Section 8.06. Determination of Right to Indemnification. Unless otherwise - ------------ ----------------------------------------- ordered by a court, any indemnification under Sections 8.01 through 8.04, herein, shall be paid by the Corporation unless a determination is made (i) by the BY-LAWS OF ICF KAISER/GEORGIA WILSON, INC. Page 8 of 9 Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders, that indemnification of an individual entitled to indemnification under Sections 8.01 through 8.04, herein, is not proper in the circumstances because he has not met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein. Section 8.07. Advance Payment of Costs, Charges and Expenses. To the full - ------------ ---------------------------------------------- extent permitted by law, the Corporation shall, upon request, pay costs, charges and expenses (including attorneys' fees) incurred by a person entitled to indemnification pursuant to Sections 8.01 and 8.02, herein, and, if applicable, pursuant to Sections 8.03 and 8.04, herein, in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding; provided, however, that the payment of such costs, charges -------- ------- and expenses incurred by a director or officer in his capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer) in advance of the final disposition of such action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event that it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized in these By-laws; such costs, charges and expenses incurred by other employees, agents and contractors may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. Section 8.08. Procedure for Indemnification. Any indemnification or advance of - ------------ ----------------------------- costs, charges and expenses provided for in Sections 8.01 through 8.07, herein, shall be made promptly, and in any event within sixty (60) days, upon the written request of the person entitled to indemnification; the right to indemnification or advances as granted by these By-laws shall be enforceable by a director or officer or other person indemnified hereunder in any court of competent jurisdiction. If the Corporation denies such request, in whole or in part, or if no disposition thereof is made within sixty (60) days, such person's costs, charges and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation; it shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses pursuant to Section 8.07, herein, where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Sections 8.01 through 8.04, herein, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 8.09. Authorization of Corporation Officers. The proper officers of - ------------ ------------------------------------- the Corporation are, and each of them acting without the other is, authorized to take any action, for and in the name of the Corporation, which he deems necessary or appropriate (as conclusively presumed from the taking of such action) to carry out and effect the foregoing Sections 8.01 through 8.08. Section 8.10. Other Rights; Continuation of Right to Indemnification. The - ------------ ------------------------------------------------------ indemnification and advancement of expenses provided by these By-laws shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any law (present or future, common or statutory), by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office or while employed by or acting as agent for the Corporation, and shall continue as to a person who has ceased to serve in the capacity making him eligible for indemnification, and shall inure to the benefit of the estate, heirs, executors and administrators of such person; all rights to indemnification under these By- laws shall be deemed to be a contract between the Corporation and each director and officer of the Corporation and, as applicable, any other person indemnified hereunder who serves or served in such capacity at any time while these By-laws as well as the relevant provisions of the Delaware General Corporation Law or any other applicable laws are or were in effect; any repeal or modification hereof or of such provisions of such law shall not in any way diminish any rights to indemnification of such director or officer or other person entitled to indemnification or the obligations of the Corporation arising hereunder. Section 8.11. Savings Clause. If Sections 8.01 through 8.10 of these By-laws - ------------ -------------- or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer, and may indemnify any other person entitled to indemnification, as to costs, charges and expenses BY-LAWS OF ICF KAISER/GEORGIA WILSON, INC. Page 9 of 9 (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of these By- laws that shall not have been invalidated and to the full extent permitted by applicable law. To the full extent permitted by law, the Corporation may enter into and perform agreements with persons, including, without limitation, present and former officers, directors and employees of the Corporation and of companies acquired by or merged with the Corporation, obligating the Corporation, among other things, to provide indemnification and advancement of costs, charges and expenses to such persons in addition to any indemnification or advancement which may be available to such person under Sections 8.01 through 8.10 of these By- laws. Section 8.12. Insurance. The Board of Directors may cause the Corporation to - ------------ --------- purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise (including employee benefit plans) against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. Section 8.13. Amendment of By-laws. The Board of Directors may from time to - ------------ -------------------- time adopt further By-laws with respect to indemnification and may amend these and such By-laws to provide at all times the fullest indemnification permitted by the General Corporation Law of the State of Delaware. ARTICLE IX ---------- Amendments Section 9.01. Amendment by Stockholders. These By-laws may be amended by a - ------------ ------------------------- majority vote of all the stock issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, provided notice of intention to amend shall have been contained in the notice of the meeting. Section 9.02. Amendment by Board of Directors. The Board of Directors by a - ------------ ------------------------------- majority vote of the whole Board at any meeting may amend these By-laws, including By-laws adopted by the stockholders, but the stockholders may from time to time specify particular provisions of the By-laws which shall not be amended by the Board of Directors. EX-3.(U) 12 EXHIBIT 3(U) Exhibit 3(u) CERTIFICATE OF INCORPORATION OF OVERSEAS CONSTRUCTORS & ENGINEERS, INC. 1. The name of the corporation is: OVERSEAS CONSTRUCTORS & ENGINEERS, INC. 2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. 4. The total number of shares of Common Stock which the corporation shall have authority to issue is one hundred thousand (100,000) and the par value of each such shares is One Dollar ($1.00) amounting in the aggregate to One Hundred Thousand Dollars ($100,000.00). 5. The board of directors is authorized to make, alter or repeal the by-laws of the corporation. Election of directors need not be by written ballot. 6. The name and mailing address of the incorporator is: L. M. Custis Corporation Trust Center 1209 Orange Street Wilmington, Delaware 19801 I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 12th day of April, 1988. L. M. Custis CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED OFFICE AND REGISTERED AGENT OF OVERSEAS CONSTRUCTORS & ENGINEERS, INC. The Board of Directors of: OVERSEAS CONSTRUCTORS & ENGINEERS, INC. a corporation of the State of Delaware, on this 26th day of December, A.D. 1990, do hereby resolve and order that the location of the Registered Office of this Corporation within this State be, and the same hereby is: 1014 Centre Road, in the City of Wilmington, in the County of New Castle, Delaware, 19805. The name of the Registered Agent therein and in charge thereof upon whom process against the Corporation may be served, is: CORPORATION SERVICE COMPANY. OVERSEAS CONSTRUCTORS & ENGINEERS, INC. a Corporation of the State of Delaware, does hereby certify that the foregoing is a true copy of a resolution adopted by the Board of Directors at a meeting held as herein stated. IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by its President and Secretary, this 26th day of December, A.D. 1990. CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF OVERSEAS CONSTRUCTORS & ENGINEERS, INC. Overseas Constructors & Engineers, Inc., a corporation organized and existing and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That the Board of Directors of said corporation at a meeting duly convened and held, adopted the following resolution: RESOLVED that the Board hereby declares it advisable and in the best interest of the Company that Article 1 of the Certificate of Incorporation be amended to read as follows: The name of the corporation is "ICF Kaiser Overseas Engineering, Inc." SECOND: That the said amendment has been consented to and authorized by the holders of a majority of the issued and outstanding stock entitled to vote by written consent given in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware. THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Section 242 and 228 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said corporation has caused this Certificate to be signed by, Alvin S. Rapp, its President, and attested by Paul Weeks, II, its Secretary, this 21st day of July A.D. 1995. Alvin S. Rapp, President Paul Weeks, II, Secretary EX-3.(V) 13 EXHIBIT 3(V) Exhibit 3(v) AMENDED AND RESTATED BY-LAWS of ICF KAISER OVERSEAS ENGINEERING, INC. ARTICLE I --------- Offices Section 1.01. Registered Office in Delaware. The registered office shall be in - ------------- ----------------------------- Wilmington, Delaware. The name of the registered agent of the Corporation at such location is Corporation Service Company. Section 1.02. Principal Office. The Board of Directors is granted full power - ------------- ---------------- and authority to fix and thereafter change the location of the principal office of the Corporation at any location within the United States. Section 1.03. Other Offices. The Corporation may have such other offices - ------------- ------------- either within or without the State of Delaware as the Board of Directors may from time to time determine. ARTICLE II ---------- Meetings of Stockholders Section 2.01. Time and Place of Meeting. Annual meetings of the stockholders - ------------- ------------------------- for the purpose of electing directors, making reports of the affairs of the Corporation and transacting such other business as may properly come before the meeting shall be held at such place, within or without the State of Delaware, on such date and at such time as the Board of Directors shall each year fix, which date shall be within thirteen months subsequent to the later of the date of incorporation or the last annual meeting of stockholders. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be fixed by the Board of Directors and stated in the notice of meeting. If no other place is fixed by the Board of Directors, meetings of stockholders shall be held at the principal executive office of the Corporation. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Corporation. Section 2.02. Notice of Meeting. Written notice of meetings of stockholders, - ------------- ------------------ stating the place, date and hour thereof, and in the case of a special meeting, the purpose or purposes for which the meeting is being called, shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote thereat. Section 2.03. Qualified Voters. The officer who has charge of the stock ledger - ------------- ---------------- of the Corporation shall prepare, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting during ordinary business hours for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present and entitled to vote. Section 2.04. Special Meetings. Special meetings of the stockholders may be - ------------- ---------------- called by the Board of Directors or by the President or by a writing signed by stockholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote at such meeting. Such call shall state the purpose or purposes of the proposed meeting. The Secretary shall give notice of such meeting to the stockholders entitled to vote thereat, in accordance with such call. Section 2.05. Business at Special Meetings. Business transacted at any special - ------------- ---------------------------- meeting of stockholders shall be limited to the purposes stated in the notice. Section 2.06. Quorum. The holders of a majority of the stock issued and - ------------- ------ outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting (if the adjournment is not for more than thirty days and a new record date for the determination of stockholders entitled to vote is not fixed), until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. AMENDED AND RESTATED BY-LAWS OF ICF KAISER OVERSEAS ENGINEERING, INC. Page 2 of 9 Section 2.07. Vote Required. When a quorum is present at any meeting, the vote - ------------- ------------- of the holders of a majority of the shares of stock having voting power voting, in person or by proxy, on a question shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes, the Certificate of Incorporation or these By-laws a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 2.08. Proxies. Each stockholder shall at every meeting of the - ------------- ------- stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date unless the proxy provides for a longer period. No proxy or power of attorney to vote shall be used to vote at a meeting of the stockholders unless it shall have been filed with the Secretary of the meeting when required by the inspectors of election. All questions regarding the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided by two inspectors of election who shall be appointed by the Board of Directors, or if not so appointed, then by the presiding officer of the meeting. Section 2.09. Presiding Officer. The President of the Corporation shall - ------------- ----------------- preside over all meetings of stockholders. Section 2.10. Consent. Whenever the vote of stockholders at a meeting thereof - ------------- ------- is required or permitted to be taken in connection with any corporate action by any provisions of the statutes, the By-laws or the Certificate of Incorporation, the meeting and vote may be dispensed with if the number of stockholders who would have been entitled to vote upon the action if such meeting were held, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting, shall consent in writing to such corporate action being taken. Prompt notice shall be given by the Secretary to all stockholders of the taking of corporate action without a meeting by less than unanimous written consent. ARTICLE III ----------- Directors Section 3.01. Number and Election. The number of directors which shall - ------------- ------------------- constitute the whole Board shall be no less than one (1) or more than ten (10). By amendment of this By-law, the number may be increased or decreased from time to time by the Board of Directors or stockholders within the limits permitted by law, but no decrease in the number of directors shall change the term of any director in office at the time thereof. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 3.02, and each director shall hold office until his successor is elected and accepts office unless he earlier resigns or is removed. Directors need not be stockholders. A director may resign at any time upon written notice to the Corporation or orally at any meeting of the directors or stockholders. Section 3.02. Removal and Vacancies. A director may be removed with or without - ------------- --------------------- cause by a majority vote of the holders of the outstanding shares entitled to vote. [Subject to any Stockholder's Agreement] Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and accept office, unless sooner displaced. Section 3.03. Management, The business of the Corporation shall be managed by - ------------- ---------- its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-laws directed or required to be exercised or done by the stockholders. Section 3.04. Place of Meetings. The Board of Directors of the Corporation may - ------------- ----------------- hold meetings, both regular and special, either within or without the State of Delaware. Meetings may be held by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting. Section 3.05. Annual Meeting. The first meeting of each newly elected Board of - ------------- -------------- Directors shall be held immediately following the adjournment of the annual meeting of stockholders and at the place thereof. No notice of such meeting shall be necessary to the directors in order legally to constitute the meeting, provided a quorum is present. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors. AMENDED AND RESTATED BY-LAWS OF ICF KAISER OVERSEAS ENGINEERING, INC. Page 3 of 9 Section 3.06. Notice for Regular Meetings. Regular meetings of the Board of - ------------- --------------------------- Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors. Section 3.07. Special Meetings. Special meetings of the Board of Directors may - ------------- ---------------- be called by a majority of the Board of Directors or the President and shall be held on notice by letter mailed or delivered for transmission not later than on the third day immediately preceding the day of such meeting, or by written notice delivered or received not later than the day immediately preceding the day of such meeting. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Section 3.08. Quorum. At meetings of the Board of Directors, a majority of the - ------------- ------ full number of directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 3.09. Chairman of the Board. At its first meeting after each annual - ------------- --------------------- meeting of stockholders, the Board of Directors shall elect from among its members a Chairman. The Board of Directors may also choose a Vice Chairman from among its members. The Chairman shall preside at all meetings of the Board of Directors, and shall perform such other duties as the Board may prescribe. The Chairman may participate and act in any meeting of the Board of Directors as a director. The Vice Chairman, if any, shall act under the direction of the Chairman and in the absence or disability of the Chairman shall perform the duties and exercise the powers of the Chairman. The Chairman and the Vice Chairman, if any, (i) shall hold their respective offices at the pleasure of the Board of Directors, and (ii) may be removed with or without cause at any time by the Board of Directors. Any vacancy occurring in the office of the Chairman or Vice Chairman by death, resignation, removal or otherwise shall be filled by the Board of Directors. Section 3.10. Committees. The Board of Directors may, by resolution adopted by - ------------- ---------- a majority of the whole Board, designate one or more committees of the Board of Directors, each committee to consist of one or more of the directors of the Corporation, which, to the extent provided in the resolution, may have and exercise any or all the powers of the Board of Directors in the management of the business and affairs of the Corporation including, but not limited to, the power and authority of the Board of Directors: (i) to authorize the seal of the Corporation to be affixed to all papers; (ii) to declare a dividend; (iii) to authorize the issuance of stock; (iv) to adopt a certificate of ownership and merger pursuant to Section 253, of Title 8, Delaware Code; and (v) to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors as provided in Section 151(a) of Title 8, Delaware Code, fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for shares of any other class or classes or any other series of the same of any other class or classes of stock of the Corporation. Such committee or committees shall have such name or names as may be determined from time to time by the Board of Directors. The member or members of any such committee present at any meeting and not disqualified from voting may, whether or not they constitute a quorum, unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. At meetings of such committees, a majority of the members or alternate members at any meeting at which there is a quorum shall be the act of the committee. Section 3.11. Committee Minutes. The committees shall keep regular minutes of - ------------- ----------------- their proceedings and report the same to the Board of Directors. Section 3.12. Consent. Any action required or permitted to be taken at any - ------------- ------- meeting of the Board of Directors or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee. Section 3.13. Compensation. The directors may be paid their expenses of - ------------- ------------ attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board of Directors may be allowed like reimbursement and compensation for attending committee meetings. ARTICLE IV ---------- Notices AMENDED AND RESTATED BY-LAWS OF ICF KAISER OVERSEAS ENGINEERING, INC. Page 4 of 9 Section 4.01. Notice. Notices to directors and stockholders mailed to them at - ------------- ------ their addresses appearing on the books of the Corporation shall be deemed to be given at the time when deposited in the United States mail, postage prepaid. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. Section 4.02. Waiver. Whenever any notice is required to be given under the - ------------- ------ provisions of the statute, the Certificate of Incorporation or of these By-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purposes of, any meeting need be specified in such waiver. Attendance at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. ARTICLE V --------- Officers Section 5.01. Election. The officers of the Corporation shall be chosen by the - ------------- -------- Board of Directors at its first meeting after each annual meeting of stockholders and shall be a President, a Secretary and a Treasurer. The Board of Directors may also choose one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers. Two or more offices may be held by the same person. Section 5.02. Other Officers. The Board of Directors may appoint such other - ------------- -------------- officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. Section 5.03. Salaries. The salaries of all officers of the Corporation shall - ------------- -------- be fixed by or under the direction of the Board of Directors. Section 5.04. Vacancies. The officers of the Corporation shall hold office at - ------------- --------- the pleasure of the Board of Directors. Any officer may be removed with or without cause at any time by the Board of Directors. Each officer shall hold his office until his successor is elected and qualified or until his earlier resignation or removal. The Board of Directors may fill any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise. Section 5.05. President. The President shall serve as Chief Executive Officer - ------------- --------- of the Corporation, shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall execute on behalf of the Corporation, and may affix or cause the seal to be affixed to, all instruments requiring such execution except to the extent the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. He shall perform such additional duties and have such additional powers as the Board of Directors may from time to time prescribe. Section 5.06. Vice Presidents. The Vice Presidents shall act under the - ------------- --------------- direction of the President and in the absence or disability of the President shall perform the duties and exercise the powers of the President. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. The Board of Directors may designate one or more Executive Vice Presidents or may otherwise specify the order of seniority of the Vice Presidents. The duties and powers of the President shall descend to the Vice Presidents in such specified order of seniority. Section 5.07. Secretary. The Secretary shall act under the direction of the - ------------- --------- President. Subject to the direction of the President, he shall attend all meetings of the Board of Directors and all meetings of the stockholders and record the proceedings in a book to be kept for that purpose. He shall perform like duties for committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the President or the Board of Directors. He shall keep in safe custody the seal of the Corporation and, when authorized by the President or the Board of Directors, cause it to be affixed to any instrument requiring it. Section 5.08. Assistant Secretaries. The Assistant Secretaries shall act under - ------------- --------------------- the direction of the President. In the order of their seniority, unless otherwise determined by the President or the Board of Directors, they shall, in the absence or AMENDED AND RESTATED BY-LAWS OF ICF KAISER OVERSEAS ENGINEERING, INC. Page 5 of 9 disability of the Secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. Section 5.09. Treasurer. The Treasurer shall act under the direction of the - ------------- --------- President. Subject to the direction of the President he shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the President or the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. He may affix or cause to be affixed the seal of the Corporation to documents so requiring. Section 5.10. Assistant Treasurers. The Assistant Treasurers in the order of - ------------- -------------------- their seniority, unless otherwise determined by the President or the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. ARTICLE VI ---------- Certificates of Stock Section 6.01. Certificate. Every holder of stock in the Corporation shall be - ------------- ----------- entitled to have a certificate signed by the Chairman or Vice-Chairman of the Board of Directors, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. Every such certificate shall contain a statement of the restrictions provided in Section 4 of this Article. Section 6.02. Facsimile Signature. Any or all the signatures on the - ------------- ------------------- certificate may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued with the same effect as though the person had not ceased to be such officer, transfer agent or registrar. The seal of the Corporation or a facsimile thereof may, but need not, be affixed to certificates of stock. Section 6.03. Lost Certificates. The Board of Directors may direct a new - ------------- ----------------- certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 6.04. Transfer. Upon surrender to the Corporation or the transfer - ------------- -------- agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books, provided, however, the Corporation shall have no obligation to issue new certificates, cancel old certificates or record transactions unless and until it is satisfied that (i) all provisions of the Certificate of Incorporation, these By-laws and any legends on the certificate regarding transfer of shares and restrictions on such transfers have been complied with, and (ii) all other applicable restrictions, including restrictions imposed by law, including federal and state securities law, and by any stockholders agreement to which the Corporation is a party, have been complied with. Section 6.05. Record Date. The Board of Directors may fix in advance a date, - ------------- ----------- not more than sixty days nor less than ten days preceding the date of any meeting of stockholders, or not more than sixty days before the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining a consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent, and in such case such stockholders and only AMENDED AND RESTATED BY-LAWS OF ICF KAISER OVERSEAS ENGINEERING, INC. Page 6 of 9 such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. Section 6.06. Recognition of Ownership. The Corporation shall be entitled to - ------------- ------------------------ recognize the person registered on its books as the owner of shares to be the exclusive owner for all purposes including voting and dividends, and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE VII ----------- Miscellaneous Section 7.01. Reserves. There may be set aside out of any funds of the - ------------- -------- Corporation available for dividends such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper, as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for the purchase of additional property, or for such other purpose as the directors shall think conducive to the interest of the Corporation, and the Board of Directors may modify or abolish any such reserve. Section 7.02. Checks, Demands and Notes. All checks or demands for money and - ------------- ------------------------- notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. Section 7.03. Fiscal Year. The fiscal year of the Corporation shall be as - ------------- ----------- fixed by the Board of Directors. Section 7.04. Seal. The corporate seal shall have inscribed thereon the name - ------------- ---- of the Corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. ARTICLE VIII ------------ Indemnification Section 8.01. Indemnification of Directors and Officers for Actions, Suits, or - ------------- ---------------------------------------------------------------- Proceedings Other Than By Or In The Right of the Corporation. To the full - ------------------------------------------------------------ extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans) or by reason of any action alleged to have been taken or omitted in such capacity against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in -------------- good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of ---- ---------- itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.02. Indemnification of Directors and Officers for Actions or Suits By - ------------- ----------------------------------------------------------------- Or In The Right of the Corporation. To the full extent permitted by law, the - ---------------------------------- Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including AMENDED AND RESTATED BY-LAWS OF ICF KAISER OVERSEAS ENGINEERING, INC. Page 7 of 9 attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Section 8.03. Indemnification of Others for Actions, Suits, or Proceedings - ------------- ------------------------------------------------------------ Other Than By Or In The Right of the Corporation. To the full extent permitted - ------------------------------------------------ by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.04. Indemnification of Others for Actions or Suits By Or In The Right - ------------- ----------------------------------------------------------------- of the Corporation. To the full extent permitted by law, the Corporation, in - ------------------ the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Section 8.05. Indemnification for Costs, Charges and Expenses of Successful - ------------- ------------------------------------------------------------- Party. Notwithstanding the other provisions of these By-laws, to the extent - ----- that a director or officer of the Corporation or other person indemnified under Sections 8.01 through 8.04, herein, has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, he shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection therewith. Section 8.06. Determination of Right to Indemnification. Unless otherwise - ------------- ----------------------------------------- ordered by a court, any indemnification under Sections 8.01 through 8.04, herein, shall be paid by the Corporation unless a determination is made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so AMENDED AND RESTATED BY-LAWS OF ICF KAISER OVERSEAS ENGINEERING, INC. Page 8 of 9 directs, by independent legal counsel in a written opinion, or (iii) by the stockholders, that indemnification of an individual entitled to indemnification under Sections 8.01 through 8.04, herein, is not proper in the circumstances because he has not met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein. Section 8.07. Advance Payment of Costs, Charges and Expenses. To the full - ------------- ---------------------------------------------- extent permitted by law, the Corporation shall, upon request, pay costs, charges and expenses (including attorneys' fees) incurred by a person entitled to indemnification pursuant to Sections 8.01 and 8.02, herein, and, if applicable, pursuant to Sections 8.03 and 8.04, herein, in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding; provided, however, that the payment of such costs, charges and expenses incurred by a director or officer in his capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer) in advance of the final disposition of such action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event that it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized in these By-laws; such costs, charges and expenses incurred by other employees, agents and contractors may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. Section 8.08. Procedure for Indemnification. Any indemnification or advance of - ------------- ----------------------------- costs, charges and expenses provided for in Sections 8.01 through 8.07, herein, shall be made promptly, and in any event within sixty (60) days, upon the written request of the person entitled to indemnification; the right to indemnification or advances as granted by these By-laws shall be enforceable by a director or officer or other person indemnified hereunder in any court of competent jurisdiction. If the Corporation denies such request, in whole or in part, or if no disposition thereof is made within sixty (60) days, such person's costs, charges and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation; it shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses pursuant to Section 8.07, herein, where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Sections 8.01 through 8.04, herein, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 8.09. Authorization of Corporation Officers. The proper officers of - ------------- ------------------------------------- the Corporation are, and each of them acting without the other is, authorized to take any action, for and in the name of the Corporation, which he deems necessary or appropriate (as conclusively presumed from the taking of such action) to carry out and effect the foregoing Sections 8.01 through 8.08. Section 8.10. Other Rights; Continuation of Right to Indemnification. The - ------------- ------------------------------------------------------ indemnification and advancement of expenses provided by these By-laws shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any law (present or future, common or statutory), by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office or while employed by or acting as agent for the Corporation, and shall continue as to a person who has ceased to serve in the capacity making him eligible for indemnification, and shall inure to the benefit of the estate, heirs, executors and administrators of such person; all rights to indemnification under these By- laws shall be deemed to be a contract between the Corporation and each director and officer of the Corporation and, as applicable, any other person indemnified hereunder who serves or served in such capacity at any time while these By-laws as well as the relevant provisions of the Delaware General Corporation Law or any other applicable laws are or were in effect; any repeal or modification hereof or of such provisions of such law shall not in any way diminish any rights to indemnification of such director or officer or other person entitled to indemnification or the obligations of the Corporation arising hereunder. Section 8.11. Savings Clause. If Sections 8.01 through 8.10 of these By-laws - ------------- -------------- or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer, and may indemnify any other person entitled to indemnification, as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the AMENDED AND RESTATED BY-LAWS OF ICF KAISER OVERSEAS ENGINEERING, INC. Page 9 of 9 Corporation, to the full extent permitted by any applicable portion of these By- laws that shall not have been invalidated and to the full extent permitted by applicable law. To the full extent permitted by law, the Corporation may enter into and perform agreements with persons, including, without limitation, present and former officers, directors and employees of the Corporation and of companies acquired by or merged with the Corporation, obligating the Corporation, among other things, to provide indemnification and advancement of costs, charges and expenses to such persons in addition to any indemnification or advancement which may be available to such person under Sections 8.01 through 8.10 of these By- laws. Section 8.12. Insurance. The Board of Directors may cause the Corporation to - ------------- --------- purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise (including employee benefit plans) against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. Section 8.13. Amendment of By-laws. The Board of Directors may from time to - ------------- -------------------- time adopt further By-laws with respect to indemnification and may amend these and such By-laws to provide at all times the fullest indemnification permitted by the General Corporation Law of the State of Delaware. ARTICLE IX ---------- Amendments Section 9.01. Amendment by Stockholders. These By-laws may be amended by a - ------------- ------------------------- majority vote of all the stock issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, provided notice of intention to amend shall have been contained in the notice of the meeting. Section 9.02. Amendment by Board of Directors. The Board of Directors by a - ------------- ------------------------------- majority vote of the whole Board at any meeting may amend these By-laws, including By-laws adopted by the stockholders, but the stockholders may from time to time specify particular provisions of the By-laws which shall not be amended by the Board of Directors. EX-3.(W) 14 EXHIBIT 3(W) EXHIBIT 3(w) ARTICLES OF INCORPORATION OF KAISER ENGINEERS NEVADA COMPANY KNOW ALL MEN BY THESE PRESENTS: That we, the undersigned, have voluntarily associated ourselves together for the purpose of forming a corporation under the laws of the Sate of Nevada, relating to general corporations. We do hereby certify: FIRST: That the name of the corporation is KAISER ENGINEERS NEVADA ------ COMPANY. SECOND: The principal office of this corporation is to be located at 177 ------- West Proctor Street, Carson City, Nevada, but the corporation may maintain an office in such towns, cities, and places outside the State of Nevada as the Board of Directors may from time to time determine or as may be designed by the By-Laws of said corporation. THIRD: The nature of the business, or objects of purposes proposed to be ------ transacted, promoted or carried on are: Operation, management, engineering, construction management, maintenance and technical services for low radiation and other waste sites, and all business related thereto and all lawful activities. FOURTH: The amount of the total authorized capital stock of this ------- corporation is Twenty-Five Thousand Dollars ($25,000.00), divided into twenty- five thousand (25,000.00) shares with the par value of One Dollar ($1.00) per share. FIFTH: Such stock may be issued from time to time without action by the ------ stockholders for such consideration as may be fixed from time to time by the Board of Directors, in shares so issued, the full consideration for which has been paid or delivered, shall be deemed full paid stock, and the holder of such shares shall not be liable for any further payment thereon. All of the stock of this corporation shall be known as common stock, and each share of stock will be entitled to one vote. SIXTH: The members of the governing board of this corporation shall be ------ styled directors and their numbers shall not be less than three, nor more than nine. The names and post office addresses of the first Board of Directors are as follows: NAMES ADDRESS ----- --------- WILLIAM C. STIT 1800 Harrison Street Oakland, CA 94612 RAYMOND E. LIST 1800 Harrison Street Oakland, CA 94612 MICHAEL K. GOLDMAN 1800 Harrison Street Oakland, CA 94612 SEVENTH: The capital stock of this corporation, after the amount of the -------- subscription price or par value has been paid in, shall not be subject to assessment to pay debts of the corporation, and no paid up stock and no stock issued as fully paid, shall ever be assessable or assessed. EIGHTH: The name and post office address of the incorporator is as ------- follows: NAME ADDRESS ---- --------- GARY A. SHEERIN 549 Ruby Lane Carson City, Nevada 89706 NINTH: The period of existence of this corporation shall be perpetual. ------ IN WITNESS WHEREOF, I, the incorporator hereinabove named, have hereunto set my hand this 28th day of November, 1989. GARY A. SHEERIN STATE OF NEVADA ) COUNTY OF ) On this 28th day of November, 1989, before me, the undersigned Notary Public in and for said County and State, personally appeared GARY A. SHEERIN, known to me to be the person described in and who executed the foregoing instrument, and who acknowledged to me that he did so freely and voluntarily and for the uses and purposes therein mentioned. WITNESS my hand and official seal. Notary Public CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION KAISER ENGINEERS NEVADA COMPANY, a corporation organized under the laws of the State of Nevada, by its President and Assistant Secretary does hereby certify: 1. That the board of directors of said corporation at a meeting duly convened and held on the 1st day of July, 1990, passed a resolution declaring that the following change and amendment in the Articles of Incorporation is advisable. RESOLVED that article ONE of said Articles of Incorporation be amended to read as follows: "The name of this corporation is KAISER ENGINEERS SOUTHERN COMPANY 2. That the number of shares of the corporation outstanding and entitled to vote on an amendment to the Articles of Incorporation is twenty-five thousand (25,000); that the said change and amendment has been consented to and authorized by the written consent of stockholders holding at least a majority of each class of stock outstanding an entitled to vote thereon. IN WITNESS WHEREOF, the said KAISER ENGINEERS NEVADA COMPANY has caused this certificate to be signed by its president and its assistant secretary and its corporate seal to be hereto affixed this 4th day of October, 1990. KAISER ENGINEERS NEVADA COMPANY R. E. List, President R. E. Bonitz, Assistant Secretary STATE OF CALIFORNIA ) COUNTY OF ALAMEDA ) On October 4, 1990 personally appeared before me a Notary Public, R. E. List and R. E. Bonitz, who acknowledged that they executed the above instruments. Notary Public CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION Kaiser Engineers Nevada Company ------------------------------- Name of Corporation We the undersigned R.E. List (President) and R. E. Bonitz (Assistant Secretary) --------------------- ---------------------------------- of Kaiser Engineers Nevada Company do hereby certify: -------------------------------- That the Board of Directors of said corporation at a meeting duly convened and held on the 1st day of July, 1990, adopted a resolution to amend the --- ---- -- original articles as follows: Article 1 is hereby amended to read as follows: -- The name of the corporation is: Kaiser Engineers Southern Company The number of shares of the corporation outstanding and entitled to vote on an amendment to the Articles of Incorporation are 25,000; that the said change(s) ------ and amendment has been consented to and approved by a majority vote of the stockholders holding at least a majority of each class of stock outstanding and entitled to vote thereon. E. List, President E. Bonitz, Assistant Secretary State of California -------------------- County of Alameda County --------------------- On October 4, 1990, personally appeared before me, a Notary Public, R. --------------- -- E. List and R. E. Bonitz who acknowledge that they executed the above - ------------------------- instrument. Signature of Notary CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION (After Issuance of Stock) KAISER ENGINEERS SOUTHERN COMPANY name of corporation We the undersigned Vice President and Assistant Secretary of Kaiser Engineers Southern Company do hereby certify: That the Board of Directors of said corporation at a meeting duly convened, held on the 1st day of November, 1994 adopted a resolution to amend the original Articles as follows: Article 1 is hereby amended to read as follows: "The name of the corporation is KAISER ENGINEERS PACIFIC, INC." The number of shares of the corporation outstanding and entitled to vote on an amendment of the Articles of Incorporation is twenty-five thousand (25,000); that the said change and amendment has been consented to and authorized by the written consent of stockholders holding at least a majority of each class of stock outstanding and entitled to vote thereon. IN WITNESS WHEREOF, the said KAISER ENGINEERS SOUTHERN COMPANY has caused this certificate to be signed by its vice president and its assistant secretary and its corporate seal to be hereto affixed this 1st day of November, 1994. KAISER ENGINEERS SOUTHERN COMPANY State of California County of Alameda On this 27th day of January, 1995, personally appeared before me a Notary Public, Michael Wright and Richard E. Bonitz, who acknowledged that they executed the above instrument. Notary Public CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION (After Issuance of Stock) KAISER ENGINEERS PACIFIC, INC. We the undersigned Vice President and Assistant Secretary of Kaiser Engineers Pacific, Inc., a Nevada Corporation (the "Corporation") Do certify: 1. That the Board of Directors of the Corporation, by unanimous Written Consent on January 31, 1997, adopted Resolutions to amend the original Articles as follows: RESOLVED, that Article ONE of the Incorporation be amended to read as follows: "The name of the corporation is ICF KAISER ENGINEERS PACIFIC, INC." 2. The number of shares of the Corporation outstanding and entitled to vote on an amendment of the Articles of Incorporation is twenty-five thousand (25,000); that the said change and amendment has been consented to and authorized by the written consent of the sole stockholder of the corporation on January 31, 1997. IN WITNESS WHEREOF, the said KAISER ENGINEERS PACIFIC, INC. has caused this certificate to be signed by its Vice President and Assistant Secretary and its corporate seal to be hereto affixed this 7th day of February 1997. KAISER ENGINEERS PACIFIC, INC. COMMONWEALTH OF VIRGINIA COUNTY OF FAIRFAX I, Cynthia L. Hathaway, a notary public, do hereby certify that on this 7th day of February 1997, personally appeared before me Paul Weeks, II, and John T. Cassella, who being by me first duly sworn, declared that they are respectively the Vice President and the Assistant Secretary of Kaiser Engineers Pacific, Inc., and that they signed the foregoing Certificate of Amendment as Vice President and Assistant Secretary, respectively, and that the statements therein contained are true. Cynthia Louise Hathaway, Notary Public My Commission Expires November 30, 1999 EX-3.(X) 15 EXHIBIT 3(X) Exhibit 3(x) AMENDED AND RESTATED BY-LAWS of ICF KAISER ENGINEERS PACIFIC, INC. ARTICLE I --------- Offices Section 1.01. Registered Office in Nevada. The registered office shall be in - ------------ --------------------------- Carson City, Nevada. The name of the registered agent of the Corporation at such location is Corporation Service Company (CSC Services of Nevada, Inc.). Section 1.02. Principal Office. The Board of Directors is granted full power - ------------ ---------------- and authority to fix and thereafter change the location of the principal office of the Corporation at any location within the United States. Section 1.03. Other Offices. The Corporation may have such other offices - ------------ ------------- either within or without the State of Nevada as the Board of Directors may from time to time determine. ARTICLE II ---------- Meetings of Stockholders Section 2.01. Time and Place of Meeting. Annual meetings of the stockholders - ------------ ------------------------- for the purpose of electing directors, making reports of the affairs of the Corporation and transacting such other business as may properly come before the meeting shall be held at such place, within or without the State of Nevada, on such date and at such time as the Board of Directors shall each year fix, which date shall be within thirteen months subsequent to the later of the date of incorporation or the last annual meeting of stockholders. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Nevada, as shall be fixed by the Board of Directors and stated in the notice of meeting. If no other place is fixed by the Board of Directors, meetings of stockholders shall be held at the principal executive office of the Corporation. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Corporation. Section 2.02. Notice of Meeting. Written notice of meetings of stockholders, - ------------- ------------------ stating the place, date and hour thereof, and in the case of a special meeting, the purpose or purposes for which the meeting is being called, shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote thereat. Section 2.03. Qualified Voters. The officer who has charge of the stock ledger - ------------ ---------------- of the Corporation shall prepare, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting during ordinary business hours for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present and entitled to vote. Section 2.04. Special Meetings. Special meetings of the stockholders may be - ------------- ---------------- called by the Board of Directors or by the President or by a writing signed by stockholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote at such meeting. Such call shall state the purpose or purposes of the proposed meeting. The Secretary shall give notice of such meeting to the stockholders entitled to vote thereat, in accordance with such call. Section 2.05. Business at Special Meetings. Business transacted at any special - ------------- ---------------------------- meeting of stockholders shall be limited to the purposes stated in the notice. Section 2.06. Quorum. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting (if the adjournment is not for more than thirty days and a new record date for the determination of stockholders entitled to vote is not fixed), until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. AMENDED AND RESTATED BY-LAWS OF ICF KAISER ENGINEERS PACIFIC, INC. Page 2 of 9 Section 2.07. Vote Required. When a quorum is present at any meeting, the vote - ------------- ------------- of the holders of a majority of the shares of stock having voting power voting, in person or by proxy, on a question shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes, the Certificate of Incorporation or these By-laws a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 2.08. Proxies. Each stockholder shall at every meeting of the - ------------- ------- stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date unless the proxy provides for a longer period. No proxy or power of attorney to vote shall be used to vote at a meeting of the stockholders unless it shall have been filed with the Secretary of the meeting when required by the inspectors of election. All questions regarding the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided by two inspectors of election who shall be appointed by the Board of Directors, or if not so appointed, then by the presiding officer of the meeting. Section 2.09. Presiding Officer. The President of the Corporation shall - ------------- ----------------- preside over all meetings of stockholders. Section 2.10. Consent. Whenever the vote of stockholders at a meeting thereof - ------------- ------- is required or permitted to be taken in connection with any corporate action by any provisions of the statutes, the By-laws or the Certificate of Incorporation, the meeting and vote may be dispensed with if the number of stockholders who would have been entitled to vote upon the action if such meeting were held, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting, shall consent in writing to such corporate action being taken. Prompt notice shall be given by the Secretary to all stockholders of the taking of corporate action without a meeting by less than unanimous written consent. ARTICLE III ----------- Directors Section 3.01. Number and Election. The number of directors which shall - ------------ ------------------- constitute the whole Board shall be no less than one (1) or more than ten (10). By amendment of this By-law, the number may be increased or decreased from time to time by the Board of Directors or stockholders within the limits permitted by law, but no decrease in the number of directors shall change the term of any director in office at the time thereof. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 3.02, and each director shall hold office until his successor is elected and accepts office unless he earlier resigns or is removed. Directors need not be stockholders. A director may resign at any time upon written notice to the Corporation or orally at any meeting of the directors or stockholders. Section 3.02. Removal and Vacancies. A director may be removed with or without - ------------- --------------------- cause by a majority vote of the holders of the outstanding shares entitled to vote. [Subject to any Stockholder's Agreement] Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and accept office, unless sooner displaced. Section 3.03. Management, The business of the Corporation shall be managed by - ------------- ---------- its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-laws directed or required to be exercised or done by the stockholders. Section 3.04. Place of Meetings. The Board of Directors of the Corporation may - ------------- ----------------- hold meetings, both regular and special, either within or without the State of Nevada. Meetings may be held by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting. Section 3.05. Annual Meeting. The first meeting of each newly elected Board of - ------------ -------------- Directors shall be held immediately following the adjournment of the annual meeting of stockholders and at the place thereof. No notice of such meeting shall be necessary to the directors in order legally to constitute the meeting, provided a quorum is present. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors. AMENDED AND RESTATED BY-LAWS OF ICF KAISER ENGINEERS PACIFIC, INC. Page 3 of 9 Section 3.06. Notice for Regular Meetings. Regular meetings of the Board of - ------------- --------------------------- Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors. Section 3.07. Special Meetings. Special meetings of the Board of Directors may - ------------- ---------------- be called by a majority of the Board of Directors or the President and shall be held on notice by letter mailed or delivered for transmission not later than on the third day immediately preceding the day of such meeting, or by written notice delivered or received not later than the day immediately preceding the day of such meeting. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Section 3.08. Quorum. At meetings of the Board of Directors, a majority of the - ------------- ------ full number of directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 3.09. Chairman of the Board. At its first meeting after each annual - ------------- --------------------- meeting of stockholders, the Board of Directors shall elect from among its members a Chairman. The Board of Directors may also choose a Vice Chairman from among its members. The Chairman shall preside at all meetings of the Board of Directors, and shall perform such other duties as the Board may prescribe. The Chairman may participate and act in any meeting of the Board of Directors as a director. The Vice Chairman, if any, shall act under the direction of the Chairman and in the absence or disability of the Chairman shall perform the duties and exercise the powers of the Chairman. The Chairman and the Vice Chairman, if any, (i) shall hold their respective offices at the pleasure of the Board of Directors, and (ii) may be removed with or without cause at any time by the Board of Directors. Any vacancy occurring in the office of the Chairman or Vice Chairman by death, resignation, removal or otherwise shall be filled by the Board of Directors. Section 3.10. Committees. The Board of Directors may, by resolution adopted by - ------------- ---------- a majority of the whole Board, designate one or more committees of the Board of Directors, each committee to consist of one or more of the directors of the Corporation, which, to the extent provided in the resolution, may have and exercise any or all the powers of the Board of Directors in the management of the business and affairs of the Corporation including, but not limited to, the power and authority of the Board of Directors: (i) to authorize the seal of the Corporation to be affixed to all papers; (ii) to declare a dividend; (iii) to authorize the issuance of stock; (iv) to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors, fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for shares of any other class or classes or any other series of the same of any other class or classes of stock of the Corporation. Such committee or committees shall have such name or names as may be determined from time to time by the Board of Directors. The member or members of any such committee present at any meeting and not disqualified from voting may, whether or not they constitute a quorum, unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. At meetings of such committees, a majority of the members or alternate members at any meeting at which there is a quorum shall be the act of the committee. Section 3.11. Committee Minutes. The committees shall keep regular minutes of - ------------- ----------------- their proceedings and report the same to the Board of Directors. Section 3.12. Consent. Any action required or permitted to be taken at any - ------------- ------- meeting of the Board of Directors or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee. Section 3.13. Compensation. The directors may be paid their expenses of - ------------- ------------ attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board of Directors may be allowed like reimbursement and compensation for attending committee meetings. ARTICLE IV ---------- Notices AMENDED AND RESTATED BY-LAWS OF ICF KAISER ENGINEERS PACIFIC, INC. Page 4 of 9 Section 4.01. Notice. Notices to directors and stockholders mailed to them at - ------------ ------ their addresses appearing on the books of the Corporation shall be deemed to be given at the time when deposited in the United States mail, postage prepaid. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. Section 4.02. Waiver. Whenever any notice is required to be given under the - ------------ ------ provisions of the statute, the Certificate of Incorporation or of these By-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purposes of, any meeting need be specified in such waiver. Attendance at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. ARTICLE V --------- Officers Section 5.01. Election. The officers of the Corporation shall be chosen by the - ------------ -------- Board of Directors at its first meeting after each annual meeting of stockholders and shall be a President, a Secretary and a Treasurer. The Board of Directors may also choose one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers. Two or more offices may be held by the same person. Section 5.02. Other Officers. The Board of Directors may appoint such other - ------------- -------------- officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. Section 5.03. Salaries. The salaries of all officers of the Corporation shall - ------------- -------- be fixed by or under the direction of the Board of Directors. Section 5.04. Vacancies. The officers of the Corporation shall hold office at - ------------- --------- the pleasure of the Board of Directors. Any officer may be removed with or without cause at any time by the Board of Directors. Each officer shall hold his office until his successor is elected and qualified or until his earlier resignation or removal. The Board of Directors may fill any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise. Section 5.05. President. The President shall serve as Chief Executive Officer - ------------- --------- of the Corporation, shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall execute on behalf of the Corporation, and may affix or cause the seal to be affixed to, all instruments requiring such execution except to the extent the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. He shall perform such additional duties and have such additional powers as the Board of Directors may from time to time prescribe. Section 5.06. Vice Presidents. The Vice Presidents shall act under the - ------------- --------------- direction of the President and in the absence or disability of the President shall perform the duties and exercise the powers of the President. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. The Board of Directors may designate one or more Executive Vice Presidents or may otherwise specify the order of seniority of the Vice Presidents. The duties and powers of the President shall descend to the Vice Presidents in such specified order of seniority. Section 5.07. Secretary. The Secretary shall act under the direction of the - ------------- --------- President. Subject to the direction of the President, he shall attend all meetings of the Board of Directors and all meetings of the stockholders and record the proceedings in a book to be kept for that purpose. He shall perform like duties for committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the President or the Board of Directors. He shall keep in safe custody the seal of the Corporation and, when authorized by the President or the Board of Directors, cause it to be affixed to any instrument requiring it. Section 5.08. Assistant Secretaries. The Assistant Secretaries shall act under - ------------- --------------------- the direction of the President. In the order of their seniority, unless otherwise determined by the President or the Board of Directors, they shall, in the absence or AMENDED AND RESTATED BY-LAWS OF ICF KAISER ENGINEERS PACIFIC, INC. Page 5 of 9 disability of the Secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. Section 5.09. Treasurer. The Treasurer shall act under the direction of the - ------------- --------- President. Subject to the direction of the President he shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the President or the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. He may affix or cause to be affixed the seal of the Corporation to documents so requiring. Section 5.10. Assistant Treasurers. The Assistant Treasurers in the order of - ------------- -------------------- their seniority, unless otherwise determined by the President or the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. ARTICLE VI ---------- Certificates of Stock Section 6.01. Certificate. Every holder of stock in the Corporation shall be - ------------ ----------- entitled to have a certificate signed by the Chairman or Vice-Chairman of the Board of Directors, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. Every such certificate shall contain a statement of the restrictions provided in Section 4 of this Article. Section 6.02. Facsimile Signature. Any or all the signatures on the - ------------- ------------------- certificate may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued with the same effect as though the person had not ceased to be such officer, transfer agent or registrar. The seal of the Corporation or a facsimile thereof may, but need not, be affixed to certificates of stock. Section 6.03. Lost Certificates. The Board of Directors may direct a new - ------------- ----------------- certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 6.04. Transfer. Upon surrender to the Corporation or the transfer - ------------- -------- agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books, provided, however, the Corporation shall have no obligation to issue new certificates, cancel old certificates or record transactions unless and until it is satisfied that (i) all provisions of the Certificate of Incorporation, these By-laws and any legends on the certificate regarding transfer of shares and restrictions on such transfers have been complied with, and (ii) all other applicable restrictions, including restrictions imposed by law, including federal and state securities law, and by any stockholders agreement to which the Corporation is a party, have been complied with. Section 6.05. Record Date. The Board of Directors may fix in advance a date, - ------------- ----------- not more than sixty days nor less than ten days preceding the date of any meeting of stockholders, or not more than sixty days before the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining a consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent, and in such case such stockholders and only AMENDED AND RESTATED BY-LAWS OF ICF KAISER ENGINEERS PACIFIC, INC. Page 6 of 9 such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. Section 6.06. Recognition of Ownership. The Corporation shall be entitled to - ------------- ------------------------ recognize the person registered on its books as the owner of shares to be the exclusive owner for all purposes including voting and dividends, and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Nevada. ARTICLE VII ----------- Miscellaneous Section 7.01. Reserves. There may be set aside out of any funds of the - ------------ -------- Corporation available for dividends such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper, as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for the purchase of additional property, or for such other purpose as the directors shall think conducive to the interest of the Corporation, and the Board of Directors may modify or abolish any such reserve. Section 7.02. Checks, Demands and Notes. All checks or demands for money and - ------------- ------------------------- notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. Section 7.03. Fiscal Year. The fiscal year of the Corporation shall be as - ------------- ----------- fixed by the Board of Directors. Section 7.04. Seal. The corporate seal shall have inscribed thereon the name - ------------- ---- of the Corporation and the words "Corporate Seal". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. ARTICLE VIII ------------ Indemnification Section 8.01. Indemnification of Directors and Officers for Actions, Suits, or - ------------ ---------------------------------------------------------------- Proceedings Other Than By Or In The Right of the Corporation. To the full - ------------------------------------------------------------ extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans) or by reason of any action alleged to have been taken or omitted in such capacity against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in -------------- good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of ---- ---------- itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.02. Indemnification of Directors and Officers for Actions or Suits By - ------------- ----------------------------------------------------------------- Or In The Right of the Corporation. To the full extent permitted by law, the - ---------------------------------- Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including AMENDED AND RESTATED BY-LAWS OF ICF KAISER ENGINEERS PACIFIC, INC. Page 7 of 9 attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the court shall deem proper. Section 8.03. Indemnification of Others for Actions, Suits, or Proceedings - ------------- ------------------------------------------------------------ Other Than By Or In The Right of the Corporation. To the full extent permitted - ------------------------------------------------ by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.04. Indemnification of Others for Actions or Suits By Or In The Right - ------------- ----------------------------------------------------------------- of the Corporation. To the full extent permitted by law, the Corporation, in - ------------------ the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the court shall deem proper. Section 8.05. Indemnification for Costs, Charges and Expenses of Successful - ------------- ------------------------------------------------------------- Party. Notwithstanding the other provisions of these By-laws, to the extent - ----- that a director or officer of the Corporation or other person indemnified under Sections 8.01 through 8.04, herein, has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, he shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection therewith. Section 8.06. Determination of Right to Indemnification. Unless otherwise - ------------- ----------------------------------------- ordered by a court, any indemnification under Sections 8.01 through 8.04, herein, shall be paid by the Corporation unless a determination is made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders, that indemnification of an AMENDED AND RESTATED BY-LAWS OF ICF KAISER ENGINEERS PACIFIC, INC. Page 8 of 9 individual entitled to indemnification under Sections 8.01 through 8.04, herein, is not proper in the circumstances because he has not met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein. Section 8.07. Advance Payment of Costs, Charges and Expenses. To the full - ------------- ---------------------------------------------- extent permitted by law, the Corporation shall, upon request, pay costs, charges and expenses (including attorneys' fees) incurred by a person entitled to indemnification pursuant to Sections 8.01 and 8.02, herein, and, if applicable, pursuant to Sections 8.03 and 8.04, herein, in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding; provided, however, that the payment of such costs, charges and expenses incurred by a director or officer in his capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer) in advance of the final disposition of such action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event that it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized in these By-laws; such costs, charges and expenses incurred by other employees, agents and contractors may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. Section 8.08. Procedure for Indemnification. Any indemnification or advance of - ------------- ----------------------------- costs, charges and expenses provided for in Sections 8.01 through 8.07, herein, shall be made promptly, and in any event within sixty (60) days, upon the written request of the person entitled to indemnification; the right to indemnification or advances as granted by these By-laws shall be enforceable by a director or officer or other person indemnified hereunder in any court of competent jurisdiction. If the Corporation denies such request, in whole or in part, or if no disposition thereof is made within sixty (60) days, such person's costs, charges and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation; it shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses pursuant to Section 8.07, herein, where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Sections 8.01 through 8.04, herein, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 8.09. Authorization of Corporation Officers. The proper officers of - ------------- ------------------------------------- the Corporation are, and each of them acting without the other is, authorized to take any action, for and in the name of the Corporation, which he deems necessary or appropriate (as conclusively presumed from the taking of such action) to carry out and effect the foregoing Sections 8.01 through 8.08. Section 8.10. Other Rights; Continuation of Right to Indemnification. The - ------------- ------------------------------------------------------ indemnification and advancement of expenses provided by these By-laws shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any law (present or future, common or statutory), by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office or while employed by or acting as agent for the Corporation, and shall continue as to a person who has ceased to serve in the capacity making him eligible for indemnification, and shall inure to the benefit of the estate, heirs, executors and administrators of such person; all rights to indemnification under these By- laws shall be deemed to be a contract between the Corporation and each director and officer of the Corporation and, as applicable, any other person indemnified hereunder who serves or served in such capacity at any time while these By-laws as well as the relevant provisions of the General Corporation Law of the State of Nevada or any other applicable laws are or were in effect; any repeal or modification hereof or of such provisions of such law shall not in any way diminish any rights to indemnification of such director or officer or other person entitled to indemnification or the obligations of the Corporation arising hereunder. Section 8.11. Savings Clause. If Sections 8.01 through 8.10 of these By-laws - ------------- -------------- or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer, and may indemnify any other person entitled to indemnification, as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of these By-laws that shall not have been invalidated AMENDED AND RESTATED BY-LAWS OF ICF KAISER ENGINEERS PACIFIC, INC. Page 9 of 9 and to the full extent permitted by applicable law. To the full extent permitted by law, the Corporation may enter into and perform agreements with persons, including, without limitation, present and former officers, directors and employees of the Corporation and of companies acquired by or merged with the Corporation, obligating the Corporation, among other things, to provide indemnification and advancement of costs, charges and expenses to such persons in addition to any indemnification or advancement which may be available to such person under Sections 8.01 through 8.10 of these By-laws. Section 8.12. Insurance. The Board of Directors may cause the Corporation to - ------------- --------- purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise (including employee benefit plans) against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. Section 8.13. Amendment of By-laws. The Board of Directors may from time to - ------------- -------------------- time adopt further By-laws with respect to indemnification and may amend these and such By-laws to provide at all times the fullest indemnification permitted by the General Corporation Law of the State of Nevada. ARTICLE IX ---------- Amendments Section 9.01. Amendment by Stockholders. These By-laws may be amended by a - ------------ ------------------------- majority vote of all the stock issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, provided notice of intention to amend shall have been contained in the notice of the meeting. Section 9.02. Amendment by Board of Directors. The Board of Directors by a - ------------- ------------------------------- majority vote of the whole Board at any meeting may amend these By-laws, including By-laws adopted by the stockholders, but the stockholders may from time to time specify particular provisions of the By-laws which shall not be amended by the Board of Directors. EX-3.(Y) 16 EXHIBIT 3(Y) Exhibit 3(y) CERTIFICATE OF INCORPORATION OF ICF KAISER GCH, INC. SECTION 1.01. NAME. - ------------- ----- The name of the Corporation is ICF Kaiser GCH, Inc. SECTION 2.01. REGISTERED OFFICE AND AGENT. - ------------- ---------------------------- The registered office of the Corporation in the State of Delaware is located in the County of New Castle, at 1013 Centre Road, Wilmington 19805. Its registered agent at such address is Corporation Service Company. SECTION 3.01. PURPOSES. - ------------- --------- The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. SECTION 4.01. AUTHORIZED SHARES. - ------------- ------------------ The total number of shares of capital stock which the Corporation shall have authority to issue is one thousand (1,000) shares of Common Stock having a par value of one dollar ($1.00) per share. SECTION 5.01. INCORPORATOR. - ------------- ------------- The name and mailing address of the incorporator is Paul Weeks, II, 9300 Lee Highway, Fairfax, Virginia 22031-1207. SECTION 5.02. DURATION. - ------------- --------- The Corporation is to have perpetual existence. SECTION 6.01. LIMITATION OF LIABILITY. - ------------- ------------------------ (a) No person shall be liable to the Corporation for any loss or damage suffered by it on account of any action taken or omitted to be taken by him or her as a director or officer of the Corporation, if such person (i) in good faith exercised or used the same degree of diligence, care and skill as an ordinarily prudent person would have exercised or used under similar circumstances, or (ii) took, or omitted to take, such action in good faith reliance upon advice of counsel for the Corporation, or upon books of account or reports made to the Corporation by any of its officers or by an independent certified public accountant, or by an appraiser selected with reasonable care by the Board of Directors or by any committee designated by the Board of Directors, or in good faith reliance upon other records of the Corporation. (b) No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that the foregoing shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. SECTION 7.01. RATIFICATION BY STOCKHOLDERS. - ------------- ----------------------------- Any contract, transaction or act of the Corporation, the Board of Directors, or a committee of the Board of Directors which shall be approved or ratified by a majority of a quorum of the stockholders entitled to vote at any meeting or, without a meeting, by the written consent of the holders of a majority of the stock entitled to vote shall be as valid and binding as though approved or ratified by every stockholder of the Corporation; but any failure of the stockholders to approve or ratify such contract, transaction or act, when and if submitted, shall not be deemed in any way to invalidate the same or to deprive the Corporation, its directors or officers, of their right to proceed with such contract, transaction or act. SECTION 8.01. INDEMNIFICATION OF DIRECTORS AND OFFICERS FOR ACTIONS, SUITS, - ------------- ------------------------------------------------------------- OR PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF THE --------------------------------------------------- CORPORATION. ----------- CERTIFICATE OF INCORPORATION OF ICF KAISER GCH, INC. Page 2 of 6 To the full extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her on his or her behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him or her in the purchase or sale of securities of the Corporation, if and only if he or she acted in good faith and -------------- in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent ---- ---------- shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. SECTION 8.02. INDEMNIFICATION OF DIRECTORS AND OFFICERS FOR ACTIONS OR SUITS - ------------- -------------------------------------------------------------- BY OR IN THE RIGHT OF THE CORPORATION. -------------------------------------- To the full extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or her on his or her behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he or she -------------- acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. SECTION 8.03. INDEMNIFICATION OF OTHERS FOR ACTIONS, SUITS, OR PROCEEDINGS - ------------- ------------------------------------------------------------ OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION. ------------------------------------------------- To the full extent permitted by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him or her in the purchase or sale of securities of the Corporation, if and only if he or she acted in good -------------- faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of ---- ---------- itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. SECTION 8.04. INDEMNIFICATION OF OTHERS FOR ACTIONS OR SUITS BY OR IN THE - ------------- ----------------------------------------------------------- RIGHT OF THE CORPORATION. ------------------------- To the full extent permitted by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may CERTIFICATE OF INCORPORATION OF ICF KAISER GCH, INC. Page 3 of 6 indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or her or on his or her behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he or she acted in good ----------- faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. SECTION 8.05. INDEMNIFICATION FOR COSTS, CHARGES AND EXPENSES OF SUCCESSFUL - ------------- ------------------------------------------------------------- PARTY. ------ Notwithstanding the other provisions of this Certificate, to the extent that a director or officer of the Corporation or other person indemnified under Sections 9.01 through 9.04, herein, has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, he or she shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or her or on his or her behalf in connection therewith. SECTION 8.06. DETERMINATION OF RIGHT TO INDEMNIFICATION. - ------------- ------------------------------------------ Unless otherwise ordered by a court, any indemnification under Sections 9.01 through 9.04, herein, shall be paid by the Corporation unless a determination is made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders, that indemnification of an individual entitled to indemnification under Sections 9.01 through 9.04, herein, is not proper in the circumstances because he or she has not met the applicable standard of conduct set forth in Sections 9.01 through 9.04, herein. SECTION 8.07. ADVANCE PAYMENT OF COSTS, CHARGES AND EXPENSES. - ------------- ----------------------------------------------- To the full extent permitted by law, the Corporation shall, upon request, pay costs, charges and expenses (including attorneys' fees) incurred by a person entitled to indemnification pursuant to Sections 9.01 and 9.02, herein, and, if applicable, pursuant to Sections 9.03 and 9.04, herein, in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding; provided, however, that the payment of such costs, -------- ------- charges and expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer) in advance of the final disposition of such action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event that it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized in this certificate; such costs, charges and expenses incurred by other employees, agents and contractors may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. SECTION 8.08. PROCEDURE FOR INDEMNIFICATION. - ------------- ------------------------------ Any indemnification or advance of costs, charges and expenses provided for in Sections 9.01 through 9.07, herein, shall be made promptly, and in any event within sixty days, upon the written request of the person entitled to indemnification; the right to indemnification or advances as granted by this Certificate shall be enforceable by a director or officer or other person indemnified hereunder in any court of competent jurisdiction. If the Corporation denies such request, in whole or in part, or if no disposition thereof is made within sixty days, such person's costs, charges and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation; it shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses pursuant to Section 9.07, herein, where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Sections 9.01 through 9.04, herein. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such CERTIFICATE OF INCORPORATION OF ICF KAISER GCH, INC. Page 4 of 6 action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Sections 9.01 through 9.04, herein, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. SECTION 8.09. AUTHORIZATION OF CORPORATION OFFICERS. - ------------- -------------------------------------- The proper officers of the Corporation are, and each of them acting without the other is, authorized to take any action, for and in the name of the Corporation, which the officer deems necessary or appropriate (as conclusively presumed from the taking of such action) to carry out and effect the foregoing Sections 9.01 through 9.08. SECTION 8.10. OTHER RIGHTS; CONTINUATION OF RIGHT TO INDEMNIFICATION. - ------------- ------------------------------------------------------- The indemnification and advancement of expenses provided by this Certificate shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any law (present or future, common or statutory), by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office or while employed by or acting as an agent for the Corporation, and shall continue as to a person who has ceased to serve in the capacity making him or her eligible for indemnification, and shall inure to the benefit of the estate, heirs, executors and administrators of such person; all rights to indemnification under this Certificate shall be deemed to be a contract between the Corporation and each director and officer of the Corporation and, as applicable, any other person indemnified hereunder who serves or served in such capacity at any time while this Certificate as well as the relevant provisions of the Delaware General Corporation Law or any other applicable laws are or were in effect; any repeal or modification hereof or of such provisions of such law shall not in any way diminish any rights to indemnification of such director or officer or other person entitled to indemnification or the obligations of the Corporation arising hereunder. SECTION 8.11. SAVINGS CLAUSE. - ------------- --------------- If this Certificate or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer, and may indemnify any other person entitled to indemnification, as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Certificate that shall not have been invalidated and to the full extent permitted by applicable law. To the full extent permitted by law, the Corporation may enter into and perform agreements with persons, including, without limitation, present and former officers, directors and employees of the Corporation and of companies acquired by or merged with the Corporation, obligating the Corporation, among other things, to provide indemnification and advancement of costs, charges and expenses to such persons in addition to any indemnification or advancement which may be available to such person under Sections 9.01 through 9.10 of this Certificate. SECTION 8.12. INSURANCE. - ------------- ---------- The Board of Directors may cause the Corporation to purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise (including employee benefit plans), against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. SECTION 8.13. ADOPTION OF BY-LAWS. - ------------- -------------------- The Board of Directors may from time to time adopt By-laws with respect to indemnification and may amend such By-laws to provide at all times the fullest indemnification permitted by the General Corporation Law of the State of Delaware. SECTION 9.01. SETTLEMENT OF DEBTS. - ------------- -------------------- Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware CERTIFICATE OF INCORPORATION OF ICF KAISER GCH, INC. Page 5 of 6 may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation. SECTION 10.01. ELECTIONS OF DIRECTORS. - -------------- ----------------------- Elections of directors need not be by written ballot unless the By-laws of the Corporation shall so provide. SECTION 11.01. STOCKHOLDERS MEETINGS, RECORDS. - -------------- ------------------------------- Stockholders meetings may be held within or without the State of Delaware, as the By-laws may provide. The books of the Corporation may be kept (subject to any provision in the General Corporation Law of the State of Delaware) outside of the State of Delaware at such place or places as may be designated from time to time by the Board of Directors (or duly authorized committee of the Board of Directors) or in the By-laws of the Corporation. SECTION 12.01. BY-LAWS. - -------------- -------- The Board of Directors (or a duly authorized committee of the Board of Directors) of the Corporation shall have the power to make and, except as may be expressly stated in the By-laws, to alter and repeal its By-laws. SECTION 13.01. AMENDMENT OF CERTIFICATE OF INCORPORATION. - -------------- ------------------------------------------ The Corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate, in the manner now or hereafter prescribed by the General Corporation Law of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation. IN WITNESS WHEREOF the undersigned, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereto set my signature this 11th day of October 1994. Paul Weeks, II CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF ICF KAISER GCH, INC. ICF Kaiser GCH, Inc., a corporation organized and existing under the General Corporation Law of Delaware (the "Corporation"), hereby does certify: FIRST: That the Corporation has not received any payments for its stock. SECOND: That the Sole Director of the Corporation, by the written consent filed with minutes of the Board, adopted a resolution proposing and declaring advisable the following amendment of the Certificate of Incorporation of the Corporation: RESOLVED, that the Certificate of Incorporation of the Corporation be amended by deleting Section 1.01 in its entirety and inserting in its place the following new language: Section 1.01. Name. The name of the Corporation is ICF Kaiser Remediation ------------ ---- Company. THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Section 241 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, ICF Kaiser GCH, Inc. has caused this Certificate to be signed by Charles A. Debelius, its President and attested by Cynthia L. Hathaway, its Assistant Secretary, this 1st day of March 1995. ICF Kaiser GCH, Inc. (Now: ICF KAISER REMEDIATION COMPANY) By: /s/Charles A. Debelius President Attest: By: /s/Cynthia L. Hathaway Assistant Secretary EX-3.(Z) 17 EXHIBIT 3(Z) Exhibit 3(z) BYLAWS OF ICF KAISER REMEDIATION COMPANY ARTICLE I --------- Offices Section 1.01. Registered Office in Delaware. The registered office shall be in - ------------ ----------------------------- Wilmington, Delaware. The name of the registered agent of the Corporation at such location is Corporation Service Company. Section 1.02. Principal Office. The Board of Directors is granted full power - ------------ ---------------- and authority to fix and thereafter change the location of the principal office of the Corporation at any location within the United States. Section 1.03. Other Offices. The Corporation may have such other offices - ------------ ------------- either within or without the State of Delaware as the Board of Directors may from time to time determine. ARTICLE II ---------- Meetings of Stockholders Section 2.01. Time and Place of Meeting. Annual meetings of the stockholders - ------------ ------------------------- for the purpose of electing directors, making reports of the affairs of the Corporation and transacting such other business as may properly come before the meeting shall be held at such place, within or without the State of Delaware, on such date and at such time as the Board of Directors shall each year fix, which date shall be within thirteen months subsequent to the later of the date of incorporation or the last annual meeting of stockholders. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be fixed by the Board of Directors and stated in the notice of meeting. If no other place is fixed by the Board of Directors, meetings of stockholders shall be held at the principal executive office of the Corporation. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Corporation. Section 2.02. Notice of Meeting. Written notice of meetings of stockholders, - ------------ ----------------- stating the place, date and hour thereof, and in the case of a special meeting, the purpose or purposes for which the meeting is being called, shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote thereat. Section 2.03. Qualified Voters. The officer who has charge of the stock ledger - ------------ ---------------- of the Corporation shall prepare, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting during ordinary business hours for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present and entitled to vote. Section 2.04. Special Meetings. Special meetings of the stockholders may be - ------------- ---------------- called by the Board of Directors or by the President or by a writing signed by stockholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote at such meeting. Such call shall state the purpose or purposes of the proposed meeting. The Secretary shall give notice of such meeting to the stockholders entitled to vote thereat, in accordance with such call. Section 2.05. Business at Special Meetings. Business transacted at any special - ------------ ---------------------------- meeting of stockholders shall be limited to the purposes stated in the notice. Section 2.06. Quorum. The holders of a majority of the stock issued and - ------------ ------ outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting (if the adjournment is not for more than thirty days and a new record date for the determination of stockholders entitled to vote is not fixed), until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. BY-LAWS OF ICF KAISER REMEDIATION COMPANY PAGE 2 OF 9 Section 2.07. Vote Required. When a quorum is present at any meeting, the vote - ------------ ------------- of the holders of a majority of the shares of stock having voting power voting, in person or by proxy, on a question shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes, the Certificate of Incorporation or these By-laws a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 2.08. Proxies. Each stockholder shall at every meeting of the - ------------ ------- stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date unless the proxy provides for a longer period. No proxy or power of attorney to vote shall be used to vote at a meeting of the stockholders unless it shall have been filed with the Secretary of the meeting when required by the inspectors of election. All questions regarding the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided by two inspectors of election who shall be appointed by the Board of Directors, or if not so appointed, then by the presiding officer of the meeting. Section 2.09. Presiding Officer. The President of the Corporation shall - ------------ ----------------- preside over all meetings of stockholders. Section 2.10. Consent. Whenever the vote of stockholders at a meeting thereof - ------------ ------- is required or permitted to be taken in connection with any corporate action by any provisions of the statutes, the By-laws or the Certificate of Incorporation, the meeting and vote may be dispensed with if the number of stockholders who would have been entitled to vote upon the action if such meeting were held, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting, shall consent in writing to such corporate action being taken. Prompt notice shall be given by the Secretary to all stockholders of the taking of corporate action without a meeting by less than unanimous written consent. ARTICLE III ----------- Directors Section 3.01. Number and Election. The number of directors which shall - ------------ ------------------- constitute the whole Board shall be no less than one (1) or more than ten (10). By amendment of this By-law, the number may be increased or decreased from time to time by the Board of Directors or stockholders within the limits permitted by law, but no decrease in the number of directors shall change the term of any director in office at the time thereof. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 3.02, and each director shall hold office until his successor is elected and accepts office unless he earlier resigns or is removed. Directors need not be stockholders. A director may resign at any time upon written notice to the Corporation or orally at any meeting of the directors or stockholders. Section 3.02. Removal and Vacancies. A director may be removed with or without - ------------ --------------------- cause by a majority vote of the holders of the outstanding shares entitled to vote. [Subject to any Stockholder's Agreement] Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and accept office, unless sooner displaced. Section 3.03. Management, The business of the Corporation shall be managed by - ------------ ---------- its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-laws directed or required to be exercised or done by the stockholders. Section 3.04. Place of Meetings. The Board of Directors of the Corporation may - ------------ ----------------- hold meetings, both regular and special, either within or without the State of Delaware. Meetings may be held by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting. Section 3.05. Annual Meeting. The first meeting of each newly elected Board of - ------------ -------------- Directors shall be held immediately following the adjournment of the annual meeting of stockholders and at the place thereof. No notice of such meeting shall be necessary to the directors in order legally to constitute the meeting, provided a quorum is present. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors. Section 3.06. Notice for Regular Meetings. Regular meetings of the Board of - ------------ --------------------------- Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors. BY-LAWS OF ICF KAISER REMEDIATION COMPANY PAGE 3 OF 9 Section 3.07. Special Meetings. Special meetings of the Board of Directors may - ------------ ---------------- be called by a majority of the Board of Directors or the President and shall be held on notice by letter mailed or delivered for transmission not later than on the third day immediately preceding the day of such meeting, or by written notice delivered or received not later than the day immediately preceding the day of such meeting. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Section 3.08. Quorum. At meetings of the Board of Directors, a majority of the - ------------ ------ full number of directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 3.09. Chairman of the Board. At its first meeting after each annual - ------------ --------------------- meeting of stockholders, the Board of Directors shall elect from among its members a Chairman. The Board of Directors may also choose a Vice Chairman from among its members. The Chairman shall preside at all meetings of the Board of Directors, and shall perform such other duties as the Board may prescribe. The Chairman may participate and act in any meeting of the Board of Directors as a director. The Vice Chairman, if any, shall act under the direction of the Chairman and in the absence or disability of the Chairman shall perform the duties and exercise the powers of the Chairman. The Chairman and the Vice Chairman, if any, (i) shall hold their respective offices at the pleasure of the Board of Directors, and (ii) may be removed with or without cause at any time by the Board of Directors. Any vacancy occurring in the office of the Chairman or Vice Chairman by death, resignation, removal or otherwise shall be filled by the Board of Directors. Section 3.10. Committees. The Board of Directors may, by resolution adopted by - ------------ ---------- a majority of the whole Board, designate one or more committees of the Board of Directors, each committee to consist of one or more of the directors of the Corporation, which, to the extent provided in the resolution, may have and exercise any or all the powers of the Board of Directors in the management of the business and affairs of the Corporation including, but not limited to, the power and authority of the Board of Directors: (i) to authorize the seal of the Corporation to be affixed to all papers; (ii) to declare a dividend; (iii) to authorize the issuance of stock; (iv) to adopt a certificate of ownership and merger pursuant to Section 253, of Title 8, Delaware Code; and (v) to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors as provided in Section 151(a) of Title 8, Delaware Code, fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for shares of any other class or classes or any other series of the same of any other class or classes of stock of the Corporation. Such committee or committees shall have such name or names as may be determined from time to time by the Board of Directors. The member or members of any such committee present at any meeting and not disqualified from voting may, whether or not they constitute a quorum, unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. At meetings of such committees, a majority of the members or alternate members at any meeting at which there is a quorum shall be the act of the committee. Section 3.11. Committee Minutes. The committees shall keep regular minutes of - ------------ ----------------- their proceedings and report the same to the Board of Directors. Section 3.12. Consent. Any action required or permitted to be taken at any - ------------ ------- meeting of the Board of Directors or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee. Section 3.13. Compensation. The directors may be paid their expenses of - ------------ ------------ attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board of Directors may be allowed like reimbursement and compensation for attending committee meetings. ARTICLE IV ---------- Notices Section 4.01. Notice. Notices to directors and stockholders mailed to them at - ------------ ------ their addresses appearing on the books of the Corporation shall be deemed to be given at the time when deposited in the United States mail, postage prepaid. An BY-LAWS OF ICF KAISER REMEDIATION COMPANY PAGE 4 OF 9 affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. ----- ----- Section 4.02. Waiver. Whenever any notice is required to be given under the - ------------ ------ provisions of the statute, the Certificate of Incorporation or of these By-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purposes of, any meeting need be specified in such waiver. Attendance at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. ARTICLE V --------- Officers Section 5.01. Election. The officers of the Corporation shall be chosen by the - ------------ -------- Board of Directors at its first meeting after each annual meeting of stockholders and shall be a President, a Secretary and a Treasurer. The Board of Directors may also choose one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers. Two or more offices may be held by the same person. Section 5.02. Other Officers. The Board of Directors may appoint such other - ------------ -------------- officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. Section 5.03. Salaries. The salaries of all officers of the Corporation shall - ------------ -------- be fixed by or under the direction of the Board of Directors. Section 5.04. Vacancies. The officers of the Corporation shall hold office at - ------------ --------- the pleasure of the Board of Directors. Any officer may be removed with or without cause at any time by the Board of Directors. Each officer shall hold his office until his successor is elected and qualified or until his earlier resignation or removal. The Board of Directors may fill any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise. Section 5.05. President. The President shall serve as Chief Executive Officer - ------------ --------- of the Corporation, shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall execute on behalf of the Corporation, and may affix or cause the seal to be affixed to, all instruments requiring such execution except to the extent the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. He shall perform such additional duties and have such additional powers as the Board of Directors may from time to time prescribe. Section 5.06. Vice Presidents. The Vice Presidents shall act under the - ------------ --------------- direction of the President and in the absence or disability of the President shall perform the duties and exercise the powers of the President. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. The Board of Directors may designate one or more Executive Vice Presidents or may otherwise specify the order of seniority of the Vice Presidents. The duties and powers of the President shall descend to the Vice Presidents in such specified order of seniority. Section 5.07. Secretary. The Secretary shall act under the direction of the - ------------ --------- President. Subject to the direction of the President, he shall attend all meetings of the Board of Directors and all meetings of the stockholders and record the proceedings in a book to be kept for that purpose. He shall perform like duties for committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the President or the Board of Directors. He shall keep in safe custody the seal of the Corporation and, when authorized by the President or the Board of Directors, cause it to be affixed to any instrument requiring it. Section 5.08. Assistant Secretaries. The Assistant Secretaries shall act under - ------------ --------------------- the direction of the President. In the order of their seniority, unless otherwise determined by the President or the Board of Directors, they shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. Section 5.09. Treasurer. The Treasurer shall act under the direction of the - ------------ --------- President. Subject to the direction of the BY-LAWS OF ICF KAISER REMEDIATION COMPANY PAGE 5 OF 9 President he shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the President or the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. He may affix or cause to be affixed the seal of the Corporation to documents so requiring. Section 5.10. Assistant Treasurers. The Assistant Treasurers in the order of - ------------ -------------------- their seniority, unless otherwise determined by the President or the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. ARTICLE VI ---------- Certificates of Stock Section 6.01. Certificate. Every holder of stock in the Corporation shall be - ------------ ----------- entitled to have a certificate signed by the Chairman or Vice-Chairman of the Board of Directors, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. Every such certificate shall contain a statement of the restrictions provided in Section 4 of this Article. Section 6.02. Facsimile Signature. Any or all the signatures on the - ------------ ------------------- certificate may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued with the same effect as though the person had not ceased to be such officer, transfer agent or registrar. The seal of the Corporation or a facsimile thereof may, but need not, be affixed to certificates of stock. Section 6.03. Lost Certificates. The Board of Directors may direct a new - ------------- ----------------- certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 6.04. Transfer. Upon surrender to the Corporation or the transfer - ------------ -------- agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books, provided, however, the Corporation shall have no obligation to issue new certificates, cancel old certificates or record transactions unless and until it is satisfied that (i) all provisions of the Certificate of Incorporation, these By-laws and any legends on the certificate regarding transfer of shares and restrictions on such transfers have been complied with, and (ii) all other applicable restrictions, including restrictions imposed by law, including federal and state securities law, and by any stockholders agreement to which the Corporation is a party, have been complied with. Section 6.05. Record Date. The Board of Directors may fix in advance a date, - ------------- ----------- not more than sixty days nor less than ten days preceding the date of any meeting of stockholders, or not more than sixty days before the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining a consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent, and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. BY-LAWS OF ICF KAISER REMEDIATION COMPANY PAGE 6 OF 9 Section 6.06. Recognition of Ownership. The Corporation shall be entitled to - ------------ ------------------------ recognize the person registered on its books as the owner of shares to be the exclusive owner for all purposes including voting and dividends, and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE VII ----------- Miscellaneous Section 7.01. Reserves. There may be set aside out of any funds of the - ------------ -------- Corporation available for dividends such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper, as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for the purchase of additional property, or for such other purpose as the directors shall think conducive to the interest of the Corporation, and the Board of Directors may modify or abolish any such reserve. Section 7.02. Checks, Demands and Notes. All checks or demands for money and - ------------ ------------------------- notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. Section 7.03. Fiscal Year. The fiscal year of the Corporation shall be as - ------------ ----------- fixed by the Board of Directors. Section 7.04. Seal. The corporate seal shall have inscribed thereon the name - ------------ ---- of the Corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. ARTICLE VIII ------------ Indemnification Section 8.01. Indemnification of Directors and Officers for Actions, Suits, or - ------------ ---------------------------------------------------------------- Proceedings Other Than By Or In The Right of the Corporation. To the full - ------------------------------------------------ ----------- extent permitted by law, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans) or by reason of any action alleged to have been taken or omitted in such capacity against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in -------------- good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of ---- ---------- itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.02. Indemnification of Directors and Officers for Actions or Suits By - ------------ --------------------------------------------- ------------------- Or In The Right of the Corporation. To the full extent permitted by law, the - ---------------------------------- Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and ------ only if he acted in good faith and in a manner he reasonably believed to be in - ------- or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon BY-LAWS OF ICF KAISER REMEDIATION COMPANY PAGE 7 OF 9 application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Section 8.03. Indemnification of Others for Actions, Suits, or Proceedings - ------------ ------------------------------------------------ ----------- Other Than By Or In The Right of the Corporation. To the full extent permitted - ------------------------------------------------ by law, the Corporation, in the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any threatened, pending or completed action, suit or proceeding and any appeal therefrom, including but not limited to liability and expenses incurred on account of profits realized by him in the purchase or sale of securities of the Corporation, if and only if he acted in good faith and in a manner he reasonably -------------- believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo ---- contendere or its equivalent, shall not, of itself, create a presumption that - ---------- the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.04. Indemnification of Others for Actions or Suits By Or In The Right - ------------ ------------------------------------------------- --------------- of the Corporation. To the full extent permitted by law, the Corporation, in - ------------------ the sole discretion of the Board of Directors of the Corporation, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become an employee, agent or contractor of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or contractor of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any threatened, pending or completed action or suit and any appeal therefrom, or the defense or settlement of any claim, issue or matter, if and only if he acted in good faith and in a -------------- manner he reasonably believed to be in or not opposed to the best interests of the Corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Section 8.05. Indemnification for Costs, Charges and Expenses of Successful - ------------ -------------------------------------------------- ---------- Party. Notwithstanding the other provisions of these By-laws, to the extent - ----- that a director or officer of the Corporation or other person indemnified under Sections 8.01 through 8.04, herein, has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, he shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection therewith. Section 8.06. Determination of Right to Indemnification. Unless otherwise - ------------ ----------------------------------------- ordered by a court, any indemnification under Sections 8.01 through 8.04, herein, shall be paid by the Corporation unless a determination is made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders, that indemnification of an individual entitled to indemnification under Sections 8.01 through 8.04, herein, is not proper in the circumstances because he has not met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein. Section 8.07. Advance Payment of Costs, Charges and Expenses. To the full - ------------ ---------------------------------------------- extent permitted by law, the Corporation shall, upon request, pay costs, charges and expenses (including attorneys' fees) incurred by a person entitled to indemnification pursuant to Sections 8.01 and 8.02, herein, and, if applicable, pursuant to Sections 8.03 and 8.04, BY-LAWS OF ICF KAISER REMEDIATION COMPANY PAGE 8 OF 9 herein, in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding; provided, however, -------- ------- that the payment of such costs, charges and expenses incurred by a director or officer in his capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer) in advance of the final disposition of such action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event that it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized in these By-laws; such costs, charges and expenses incurred by other employees, agents and contractors may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. Section 8.08. Procedure for Indemnification. Any indemnification or advance of - ------------ ----------------------------- costs, charges and expenses provided for in Sections 8.01 through 8.07, herein, shall be made promptly, and in any event within sixty (60) days, upon the written request of the person entitled to indemnification; the right to indemnification or advances as granted by these By-laws shall be enforceable by a director or officer or other person indemnified hereunder in any court of competent jurisdiction. If the Corporation denies such request, in whole or in part, or if no disposition thereof is made within sixty (60) days, such person's costs, charges and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation; it shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses pursuant to Section 8.07, herein, where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Sections 8.01 through 8.04, herein, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 8.01 through 8.04, herein, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 8.09. Authorization of Corporation Officers. The proper officers of - ------------ ------------------------------------- the Corporation are, and each of them acting without the other is, authorized to take any action, for and in the name of the Corporation, which he deems necessary or appropriate (as conclusively presumed from the taking of such action) to carry out and effect the foregoing Sections 8.01 through 8.08. Section 8.10. Other Rights; Continuation of Right to Indemnification. The - ------------ ------------------------------------------------------ indemnification and advancement of expenses provided by these By-laws shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any law (present or future, common or statutory), by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office or while employed by or acting as agent for the Corporation, and shall continue as to a person who has ceased to serve in the capacity making him eligible for indemnification, and shall inure to the benefit of the estate, heirs, executors and administrators of such person; all rights to indemnification under these By- laws shall be deemed to be a contract between the Corporation and each director and officer of the Corporation and, as applicable, any other person indemnified hereunder who serves or served in such capacity at any time while these By-laws as well as the relevant provisions of the Delaware General Corporation Law or any other applicable laws are or were in effect; any repeal or modification hereof or of such provisions of such law shall not in any way diminish any rights to indemnification of such director or officer or other person entitled to indemnification or the obligations of the Corporation arising hereunder. Section 8.11. Savings Clause. If Sections 8.01 through 8.10 of these By-laws - ------------ -------------- or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer, and may indemnify any other person entitled to indemnification, as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of these By-laws that shall not have been invalidated and to the full extent permitted by applicable law. To the full extent permitted by law, the Corporation may enter into and perform agreements with persons, including, without limitation, present and former officers, directors and employees of the Corporation and of companies acquired by or merged with the Corporation, obligating the Corporation, among other things, to provide indemnification and advancement of costs, charges and expenses to such persons in addition to any indemnification or advancement which may be available to such person under Sections 8.01 through 8.10 of these By-laws. BY-LAWS OF ICF KAISER REMEDIATION COMPANY PAGE 9 OF 9 Section 8.12. Insurance. The Board of Directors may cause the Corporation to - ------------ --------- purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise (including employee benefit plans) against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. Section 8.13. Amendment of By-laws. The Board of Directors may from time to - ------------ -------------------- time adopt further By-laws with respect to indemnification and may amend these and such By-laws to provide at all times the fullest indemnification permitted by the General Corporation Law of the State of Delaware. ARTICLE IX ---------- Amendments Section 9.01. Amendment by Stockholders. These By-laws may be amended by a - ------------ ------------------------- majority vote of all the stock issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, provided notice of intention to amend shall have been contained in the notice of the meeting. Section 9.02. Amendment by Board of Directors. The Board of Directors by a - ------------ ------------------------------- majority vote of the whole Board at any meeting may amend these By-laws, including By-laws adopted by the stockholders, but the stockholders may from time to time specify particular provisions of the By-laws which shall not be amended by the Board of Directors. EX-4.(A)(6) 18 EXHIBIT 4 (A)(6) Exhibit 4(a)(6) ================================================================================ ICF KAISER INTERNATIONAL, INC., Issuer and CYGNA CONSULTING ENGINEERS AND PROJECT MANAGEMENT, INC., Existing Guarantor ICF KAISER GOVERNMENT PROGRAMS, INC., Existing Guarantor PCI OPERATING COMPANY, INC., Existing Guarantor SYSTEMS APPLICATIONS INTERNATIONAL, INC., Existing Guarantor and EDA, INCORPORATED, New Guarantor GLOBAL TRADE & INVESTMENT, INC., New Guarantor ICF KAISER EUROPE, INC., New Guarantor ICF KAISER / GEORGIA WILSON, INC. , New Guarantor ICF KAISER OVERSEAS ENGINEERING, INC., New Guarantor ICF KAISER ENGINEERS PACIFIC, INC., New Guarantor ICF KAISER REMEDIATION COMPANY, New Guarantor and ICF KAISER SYSTEMS, INC., New Guarantor TO THE BANK OF NEW YORK, Trustee --------------- Sixth Supplemental Indenture Dated as of December 3, 1997 to Indenture dated as of January 11, 1994, as supplemented --------------- $125,000,000 12% Senior Subordinated Notes due 2003 ============================================================================== Exhibit 4(a)(6) THIS SIXTH SUPPLEMENTAL INDENTURE, dated as of December 3, 1997, is entered into by and among ICF KAISER INTERNATIONAL, INC., a Delaware corporation (the "Company"), THE BANK OF NEW YORK, a New York banking corporation (the "Trustee"), the following existing GUARANTORS: Cygna Consulting Engineers and Project Management, Inc., a Delaware corporation ("Cygna"); ICF Kaiser Government Programs, Inc., a Delaware corporation ("ICFK-GP"); PCI Operating Company, Inc., a Delaware corporation ("PCI"); and Systems Applications International, Inc., a Delaware corporation "(SAI") and the following new GUARANTORS: EDA, Incorporated, a Maryland corporation ("EDA"); Global Trade & Investment, Inc., a Delaware corporation ("Global"); ICF Kaiser Europe, Inc., a Delaware corporation ("ICFK Europe"); ICF Kaiser / Georgia Wilson, Inc., a Delaware corporation ("ICFK/GW"); ICF Kaiser Overseas Engineering, Inc., a Delaware corporation ("ICFK Overseas"); ICF Kaiser Engineers Pacific, Inc., a Delaware corporation ("ICFK Pacific"); ICF Kaiser Remediation Company, a Delaware corporation ("Remcon"); and ICF Kaiser Systems, Inc., a Delaware corporation ("ICFK Systems"). WITNESSETH: WHEREAS, each new Guarantor is either a direct or an indirect Wholly Owned Restricted Subsidiary of the Company; WHEREAS, on December 3, 1997, the Company entered into an Amended and Restated Credit Agreement with CoreStates Bank, N.A., as Agent, the banking institutions named therein (the "Banks"), and certain subsidiaries of the Company named therein (the "Subsidiary Guarantors"), as a successor Bank Credit Agreement; WHEREAS, as a condition to the Company's being permitted to include the Accounts Receivable of the new Guarantors in the Borrowing Base as defined in and provided for under the Bank Credit Agreement, the new Guarantors must become Subsidiary Guarantors under the Bank Credit Agreement; WHEREAS, EDA, Global, ICFK Europe, ICFK/GW, ICFK Overseas, ICFK Pacific, Remcon, and ICFK Systems have determined that it is desirable to become Subsidiary Guarantors under the Bank Credit Agreement; WHEREAS, the Company and the Trustee have heretofore executed and delivered an Indenture dated as of January 11, 1994 as supplemented (the "Indenture"), for the purpose of issuing $125,000,000 of 12% Senior Subordinated Notes due 2003 (the "Notes"), and Section 10.01 of the Indenture provides that the Company (when authorized by a Board Resolution) and the Trustee for the Notes, at any time and from time to time, may enter into one or more indentures supplemental thereto, in form satisfactory to such Trustee, for any of the purposes set forth in said Section 10.01 (each a "Supplemental Indenture"); WHEREAS, Section 5.11 of the Indenture requires that, prior to or concurrently with the new Guarantors becoming Subsidiary Guarantors under the Bank Credit Agreement, the Company must cause the new Guarantors to execute and deliver to the Trustee a Supplemental Indenture and a Indenture Guarantee (substantially in the form attached as Exhibit B to the Indenture) pursuant to which the new Guarantors will unconditionally guarantee the payment of principal of, premium, if any, and interest on the Notes; WHEREAS, Section 5.11 of the Indenture further provides that the Indenture Guarantee referenced in the immediately preceding clause shall be subordinated in right of payment to any subsidiary guarantee granted by the new Guarantors pursuant to the Bank Credit Agreement; -2- WHEREAS, ICFK-GP became a Subsidiary Guarantor of the Bank Credit Agreement on May 6, 1996, and was already a Guarantor of the Indenture as of September 1, 1995; WHEREAS, Cygna, PCI, and SAI became Subsidiary Guarantors under the Bank Credit Agreement on June 24, 1996, and became Guarantors of the Indenture as of June 24, 1996; WHEREAS, EDA, Global, ICFK Europe, ICFK/GW, ICFK Overseas, ICFK Pacific, Remcon, and ICFK Systems will become Subsidiary Guarantors under the Bank Credit Agreement on December 3, 1997, and have determined that it is desirable simultaneously or concurrently to become new Guarantors under the Indenture; WHEREAS, the execution and delivery of this Supplemental Indenture has been duly authorized by the Executive Committee of the Board of Directors of the Company on October 17, 1997; WHEREAS, the execution and delivery of this Supplemental Indenture has been duly authorized by the Boards of Directors of each of the existing Guarantors as of November 14, 1997; WHEREAS, the execution and delivery of this Supplemental Indenture and the Indenture Guarantees have been duly authorized by the Boards of Directors of each of the new Guarantors as of November 14, 1997; WHEREAS, the Company and the Guarantors have determined that it is desirable to enter into this Sixth Supplemental Indenture and have requested the Trustee to join with them in the execution of this Sixth Supplemental Indenture; and WHEREAS, the Trustee has accepted the trusts created by this Sixth Supplemental Indenture and in evidence thereof has joined in the execution hereof; NOW, THEREFORE, THIS SIXTH SUPPLEMENTAL INDENTURE WITNESSETH, that, in consideration of the premises and of acceptance by the Trustee of the trusts created hereby and by the Indenture, and also for and in consideration of the sum of One Dollar to the Company duly paid by the Trustee at or before the execution and delivery of this Supplemental Indenture, the receipt of which is hereby acknowledged, IT IS HEREBY COVENANTED AND AGREED, by and among the Company, the existing and new Guarantors, and the Trustee, as follows: 1. Terms defined in the Indenture are used herein as therein defined. 2. ICFK-GP acknowledges that it has executed and delivered to the Trustee the Second Supplemental Indenture and an Indenture Guarantee, both as of September 1, 1995. 3. Each of Cygna, PCI, and SAI hereby acknowledge that each has executed and delivered to the Trustee the Fifth Supplemental Indenture and an Indenture Guarantee, all as of June 24, 1996. 4. Each of EDA, Global, ICFK Europe, ICFK/GW, ICFK Overseas, ICFK Pacific, and ICFK Systems hereby acknowledge its execution and delivery of an Indenture Guarantee dated as of December 3, 1997, in the form authorized by and attached as Exhibit B to the Indenture. 5. The following sundry provisions shall be a part of this Sixth Supplemental Indenture: Section 5.01. Effect of Supplemental Indenture. Upon the execution and -------------------------------- delivery of this Sixth Supplemental Indenture by the Company and the Trustee, the Indenture shall be supplemented in accordance herewith, and this Sixth Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered under the Indenture shall be bound thereby. Section 5.02. Indenture Remains in Full Force and Effect. Except as ------------------------------------------ supplemented hereby, all provisions in the Indenture shall remain in full force and effect. -3- Section 5.03. Indenture and Sixth Supplemental Indenture Construed Together. ------------------------------------------------------------- This Sixth Supplemental Indenture is an Indenture supplemental to and in implementation of the Indenture, and the Indenture and this Sixth Supplemental Indenture shall henceforth be read and construed together. Section 5.04. Confirmation and Preservation of Indenture. The Indenture as ------------------------------------------ supplemented by this Sixth Supplemental Indenture is in all respects confirmed and preserved. Section 5.05 Conflict with Trust Indenture Act. If any provision of this --------------------------------- Sixth Supplemental Indenture limits, qualifies, or conflicts with any provision of the Trust Indenture Act that is required under such Act to be part of and govern any provision of this Sixth Supplemental Indenture, the provision of such Act shall control. If any provision of this Sixth Supplemental Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the provision of such Act shall be deemed to apply to the Indenture as so modified or to be excluded by this Sixth Supplemental Indenture, as the case may be. Section 5.06 Separability Clause. In case any provision in this Sixth ------------------- Supplemental Indenture shall be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 5.07 Terms Defined in the Indenture. All capitalized terms not ------------------------------ otherwise defined herein shall have the meanings ascribed to them in the Indenture. Section 5.08 Effect of Headings. The Article and Section headings herein are ------------------ for convenience only and shall not affect the construction hereof. Section 5.09 Benefits of Sixth Supplemental Indenture, etc. Nothing in this --------------------------------------------- Sixth Supplemental Indenture, the Indenture, or the Notes, express or implied, shall give to any Person, other than the parties hereto and thereto and their successors hereunder and thereunder and the Holders of the Notes, any benefit of any legal or equitable right, remedy, or claim under the Indenture, this Sixth Supplemental Indenture, or the Notes. Section 5.10 Successors and Assigns. All covenants and agreements in this ---------------------- Sixth Supplemental Indenture by the Company and the Guarantors shall bind their successors and assigns, whether so expressed or not. Section 5.11 Trustee Not Responsible for Recitals. The recitals contained ------------------------------------ herein shall be taken as the statements of the Company and the Guarantors, and the Trustee assumes no responsibility for their correctness. Section 5.12 Certain Duties and Responsibilities of the Trustee. In entering -------------------------------------------------- into this Sixth Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee, whether or not elsewhere herein so provided. Section 5.13 Governing Law. This Sixth Supplemental Indenture shall be ------------- governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of law principles thereof. Section 5.14 Counterparts. This Sixth Supplemental Indenture may be executed ------------ in counterparts, each of which, when so executed, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Sixth Supplemental Indenture to be duly executed, and the Company, the existing and new Guarantors, and the Trustee have caused their respective corporate seals to be hereunto affixed and attested, all as of December 3, 1997. ICF KAISER INTERNATIONAL, INC. -4- CYGNA CONSULTING ENGINEERS AND PROJECT MANAGEMENT, INC. ICF KAISER GOVERNMENT PROGRAMS, INC. PCI OPERATING COMPANY, INC. SYSTEMS APPLICATIONS INTERNATIONAL, INC. EDA, INCORPORATED GLOBAL TRADE & INVESTMENT, INC. ICF KAISER EUROPE, INC. ICF KAISER / GEORGIA WILSON, INC. ICF KAISER OVERSEAS ENGINEERING, INC. ICF KAISER PACIFIC, INC. ICF KAISER REMEDIATION COMPANY ICF KAISER SYSTEMS, INC. THE BANK OF NEW YORK, as Trustee -5- EX-4.(G)(1) 19 EXHIBIT 4 (G)(1) Exhibit 4(g)(1) ================================================================================ ICF KAISER INTERNATIONAL, INC., Issuer and CYGNA CONSULTING ENGINEERS AND PROJECT MANAGEMENT, INC., Existing Guarantor ICF KAISER GOVERNMENT PROGRAMS, INC., Existing Guarantor PCI OPERATING COMPANY, INC., Existing Guarantor SYSTEMS APPLICATIONS INTERNATIONAL, INC., Existing Guarantor and EDA, INCORPORATED, New Guarantor GLOBAL TRADE & INVESTMENT, INC., New Guarantor ICF KAISER EUROPE, INC., New Guarantor ICF KAISER / GEORGIA WILSON, INC. , New Guarantor ICF KAISER OVERSEAS ENGINEERING, INC., New Guarantor ICF KAISER ENGINEERS PACIFIC, INC., New Guarantor ICF KAISER REMEDIATION COMPANY, New Guarantor and ICF KAISER SYSTEMS, INC., New Guarantor TO THE BANK OF NEW YORK, Trustee --------------- First Supplemental Indenture Dated as of December 3, 1997 to Indenture dated as of December 23, 1996 --------------- $15,000,000 12% Senior Notes due 2003, Series B ============================================================================== THIS FIRST SUPPLEMENTAL INDENTURE, dated as of December 3, 1997, is entered into by and among ICF KAISER INTERNATIONAL, INC., a Delaware corporation (the "Company"), THE BANK OF NEW YORK, a New York banking corporation (the "Trustee"), the following existing GUARANTORS: Cygna Consulting Engineers and Project Management, Inc., a Delaware corporation ("Cygna"); ICF Kaiser Government Programs, Inc., a Delaware corporation ("ICFK-GP"); PCI Operating Company, Inc., a Delaware corporation ("PCI"); and Systems Applications International, Inc., a Delaware corporation "(SAI") and the following new GUARANTORS: EDA, Incorporated, a Maryland corporation ("EDA"); Global Trade & Investment, Inc., a Delaware corporation ("Global"); ICF Kaiser Europe, Inc., a Delaware corporation ("ICFK Europe"); ICF Kaiser / Georgia Wilson, Inc., a Delaware corporation ("ICFK/GW"); ICF Kaiser Overseas Engineering, Inc., a Delaware corporation ("ICFK Overseas"); ICF Kaiser Engineers Pacific, Inc., a Delaware corporation ("ICFK Pacific"); ICF Kaiser Remediation Company, a Delaware corporation ("Remcon"); and ICF Kaiser Systems, Inc., a Delaware corporation ("ICFK Systems"). WITNESSETH: WHEREAS, each new Guarantor is either a direct or an indirect Wholly Owned Restricted Subsidiary of the Company; WHEREAS, on December 3, 1997, the Company entered into an Amended and Restated Credit Agreement with CoreStates Bank, N.A., as Agent, the banking institutions named therein (the "Banks"), and certain subsidiaries of the Company named therein (the "Subsidiary Guarantors"), as a successor Bank Credit Agreement; WHEREAS, as a condition to the Company's being permitted to include the Accounts Receivable of the new Guarantors in the Borrowing Base as defined in and provided for under the Bank Credit Agreement, the new Guarantors must become Subsidiary Guarantors under the Bank Credit Agreement; WHEREAS, EDA, Global, ICFK Europe, ICFK/GW, ICFK Overseas, ICFK Pacific, Remcon, and ICFK Systems have determined that it is desirable to become Subsidiary Guarantors under the Bank Credit Agreement; WHEREAS, the Company and the Trustee have heretofore executed and delivered an Indenture dated as of December 23, 1996 (the "Indenture"), for the purpose of issuing $15,000,000 of 12% Senior Notes due 2003, Series B (the "Notes"), and Section 10.01 of the Indenture provides that the Company (when authorized by a Board Resolution) and the Trustee for the Notes, at any time and from time to time, may enter into one or more indentures supplemental thereto, in form satisfactory to such Trustee, for any of the purposes set forth in said Section 10.01 (each a "Supplemental Indenture"); WHEREAS, Section 5.11 of the Indenture requires that, prior to or concurrently with the new Guarantors becoming Subsidiary Guarantors under the Bank Credit Agreement, the Company must cause the new Guarantors to execute and deliver to the Trustee a Supplemental Indenture and a Indenture Guarantee (substantially in the form attached as Exhibit G to the Indenture) pursuant to which the new Guarantors will unconditionally guarantee the payment of principal of, premium, if any, and interest on the Notes; WHEREAS, ICFK-GP became a Subsidiary Guarantor of the Bank Credit Agreement on May 6, 1996, and was a Guarantor of the Indenture at the time the Notes were issued; -2- WHEREAS, Cygna, PCI, and SAI became Subsidiary Guarantors under the Bank Credit Agreement on June 24, 1996, and were Guarantors of the Indenture at the time the Notes were issued; WHEREAS, EDA, Global, ICFK Europe, ICFK/GW, ICFK Overseas, ICFK Pacific, Remcon, and ICFK Systems will become Subsidiary Guarantors under the Bank Credit Agreement on December 3, 1997, and have determined that it is desirable simultaneously or concurrently to become new Guarantors under the Indenture; WHEREAS, the execution and delivery of this Supplemental Indenture has been duly authorized by the Executive Committee of the Board of Directors of the Company on October 17, 1997; WHEREAS, the execution and delivery of this Supplemental Indenture has been duly authorized by the Boards of Directors of each of the existing Guarantors as of November 14, 1997; WHEREAS, the execution and delivery of this Supplemental Indenture and the Indenture Guarantees have been duly authorized by the Boards of Directors of each of the new Guarantors as of November 14, 1997; WHEREAS, the Company and the Guarantors have determined that it is desirable to enter into this First Supplemental Indenture and have requested the Trustee to join with them in the execution of this First Supplemental Indenture; and WHEREAS, the Trustee has accepted the trusts created by this First Supplemental Indenture and in evidence thereof has joined in the execution hereof; NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH, that, in consideration of the premises and of acceptance by the Trustee of the trusts created hereby and by the Indenture, and also for and in consideration of the sum of One Dollar to the Company duly paid by the Trustee at or before the execution and delivery of this Supplemental Indenture, the receipt of which is hereby acknowledged, IT IS HEREBY COVENANTED AND AGREED, by and among the Company, the existing and new Guarantors, and the Trustee, as follows: 1. Terms defined in the Indenture are used herein as therein defined. 2. Each of Cygna, ICFK-GP, PCI, and SAI hereby acknowledge that each has executed and delivered to the Trustee an Indenture Guarantee, all as of December 23, 1996. 3. Each of EDA, Global, ICFK Europe, ICFK/GW, ICFK Overseas, ICFK Pacific, and ICFK Systems hereby acknowledge its execution and delivery of an Indenture Guarantee dated as of December 3, 1997, in the form authorized by and attached as Exhibit G to the Indenture. 4. The following sundry provisions shall be a part of this First Supplemental Indenture: Section 4.01. Effect of Supplemental Indenture. Upon the execution and -------------------------------- delivery of this First Supplemental Indenture by the Company and the Trustee, the Indenture shall be supplemented in accordance herewith, and this First Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered under the Indenture shall be bound thereby. Section 4.02. Indenture Remains in Full Force and Effect. Except as ------------------------------------------ supplemented hereby, all provisions in the Indenture shall remain in full force and effect. Section 4.03. Indenture and First Supplemental Indenture Construed Together. ------------------------------------------------------------- This First Supplemental Indenture is an Indenture supplemental to and in implementation of the Indenture, and the Indenture and this First Supplemental Indenture shall henceforth be read and construed together. Section 4.04. Confirmation and Preservation of Indenture. The Indenture as ------------------------------------------ supplemented by this First Supplemental Indenture is in all respects confirmed and preserved. -3- Section 4.05 Conflict with Trust Indenture Act. If any provision of this --------------------------------- First Supplemental Indenture limits, qualifies, or conflicts with any provision of the Trust Indenture Act that is required under such Act to be part of and govern any provision of this First Supplemental Indenture, the provision of such Act shall control. If any provision of this First Supplemental Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the provision of such Act shall be deemed to apply to the Indenture as so modified or to be excluded by this First Supplemental Indenture, as the case may be. Section 4.06 Separability Clause. In case any provision in this First ------------------- Supplemental Indenture shall be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 4.07 Terms Defined in the Indenture. All capitalized terms not ------------------------------ otherwise defined herein shall have the meanings ascribed to them in the Indenture. Section 4.08 Effect of Headings. The Article and Section headings herein are ------------------ for convenience only and shall not affect the construction hereof. Section 4.09 Benefits of First Supplemental Indenture, etc. Nothing in this --------------------------------------------- First Supplemental Indenture, the Indenture, or the Notes, express or implied, shall give to any Person, other than the parties hereto and thereto and their successors hereunder and thereunder and the Holders of the Notes, any benefit of any legal or equitable right, remedy, or claim under the Indenture, this First Supplemental Indenture, or the Notes. Section 4.10 Successors and Assigns. All covenants and agreements in this ---------------------- First Supplemental Indenture by the Company and the Guarantors shall bind their successors and assigns, whether so expressed or not. Section 4.11 Trustee Not Responsible for Recitals. The recitals contained ------------------------------------ herein shall be taken as the statements of the Company and the Guarantors, and the Trustee assumes no responsibility for their correctness. Section 4.12 Certain Duties and Responsibilities of the Trustee. In entering -------------------------------------------------- into this First Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee, whether or not elsewhere herein so provided. Section 4.13 Governing Law. This First Supplemental Indenture shall be ------------- governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of law principles thereof. Section 4.14 Counterparts. This First Supplemental Indenture may be executed ------------ in counterparts, each of which, when so executed, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, and the Company, the existing and new Guarantors, and the Trustee have caused their respective corporate seals to be hereunto affixed and attested, all as of December 3, 1997. ICF KAISER INTERNATIONAL, INC. CYGNA CONSULTING ENGINEERS AND PROJECT MANAGEMENT, INC. ICF KAISER GOVERNMENT PROGRAMS, INC. PCI OPERATING COMPANY, INC. SYSTEMS APPLICATIONS INTERNATIONAL, INC. EDA, INCORPORATED -4- GLOBAL TRADE & INVESTMENT, INC. ICF KAISER EUROPE, INC. ICF KAISER / GEORGIA WILSON, INC. ICF KAISER OVERSEAS ENGINEERING, INC. ICF KAISER PACIFIC, INC. ICF KAISER REMEDIATION COMPANY ICF KAISER SYSTEMS, INC. THE BANK OF NEW YORK, as Trustee -5- EX-10.(A) 20 EXHIBIT 10(A) EXHIBIT 10(a) ________________________________________________________________________________ AMENDED AND RESTATED CREDIT AGREEMENT among ICF KAISER INTERNATIONAL, INC., CERTAIN SUBSIDIARIES THEREOF, AS GUARANTORS, and THE BANKING INSTITUTIONS NAMED HEREIN with CORESTATES BANK, N.A. as Agent December 3, 1997 ________________________________________________________________________________ TABLE OF CONTENTS -----------------
Page I. CERTAIN DEFINITIONS................................................................ 1 1.1 Definitions.................................................................. 1 1.2 Accounting Terms............................................................. 17 II. THE CREDIT......................................................................... 18 2.1 The Loans.................................................................... 18 (a) Revolving Credit Loans................................................. 18 2.2 The Revolving Credit Notes................................................... 19 2.3 Funding Procedures........................................................... 19 2.4 Interest..................................................................... 21 (a) Base Rate............................................................... 21 (b) LIBO Rate............................................................... 21 (c) Conversions of Loans.................................................... 21 (d) Default Rate............................................................ 22 (e) Applicable Margins...................................................... 22 2.5 Letters of Credit............................................................ 22 (a) General Requirements.................................................... 22 (b) Letter of Credit Requests............................................... 23 (c) Letter of Credit Participations......................................... 23 (d) Agreement to Repay Letter of Credit Drawings, Collateral, etc........... 26 2.6 Fees......................................................................... 27 (a) Commitment Fee.......................................................... 27 (b) Letter of Credit Fees................................................... 28 (c) Fronting Fee............................................................ 28 (d) Closing Fee............................................................. 28 2.7 Reduction or Termination of Aggregate Revolving Loan Commitment.............. 28 (a) Notice of Voluntary Reduction or Termination............................ 28 (b) Mandatory Termination................................................... 28 (c) Mandatory Reduction..................................................... 28 2.8 Prepayments.................................................................. 29 (a) Mandatory Prepayments................................................... 29 (b) Base Rate Loans......................................................... 29 (c) LIBO Rate Loans......................................................... 30 2.9 Payments..................................................................... 30 (a) LIBO Loans.............................................................. 30 (b) Base Rate Loans......................................................... 30 (c) Letter of Credit Fees................................................... 30 (d) Form of Payments, Application of Payments, Payment Administration, Etc.. 30 (e) Net Payments............................................................ 31 2.10 Changes in Circumstances; Yield Protection................................... 32 2.11 Illegality................................................................... 33 III. REPRESENTATIONS AND WARRANTIES..................................................... 34 3.1 Organization, Standing....................................................... 34
3.2 Corporate Authority, Validity Etc....................................... 34 3.3 Litigation.............................................................. 35 3.4 ERISA................................................................... 35 3.5 Financial Statements.................................................... 35 3.6 Not in Default; Judgments, etc.......................................... 36 3.7 Taxes................................................................... 36 3.8 Permits, Licenses, Etc.................................................. 36 3.9 Compliance With Laws.................................................... 36 3.10 Solvency................................................................ 37 3.11 No Burdensome Agreements................................................ 37 3.12 Subsidiaries, Investments, Etc.......................................... 37 3.13 Amounts Owed to or from Affiliates; Intercompany Agreements............. 37 (a) Affiliates....................................................... 37 (b) Intercompany Agreements.......................................... 38 3.14 Subsidiaries............................................................ 38 3.15 Maintenance of Insurance................................................ 38 3.16 U.S. Government Contracts............................................... 38 3.17 Margin Stock............................................................ 38 3.18 Properties.............................................................. 38 3.19 Change.................................................................. 38 3.20 Disclosure Generally.................................................... 38 IV. SECURITY....................................................................... 39 4.1 Security Documents...................................................... 39 V. CONDITIONS PRECEDENT........................................................... 39 5.1 All Loans and Letters of Credit......................................... 39 (a) Documents......................................................... 39 (b) Covenants; Representations........................................ 39 (c) Defaults.......................................................... 39 (d) Change............................................................ 39 (e) Lock-Box Accounts................................................. 40 (f) Fees and Reimbursable Expenses.................................... 40 (g) Actions to Perfect Liens.......................................... 40 (h) Amended and Restated Security Agreement........................... 40 5.2 Conditions to Effectiveness............................................. 40 (a) Articles, Bylaws.................................................. 40 (b) Evidence of Authorization......................................... 40 (c) Legal Opinions.................................................... 40 (d) Incumbency........................................................ 41 (e) Notes............................................................. 41 (f) Documents......................................................... 41 (g) Consents.......................................................... 41 (h) Other Agreements.................................................. 41 (i) Change............................................................ 41 (j) Due Diligence Review.............................................. 41 VI. AFFIRMATIVE COVENANTS.......................................................... 41 6.1 Financial Statements and Reports........................................ 41
(a) Annual Statements........................................................... 41 (b) Quarterly Statements........................................................ 42 (c) Statements excluding Kaiser-Hill............................................ 42 (d) Financial Statements and Reports Sent to Shareholders or Filed With the SEC. 43 (e) No Default.................................................................. 43 (f) Compliance.................................................................. 43 (g) Borrowing Base Certificate.................................................. 43 (h) Projections................................................................. 43 (i) ERISA....................................................................... 44 (j) Material Changes............................................................ 44 (k) Other Information........................................................... 44 (l) Quarterly Status Reports.................................................... 44 6.2 Corporate Existence............................................................... 44 6.3 ERISA............................................................................. 44 6.4 Compliance with Regulations....................................................... 45 6.5 Conduct of Business; Permits and Approvals; Compliance with Laws.................. 45 6.6 Maintenance of Insurance.......................................................... 45 6.7 Payment of Debt; Payment of Taxes; Etc............................................ 45 6.8 Notice of Events.................................................................. 45 6.9 Inspection Rights................................................................. 46 6.10 Generally Accepted Accounting Principles.......................................... 46 6.11 Use of Proceeds................................................................... 47 6.12 Further Assurances................................................................ 47 VII. NEGATIVE COVENANTS....................................................................... 47 7.1 Merger, Consolidation............................................................. 47 7.2 Indebtedness for Borrowed Money................................................... 47 7.3 Liens............................................................................. 48 7.4 Guarantees........................................................................ 48 7.5 Margin Stock...................................................................... 48 7.6 Acquisitions and Investments...................................................... 48 7.7 Transfer of Assets; Nature of Business............................................ 50 7.8 Restricted Payments............................................................... 50 7.9 Accounting Change................................................................. 51 7.10 Modification of Indenture......................................................... 51 7.11 New Subsidiaries and Subsidiary Guarantors........................................ 51 VIII. FINANCIAL COVENANTS...................................................................... 51 8.1 Fixed Charge Coverage............................................................. 52 8.2 Interest Coverage................................................................. 52 8.3 Senior Funded Indebtedness to EBITDA.............................................. 52 8.4 Indebtedness for Borrowed Money to Total Capitalization........................... 52 8.5 Indebtedness for Borrowed Money to EBITDA......................................... 52 IX. GUARANTY................................................................................. 53 9.1 Guaranty.......................................................................... 53 9.2 No Impairment of Guaranty......................................................... 54 9.3 Continuation and Reinstatement, Etc............................................... 54
9.4 Representations and Warranties................................................... 55 X. DEFAULT.................................................................................. 55 10.1 Events of Default............................................................... 55 (a) Payments................................................................ 55 (b) Covenants............................................................... 55 (c) Representations, Warranties, Etc........................................ 55 (d) Bankruptcy, Etc......................................................... 55 (e) Certain Other Defaults.................................................. 56 (f) Judgments............................................................... 56 (g) Attachments............................................................. 56 (h) Change in Control....................................................... 56 XI. AGENT.................................................................................... 57 11.1 Appointment and Authorization................................................... 57 11.2 Duties and Obligations.......................................................... 57 11.3 The Agent as a Bank............................................................. 58 11.4 Independent Credit Decisions.................................................... 58 11.5 Indemnification................................................................. 58 11.6 Successor Agent................................................................. 59 11.7 Allocations Made By Agent....................................................... 59 XII. MISCELLANEOUS............................................................................ 59 12.1 Waiver.......................................................................... 59 12.2 Amendments...................................................................... 59 12.3 Governing Law................................................................... 60 12.4 Participations and Assignments.................................................. 60 12.5 Captions........................................................................ 61 12.6 Notices......................................................................... 61 12.7 Sharing of Collections, Proceeds and Set-Offs; Application of Payments.......... 61 12.8 Expenses of the Agent; Indemnification of the Agent and the Banks............... 62 12.9 Survival of Warranties and Certain Agreements................................... 63 12.10 Severability.................................................................... 63 12.11 Banks' Obligations Several; Independent Nature of Banks' Rights................. 63 12.12 No Fiduciary Relationship....................................................... 64 12.13 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.................................. 64 12.14 WAIVER OF JURY TRIAL............................................................ 64 12.15 Counterparts; Effectiveness..................................................... 65 12.16 Use of Defined Terms............................................................ 65
EXHIBITS - -------- A Commitments B Security Agreement C Revolving Credit Note D Loan Requests E Opinion of Counsel for Borrower F Officer's Certificate G Borrowing Base Certificate H Form of Joinder Agreement I Form of Insurance 6.1(l) Form of Contract Status Report SCHEDULES - --------- 1.1(b) Existing Liens 2.4(e) Applicable Margins 2.5(a) Existing Letters of Credit 3.3 Litigation 3.5 Liabilities 3.7 Taxes 3.12 Subsidiaries 3.13 Intercompany Debt; Intercompany Agreements; Dividends 7.4 Existing Guarantees -v- AMENDED AND RESTATED CREDIT AGREEMENT ------------------------------------- THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 3, 1997 (this "AGREEMENT"), is entered into by and among ICF KAISER INTERNATIONAL, INC. ("BORROWER"), a Delaware corporation, each of its subsidiaries signatories hereto (each a "Subsidiary Guarantor" and collectively the "Subsidiary Guarantors"), the banking institutions signatories hereto (each, a "BANK" and collectively, the "BANKS") and CORESTATES BANK, N.A., as agent for the Banks under this Agreement (in such capacity, the "AGENT"). WITNESSETH: ---------- WHEREAS, the Borrower, certain of the Subsidiary Guarantors and certain of the Banks are parties to a Credit Agreement, dated as of May 6, 1996, as amended (the "1996 Credit Agreement"), providing for a secured revolving credit facility for loans and letters of credit, which revolving credit facility is used to provide working capital to the Borrower and its Subsidiaries and for general corporate purposes; WHEREAS, the Borrower, the Subsidiary Guarantors, the Banks and the Agent have agreed to amend the 1996 Credit Agreement as provided herein, to add subsidiaries as Subsidiary Guarantors, to add banking institutions as Banks, and to amend and restate the 1996 Credit Agreement as so amended. I. CERTAIN DEFINITIONS. ------------------- I.1 DEFINITIONS. As used in this Agreement, the following terms shall have these meanings: "1996 SENIOR NOTES" shall mean the Borrower's 12% Senior Notes due 2003, Series A, issued December 23, 1996, and all 12% Senior Notes due 2003, Series B, issued March 7, 1997, in exchange therefor. "ACCOUNT" shall mean all rights to payment for goods sold or leased or for services rendered, whether or not such rights have been earned by performance. "ACQUISITION" shall have the meaning set forth in Section 7.6(d). "ADDITIONAL AMOUNT" shall have the meaning set forth in Section 2.1(a)(6). "AFFILIATE" shall mean any Person (other than a Subsidiary) (1) which directly or indirectly controls, or is controlled by, or is under common control with Borrower or a Subsidiary; (2) which directly or indirectly beneficially owns or holds ten percent (10%) or more of any class of voting stock of Borrower or any Subsidiary; or (3) ten percent (10%) or more of whose voting stock of which is directly or indirectly beneficially owned or held by Borrower or a Subsidiary. The term control shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. "AGREEMENT" shall mean this Credit Agreement, as amended, supplemented, or modified from time to time and all exhibits and schedules attached hereto. "AGGREGATE REVOLVING LOAN COMMITMENT" shall have the meaning set forth in Section 2.1(a)(1). "APPLICABLE MARGIN" shall mean the margin applicable to Base Rate Loans and to LIBO Rate Loans determined in accordance with Schedule 2.4(e) hereto. "BASE RATE" shall mean, for any day, the higher of the Federal Funds Rate plus 1/2 of 1% per annum or the prime commercial lending rate of the Agent, as announced from time to time at its head office, calculated on the basis of the actual number of days elapsed in a year of 365/366 days. "BASE RATE LOANS" shall mean Revolving Credit Loans accruing interest based on the Base Rate. "BLOCKED ACCOUNT AGREEMENTS" shall have the meaning set forth in the Security Agreement. "BORROWING BASE" shall mean the sum of (i) 85% of Eligible Domestic Billed Accounts Receivable, (ii) 50% of Eligible Unbilled Accounts Receivable and (iii) 90% of Eligible Foreign Billed Accounts Receivable; provided, however, that the maximum Borrowing Base value of Eligible Unbilled Accounts Receivable shall not exceed $15,000,000. "BUSINESS DAY" shall mean any day other than a Saturday, Sunday, or other day on which commercial banks in Philadelphia are authorized or required to close under the laws of the Commonwealth of Pennsylvania and, if the applicable day relates to a LIBO Rate Loan, or notice with respect to a LIBO Rate Loan, a day on which dealings in Dollar deposits are also carried on in the London interbank market and banks are open for business in London ("London Business Day"). "CAPITAL EXPENDITURES" shall mean expenditures for any fixed assets or improvements, replacements, substitutions or additions thereto which have a useful life of more than one year, including assets acquired pursuant to a Capitalized Lease but not including any such expenditures that constitute Investments made in accordance with Section 7.6, less 50% of Capital Expenditures of Kaiser-Hill and K-H Funding. "CAPITAL STOCK" shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person other than a corporation, and any and all warrants or options to purchase any of the foregoing. "CAPITALIZED LEASE" shall mean all lease obligations of any Person for any property (whether real, personal or mixed) which have been or should be capitalized on the books of the lessee in accordance with Generally Accepted Accounting Principles. "CHANGE OF CONTROL" means any of the following: (i) the sale, lease, conveyance or other disposition of all or substantially all of Borrower's assets as an entirety or substantially as -2- an entirety to any Person or "group" (within the meaning of Section 13(d)(3) of the Exchange Act) in one or a series of transactions, provided that a transaction where the holders of all classes of voting Capital Stock of Borrower immediately prior to such transaction own, directly or indirectly, more than 50% of the aggregate voting power of all classes of voting Capital Stock of such Person or group immediately after such transactions shall not be a Change of Control; (ii) the acquisition by Borrower and any of its Subsidiaries of 50% or more of all classes of voting Capital Stock of Borrower in one transaction or a series of related transactions; (iii) the approval by Borrower of a plan of liquidation of Borrower; (iv) any transaction or series of transactions (as a result of a tender offer, merger, consolidation or otherwise) that results in, or that is in connection with, (a) any Person, including a "group" (within the meaning of Section 13(d)(3) of the Exchange Act) that includes such Person, acquiring "beneficial ownership" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% or more of the aggregate voting power of all classes of voting Capital Stock of Borrower or any Person that possesses "beneficial ownership" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% or more of the aggregate voting power of all classes of voting Capital Stock of Borrower, or (b) less than 50% (measured by the aggregate voting power of all classes) of Borrower's voting Capital Stock being registered under Section 12(b) or 12(g) of the Exchange Act; or (v) a majority of the Board of Directors of Borrower not being comprised of Continuing Directors. "CLOSING DATE" shall mean December 3, 1997. "CODE" shall mean the Internal Revenue Code of 1986, as amended from time to time, and all rules and regulations with respect thereto in effect from time to time. "COLLATERAL" shall have the meaning set forth in the Security Agreement. "COMMITMENT FEE" shall have the meaning set forth in Section 2.6(a). "COMMITMENT PERCENTAGE" shall mean with respect to each Bank the percentage set forth opposite its name on Exhibit A to this Agreement. "CONSOLIDATED FIXED CHARGES" shall mean for any period, Consolidated Interest Expense, Consolidated Lease Expense and dividends payable by Borrower on its Capital Stock, determined on a consolidated basis in accordance with Generally Accepted Accounting Principles, for such period, less 50% of the Consolidated Fixed Charges of Kaiser-Hill and K-H Funding. "CONSOLIDATED INTEREST EXPENSE" shall mean for any period, interest expense of Borrower and its Subsidiaries other than its Single Purpose Subsidiaries for such period, determined on a consolidated basis in accordance with Generally Accepted Accounting Principles (net of interest income for such period). "CONSOLIDATED LEASE EXPENSE" shall mean for any period, the aggregate rental expenses of Borrower and its Subsidiaries other than its Single Purpose Subsidiaries, determined on a consolidated basis in accordance with Generally Accepted Accounting Principles, payable in respect of such period under leases (other than capitalized leases) for real and/or personal property (net of income from subleases thereof). -3- "CONSOLIDATED NET INCOME" shall mean for any period, the consolidated net income (or deficit) of Borrower and its Subsidiaries other than its Single Purpose Subsidiaries for such period (taken as a cumulative whole), determined in accordance with Generally Accepted Accounting Principles, provided that there shall be excluded therefrom (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with Borrower or any Subsidiary except mergers accounted for under the pooling of interests method, (b) the income (or deficit) of any Person (other than a Subsidiary) in which Borrower or any Subsidiary has an ownership interest, except to the extent that Borrower or such Subsidiary has received, or has the right to receive, such income, (c) the undistributed earnings of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation or requirement of law applicable to such Subsidiary, (d) any aggregate net gain (but not any aggregate net loss) during such period arising from the sale, exchange or other disposition of capital assets (such term to include all fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities), (e) any write-up of any asset, (f) any net gain from the collection of the proceeds of life insurance policies, (g) any gain arising from the acquisition of any securities, or the extinguishment, under Generally Accepted Accounting Principles, of any Indebtedness for Borrowed Money of Borrower or any Subsidiary, (h) in the case of a successor to Borrower by consolidation or merger or as a transferee of its assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets and (i) any deferred credit representing the excess of equity in any Subsidiary at the date of acquisition over the cost of the investment in such Subsidiary; provided, however, that Consolidated Net Income shall include the consolidated net income of Kaiser-Hill and K-H Funding to the extent included in the consolidated net income of Borrower in accordance with Generally Accepted Accounting Principles. "CONSOLIDATED NET WORTH" shall mean the aggregate amount of the capital stock accounts plus (or minus in the case of a deficit) the retained earnings of Borrower and its Subsidiaries determined on a consolidated basis in accordance with Generally Accepted Accounting Principles. "CONTINUING DIRECTOR" of Borrower as of any date means a member of the Board of Directors of Borrower who (i) was a member of the Board of Directors of Borrower on the date hereof or (ii) was nominated for election or elected to the Board of Directors of Borrower with the affirmative vote of at least a majority of the directors who were Continuing Directors at the time of such nomination or election. "CREDIT RECLASSIFICATIONS" shall mean net credit balances on an individual account basis which remain outstanding for greater than 90 days. "DEBT" shall mean, as of any date of determination, with respect to Borrower and its Subsidiaries, without duplication, (i) all items which in accordance with Generally Accepted Accounting Principles would be included in determining total liabilities as shown on the liability side of a consolidated balance sheet of Borrower and its Subsidiaries as of the date on which Debt is to be determined, (ii) all indebtedness secured by any Lien on any property or asset owned or held by Borrower or any Subsidiary subject thereto, whether or not the indebtedness -4- secured thereby shall have been assumed, (iii) all indebtedness of others with respect to which Borrower or any Subsidiary has become liable by way of a guarantee (including, any obligation of the guaranteeing person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (d) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof, (iv) all contingent liabilities of Borrower or any Subsidiary, including but not limited to contingent liabilities in connection with outstanding letters of credit, and (v) lease obligations that, in conformity with Generally Accepted Accounting Principles, have been or should be capitalized on such entity's balance sheet. "DEFAULT RATE" shall mean 2% per annum above the interest rate otherwise applicable on all Loans and Unpaid Drawings and 2% per annum above the rate of all fees otherwise applicable to Letters of Credit. "DEFERRED REVENUE" shall mean with respect to any Accounts due from any Person to which Borrower has a liability to provide services as a result of billings in excess of the value of work performed, the lesser of (a) such excess and (b) the amount of such Accounts due from such Person. "DISCOUNTED TREASURIES" shall have the meaning set forth in Section 2.5(d). "DOCUMENTARY LETTER OF CREDIT" shall mean a letter of credit issued for the account of Borrower in the ordinary course of business of Borrower to secure the deferred purchase price of goods. "DOLLARS" shall mean the lawful currency of the United States of America. "DOMESTIC SUBSIDIARY" shall mean as to any Person, a Subsidiary of such Person the jurisdiction of incorporation of which is, and the chief executive office of which is located in, one of the States of the United States or the District of Columbia. "DRAWING" shall have the meaning set forth in Section 2.5(d). "EBIT" shall mean, for any period, Consolidated Net Income plus the sum of (a) Consolidated Interest Expense and (b) income tax expense to the extent such items are taken into account in determining Consolidated Net Income. "EBITDA" shall mean, for any period, Consolidated Net Income plus the sum ---- of (a) Consolidated Interest Expense, (b) income tax expense, (c) depreciation expense, (d) amortization expense, (e) extraordinary or unusual losses or other losses not incurred in the ordinary course of business included in the calculation of net income, (f) any non-cash charge against net income required to be recognized in connection with the issuance of capital stock to -5- employees (whether upon lapse of vesting restrictions, exercise of employee options or otherwise) and (g) any non-cash charge against net income required to be recognized in connection with employee benefit plans, less extraordinary or ---- unusual gains or other gains not incurred in the ordinary course of business included in the calculation of net income, in each case to the extent such items are taken into account in determining Consolidated Net Income. "ELIGIBLE DOMESTIC BILLED ACCOUNTS RECEIVABLE" shall mean, as of the time of submission of a Borrowing Base Certificate pursuant to Section 6.1(f), Accounts that represent a valid obligation from actual sale and delivery of goods or rendition of services to or for the benefit of such account debtor arising in the ordinary course of business invoiced by Borrower and the Subsidiary Guarantors on or prior to the Receivables Record Date applicable to such Borrowing Base Certificate and which have been outstanding less than 90 days from the date of such invoice, excluding (a) intercompany accounts, (b) accounts as to which the account debtor of which is not incorporated or otherwise organized under the laws of one of the States, territories or possessions of the United States, the District of Columbia, or the Commonwealth of Puerto Rico, (c) accounts as to which the account debtor of which is a debtor in any bankruptcy, insolvency, or reorganization proceedings, (d) any non-trade Accounts and (e) Accounts which the Agent or the Required Banks, exercising reasonable discretion, have otherwise determined to be unacceptable to them, provided, that Eligible Domestic Billed Accounts Receivable shall be reduced by - -------- the sum of (a) the amount at such date of reserves against such reductions in accounts otherwise qualifying as Eligible Domestic Billed Accounts Receivable, as from time to time Borrower shall determine in the ordinary course of its business, (b) any retainages or variances, (c) Deferred Revenue, (d) Unapplied Cash and (e) Credit Reclassification. "ELIGIBLE FOREIGN BILLED ACCOUNTS RECEIVABLE" shall mean, as of the time of submission of a Borrowing Base Certificate pursuant to Section 6.1(f), Accounts that represent a valid obligation from actual sale and delivery of goods or rendition of services to or for the benefit of an account debtor that is not incorporated or otherwise organized under the laws of one of the States, territories or possessions of the United States, the District of Columbia, or the Commonwealth of Puerto Rico arising in the ordinary course of business invoiced by Borrower or the Subsidiary Guarantors on or prior to the Receivables Record Date applicable to such Borrowing Base Certificate and which have been outstanding less than 90 days from the date of such invoice, where such obligor is covered by a letter of credit or is a member of the OECD, or Borrower or the Subsidiary Guarantor has obtained insurance in form and substance substantially as attached hereto as Exhibit I or other guarantee similar to a letter of credit satisfactory to the Agent, provided that Foreign Billed Accounts Receivable shall be reduced by the sum of (a) the amount at such date of reserves against such reductions in accounts otherwise qualifying as Foreign Billed Accounts Receivable, as from time to time Borrower shall determine in the ordinary course of its business, (b) any retainages or variances, (c) Deferred Revenue, (d) Unapplied Cash and (e) Credit Reclassification. "ELIGIBLE UNBILLED ACCOUNTS RECEIVABLE" shall mean, as of the time of submission of a Borrowing Base Certificate pursuant to Section 6.1(f), Accounts of Borrower or a Subsidiary Guarantor that represent a valid obligation from actual sale and delivery of goods or rendition of services to or for the benefit of the applicable account debtor completed within thirty days of the applicable Receivables Record Date and arising in the ordinary course of business that are not invoiced as of such Receivables Record Date but otherwise meeting the criteria set forth in the -6- definition of "Eligible Domestic Billed Accounts Receivable"or "Eligible Foreign Billed Accounts Receivable" in all respects, and subject to reductions comparable to reductions taken in account in such definition. "ENVIRONMENTAL CONTROL STATUTES" shall mean each and every applicable federal, state, county or municipal statute, ordinance, rule, regulation, order, directive or requirement, together with all successor statutes, ordinances, rules, regulations, orders, directives or requirements, of any Governmental Authority, including without limitation laws in any way related to Hazardous Substances. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time. "ERISA AFFILIATE" shall mean any corporation which is a member of the same controlled group of corporations as Borrower within the meaning of Section 414(b) of the Code, or any trade or business which is under common control with Borrower within the meaning of Section 414(c) of the Code. "EVENT OF DEFAULT" shall have the meaning set forth in Section 10.1. "FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (i) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day. "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean generally accepted accounting principles as in effect from time to time in the United States, consistently applied. "GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "HAZARDOUS SUBSTANCE" shall mean (a) any substance designated pursuant to section 311(b)(2)(A) of the Federal Water Pollution Control Act, (b) any element, compound, mixture, solution or substance designated pursuant to section 102 of CERCLA, (c) any hazardous waste having the characteristics identified under or listed pursuant to section 3001 of the Solid Waste Disposal Act (but not including any waste the regulation of which under the Solid Waste Disposal Act has been suspended by Act of Congress), (d) any toxic pollutant listed under section 307(a) of the Federal Water Pollution Control Act, (e) any hazardous air pollutant listed under section 112 of the Clean Air Act, and (f) any imminently hazardous chemical substance or mixture with respect to which the Administrator has taken action pursuant to section 7 of the Toxic Substances Control Act. The term specifically includes petroleum, including crude oil or any faction thereof, asbestos, asbestos containing materials and urea formaldehyde insulation. -7- The term does not include natural gas, natural gas liquids, liquefied natural gas, or synthetic gas useable for fuel (or mixtures of natural gas and such synthetic gas). "HUNTERS BRANCH INVESTMENT" shall mean the direct or indirect Investment by the Borrower or any Subsidiary in the buildings and associated land at 9300 and/or 9302 Lee Highway, Fairfax, Virginia. "ICF KAISER BRAZIL HOLDINGS" shall mean ICF Kaiser Brazil Holdings, Inc., a corporation organized under the laws of the State of Delaware which will have as its sole purpose the ownership of ICF Kaiser Participacoes Ltda. "ICF KAISER HUNTERS BRANCH" shall mean ICF Kaiser Hunters Branch Leasing, Inc., a corporation (however denominated) organized under the laws of the State of Delaware, created in order to own the Hunters Branch Investment either directly or indirectly. "ICF KAISER NETHERLANDS" shall mean ICF Kaiser Netherlands B.V., a corporation organized under the laws of the country of Netherlands which is an indirect wholly owned Subsidiary of Borrower and a Subsidiary Guarantor. "ICF KAISER PARTICIPACOES LTDA." shall mean the entity (however denominated) organized under the laws of Brazil which will own substantially all of the capital stock of IESA following the IESA Investment. "IESA" shall mean Internacional de Engenharia S.A., a corporation organized under the laws of Brazil, together with its subsidiaries IESA-Technologia de Sistemas Ltda., Servap Engenharia e Consultoria Ltda., IESA Negocios Ltda., IESA Participacoes Ltda., and Project Engineering Ltd/Cayman Islands. "IESA INVESTMENT" shall mean the Investment in and eventual ownership of substantially all of the capital stock of IESA by ICF Kaiser Participacoes Ltda. "INDEBTEDNESS FOR BORROWED MONEY" shall mean without duplication (i) all indebtedness, liabilities, and obligations, now existing or hereafter arising for money borrowed by Borrower and its Subsidiaries (other than indebtedness of Borrower to any Subsidiary or of any Subsidiary to Borrower or any one or more other Subsidiaries of Borrower), whether or not evidenced by any note, indenture, or agreement (including, without limitation, the Notes and any indebtedness for money borrowed from a Borrower Affiliate) (ii) Letter of Credit Outstandings, and (iii) all indebtedness of others for money borrowed (including a Borrower Affiliate) with respect to which Borrower or a Subsidiary has become liable by way of a guarantee or indemnity. "INDEMNITEES" shall have the meaning set forth in Section 12.8(b). "INDENTURES" shall mean the Indenture dated as of December 23, 1996 between Borrower and The Bank of New York and the Indenture dated as of January 11, 1994 between Borrower and The Bank of New York. "INTERCOMPANY AGREEMENTS" shall have the meaning set forth in Section 3.13(b). -8- "INTERCOMPANY DEBT" shall have the meaning set forth in Section 3.13. "INTEREST PERIOD" shall mean with respect to any LIBO Rate Loan, each period commencing on the date any such Loan is made, or, with respect to a Loan being renewed, the last day of the next preceding Interest Period with respect to a Loan, and ending on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day of the calendar month) in the first, second, third or sixth calendar month thereafter as selected under the procedures specified in Section 2.3, if the Banks are then offering LIBO Rate Loans for such period; provided that each LIBO Rate Loan Interest Period which would otherwise end on a day which is not a Business Day (or, for purposes of Loans to be repaid in London, such day is not a London Business Day) shall end on the next succeeding Business Day (or London Business Day, as appropriate) unless such next succeeding Business Day (or London Business Day, as appropriate) falls in the next succeeding calendar month, in which case the Interest Period shall end on the next preceding Business Day (or London Business Day, as appropriate). "INVESTMENT" in any Person shall mean, without duplication: (a) the acquisition (whether for cash, property, services or securities or otherwise) of Capital Stock, bonds, notes, debentures, partnership or other ownership interests or other securities of such Person; and (b) any deposit with, or advance, loan or other extension of credit to, such Person or guarantee or assumption of, or other contingent obligation with respect to, Indebtedness for Borrowed Money of such Person, other than Indebtedness for Borrowed Money permitted by Section 7.2 or guarantees permitted by Section 7.4; provided, however, that the term "INVESTMENT" shall not include: --------- ------- (i) extensions of trade credit and advances to customers and suppliers and other contractual and trade relationships, requiring repayment within reasonable commercial periods, to the extent made in the ordinary course of business consistent with past practice and in accordance with normal industry practice; (ii) loans and advances to non-executive employees of Borrower and its Subsidiaries requiring repayment within commercially reasonable periods and made in the ordinary course of business consistent with past practice, provided that the aggregate amount of loans and advances under this clause (ii) shall not exceed $250,000 at any one time; (iii) investments of Borrower in any Subsidiary existing prior to the time of such investment (other than a Single Purpose Subsidiary) and by any Subsidiary in Borrower or any other Subsidiary existing prior to the time of such investment (other than a Single Purpose Subsidiary) of Borrower; -9- (iv loans to officers of Borrower and its Subsidiaries in connection with any relocation of residence, approved by a majority of the independent members of the Board of Directors of Borrower, provided that -------- the aggregate of amount of loans under this clause (iv) shall not exceed $1,000,000 in any fiscal year; and (v investments in the form, or out of the net proceeds of the sale (other than to a Subsidiary or employee stock ownership plan of Borrower) of, Capital Stock of Borrower. "ISSUING BANK" shall have the meaning set forth in Section 2.5(a). "KAISER-HILL" shall mean Kaiser-Hill Company, LLC, a limited liability company indirectly owned equally by Borrower and CH2M Hill Companies, Ltd. "K-H FUNDING" shall mean Kaiser-Hill Funding Company, L.L.C., a limited liability company formed under the laws of the State of Delaware, owned in the following percentages by Kaiser-Hill (98%), ICF Kaiser Government Programs, Inc. (1%), and CH2M Hill Federal Group, Ltd. (1%), a wholly owned subsidiary of CH2M Hill Companies, Ltd. "L/C BANK" shall have the meaning set forth in Section 2.5(a). "LETTER OF CREDIT" shall mean a Documentary Letter of Credit or a Standby Letter of Credit issued hereunder, and shall include all existing Letters of Credit described in Schedule 2.5(a) hereto which were issued by a Bank and remain outstanding on the date of this Agreement. "LETTER OF CREDIT OUTSTANDINGS" shall mean, at any time, the aggregate Stated Amount of all outstanding Letters of Credit plus the aggregate amount of Unpaid Drawings. "LIBO RATE" shall mean, for the applicable Interest Period, (i) the rate, rounded upwards to the next one-sixteenth of one percent, determined by the Agent two London Business Days prior to the date of the corresponding LIBO Rate Loan, at which the Agent is offered deposits in Dollars at approximately 11:00 A.M., London time, by leading banks in the interbank eurodollar market for delivery on the date of such Loan in an amount and for a period comparable to the amount and Interest Period of such Loan and in like funds, divided by (ii) a number equal to one (1.0) minus the LIBO Rate Reserve Percentage. The LIBO Rate shall be adjusted automatically with respect to any LIBO Rate Loan outstanding on the effective date of any change in the LIBO Rate Reserve Percentage, as of such effective date. LIBO Rate shall be calculated on the basis of the number of days elapsed in a year of 360 days. "LIBO RATE LOANS" shall mean Revolving Credit Loans accruing interest based on the LIBO Rate. "LIBO RATE RESERVE PERCENTAGE" shall mean, for any LIBO Rate Loan for any Interest Period therefor, the daily average of the stated maximum rate (expressed as a decimal) at which reserves (including any marginal, supplemental, or emergency reserves) are required to be maintained during such Interest Period under Regulation D by the Agent against "Eurocurrency -10- liabilities" (as such terms is used in Regulation D) but without benefit of credit proration, exemptions, or offsets that might otherwise be available to the Agent from time to time under Regulation D. Without limiting the effect of the foregoing, the LIBO Rate Reserve Percentage shall reflect any other reserves required to be maintained by the Agent against (1) any category of liabilities which includes deposits by reference to which the rate for LIBO Rate Loans is to be determined; or (2) any category of extension of credit or other assets which include LIBO Rate Loans. "LIEN" shall mean any lien, mortgage, security interest, chattel mortgage, pledge or other encumbrance (statutory or otherwise) of any kind securing satisfaction of an obligation, including any agreement to give any of the foregoing, any conditional sales or other title retention agreement, any lease in the nature thereof, and the filing of or the agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction or similar evidence of any encumbrance, whether within or outside the United States. "LOAN" shall mean a Revolving Credit Loan. "LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Security Agreement, the Blocked Account Agreements and each other agreement, document and instrument referred to herein or therein. "MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in ERISA Section 4001(a)(3). "NON-RECOURSE INDEBTEDNESS" shall mean Indebtedness for Borrowed Money of a Single Purpose Subsidiary with respect to which (a) the sole legal recourse for collection of principal, premium, if any, and interest on such Indebtedness is against (i) the specific property identified in the instruments evidencing or securing such Indebtedness and such property was acquired with the proceeds of such Indebtedness or such Indebtedness was incurred within 90 days of the acquisition of such property, and/or (ii) the Capital Stock of such Single Purpose Subsidiary, provided that such Single Purpose Subsidiary has no assets other than the specific property acquired with the proceeds of such Indebtedness for Borrowed Money, capital contributed to such Subsidiary in compliance with the terms of this Agreement, and such other assets as may be reasonably required for the limited operations of such Subsidiary, and (b) neither Borrower nor any Subsidiary of Borrower, other than the referent Single Purpose Subsidiary, is directly or indirectly liable to make any payment thereon, has any guarantee obligation in respect of such Indebtedness for Borrowed Money or such Single Purpose Subsidiary or has pledged or granted any lien or encumbrances on any assets as collateral or security with respect thereto, other than the capital stock of the referent Single Purpose Subsidiary. "NOTES" shall mean the Revolving Credit Notes. "OBLIGATIONS" shall mean all now existing or hereafter arising debts, obligations, covenants, and duties of payment or performance of every kind, matured or unmatured, direct or contingent, owing, arising, due, or payable to the Banks or the Agent by or from Borrower arising out of this Agreement or any other Loan Document, including, without limitation, all -11- obligations to repay principal of and interest on all the Revolving Credit Loans, to make reimbursements or payments with respect to Letters of Credit, and to pay interest, fees, costs, charges, expenses, professional fees, and all sums chargeable to Borrower under the Loan Documents, whether or not evidenced by any note or other instrument. "OPERATING LEASE" shall mean an operating lease as defined by Generally Accepted Accounting Principles, excluding all leases the expenses for which may be charged to a customer of Borrower or a Subsidiary pursuant to the written terms of the contract with such customer. "PBGC" shall mean the Pension Benefit Guaranty Corporation and any successor thereto. "PENSION PLAN" shall mean, at any time, any Plan (including a Multiemployer Plan), the funding requirements of which (under ERISA Section 302 or Code Section 412) are, or at any time within the six years immediately preceding the time in question, were in whole or in part, the responsibility of Borrower or any ERISA Affiliate. "PERMITTED BUSINESSES" shall mean the businesses of providing consulting, engineering or construction services to public and private sector clients in the environment, energy, infrastructure and industry markets. "PERMITTED LIENS" shall mean: (a) any Liens for current taxes, assessments and other governmental charges not yet due and payable or being contested in good faith by Borrower or one or more of its Subsidiaries by appropriate proceedings and for which adequate reserves have been established by Borrower or one or more of its Subsidiaries as reflected in Borrower's or one or more of its Subsidiaries' financial statements; (b) any mechanic's, materialman's, carrier's, warehousemen's or similar Liens for sums not yet due or being contested in good faith by Borrower or one or more of its Subsidiaries by appropriate proceedings and for which adequate reserves have been established by Borrower or one or more of its Subsidiaries as reflected in Borrower's or one or more of its Subsidiaries' financial statements; (c) Liens in favor of the Banks under the Loan Documents; (d) easements, rights-of-way, restrictions and other similar encumbrances on the real property or fixtures of Borrower or one or more of its Subsidiaries incurred in the ordinary course of business which individually or in the aggregate are not substantial in amount and which do not in any case materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of Borrower or any of its Subsidiaries; (e) Liens (other than Liens imposed on any property of Borrower or one or more of its Subsidiaries or any ERISA Affiliate pursuant to ERISA or section 412 of the Code) incurred or deposits made in the ordinary course of -12- business, including Liens in connection with workers' compensation, unemployment insurance and other types of social security and Liens to secure performance of tenders, statutory obligations, trade contracts (other than for Indebtedness for Borrowed Money), surety and appeal bonds (in the case of appeal bonds such Lien shall not secure any reimbursement or indemnity obligation in an amount greater than $250,000), bids, leases that are not capitalized leases, performance bonds, sales contracts and other similar obligations, deposits securing liability to insurance carriers under insurance or self-insurance arrangements, in each case, not incurred in connection with the obtaining of credit or the payment of a deferred purchase price, and which do not, in the aggregate, result in a material adverse effect on the business, operations, assets or condition (financial or otherwise) of Borrower or one or more of its Subsidiaries; (f) Liens existing upon the date hereof as set forth in Schedule 1.1(b) hereto. (g) Liens securing obligations incurred to finance the deferred purchase price of property, provided that (i) such Liens shall be created -------- within 120 days after the acquisition of such property, (ii) such Liens do not at any time encumber any property other than the property financed by such obligations, (iii) the amount of the obligation secured thereby is not increased, and (iv) the principal amount of an obligation secured by any such Lien shall at no time exceed the lesser of (A) 100% of the original purchase price of such property and (B) the fair value (as determined in good faith by the Board of Directors of Borrower) of such property at the time it was acquired; (h) Liens securing obligations assumed in connection with Investments made in accordance with Section 7.6, provided that (i) such Liens exist at -------- the time of the Investment and were not created in anticipation thereof, (ii) any such Lien is not spread to cover any additional property or assets after the time of such Investment, and (iii) the amount of the obligation secured by any such Lien is not increased; (i) Liens securing Non-Recourse Indebtedness; and (j) Liens (not otherwise permitted hereunder) which secure obligations not exceeding (as to Borrower and its Subsidiaries) $500,000 in aggregate amount at any time outstanding, provided that such Liens are limited to assets other than Accounts. "PERSON" shall mean any individual, corporation, partnership, joint venture, association, company, business trust or entity. "PLAN" shall mean an employee benefit plan as defined in Section 3(3) of ERISA, other than a Multiemployer Plan, whether formal or informal and whether or not legally binding. -13- "POTENTIAL DEFAULT" shall mean an event, condition or circumstance, that with the giving of notice or lapse of time or both would become an Event of Default. "PROHIBITED TRANSACTION" shall mean a transaction that is prohibited under Code Section 4975 or ERISA Section 406 and not exempt under Code Section 4975 or ERISA Section 408. "RECEIVABLES RECORD DATE" shall mean, as to any Borrowing Base Certificate submitted pursuant to Section 6.1(f) hereof, the last calendar day of the immediately preceding calendar month. "REGULATION" shall mean any statute, law, ordinance, regulation, order or rule of any United States or foreign, federal, state, local or other government or governmental body, including, without limitation, those covering or related to banking, financial transactions, securities, public utilities, environmental control, energy, safety, health, transportation, bribery, record keeping, zoning, antidiscrimination, antitrust, wages and hours, employee benefits, and price and wage control matters. "REGULATORY CHANGE" shall mean any change after the date of this Agreement in United States, federal, state or foreign laws or regulations (including Regulation D of the Board of Governors of the Federal Reserve System) or the adoption or making after such date of any interpretations, directives or requests of or under any United States federal, state, or foreign laws or (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof applying to a class of banks including any one of the Banks but excluding any foreign office of any Bank. "RELEASE OF HAZARDOUS SUBSTANCES" shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment of any Hazardous Substances (including the abandonment or discarding of barrels, containers, and other closed receptacles containing any Hazardous Substance), but excludes the normal application of fertilizer or pesticides. "REPORTABLE EVENT" shall mean, with respect to a Pension Plan: (a) Any of the events set forth in ERISA Sections 4043(c) (other than a reportable event as to which the provision of 30 days' notice to the PBGC is waived under the applicable statute or regulations) or 4063(a) or the regulations thereunder, (b) an event requiring Borrower or any ERISA Affiliate to provide security to a Pension Plan under Code Section 401(a)(29) and (c) any failure by Borrower or any ERISA Affiliate to make payments required by Code Section 412(m). "REQUIRED BANKS" shall mean Banks whose outstanding Revolving Loan Commitments equal or exceed 66_% of the total of such Revolving Loan Commitments. "REVOLVER TERMINATION DATE" shall have the meaning set forth in Section 2.1. "REVOLVING LOAN COMMITMENT" shall have the meaning set forth in Section 2.1. "REVOLVING CREDIT LOAN" or "LOAN" shall have the meaning set forth in Section 2.1. -14- "REVOLVING CREDIT NOTE" shall have the meaning set forth in Section 2.2. "SECURITY AGREEMENT" shall mean the Amended and Restated Security Agreement, dated as of the date hereof, among Borrower, the Subsidiary Guarantors and the Agent in the form of Exhibit B hereto. "SECURITY DOCUMENTS" shall mean the Security Agreement and all financing statements, documents and instruments contemplated by such agreements to create, perfect and maintain the lien of the Agent in and to the Collateral. "SENIOR FUNDED INDEBTEDNESS" shall mean as of the date of determination, the sum of (i) Indebtedness for Borrowed Money, excluding Subordinated Debt and guarantees to the extent included in Indebtedness for Borrowed Money; (ii) Capitalized Lease obligations; and (iii) obligations in connection with bankers' acceptances, of Borrower and its Subsidiaries, determined on a consolidated basis in accordance with Generally Accepted Accounting Principles. "SINGLE PURPOSE SUBSIDIARY" shall mean as to any Person, a Subsidiary of such Person the activities of which, including its Subsidiaries and partnerships or other entities owned, or the management of which are otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Single Purpose Subsidiary, are limited to (a) ownership of all or a portion of the interests in a single project constituting one or more Permitted Businesses, either directly or through the ownership of the Capital Stock of another Person, and (b) the development, engineering, design, project management, construction or operation of such project; ICF Kaiser Brazil Holdings, ICF Kaiser Participacoes Ltda., and IESA shall be deemed to be Single Purpose Subsidiaries for all purposes hereunder. "SOLVENT" shall mean, with respect to any Person, that the aggregate present fair saleable value of such Person's assets is in excess of the total amount of its probable liabilities on its existing debts as they become absolute and matured, such Person has not incurred debts beyond its foreseeable ability to pay such debts as they mature, and such Person has capital adequate to conduct the business it is presently engaged in or is about to engage in. "STANDBY LETTER OF CREDIT" shall mean a letter of credit issued for the account of Borrower, other than a Documentary Letter of Credit. "STATED AMOUNT" of each Letter of Credit shall mean, at any time, the maximum amount available to be drawn thereunder, determined without regard to whether any conditions to drawing could then be met. "SUBORDINATED DEBT" shall mean Borrower's Senior Subordinated Notes due 2003 and any other Indebtedness for Borrowed Money subordinated to payment of the Obligations in a manner satisfactory to the Required Banks in their sole discretion. "SUBSIDIARY" shall mean as to any Person, (i) a corporation of which shares of stock or other ownership interests having ordinary voting power (other than stock having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation are at the time owned, or the management of which is otherwise -15- controlled, directly or indirectly through one or more intermediaries, or both, by such Person and (ii) any limited liability company in which such Person, directly or indirectly, owns at least a majority of the ownership interests having ordinary voting power, or the management of which is otherwise controlled, directly or indirectly, through one or more intermediaries by such Person, or both; provided, however, that in no event shall either Kaiser-Hill or -------- ------- K-H Funding constitute a Subsidiary within the meaning of this definition; unless otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of Borrower. "TAXES" shall have the meaning set forth in Section 2.9(e)(1). "TERMINATION EVENT" shall mean, with respect to a Pension Plan: (a) a Reportable Event, (b) the termination of a Pension Plan, or the filing of a notice of intent to terminate a Pension Plan, or the treatment of a Pension Plan amendment as a termination under ERISA Section 4041(c), (c) the institution of proceedings to terminate a Pension Plan under ERISA Section 4042(a) or (d) the appointment of a trustee to administer any Pension Plan under ERISA Section 4042(b). "TOTAL CAPITALIZATION" shall mean as of the date of determination, the sum of (i) the Consolidated Net Worth of Borrower and its Subsidiaries at such date and (ii) the outstanding principal amount of the Indebtedness for Borrowed Money of Borrower and its Subsidiaries at such date. "TRANSACTION" shall mean the establishment of the facility contemplated by this Agreement. "UNAPPLIED CASH" shall mean Accounts of Borrower which have been paid by the relevant obligor but which payments have not yet been reflected on the accounts receivables records of Borrower. "UNFUNDED PENSION LIABILITIES" shall mean, with respect to any Pension Plan at any time, the amount determined by taking the accumulated benefit obligation, as disclosed in accordance with Statement of Accounting Standards No. 87, over the fair market value of Pension Plan assets. "UNPAID DRAWING" shall have the meaning set forth in Section 2.5(d). "UNRECOGNIZED RETIREE WELFARE LIABILITY" shall mean, with respect to any Plan that provides post-retirement benefits other than pension benefits, the amount of the accumulated post-retirement benefit obligation, as determined in accordance with Statement of Financial Accounting Standards No. 106, as of the most recent valuation date. For purposes of determining the aggregate amount of the Unrecognized Retiree Welfare Liability, Plans maintained by a Subsidiary that is not otherwise a ERISA Affiliate shall be taken into account. I.2 ACCOUNTING TERMS. All accounting terms used herein shall be construed ---------------- in accordance with Generally Accepted Accounting Principles consistent with those applied in the preparation of the financial statements referred to in Section -16- 3.5, and all financial data submitted pursuant to this Agreement shall be prepared in accordance with such principles. II. THE CREDIT. ----------- II.1 THE LOANS --------- (a) REVOLVING CREDIT LOANS. (1 Subject to the terms and conditions hereof, each Bank agrees, severally and not jointly with the other Banks, to make revolving credit loans (collectively called the "REVOLVING CREDIT LOANS" and individually a "REVOLVING CREDIT LOAN") to Borrower from time to time during the period commencing the date hereof and ending three (3) years from the date hereof, or on any earlier date as provided in Sections 2.7(b) and 10.1 hereof (the "REVOLVER TERMINATION DATE"), in principal amounts not to exceed at any time outstanding in the aggregate the amount set forth opposite the name of each such Bank on Exhibit A hereto under the caption "Revolving Loan Commitment" (each such amount being hereinafter called such Bank's "REVOLVING LOAN COMMITMENT" and collectively, the Banks' "AGGREGATE REVOLVING LOAN COMMITMENT"). All Loans shall be made by the Banks simultaneously and pro rata in accordance with the --- ---- Revolving Loan Commitments. The failure of any one or more of the Banks to make Revolving Credit Loans in accordance with its or their obligations shall not relieve the other Banks of their several obligations under this subsection, but in no event shall the aggregate amount at any one time outstanding which any Bank shall be required to lend under this Section 2.1(a), when added to such Bank's Commitment Percentage of Letter of Credit Outstandings at such time, exceed the amount of such Bank's Revolving Loan Commitment at that time. (2 Borrower may request Revolving Credit Loans to bear interest at either the Base Rate or LIBO Rate options described in Section 2.4. The Revolving Credit Loans outstanding at any one time may involve any combination of such interest rate options in such amounts as Borrower may determine, subject to the terms and conditions hereof, including the requirement concerning minimum Loan requests and the requirements that (i) no request may be made which would require more than one interest rate option or more than one Interest Period to apply to a single Revolving Credit Loan, and (ii), in the case of LIBO Rate Loans, (a) not more than five such Loans may be outstanding at any one time, in the aggregate and (b) no LIBO Rate Loan may have an Interest Period extending beyond the Revolver Termination Date. (3 Notwithstanding the foregoing, Borrower shall not be entitled to a Revolving Credit Loan if, after giving effect to such Revolving Credit Loan, (A) the unpaid principal amount of the Revolving Credit Loans to Borrower then outstanding plus the Letter of Credit Outstandings at such time would exceed the least of (i) the Aggregate Revolving Loan Commitment, (ii) the then current Borrowing Base or (iii) $60,000,000 until such time as the Indentures each have been terminated or modified to permit a greater level of indebtedness under this Agreement or (B) the unpaid principal amount of the Revolving Credit Loans to Borrower then outstanding would exceed $25,000,000. (4 Except for Revolving Credit Loans which exhaust the full remaining amount permitted by clause (3) above, and conversions which result in the conversion -17- of all Revolving Credit Loans subject to a particular interest rate option, each of which hereof may be in lesser amounts, each Loan when made and each conversion of Loans of one type into Loans of another type hereunder shall be in an amount at least equal to $1,000,000, or if greater, then in such minimum amount plus $1,000,000 multiples. (5 Within the limits of clause (3) above, the Aggregate Revolving Loan Commitment and the Borrowing Base, Borrower may borrow, prepay (in accordance with Section 2.8) and reborrow Revolving Credit Loans. All Revolving Credit Loans shall, in any event, be repaid by Borrower on the Revolver Termination Date. (6 If any principal of a LIBO Rate Loan shall be repaid (whether upon prepayment or acceleration) or converted to a Base Rate Loan pursuant to Section 2.3 prior to the last day of the Interest Period applicable to such LIBO Rate Loan or if Borrower fails for any reason to borrow a LIBO Rate Loan after giving irrevocable notice pursuant to Section 2.3, Borrower shall pay to each Bank, in addition to the principal and interest then to be paid, such additional amounts as may be necessary to compensate each Bank for all direct and indirect costs and losses (including losses resulting from redeployment of prepaid or unborrowed funds at rates lower than the cost of such funds to such Bank and including lost profits) incurred or sustained by such Bank (the "ADDITIONAL AMOUNT") as a result of such repayment or failure to borrow. The Additional Amount (which each Bank shall take reasonable measures to minimize) shall be specified in a written notice or certificate delivered to Borrower by the Agent in the form provided by each Bank sustaining such costs or losses. Such notice or certificate shall contain a calculation in reasonable detail of the Additional Amount to be compensated and shall be conclusive as to the facts and the amounts stated therein, absent manifest error. II.2 THE REVOLVING CREDIT NOTES. The Revolving Credit Loans made by each -------------------------- Bank shall all be evidenced by a single promissory note of Borrower (each such promissory note, as it may be amended, extended, modified or renewed, a "REVOLVING CREDIT NOTE") in principal face amount equal to such Bank's Revolving Loan Commitment, payable to the order of such Bank and otherwise in the form attached hereto as Exhibit C. The Revolving Credit Notes shall be dated the Closing Date, shall bear interest at the rate per annum and shall be payable as to principal and interest in accordance with the terms hereof, and shall be delivered in substitution for any Revolving Credit Note previously delivered to such Bank. The Revolving Credit Notes shall mature upon the Revolver Termination Date and, upon maturity each outstanding Revolving Credit Loan evidenced thereby shall be due and payable. The Agent shall maintain records of all Loans evidenced by the Revolving Credit Notes and of all payments thereon, which records shall be conclusive absent manifest error. II.3 FUNDING PROCEDURES. ------------------- (a) Each request for a Revolving Credit Loan or the conversion or renewal of an interest rate with respect to a Loan shall be made not later than 11:00 A.M. on a Business Day by delivery to the Agent of a written request signed by Borrower, or in the alternative a telephone request followed promptly by written confirmation of the request, specifying the date and amount of the Loan to be made, converted or renewed, selecting the interest rate option applicable thereto and specifying in the case of LIBO Rate Loans the Interest Period. The form of request attached hereto as Exhibit D shall be used to request the making, conversion or renewal of Revolving -18- Credit Loans, unless otherwise agreed. Each request shall be received not less than one Business Day prior to the date of the proposed borrowing, conversion or renewal in the case of Base Rate Loans, and three London Business Days prior to the date of the proposed borrowing, conversion or renewal in the case of LIBO Rate Loans. No request shall be effective until actually received in writing by the Agent. (b) Upon receipt of a request for a Loan and if the conditions precedent provided herein shall be satisfied at the time of such request, the Agent promptly (and not later than 2:00 P.M. on the date of receipt of such request) shall notify each Bank of such request and of such Bank's ratable share of such Loan. Upon receipt by the Agent the request for a Loan shall not be revocable by Borrower. (c) Not later than 11:00 A.M. on the date of each Loan, each Bank shall make available (except as provided in clause (d) below) its ratable share of such Loan, in immediately available funds, to the Agent at the address set forth opposite its name on the signature page hereof or at such office or account in London as the Agent shall specify to Borrower and the Banks. Unless an officer of the Agent active on Borrower's accounts knows that any applicable condition specified herein has not been satisfied, the Agent will make the funds so received from the Banks immediately available to Borrower on the date of each Loan by a credit to the account of Borrower at the Agent's aforesaid address. (d) If the Agent has notified the Banks as contemplated by Section 2.3(b) hereof, then unless the Agent shall have been notified by any Bank at least one Business Day prior to the date of the making, conversion or renewal of any LIBO Rate Loan, or by 3:00 P.M. on the date a Base Rate Loan is requested, that such Bank does not intend to make available to the Agent such Bank's portion of the total amount of the Loan to be made, converted or renewed on such date, the Agent may assume that such Bank has made such amount available to the Agent on the date of the Loan and the Agent may, in reliance upon such assumption, make available to Borrower a corresponding amount. If and to the extent such Bank shall not have so made such funds available to the Agent, such Bank agrees to repay the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to Borrower until the date such amount is repaid to the Agent, at the Federal Funds Rate plus 50 basis points for three Business Days, and thereafter at the Base Rate. If such Bank shall repay to the Agent such corresponding amount, such amounts so repaid shall constitute such Bank's Loan for purposes of this Agreement. If such Bank does not repay such corresponding amount forthwith upon the Agent's demand therefor, the Agent shall promptly notify Borrower, and Borrower immediately shall pay such corresponding amount to the Agent, without any prepayment penalty or premium, but with interest on the amount repaid, for each day from the date such amount is made available to Borrower until the date such amount is repaid to the Agent, at the rate of interest applicable at the time to such Loan. Nothing herein shall be deemed to relieve any Bank of its obligation to fulfill its Revolving Loan Commitment hereunder or to prejudice any rights which Borrower may have against any Bank as a result of any default by such Bank hereunder. (e) If the Banks make, convert or renew a Loan on a day on which all or any part of an outstanding Loan from the Banks is to be repaid, each Bank shall apply the proceeds of its new Loan to make such repayment and only an amount equal to the difference (if any) -19- between the amount being borrowed and the amount being repaid shall be made available by such Bank to the Agent as provided in clause (c). II.4 INTEREST. --------- (a) BASE RATE. Each Base Rate Loan shall bear interest on the principal amount thereof from the date made until such Loan is paid in full or converted, at a rate per annum equal to the Base Rate plus the Applicable Margin determined from time to time. (b) LIBO RATE. Each LIBO Rate Loan shall bear interest on the principal amount thereof from the date made until such Loan is paid in full or converted, at a fixed rate per annum equal to the LIBO Rate plus the Applicable Margin determined from time to time. (i After receipt of a request for a LIBO Rate Loan, the Agent shall proceed to determine the LIBO Rate to be applicable thereto. The Agent shall give prompt notice by telephone or facsimile to Borrower and to each Bank of the LIBO Rate thus determined in respect of each LIBO Rate Loan or any change therein. (ii In the event Borrower fails or is not permitted to select an Interest Period for any LIBO Rate Loan within the time period and otherwise as provided herein, such Loan shall be automatically converted into a Base Rate Loan on the last day of the Interest Period for such Loan. (c) CONVERSIONS OF LOANS. Borrower shall have the right to convert Base Rate Loans into LIBO Loans, and vice versa, from time to time, provided that: (i) Borrower shall give the Agent notice of each permitted conversion as provided in Section 2.3 hereof; (ii) LIBO Rate Loans may be converted only as of the last day of the applicable Interest Period for such Loans; and (iii) without the consent of each of the Banks, no Base Rate Loan may be converted into a LIBO Rate Loan and no Interest Period may be renewed if on the proposed date of conversion an Event of Default, or Potential Default, exists or would thereby occur. The Agent shall use its best efforts to notify Borrower of the effectiveness of such conversion, and the new interest rate to which the converted Loan is subject, as soon as practicable after the conversion; provided, however, that any failure to give such notice shall not affect Borrower's obligations or the Banks' rights and remedies hereunder in any way whatsoever. (d) DEFAULT RATE. (i If any Event of Default specified in Section 10.1(a) or Section 10.1(d) shall occur; or (ii If any other Event of Default occurs and the Notes are declared to be immediately due and payable; -20- THEN, the rate of interest applicable to each Loan then outstanding, all Unpaid Drawings and the fees applicable to all Letters of Credit provided for in Section 2.6(c) shall be the Default Rate. Unless waived by the Required Banks, the Default Rate shall apply from the date of the Event of Default until the date such Event of Default or breach is cured, and interest accruing at the Default Rate shall be payable upon demand. (e) APPLICABLE MARGINS. The margin applicable to Base Rate Loans and the LIBO Rate Loans (in each such case, the "APPLICABLE MARGIN") will be determined from time to time based on the ratio of Indebtedness for Borrowed Money to EBITDA. Upon receipt by the Agent of the quarterly financial statements required to be delivered pursuant to Section 6.1(b), the Agent shall determine the ratio of Indebtedness for Borrowed Money to EBITDA for the quarterly period covered by such statements. The Agent shall thereupon determine the Applicable Margin corresponding to such ratio, in each case pursuant to the schedule attached as Schedule 2.4(e) hereto. Any adjustment to the Applicable Margins shall become effective five Business Days following receipt by the Agent of the financial statements required pursuant to Section 6.1(b) hereof or, if Borrower fails to provide financial statements within the time period required by Section 6.1(b) hereof, and such financial statements cause the Applicable Margins to increase, such adjustment of the Applicable Margins shall become effective retroactive to the date five Business Days following the date the financial statements were required under Section 6.1(b) to be furnished. Any adjustment in such Applicable Margins shall affect the Applicable Margin of Base Rate Loans then in effect or thereafter made, and shall apply to the Applicable Margin of LIBO Rate Loans thereafter made. II.5 LETTERS OF CREDIT. ------------------ (a) GENERAL REQUIREMENTS. (1 Subject to and upon the terms and conditions herein set forth, Borrower may request CoreStates Bank, N.A. ("L/C BANK") or, upon the written consent of L/C Bank and the requested Bank, any other Bank at any time and from time to time prior to the Revolver Termination Date, to issue, and subject to the terms and conditions contained herein such Bank (the "ISSUING BANK") shall issue, for the account of Borrower, one or more Letters of Credit in such form as is approved by the Issuing Bank in its sole discretion. The Borrower agrees not to request the issuance of any Letter of Credit for use by, in connection with, or for IESA, ICF Kaiser Participacoes Ltda., and/or ICF Kaiser Brazil Holdings unless the Borrower has obtained the prior written consent of the Agent for the issuance of such Letter of Credit. (2 Notwithstanding the foregoing, no Letter of Credit shall be issued the Stated Amount of which, when added to the Letter of Credit Outstandings and outstanding principal amount of Revolving Credit Loans at such time, would exceed the least of (i) the Aggregate Revolving Loan Commitment (ii) the Borrowing Base or (iii)$60,000,000 until such time as the Indentures each have been terminated or modified to permit a greater level of indebtedness under this Agreement. (3 (i No Letter of Credit shall bear an expiry date later than the Revolver Termination Date, and (ii) the aggregate Stated Amount of all Letters of Credit containing any term or provision that extends the expiry date or otherwise renews such Letter of -21- Credit without explicit action being taken by the Issuing Bank outstanding at any time shall not exceed $3,000,000. (b) LETTER OF CREDIT REQUESTS. (1 Whenever Borrower desires that a Letter of Credit be issued for its account, Borrower shall give the Issuing Bank (with copies to be sent to the Agent and each other Bank) at least five Business Days' prior written request therefor (or such shorter period of notice as the Issuing Bank may agree upon with Borrower from time to time). (2 The execution and delivery of each request for a Letter of Credit shall be deemed to be a representation and warranty by Borrower that such Letter of Credit may be issued in accordance with, and will not violate the requirements of, this Section 2.5. Unless the Issuing Bank has received notice from the Agent or the Required Banks before it issues the respective Letter of Credit that one or more of the conditions specified in Section 5.1 are not then satisfied, or that the issuance of such Letter of Credit would violate this Section 2.5, then the Issuing Bank may issue the requested Letter of Credit for the account of Borrower in accordance with the terms of this Agreement and, with respect to any matters not specifically covered by this Agreement, in accordance with the Issuing Bank's usual and customary practices. (c) LETTER OF CREDIT PARTICIPATIONS. (1 Immediately upon the issuance by the Issuing Bank of any Letter of Credit (or in the case of the existing Letters of Credit, upon the effective date of this Agreement), the Issuing Bank shall be deemed to have sold and transferred to each Bank (other than the Issuing Bank), and each such Bank shall be deemed irrevocably and unconditionally to have purchased and received from the Issuing Bank, without recourse or warranty, an undivided interest and participation, to the extent of such Bank's Commitment Percentage, in such Letter of Credit, each substitute letter of credit, each drawing made thereunder and the obligations of Borrower under this Agreement with respect thereto, and any security therefor or guaranty pertaining thereto. Upon any change in the Revolving Loan Commitments of the Banks, it is hereby agreed that, with respect to all outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic adjustment to the participations pursuant to this Section 2.5(c) to reflect the new Commitment Percentages of the assigning and assignee Banks. (2 In determining whether to pay under any Letter of Credit, the Issuing Bank shall have no obligation relative to the Banks other than to confirm that any documents required to be delivered under such Letter of Credit appear to have been delivered and that they appear to comply on their face with the requirements of such Letter of Credit. Any action taken or omitted to be taken by the Issuing Bank under or in connection with any Letter of Credit if taken or omitted in the absence of gross negligence or wilful misconduct, shall not create for the Issuing Bank any resulting liability to any Bank. (3 In the event that the Issuing Bank makes any payment under any Letter of Credit and Borrower shall not have reimbursed such amount in full in cash to the Issuing Bank pursuant to and as required by Section 2.5(d), the Issuing Bank shall promptly notify the Agent, which shall promptly notify each Bank of such failure, and each Bank shall -22- promptly and unconditionally pay to the Agent for the account of the Issuing Bank, the amount of such Bank's Commitment Percentage of such unreimbursed payment in same day funds. Such payment shall be made to the Agent at the address set forth opposite its name on the signature page hereof or at such office or account in London as the Agent shall specify to the Banks. If the Agent so notifies, prior to 11:00 A.M. on any Business Day, any Bank required to fund a payment under a Letter of Credit, such Bank shall make its required payment on the same Business Day. If and to the extent such Bank shall not have so made its Commitment Percentage of the amount of such payment available to the Agent for the account of the Issuing Bank, such Bank agrees to pay to the Agent for the account of the Issuing Bank, forthwith on demand, such amount, together with interest thereon, for each day from such date until the date such amount is paid to the Agent for the account of the Issuing Bank at the Federal Funds Rate plus 50 basis points. The failure of any Bank to make available to the Agent for the account of the Issuing Bank its Commitment Percentage of any payment under any Letter of Credit shall not relieve any other Bank of its obligation hereunder to make available to the Agent for the account of the Issuing Bank its Commitment Percentage of any payment under any Letter of Credit on the date required, as specified above; but no Bank shall be responsible for the failure of any other Bank to make available to the Agent for the account of the Issuing Bank such other Bank's Commitment Percentage of any such payment. (4 Whenever the Issuing Bank receives a payment of a reimbursement obligation as to which the Agent has received for the account of the Issuing Bank any payments from the Banks pursuant to clause (3) above, the Issuing Bank shall pay to the Agent and the Agent shall promptly pay to each Bank which has paid its Commitment Percentage thereof, in same day funds, an amount equal to such Bank's Commitment Percentage thereof. (5 Upon the request of any Bank, the Issuing Bank shall furnish to such Bank copies of any Letter of Credit to which the Issuing Bank is party and such other documentation relating to such Letter of Credit as may reasonably be requested by such Bank. (6 As between Borrower on the one hand and the Issuing Bank and the Banks on the other hand, Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit by the respective beneficiaries of such Letters of Credit. Without limiting the generality of the foregoing, neither the Issuing Bank nor any other Bank shall be responsible (except in the case of its gross negligence or willful misconduct) for the following: (i the form, validity, sufficiency, accuracy, genuineness or legal effect of any documents submitted by any party in connection with the application for and issuance of or any drawing under such Letters of Credit, even if it should in fact prove to be in any respects invalid, insufficient, inaccurate, fraudulent or forged; (ii the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; -23- (iii failure of the beneficiary of any such Letter of Credit to comply fully with conditions required in order to draw upon such Letter of Credit, other than material conditions or instructions that expressly appear in such Letter of Credit; (iv errors, omissions, interruptions or delays in the transmission or delivery of any messages by mail, cable, telegraph, telecopier, telex or otherwise, whether or not they are encoded; (v errors in interpretation of technical terms; (vi any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or the proceeds thereof; (vii the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing of any such Letter of Credit; and (viii any consequences arising from causes beyond the control of the Issuing Bank, including without limitation any acts of governments. (7 The obligations of the Banks to make payments to the Agent for the account of the Issuing Bank with respect to Letters of Credit issued in conformity with this Agreement shall be irrevocable and not subject to any qualification or exception whatsoever (except that no Bank shall be obligated to reimburse any Issuing Bank for wrongful payments made as a result of acts or omissions constituting wilful misconduct or gross negligence by such Issuing Bank) and shall be made in accordance with the terms and conditions of this Agreement under all circumstances, including, without limitation, any of the following circumstances: (i any lack of validity or enforceability of this Agreement or any of the other Loan Documents; (ii the existence of any claim, setoff, defense or other right which Borrower may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), the Agent, the Issuing Bank, any Bank, or any other Person, whether in connection with this Agreement, any Letter of Credit, the transactions contemplated herein or any unrelated transactions; (iii any draft, certificate or any other document presented under the Letter of Credit shall prove to be forged, fraudulent, invalid or insufficient in any respect or any statement therein shall prove to be untrue or inaccurate in any respect; -24- (iv the surrender or impairment of any security for the performance or observance of any of the terms of any of the Loan Documents; (v the occurrence of any Potential Default or Event of Default; or (vi the termination of this Agreement or any Revolving Loan Commitment (but only with respect to Letters of Credit issued prior to such termination). (d) AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS, COLLATERAL, ETC. (1 Borrower agrees to reimburse the Issuing Bank, in immediately available funds, for any payment made by the Issuing Bank under any Letter of Credit issued for the benefit of Borrower (each such amount so paid until reimbursed, an "UNPAID DRAWING") immediately after, and in any event on the date of, such payment, with interest on the amount so paid by the Issuing Bank, to the extent not reimbursed prior to 11:00 A.M. (Philadelphia time) on the date of such payment such interest shall accrue, from and including the date paid to but excluding the date reimbursement is made as provided above, at a rate per annum equal to the Base Rate plus 200 basis points, such interest to be payable promptly following demand. (2 The obligations of Borrower under this Section 2.5(d) to reimburse the Issuing Bank with respect to Unpaid Drawings (including, in each case, interest thereon) shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which Borrower may have or have had against any Bank (including in its capacity as the Issuing Bank or as a participant in any Letter of Credit), including, without limitation, any defense based upon any non-application or misapplication by the beneficiary of the proceeds of any drawing under a Letter of Credit (each, a "DRAWING"); provided, however, that Borrower shall not be obligated to reimburse the Issuing Bank for any wrongful payment made by the Issuing Bank under a Letter of Credit as a result of acts or omissions constituting wilful misconduct or gross negligence on the part of the Issuing Bank. (3 On the Revolver Termination Date, Borrower shall deliver to the Agent cash or U.S. Treasury Bills with maturities of not more than ninety (90) days from the date of delivery (discounted in accordance with customary banking practice to present value to determine amount) ("DISCOUNTED TREASURIES") in an amount equal at all times to one hundred and five percent (105%) of the Letter of Credit Outstandings, such cash or Discounted Treasuries and all interest earned thereon to constitute cash collateral for Borrower's reimbursement obligation with respect to all Letters of Credit outstanding on the Revolver Termination Date. If such cash collateral or Discounted Treasuries have not been deposited within five (5) days after the date required, one or more of the Banks shall be entitled to charge any account maintained by Borrower or any wholly owned Subsidiary with such Bank or Banks to the extent necessary to create such cash collateral for the benefit of all Banks. Any cash collateral deposited under this paragraph, and all interest earned thereon, shall be held by the Agent and invested and reinvested at the expense and the written direction of Borrower, in U.S. Treasury Bills with maturities of no -25- more than ninety (90) days from the date of investment. Upon expiration of such Letters of Credit or reimbursement by Borrower of Unpaid Drawings thereunder and if no Event of Default or Potential Default then exists, any such collateral shall be released to Borrower. (e) TRADE COLLATERAL. Borrower hereby grants to the Bank issuing a Documentary Letter of Credit an absolute security interest in and unqualified right to possession and disposal of all property shipped under or in connection with each Documentary Letter of Credit issued, created or entered into by such Bank, and in and to all shipping documents, documents of title, or drafts drawn under a Documentary Letter of Credit, together with the proceeds of each and all of the foregoing, as and to the extent required by the applicable application for each Documentary Letter of Credit when issued, until such time as all the obligations and liabilities of Borrower to such Bank under or with reference to such Documentary Letter of Credit, and all other Obligations, now or hereafter incurred, have been fully paid and discharged. Borrower will execute and deliver to each Bank from time to time all such other agreements, instruments and other documents (including without limitation all requested financing and continuation statements) and do all such further acts and things as a Bank may reasonably request in order to further evidence or carry out the intent of this Section or to perfect the lien and security interest created hereby or intended so to be. II.6 FEES. ---- (a) COMMITMENT FEE. Borrower shall pay to the Agent on behalf of each Bank as compensation for such Bank's Revolving Loan Commitment a fee (the "COMMITMENT FEE"), pro rata based upon each Bank's Commitment Percentage, computed at the rate of 5/8 of 1% per annum on the average daily amount of the unused portion of the Aggregate Revolving Loan Commitment accrued from and after the date hereof. The unused portion of the Aggregate Revolving Loan Commitment shall mean the Aggregate Revolving Loan Commitment less the sum of the aggregate unpaid principal of outstanding Revolving Credit Loans plus the Letter of Credit Outstandings. The Commitment Fee shall be payable in arrears on the first Business Day of each January, April, July and October, commencing July 1, 1996 (for the three month period or portion thereof ended on the preceding day), and on the Revolver Termination Date. Payment shall be made to the Agent on behalf of the Banks and the Agent shall promptly forward to each Bank the pro rata amount due such Bank. The Commitment Fee shall be calculated on the basis of a 360-day year for the actual number of days elapsed. (b) LETTER OF CREDIT FEES. The fee applicable to Letters of Credit shall be computed at the applicable LIBO Rate Applicable Margin per annum as provided in Schedule 2.4(e) hereto on the average daily amount of Letter of Credit Outstandings accrued from and after the date hereof. Such fee shall be due and payable by the Borrower to the Banks (on the basis of each Bank's Commitment Percentage) quarterly in arrears on and through the first Business Day of each January, April, July and October, commencing July 1, 1996 (for the three-month period or portion thereof ended on the preceding day) and on the Revolver Termination Date. (c) FRONTING FEE. Borrower agrees to pay to the Issuing Bank, for its own account, (A) a fee (the "FRONTING FEE") equal to one-eighth of one percent (1/8%) per annum of the aggregate face amount of the outstanding Letters of Credit which shall be computed and paid -26- on a quarterly basis, in arrears, on the first Business Day of each calendar quarter, beginning in the first calendar quarter after the date hereof, in each case for the actual number of days elapsed over a 360 day year, and (B) customary issuance, amendment, extension, cancellation and administration fees and charges for each Letter of Credit, due and payable upon demand of the Issuing Bank. (d) CLOSING FEE. Borrower shall pay to the Agent the fees set forth in the term sheet dated October 15, 1997 executed by Borrower. II.7 REDUCTION OR TERMINATION OF AGGREGATE REVOLVING LOAN COMMITMENT. --------------------------------------------------------------- (a) NOTICE OF VOLUNTARY REDUCTION OR TERMINATION. Borrower may at any time, on not less than three Business Days' written notice by Borrower to the Agent, terminate or permanently reduce the Aggregate Revolving Loan Commitment pro rata among the Banks, provided that any reduction shall be in the amount of $3,000,000 or a multiple thereof. (b) MANDATORY TERMINATION. In the event the Aggregate Revolving Loan Commitment is terminated by Borrower, the Revolver Termination Date shall accelerate and Borrower shall, simultaneously with such termination, repay the Base Rate Loans and LIBO Rate Loans in accordance with Section 2.8, and shall deliver to the Agent cash or Discounted Treasuries relating to Letter of Credit Outstandings in accordance with Section 2.5(d)(3). (c) MANDATORY REDUCTION. Except to the extent (i) proceeds arise from a sale that is permitted by Section 7.7(i) through (iv) hereof, or (ii) otherwise agreed by the Required Banks, the Aggregate Revolving Loan Commitment shall be reduced from time to time by the full amount of net cash proceeds of assets sold by Borrower or any Subsidiary on or after the date hereof, if and to the extent the aggregate amount of all such sales after the date hereof exceed 15% of the lesser of (i) total assets of Borrower and its Subsidiaries on a consolidated basis or (ii) EBITDA for the immediately preceding four fiscal quarters, determined as of the end of the fiscal quarter immediately preceding such sale. II.8 PREPAYMENTS. ----------- (a) MANDATORY PREPAYMENTS. If at any time (a) the aggregate outstanding Revolving Credit Loans plus Letter of Credit Outstandings exceed the lesser of (y) the then Aggregate Revolving Loan Commitment or (z) the then current Borrowing Base or (b) the unpaid principal amount of the Revolving Credit Loans to Borrower then outstanding exceed $25,000,000, Borrower shall make a prepayment of principal in respect of the Base Rate Loans in such amount as is necessary to assure that the aggregate principal amount of Loans outstanding immediately after such reduction plus Letter of Credit Outstandings will not exceed the lesser of the then Aggregate Revolving Loan Commitment and the then current Borrowing Base. If prepayment in full of the Base Rate Loans does not reduce the amount of all Loans outstanding plus Letter of Credit Outstandings to an amount that will not exceed the lesser of the then Aggregate Revolving Loan Commitment and the then current -27- Borrowing Base, Borrower shall deposit with the Agent cash and Discounted Treasuries in an amount sufficient to repay that portion of the principal amount of LIBO Rate Loans outstanding, with interest thereon through the end of each applicable Interest Period, as is necessary to assure that the aggregate principal amount of Loans outstanding immediately after such reduction of the Base Rate Loans less the principal amount of LIBO Loans repaid by such collateral plus Letter of Credit Outstandings will not exceed the lesser of the then Aggregate Revolving Loan Commitment and the then current Borrowing Base, such collateral to be held by the Agent on behalf of the Banks until each such maturity date and then applied to the repayment of such Loans. If, upon prepayment in full of the Base Rate Loans and deposit of cash and Discounted Treasuries in an amount sufficient to repay the principal amount of the LIBO Rate Loans, the Letter of Credit Outstandings exceed the lesser of the then Aggregate Revolving Loan Commitment and the then current Borrowing Base, Borrower shall deposit with the Agent cash and Discounted Treasuries in an amount equal to one hundred five percent (105%) of the amount by which Letters of Credit Outstandings exceed the lesser of the then Aggregate Revolving Loan Commitment and the then current Borrowing Base, such collateral to be held by the Agent on behalf of the Banks to reimburse the Issuing Bank for the amount of any Unpaid Drawings. Upon reduction of Letter of Credit Outstandings to an amount equal to the lesser of the then Aggregate Revolving Loan Commitment and the then current Borrowing Base and if no Event of Default or Potential Default then exists, any such collateral held for reimbursement of Unpaid Drawings of Letters of Credit shall be released to Borrower. If Borrower sells or otherwise disposes of assets requiring a reduction in the Aggregate Revolving Loan Commitment pursuant to Section 2.7(c) hereof, Borrower shall use the proceeds of each such sale or disposition to prepay the Revolving Credit Loans, unless the Required Banks consent in writing to the waiver of this provision, such waiver being required for each sale or disposition. (b) BASE RATE LOANS. In addition, on one Business Day's notice by Borrower to the Agent and the Banks, Borrower may, at its option, prepay the Base Rate Loans in whole at any time or in part from time to time, provided that each partial prepayment shall be in the principal amount of multiples of $1,000,000. (c) LIBO RATE LOANS. On three Business Days' notice by Borrower to the Agent and the Banks, Borrower may prepay any LIBO Rate Loan provided that if Borrower shall prepay a LIBO Rate Loan prior to the last day of the applicable Interest Period, or shall fail to borrow any LIBO Rate Loan on the date such Loan is to be made, Borrower shall pay to each Bank, in addition to the principal and interest then to be paid in the case of a prepayment, the Additional Amount incurred or sustained by such Bank as a result of such prepayment or failure to borrow as provided in Section 2.1(a)(6). II.9 PAYMENTS. (a) LIBO LOANS. Accrued interest on LIBO Loans with Interest Periods of one, two or three months shall be due and payable on the last day of such Interest Period. Accrued interest on LIBO Loans with Interest Periods of six months shall be due and payable at the end of the third month and on the last day of such Interest Period. -28- (b) BASE RATE LOANS. Accrued interest on all Base Rate Loans shall be due and payable on the first Business Day of each calendar month and upon the Revolver Termination Date. (c) LETTER OF CREDIT FEES. Accrued Letter of Credit fees on all Letters of Credit shall be due and payable on the first Business Day of each calendar quarter and upon the Revolver Termination Date. (d) FORM OF PAYMENTS, APPLICATION OF PAYMENTS, PAYMENT ADMINISTRATION, ETC. Provided that no Event of Default or Potential Default thenexists and except as provided in Section 2.8(a) hereof, all payments and prepayments shall be applied to the Loans in such order and to such extent as shall be specified by Borrower, by written notice to the Agent at the time of such payment or prepayment. If no such written notice is received by the Agent or if an Event of Default or Potential Default then exists, the payment or prepayment shall be applied to the Loans in such order and to such extent as the Agent shall determine in accordance with Section 12.7. Except as otherwise provided herein, all payments of principal, interest, fees, or other amounts payable by Borrower hereunder shall be remitted to the Agent on behalf of the Banks at the address set forth opposite its name on the signature page hereof or at such office or account in London as the Agent shall specify to Borrower and the Banks, in immediately available funds not later than 2:00 P.M. on the day when due. The Agent will promptly distribute to each Bank by wire transfer in immediately available funds each Bank's pro rata share of such payment based upon such Bank's Commitment Percentage. Whenever any payment is stated as due on a day which is not a Business Day, the maturity of such payment shall, except as otherwise provided in the definition of "Interest Period" in Section 1.1, be extended to the next succeeding Business Day and interest and fees shall continue to accrue during such extension. Borrower authorizes the Agent to deduct from any account of Borrower or any wholly owned Subsidiary maintained at the Agent or over which the Agent has control any amount payable under this Agreement, the Notes or any other Loan Document which is not paid in a timely manner. The Agent's failure to deliver any bill, statement or invoice with respect to amounts due under this Section or under any Loan Document shall not affect Borrower's obligation to pay any installment of principal, interest or any other amount under this Agreement when due and payable. (e) NET PAYMENTS. (1) All payments made to the Banks and the Agent by Borrower hereunder, under any Note or under any other Loan Document will be made without setoff, counterclaim or other defense. All such payments will be made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or any political subdivision or taxing authority thereof or therein (but excluding, except as provided below, any tax imposed on or measured by the gross or net income of a Bank (including all interest, penalties or similar liabilities related thereto) pursuant to the laws of the United States of America or any political subdivision thereof, or taxing authority of the United States of America or any political subdivision thereof, in which the principal office or applicable lending office of such Bank is located), and all interest, penalties or similar liabilities with respect thereto -29- (collectively, together with any amounts payable pursuant to the next sentence, "TAXES"). Borrower shall also reimburse each Bank, upon the written request of such Bank, for Taxes imposed on or measured by the gross or net income of such Bank pursuant to the laws of the United States of America (or any State or political subdivision thereof), or the jurisdiction (or any political subdivision or taxing authority thereof) in which the principal office or applicable lending office of such Bank is located as such Bank shall determine are payable by such Bank due to the amount of Taxes paid to or on behalf of such Bank pursuant to this or the preceding sentence. If any Taxes are so levied or imposed, Borrower agrees to pay the full amount of such Taxes, and such additional amounts as may be necessary so that every payment of all amounts due hereunder, under any Note or under any other Loan Document, after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein or in such Note. Borrower will furnish to the Agent upon request certified copies of tax receipts evidencing such payment by Borrower. Borrower will indemnify and hold harmless the Agent and each Bank, and reimburse the Agent or such Bank upon its written request, for the amount of any Taxes so levied or imposed and paid or withheld by such Bank. (2) Notwithstanding the preceding paragraph (1), Borrower shall be entitled, to the extent required to do so by law, to deduct or withhold Taxes imposed by the United States of America (or any political subdivision or taxing authority thereof) from interest, fees or other amounts payable hereunder for the account of any Person other than a Bank (x) that is a domestic corporation (as such term is defined in Section 7701 of the Code) for federal income tax purposes (but excluding any foreign office of any Bank) or (y) that has necessary forms on file with Borrower for the applicable year to the extent deduction or withholding of such Taxes is not required as a result of the filing of such forms, provided that if Borrower shall so deduct or withhold any such Taxes, it shall provide a statement to the Agent and such Bank, setting forth the amount of such Taxes so deducted or withheld, the applicable rate and any other information or documentation which such Bank may reasonably request for assisting such Bank to obtain any allowable credits or deductions for the taxes so deducted or withheld in the jurisdiction or jurisdictions in which such Bank is subject to tax. II.10 CHANGES IN CIRCUMSTANCES; YIELD PROTECTION. ------------------------------------------ (a) If any Regulatory Change or compliance by the Banks with any request made after the date of this Agreement by the Board of Governors of the Federal Reserve System or by any Federal Reserve Bank or other central bank or fiscal, monetary or similar authority (in each case whether or not having the force of law) shall: (i) impose, modify or make applicable any reserve, special deposit, Federal Deposit Insurance Corporation premium or similar requirement or imposition against assets held by, or deposits in or for the account of, or loans made by, or any other acquisition of funds for loans or advances by, the Banks; (ii) impose on the Banks any other condition regarding the Notes or the Letters of Credit; -30- (iii) subject the Banks to, or cause the withdrawal or termination of any previously granted exemption with respect to, any tax (including any withholding tax but not including any income tax not currently causing the Banks to be subject to withholding) or any other levy, impost, duty, charge, fee or deduction on or from any payments due from Borrower; or (iv) change the basis of taxation of payments from Borrower to the Banks (other than by reason of a change in the method of taxation of a Bank's net income); and the result of any of the foregoing events is to increase the cost to a Bank of making or maintaining any Loan or Letter of Credit or to reduce the amount of principal, interest or fees to be received by the Bank hereunder in respect of any Loan or Letter of Credit, the Agent will immediately so notify Borrower. If a Bank determines in good faith that the effects of the change resulting in such increased cost or reduced amount cannot reasonably be avoided or the cost thereof mitigated, then upon notice by the Agent to Borrower, Borrower shall pay to such Bank on each interest payment date of the Loan or, as to those increased costs or reduced amounts relating to Letters of Credit within thirty days of such notice, such additional amount as shall be necessary to compensate the Bank for such increased cost or reduced amount. (b) If any Bank shall determine that any Regulation regarding capital adequacy or the adoption of any Regulation regarding capital adequacy, which Regulation is applicable to banks (or their holding companies) generally and not such Bank (or its holding company) specifically, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Bank (or its holding company) with any such request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has the effect of reducing the rate of return on such Bank's capital as a consequence of its obligations hereunder to a level below that which such Bank could have achieved but for such adoption, change or compliance (taking into consideration such Bank's policies with respect to capital adequacy) by an amount deemed by such Bank to be material, Borrower shall promptly pay to the Agent for the account of such Bank, upon the demand of such Bank, such additional amount or amounts as will compensate such Bank for such reduction. (c) If the Agent shall determine (which determination will be made after consultation with any Bank requesting same and shall be, in the absence of fraud or manifest error, conclusive and binding upon all parties hereto) that by reason of abnormal circumstances affecting the interbank eurodollar or applicable eurocurrency market adequate and reasonable means do not exist for ascertaining the LIBO Rate to be applicable to the requested LIBO Rate Loan or that eurodollar or eurocurrency funds in amounts sufficient to fund all the LIBO Rate Loans are not obtainable on reasonable terms, the Agent shall give notice of such inability or determination by telephone to Borrower and to each Bank at least two Business Days prior to the date of the proposed Loan and thereupon the obligations of the Banks to make, convert other Loans to, or renew such LIBO Rate Loan shall be excused, subject, however, to the right of Borrower at any time thereafter to submit another request. -31- (d) Determination by a Bank for purposes of this Section 2.10 of the effect of any Regulatory Change or other change or circumstance referred to above on its costs of making or maintaining Loans or Letters of Credit or on amounts receivable by it in respect of the Loans or Letters of Credit, and of the additional amounts required to compensate such Bank in respect of any additional costs, shall be made in good faith and shall be evidenced by a certificate, signed by an officer of such Bank and delivered to Borrower, as to the fact and amount of the increased cost incurred by or the reduced amount accruing to the Bank owing to such event or events. Such certificate shall be prepared in reasonable detail and shall be conclusive as to the facts and amounts stated therein, absent manifest error. (e) The affected Bank will notify Borrower of any event occurring after the date of this Agreement that will entitle the Bank to compensation pursuant to this Section as promptly as practicable after it obtains knowledge thereof and determines to request such compensation. Said notice shall be in writing, shall specify the applicable Section or Sections of this Agreement to which it relates and shall set forth the amount of amounts then payable pursuant to this Section 2.10. Borrower shall pay such Bank the amount shown as due on such notice within 10 days after its receipt of the same. II.11 ILLEGALITY. Notwithstanding any other provision in this Agreement, ---------- if the adoption of any applicable Regulations, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank, or comparable agency charged with the interpretation or administration thereof, or compliance by the Banks with any request or directive (whether or not having the force of law) of any such authority, central bank, or comparable agency shall make it unlawful or impossible for the Banks to (1) maintain their Revolving Loan Commitments, then upon notice to Borrower by the Agent, the Revolving Loan Commitments shall terminate; or (2) maintain or fund their LIBO Rate Loans, then upon notice to Borrower of such event, Borrower's outstanding LIBO Rate Loans shall be converted into Base Rate Loans. III. REPRESENTATIONS AND WARRANTIES ------------------------------ Borrower represents and warrants to the Banks as to itself and each Subsidiary or Subsidiary Guarantor, as the case may be, that: III.1 ORGANIZATION, STANDING. Borrower and each Subsidiary Guarantor (i) ---------------------- is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, (ii) has the corporate power and authority necessary to own its assets, carry on its business and enter into and perform its obligations hereunder, under each Loan Document to which it is a party and (iii) is qualified to do business and is in good standing in each jurisdiction where the nature of its business or the ownership of its properties requires such qualification except where the failure to be so qualified would not have a material adverse effect on the business, operations, assets or condition (financial or otherwise) of Borrower and its Subsidiaries taken as a whole. -32- III.2 CORPORATE AUTHORITY, VALIDITY ETC. The making and performance of --------------------------------- the ETC. Loan Documents to which it is a party are within the power and authority of Borrower and each Subsidiary Guarantor and have been duly authorized by all necessary corporate action. The making and performance of the Loan Documents do not and under present law will not require any consent or approval of any of Borrower's or any Subsidiary Guarantor's shareholders or any other person, do not and under present law will not violate any law, rule, regulation order, writ, judgment, injunction, decree, determination or award, do not violate any provision of its charter or by-laws, do not and will not result in any breach of any material agreement, lease or instrument to which it is a party, by which it is bound or to which any of its assets are or may be subject, and do not and will not give rise to any Lien, other than Liens in favor of the Banks under the Loan Documents, upon any of its assets. The number of shares and classes of the capital stock of Borrower and each Subsidiary Guarantor and the ownership thereof are accurately set forth on Schedule 3.12 attached hereto; all such shares are validly issued, fully paid and non-assessable, and the issuance and sale thereof are in compliance with all applicable federal and state securities and other applicable laws; and the shareholders' ownership thereof is free and clear of any liens or encumbrances or other contractual restrictions. Further, neither Borrower nor any Subsidiary Guarantor is in default under any material agreement, lease or instrument except to the extent such default reasonably could not have a material adverse effect on the business, operations, assets or condition (financial or otherwise) of Borrower and its Subsidiaries taken as a whole and except to the extent such default reasonably could not have a material adverse effect on Borrower's ability to perform its obligations under the Loan Documents. No authorizations, approvals or consents of, and no filings or registrations with, any governmental or regulatory authority or agency are necessary for the execution, delivery or performance by Borrower or any Subsidiary Guarantor of any Loan Document to which Borrower is a party or for the validity or enforceability thereof. Each Loan Document, when executed and delivered, will be the legal, valid and binding obligation of Borrower and each Subsidiary Guarantor, enforceable against it in accordance with its terms except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, and other similar laws affecting creditors' rights generally. III.3 LITIGATION. Except as disclosed on Schedule 3.3, there are no ---------- actions, suits or proceedings pending or, to Borrower's knowledge, threatened against or affecting Borrower or any Subsidiary or any assets of Borrower or any Subsidiary before any court, government agency, or other tribunal which if adversely determined reasonably could have a material adverse effect on the financial condition, operations or assets of Borrower and its Subsidiaries taken as a whole or upon the ability of Borrower or any Subsidiary Guarantor to perform under the Loan Documents. The status (including the tribunal, the nature of the claim and the amount in controversy) of each such litigation matter as of the date of this Agreement is set forth in Schedule 3.3. III.4 ERISA. Borrower and each Subsidiary and ERISA Affiliate is in ----- compliance in all material respects with all applicable provisions of ERISA and the regulations promulgated thereunder; and, (a) neither Borrower, any Subsidiary, nor any ERISA Affiliate maintains or contributes to or has maintained or contributed to any multi employer plan (as defined in section 4001 of ERISA) under which Borrower, any Subsidiary or any ERISA Affiliate could have any withdrawal liability; (b) neither Borrower, any Subsidiary, nor any ERISA Affiliate, sponsors or maintains any Plan under which there is an accumulated funding -33- deficiency within the meaning of (S)412 of the Code, whether or not waived; (c) the aggregate liability for accrued benefits and other ancillary benefits under each Plan that is or will be sponsored or maintained by Borrower, any Subsidiary or any ERISA Affiliate (determined on the basis of actuarial assumptions utilized by the actuary for the plan in preparing the most recent Annual Report) does not exceed the aggregate fair market value of the assets under each such defined benefit pension Plan; (d) the aggregate liability of Borrower and each Subsidiary and each ERISA Affiliate arising out of or relating to a failure of any Plan to comply with the provisions of ERISA or the Code, will not have a material adverse effect on Borrower or any Subsidiary; and (e) there does not exist any unfunded liability (determined on the basis of actuarial assumptions utilized by the actuary for the plan in preparing the most recent Annual Report) of Borrower, any Subsidiary or ERISA Affiliate under any plan, program or arrangement providing post-retirement life or health benefits. III.5 FINANCIAL STATEMENTS. The consolidated financial statements of -------------------- Borrower and its Subsidiaries as of and for the year ended December 31, 1996 consisting in each case of a balance sheet, a statement of operations, a statement of shareholders' equity, a statement of cash flows and accompanying footnotes, present fairly, in all material respects, the financial position, results of operations and cash flows of Borrower and its Subsidiaries as of the dates and for the periods referred to, in conformity with Generally Accepted Accounting Principles. Except as set forth on Schedule 3.5, there are no liabilities, fixed or contingent, which are not reflected in such financial statements, other than liabilities which are not required to be reflected in such balance sheets. There has been no material adverse change in the business, operations or assets or condition (financial or otherwise) of Borrower or any of the Subsidiary Guarantors since December 31, 1996. III.6 NOT IN DEFAULT; JUDGMENTS, ETC. No Event of Default or Potential ------------------------------ Default under any Loan Document has occurred and is continuing. Borrower and its Subsidiaries have satisfied all judgments and neither Borrower nor any Subsidiary is in default with respect to any judgment, writ, injunction, decree, rule, or regulation of any court, arbitrator, or federal, state, municipal, or other governmental authority, commission, board bureau, agency, or instrumentality, domestic or foreign. III.7 TAXES. Borrower and each Subsidiary has filed all federal, state, ----- local and foreign tax returns and reports which it is required by law to file and has paid all taxes, including wage taxes, assessments, withholdings and other governmental charges which are presently due and payable (other than those being contested in good faith by appropriate proceedings and disclosed on Schedule 3.7). The tax charges, accruals and reserves on the books of Borrower and each Subsidiary are adequate to pay all such taxes that have accrued but are not presently due and payable. Borrower and each Subsidiary Guarantor is a member of an affiliated group of corporations filing consolidated returns for United States federal income tax purposes, and Borrower is the "common parent" of such group. III.8 PERMITS, LICENSES, ETC. Borrower and each Subsidiary possesses all ---------------------- permits, licenses, franchises, trademarks, trade names, copyrights and patents necessary to the conduct of its business as presently conducted or as presently proposed to be conducted, except where the failure to possess the same would not have a material effect on the financial condition, operations or assets of Borrower and its Subsidiaries taken as a whole. -34- III.9 COMPLIANCE WITH LAWSIII.9 COMPLIANCE WITH LAWS. ----------------------------------------------- (a) Borrower and each Subsidiary is in compliance in all material respects with all Regulations applicable to its business (including obtaining all authorizations, consents, approvals, orders, licenses, exemptions from, and making all filings or registrations or qualifications with, any court or governmental department, public body or authority, commission, board, bureau, agency, or instrumentality), the noncompliance with which reasonably could have a material adverse effect on the business, operations, assets or condition (financial or otherwise) of Borrower and its Subsidiaries taken as a whole. (b) Hazardous Wastes, Substances and Petroleum Products. --------------------------------------------------- (1) Borrower and each Subsidiary: (i) has received all permits and filed all material notifications necessary to carry on their respective business(es); and (ii) is in compliance in all respects with all Environmental Control Statutes. (2) Neither Borrower nor any Subsidiary has given any written or oral notice, nor has it failed to give required notice, to the Environmental Protection Agency ("EPA") or any state or local agency with regard to any actual or imminently threatened Release of Hazardous Substances on properties owned, leased or operated by Borrower or any Subsidiary or used in connection with the conduct of its business and operations. (3) Neither Borrower nor any Subsidiary has received notice that it is potentially responsible for costs of clean-up or remediation of any actual or imminently threatened Release of Hazardous Substances pursuant to any Environmental Control Statute. (4) No real property owned or leased by Borrower or any Subsidiary is in material violation of any Environmental Control Statutes, no Hazardous Substances are present on said real property and neither Borrower nor any Subsidiary has been identified in any litigation, administrative proceedings or investigation as a potentially responsible party for any liability under any Environmental Control Statutes. III.10 SOLVENCY. Borrower and each Subsidiary Guarantor, on a consolidated -------- basis, are, and after giving effect to the transactions contemplated hereby, will be, Solvent. III.11 NO BURDENSOME AGREEMENTS. Neither Borrower nor any Subsidiary is a ------------------------ party to or bound by any agreement or instrument or subject to any corporate or other restriction, the performance or observance of which now has or, as far as Borrower or any Subsidiary can reasonably foresee, may have a materially adverse effect on the financial condition, operations or assets of Borrower or of Borrower and its Subsidiaries taken as a whole. III.12 SUBSIDIARIES, INVESTMENTS, ETC. Set forth in Schedule 3.12 hereto ------------------------------ is a complete and correct list, as of the date of this Agreement, of all Subsidiaries (and the respective jurisdiction of incorporation of each such Subsidiary), and of all -35- Investments held by Borrower in any joint venture or other Person. Except as disclosed in Schedule 3.12 hereto, as of the date hereof, Borrower owns, directly or through a Subsidiary, free and clear of Liens, the percentage and nature of ownership interests of each Subsidiary as set forth in Schedule 3.12 and all such interests are validly issued, fully paid and non-assessable, and Borrower (or the respective Subsidiary) also owns, free and clear of Liens, all such Investments. Schedule 3.12 also sets forth as to each Subsidiary the percentage and nature of ownership interests, and names of the record and beneficial owners of all such issued and outstanding interests. Except as set forth on Schedule 3.12, all of the issued and outstanding Capital Stock of each Subsidiary have been duly authorized and validly issued and are fully paid and nonassessable and held free and clear of all Liens whatsoever, and there are no outstanding subscriptions, options, warrants, calls, conversion or exchange rights, commitments or agreements of any character obligating any Subsidiary to issue, deliver or sell additional Capital Stock of any class or any securities convertible into or exchangeable for any such Capital Stock. III.13 AMOUNTS OWED TO OR FROM AFFILIATES; INTERCOMPANY AGREEMENTS. ----------------------------------------------------------- (a) AFFILIATES. Except as disclosed on Schedule 3.13 as of the date of this Agreement, there is not outstanding and unpaid any debt, loan, advance, guaranty or investment (i) by Borrower or any Subsidiary to or for the benefit of any Subsidiary or Borrower Affiliate or (ii) to Borrower or any Subsidiary from any Subsidiary or Borrower Affiliate (collectively, "INTERCOMPANY DEBT"), and there has not been paid (1) by Borrower to or for the benefit of any Borrower Affiliate or (2) to Borrower or any Subsidiary from any Subsidiary or Borrower Affiliate, any amount for management, administrative, operational, consulting, brokerage or other services. Neither Borrower nor any Subsidiary has prepaid to or for the benefit of any Subsidiary or Borrower Affiliate any Intercompany Debt or amount for management, administrative, operational, consulting, brokerage or other services. (b) INTERCOMPANY AGREEMENTS. Except as disclosed on Schedule 3.13 hereto as of the date of this Agreement, there are no agreements between Borrower or any Subsidiary and any Subsidiary or Borrower Affiliate relating to the extension of any funds to Borrower, the sharing of any costs among Borrower and any Subsidiary or Borrower Affiliate or the provision of any management, administrative, operational, consulting, brokerage or other services to Borrower ("INTERCOMPANY AGREEMENTS"). III.14 SUBSIDIARIES. The Subsidiaries of Borrower listed on Schedule 3.12, ------------ as supplemented from time to time, constitute all of the Subsidiaries of Borrower. Borrower and the Subsidiary Guarantors collectively own (directly and not through other Subsidiaries) at least 90% of the assets of Borrower and its consolidated Domestic Subsidiaries on a consolidated basis. Borrower and the Domestic Subsidiaries collectively own (directly and not through other Subsidiaries) at least 75% of the assets of Borrower and its consolidated Subsidiaries on a consolidated basis. III.15 MAINTENANCE OF INSURANCE. Borrower maintains insurance with ------------------------ financially sound and reputable insurance companies or associations in such amounts and covering such risks as are usually carried by companies engaged in the same -36- or a similar business and similarly situated, which insurance may provide for reasonable deductibility from coverage thereof. III.16 U.S. GOVERNMENT CONTRACTS. Neither the Borrower nor any Subsidiary ------------------------- is in receipt of any notice from any governmental authority that Borrower is disqualified, barred or suspended from bidding on or performing any contract or proposed contract. III.17 MARGIN STOCK. Borrower has not and will not use or permit any ------------ proceeds of the Loans to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve Systems, as amended from time to time. III.18 PROPERTIES. Borrower has good title to, or in the case of leased ---------- property has valid leasehold interests in, all of its material properties and assets (whether real or personal, tangible or intangible). III.19 CHANGE. No material adverse change shall have occurred in the ------ business, operations, property, financial condition or prospects of the Borrower since December 31, 1996. III.20 DISCLOSURE GENERALLY. The representations and statements made by or -------------------- on behalf of Borrower or any Subsidiary in connection with this credit facility and each Loan hereunder, including representations and statements in each of the Loan Documents, do not contain any untrue statement of a material fact or omit to state a material fact or any fact necessary to make the representations made not materially misleading. No written information, exhibit, report or financial statement furnished by Borrower or any Subsidiary to the Banks in connection with this Agreement, the Loans, or any Loan Document, contains any material misstatement of fact or omits to state a material fact or any fact necessary to make the statements contained therein not materially misleading. IV. SECURITY. -------- IV.1 SECURITY DOCUMENTS. As security for the punctual payment in full of ------------------ all Obligations, the Agent on behalf of the Banks shall have and shall continue to have a valid first lien on and security interest in all the Collateral (as defined in the Security Agreement) of Borrower and each Subsidiary Guarantor, excluding ICF Kaiser Netherlands, to the extent provided in the Security Agreement. In addition, Borrower and the Subsidiary Guarantors or any of them, excluding ICF Kaiser Netherlands, will obtain for the Banks a valid first lien on and security interest in those assets of the nature of the Collateral of each Person, a majority of the voting stock of which is held by Borrower or a Subsidiary Guarantor to the extent provided in the Security Agreement, upon the acquisition by any of them of a majority of the voting stock of any Person through the purchase of capital stock or otherwise. The Borrower agrees to use commercially reasonable efforts to obtain such a valid first lien on and security interest in the Collateral of ICF Kaiser Netherlands. Upon the granting of such lien, such assets shall become Collateral for all purposes of this Agreement and the Security Agreement. -37- V. CONDITIONS PRECEDENT. -------------------- V.1 ALL LOANS AND LETTERS OF CREDIT..1 ALL LOANS AND LETTERS OF CREDIT. The obligation of each Bank to make any Loan or issue any Letter of Credit, is conditioned upon the following: (a) DOCUMENTS. In the case of a Loan, Borrower shall have delivered and the Agent shall have received a request for a Loan, as provided in Sections 2.1 and 2.3. In the case of a Letter of Credit the Issuing Bank shall have received an appropriate request therefor. (b) COVENANTS; REPRESENTATIONS. Each Person that is a party thereto other than the Banks and the Agent shall be in compliance with all covenants, agreements and conditions in each Loan Document and each representation and warranty contained in each Loan Document shall be true with the same effect as if such representation or warranty had been made on the date such Loan or Letter of Credit is made or issued. (c) DEFAULTS. Immediately prior to and after giving effect to such transaction, no Event of Default or Potential Default shall exist. (d) CHANGE. No material adverse change shall have occurred in the financial condition or prospects of Borrower or Borrower and its Subsidiaries taken as a whole since the date hereof. (e) LOCK-BOX ACCOUNTS. The Agent and Borrower shall have entered into one or more lock-box agreements, in form and substance satisfactory to the Agent and the Banks, pursuant to Section 3 of the Security Agreement. The Agent and the Banks shall have received evidence, in form and substance satisfactory to them, that Borrower and each Subsidiary Guarantor shall have instructed all of its account debtors to make all payments in respect of the Accounts to the relevant Lock-Box Account (as defined in the Security Agreement). (f) FEES AND REIMBURSABLE EXPENSES. The Agent shall have received the fees and reimbursable expenses to be received on the date hereof referred to in Sections 2.6(d) and 12.8(a) hereof. (g) ACTIONS TO PERFECT LIENS. The Agent shall have received evidence in form and substance reasonably satisfactory to it that all filings, recordings, registrations and other actions, including, without limitation, the filing of duly executed financing statements on form UCC-1, necessary or, in the opinion of the Agent, desirable to perfect the Liens created by the Security Documents shall have been completed. (h) AMENDED AND RESTATED SECURITY AGREEMENT. The Borrower, the Subsidiary Guarantors and the Agent shall have entered into the Security Agreement. -38- V.2 CONDITIONS TO EFFECTIVENESS. This Agreement shall not be effective until each of the following conditions has been satisfied: (a) ARTICLES, BYLAWS. The Banks shall have received copies of the Articles or Certificates of Incorporation and Bylaws of Borrower and each of the Subsidiary Guarantors, certified by such party's Secretary or Assistant Secretary (or the certificate of such officer that the copies of such documents previously delivered to the Banks are still true and complete); together with Certificates of Good Standing from any jurisdiction where the nature of the business of Borrower and each of the Subsidiary Guarantor or the ownership of their respective properties requires such qualification except where the failure to be so qualified would not have a material adverse effect on the business, operations, assets or condition (financial or otherwise) of Borrower or Borrower and its Subsidiaries taken as a whole; (b) EVIDENCE OF AUTHORIZATION. The Banks shall have received copies certified by the Secretary or Assistant Secretary of Borrower and each Subsidiary Guarantor of all corporate or other action taken by such party to authorize its execution and delivery and performance of the Loan Documents and to authorize the Revolving Credit Loans and Letters of Credit hereunder, together with such other related papers as the Banks shall reasonably require; (c) LEGAL OPINIONS. The Banks shall have received a favorable written opinion of Crowell & Moring LLP, Counsel for Borrower and the Subsidiary Guarantors, which shall be addressed to the Banks and be dated the date of the first Loan, in substantially the form attached as Exhibit E, and such other legal opinion or opinions as the Banks may reasonably request; (d) INCUMBENCY. The Banks shall have received a certificate signed by the Secretary or Assistant Secretary of Borrower and each Subsidiary Guarantor, together with the true signature of the officer or officers authorized to execute and deliver the Loan Documents and certificates thereunder, upon which the Banks shall be entitled to rely conclusively until the Agent shall have received a further certificate of the appropriate Secretary or Assistant Secretary amending the prior certificate and submitting the signature of the officer or officers named in the new certificate as being authorized to execute and deliver Loan Documents and certificates thereunder; (e) NOTES. Each Bank shall have received an executed Note payable to the order of such Bank and otherwise in the form of Exhibit C hereto. (f) DOCUMENTS. The Agent shall have received all certificates, instruments and other documents then required to be delivered pursuant to any Loan Documents, in each instance in form and substance reasonably satisfactory to the Agent and the Banks; (g) CONSENTS. Borrower shall have provided to the Banks evidence satisfactory to the Banks that all governmental, shareholder and third party consents and approvals necessary in connection with the transactions contemplated hereby have been obtained and remain in effect; -39- (h) OTHER AGREEMENTS. Borrower and each Subsidiary Guarantor shall have executed and delivered each other Loan Document required hereunder; (i) CHANGE. No material adverse change shall have occurred in the financial condition or prospects of Borrower since December 31, 1996; and (j) DUE DILIGENCE REVIEW. Each Bank shall be fully satisfied in its sole discretion with the results of its review of, and its other due diligence investigations with respect to, the business, management, finances, operations, affairs, prospects, assets, existing and potential liabilities, obligations, profits or condition of Borrower, and its environmental review of all real property used in Borrower's business. VI. AFFIRMATIVE COVENANTS --------------------- Borrower covenants and agrees that, without the prior written consent of the Required Banks, from and after the date hereof and so long as the Revolving Loan Commitments are in effect or any Obligations remain unpaid or outstanding, Borrower will: VI.1 FINANCIAL STATEMENTS AND REPORTS. Furnish to the Agent and each of the -------------------------------- Banks the following financial information: (a) ANNUAL STATEMENTS. As soon as available but no later than one hundred and five (105) days after the end of each fiscal year, a balance sheet of Borrower and its Subsidiaries as of the end of such year and the prior year in comparative form, and related statements of operations, shareholders' equity, and cash flows for Borrower and its Subsidiaries for the fiscal year and the prior fiscal year in comparative form. The financial statements shall be on a consolidated basis and shall include consolidating information. The financial statements shall be in reasonable detail with appropriate notes and be prepared in accordance with Generally Accepted Accounting Principles. The annual financial statements (other than the consolidating information) shall be certified (without any qualification or exception) by independent public accountants of nationally recognized standing acceptable to the Banks and such consolidating information shall be certified by the Executive Vice President and Chief Financial Officer of Borrower. Such financial statements shall be accompanied by a report of such independent certified public accountants, and such consolidating information shall be accompanied by a report of such Executive Vice President and Chief Financial Officer, in each case stating that, in the opinion of such accountants or officer, respectively, such financial statements or consolidating information present fairly, in all material respects, the financial position, and the results of operations and the cash flows of Borrower and its Subsidiaries for the period then ended in conformity with Generally Accepted Accounting Principles, except for inconsistencies resulting from changes in accounting principles and methods agreed to by such accountants or officer and specified in such report, and that, in the case of such financial statements, the examination by such accountants of such financial statements has been made in accordance with generally accepted auditing standards and accordingly included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and assessing the accounting principles used and significant estimates made, as well as evaluating the overall financial statement presentation. Each financial statement provided under this subsection -40- (a) (other than the consolidating financial statements) shall be accompanied by a certificate signed by such accountants either stating that during the course of their examination nothing came to their attention which would cause them to believe that any event has occurred and is continuing which constitutes an Event of Default or Potential Default, or describing each such event. In addition to the annual financial statements, Borrower shall, promptly upon receipt thereof, furnish to the Banks a copy of each other report submitted to the board of directors of Borrower by its independent accountants in connection with any annual, interim or special audit made by them of the financial records of Borrower and its Subsidiaries. (b) QUARTERLY STATEMENTS. As soon as available but no later than sixty (60) calendar days after the end of each fiscal quarter of each fiscal year, a consolidated balance sheet of Borrower and its Subsidiaries and related consolidated statements of operations, retained earnings and cash flows for such quarterly period and for the period from the beginning of such fiscal year to the end of such fiscal quarter, together with consolidating information, excluding Kaiser-Hill, and a corresponding financial statement for the same periods in the preceding fiscal year certified by the Executive Vice President and Chief Financial Officer or the Vice President and Treasurer of Borrower as having been prepared in with Generally Accepted Accounting Principles (subject to changes resulting from audits and year-end adjustments). (c) STATEMENTS EXCLUDING KAISER-HILL. As soon as available but no later than sixty (60) calendar days after the end of each fiscal quarter of each fiscal year, and as soon as available but no later than one hundred and five (105) calendar days after the end of each fiscal year, a consolidated balance sheet of Borrower and its Subsidiaries and related consolidated statements of operations for such quarterly or annual period, as the case may be, excluding all financial information relating to Kaiser-Hill, and a corresponding financial statement for the same periods in the preceding fiscal year certified as correct by the Executive Vice President and Chief Financial Officer or the Vice President and Treasurer. (d) FINANCIAL STATEMENTS AND REPORTS SENT TO SHAREHOLDERS OR FILED WITH THE SEC. Within fifteen (15) days after the same are sent copies of all financial statements and reports which Borrower and its Subsidiaries sends to its shareholders, and within fifteen (15) days after the same are filed, copies of all financial statements, notices, reports, and filings which Borrower may make to, or file with, the Securities and Exchange Commission or any successor or analogous Governmental Authority. (e) NO DEFAULT. Within sixty (60) calendar days after the end of each of the first three fiscal quarters of each fiscal year and within one hundred five (105) calendar days after the end of each fiscal year, a certificate signed by the Executive Vice President and Chief Financial Officer of Borrower certifying that, to the best of such officer's knowledge, after due inquiry, (i) Borrower and each Subsidiary Guarantor has complied with all covenants, agreements and conditions in each Loan Document and that each representation and warranty contained in each Loan Document is true and correct with the same effect as though each such representation and warranty had been made on the date of such certificate (except to the extent such representation or warranty related to a specific prior date), and (ii) no event has -41- occurred and is continuing which constitutes an Event of Default or Potential Default, or describing each such event and the remedial steps being taken by Borrower. (f) COMPLIANCE. Within sixty (60) calendar days after the end of each of the first three fiscal quarters of each fiscal year and within one hundred five (105) calendar days after the end of each fiscal year, a certificate signed by the Executive Vice President and Chief Financial Officer or the Vice President and Treasurer of Borrower demonstrating compliance with all financial covenants (including all relevant calculations) and representations contained in this Agreement as of the end of such period. Such certificate will be substantially in the form of Exhibit F hereto, or in such other form as the Agent may reasonably request from time to time. The Executive Vice President and Chief Financial Officer or the Vice President and Treasurer of Borrower shall provide any and all reports, audits, and such other information as may be reasonably requested by the Agent to substantiate such compliance by Borrower or upon which said officer may have relied in signing such certificate. (g) BORROWING BASE CERTIFICATE. Within twenty (20) calendar days after the end of each month, a Borrowing Base Certificate in the form attached hereto as Exhibit G signed by the Executive Vice President and Chief Financial Officer or the Vice President and Treasurer of Borrower, together with an aging of all Accounts, consolidating financial statements and such other information as may be reasonably requested by the Agent to substantiate such Borrowing Base Certificate. (h) PROJECTIONS. Not later than 30 days prior to the end of each fiscal year of Borrower, projections of the operating budget and cash flows for Borrower and its Subsidiaries for the immediately following fiscal year, satisfactory in form to the Agent and the Banks. (i) ERISA. Within fifteen (15) Business Days of filing, all reports and forms filed with respect to all Plans, except as filed in the normal course of business and that would not result in an adverse action to be taken under ERISA, and details of related information of a Reportable Event. (j) MATERIAL CHANGES. Within five (5) Business Days of the occurrence thereof, notice of any litigation, administrative proceeding, investigation, business development, or change in financial condition which could reasonably be expected to have a material adverse effect on the business, operations, assets or condition (financial or otherwise) of Borrower or its Subsidiaries taken as a whole. (k) OTHER INFORMATION. All material press releases simultaneously with release. In addition, promptly upon request by the Agent or the Banks from time to time (which may be on a monthly or other basis), Borrower shall provide such other information and reports regarding the operations, business affairs, prospects and financial condition of Borrower or Affiliate as the Agent or the Banks may reasonably request; provided, however, that Borrower shall not be obligated to disclose any information with respect to such Affiliate if such information has no relation to Borrower and disclosure thereof would violate any applicable federal or state securities law. -42- (l) QUARTERLY STATUS REPORTS. Within thirty (30) calendar days after the end of each fiscal quarter of each fiscal year, a contract status report, substantially in the form of Exhibit 6.1(l) hereto, listing the top twenty-five (25) contracts by overall dollar value of Borrower and its Subsidiaries. VI.2 CORPORATE EXISTENCE. Preserve its corporate existence and material ------------------- franchises, licenses, patents, copyrights, trademarks and tradenames consistent with good business practice. Maintain, keep, and preserve, and cause each Subsidiary Guarantor to maintain, keep, and preserve, all of its properties (tangible and intangible) necessary or useful in the conduct of its business in good working order and condition, ordinary wear and tear expected. VI.3 ERISA. (a) Comply in all material respects with the provisions of ----- ERISA to the extent applicable to any Plan maintained for the employees of Borrower, any Subsidiary or any ERISA Affiliate; (b) do or cause to be done all such acts and things that are required to maintain the qualified status of each Plan and tax exempt status of each trust forming part of such Plan; (c) not incur any material accumulated funding deficiency (within the meaning of ERISA and the regulations promulgated thereunder), or any material liability to the PBGC (as established by ERISA); (d) permit any event to occur (i) as described in Section 4042 of ERISA or (ii) which may result in the imposition of a lien on its properties or assets; and (e) notify Banks in writing promptly after it has come to the attention of senior management of Borrower of the assertion or threat of any "reportable event" or other event described in Section 4042 of ERISA (relating to the soundness of a Plan) or the PBGC's ability to assert a material liability against it or impose a lien on Borrower's, any Subsidiary's, or any ERISA Affiliates' properties or assets; and (f) refrain from engaging in any Prohibited Transactions or actions causing possible liability under Section 502 of ERISA. VI.4 COMPLIANCE WITH REGULATIONS. Comply in all material respects with all --------------------------- Regulations applicable to its business, the noncompliance with which reasonably could be expected to have a material adverse effect on the business, operations, assets or condition (financial or otherwise) of Borrower or of Borrower and its Subsidiaries taken as a whole. VI.5 CONDUCT OF BUSINESS; PERMITS AND APPROVALS; COMPLIANCE WITH LAWS. ----------------------------------------------------------------- Continue to engage in Permitted Businesses; maintain, and cause each Subsidiary Guarantor to maintain, in full force and effect, its franchises, and all licenses, patents, trademarks, trade names, contracts, permits, approvals and other rights necessary to the conduct of its business. VI.6 MAINTENANCE OF INSURANCE. Maintain insurance with financially sound ------------------------ and reputable insurance companies or associations in such amounts and covering such risks as are usually carried by companies engaged in the same or a similar business and similarly situated, which insurance may provide for reasonable deductibility from coverage thereof. VI.7 PAYMENT OF DEBT; PAYMENT OF TAXES; ETC. Promptly pay and discharge: --------------------------------------- 43 (a) all of its Debt in accordance with the terms thereof; (b) all taxes, assessments, and governmental charges or levies imposed upon it or upon its income and profits, upon any of its property, real, personal or mixed, or upon any part thereof, before the same shall become in default; or (c) all lawful claims for labor, materials and supplies or otherwise, which, if unpaid, might become a lien or charge upon such property or any part thereof; provided, however, that so long as Borrower first notifies the Agent of its intention to do so, Borrower shall not be required to pay and discharge (or to cause such Subsidiary to pay and discharge) any such Debt, tax, assessment, charge, levy or claim so long as the failure to so pay or discharge does not constitute or result in a Event of Default or Potential Default hereunder and so long as no foreclosure or other similar proceedings shall have been commenced against such property or any part thereof and so long as the validity thereof shall be contested in good faith by appropriate proceedings diligently pursued and it shall have set aside on its books adequate reserves with respect thereto. VI.8 NOTICE OF EVENTS. Promptly upon discovery by Borrower or any officer ---------------- of Borrower of any of the events described in Subsections (a) through (f) hereof, Borrower shall deliver to the Agent telephone notice, and within three (3) calendar days of such telephone notice deliver to the Agent a written notice, which describes the event and all action Borrower proposes to take with respect thereto: (a) an Event of Default or Potential Default under this Agreement; (b) any default or event of default under a contract or contracts and the default or event of default involves payments by Borrower or any Subsidiary in an aggregate amount equal to or in excess of $1,000,000; (c) a default or event of default under or as defined in any evidence of or agreements for Indebtedness for Borrowed Money under which Borrower's or any Subsidiary's liability is equal to or in excess of $1,000,000 singularly or in the aggregate, whether or not an event of default thereunder has been declared by any party to such agreement or any event which, upon the lapse of time or the giving of notice or both, would become an event of default under any such agreement or instrument or would permit any party to any such instrument agreement to terminate or suspend any commitment to lend to Borrower or the Subsidiaries or to declare or to cause any such indebtedness to be accelerated or payable before it would otherwise be due; (d) the institution of, any material adverse determination in, or the entry of any default judgment or order or stipulated judgment or order in, any suit, action, arbitration, administrative proceeding, criminal prosecution or -44- governmental investigation against Borrower or any Subsidiary in which the amount in controversy is in excess of $1,000,000 singularly or in the aggregate; (e) any change in any Regulation, including, without limitation, changes in tax laws and regulations, which could reasonably have a material adverse impact on the ability of Borrower to perform its obligations under the Loan Documents or a material adverse effect on the business, operations, assets or condition (financial or otherwise) of Borrower and its Subsidiaries taken as a whole; or (f) the receipt of any notice from any governmental authority that Borrower is disqualified, barred or suspended from bidding on or performing any contract or proposed contract. VI.9 INSPECTION RIGHTS. At any time during regular reasonably requested of ----------------- Borrower by the Agent, permit the Agent on behalf of the Banks, or any Bank, or any authorized officer, employee, agent, or representative of the Agent or any Bank to examine and make abstracts from the records and books of account of Borrower or any Subsidiary, wherever located and to visit the properties of Borrower or any Subsidiary, as permitted by law; and to discuss the affairs, finances, and accounts of Borrower or any Subsidiary with any of Borrower's or any Subsidiary's officers, directors or independent accountants, as permitted by law, which activities shall be at the expense of such Bank. The Banks shall also have the right to have conducted by the Agent, one (1) financial and collateral audit per year, and two (2) additional collateral audits per year. The Borrower shall bear the expense of such audits. VI.10 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Maintain its books and ---------------------------------------- records at all times in accordance with Generally Accepted Accounting Principles. VI.11 USE OF PROCEEDS. The proceeds of the Loans hereunder shall be used by --------------- Borrower and its Subsidiaries for working capital and general corporate purposes, including the issuance of Documentary Letters of Credit and Standby Letters of Credit. VI.12 FURTHER ASSURANCES. Do such further acts and things and execute and ------------------- deliver to the Agent such additional assignments, agreements, powers and instruments, as the Banks may reasonably require or reasonably deem advisable to carry into affect the purposes of this Agreement or to better assure and confirm unto the Banks rights, powers and remedies hereunder. VII. NEGATIVE COVENANTS. ------------------ Borrower covenants and agrees that, without the prior written consent of the Required Banks, from and after the date hereof and so long as the Revolving Loan Commitments are in effect or any Obligations remain unpaid or outstanding, Borrower will not, and will not permit any Subsidiary to: -45- VII.1 MERGER, CONSOLIDATION. Merge or consolidate with or into any --------------------- corporation except, if no Potential Default or Event of Default shall have occurred and be continuing either immediately prior to or upon the consummation of such transaction, a Subsidiary may be merged with or into Borrower or another Subsidiary, subject to compliance with Section 7.11, or a Subsidiary may be merged with or into another Person in connection with the acquisition of an Investment permitted by Section 7.6. VII.2 INDEBTEDNESS FOR BORROWED MONEY. Incur, create, or permit to exist ------------------------------- any Indebtedness for Borrowed Money except: (a) the Obligations; (b) Subordinated Debt; (c) Non-Recourse Indebtedness; (d) Indebtedness incurred by Borrower or any Subsidiary to finance the acquisition of property (whether pursuant to a loan, financing lease or otherwise) in the ordinary course of business not exceeding in aggregate principal amount at any one time outstanding of $1,000,000; (e) the 1996 Senior Notes; and (f) (1) Non-Recourse Indebtedness in the amount of $950,000 incurred by ICF Kaiser Participacoes Ltda. in order to complete the IESA Investment; (2) Non-Recourse Indebtedness incurred by IESA and/or ICF Kaiser Participacoes Ltda. following the IESA Investment; and (3) Indebtedness for Borrowed Money and other Debt of IESA existing as of the date of the closing of the IESA Investment; provided that in each of (1), (2) and (3) -------- above, neither the Borrower nor any Subsidiary other than ICF Kaiser Brazil Holdings, ICF Kaiser Participacoes Ltda., or IESA shall be permitted (x) to have any guarantee obligation in respect of such Indebtedness or Debt otherwise permitted by this subsection or (y) to pledge or grant any lien or encumbrances on any assets as collateral or security with respect to such Indebtedness or Debt otherwise permitted by this subsection. VII.3 LIENS. Create, assume or permit to exist any Lien on any property or ----- assets, whether now owned or hereafter acquired, or upon any income or profits therefrom, except Permitted Liens. VII.4 GUARANTEES. Guarantee or otherwise in any way become or be ---------- responsible for indebtedness or obligations (including working capital maintenance, take-or-pay contracts, etc.) of any other Person, contingently or otherwise, except: (a) the endorsement of negotiable instruments of deposit in the normal course of business; -46- (b) guarantees by Borrower or a Subsidiary issued to secure the indebtedness or obligation of any Subsidiary, which underlying indebtedness or obligation is permitted hereunder; (c) guarantees (other than those described in subsection (a) and (b)) made in the ordinary course of business; and (d) existing guarantees described on Schedule 7.4 hereto. VII.5 MARGIN STOCK. Use or permit any proceeds of the Loans to be used, ------------ either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock within the meaning of Regulation U of The Board of Governors of the Federal Reserve System, as amended from time to time. VII.6 ACQUISITIONS AND INVESTMENTS. ---------------------------- Make any Investments in any Person, except: (a) Borrower may maintain its ownership interest in each of the Subsidiaries listed on Schedule 3.12 at the percentage of ownership disclosed on said Schedule. (b) any Subsidiary may make and own Investments in Borrower; (c) Borrower or any Subsidiary may acquire and hold stock, obligations or securities received in settlement of debts owing to Borrower or such Subsidiary; (d) Borrower or any Subsidiary may make and own Investments in a Person or acquire all or substantially all of the assets or Capital Stock of any Person (an "ACQUISITION") provided that the aggregate amount of all such Acquisitions after the date hereof shall not exceed $5,000,000 in the aggregate and any single Acquisition shall not exceed $2,000,000; (e) Borrower or any Subsidiary may acquire in the ordinary course of business interests in project-related joint ventures similar to other joint ventures in which Borrower or its Subsidiaries owns an interest on the date hereof, provided that the aggregate amount of cash and fair value of other -------- assets (other than services) contributed by Borrower and its Subsidiaries shall not exceed $750,000 in any twelve-month period; (f) Borrower or any Subsidiary may (i) make investments in Single Purpose Subsidiaries and (ii) serve as partner, shareholder, member, investor, developer and/or owner/operator/lessee of project finance ventures in which the output of the project being developed is under contract to a Person which is not an Affiliate of Borrower or any of its Subsidiaries pursuant to a "take-or-pay", tolling or similar contract and which Borrower, in its reasonable judgment, determines to be in a business presently conducted by Borrower and/or its Subsidiaries, provided that such -------- venture described in clause (ii) -47- above is entered into during such time as no Default or Event of Default has occurred and is continuing or would occur after giving effect thereto, and provided, further, that the sum of (x) the aggregate investments and -------- ------- commitments to make investments by Borrower and its Subsidiaries in all such ventures described in clause (ii) above plus (y) such investments described in clause (i) above shall not exceed an amount equal to $7,500,000; (g) Borrower or any Subsidiary may make and own: (i) Investments in certificates of deposit or time deposits having maturities in each case not exceeding one year from the date of issuance thereof and issued by a Bank, or any FDIC-insured commercial bank incorporated in the United States or any state thereof having a combined capital and surplus of not less than $500,000,000; (ii) Investments in marketable direct obligations issued or unconditionally guaranteed by the United States of America, any agency thereof, or backed by the full faith and credit of the United States of America, in each case maturing within one year from the date of issuance or acquisition thereof; (iii) Investments in commercial paper issued by a corporation incorporated in the United States or any State thereof maturing no more than one year from the date of issuance thereof and, at the time of acquisition, having a rating of A-1 (or better) by Standard & Poor's Corporation or P-1 (or better) by Moody's Investors Service, Inc.; and (iv) Investments in money market mutual funds all of the assets of which are invested in cash or investments described in clauses (i), (ii) and (iii) of this paragraph (g). (h) ICF Kaiser Hunters Branch may make such additional Hunters Branch Investments in amounts not to exceed the amounts set forth below and $6,000,000 in the aggregate without deducting any such Investments from the $5,000,000 aggregate Acquisitions limit set forth in subsection (d) of this Section 7.6: $600,000 in each of years 1997, 1998 and 1999; and $700,000 in each of years 2000, 2001, 2002, 2003, 2004, 2005 and 2006. (i) ICF Kaiser Participacoes Ltda. may complete the IESA Investment, provided that any cash from Borrower or any Subsidiary made available to ICF Kaiser Participacoes Ltda. in connection with the IESA Investment shall be limited to a maximum of $350,000; provided, further, that such amount (when used) shall not be required to be deducted from the $5,000,000 aggregate Acquisitions limit set forth in subsection (d) of this Section 7.6. -48- (j) Borrower or any Subsidiary may complete the Investment in KWA Kenwalt Australia Pty Ltd., a corporation organized under the laws of the country of Australia, provided that any cash from Borrower or any Subsidiary used in connection with said Investment after the date hereof shall be limited to a maximum of $300,000; provided, further, that such amount (when used) shall not be required to be deducted from the $5,000,000 aggregate Acquisitions limit set forth in subsection (d) of this Section 7.6. VII.7 TRANSFER OF ASSETS; NATURE OF BUSINESS. Except as otherwise provided -------------------------------------- in this Agreement, sell, transfer, pledge, assign or otherwise dispose of any assets of Borrower or any Subsidiary (including by means of dilution of Borrower's or a Subsidiary's interest in a Person as and to the extent Borrower or a Subsidiary receives a portion of the proceeds of the dilutive issuance) unless (i) such sale or disposition shall be in the ordinary course of Borrower's or such Subsidiary's business; (ii) sales or other dispositions of assets from Borrower to a Subsidiary of Borrower, or from a Subsidiary of Borrower to Borrower or one or more other Subsidiaries of Borrower so long as such subsidiary meets the requirements of Section 3.14; (iii) sales of assets in connection with sale and leaseback transactions otherwise in compliance with this Agreement; or (iv) a mandatory reduction in the Aggregate Revolving Loan Commitment is made to the extent required by Section 2.7(c), and, in any such case, no Event of Default or Potential Default shall have occurred or will thereby occur; provided, however, that no such sale transfer, pledge, assignment or disposition shall include any of the Collateral; discontinue any substantial part of the existing businesses of Borrower and its Subsidiaries taken as a whole or change the nature of such businesses or otherwise change the legal form of such businesses. VII.8 RESTRICTED PAYMENTS. Make any redemptions, repurchases, dividends or ------------------- distributions of any kind in respect of Borrower's Capital Stock, other than redemptions, repurchases, dividends or distributions payable in the form of, or with the net proceeds of the sale (other than to a Subsidiary or employee stock ownership plan of Borrower) of, Capital Stock of Borrower. VII.9 ACCOUNTING CHANGE. Make or permit any change in financial accounting ----------------- policies or financial reporting practices, except as permitted by Generally Accepted Accounting Principles or regulations of the Securities and Exchange Commission. VII.10 MODIFICATION OF INDENTURE. Consent to or permit any amendment, modification or waiver of any material provision or term contained in (a) the Indenture dated as of January 11, 1994, as supplemented through the Sixth Supplemental Indenture, between Borrower and The Bank of New York, as Trustee, relating to the 12% Senior Subordinated Notes due 2003 issued by Borrower or (b) the Indenture dated as of December 23, 1996, as supplemented through the First Supplemental Indenture, between the Borrower, the guarantors named therein and The Bank of New York, as Trustee, relating to the 1996 Senior Notes unless, fifteen (15) days before consenting to or permitting such amendment, modification or waiver, Borrower shall furnish to the Agent and each of the Banks a certificate signed by the Executive Vice President and Chief Financial Officer or Vice President and Treasurer of Borrower certifying that, to the best of such officer's knowledge, after due inquiry, immediately after such amendment, modification or waiver, (i) Borrower has complied with all covenants, -49- agreements and conditions in each Loan Document and each representation and warranty contained in each Loan Document is true and correct with the same effect as though each such representation and warranty had been made on the date of such certificate (except to the extent such representation or warranty related to a specific prior date), and (ii) no event has occurred and is continuing that constitutes an Event of Default or Potential Default. VII.11 NEW SUBSIDIARIES AND SUBSIDIARY GUARANTORS. Within fifteen (15) ------------------------------------------ days after each day on which the representation set forth in Section 3.14 would be incorrect if made on such day, deliver to the Agent and each Bank a supplement to Schedule 3.12 adding such Subsidiaries as shall be required in order to render such representation correct and execute and deliver a Joinder Agreement in the form attached hereto as Exhibit H and such other documents as the Agent shall determine are necessary or desirable to add such additional Subsidiary or Subsidiaries as Subsidiary Guarantors hereunder and to grant to the Agent a first priority perfected security interest in all Collateral of such additional Subsidiary Guarantors; provided, that in determining whether the -------- representation set forth in Section 3.14 would be incorrect if made on any day, Borrower may rely on the most recent financial statements of Borrower delivered pursuant to Section 6.1(b) unless Borrower has taken any action which, to the knowledge of Borrower, has caused such representation to be incorrect as of such date of determination. VIII. FINANCIAL COVENANTS. ------------------- Borrower covenants and agrees that, without the prior written consent of the Required Banks, from and after the date hereof and so long as the Revolving Loan Commitments are in effect or any Obligations remain unpaid or outstanding, Borrower will not: VIII.1 FIXED CHARGE COVERAGE. Permit, as of the end of any fiscal quarter --------------------- ending in the periods set forth below for the immediately preceding four fiscal quarters, the ratio of (i) EBITDA less Capital Expenditures plus Consolidated Lease Expenses of Borrower and its Subsidiaries, to (ii) Consolidated Fixed Charges for such period to be less than the ratio set forth opposite such period below: Fiscal Quarters Ending ---------------------- December 31, 1997 through March 31, 1998 1.10:1.0 April 1, 1998 through September 30, 1998 1.15:1.0 October 1, 1998 and thereafter 1.20:1.0 -50- VIII.2 INTEREST COVERAGE. Permit, as of the end of any fiscal quarter ----------------- ending in the periods set forth below for the immediately preceding four fiscal quarters, the ratio of (i) EBITDA for such period to (ii) Consolidated Interest Expense for such period to be less than the ratio set forth opposite such period below: Test Period ----------- December 31, 1997 through March 31, 1998 1.55:1.0 April 1, 1998 through June 30, 1998 1.60:1.0 July 1, 1998 through September 30, 1998 1.70:1.0 October 1, 1998 and thereafter 1.80:1.0 VIII.3 SENIOR FUNDED INDEBTEDNESS TO EBITDA. Permit the ratio of Senior ------------------------------------ Funded Indebtedness on the last day of any fiscal quarter to EBITDA as of such day for the immediately preceding four fiscal quarters to be greater than 2.5:1.0. VIII.4 INDEBTEDNESS FOR BORROWED MONEY TO TOTAL CAPITALIZATION. Permit the ------------------------------------------------------- ratio of Indebtedness for Borrowed Money to Total Capitalization on the last day of any fiscal quarter to be greater than .86:1.0. VIII.5 INDEBTEDNESS FOR BORROWED MONEY TO EBITDA. Permit the ratio of ----------------------------------------- Indebtedness for Borrowed Money on the last day of any fiscal quarter ending in the periods set forth below to EBITDA as of such day for the immediately preceding four (4) fiscal quarters to be greater than the ratio set forth opposite such period below: Test Period ----------- December 31, 1997 through June 30, 1998 6.75:1.0 July 1, 1998 through September 30, 1998 6.50:1.0 October 1, 1998 through December 31, 1998 6.00:1.0 January 1, 1999 through June 30, 1999 5.75:1.0 July 1, 1999 through December 31, 1999 5.00:1.0 January 1, 2000 and thereafter 4.75:1.0 ; except as provided below, in all calculations made pursuant to this Article, the Borrower shall exclude any and all amounts (positive and negative) attributable to IESA, ICF Kaiser Participacoes Ltda., and/or ICF Kaiser Brazil Holdings that otherwise might be includible in Capital Expenditures, Consolidated Fixed Charges, Consolidated Interest Expense, Consolidated Lease Expenses, Consolidated Net Income, Consolidated Net Worth, EBITDA, Indebtedness for Borrowed Money, Senior Funded Indebtedness and Total Capitalization. IX. GUARANTY. -------- IX.1 GUARANTY. -------- -51- (a) Each Subsidiary Guarantor unconditionally and irrevocably guarantees the due and punctual payment by, and performance of, the Obligations of Borrower. Each Subsidiary Guarantor further agrees that the Obligations may be extended or renewed, in whole or in part, without notice or further assent from it (except as may be otherwise required herein), and it will remain bound upon this guaranty notwithstanding any extension or renewal of any Obligation. (b) Each Subsidiary Guarantor waives presentation to, demand for payment from and protest to, as the case may be, Borrower, any Subsidiary Guarantor or any other guarantor of the Obligations, and also waives notice of protest for nonpayment. The obligations of each Subsidiary Guarantor hereunder shall not be affected by (i) the failure of the Agent or any Bank to assert any claim or demand or to enforce any right or remedy against Borrower, any Subsidiary Guarantor or any other guarantor of the Obligations under the provisions of this Agreement, any other Loan Document, any other agreement or otherwise; (ii) any extension or renewal of any provision hereof or thereof; (iii) the failure of the Agent or any Bank to notify or obtain the consent of any Subsidiary Guarantor with respect to any rescission, waiver, compromise, acceleration, amendment or modification of any of the terms or provisions of this Agreement, any other Loan Document or any other agreement; (iv) the release, exchange, waiver or foreclosure of any security held by the Agent or any Bank for the Obligations or any of them; (v) the failure of the Agent or a Bank to exercise any right or remedy against any Subsidiary Guarantor or any other guarantor of the Obligations; or (vi) the release or substitution of any Subsidiary Guarantor. (c) Each Subsidiary Guarantor further agrees that this guaranty constitutes a guaranty of performance and of payment when due and not just of collection, and expressly waives any right to require that any resort be had by the Agent or any Bank to any security held for payment of the Obligations or to any balance of any deposit, account or credit on the books of the Agent or any Bank in favor of Borrower, any Subsidiary Guarantor or any other guarantor of the Obligations or to any other Person. (d) Each Subsidiary Guarantor hereby expressly assumes all responsibilities to remain informed of the financial condition of Borrower and any circumstances affecting the ability of Borrower to perform under this Agreement or any other Loan Document. (e) Each Subsidiary Guarantor's guaranty shall not be affected by the genuineness, validity, regularity or enforceability of the Obligations, or any other Loan Documents, or by the existence, validity, enforceability, perfection, or extent of collateral therefor or by any other circumstances relating to the Obligations which might otherwise constitute a defense to this Guaranty. The Banks and the Agent make no representation or warranty in respect to any such circumstances and have no duty or responsibility whatsoever to each Subsidiary Guarantor in respect to the management and maintenance of the Obligations or any collateral security for the Obligations. IX.2 NO IMPAIRMENT OF GUARANTY. The obligations of each Subsidiary ------------------------- Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including, without limitation, any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality -52- or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Subsidiary Guarantor hereunder shall not be discharged or impaired or otherwise affected by the failure of the Agent or any Bank to assert any claim or demand or to enforce any remedy under this Agreement or any other agreement, by any waiver or modification of any provision thereof, by any default, failure or modification of any provision thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of such Subsidiary Guarantor or would otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law, unless and until the Obligations are finally and indefeasibly paid in full. IX.3 CONTINUATION AND REINSTATEMENT, ETC. ----------------------------------- (a) Each Subsidiary Guarantor further agrees that its guaranty hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or is otherwise restored by any Bank. In furtherance of the provisions of this Section 9.3, and not in limitation of any other right which the Agent or a Bank may have at law or in equity against Borrower or a Subsidiary Guarantor by virtue hereof, upon failure of Borrower to pay any Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice or otherwise, each Subsidiary Guarantor hereby promises to and will, upon receipt of written demand by the Agent or any Bank, forthwith pay or cause to be paid to the Agent or such Bank in cash an amount equal to the unpaid amount of all the Obligations with interest at the Default Rate. (b) All rights of the Subsidiary Guarantors against Borrower, arising as a result of the payment by any Subsidiary Guarantor of the sums to the Agent or a Bank by way of right of subrogation or otherwise shall in all respects be subordinated and junior in right of payment to the prior final and indefeasible payment in full of all the Obligations to the Agent and the Banks. If any amount shall be paid to such Subsidiary Guarantors for the account of Borrower, such amount shall be held in trust for the benefit of the Banks and shall forthwith be paid to the Banks to be credited and applied to the Obligations, whether matured or unmatured. (c) Each Subsidiary Guarantor shall have a right of contribution from each other Subsidiary Guarantor with respect to any sums paid by a Subsidiary Guarantor to a Bank hereunder, which right of contribution shall in all respects be subordinated and junior in right of payment to the prior final and indefeasible payment in full of the Obligations to the Agent and the Banks. (d) The obligations of the Subsidiary Guarantors hereunder shall terminate upon the final and indefeasible payment in full of the Obligations to the Agent and the Banks. In addition, the Agent and the Banks shall release a Subsidiary Guarantor from its obligations hereunder upon the disposition of all of the capital stock of such Subsidiary Guarantor. IX.4 REPRESENTATIONS AND WARRANTIES. Each Subsidiary Guarantor hereby ------------------------------ represents and warrants to the Agent and the Banks that each representation and warranty by Borrower set forth in this Agreement and each other Loan -53- Document relating to such Subsidiary Guarantor, including without limitation the representations and warranties contained in Article III hereof, is true, correct and complete in all respects. X. DEFAULT. ------- X.1 EVENTS OF DEFAULT. Borrower shall be in default if any one or more of ----------------- the following events ("EVENT OF DEFAULT") occurs: (a) PAYMENTS. Borrower fails to pay any principal of or interest on any Note when due and payable (whether at maturity, by notice of intention to prepay, or otherwise) or fails to pay when it is due and payable any other amount payable under any Loan Document; (b) COVENANTS. (i) Borrower fails to observe or perform as and when required any of the terms, conditions or covenants contained in any Loan Document (other than those referred to in clause (ii) below); or (ii) Borrower fails to observe or perform as and when required any of the terms, conditions or covenants contained in Sections 6.2 (other than as to the corporate existence of Borrower), 6.5, 6.8(b), 6.8(c), and 6.8(d) of this Agreement, and such failure shall continue for fifteen (15) days after Borrower obtains knowledge of such breach. (c) REPRESENTATIONS, WARRANTIES, ETC. Any representation or warranty made, or deemed made, by Borrower herein or in any Loan Document or in any exhibit, schedule, report or certificate delivered pursuant hereto or thereto shall prove to have been false, misleading or incorrect in any material respect when made or deemed to have been made; (d) BANKRUPTCY, ETC. Borrower is dissolved or liquidated, makes an assignment for the benefit of creditors, files a petition in bankruptcy, is adjudicated insolvent or bankrupt, petitions or applies to any tribunal for any receiver or trustee, commences any proceeding relating to itself under any bankruptcy, reorganization, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, has commenced against it any such proceeding which remains undismissed for a period of sixty (60) days, indicates its consent to, approval of or acquiescence in any such proceeding, or any receiver of or trustee for Borrower or any substantial part of the property of Borrower is appointed, or Borrower suffers any such receivership or trusteeship to continue undischarged for a period of sixty (60) days; (e) CERTAIN OTHER DEFAULTS. If Borrower or any Subsidiary shall fail to pay when due any Indebtedness for Borrowed Money which singularly or in the aggregate exceeds $1,000,000, and such failure shall continue beyond any applicable cure period, or Borrower or any Subsidiary shall suffer to exist any default or event of default in the performance or observance, subject to any applicable grace period, of any agreement, term, condition or covenant with respect to any agreement or document relating to -54- Indebtedness for Borrowed Money, if the effect of such default is to permit, with the giving of notice or passage of time or both, the holders thereof, or any trustee or agent for said holders, to terminate or suspend any commitment (which is equal to or in excess of $1,000,000) to lend money or to cause or declare any portion of any borrowings thereunder to become due and payable prior to the date on which it would otherwise be due and payable, provided that during any applicable cure period the Banks' obligations hereunder to make further Loans or issue Letters of Credit shall be suspended; (f) JUDGMENTS. Any judgments against Borrower or any Subsidiary or any attachments against its assets or property for amounts in excess of $1,000,000 in the aggregate remain unpaid, unstayed on appeal, undischarged, unbonded and undismissed for a period of thirty (30) days; (g) ATTACHMENTS. Any assets of Borrower or any Subsidiary shall be subject to attachments, levies, or garnishments for amounts in excess of $1,000,000 in the aggregate which have not been dissolved or satisfied within thirty (30) days after service of notice thereof to Borrower or such Subsidiary; or (h) CHANGE IN CONTROL. A Change of Control shall occur. Then and in every such event other than that specified in clause (d), the Agent shall, at the written request of the Required Banks, terminate the Revolving Loan Commitments and may declare the Revolving Loans and all other Obligations, including without limitation accrued interest, to be, and the Revolving Loans and all other Obligations shall thereupon become, due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Borrower. Upon the occurrence of any event specified in clause (d) above, the Revolving Loan Commitments shall automatically terminate and the Revolving Loans and all other Obligations, including without limitation accrued interest, shall immediately be due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Borrower. To the extent that the Obligations accelerated hereunder relate to Letters of Credit, the amount becoming due and payable shall be the aggregate amount of the Letter of Credit Outstandings, whether or not any drawings or claims have been presented thereunder. Any date on which the Loans and such other obligations are declared due and payable pursuant to this Section 10.1, shall be a Revolver Termination Date for purposes of this Agreement. XI. AGENT. ----- XI.1 APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably appoints ----------------------------- and authorizes the Agent to take such action on its behalf and to exercise such powers under this Agreement and the Loan Documents as are specifically delegated to the Agent by the terms hereof or thereof, together with such other powers as are reasonably incidental thereto. The relationship between the Agent and each Bank has no fiduciary aspects, and the Agent's duties (as Agent) hereunder are acknowledged to be only ministerial and not involving the exercise of discretion on its part. Nothing in this Agreement or any Loan Document shall be construed to impose on the Agent any duties or responsibilities other than those for which express provision is made herein or therein. In performing its duties -55- and functions hereunder, the Agent does not assume and shall not be deemed to have assumed, and hereby expressly disclaims, any obligation with or for Borrower. As to matters not expressly provided for in this Agreement or any Loan Document, the Agent shall not be required to exercise any discretion or to take any action or communicate any notice, but shall be fully protected in so acting or refraining from acting upon the instructions of the Required Banks (or all Banks, if required by the applicable Section of this Agreement) and their respective successors and assigns; provided, however, that in no event shall the Agent be required to take any action which exposes it to personal liability or which is contrary to this Agreement, any Loan Document or applicable law, and the Agent shall be fully justified in failing or refusing to take any action hereunder unless it shall first be specifically indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or omitting to take any such action. If an indemnity furnished to the Agent for any purpose shall, in the reasonable opinion of the Agent, be insufficient or become impaired, the Agent may call for additional indemnity from the Banks and not commence or cease to do the acts for which such indemnity is requested until such additional indemnity is furnished. XI.2 DUTIES AND OBLIGATIONS. In performing its functions and duties ---------------------- hereunder on behalf of the Banks, the Agent shall exercise the same care and skill as it would exercise in dealing with loans for its own account. Neither the Agent nor any of its directors, officers, employees or other agents shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or any Loan Document except for its or their own gross negligence or willful misconduct. Without limiting the generality of the foregoing, the Agent (a) may consult with legal counsel and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith and in accordance with the advice of such experts; (b) makes no representation or warranty to any Bank as to, and shall not be responsible to any Bank for, any recital, statement, representation or warranty made in or in connection with this Agreement, any Loan Document or in any written or oral statement (including a financial or other such statement), instrument or other document delivered in connection herewith or therewith or furnished to any Bank by or on behalf of Borrower; (c) shall have no duty to ascertain or inquire into Borrower's performance or observance of any of the covenants or conditions contained herein or to inspect any of the property (including the books and records) of Borrower or inquire into the use of the proceeds of the Revolving Credit Loans or (unless the officers of the Agent active in their capacity as officers of the Agent on Borrower's account have actual knowledge thereof or have been notified in writing thereof) to inquire into the existence or possible existence of any Event of Default or Potential Default; (d) shall not be responsible to any Bank for the due execution, legality, validity, enforceability, effectiveness, genuineness, sufficiency, collectability or value of this Agreement or any other Loan Document or any instrument or document executed or issued pursuant hereto or in connection herewith, except to the extent that such may be dependent on the due authorization and execution by the Agent itself; (e) except as expressly provided herein in respect of information and data furnished to the Agent for distribution to the Banks, shall have no duty or responsibility, either initially or on a continuing basis, to provide to any Bank any credit or other information with respect to Borrower, whether coming into its possession before the making of the Loans or at any time or times thereafter; and (f) shall incur no liability under or in respect of this Agreement or any other Loan Document for, and shall be entitled to rely and act upon, any notice, consent, certificate or other instrument or writing (which may be by facsimile (telecopier), telegram, cable, or other electronic means) believed by it to be genuine and correct and to have been signed or sent by the -56- proper party or parties. XI.3 THE AGENT AS A BANK. With respect to its Revolving Loan Commitment ------------------- and the Loans made and to be made by it and the Letters of Credit issued and to be issued by it, CoreStates Bank, N.A. shall have the same rights and powers under this Agreement and all other Loan Documents as the other Banks and may exercise the same as if it were not the Agent. The terms "Bank" and "Banks" as used herein shall, unless otherwise expressly indicated, include CoreStates Bank, N.A. in its individual capacity. CoreStates Bank, N.A. and any successor Agent which is a commercial bank, and their respective affiliates, may accept deposits from, lend money to, act as trustee under indentures of and generally engage in any kind of business with, Borrower and its Affiliates from time to time, all as if such entity were not the Agent hereunder and without any duty to account therefor to any Bank. XI.4 INDEPENDENT CREDIT DECISIONS. Each Bank acknowledges to the Agent ---------------------------- that it has, independently and without reliance upon the Agent or any other Bank, and based upon such documents and information as it has deemed appropriate, made its own independent credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently or through other advisers and representatives but without reliance upon the Agent or any other Bank, and based upon such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or refraining from taking any action under this Agreement or any Loan Document. XI.5 INDEMNIFICATION. The Banks agree to indemnify the Agent (to the --------------- extent not reimbursed by Borrower), ratably in proportion to each Bank's Commitment Percentage, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Agent in such capacity in any way relating to or arising out of this Agreement or any Loan Document or any action taken or omitted to be taken by the Agent in such capacity hereunder or under any Loan Document; provided that none of the Banks shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's gross negligence or willful misconduct. Without limiting the generality of the foregoing, each Bank agrees to reimburse the Agent, promptly on demand, for such Bank's ratable share (based upon the aforesaid apportionment) of any out-of- pocket expenses (including counsel fees and disbursements) incurred by the Agent in connection with the preparation, execution, administration or enforcement of, or the preservation of any rights under, this Agreement and the Loan Documents to the extent that the Agent is not reimbursed for such expenses by Borrower. XI.6 SUCCESSOR AGENT. The Agent may resign at any time by giving written --------------- notice of such resignation to the Banks and Borrower, such resignation to be effective only upon the appointment of a successor Agent as hereinafter provided. Upon any such notice of resignation, the Banks shall jointly appoint a successor Agent upon written notice to Borrower and the retiring Agent. If no successor Agent shall have been jointly appointed by such Banks and shall have accepted such appointment within thirty (30) days after the retiring Agent shall have given notice of resignation, the retiring Agent may, upon notice to Borrower and the Banks, appoint a successor Agent. Upon its acceptance of any appointment as Agent hereunder, the successor Agent shall succeed to and become vested with all the rights, powers, -57- privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations as Agent under this Agreement and the Loan Documents. After any retiring Agent's resignation hereunder, the provisions hereof shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Agent under this Agreement and the Loan Documents. XI.7 ALLOCATIONS MADE BY AGENT. As between the Agent and the Banks, ------------------------- unless a Bank objecting to a determination or allocation made by the Agent pursuant to this Agreement delivers to the Agent written notice of such objection within one hundred twenty (120) days after the date any distribution was made by the Agent, such determination or allocation shall be conclusive on such one hundred twentieth day and only those items expressly objected to in such notice shall be deemed disputed by such Bank. The Agent shall not have any duty to inquire as to the application by the Banks of any amounts distributed to them. XII. MISCELLANEOUS ------------- XII.1 WAIVER. No failure or delay on the part of the Agent or any Bank or ------ any holder of any Note in exercising any right, power or remedy under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy under any Loan Document. The remedies provided under the Loan Documents are cumulative and not exclusive of any remedies provided by law. XII.2 AMENDMENTS. No amendment, modification, termination or waiver of ---------- any Loan Document or any provision thereof nor any consent to any departure by Borrower therefrom shall be effective unless the same shall have been approved in writing by the Required Banks, be in writing and be signed by the Agent and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No notice to or demand on Borrower shall entitle Borrower to any other or further notice or demand in similar or other circumstances. Notwithstanding any other provision contained in any Loan Document, no amendment, modification, termination or waiver shall affect the manner of calculating the Borrowing Base, the payment of principal (including without limitation the date when due), extend the Revolver Termination Date, reduce any interest rate margin or any fee provided herein, increase any Revolving Loan Commitment, release any Collateral, modify the definition of "Required Bank" or adversely affect the security interest or any voting or consent rights of the Banks herein without the written consent of all the Banks. The rights and responsibilities of the Agent hereunder cannot be changed without the Agent's prior written consent. XII.3 GOVERNING LAW. The Loan Documents and all rights and obligations of ------------- the parties thereunder shall be governed by and be construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania without regard to Pennsylvania or federal principles of conflict of laws. XII.4 PARTICIPATIONS AND ASSIGNMENTS. This Agreement shall bind and ------------------------------ inure to the benefit of the parties and their respective successors -58- and assigns except that neither the Borrower nor any Subsidiary Guarantor may assign any such Person's rights or obligations hereunder. Borrower hereby acknowledges and agrees that a Bank may at any time: (a) grant participations in all or any portion of its Revolving Loan Commitment, any Note or of its right, title and interest therein or in or to any Loan Document (collectively, "Participations") to any other lending office or to any other bank, lending institution or other entity which has the requisite sophistication to evaluate the merits and risks of investments in Participations ("Participants"); provided, however, that: (i) all amounts payable by Borrower hereunder shall be determined as if such Bank had not granted such Participation; and (ii) any agreement pursuant to which any Bank may grant a Participation: (x) shall provide that such Bank shall retain the sole right and responsibility to enforce the obligations of Borrower hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provisions of this Agreement; (y) such participation agreement may provide that such Bank will not agree to any modification, amendment or waiver of this Agreement without the consent of the Participant if such modification, amendment or waiver would reduce the principal of or rate of interest on the Loan or postpone the date fixed for any payment of principal of or interest on the Loan; and (z) shall not relieve such Bank from its obligations, which shall remain absolute, to make Loans hereunder and issue (or assume a participation in) Letters of Credit hereunder; and (b) each Bank may assign any of its rights or interests under the Loan Documents (but only with the consent of Borrower and the Agent, which consent shall not be unreasonably withheld), provided that: (i) each such assignment shall be in an amount of at least $5,000,000 and the transferor Bank's remaining interest shall be not less than 33% of its original Revolving Loan Commitment; (ii) each such assignment by a Bank of its Loans, or Revolving Credit Commitment shall be made in such manner so that the same portion of its Loans, Note, Revolving Credit Commitment and obligations under Letters of Credit is assigned to the respective assignee and (iii) each such assignment during the existence of an Event of Default shall not require the consent of Borrower, but if such assignment is made to a foreign entity or a Person controlled by a foreign entity, the transferor Bank shall give the Borrower five (5) days notice prior to such assignment. Upon execution and delivery by the assignee to Borrower and the Agent of an instrument in writing pursuant to which such assignee agrees to become a "Bank" hereunder (if not already a Bank) having the Commitment (s) and Loans specified in such instrument, and upon consent thereto by Borrower and the Agent, to the extent required above, the assignee shall have, to the extent of such assignment (unless otherwise provided in such assignment with the consent of Borrower and the Agent), the obligations, rights and benefits of a Bank hereunder holding the Revolving Credit Commitment(s), Loans (or portions thereof) and Letters of Credit or participations therein, as applicable, assigned to it (in addition to the Revolving Credit Commitment(s), Loans and Letters of Credit or participations therein, as applicable, if any, theretofore held by such assignee) and the assigning Bank shall, to the extent of such assignment, be released from the Commitment (s) (or portion (s) thereof) so assigned. Upon each such assignment the assigning Bank shall pay the Agent an assignment fee of $3,500. XII.5 CAPTIONS. Captions in the Loan Documents are included for -------- convenience of reference only and shall not constitute a part of any Loan Document for any other purpose. XII.6 NOTICES. All notices, requests, demands, directions, declarations ------- and other communications between the Banks and Borrower or a Subsidiary Guarantor provided -59- for in any Loan Document shall, except as otherwise expressly provided, be mailed by registered or certified mail, return receipt requested, or telegraphed, or telefaxed, or delivered in hand to the applicable party, in the case of the Agent or any of the Banks, at its address indicated opposite its name on the signature pages hereto, and, in the case of the Borrower or any Subsidiary Guarantor, at its address indicated on Schedule 3.12 hereto. The foregoing shall be effective and deemed received three days after being deposited in the mails, postage prepaid, addressed as aforesaid and shall whenever sent by telegram, telegraph or telefax or delivered in hand be effective when received. Any party may change its address by a communication in accordance herewith. XII.7 SHARING OF COLLECTIONS, PROCEEDS AND SET-OFFS; APPLICATION OF ------------------------------------------------------------- PAYMENTS. - -------- (a) If any Bank, by exercising any right of set-off, counterclaim or foreclosure against trade collateral or otherwise, receives payment of principal or interest or other amount due on any Loan or Letter of Credit which is greater than the percentage share of such Bank (determined as set forth below), the Bank receiving such proportionately greater payment shall purchase such participations in the Loans and Letter of Credit reimbursement obligations held by the other Banks, and such other adjustments shall be made as may be required, so that all such payments shall be shared by the Banks on the basis of their percentage shares; provided that if all or any portion of such proportionately greater payment of such indebtedness is thereafter recovered from, or must otherwise be restored by, such purchasing Bank, the purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest being paid by such purchasing Bank. The percentage share of each Bank shall be based on the portion of the outstanding Loans of such Bank (prior to receiving any payment for which an adjustment must be made under this Section 12.7(a)) in relation to the aggregate outstanding Loans of all the Banks. Borrower agrees, to the fullest extent it may effectively do so under applicable law, that any holder of a participation in a Loan or reimbursement obligation, whether or not acquired pursuant to the foregoing arrangements, may exercise rights of set-off or counterclaim and other rights with respect to such participation as fully as if such holder of a participation were a direct creditor of Borrower in the amount of such participation. If under any applicable bankruptcy, insolvency or other similar law, any Bank receives a secured claim in lieu of a set-off to which this Section would apply, such Bank shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Banks entitled under this Section to share in the benefits of any recovery on such secured claim. (b) If an Event of Default or a Potential Default shall have occurred and be continuing, the Agent and each Bank and Borrower agree that all payments on account of the Loans and Letters of Credit shall be applied by the Agent and the Banks as follows: (1) First, to the Agent for any Agent fees then due and payable under this Agreement until such fees are paid in full; (2) Second, to the Agent for any fees, costs or expenses (including expenses described in Section 12.8) incurred by the Agent under any of the Loan Documents or this Agreement, then due and payable and not reimbursed by Borrower or the Banks until such fees, costs and expenses are paid in full; -60- (3) Third, to the Banks for their percentage shares of the Commitment Fee then due and payable under this Agreement until such fee is paid in full; (4) Fourth, to the Banks for their respective shares of all costs, expenses and fees then due and payable from Borrower until such costs, expenses and fees are paid in full; (5) Fifth, to the Banks for their percentage shares of all interest then due and payable from Borrower until such interest is paid in full, which percentage shares shall be calculated by determining each Bank's percentage share (determined as set forth in Section 12.7(a)) of the amounts allocated in (a) above; and (6) Sixth, to the Banks for their percentage shares of the principal amount of the Loans and reimbursement obligations with respect to Letters of Credit then due and payable from Borrower until such principal is paid in full, which percentage shares shall be calculated by determining each Bank's percentage share (determined as set forth in Section 12.7(a)) of the amounts allocated in (a) above. XII.8 EXPENSES OF THE AGENT; INDEMNIFICATION OF THE AGENT AND THE BANKS. ----------------------------------------------------------------- (a) Borrower will from time to time reimburse the Agent promptly following demand for all out-of-pocket expenses (including the reasonable fees and expenses of legal counsel) in connection with (i) the preparation of the Loan Documents and any amendments or waivers thereto, (ii) the making of any Loans, (iii) the administration of the Loan Documents, and (iv) the enforcement of the Loan Documents; and reimburse the Banks for all out-of-pocket expenses (including reasonable fees and expenses of legal counsel) in connection with the enforcement of the Loan Documents. (b) In addition to the payment of the foregoing expenses, Borrower hereby agrees to indemnify, protect and hold the Agent, each Bank and any holder of the Notes and the officers, directors, employees, agents, affiliates and attorneys of the Agent, each Bank and such holder (collectively, the "INDEMNITEES") harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature, including reasonable fees and expenses of legal counsel, and including legal fees and settlement costs whether or not the transaction contemplated hereby is consummated, which may be imposed on, incurred by, or asserted against such Indemnitee by Borrower or other third parties and arise out of or relate to this Agreement or the other Loan Documents or any other matter whatsoever related to the transactions contemplated by or referred to in this Agreement or the other Loan Documents; provided, however, that Borrower shall have no obligation to an Indemnitee hereunder to the extent that the liability incurred by such Indemnitee has been determined by a court of competent jurisdiction to be the result of gross negligence or willful misconduct of such Indemnitee. -61- XII.9 SURVIVAL OF WARRANTIES AND CERTAIN AGREEMENTS. All agreements, --------------------------------------------- representations and warranties made or deemed made herein shall survive the execution and delivery of this Agreement, the making of the Loans hereunder and the execution and delivery of the Notes. Notwithstanding anything in this Agreement or implied by law to the contrary, the agreements of Borrower set forth in Sections 2.5(d), 2.7(b), 2.9, 2.10 and 12.8 and the agreements of the Banks set forth in Sections 11.1, 11.5 and 12.7 shall survive the payment of the Loans and the termination of this Agreement. This Agreement shall remain in full force and effect until the latest to occur of the termination of the Aggregate Revolving Loan Commitment or the repayment in full of all amounts owed by Borrower under any Loan Document. XII.10 SEVERABILITY. The invalidity, illegality or unenforceability in ------------ any jurisdiction of any provision in or obligation under this Agreement, the Notes or other Loan Documents shall not affect or impair the validity, legality or enforceability of the remaining provisions or obligations under this Agreement, the Notes or other Loan Documents or of such provision or obligation in any other jurisdiction. XII.11 BANKS' OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF BANKS' RIGHTS. --------------------------------------------------------------- The obligation of each Bank hereunder is several and not joint and no Bank shall be the agent of any other (except to the extent the Agent is authorized to act as such hereunder). No Bank shall be responsible for the obligation or commitment of any other Bank hereunder. In the event that any Bank at any time should fail to make a Loan as herein provided, the other Banks, or any of them as may then be agreed upon, at their sole option, may make the Loan that was to have been made by the Bank so failing to make such Loan. Nothing contained in any Loan Document and no action taken by Agent or any Bank pursuant hereto or thereto shall be deemed to constitute Banks to be a partnership, an association, a joint venture or any other kind of entity. The amounts payable at any time hereunder to each Bank shall be a separate and independent debt, and, subject to the terms of this Agreement, each Bank shall be entitled to protect and enforce its rights arising out of this Agreement and it shall not be necessary for any other Bank to be joined as an additional party in any proceeding for such purpose. XII.12 NO FIDUCIARY RELATIONSHIP. No provision in this Agreement or in ------------------------- in any of the other Loan Documents and no course of dealing between the parties shall be deemed to create any fiduciary duty by Agent or any Bank to Borrower. XII.13 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. BORROWER, EACH ---------------------------------------------- SUBSIDIARY GUARANTOR, THE AGENT AND EACH BANK HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE EASTERN DISTRICT OF PENNSYLVANIA AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THE NOTES, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY BE LITIGATED IN SUCH COURTS. EACH PARTY TO THIS AGREEMENT ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE -62- BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, SUCH NOTE, OR SUCH OTHER LOAN DOCUMENT. XII.14 WAIVER OF JURY TRIAL. BORROWER, EACH SUBSIDIARY GUARANTOR, THE -------------------- AGENT AND EACH BANK HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE LENDER/BORROWER RELATIONSHIP ESTABLISHED HEREBY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. BORROWER, EACH SUBSIDIARY GUARANTOR, THE AGENT AND EACH BANK ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO THE TRANSACTION, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER, EACH SUBSIDIARY GUARANTOR, AGENT AND EACH BANK FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. XII.15 COUNTERPARTS; EFFECTIVENESS. This Agreement and any amendment --------------------------- hereto or waiver hereof may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement and any amendments hereto or waivers hereof shall become effective when the Agent shall have received signed counterparts or notice by telecopy of the signature page that the counterpart has been signed and is being delivered to the Agent or facsimile that such counterparts have been signed by all the parties hereto or thereto. XII.16 USE OF DEFINED TERMS. All words used herein in the singular or -------------------- plural shall be deemed to have been used in the plural or singular where the context or construction so requires. Any defined term used in the singular preceded by "any" shall be taken to indicate any number of the members of the relevant class. -63- [SIGNATURE PAGE TO CREDIT AGREEMENT] IN WITNESS WHEREOF, Borrower, the Subsidiary Guarantors, and the Banks have caused this Agreement to be executed by their proper corporate officers thereunto duly authorized as of the day and year first above written. ICF KAISER INTERNATIONAL, INC. By:____________________________ Title: CLEMENT INTERNATIONAL CORPORATION CYGNA GROUP, INC. By:______________________________ By:____________________________ Title: Title: EXCELL DEVELOPMENT HENRY J. KAISER COMPANY CONSTRUCTION, INC. By:______________________________ By:____________________________ Title: Title: ICF INFORMATION TECHNOLOGY, INC. ICF INCORPORATED By:______________________________ By:____________________________ Title: Title: ICF KAISER ENGINEERS ICF KAISER ENGINEERS CORPORATION (CALIFORNIA) CORPORATION By:______________________________ By:____________________________ Title: Title: ICF KAISER ENGINEERS ICF KAISER ENGINEERS MASSACHUSETTS, INC. GROUP, INC. By:______________________________ By:____________________________ Title: Title: ICF KAISER GOVERNMENT -64- [SIGNATURE PAGE TO CREDIT AGREEMENT] PROGRAMS, INC. ICF KAISER ENGINEERS, INC. By:______________________________ By:____________________________ Title: Title: ICF KAISER HOLDINGS UNLIMITED, INC. ICF KAISER HANFORD COMPANY By:______________________________ By:____________________________ Title: Title: ICF RESOURCES INCORPORATED ICF LEASING CORPORATION, INC. By:______________________________ By:____________________________ Title: Title: KE SERVICES CORPORATION KE LIVERMORE, INC. By:______________________________ By:____________________________ Title: Title: KAISER ENGINEERS AND KAISER ENGINEERS INTERNATIONAL, CONSTRUCTORS, INC. INC. By:______________________________ By:____________________________ Title: Title: SYSTEMS APPLICATIONS INTERNATIONAL, TUDOR ENGINEERING COMPANY INC. By:______________________________ By:____________________________ Title: Title: CYGNA CONSULTING ENGINEERS AND PCI OPERATING COMPANY, INC. PROJECT MANAGEMENT, INC. By:______________________________ By:____________________________ Title: Title: ICF KAISER SYSTEMS, INC. ICF KAISER/GEORGIA WILSON, INC. -65- [SIGNATURE PAGE TO CREDIT AGREEMENT] By:______________________________ By:____________________________ Title: Title: GLOBAL TRADE & INVESTMENT, INC. ICF KAISER ENGINEERS PACIFIC, INC. By:______________________________ By:____________________________ Title: Title: EDA, INCORPORATED ICF KAISER REMEDIATION COMPANY By:______________________________ By:____________________________ Title: Title: ICF KAISER OVERSEAS ENGINEERING, ICF KAISER EUROPE, INC. INC. By:______________________________ By:____________________________ Title: Title: ICF KAISER NETHERLANDS B.V. By:______________________________ Title: FC 1-8-3-16 CORESTATES BANK, N.A., 1339 Chestnut Street, 3rd Floor as a Bank and as Agent Philadelphia, PA 19101-7618 By:____________________________ Title: 7729 Leesburg Pike, Suite 500 SIGNET BANK Falls Church, VA 22043 By:____________________________ Title: World Trade Center NATIONAL BANK OF CANADA, a 401 East Pratt Street, Suite 631 Canadian Chartered Bank -66- [SIGNATURE PAGE TO CREDIT AGREEMENT] Baltimore, MD 21202 By:____________________________ Title: By:____________________________ Title: 100 Federal Street BANKBOSTON, N.A. Mail Code: 01-09-06 Boston, MA 02110 By:____________________________ Title: -67- EXHIBIT A COMMITMENTS
Commitment Amount Percentage CoreStates Bank, N.A. $20,000,000 30.769% Signet Bank $15,000,000 23.077% National Bank of Canada $15,000,000 23.077% BankBoston, N.A. $15,000,000 23.077%
SCHEDULE 2.4(e)
Indebtedness for Borrowed Money to EBITDA Ratio Base Rate Margin LIBO Rate Margin - --------------------- ---------------- ---------------- Less than 5x 0 1-1/2% Equal to or greater than 5x 1/2% 2% but less than 5-1/2x Equal to or greater than 5-1/2x 3/4% 2-1/4% but less than 6x Equal to or greater than 6x 1% 2-1/2%
EX-10.(A)(1) 21 EXHIBIT 10(A)(1) Exhibit No. 10(a)(1) FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT This First Amendment dated as of March 12, 1998 (the "Amendment") to the Amended and Restated Credit Agreement, dated as of December 3, 1997, (the "Credit Agreement"), is entered into by and among ICF Kaiser International, Inc. ("Borrower"), a Delaware corporation, each of its subsidiaries signatories hereto (each a "Subsidiary Guarantor" and collectively the "Subsidiary Guarantors"), the banking institutions signatories hereto (each, a "Bank" and collectively, the "Banks") and CoreStates Bank, N.A., as agent for the Banks under this Credit Agreement (in such capacity, the "Agent"). WITNESSETH - ---------- WHEREAS, Borrower, each Subsidiary Guarantor, the Banks and the Agent are parties to an Amended and Restated Credit Agreement, dated as of December 3, 1997 (the "Credit Agreement"), whereby the Banks have agreed to provide a revolving credit facility for loans and for letters of credit; WHEREAS, the Borrower and the Subsidiary Guarantors have requested, and the Banks and the Agent have agreed, to amend the Credit Agreement in certain respects, as provided herein. NOW, THEREFORE, in consideration of the premises and intending to be legally bound hereby, the parties hereto agree as follows: 1. Amendment to Credit Agreement. ----------------------------- a. The definition of "EBITDA" in Section 1.1 of Article I is hereby amended in order to add a new subsection (h), and such definition, as so amended, shall read in its entirety as follows: "EBITDA" shall mean, for any period, Consolidated Net Income plus the sum of (a) Consolidated Interest Expense, (b) income tax expense, (c) depreciation expense, (d) amortization expense, (e) extraordinary or unusual losses or other losses not incurred in the ordinary course of business included in the calculation of net income, (f) any non-cash charge against net income required to be recognized in connection with the issuance of capital stock to employees (whether upon lapse of vesting restrictions, exercise of employee options or otherwise), (g) any non-cash charge against net income required to be recognized in connection with employee benefit plans, and (h) for the fourth fiscal quarter of 1997, an amount not to exceed $9.3 million in connection with the four nitric acid projects of the Borrower or any Subsidiary set forth in Schedule 1.1(a) hereto, less extraordinary or unusual gains or other gains not incurred in the ordinary course of business included in the calculation of net income, in each case to the extent such items are taken into account in determining Consolidated Net Income. b. The definition of "Investment" in Section 1.1 of Article I is hereby amended in order to add a new clause to the end of subsection (v) of such definition, and such subsection (v), as so amended, shall read in its entirety as follows: (v) investments in the form, or out of the net proceeds of the sale (other than to a Subsidiary or employee stock ownership plan of Borrower) of, Capital Stock of Borrower, subject to the conditions set forth in Section 7.6(d). c. Section 6.1 of Article VI is hereby amended in order to add a new subsection (m) together with a new Schedule 6.1(m), and such new subsection (m) shall read in its entirety as follows and the new Schedule 6.1(m) is attached hereto: 6.1 Financial Statements and Reports. Furnish to the Agent and each -------------------------------- of the Banks the following financial information: (m) Nitric Acid Project Monthly Reports. Within 30 calendar days after the end of any month and until all of the four nitric acid projects of the Borrower or any Subsidiary set forth in Schedule 1.1(a) hereto are completed, a nitric acid project monthly report for the immediately preceding calendar month containing information with respect to the actual cost to complete and cash flows of each nitric acid project set forth in Schedule 1.1(a) hereto; in each such report, the actual information required to be contained therein shall be compared to the projected cost to complete and cash flows for each such nitric acid project as set forth in Schedule 1.1(a). d. Section 7.6(d) of Article VII is hereby amended in order to specify that the dollar limitations apply to cash used for such Investments and Acquisitions and to add four new clauses thereto, and such subsection (d) as so amended, shall read in its entirety as follows: 7.6 Acquisitions and Investments. ---------------------------- Make any Investments in any Person, except: (d) Borrower or any Subsidiary may make and own Investments in a Person or acquire all or substantially all of the assets or Capital Stock of any Person (an "Acquisition") provided that the aggregate amount of all such Acquisitions after the date hereof shall not exceed $5,000,000 cash in the aggregate and any single Acquisition shall not exceed $2,000,000 cash; provided, further, (i) that the Borrower shall be required to obtain the consent of the Required Banks for all proposed Acquisitions with a Total Consideration greater than $2,000,000 (in cash) and $4,000,000 (in cash and/or in the form of Capital Stock or any other consideration) (each such Acquisition a "Large Acquisition"), (ii) that no later than 30 calendar days prior to the closing on any proposed Large Acquisition, the Borrower shall request such consent and shall provide the Agent and the Banks with an information package on any such proposed Large Acquisition containing a synopsis of the proposed Large Acquisition, actual and projected financial information for the proposed Large Acquisition (three years historical and five years projected), and pro forma covenant compliance under the Credit Agreement assuming closing on such Large Acquisition, (iii) that for the purposes of this subsection (d), Total Consideration shall include the purchase price plus assumed liabilities (including contingent liabilities) of any Large Acquisition, and (iv) that the Agent and the Required Banks shall act on each such request for consent within 15 calendar days from receipt of such request from the Borrower. 2. Conditions Precedent. The amendment to the Credit Agreement contained in -------------------- Section 1 hereof shall be effective upon satisfaction of the following conditions precedent. (a) Evidence of Authorization. The Banks shall have received copies certified by the Secretary or Assistant Secretary of Borrower and each Subsidiary Guarantor of all corporate or other action taken by such party to authorize its execution and delivery and performance of this First Amendment and the Loan Documents as amended hereby, together with such other related papers as the Banks shall reasonably require. (b) Documents. The Agent shall have received all certificates, instruments and other documents then required to be delivered pursuant to any Loan Documents, in each instance in form and substance reasonably satisfactory to the Agent and the Banks. (c) Fee. The Agent shall have received for the account of the Banks the previously agreed to amendment fee. (d) Other Agreements. Borrower and each Subsidiary Guarantor shall have executed and delivered each other Loan Document required hereunder. 3. Representations and Warranties. ------------------------------ Page 2 of 5 (a) The Borrower confirms the accuracy of the representations and warranties made in Article 3 of the Credit Agreement as of the date originally given and restates to the Banks such representations and warranties on and as of the date hereof as if originally given on such date. (b) The Borrower confirms that as of the date of this First Amendment, there has been no litigation, administrative proceeding, investigation, business development, or change in financial condition which could reasonably be expected to have a material adverse effect on the business, operations, assets or condition (financial or otherwise) of the Borrower or its Subsidiaries taken as a whole. 4. Covenants. --------- (a) The Borrower warrants to the Banks that the Borrower is in compliance and has complied with all covenants, agreements and conditions in each Loan Document on and as of the date hereof, that no Potential Default or Event of Default has occurred and is continuing on the date hereof and that, upon the consummation of the transactions contemplated hereby, no Potential Default or Event of Default shall have occurred and be continuing. (b) The Borrowers shall provide to the Agent and its representatives all requested access and assistance as shall be reasonably necessary for such due diligence review as the Agent shall determine is necessary or advisable, including without limitation a collateral audit. 5. Effect of Agreement. ------------------- This Agreement amends the Loan Documents only to the extent and in the manner herein set forth, and in all other respects the Loan Documents are ratified and confirmed. 6. Counterparts. ------------ This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures hereto were upon the same instrument. 7. Governing Law. ------------- This Agreement and all rights and obligations of the parties hereunder shall be governed by and be construed and enforced in accordance with the laws of Pennsylvania without regard to principles of conflict of law. IN WITNESS WHEREOF, the Borrower, the Subsidiary Guarantors, and the Banks have caused this Agreement to be executed by their proper corporate officers thereunto duly authorized as of the day and year first above written. CORESTATES BANK, N.A. ICF KAISER INTERNATIONAL, INC. By: /s/ John D. Brady By: /s/ Kenneth L. Campbell -------------------------- ------------------------------ Name: John D. Brady Name: Kenneth L. Campbell Title: Vice President Title: Executive Vice President and Chief Financial Officer FIRST UNION COMMERCIAL CORP. NATIONAL BANK OF CANADA By: /s/ S. Kelley By: /s/ Robert A. Incorvati -------------------------- ------------------------------ Name: S. Kelley Name: Robert A. Incorvati Title: Vice President Title: Vice President By: /s/ Michael E. Williams ------------------------------ Name: Michael E. Williams Title: Vice President/Manager Page 3 of 5 BANKBOSTON, N. A. By: /s/ W. J. Sherald -------------------------- Name: W. J. Sherald Title: Vice President The Subsidiary Guarantors: - -------------------------------------------------------------------------------- CLEMENT INTERNATIONAL CORPORATION Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- CYGNA CONSULTING ENGINEERS & PROJECT MANAGEMENT, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- CYGNA GROUP, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- EDA, INCORPORATED Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- EXCELL DEVELOPMENT CONSTRUCTION, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- GLOBAL TRADE & INVESTMENT, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- HENRY J. KAISER COMPANY Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF INCORPORATED Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF INFORMATION TECHNOLOGY, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF KAISER ENGINEERS (CALIFORNIA) CORPORATION Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF KAISER ENGINEERS CORPORATION Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF KAISER ENGINEERS GROUP, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF KAISER ENGINEERS MASSCAHUSETTS, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF KAISER ENGINEERS PACIFIC, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF KAISER ENGINEERS, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF KAISER EUROPE, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF KAISER GOVERNMENT PROGRAMS, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- Page 4 of 5 - -------------------------------------------------------------------------------- ICF KAISER HANFORD COMPANY Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF KAISER HOLDINGS UNLIMITED, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF KAISER NETHERLANDS B.V. By its Managing Directors ICF KAISER HOLDINGS UNLIMITED, INC. Represented by: Michael K. Goldman, President By: /s/ Michael K. Goldman ---------------------- ICF KAISER ENGINEERS EASTERN EUROPE, INC. Represented by: Paul Weeks, II, Director & Secretary By: /s/ Paul Weeks, II ------------------ - -------------------------------------------------------------------------------- ICF KAISER OVERSEAS ENGINEERING, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF KAISER REMEDIATION COMPANY Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF KAISER SYSTEMS, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF KAISER/GEORGIA WILSON, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF LEASING CORPORATION, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- ICF RESOURCES INCORPORATED Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- KAISER ENGINEERS AND CONSTRUCTORS, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- KAISER ENGINEERS INTERNATIONAL, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- KE LIVERMORE, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- KE SERVICES CORPORATION Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- PCI OPERATING COMPANY, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- SYSTEMS APPLICATIONS INTERNATIONAL, INC. Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- TUDOR ENGINEERING COMPANY Name: Timothy P. O'Connor By: /s/ Timothy P. O'Connor Title: Assistant Treasurer ----------------------- - -------------------------------------------------------------------------------- Page 5 of 5 EX-10.(B) 22 EXHIBIT 10(B) Exhibit 10(b) ________________________________________________________________________________ AMENDED AND RESTATED SECURITY AGREEMENT among ICF KAISER INTERNATIONAL, INC., CERTAIN SUBSIDIARIES THEREOF and CORESTATES BANK, N.A. as Agent December 3, 1997 ________________________________________________________________________________ AMENDED AND RESTATED SECURITY AGREEMENT ---------------------------------------- THIS AMENDED AND RESTATED SECURITY AGREEMENT, dated as of December 3, 1997 (this "SECURITY AGREEMENT"), is entered into by and among ICF KAISER INTERNATIONAL, INC. ("ICF KAISER" or "BORROWER"), a Delaware corporation, each of its subsidiaries signatories hereto (each, a "SUBSIDIARY GUARANTOR" and collectively the "SUBSIDIARY GUARANTORS") and CORESTATES BANK, N.A., as agent for the Banks under the Credit Agreement referred to below (in such capacity, the "AGENT"). ICF Kaiser and the Subsidiary Guarantors are sometimes referred to herein collectively as the "DEBTORS" and individually as a "DEBTOR." WITNESSETH: ---------- WHEREAS, ICF Kaiser, the Subsidiary Guarantors, the Agent and certain financial institutions (the "Banks") are parties to a Credit Agreement, dated as of May 6, 1996, as amended and restated pursuant to the Amended and Restated Credit Agreement dated as of the date hereof (the "Credit Agreement"), providing to ICF Kaiser a revolving credit facility for loans and letters of credit, which loans and letters of credit are secured under and pursuant to a Security Agreement, dated as of May 6, 1996, between the Debtors and the Agent, as amended by the First Amendment dated as of December 17, 1996 and the Second Amendment dated as of June 19, 1997 (the "1996 Security Agreement"); WHEREAS, it is a condition to the execution and delivery of the Credit Agreement that this Security Agreement be executed and delivered; and WHEREAS, ICF Kaiser, the Subsidiary Guarantors and the Agent desire to amend the 1996 Security Agreement to add additional Subsidiary Guarantors and as otherwise provided herein, and to restate the 1996 Security Agreement as so amended. NOW, THEREFORE, in consideration of the premises and intending to be legally bound hereby, the parties hereto agree as follows: 1. DEFINITIONS. (a) As used herein the following terms shall have the meanings indicated: "ACCOUNTS" shall mean all rights to payment for goods sold or leased or for services rendered, whether or not such rights have been earned by performance. "AGENT" has the meaning set forth in the preliminary paragraph hereof, and including any successor from time to time serving as "Agent" under the Credit Agreement. "BLOCKED ACCOUNT" shall have the meaning assigned to such term in Section 4(a) hereof. "CASH CONCENTRATION ACCOUNTS" shall mean, collectively, account no. 1412209809 in the name of ICF Kaiser International, Inc., account no. 1412184330 in the name of ICF Kaiser International, Inc., and such other account or accounts as ICF Kaiser and the Agent shall from time to time agree, each maintained with CoreStates Bank, N.A. at its office at 1345 Chestnut Street, Philadelphia, Pennsylvania, but under the sole control and dominion of the Secured Party. "CHATTEL PAPER" shall have the meaning assigned to such term under the Uniform Commercial Code. "COLLATERAL" shall mean all now-existing or hereafter acquired or arising (i) Accounts, (ii) General Intangibles, Chattel Paper, Contracts and Instruments, (iii) guarantees of any Accounts and all other security held for the payment or satisfaction thereof, (iv) balance of any deposit, agency or other account with any Bank, (v) Inventory, (vi) Equipment, (vii) Pledged Securities and the certificates representing the Pledged Securities, (viii) Patents and Trademarks, (ix) Discounted Treasuries delivered by the Debtors to the Agent pursuant to the Credit Agreement, (x) books, records and other property at any time evidencing or related to the foregoing, together with all products and Proceeds (including insurance Proceeds) of any of the foregoing. "CONTRACTS" shall have the meaning assigned to such term under the Uniform Commercial Code. "CREDIT AGREEMENT" shall mean the Credit Agreement among the Debtors, the Agent and the Banks, as hereafter amended from time to time. "EQUIPMENT" shall have the meaning assigned to such term under the Uniform Commercial Code. "GENERAL INTANGIBLES" shall have the meaning assigned to such term under the Uniform Commercial Code. "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean generally accepted accounting principles as in effect in the United States from time to time, consistently applied. "GOVERNMENT ACCOUNTS" shall mean Accounts the account debtor of which is the Government of the United States or any agency, department or instrumentality thereof. "INSTRUMENTS" shall have the meaning assigned to such term under the Uniform Commercial Code as in effect in the Commonwealth of Pennsylvania. "INVENTORY" shall have the meaning assigned to such term under the Uniform Commercial Code, and in any event, including all inventory, merchandise, goods and other personal property that are held by or on behalf of a Person for sale or lease or to be furnished under a contract of service or which gave rise to any Account, including returned goods. "LIEN" shall mean any lien, mortgage, security interest, chattel mortgage, pledge or other encumbrance (statutory or otherwise) of any kind securing satisfaction or performance of an obligation, including any agreement to give any of the foregoing, any conditional sales or other title retention agreement, any lease in the nature thereof, and the filing of or the agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction or similar evidence of any encumbrance, whether within or outside the United States. "LOCKBOX ACCOUNT" shall have the meaning assigned to such term in Section 4(a) hereof. "OBLIGATIONS" shall mean all now existing or hereafter arising debts, obligations, covenants, and duties of payment or performance of every kind, matured or unmatured, direct or contingent, owing, arising, due, or payable to the Banks or the Agent by or from ICF Kaiser or the Subsidiary Guarantors arising out of the Credit Agreement or any other Loan Document, including, without limitation, all obligations of ICF Kaiser to repay principal of and interest on all the Revolving Credit Loans, to make reimbursements or payments with respect to Letters of Credit, and to pay interest, fees, costs, charges, expenses, professional fees, and all sums chargeable to the Debtors under the Loan Documents, whether or not evidenced by any note or other instrument and all obligations of each Subsidiary Guarantor in guaranty of the obligations of Borrower. "PATENTS AND TRADEMARKS" shall mean patents and trademarks owned, directly or indirectly, by a Debtor. "PLEDGED SECURITIES" shall mean all of the capital stock or other ownership interests of those domestic Subsidiaries held directly by the Debtors and 65% of the capital stock or other ownership interests of those foreign Subsidiaries held directly by the Debtors, except ICF Kaiser Brazil Holdings, Inc. -3- Set forth in Schedule C hereto is a listing of each of the Pledged Securities existing on the date hereof. "PREVAILING INTEREST RATE" as of any date shall mean the highest rate of interest then payable by the Debtors under the Credit Agreement. "PROCEEDS" shall have the meaning assigned to such term under the Uniform Commercial Code as in effect in the Commonwealth of Pennsylvania. "SECURED PARTY" means the Agent. "SELECTED GOVERNMENT CONTRACTS" shall mean all contracts between a Debtor and the government of the United States or any department, agency or instrumentality thereof the terms of which provide for gross payments to such Debtor equal to or in excess of $1 million and other such contracts (without regard to the amount of gross payments) which have been designated by ICF Kaiser as "Selected Government Contracts." "SUBSIDIARIES" shall mean as to any Person, (i) a corporation of which shares of stock or other ownership interests having ordinary voting power (other than stock having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person and (ii) any limited liability company or partnership in which such Person, directly or indirectly, owns at least a majority of the ownership interests having ordinary voting power, or the management of which is otherwise controlled, directly or indirectly, through one or more intermediaries by such Person, or both. "UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial Code as in effect from time to time in the Commonwealth of Pennsylvania. (b) Capitalized terms used herein and not otherwise defined herein shall have their respective meanings assigned in the Credit Agreement. 2. GRANT OF SECURITY. To secure the payment, promptly when due, and the punctual performance of all of the Obligations, each of the Debtors hereby pledges and assigns to the Secured Party, and grants to the Secured Party and agrees that the Secured Party -4- shall have, for itself and the ratable benefit of the Banks, a general continuing lien upon and security interest in all its Collateral, which lien and security interest shall be a general continuing first priority lien upon and security interest in such Collateral. 3. BOOKS AND RECORDS. The Debtors shall faithfully keep complete and accurate books and records and make all necessary entries therein to reflect the amounts, identity of account debtors and all events and transactions giving rise to the Collateral and all payments, credits and adjustments applicable thereto, shall keep the Secured Party fully and accurately informed as to the locations of all such books and records related to the Collateral and shall permit the Secured Party and its agents to have such access to them and to any other records pertaining to the Debtors' business as the Secured Party may request from time to time. 4. COLLECTION OF ACCOUNTS; ASSIGNMENT OF CLAIMS ACT (a) Until otherwise notified by the Secured Party, the Debtors may collect all amounts due on the Collateral from the respective account debtors or obligors liable thereon, but the Proceeds so collected by the Debtors shall be held by the Debtors in trust for the Secured Party. Each Debtor shall collect such amounts by instructing the account debtor thereof to make payment either to a Cash Concentration Account or to a lockbox account ("Lockbox Account") or blocked deposit account ("Blocked Account") maintained with a bank that has entered into a letter agreement with such Debtor and the Secured Party (a "Blocked Account Agreement") in substantially the form of Exhibit A attached hereto. After the occurrence of a Potential Default or an Event of Default, the Secured Party may, and upon direction of the Required Banks shall, upon five Business Days notice to ICF Kaiser, terminate the authority hereby given to the Debtors to make such collections and, acting if it so chooses in the name of any of the Debtors, collect any amounts due on the Collateral directly or through an agent, sell, assign, compromise, discharge or extend the time for payment of any Account or other Collateral, institute legal action for the collection of any Account or other Collateral and do all acts and things necessary or incidental thereto, and the Debtors hereby ratify all that the Secured Party shall lawfully do under the authority hereby granted to it. After the occurrence of a Potential Default or an Event of Default, the Secured Party may at any time, and upon direction of the Required Banks shall, upon five Business Days notice to ICF Kaiser, notify any account debtor on any Account or obligor with respect to any other Collateral that the Collateral -5- has been assigned to the Secured Party and is to be paid directly to the Secured Party. Alternatively, at its election the Secured Party may, and upon direction of the Required Banks shall, after the occurrence of a Potential Default or an Event of Default, require the Debtors to, and in such event the Debtors at their sole expense will, notify account debtors and obligors that payments are thenceforth to be made directly to the Secured Party. After the occurrence of a Potential Default or an Event of Default, the Debtors shall not, without the written consent of the Secured Party at the direction of the Required Banks in each case, compromise, discharge, extend the time for payment of or otherwise grant any indulgence or allowance with respect to any Account or other Collateral. (b) The Debtors represent and warrant that (i) Schedule A contains a true and correct listing of all Selected Government Contracts in effect on the date hereof and (ii) as of the date hereof, the Selected Government Contracts comprise at least seventy-five percent (75%) of the aggregate dollar amount of all those Government Accounts of the Debtors for which invoices have been issued. The Debtors have, as of the date hereof, provided to the Secured Party executed copies of all notices and instruments (forms of which are attached hereto as Exhibit B) necessary to allow the Secured Party to cause its security interest in all Collateral arising from or related to Selected Government Contracts to be entitled to the rights and benefits provided by compliance with the Federal Assignment of Claims Act and any regulations thereunder. If any Debtor enters into any Selected Government Contract subsequent to the date hereof, the Debtor shall, within 45 days of the end of the calendar quarter within which such Debtor entered into such Selected Government Contract, notify the Secured Party in writing of such Selected Government Contract and execute and deliver to the Secured Party all notices and instruments of the type described in the preceding sentence that pertain to such new Selected Government Contract. Notwithstanding the provisions of subparagraph (a) of this Section 4, the Secured Party may, in its sole discretion, and upon direction of the Required Banks shall, upon five Business Days notice to the Debtors, deliver or file all such documentation relating to Selected Government Contracts with the appropriate government officers and take all such other actions as may be necessary to cause the interest of the Secured Party in such Selected Government Contracts to satisfy the requirements of the Federal Assignment of Claims Act and any regulations thereunder, and the Debtors will take all such additional actions requested by the Secured Party to cause such result. No Debtor shall execute or deliver any notice or instrument of the type described in this paragraph (b) which names as assignee any party other than the Secured Party. -6- (c) If any of the Collateral is or becomes evidenced by a promissory note, draft, trade acceptance, Chattel Paper or Instrument, the Debtors will promptly deliver the same to the Secured Party appropriately endorsed to the Secured Party's order. Regardless of the form of such endorsement, each Debtor hereby waives presentment, demand, notice of dishonor, protest and notice of protest and all other notices with respect thereto. Upon obtaining knowledge thereof, the Debtors will promptly notify the Secured Party of (i) any material adverse change in the financial condition of any account debtor on a material amount of the Accounts, or in the collectability of a material amount of the Accounts or other Collateral, and (ii) all material claims, setoffs, rejections, returns and adjustments which may result in a reduction of the liability of an account debtor on a material amount of the Accounts included in the Collateral. 5. DEPOSIT OF PLEDGED SECURITIES; REREGISTRATION OF SHARES; RESERVATION OF VOTING RIGHTS (a) To perfect the security interest of the Secured Party in and to the Pledged Securities, as provided herein, the Debtors have deposited with the Secured Party such Pledged Securities as are in certificated form, in each case endorsed in blank. At any time and from time to time the Secured Party may cause all or any of the Pledged Securities to be transferred into its name or into the name of its nominee or nominees. (b) At any time after the occurrence and during the continuation of an Event of Default, the Secured Party shall be entitled to exercise any and all voting power with respect to the Pledged Securities and shall exercise such power as directed by the Banks. At all other times each Debtor shall be entitled to exercise as it thinks fit, but in a manner not inconsistent with the provisions of the Credit Agreement, all voting power with respect to the Pledged Securities. 6. ADDITIONAL COLLATERAL In case any dividend of stock or other ownership interest shall be declared on any of the Pledged Securities, or any shares of stock or fractions thereof shall be issued pursuant to any stock split involving any of the Pledged Securities, or any distribution of securities shall be made on any of the Pledged Securities, whether pursuant to any recapitalization or reclassification of the capital of any of the Debtors, a reorganization thereof, or otherwise, the shares or other securities so distributed shall be delivered to the Secured Party. 7. TITLE TO COLLATERAL. -7- (a) Each Debtor has acquired or shall acquire absolute and exclusive title to each and every item or unit of the Collateral attributable to such Debtor free and clear of all Liens, except Permitted Liens as provided under the Credit Agreement, and each Debtor shall warrant and defend its title to the Collateral, subject to the rights of the Secured Party, against the claims and demands of all persons whomsoever. (b) The Secured Party may, at its sole election but without obligation to do so, discharge any Lien not permitted under the Credit Agreement and all expenses incurred by the Secured Party in so doing, together with interest thereon at the Prevailing Interest Rate, shall be added to the Obligations and shall be payable by the Debtors on demand. 8. TAXES AND LIENS. Except for Permitted Liens, the Debtors shall immediately notify the Secured Party in the event there ever arises against any of the Collateral any lien, assessment, tax or other liability, whether or not entitled to priority over the Secured Party's security interest hereunder. In any such event, whether or not such notice is given, the Secured Party shall have the right (but shall be under no obligation) to pay any tax or other liability of any of the Debtors deemed by the Secured Party in good faith to affect the Secured Party's interests hereunder. The Debtors shall repay to the Secured Party on demand all sums which the Secured Party shall have paid under this section in respect of taxes or other liabilities of any of the Debtors, with interest thereon at the Prevailing Interest Rate, and the Debtors' liability to the Secured Party for such repayment with interest shall be included in the Obligations. The Secured Party shall be subrogated to the extent of any such payment by it to all the rights and liens of the payee against the Debtors' assets. The Debtors shall furnish to the Secured Party from time to time upon the Secured Party's request proof satisfactory to the Secured Party of the making of all payments or deposits required by applicable law to be made with respect to amounts withheld by the Debtors from wages and salaries of employees and amounts contributed by the Debtors on account of federal, state or other income or wage taxes and amounts due under the Federal Insurance Contributions Act or the Federal Unemployment Tax Act or any similar legislation. 9. SIGNIFICANT LOCATIONS; NAME. (a) Each Debtor represents and warrants to the Secured Party that none of the books and records relating to the Collateral is or will be located or used at any location other than its respective locations identified in Schedule B attached hereto, and that none of the Inventory or Equipment owned by such Debtor (other than de minimis amounts) is or will be located at any location other than its respective locations identified in Schedule B attached hereto. The Debtors shall notify the Secured Party in writing prior to any change in location of any such books and -8- records. If any of the Collateral or any of the Debtors' records concerning any of the Collateral are at any time to be located on premises leased by any Debtor, or any premises owned by any Debtor subject to a mortgage or other lien, the Debtors shall, at the request of the Secured Party, obtain and deliver to the Secured Party, prior to the delivery of any such Collateral or books or records to such premises, an agreement in form satisfactory to the Secured Party waiving the landlord's, mortgagee's or other lienholder's right to enforce against the Collateral or the Debtors' records concerning the same and assuring the Secured Party's access to such Collateral and books and records to facilitate the Secured Party's exercise of its rights to take possession thereof. The location of each Debtor's chief executive office and, if different, the location of each Debtor's principal place of business are set forth in Schedule B, and the Debtors agree to provide the Secured Party prior written notice of any change of any such chief executive office or principal place of business of the Debtors. Debtors agree to use their good faith efforts to obtain within 90 days of the date hereof from the landlord of the premises including the chief executive office of ICF Kaiser a waiver of such landlord's rights to enforce any interest against the Collateral. (b) Each Debtor represents and warrants that at no time during the past five years has such Debtor been known by or used any other name, including any trade or fictitious name, except as disclosed in Schedule B. No Debtor shall change its name without giving the Secured Party at least 30 days prior written notice of such change. 10. FURTHER ASSURANCES; WAIVER OF PREEMPTIVE RIGHTS; MAINTENANCE OF COLLATERAL. (a) The Debtors shall execute and deliver to the Secured Party from time to time all such other agreements, instruments and other documents (including, without limitation, all requested financing and continuation statements and government contract notices and all requested documents relating to the creation, perfection or protection of liens and security interests in jurisdictions outside of the United States) and do all such other and further acts and things as the Secured Party may (and, upon the direction of the Required Banks, shall) reasonably request in order further to evidence or carry out the intent of this Agreement or to perfect and protect the liens and security interests created hereby or intended so to be. In addition, if an Event of Default or a Potential Default shall have occurred and be continuing, at the request of the Secured Party each Debtor will execute and deliver to the Secured Party all notices or instruments, and take all such other actions, as may be required in order that the security interest of the Secured Party in all Government Accounts and the Proceeds thereof shall satisfy the requirements of the Federal Assignment of Claims Act and any regulations thereunder. (b) The Debtors, for the Debtors and their respective successors and assigns, do hereby irrevocably waive and release all preemptive, first-refusal and other similar rights of the Debtors to purchase any or all of the Pledged Securities upon any sale thereof by the Secured -9- Party hereunder, whether such right to purchase arises under the Certificate or Articles of Incorporation or any By-Law of the issuer of the Pledged Securities, by operation of law or otherwise. (c) The Debtors will maintain the Collateral in good condition and repair, will give it suitable preventative maintenance in the case of machinery and equipment, and will pay the cost of all repairs to or maintenance of the same which may be required from time to time. The Debtors will not do or permit to be done anything which might impair the value of any item of the Collateral owned by any Debtor or the security intended to be afforded hereby. The Debtors will immediately notify the Secured Party and the Banks of any event causing any material loss or depreciation in value of the Collateral and of the extent of such loss or depreciation. The Debtors, upon the Secured Party's request, will permit the Secured Party at any time and from time to time, through its officers or other agents, to have access to the Collateral for the purpose of inspecting or, after an Event of Default, assembling and removing the same. 11. DEFAULT AND REMEDIES. (a) The Debtors shall be in default hereunder upon the occurrence of an Event of Default (as defined in the Credit Agreement). (b) Except as otherwise provided in the Credit Agreement with respect to an Event of Default occurring under Section 10.1(d) thereof, upon the occurrence of any Event of Default and so long as the same shall be continuing, the Secured Party may at its option exercise from time to time any and all rights and remedies available to it under the Uniform Commercial Code or otherwise, including the right to foreclose or otherwise realize upon any of the Collateral and to dispose of any of the Collateral at one or more public or private sales or other proceedings, and the Debtors agree that any of the Banks, or the nominee of any Bank, may become the purchaser at any such sale or sales. The Debtors agree that ten (10) days shall be reasonable prior notice of the date of any public sale or other disposition of all or any part of the Collateral, or of the date on or after which any private sale or other disposition of the same may be made. All rights and remedies granted the Secured Party hereunder or under any other agreement between the Secured Party and any of the Debtors shall be deemed concurrent and cumulative and not alternative, and the Secured Party may proceed with any number of remedies at the same time or at different times until all the Obligations are fully satisfied. The exercise of any one right or remedy shall not be deemed a waiver or release of or any election against any other right or remedy, and the Secured Party may proceed against any of the Debtors and the Collateral and any other collateral granted by any of the Debtors to the Secured Party under any other agreement, all in any order and through any available remedies. A waiver on any one occasion shall not be construed as a waiver or bar on any future occasion. All property of any -10- kind held at any time by the Secured Party as Collateral shall stand as one general continuing collateral security for all the Obligations and may be retained by the Secured Party as security until all the Obligations are fully satisfied. The Debtors shall pay to the Secured Party on demand any and all expenses (including reasonable attorneys' fees and legal expenses) which may have been incurred by the Secured Party, with interest at the Prevailing Interest Rate, in connection with the custody, preservation, use, operation, preparation for sale or sale of any of the Collateral, the incurring of all of which are hereby authorized to the extent the Secured Party deems the same advisable. The Debtors' liability to the Secured Party for any such payment with interest at the Prevailing Interest Rate shall be included in the Obligations. The Proceeds of any Collateral received by the Secured Party at any time before or after default, whether from a sale or other disposition of Collateral or otherwise, or the Collateral itself, shall be applied to the payment in full or in part of such of the Obligations and in such order and manner as the Secured Party may elect (except as may be otherwise provided in the Credit Agreement), and the Debtors shall remain liable for any deficiency. Each Debtor to the extent of its rights in the Collateral waives and releases any right to require the Secured Party or the Banks to collect any of the Obligations from any particular Collateral or any other collateral then held by the Secured Party or the Banks under any theory of marshalling of assets or otherwise. (c) If at any time when the Secured Party shall determine to exercise its rights to sell all or any part of the Pledged Securities pursuant to this Agreement, such Pledged Securities or the part thereof to be sold shall not, for any reason, be effectively registered under the Securities Act of 1933 (the "Securities Act"), the Secured Party is hereby expressly authorized to sell such Pledged Securities or such part thereof by private sale in such manner and under such circumstances as the Secured Party may deem necessary or advisable in order that such sale may legally be effected without such registration. Without limiting the generality of the foregoing, in any such event the Secured Party: (i) may proceed to make such private sale whether or not a registration statement for the purpose of registering the Pledged Securities or such part thereof shall have been filed under the Securities Act; (ii) may approach and negotiate with a restricted number of potential purchasers to effect such sale; and (iii) may restrict such sale to purchasers as to their number, nature of business, level of sophistication and investment intention (including without limitation, to purchasers each of whom will represent and agree to the satisfaction of the Secured Party that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Pledged Securities or part thereof), it being understood that the Secured Party may require each Debtor, and each Debtor hereby agrees upon the written request of the Secured Party, to cause: (i) a legend or legends to be placed on the certificates to be delivered to such purchasers to the effect that the offering and sale of the Pledged Securities represented thereby have not been registered under the Securities Act and setting forth or referring to any required restrictions on the transferability of such Securities; (ii) the issuance of stop transfer instructions to such Debtor's own securities and an appropriate notation to be made in the appropriate records of such Debtor; and (iii) to be delivered to the purchasers a signed written agreement of such Debtor that such purchasers will -11- be entitled to the rights of the Secured Party under this Agreement. In addition, it is understood that such purchasers may be required as a condition of any such sale to furnish a signed written agreement that the Pledged Securities will not be sold without registration or other compliance with the requirements of the Securities Act. In the event of any such sale, each Debtor hereby consents and agrees that neither the Secured Party nor any Bank will incur any responsibility or liability for selling all or any part of the Pledged Securities at a price which the Secured Party or the Banks may deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might be realized if the sale were public and deferred until after registration as aforesaid. (d) In addition, if at any time when the Secured Party shall determine to exercise its rights to sell all or any part of the Pledged Securities pursuant to this Agreement, such transfer may not be effected without approval of federal or state agencies or authorities, including without limitation approval of the United States Department of Energy or the United States Department of Defense or the Federal Trade Commission and the Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the Secured Party is hereby expressly authorized to take all actions as may be necessary to obtain such approvals and to sell such Pledged Securities in such manner and under such circumstances as the Secured Party may deem necessary or advisable in order that such sale may legally be effected. In the event of any such sale, each Debtor hereby consents and agrees that neither the Secured Party nor any Bank will incur any responsibility or liability for selling all or any part of the Pledged Securities at a price which the Agent or the Banks may deem reasonable under the circumstances. 12. POWER OF ATTORNEY. Each Debtor hereby irrevocably appoints any officer, employee or agent of the Secured Party as such Debtor's true and lawful attorney-in-fact with power to, upon the occurrence of an Event of Default: (i) endorse such Debtor's name upon any notes, checks, drafts, money orders, or other instruments or payments or other Collateral that may come into the Secured Party's possession; (ii) sign and endorse such Debtor's name upon any invoices, assignments, verifications and notices in connection with any of the Collateral, and any instruments or documents relating thereto or to such Debtor's rights therein; and (iii) at any time whether or not an Event of Default has occurred, to execute in such Debtor's name and file one or more financing, amendment and continuation statements covering the Collateral. Any such attorney of such Debtor shall have full power to do any and all things necessary to be done with respect to the above transactions as fully and effectually as such Debtor might do, and such Debtor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. 13. FINANCING STATEMENTS. -12- Each Debtor shall execute all financing statements and amendments thereto and continuations thereof as the Secured Party may request from time to time to evidence the security interest granted, or intended to be granted, to the Secured Party hereunder and will pay all filing fees and taxes, if any, necessary to effect the filing thereof. Wherever permitted by law, each Debtor authorizes the Secured Party to file financing statements with respect to the Collateral without the signature of such Debtor. A copy of this Agreement or a copy of any financing statement prepared in connection with this Agreement may itself be filed as a financing statement. 14. RESIGNATION OR REMOVAL OF SECURED PARTY. Subject to the appointment and acceptance of a successor Secured Party as provided below, the Secured Party may resign at any time by giving at least 60 days' written notice thereof to ICF Kaiser, such resignation to be effective upon the acceptance of the position of Secured Party by a successor Secured Party. The Secured Party may be removed at any time with cause by written notice from the Required Banks. Upon any such resignation or removal, the Required Banks shall have the right to appoint a successor Secured Party which shall be a bank or trust company selected by the Required Banks if there be such an institution willing, able and legally qualified to perform the duties of the Secured Party hereunder upon reasonable or customary terms. If, within 90 days of notice of resignation by or removal of the Secured Party, a successor Secured Party shall not have been appointed, the Secured Party may petition a court of competent jurisdiction for the appointment of a successor Secured Party. Upon the acceptance of any appointment as Secured Party hereunder by a successor Secured Party, such successor Secured Party shall thereupon succeed to and become vested with all the rights, title, interest and duties of the resigning or removed Secured Party. On request of the successor Secured Party or the Required Banks, the resigning or removed Secured Party shall execute and deliver such assignments or other instruments and take such other actions as may reasonably be requested to provide for or evidence the transfer to the successor Secured Party all rights, title and interest of the resigning or removed Secured Party (including without limitation the execution and delivery of appropriate statements under the Uniform Commercial Code), and the resigning or removed Secured Party thereafter shall be discharged from its duties and obligations hereunder. Notwithstanding any such resignation or removal, the Secured Party shall continue to be entitled to the benefits of Sections 10.5 and 11.8 of the Credit Agreement in respect of any actions taken or omitted to be taken while it was acting as Secured Party hereunder. 15. INSURANCE. The Debtors shall maintain insurance at all times in accordance with the requirements of Section 6.6 of the Credit Agreement. All such policies of insurance shall name the Secured Party as lender loss payee and shall provide for not less than thirty (30) days' prior written notice to the Secured Party of intended cancellation or reduction in coverage. The -13- Debtors shall furnish the Secured Party with certificates or other evidence satisfactory to the Secured Party of compliance with the foregoing insurance provisions. The Debtors expressly authorize their insurance carriers to pay proceeds of all insurance policies covering all or any part of the Collateral directly to the Secured Party. 16. MISCELLANEOUS. (a) This Agreement shall continue in full force and effect so long as any of the Obligations shall exist from time to time. (b) No modification or waiver of any provision hereof shall be effective unless the same is in writing and signed by the party against whom its enforcement is sought. This Agreement may be signed in any number of counterparts and by different parties in separate counterparts, all with the same effect as if the signatures were on the same counterpart, and all counterparts hereof, taken together, shall constitute but one and the same Agreement. (c) The representations, warranties, covenants and agreements contained herein are all material and continuing, and any breach of any of them shall constitute a material breach of this Agreement. (d) All the rights and remedies of the Secured Party hereunder shall be cumulative with and not alternative to or in lieu of the Secured Party's rights and remedies under any other agreement or agreements. (e) This Agreement shall bind and inure to the benefit of the parties and their respective successors and assigns, except that no Debtor shall assign any of such Debtor's obligations hereunder without the Secured Party's prior written consent which shall be given at the direction of the Required Banks. (f) Any provision hereof which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without affecting the validity or enforceability of the remainder of this Agreement or the validity or enforceability of such provision in any other jurisdiction. (g) No persons other than the Debtors, the Banks, the Secured Party and the respective assignees of the Banks and the Secured Party are intended to be benefitted hereby or shall have any rights hereunder, as third-party beneficiaries or otherwise. References in this Agreement to the "benefit of the Banks" and similar references are intended to refer to an apportionment of rights and benefits as among the Banks in accordance with the Credit Agreement. -14- (h) Each Debtor acknowledges that this Agreement and the obligations of the Debtors hereunder and the security created or intended to be created hereby have constituted, and were intended by such Debtor to constitute, a material inducement to the Banks to enter into the Credit Agreement, knowing that the Banks and the Secured Party will rely upon this Agreement. (i) All notices, requests, demands, directions, declarations or other communications hereunder shall be given in the manner required under the Credit Agreement. (j) All issues arising hereunder shall be governed by and be construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania without regard to Pennsylvania or federal principles of conflict of laws. (k) Although the intent of the parties is for ICF Kaiser Netherlands B.V. to create hereby a security interest in Collateral owned by it to the extent possible under applicable law, the parties acknowledge and agree that, notwithstanding anything in the Loan Documents to the contrary, the pledge of the Pledged Securities issued by, and receivables owned by, ICF Kaiser Netherlands B.V. shall be the subject of separate documentation governed by Netherlands law to be completed as soon as practicable after the date hereof. -15- IN WITNESS WHEREOF, this Agreement has been duly executed under due authorization as of the day and year first above written. 9300 Lee Highway ICF KAISER INTERNATIONAL, INC. Fairfax, VA 22031 By:___________________________ Title: 1339 Chestnut Street CORESTATES BANK, N.A., as Agent P.O. Box 7618 Philadelphia, PA 19107-7618 By:____________________________ Title: CLEMENT INTERNATIONAL CORPORATION CYGNA GROUP, INC. By:______________________________ By:____________________________ Title: Title: EXCELL DEVELOPMENT HENRY J. KAISER COMPANY CONSTRUCTION, INC. By:______________________________ By:____________________________ Title: Title: ICF INFORMATION TECHNOLOGY, INC. ICF INCORPORATED By:______________________________ By:____________________________ Title: Title: ICF KAISER ENGINEERS ICF KAISER ENGINEERS CORPORATION (CALIFORNIA) CORPORATION -16- By:______________________________ By:____________________________ Title: Title: ICF KAISER ENGINEERS ICF KAISER ENGINEERS MASSACHUSETTS, INC. GROUP, INC. By:______________________________ By:____________________________ Title: Title: ICF KAISER GOVERNMENT PROGRAMS, INC. ICF KAISER ENGINEERS, INC. By:______________________________ By:____________________________ Title: Title: ICF KAISER HOLDINGS UNLIMITED, INC. ICF KAISER HANFORD COMPANY By:______________________________ By:____________________________ Title: Title: ICF RESOURCES INCORPORATED ICF LEASING CORPORATION, INC. By:______________________________ By:____________________________ Title: Title: KE SERVICES CORPORATION KE LIVERMORE, INC. By:______________________________ By:____________________________ Title: Title: KAISER ENGINEERS AND KAISER ENGINEERS INTERNATIONAL, CONSTRUCTORS, INC. INC. By:______________________________ By:____________________________ Title: Title: -17- SYSTEMS APPLICATIONS INTERNATIONAL, INC. TUDOR ENGINEERING COMPANY By:______________________________ By:____________________________ Title: Title: CYGNA CONSULTING ENGINEERS AND PCI OPERATING COMPANY, INC. PROJECT MANAGEMENT, INC. By:______________________________ By:____________________________ Title: Title: ICF KAISER SYSTEMS, INC. ICF KAISER/GEORGIA WILSON, INC. By:______________________________ By:____________________________ Title: Title: GLOBAL TRADE & INVESTMENT, INC. ICF KAISER ENGINEERS PACIFIC, INC. By:______________________________ By:____________________________ Title: Title: EDA, INCORPORATED ICF KAISER REMEDIATION COMPANY By:______________________________ By:____________________________ Title: Title: ICF KAISER OVERSEAS ENGINEERING, INC. ICF KAISER EUROPE, INC. By:______________________________ By:____________________________ Title: Title: ICF KAISER NETHERLANDS B.V. By:______________________________ Title: -18- EXHIBIT A TO SECURITY AGREEMENT FORM OF LOCKBOX AND BLOCKED ACCOUNT LETTER _______________ __, 1996 [Name and address of Lockbox Bank or Blocked Account Bank] Re: [ICF KAISER INTERNATIONAL, INC.] [NAME OF GRANTOR] -------------------------------- ----------------- Ladies and Gentlemen: Reference is made to lockbox no. __________ into which certain monies, instruments and other properties are deposited from time to time and deposit account no. ___________ (collectively, the "Lockbox Account") [and the blocked --------------- deposit account no. ____________ (the "Blocked Account")]* maintained with you by [ICF Kaiser International, Inc.] [name of Grantor] (the "Grantor"). Pursuant ------- to the Security Agreement, dated as of April __, 1996 (the "Security -------- Agreement"), the Grantor has granted to CoreStates Bank, N.A. (the "Agent"), as - --------- agent for the banks referred to therein (the "Banks"), a security interest in certain property of the Grantor, including, among other things, all now-existing or hereafter acquired or arising (i) accounts, (ii) general intangibles, chattel paper, and instruments derived from or related to any accounts, (iii) all guarantees of any accounts and all other security held for the payment or satisfaction thereof, (iv) goods or services the sale or lease of which gave rise to any account, including returned goods, (v) balance of any deposit, agency or other account with any Bank, (vi) United States government securities delivered by the Grantor to the Agent, and (vii) all books, records and other property at any time evidencing or related to the foregoing, together with all products and proceeds (including insurance proceeds) of any of the foregoing. It is a condition to the continued maintenance of the Lockbox Account [and the Blocked Account] with you that you agree to this letter agreement. By signing this letter agreement, you acknowledge notice of the Security Agreement and confirm to the Agent that the description of the Lockbox Account [and the Blocked Account] set forth on Schedule I hereto is correct and that you have received no notice of any other pledge or assignment of the Lockbox Account or the Blocked Account]. Further you hereby agree with the Agent that: (a) Notwithstanding anything to the contrary in any other agreement relating to the Lockbox Account [and the Blocked Account], the Lockbox Account [and the ______________________ * All bracketed language to be included in letters regarding Blocked Accounts. Blocked Account] is [are] and will be subject to the terms and conditions of the Security Agreement, will be maintained solely for the benefit of the Agent, will be entitled "CoreStates Bank, N.A., as Agent, Re: [Name of Grantor]" and will be subject to written instructions only from an officer of the Agent. (b) You will collect mail from the Lockbox Account [and the Blocked Account] on each of your business days at times that coincide with the delivery of mail thereto. (c) You will follow your usual operating procedures for the handling of any remittance received in the Lockbox Account [and the Blocked Account] that contains restrictive endorsements, irregularities (such as a variance between the written and numerical amounts), undated or postdated items, missing signatures, incorrect payees, etc. (d) You will endorse and process all eligible checks and other remittance items not covered by paragraph (c) and deposit such checks and remittance items in the Lockbox Account [and the Blocked Account]. (e) You will maintain a record of all checks and other remittance items received in the Lockbox Account [and the Blocked Account] and, in addition to providing the Grantor with photostats, vouchers, enclosures, etc. of such checks and remittance items on a daily basis, furnish to the Agent (i) a monthly statement of the Lockbox Account [and the Blocked Account] and (ii) a daily collection and check float report, to be transmitted electronically to the Agent at: 215-973-6745. (f) You will transfer, in same day funds, on each of your business days, all amounts collected from the Lockbox Account [and the Blocked Account] on such day to the following account (the "Cash Concentration ------------------ Account"): ------- ICF Kaiser International, Inc. Account No. [1412209809] CoreStates Bank, N.A. 1345 Chestnut Street Philadelphia, PA 19107 Attention: Kathleen Crouse Each such transfer of funds shall neither comprise only part of a remittance nor reflect the rounding off of any funds so transferred. (g) All transfers referred to in paragraph (f) above shall be made by -21- the undersigned irrespective of, and without deduction for, any counterclaim, defense, recoupment or set-off and shall be final, and the undersigned will not seek to recover from the Agent for any reason any such payment once made. (h) All service charges and fees with respect to the Lockbox Account [and the Blocked Account] shall be payable by the Grantor, and deposited checks returned for any reason shall not be charged to the Lockbox Account [and the Blocked Account]. (i) The Agent shall be entitled to exercise any and all rights of the Grantor in respect of the Lockbox Account [and the Blocked Account] in accordance with the terms of the Security Agreement, and the undersigned shall comply in all respects with such exercise. This letter agreement shall be binding upon you and your successors and assigns and shall inure to the benefit of the Agent, the Banks and their successors, transferees and assigns. You may terminate this letter agreement only upon thirty days' prior written notice to the Grantor and the Agent. Upon such termination you shall close the Lockbox Account [and the Blocked Account] and transfer all funds in the Lockbox Account [and the Blocked Account] to the Cash Concentration Account. After any such termination, you shall nonetheless remain obligated promptly to transfer to the Cash Concentration Account all funds and other property received in respect of the Lockbox Account [and the Blocked Account]. -22- THIS LETTER AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. Very truly yours, [ICF KAISER INTERNATIONAL, INC.] [NAME OF GRANTOR] By:_________________________ Title: CORESTATES BANK, N.A., as Agent By:_________________________ Title: Acknowledged and agreed to as of the date first above written: [NAME OF LOCKBOX BANK OR BLOCKED ACCOUNT BANK] By:___________________________ Title: -23- SCHEDULE I TO EXHIBIT A TO SECURITY AGREEMENT
Name and Address of Lockbox Mailing Address of Lockbox Account [Blocked Account Bank] [Blocked Account] Number ---------------------- ----------------- ------
EXHIBIT B TO SECURITY AGREEMENT [Forms of notices and instruments relating to the Federal Assignment of Claims Act] SCHEDULE A TO SECURITY AGREEMENT 1. List of Selected Government Contracts: SCHEDULE B TO SECURITY AGREEMENT 1. The location of each Debtor's chief executive office and, if not the same, the location of each Debtor's principal place of business are as follows: 2. During the past five years no Debtor has used or been known by any other name, including any trade or fictitious name, except as follows: SCHEDULE C TO SECURITY AGREEMENT 1. List of Pledged Securities: EX-10.(G) 23 EXHIBIT 10(G) Exhibit 10(g) CONSOLIDATED, AMENDED AND RESTATED DEED OF LEASE THIS CONSOLIDATED, AMENDED AND RESTATED DEED OF LEASE is made and entered into as of the 12 day of November, 1997, effective for all purposes as of the 1st day of January, 1997, by and between (i) HMCE ASSOCIATES LIMITED PARTNERSHIP, R.L.L.P., a Virginia registered limited partnership, successor in interest to HMCE Associates Limited Partnership (hereinafter re(Pounds)erred to as "Landlord"), and (ii) ICF KAISER HUNTERS BRANCH LEASING, INC., a Delaware corporation, successor in interest to ICF International, Inc. (hereinafter referred to as "Tenant"), and referred to by singular pronouns of the neuter gender, regardless of the number and gender of the parties involved. WHEREAS, the Landlord and Tenant are parties to a certain Lease Agreement dated January 30, 1987 (the "Lease"), pursuant to which Landlord leased to Tenant certain office space containing approximately 196,749 square feet of net rentable area in the office building known as "Hunter's Branch - Phase I" and located in Fairfax, Virginia (the "Building"); and WHEREAS, Landlord and Tenant entered into a First Amendment to Lease Agreement dated August 31, 1987 (the "First Amendment"), wherein Landlord leased to Tenant certain additional space in the Building containing, in the aggregate, approximately 3,210 square feet of net rentable area; and WHEREAS, Landlord and Tenant entered into a Second Amendment to Lease Agreement dated September 23, 1987 (the "Second Amendment"), for the purpose of complying with the requirements of Landlord's first Mortgagee; and WHEREAS, Landlord and Tenant entered into a Third Amendment to Lease Agreement dated February 12, 1990 (the "Third Amendment"), which modified certain provisions of the Lease relating to Basic Rent and Operating Expense Increases; and WHEREAS, Landlord and Tenant now desire to consolidate, amend and restate the Lease, the First Amendment, the Second Amendment and the Third Amendment in this Consolidated, Amended and Restated Lease Agreement. NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Leased Premises, for the Term (as defined below), except that Landlord reserves and Tenant shall have no right in and to (a) the use of the exterior faces of all perimeter walls of the Building, (b) except as otherwise provided in Section 10(d), the use of the roof of the Building, or (c) the use of the air space above the Building. 1. Definitions. (a) General Interpretive Principles. For purposes of this Lease, except as otherwise expressly provided or unless the context otherwise requires, (i) the terms defined in this Section have the meanings assigned to them in this Section and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other genders; (ii) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles; (iii) references herein to "Sections," "subsections," "paragraphs" and other subdivisions without reference to a document are to designated Sections, subsections, paragraphs and other subdivisions of this Lease; (iv) a reference to a sub-section without further reference to a Section is a reference to such subsection as contained in the same Section in which the reference appears, and this rule shall also apply to paragraphs and other subdivisions; (v) the words "herein," "hereof," "hereunder" and other words of similar import refer to this Lease as a whole and not to any particular provision; and (vi) the word "including" means "including, but not limited to." (b) Special Lease Definitions. As used in this Lease the following words and phrases shall have the meanings indicated: Basic Rent: For each Lease Year, an amount equal to the product obtained by multiplying the Rentable Area of the Leased Premises by the Rent per Square Foot for such Lease Year. Building: The office building known as the "ICF Kaiser Building," located at 9300 Lee Highway, Fairfax, Virginia 22031, on the land described in Exhibit A to this Lease, including Tenant's non-exclusive right in and to the parking deck and Landlord's leasehold estate in the underlying land. Building Rentable Area: 201,929 square feet. Comparison Month: The calendar month of March. CPI: The Consumer Price Index for All Urban Consumers (CPI-U) -- All Items (1982-84 = 100) for the Washington, DC - MD - VA metropolitan area currently prepared by the Bureau of Labor Statistics of the United States Department of Labor and published bi-monthly. If, during the Term, the CPI ceases to be published, then Landlord and Tenant shall mutually agree upon a substitute index, it being understood and agreed that such substitute index shall be similar index generally recognized as authoritative, and the parties shall reconcile the base thereof with the base of the CPI. If the parties cannot agree upon a substitute index, then the matter shall be submitted to arbitration under the rules of the American Arbitration Association. First Rental Period: As defined in (S)4.2(b) of the Ground Lease. Inflation Adjustment: For the sixth Lease Year (i.e. commencing November 1, 2003) and each Lease Year thereafter during the Term (including any Renewal Period), the lesser of (i) 2.5% of the Rent per Square Foot for the immediately preceding Lease Year or (ii) 225% of the percentage (if any) by which (x) the CPI for the Comparison Month in the immediately preceding Lease Year exceeds (y) the CPI for the Comparison Month in 1998. Exhibit C contains an illustration of the operation of the Inflation Adjustment. Initial Term: The period commencing on the Lease Commencement Date and ending on October 31, 2012, but in any event the Initial Term shall end on any date when this Lease is sooner terminated pursuant to its terms. Land: The land described in Exhibit A. Landlord's Notice Address: 1355 Piccard Drive, Suite 470, Rockville, Maryland 20850. Lease Commencement Date: January 1, 1997. Leased Premises: The space containing 199,959 square feet of Rentable Area , consisting of the part of the Second Floor outlined on the floor plans of the Building attached hereto as Exhibit B, the entire First Floor, the entire Third through Twelfth Floors inclusive, and the Penthouse. Leasing Broker: The Carey Winston Company, which broker shall be paid by Tenant. Office Park: The project consisting of the Building, the office building known as 9302 Lee Highway, Fairfax, Virginia 22031, and the common areas and facilities serving both such buildings. Office Space: The portion of the Building consisting of the First through Twelfth Floors, inclusive. -2- Operating Expense Base: The quotient obtained by dividing (i) $1,162,899.00, by (ii) the Building Rentable Area. Operating Expense Commencement Date: January 1, 1998. Operating Expense Increases: For the calendar year in which the Operating Expense Commencement Date occurs and each calendar year thereafter during the Term, an amount equal to Tenant's Proportionate Share of the excess of Landlord's Operating Expenses for such calendar year over the product obtained by multiplying the Operating Expense Base by the Building Rentable Area. Renewal Period: The additional period of five years for which Tenant is permitted to extend the Initial Term of this Lease pursuant to Section 30. Rent Commencement Date: January 1, 1997. Rent per Square Foot: $24.00 during the period from January 1, 1997 through November 11, 1997 (i.e., total Basic Rent for such period shall be $4,141,616.55). $24.50 for the period from November 12, 1997 through December 31, 1997, and for each of the second, third, fourth and fifth Lease Years (i.e., Basic Rent for such period shall be $4,898,995.50 per Lease Year). For the sixth Lease Year, the Rent per Square Foot shall be an amount equal to $24.00, increased by the Inflation Adjustment for the sixth Lease Year. For the seventh Lease Year, and for each Lease Year thereafter during the Term, the Rent per Square Foot shall be an amount equal to the Rent per Square Foot for the immediately preceding Lease Year, increased by the Inflation Adjustment for the Lease Year for which the computation is being made. The foregoing amounts are net of the cost of electricity for the Leased Premises, which shall be billed to and paid by Tenant. Rentable Area: The net rentable area (in square feet) of all or any part of the Leased Premises from time to time. The net rentable area of the Leased Premises is agreed to be 199,959 square feet. Second Rental Period: As defined in (S)4.2(c) of the Ground Lease. Security Deposit: $125,000. Storage Space: The area, containing 5,855 square feet of Rentable Area, located in the Penthouse, which is shown on the floor plans attached as Exhibit B to this Lease. Tenant's Notice Address: 9300 Lee Highway, Fairfax, Virginia 22031-1207, Attn: Lease Administrator, with a copy to the same address, Attn: General Counsel. Tenant's Proportionate Share: The percentage from time to time which the Rentable Area of the Leased Premises is of the Building Rentable Area, which percentage is acknowledged and agreed to be ninety-nine percent (99%) as of the date of this Lease. Term: The Initial Term and the Renewal Period, if any, as to which Tenant shall have effectively exercised its right to extend, but in any event the Term shall end on any date when this Lease is sooner terminated pursuant to the terms hereof. (c) General Definitions. As used in this Lease the following words and phrases shall have the meanings indicated: -3- Additional Charges: All amounts payable by Tenant to Landlord under this Lease other than Basic Rent. All Additional Charges shall be deemed to be additional rent and all remedies applicable to the non-payment of Basic Rent shall be applicable thereto. Alterations: As defined in Section 9(a). Business Days: All days except Saturdays, Sundays and the following legal holidays: New Years Day, Memorial Day, Fourth of July, Labor Day, Thanksgiving Day and Christmas Day. Default Interest Rate: A rate per annum equal to the lesser of (a) the sum of (i) the base rate of interest from time to time established and publicly announced by NationsBank, N.A., Washington, D.C., in its sole discretion, as its then-applicable base rate of interest to be used in determining actual interest rates to be charged to certain of its borrowers, said base rate to change from time to time as and when the change is announced as being effective, plus (ii) two percent (2%), or (b) ten percent (10%) per annum. Event of Default: Any of the events set forth in Section 16(a) as an event of default. Floor: A floor of the Building located above the foundation slab or above an area below grade level which is designated as a basement or cellar. The term "Floor" preceded by a number shall mean the indicated floor of the Building. Ground Lease: The Lease Agreement dated May 29, 1986, between The First Union National Bank of Virginia, as Trustee, as successor by merger to First American Bank of Virginia, Trustee, as lessor, and Landlord, as lessee, as amended by a First Amendment to Ground Lease, dated August 18, 1987, and as further amended by a Second Amendment to Ground Lease dated September 22, 1987, pursuant to which Landlord leases the land described in Exhibit A to this Lease. Landlord: The landlord named herein or any subsequent owner or lessee, from time to time, of the Landlord's interest in the Building. Lease: This Deed of Lease, as amended from time to time, and all Exhibits attached hereto. Lease Year: The period of 12 months commencing on the Lease Commencement Date and ending on the last day of the month which completes 12 full calendar months after the Lease Commencement Date, and each 12 month period thereafter commencing on the first day after the end of the immediately preceding Lease Year, except that the last Lease Year shall end on the last day of the Term. Legal Requirements: All laws, statutes, ordinances, orders, rules, regulations and requirements of all federal, state and municipal governments, and the appropriate agencies, officers, departments, boards and commissions thereof, and the board of fire underwriters and/or the fire insurance rating organization or similar organization performing the same or similar functions, whether now or hereafter in force, applicable to the Building or any part thereof and/or the Leased Premises, and notices from Landlord's Mortgagee, as to the manner of use or occupancy or the maintenance, repair or condition of the Leased Premises and/or the Building, and the usual and customary requirements of the carriers of all fire insurance policies maintained by Landlord on the Building. Mortgage: Any mortgage, deed of trust or other security instrument of record creating an interest in or affecting title to the Building or the land on which it is constructed, or both, or any part thereof, including a leasehold mortgage or subleasehold mortgage, and any and all renewals, modifications, consolidations, or extensions of any such instrument; Mortgagee shall mean the holder or beneficiary of any Mortgage. -4- Operating Expenses: The aggregate of all costs and expenses reasonably and customarily paid or incurred on an accrual basis by Landlord in connection with the management, operation, servicing and maintenance of the Leased Premises, the Building, the Building parking facility and the land on which the Building is constructed including, but not limited to, employees' wages, salaries, welfare and pension benefits and other fringe benefits; payroll taxes; Real Estate Taxes; the Net Annual Rental payable by Landlord under (and as defined in) the Ground Lease; electricity charges for the main lobby, service areas and other common areas of the Building and the operation of the Building elevators; telephone service; painting of public or other common areas of the Building; exterminating service; detection and security services; trash removal; sewer and water charges; premiums for fire and casualty, liability, rent, workers' compensation, sprinkler, water damage and other insurance; repairs and maintenance to the Building; building, janitorial and cleaning supplies; uniforms and dry cleaning; snow removal; landscaping maintenance; window cleaning; service contracts for the maintenance of elevators, boilers, HVAC and other mechanical, plumbing and electrical equipment; legal fees (other than legal fees relating to the negotiation of leases with present or prospective tenants of the Building or the enforcement of Landlord's rights under leases with tenants for space in the Building); accounting fees; advertising; management fees of four percent (4%) of gross Building rents (exclusive of Operating Expense payments), whether or not paid to any Person having an interest in or under common ownership with Landlord; one-half of all costs and expenses of providing the shuttle bus services required by Section 31 (reduced by all amounts received by Landlord or its affiliates for after- hours shuttle bus service); dues and assessments to any property owners' association in which the Building is a member; window glass replacement, repair and cleaning; repair and maintenance of the grounds, including costs of landscaping, gardening and planting; service contracts with independent contractors, including but not limited to security and energy management service contractors; compensation (including employment taxes, fringe benefits, salaries, wages, medical, surgical and general welfare benefits [including health, accident and group life insurance]) for all personnel employed by Landlord or its property management company who perform duties in connection with the operation, management, maintenance and repair of the Building (in each case, allocated among all properties served by such employees on a reasonable basis, if such employees are utilized by more than one property), including a proportionate share of the salary and benefits of the property manager assigned to the Building, based upon the number of properties served by such property manager, but in no event more than one-fourth (1/4) of such salary and benefits; and all other expenses now or hereafter reasonably and customarily incurred in connection with the operation, maintenance, and management of first class office buildings in the Tysons Corner area of Northern Virginia. If Landlord makes an expenditure for a capital improvement to the Building to reduce Operating Expenses or to comply with Legal Requirements not in effect at the time the Building was constructed, and if, under generally accepted accounting principles, such expenditure is not a current expense, the cost thereof shall be amortized over a period equal to the useful life of such improvements, determined in accordance with generally accepted accounting principles, and the amortized cost allocated to each calendar year during the Term shall be treated as an Operating Expense. Except as provided in the preceding sentence, capital expenditures, depreciation and amortization shall not be included in Operating Expenses. Refunds of Real Estate Taxes (reduced by Landlord's reasonable expenses in obtaining such refunds), amounts received by Landlord from tenants of the Building for after-hours heating and air conditioning service and other special services and (to the extent that Operating Expenses include the cost of any repair or reconstruction work) the amount of any insurance recoveries, shall be credited against Operating Expenses in computing the amount thereof. Operating Expenses shall also be reduced as provided in Section 3(b). Operating Expenses shall not include financing or mortgage costs; depreciation expense; advertising for vacant space or building promotion; leasing commissions; executive salaries or compensation to any employee of Landlord or its property management company above the rank of the property manager assigned to the Building; more than one- fourth (1/4) of the salary and benefits of the property manager assigned to the Building; the cost of tenant improvements; legal fees for leasing vacant space in the Building or enforcing Landlord's rights under leases with tenants for space in the Building; or charges for electricity used directly by Tenant or by other tenants of the Building. Operating Expenses also shall not include: costs of additional insurance premiums for the Building due to any tenant's operations within such tenant's demised premises, which are payable by such tenant under such tenant's lease; the cost of repairs or replacements incurred by reason of fire or other casualty; or any other costs or expenses for which Landlord actually receives reimbursement from any source (other than amounts paid by tenants of the Building with respect to Operating Expenses), including, without limitation, insurance proceeds, condemnation awards or warranties. -5- Penthouse: The Floor immediately above the Twelfth Floor. Person: A natural person, a partnership, a corporation, a limited liability company and any other form of business or legal association or entity. Real Estate Taxes: All taxes, assessments, vault rentals, water and sewer rents, if any, and other charges, if any, general, special or other wise, including all assessments for schools, public betterments and general or local improvements, levied or assessed upon or with respect to the ownership of and/or all other taxable interests in the Building and the land on which it is built imposed by any public or quasi-public authority having jurisdiction and personal property taxes levied or assessed on Landlord's personal property used in connection with the operation, maintenance and repair of the Building. Real Estate Taxes shall not include any inheritance, estate, succession, transfer, recordation, gift, franchise, corporation, income or profit tax or capital levy. If at any time during the Term the methods of taxation shall be altered so that in addition to or in lieu of or as a substitute for the whole or any part of any Real Estate Taxes levied, assessed or imposed there shall be levied, assessed or imposed (i) a tax, license fee, excise or other charge on the rents received by Landlord, or (ii) any other type of tax or other imposition (except those excluded from Real Estate Taxes in the preceding sentence) in lieu of, or as a substitute for, or in addition to, the whole or any portion of any Real Estate Taxes, then the same shall be included as Real Estate Taxes. A tax bill or true copy thereof, together with any explanatory or detailed statement of the area or property covered thereby, submitted by Landlord to Tenant shall be conclusive evidence of the amount of taxes assessed or levied, as well as of the items taxed. If any real property tax or assessment levied against the land, buildings or improvements covered thereby or the rents reserved therefrom, shall be evidenced by improvement or other bonds, or in other form, which may be paid in annual installments, only the amount paid or payable in any Lease Year shall be included as Real Estate Taxes for that Lease Year. Taking: A taking of property or any interest therein or right appurtenant or accruing thereto, by condemnation or eminent domain or by action, proceedings, or agreement in lieu thereof, pursuant to governmental authority. Tenant: The tenant named herein and any permitted assignee under Section 15. Tenant's Special Installations: As defined in Section 9(d). Unavoidable Delays: Delays caused by strikes, acts of God, lockouts, labor difficulties, riots, explosions, sabotage, accidents, inability to obtain labor or materials, governmental restrictions, enemy action, civil commotion, fire, unavoidable casualty or similar causes beyond the reasonable control of the Landlord or the Tenant, as the case may be. No payment of any monetary amounts required of, or the obtaining or delivery of any required insurance policies by, either Landlord or Tenant shall be delayed or excused by acts of Unavoidable Delay. 2. Condition of Premises. Tenant accepts the Leased Premises in their as-is, where-is condition as of the date of this Lease, subject to any and all deficiencies and defects therein, and without any express or implied warranties of habitability, fitness, fitness for a particular purpose or otherwise. 3. Rent and Additional Charges. (a) Payment of Rent and Additional Charges. Tenant shall pay the Basic Rent for each Lease Year in equal monthly installments in advance on the first (1st) day of each month during the Term. The Basic Rent and all Additional Charges shall be paid promptly when due, in lawful money of the United States, without notice or demand and without deduction, diminution, abatement, counterclaim or setoff of any amount or for any reason whatsoever, except as otherwise expressly provided in subsections (b) and (g) and Sections 13 and -6- 14, to Landlord by wire transfer to such bank account as Landlord may from time to time designate. If Tenant makes any payment to Landlord by check (which, for any payment other than by wire transfer, shall require Landlord's consent), such payment shall be by check of Tenant and Landlord shall not be required to accept the check of any other person, and any check received by Landlord shall be deemed received subject to collection. If any check is mailed by Tenant, Tenant shall post such check in sufficient time prior to the date when payment is due so that such check will be received by Landlord on or before the date when payment is due. Tenant shall assume the risk of lateness or failure of delivery of the mails, and no lateness or failure of the mails will excuse Tenant from its obligation to have made the payment in question when required under this Lease. All bank service charges resulting from any bad checks shall be borne by Tenant. The rent reserved under this Lease shall be the total of all Basic Rent and Additional Charges, increased and adjusted as elsewhere herein provided, payable during the entire Term and, accordingly, the methods of payment provided for herein, namely, annual and monthly rental payments, are for convenience only and are made on account of the total rent reserved hereunder. (b) Payment of Operating Expense Increases. Tenant shall pay as additional rent Operating Expense Increases for each calendar year, commencing with the calendar year in which the Operating Expense Commencement Date occurs. Landlord shall make a reasonable estimate of Tenant's Operating Expense Increases for each calendar year (based on the projected Real Estate Taxes payable for the real estate tax fiscal years included in such calendar year, the other Operating Expenses for the preceding calendar year and known increases in other Operating Expenses for the current calendar year), and Tenant shall pay to Landlord 1/12th of the amount so estimated on the first day of each month in advance, beginning on January 1, 1998 and continuing thereafter throughout the Term. If Landlord's estimate of Tenant's Operating Expense Increases for any calendar year is received by Tenant after January 1 of the calendar year, Tenant shall pay to Landlord in a lump sum, within 15 days after receipt of the estimate, the arrearages in the monthly estimates for each month in the calendar year before receipt of the estimate and shall pay the remaining monthly installments on the first day of each month in advance during the balance of the calendar year. Within 150 days after the end of each calendar year, Landlord shall submit to Tenant a statement prepared by an independent certified public accountant setting forth in reasonable detail the Operating Expenses for such calendar year and the amount of Tenant's Operating Expense Increases for such calendar year. If Tenant's Operating Expense Increases so stated are more than the amount theretofore paid by Tenant for Operating Expense Increases based on Landlord's estimate, Tenant shall pay to Landlord the deficiency within 15 days after the submission of such statement. If Tenant's Operating Expense Increases so stated are less than the amount theretofore paid by Tenant for Operating Expense Increases based on Landlord's estimate, Landlord shall refund to Tenant the excess within 15 days after submission of such statement or Landlord, at its option, shall credit the excess against the next monthly installment of Basic Rent thereafter payable by Tenant under this Lease. Tenant, at its sole cost and expense, shall have the right, at reasonable times and upon reasonable notice given within 90 days after receipt of a statement for Tenant's Operating Expense Increases for any calendar year, to audit the statements furnished to Tenant for such calendar year. If either the Operating Expense Commencement Date shall not coincide with the beginning of a calendar year or the last day of the Term shall not coincide with the end of a calendar year, then the amount of Operating Expense Increases payable for the calendar year in which the Operating Expense Commencement Date or the last day of the Term occurs, as the case may be, shall be pro-rated on a daily basis between Landlord and Tenant based on the number of days in such calendar year after the Operating Expense Commencement Date or before the last day of the Term. Tenant's obligations under this subsection to pay Operating Expense Increases and Landlord's obligation to reimburse Tenant for an overpayment of Operating Expenses shall survive the expiration of the Term. (c) Interest. If Tenant fails to make any payment of Basic Rent or Additional Charges by the earlier to occur of (i) 5 business days after the due date thereof or (ii) 7 days after the due date thereof, interest shall, at Landlord's option, accrue on the unpaid portion thereof from the due date at the Default Interest Rate, but in no event at a rate higher than the maximum rate allowed by law, and shall be payable on demand. (d) Accord and Satisfaction. No payment by Tenant or receipt by Landlord of any lesser amount than the amount stipulated to be paid hereunder shall be deemed other than on account of the earliest -7- stipulated Basic Rent or Additional Charges; nor shall any endorsement or statement on any check or letter be deemed an accord and satisfaction, and Landlord may accept any check or payment without prejudice to Landlord's right to recover the balance due or to pursue any other remedy available to Landlord. (e) Late Payment Charge. If Tenant fails to pay any Basic Rent or Additional Charges by the earlier to occur of (i) 5 business days after the due date thereof or (ii) 7 days after the due date thereof, Tenant shall also pay to Landlord on demand a late payment service charge (to cover Landlord's administrative and overhead expenses of processing late payments) equal to the greater of $100.00 or 5% of such unpaid sum for each and every calendar month or part thereof after the due date that such sum has not been paid to Landlord. Such payment shall be deemed liquidated damages and not a penalty, but shall not excuse the untimely payment of rent. (f) Reduction of Real Estate Taxes. Landlord shall give Tenant a copy of any tax assessment notice with respect to the Building within 15 days after receipt thereof. Landlord will use reasonable efforts to obtain a reduction of Real Estate Taxes, provided Tenant makes a written request to Landlord so to do and, in such request, agrees to pay its proportionate share of the costs thereof as hereinafter provided, and Landlord receives such request not less than 20 days prior to the last day on which Real Estate Tax reduction proceedings for the particular real estate tax year in question may be commenced. The method and manner of conducting proceedings for such reduction, including the selection of counsel, shall be solely within the judgment and determination of Landlord, and Landlord may cancel, discontinue or settle such proceedings if, in Landlord's judgment, such cancellation, discontinuance or settlement is advisable. Landlord shall keep Tenant informed of the status of any such proceeding. If Landlord determines to cancel or discontinue such proceeding, Tenant shall have the right, either alone or with other tenants of the Building, to continue such proceeding at its or their own expense. To the extent that the reasonable costs and expenses, including legal fees, of such proceedings instituted and conducted by Landlord, requested by Tenant and others, exceed the amount of any tax refund, Tenant shall pay that proportion of such excess cost and expense which the Rentable Area of the Leased Premises bears to the total rentable area leased to all tenants making such request at the time it is made. (g) Abatement of Basic Rent. If, because of Landlord's failure to provide any of the services referred to in Sections 5(h), all or substantially all of the Leased Premises becomes untenantable and Tenant is unable to and does not, in fact, use all or substantially all of the Leased Premises for the uses permitted by Section 6(a) for a continuous period of 10 Business Days, then provided the cause of such cessation of services is not the result, in whole or in principal part, of Tenant's negligence or intentional misconduct, Tenant shall be entitled to an abatement of Basic Rent for the period of time in which Tenant is unable to use, and does not, in fact, use all or substantially all of the Leased Premises for the uses permitted by Section 6(a). Any dispute between Landlord and Tenant as to Tenant's entitlement to an abatement of Basic Rent shall be submitted to mediation pursuant to Section 28. (h) Retroactive Rent Adjustment. Subject to the availability of Net Cash Flow, as defined in Section 2.2 of the Limited Liability Company Agreement of Hunters Branch Partners, L.L.C., reduced only by the Retroactive Rent Adjustments described herein and in Tenant's Lease for premises in 9302 Lee Highway, Vienna, Virginia ("Available Cash Flow"), Tenant shall receive Retroactive Rent Adjustments in the following amounts for the following 12-month periods ("Adjustment Years") during the Term:
Adjustment Year Amount of Rent Adjustment 11/1/97 - 10/31/98 $269,455.00 11/1/98 - 10/31/99 274,042.00 11/1/99 - 10/31/00 287,035.00 11/1/00 - 10/31/01 307,856.00 11/1/01 - 10/31/02 319,547.00 11/1/02 - 10/31/03 206,425.00
-8- 11/1/03 - 10/31/04 216,051.00 11/1/04 - 10/31/05 236,776.00 11/1/05 - 10/31/06 240,617.00 11/1/06 - 10/31/07 153,560.00 11/1/07 - 10/31/08 262,733.00 11/1/08 - 10/31/09 263,676.00 11/1/09 - 10/31/10 298,457.00 11/1/10 - 10/31/11 351,375.00 11/1/11 - 10/31/12 379,037.00
Subject to Available Cash Flow, the Retroactive Rent Adjustment shall be paid by Landlord to Tenant in equal monthly installments in arrears. If the monthly installment of the Retroactive Rent Adjustment for any month is not fully paid because of the lack of Available Cash Flow, then the unpaid portion shall be paid in a later month of the Term (if any) when there is sufficient Available Cash Flow to pay such unpaid portion. Landlord agrees that it will not pay, and Tenant agrees that it will not accept, a Retroactive Rent Adjustment for any month during any Adjustment Year unless the Annual Priority Return (as defined in Section 2.2 of the Limited Liability Company Agreement of Hunters Branch Partners, L.L.C.) for such month (together with accrued interest, if any) has been paid by Hunters Branch Partners, L.L.C. to the Person entitled to receive such payment. (i) Lease Restructuring Fee. Upon execution of this Lease, Tenant has paid Landlord a Lease Restructuring Fee in the amount of $660,767.80, receipt of which is hereby acknowledged by Landlord. 4. Common Areas. Throughout the Term, Tenant and its agents, employees and business invitees shall have the non-exclusive right, in common with other tenants of the Building and the adjacent office building, to use the public lobbies, elevators, corridors, stairways, parking garage, sky walk, patios, sidewalks, roadways and other common areas in the Building and the Land, and the toilet rooms in public areas of multi-tenant floors in the Building. Landlord shall have the right to rent parking spaces in the parking garage to persons other than tenants of the Building and the adjacent office building with Tenant's prior written approval, which approval shall not be unreasonably withheld, and which approval shall be deemed given provided that (i) no third party parking contract shall be for a period of more than one (1) month, (ii) access to the parking garage shall be controlled by access or key cards, and (iii) reasonable security shall be provided with respect to the parking garage area. Landlord shall have the right at any time, without the Tenant's consent, to change the arrangement or location of entrances, passageways, doors, doorways, corridors, stairs, toilet rooms or other public portions of the Building, provided any such change does not unreasonably obstruct Tenant's access to the Leased Premises. The balconies on the tenth, eleventh and twelfth floors of the Building shall be reserved for Tenant's exclusive use. Notwithstanding anything to the contrary in this Lease, tenants of the other building in the Office Park (9302 Lee Highway), their agents, employees and business invitees will not have any right to use the internal lobbies, elevators, corridors, stairways and toilet rooms in the Building. 5. Services and Utilities. (a) Building Services. Throughout the Term, Landlord agrees that the Building will be managed and maintained in accordance with generally accepted industry practices and in a manner befitting a modern, first class rental office building in Fairfax County, Virginia, and that, subject to Legal Requirements, it will furnish to Tenant the following services: (1) Subject to the provisions of subsection (b), normal and usual electricity for lighting purposes and the operation of ordinary office equipment; -9- (2) Adequate supplies for toilet rooms located in public areas of the Building; (3) Normal and usual cleaning and janitorial services after business hours on Business Days in accordance with the standards set forth in Exhibit D attached hereto and made a part hereof, provided, however, that Landlord shall not provide cleaning and janitorial services to the double- secured areas of the Leased Premises; (4) Hot and cold running water in the toilet rooms located in public areas of the Building and at valved outlets at the locations in the Leased Premises shown on Tenant's Space Layout; (5) Subject to the provisions of subsections (c) and (e), heating and air-conditioning to the Leased Premises when required for the comfortable occupancy of the Leased Premises, at reasonable temperatures, pressures and degrees of humidity, and in reasonable volumes and velocities, between the hours of 8:00 A.M. and 7:00 P.M. on Business Days and between the hours of 9:00 A.M. and 1:00 P.M. on Saturdays unless Saturday is a legal holiday; (6) Automatically operated elevator facilities 24 hours a day, seven days a week throughout the Term; (7) All electric bulbs and fluorescent tubes in permanently installed light fixtures in the Leased Premises and in the public areas of the Building; (8) Five (5) keys for the suite entry door to each portion of the Leased Premises located on a separate Floor at no cost to Tenant, but all additional keys, including replacements for lost keys, shall be issued only upon the payment of a reasonable cost for each additional key; (9) An electronic card security access system for the public areas of the Building and the garage and a reasonable number of access cards for use by Tenant's employees; and (10) A fully-operational structured parking facility for use by tenants of the Building with access limited to Persons authorized by Tenant or Landlord. (b) Electricity. Landlord shall not be liable in any way to Tenant for any failure or defect in the supply or character of electrical energy furnished to the Leased Premises by reason of any requirement, act or omission of the public utility serving the Building with electricity. Tenant's use of electrical energy in the Leased Premises shall not at any time exceed the capacity of any of the electrical conductors and equipment in or otherwise serving the Leased Premises as shown on Landlord's Building Plans. Tenant shall not install or operate in the Leased Premises any electrically operated equipment which uses electric current in excess of the capacity of the feeders and panel boards serving the Leased Premises as shown on Landlord's Building Plans without Landlord's written consent, which consent may be conditioned upon Tenant's agreement to pay the cost of any additional wiring which may be required for the operation of such equipment. In order to insure that such capacity is not exceeded and to avert a possible adverse effect upon the Building electrical service Tenant shall give notice to Landlord whenever Tenant shall connect to the Building electrical distribution system any electrically operated equipment other than lamps, typewriters and similar small office machines. Any feeders or risers to supply Tenant's electrical requirements in addition to those originally installed, and all other equipment proper and necessary in connection with such feeders or risers, shall be installed by Landlord upon Tenant's request, at the sole cost and expense of Tenant, provided that, in Landlord's reasonable judgment, such additional feeders or risers are permissible under applicable laws and insurance regulations and the installation of such feeders or risers will not cause permanent damage or injury to the Building or cause or create a dangerous condition or unreasonably interfere with other tenants of the Building. All Floors occupied entirely by Tenant shall be separately metered or sub-metered for electricity and all other parts of the Leased Premises, may, at Landlord's option, be separately -10- metered or sub-metered for electricity. Tenant shall pay (or reimburse Landlord for) the cost of purchasing and installing separate electric meters or sub- meters for each whole Floor and each part of a Floor included in the Leased Premises, and for any other part of the Leased Premises which Landlord elects to have metered or sub-metered. Tenant shall pay directly to the public utility company all charges for electricity used by Tenant in all parts of the Leased Premises which are separately metered, or Tenant shall reimburse Landlord directly for its electrical usage in all parts of the Leased Premises which are sub-metered. Landlord shall have the right from time to time to have a survey made by an independent electrical engineer or electrical consulting firm to be selected and paid for by Landlord to determine the amount of electricity consumed by Tenant in the parts of the Leased Premises which do not consist of an entire Floor. Tenant shall pay to Landlord, at monthly intervals upon receipt of an invoice therefor, the cost of electricity it consumes in the parts of the Leased Premises which do not consist of an entire Floor as determined by such electrical engineer or consulting firm. (c) Heating and Air-Conditioning. Landlord shall provide heat and air-conditioning at times in addition to those specified in paragraph (5) of subsection (a) at Tenant's expense, provided Tenant gives Landlord notice prior to 3:00 P.M. (in the case of after-hours service on weekdays) and prior to 3:00 P.M. on Fridays or the day preceding a holiday (in the case of after-hours service on Saturdays, Sundays or holidays). (d) Maintenance of Pipes, Conduits, etc. Landlord reserves the right to erect, use, maintain and repair pipes, conduits, cables, plumbing, vents and wires in, to and through the Leased Premises as and to the extent that Landlord may now or hereafter deem to be necessary or appropriate for the proper operation and maintenance of the Building, or other tenants' installations in the Building, and the right at all times to transmit water, heat, air- conditioning and electric current through such pipes, conduits, cables, plumbing, vents and wires, provided that Landlord, in the exercise of such rights, shall not unreasonably inconvenience Tenant or unreasonably interfere with Tenant's use of the Leased Premises. (e) HVAC Specifications. Landlord agrees that the air- conditioning system in the portion of the Leased Premises consisting of Office Space will be capable of providing, and (unless otherwise ordered by federal, state or local governmental authorities) the system shall provide, temperatures of not more than 77 degrees F dry bulb and a relative humidity not in excess of 50% with outside conditions of 95 degrees F dry bulb and 78 degrees F wet bulb, except as otherwise provided in this subsection. Landlord agrees that the heating system in the portion of the Leased Premises consisting of Office Space will be capable of providing, and (unless otherwise ordered by federal, state or local governmental authorities) the system shall provide, temperatures of not less than 70 degrees F whenever the outdoor dry bulb temperature is lower than 65 degrees F but no lower than 0 degrees F, with indoor relative humidity at such level as not to permit the formation of condensation on the windows. Landlord shall not be responsible if the normal operation of the Building air- conditioning system shall fail to provide conditioned air at reasonable temperatures, pressures or degrees of humidity or in reasonable volumes or velocities in any portions of the Leased Premises consisting of Office Space which (i) shall have a connected electrical load in excess of three watts per square foot of Rentable Area of the Leased Premises for all purposes (including lighting and power) or which shall have a human occupancy factor in excess of one person for each 100 square feet of Rentable Area of the portion of the Leased Premises consisting of Office Space (the average electrical load and human occupancy factors for which the Building air-conditioning system is designed), or (ii) because of rearrangement of partitioning or other Alterations made by or on behalf of Tenant or any Person claiming through or under Tenant (excepting work performed by Landlord for Tenant prior to Tenant's initial occupancy of the Leased Premises). (f) Access to HVAC Facilities. Landlord shall have unrestricted access to any and all air-conditioning facilities in the Leased Premises for the purposes of repairs, maintenance, alterations and improvements, but in exercising its rights under this subsection Landlord shall use its best efforts to minimize interference with Tenant's business in the Leased Premises. Notwithstanding anything to the contrary herein or in Section 5(d), except in the event of an emergency, Landlord may obtain access to the double-secured areas of the Leased Premises only with the permission and assistance of Tenant's Director of Facilities or his designee. Tenant shall provide Landlord with keys to the double-secured areas of the Leased Premises. Tenant's Director of Facilities, or his designee, shall be available to provide access to the double- secured areas of the Leased Premises on -11- a non-emergency basis promptly after Landlord's request for permission to enter the same, and in any event no later than 24 hours after such request. (g) Reduction of Air-Conditioning Use. Tenant agrees to use reasonable efforts to keep or cause to be kept closed all window draperies or venetian blinds in the Leased Premises as and when necessary because of the sun's position whenever the air-conditioning system is in operation, and Tenant agrees at all times to cooperate fully with Landlord and to abide by all the reasonable regulations and requirements which Landlord may prescribe for the proper functioning and protection of the Building air-conditioning system. (h) Cessation of HVAC and Mechanical Services. Landlord reserves the right to stop the service of heating, air-conditioning, ventilating, elevator, plumbing, electricity or other mechanical systems or facilities in the Building, if necessary by reason of accident or emergency, or for repairs, alterations, replacements, additions or improvements which, in the reasonable judgment of Landlord, are desirable or necessary, until said repairs, alterations, replacements, additions or improvements shall have been completed. The exercise of such right by Landlord shall not constitute an actual or constructive eviction, in whole or in part, or relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord or its agents by reason of inconvenience or annoyance to Tenant, or injury to, or interruption of, Tenant's business, or otherwise, or entitle Tenant to any abatement or diminution of rent except as provided in Section 3(i). Except in cases of emergency repairs, Landlord will give Tenant reasonable advance notice of any contemplated stoppage of any such systems or facilities pursuant to the foregoing. In all cases, Landlord will use due diligence to complete any such repairs, alterations, replacements, additions or improvements promptly. Landlord shall also perform any such work in a manner designed to minimize interference with Tenant's normal business operations. 6. Use of Leased Premises. (a) Permitted Uses. Tenant shall use and occupy the portion of the Leased Premises consisting of Office Space solely for general office purposes, and shall use and occupy the portion of the Leased Premises consisting of Storage Space solely for storage, all in accordance with the applicable zoning regulations and consistent with the character and dignity of the Building, and shall not use, permit or suffer the use of the Leased Premises for any other purpose whatsoever without the prior written consent of the Landlord. Tenant shall not use, or permit the Leased Premises to be used, for the sale of food, beverages or tobacco products, except that Tenant may operate on the Leased Premises vending machines for the sale of food, beverages and tobacco products to its employees. Tenant shall not permit or suffer the Leased Premises to be occupied by anyone other than Tenant except as provided by Section 15. Tenant shall at all times have access to the Leased Premises 24 hours a day, seven days a week, subject, however, in all respects to all the terms, covenants and conditions contained in this Lease. However, Landlord may regulate and restrict access to the Building at times other than normal business hours on Business Days for security purposes so long as Tenant's employees and agents have reasonable access to the Leased Premises without unreasonable inconvenience. (b) Restrictions on Use. Throughout the Term, Tenant covenants and agrees: (i) to pay 10 days before delinquency any and all taxes, assessments and public charges levied, assessed or imposed upon Tenant's business conducted in the Leased Premises, upon the leasehold estate created by this Lease or upon Tenant's fixtures, furnishings or equipment in the Leased Premises; (ii) not to use or permit or suffer the use of any portion of the Leased Premises for any unlawful purpose; (iii) not to use the plumbing facilities for any purpose other than that for which they were constructed, or dispose of any foreign substances therein; (iv) not to place a load on any floor exceeding the floor load per square foot which such floor was designed to carry in accordance with Landlord's Building Plans, and not to install, operate or maintain in the Leased Premises any heavy item of equipment except in such manner as to achieve a proper distribution of weight; (v) not to strip, overload, damage or deface the Leased Premises, or the hallways, stairways, elevators, parking facilities or other public areas of the Building, or the fixtures therein or used therewith; (vi) not to move any furniture or equipment into or out of the Leased Premises except at such times as Landlord may from time to time reasonably designate; (vii) not to use any floor adhesive in the installation of any carpeting; (viii) not to install any other equipment of any kind or nature -12- which will or may necessitate any changes, replacements or additions to, or in the use of, the water system, heating system, plumbing system, air-conditioning system or electrical system of the Leased Premises or the Building, without first obtaining the written consent of Landlord; and (ix) at all times to comply with all Legal Requirements. (c) Compliance with Legal Requirements. Tenant will not use or occupy the Leased Premises in violation of any Legal Requirements. If any governmental authority, after the commencement of the Term, shall contend or declare that the Leased Premises are being used for a purpose which is in violation of any Legal Requirements, then Tenant shall, upon five days' notice from Landlord, immediately discontinue such use of the Leased Premises. If thereafter the governmental authority asserting such violation threatens, commences or continues criminal or civil proceedings against Landlord for Tenant's failure to discontinue such use, in addition to any and all rights, privileges and remedies given to Landlord under this Lease for default therein, Landlord shall have the right to terminate this Lease forthwith. Tenant shall indemnify and hold Landlord harmless from and against any and all liability for any such violation or violations. (d) Compliance with Insurance Requirements. Tenant shall not do any act, matter, thing or failure to act in respect of the Leased Premises and/or the Building that will invalidate or be in conflict with fire insurance policies covering the Building or any part thereof, and shall not do, or permit anything to be done, in or upon the Leased Premises and/or the Building, or bring or keep anything therein, which shall increase the rate of fire insurance on the Building or on any property located therein. If, by reason of the failure of Tenant to comply with the provisions of this subsection, the fire insurance rate shall at any time be higher than it otherwise would be, then Tenant shall reimburse Landlord and any other tenant of the Building, on demand, for that part of all premiums for any insurance coverage that shall have been charged because of such violation by Tenant and which Landlord or such other tenant, or both, shall have paid on account of an increase in the rate or rates in its own policies of insurance. Tenant shall not be responsible for any increase in fire insurance rates generally applicable to office space in Fairfax County, Virginia, and not resulting from the particular manner in which Tenant uses the Leased Premises. (e) No Flammable Substances. Tenant shall not bring or permit to be brought or kept in or on the Leased Premises any flammable, combustible or explosive fluid, material, chemical or substance except standard cleaning fluid, standard equipment and materials (including magnetic tape) customarily used in conjunction with business machines and equipment of the type used from time to time by Tenant in reasonable quantities. 7. Care of Leased Premises. (a) By Tenant. Tenant shall act with care in its use and occupancy of the Leased Premises and the fixtures therein and, at Tenant's sole cost and expense, shall make all repairs and replacements to the Leased Premises, structural or otherwise, necessitated or caused by the acts, omissions or negligence of Tenant or any Person claiming through or under Tenant or by the use or occupancy or manner of use or occupancy of the Leased Premises by Tenant or any such Person; however the foregoing provisions of this subsection shall be subject to the provisions of Section 13. Without affecting Tenant's obligations set forth in the preceding sentence, Tenant, at Tenant's sole cost and expense, shall also (i) make all repairs and replacements, as and when necessary, to Tenant's Special Installations and to any Alterations made or performed by or on behalf of Tenant or any Person claiming through or under Tenant, (ii) perform all maintenance and make all repairs and replacements, as and when necessary, to any air-conditioning equipment, private elevators, escalators, conveyors or mechanical systems (other than the standard equipment and systems serving the Building) which may be installed in the Leased Premises, or elsewhere in the Building and serving the Leased Premises, by Landlord, Tenant or others, (iii) perform all maintenance and make all repairs and replacements, as and when necessary, to the antennas and satellite dishes installed by Tenant on the roof of the Building and make all repairs to the roof caused by such installation, and (iv) perform regular cleaning and janitorial services in the double-secured areas of the Leased Premises. However, except as otherwise provided in this Lease, Tenant shall not have any right to install air-conditioning equipment, elevators, escalators, conveyors or mechanical systems. In addition to the foregoing, all damage or injury to the -13- Leased Premises and to its fixtures, appurtenances and equipment or to the Building or to its fixtures, appurtenances and equipment caused by Tenant moving property in or out of the Building or by installation or removal of furniture, fixtures or other property by Tenant shall be repaired, restored or replaced promptly by Tenant, at its sole cost and expense, to the reasonable satisfaction of Landlord. All such aforesaid repairs, restoration and replacements shall be in quality and class equal to the original work or installation but in no event need exceed Building standards. (b) By Landlord. Except as otherwise provided in subsection (a), Landlord shall perform the following maintenance and repairs as and when necessary (the costs of which shall be Operating Expenses hereunder, to the extent included in the definition of Operating Expenses in Section 1(c)): (i) structural repairs to the Leased Premises and Building; (ii) maintenance and repairs required in order to provide the elevator, plumbing, electrical, heating and air-conditioning services to be furnished by Landlord pursuant to this Lease; (iii) maintenance of and repairs to exterior portions of the Building, including the windows, balconies and roof thereof; (iv) maintenance of and repairs to the toilet rooms in the Building, and to the public lobbies, elevators, corridors, stairways, parking garage, sky walk, patios, sidewalks, roadways and other common areas in the Building and the Land; and (v) other repairs to the Leased Premises and the Building necessary for Tenant's use and enjoyment of the Leased Premises. Landlord's obligations to make repairs to the Leased Premises under the preceding sentence shall not accrue until after notice to Landlord of the necessity for any specific repair. 8. Rules and Regulations. Tenant and its agents and employees shall comply with and observe all reasonable rules and regulations concerning the use, management, operation, safety and good order of the Leased Premises and the Building which may from time to time be promulgated by Landlord, provided that such rules and regulations are not inconsistent with the provisions of this Lease and do not materially interfere with Tenant's use of the Leased Premises. Initial rules and regulations, which shall be effective until amended by Landlord, are attached to this Lease as Exhibit E hereto and made a part hereof. Tenant shall be deemed to have received notice of any amendment to the rules and regulations when a copy of such amendment has been delivered to Tenant at the Leased Premises or has been mailed to Tenant in the manner prescribed for the giving of notices. If Tenant disputes the reasonableness of any additional rule or regulation hereafter made or adopted by Landlord, the parties agree to submit the question of the reasonableness of such rule or regulation for decision to the governing board for the time being of the Building Owners and Managers Association of Washington, D.C., or to such impartial person or persons as it or the parties hereto may designate, whose determination shall be final and conclusive upon the parties hereto. Tenant may not dispute the reasonableness of any additional rule or regulation unless Tenant's intention to do so shall be asserted by notice given to Landlord within 15 days after notice is given to Tenant of the adoption of any such additional rule or regulation. Landlord shall not be responsible to Tenant for any violation of the rules and regulations, or the covenants or agreements contained in any other lease, by any other tenant of the Building, or such tenant's agents or employees, and Landlord may waive in writing, or otherwise, any or all of the rules or regulations in respect of any one or more tenants. 9. Tenant's Alterations and Installments. (a) Restrictions on Alterations. Tenant shall not make or perform, or permit the making or performance of, any alterations, installations, improvements, additions or other physical changes in or about the Leased Premises (referred to collectively as "Alterations") without Landlord's prior consent. Landlord agrees not unreasonably to withhold or delay its consent to any nonstructural Alterations proposed to be made by Tenant to adapt the Leased Premises for Tenant's business purposes or the business purposes of any other permitted occupant of the Leased Premises, except that Landlord shall have no obligation to consent to any Alteration which will reduce the value or utility of the Building or affect the outside appearance of the Building or the color or style of any venetian blinds supplied by Landlord (except that Tenant may remove any such venetian blinds provided Tenant promptly replaces such venetian blinds with venetian blinds of a similar type and color). Notwithstanding the foregoing provisions of this subsection or Landlord's consent to any Alterations, all Alterations, whether made -14- prior to or during the Term, shall be made and performed in conformity with and subject to the following provisions: (i) all Alterations shall be made and performed at Tenant's sole cost and expense and at such time and in such manner as Landlord may reasonably from time to time designate; (ii) Alterations shall be made only by contractors or mechanics approved by Landlord, such approval not to be unreasonably withheld or delayed; (iii) no Alteration shall materially affect any part of the Building other than the Leased Premises or adversely affect any service required to be furnished by Landlord to Tenant or to any other tenant or occupant of the Building; (iv) all business machines and mechanical equipment shall be placed and maintained by Tenant in settings sufficient in Landlord's reasonable judgment to absorb and prevent vibration, noise and annoyance to other tenants or occupants of the Building; (v) Tenant shall submit to Landlord reasonably detailed plans and specifications for each proposed alteration and shall not commence any such Alteration without first obtaining Landlord's approval of such plans and specifications, which approval will not be unreasonably withheld or delayed; (vi) all Alterations in or to the electrical facilities in or serving the Leased Premises shall be subject to the provisions of Section 5 relating to exceeding electrical capacity; (vii) notwithstanding Landlord's approval of plans and specifications for any Alteration, all Alterations shall be made and performed in full compliance with all Legal Requirements and in accordance with the Rules and Regulations; (viii) all materials and equipment to be incorporated in the Leased Premises as a result of all Alterations shall be of good quality; and (ix) Tenant shall require any contractor performing Alterations to carry and maintain at all times during the performance of the work, at no expense to Landlord, (i) a policy of comprehensive public liability insurance, including contractor's liability coverage, contractual liability coverage, completed operations coverage, contractor's protective liability coverage and a broad form property damage endorsement, naming Landlord and (at Landlord's request) any Mortgagee of the Building and any management agent as additional named insureds), with such policy to afford protection to the limit of not less than $2,000,000 with respect to bodily injury or death to any number of persons in any one accident and to the limit of not less than $1,000,000 to damage to the property of any one owner from one occurrence, and (ii) workers' compensation or similar insurance in the form and amounts required by the laws of the State of Virginia. In the event the estimated cost of an Alteration (which shall include the aggregate cost of a series of Alterations which are reasonably aggregated into a single project) is in excess of $100,000.00, or in the event of an Alteration to a structural member of, or mechanical system in, the Leased Premises, Landlord shall have the right to place other and further restrictions and conditions thereon prior to Tenant being authorized to commence such Alteration. Such additional conditions may include, by way of illustration and not of limitation, the requirement that the contractor be bonded or bondable. In the event of any dispute between the parties as to whether or not Landlord has acted reasonably in any case with respect to which Landlord is required, pursuant to the provisions of this subsection (a), to do so, Tenant's sole remedy shall be to submit such dispute to mediation pursuant to Section 28. If the determination in any such mediation shall be adverse to Landlord, Landlord nevertheless shall not be liable to Tenant for breach of Landlord's covenant to act reasonably, and Tenant's sole remedy in such event shall be to proceed with the proposed Alterations. However, if the parties are unable to settle such matter by mediation, and such matter is submitted to litigation, Landlord's liability and Tenant's remedies shall not be so limited. (b) Tenant's Right to Cure. If Tenant shall be in default under this Section by reason of the making of any Alteration not hereby authorized or by reason of failure to give any notice or to obtain any approval required herein, Tenant may cure such default within the applicable grace period provided in this Lease for curing such default by removing such Alteration and restoring the Leased Premises to their former condition, as provided in Section 7. (c) Fixtures Become Landlord's Property. Except to the extent specifically provided in subsection (e), all appurtenances, fixtures, improvements, additions and other property attached to or installed in the Leased Premises, whether by Landlord or Tenant or others, and whether at Landlord's expense, or Tenant's expense, or the joint expense of Landlord and Tenant, which are of a permanent nature or which cannot be removed without structural damage to the Building, shall be and remain the property of Landlord. Any replacements of any property of Landlord, whether made at Tenant's expense or otherwise, shall be and remain the property of Landlord. -15- (d) Tenant's Special Installations. All furniture, furnishings and trade fixtures, excepting lighting fixtures and equipment, but including, without limitation, murals, carpets, rugs, business machines and equipment, vaults, vault doors and door frames, and vault equipment, if any, safe deposit equipment, counterscreens, grillwork, cages, partitions which are moveable, railings, raised floors, escalators, conveyors, stairs, elevators, paneling, equipment relating to food preparation, food storage and serving, dishwashing and cleaning devices and air-conditioning equipment, and any other moveable property installed by, or at the expense of Tenant, including any such property paid for with any allowance provided by Landlord to Tenant, shall remain the property of Tenant and are referred to herein as "Tenant's Special Installations". Tenant may at its expense remove any part of said property at any time during the Term, and shall at its expense remove all of said property at the expiration or other termination of the Term unless Landlord shall otherwise consent in writing. Upon removal of any or all of said property Tenant shall then repair all damage caused by such removal. Any of Tenant's Special Installations which are not removed from the Leased Premises at the expiration of the Term shall be deemed to have been abandoned by Tenant and may be disposed of by Landlord without liability to Tenant. (e) Mechanics' Liens. Notice is hereby given that Landlord shall not be liable for any labor or materials furnished or to be furnished to Tenant upon credit, and that no mechanic's, materialman's or other lien for any such labor or materials shall attach to or affect the reversion or other estate or interest of Landlord in and to the Leased Premises or the Building. Whenever and as often as any mechanic's lien or materialman's lien shall have been filed against the Leased Premises or the Building based upon any act or interest of Tenant or of anyone claiming through Tenant, or if any lien or security interest with respect thereto shall have been filed affecting any materials, machinery or fixtures used in the construction, repair or operation thereof or annexed thereto by Tenant or its successors in interest, Tenant shall forthwith take such action by bonding, deposit or payment as will remove or satisfy the lien or other security interest and in default thereof after the expiration of 20 days after notice to Tenant, Landlord, in addition to any other remedy under this Lease, may pay the amount secured by such lien or security interest or discharge the same by deposit and the amount so paid or deposited shall be collectible as additional rent. The provisions of this subsection shall not be applicable to liens filed with respect to work done for Tenant's account by Landlord. 10. Name of Building; Tenant's Signs. (a) Name. Provided that no Event of Default (as defined in Section 16) or Event of Bankruptcy (as defined in Section 17) has occurred and is continuing, throughout the Term, the Building shall be designated as the "ICF Kaiser Building", and Landlord shall use that name in all advertising prepared by, or at the direction of, Landlord in connection with the leasing of space in the Building to the public. Notwithstanding the foregoing, if Tenant shall change its corporate name, then Tenant shall have the right, by written notice to Landlord, to require Landlord to re-designate the Building with a name incorporating all or part of Tenant's new name, provided the same is not in violation of any rule, regulation or statute having jurisdiction over the Building or Landlord. In such event, Tenant shall bear all costs of changing the signage on the Building, and Tenant shall, within fifteen (15) days after receipt of an invoice therefor, reimburse Landlord for Landlord's reasonable costs incurred in connection with the Building name change, including costs incurred to change Landlord's advertising and costs of any required notices to any governmental agencies. Landlord expressly reserves the right to have the Building designated by a street number or numbers and to affix to the Building, at locations designated by Landlord, signs indicating any such number or numbers and the name of the Building (if any) as selected from time to time by Tenant in accordance with the provisions of this subsection. (b) Restrictions on Exterior Signs. Except as otherwise provided in subsection (d), Landlord has not granted to Tenant any rights in or to the roof or the outer side of the outside walls of the Building, control of which is hereby reserved by Landlord. Tenant shall not display or erect any lettering, signs, advertisements, awnings or other projections on the exterior of the Leased Premises or in the interior of the Leased Premises if visible from a public way, except for customary hallway door lettering. -16- (c) Directory Tablets. Landlord, at its expense, shall maintain the existing directory tablets (i) in the main lobby of the other building in the Office Park, (ii) in the skywalk between the Building and the other building in the Office Park (located at 9302 Lee Highway), and (iii) on the walkway between the Building and the other building in the Office Park, upon each of which Landlord, at Tenant's expense, will affix Tenant's name and a reasonable number of names of its officers, partners or employees. The size, color and style of such directories and names affixed thereto shall be selected by Landlord. (d) Tenant's Permitted Signs. Subject to Section 10(a) above, Landlord shall permit Tenant throughout the Term to install and maintain, subject to Legal Requirements, two suitable signs on the exterior of the Building. The location, size, color and style of Tenant's exterior signs shall be subject to Landlord's approval, such approval not to be unreasonably withheld or delayed. Landlord hereby approves Tenant's signs which are currently on the Building, and agrees that, if the name of the Building is changed pursuant to Section 10(a), Tenant, at its expense, may replace such signs with similar signs displaying the new name. (e) Access to Roof. Throughout the Term, Landlord shall permit Tenant to install and maintain, subject to Legal Requirements and the provisions of this Section 10(e), not more than three (3) satellite or antenna dishes on the roof of the Building ("Tenant's Roof Use"). (i) Landlord shall make available to Tenant access to and locations mutually acceptable to Landlord and Tenant on the roof for the construction, installation, maintenance, repair, operation and use of such satellite or antenna dishes. Tenant shall screen such installations in a manner mutually acceptable to Landlord and Tenant. Tenant shall have the right to remove such satellite or antenna dishes and any related equipment from the Building at the expiration or other termination of the Term of this Lease, provided that Tenant repairs any damage occasioned by such removal. Tenant shall pay all costs associated with the installation, maintenance, repair, use, insurance and removal of such satellite or antenna dishes and any related equipment. (ii) Tenant shall give Landlord's Building manager reasonable telephonic notice before any entry onto the roof of the Building by Tenant's agents, employees or contractors, and shall permit Landlord's Building manager to accompany Tenant's agents, employees or contractors on any such entry onto the roof. Except as otherwise hereinafter set forth in this Section 10(e), Landlord shall not be liable for any claims, losses, actions, damages, liabilities or expenses arising from any satellite or antenna dishes or related equipment installed by Tenant on the roof of the Building, or the installation, maintenance, repair, use or removal of such dishes and related equipment, unless caused by the negligence or willful misconduct of Landlord, its agents, employees or contractors. (iii) If Landlord permits any other party to install satellite or antenna dishes on the roof of the Building, and such equipment interferes with the operation of Tenant's equipment, then Landlord, at its expense, shall take whatever measures may be necessary to eliminate such interference. (iv) If the rate of any insurance carried by Landlord is increased as a result of Tenant's Roof Use, then Tenant will pay to Landlord within ten (10) days before the date Landlord is obligated to pay a premium on the insurance (or within ten (10) days after Landlord delivers to Tenant a certified statement from Landlord's insurance carrier stating that the rate increase was caused by Tenant's Roof Use, whichever date is later), a sum equal to the difference between the original premium and the increased premium resulting from Tenant's Roof Use. (v) Landlord has not made any representations or promises pertaining to the suitability of the Building's roof for Tenant's Roof Use. Tenant, solely for the purpose of this Section 10(e) and its right to rooftop access hereunder, accepts the rooftop in its "as is" condition. (vi) Tenant will obtain prior to installation, any and all governmental licenses, approvals necessary for the installation, maintenance and use of any equipment installed pursuant to this Section -17- 10(e). Tenant's Roof Use shall not in any way conflict with any applicable Legal Requirements. Tenant shall indemnify and hold Landlord harmless from and against any and all loss, cost (including reasonable attorney's fees incurred in defending Landlord), damage or liability arising out of any violation by Tenant's Roof Use of any applicable Legal Requirements. (vii) Tenant's Roof Use shall be exercised: (1) in such manner as will not create any hazardous condition or interfere with or impair the operation of the heating, ventilation, air conditioning, plumbing, electrical, fire protection, life, safety, public utilities or other systems or facilities in the Building; (2) in compliance with all applicable Legal Requirements; (3) in such a manner as will not unreasonably interfere with Landlord's operation or maintenance of the Building; (4) at Tenant's cost, including the cost of repairing any damage to the Building and any personal injury and/or property damage caused by the installation, inspection, adjustment, maintenance, removal or replacement of any of Tenant's equipment on the roof; and (5) in a manner which will not void or invalidate any roof warranty then in effect with respect to the roof of the Building. Tenant's Roof Use shall be used solely in the ordinary course of Tenant's business operations (and not for resale by Tenant), and any use of the roof outside of the ordinary course of Tenant's business operations (such as, but not limited to, subleasing portions of the roof for profit to third parties, in order for such third parties to establish communications transmission facilities) shall be subject to Landlord's consent, which consent shall not be unreasonably withheld, but may be conditioned, inter alia, upon the payment by Tenant to Landlord of any net revenues paid to Tenant in respect thereof. 11. Liability Insurance. (a) Required Coverage. Tenant, at Tenant's sole cost and expense, shall obtain and maintain in effect at all times during the Term, a policy of comprehensive general public liability insurance with broad form property damage endorsement, naming Landlord and (at Landlord's request) any Mortgagee of the Building and any management agent as additional insured(s), protecting Landlord, Tenant and any such Mortgagee and management agent against any liability for bodily injury, death or property damage occurring upon, in or about any part of the Building, including the roof, or the Land, the Leased Premises or any appurtenances thereto, with such policies to afford protection to the limit of $5,000,000 with respect to bodily injury or death to any one person, to the limit of $5,000,000 with respect to bodily injury or death to any number of persons in any one accident, and to the limit of $5,000,000 with respect to damage to the property of any one owner from one occurrence. Such comprehensive liability insurance may be effected by a policy or policies of blanket insurance which cover other property in addition to the Leased Premises, provided that the protection afforded thereunder shall be no less than that which would have been afforded under a separate policy or policies relating only to the Leased Premises and provided further that in all other respects any such policy shall comply with the other provisions of this Section. (b) Policy Requirements. The insurance policy required to be obtained by Tenant under this Section: (i) shall be issued by insurance companies rated A- or better in the most current issue of Best's Insurance Reports, licensed to do business in the state in which the Building is located and domiciled in the United States; and (ii) shall be written as primary policy coverage and not contributing with or in excess of any coverage which Landlord may carry. Neither the issuance of any insurance policy required under this Lease, nor the minimum limits specified herein with respect to Tenant's insurance coverage, shall be deemed to limit or restrict in any way Tenant's liability arising under or out of this Lease. With respect to each insurance policy required to be obtained by Tenant under this Section, on or before the Lease Commencement Date, and at least 30 days before the expiration of the expiring policy or certificate previously furnished, Tenant shall deliver to Landlord a certificate of insurance therefor, together with evidence of payment of all applicable premiums. Each insurance policy required to be carried hereunder by or on behalf of Tenant shall provide (and any certificate evidencing the existence of each such insurance policy shall certify) that such insurance policy shall not be canceled unless Landlord shall have received 20 days' prior written notice of cancellation. (c) Indemnification of Landlord. Except for the willful or negligent acts or omissions of Landlord or its agents or employees, Tenant hereby agrees to indemnify and hold harmless Landlord -18- from and against any and all claims, losses, actions, damages, liabilities and expenses (including attorneys' fees) that (i) arise from or are in connection with Tenant's possession, use, occupancy, management, repair, maintenance or control of the Leased Premises, or any portion thereof, or (ii) arise from or are in connection with any willful or negligent act or omission of Tenant or Tenant's agents, employees or subtenants, or (iii) result from any default, breach, violation or nonperformance of this Lease or any provision therein by Tenant, or (iv) arise from injury or death to persons or damage to property sustained on or about the Leased Premises, or (v) arise from Tenant's installation, maintenance, repair, use or removal of any rooftop satellite or antenna dishes or related equipment. Tenant shall, at its own cost and expense, defend any and all actions, suits and proceedings which may be brought against Landlord with respect to the foregoing or in which Landlord may be impleaded. Tenant shall pay, satisfy and discharge any and all money judgments which may be recovered against Landlord in connection with the foregoing. (d) Indemnification of Tenant. Except for the willful or negligent acts or omissions of Tenant or its agents or employees, Landlord hereby agrees to indemnify and hold harmless Tenant from and against any and all claims, losses, actions, damages, liabilities and expenses (including attorneys' fees) that (i) arise from or are in connection with Landlord's possession, use, occupancy, management, repair, maintenance or control of the common areas of the Building located on any Floor not wholly occupied by Tenant, or (ii) arise from or are in connection with any willful or negligent act or omission of Landlord or Landlord's agents or employees, or (iii) result from any default, breach, violation or nonperformance of this Lease or any provision therein by Landlord, or (iv) arise from injury or death to persons or damage to property sustained on or about the common areas of the Building located on any Floor not wholly occupied by Tenant. Landlord shall, at its own cost and expense, defend any and all actions, suits and proceedings which may be brought against Tenant with respect to the foregoing or in which Tenant may be impleaded. Landlord shall pay, satisfy and discharge any and all money judgments which may be recovered against Tenant in connection with the foregoing. 12. Fire Insurance. (a) Required Coverage. Landlord shall, throughout the Term, at its expense, keep the Building, but not Tenant's Special Installations, Alterations or Tenant's furniture, furnishings, trade fixtures or property removable by Tenant under the provisions of this Lease (including any rooftop satellite or antenna dishes and related equipment), insured against all loss or damage by fire with extended coverage in such amount as any first Mortgagee of the Building may from time to time require. Tenant shall, throughout the Term, at its expense, keep Tenant's Special Installations and Alterations and Tenant's personal property, including any rooftop satellite or antenna dishes and related equipment, insured against all loss or damage by fire with extended coverage in an amount sufficient to prevent Tenant from becoming a co-insurer. Tenant's policies of insurance shall contain, if available from the insurer, an appropriate clause or endorsement under which the insurer agrees that such policy shall not be canceled without at least 30 days notice to Landlord. (b) Notice of Insurance Coverage. Landlord and Tenant will (i) if requested, advise the other as to the provisions of fire and extended coverage insurance policies obtained pursuant to this Section, and (ii) notify the other promptly of any change in the terms of any such policy which would affect such provisions. (c) Mutual Waiver of Subrogation (i) Notwithstanding anything to the contrary in this Lease, whether the loss or damage is due to the negligence of Landlord or Landlord's agents or employees, or any other cause, Tenant hereby releases Landlord and Landlord's agents and employees from responsibility for and waives its entire claim of recovery for (i) any and all loss or damage to the personal property of Tenant located in the Building (excluding any personal property required to be insured by Landlord pursuant to the provisions hereof), arising out of any of the perils which are covered by Tenant's property insurance policy, with extended coverage endorsements which Tenant is required to obtain under the applicable provisions of this Lease, whether or not actually obtained. -19- (ii) Notwithstanding anything to the contrary in this Lease, whether the loss or damage is due to the negligence of Tenant or Tenant's agents or employees, or any other cause, Landlord hereby releases Tenant and Tenant's agents and employees from responsibility for and waives its entire claim of recovery for any and all loss or damage to the Building or any personal property of Landlord located about the Building and the Building generally and all property attached thereto (excluding any such property required to be insured by Tenant hereunder), arising out of any of the perils which are covered by Landlord's property insurance policy which Landlord is required to obtain under the applicable provisions of this Lease, whether or not actually obtained. (iii) Landlord and Tenant shall each cause its respective property insurance carrier(s) to consent to such waiver of all rights of subrogation against the other, and to issue an endorsement to all policies of property insurance obtained by such party confirming that the foregoing release and waiver will not invalidate such policies. 13. Damage by Fire or Other Casualty. In the event of loss of, or damage to, the Leased Premises or the Building by fire or other casualty, the rights and obligations of the parties hereto shall be as follows: (a) Repair of Damage. If the Leased Premises or any part thereof shall be damaged by fire or other casualty, Tenant shall give prompt notice thereof to Landlord, and Landlord, upon receiving such notice, shall proceed promptly and with reasonable diligence, subject to Unavoidable Delays, to repair, or cause to be repaired, such damage in a manner designed to minimize interference with Tenant's occupancy (but with no obligation to employ labor at overtime or other premium pay rates). If the Leased Premises or any part thereof shall be rendered untenantable by reason of such damage, whether to the Leased Premises or the Building, the Basic Rent and Additional Charges shall proportionately abate with respect thereto for the period from the date of such damage to the date when such damage shall have been repaired for the portion of the Leased Premises rendered untenantable. However, if, prior to the date when all of such damage shall have been repaired, any part of the Leased Premises is damaged shall be rendered tenantable and shall be used or occupied by Tenant or any Person or Persons claiming through or under Tenant, then the amount by which the Basic Rent and Additional Charges shall abate shall be equitably apportioned for the period from the date of any such use. (b) Termination of Lease by Landlord or Tenant. If as a result of fire or other casualty more than one-half (1/2) of the Building Rentable Area is rendered untenantable, Landlord within 60 days from the date of such fire or casualty may terminate this Lease by notice to Tenant, specifying a date, not less than 20 nor more than 40 days after the giving of such notice, on which the Term shall expire as fully and completely as if such date were the date herein originally fixed for the expiration of the Term. If the Leased Premises are damaged as a result of fire or other casualty and if the damage to the Leased Premises (but not including Tenant's Special Installations or Alterations) is so extensive that such damage cannot be substantially repaired within 240 days from the date of the fire or other casualty (except for Unavoidable Delays), either Landlord or Tenant within 30 days from the date of such fire or other casualty may terminate this Lease by notice to the other, specifying a date, not less than 20 nor more than 40 days after the giving of such notice, on which the Term shall expire as fully and completely as if such date were the date originally fixed for the expiration of the Term. If either Landlord or Tenant terminates this Lease, the Basic Rent and Additional Charges shall be apportioned as of the date of such fire or other casualty. If neither Landlord nor Tenant so elects to terminate this Lease, then Landlord shall proceed to repair the damage to the Building and the damage to the Leased Premises (but not Tenant's Special Installations or Alterations), if any shall have occurred, and the Basic Rent and Additional Charges shall meanwhile be apportioned and abated all as provided in subsection (a). However, if such damage is not repaired and the Leased Premises and the Building restored to reasonably the same condition as they were prior to such damage within 240 days from the date of such damage (such 240-day period to-be extended by the period of any Unavoidable Delays), Tenant, within 30 days from the expiration of such 240-day period (as the same may be extended), may terminate this Lease by notice to Landlord, specifying a date not more than 60 days after the giving of such notice on which the Term shall expire as fully and completely as if such date were the date herein originally fixed for the expiration of the Term. -20- (c) Termination of Lease by Landlord. If the Leased Premises shall be rendered untenantable to the extent of eighty percent (80%) or more by fire or other casualty during the last six months of the Term, Landlord or Tenant may terminate this Lease upon notice to the other party given within 90 days after such fire or other casualty specifying a date, not less than 20 days nor more than 40 days after the giving of such notice, on which the Term shall expire as fully and completely as if such date were the date originally fixed for the expiration of the Term. If either Landlord or Tenant terminates this Lease pursuant to this subsection, the Basic Rent and Additional Charges shall be apportioned as of the date of such fire or casualty. (d) Limitation on Landlord's Repair Obligation. Landlord shall not be required to repair or replace any of Tenant's Special Installations or Alterations or any other personal property of Tenant and no damages, compensation or claim shall be payable by Landlord for inconvenience, loss of business or annoyance arising from any repair or restoration of any portion of the Leased Premises or of the Building, but the foregoing shall not be deemed to relieve Landlord of liability for its breach of any covenant of this Lease. (e) Inapplicability of Other Laws. The provisions of this Section shall be considered an express agreement governing any instance of damage or destruction of the Building or the Leased Premises by fire or other casualty, and any law now or hereafter in force providing for such a contingency in the absence of express agreement shall have no application. (f) Landlord Released from Liability. Notwithstanding any other provision of this Lease, Landlord shall not be liable or responsible for, and Tenant hereby releases Landlord and its partners, officers, directors, agents and employees from, any and all liability or responsibility to Tenant or any Person claiming by, through or under Tenant, by way of subrogation or otherwise, for any injury, loss or damage to Tenant's property caused by any of the perils insured against by the fire insurance policy with extended coverage endorsement which is customarily issued in Fairfax County, Virginia, and Tenant shall require its insurer(s) to include in all of Tenant's insurance policies which could give rise to a right of subrogation against Landlord a clause or endorsement whereby the insurer(s) shall waive any right of subrogation against Landlord. (g) Tenant Released from Liability. Notwithstanding any other provision of this Lease, Tenant shall not be liable or responsible for, and Landlord hereby releases Tenant and its partners, officers, directors, agents and employees from, any and all liability or responsibility to Landlord or any Person claiming by, through or under Landlord, by way of subrogation or otherwise, for any injury, loss or damage to Landlord's property caused by any of the perils insured against by the fire insurance policy with extended coverage endorsement which is customarily issued in Fairfax County, Virginia, and Landlord shall require its insurer(s) to include in all of Landlord's insurance policies which could give rise to a right of subrogation against Tenant a clause or endorsement whereby the insurer(s) shall waive any rights of subrogation against Tenant. (h) Insurance Proceeds. The proceeds payable under all fire and other hazard insurance policies maintained by Landlord on the Building shall belong to and be the property of Landlord, and Tenant shall not have any interest in such proceeds. Tenant agrees to look to its own fire and hazard insurance policies in the event of damage to Tenant's Special Installations or Alterations or its personal property. 14. Condemnation. (a) Effect of Taking. In the event of a Taking of the whole of the Leased Premises, this Lease shall terminate as of the date of such Taking. If only a part of the Leased Premises shall be so taken then, except as otherwise provided in this subsection, this Lease shall continue in force and effect but, from and after the date of the Taking, the Basic Rent and Additional Charges shall be reduced on the basis of the square footage of the portion of the Leased Premises so taken. If a part of the Building shall be taken, and if either (i) the part of the Building so taken contains more than twenty-five percent (25%) of the Rentable Area of the Leased Premises, immediately prior to such Taking, or (ii) in Landlord's reasonable opinion, it shall be impracticable to continue to -21- operate the Building, then Landlord, at Landlord's option, may give to Tenant within 60 days after the date upon which Landlord shall have received notice of the Taking, a 30 days' notice of termination of this Lease. If a part of the Building shall be taken, and if either (i) the part of the Building taken contains more than thirty-five percent (35%) of the Rentable Area of the Leased Premises immediately prior to such Taking, or (ii) by reason of such Taking, all or substantially all of the Leased Premises becomes untenantable and Tenant is unable and does not, in fact use all or substantially all of the Leased Premises for the uses permitted by Section 6(a), then Tenant, at Tenant's option, may give to Landlord within 60 days after the date upon which Tenant shall have received notice of such Taking, a 30 days' notice of termination of this Lease. If a 30 days' notice of termination is given by Landlord or Tenant, this Lease shall terminate upon the expiration of the 30-day period. If this Lease is terminated pursuant to the foregoing provisions of this subsection, then, to the extent permitted by applicable law and such Taking, Tenant shall have access to the Leased Premises in order to remove Tenant's Special Installations and any other personal property then owned by Tenant and which Tenant is entitled to remove pursuant to this Lease during the period of 30 days from the date Tenant is permitted access therefor. If a Taking occurs which does not result in the termination of this Lease, Landlord shall repair, alter and restore the remaining portions of the Leased Premises to their former condition to the extent that the same may be feasible. (b) Award. Landlord shall have the exclusive right to receive any and all awards made for damages to the Leased Premises and the Building accruing by reason of a Taking or by reason of anything lawfully done in pursuance of public or other authority. Tenant hereby releases and assigns to Landlord all of Tenant's rights to such awards, and covenants to deliver such further assignments and assurances thereof as Landlord may from time to time request, hereby irrevocably designating and appointing Landlord as its attorney- in-fact to execute and deliver in Tenant's name and behalf all such further assignments thereof. However, Tenant shall have the right to make its own claim against the condemning authority for a separate award for the value of any of Tenant's Special Installations and Alterations, for moving and relocation expenses and for such business damages and/or consequential damages as may be allowed by law which do not constitute part of the compensation for the Building and do not diminish the amount of the award to which Landlord would otherwise be entitled. 15. Assignment and Subletting. (a) Subletting to ICF Kaiser International, Inc. It is understood and agreed that Tenant will sublet the entire Leased Premises to its affiliate, ICF Kaiser International, Inc., for a basic rent in excess of the Basic Rent payable hereunder. Upon the written request of Landlord or any Mortgagee following an event of default under any loan secured by a Mortgage, Tenant shall pay to Landlord one hundred percent (100%) of the amount of such excess, monthly as received by Tenant from ICF Kaiser International, Inc. (b) Assignment and Subletting Prohibited. Tenant shall not mortgage, pledge, encumber, sell, assign or transfer this Lease, in whole or in part, by operation of law or otherwise, or sublease all or any part of the Leased Premises, without Landlord's written consent, which consent may be withheld for any reason whatsoever except as provided in subsection (a) and subsection (d). In connection with any request by Tenant for such consent to assign or sublet, Tenant shall submit to Landlord, in writing, a statement containing the name of the proposed assignee or subtenant, such information as to its financial responsibility and standing as Landlord may reasonably require, and all of the terms and provisions upon which the proposed assignment or subletting is to be made, and, unless the proposed sublet area shall constitute the entire Leased Premises, such statement shall be accompanied by a floor plan delineating the proposed sublet area. Any attempted transfer, assignment, subletting, mortgaging or encumbering of this Lease in violation of the provisions of this Section shall be void and confer no rights upon any third person. No permitted assignment or subletting shall relieve Tenant of any of its obligations under this Lease. (c) Merger and Consolidation. Notwithstanding the provisions of subsection (b), Tenant shall have the privilege, without the consent of Landlord, to assign its interest in this Lease to any corporation which is a successor to Tenant, either by merger or consolidation, or to any corporation which controls, -22- is controlled by, or is under common control with, the Tenant. However, no such assignment shall be valid unless, within 10 days after the consummation thereof, Tenant shall deliver to Landlord (i) a duplicate original instrument of assignment in form reasonably satisfactory to Landlord, duly executed by Tenant, and (ii) an instrument in form and substance reasonably satisfactory to Landlord, duly executed by the assignee, in which such assignee shall agree to observe and perform, and to be personally bound by, all of the terms, covenants and conditions of this Lease on Tenant's part to be observed and performed, whether or not accruing prior to or after the date of such assignment and whether or not relating to matters arising prior to such assignment. (d) Permitted Subletting. Unless an Event of Default has occurred and is continuing, Landlord shall not unreasonably withhold or delay Landlord's consent to sublettings by Tenant of a part or parts of the Leased Premises, but Landlord shall not be obligated to consent to a subletting for a use prohibited by Section 6(a). Each such subletting shall be for undivided occupancy by the subtenant of that part of the Floor affected thereby for the use permitted under this Lease. Landlord may, however, withhold such consent if, in Landlord's reasonable judgment, the proposed subtenant is not engaged in a business consistent with the character and dignity of the Building, or will impose any additional material burden upon Landlord in the operation of the Building (to an extent greater than the burden to which Landlord would have been put if Tenant continued to use, or used, such part of the Leased Premises for its own purposes). In the event of any dispute between Landlord and Tenant as to the reasonableness of Landlord's refusal to consent to any subletting such dispute shall be submitted to mediation pursuant to Section 28. Except as otherwise set forth in subsection (a), if any portion of the Leased Premises is sublet at any time, and if the rent received by Tenant on account of such subletting exceeds the Basic Rent, allocated to the space subject to the sublease in the proportion of the area of such space to the Rentable Area of the Leased Premises, plus actual out-of-pocket expenses incurred by Tenant in connection with Tenant's subleasing of such space, including advertising, attorneys' fees, brokerage commissions and the unamortized cost of preparing such space for occupancy by the subtenant, then, except as otherwise provided in the next sentence, Tenant shall pay to Landlord fifty percent (50%) of such excess, monthly as received by Tenant from the subtenant. Except as otherwise set forth in subsection (a), Landlord shall not share in any profit derived by Tenant from the permitted subletting of all or any part of the space located on the Floor designated by Tenant as its "Sublet Floor" in a notice given to Landlord before Tenant enters into its first permitted sublease pursuant to this subsection. Notwithstanding anything to the contrary in this Section 15(d), Tenant shall have the right to sublet space in the Leased Premises to Tenant's affiliates (hereinafter defined), subcontractors or consultants without notice to or the consent of Landlord, and, except as set forth in Section 15(a), without paying any portion of the profits of such subletting to Landlord. As used herein, a "Tenant's affiliate" shall mean a corporation or other entity which controls, is controlled by or is under common control with Tenant, or which is a joint venture partner of Tenant. (e) Collection of Rent from Assignee. If Tenant's interest in this Lease is assigned, whether or not in violation of the provisions of this Section, Landlord may collect rent from the assignee; if the Leased Premises or any part thereof are sublet to, or occupied by, or used by, any Person other than Tenant, whether or not in violation of this Section, Landlord, after default by Tenant under this Lease, may collect rent from the subtenant, user or occupant. In either case, Landlord shall apply the amount collected to the rents reserved in this Lease, but neither any such assignment, subletting, occupancy or use, whether with or without Landlord's prior consent, nor any such collection or application, shall be deemed a waiver of any term, covenant or condition of this Lease or the acceptance by Landlord of such assignee, subtenant, occupant or user as tenant. The consent by Landlord to any assignment or subletting shall not relieve Tenant from its obligation to obtain the express prior consent of Landlord to any further assignment or subletting. The listing of any name other than that of Tenant on any door of the Leased Premises or on any directory in the Building, or otherwise, shall not operate to vest in the Person so named any right or interest in this Lease or in the Leased Premises or be deemed to constitute, or serve as a substitute for, any prior consent of Landlord required under this Section, and it is understood that any such listing shall constitute a privilege extended by Landlord which shall be revocable at Landlord's will by notice to Tenant. Neither an assignment of Tenant's interest in this Lease nor a subletting, occupancy or use of the Leased Premises or any part thereof by any Person other than Tenant, nor the collection of rent by Landlord from any Person other than Tenant as provided in this subsection, nor the application of any such rent as provided in this subsection shall, in -23- any circumstances, relieve Tenant from its obligation fully to observe and perform the terms, covenants and conditions of this Lease on Tenant's part to be observed and performed. 16. Default Provisions. (a) Events of Default. Each of the following events shall be deemed to be, and is referred to in this Lease as, an "Event of Default": (1) A default by Tenant in making any payment of Basic Rent or Additional Charges on the date such payment is due and payable which continues for more than five days after Landlord shall have given Tenant a written notice specifying such default; or (2) If, within any period of 12 consecutive months, Landlord has given two written notices to Tenant pursuant to paragraph (1), a further default by Tenant, within the 12-month period after the giving of the second such notice, in making any payment of Basic Rent or Additional Charges on the date such payment is due which continues for more than 10 days after such payment is due; or (3) The neglect or failure of Tenant to perform or observe any of the terms, covenants or conditions contained in this Lease on Tenant's part to be performed or observed (other than those referred to in paragraph (1) above) which is not remedied by Tenant (i) within 20 days after Landlord shall have given to Tenant written notice specifying such neglect or failure, or (ii) in the case of any such neglect or failure which cannot with due diligence and in good faith be cured within 20 days, within such additional period, if any, as may be reasonably required to cure such default with due diligence and in good faith provided that Tenant commences the curing of the same within the 20-day period (it being intended that, in connection with any such default which is not susceptible of being cured with due diligence and in good faith within 20 days, the time within which the Tenant is required to cure such default shall be extended for such additional period as may be necessary for the curing thereof with due diligence and in good faith); or (4) The assignment, transfer, mortgaging or encumbering of this Lease or the subletting of the Leased Premises in a manner not permitted by Section 15; or (5) The taking of this Lease or the Leased Premises, or any part thereof, upon execution or by other process of law directed against Tenant, or upon or subject to any attachment at the instance of any creditor of or claimant against Tenant, which execution or attachment shall not be discharged or disposed of within 30 days after the levy thereof. (b) Landlord's Rights Upon Event of Default. Upon the occurrence of an Event of Default, Landlord shall have the right, at its election, then or at any time thereafter while such Event of Default shall continue, either: (1) To give Tenant written notice that this Lease will terminate on a date to be specified in such notice, which date shall not be less than three days after such notice if such notice is sent by registered or certified mail, but which date may be the date of such notice or any date thereafter if such notice is delivered in person, and on the date specified in such notice Tenant's right to possession of the Leased Premises shall cease and this Lease shall thereupon be terminated, but Tenant shall remain liable as provided in subsection (c); or (2) Without demand or notice, to reenter and take possession of the Leased Premises, or any part thereof, and repossess the same as of Landlord's former estate and expel Tenant and those claiming through or under Tenant and remove the effects of both or either, either by summary proceedings, or by action at law or in equity, without being deemed guilty of any manner of trespass and without prejudice to any remedies for arrears of rent or preceding breach of covenant. -24- If Landlord elects to re-enter under paragraph (2), Landlord may terminate this Lease, or, from time to time, without terminating this Lease, may relet the Leased Premises, or any part thereof, as agent for Tenant for such term or terms and at such rental or rentals and upon such other terms and conditions as Landlord may deem advisable, with the right to make alterations and repairs to the Leased Premises. No such re-entry or taking of possession of the Leased Premises by Landlord shall be construed as an election on Landlord's part to terminate this Lease unless a written notice of such intention is given to Tenant under paragraph (1) or unless the termination thereof be decreed by a court of competent jurisdiction. Tenant waives any right to the service of any notice of Landlord's intention to reenter provided for by any present or future law. (c) Tenant's Liability for Damages. If Landlord terminates this Lease pursuant to subsection (b), Tenant shall remain liable (in addition to accrued liabilities) to the extent legally permissible for (i) the sum of (A) all Basic Rent and Additional Charges provided for in this Lease until the date this Lease would have expired had such termination not occurred, and (B) any and all reasonable expenses incurred by Landlord in reentering the Leased Premises, repossessing the same, making good any default of Tenant, painting, altering or dividing the Leased Premises, combining the same with any adjacent space for any new tenants, putting the same in proper repair, reletting the same (including any and all reasonable attorney's fees and disbursements and reasonable brokerage fees incurred in so doing), and any and all expenses which Landlord may incur during the occupancy of any new tenant (other than expenses of a type that are Landlord's responsibility under the terms of this Lease); less (ii) the proceeds of any reletting. Tenant agrees to pay to Landlord the difference between items (i) and (ii) above with respect to each month during the Term, at the end of such month. Any suit brought by Landlord to enforce collection of such difference for any one month shall not prejudice Landlord's right to enforce the collection of any difference for any subsequent month. In addition to the foregoing, Tenant shall pay to Landlord, whether or not the Lease is terminated, such sums as the court which has jurisdiction thereover may adjudge reasonable as attorney's fees with respect to any successful law suit or action instituted by Landlord to enforce the provisions of this Lease. Landlord shall have the right, at its sole option, to relet the whole or any part of this Leased Premises for the whole of the unexpired Term, or longer, or from time to time for shorter periods, for any rental then obtainable, giving such concessions of rent and making such special repairs, alterations, decorations and paintings for any new tenant as Landlord, in its sole and absolute discretion, may deem advisable. Tenant's liability as aforesaid shall survive the institution of summary proceedings and the issuance of any warrant thereunder. Landlord shall be under no obligation to relet the Leased Premises, but agrees to use its best efforts to do so. (d) Liquidated Damages. If Landlord terminates this Lease pursuant to subsection (b), Landlord shall have the right, at any time, at its option, to require Tenant to pay to Landlord, on demand, as liquidated and agreed final damages in lieu of Tenant's liability under subsection (c), an amount equal to the difference discounted to the date of such demand at an annual rate of interest equal to the then-current yield on actively traded U.S. Treasury bonds with 10-year maturities, as published in the Federal Reserve Statistical Release for the week prior to the date of such termination, between (i) the Basic Rent and Additional Charges, computed on the basis of the then current annual rate of Basic Rent and Additional Charges, which would have been payable from the date of such demand to the date when this Lease would have expired, if it had not been terminated, and (ii) the then fair rental value of the Leased Premises for the same period. Upon exercise of this option by Landlord and payment of such liquidated and agreed final damages, Tenant shall be released from all further liability under this Lease with respect to the period after the date of such demand. If, after the Event of Default giving rise to the termination of this Lease, but before presentation of proof of such liquidated damages, the Leased Premises, or any part thereof, shall be relet by Landlord for a term of one year or more, the amount of rent reserved upon such reletting shall be deemed to be the fair rental value for the part of the Leased Premises so relet during the term of such reletting. (e) Rights and Remedies Cumulative. The rights and remedies herein conferred are cumulative and not exclusive of any other rights or remedies, and shall be in addition to every other right, power and remedy that Landlord may have, whether specifically granted herein, or presently or hereafter existing at law, in equity, or by statute. -25- 17. Bankruptcy. (a) Events of Bankruptcy. The following shall be Events of Bankruptcy under this Lease: (i) Tenant's becoming insolvent, as that term is defined in Title 11 of the United States Code (the "Bankruptcy Code"), or under the insolvency laws of any state, district, commonwealth or territory of the United States (the "Insolvency Laws"); (ii) the appointment of a receiver or custodian for any or all of Tenant's property or assets, or the institution of a foreclosure action upon any of Tenant's real or personal property; (iii) the filing of a voluntary petition under the provisions of the Bankruptcy Code or Insolvency Laws; (iv) the filing of an involuntary petition against Tenant as the subject debtor under the Bankruptcy Code or Insolvency Laws, which either (A) is not dismissed within sixty (60) days of filing, or (B) results in the issuance of an order for relief against the debtor; or (iv) Tenant's making or consenting to an assignment for the benefit of creditors or a common law composition of creditors. (b) Landlord's Rights Upon Event of Bankruptcy. Upon the occurrence of an Event of Bankruptcy, Landlord shall have all rights and remedies available to Landlord pursuant to Section 16; provided, however, that while a case in which Tenant is the subject debtor under the Bankruptcy Code is pending, Landlord shall not exercise its rights and remedies pursuant to Section 16 so long as (1) the Bankruptcy Code prohibits the exercise of such rights and remedies, and (2) Tenant or its Trustee in Bankruptcy (hereinafter referred to as "Trustee") (i) cures all defaults under this Lease, (ii) compensates Landlord for monetary damages incurred as a result of such defaults, (iii) provides adequate assurance of future performance on the part of Tenant as debtor in possession or on the part of the assignee tenant, and (iv) complies with all other requirements of the Bankruptcy Code. 18. Either Party May Perform the Other's Obligations. If Tenant shall fail to keep or perform any of its obligations as provided in this Lease in respect to (a) maintenance of insurance, (b) repairs and maintenance of the Leased Premises, (c) compliance with Legal Requirements, or (d) the making of any other payment or performance of any other obligation, then Landlord may (but shall not be obligated to do so) upon the continuance of such failure on Tenant's part for 10 days after written notice to Tenant (or after such additional period, if any, as Tenant may reasonably require to cure such failure if of a nature which cannot be cured within said 10 day period), or without notice in the case of an emergency, and without waiving or releasing Tenant from any obligation, and as an additional but not exclusive remedy, make any such payment or perform any such obligation and all sums so paid by Landlord and all necessary incidental costs and expenses, including attorney's fees, incurred by Landlord in making such payment or performing such obligation, together with interest thereon from the date of payment at the Default Interest Rate, shall be deemed additional rent and shall be paid to Landlord on demand, or at Landlord's option may be added to any installment of Basic Rent thereafter falling due, and if not so paid by Tenant, Landlord shall have the same rights and remedies as in the case of a default by Tenant in the payment of Basic Rent. If Landlord shall fail to keep or perform any of its obligations as provided in this Lease in respect to (a) maintenance of insurance, (b) repairs and maintenance of the Leased Premises, the Building or the common areas, or (c) the making of any other payment or performance of any other obligation, then Tenant may (but shall not be obligated to do so) upon the continuance of such failure on Landlord's part for 10 days after written notice to Landlord (or after such additional period, if any, as Landlord may reasonably require to cure such failure if of a nature which cannot be cured within said 10 day period), or without notice in the case of an emergency, and without waiving or releasing Landlord from any obligation, and as an additional but not exclusive remedy, make any such payment or perform any such obligation and all sums so paid by Tenant and all necessary incidental costs and expenses, including attorney's fees, incurred by Tenant in making such payment or performing such obligation, together with interest thereon from the date of payment at the Default Interest Rate, shall be paid by Landlord to Tenant on demand. 19. Security Deposit. -26- (a) Use and Application. Tenant has deposited with Landlord the Security Deposit, as security for the prompt, full and faithful performance by Tenant of each and every provision of this Lease and of all obligations of Tenant hereunder. Landlord has invested the Security Deposit, and shall keep the same invested, in (i) prime commercial paper, banker's acceptances or certificates of deposit in United States commercial banks (having net assets in excess of $100,000,000), in each case having a maturity of not more than 30 days, or (ii) obligations of the United States Government having a maturity of not more than 90 days, or (iii) one or more mutual funds which invest their assets primarily in investment of the type described in clauses (i) and (ii), or (iv) one or more interest-bearing accounts in financial institutions the deposits in which are insured by an agency of the United States. If an Event of Default occurs, Landlord may use, apply or retain the whole or any part of the Security Deposit for the payment of (i) any Basic Rent or Additional Charges which Tenant may not have paid or which may become due after the occurrence of such Event of Default, (ii) any sum expended by Landlord on Tenant's behalf in accordance with the provisions of this Lease, or (iii) any sum which Landlord may expend or be required to expend by reason of Tenant's default, including damages or deficiency in the reletting of the Leased Premises as provided in Section 16. The use, application or retention of the Security Deposit, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by law and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. If any portion of the Security Deposit is used, applied or retained by Landlord for the purpose set forth above, Tenant agrees, within 10 days after a written demand therefor is made by Landlord, to deposit cash with the Landlord in an amount sufficient to restore the Security Deposit to its original amount. (b) Return of Security Deposit. Provided that Tenant is not then in default, the Security Deposit, or any balance thereof, and all accrued interest or gains thereon, shall be returned to Tenant within thirty (30) days after the expiration of the Term. In the absence of evidence satisfactory to Landlord of any permitted assignment of the right to receive the Security Deposit, or the remaining balance thereof, Landlord may return the same to the original Tenant, regardless of one or more assignments of Tenant's interest in this Lease or the Security Deposit. In such event, upon the return of the Security Deposit (or balance thereof) to the original Tenant, Landlord shall be completely relieved of liability under this Section. (c) Return of Accrued Interest on Security Deposit. Within thirty (30) days after the execution of this Lease by both parties hereto, Landlord will return all accrued interest on the Security Deposit to Tenant. (d) Transfer of Security Deposit. In the event of a transfer of Landlord's interest in the Leased Premises, Landlord shall have the right to transfer the Security Deposit to the transferee thereof. In such event, upon the delivery by Landlord to Tenant of such transferee's written acknowledgment of its receipt of the Security Deposit, Landlord shall be deemed to have been released by Tenant from all liability or obligation for the return of the Security Deposit, and Tenant agrees to look solely to such transferee for the return of the Security Deposit and the transferee shall be bound by all provisions of this Lease relating to the return of the Security Deposit. (e) Restrictions on Encumbering. The Security Deposit shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior written consent of Landlord. (f) Letter of Credit. At any time during the Term, Tenant shall have the right to deliver to Landlord a letter of credit in the amount of the Security Deposit, to be held by Landlord as security for the performance by Tenant of all of the obligations to be performed by it under this Lease. In such event, Landlord shall refund the cash Security Deposit and all accrued interest thereon to Tenant within fifteen (15) days after receipt of such letter of credit. The letter of credit (and each replacement or renewal thereof) shall (i) be irrevocable, (ii) be issued by NationsBank, N.A. or another national bank having an office in Washington, D.C. or Fairfax County, Virginia, which has net assets of $50,000,000 or more, (iii) be for a term of not less than 12 months after the date of issuance, and (iv) authorize Landlord to draw thereon by a sight draft delivered to the issuing bank accompanied by an affidavit of a general partner, or executive officer, of Landlord that an Event of Default has -27- occurred and is continuing or that Tenant has failed to deliver a replacement letter of credit within the time required by this subsection. Tenant shall, on or before the 30th day before the expiration date of the letter of credit then being held by Landlord under this subsection, deliver to Landlord an extension or renewal of the letter of credit for a period of not less than 12 months. Tenant shall extend or renew the letter of credit, or any extension or renewal thereof, for successive periods of at least 12 months each throughout the Term. Upon the occurrence of an Event of Default or the Tenant's failure to deliver a replacement letter of credit within the time required by this subsection, Landlord shall be authorized to draw on the letter of credit then being held by it. Landlord shall receive, hold and apply the proceeds of the letter of credit in the same manner and on the same terms as the Security Deposit. All references in this Lease to the "Security Deposit" shall be deemed to include the proceeds of the letter of credit. 20. Subordination. (a) Mortgages. This Lease and Tenant's interest hereunder shall have priority over, and be senior to, the lien of any Mortgage made by Landlord after the date of this Lease. However, if at any time or from time to time during the Term, a Mortgagee or prospective Mortgagee requests that this Lease be subject and subordinate to its Mortgage, this Lease and Tenant's interest hereunder shall be subject and subordinate to the lien of such Mortgage and to all renewals, modifications, replacements consolidations and extensions thereof and to any and all advances made thereunder and the interest thereon. Tenant agrees that, within 10 days after receipt of a written request therefor from Landlord, it will, from time to time, execute and deliver any instrument or other document required by any such Mortgagee to subordinate this Lease and its interest in the Leased Premises to the lien of such Mortgage. If, at any time or from time to time during the Term, a Mortgagee of a Mortgage made prior to the date of this Lease shall request that this Lease have priority over the lien of such Mortgage, and if Landlord consents thereto, this Lease shall have priority over the lien of such Mortgage and all renewals, modifications, replacements, consolidations and extensions thereof and all advances made thereunder and the interest thereon, and Tenant shall, within 10 days after receipt of a written request therefor from Landlord, execute, acknowledge and deliver any and all documents and instruments confirming the priority of this Lease. In any event, however, if this Lease shall have priority over the lien of a Mortgage, this Lease shall not become subject or subordinate to the lien of any subordinate Mortgage, and Tenant shall not execute any subordination documents or instruments for any subordinate Mortgagee, without the written consent of the prior Mortgagee. (b) Ground Leases. This Lease and Tenant's interest hereunder shall be subject and subordinate to each and every ground or underlying lease hereafter made of the Building or the land on which it is constructed, or both, and to all renewals, modifications, replacements and extensions thereof. Tenant agrees that, within 10 days after receipt of written request therefor from Landlord, it will, from time to time, execute, acknowledge and deliver any instrument or other document required by any such lessor to subordinate this Lease and its interest in the Leased Premises to such ground or underlying lease. (c) First Mortgagee's Right of Cure. If (i) the Building, or any part thereof, or the land on which the Building is constructed, or the Landlord's leasehold estate in the Building, is at any time subject to a first Mortgage, and (ii) this Lease, or the Basic Rent and Additional Charges payable under this Lease, is assigned to the first Mortgagee, and (iii) the Tenant is given written notice of such assignment, including the name and address of the assignee, then, in that event, Tenant shall not terminate this Lease or make any abatement in the Basic Rent payable hereunder for any default on the part of the Landlord without first giving written notice, in the manner provided elsewhere in this Lease for the giving of notices, to such first Mortgagee, specifying the default in reasonable detail, and affording such first Mortgagee a reasonable opportunity to make performance, at its election, for and on behalf of the Landlord. (d) Non-Disturbance Agreement. Notwithstanding the provisions of subsections (a) and (b), neither this Lease nor any right, title or interest of Tenant in the Leased Premises shall be subordinate to the lien of any ground or underlying lease or any Mortgage made or placed after the date of this Lease, and Tenant shall not be required to subordinate this Lease or Tenant's interest in the Leased Premises to any such ground or underlying lease or any such Mortgage, unless such lease or Mortgage contains an express provision (or the lessor -28- or the Mortgagee or other party secured by the Mortgage agrees in writing) to the effect that so long as this Lease has not been terminated by reason of the occurrence of an Event of Default, the lessor or the Mortgagee (or other party secured by the Mortgage) will be bound by all of the terms and provisions of this Lease (except as otherwise set forth in such agreement), a default by the Landlord under such lease or by the mortgagor under such Mortgage shall not have any effect upon Tenant's right to occupy the Leased Premises in accordance with all of the terms and conditions of this Lease, and the term, estate and options of Tenant under this Lease shall not be terminated or otherwise affected by a termination of such ground or underlying lease or a foreclosure and sale or other action instituted under or in connection with such Mortgage. Contemporaneously with the execution of this Lease, Landlord shall deliver to Tenant a non-disturbance agreement, in form reasonably satisfactory to Tenant, from the Mortgagee under any existing Mortgage, to the effect that so long as this Lease has not been terminated by reason of the occurrence of an Event of Default, the Mortgagee (or other party secured by the Mortgage) will be bound by all of the terms and provisions of this Lease, a default by the mortgagor under such Mortgage shall not have any effect upon Tenant's right to occupy the Leased Premises in accordance with all of the terms and conditions of this Lease, and the term, estate and options of Tenant under this Lease shall not be terminated or otherwise affected by a foreclosure and sale or other action instituted under or in connection with such Mortgage. Contemporaneously with the execution of this Agreement, Landlord shall deliver to Tenant a non-disturbance agreement, in form reasonably satisfactory to Tenant, from the lessor under the Ground Lease, to the effect that so long as this Lease has not been terminated by reason of the occurrence of an Event of Default, the lessor will be bound by all of the terms and provisions of this Lease, a default by the Landlord under such Ground Lease shall not have any effect upon Tenant's right to occupy the Leased Premises in accordance with all of the terms and conditions of this Lease, and the term, estate and options of Tenant under this Lease shall not be terminated or otherwise affected by a termination of such Ground Lease. 21. Attornment. In the event of (a) a transfer of Landlord's interest in the Leased Premises, (b) the termination of any ground or underlying lease of the Building or the land on which it is constructed, or both, or (c) the purchase of the Building or Landlord's interest therein in a foreclosure sale or by deed in lieu of foreclosure under any Mortgage or pursuant to a power of sale contained in any Mortgage, then in any of such events Tenant shall, at Landlord's request, attorn to and recognize the transferee or purchaser of Landlord's interest or the lessor under the terminated ground or underlying lease, as the case may be, as Landlord under this Lease for the balance then remaining of the Term, and thereafter this Lease shall continue as a direct lease between such person, as "Landlord," and Tenant, as "Tenant," except that such lessor, transferee or purchaser shall not be liable for any act or omission of Landlord prior to such lease termination or prior to such person's succession to title, nor be subject to any offset, defense or counterclaim accruing prior to such lease termination or prior to such person's succession to title, nor be bound by any payment of Basic Rent or Additional Charges prior to such lease termination or prior to such person's succession to title for more than one month in advance. Tenant shall, upon request by Landlord or the transferee or purchaser of Landlord's interest or the lessor under the terminated ground or underlying lease, as the case may be, execute and deliver an instrument or instruments confirming the foregoing provisions of this Section. Tenant hereby waives the provisions of any present or future law or regulation which gives or purports to give Tenant any right to terminate or otherwise adversely affect this Lease, or the obligations of Tenant hereunder, upon or as a result of the termination of any such ground or underlying lease or the completion of any such foreclosure and sale. 22. Quiet Enjoyment. Landlord covenants that Tenant, upon paying the Basic Rent and the Additional Charges provided for in this Lease, and upon performing and observing all of the terms, covenants, conditions and provisions of this Lease on Tenant's part to be kept, observed and performed, shall quietly hold, occupy and enjoy the Leased Premises during the Term without hindrance, ejection or molestation by Landlord or any party lawfully claiming through or under Landlord. -29- 23. Landlord's Right of Access to Leased Premises. (a) Right of Entry. Landlord and its agents shall have the following rights in and about the Leased Premises: (i) to enter the Leased Premises at all reasonable times to examine the Leased Premises or for any of the purposes set forth in this Section or for the purpose of performing any obligation of Landlord under this Lease or exercising any right or remedy reserved to Landlord in this Lease, and if Tenant, its officers, partners, agents or employees shall not be personally present or shall not open and permit an entry into the Leased Premises at any time when such entry shall be necessary or permissible, to use a master key or forcibly to enter the Leased Premises; (ii) to erect, install, use and maintain pipes, ducts and conduits in and through the Leased Premises which, when completed, will not substantially interfere with the use or appearance or materially reduce the space afforded to Tenant in the Leased Premises; (iii) to exhibit the Leased Premises to others at reasonable times and for reasonable purposes; (iv) to make such repairs, alterations or improvements, or to perform maintenance of all heating, air- conditioning, elevator, plumbing, electrical and other mechanical facilities installed by Landlord, as may be required from time to time by this Lease to be made or performed by Landlord; (v) to take all materials into and upon the Leased Premises that may be required in connection with any such repairs, alterations, improvements or maintenance; and (vi) to alter, renovate and decorate the Leased Premises at any time during the Term if Tenant shall have removed all or substantially all of Tenant's property from the Leased Premises. Landlord agrees to give prior notice before it exercises its rights under this subsection, except that Landlord may enter the Leased Premises without notice in the case of an emergency. In making such an entry, Landlord agrees to use reasonable efforts to avoid interfering with the regular and usual conduct of the Tenant's business. Notwithstanding anything to the contrary herein, Landlord may obtain access to the double-secured areas of the Leased Premises only with the permission and assistance of Tenant's Director of Facilities, except in the event of an emergency posing a threat of immediate injury to persons or property. (b) Rights in Adjacent Areas. Except as otherwise provided in Section 10, all parts (except surfaces facing the interior of the Leased Premises) of all walls, windows and doors bounding the Leased Premises (including exterior Building walls, corridor walls, doors and entrances), all balconies, terraces and roofs adjacent to the Leased Premises, all space in or adjacent to the Leased Premises used for shafts, stacks, stairways, chutes, pipes, conduits, ducts, fan rooms, heating, air-conditioning, plumbing, electrical and other mechanical facilities installed by Landlord, service closets and other Building facilities, and the use thereof, as well as access thereto through the Leased Premises for the purposes of operation, maintenance, alteration and repair, are hereby reserved to Landlord. Nothing contained in this Section shall impose any obligation upon Landlord with respect to the operation, maintenance, alteration or repair of the Leased Premises or the Building. (c) Effect of Landlord's Entry. The exercise by Landlord or its agents of any right reserved to Landlord in this Section shall not constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any abatement or diminution of rent, or relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord, or its agents, or upon any lessor under any ground or underlying lease, by reason of inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's business, or otherwise. Landlord agrees to exercise its rights under this Section in a manner designed to minimize interference with Tenant's normal business operations, without any obligation, however, to employ labor at overtime or other premium pay rates. 24. Limitation on Landlord's Liability. (a) Accidents, etc. Except for damages resulting from the willful or negligent act or omission of Landlord, its agents, employees or contractors, Landlord shall not be liable to Tenant, its employees, agents, business invitees, licensees, customers, guests or trespassers, for any damage or loss to the property of Tenant or others located on the Leased Premises, or in the Building or the land on which it is built, or for any accident or injury to Persons in the Leased Premises or the Building, resulting from the necessity of repairing any portion of the Building; the use or operation (by Tenant or any other Person or Persons whatsoever) of any elevators, or heating, cooling, electrical or plumbing equipment or apparatus; the termination of this Lease by -30- reason of the destruction of the Building or the Leased Premises; any fire, robbery, theft, and/or any other casualty; any leaking in any part or portion of the Leased Premises or the Building; any water, wind, rain, or snow that may leak into, or flow from, any part of the Leased Premises or the Building; any acts or omissions of any occupant of any space adjacent to or adjoining all or any part of the Leased Premises; any water, gas, steam, fire, explosion, electricity or falling plaster; the bursting, stoppage or leakage of any pipes, sewer pipes, drains, conduits, appliances or plumbing works; or any other cause whatsoever. (b) Unavoidable Delays. Neither Landlord nor Tenant shall be required to perform any of its obligations under any provision of this Lease, or be liable for loss or damage for failure to do so, nor shall the other party be released from any of its obligations under this Lease because of such party's failure to perform, where such failure arises from or through Unavoidable Delays or Legal Requirements. If Landlord or Tenant is so delayed or prevented from performing any of its obligations during the Term, the period of such delay or such prevention shall be deemed added to the time herein provided for the performance of any such obligation. Lack of funds shall not be deemed an Unavoidable Delay for purposes of this Section 24(b), and nothing in this Section 24(b) shall excuse Tenant's failure to promptly pay any Basic Rent or Additional Charges due under this Lease, or Landlord's or Tenant's failure to maintain policies or deliver certificates of insurance required hereunder. (c) Building Services. If Landlord shall fail to supply, or be delayed in applying, any service expressly or impliedly to be supplied under this Lease, or shall be unable to make, or be delayed in making, any repairs, alterations, additions, improvements or decorations, or shall be unable to supply, or be delayed in supplying, any equipment or fixtures, and if such failure, delay or inability shall result from Unavoidable Delays, such failure, delay or inability shall not constitute an actual or constructive eviction, in whole or in part, or relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord or its agents by reason of inconvenience to Tenant, or injury to, or interruption of, Tenant's business, or otherwise, or entitle Tenant to any abatement or diminution of rent except as provided in Section 3(i). (d) Liability Limited to Landlord's Estate. Notwithstanding any provision to the contrary, Tenant shall look solely to the estate and property of Landlord in and to the Building (or the proceeds received by Landlord on a sale of such estate and property but not the proceeds of any financing or refinancing thereof) in the event of any claim against Landlord arising out of or in connection with this Lease, the relationship of Landlord and Tenant or Tenant's use of the Leased Premises, and Tenant agrees that the liability of Landlord arising out of or in connection with this Lease, the relationship of Landlord and Tenant or Tenant's use of the Leased Premises, shall be limited to such estate and property of Landlord (or sale, insurance or condemnation proceeds in connection therewith). No other properties or assets of Landlord shall be subject to levy, execution or other enforcement procedures for the satisfaction of any judgment (or other judicial process) or for the satisfaction of any other remedy of Tenant arising out of or in connection with this Lease, the relationship of Landlord and Tenant or Tenant's use of the Leased Premises, and if Tenant shall acquire a lien on or interest in any other properties or assets by judgment or otherwise, Tenant shall promptly release such lien on or interest in such other properties and assets by executing, acknowledging and delivering to Landlord an instrument to that effect prepared by Landlord's attorneys. 25. Estoppel Certificates. Tenant and Landlord each agrees, from time to time, within 15 days after written request therefor by the other party, to execute, acknowledge and deliver to the other party a statement in writing certifying to the other party, any Mortgagee, assignee of a Mortgagee, or any purchaser, of the Building or the land on which it is constructed, or both, or any other Person designated by the other party, as of the date of such statement, (i) that Tenant is in possession of the Leased Premises; (ii) that this Lease is unmodified and in full force and effect (or, if there have been modifications, that this Lease is in full force and effect as modified and setting forth such modifications); (iii) whether or not there are then existing any set-offs or defenses known to such party against the enforcement of any right or remedy of the other party, or any duty or obligation of such party, hereunder (and, if so, specifying the same in detail); (iv) the dates, if any, to which any Basic Rent or Additional Charges have been paid -31- in advance; (v) that such party has no knowledge of any uncured defaults on the part of the other party under this Lease (or, if such party has knowledge of any such uncured defaults, specifying the same in detail); (vi) that such party has no knowledge of any event having occurred that authorizes the termination of this Lease by such party (or, if such party has such knowledge, specifying the same in detail); (vii) the amount of any Security Deposit held by Landlord; and (viii) any additional facts reasonably requested by any such Mortgagee, assignee of a Mortgagee, purchaser or other Person. 26. Surrender of Leased Premises. (a) Possession. Tenant shall, on or before the last day of the Term, except as otherwise expressly provided elsewhere in this Lease, remove all of its property and peaceably and quietly leave, surrender and yield up to the Landlord the Leased Premises, free of subtenancies, broom clean and in good order and condition except for reasonable wear and tear, damage by fire or other casualty, or conditions requiring repair by Landlord hereunder at Landlord's expense. (b) Inspection of Leased Premises. At the time Tenant surrenders the Leased Premises at the end of the Term, or within twenty (20) days thereafter, Landlord and Tenant, or their respective agents, shall inspect the Leased Premises and shall prepare and sign an inspection form to describe the condition of the Leased Premises at the time of surrender. (c) Survival. The provisions of this Section shall survive any expiration or termination of this Lease. 27. Holding Over. If Tenant shall hold over possession of the Leased Premises after the end of the Term, Tenant shall be deemed to be occupying the Leased Premises as a Tenant from month to month, at one hundred fifty percent (150%) of the Basic Rent, adjusted to a monthly basis, and subject to all the other conditions, provisions and obligations of this Lease insofar as the same are applicable, or as the same shall be adjusted, to a month-to-month tenancy. 28. Mediation. In any case in which it is provided by the terms of this Lease that any matter shall be determined by mediation, then such mediation shall be in accordance with the Commercial Mediation Rules then in effect of the American Arbitration Association ("AAA"). The mediation proceeding shall be conducted in Washington, D.C., by one mediator selected by the AAA. The cost of the mediation, including filing fees with the AAA and the cost of the mediator, shall be borne equally by the parties. In the mediation sessions, the parties shall endeavor in good faith to resolve the claim or controversy at issue. Any party or the mediator shall have the right to terminate the mediation at any time after the first mediation session. Neither party may make any disclosure of the existence or results of the mediation without the prior written consent of the other party. The mediator may not make any disclosure of the existence or results of the mediation without the prior written consent of both parties. No discussions in the mediation shall be admissible in any litigation between the parties, and the mediator shall not be subject to subpoena to testify to any communication between the mediator and either party. If the parties are unable to settle the matter by mediation, then either party may submit such matter to litigation. 29. Parking. Throughout the Term, Tenant shall be entitled to the use of 675 parking spaces in the structured parking facility for the Office Park (the "Parking Spaces"), without additional charge therefor. The Parking Spaces shall be available to Tenant and/or its employees on an unreserved basis, in common with the other tenants of the Office Park. -32- 30. Renewal of Term. Provided that this Lease shall be in full force and effect and that Tenant shall not then be in default, Tenant shall have the right, at Tenant's sole option, to extend the Lease for one (1) consecutive additional period of five (5) years (such additional period being hereinafter referred to as the "Renewal Period", if exercised, and included in the definition of the Term). Such option to extend shall be exercised by Tenant giving written notice of the exercise to Landlord at least twenty-four (24) months prior to the expiration of the Initial Term of this Lease. The Renewal Period shall be for the same Basic Rent payable during the last Lease Year of the Initial Term, escalated at the commencement of the Renewal Period and at the commencement of each Lease Year thereafter by the Inflation Adjustment, and upon the same terms, covenants and conditions set forth in this Lease with respect to the Initial Term, and Tenant's obligations to pay Operating Expense Increases pursuant to Section 3(b) shall continue without interruption during the Renewal Period. In the event Tenant defaults beyond any applicable cure period under this Lease after providing notice of exercise of its renewal option but prior to the expiration of the Initial Term, such exercise shall, at Landlord's option exercised by written notice to Tenant, be void ab initio. 31. Shuttle Service. Landlord shall provide for Tenant' s employees, other tenants of the Building and other adjacent buildings owned by Landlord or its affiliates, and the employees of such other tenants a private shuttle bus service between the Building and the Vienna Metro Station. Subject to Unavoidable Delays, the shuttle bus service shall be provided throughout the Term and continuously during the hours between 7:00 a.m. and 8:00 p.m. on Business Days. Landlord shall use shuttle buses which have reasonably adequate seating capacity taking into account average passenger usage from time to time. Landlord shall provide private shuttle bus service for Tenant's employees at times in addition to those specified in this Section, at Tenant's expense, as mutually agreed upon by Landlord and Tenant. Landlord shall charge Tenant for after-hours service at an hourly rate from time to time established by Landlord, in its sole discretion, but in no event will the rate per hour charged to Tenant be more than an amount per hour which represents Landlord's reasonable estimate of its actual cost of providing such after-hours service, including labor, cost of fuel, and wear and tear on equipment, plus an allowance of 10% thereof to cover general overhead. In the event the same after-hours service is also requested by other tenants of the Building (or any other building owned by Landlord or its affiliates) in addition to Tenant, the charge therefor to each tenant requesting such after- hours service shall be a pro-rated amount based upon the net rentable area of the leased premises of all tenants requesting such after-hours service. Payment for such charges shall be due and payable to Landlord within 15 days after Tenant's receipt of an invoice therefor. Any dispute between Landlord and Tenant with respect to the adequacy of Landlord's shuttle bus service shall be submitted to mediation pursuant to Section 28. 32. Leasing Commission. Landlord and Tenant each represent and warrant to the other that neither of them has employed any broker, other than The Carey Winston Company, in carrying on the negotiations relative to this Lease. Tenant shall pay any commission due The Carey Winston Company in connection with this Lease. Landlord and Tenant shall each indemnify and hold harmless the other from and against any claim or claims for brokerage or other commission arising from or out of any breach of the foregoing representation and warranty. 33. Telephone Switch. Tenant intends, at its expense, to install a telephone switch in the Office Space to provide telephone service to the Leased Premises. Subject to agreement by Landlord and Tenant on marketing arrangements and other matters, Tenant shall have the right to use its telephone switch to provide telephone service to other tenants of the Building and any adjacent office building located in the Office Park. Tenant hereby agrees to indemnify and hold harmless Landlord from and against any and all claims, cases, actions, damages, liabilities and -33- expenses (including attorneys' fees) that arise from or are in connection with Tenant's provision of telephone services to other tenants. 34. General Provisions. (a) Binding Effect. The covenants, conditions, agreements, terms and provisions herein contained shall be binding upon, and shall inure to the benefit of, the parties hereto and, subject to the provisions of Section 15, each of their respective personal representatives, successors and assigns. (b) Governing Law. It is the intention of the parties hereto that this Lease (and the terms and provisions hereof) shall be construed and enforced in accordance with the laws of the State of Virginia. (c) Waivers. No failure by Landlord to insist upon the strict performance of any term, covenant, agreement, provision, condition or limitation of this Lease or to exercise any right or remedy consequent upon a breach thereof, and no acceptance by the Landlord of full or partial rent during the continuance of any such breach, shall constitute a waiver of any such breach or of any such term, covenant, agreement, provision, condition or limitation. No term, covenant, agreement, provision, condition or limitation of this Lease to be kept, observed or performed by Landlord or by Tenant, and no breach thereof, shall be waived, altered or modified except by a written instrument executed by Landlord or by Tenant, as the case may be. No waiver of any breach shall affect or alter this Lease, but each and every term, covenant, agreement, provision, condition and limitation of this Lease shall continue in full force and effect with respect to any other then existing or subsequent breach thereof. (d) Notices. No notice, request, consent, approval, waiver or other communication which may be or is required or permitted to be given under this Lease shall be effective unless the same is in writing and is delivered in person or sent by registered or certified mail, return receipt requested, first- class postage prepaid, (1) if to Landlord, at Landlord's Notice Address, or (2) if to Tenant, at Tenant's Notice Address, or at any other address that may be given by one party to the other by notice pursuant to this subsection. Such notices, if sent by registered or certified mail, shall be deemed to have been given at the time of mailing. (e) Entire Agreement. It is understood and agreed by and between the parties hereto that this Lease contains the final and entire agreement between said parties, and that they shall not be bound by any terms, statements, conditions or representations, oral or written, express or implied, not herein contained. It is understood and agreed, however, that the terms hereof shall be modified, if so required, for the purpose of complying with or fulfilling the requirements of any Mortgagee secured by a first Mortgage that may now be or hereafter become a lien on the Building, provided, however, that such modification shall not be in substantial derogation or diminution of any of the rights of the parties hereunder, nor increase any of the obligation or liabilities of the parties hereunder. (f) Jury Trial. Landlord and Tenant each hereby waives all right to trial by jury in any claim, action, proceeding or counterclaim by either Landlord or Tenant against the other on any matters arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant and/or Tenant's use or occupancy of the Leased Premises. (g) Venue. Tenant hereby waives any objection to the venue of any action filed by Landlord against Tenant in any state or federal court in the jurisdiction in which the Building is located, and Tenant further waives any right, claim or power, under the doctrine of forum non conveniens or otherwise, to transfer any such action filed by Landlord to any other court. (h) Corporate Authority. Concurrently with the signing of this Lease, Tenant shall furnish to Landlord certified copies of the resolutions of its Board of Directors (or of the executive committee of its Board of Directors) authorizing Tenant to enter into this Lease; and Tenant shall also furnish to Landlord evidence -34- (reasonably satisfactory to Landlord and its counsel) that Tenant is a duly organized corporation in good standing under the laws of the jurisdiction of its incorporation, is qualified to do business in good standing in the State of Virginia, has the power and authority to enter into this Lease, and that all corporate action requisite to authorize Tenant to enter into this Lease has been duly taken. (i) Time of the Essence. Time is of the essence in the performance of Landlord's and Tenant's obligations under this Lease. (j) Gender. Wherever appropriate herein, the singular includes the plural and the plural includes the singular. (k) Invalidity. If any provision of this Lease shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not be affected thereby. (1) Captions. The captions in this Lease are for convenience only and shall not affect the interpretation of the provisions hereof. (m) No Partnership. This Lease is not intended to create a partnership or joint venture between Landlord and Tenant in the conduct of their respective businesses. (n) Counterparts. This Lease has been executed in several counterparts, but all counterparts shall constitute one and the same instrument. (o) Deed of Lease. To the extent required under applicable law to make this Lease legally effective, this Lease shall constitute a deed of lease. 35. Approval of Building Food Service Tenants. Throughout the Lease Term, Landlord shall not lease any space in the Building to a food service tenant, or approve the transfer of any lease of space in the Building to a food service tenant, without Tenant's prior written approval of such food service tenant, which approval shall not be unreasonably withheld, conditioned or delayed. 36. Termination of Prior Lease. This Lease entirely supersedes the Lease Agreement dated January 30, 1987, as amended by the First Amendment, the Second Amendment and the Third Amendment, and the Lease Agreement dated January 30, 1987, as amended, is hereby terminated. IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be signed by their duly authorized partners or officers as of the day and year first above written. Landlord HMCE ASSOCIATES LIMITED PARTNERSHIP, R.L.L.P. By /s/ David W. Evans ------------------------- Tenant ICF KAISER HUNTERS BRANCH LEASING, INC. By /s/ Timothy P. O'Connor ------------------------- Vice President and Assistant Treasurer -35- EX-10.(H) 24 EXHIBIT 10(H) Exhibit 10(h) CONSOLIDATED, AMENDED AND RESTATED DEED OF LEASE THIS CONSOLIDATED, AMENDED AND RESTATED DEED OF LEASE is made and entered into as of the 12 day of November, 1997, effective for all purposes as of the 1st day of January, 1997, by and between (i) HMCE ASSOCIATES LIMITED PARTNERSHIP, R.L.L.P., a Virginia registered limited partnership, successor in interest to HB Limited Partnership, successor in interest to HMCE Associates Limited Partnership (hereinafter re(Pounds)erred to as "Landlord"), and (ii) ICF KAISER HUNTERS BRANCH LEASING, INC., a Delaware corporation, successor in interest to American Capital & Research Corporation (hereinafter referred to as "Tenant"), and referred to by singular pronouns of the neuter gender, regardless of the number and gender of the parties involved. WHEREAS, the Landlord and Tenant are parties to a certain Lease Agreement dated April 27, 1988 (the "Lease"), pursuant to which Landlord leased to Tenant certain office space containing approximately 105,057 square feet of net rentable area in the office building known as "Hunter's Branch - Phase I, Building 2" located in Fairfax, Virginia (the "Building"); and WHEREAS, Landlord and Tenant entered into a First Amendment to Lease Agreement dated July 29, 1988 (the "First Amendment"), which modified a component of the rent payable under the Lease; and WHEREAS, Landlord and Tenant entered into a Second Amendment to Lease Agreement dated February 12, 1990 (the "Second Amendment"), which modified certain provisions of the Lease relating to Basic Rent and Operating Expense Increases; and WHEREAS, Landlord and Tenant entered into a Third Amendment to Lease Agreement dated December 22, 1992 (the "Third Amendment"), whereby Tenant surrendered 167 rentable square feet of the leased premises to Landlord; and WHEREAS, Landlord and Tenant now desire to consolidate, amend and restate the Lease, the First Amendment, the Second Amendment and the Third Amendment in this Consolidated, Amended and Restated Lease Agreement.. NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Leased Premises, for the Term (as defined below), except that Landlord reserves and Tenant shall have no right in and to (a) the use of the exterior faces of all perimeter walls of the Building, (b) except as otherwise provided in subsections (d) and (e) of Section 10, the use of the roof of the Building, or (c) the use of the air space above the Building. 1. Definitions. (a) General Interpretive Principles. For purposes of this Lease, except as otherwise expressly provided or unless the context otherwise requires, (i) the terms defined in this Section have the meanings assigned to them in this Section and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other genders; (ii) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles; (iii) references herein to "Sections," "subsections," "paragraphs" and other subdivisions without reference to a document are to designated Sections, subsections, paragraphs and other subdivisions of this Lease; (iv) a reference to a sub-section without further reference to a Section is a reference to such subsection as contained in the same Section in which the reference appears, and this rule shall also apply to paragraphs and other subdivisions; (v) the words "herein," "hereof," "hereunder" and other words of similar import refer to this Lease as a whole and not to any particular provision; and (vi) the word "including" means "including, but not limited to"; and (vii) a reference to an Exhibit without further reference to another document is a reference to such Exhibit as an Exhibit to this Lease. (b) Special Lease Definitions. As used in this Lease the following words and phrases shall have the meanings indicated: Basic Rent: For each Lease Year, an amount equal to the product obtained by multiplying the Rentable Area of the Leased Premises by the Rent per Square Foot for such Lease Year. Building: The office building known as 9302 Lee Highway, Fairfax, Virginia 22031, on the land described in Exhibit A to this Lease, including Tenant's non-exclusive right in and to the parking deck and Landlord's leasehold estate in the underlying land. Building Rentable Area: 200,071 square feet, being the total net rentable area of the Building consisting of Office Space.. Comparison Month: The calendar month of March. CPI: The Consumer Price Index for All Urban Consumers (CPI-U) -- All Items (1982-84 = 100) for the Washington, DC - MD - VA metropolitan area currently prepared by the Bureau of Labor Statistics of the United States Department of Labor and published bi-monthly. If, during the Term, the CPI ceases to be published, then Landlord and Tenant shall mutually agree upon a substitute index, it being understood and agreed that such substitute index shall be similar index generally recognized as authoritative, and the parties shall reconcile the base thereof with the base of the CPI. If the parties cannot agree upon a substitute index, then the matter shall be submitted to arbitration under the rules of the American Arbitration Association. First Rental Period: As defined in (S)4.2(b) of the Ground Lease. Inflation Adjustment: For the sixth Lease Year (i.e. commencing November 1, 2003) and each Lease Year thereafter during the Term (including any Renewal Period), the lesser of (i) 2.5% of the Rent per Square Foot for the immediately preceding Lease Year or (ii) 225% of the percentage (if any) by which (x) the CPI for the Comparison Month in the immediately preceding Lease Year exceeds (y) the CPI for the Comparison Month in 1998. Exhibit C contains an illustration of the operation of the Inflation Adjustment. Initial Term: The period commencing on the Lease Commencement Date and ending on October 31, 2012, but in any event the Initial Term shall end on any date when this Lease is sooner terminated pursuant to its terms. Land: The land described in Exhibit A. Landlord's Notice Address: 1355 Piccard Drive, Suite 470, Rockville, Maryland 20850. Lease Commencement Date: January 1, 1997. Leased Premises: The space containing 104,890 square feet of Rentable Area, consisting of the part of the First Floor outlined on the floor plans of the Building attached hereto as Exhibit B, the entire Second through Sixth Floors inclusive, and the Penthouse. Leasing Broker: The Carey Winston Company, which broker shall be paid by Tenant. Office Park: The project consisting of the Building, the office building known as 9300 Lee Highway, Fairfax, Virginia 22031, and the common areas and facilities serving both such buildings. Office Space: The portion of the Building consisting of the First through Twelfth Floors, inclusive. -2- Operating Expense Base: The quotient obtained by dividing (i) $1,086,869.00, by (ii) the Building Rentable Area. Operating Expense Commencement Date: January 1, 1998. Operating Expense Increases: For the calendar year in which the Operating Expense Commencement Date occurs and each calendar year thereafter during the Term, an amount equal to Tenant's Proportionate Share of the excess of Landlord's Operating Expenses for such calendar year over the product obtained by multiplying the Operating Expense Base by the Building Rentable Area. Renewal Period: The additional period of five years for which Tenant is permitted to extend the Initial Term of this Lease pursuant to Section 30. Rent Commencement Date: January l, 1997. Rent per Square Foot: $23.16 during the period from January 1, 1997 through November 11, 1997 (i.e., total Basic Rent for such period shall be $2,096,478.10). $23.64 for the period from November 12, 1997 through December 31, 1997, and for each of the second, third, fourth and fifth Lease Years (i.e., Basic Rent for such period shall be $2,479,599.60 per Lease Year). For the sixth Lease Year, the Rent per Square Foot shall be an amount equal to $23.16, increased by the Inflation Adjustment for the sixth Lease Year. For the seventh Lease Year, and for each Lease Year thereafter during the Term, the Rent per Square Foot shall be an amount equal to the Rent per Square Foot for the immediately preceding Lease Year, increased by the Inflation Adjustment for the Lease Year for which the computation is being made. The foregoing amounts are net of the cost of electricity for the Leased Premises, which shall be billed to and paid by Tenant. Rentable Area: The net rentable area (in square feet) of all or any part of the Leased Premises from time to time. The net rentable area of the Leased Premises is agreed to be 104,890 square feet. Second Rental Period: As defined in (S)4.2(c) of the Ground Lease. Security Deposit: $125,000. Storage Space: The area, containing approximately 5,855 square feet of Rentable Area, located in the Penthouse, which is shown on the floor plans attached as Exhibit B to this Lease. Tenant's Notice Address: 9300 Lee Highway, Fairfax, Virginia 22031- 1207, Attn: Lease Administrator, with a copy to the same address, Attn: General Counsel. Tenant's Proportionate Share: The percentage from time to time which the Rentable Area of the portion of the Leased Premises consisting of Office Space is of the Building Rentable Area, which percentage is acknowledged and agreed to be forty-nine and one-half percent (49.5%) as of the date of this Lease. -3- Exhibit Term: The Initial Term and the Renewal Period, if any, as to which Tenant shall have effectively exercised its right to extend, but in any event the Term shall end on any date when this Lease is sooner terminated pursuant to the terms hereof. (c) General Definitions. As used in this Lease the following words and phrases shall have the meanings indicated: Additional Charges: All amounts payable by Tenant to Landlord under this Lease other than Basic Rent. All Additional Charges shall be deemed to be additional rent and all remedies applicable to the non-payment of Basic Rent shall be applicable thereto. Alterations: As defined in Section 9(a). Business Days: All days except Saturdays, Sundays and the following legal holidays: New Years Day, Memorial Day, Fourth of July, Labor Day, Thanksgiving Day and Christmas Day. Default Interest Rate: A rate per annum equal to the lesser of (a) the sum of (i) the base rate of interest from time to time established and publicly announced by NationsBank, N.A., Washington, D.C., in its sole discretion, as its then-applicable base rate of interest to be used in determining actual interest rates to be charged to certain of its borrowers, said base rate to change from time to time as and when the change is announced as being effective, and (ii) two percent (2%), or (b) ten percent (10%) per annum. Event of Default: Any of the events set forth in Section 16(a) as an event of default. Floor: A floor of the Building located above the foundation slab or above an area below grade level which is designated as a basement or cellar. The term "Floor" preceded by a number shall mean the indicated floor of the Building. Ground Lease: The Lease Agreement dated November 3, 1987, between The First Union National Bank of Virginia, as Trustee, as successor by merger to First American Bank of Virginia, Trustee, as lessor, and Landlord, as lessee, pursuant to which Landlord leases the land described in Exhibit A to this Lease. Landlord: The landlord named herein or any subsequent owner or lessee, from time to time, of the Landlord's interest in the Building. Lease: This Deed of Lease, as amended from time to time, and all Exhibits attached hereto. Lease Year: The period of 12 months commencing on the Lease Commencement Date and ending on the last day of the month which completes 12 full calendar months after the Lease Commencement Date, and each 12 month period thereafter commencing on the first day after the end of the immediately preceding Lease Year, except that the last Lease Year shall end on the last day of the Term. Legal Requirements: All laws, statutes, ordinances, orders, rules, regulations and requirements of all federal, state and municipal governments, and the appropriate agencies, officers, departments, boards and commissions thereof, and the board of fire underwriters and/or the fire insurance rating organization or similar organization performing the same or similar functions, whether now or hereafter in force, applicable to the Building or any part thereof and/or the Leased Premises, and notices from Landlord's Mortgagee, as to the manner of use or occupancy or the maintenance, repair or condition of the Leased Premises and/or the Building, and the usual and customary requirements of the carriers of all fire insurance policies maintained by Landlord on the Building. Mortgage: Any mortgage, deed of trust or other security instrument of record creating an interest in or affecting title to the Building or the land on which it is constructed, or both, or any part thereof, including a leasehold mortgage or subleasehold mortgage, and any and all renewals, modifications, consolidations, or extensions of any such instrument; Mortgagee shall mean the holder or beneficiary of any Mortgage. Operating Expenses: The aggregate of all costs and expenses reasonably and customarily paid or incurred on an accrual basis by Landlord in connection with the management, operation, servicing and maintenance of the Leased Premises, the Building, the Building parking facility and the land on which the Building is constructed including, but not limited to, employees' wages, salaries, welfare and pension benefits and other fringe benefits; payroll taxes; Real Estate Taxes; the Net Annual Rental payable by Landlord under (and as defined in) the Ground Lease; electricity charges for the main lobby, service areas and other common areas of the Building and the operation of the Building elevators; telephone service; painting of public or other common areas of the Building; exterminating service; detection and security services; trash removal; sewer and water charges; premiums for fire and casualty, liability, rent, workers' compensation, sprinkler, water damage and other insurance; repairs and maintenance to the Building; building, janitorial and cleaning supplies; uniforms and dry cleaning; snow removal; landscaping maintenance; window cleaning; service contracts for the maintenance of elevators, boilers, HVAC and other mechanical, plumbing and electrical equipment; legal fees (other than legal fees relating to the negotiation of leases with present or prospective tenants of the Building or the enforcement of Landlord's rights under leases with tenants for space in the Building); accounting fees; advertising; management fees of four percent (4%) of gross Building rents (exclusive of Operating Expense payments), whether or not paid to any Person having an interest in or under common ownership with Landlord; one-half of all costs and expenses of providing the shuttle bus services required by Section 31 (reduced by all amounts received by Landlord or its affiliates for after- hours shuttle bus service); dues and assessments to any property owners' association in which the Building is a member; window glass replacement, repair and cleaning; repair and maintenance of the grounds, including costs of landscaping, gardening and planting; service contracts with independent contractors, including but not limited to security and energy management service contractors; compensation (including employment taxes, fringe benefits, salaries, wages, medical, surgical and general welfare benefits [including health, accident and group life insurance]) for all personnel employed by Landlord or its property management company who perform duties in connection with the operation, management, maintenance and repair of the Building (in each case, allocated among all properties served by such employees on a reasonable basis, if such employees are utilized by more than one property), including a proportionate share of the salary and benefits of the property manager assigned to the Building, based upon the number of properties served by such property manager, but in no event more than one-fourth (1/4) of such salary and benefits; and all other expenses now or hereafter reasonably and customarily incurred in connection with the operation, maintenance, and management of first class office buildings in the Tysons Corner area of Northern Virginia. If Landlord makes an expenditure for a capital improvement to the Building to reduce Operating Expenses or to comply with Legal Requirements not in effect at the time the Building was constructed, and if, under generally accepted accounting principles, such expenditure is not a current expense, the cost thereof shall be amortized over a period equal to the useful life of such improvements, determined in accordance with generally accepted accounting principles, and the amortized cost allocated to each calendar year during the Term shall be treated as an Operating Expense. Except as provided in the preceding sentence, capital expenditures, depreciation and amortization shall not be included in Operating Expenses. Refunds of Real Estate Taxes (reduced by Landlord's reasonable expenses in obtaining such refunds), amounts received by Landlord from tenants of the Building for after- hours heating and air conditioning service and other special services and (to the extent that Operating Expenses include the cost of any repair or reconstruction work) the amount of any insurance recoveries, shall be credited against Operating Expenses in computing the amount thereof. Operating Expenses shall also be reduced as provided in Section 3(b). Operating Expenses shall not include financing or mortgage costs; depreciation expense; advertising for vacant space or building promotion; leasing commissions; executive salaries or compensation to any employee of Landlord or its property management company above the rank of the property manager assigned to the Building; more than one- fourth (1/4) of the salary and benefits of the property manager assigned to the Building; the cost of tenant improvements; legal fees for leasing vacant space in the Building or enforcing Landlord's rights under leases with tenants for space in the Building; or charges for electricity used directly by Tenant or by other tenants of the Building. Operating Expenses also shall not include: costs of additional insurance premiums for the Building due to any tenant's operations within such tenant's demised premises, which are payable by such tenant under such tenant's lease; the cost of repairs or replacements incurred by reason of fire or other casualty; or any other costs or -5- expenses for which Landlord actually receives reimbursement from any source (other than amounts paid by tenants of the Building with respect to Operating Expenses), including, without limitation, insurance proceeds, condemnation awards or warranties. Penthouse: The Floor immediately above the Twelfth Floor. Person: A natural person, a partnership, a corporation, a limited liability company and any other form of business or legal association or entity. Real Estate Taxes: All taxes, assessments, vault rentals, water and sewer rents, if any, and other charges, if any, general, special or other wise, including all assessments for schools, public betterments and general or local improvements, levied or assessed upon or with respect to the ownership of and/or all other taxable interests in the Building and the land on which it is built imposed by any public or quasi-public authority having jurisdiction and personal property taxes levied or assessed on Landlord's personal property used in connection with the operation, maintenance and repair of the Building. Real Estate Taxes shall not include any inheritance, estate, succession, transfer, recordation, gift, franchise, corporation, income or profit tax or capital levy. If at any time during the Term the methods of taxation shall be altered so that in addition to or in lieu of or as a substitute for the whole or any part of any Real Estate Taxes levied, assessed or imposed there shall be levied, assessed or imposed (i) a tax, license fee, excise or other charge on the rents received by Landlord, or (ii) any other type of tax or other imposition (except those excluded from Real Estate Taxes in the preceding sentence) in lieu of, or as a substitute for, or in addition to, the whole or any portion of any Real Estate Taxes, then the same shall be included as Real Estate Taxes. A tax bill or true copy thereof, together with any explanatory or detailed statement of the area or property covered thereby, submitted by Landlord to Tenant shall be conclusive evidence of the amount of taxes assessed or levied, as well as of the items taxed. If any real property tax or assessment levied against the land, buildings or improvements covered thereby or the rents reserved therefrom, shall be evidenced by improvement or other bonds, or in other form, which may be paid in annual installments, only the amount paid or payable in any Lease Year shall be included as Real Estate Taxes for that Lease Year. Taking: A taking of property or any interest therein or right appurtenant or accruing thereto, by condemnation or eminent domain or by action, proceedings, or agreement in lieu thereof, pursuant to governmental authority. Tenant: The tenant named herein and any permitted assignee under Section 15. Tenant's Special Installations: As defined in Section 9(d). Unavoidable Delays: Delays caused by strikes, acts of God, lockouts, labor difficulties, riots, explosions, sabotage, accidents, inability to obtain labor or materials, governmental restrictions, enemy action, civil commotion, fire, unavoidable casualty or similar causes beyond the reasonable control of the Landlord or the Tenant, as the case may be.No payment of any monetary amounts required of, or the obtaining or delivery of any required insurance policies by, either Landlord or Tenant shall be delayed or excused by acts of Unavoidable Delay. 2. Condition of Premises. Tenant accepts the Leased Premises in their as-is, where-is condition as of the date of this Lease, subject to any and all deficiencies and defects therein, and without any express or implied warranties of habitability, fitness, fitness for a particular purpose or otherwise. 3. Rent and Additional Charges. (a) Payment of Rent and Additional Charges. Tenant shall pay the Basic Rent for each Lease Year in equal monthly installments in advance on the first (1st) day of each month during the Term. The Basic Rent and all Additional Charges shall be paid promptly when due, in lawful money of the United States, without notice or -6- demand and without deduction, diminution, abatement, counterclaim or setoff of any amount or for any reason whatsoever, except as otherwise expressly provided in subsections (b) and (h) and Sections 13 and 14, to Landlord by wire transfer to such bank account as Landlord may from time to time designate. If Tenant makes any payment to Landlord by check (which, for any payment other than by wire transfer, shall require Landlord's consent), such payment shall be by check of Tenant and Landlord shall not be required to accept the check of any other person, and any check received by Landlord shall be deemed received subject to collection. If any check is mailed by Tenant, Tenant shall post such check in sufficient time prior to the date when payment is due so that such check will be received by Landlord on or before the date when payment is due. Tenant shall assume the risk of lateness or failure of delivery of the mails, and no lateness or failure of the mails will excuse Tenant from its obligation to have made the payment in question when required under this Lease. All bank service charges resulting from any bad checks shall be borne by Tenant. The rent reserved under this Lease shall be the total of all Basic Rent and Additional Charges, increased and adjusted as elsewhere herein provided, payable during the entire Term and, accordingly, the methods of payment provided for herein, namely, annual and monthly rental payments, are for convenience only and are made on account of the total rent reserved hereunder. (b) Payment of Operating Expense Increases. Tenant shall pay as additional rent Operating Expense Increases for each calendar year, commencing with the calendar year in which the Operating Expense Commencement Date occurs. Landlord shall make a reasonable estimate of Tenant's Operating Expense Increases for each calendar year (based on the projected Real Estate Taxes payable for the real estate tax fiscal years included in such calendar year, the other Operating Expenses for the preceding calendar year and known increases in other Operating Expenses for the current calendar year), and Tenant shall pay to Landlord 1/12th of the amount so estimated on the first day of each month in advance, beginning on January 1, 1998 and continuing thereafter throughout the Term. If Landlord's estimate of Tenant's Operating Expense Increases for any calendar year is received by Tenant after January 1 of the calendar year, Tenant shall pay to Landlord in a lump sum, within 15 days after receipt of the estimate, the arrearages in the monthly estimates for each month in the calendar year before receipt of the estimate and shall pay the remaining monthly installments on the first day of each month in advance during the balance of the calendar year. Within 150 days after the end of each calendar year, Landlord shall submit to Tenant a statement prepared by an independent certified public accountant setting forth in reasonable detail the Operating Expenses for such calendar year and the amount of Tenant's Operating Expense Increases for such calendar year. If Tenant's Operating Expense Increases so stated are more than the amount theretofore paid by Tenant for Operating Expense Increases based on Landlord's estimate, Tenant shall pay to Landlord the deficiency within 15 days after the submission of such statement. If Tenant's Operating Expense Increases so stated are less than the amount theretofore paid by Tenant for Operating Expense Increases based on Landlord's estimate, Landlord shall refund to Tenant the excess within 15 days after submission of such statement or Landlord, at its option, shall credit the excess against the next monthly installment of Basic Rent thereafter payable by Tenant under this Lease. Tenant, at its sole cost and expense, shall have the right, at reasonable times and upon reasonable notice given within 90 days after receipt of a statement for Tenant's Operating Expense Increases for any calendar year, to audit the statements furnished to Tenant for such calendar year. If either the Operating Expense Commencement Date shall not coincide with the beginning of a calendar year or the last day of the Term shall not coincide with the end of a calendar year, then the amount of Operating Expense Increases payable for the calendar year in which the Operating Expense Commencement Date or the last day of the Term occurs, as the case may be, shall be pro-rated on a daily basis between Landlord and Tenant based on the number of days in such calendar year after the Operating Expense Commencement Date or before the last day of the Term. Tenant's obligations under this subsection to pay Operating Expense Increases and Landlord's obligation to reimburse Tenant for an overpayment of Operating Expenses shall survive the expiration of the Term. (c) Gross Up of Operating Expenses. (1) If, during all or any part of a calendar year, any part of the Building Rentable Area is leased to a tenant (hereinafter referred to as a "Special Tenant") pursuant to a Lease in which operating expenses are not defined to include substantially the same components as the Operating Expenses (as defined in Section 1(c), the Operating Expenses for such calendar year shall be deemed to equal the Operating Expenses, as reasonably -7- estimated by Landlord, that would have been incurred by Landlord if all Special Tenant's leases included substantially the same components as the Operating Expenses. (2) If the average occupancy level of the Building for any calendar year is less than 95%, the Operating Expenses for such calendar year shall be deemed to equal the amount of Operating Expenses, as reasonably estimated by Landlord, that would have been incurred by Landlord during such calendar year if the average occupancy level of the Building for the calendar year had been 95%. For purposes of the preceding sentence, the "average occupancy level of the Building" for any calendar year shall be the arithmetic average of the Building Rentable Area occupied by tenants on the first day of each month during the calendar year. (3) If, during any calendar year, any part of the Building Rentable Area is leased to a Special Tenant and the average occupancy level of the Building is less than 95%, Landlord may make both the adjustments to Operating Expenses in paragraph (1) and the adjustment to Operating Expenses in paragraph (2). (d) Interest. If Tenant fails to make any payment of Basic Rent or Additional Charges by the earlier of (i) 5 business days after the due date thereof or (ii) 7 days after the due date thereof, interest shall, at Landlord's option, accrue on the unpaid portion thereof from the due date at the Default Interest Rate, but in no event at a rate higher than the maximum rate allowed by law, and shall be payable on demand. (e) Accord and Satisfaction. No payment by Tenant or receipt by Landlord of any lesser amount than the amount stipulated to be paid hereunder shall be deemed other than on account of the earliest stipulated Basic Rent or Additional Charges; nor shall any endorsement or statement on any check or letter be deemed an accord and satisfaction, and Landlord may accept any check or payment without prejudice to Landlord's right to recover the balance due or to pursue any other remedy available to Landlord. (f) Late Payment Charge. If Tenant fails to pay any Basic Rent or Additional Charges by the earlier of (i) 5 business days after the due date thereof or (ii) 7 days after the due date thereof, Tenant shall also pay to Landlord on demand a late payment service charge (to cover Landlord's administrative and overhead expenses of processing late payments) equal to the greater of $100.00 or 5% of such unpaid sum for each and every calendar month or part thereof after the due date that such sum has not been paid to Landlord. Such payment shall be deemed liquidated damages and not a penalty, but shall not excuse the untimely payment of rent. (g) Reduction of Real Estate Taxes. Landlord shall give Tenant a copy of any tax assessment notice with respect to the Building within 15 days after receipt thereof. Landlord will use reasonable efforts to obtain a reduction of Real Estate Taxes, provided Tenant and other tenants in the Building which, together with Tenant, occupy, collectively, at least fifty percent (50%) of the Building Rentable Area, make a written request to Landlord so to do and, in such request, each agrees to pay its proportionate share of the costs thereof as hereinafter provided, and Landlord receives such request not less than 20 days prior to the last day on which Real Estate Tax reduction proceedings for the particular real estate tax year in question may be commenced. The method and manner of conducting proceedings for such reduction, including the selection of counsel, shall be solely within the judgment and determination of Landlord, and Landlord may cancel, discontinue or settle such proceedings if, in Landlord's judgment, such cancellation, discontinuance or settlement is advisable. Landlord shall keep Tenant informed of the status of any such proceeding. If Landlord determines to cancel or discontinue such proceeding, Tenant shall have the right, either alone or with other tenants of the Building, to continue such proceeding at its or their own expense. To the extent that the reasonable costs and expenses, including legal fees, of such proceedings instituted and conducted by Landlord, requested by Tenant and others, exceed the amount of any tax refund, Tenant shall pay that proportion of such excess cost and expense which the Rentable Area of the Leased Premises bears to the total rentable area leased to all tenants making such request at the time it is made. (h) Abatement of Basic Rent. If, because of Landlord's failure to provide any of the services referred to in Sections 5(h), all or substantially all of the Leased Premises becomes untenantable and Tenant is unable to and does not, in fact, use all or substantially all of the Leased Premises for the uses permitted by Section -8- 6(a) for a continuous period of 10 Business Days, then provided the cause of such cessation of services is not the result, in whole or in principal part, of Tenant's negligence or intentional misconduct, Tenant shall be entitled to an abatement of Basic Rent for the period of time in which Tenant is unable to use, and does not, in fact, use all or substantially all of the Leased Premises for the uses permitted by Section 6(a). Any dispute between Landlord and Tenant as to Tenant's entitlement to an abatement of Basic Rent shall be submitted to mediation pursuant to Section 28. (i) Retroactive Rent Adjustment. Subject to the availability of Net Cash Flow, as defined in Section 2.2 of the Limited Liability Company Agreement of Hunters Branch Partners, L.L.C., reduced only by the Retroactive Rent Adjustments described herein and in Tenant's Lease for premises in 9300 Lee Highway, Vienna, Virginia ("Available Cash Flow"), Tenant shall receive Retroactive Rent Adjustments in the following amounts for the following 12-month periods ("Adjustment Years") during the Term:
Adjustment Year Amount of Rent Adjustment 11/1/97 - 10/31/98 $134,728.00 11/1/98 - 10/31/99 137,021.00 11/1/99 - 10/31/00 143,517.00 11/1/00 - 10/31/01 153,928.00 11/1/01 - 10/31/02 159,774.00 11/1/02 - 10/31/03 103,212.00 11/1/03 - 10/31/04 108,026.00 11/1/04 - 10/31/05 118,388.00 11/1/05 - 10/31/06 120,309.00 11/1/06 - 10/31/07 76,780.00 11/1/07 - 10/31/08 131,366.00 11/1/08 - 10/31/09 131,838.00 11/1/09 - 10/31/10 149,229.00 11/1/10 - 10/31/11 175,687.00 11/1/11 - 10/31/12 189,519.00
Subject to Available Cash Flow, the Retroactive Rent Adjustment shall be paid by Landlord to Tenant in equal monthly installments in arrears. If the monthly installment of the Retroactive Rent Adjustment for any month is not fully paid because of the lack of Available Cash Flow, then the unpaid portion shall be paid in a later month of the Term (if any) when there is sufficient Available Cash Flow to pay such unpaid portion. Landlord agrees that it will not pay, and Tenant agrees that it will not accept, a Retroactive Rent Adjustment for any month during any Adjustment Year unless the Annual Priority Return (as defined in Section 2.2 of the Limited Liability Company Agreement of Hunters Branch Partners, L.L.C.) for such month (together with accrued interest, if any) has been paid by Hunters Branch Partners, L.L.C. to the Person entitled to receive such payment. (j) Lease Restructuring Fee. Upon execution of this Lease, Tenant has paid Landlord a Lease Restructuring Fee in the amount of $208,257.12, receipt of which is hereby acknowledged by Landlord. 4. Common Areas. Throughout the Term, Tenant and its agents, employees and business invitees shall have the non-exclusive right, in common with other tenants of the Building and the adjacent office building, to use the public lobbies, elevators, corridors, stairways, parking garage, sky walk, patios, sidewalks, roadways and other common areas in the Building and the Land, and the toilet rooms in public areas of multi-tenant floors in the Building. Landlord shall have the right to rent parking spaces in the parking garage to persons other than tenants of the Building and the adjacent office building with Tenant's prior written approval, which approval shall not be unreasonably withheld, and which approval shall be deemed given provided that (i) no third party parking contract -9- shall be for a period of more than one (1) month, (ii) access to the parking garage shall be controlled by access or key cards, and (iii) reasonable security shall be provided with respect to the parking garage area. Landlord shall have the right at any time, without the Tenant's consent, to change the arrangement or location of entrances, passageways, doors, doorways, corridors, stairs, toilet rooms or other public portions of the Building, provided any such change does not unreasonably obstruct Tenant's access to the Leased Premises. 5. Services and Utilities. (a) Building Services. Throughout the Term, Landlord agrees that the Building will be managed and maintained in accordance with generally accepted industry practices and in a manner befitting a modern, first class rental office building in Fairfax County, Virginia, and that, subject to Legal Requirements, it will furnish to Tenant the following services: (1) Subject to the provisions of subsection (b), normal and usual electricity for lighting purposes and the operation of ordinary office equipment; (2) Adequate supplies for toilet rooms located in public areas of the Building; (3) Normal and usual cleaning and janitorial services after business hours on Business Days in accordance with the standards set forth in Exhibit D attached hereto and made a part hereof, provided, however, that Landlord shall not provide cleaning and janitorial services to the double-secured areas of the Leased Premises; (4) Hot and cold running water in the toilet rooms located in public areas of the Building and at valved outlets at the locations in the Leased Premises shown on Tenant's Space Layout; (5) Subject to the provisions of subsections (c) and (e), heating and air-conditioning to the Leased Premises when required for the comfortable occupancy of the Leased Premises, at reasonable temperatures, pressures and degrees of humidity, and in reasonable volumes and velocities, between the hours of 8:00 A.M. and 7:00 P.M. on Business Days and between the hours of 9:00 A.M. and 1:00 P.M. on Saturdays unless Saturday is a legal holiday; (6) Automatically operated elevator facilities 24 hours a day, seven days a week throughout the Term; (7) All electric bulbs and fluorescent tubes in permanently installed light fixtures in the Leased Premises and in the public areas of the Building; (8) Five (5) keys for the suite entry door to each portion of the Leased Premises located on a separate Floor at no cost to Tenant, but all additional keys, including replacements for lost keys, shall be issued only upon the payment of a reasonable cost for each additional key; (9) An electronic card security access system for the public areas of the Building and the garage and a reasonable number of access cards for use by Tenant's employees; and (10) A fully-operational structured parking facility for use by tenants of the Building with access limited to Persons authorized by Tenant or Landlord. (b) Electricity. Landlord shall not be liable in any way to Tenant for any failure or defect in the supply or character of electrical energy furnished to the Leased Premises by reason of any requirement, act or omission of the public utility serving the Building with electricity. Tenant's use of electrical energy in the Leased Premises shall not at any time exceed the capacity of any of the electrical conductors and equipment in or otherwise serving the Leased Premises as shown on Landlord's Building Plans. Tenant shall not install or operate in the -10- Leased Premises any electrically operated equipment which uses electric current in excess of the capacity of the feeders and panel boards serving the Leased Premises as shown on Landlord's Building Plans without Landlord's written consent, which consent may be conditioned upon Tenant's agreement to pay the cost of any additional wiring which may be required for the operation of such equipment. In order to insure that such capacity is not exceeded and to avert a possible adverse effect upon the Building electrical service Tenant shall give notice to Landlord whenever Tenant shall connect to the Building electrical distribution system any electrically operated equipment other than lamps, typewriters and similar small office machines. Any feeders or risers to supply Tenant's electrical requirements in addition to those originally installed, and all other equipment proper and necessary in connection with such feeders or risers, shall be installed by Landlord upon Tenant's request, at the sole cost and expense of Tenant, provided that, in Landlord's reasonable judgment, such additional feeders or risers are permissible under applicable laws and insurance regulations and the installation of such feeders or risers will not cause permanent damage or injury to the Building or cause or create a dangerous condition or unreasonably interfere with other tenants of the Building. All Floors occupied entirely by Tenant shall be separately metered or sub-metered for electricity and all other parts of the Leased Premises, may, at Landlord's option, be separately metered or sub-metered for electricity. Tenant shall pay (or reimburse Landlord for) the cost of purchasing and installing separate electric meters or sub-meters for each whole Floor and each part of a Floor included in the Leased Premises, and for any other part of the Leased Premises which Landlord elects to have metered or sub-metered. Tenant shall pay directly to the public utility company all charges for electricity used by Tenant in all parts of the Leased Premises which are separately metered, or Tenant shall reimburse Landlord directly for its electrical usage in all parts of the Leased Premises which are sub-metered. Landlord shall have the right from time to time to have a survey made by an independent electrical engineer or electrical consulting firm to be selected and paid for by Landlord to determine the amount of electricity consumed by Tenant in the parts of the Leased Premises which do not consist of an entire Floor. Tenant shall pay to Landlord, at monthly intervals upon receipt of an invoice therefor, the cost of electricity it consumes in the parts of the Leased Premises which do not consist of an entire Floor as determined by such electrical engineer or consulting firm. (c) Heating and Air-Conditioning. Landlord shall provide heat and air-conditioning at times in addition to those specified in paragraph (5) of subsection (a) at Tenant's expense, provided Tenant gives Landlord notice prior to 3:00 P.M. ( in the case of after-hours service on weekdays) and prior to 3:00 P.M. on Fridays or the day preceding a holiday (in the case of after-hours service on Saturdays, Sundays or holidays). In no event will the rate per hour charged to Tenant for after-hours service be more than an amount per hour which represents Landlord's reasonable estimate of its actual cost of providing such after-hours heating and air-conditioning service, including labor and wear and tear on equipment, but excluding the cost of electricity. Payment for such charges shall be due and payable to Landlord within 15 days after Tenant's receipt of an invoice therefor. (d) Maintenance of Pipes, Conduits, etc. Landlord reserves the right to erect, use, maintain and repair pipes, conduits, cables, plumbing, vents and wires in, to and through the Leased Premises as and to the extent that Landlord may now or hereafter deem to be necessary or appropriate for the proper operation and maintenance of the Building, or other tenants' installations in the Building, and the right at all times to transmit water, heat, air- conditioning and electric current through such pipes, conduits, cables, plumbing, vents and wires, provided that Landlord, in the exercise of such rights, shall not unreasonably inconvenience Tenant or unreasonably interfere with Tenant's use of the Leased Premises. (e) HVAC Specifications. Landlord agrees that the air-conditioning system in the portion of the Leased Premises consisting of Office Space will be capable of providing, and (unless otherwise ordered by federal, state or local governmental authorities) the system shall provide, temperatures of not more than 77 degrees F dry bulb and a relative humidity not in excess of 50% with outside conditions of 95 degrees F dry bulb and 78 degrees F wet bulb, except as otherwise provided in this subsection. Landlord agrees that the heating system in the portion of the Leased Premises consisting of Office Space will be capable of providing, and (unless otherwise ordered by federal, state or local governmental authorities) the system shall provide, temperatures of not less than 70 degrees F whenever the outdoor dry bulb temperature is lower than 65 degrees F but no lower than 0 degrees F, with indoor relative humidity at such level as not to permit the formation of condensation on the windows. Landlord shall not be responsible if the normal -11- operation of the Building air-conditioning system shall fail to provide conditioned air at reasonable temperatures, pressures or degrees of humidity or in reasonable volumes or velocities in any portions of the Leased Premises consisting of Office Space which (i) shall have a connected electrical load in excess of three watts per square foot of Rentable Area of the Leased Premises for all purposes (including lighting and power) or which shall have a human occupancy factor in excess of one person for each 100 square feet of Rentable Area of the portion of the Leased Premises consisting of Office Space (the average electrical load and human occupancy factors for which the Building air- conditioning system is designed), or (ii) because of rearrangement of partitioning or other Alterations made by or on behalf of Tenant or any Person claiming through or under Tenant (excepting work performed by Landlord for Tenant prior to Tenant's initial occupancy of the Leased Premises). (f) Access to HVAC Facilities. Landlord shall have unrestricted access to any and all air-conditioning facilities in the Leased Premises for the purposes of repairs, maintenance, alterations and improvements, but in exercising its rights under this subsection Landlord shall use its best efforts to minimize interference with Tenant's business in the Leased Premises. Notwithstanding anything to the contrary herein or in Section 5(d), except in the event of an emergency, Landlord may obtain access to the double-secured areas of the Leased Premises only with the permission and assistance of Tenant's Director of Facilities or his designee. Tenant shall provide Landlord with keys to the double-secured areas of the Leased Premises. Tenant's Director of Facilities, or his designee, shall be available to provide access to the double- secured areas of the Leased Premises on a non-emergency basis promptly after Landlord's request for permission to enter the same, and in any event no later than 24 hours after such request. (g) Reduction of Air-Conditioning Use. Tenant agrees to use reasonable efforts to keep or cause to be kept closed all window draperies or venetian blinds in the Leased Premises as and when necessary because of the sun's position whenever the air-conditioning system is in operation, and Tenant agrees at all times to cooperate fully with Landlord and to abide by all the reasonable regulations and requirements which Landlord may prescribe for the proper functioning and protection of the Building air-conditioning system. (h) Cessation of HVAC and Mechanical Services. Landlord reserves the right to stop the service of heating, air-conditioning, ventilating, elevator, plumbing, electricity or other mechanical systems or facilities in the Building, if necessary by reason of accident or emergency, or for repairs, alterations, replacements, additions or improvements which, in the reasonable judgment of Landlord, are desirable or necessary, until said repairs, alterations, replacements, additions or improvements shall have been completed. The exercise of such right by Landlord shall not constitute an actual or constructive eviction, in whole or in part, or relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord or its agents by reason of inconvenience or annoyance to Tenant, or injury to, or interruption of, Tenant's business, or otherwise, or entitle Tenant to any abatement or diminution of rent except as provided in Section 3(h). Except in cases of emergency repairs, Landlord will give Tenant reasonable advance notice of any contemplated stoppage of any such systems or facilities pursuant to the foregoing. In all cases, Landlord will use due diligence to complete any such repairs, alterations, replacements, additions or improvements promptly. Landlord shall also perform any such work in a manner designed to minimize interference with Tenant's normal business operations. 6. Use of Leased Premises. (a) Permitted Uses. Tenant shall use and occupy the portion of the Leased Premises consisting of Office Space solely for general office purposes, and shall use and occupy the portion of the Leased Premises consisting of Storage Space solely for storage, all in accordance with the applicable zoning regulations and consistent with the character and dignity of the Building, and shall not use, permit or suffer the use of the Leased Premises for any other purpose whatsoever without the prior written consent of the Landlord. Tenant shall not use, or permit the Leased Premises to be used, for the sale of food, beverages or tobacco products, except that Tenant may operate on the Leased Premises vending machines for the sale of food, beverages and tobacco products to its employees. Tenant shall not permit or suffer the Leased Premises to be occupied by anyone other than Tenant except as provided by Section 15. Tenant shall at all times have access to the Leased Premises 24 hours a day, -12- seven days a week, subject, however, in all respects to all the terms, covenants and conditions contained in this Lease. However, Landlord may regulate and restrict access to the Building at times other than normal business hours on Business Days for security purposes so long as Tenant ' s employees and agents have reasonable access to the Leased Premises without unreasonable inconvenience. (b) Restrictions on Use. Throughout the Term, Tenant covenants and agrees: (i) to pay 10 days before delinquency any and all taxes, assessments and public charges levied, assessed or imposed upon Tenant's business conducted in the Leased Premises, upon the leasehold estate created by this Lease or upon Tenant's fixtures, furnishings or equipment in the Leased Premises; (ii) not to use or permit or suffer the use of any portion of the Leased Premises for any unlawful purpose; (iii) not to use the plumbing facilities for any purpose other than that for which they were constructed, or dispose of any foreign substances therein; (iv) not to place a load on any floor exceeding the floor load per square foot which such floor was designed to carry in accordance with Landlord's Building Plans, and not to install, operate or maintain in the Leased Premises any heavy item of equipment except in such manner as to achieve a proper distribution of weight; (v) not to strip, overload, damage or deface the Leased Premises, or the hallways, stairways, elevators, parking facilities or other public areas of the Building, or the fixtures therein or used therewith; (vi) not to move any furniture or equipment into or out of the Leased Premises except at such times as Landlord may from time to time reasonably designate; (vii) not to use any floor adhesive in the installation of any carpeting; (viii) not to install any other equipment of any kind or nature which will or may necessitate any changes, replacements or additions to, or in the use of, the water system, heating system, plumbing system, air-conditioning system or electrical system of the Leased Premises or the Building, without first obtaining the written consent of Landlord; and (ix) at all times to comply with all Legal Requirements. (c) Compliance with Legal Requirements. Tenant will not use or occupy the Leased Premises in violation of any Legal Requirements. If any governmental authority, after the commencement of the Term, shall contend or declare that the Leased Premises are being used for a purpose which is in violation of any Legal Requirements, then Tenant shall, upon five days' notice from Landlord, immediately discontinue such use of the Leased Premises. If thereafter the governmental authority asserting such violation threatens, commences or continues criminal or civil proceedings against Landlord for Tenant's failure to discontinue such use, in addition to any and all rights, privileges and remedies given to Landlord under this Lease for default therein, Landlord shall have the right to terminate this Lease forthwith. Tenant shall indemnify and hold Landlord harmless from and against any and all liability for any such violation or violations. (d) Compliance with Insurance Requirements. Tenant shall not do, permit or suffer to be done any act, matter, thing or failure to act in respect of the Leased Premises and/or the Building that will invalidate or be in conflict with fire insurance policies covering the Building or any part thereof, and shall not do, or permit anything to be done, in or upon the Leased Premises and/or the Building, or bring or keep anything therein, which shall increase the rate of fire insurance on the Building or on any property located therein. If, by reason of the failure of Tenant to comply with the provisions of this subsection, the fire insurance rate shall at any time be higher than it otherwise would be, then Tenant shall reimburse Landlord and any other tenant of the Building, on demand, for that part of all premiums for any insurance coverage that shall have been charged because of such violation by Tenant and which Landlord or such other tenant, or both, shall have paid on account of an increase in the rate or rates in its own policies of insurance. Tenant shall not be responsible for any increase in fire insurance rates generally applicable to office space in Fairfax County, Virginia, and not resulting from the particular manner in which Tenant uses the Leased Premises. (e) No Flammable Substances. Tenant shall not bring or permit to be brought or kept in or on the Leased Premises any flammable, combustible or explosive fluid, material, chemical or substance except standard cleaning fluid, standard equipment and materials (including magnetic tape) customarily used in conjunction with business machines and equipment of the type used from time to time by Tenant in reasonable quantities. -13- 7. Care of Leased Premises. (a) By Tenant. Tenant shall act with care in its use and occupancy of the Leased Premises and the fixtures therein and, at Tenant's sole cost and expense, shall make all repairs and replacements to the Leased Premises, structural or otherwise, necessitated or caused by the acts, omissions or negligence of Tenant or any Person claiming through or under Tenant or by the use or occupancy or manner of use or occupancy of the Leased Premises by Tenant or any such Person; however the foregoing provisions of this subsection shall be subject to the provisions of Section 13. Without affecting Tenant's obligations set forth in the preceding sentence, Tenant, at Tenant's sole cost and expense, shall also (i) make all repairs and replacements, as and when necessary, to Tenant's Special Installations and to any Alterations made or performed by or on behalf of Tenant or any Person claiming through or under Tenant, (ii) perform all maintenance and make all repairs and replacements, as and when necessary, to any air-conditioning equipment, private elevators, escalators, conveyors or mechanical systems (other than the standard equipment and systems serving the Building) which may be installed in the Leased Premises, or elsewhere in the Building and serving the Leased Premises, by Landlord, Tenant or others, (iii) perform all maintenance and make all repairs and replacements, as and when necessary, to the antennas and satellite dishes installed by Tenant on the roof of the Building and make all repairs to the roof caused by such installation, and (iv) perform regular cleaning and janitorial services in the double-secured areas of the Leased Premises. However, except as otherwise provided in this Lease, Tenant shall not have any right to install air-conditioning equipment, elevators, escalators, conveyors or mechanical systems. In addition to the foregoing, all damage or injury to the Leased Premises and to its fixtures, appurtenances and equipment or to the Building or to its fixtures, appurtenances and equipment caused by Tenant moving property in or out of the Building or by installation or removal of furniture, fixtures or other property by Tenant shall be repaired, restored or replaced promptly by Tenant, at its sole cost and expense, to the reasonable satisfaction of Landlord. All such aforesaid repairs, restoration and replacements shall be in quality and class equal to the original work or installation but in no event need exceed Building standards. (b) By Landlord. Except as otherwise provided in subsection (a), Landlord shall perform the following maintenance and repairs as and when necessary (the costs of which shall be Operating Expenses hereunder, to the extent included in the definition of Operating Expenses in Section 1(c)): (i) structural repairs to the Leased Premises and Building; (ii) maintenance and repairs required in order to provide the elevator, plumbing, electrical, heating and air-conditioning services to be furnished by Landlord pursuant to this Lease; (iii) maintenance of and repairs to exterior portions of the Building, including the windows, balconies and roof thereof; (iv) maintenance of and repairs to the toilet rooms in the Building, and to the public lobbies, elevators, corridors, stairways, parking garage, sky walk, patios, sidewalks, roadways and other common areas in the Building and the Land; and (v) other repairs to the Leased Premises and the Building necessary for Tenant's use and enjoyment of the Leased Premises. Landlord's obligations to make repairs to the Leased Premises (but not the Building) under the preceding sentence shall not accrue until after notice to Landlord of the necessity for any specific repair. 8. Rules and Regulations. Tenant and its agents and employees shall comply with and observe all reasonable rules and regulations concerning the use, management, operation, safety and good order of the Leased Premises and the Building which may from time to time be promulgated by Landlord, provided that such rules and regulations are not inconsistent with the provisions of this Lease and do not materially interfere with Tenant's use of the Leased Premises. Initial rules and regulations, which shall be effective until amended by Landlord, are attached to this Lease as Exhibit E hereto and made a part hereof. Tenant shall be deemed to have received notice of any amendment to the rules and regulations when a copy of such amendment has been delivered to Tenant at the Leased Premises or has been mailed to Tenant in the manner prescribed for the giving of notices. If Tenant disputes the reasonableness of any additional rule or regulation hereafter made or adopted by Landlord, the parties agree to submit the question of the reasonableness of such rule or regulation for decision to the governing board for the time being of the Building Owners and Managers Association of Washington, D.C., or to such impartial person or persons as it or the parties hereto may designate, whose determination shall be final and conclusive upon the parties -14- hereto. Tenant may not dispute the reasonableness of any additional rule or regulation unless Tenant 's intention to do so shall be asserted by notice given to Landlord within 15 days after notice is given to Tenant of the adoption of any such additional rule or regulation. Landlord shall not be responsible to Tenant for any violation of the rules and regulations, or the covenants or agreements contained in any other lease, by any other tenant of the Building, or such tenant's agents or employees, and Landlord may waive in writing, or otherwise, any or all of the rules or regulations in respect of any one or more tenants. 9. Tenant's Alterations and Installments. (a) Restrictions on Alterations. Tenant shall not make or perform, or permit the making or performance of, any alterations, installations, improvements, additions or other physical changes in or about the Leased Premises (referred to collectively as "Alterations") without Landlord's prior consent. Landlord agrees not unreasonably to withhold or delay its consent to any nonstructural Alterations proposed to be made by Tenant to adapt the Leased Premises for Tenant's business purposes or the business purposes of any other permitted occupant of the Leased Premises, except that Landlord shall have no obligation to consent to any Alteration which will reduce the value or utility of the Building or affect the outside appearance of the Building or the color or style of any venetian blinds supplied by Landlord (except that Tenant may remove any such venetian blinds provided Tenant promptly replaces such venetian blinds with venetian blinds of a similar type and color). Notwithstanding the foregoing provisions of this subsection or Landlord's consent to any Alterations, all Alterations, whether made prior to or during the Term, shall be made and performed in conformity with and subject to the following provisions: (i) all Alterations shall be made and performed at Tenant's sole cost and expense and at such time and in such manner as Landlord may reasonably from time to time designate; (ii) Alterations shall be made only by contractors or mechanics approved by Landlord, such approval not to be unreasonably withheld or delayed; (iii) no Alteration shall materially affect any part of the Building other than the Leased Premises or adversely affect any service required to be furnished by Landlord to Tenant or to any other tenant or occupant of the Building; (iv) all business machines and mechanical equipment shall be placed and maintained by Tenant in settings sufficient in Landlord's reasonable judgment to absorb and prevent vibration, noise and annoyance to other tenants or occupants of the Building; (v) Tenant shall submit to Landlord reasonably detailed plans and specifications for each proposed alteration and shall not commence any such Alteration without first obtaining Landlord's approval of such plans and specifications, which approval will not be unreasonably withheld or delayed; (vi) all Alterations in or to the electrical facilities in or serving the Leased Premises shall be subject to the provisions of Section 5 relating to exceeding electrical capacity; (vii) notwithstanding Landlord's approval of plans and specifications for any Alteration, all Alterations shall be made and performed in full compliance with all Legal Requirements and in accordance with the Rules and Regulations; (viii) all materials and equipment to be incorporated in the Leased Premises as a result of all Alterations shall be of good quality; and (ix) Tenant shall require any contractor performing Alterations to carry and maintain at all times during the performance of the work, at no expense to Landlord, (i) a policy of comprehensive public liability insurance, including contractor's liability coverage, contractual liability coverage, completed operations coverage, contractor's protective liability coverage and a broad form property damage endorsement, naming Landlord and (at Landlord's request) any Mortgagee of the Building and any management agent as additional named insureds), with such policy to afford protection to the limit of not less than $2,000,000 with respect to bodily injury or death to any number of persons in any one accident and to the limit of not less than $1,000,000 to damage to the property of any one owner from one occurrence, and (ii) workers' compensation or similar insurance in the form and amounts required by the laws of the State of Virginia. In the event the estimated cost of an Alteration (which shall include the aggregate cost of a series of Alterations which are reasonably aggregated into a single project) is in excess of $100,000.00, or in the event of an Alteration to a structural member of, or mechanical system in, the Leased Premises, Landlord shall have the right to place other and further restrictions and conditions thereon prior to Tenant being authorized to commence such Alteration. Such additional conditions may include, by way of illustration and not of limitation, the requirement that the contractor be bonded or bondable. In the event of any dispute between the parties as to whether or not Landlord has acted reasonably in any case with respect to which Landlord is required, pursuant to the provisions of this subsection (a), to do so, Tenant's sole remedy shall be to submit such dispute to mediation pursuant to Section 28. If the determination in any such mediation shall be adverse to Landlord, Landlord nevertheless shall not be liable to -15- Tenant for breach of Landlord's covenant to act reasonably, and Tenant's sole remedy in such event shall be to proceed with the proposed Alterations. However, if the parties are unable to settle such matter by mediation, and such matter is submitted to litigation, Landlord's liability and Tenant's remedies shall not be so limited. (b) Tenant's Right to Cure. If Tenant shall be in default under this Section by reason of the making of any Alteration not hereby authorized or by reason of failure to give any notice or to obtain any approval required herein, Tenant may cure such default within the applicable grace period provided in this Lease for curing such default by removing such Alteration and restoring the Leased Premises to their former condition, as provided in Section 7. (c) Fixtures Become Landlord's Property. Except to the extent specifically provided in subsection (e), all appurtenances, fixtures, improvements, additions and other property attached to or installed in the Leased Premises, whether by Landlord or Tenant or others, and whether at Landlord's expense, or Tenant's expense, or the joint expense of Landlord and Tenant, which are of a permanent nature or which cannot be removed without structural damage to the Building, shall be and remain the property of Landlord. Any replacements of any property of Landlord, whether made at Tenant's expense or otherwise, shall be and remain the property of Landlord. (d) Tenant's Special Installations. All furniture, furnishings and trade fixtures, excepting lighting fixtures and equipment, but including, without limitation, murals, carpets, rugs, business machines and equipment, vaults, vault doors and door frames, and vault equipment, if any, safe deposit equipment, counterscreens, grillwork, cages, partitions which are moveable, railings, raised floors, escalators, conveyors, stairs, elevators, paneling, equipment relating to food preparation, food storage and serving, dishwashing and cleaning devices and air-conditioning equipment, and any other moveable property installed by, or at the expense of Tenant, including any such property paid for with any allowance provided by Landlord to Tenant, shall remain the property of Tenant and are referred to herein as "Tenant's Special Installations". Tenant may at its expense remove any part of said property at any time during the Term, and shall at its expense remove all of said property at the expiration or other termination of the Term unless Landlord shall otherwise consent in writing. Upon removal of any or all of said property Tenant shall then repair all damage caused by such removal. Any of Tenant's Special Installations which are not removed from the Leased Premises at the expiration of the Term shall be deemed to have been abandoned by Tenant and may be disposed of by Landlord without liability to Tenant. (e) Mechanics' Liens. Notice is hereby given that Landlord shall not be liable for any labor or materials furnished or to be furnished to Tenant upon credit, and that no mechanic's, materialman's or other lien for any such labor or materials shall attach to or affect the reversion or other estate or interest of Landlord in and to the Leased Premises or the Building. Whenever and as often as any mechanic's lien or materialman's lien shall have been filed against the Leased Premises or the Building based upon any act or interest of Tenant or of anyone claiming through Tenant, or if any lien or security interest with respect thereto shall have been filed affecting any materials, machinery or fixtures used in the construction, repair or operation thereof or annexed thereto by Tenant or its successors in interest, Tenant shall forthwith take such action by bonding, deposit or payment as will remove or satisfy the lien or other security interest and in default thereof after the expiration of 20 days after notice to Tenant, Landlord, in addition to any other remedy under this Lease, may pay the amount secured by such lien or security interest or discharge the same by deposit and the amount so paid or deposited shall be collectible as additional rent. The provisions of this subsection shall not be applicable to liens filed with respect to work done for Tenant's account by Landlord. 10. Name of Building; Tenant's Signs. (a) Name. Landlord agrees that, throughout the Term, it will not use any name for the Building other than its street address without first obtaining the Tenant's written consent, which Tenant agrees not unreasonably to withhold or delay. Landlord expressly reserves the right to have the Building designated by a street number or numbers and to affix to the Building, at locations designated by Landlord, signs indicating any such number or numbers and the name of the Building (if any) as selected from time to time by Landlord in accordance -16- with the provisions of this subsection. Landlord agrees that it will not install signs on the exterior of the Building, except for (i) signs for retail tenants, and (ii) Tenant's signs permitted by subsection (d). (b) Restrictions on Exterior Signs. Except as otherwise provided in subsection (d), Landlord has not granted to Tenant any rights in or to the roof or the outer side of the outside walls of the Building, control of which is hereby reserved by Landlord. Tenant shall not display or erect any lettering, signs, advertisements, awnings or other projections on the exterior of the Leased Premises or in the interior of the Leased Premises if visible from a public way, except for customary hallway door lettering. (c) Directory Tablets. Landlord, at its expense, shall maintain the existing directory tablets (i) in the main lobby of the Building, (ii) in the skywalk between the Building and the other building in the Office Park, and (iii) on the walkway between the Building and the other building in the Office Park, upon each of which Landlord, at Tenant's expense, will affix Tenant's name and a reasonable number of names of its officers, partners or employees. The size, color and style of such directories and names affixed thereto shall be selected by Landlord. (d) Tenant's Permitted Signs. Landlord shall permit Tenant throughout the Term to install and maintain, subject to Legal Requirements, two suitable signs on the exterior of the Building. The location, size, color and style of Tenant's exterior signs shall be subject to Landlord's approval, such approval not to be unreasonably withheld or delayed. Landlord hereby approves Tenant's signs which are currently on the Building, and agrees that, if Tenant's name is changed, Tenant, at its expense, may replace such signs with similar signs displaying the new name. (e) Access to Roof. Throughout the Term, Landlord shall permit Tenant to install and maintain, subject to Legal Requirements and the provisions of this Section 10(e), not more than one (1) satellite or antenna dish on the roof of the Building ("Tenant's Roof Use"). (i) Landlord shall make available to Tenant access to and a location mutually acceptable to Landlord and Tenant on the roof for the construction, installation, maintenance, repair, operation and use of such satellite or antenna dishes. Tenant shall screen such installations in a manner mutually acceptable to Landlord and Tenant. Tenant shall have the right to remove such satellite or antenna dishes and any related equipment from the Building at the expiration or other termination of the Term of this Lease, provided that Tenant repairs any damage occasioned by such removal. Tenant shall pay all costs associated with the installation, maintenance, repair, use, insurance and removal of such satellite or antenna dishes and any related equipment. (ii) Tenant shall give Landlord's Building manager reasonable telephonic notice before any entry onto the roof of the Building by Tenant's agents, employees or contractors, and shall permit Landlord's Building manager to accompany Tenant's agents, employees or contractors on any such entry onto the roof. Except as otherwise hereinafter set forth in this Section 10(e), Landlord shall not be liable for any claims, losses, actions, damages, liabilities or expenses arising from any satellite or antenna dish or related equipment installed by Tenant on the roof of the Building, or the installation, maintenance, repair, use or removal of such dish and related equipment, unless caused by the negligence or willful misconduct of Landlord, its agents, employees or contractors. (iii) Tenant's Roof Use shall be undertaken so as to not interfere with the operation of other equipment on the roof of the Building or the roof of the other building in the Office Park. If Tenant's equipment on the roof of the Building interferes with the operation of any such other equipment, then Tenant, at its expense, shall take whatever measures may be necessary to eliminate such interference. (iv) If the rate of any insurance carried by Landlord is increased as a result of Tenant's Roof Use, then Tenant will pay to Landlord within ten (10) days before the date Landlord is obligated to pay a premium on the insurance (or within ten (10) days after Landlord delivers to Tenant a certified statement from Landlord's insurance carrier stating that the rate increase was caused by Tenant's Roof Use, whichever date is later), a sum equal to the difference between the original premium and the increased premium resulting from Tenant's Roof Use. -17- (v) Landlord has not made any representations or promises pertaining to the suitability of the Building's roof for Tenant's Roof Use. Tenant, solely for the purpose of this Section 10(e) and its right to rooftop access hereunder, accepts the rooftop in its "as is" condition. (vi) Tenant will obtain prior to installation, any and all governmental licenses, approvals necessary for the installation, maintenance and use of any equipment installed pursuant to this Section 10(e). Tenant's Roof Use shall not in any way conflict with any applicable Legal Requirements. Tenant shall indemnify and hold Landlord harmless from and against any and all loss, cost (including reasonable attorney's fees incurred in defending Landlord), damage or liability arising out of any violation by Tenant's Roof Use of any applicable Legal Requirements. (vii) Tenant's Roof Use shall be exercised: (1) in such manner as will not create any hazardous condition or interfere with or impair the operation of the heating, ventilation, air conditioning, plumbing, electrical, fire protection, life, safety, public utilities or other systems or facilities in the Building; (2) in compliance with all applicable Legal Requirements; (3) in such a manner as will not unreasonably interfere with Landlord's operation or maintenance of the Building; (4) at Tenant's cost, including the cost of repairing any damage to the Building and any personal injury and/or property damage caused by the installation, inspection, adjustment, maintenance, removal or replacement of any of Tenant's equipment on the roof; and (5) in a manner which will not void or invalidate any roof warranty then in effect with respect to the roof of the Building. Tenant's Roof Use shall be used solely in the ordinary course of Tenant's business operations (and not for resale by Tenant), and any use of the roof outside of the ordinary course of Tenant's business operations (such as, but not limited to, subleasing portions of the roof for profit to third parties, in order for such third parties to establish communications transmission facilities) shall be subject to Landlord's consent, which consent shall not be unreasonably withheld, but may be conditioned, inter alia, upon the payment by Tenant to Landlord of any net revenues paid to Tenant in respect thereof. 11. Liability Insurance. (a) Required Coverage. Tenant, at Tenant's sole cost and expense, shall obtain and maintain in effect at all times during the Term, a policy of comprehensive general public liability insurance with broad form property damage endorsement, naming Landlord and (at Landlord's request) any Mortgagee of the Building and any management agent as additional insured(s), protecting Landlord, Tenant and any such Mortgagee and management agent against any liability for bodily injury, death or property damage occurring upon, in or about any part of the Building, including the roof, or the Land, the Leased Premises or any appurtenances thereto, with such policies to afford protection to the limit of $5,000,000 with respect to bodily injury or death to any one person, to the limit of $5,000,000 with respect to bodily injury or death to any number of persons in any one accident, and to the limit of $5,000,000 with respect to damage to the property of any one owner from one occurrence. Such comprehensive liability insurance may be effected by a policy or policies of blanket insurance which cover other property in addition to the Leased Premises, provided that the protection afforded thereunder shall be no less than that which would have been afforded under a separate policy or policies relating only to the Leased Premises and provided further that in all other respects any such policy shall comply with the other provisions of this Section. (b) Policy Requirements. The insurance policy required to be obtained by Tenant under this Section: (i) shall be issued by insurance companies rated A- or better in the most current issue of Best's Insurance Reports, licensed to do business in the state in which the Building is located and domiciled in the United States; and (ii) shall be written as primary policy coverage and not contributing with or in excess of any coverage which Landlord may carry. Neither the issuance of any insurance policy required under this Lease, nor the minimum limits specified herein with respect to Tenant's insurance coverage, shall be deemed to limit or restrict in any way Tenant's liability arising under or out of this Lease. With respect to each insurance policy required to be obtained by Tenant under this Section, on or before the Lease Commencement Date, and at least 30 days before the expiration of the expiring policy or certificate previously furnished, Tenant shall deliver to Landlord a certificate of insurance therefor, together with evidence of payment of all applicable premiums. Each insurance policy required -18- to be carried hereunder by or on behalf of Tenant shall provide (and any certificate evidencing the existence of each such insurance policy shall certify) that such insurance policy shall not be canceled unless Landlord shall have received 20 days' prior written notice of cancellation. (c) Indemnification of Landlord. Except for the willful or negligent acts or omissions of Landlord or its agents or employees, Tenant hereby agrees to indemnify and hold harmless Landlord from and against any and all claims, losses, actions, damages, liabilities and expenses (including attorneys' fees) that (i) arise from or are in connection with Tenant's possession, use, occupancy, management, repair, maintenance or control of the Leased Premises, or any portion thereof, or (ii) arise from or are in connection with any willful or negligent act or omission of Tenant or Tenant's agents, employees or subtenants, or (iii) result from any default, breach, violation or nonperformance of this Lease or any provision therein by Tenant, or (iv) arise from injury or death to persons or damage to property sustained on or about the Leased Premises, or (v) arise from Tenant's installation, maintenance, repair, use or removal of any rooftop satellite or antenna dishes or related equipment. Tenant shall, at its own cost and expense, defend any and all actions, suits and proceedings which may be brought against Landlord with respect to the foregoing or in which Landlord may be impleaded. Tenant shall pay, satisfy and discharge any and all money judgments which may be recovered against Landlord in connection with the foregoing. (d) Indemnification of Tenant. Except for the willful or negligent acts or omissions of Tenant or its agents or employees, Landlord hereby agrees to indemnify and hold harmless Tenant from and against any and all claims, losses, actions, damages, liabilities and expenses (including attorneys' fees) that (i) arise from or are in connection with Landlord's possession, use, occupancy, management, repair, maintenance or control of the common areas of the Building located on any Floor not wholly occupied by Tenant, or (ii) arise from or are in connection with any willful or negligent act or omission of Landlord or Landlord's agents or employees, or (iii) result from any default, breach, violation or nonperformance of this Lease or any provision therein by Landlord, or (iv) arise from injury or death to persons or damage to property sustained on or about the common areas of the Building located on any Floor not wholly occupied by Tenant. Landlord shall, at its own cost and expense, defend any and all actions, suits and proceedings which may be brought against Tenant with respect to the foregoing or in which Tenant may be impleaded. Landlord shall pay, satisfy and discharge any and all money judgments which may be recovered against Tenant in connection with the foregoing. 12. Fire Insurance. (a) Required Coverage. Landlord shall, throughout the Term, at its expense, keep the Building, but not Tenant's Special Installations, Alterations or Tenant's furniture, furnishings, trade fixtures or property removable by Tenant under the provisions of this Lease (including any rooftop satellite or antenna dishes and related equipment), insured against all loss or damage by fire with extended coverage in such amount as any first Mortgagee of the Building may from time to time require. Tenant shall, throughout the Term, at its expense, keep Tenant's Special Installations and Alterations and Tenant's personal property, including any rooftop satellite or antenna dishes and related equipment, insured against all loss or damage by fire with extended coverage in an amount sufficient to prevent Tenant from becoming a co-insurer. Tenant's policies of insurance shall contain, if available from the insurer, an appropriate clause or endorsement under which the insurer agrees that such policy shall not be canceled without at least 30 days notice to Landlord. (b) Notice of Insurance Coverage. Landlord and Tenant will (i) if requested, advise the other as to the provisions of fire and extended coverage insurance policies obtained pursuant to this Section, and (ii) notify the other promptly of any change in the terms of any such policy which would affect such provisions. (c) Mutual Waiver of Subrogation (i) Notwithstanding anything to the contrary in this Lease, whether the loss or damage is due to the negligence of Landlord or Landlord's agents or employees, or any other cause, Tenant hereby releases Landlord and Landlord's agents and employees from responsibility for and waives its entire claim of recovery for (i) -19- any and all loss or damage to the personal property of Tenant located in the Building (excluding any personal property required to be insured by Landlord pursuant to the provisions hereof), arising out of any of the perils which are covered by Tenant's property insurance policy, with extended coverage endorsements which Tenant is required to obtain under the applicable provisions of this Lease, whether or not actually obtained. (ii) Notwithstanding anything to the contrary in this Lease, whether the loss or damage is due to the negligence of Tenant or Tenant's agents or employees, or any other cause, Landlord hereby releases Tenant and Tenant's agents and employees from responsibility for and waives its entire claim of recovery for any and all loss or damage to the Building or any personal property of Landlord located about the Building and the Building generally and all property attached thereto (excluding any such property required to be insured by Tenant hereunder), arising out of any of the perils which are covered by Landlord's property insurance policy which Landlord is required to obtain under the applicable provisions of this Lease, whether or not actually obtained. (iii) Landlord and Tenant shall each cause its respective property insurance carrier(s) to consent to such waiver of all rights of subrogation against the other, and to issue an endorsement to all policies of property insurance obtained by such party confirming that the foregoing release and waiver will not invalidate such policies. 13. Damage by Fire or Other Casualty. In the event of loss of, or damage to, the Leased Premises or the Building by fire or other casualty, the rights and obligations of the parties hereto shall be as follows: (a) Repair of Damage. If the Leased Premises or any part thereof shall be damaged by fire or other casualty, Tenant shall give prompt notice thereof to Landlord, and Landlord, upon receiving such notice, shall proceed promptly and with reasonable diligence, subject to Unavoidable Delays, to repair, or cause to be repaired, such damage in a manner designed to minimize interference with Tenant's occupancy (but with no obligation to employ labor at overtime or other premium pay rates). If the Leased Premises or any part thereof shall be rendered untenantable by reason of such damage, whether to the Leased Premises or the Building, the Basic Rent and Additional Charges shall proportionately abate with respect thereto for the period from the date of such damage to the date when such damage shall have been repaired for the portion of the Leased Premises rendered untenantable. However, if, prior to the date when all of such damage shall have been repaired, any part of the Leased Premises is damaged shall be rendered tenantable and shall be used or occupied by Tenant or any Person or Persons claiming through or under Tenant, then the amount by which the Basic Rent and Additional Charges shall abate shall be equitably apportioned for the period from the date of any such use. (b) Termination of Lease by Landlord or Tenant. If as a result of fire or other casualty more than one-half (1/2) of the Leased Premises is rendered untenantable, Landlord within 60 days from the date of such fire or casualty may terminate this Lease by notice to Tenant, specifying a date, not less than 20 nor more than 40 days after the giving of such notice, on which the Term shall expire as fully and completely as if such date were the date herein originally fixed for the expiration of the Term. If the Leased Premises are damaged as a result of fire or other casualty and if the damage to the Leased Premises (but not including Tenant's Special Installations or Alterations) is so extensive that such damage cannot be substantially repaired within 240 days from the date of the fire or other casualty (except for Unavoidable Delays), either Landlord or Tenant within 30 days from the date of such fire or other casualty may terminate this Lease by notice to the other, specifying a date, not less than 20 nor more than 40 days after the giving of such notice, on which the Term shall expire as fully and completely as if such date were the date originally fixed for the expiration of the Term. If either Landlord or Tenant terminates this Lease, the Basic Rent and Additional Charges shall be apportioned as of the date of such fire or other casualty. If neither Landlord nor Tenant so elects to terminate this Lease, then Landlord shall proceed to repair the damage to the Building and the damage to the Leased Premises (but not Tenant's Special Installations or Alterations), if any shall have occurred, and the Basic Rent and Additional Charges shall meanwhile be apportioned and abated all as provided in subsection (a). However, if such damage is not repaired and the Leased Premises and the Building -20- restored to reasonably the same condition as they were prior to such damage within 240 days from the date of such damage (such 240-day period to-be extended by the period of any Unavoidable Delays), Tenant, within 30 days from the expiration of such 240-day period (as the same may be extended), may terminate this Lease by notice to Landlord, specifying a date not more than 60 days after the giving of such notice on which the Term shall expire as fully and completely as if such date were the date herein originally fixed for the expiration of the Term. (c) Termination of Lease by Landlord. If the Leased Premises shall be rendered untenantable to the extent of eighty percent (80%) or more by fire or other casualty during the last six months of the Term, Landlord or Tenant may terminate this Lease upon notice to the other party given within 90 days after such fire or other casualty specifying a date, not less than 20 days nor more than 40 days after the giving of such notice, on which the Term shall expire as fully and completely as if such date were the date originally fixed for the expiration of the Term. If either Landlord or Tenant terminates this Lease pursuant to this subsection, the Basic Rent and Additional Charges shall be apportioned as of the date of such fire or casualty. (d) Limitation on Landlord's Repair Obligation. Landlord shall not be required to repair or replace any of Tenant's Special Installations or Alterations or any other personal property of Tenant and no damages, compensation or claim shall be payable by Landlord for inconvenience, loss of business or annoyance arising from any repair or restoration of any portion of the Leased Premises or of the Building, but the foregoing shall not be deemed to relieve Landlord of liability for its breach of any covenant of this Lease. (e) Inapplicability of Other Laws. The provisions of this Section shall be considered an express agreement governing any instance of damage or destruction of the Building or the Leased Premises by fire or other casualty, and any law now or hereafter in force providing for such a contingency in the absence of express agreement shall have no application. (f) Landlord Released from Liability. Notwithstanding any other provision of this Lease, Landlord shall not be liable or responsible for, and Tenant hereby releases Landlord and its partners, officers, directors, agents and employees from, any and all liability or responsibility to Tenant or any Person claiming by, through or under Tenant, by way of subrogation or otherwise, for any injury, loss or damage to Tenant's property caused by any of the perils insured against by the fire insurance policy with extended coverage endorsement which is customarily issued in Fairfax County, Virginia, and Tenant shall require its insurer(s) to include in all of Tenant's insurance policies which could give rise to a right of subrogation against Landlord a clause or endorsement whereby the insurer(s) shall waive any right of subrogation against Landlord. (g) Tenant Released from Liability. Notwithstanding any other provision of this Lease, Tenant shall not be liable or responsible for, and Landlord hereby releases Tenant and its partners, officers, directors, agents and employees from, any and all liability or responsibility to Landlord or any Person claiming by, through or under Landlord, by way of subrogation or otherwise, for any injury, loss or damage to Landlord's property caused by any of the perils insured against by the fire insurance policy with extended coverage endorsement which is customarily issued in Fairfax County, Virginia, and Landlord shall require its insurer(s) to include in all of Landlord's insurance policies which could give rise to a right of subrogation against Tenant a clause or endorsement whereby the insurer(s) shall waive any rights of subrogation against Tenant. (h) Insurance Proceeds. The proceeds payable under all fire and other hazard insurance policies maintained by Landlord on the Building shall belong to and be the property of Landlord, and Tenant shall not have any interest in such proceeds. Tenant agrees to look to its own fire and hazard insurance policies in the event of damage to Tenant's Special Installations or Alterations or its personal property. 14. Condemnation. (a) Effect of Taking. In the event of a Taking of the whole of the Leased Premises, this Lease shall terminate as of the date of such Taking. If only a part of the Leased Premises shall be so taken then, -21- except as otherwise provided in this subsection, this Lease shall continue in force and effect but, from and after the date of the Taking, the Basic Rent and Additional Charges shall be reduced on the basis of the square footage of the portion of the Leased Premises so taken. If a part of the Building shall be taken, and if either (i) the part of the Building so taken contains more than twenty-five percent (25%) of the Rentable Area of the Leased Premises, immediately prior to such Taking, or (ii) in Landlord's reasonable opinion, it shall be impracticable to continue to operate the Building, then Landlord, at Landlord's option, may give to Tenant within 60 days after the date upon which Landlord shall have received notice of the Taking, a 30 days' notice of termination of this Lease. If a part of the Building shall be taken, and if either (i) the part of the Building taken contains more than thirty-five percent (35%) of the Rentable Area of the Leased Premises immediately prior to such Taking, or (ii) by reason of such Taking, all or substantially all of the Leased Premises becomes untenantable and Tenant is unable and does not, in fact use all or substantially all of the Leased Premises for the uses permitted by Section 6(a), then Tenant, at Tenant's option, may give to Landlord within 60 days after the date upon which Tenant shall have received notice of such Taking, a 30 days' notice of termination of this Lease. If a 30 days' notice of termination is given by Landlord or Tenant, this Lease shall terminate upon the expiration of the 30-day period. If this Lease is terminated pursuant to the foregoing provisions of this subsection, then, to the extent permitted by applicable law and such Taking, Tenant shall have access to the Leased Premises in order to remove Tenant's Special Installations and any other personal property then owned by Tenant and which Tenant is entitled to remove pursuant to this Lease during the period of 30 days from the date Tenant is permitted access therefor. If a Taking occurs which does not result in the termination of this Lease, Landlord shall repair, alter and restore the remaining portions of the Leased Premises to their former condition to the extent that the same may be feasible. (b) Award. Landlord shall have the exclusive right to receive any and all awards made for damages to the Leased Premises and the Building accruing by reason of a Taking or by reason of anything lawfully done in pursuance of public or other authority. Tenant hereby releases and assigns to Landlord all of Tenant's rights to such awards, and covenants to deliver such further assignments and assurances thereof as Landlord may from time to time request, hereby irrevocably designating and appointing Landlord as its attorney-in-fact to execute and deliver in Tenant's name and behalf all such further assignments thereof. However, Tenant shall have the right to make its own claim against the condemning authority for a separate award for the value of any of Tenant's Special Installations and Alterations, for moving and relocation expenses and for such business damages and/or consequential damages as may be allowed by law which do not constitute part of the compensation for the Building and do not diminish the amount of the award to which Landlord would otherwise be entitled. 15. Assignment and Subletting. (a) Subletting to ICF Kaiser International, Inc. It is understood and agreed that Tenant will sublet the entire Leased Premises to its affiliate, ICF Kaiser International, Inc., for a basic rent in excess of the Basic Rent payable hereunder. Upon the written request of Landlord or any Mortgagee following an event of default under any loan secured by a Mortgage, Tenant shall pay to Landlord one hundred percent (100%) of the amount of such excess, monthly as received by Tenant from ICF Kaiser International, Inc. (b) Assignment and Subletting Prohibited. Tenant shall not mortgage, pledge, encumber, sell, assign or transfer this Lease, in whole or in part, by operation of law or otherwise, or sublease all or any part of the Leased Premises, without Landlord's written consent, which consent may be withheld for any reason whatsoever except as provided in subsection (a) and subsection (d). In connection with any request by Tenant for such consent to assign or sublet, Tenant shall submit to Landlord, in writing, a statement containing the name of the proposed assignee or subtenant, such information as to its financial responsibility and standing as Landlord may reasonably require, and all of the terms and provisions upon which the proposed assignment or subletting is to be made, and, unless the proposed sublet area shall constitute the entire Leased Premises, such statement shall be accompanied by a floor plan delineating the proposed sublet area. Any attempted transfer, assignment, subletting, mortgaging or encumbering of this Lease in violation of the provisions of this Section shall be void and confer no rights upon any third person. No permitted assignment or subletting shall relieve Tenant of any of its obligations under this Lease. -22- (c) Merger and Consolidation. Notwithstanding the provisions of subsection (b), Tenant shall have the privilege, without the consent of Landlord, to assign its interest in this Lease to any corporation which is a successor to Tenant, either by merger or consolidation, or to any corporation which controls, is controlled by, or is under common control with, the Tenant. However, no such assignment shall be valid unless, within 10 days after the consummation thereof, Tenant shall deliver to Landlord (i) a duplicate original instrument of assignment in form reasonably satisfactory to Landlord, duly executed by Tenant, and (ii) an instrument in form and substance reasonably satisfactory to Landlord, duly executed by the assignee, in which such assignee shall agree to observe and perform, and to be personally bound by, all of the terms, covenants and conditions of this Lease on Tenant's part to be observed and performed, whether or not accruing prior to or after the date of such assignment and whether or not relating to matters arising prior to such assignment. (d) Permitted Subletting. Unless an Event of Default has occurred and is continuing, Landlord shall not unreasonably withhold or delay Landlord's consent to sublettings by Tenant of a part or parts of the Leased Premises, but Landlord shall not be obligated to consent to a subletting for a use prohibited by Section 6(a). Each such subletting shall be for undivided occupancy by the subtenant of that part of the Floor affected thereby for the use permitted under this Lease. Landlord may, however, withhold such consent if, in Landlord's reasonable judgment, the proposed subtenant is not engaged in a business consistent with the character and dignity of the Building, or will impose any additional material burden upon Landlord in the operation of the Building (to an extent greater than the burden to which Landlord would have been put if Tenant continued to use, or used, such part of the Leased Premises for its own purposes). In the event of any dispute between Landlord and Tenant as to the reasonableness of Landlord's refusal to consent to any subletting such dispute shall be submitted to mediation pursuant to Section 28. Except as otherwise set forth in subsection (a), if any portion of the Leased Premises is sublet at any time, and if the rent received by Tenant on account of such subletting exceeds the Basic Rent, allocated to the space subject to the sublease in the proportion of the area of such space to the Rentable Area of the Leased Premises, plus actual out-of-pocket expenses incurred by Tenant in connection with Tenant's subleasing of such space, including advertising, attorneys' fees, brokerage commissions and the unamortized cost of preparing such space for occupancy by the subtenant, then, except as otherwise provided in the next sentence, Tenant shall pay to Landlord fifty percent (50%) of such excess, monthly as received by Tenant from the subtenant. Except as otherwise set forth in subsection (a), Landlord shall not share in any profit derived by Tenant from the permitted subletting of all or any part of the space located on the Floor designated by Tenant as its "Sublet Floor" in a notice given to Landlord before Tenant enters into its first permitted sublease pursuant to this subsection. Notwithstanding anything to the contrary in this Section 15(d), Tenant shall have the right to sublet space in the Leased Premises to Tenant's affiliates (hereinafter defined), subcontractors or consultants without notice to or the consent of Landlord, and, except as set forth in Section 15(a), without paying any portion of the profits of such subletting to Landlord. As used herein, a "Tenant's affiliate" shall mean a corporation or other entity which controls, is controlled by or is under common control with Tenant, or which is a joint venture partner of Tenant. (e) Collection of Rent from Assignee. If Tenant's interest in this Lease is assigned, whether or not in violation of the provisions of this Section, Landlord may collect rent from the assignee; if the Leased Premises or any part thereof are sublet to, or occupied by, or used by, any Person other than Tenant, whether or not in violation of this Section, Landlord, after default by Tenant under this Lease, may collect rent from the subtenant, user or occupant. In either case, Landlord shall apply the amount collected to the rents reserved in this Lease, but neither any such assignment, subletting, occupancy or use, whether with or without Landlord's prior consent, nor any such collection or application, shall be deemed a waiver of any term, covenant or condition of this Lease or the acceptance by Landlord of such assignee, subtenant, occupant or user as tenant. The consent by Landlord to any assignment or subletting shall not relieve Tenant from its obligation to obtain the express prior consent of Landlord to any further assignment or subletting. The listing of any name other than that of Tenant on any door of the Leased Premises or on any directory in the Building, or otherwise, shall not operate to vest in the Person so named any right or interest in this Lease or in the Leased Premises or be deemed to constitute, or serve as a substitute for, any prior consent of Landlord required under this Section, and it is understood that any such listing shall constitute a privilege extended by Landlord which shall be revocable at Landlord's will by notice to Tenant. Neither an assignment of Tenant's interest in this Lease nor a subletting, occupancy or use of the Leased Premises or any part thereof by any -23- Person other than Tenant as provided in this subsection, nor the application of any such rent as provided in this subsection shall, in any circumstances, relieve Tenant from its obligation fully to observe and perform the terms, covenants and conditions of this Lease on Tenant's part to be observed and performed. 16. Default Provisions. (a) Events of Default. Each of the following events shall be deemed to be, and is referred to in this Lease as, an "Event of Default": (1) A default by Tenant in making any payment of Basic Rent or Additional Charges on the date such payment is due and payable which continues for more than five days after Landlord shall have given Tenant a written notice specifying such default; or (2) If, within any period of 12 consecutive months, Landlord has given two written notices to Tenant pursuant to paragraph (1), a further default by Tenant, within the 12-month period after the giving of the second such notice, in making any payment of Basic Rent or Additional Charges on the date such payment is due which continues for more than 10 days after such payment is due; or (3) The neglect or failure of Tenant to perform or observe any of the terms, covenants or conditions contained in this Lease on Tenant's part to be performed or observed (other than those referred to in paragraph (1) above) which is not remedied by Tenant (i) within 20 days after Landlord shall have given to Tenant written notice specifying such neglect or failure, or (ii) in the case of any such neglect or failure which cannot with due diligence and in good faith be cured within 20 days, within such additional period, if any, as may be reasonably required to cure such default with due diligence and in good faith provided that Tenant commences the curing of the same within the 20-day period (it being intended that, in connection with any such default which is not susceptible of being cured with due diligence and in good faith within 20 days, the time within which the Tenant is required to cure such default shall be extended for such additional period as may be necessary for the curing thereof with due diligence and in good faith); or (4) The assignment, transfer, mortgaging or encumbering of this Lease or the subletting of the Leased Premises in a manner not permitted by Section 15; or (5) The taking of this Lease or the Leased Premises, or any part thereof, upon execution or by other process of law directed against Tenant, or upon or subject to any attachment at the instance of any creditor of or claimant against Tenant, which execution or attachment shall not be discharged or disposed of within 30 days after the levy thereof. (b) Landlord's Rights Upon Event of Default. Upon the occurrence of an Event of Default, Landlord shall have the right, at its election, then or at any time thereafter while such Event of Default shall continue, either: (1) To give Tenant written notice that this Lease will terminate on a date to be specified in such notice, which date shall not be less than three days after such notice if such notice is sent by registered or certified mail, but which date may be the date of such notice or any date thereafter if such notice is delivered in person, and on the date specified in such notice Tenant's right to possession of the Leased Premises shall cease and this Lease shall thereupon be terminated, but Tenant shall remain liable as provided in subsection (c); or (2) Without demand or notice, to reenter and take possession of the Leased Premises, or any part thereof, and repossess the same as of Landlord's former estate and expel Tenant and those claiming through or under Tenant and remove the effects of both or either, either by summary proceedings, or by action at law or in -24- equity, without being deemed guilty of any manner of trespass and without prejudice to any remedies for arrears of rent or preceding breach of covenant. If Landlord elects to re-enter under paragraph (2), Landlord may terminate this Lease, or, from time to time, without terminating this Lease, may relet the Leased Premises, or any part thereof, as agent for Tenant for such term or terms and at such rental or rentals and upon such other terms and conditions as Landlord may deem advisable, with the right to make alterations and repairs to the Leased Premises. No such re-entry or taking of possession of the Leased Premises by Landlord shall be construed as an election on Landlord's part to terminate this Lease unless a written notice of such intention is given to Tenant under paragraph (1) or unless the termination thereof be decreed by a court of competent jurisdiction. Tenant waives any right to the service of any notice of Landlord's intention to reenter provided for by any present or future law. (c) Tenant's Liability for Damages. If Landlord terminates this Lease pursuant to subsection (b), Tenant shall remain liable (in addition to accrued liabilities) to the extent legally permissible for (i) the sum of (A) all Basic Rent and Additional Charges provided for in this Lease until the date this Lease would have expired had such termination not occurred, and (B) any and all reasonable expenses incurred by Landlord in reentering the Leased Premises, repossessing the same, making good any default of Tenant, painting, altering or dividing the Leased Premises, combining the same with any adjacent space for any new tenants, putting the same in proper repair, reletting the same (including any and all reasonable attorney's fees and disbursements and reasonable brokerage fees incurred in so doing), and any and all expenses which Landlord may incur during the occupancy of any new tenant (other than expenses of a type that are Landlord's responsibility under the terms of this Lease); less (ii) the proceeds of any reletting. Tenant agrees to pay to Landlord the difference between items (i) and (ii) above with respect to each month during the Term, at the end of such month. Any suit brought by Landlord to enforce collection of such difference for any one month shall not prejudice Landlord's right to enforce the collection of any difference for any subsequent month. In addition to the foregoing, Tenant shall pay to Landlord, whether or not the Lease is terminated, such sums as the court which has jurisdiction thereover may adjudge reasonable as attorney's fees with respect to any successful law suit or action instituted by Landlord to enforce the provisions of this Lease. Landlord shall have the right, at its sole option, to relet the whole or any part of this Leased Premises for the whole of the unexpired Term, or longer, or from time to time for shorter periods, for any rental then obtainable, giving such concessions of rent and making such special repairs, alterations, decorations and paintings for any new tenant as Landlord, in its sole and absolute discretion, may deem advisable. Tenant's liability as aforesaid shall survive the institution of summary proceedings and the issuance of any warrant thereunder. Landlord shall be under no obligation to relet the Leased Premises, but agrees to use its best efforts to do so. (d) Liquidated Damages. If Landlord terminates this Lease pursuant to subsection (b), Landlord shall have the right, at any time, at its option, to require Tenant to pay to Landlord, on demand, as liquidated and agreed final damages in lieu of Tenant's liability under subsection (c), an amount equal to the difference discounted to the date of such demand at an annual rate of interest equal to the then-current yield on actively traded U.S. Treasury bonds with 10-year maturities, as published in the Federal Reserve Statistical Release for the week prior to the date of such termination, between (i) the Basic Rent and Additional Charges, computed on the basis of the then current annual rate of Basic Rent and Additional Charges, which would have been payable from the date of such demand to the date when this Lease would have expired, if it had not been terminated, and (ii) the then fair rental value of the Leased Premises for the same period. Upon exercise of this option by Landlord and payment of such liquidated and agreed final damages, Tenant shall be released from all further liability under this Lease with respect to the period after the date of such demand. If, after the Event of Default giving rise to the termination of this Lease, but before presentation of proof of such liquidated damages, the Leased Premises, or any part thereof, shall be relet by Landlord for a term of one year or more, the amount of rent reserved upon such reletting shall be deemed to be the fair rental value for the part of the Leased Premises so relet during the term of such reletting. (e) Rights and Remedies Cumulative. The rights and remedies herein conferred are cumulative and not exclusive of any other rights or remedies, and shall be in addition to every other right, power -25- and remedy that Landlord may have, whether specifically granted herein, or presently or hereafter existing at law, in equity, or by statute. 17. Bankruptcy. (a) Events of Bankruptcy. The following shall be Events of Bankruptcy under this Lease: (i) Tenant's becoming insolvent, as that term is defined in Title 11 of the United States Code (the "Bankruptcy Code"), or under the insolvency laws of any state, district, commonwealth or territory of the United States (the "Insolvency Laws"); (ii) the appointment of a receiver or custodian for any or all of Tenant's property or assets, or the institution of a foreclosure action upon any of Tenant's real or personal property; (iii) the filing of a voluntary petition under the provisions of the Bankruptcy Code or Insolvency Laws; (iv) the filing of an involuntary petition against Tenant as the subject debtor under the Bankruptcy Code or Insolvency Laws, which either (A) is not dismissed within sixty (60) days of filing, or (B) results in the issuance of an order for relief against the debtor; or (iv) Tenant's making or consenting to an assignment for the benefit of creditors or a common law composition of creditors. (b) Landlord's Rights Upon Event of Bankruptcy. Upon the occurrence of an Event of Bankruptcy, Landlord shall have all rights and remedies available to Landlord pursuant to Section 16; provided, however, that while a case in which Tenant is the subject debtor under the Bankruptcy Code is pending, Landlord shall not exercise its rights and remedies pursuant to Section 16 so long as (1) the Bankruptcy Code prohibits the exercise of such rights and remedies, and (2) Tenant or its Trustee in Bankruptcy (hereinafter referred to as "Trustee") (i) cures all defaults under this Lease, (ii) compensates Landlord for monetary damages incurred as a result of such defaults, (iii) provides adequate assurance of future performance on the part of Tenant as debtor in possession or on the part of the assignee tenant, and (iv) complies with all other requirements of the Bankruptcy Code. 18. Either Party May Perform the Other's Obligations. If Tenant shall fail to keep or perform any of its obligations as provided in this Lease in respect to (a) maintenance of insurance, (b) repairs and maintenance of the Leased Premises, (c) compliance with Legal Requirements, or (d) the making of any other payment or performance of any other obligation, then Landlord may (but shall not be obligated to do so) upon the continuance of such failure on Tenant's part for 10 days after written notice to Tenant (or after such additional period, if any, as Tenant may reasonably require to cure such failure if of a nature which cannot be cured within said 10 day period), or without notice in the case of an emergency, and without waiving or releasing Tenant from any obligation, and as an additional but not exclusive remedy, make any such payment or perform any such obligation and all sums so paid by Landlord and all necessary incidental costs and expenses, including attorney's fees, incurred by Landlord in making such payment or performing such obligation, together with interest thereon from the date of payment at the Default Interest Rate, shall be deemed additional rent and shall be paid to Landlord on demand, or at Landlord's option may be added to any installment of Basic Rent thereafter falling due, and if not so paid by Tenant, Landlord shall have the same rights and remedies as in the case of a default by Tenant in the payment of Basic Rent. If Landlord shall fail to keep or perform any of its obligations as provided in this Lease in respect to (a) maintenance of insurance, (b) repairs and maintenance of the Leased Premises, the Building or the common areas, or (c) the making of any other payment or performance of any other obligation, then Tenant may (but shall not be obligated to do so) upon the continuance of such failure on Landlord's part for 10 days after written notice to Landlord (or after such additional period, if any, as Landlord may reasonably require to cure such failure if of a nature which cannot be cured within said 10 day period), or without notice in the case of an emergency, and without waiving or releasing Landlord from any obligation, and as an additional but not exclusive remedy, make any such payment or perform any such obligation and all sums so paid by Tenant and all necessary incidental costs and expenses, including attorney's fees, incurred by Tenant in making such payment or performing such obligation, together with interest thereon from the date of payment at the Default Interest Rate, shall be paid by Landlord to Tenant on demand. -26- 19. Security Deposit. (a) Use and Application. Tenant has deposited with Landlord the Security Deposit, as security for the prompt, full and faithful performance by Tenant of each and every provision of this Lease and of all obligations of Tenant hereunder. Landlord has invested the Security Deposit, and shall keep the same invested, in (i) prime commercial paper, banker's acceptances or certificates of deposit in United States commercial banks (having net assets in excess of $100,000,000), in each case having a maturity of not more than 30 days, or (ii) obligations of the United States Government having a maturity of not more than 90 days, or (iii) one or more mutual funds which invest their assets primarily in investment of the type described in clauses (i) and (ii), or (iv) one or more interest-bearing accounts in financial institutions the deposits in which are insured by an agency of the United States. If an Event of Default occurs, Landlord may use, apply or retain the whole or any part of the Security Deposit for the payment of (i) any Basic Rent or Additional Charges which Tenant may not have paid or which may become due after the occurrence of such Event of Default, (ii) any sum expended by Landlord on Tenant's behalf in accordance with the provisions of this Lease, or (iii) any sum which Landlord may expend or be required to expend by reason of Tenant's default, including damages or deficiency in the reletting of the Leased Premises as provided in Section 16. The use, application or retention of the Security Deposit, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by law and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. If any portion of the Security Deposit is used, applied or retained by Landlord for the purpose set forth above, Tenant agrees, within 10 days after a written demand therefor is made by Landlord, to deposit cash with the Landlord in an amount sufficient to restore the Security Deposit to its original amount. (b) Return of Security Deposit. Provided that Tenant is not then in default, the Security Deposit, or any balance thereof, and all accrued interest or gains thereon, shall be returned to Tenant within thirty (30) days after the expiration of the Term. In the absence of evidence satisfactory to Landlord of any permitted assignment of the right to receive the Security Deposit, or the remaining balance thereof, Landlord may return the same to the original Tenant, regardless of one or more assignments of Tenant's interest in this Lease or the Security Deposit. In such event, upon the return of the Security Deposit (or balance thereof) to the original Tenant, Landlord shall be completely relieved of liability under this Section. (c) Return of Accrued Interest on Security Deposit. Within thirty (30) days after the execution of this Lease by both parties hereto, Landlord will return all accrued interest on the Security Deposit to Tenant. (d) Transfer of Security Deposit. In the event of a transfer of Landlord's interest in the Leased Premises, Landlord shall have the right to transfer the Security Deposit to the transferee thereof. In such event, upon the delivery by Landlord to Tenant of such transferee's written acknowledgment of its receipt of the Security Deposit, Landlord shall be deemed to have been released by Tenant from all liability or obligation for the return of the Security Deposit, and Tenant agrees to look solely to such transferee for the return of the Security Deposit and the transferee shall be bound by all provisions of this Lease relating to the return of the Security Deposit. (e) Restrictions on Encumbering. The Security Deposit shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior written consent of Landlord. (f) Letter of Credit. At any time during the Term, Tenant shall have the right to deliver to Landlord a letter of credit in the amount of the Security Deposit, to be held by Landlord as security for the performance by Tenant of all of the obligations to be performed by it under this Lease. In such event, Landlord shall refund the cash Security Deposit and all accrued interest thereon to Tenant within fifteen (15) days after receipt of such letter of credit. The letter of credit (and each replacement or renewal thereof) shall (i) be irrevocable, (ii) be issued by NationsBank, N.A. or another national bank having an office in Washington, D.C. or Fairfax County, Virginia, which has net assets of $50,000,000 or more, (iii) be for a term of not less than 12 months after the date of issuance, and (iv) authorize Landlord to draw thereon by a sight draft delivered to the issuing bank -27- accompanied by an affidavit of a general partner, or executive officer, of Landlord that an Event of Default has occurred and is continuing or that Tenant has failed to deliver a replacement letter of credit within the time required by this subsection. Tenant shall, on or before the 30th day before the expiration date of the letter of credit then being held by Landlord under this subsection, deliver to Landlord an extension or renewal of the letter of credit for a period of not less than 12 months. Tenant shall extend or renew the letter of credit, or any extension or renewal thereof, for successive periods of at least 12 months each throughout the Term. Upon the occurrence of an Event of Default or the Tenant's failure to deliver a replacement letter of credit within the time required by this subsection, Landlord shall be authorized to draw on the letter of credit then being held by it. Landlord shall receive, hold and apply the proceeds of the letter of credit in the same manner and on the same terms as the Security Deposit. All references in this Lease to the "Security Deposit" shall be deemed to include the proceeds of the letter of credit. 20. Subordination. (a) Mortgages. This Lease and Tenant's interest hereunder shall have priority over, and be senior to, the lien of any Mortgage made by Landlord after the date of this Lease. However, if at any time or from time to time during the Term, a Mortgagee or prospective Mortgagee requests that this Lease be subject and subordinate to its Mortgage, this Lease and Tenant's interest hereunder shall be subject and subordinate to the lien of such Mortgage and to all renewals, modifications, replacements consolidations and extensions thereof and to any and all advances made thereunder and the interest thereon. Tenant agrees that, within 10 days after receipt of a written request therefor from Landlord, it will, from time to time, execute and deliver any instrument or other document required by any such Mortgagee to subordinate this Lease and its interest in the Leased Premises to the lien of such Mortgage. If, at any time or from time to time during the Term, a Mortgagee of a Mortgage made prior to the date of this Lease shall request that this Lease have priority over the lien of such Mortgage, and if Landlord consents thereto, this Lease shall have priority over the lien of such Mortgage and all renewals, modifications, replacements, consolidations and extensions thereof and all advances made thereunder and the interest thereon, and Tenant shall, within 10 days after receipt of a written request therefor from Landlord, execute, acknowledge and deliver any and all documents and instruments confirming the priority of this Lease. In any event, however, if this Lease shall have priority over the lien of a Mortgage, this Lease shall not become subject or subordinate to the lien of any subordinate Mortgage, and Tenant shall not execute any subordination documents or instruments for any subordinate Mortgagee, without the written consent of the prior Mortgagee. (b) Ground Leases. This Lease and Tenant's interest hereunder shall be subject and subordinate to each and every ground or underlying lease hereafter made of the Building or the land on which it is constructed, or both, and to all renewals, modifications, replacements and extensions thereof. Tenant agrees that, within 10 days after receipt of written request therefor from Landlord, it will, from time to time, execute, acknowledge and deliver any instrument or other document required by any such lessor to subordinate this Lease and its interest in the Leased Premises to such ground or underlying lease. (c) First Mortgagee's Right of Cure. If (i) the Building, or any part thereof, or the land on which the Building is constructed, or the Landlord's leasehold estate in the Building, is at any time subject to a first Mortgage, and (ii) this Lease, or the Basic Rent and Additional Charges payable under this Lease, is assigned to the first Mortgagee, and (iii) the Tenant is given written notice of such assignment, including the name and address of the assignee, then, in that event, Tenant shall not terminate this Lease or make any abatement in the Basic Rent payable hereunder for any default on the part of the Landlord without first giving written notice, in the manner provided elsewhere in this Lease for the giving of notices, to such first Mortgagee, specifying the default in reasonable detail, and affording such first Mortgagee a reasonable opportunity to make performance, at its election, for and on behalf of the Landlord. (d) Non-Disturbance Agreement. Notwithstanding the provisions of subsections (a) and (b), neither this Lease nor any right, title or interest of Tenant in the Leased Premises shall be subordinate to the lien of any ground or underlying lease -28- or any Mortgage made or placed after the date of this Lease, and Tenant shall not be required to subordinate this Lease or Tenant's interest in the Leased Premises to any such ground or underlying lease or any such Mortgage, unless such lease or Mortgage contains an express provision (or the lessor or the Mortgagee or other party secured by the Mortgage agrees in writing) to the effect that so long as this Lease has not been terminated by reason of the occurrence of an Event of Default, the lessor or the Mortgagee (or other party secured by the Mortgage) will be bound by all of the terms and provisions of this Lease (except as otherwise set forth in such agreement), a default by the Landlord under such lease or by the mortgagor under such Mortgage shall not have any effect upon Tenant's right to occupy the Leased Premises in accordance with all of the terms and conditions of this Lease, and the term, estate and options of Tenant under this Lease shall not be terminated or otherwise affected by a termination of such ground or underlying lease or a foreclosure and sale or other action instituted under or in connection with such Mortgage. Contemporaneously with the execution of this Lease, Landlord shall deliver to Tenant a non-disturbance agreement, in form reasonably satisfactory to Tenant, from the Mortgagee under any existing Mortgage, to the effect that so long as this Lease has not been terminated by reason of the occurrence of an Event of Default, the Mortgagee (or other party secured by the Mortgage) will be bound by all of the terms and provisions of this Lease, a default by the mortgagor under such Mortgage shall not have any effect upon Tenant's right to occupy the Leased Premises in accordance with all of the terms and conditions of this Lease, and the term, estate and options of Tenant under this Lease shall not be terminated or otherwise affected by a foreclosure and sale or other action instituted under or in connection with such Mortgage. Contemporaneously with the execution of this Agreement, Landlord shall deliver to Tenant a non-disturbance agreement, in form reasonably satisfactory to Tenant, from the lessor under the Ground Lease, to the effect that so long as this Lease has not been terminated by reason of the occurrence of an Event of Default, the lessor will be bound by all of the terms and provisions of this Lease, a default by the Landlord under such Ground Lease shall not have any effect upon Tenant's right to occupy the Leased Premises in accordance with all of the terms and conditions of this Lease, and the term, estate and options of Tenant under this Lease shall not be terminated or otherwise affected by a termination of such Ground Lease. 21. Attornment. In the event of (a) a transfer of Landlord's interest in the Leased Premises, (b) the termination of any ground or underlying lease of the Building or the land on which it is constructed, or both, or (c) the purchase of the Building or Landlord's interest therein in a foreclosure sale or by deed in lieu of foreclosure under any Mortgage or pursuant to a power of sale contained in any Mortgage, then in any of such events Tenant shall, at Landlord's request, attorn to and recognize the transferee or purchaser of Landlord's interest or the lessor under the terminated ground or underlying lease, as the case may be, as Landlord under this Lease for the balance then remaining of the Term, and thereafter this Lease shall continue as a direct lease between such person, as "Landlord," and Tenant, as "Tenant," except that such lessor, transferee or purchaser shall not be liable for any act or omission of Landlord prior to such lease termination or prior to such person's succession to title, nor be subject to any offset, defense or counterclaim accruing prior to such lease termination or prior to such person's succession to title, nor be bound by any payment of Basic Rent or Additional Charges prior to such lease termination or prior to such person's succession to title for more than one month in advance. Tenant shall, upon request by Landlord or the transferee or purchaser of Landlord's interest or the lessor under the terminated ground or underlying lease, as the case may be, execute and deliver an instrument or instruments confirming the foregoing provisions of this Section. Tenant hereby waives the provisions of any present or future law or regulation which gives or purports to give Tenant any right to terminate or otherwise adversely affect this Lease, or the obligations of Tenant hereunder, upon or as a result of the termination of any such ground or underlying lease or the completion of any such foreclosure and sale. 22. Quiet Enjoyment. Landlord covenants that Tenant, upon paying the Basic Rent and the Additional Charges provided for in this Lease, and upon performing and observing all of the terms, covenants, conditions and provisions of this Lease on Tenant's part to be kept, observed and performed, shall quietly hold, occupy and enjoy the Leased Premises during the Term without hindrance, ejection or molestation by Landlord or any party lawfully claiming through or under Landlord. -29- 23. Landlord's Right of Access to Leased Premises. (a) Right of Entry. Landlord and its agents shall have the following rights in and about the Leased Premises: (i) to enter the Leased Premises at all reasonable times to examine the Leased Premises or for any of the purposes set forth in this Section or for the purpose of performing any obligation of Landlord under this Lease or exercising any right or remedy reserved to Landlord in this Lease, and if Tenant, its officers, partners, agents or employees shall not be personally present or shall not open and permit an entry into the Leased Premises at any time when such entry shall be necessary or permissible, to use a master key or forcibly to enter the Leased Premises; (ii) to erect, install, use and maintain pipes, ducts and conduits in and through the Leased Premises which, when completed, will not substantially interfere with the use or appearance or materially reduce the space afforded to Tenant in the Leased Premises; (iii) to exhibit the Leased Premises to others at reasonable times and for reasonable purposes; (iv) to make such repairs, alterations or improvements, or to perform maintenance of all heating, air-conditioning, elevator, plumbing, electrical and other mechanical facilities installed by Landlord, as may be required from time to time by this Lease to be made or performed by Landlord; (v) to take all materials into and upon the Leased Premises that may be required in connection with any such repairs, alterations, improvements or maintenance; and (vi) to alter, renovate and decorate the Leased Premises at any time during the Term if Tenant shall have removed all or substantially all of Tenant's property from the Leased Premises. Landlord agrees to give prior notice before it exercises its rights under this subsection, except that Landlord may enter the Leased Premises without notice in the case of an emergency. In making such an entry, Landlord agrees to use reasonable efforts to avoid interfering with the regular and usual conduct of the Tenant's business. Notwithstanding anything to the contrary herein, Landlord may obtain access to the double-secured areas of the Leased Premises only with the permission and assistance of Tenant's Director of Facilities, except in the event of an emergency posing a threat of immediate injury to persons or property. (b) Rights in Adjacent Areas. Except as otherwise provided in Section 10, all parts (except surfaces facing the interior of the Leased Premises) of all walls, windows and doors bounding the Leased Premises (including exterior Building walls, corridor walls, doors and entrances), all balconies, terraces and roofs adjacent to the Leased Premises, all space in or adjacent to the Leased Premises used for shafts, stacks, stairways, chutes, pipes, conduits, ducts, fan rooms, heating, air-conditioning, plumbing, electrical and other mechanical facilities installed by Landlord, service closets and other Building facilities, and the use thereof, as well as access thereto through the Leased Premises for the purposes of operation, maintenance, alteration and repair, are hereby reserved to Landlord. Nothing contained in this Section shall impose any obligation upon Landlord with respect to the operation, maintenance, alteration or repair of the Leased Premises or the Building. (c) Effect of Landlord's Entry. The exercise by Landlord or its agents of any right reserved to Landlord in this Section shall not constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any abatement or diminution of rent, or relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord, or its agents, or upon any lessor under any ground or underlying lease, by reason of inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's business, or otherwise. Landlord agrees to exercise its rights under this Section in a manner designed to minimize interference with Tenant's normal business operations, without any obligation, however, to employ labor at overtime or other premium pay rates. 24. Limitation on Landlord's Liability. (a) Accidents, etc. Except for damages resulting from the willful or negligent act or omission of Landlord, its agents, employees or contractors, Landlord shall not be liable to Tenant, its employees, agents, business invitees, licensees, customers, guests or trespassers, for any damage or loss to the property of Tenant or others located on the Leased Premises, or in the Building or the land on which it is built, or for any accident or injury to Persons in the Leased Premises or the Building, resulting from the necessity of repairing any portion of the Building; the use or operation (by Tenant or any other Person or Persons whatsoever) of any elevators, or heating, cooling, electrical or plumbing equipment or apparatus; the termination of this Lease by -30- reason of the destruction of the Building or the Leased Premises; any fire, robbery, theft, and/or any other casualty; any leaking in any part or portion of the Leased Premises or the Building; any water, wind, rain, or snow that may leak into, or flow from, any part of the Leased Premises or the Building; any acts or omissions of any occupant of any space adjacent to or adjoining all or any part of the Leased Premises; any water, gas, steam, fire, explosion, electricity or falling plaster; the bursting, stoppage or leakage of any pipes, sewer pipes, drains, conduits, appliances or plumbing works; or any other cause whatsoever. (b) Unavoidable Delays. Neither Landlord nor Tenant shall be required to perform any of its obligations under any provision of this Lease, or be liable for loss or damage for failure to do so, nor shall the other party be released from any of its obligations under this Lease because of such party's failure to perform, where such failure arises from or through Unavoidable Delays or Legal Requirements. If Landlord or Tenant is so delayed or prevented from performing any of its obligations during the Term, the period of such delay or such prevention shall be deemed added to the time herein provided for the performance of any such obligation. Lack of funds shall not be deemed an Unavoidable Delay for purposes of this Section 24(b), and nothing in this Section 24(b) shall excuse Tenant's failure to promptly pay any Basic Rent or Additional Charges due under this Lease, or Landlord's or Tenant's failure to maintain policies or deliver certificates of insurance required hereunder. (c) Building Services. If Landlord shall fail to supply, or be delayed in applying, any service expressly or impliedly to be supplied under this Lease, or shall be unable to make, or be delayed in making, any repairs, alterations, additions, improvements or decorations, or shall be unable to supply, or be delayed in supplying, any equipment or fixtures, and if such failure, delay or inability shall result from Unavoidable Delays, such failure, delay or inability shall not constitute an actual or constructive eviction, in whole or in part, or relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord or its agents by reason of inconvenience to Tenant, or injury to, or interruption of, Tenant's business, or otherwise, or entitle Tenant to any abatement or diminution of rent except as provided in Section 3(i). (d) Liability Limited to Landlord's Estate. Notwithstanding any provision to the contrary, Tenant shall look solely to the estate and property of Landlord in and to the Building (or the proceeds received by Landlord on a sale of such estate and property but not the proceeds of any financing or refinancing thereof) in the event of any claim against Landlord arising out of or in connection with this Lease, the relationship of Landlord and Tenant or Tenant's use of the Leased Premises, and Tenant agrees that the liability of Landlord arising out of or in connection with this Lease, the relationship of Landlord and Tenant or Tenant's use of the Leased Premises, shall be limited to such estate and property of Landlord (or sale, insurance or condemnation proceeds in connection therewith). No other properties or assets of Landlord shall be subject to levy, execution or other enforcement procedures for the satisfaction of any judgment (or other judicial process) or for the satisfaction of any other remedy of Tenant arising out of or in connection with this Lease, the relationship of Landlord and Tenant or Tenant's use of the Leased Premises, and if Tenant shall acquire a lien on or interest in any other properties or assets by judgment or otherwise, Tenant shall promptly release such lien on or interest in such other properties and assets by executing, acknowledging and delivering to Landlord an instrument to that effect prepared by Landlord's attorneys. 25. Estoppel Certificates. Tenant and Landlord each agrees, from time to time, within 15 days after written request therefor by the other party, to execute, acknowledge and deliver to the other party a statement in writing certifying to the other party, any Mortgagee, assignee of a Mortgagee, or any purchaser, of the Building or the land on which it is constructed, or both, or any other Person designated by the other party, as of the date of such statement, (i) that Tenant is in possession of the Leased Premises; (ii) that this Lease is unmodified and in full force and effect (or, if there have been modifications, that this Lease is in full force and effect as modified and setting forth such modifications); (iii) whether or not there are then existing any set-offs or defenses known to such party against the enforcement of any right or remedy of the other party, or any duty or obligation of such party, hereunder (and, if so, specifying the same in detail); (iv) the dates, if any, to which any Basic Rent or Additional Charges have been paid in advance; (v) that such party has no knowledge of any uncured defaults on the part of the other party under this Lease (or, if such party has knowledge of any such uncured defaults, specifying the same in detail); (vi) that such -31- party has no knowledge of any event having occurred that authorizes the termination of this Lease by such party (or, if such party has such knowledge, specifying the same in detail); (vii) the amount of any Security Deposit held by Landlord; and (viii) any additional facts reasonably requested by any such Mortgagee, assignee of a Mortgagee, purchaser or other Person. 26. Surrender of Leased Premises. (a) Possession. Tenant shall, on or before the last day of the Term, except as otherwise expressly provided elsewhere in this Lease, remove all of its property and peaceably and quietly leave, surrender and yield up to the Landlord the Leased Premises, free of subtenancies, broom clean and in good order and condition except for reasonable wear and tear, damage by fire or other casualty, or conditions requiring repair by Landlord hereunder at Landlord's expense. (b) Inspection of Leased Premises. At the time Tenant surrenders the Leased Premises at the end of the Term, or within twenty (20) days thereafter, Landlord and Tenant, or their respective agents, shall inspect the Leased Premises and shall prepare and sign an inspection form to describe the condition of the Leased Premises at the time of surrender. (c) Survival. The provisions of this Section shall survive any expiration or termination of this Lease. 27. Holding Over. If Tenant shall hold over possession of the Leased Premises after the end of the Term, Tenant shall be deemed to be occupying the Leased Premises as a Tenant from month to month, at one hundred fifty percent (150%) of the Basic Rent, adjusted to a monthly basis, and subject to all the other conditions, provisions and obligations of this Lease insofar as the same are applicable, or as the same shall be adjusted, to a month-to-month tenancy. 28. Mediation. In any case in which it is provided by the terms of this Lease that any matter shall be determined by mediation, then such mediation shall be in accordance with the Commercial Mediation Rules then in effect of the American Arbitration Association ("AAA"). The mediation proceeding shall be conducted in Washington, D.C., by one mediator selected by the AAA. The cost of the mediation, including filing fees with the AAA and the cost of the mediator, shall be borne equally by the parties. In the mediation sessions, the parties shall endeavor in good faith to resolve the claim or controversy at issue. Any party or the mediator shall have the right to terminate the mediation at any time after the first mediation session. Neither party may make any disclosure of the existence or results of the mediation without the prior written consent of the other party. The mediator may not make any disclosure of the existence or results of the mediation without the prior written consent of both parties. No discussions in the mediation shall be admissible in any litigation between the parties, and the mediator shall not be subject to subpoena to testify to any communication between the mediator and either party. If the parties are unable to settle the matter by mediation, then either party may submit such matter to litigation. 29. Parking. Throughout the Term, Tenant shall be entitled to the use of 334 parking spaces in the structured parking facility for the Office Park (the "Parking Spaces"), without additional charge therefor. The Parking Spaces shall be available to Tenant and/or its employees on an unreserved basis, in common with the other tenants of the Office Park. If at any time Tenant leases any additional space in the Building, Tenant shall be entitled, without charge, to the use of one additional parking space in such parking facility for each 297 square feet of net rentable area of such space. -32- 30. Renewal of Term. Provided that this Lease shall be in full force and effect and that Tenant shall not then be in default, Tenant shall have the right, at Tenant's sole option, to extend the Lease for one (1) consecutive additional period of five (5) years (such additional period being hereinafter referred to as the "Renewal Period", if exercised, and included in the definition of the Term). Such option to extend shall be exercised by Tenant giving written notice of the exercise to Landlord at least twenty-four (24) months prior to the expiration of the Initial Term of this Lease. The Renewal Period shall be for the same Basic Rent payable during the last Lease Year of the Initial Term, escalated at the commencement of the Renewal Period and at the commencement of each Lease Year thereafter by the Inflation Adjustment, and upon the same terms, covenants and conditions set forth in this Lease with respect to the Initial Term, and Tenant's obligations to pay Operating Expense Increases pursuant to Section 3(b) shall continue without interruption during the Renewal Period. In the event Tenant defaults beyond any applicable cure period under this Lease after providing notice of exercise of its renewal option but prior to the expiration of the Initial Term, such exercise shall, at Landlord's option exercised by written notice to Tenant, be void ab initio. 31. Shuttle Service. Landlord shall provide for Tenant' s employees, other tenants of the Building and other adjacent buildings owned by Landlord or its affiliates, and the employees of such other tenants a private shuttle bus service between the Building and the Vienna Metro Station. Subject to Unavoidable Delays, the shuttle bus service shall be provided throughout the Term and continuously during the hours between 7:00 a.m. and 8:00 p.m. on Business Days. Landlord shall use shuttle buses which have reasonably adequate seating capacity taking into account average passenger usage from time to time. Landlord shall provide private shuttle bus service for Tenant's employees at times in addition to those specified in this Section, at Tenant's expense, as mutually agreed upon by Landlord and Tenant. Landlord shall charge Tenant for after-hours service at an hourly rate from time to time established by Landlord, in its sole discretion, but in no event will the rate per hour charged to Tenant be more than an amount per hour which represents Landlord's reasonable estimate of its actual cost of providing such after-hours service, including labor, cost of fuel, and wear and tear on equipment, plus an allowance of 10% thereof to cover general overhead. In the event the same after-hours service is also requested by other tenants of the Building (or any other building owned by Landlord or its affiliates) in addition to Tenant, the charge therefor to each tenant requesting such after- hours service shall be a pro-rated amount based upon the net rentable area of the leased premises of all tenants requesting such after-hours service. Payment for such charges shall be due and payable to Landlord within 15 days after Tenant's receipt of an invoice therefor. Any dispute between Landlord and Tenant with respect to the adequacy of Landlord's shuttle bus service shall be submitted to mediation pursuant to Section 28. 32. Leasing Commission. Landlord and Tenant each represent and warrant to the other that neither of them has employed any broker, other than The Carey Winston Company, in carrying on the negotiations relative to this Lease. Tenant shall pay any commission due The Carey Winston Company in connection with this Lease. Landlord and Tenant shall each indemnify and hold harmless the other from and against any claim or claims for brokerage or other commission arising from or out of any breach of the foregoing representation and warranty. 33. General Provisions. (a) Binding Effect. The covenants, conditions, agreements, terms and provisions herein contained shall be binding upon, and shall inure to the benefit of, the parties hereto and, subject to the provisions of Section 15, each of their respective personal representatives, successors and assigns. -33- (b) Governing Law. It is the intention of the parties hereto that this Lease (and the terms and provisions hereof) shall be construed and enforced in accordance with the laws of the State of Virginia. (c) Waivers. No failure by Landlord to insist upon the strict performance of any term, covenant, agreement, provision, condition or limitation of this Lease or to exercise any right or remedy consequent upon a breach thereof, and no acceptance by the Landlord of full or partial rent during the continuance of any such breach, shall constitute a waiver of any such breach or of any such term, covenant, agreement, provision, condition or limitation. No term, covenant, agreement, provision, condition or limitation of this Lease to be kept, observed or performed by Landlord or by Tenant, and no breach thereof, shall be waived, altered or modified except by a written instrument executed by Landlord or by Tenant, as the case may be. No waiver of any breach shall affect or alter this Lease, but each and every term, covenant, agreement, provision, condition and limitation of this Lease shall continue in full force and effect with respect to any other then existing or subsequent breach thereof. (d) Notices. No notice, request, consent, approval, waiver or other communication which may be or is required or permitted to be given under this Lease shall be effective unless the same is in writing and is delivered in person or sent by registered or certified mail, return receipt requested, first- class postage prepaid, (1) if to Landlord, at Landlord's Notice Address, or (2) if to Tenant, at Tenant's Notice Address, or at any other address that may be given by one party to the other by notice pursuant to this subsection. Such notices, if sent by registered or certified mail, shall be deemed to have been given at the time of mailing. (e) Entire Agreement. It is understood and agreed by and between the parties hereto that this Lease contains the final and entire agreement between said parties, and that they shall not be bound by any terms, statements, conditions or representations, oral or written, express or implied, not herein contained. It is understood and agreed, however, that the terms hereof shall be modified, if so required, for the purpose of complying with or fulfilling the requirements of any Mortgagee secured by a first Mortgage that may now be or hereafter become a lien on the Building, provided, however, that such modification shall not be in substantial derogation or diminution of any of the rights of the parties hereunder, nor increase any of the obligation or liabilities of the parties hereunder. (f) Jury Trial. Landlord and Tenant each hereby waives all right to trial by jury in any claim, action, proceeding or counterclaim by either Landlord or Tenant against the other on any matters arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant and/or Tenant's use or occupancy of the Leased Premises. (g) Venue. Tenant hereby waives any objection to the venue of any action filed by Landlord against Tenant in any state or federal court in the jurisdiction in which the Building is located, and Tenant further waives any right, claim or power, under the doctrine of forum non conveniens or otherwise, to transfer any such action filed by Landlord to any other court. (h) Corporate Authority. Concurrently with the signing of this Lease, Tenant shall furnish to Landlord certified copies of the resolutions of its Board of Directors (or of the executive committee of its Board of Directors) authorizing Tenant to enter into this Lease; and Tenant shall also furnish to Landlord evidence (reasonably satisfactory to Landlord and its counsel) that Tenant is a duly organized corporation in good standing under the laws of the jurisdiction of its incorporation, is qualified to do business in good standing in the State of Virginia, has the power and authority to enter into this Lease, and that all corporate action requisite to authorize Tenant to enter into this Lease has been duly taken. (i) Time of the Essence. Time is of the essence in the performance of Landlord's and Tenant's obligations under this Lease. (j) Gender. Wherever appropriate herein, the singular includes the plural and the plural includes the singular. -34- (k) Invalidity. If any provision of this Lease shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not be affected thereby. (1) Captions. The captions in this Lease are for convenience only and shall not affect the interpretation of the provisions hereof. (m) No Partnership. This Lease is not intended to create a partnership or joint venture between Landlord and Tenant in the conduct of their respective businesses. (n) Counterparts. This Lease has been executed in several counterparts, but all counterparts shall constitute one and the same instrument. (o) Deed of Lease. To the extent required under applicable law to make this Lease legally effective, this Lease shall constitute a deed of lease. 34. Termination of Prior Lease. This Lease entirely supersedes the Lease Agreement dated April 27, 1988, as amended by the First Amendment, the Second Amendment and the Third Amendment, and the Lease Agreement dated April 27, 1988, as amended, is hereby terminated. IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be signed by their duly authorized partners or officers as of the day and year first above written. Landlord HMCE ASSOCIATES LIMITED PARTNERSHIP, R.L.L.P. By /s/ David W. Evans ---------------------------- Tenant ICF KAISER HUNTERS BRANCH LEASING, INC. By /s/ Timothy P. O'Commor ---------------------------- -35- EX-10.(I) 25 EXHIBIT 10(I) Exhibit 10(i) CONTRIBUTION AGREEMENT THIS CONTRIBUTION AGREEMENT is made and entered into this 3rd day of November, 1997, by and among (i) HMCE ASSOCIATES LIMITED PARTNERSHIP, R.L.L.P. ("HMCE"), a Virginia limited liability limited partnership, (ii) HB LIMITED PARTNERSHIP, R.L.L.P. ("HB"), a Virginia limited liability limited partnership, and (iii) IFA NUTLEY PARTNERS, LLC, a Delaware limited liability company ("IFA"). RECITALS A. HMCE owns a leasehold estate in certain land in Fairfax County, Virginia, and the building, improvements, fixtures and equipment thereon, which has a street address of 9300 Lee Highway, Fairfax, Virginia. B. HB owns a leasehold estate in certain land in Fairfax County, Virginia, and the building, improvements, fixtures and equipment thereon, which has a street address of 9302 Lee Highway, Vienna, Virginia. C. HMCE, HB and IFA have agreed to form a limited liability company under the laws of the State of Delaware, to be known as Hunters Branch Partners, L.L.C. ("Hunters Branch LLC"), for the purpose of acquiring, owning and operating the leasehold estates, buildings, improvements, fixtures and equipment referred to in Recitals A and B. D. HMCE and HB have agreed to transfer and convey to Hunters Branch LLC the leasehold estates, buildings, improvements, fixtures, equipment and certain other tangible and intangible assets and properties owned by each of them and used by them in connection with the management, operation, maintenance and repair of the buildings and improvements. E. IFA has agreed to make certain capital contributions to Hunters Branch LLC. F. ICF Kaiser International, Inc. ("ICF Kaiser"), which is presently a tenant in the buildings owned by HMCE and HB, has agreed to cancel and terminate its existing leases, to cause one of its subsidiaries to enter into new leases with Hunters Branch L.L.C. and to guaranty those new leases. NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: ARTICLE I Definitions Section 1.1 General Interpretive Principles. For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, (i) the terms defined in this Section have the meanings assigned to them in this Section and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other genders; (ii) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles; (iii) references herein to "Articles," "Sections," "subsections," "paragraphs" and other subdivisions without reference to a document are to designated Articles, Sections, subsections, paragraphs and other subdivisions of this Agreement; (iv) a reference to a subsection without further reference to a Section is a reference to such subsection as contained in the same Section in which the reference appears, and this rule shall also apply to paragraphs and other subdivisions; (v) a reference to an Exhibit or a Schedule without a further reference to the document to which the Exhibit or Schedule is attached is a reference to an Exhibit or Schedule to this Agreement; (vi) the words "herein," "hereof," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular provision; and (vii) the word "including" means "including, but not limited to." Section 1.2 Defined Terms. For all purposes of this Agreement, the following terms shall have the respective meanings set forth below: -1- "9300 Building" shall mean the building, fixtures and other improvements located on the 9300 Land. "9300 Ground Lease" shall mean the Ground Lease dated May 29, 1986, between Ground Lessor, as Landlord, and HMCE, as tenant, as recorded in Deed Book 6398, at page 127, among the Land Records of Fairfax County, Virginia, as amended by a First Amendment to Ground Lease dated August 18, 1987, recorded in Deed Book 6847, at page 660, among said Land Records, a Second Amendment to Ground Lease dated September 22, 1987, recorded in Deed Book 6859, at page 278, among said Land Records, and a Third Amendment to Ground Lease dated June 23, 1988, recorded in Deed Book 7186, at page 1643, among said Land Records. "9300 Land" shall mean the parcel of land, containing 6.97700 acres, more or less, described in Exhibit A-1. "9300 ICF Space Lease" shall mean the Lease Agreement, dated January 30, 1987, between HMCE, as landlord, and ICF Kaiser, as tenant, as amended, pursuant to which ICF Kaiser leases all of the 9300 Building. "9300 New ICF Space Lease" shall mean the Lease Agreement, dated as of the Closing Date, substantially in the form attached as Exhibit H, pursuant to which ICF Leasing will lease all of the 9300 Building. "9300 Leasehold Estate" shall mean the leasehold estate in the 9300 Land and the 9300 Building created by the 9300 Ground Lease. "9302 Building" shall mean the building, fixtures and other improvements located on the 9302 Land. "9302 Ground Lease" shall mean the Ground Lease dated November 3, 1987, between Ground Lessor, as Landlord, and HMCE, as tenant, as recorded in Deed Book 6909, at page 793, among the Land Records of Fairfax County, Virginia, as amended by a First Amendment to Ground Lease dated June 23, 1988, recorded in Deed Book 7186, at page 1665, among said Land Records, and as assigned by HMCE to HB pursuant to an Assignment and Assumption of Ground Lease dated April 1, 1990, recorded in Deed Book 7589, at page 682, among said Land Records. "9302 Land" shall mean the parcel of land, containing 6.92704 acres, more or less, described in Exhibit A-2. "9302 ICF Space Lease" shall mean the Lease Agreement, dated April 27, 1988, between HMCE, as landlord, and American Capital and Research Corporation, as tenant, as amended, pursuant to which ICF Kaiser leases a portion of the 9302 Building. "9302 New ICF Space Lease" shall mean the Lease Agreement, dated as of the Closing Date, substantially in the form attached as Exhibit I, pursuant to which ICF Leasing will lease a portion of the 9302 Building. "9302 Leasehold Estate" shall mean the leasehold estate in the 9302 Land and the 9302 Building created by the 9302 Ground Lease. "Additional Rent" shall mean all reimbursements of Operating Expenses, administrative charges, reimbursements of Real Estate Taxes, retroactive rent escalations, insurance cost reimbursements, and all other amounts and charges payable by Tenants to HMCE and HB, as landlords, under their Space Leases (other than Minimum Rent), but shall not include Security Deposits. -2- "Agreement" shall mean this Agreement in its present form or as it may be amended, modified or supplemented from time to time. "Bill of Sale" shall mean a bill of sale substantially in the form attached as Exhibit E. "Buildings" shall mean the 9300 Building and the 9302 Building. "Business Days" shall mean any day of the week other than Saturday, Sunday or a day on which banking institutions in either New York, New York, or Washington, D.C., are obligated or authorized by law to close. "Certificate of Formation" shall mean the Certificate of Formation of Hunters Branch LLC substantially in the form attached as Exhibit B. "Closing" shall have the meaning set forth in Section 9.1. "Closing Date" shall mean the date on which the closing of the Nomura Loan is consummated. "Code" shall mean the Internal Revenue Code of 1986, as amended. "Contracts" shall mean all written contracts and agreements entered into by HMCE, HB or their management agent providing for the management, operation, supply, maintenance, repair, advertising or promotion of the Real Property, including service agreements, maintenance contracts, cleaning contracts, employment contracts, contracts for the purchase or delivery of labor, services, materials or supplies and equipment rental agreements or leases of tangible personal property, but excluding insurance policies and any currently existing property or asset management agreement(s). "Delinquent Rent" shall mean Rent which is due and payable by a Space Tenant on or before the Proration Date but has not been paid by the Proration Date. "Effective Date" shall mean the date of this Agreement. "Existing TIAA Mortgage Loans" shall mean the loans made by TIAA to HMCE and HB which are secured by Mortgages on the Leasehold Estates and the Land and which will have an unpaid principal balance, as of the Effective Date, of $32,648,358.28 (in the case of the loan for the 9300 Building) and $30,376,731.58 (in the case of the loan for the 9302 Building). "General Assignment" shall mean an Assignment of Licenses, General Intangibles and Warranties substantially in the form attached as Exhibit G. "Governmental Authorities" shall mean any board, bureau, commission, department or body of any municipal, county, state or federal governmental unit, or any subdivision thereof, having or acquiring jurisdiction over the Real Property or the management, operation, use or improvement thereof. "Ground Leases" shall mean the 9300 Ground Lease and the 9302 Ground Lease. "Ground Lessor" shall mean First Union Bank of Virginia, N.A., successor by merger to First American Bank of Virginia, as Trustee for J. Willard Marriott, Jr., Richard E. Marriott and Snell Construction Corporation under that certain trust agreement dated December 31, 1979. "Ground Lease Assignment" shall mean an Assignment and Assumption of Ground Leases substantially in the form attached as Exhibit D. -3- "Ground Lease Rent" shall mean the rent payable to the Ground Lessor under the Ground Leases. "ICF Leasing" shall mean ICF Kaiser Hunters Branch Leasing, Inc., a Delaware corporation. "ICF Kaiser Lease Guaranty" shall mean a Guaranty of Lease in the form attached to the 9300 New ICF Space Lease and the 9302 New ICF Space Lease. "LLC Agreement shall mean the Limited Liability Company Agreement substantially in the form attached as Exhibit C. "Land" shall mean the 9300 Land and the 9302 Land. "Leasehold Estates" shall mean the 9300 Leasehold Estate and the 9302 Leasehold Estate. "Licenses" shall mean all licenses, authorizations, approvals and permits issued by Governmental Authorities relating to HMCE's and HB's (and not any Space Tenant's) use, operation, ownership or maintenance of the Real Property. "Membership Interest" shall mean an interest as a Member in Hunters Branch LLC. "Minimum Rent" shall mean all base rent, minimum rent or basic rent (including cost-of-living adjustments) payable in fixed installments and fixed amounts for stated periods by Space Tenants under their Space Leases. "Mortgage" shall mean a mortgage, deed of trust or other type of security instrument of the type commonly given to secure loans or advances on, or the unpaid purchase price of, real property in the jurisdiction in which such real property is located. "Nomura" shall mean Nomura Asset Capital Corporation. "Nomura Commitment" is that certain commitment letter from Nomura dated September 29, 1997 pursuant to which Nomura has agreed to make the Nomura Loan. "Nomura Loan" shall mean that certain loan to be made by Nomura in the approximate amount of $58,000,000.00, secured by Mortgages on the Real Property and the Leasehold Estates, pursuant to the Nomura Commitment. "Operating Expenses" shall mean all costs, expenses, charges and fees incurred by HMCE, HB or Hunters Branch LLC, as the case may be, relating to the management, operation, maintenance and repair of the Real Property, including Ground Lease Rent, electricity, gas, water and sewer charges, telephone and other public utilities, common area maintenance charges, insurance premiums, vault charges, personal property taxes, excise taxes on Rent, business occupational taxes, periodic charges payable under Contracts, periodic fees payable under transferable Licenses for the operation (as opposed to the construction) of the Real Property which are assigned to Hunters Branch LLC, salaries, wages, vacation and sick pay, pension, welfare and other fringe benefits, employee-related taxes and other labor costs, but not including any costs, expenses, charges or fees which are the direct responsibility of a Space Tenant or any costs, expenses, charges or fees that are subject to cost-of- living adjustments under a GSA Lease. "Option Agreement" shall mean the Option Agreement between Hunters Branch LLC, Ground Lessor and IFA substantially in the form attached as Exhibit J. -4- "Permitted Exceptions" shall mean (i) the lien of current Real Estate Taxes not yet due and payable, (ii) the Space Leases and any additions, renewals and replacements thereof, (iii) the state of facts which would be disclosed by an accurate survey of the Real Property, and (iv) the additional exceptions approved by Nomura. "Person" shall mean an individual, estate, trust, partnership, corporation, Governmental Authority or other legal entity. "Personal Property" shall mean all furniture, furnishings, fixtures, equipment, maintenance vehicles, tools and other tangible personal property of every kind and description owned by HMCE and HB on, attached to or used or useful in connection with the management, operation, maintenance and repair of the Buildings, including HMCE's inventory of spare and replacement parts and its inventory of consumable supplies. "Property" shall mean that property being contributed by HMCE pursuant to Section 2.3 of this Agreement. "Proration Date" shall mean the Closing Date. "Real Estate Taxes" shall mean all taxes, assessments, vault rentals, and other charges, if any, general, special or otherwise, including all assessments for schools, public betterments and general or local improvements, levied or assessed upon or with respect to the ownership of and/or all other taxable interests in the Real Property imposed by any public or quasi-public authority having jurisdiction. "Real Property" shall mean the Land and the Buildings. "Reimbursable Expenses" shall mean all or a portion of the Operating Expenses under Space Leases that are not Real Estate Taxes, which are taken into account under a Space Tenant's Space Lease in determining the amount of Additional Rent payable by the Tenant. "Rent" shall mean, collectively, Minimum Rent and Additional Rent. "Security Deposits" shall mean all security deposits, access card or key deposits, cleaning fees and other deposits (including any interest accrued thereon in accordance with the terms of the Space Leases) relating to space within the Buildings paid by Space Tenants to HMCE, HB or their managing agent. "Space Lease and Contract Assignment" shall mean an Assignment and Assumption of Certain Leases, Tenancies and Written Agreements in the form attached as Exhibit F, providing for the assignment and assumption of all Space Leases and Contracts to Hunters Branch LLC. "Space Leases" shall mean all written leases (other than subleases entered into by Tenants), including all amendments, extensions, modifications and supplements thereto, pursuant to which any Person uses or occupies any part of the Real Property, including the 9300 ICF Space Lease and the 9302 ICF Space Lease. "Space Tenants" shall mean all Persons leasing or occupying space within the Real Property pursuant to the Space Leases. "TIAA" shall mean Teachers Insurance and Annuity Association of America. "Utility Deposits" shall mean all deposits made by HMCE and HB with the Persons providing water, sewer, gas, electricity, telephone and other public utilities to the Real Property. "Warranties" shall mean all assignable warranties or guaranties presently in effect from contractors, suppliers or manufacturers of personal property installed in or used in connection with the Real Property or any work performed or improvements included as a part of the Real Property. -5- ARTICLE II Formation of Hunters Branch LLC and Contribution of the Property Section 2.1 Merger of HB into HMCE. On or before the Closing Date, HB shall be merged into HMCE in a statutory merger pursuant to Section 50- 73.48:4 of the Code of Virginia (1950). HMCE shall be the surviving limited partnership in the merger. As provided in Section 50-73:48:4 of the Code of Virginia (1950), upon the filing of Articles of Merger with the Virginia State Corporation Commission, title to all assets and property owned by HB shall be vested in HMCE by operation of law and all debts, liabilities and obligations of HB shall automatically become the debts, liabilities and obligations of HMCE. Section 2.2 Formation of Hunters Branch LLC. (a) Filing of Certificate of Formation. Before the Closing Date, HMCE shall cause the Certificate of Formation to be filed with the Secretary of State of the State of Delaware and shall cause Hunters Branch LLC to be qualified to do business as a foreign limited liability company in the Commonwealth of Virginia. (b) Signing of LLC Agreement. On the Closing Date, and subject to the terms and conditions of this Agreement, HMCE and IFA shall form Hunters Branch LLC by executing and delivering the LLC Agreement, which shall be dated as of the Closing Date. Section 2.3 Property to be Contributed by HMCE. On the Closing Date, and subject to the terms and conditions set forth in this Agreement, HMCE (on its own behalf and as successor by merger to HB) agrees to convey, transfer and assign the following property to Hunters Branch LLC, as a capital contribution: (a) all right, title and interest of HMCE in and to the Leasehold Estates; (b) the Personal Property; (c) all right, title and interest of HMCE in and to the Space Leases (including any right of HMCE in and to Security Deposits) and the Contracts; (d) all right, title and interest of HMCE, if any, in and to all transferable Licenses; (e) all right, title and interest of HMCE in and to the Warranties; and (f) the additional property, including money, described in clauses (ii) and (iii) of Section 4.2(a) of the LLC Agreement. HMCE shall transfer and assign good and marketable title to the Leasehold Estates and good title to the Personal Property free and clear all liens, encumbrances, easements, covenants, conditions, leases and other matters affecting title, except for the Permitted Exceptions. Section 2.4 Property to be Contributed by IFA. On the Closing Date, and subject to the terms and conditions of this Agreement, IFA shall pay to Hunters Branch LLC, as a capital contribution, the amounts required by Section 4.2(b) of the LLC Agreement by wire transfer of immediately available funds to a bank account designated by HMCE. If required to do so by TIAA, in connection with the purchase and/or discharge of the Existing TIAA Mortgage Loans, IFA shall make a part of the capital contribution by wire transfer of immediately available funds to a bank account designated by TIAA, to be applied by TIAA as a principal payment of the Existing TIAA Mortgage Loans. Section 2.5 No Other Obligations Contributed or Assumed. Except as provided in Section 2.3 and Section 2.4, and in Section 5.6, no other assets or property of HB or HMCE shall be contributed to, and no other -6- liabilities or obligations of HB or HMCE shall be assumed by, Hunters Branch LLC. All other assets and liabilities of HMCE shall remain the assets and liabilities of HB and/or HMCE, as applicable. ARTICLE III Representations and Warranties of HMCE and HB HMCE and HB make the representations and warranties in this Article to ICF Kaiser and IFA for the purpose of inducing them to execute and deliver this Agreement and to consummate the transactions contemplated by this Agreement: Section 3.1 Organization. Each of HMCE and HB is a limited partnership duly organized, validly existing and in good standing under the laws of the Commonwealth of Virginia. Section 3.2 Authorization. The requisite number of the general and limited partners of HMCE and HB required by the Limited Partnership Agreements pursuant to which they are organized has authorized the execution and delivery of this Agreement and the transactions contemplated hereby, and the individuals who are executing and delivering this Agreement on behalf of HMCE and HB have been fully authorized and empowered to do so. Section 3.3 No Conflicting Agreements. The execution and delivery by HMCE and HB of, and the performance and compliance by them with the terms and provisions of, this Agreement do not violate any of the terms, conditions or provisions of (i) their respective Limited Partnership Agreements, (ii) any judgment, order, injunction, decree, regulation or ruling of any court or other governmental authority to which they, or either of them, is subject, or (iii) except for the documents evidencing and securing the Existing TIAA Mortgage Loans, any agreement, contract, note, mortgage or indenture to which either of them is a party or to which any of the property owned by either of them is subject. Section 3.4 Approvals. No authorization, consent, order, approval or license from, filing with, or other act by any Governmental Authority or other Person is or will be necessary to permit the valid execution and delivery by HMCE and HB of this Agreement or the performance by either of them of the obligations to be performed by them under this Agreement, which has not been obtained. Section 3.5 United States Person. Each of HMCE and HB is a "United States person" within the meaning of Sections 1445(f)(3) and 7701(a)(30) of the Internal Revenue Code of 1986, as amended. Section 3.6 Brokers. Except for The Carey Winston Company in connection with the 9300 New ICF Space Lease and the 9302 New ICF Space Lease (the fees of which shall be paid by the tenant thereunder, Preminger & Glazer in connection with the Nomura Loan and Carr American and The Evans Company as set forth in Section 2.6 hereof), no agent, broker, or other Person acting pursuant to express or implied authority of HMCE or HB is entitled to a commission or finder's fee in connection with the transactions contemplated by this Agreement or will be entitled to make any claim against IFA for a commission or finder's fee. HMCE and HB have not dealt with any agent or broker in connection with the transactions contemplated by this Agreement other than as set forth above. Section 3.7 Investment Representation. HMCE represents and warrants that the membership interest in Hunters Branch LLC to be received by it will be acquired by it solely for its own account and with no intention of distributing or reselling the membership interest in any transaction which would be in violation of, or would cause the transactions contemplated herein to violate, the securities laws of the United States of America, any state thereof or the District of Columbia, without prejudice, however, to HMCE's right at all times to sell or otherwise dispose of all or any part of the membership interest in Hunters Branch LLC (subject to the limitations and qualifications set forth in the LLC Agreement) under an exemption from registration available under the Securities Act of 1933, as amended (the "Securities Act"), and any applicable state or District of Columbia securities law, and subject, nevertheless, to the disposition of HMCE's property being at all times within its control in compliance with applicable state and federal regulations. -7- Section 3.8 Pending Litigation. To the best knowledge of HMCE and HB, there are no pending actions, suits, arbitrations, claims or proceedings, at law, in equity or otherwise, affecting all or any portion of the Real Property or in which HMCE or HB is a party, including judicial, municipal or administrative proceedings in eminent domain, collection actions, building code violations, health and safety violations, federal, state or local agency actions regarding environmental matters, federal environmental protection agency, or zoning violations, employment discrimination or unfair labor practices, or worker's compensation, personal injuries or property damages alleged to have occurred at the Real Property or by reason of the condition or use of or construction on the Real Property. Section 3.9 Default under Permitted Exceptions. Neither HMCE or HB has received written notice that it is in default under any document, instrument or agreement constituting a Permitted Exception, under the Space Leases, or under any governmental requirements applicable to the Real Property. Section 3.10 Leasing Commissions. No leasing commissions are currently due or shall in the future become due for any current or extension terms of the Space Leases in effect on October 1, 1997 (except as disclosed in Section 3.6) and neither HMCE nor HB has any obligation to make tenant improvements for the Space Tenants under any of such Space Leases. Section 3.11 Compliance with Law. To the actual knowledge of HMCE and HB (without independent investigation or inquiry), all applicable laws, ordinances, rules, requirements, regulations and building codes of any Governmental Authorities applicable to the Real Property have been complied with in all material respects. Section 3.12 Documents True. HMCE and HB have delivered to IFA a true, correct and complete copy of each Contract described on Schedule 1 and each Space Lease described on Schedule 2. Section 3.13 No Options. There do not exist any rights of first offer or refusals or options to purchase the Real Property or any portion thereof. Section 3.14 Space Leases. The Space Leases constitute the entire agreement between the parties thereto, have not been amended, modified or supplemented, except for such amendments, modifications and supplements described on Schedule 2, and there are no leases, tenancy or occupancy agreements affecting the Real Property other than those described on Schedule 2. All Space Leases are in full force and effect and there is no default existing thereunder on the part of HMCE or HB as landlord, or on the part of any Space Tenants. All services required to be supplied by the landlord under the Space Leases and all tenant improvements required to be constructed by the landlord under the Space Leases have been supplied and/or constructed, and neither HMCE nor HB has received notice of its failure to supply or construct same. The Space Lease Schedule is true, correct and complete in all material respects. Notwithstanding the foregoing representation, for any Space Lease for which Hunters Branch LLC receives a Space Tenant Estoppel Certificate confirming all of the foregoing, Hunters Branch LLC shall rely on such Space Tenant Estoppel Certificate in lieu of the foregoing representation, and the foregoing representation, as to any Space Leases for which a Space Tenant Estoppel Certificate is received shall not survive closing. Section 3.15 Insurance Notices. Neither HMCE or HB has received any written notice from any of its insurance carriers or any insurance carrier of any Space Tenant of any defects or inadequacies in the Real Property, or any portion thereof, which would adversely affect the insurability of the Real Property or the cost of any such insurance. There are no pending insurance claims instituted by HMCE or HB with respect to all or any portion of the Real Property. 3.16 Structural Defects. To the best knowledge of HMCE and HB, without independent investigation or inquiry, there are no material physical or mechanical deficiencies in the Property except as disclosed on Schedule 3 attached hereto. 3.17 Environmental. To the best knowledge of HMCE and HB, without independent investigation or inquiry, other than such substances in such amounts as are customarily incident to a general office -8- use, and then in such quantities and in such amounts as are not in violation of any applicable federal, state or local statute or regulation applicable to Hazardous Substances (as hereinafter defined), (i) no Hazardous Substances or toxic substances have been treated, stored, handled or disposed of on, under or at the Real Property; (ii) the Real Property has not been used for industrial purposes or for the storage, treatment or disposal of hazardous waste or materials; and (iii) the Real Property has never been listed by a governmental agency as containing any oil, hazardous waste, hazardous material, chemical waste or other toxic substance. Further, to the best knowledge of HMCE and HB, without independent investigation or inquiry, there are no underground storage tanks under, nor any asbestos or asbestos-containing materials which are incorporated within any improvements upon, or otherwise located in, on, or under the Real Property. HMCE and HB have provided to IFA full and complete disclosure of all studies and information in their possession (or which are readily available to them) regarding the environmental condition of the Real Property, and the presence of any Hazardous Substances. Neither HMCE nor HB have deposited, placed, stored or permitted to be deposited, placed or stored on, under or in the Real Property, any Hazardous Substances. "Hazardous Substances", as used herein, means any toxic or hazardous waste, pollutants or substances, including, without limitation, petroleum products or by-products, asbestos (irrespective of whether or not encapsulated) and substances defined or listed as hazardous substances or toxic substances or similarly identified in or pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 41 U.S.C. Section 9601, et seq., hazardous materials identified in or pursuant to the Hazardous Materials Transportation Act, 49 U.S.C. Section 1802, et seq., hazardous waste identified in or pursuant to the Resource Conservation and Recovery Act of 1976, as amended, 15 U.S.C. Section 2601, et seq. or any hazardous or toxic substance or pollutant regulated under any other applicable federal or local environmental law; Section 3.18 Complete Contribution. The assets being contributed by HMCE under this Agreement constitute all assets historically required for the operation of the Real Property. Section 3.19 Service Contracts. Except for the Contracts described on Schedule 1, the Space Leases described on Schedule 2, and the Permitted Exceptions, there are no service, maintenance, operating or other agreements affecting all or any part of the Real Property that will be binding on Hunters Branch L.L.C. after the Closing. Section 3.20 Oral Agreements. There do not exist any unwritten agreements with any Governmental Authority, vendor, Space Tenant, Ground Lessor or adjoining property owner which is or could become binding on Hunters Branch LLC or the Real Property after the Closing. Section 3.21 Survival. All representations and warranties contained in this Article shall survive the Closing, except that the representations and warranties in Section 3.8 through Section 3.20, inclusive, shall terminate twelve (12) months after the Closing Date unless, within the 12-month period, HMCE receives notice of a breach of any such representation or warranty. Section 3.22 Knowledge. For purposes of this Article III, the knowledge of HMCE and HB shall be limited to the actual knowledge of David A. Evans and P. Diane Tipton and shall not include knowledge imputed to HMCE and HB from any other Person; which HMCE represents are those persons who are the representatives of HMCE with the most substantive knowledge of the Real Property, having performed reasonable and diligent inquiry as would be customary for similar transactions as that contemplated hereby (except as otherwise indicated in Section 3.11, Section 3.16 and Section 3.17), which inquiry includes, but is not necessarily limited to inquiry of the existing property manager. ARTICLE IV Representations and Warranties of IFA IFA makes the representations and warranties in this Article to HMCE and HB for the purpose of inducing them to execute and deliver this Agreement and to consummate the transactions contemplated by this Agreement: -9- Section 4.1 Organization. IFA is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified as a foreign limited liability company in good standing in the Commonwealth of Virginia. Section 4.2 Authorization. The requisite number of the members of IFA required by its limited liability company agreement pursuant to which it is organized has authorized the execution and delivery of this Agreement and the transactions contemplated hereby, and the individuals who are executing and delivering this Agreement on behalf of IFA have been fully authorized and empowered to do so. Section 4.3 No Conflicting Agreements. The execution and delivery by IFA of, and the performance and compliance by it with the terms and provisions of, this Agreement do not violate any of the terms, conditions or provisions of (i) IFA's limited liability company agreement, (ii) any judgment, order, injunction, decree, regulation or ruling of any court or other governmental authority to which it is subject, or (iii) any agreement, contract, note, mortgage or indenture to which it is a party or to which any of the property owned by it is subject. Section 4.4 Approvals. No authorization, consent, order, approval or license from, filing with, or other act by any Governmental Authority or other Person is or will be necessary to permit the valid execution and delivery by IFA of this Agreement or the performance by it of the obligations to be performed by it under this Agreement, which has not been obtained. Section 4.5 United States Person. IFA is a "United States person" within the meaning of Sections 1445(f)(3) and 7701(a)(30) of the Internal Revenue Code of 1986, as amended. Section 4.6 Brokers. Except for The Carey Winston Company in connection with the 9300 New Space Lease and the 9302 New Space Lease (the fees of which shall be paid by the tenant thereunder, Preminger & Glazer in connection with the Nomura Loan and Carr America and The Evans Company as set forth in Section 2.6 hereof), no agent, broker, or other Person acting pursuant to express or implied authority of ICF Kaiser, ICF Leasing or IFA is entitled to a commission or finder's fee in connection with the transactions contemplated by this Agreement or will be entitled to make any claim against HMCE or HB for a commission or finder's fee. ICF Kaiser, ICF Leasing and IFA have not dealt with any agent or broker in connection with the transactions contemplated by this Agreement other than as set forth above. Section 4.7 Investment Representation. IFA represents and warrants that the membership interest in Hunters Branch LLC to be received by it will be acquired by it solely for its own account and with no intention of distributing or reselling the membership interest in any transaction which would be in violation of, or would cause the transactions contemplated herein to violate, the securities laws of the United States of America, any state thereof or the District of Columbia, without prejudice, however, to IFA's right at all times to sell or otherwise dispose of all or any part of the membership interest in Hunters Branch LLC (subject to the limitations and qualifications set forth in the Limited Liability Company Agreement) under an exemption from registration available under the Securities Act, and any applicable state or District of Columbia securities law, and subject, nevertheless, to the disposition of IFA's property being at all times within its control in compliance with applicable state and federal regulations. ARTICLE V Additional Obligations of HMCE and HB Section 5.1 Operating Records. On the Closing Date, HMCE shall deliver to Hunters Branch LLC all books, records, operating reports, files and other materials in its possession and control necessary to a complete continuity in the operation of the Buildings, or copies thereof. Section 5.2 Affirmative Covenants. Between the Effective Date and the Closing Date, HMCE and HB agree that they will: -10- (a) manage and operate the Buildings in the ordinary and usual manner and maintain in full force and effect until the Closing Date their present insurance policies described in the Insurance Schedule, or renewals thereof; (b) at their expense, maintain the Buildings in their present order and condition, make all necessary repairs and replacements and deliver the Buildings on the Closing Date in substantially the same condition they are in on the Effective Date, reasonable wear and tear and damage by casualty excepted; (c) perform, observe and comply with all material terms and provisions of all Space Leases to be performed, observed or complied with by them as the landlord under such Space Leases; (d) perform, observe and comply with all material terms and provisions of the Ground Leases to be performed, observed or complied with by them as the tenants under the Ground Leases; and (e) timely make all payments of principal of and interest on the Existing TIAA Mortgage Loans (except that HMCE will pay interest only on the Existing TIAA Loan for the 9300 Building for the month of October), and otherwise perform, observe and comply with all of the material terms and provisions of the documents evidencing and securing the Existing TIAA Mortgage Loans. Section 5.3 Negative Covenants. Between the Effective Date and the Closing Date, HMCE and HB agree that, without IFA's written consent in each case, they will not: (a) voluntarily grant, create, assume or permit to exist any Mortgage, lien, lease, encumbrance, easement, covenant, condition, right-of-way or restriction upon the Leasehold Estates or voluntarily take or permit any action adversely affecting the title to the Leasehold Estates as such title exists on the Effective Date; (b) alter, amend, renew or extend any Space Lease; (c) terminate any Space Lease, or accept a surrender of the leased premises thereunder, except for nonpayment of rent or a material nonmonetary default by the Tenant; (d) remove any material item of Personal Property from the Buildings unless the same is replaced with similar items of equal or better quality before the Closing Date; (e) defer or otherwise fail to make any repair, replacement or improvement (excluding, however, capital improvements of a non-emergency nature) which would or should be undertaken by a prudent owner of property similar to the Real Property in the Washington, D.C. metropolitan area; (f) allow the status of title to the Real Property to differ from that which exists as of the Effective Date; (g) incur or allow to exist any indebtedness, obligation or liability other than as set forth in this Agreement (h) liquidate any Security Deposit, except that a Security Deposit may be applied to cure a monetary default under a Space Lease which is a failure to pay rent for a period in excess of sixty (60) days; or (i) commit or allow any waste to the Real Property. IFA agrees that it will not unreasonably withhold, delay or condition its consent with respect to any of the matters referred to in this Section 5.3(b) or 5.3(d). -11- Section 5.4 Expenses. HMCE and HB agree to pay all expenses incurred by them in connection with the negotiation, execution and performance of this Agreement and the transactions contemplated hereby, including the fees and expenses of its legal counsel. Section 5.5 Further Assurances. HMCE agrees that it will, at any time and from time to time after the Closing Date, upon request of Hunters Branch LLC do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered, at no material cost, expense or liability to HMCE, all such further acts, deeds, assignments, transfers, conveyances and assurances as may reasonably be required to carry out the terms of this Agreement. Section 5.6 New Lease Obligations. All obligations for tenant improvements and leasing commissions for Space Leases in effect on October 1, 1997 shall be the responsibility of HMCE and/or HB, as applicable. Neither HMCE nor HB shall enter into any new leases or enter into any amendments, modifications, or renewals of Space Leases or otherwise make any changes to any of the Space Leases without the prior written consent of IFA, which IFA may withhold in its reasonable discretion. In the event, subsequent to the date hereof, HMCE or HB desires to enter into any new leases, HMCE or HB, as applicable, shall provide IFA with a photocopy of each such lease for approval. If IFA approves such new lease in writing, HMCE or HB may enter into the new lease and such new leases shall be considered a part of the Space Leases hereunder, and IFA shall (i) reimburse HMCE or HB for all tenant improvement and brokerage commission costs provided for in the lease and incurred by HMCE or HB in connection therewith, or (ii) on the Closing Date shall assume the obligation to pay for all commissions, allowances and all other obligations to become due under or in connection with such new lease(s) by the landlord. ARTICLE VI Additional Obligations of IFA Section 6.1 Expenses. IFA agrees to pay all expenses incurred by it in connection with the negotiation, execution and performance of this Agreement and the transactions contemplated hereby, including the fees and expenses of its legal counsel. ARTICLE VII Conditions Precedent to HMCE's Obligations The obligations of HMCE to transfer and convey the Property to Hunters Branch LLC and to perform the other covenants and obligations to be performed by it on the Closing Date shall be subject to the following conditions (all or any of which may be waived, in whole or in part, by HMCE): Section 7.1 IFA's Representations and Warranties True. The representations and warranties made by IFA in Article IV shall be true and correct on the Effective Date and shall be true and correct in all material respects on and as of the Closing Date with the same force and effect as though such representations and warranties had been made on and as of such date; and IFA shall have executed and delivered to HMCE a certificate, dated as of the Closing Date, to the foregoing effect. Section 7.2 IFA's Performance. IFA shall have performed all obligations required by this Agreement to be performed by it on or before the Closing Date. Section 7.3 Closing of Nomura Loan. On the Closing Date, Nomura shall consummate the closing of the Nomura Loan in accordance with the Nomura Commitment, unless the failure of such closing to occur is caused by a default by HMCE or HB in performing any of the obligations to be performed by them under this Agreement. ARTICLE VIII Conditions Precedent to IFA's Obligations -12- The obligations of IFA to perform the covenants and obligations to be performed by it on the Closing Date, including the obligation of IFA to make the capital contribution described in Section 2.4 of this Agreement to Hunters Branch LLC, shall be subject to the following conditions (all or any of which may be waived, in whole or in part, by IFA): Section 8.1 HMCE's and HB's Representations and Warranties True. The representations and warranties made by HMCE and HB in Article III shall be true and correct on the Effective Date and shall be true and correct in all material respects on and as of the Closing Date with the same force and effect as if such representations had been made on and as of such date; and HMCE shall have executed and delivered to IFA a certificate, dated as of the Closing Date, to the foregoing effect. Section 8.2 HMCE's Performance. HMCE shall have performed all covenants and obligations required by this Agreement to be performed by it on or before the Closing Date. Section 8.3 Title to Leasehold Estates. On the Closing Date, HMCE shall be the sole owner of the Leasehold Estates and such title shall be marketable, good of record and in fact, and free and clear of all Mortgages, liens, encumbrances, easements, Leases, conditions and other matters affecting title other than the Permitted Exceptions. Section 8.4 Closing of Nomura Loan. On the Closing Date, Nomura shall consummate the closing of the Nomura Loan in accordance with the Nomura Commitment, unless the failure of such closing to occur is caused by a default by ICF Kaiser or IFA in performing any of the obligations to be performed by it under this Agreement. Section 8.5 Condemnation. On the Closing Date, no part of the Land or the Buildings shall be about to be acquired, or shall previously have been acquired, by authority of any governmental agency in the exercise of its power of eminent domain or by private purchase in lieu thereof, nor on the Closing Date shall there be any threat or imminence of any such acquisition or purchase. Section 8.6 Estoppel Certificates. IFA and Nomura shall have received (i) estoppel certificates ("Space Tenant Estoppel Certificates") duly executed by each of the Space Tenants. The Space Tenant Estoppel Certificates shall be dated not more than thirty (30) days prior to the Closing Date. The Space Tenant Estoppel Certificates shall be in the form of, and upon the terms contained in, Exhibit K attached hereto, unless any estoppel form is attached to a Space Lease, in which event the form required by such Space Lease shall be used, and (ii) estoppel certificates (the "Ground Lease Estoppel Certificates") executed by the Ground Lessor substantially in the form attached as Exhibit L. HMCE shall deliver the Tenant Estoppel Certificates and Ground Lease Estoppel Certificates to IFA as soon as reasonably possible after receipt thereof. Section 8.7 Material Adverse Change. Between the Effective Date and the Closing Date, there shall have been no material adverse change in the condition of the Real Property. ARTICLE IX Closing Section 9.1 Closing Date. The closing of the transactions contemplated by this Agreement (the "Closing") shall take place on October 31, 1997, simultaneously with the closing of the Nomura Loan. The Closing shall be held at the office of an attorney-at-law, a title insurance company or a title insurance agent in the Washington, D.C. metropolitan area mutually acceptable to HMCE and IFA. Notwithstanding the foregoing, the Closing Date may be postponed by IFA by written notice to HMCE, to a date not later than November 21, 1997. The date on which closing is actually consummated is herein referred to as the "Closing Date". Section 9.2 HMCE's Deliveries to IFA. Subject to the terms and conditions of this Agreement, HMCE shall deliver, or cause to be delivered, to IFA on the Closing Date, the following: -13- (a) the LLC Agreement, signed by HMCE; (b) the Option Agreement, signed by the Ground Lessors and by HMCE in its capacity as a member of Hunters Branch LLC; (c) all documents or instruments required to be delivered by HMCE or the Ground Lessor pursuant to or consistent with the Nomura Commitment, including a subordination of the Ground Lessor's interest in the Ground Leases to the deed(s) of trust to be recorded to secure the Nomura Loan, and Subordination, Non-Disturbance and Attornment Agreements received by HMCE from each of the Space Tenants, subordinating the Space Leases to the Mortgage securing the Nomura Loan; (d) evidence of HMCE's authority to consummate the transactions contemplated by this Agreement; (e) the Space Tenant Estoppel Certificates and Ground Lease Estoppel Certificates received by HMCE from the Space Tenants and the Ground Lessor; (f) all other documents, instruments, agreements and certificates required by this Agreement to be signed and/or delivered by HMCE to IFA at the Closing; and (g) a legal opinion from counsel to HMCE confirming the existence of HMCE and its authority to consummate the transactions contemplated hereby. Section 9.3 IFA's Deliveries to HMCE. Subject to the terms and conditions of this Agreement, IFA shall deliver, or cause to be delivered, to HMCE, on the Closing Date, the following: (a) the LLC Agreement, signed by IFA; (b) the Option Agreement, signed by IFA; (c) evidence of IFA's authority to consummate the transactions contemplated by this Agreement; and (d) all other documents, instruments, agreements and certificates required by this Agreement to be signed and/or delivered by IFA to HMCE at the Closing. Section 9.4 IFA's Additional Deliveries to Hunters Branch LLC. Subject to the terms and conditions of this Agreement, IFA shall cause to be delivered, to Hunters Branch LLC on the Closing Date, the following: (a) evidence of ICF Leasing's authority in respect of those undertakings hereunder contemplated to be performed by it. (b) evidence of ICF Kaiser's authority in respect of those undertakings to be performed by it pursuant to the ICF Kaiser Lease Guaranty. (c) all documents and instruments required by Nomura to be signed by ICF Kaiser or ICF Leasing in order to consummate the Nomura Loan, but neither ICF Kaiser nor ICF Leasing shall be obligated to sign or deliver any document or instrument that imposes on it any personal liability for payment of the Nomura Loan; and (d) all other documents, instruments, agreements and certificates required by this Agreement to be signed and/or delivered by ICF Kaiser to Hunters Branch LLC at the Closing. Section 9.5 Hunters Branch LLC's Deliveries. Subject to the terms and conditions of this Agreement, IFA as Managing Member of Hunters Branch LLC, shall deliver, or cause to be delivered, to ICF Kaiser and/or ICF Leasing, as applicable, on the Closing Date, the following: -14- (a) evidence of Hunters Branch LLC's authority to consummate the transactions contemplated by this Agreement; and (b) all other documents, instruments, agreements and certificates required by this Agreement to be signed and/or delivered by Hunters Branch LLC to ICF Kaiser or ICF Leasing at the Closing. Section 9.6 HMCE's Deliveries to Hunters Branch LLC. Subject to the terms and conditions of this Agreement, HMCE shall deliver, or cause to be delivered, to Hunters Branch LLC on the Closing Date, the following: (a) the Ground Lease Assignment for the 9300 Ground Lease and the Ground Lease Assignment for the 9302 Ground Lease, both signed by HMCE. (b) the Bill of Sale, signed by HMCE; (c) the Space Lease and Contract Assignment, signed by HMCE; (d) instruments terminating the 9300 ICF Space Lease and the 9302 ICF Space Lease, signed by ICF Kaiser and HMCE; (e) the 9300 New ICF Space Lease, signed by ICF Leasing and HMCE; (f) the 9302 New ICF Space Lease, signed by ICF Leasing and HMCE; (g) the ICF Kaiser Lease Guaranty; (h) the General Assignment, signed by HMCE; (i) all original insurance policies with respect to which premiums are to be apportioned as of the Closing Date or, if unobtainable, true copies or certificates thereof; (j) a certification as to HMCE's non-foreign status which complies with the provisions of Section 1445(b)(2) of the Code, any temporary or final regulations promulgated thereunder, and any revenue procedures or other officially published announcements of the Internal Revenue Service or the U.S. Department of the Treasury in connection therewith; (k) an Affidavit signed by HMCE, addressed to the title insurance company(ies) designated by Nomura, with respect to the absence of claims which would give rise to mechanics' liens, the absence of parties in possession of the Buildings other than Space Tenants under the Space Leases (and other than subtenants of Space Tenants) and the absence of unrecorded easements granted by HMCE or HB, in the form customarily required by title insurance companies insuring title to real property in Fairfax County, Virginia, to eliminate the exceptions for those matters from Hunters Branch LLC's and Nomura's title insurance policy(ies) for the Ground Leases; (l) the Closing Statement referred to in Section 10.1; (m) an original executed counterpart of each Space Lease and Contract then in effect; (n) all keys to the Buildings and the Personal Property, if any, which are in HMCE's possession or control, or otherwise obtainable by HMCE without undue burden or expense, with labels identifying each lock to which such keys relate; (o) all certificate(s) of occupancy, if any, for the Buildings in HMCE's possession or otherwise obtainable by HMCE without undue burden or expense; -15- (p) letters signed by HMCE addressed to all Space Tenants in a form approved by IFA (such approval not to be unreasonably withheld, delayed or conditioned) notifying such Space Tenants of the transfer of ownership of the Leasehold Estates and directing the Space Tenants to pay rent that becomes payable after the Closing Date or rent that is unpaid on the Closing Date, or both, to Hunters Branch LLC or at its direction; (q) a rent roll, in substantially the same form required by Nomura to be delivered to Nomura in connection with the Nomura Loan, setting forth all past due and uncollected Rent owed by Space Tenants, all prepayments of Rent and all Security Deposits, if any, held by HMCE, its managing agent or any other Person under all Space Leases; (r) state and local returns, if any, required to report the transactions contemplated by this Agreement; (s) all documents and instruments required by Nomura to be signed by HMCE in order to consummate the Nomura Loan, but HMCE shall not be obligated to sign or deliver any document or instrument that imposes personal liability on it or its partners for payment of the Nomura Loan; and (t) all other documents, instruments, agreements and certificates required by this Agreement to be signed and/or delivered by HMCE to Hunters Branch LLC at the Closing. Section 9.7 Hunters Branch LLC's Deliveries to HMCE. Subject to the terms and conditions of this Agreement, IFA, as Managing Member of Hunters Branch LLC, shall deliver, or cause to be delivered, to HMCE on the Closing Date, the following: (a) the Ground Lease Assignment for the 9300 Ground Lease and the Ground Lease Assignment for the 9302 Ground Lease, both signed by IFA as Managing Member of Hunters Branch LLC; (b) the Space Lease and Contract Assignment, signed by IFA, as Managing Member of Hunters Branch LLC; (c) the Closing Statement referred to in Section 10.1; (d) evidence of Hunters Branch LLC's authority to consummate the transactions contemplated by this Agreement; (e) state and local returns, if any, required to report the transactions contemplated by this Agreement, signed by IFA, as Managing Member of Hunters Branch LLC; and (p) all other documents, instruments, agreements and certificates required by this Agreement to be signed and/or delivered by Hunters Branch LLC to HMCE at the Closing. ARTICLE X Closing Adjustments and Prorations Section 10.1 General. All rentals, revenues and other income generated by the Buildings and all Real Estate Taxes and Operating Expenses related to the Buildings shall be paid or shall be prorated between HMCE and Hunters Branch LLC in accordance with the provisions of this Article. For purposes of the prorations and adjustments to be made pursuant to this Article, Hunters Branch LLC shall be deemed to own the Leasehold Estates and therefore be entitled to any revenues and be responsible for any expenses for the entire day upon which the Closing occurs. Any apportionments and prorations which are not expressly provided for in this Article shall be made in accordance with the customary practice in Fairfax County, Virginia. HMCE and IFA shall cause their accountants to prepare a separate schedule of adjustments for the Buildings (the "Closing Statement") before the Proration Date. Any net adjustment in favor of Hunters Branch LLC shall be paid by HMCE in cash or cash equivalent at the Closing. Any net adjustment in favor of HMCE shall be paid by Hunters Branch LLC in cash or -16- cash equivalent at, or within 45 days after, the Closing. A copy of the Closing Statement agreed upon by HMCE and Hunters Branch LLC shall be executed by HMCE and IFA at the Closing. Section 10.2 Rent. Rent shall be prorated at the Closing in accordance with the following provisions: (a) Minimum Rent. Subject to Section 10.2(c) (relating to Delinquent Rent), Minimum Rent shall be prorated between HMCE and Hunters Branch LLC as of the Proration Date on an accrual basis based on the actual number of days in the month during which the Proration Date occurs. HMCE shall be entitled to all Minimum Rent which accrues before the Proration Date and Hunters Branch LLC shall be entitled to all Minimum Rent which accrues on and after the Proration Date. (b) Additional Rent. Subject to Section 10.2(c) (relating to Delinquent Rent), monthly or other payments made by Tenants in advance based upon projected or estimated Additional Rent shall be prorated between HMCE and Hunters Branch LLC as of the Proration Date on an accrual basis based on the actual number of days in the monthly or other period for which the advance payment is made in which the Proration Date occurs. Such proration shall be made separately for each Space Tenant who is obligated to pay Additional Rent on the basis of the fiscal year set forth in the Space Tenant's Space Lease for the determination and payment of Additional Rent. The actual fiscal year for determination and payment of Additional Rent in which the Proration Date occurs is hereinafter referred to as the "Applicable Additional Rent Fiscal Year." Subject to the proration of advance payments required by the preceding sentence, HMCE shall initially retain all monthly or other payments of Additional Rent made by each Space Tenant for its Applicable Additional Rent Fiscal Year before the Proration Date until the Final Closing Adjustment and Hunters Branch LLC shall initially retain all such monthly or other payments of Additional Rent made by each Space Tenant for its Applicable Additional Rent Fiscal year on and after the Proration Date until the Final Closing Adjustment. HMCE and Hunters Branch LLC shall prorate the total Additional Rent due from each Space Tenant for the Space Tenant's Applicable Additional Rent Fiscal Year as a part of the Final Closing Adjustment pursuant to Section 10.11(b). (c) Delinquent Rent. Delinquent Rent shall be prorated between HMCE and Hunters Branch LLC as of the Proration Date but not until it is actually collected by Hunters Branch LLC after the Closing. Hunters Branch LLC shall pay to HMCE when and as collected, and as soon as practicable following receipt, all Delinquent Rent collected by Hunters Branch LLC after the Closing which is attributable to the period before the Proration Date, net of the costs of collection (including reasonable attorneys' fees and costs). As a part of the Final Closing Adjustment, any Delinquent Rent which has not as yet been paid shall be assigned to HMCE, but after the Closing and continuing through and after the Final Closing Adjustment, without the express written consent of Hunters Branch LLC, HMCE shall not take any action against a Space Tenant owing Delinquent Rent which would affect such Space Tenant's right to occupy the premises leased under its Space Lease, but HMCE may take any other action it deems necessary or appropriate (in its own name but not in the name of Hunters Branch LLC) to sue for and collect the Delinquent Rent. Delinquent Rent collected by Hunters Branch LLC after the Closing, net of the costs of collection (including reasonable attorneys' fees and costs), shall be applied in the following order of priority: (1) in the case of Delinquent Rent which is less than 31 days overdue as of the Proration Date, against the Space Tenant's Rent obligations in the chronological order in which they accrue; and (2) second, in the case of Delinquent Rent which is more than 30 days overdue as of the Proration Date, against the Space Tenant's Rent obligations in the inverse chronological order in which they accrue. (d) Other Rent Adjustments. All Rent payable by each Space Tenant whose Space Lease was terminated before the Proration Date by the terms thereof (or whose space lease was terminated by agreement prior to the Effective Date) shall belong entirely to HMCE. All Rent payable by each Space Tenant whose Lease commences on or after the Proration Date shall belong entirely to Hunters Branch LLC. Section 10.3 Taxes and Assessments. -17- (a) Proration of Taxes at Closing. All non-delinquent Real Estate Taxes assessed against the Land and the Buildings shall be prorated between HMCE and Hunters Branch LLC on an accrual basis, based upon the actual current tax bill. All Real Estate Taxes allocable to the period before the Proration Date shall be the obligation of HMCE and all Real Estate Taxes allocable to the period on and after the Proration Date shall be the obligation of Hunters Branch LLC Any delinquent Real Estate Taxes assessed against the Land the Buildings shall be paid (together with any interest and penalties) by HMCE at the Closing in cash or cash equivalent. (b) Post-Closing Refunds of Taxes. Any refunds of Real Estate Taxes made after the Closing shall be held in trust by Hunters Branch LLC (and, if received by HMCE, shall be delivered immediately to Hunters Branch LLC to be held in trust in accordance with this Section) and shall first be applied to the unreimbursed costs incurred in obtaining the refund, then paid to any Space Tenants who are entitled to the same and the balance, if any, shall be paid to HMCE (for the period prior to the Closing Date) and to Hunters Branch LLC (for the period commencing on and after the Closing Date). Section 10.4 Operating Expenses. All Operating Expenses and Ground Lease Rent shall be prorated between HMCE and Hunters Branch LLC as of the Proration Date on an accrual basis, based on the actual number of days in the month during which the Proration Date occurs. HMCE shall be responsible for all Operating Expenses and Ground Lease Rent attributable to the period before the Proration Date and Hunters Branch LLC shall be responsible for all Operating Expenses and Ground Lease Rent attributable to the period on and after the Proration Date. To the extent commercially reasonable and practicable, HMCE and Hunters Branch LLC shall obtain billings and meter readings as of the Business Day preceding the Proration Date to aid in the proration of charges for gas, electricity and other utility services which are not the direct responsibility of Space Tenants. If billings or meter readings as of the Business Day preceding the Proration Date are obtained, adjustments of any costs, expenses, charges or fees shown thereon shall be made in accordance with such billings or meter readings. If billings or meter readings as of the Business Day preceding the Proration Date are not available for any utility service, the charges therefor shall be adjusted at the Closing on the basis of the per diem charges for the most recent prior period for which bills were issued and shall be further adjusted at the Final Closing Adjustment on the basis of the actual bills for the current period. Section 10.5 Existing TIAA Mortgage Loans. HMCE shall be responsible for all costs incurred by TIAA in connection with the Existing TIAA Mortgage Loans except as set forth below. As of September 30, 1997, outstanding legal fees charged by Debevoise and Plimpton (the "TIAA Counsel") in its representation of TIAA in connection with the Existing TIAA Mortgage Loans were in the amount of $45,135.45, which amount, as well as any additional legal fees incurred by TIAA in connection with the Existing TIAA Mortgage Loans through the Effective Date, shall be borne by Hunters Branch LLC. HMCE shall have no obligation for any payment on account thereof except in respect of the $30,000.00 contribution being made pursuant to Section 4.2(a) of the LLC Agreement. (a) Interest. Accrued interest shall be paid by HMCE at the Closing through the Effective Date. (b) Escrows. HMCE shall be credited with and Hunters Branch LLC shall be charged with the amount of the escrows for Real Estate Taxes and insurance, if any, held by or on behalf of TIAA on the Closing Date; provided that TIAA delivers such amounts to Nomura for the account of Hunters Branch LLC. Section 10.6 Security Deposits and Other Space Tenant Credits. Hunters Branch LLC shall be credited with and HMCE shall be charged with an amount equal to the sum of (i) all Security Deposits being (or required to be) held by HMCE or any other Person under the Space Leases (including interest thereon if required pursuant to the terms of any Space Leases), and (ii) the amount of any other credits due to Space Tenants as of the Closing Date (other than credits for free rent or other lease concessions unless in the form of monetary payments to be made to any Space Tenant) in accordance with the terms of the Space Leases. HMCE shall be entitled to retain all Security Deposits or other such credits due Space Tenants for which Hunters Branch LLC receives credit and HMCE is charged pursuant to this Section. -18- Section 10.7 Utility Deposits. Hunters Branch LLC shall pay to HMCE at the Closing the amount of all Utility Deposits, against a good and sufficient transfer by HMCE to Hunters Branch LLC of all interest of HMCE in the Utility Deposits, unless the utility company's policy is to refuse to honor such assignment in which case HMCE shall be entitled to retain its Utility Deposits and Hunters Branch LLC will post new Utility Deposits. Section 10.8 Collection of Delinquent Rent. Hunters Branch LLC shall have the right after the Closing to collect Delinquent Rent relating to the period before the Proration Date, but shall not be obligated to do so. Hunters Branch LLC shall act in a reasonable and diligent manner to collect Delinquent Rent for the annual period in which the Proration Date occurs, but Hunters Branch LLC shall not be required to retain counsel or to institute suit or commence other legal action in order to collect Delinquent Rent. The legal fees and related costs and expenses incurred in collecting Delinquent Rent shall be paid by HMCE, subject to any reimbursement obtained in accordance with the Space Tenant's Space Lease. Hunters Branch LLC shall not waive any Delinquent Rent or modify or amend any Space Lease so as to reduce the Delinquent Rent owed by the Space Tenant for any period for which HMCE is entitled to receive such Delinquent Rent, without first obtaining HMCE's written consent. This Section shall not prohibit HMCE from suing or taking other action to collect Delinquent Rent pursuant to Section 10.2(c), subject to the limitations set forth in Section 10.2(a). Section 10.9 Credit for Free Rent. At the Closing, HMCE shall give Hunters Branch LLC credit for an amount, determined on an accrual basis, equal to the abatement of Minimum Rent for any period on and after the Closing Date to which Space Tenants are entitled under Space Leases in effect on the Effective Date. Section 10.10 Required Statements and Reports. (a) Exchange of Information. As soon as reasonably practical after the Closing Date, HMCE shall deliver to Hunters Branch LLC a statement, certified to be true and correct by HMCE, setting forth all Operating Expenses incurred by HMCE during the period beginning on the first day of the calendar year in which the Proration Date occurs (the "Calendar Year of Proration") and ending on the day before the Proration Date and all reimbursements (if any) received during such period by HMCE, as landlord, under the Space Leases for each Space Tenant's share of Reimbursable Expenses for the Calendar Year of Proration. As soon as reasonably practical after December 31 of the Calendar Year of Proration, Hunters Branch LLC shall deliver to HMCE statements, certified to be true and correct by Hunters Branch LLC, setting forth all Operating Expenses incurred by Hunters Branch LLC during the period beginning on the Proration Date and ending on the last day of the Calendar Year of Proration and all reimbursements received during such period by Hunters Branch LLC, as landlord, under the Space Leases for each Space Tenant's share of Reimbursable Expenses for the Calendar Year of Proration. (b) Hunters Branch LLC's Obligation to Bill Space Tenants. Hunters Branch LLC shall bill each Space Tenant, at the time and in the manner required by the Space Tenant's Space Lease, for the amount (if any) of Reimbursable Expenses for the Calendar Year of Proration which the Space Tenant is obligated to pay to Hunters Branch LLC, as landlord under the Space Tenant's Space Lease, and shall prepare and deliver to each Space Tenant, at Hunters Branch LLC's expense, all statements and other supporting information required by the Space Tenant's Space Lease to substantiate the amount billed. Section 10.11 Final Closing Adjustment. Within 180 days after the Closing Date, HMCE and Hunters Branch LLC shall make a final adjustment to the prorations made pursuant to this Article (the "Final Closing Adjustment"). The Final Closing Adjustment shall be made in the following manner: (a) General. All adjustments or prorations which could not be determined at the Closing because of the lack of actual statements, bills or invoices for the current period, the year-end adjustment of Additional Rent, or any other reason shall be made as a part of the Final Closing Adjustment. Any net adjustment in favor of Hunters Branch LLC shall be paid in cash or cash equivalent by HMCE to Hunters Branch LLC no later than 20 days after the Final Closing Adjustment. Any net adjustment in favor of HMCE shall be paid in cash or cash equivalent by Hunters Branch LLC to HMCE no later than 20 days after the Final Closing Adjustment. (b) Additional Rent Adjustment. HMCE and Hunters Branch LLC shall prorate the actual amount of Additional Rent paid by each Space Tenant for such Space Tenant's Applicable Additional Rent Fiscal -19- Year (as distinguished from the interim payments prorated as of the Proration Date pursuant to Section 10.2(a)) as follows: (1) HMCE shall be entitled to the portion of the actual amount of Additional Rent paid by the Space Tenant equal to the product obtained by multiplying such amount by a fraction, the numerator of which is the total amount of Reimbursable Expenses incurred by HMCE during the portion of the Space Tenant's Applicable Additional Rent Fiscal Year preceding the Proration Date and the denominator of which is the total amount of Reimbursable Expenses incurred by HMCE and Hunters Branch LLC during the Space Tenant's Applicable Additional Rent Fiscal Year; and (2) Hunters Branch LLC shall be entitled to the balance of the Additional Rent paid by the Space Tenant. If the sum of all interim payments on account of Additional Rent collected and retained by HMCE from each Space Tenant for the Space Tenant's Applicable Additional Rent Fiscal Year pursuant to Section 10.2(b) (reduced by a pro-rated portion of the interim payment on account of Additional Rent paid for the month or quarter in which the Proration Date occurs for which Hunters Branch LLC is given credit pursuant to Section 10.2(b)) exceeds the amount of Additional Rent to which HMCE is entitled with respect to such Space Tenant pursuant to paragraph (1) above, HMCE shall pay such excess to Hunters Branch LLC If the sum of all interim payments on account of Additional Rent collected and retained by Hunters Branch LLC from each Space Tenant for the Space Tenant's Applicable Additional Rent Fiscal Year pursuant to Section 10.2(b) (increased by a pro- rated portion of the interim payment on account of Additional Rent paid for the month or quarter in which the Proration Date occurs for which Hunters Branch LLC is given credit pursuant to Section 10.2(b)) exceeds the amount of Additional Rent to which Hunters Branch LLC is entitled with respect to such Space Tenant pursuant to paragraph (2) above, Hunters Branch LLC shall pay the excess to HMCE. The adjustment of interim payments received and actual Additional Rent paid shall be made separately for each Space Tenant (as opposed to aggregating all interim payments received by HMCE or Hunters Branch LLC from all Space Tenants and offsetting the same against the entire amount of Additional Rent payable by all Space Tenants). If the sum of the interim payments on account of Additional Rent collected by HMCE and the interim payments on account of Additional Rent collected by Hunters Branch LLC exceeds the Additional Rent actually owed by the Space Tenant for the Space Tenant's Applicable Additional Rent Fiscal Year, Hunters Branch LLC shall remit to, or give the Space Tenant credit for, such excess and HMCE and Hunters Branch LLC shall make any necessary adjustment between them in accordance with the immediately preceding sentences. If the Space Tenant's Lease requires the Space Tenant to pay Additional Rent on the basis of more than one category of Reimbursable Expenses, e.g., one or more components of Operating Expenses and real estate taxes, the prorations required by this Section 10.11(b) shall be made separately for each category. (c) No Further Adjustments. Except for: (i) additional or supplemental real estate taxes, real estate tax credits or rebates, or other adjustments to real estate taxes due to back assessments, corrections to previous tax bills or real estate tax appeals or contests, and (ii) any item of Additional Rent which may be contested by a Space Tenant, the Final Closing Adjustment shall be conclusive and binding upon HMCE and Hunters Branch LLC and HMCE and Hunters Branch LLC hereby waive any right to contest after the Final Closing Adjustment any prorations, apportionments or adjustments to be made pursuant to this Section. ARTICLE XI Termination Section 11.1 Reasons for Termination. This Agreement may be terminated upon written notice given to the other party by: (a) ICF Kaiser or IFA at the Closing, if any one of the conditions set forth in Article VIII is not satisfied on the Closing Date; or (b) HMCE at the Closing, if any of the conditions set forth in Article VII is not satisfied on the Closing Date; or -20- (c) ICF Kaiser, IFA or HMCE at any time after November 30, 1997, if the Closing does not occur before the date on which a notice of termination is given by one party to the other party. Section 11.2 Effect of Termination. If any party terminates this Agreement pursuant to Section 11.1, this Agreement shall become null and void and no party shall have any further liability or obligation to any other party under this Agreement, except as otherwise provided in the next sentence. If IFA or HMCE terminates this Agreement pursuant to Section 11.1(a) or Section 11.1(b) because of a breach by the other party of any of the representations or warranties made by the other party in this Agreement or the failure of the other party to perform any of the covenants or agreements to be performed by it under this Agreement, the terminating party may sue to recover its damages arising out of such misrepresentation, breach of warranty or default. Section 11.3 Right to Seek Specific Performance. If HMCE, IFA or ICF Kaiser defaults in performing any of the covenants or agreements to be performed by it under this Agreement, the other party shall have the right, instead of terminating this Agreement pursuant to Section 11.1, to elect to permit this Agreement to remain in effect and to sue for specific performance. ARTICLE XII Miscellaneous Provisions Section 12.1 Entire Agreement. This Agreement, together with the Exhibits hereto and any other agreements entered into by and among the parties hereto simultaneously with, and dated the same day as, this Agreement, contains the entire agreement between the parties relating to the transactions contemplated by this Agreement; all prior negotiations between the parties are merged by this Agreement; and there are no promises, agreements, conditions, undertakings, warranties or representations, oral or written, express or implied, between them other than as herein set forth. No change or modification of this Agreement shall be valid unless the same is in writing and signed by the parties hereto. No waiver of any of the provisions of this Agreement, or any other agreement referred to herein, shall be valid unless in writing and signed by the party against whom it is sought to be enforced. Section 12.2 Survival of Agreements. All provisions of this Agreement which, by their terms, are to be performed after the Closing Date, shall survive the Closing. Section 12.3 Counterparts. This Agreement may be executed in any number of counterparts and it shall not be necessary that each party to this Agreement execute each counterpart. Each counterpart so executed (or, if all parties do not sign on the same counterpart, each group of counterparts signed by all parties) shall be deemed to be an original, but all such counterparts together shall constitute one and the same instrument. In making proof of this Agreement, it shall not be necessary to account for more than one counterpart or group of counterparts signed by all parties. Section 12.4 Benefit and Burden. Neither HMCE nor HB may assign its rights under this Agreement without IFA's prior written consent. Neither ICF Kaiser nor IFA may assign its rights under this Agreement without HMCE's prior written consent. Subject to the foregoing, all terms of this Agreement shall be binding upon, and inure to the benefit of and be enforceable by, the respective personal representatives, heirs, successors and assigns of the parties hereto. Section 12.5 Governing Law. This Agreement is intended to be performed in the jurisdiction in which the Buildings are located and shall be construed and enforced in accordance with the laws of such jurisdiction, without resort to conflicts of laws principles. Section 12.6 Notices. (a) Manner of Giving Notice. Each notice, request, demand, consent, approval or other communication (hereafter in this Section referred to collectively as "notices" and referred to singly as a "notice") -21- which HMCE, HB, IFA or ICF Kaiser is required or permitted to give to any other party pursuant to this Agreement shall be in writing and shall be deemed to have been duly and sufficiently given if (1) personally delivered with proof of delivery thereof (any notice so delivered shall be deemed to have been received at the time so delivered), (2) sent by Federal Express (or other similar overnight courier) designating early morning delivery (any notice so delivered shall be deemed to have been received on the next Business Day following receipt by the courier), (3) sent by United States registered or certified mail, return receipt requested, postage prepaid, at a post office regularly maintained by the United States Postal Service (any notice so sent shall be deemed to have been received two days after mailing in the United States), or (4) sent by telecopier or facsimile machine which automatically generates a transmission report that states the date and time of the transmission the length of the document transmitted and the telephone number of the recipient's telecopier or facsimile machine (with a copy thereof sent in accordance with paragraph (2) above) (any notice so delivered shall be deemed to have been received (i) on the date of transmission, if so transmitted before 5:30 p.m. (local time of the recipient) on a Business Day, or (ii) on the next Business Day, if so transmitted on or after 5:30 p.m. (local time of the recipient) on a Business Day or if transmitted on a day other than a Business Day), addressed to the parties at their respective addresses designated pursuant to subsection (b). (b) Addresses for Notices. All notices shall be addressed to the parties at the following addresses: (1) if to HMCE or HB: c/o Ms. P. Diane Tipton The Evans Company 8251 Greensboro Drive, Suite 850 McLean, Virginia 22102 Telecopy Number: (703) 893-0617 with a copy to: Joel N. Simon, Esq. Arent Fox Kintner Plotkin & Kahn 1050 Connecticut Avenue, N.W. Washington, D.C. 20036-5339 Telecopy Number: (202) 857-6395 (2) if to IFA: Mr. Richard L. Perlmutter Argo Investment Company, LC 1355 Piccard Drive, Suite 470 Rockville MD 20850 Telecopy Number: (301) 948-7642 with a copy to: Mr. Clayton Foulger Foulger-Pratt Companies 1355 Piccard Drive, Suite 400 Rockville, MD 20850 -22- Telecopy Number: (301) 948-5949 with a copy to: J. Richard Saas, Esq. Tenenbaum & Saas, P.C. 4330 East-West Highway, Suite 1150 Bethesda, Maryland 20814 Telecopy Number: (301) 961-5305 Mr. Timothy O'Connor ICF Kaiser International, Inc. 9300 Lee Highway Fairfax, Virginia 22031-1207 Telecopy Number: (703) 934-3528 Paul Weeks, Esq. ICF Kaiser International, Inc. 9300 Lee Highway Fairfax, Virginia 22031-1207 Telecopy Number: (703) 934-3029 James J. Maiwurm, Esq. Crowell & Moring, LLP 1001 Pennsylvania Avenue, N.W. Washington, D.C. 20004-2595 Telecopy Number: (202) 628-5116 Any party may, by notice given pursuant to this Section, change the person or persons and/or address or addresses, or designate an additional person or persons or an additional address or addresses, for its notices, but notice of a change of address shall only be effective upon receipt. HMCE, IFA and ICF Kaiser agree that they shall not refuse or reject delivery of any notice given hereunder, that it will acknowledge, in writing, receipt of the same upon request by the other party and that any notice rejected or refused by it shall be deemed for all purposes of this Agreement to have been received by the rejecting party on the date so refused or rejected, as conclusively established by the records of the U.S. Postal Service or the courier service. (c) Notice Given by Counsel. All Notices that are required or permitted to be given under this Agreement may be given by the parties hereto or by their respective counsel, who are hereby authorized to do so on the parties' behalf. Section 12.7 Press Release. HMCE and ICF Kaiser agree that before the Closing Date they will not issue any press release, advertisement or other public communication with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the other party hereto, except to the extent required by law. If ICF Kaiser is required by law to issue such a press release or other public communication before the Closing Date, at least two Business Days before the issuance of the same it shall deliver a copy of the proposed press release or other public communication to HMCE for its review and approval, which approval shall not be unreasonably withheld or delayed. Section 12.8 Partial Invalidity. If any term or provision of this Agreement or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. -23- Section 12.9 Attorneys' Fees. In the event the parties shall become engaged in any litigation or with each other in connection with or arising out of this Agreement, the prevailing party shall be reimbursed and indemnified by the party not prevailing in such litigation for all costs and expenses reasonably incurred by the prevailing party in enforcing or establishing its rights hereunder, including court costs and reasonable attorneys' fees and disbursements. The prevailing party shall be determined by the court based upon an assessment of which party's major arguments or positions taken in the proceedings could fairly be said to have prevailed over the other party's major arguments or positions on major disputed issues. Section 12.10 Waiver of Jury Trial. Each party to this Agreement waives trial by jury in any action, proceeding or counterclaim brought by such party against any other party on any matter arising out of or in any way connected with this Agreement. Section 12.11 Time of the Essence. Except as otherwise provided in this Agreement, time shall be of the essence with respect to each and every provision of this Agreement. Section 12.12 Arm's Length Transaction. Each of the parties hereto represents and warrants to each of the other parties hereto that this Agreement represents the result of arm's length third party negotiation by such party, that each such party enters into this Agreement of its own accord and free will, and that each such party has been represented in connection with the negotiation hereof by competent legal and tax counsel of its own choice. No party hereto is relying on any other party hereto concerning or in respect of any tax or other treatment which may be given such party as a result of the transaction contemplated hereby, each party hereto relying on its own professional advisors in connection therewith. IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above stated. WITNESS: HMCE ASSOCIATES LIMITED PARTNERSHIP, R.L.L.P. /s/ Joel N. Simm By: /s/ David W. Evans - ----------------------- -------------------------------------- David W. Evans, Authorized General Partner HB LIMITED PARTNERSHIP, R.L.L.P. By: HMCE Associates Limited Partnership, R.L.L.P., its General Partner /s/ Joel N. Simm By: /s/ David W. Evans - ----------------------- ------------------------------------- David W. Evans, Authorized General Partner IFA NUTLEY PARTNERS, LLC By: Hunters Branch Manager, Inc., its Managing Member /s/ Kary Hilliard - ------------------------ By: /s/ Richard L. Perlmutter ------------------------------------- Name: Richard L. Perlmutter Title: Vice President -24- EXHIBIT A-1 Description of 9300 Land EXHIBIT A-2 Description of 9302 Land EXHIBIT B Certificate of Formation EXHIBIT C Form of Limited Liability Company Agreement EXHIBIT D Assignment and Assumption of Ground Leases EXHIBIT E Bill of Sale EXHIBIT F Assignment and Assumption of Certain Leases, Tenancies and Written Contracts EXHIBIT G Assignment of Licenses and Warranties and General Assignment EXHIBIT H Form of 9300 New ICF Space Lease EXHIBIT I Form of 9302 New ICF Space Lease EXHIBIT J Form of Option Agreement EXHIBIT K Form of Space Tenant Estoppel Certificate EXHIBIT L Form of Ground Lessor Estoppel Certificate EXHIBIT M Form of Lease Termination Agreement -25- EX-10.(K)(3) 26 EXHIBIT 10(K)(3) MODIFICATIONS TO CONTRACT DE-AC34-95RF00825 EXHIBIT 10(k)(3)
DATE MOD CHANGES - ---- --- ------- 03/20/97 A047 1. Article B.3, Obligation of Funds as Follows: Funds Obligated to date $1,218,671,241.09 Funds Obligated by Mod A047 $ 4,200,000.00 Funds Obligated since inception of contract $1,222,871,241.09 05/06/97 M048 1. Section J, Attachment H, Performance Based Incentive Fee Rating Plans: ---------------------------------------------------------------------- Revised FY96 Rating Plan contained in this modification. 2. Section J, Attachment I, Performance Breakdown Structure Matrix for FY96. ------------------------------------------------------------------------- Revised Section J, Attachment I, Performance Breakdown Structure for FY96 contained in this modification. 03/27/97 A049 1. Article B.3, Obligation of Funds as Follows: Funds Obligated to date $1,222,871,241.09 Funds Obligated by Mod A049 $ 425,290.96 Funds Obligated since inception of contract $1,223,296,532.05 04/04/97 M050 1. Section H, Clause H.3, Technical Direction: Contracting Officers ------------------------------------------- Representative (COR) designation changes. 06/24/97 M051 1. Clause H.30, Master Activity List Authorization Agreement is deleted in its --------------------------------------------------------- entirety and replaced because of the introduction of other authorization agreements in Clause H.31. 2. Clause H.31, Authorization Agreements is added (see Mod M051) ------------------------------------- 3. Section J, List of Attachments (Page J - 1) is deleted in its entirety and ------------------------------ replaced with a revised page J - 1, List of Attachments. This modification recognizes a title change to Attachment B. 06/24/97 M051 4. Section J, Attachment B, Authorization Agreements (page AB - 1_ is deleted ------------------------------------------------- (Cont.) in its entirety and replaced with a revised Attachment B, Authorization Agreements contained in this modification. 06/20/97 M052 1. Clause B.2, Estimated Cost and Fee, is deleted in its entirety and replaced. ----------------------------------- See details in Mod M052. 2. Section J, Attachment H, Performance Based Incentive Fee Rating Plans for FY97, ------------------------------------------------------------------------------- which were added to this Contract in Mod M037, are revised (see Enclosure #1 in Mod M052). 3. Section J, Attachment I, Performance Breakdown Structure for FY97 is deleted in ----------------------------------------------------------------- its entirety and replaced with an updated Section J, Attachment I - Performance Breakdown Structure Matrix, K-H Performance Objectives, Goals, and Measures for FY97. The update reflects the changes to certain existing Performance Measures and the addition of certain additional SuperStretch Performance Objectives, Goals, and Measures, the numbers of which are identified in Item #2 above (see Enclosure #2 in Mod M052). 06/24/97 M053 The Key Personnel listing within Section J, Attachment G, Key Personnel is deleted in -------------------------------------- its entirety and replaced. 04/29/97 A054 1. Article B.3, Obligation of Funds as Follows:
MODIFICATIONS TO CONTRACT DE-AC34-95RF00825 EXHIBIT 10(k)(3)
DATE MOD CHANGES - ---- --- ------- Funds Obligated to date $1,223,296.532.05 Funds Obligated by Mod A054 $ 28,013,868.55 Funds Obligated since inception of contract $1,251,310,400.60 07/02/97 M055 B.7 Estimated Cost and Fixed Fee -------------------------------- The Contractor will provide support to EG&G Rocky Flats, Inc. as described in the Tri-party Agreement between DOE RFFO, K-H, and EG&G and the Statement of Work. The estimated Cost and Fixed fee is as follows: Estimated Cost Fixed Fee -------------- --------- 7/1/95 - 9/30/96 $673,440 $26,560 10/1/96 - 9/30/97 $256,745 $ 8,500 B.8 Directed Work ------------------ DOE RFFO may issue work authorizations to the Contractor which are not part of its baseline activities. Support requested will generally be infrastructure for DOE facilities and operations (telecommunications, building maintenance, utilities, 07/02/97 M055 personnel relocations, information resources, property management, etc.) or other (Cont.) support activities where economics of scale indicate significant cost savings to the government by combining support for DOE staff with general site support. The estimated Cost and Fixed Fee for DOE directed work not anticipated at cost/fee negotiations and not applicable to contract clause H.12(f) is as follows: Estimated Cost Fixed Fee -------------- --------- 10/1/95 - 9/30/96 $6,039,333 $210,000 05/28/97 A056 1. Article B.3, Obligation of Funds as Follows: Funds Obligated to date $1,251,310,400.60 Funds Obligated by Mod A056 $ 11,953,430,97 Funds Obligated since inception of contract $1,263,263,831.57 10/20/97 M057 1. Section H, Table of Contents (pages H-1&2), is deleted in its entirety and replaced ------------------------------------------- (Enclosure #1 in Mod M057) with revised pages H-1&2, Table of Contents. This change recognized the title added for Clause H.31 in Mod M051. Page H-1 has been republished without change. 2. Section H, Clause H.3, Technical Direction. In Subparagraph (b), the Contracting ------------------------------------------- Officer's Rep (COR) designation to Roger A. Butler is hereby deleted. A COR designation to Gerald A. Duffy is hereby added to subparagraph (b). Subparagraph (b) is further revised by deleting the word "Deputy" from the position title in the COR designation to Mike Weis, thereby revising his position title to read "Assistant Manager for Performance Assessment." 3. Section I, Table of Contents. Pages I-3, I-4, I-7 and I-8 are deleted in their entirety ----------------------------- and replaced with updated pages. Page I-3 corrects the title on Clause I.33 to agree with the title shown on the Clause itself within Section I. Page I-7 recognizes Clause I.107 added in Mod M061. Pages I-4 and I-8 are republished without change. 09/17/97 M058 1. Section J, Attachment F: The List of DOE Directives is deleted in ------------------------
MODIFICATIONS TO CONTRACT DE-AC34-95RF00825 EXHIBIT 10(k)(3)
DATE MOD CHANGES - ---- --- ------- its entirety and replaced. 2. Section J, Attachment C, Item #20: Item #20 of the Reference Documents is deleted in its ---------------------------------- entirety and updated. 07/15/97 M059 1. Clause B.2, Estimated Cost and Fee, is deleted in its entirety and replaced. ----------------------------------- 2. Section J, Attachment H, Performance Based Incentive Fee Rating Plans, for FY97: The -------------------------------------------------------------------------------- FY97 contents of Section J, Attachment H are revised. 06/26/97 A060 1. Article B.3, Obligation of Funds as Follows: Funds Obligated to date $1,263,263,831.57 Funds Obligated by Mod A056 $ 680,798.75 Funds Obligated since inception of contract $1,263,944,630.32 08/27/97 A061 This modification is to add clause I.107 for Subcontracts for Commercial Items and Commercial Components 07/30/97 A062 1. Article B.3, Obligation of Funds as Follows: Funds Obligated to date $1,263,944,630.32 Funds Obligated by Mod A062 $ 11,252,879.21 Funds Obligated since inception of contract $1,275,197,509.53 01/25/98 A063 1. Clause B.6, Payment of Base Fee and Performance Based Incentive Fee, is amended by -------------------------------------------------------------------- revising the title of paragraph (e) from "Loss of Incentive Fee" to "Loss of Incentive Fee for Contractor Actions." 2. Clause B.6, Payment of Base Fee and Performance Based Incentive Fee, is further amended -------------------------------------------------------------------- by adding new paragraphs (f) and (g) contained in this modification. 3. Clause H.21, Environmental, Safety and Health (Government Owned or Leased) is amended by -------------------------------------------------------------------------- the addition of paragraphs (f) through (m) contained in this modification. 09/24/97 A064 1. Clause B.2, Estimated Cost and Fee, is deleted in its entirety and replaced. ----------------------------------- 2. Section J, Attachment H, Performance Based Incentive Fee Rating Plans, for FY97: The -------------------------------------------------------------------------------- FY97 contents of Section J, Attachment H are hereby revised (See Enclosure #1 contained in this modification). Rating Plans numbered 97-C4.35R, 97-C4.36R, 97-C4.37R, 97-C5.01R, and 97-S7.01R are added to Contract. Also included in Enclosure #1 is an updated "List of FY97 Rating Plans" which recognizes the above changes. 3. Section J, Attachment I, Performance Breakdown Structure, for FY97: This Attachment is ------------------------------------------------------------------- deleted in its entirety and replaced with an updated Section J, Attachment I -Performance Breakdown Structure Matrix, RFETS Performance Objectives, Goals, and Measures for FY97. See Enclosure #2 contained in this modification. The update reflects the addition of the five new Performance Measures identified above. 08/07/97 A065 1. Article B.3, Obligation of Funds as Follows:
MODIFICATIONS TO CONTRACT DE-AC34-95RF00825 EXHIBIT 10(k)(3)
DATE MOD CHANGES - ---- --- ------- Funds Obligated to date $1,275,197,509.53 Funds Obligated by Mod A065 $ 374,086.66 Funds Obligated since inception of contract $1,275,571,596.19 08/21/97 A066 1. Article B.3, Obligation of Funds as Follows: Funds Obligated to date $1,275,571,596.19 Funds Obligated by Mod A066 $ 500,000.00 Funds Obligated since inception of contract $1,276,071,596.19 09/02/97 A067 1. Article B.3, Obligation of Funds as Follows: Funds Obligated to date $1,276,071,596.19 Funds Obligated by Mod A067 $ -394,862.06 Funds Obligated since inception of contract $1,275,676,734.13 09/29/97 M068 1. Section J, Attachment B, Authorization Agreements (page AB-1) is deleted in its entirety ------------------------------------------------------------- and replaced with a revised title page (Enclosure #1 contained in this modification) which reflects one revised and three new Authorization Agreements. 2. Section J, Attachment B, is updated to include copies of a revised and three additional ------------------------ authorization agreements (Enclosure #2 contained in this modification) that have been fully executed and incorporated into this Contract by reference, in accordance with Clause H.31. 3. Correction to Section I, Clause I.107, Modification M061(a) on the Standard Form 30, ------------------------------------- Item 14, incorrectly made reference to "Attached Pages" rather than to a one-page attachment (b) inadvertently included, in the distribution of the executed modification, 17 pages of background information that was not intended to be part of the Contract and should be removed from the Contract, and (d) contained errors and omissions in the text of Clause I.10. The corrected version of Clause I.107 in its entirety is contained in Modification M068. 10/28/97 M069 1. Section J, Attachment F: This List of DOE Directives is deleted in its entirety and ------------------------ replaced with the listing in Enclosure #1 contained in this Modification. Enclosure #1 reflects the addition of 7 new directives and the deletion of certain existing directives. A copy of each added DOE Directive is provided in Enclosure #2 contained in this Modification. 09/29/97 A070 1. Article B.3, Obligation of Funds as Follows: Funds Obligated to date $1,275,676,734.13 Funds Obligated by Mod A070 $ 1,622,438.04 Funds Obligated since inception of contract $1,277,299,172.17 09/30/97 A071 1. Article B.3, Obligation of Funds as Follows: Funds Obligated to date $1,277,299,172.17 Funds Obligated by Mod A071 $ 1,669,788.24 Funds Obligated since inception of contract $1,278,968,960.41 Mod 72 has not been received
MODIFICATIONS TO CONTRACT DE-AC34-95RF00825 EXHIBIT 10(k)(3)
DATE MOD CHANGES - ---- --- ------- 12/4/97 M073 1. Section J, Attachment F: The List of DOE Directives is deleted in its entirety and ------------------------ replaced with the listing in Enclosure #1 contained in this Modification. A copy of each added DOE is provided in Enclosure #2 contained in this Modification. 10/27/97 A074 1. Article B.3, Obligation of Funds as Follows: Funds Obligated to date $1,278,968,960.41 Funds Obligated by Mod A074 $ 123,525,369.00 Funds Obligated since inception of contract $1,402,494,329.41 11/15/97 A075 1. Article B.3, Obligation of Funds as Follows: Funds Obligated to date $1,402,494,329.41 Funds Obligated by Mod A075 $ 542,071.46 Funds Obligated since inception of contract $1,403,036,400.87 11/28/97 A076 1. Article B.3, Obligation of Funds as Follows: Funds Obligated to date $1,403,036,400.87 Funds Obligated by Mod A076 $ 474,012,060.07 Funds Obligated since inception of contract $1,877,048,460.94 12/24/97 A077 1. Article B.3, Obligation of Funds as Follows: Funds Obligated to date $1,877,048,460.94 Funds Obligated by Mod A077 $ -534,912.79 Funds Obligated since inception of contract $1,876,513,548.15 Mod 78 has not been received 3/13/98 M079 Section J, Attachment F: The List of DOE Directives is deleted in its entirety and replaced ------------------------ with the listing in Enclosure #1 contained in this Modification. 1/28/98 A080 1. Article B.3, Obligation of Funds as Follows: Funds Obligated to date $1,876,513,548.15 Funds Obligated by Mod A080 $ 2,248,704.68 Funds Obligated since inception of contract $1,878,762,252.83 02/26/98 A081 1. Article B.3, Obligation of Funds as Follows: Funds Obligated to date $1,878,762,252.83 Funds Obligated by Mod A081 $ -2,790,973.21 Funds Obligated since inception of contract $1,875,971,279.62
EX-10.(BB) 27 EXHIBIT 10(BB) Exhibit 10(bb) ANNUAL INCENTIVE COMPENSATION (IC) PLAN FOR SENIOR EXECUTIVES ------------------------------------------------------------- I. Eligibility EDWARDS, his direct reports (Campbell, Gaffney, Goldman, Tipermas), and the three group presidents (Grumbly, Kesavan, Watson). II. Payment Awards will be paid partially in cash and partially in restricted stock that vests over three years. III. Calculation of Pools Edwards and the four direct reports are paid solely from the "Corporate Pool". The three group presidents are paid from the "Corporate Pool" and from their "Group Pool," as shown below. Discretionary bonuses outside of this plan may be granted to any of these individuals for meritorious performance. IV. Determination of Corporate Pool The size of the Corporate Pool is determined solely by the earnings-per-share performance of ICF Kaiser International, as follows: $80,000 plus 24,000 restricted shares for each $.01 EPS over $.10 EPS and below $.20 EPS; $120,000 plus 36,000 restricted shares for each $.01 EPS over $.20 EPS. For example: 1998 EPS Cash Restricted Shares -------- ---- ----------------- $0.10 $ 0 0 $0.15 $ 400,000 120,000 $0.20 $ 800,000 240,000 $0.25 $1,400,000 420,000 The final accounting for EPS may be adjusted by the Compensation and Human Resources Committee, after discussion with the CEO, for any one-time voluntary capital transaction, either positive or negative. (Note: The EPS numbers must be net of the cash and restricted stock issued under this plan. This means, for example, that, to yield an EPS of $.20, we would have to earn approximately $0.26 before the target payment of $0.8 million of cash under this plan, 240,000 shares of restricted stock [at an assumed $2.00 per share] to be paid under this plan, and the 300,000 shares of restricted stock to be paid under the LTI Plan.) EX-10.(EE) 28 EXHIBIT 10(EE) Exhibit 10(ee) ICF KAISER INTERNATIONAL, INC. SENIOR EXECUTIVE OFFICERS SEVERANCE PLAN (SEOSP) OBJECTIVE - --------- To provide compensation for select Senior Executives of ICF Kaiser International, Inc. (ICF Kaiser or the Company) for the loss of their jobs. PARTICIPANTS - ------------ Participants in the SEOSP shall include the following positions in ICF Kaiser: . Chief Executive Officer . President . Chief Operating Officer . Chief Financial Officer . Executive Vice President, Corporate Development . President, Consulting Group . President, Federal Programs Group . President, Engineers & Constructors Group . Treasurer . General Counsel . Any officer as designated by the Compensation Committee of the Board of Directors Having once become a participant in the SEOSP unless such participant provides express written consent waiving participation in the SEOSP, such participant shall continue to be eligible to receive the benefits provided by this SEOSP throughout such participant's employment with ICF Kaiser or its affiliates. ELIGIBILITY - ----------- A participant is eligible to receive severance payments if ICF Kaiser terminates participant's employment without "cause" or the participant elects to terminate employment for "good reason". For purposes of this policy, "good reason" and "cause" are defined as follows: . Good Reason -- (i) without participant's express written consent, the offices, duties, responsibilities, compensation or benefits of the participant are substantially reduced (except in connection with the termination of employment voluntarily by the participant, by the Company for "cause," or in the case of disability or death); (ii) without the participant's express written consent the Company's principal executive offices shall have been relocated outside the Washington, DC metropolitan area, or the participant shall be based anywhere other than the Washington, DC metropolitan area or other office location designated in the participant's employment agreement (except for required travel on the Company's business to an extent substantially consistent with participant's present business obligations); or (iii) the individuals who were directors of the Company at the beginning of any immediately preceding 12 consecutive month period cease for any reason to constitute a majority of the Board of Directors of the Company or of the ultimate parent (if any) of the Company. For purposes of this provision, a person elected, or nominated for election, as a director by a vote of at least 2/3 of the then existing directors shall be deemed to be a "director of the Company at the beginning of any immediately preceding 12 consecutive month period." . Cause -- (i) the continued, willful and deliberate failure of the participant to perform participant's duties in a manner substantially consistent with the manner prescribed by the Board of Directors or the Chief Executive Officer of the Company consistent with law and professional ethics (other than any such failure resulting from participant's incapacity due to physical or mental illness); (ii) the engaging by the participant in misconduct materially, directly and demonstrably injurious to the Company; or (iii) the conviction of the participant of commission of a felony, whether or not such felony was committed in connection with the Company's business. (iv) In no event shall the failure to achieve profit or other financial goals or alleged incompetence on the participant's part be deemed to constitute "cause" so long as such failure or incompetence does not result from the participant's failure to perform duties in good faith. SEVERANCE BENEFITS - ------------------ Severance benefits will be computed in accordance with the following schedule: Length of Employment Number of Months of Average Salary -------------------- ---------------------------------- . 0 - 6 years 6 months . 7 + years 1 month for each year of service Length of Employment shall be calculated in terms of completed years of continuous employment from the participant's date of hire. A fractional year of service in excess of 6 months shall count as a full year. Average Salary shall be the participant's average monthly gross salary (excluding all bonus) for the six months prior to termination of employment. --------- Deductions will be made by ICF Kaiser of such amounts as may be required to be withheld by applicable law and regulations. SEOSP BENEFIT TO BE MINIMUM BENEFIT - ----------------------------------- The severance benefit provided to a participant under this SEOSP is intended to set a minimum severance benefit for the participant. On the one hand, if a participant is entitled to a greater severance benefit in accordance with the terms of another plan, contract or arrangement with ICF Kaiser or its affiliates, the provisions of such plan, contract or arrangement shall prevail and no severance benefit shall be paid pursuant to this SEOSP. On the other hand, if a participant is entitled to the same or a lesser severance benefit in accordance with the terms or another plan, contract or arrangement with ICF Kaiser or its affiliates, additional severance payments shall be made by ICF Kaiser pursuant to the SEOSP only to the extent required to make the participant's aggregate severance benefits from ICF Kaiser and its affiliates equal to those provided by the SEOSP. SEOSP participants shall not participate in the severance pay plan set forth in the ICF MUTUAL RELEASES - --------------- As a condition to a participant's receiving benefits under the SEOSP, the participant and the Company shall exchange mutual general releases, provided, however, that the obligations of the Company set forth in its Certificate of Incorporation, By-laws or other document, to indemnify the participant shall continue. REPORTS TO THE COMPENSATION COMMITTEE - ------------------------------------- The Company shall submit to the Compensation Committee, at least semiannually, a report listing the participants in the SEOSP by name with their then current severance benefit under the SEOSP in months and dollars. PAYMENT OF SEVERANCE BENEFITS - ----------------------------- Severance benefits will be paid either: (i) in two installments, the first of which shall be paid within five business days of the effective date of the termination and be calculated by multiplying the total benefit due under this plan by x-twelfths (x/12), where x equals the number of full months from date of termination of employment to the end of the calendar year that includes the date of termination of employment to the end of the calendar year that includes the date of termination of employment; and the second of which shall be paid on January 1, of the next calendar year and be the balance of the total benefit due; or (ii) if so requested in writing by the participant and approved by the Compensation Committee in its sole discretion, the total severance benefit shall be paid to the participant in a lump sum within five days of the date of termination. Severance payments will not be considered time worked for the purposes of extension of other benefit coverage or continuous employment. Severance pay will not be considered compensation for purposes of Retirement or Section 401(k) Plans, and will not increase Years of Service for such Plans purposes. EFFECTIVE DATE April 4, 1994. - -------------- As amended May 1, 1997 EX-10.(KK) 29 EXHIBIT 10(KK) Exhibit 10(kk) [ICF Kaiser Letterhead] EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT ("Agreement"), effective as of January 1, 1997, by and among ICF Kaiser International, Inc. ("Company"), a Delaware corporation and Michael Gaffney, ("Executive"), a resident of Virginia. WHEREAS, the Company desires to retain the services of Executive as Senior Vice President, and Executive desires to serve in that capacity-, and WHEREAS, the Company will benefit from the Executive's services in that role, NOW THEREFORE, in consideration of the mutual covenants and agreements herein, the parties hereby agree as follows: 1. Employment Period: Duties. (a) Employment and Employment Period. The Company shall employ the Executive to serve as Senior Vice President for a period of three years commencing January 1, 1997 (the "Employment Period:). (b) Duties and Responsibilities. The Executive shall have wide responsibilities for Business Development for ICF Kaiser International, Inc. in the engineering and construction area. The Executive will be a member of the Management Group. 2. Compensation and Fringe Benefits. (a) Base Compensation. For the 15 month period from January 1, 1997 through March 31, 1998, the Company shall pay Executive a base salary at a rate of $230,000 per year in accordance with the Company's regular practice for compensating senior management personnel. The Company shall pay Executive a base salary at a rate of $250,000 per year from April 1, 1998 through March 31, 1999 and $275,000 from April 1, 1999 through March 31, 2000. (b) Bonus Compensation. Executive will be eligible to receive an annual bonus of up to 50% of his annual base compensation. Bonus will be determined as follows: 60% based on sales targets, 20% based on ICF Kaiser Engineering and Construction Group revenue and profit targets, and 20% on other qualitative factors. Bonuses are granted only to the extent the firm has generated sufficient profits and only to those officers whose performance throughout the year is exemplary. Bonus awards may be comprised of cash, stock options, or restricted stock. It is corporate policy to make bonus payments only to eligible staff who are employed by ICF Kaiser when bonuses are distributed. (c) Fringe Benefits. The Executive shall be entitled to such fringe benefits as are generally made available by the Company to senior management personnel. Such benefits shall include participation in the Company's defined contribution retirement plan, Section 401 (k) plan, and health, term life and disability insurance programs. The Executive also will be reimbursed for reasonable expenses incurred in connection with travel and entertainment related to the Company's business and affairs which will be paid by the Company in a manner, consistent with past practice and as amended by any subsequent changes of Company Policy. [ICF Kaiser Letterhead] 3. Termination. In the event the Company elects to terminate this Agreement without "cause" the Company shall pay to the Executive a severance payment of $175,000. Cause is defined as (i) the continued, willful and deliberate failure of the participant to perform participant's duties in a manner substantially consistent with the manner prescribed by the Board of Directors or the Chief Executive Officer of the Company consistent with law, and professional ethics (other than any such failure resulting from participant's incapacity due to physical or mental illness) (ii) the engaging by the participant in misconduct materially, directly and demonstrably injurious to the Company, or (iii) the conviction of the participant of commission of a felony, whether or not such felony was committed in connection with the Company's business. (iv) In no event shall the failure to achieve profit or other financial goals or alleged incompetence on the participant's part be deemed to constitute "cause" so long as such failure or incompetence does not result from the participant's failure to perform duties in good faith. 4. Non-Competition The Executive will not engage or participate directly or indirectly as principal, agent, employee, employer, consultant, stock holder, partner, or in any other individual capacity whatsoever, in the conduct or management of, or own any stock or any other equity investment in or debt of any business which is competitive with any business conducted by the Company through the earlier of the end of the Employment Period or six months following termination of the Executive's employment by the Company. 5. Assignability The Company's rights and obligations under this Agreement shall be assignable by the Company as incident to the transfer, by merger or otherwise, of all or substantially all of the business of the Company. In the event of any such assignment by the Company, all rights and obligations of the Company hereunder shall inure to the benefit of the assignee. Executive Michael Gaffney ICF Kaiser International, Inc, Marc Tipermas Executive Vice President 2 EX-10.(LL) 30 EXHIBIT 10(LL) Exhibit 10(ll) ICF KAISER INTERNATIONAL, INC. 9300 Lee Highway Fairfax, Virginia 22031-2107 March 13, 1998 Jarrod M. Cohen Cowen Incorporated Financial Square New York, NY 10005-3597 Dear Jarrod: The purpose of this letter is to set forth the agreements we have reached as a result of recent discussions. It will become effective on the date of your execution of this letter (the "Effective Date"). As promptly as practicable after receipt of your written request at any time between July 1, 1998 and December 31, 1998, the Board of Directors of ICF Kaiser International, Inc. (the "Company") will take all steps necessary to create, and elect you to fill, a vacancy in the class of 2000 on the Board of Directors of the Company. As you know, the Board has been on record since early 1997 as to its intent to add several other outside directors to reach a total size of twelve, with three management directors and nine outsiders. Consistent with that intent, the Board has proposed to nominate Michael E. Tennenbaum for election to the Company's Board of Directors at the 1998 annual meeting on the terms outlined in the attachment. For your part, you, Cowen & Company, Cowen Incorporated and Joseph M. Cohen (the "Cohen Parties") agree as follows: (a) You will not consent (and will withdraw any previously granted consent) to be a nominee for election to the Company's Board of Directors at the 1998 annual meting of the Company's shareholders. (b) At the Company's 1998 annual meeting of shareholders the Cohen Parties will vote in favor of the nominees for election as directors proposed by the Company's Board of Directors. (c) During the period commencing on the Effective Date and ending on the later of (x) December 31, 1998 or (y) if you elect to become a member of the Board of Directors prior to December 31, 1998, the date you or any other designee of the Cohen Parties ceases to be a member of the Board of Directors, the Cohen Parties shall not, without the express written consent of a majority of the directors of the Company other than the Cohen Parties or their designees: (i) subject any of the Company's voting securities to a voting trust or voting agreement; (ii) solicit proxies or become a "participant" in a "solicitation" (as such terms are defined in Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), in opposition to any recommendation of the Board of Directors of the Jarrod M. Cohen March 13, 1998 Page 2 Company; (iii) join a partnership, limited partnership, syndicate or other group, or otherwise act in concert with any other person, for the purpose of acquiring holding, voting or disposing of voting securities of the Company, or otherwise become a "person" within the meaning of Section 13(d)(3) of the Exchange Act (in each case other than solely with another Cohen Party); (iv) become, alone or in conjunction with others, an "Acquiring Person" as defined in the Company's Shareholder Rights Plan as adopted January 13, 1992; or (v) dispose of any voting securities of the Company to any person who, to the knowledge of the Cohen Parties, as a result of acquiring such voting securities would become an "Acquiring Person" as defined in the Company's Shareholder Rights Plan as adopted January 13, 1992. (d) Each of the Cohen Parties shall be present, in person or by proxy, and without further action hereby agree that they shall be deemed (to the extent permitted by law) to be present, at all meetings of the stockholders of the Company with respect to which the Cohen Parties receives notice so that all voting securities of the Company owned by any of them may be counted for the purpose of determining the presence of a quorum at such meetings. (e) For purposes of this letter (x) "Affiliate" shall have the same meaning as Affiliate under Rule 12b-2 under the Exchange Act, and (y) "Beneficial Owner" shall have the same meaning as "Beneficial Owner" under Rule 13d-3 under the Exchange Act, and "Beneficial Ownership" shall have a correlative meaning. If the foregoing accurately summarizes our agreement, please sign where indicated below. Very truly yours, ICF KAISER INTERNATIONAL, INC. COWEN & COMPANY COWEN INCORPORATED Joseph M. Cohen Jarrod M. Cohen EX-10.(MM) 31 EXHIBIT 10(MM) Exhibit 10(mm) ICF KAISER INTERNATIONAL, INC. NON-EMPLOYEE DIRECTORS COMPENSATION AND PHANTOM STOCK PLAN ADOPTED BY THE BOARD OF DIRECTORS ON FEBRUARY 28, 1997, WITH AN EFFECTIVE DATE OF MARCH 1, 1997 1. PURPOSE. The purpose of the ICF Kaiser International, Inc. Non-employee Directors Compensation and Phantom Stock Plan (the "Plan") is to advance the interests of ICF Kaiser International, Inc. (the "Corporation") and its shareholders by adequately compensating non-employee directors for the time spent on the Corporation's matters and by encouraging increased equity participation by members of the Board of Directors (the "Board") of the Corporation who are not employees of the Corporation or any of its subsidiaries. The Plan does this by enhancing the Corporation's ability to attract and retain the services of experienced, able, and knowledgeable persons to serve as directors and by providing additional incentive for such directors to make a maximum contribution to the Corporation's success through continuing and increased equity participation in the Corporation. 2. ADMINISTRATION. The Plan shall be administered by the Board. In addition to its duties with respect to the Plan stated elsewhere in the Plan, the Board shall have full authority, consistent with the Plan, to interpret the Plan, to promulgate such rules and regulations with respect to the Plan as it deems desirable, and to make all other determinations necessary or desirable for the administration of the Plan. All decisions, determinations, and interpretations of the Board shall be binding upon all persons. 3. ELIGIBILITY. All members of the Board who are not employees of the Corporation or any of its subsidiaries (the "Non-employee Directors"). 4. ANNUAL RETAINER. Each Non-employee Director shall be paid an annual cash retainer in the amount of $20,000, payable quarterly in advance. A Non-employee Director elected during a quarter shall be paid a $5,000 retainer upon his or her election, and thereafter shall be paid his or her annual retainer quarterly in advance. 5. PAYMENT FOR ATTENDANCE AT MEETINGS. Each Non-employee Director shall be paid in cash $1,000 for each meeting of the Board of Directors or any Committee of the Board of Directors that the Non-employee Director was entitled to and did attend. Such payments shall be made quarterly in arrears for all meetings attended during the immediately preceding quarter. 6. GRANT OF A PHANTOM STOCK AWARD. Each Non-employee Director shall be granted a Phantom Stock Award ("PSA") at the annual meeting of the Board of Directors. The stock to which the PSAs shall relate shall be shares of Common Stock, $0.01 par value, of the Corporation (the "Common Stock"). The PSA granted under the Plan each year to each Non-employee Director shall equal $20,000 worth of shares of Common Stock, determined in accordance with the provisions of Section 7. Fractional PSAs shall not be granted; at the time of grant, the PSA shall be rounded up to the next whole share of Common Stock to which the PSA relates. 7. TERMS OF PHANTOM STOCK AWARD. a. DURATION OF PSA. The duration of the PSAs shall be three (3) years from the date of grant. b. EXERCISE OF PSA. Each PSA represents the right of the grantee thereof to receive a cash amount equal to the fair market value on the date of exercise of the total number of shares of Common Stock to which the PSA relates. Subject to the provisions of Section 9 and without any further action by the grantee, a PSA will be automatically exercised in full on behalf of any current or former Non-employee Director on the date that is thirty-six (36) months following the date of grant. c. VALUE OF COMMON STOCK TO WHICH THE PSA RELATES. The fair market value of the shares of Common Stock to which the PSA relates on any date shall be the average of the closing price of a share of Common Stock on each of twenty (20) consecutive trading days on the New York Stock Exchange (NYSE), with the twentieth (20th) day being the last trading date immediately prior to the date of grant of the PSA or the exercise date of the PSA, as the case may be. The Corporation shall determine the closing price of a share of Common Stock by using its stock transfer agent's NYSE data listing service. If such service becomes unavailable, the Corporation shall determine the closing price of a share of Common Stock by reference to the reports of the New York Stock NON-employee Directors Compensation and Phantom Stock Plan Page 2 Exchange Composite Transactions Listings. If no sales of Common Stock take place on any of the twenty (20) consecutive days, then the closing price of the Common Stock on the immediately preceding day shall be used for the non-trading day's closing price. d. PAYMENT UPON EXERCISE OF PSA. The Corporation shall pay the amount due and owing to each Non-employee Director in cash promptly following the exercise of the PSA. 8. WITHHOLDING. The Corporation shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to the Non- employee Director under the Plan the amount of any taxes required by law to be withheld with respect to the annual retainers, meeting payments, PSAs, and any other compensation paid under the Plan. 9. EFFECT OF DEATH ON THE PSA. Notwithstanding the provisions of Section 7, upon the death of the grantee prior to the exercise date of the PSAs, all PSAs held by such deceased Non-employee Director shall be automatically exercised in full, with the exercise date being the last trading day of the month in which the Non-employee Director died. The Corporation shall make any payment due upon such exercise to such Non-employee Director's legal representative. 10. NONTRANSFERABILITY OF PSAS. Subject to the provisions of Section 9, The Non-employee Director shall not sell, transfer, assign, give, place in trust, or otherwise dispose of or pledge, grant a security interest in, or otherwise encumber his or her rights under the PSA granted pursuant to the Plan, and any purported sale, transfer, pledge, or other disposition or encumbrance shall be null and void. PSAs shall be exercisable only by the Corporation on behalf of the Non-employee Director grantee, and the Corporation shall have no obligation whatsoever to recognize a PSA transfer to any other person or to make any payment due upon a PSA's exercise to any person other than the grantee. 11. NO RIGHTS AS A SHAREHOLDER. A Non-employee Director (or his or her legal representative pursuant to the provisions of Section 9) shall have no rights as a shareholder of the Corporation, and shall have no voting rights of any kind, with respect to any shares of Common Stock to which the PSA relates. 12. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. If there is a change in the number or kind of outstanding shares of Common Stock by reason of a stock dividend, stock split, recapitalization, merger, consolidation, combination, or other similar event, or if there is a distribution to the Corporation's Common Stock shareholders other than a cash dividend, appropriate adjustments shall be made by the Board to the number of shares of Common Stock to which the PSAs relate, to the extent that the Board, in its sole discretion, determines that such change makes such adjustment necessary or equitable. 13. LAWS AND REGULATIONS. The Plan and all of the Corporation's obligations under the Plan shall be subject to all applicable laws, rules, and regulations. 14. AMENDMENT, CONSTRUCTION, AND TERMINATION OF THE PLAN. The Board may at any time or times amend the Plan for the purpose of satisfying the requirements of any changes in applicable laws, rules, or regulations or for any other purpose which at the time may be permitted by law. Terms of the Plan will be construed by the Board of Directors, and all determinations of the Board will be final and binding on the Non-employee Directors. The Board may terminate the Plan at any time with respect to prospective compensation payments and future PSA grants. 15. EFFECTIVE DATE. The effective date of the Plan shall be March 1, 1997. EX-10.(NN) 32 EXHIBIT 10(NN) Exhibit 10(nn) ICF KAISER INTERNATIONAL, INC. 9300 Lee Highway Fairfax, Virginia 22031-2107 March 13, 1998 Mr. Michael E. Tennenbaum Tennenbaum & Co., L.L.C. 1999 Avenue of the Stars, Suite 1010 Los Angeles, CA 90067-6022 Dear Michael: The purpose of this letter is to set forth the agreements we have reached as a result of discussions over the past several days. It will become effective on the date of your execution of this letter (the "Effective Date"). The Board of Directors of ICF Kaiser International, Inc. (the "Company") will nominate, recommend and solicit proxies for your election as a director, for a three-year term, at the 1998 annual meeting of shareholders. Also, the Board of Directors has acted to unconditionally and irrevocably offer Jarrod Cohen the opportunity to join the Board at his written request at any time between July 1, 1998 and December 31, 1998 for a term extending to the annual meeting of shareholders in 2000, and until his successor is elected. For your part, you and Tennenbaum & Co., L.L.C. (the "Tennenbaum Parties") agree as follows: (a) During the period commencing on the Effective Date and ending on the earlier of (i) five years after the Effective Date and (ii) the day after the date the Tennenbaum Parties and all of their Affiliates cease to be the Beneficial Owners of any of the Company's voting securities ("Restricted Securities"), the Tennenbaum Parties shall not, without the express written consent of a majority of the directors of the Company not designated by the Tennenbaum Parties pursuant to this Agreement, acquire, directly or indirectly, any voting securities of the Company if, following such acquisition, such Tennenbaum Parties, together with their Affiliates, would directly or indirectly be the Beneficial Owners of voting securities of the Company representing in the aggregate more than 19.5% of the total combined voting power of all issued and outstanding securities of the Company (it being understood that this provision shall not be violated if such Tennenbaum Parties and their Affiliates become entitled to exercise voting power in excess of such percentage as a result of any event or circumstance other than the acquisition by such Tennenbaum Parties or their Affiliates of Beneficial Ownership of additional voting securities of the Company). The Company hereby agrees that it shall not take any action, including without limitation, any amendment to its Shareholders Rights plan, that would prevent the Tennenbaum Parties from acquiring additional securities within the limitations set forth herein. (b) During the period (i) between the date hereof and May 1, 1998 and (ii) that you or another person who is an Affiliate of the Tennenbaum Parties is a member of the Board of Directors, and for a period of 90 days thereafter, the Tennenbaum Parties shall not, without the express written consent of a majority of the directors of the Company not designated by the Tennenbaum Parties pursuant to this Agreement: (x) subject any Restricted Securities to any voting trust or voting agreement; Mr. Michael E. Tennenbaum March 13, 1998 Page 2 (y-1) recruit, or engage in organizing persons not nominated by the Board of Directors to oppose the Board of Directors nominated candidates in an election; or (y-2) financially support (including contributing money, lending money, furnishing credit or entering into any other arrangements or contracts regarding financing) a proxy contest for Board of Directors candidates to oppose the candidates nominated by the Board of Directors; or (y-3) provide any material, non-public information gained in your position as Director to opposing Board candidates, except as required by law, and then only after notice to the Company. (z) join a partnership, limited partnership, syndicate or other group, or otherwise act in concert with any other person, for the purpose of acquiring holding, voting or disposing of voting securities of the Company, or otherwise become a "person" within the meaning of Section 13(d)(3) of the Exchange Act (in each case other than solely with another Tennenbaum Party). (c) Each of the Tennenbaum Parties shall be present, in person or by proxy, and without further action hereby agree that they shall be deemed (to the extent permitted by law) to be present, at all meetings of the stockholders of the Company with respect to which the Tennenbaum Parties receive notice so that all voting securities of the Company owned by any of them may be counted for the purpose of determining the presence of a quorum at such meetings. (d) For purposes of this letter (i) "Affiliate" shall have the same meaning as Affiliate under Rule 12b-2 under the Exchange Act, and (ii) "Beneficial Owner" shall have the same meaning as "Beneficial Owner" under Rule 13d-3 under the Exchange Act, and "Beneficial Ownership" shall have a correlative meaning. The agreements set forth in paragraphs (a)-(d) above shall terminate and be of no further effect in the event (i) you are not elected as a director of ICF Kaiser, as contemplated herein, on or before May 30, 1998; or (ii) Jarrod Cohen does not become a director upon his acceptance of the offer referred to above. The Company hereby agrees to promptly reimburse the Tennenbaum Parties for all reasonable and necessary documented out-of-pocket expenses incurred by them (including, but not limited to fees and disbursements of counsel) in connection with their proposals to the Board of Directors of the Company and the potential solicitation of proxies for the election of directors to the Company, up to a maximum of $25,000. If the foregoing accurately summarizes our agreement, please sign where indicated below. Very truly yours, ICF KAISER INTERNATIONAL, INC. TENNENBAUM & CO., L.L.C. Michael E. Tennenbaum, individually EX-21 33 EXHIBIT 21 Exhibit 21 ICF KAISER 9300 Lee Highway, Fairfax, Virginia 22031 ICF Kaiser International, Inc.'s ownership of the following affiliated entities which are less than wholly owned is indicated by an ownership percentage figure in parentheses following the name of the entity.
Jurisdiction Entity Name Of Formation - --------------------------------------------------------------------------------------------- I. Clement International Corporation Delaware II. Newsys Environmental Technology System (15%) Taiwan I. Cygna Group, Inc. Delaware II. Liability Risk Management, Inc. California I. EDA, Incorporated Maryland I. ICF Cannon Associates, Inc. Delaware I. First Patriot Bankshares Corporation (20,400 Common Shares) Virginia I. ICF Consulting Associates, Inc. Delaware I. ICF Incorporated Delaware II. ICF/EKO (37.5%) Russia II. WHX Corporation (56 Common Shares) Delaware I. ICF Information Technology, Inc. Delaware II. Phase Linear Systems Incorporated Delaware I. ICF Kaiser Defense Programs, Inc. Delaware II. Kaiser-Hill TERC Company, LLC (65%) Delaware I. ICF Kaiser Development Corporation, Inc. Delaware II. Global Trade & Investment, Inc. Delaware II. ICF Kaiser Coke Chemicals, LLC (25%) Delaware I. ICF Kaiser Engineers Group, Inc. Delaware II. Henry J. Kaiser Company Nevada II. ICF Florida First, Inc. Delaware II. ICF Kaiser Engineers, Inc. Ohio III. Henry J. Kaiser Company (Canada) Ltd. Canada III. ICF Kaiser Engineers & Builders, Inc. Delaware III. ICF Kaiser Engineers (California) Corporation Delaware III. ICF Kaiser Engineers Corporation New York III. ICF Kaiser Engineers of Michigan, Inc. Michigan III. ICF Kaiser International Planning & Design, Inc. Pennsylvania (33 1/3%) III. ICF Kaiser Overseas Engineering, Inc. Delaware III. ICF Kaiser Remediation Company Delaware III. Kaiser Engineers Australia Pty. Limited (50%) Australia IV. High Speed Rail Engineers Pty. Ltd. (25%) Australia IV. ICF Kaiser Aluterv Hungary IV. Kaiser Engineers (NZ) Ltd (99%) New Zealand III. Kaiser Engineers and Constructors, Inc. Nevada IV. ICF Kaiser Construcoes e Empreendimentos Ltda. (99%) Brazil IV. ICF Pty. Ltd. (50%) Australia IV. Kaiser Engineers Limited (0.02%) U.K. IV. Kaiser Engineers Australia Pty. Limited (50%) Australia IV. Kaiser Engenharia de Portugal S.A. (50%) Portugal V. ICF Kaiser Construcoes e Empreendimentos Ltda. (1%) Brazil IV. Kaiser Engineers (NZ) Ltd (1%) New Zealand IV. Kaiser Engineers Pty. Ltd. (50%) Australia IV. Kaiser Ingenieria de Chile Limitada (51%) Chile III. Kaiser Engineers International, Inc. Nevada IV. American Transit Consultants (33 1/3) Joint Venture V. American Transit Consultants, Inc. Delaware IV. ICF Pty. Ltd. (50%) Australia IV. ICF Kaiser Panama S.A. Panama IV. Kaiser Engenharia de Portugal S.A. (50%) Portugal IV. Kaiser Engineers Pty. Ltd. (50%) Australia IV. Kaiser Ingenieria de Chile Limitada (49%) Chile III. Kaiser Engineers Limited (99.98%) U.K. IV. Kaiser Engineers Technical Services Limited (80%) Cyprus IV. Kaiser Engineers (UK) Limited (50%) U.K. III. Kaiser Engineers (UK) Limited (50%) U.K. IV. Kaiser Engineers Technical Services Limited (20%) Cyprus III. Kaiser Engenharia e Constructoes Limitada Brazil III. KE, Inc. Philippines III. KE Services Corporation Delaware III. Mueller Industries, Inc. (1,589 Common Shares) Delaware III. PCI Operating Company, Inc. Delaware II. ICF Technology Incorporated Delaware II. International Waste Energy Systems, Inc. Delaware II. KE Livermore, Inc. Delaware II. LIFAC-North America Partnership (50%) Delaware I. ICF Kaiser Engineers Massachusetts, Inc. Delaware I. ICF Kaiser Engineers Pacific, Inc. Nevada II. Waimana Kaiser Enterprises (48%) Hawaii I. ICF Kaiser Europe, Inc. Delaware I. ICF Kaiser / Georgia Wilson, Inc. Delaware I. ICF Kaiser Government Programs, Inc. Delaware II. Kaiser-Hill Company, LLC (50%) Colorado III. Kaiser-Hill Funding Company, L.L.C. (98%) Delaware II. Kaiser-Hill Funding Company, L.L.C. (1%) Delaware I. ICF Kaiser Hanford Company Delaware I ICF Kaiser Holdings Unlimited, Inc. Delaware II. American Venture Investments Incorporated Delaware III. American Venture Holdings, Inc. Delaware II. Cygna Consulting Engineers and Project Management, Inc. California II. Excell Development Construction, Inc. Delaware II. ICF Kaiser Brazil Holdings, Inc. Delaware III. ICF Kaiser Participacoes Ltda. Brazil II. ICF Kaiser Engineers Eastern Europe, Inc. Delaware III. ICF Kaiser Netherlands B.V. (10%) Netherlands II. ICF Kaiser Hunters Branch Leasing, Inc. Delaware II. ICF Kaiser Netherlands B.V. (90%) Netherlands II. ICF Leasing Corporation, Inc. Delaware II. Metro Rail Transit Corp. Limited (12%) Hong Kong II. French Environmental Holdings, LLC (49%) France I. ICF Kaiser Servicios Ambientales, S.A. de C.V. (66 2/3%) Mexico I. ICF Kaiser Systems, Inc. Delaware I. ICF Resources Incorporated Delaware II. ICF R G.P. No. 1, Inc. Delaware III. Gary PCI Ltd. L.P. Delaware IV. Gary Coal Processing L.P. Delaware II. HBG Hawaii, Inc. Delaware III. Silversword, Inc. (50%) Delaware IV. Silversword Ltd. L.P. Delaware II. HBG International, Inc. Delaware III. PyroCarbons, Ltd. (50%) Virginia II. PCI Operating Company Partnership (49%) Delaware I. Monument Select Insurance Company Vermont I. Systems Applications, Inc. Nevada I. Systems Applications International, Inc. Delaware I. The K.S. Crump Group, Inc. Delaware I. Tudor Engineering Company Delaware
Page 1 of 1 Current as of December 31, 1997 EX-23 34 EXHIBIT 23 EXHIBIT 23 Consent of Independent Accountants We consent to the incorporation by reference in the registration statements of ICF Kaiser International, Inc. (the Company) on Forms S-8 [Registration Nos. 33- 42677 (Non-employee Directors Stock Option Plan), 33-42678 (Stock Incentive Plan), 33-51460 (Section 401(k) Plan), 33-60663 (Retirement Plan), 33-60661 and 33-65351 (Employee Stock Ownership Plan), 33-60665 (Consultants, Agents and Part Time Employees Stock Plan) and 33-51812 (Employee Stock Purchase Plan)] and on Form S-3 [Registration No. 33-51677 (600,000 Warrants)], and [Registration No. 333-16937 (1,135,795 shares)] of our report dated March 26, 1998, on our audits of the consolidated financial statements and financial statement schedule of ICF Kaiser International, Inc. and Subsidiaries as of December 31, 1997 and 1996, and the years ended December 31, 1997 and 1996, and the ten months ended December 31, 1995, which report is included in the Company's Report on Form 10- K. McLean, Virginia March 30, 1998 EX-27 35 EXHIBIT 27
5 12-MOS DEC-31-1997 JAN-01-1997 DEC-31-1997 19,198,000 0 271,172,000 7,142,000 0 312,999,000 51,446,000 39,648,000 398,466,000 222,478,000 141,004,000 0 0 225,000 27,102,000 398,466,000 0 1,108,116 0 973,902 0 1,195,000 18,276,000 2,561,000 (3,319,000) (4,987,000) 0 0 0 (4,987,000) (0.22) (0.22) Excludes current portion of bonds, mortgages, and similar debt. Represents gross revenue which includes costs of certain services subcontracted to third parties and other reimbursable direct project costs, such as materials procured by the Company on behalf of its customers.
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